2024 Hatch-Waxman Year in Review
Introduction
In 2024, the Hatch-Waxman Act continued to play a critical role in the U.S. pharmaceutical landscape, driving the dynamics between brand-name drugmakers and generics. This landmark legislation, enacted to encourage innovation while ensuring access to affordable medications, remained a focal point for numerous legal battles and regulatory shifts. Key decisions throughout the year have refined interpretations of its provisions, influencing patent challenges, market exclusivities, and the pathway for generics. As the pharmaceutical sector navigates evolving market pressures, agency action, and possible legislation, the legal contours of the Hatch-Waxman Act continued to impact both the business and legal strategies of pharmaceutical companies in 2024.
The Year By Numbers
In the year 2024, 312 complaints were filed initiating Hatch-Waxman litigation (compared to 259 in 2023)1:
As evident above, the overwhelming majority of ANDA complaints were filed in the District of Delaware and the District of New Jersey. This common trend remains consistent for the same reasons these district courts have always been hubs for ANDA litigation: most pharmaceutical companies are incorporated in Delaware and are commonly headquartered in New Jersey. Furthermore, because these two jurisdictions handle the majority of ANDA litigation, the local patent rules and proclivities of judges within these districts generally account for the unique procedural complexities that large-scale Hatch-Waxman litigation can impose on these dockets.
Given that Hatch-Waxman litigation is statutorily decided at the bench if it goes to trial, it behooves all litigants to have matters handled by judges experienced in the technical subject matter. As shown above, almost 50% of all ANDA complaints filed were assigned to one of five judges, ensuring that those judges have familiarity with common Hatch-Waxman substantive and procedural issues, and usually leading to a rapport between those judges and the attorneys that frequently litigate in front of them.
In 2024, 283 on-going Hatch-Waxman litigations were either resolved or terminated.2 There was a slight decrease in settlements in 2024: 39% of terminated matters in 2024 compared to 50% in 2023.3 Innovator companies (i.e., NDA & patent holders) were considered to have prevailed on issues 20% of the time, whereas generic companies were considered to have prevailed on issues only 2% of the time (i.e., those decisions excluding settlements and procedural resolutions). While these statistics may suggest that innovator companies find favorable resolutions more frequently than generic manufacturers, generics generally may be more inclined to seek settlement when perceiving a likely favorable outcome, rather than continue litigation. This trend existed in 2023 and remained in 2024.
Looking at patent findings from 2024 (below4), evidently very few ANDA cases were decided at summary judgment in 2024, a frequency from which few conclusions can be drawn. When cases went to trial, however, we saw a finding of infringement more frequently than noninfringement, and validity was upheld more frequently than not. Of those that were held invalid at trial, most were decided on obviousness grounds. Granted, however, these numbers don’t consider invalidity positions that were dropped due to case narrowing prior to trial, rather than on the merits.
This contrasts slightly to the results from 2023 (below5):
Namely, judges were seemingly more reticent to find patents invalid at summary judgment in 2024, while they did so three times in 2023 – again, however, a small sample size. In good news for innovator companies, district courts not only held patents invalid at trial far less frequently in 2024 compared to the year prior: 4 of 17 (24%) and 9 of 15 (60%), respectively. District courts also found infringement of valid patents at trial slightly more in 2024 compared to the year prior: 9 of 13 (69%) versus 6 of 10 (60%), respectively.
Federal Circuit Decisions and the Greater Context In Which They Fit
We saw a slight uptick in Hatch-Waxman decisions from the Federal Circuit last year (7 in 2024 compared to 5 in both 2023 and 2022), some of which significantly affect going forward how practitioners and in-house counsel manage and plan their IP strategies, expand their portfolios through prosecution, and preserve existing exclusivities in the federal courts and in front of the Patent Trial and Appeal Board. Some of the decisions we’ve seen from the Federal Circuit in 2024 were also germane to broader agency and legislative proposals that could come to fruition in 2025, as discussed below.
Edwards Lifesciences v. Meril Life Sciences6& the Safe Harbor Provision
Holding: The Hatch-Waxman safe harbor applied to the importation of two demonstration samples to a medical conference for the purpose of recruiting clinical investigators to support FDA approval.
Although not a decision surrounding the filing of an ANDA, the Federal Circuit began their 2024 Hatch-Waxman jurisprudence addressing the safe harbor provision, 35 U.S.C. § 271(e)(1): a valuable mechanism for fostering innovation in the pharmaceutical space. Federal Circuit precedent has interpreted the provision as broad, applying “as long as there is a reasonable basis for believing that the use of the patented invention will produce the types of information that are relevant to an FDA submission,”7 and even extending to activities which may be promotional rather than regulatory, but “where those activities are consistent with the collection of data necessary for filing an application with the FDA.”8 Here, Judges Stoll, Cunningham, and Lourie (dissenting) addressed whether the importation of two demonstration-only transcatheter heart valves for a conference during the process of pre-market approval was protected by the safe harbor, and ultimately affirmed precedent.9 As Judge Stoll put it, the question is not why or how the devices were imported or used, but whether the importation was for a use reasonably related to submitting information to the FDA.10 It was here. On appeal from a grant of summary judgment of no infringement, the Federal Circuit affirmed that there was no genuine dispute of material fact that Meril imported the devices for purposes reasonably related to recruiting investigators during pre-market approval processes and thus was covered by the safe harbor provision.11 For innovator companies, especially those in crowded commercial spaces where the risk of “brand-to-brand” litigation is higher, the safe harbor’s broad applicability to a variety of pre-approval activities under the ”reasonably related” standard offers peace of mind throughout early stages of product development; however, practitioners should advise their clients that the safe harbor is less helpful post-FDA approval, where routine submissions aren’t generally afforded the same protection.12
While courts may view the Hatch-Waxman safe harbor as offering a “wide berth,”13 U.S. patent law generally has a particularly narrow experimental use defense to patent infringement.14 The Edwards decision was followed months later by a request for public commentary by the United States Patent and Trademark Office (USPTO) on the potential legislative codification of the experimental use exception.15 To date, statutory experimental use defenses are confined in the U.S. to the Hatch-Waxman Act16 and the Plant Variety Protection Act,17 but are codified in a much broader fashion in other leading IP countries, such as Germany, China, and India. Feedback to the USPTO’s request was mixed; proponents of further codification suggested the exception was overly narrow, vague, or detrimental to US innovation on the global scale, whereas those with opposing viewpoints generally suggested the status quo was sufficient. At this time, the USPTO has not taken any further public action on the topic, but don’t be surprised if we see legislation promoting American innovation in 2025, such as an expanded codification of the experimental use defense.
Salix Pharmaceuticals v. Norwich Pharmaceuticals,18Post-trial Section VIII Carve-outs, and the Obviousness of Polymorph Patents
Holding: The district court did not err in denying the generic’s motion to modify judgment after amending its ANDA to remove an infringing indication after trial; the district court also did not err in finding that a person of ordinary skill in the art would have a reasonable expectation of success obtaining certain polymorph forms of rifaximin.
One month later, the first ANDA decision came from the Federal Circuit from Judges Lourie, Chen, and Cunningham (dissenting in part), who issued a surprising decision in light of (but not contradictory to) previous rulings on polymorph patents, while also addressing a unique post-trial tactic by the ANDA filer to gain earlier entry into the market. With respect to the former, Federal Circuit precedent has made it clear that finding polymorph claims obvious is a tall task given the unpredictability of chemical polymorphism and therefore the lack of reasonable expectation of success, as discussed in Grunenthal GMBH v. Alkem19 (2019) and Pharmacyclics v. Alvogen20 (2022). However, unique to this case were the “distinct factual predicates” that justified the district court’s obviousness finding.21 The prior art here contained examples which disclosed in detail the process that would produce the claimed polymorph, turn demonstrating a reasonable expectation of success in doing so.22 Therefore, unlike in previous § 103 decision on polymorphs, those at issue here was appropriately found to be obvious. Separately, Norwich’s ANDA sought to market generic Xifaxan for three indications: travelers’ disease, hepatic encephalopathy (HE) and irritable-bowel syndrome with diarrhea (IBS-D).23 However, when the district court ordered that the ANDA would not be approved until the expiry of the HE patents (which were found infringed), Norwich amended its ANDA post-trial to remove the infringing HE indication and sought to modify the judgment and gain earlier market entry.24 Both the district court and Federal Circuit rejected this attempt.25 The latter held that “it [was] not the potential use that of the drug for HE that is the relevant infringement,” but instead “the submission of the ANDA that included an infringing use,” and therefore “[t]hat the ANDA further recited a non-patent-protected indication does not negate the infringement resulting from the ANDA’s submission.”26 Further, allowing amendment of an ANDA at the Rule 60 stage is in the discretion of the district court, and the Federal Circuit’s affirmation of the district court’s decision created strong precedent that determining “whether an ANDA applicant has successfully carved out language from a label to turn infringement into non-infringement” “would essentially be a second litigation,” and is “inequitable and inappropriate.”27
This decision offers two key takeaways for counsel for both innovators and generics: for the former, the nonobviousness of polymorph patents is not a guaranteed, despite the unique, unpredictable nature of the science and the general position of related jurisprudence. While finding polymorph patents obvious is still a significant challenge given their general nature, it is possible for the right facts to line up correctly in a § 103 analysis. For generic companies, future tactical attempts to carve out infringing indications post-trial now must overcome cut-and-dry precedent suggesting the futility of the practice to gain earlier market entry.
Amarin Pharma v. Hikma Pharmaceuticals28 & Skinny Labels
Holding: The complaint plausibly pleaded induced infringement based on the label and public statements made by the generic manufacturer.
The next panel from the Federal Circuit (Moore, Lourie, Albright) next dealt with what seemed like a section viii carve out ANDA case, but was rather a “run-of-the-mill induced infringement case.”29 The generic product, an icosapent ethyl already on the market, was approved for only one of the two indications (treatment of severe hypertriglyceridemia) that the NDA product (Vascepa) had been approved for, but included no limitation of use as to the second indication, and the generic manufacturer had made repeated public statements referring to itself as the “generic Vascepa,” despite being approved for only half the indications.30 Unique to this case was that it was appealed from the motion to dismiss stage, and thus discovery had not occurred.31 Not in dispute however was that the complaint sufficiently alleged direct infringement, knowledge, and intent, and thus the Federal Circuit’s decision focused on whether an “inducing act” was sufficiently alleged – it was.32 Reversing the district court’s dismissal, the Federal Circuit managed to walk along the “careful balance struck by the Hatch-Waxman Act regarding section viii carve-outs,” emphasizing that this decision did not “effectively eviscerate section viii-carveouts,” as argued by Hikma, and was instead “limited to the allegations” and “guided by the standard of review appropriate for this stage of the proceedings.”33 Given those explicitly limiting statements, this decision does little to affect true section viii jurisprudence under the Hatch-Waxman Act, and thus for practitioners, reliance on cases such as GlaxoSmithKline v. Teva (2021)34 is still appropriate for skinny label analyses.
Following the Salix and Amarin decisions in 2024 we saw new related agency action from the FDA and year-end legislation. In July 2024, the FDA rejected a citizen’s petition from Novartis requesting the FDA reject ANDAs for generic Entresto, instead allowing generic manufacturers to add new language to their label, not included in the currently approved indication, that would effectively narrow the subset of patients for which use of the generic product is appropriate.35 In this case, inclusion of the language “patients with…reduced ejection fraction” was permissible as it therefore excluded “patients with…preserved ejection fraction,” which is patent protected.36 This decision was affirmed by the District Court for the District of Columbia.37 To wrap up 2024, we also saw the introduction of a bill titled the “Skinny Labels, Big Savings Act” on December 17, which seeks to provide safe harbor protection to generics and biosimilars using skinny labels in certain contexts.38
Allergan USA v. MSN Laboratories39 & Obviousness-type Double Patenting
Holding: First-filed, first-issued, later-expiring patent claims were not invalid for obviousness-type double patenting over later-filed, later-issued, earlier-expiring reference claims.
In August, the Federal Circuit clarified its 2023 In re Cellect decision40 which, at the time, served to massively upheave the doctrine of obviousness-type double patenting (ODP), patent term adjustments (PTA), and terminal disclaimers. However, Judges Lourie, Dyk, and Reyna reeled the impacts of that decision back in. Although the district court considered itself “bound” by the In re Cellect holding, the Federal Circuit distinguished the two as addressing different questions.41 Here, the question was “can a first-filed, first-issued, later-expiring claim be invalidated by a later-filed, later-issued, earlier-expiring reference claim having a common priority date,” to which the Court decided “no.”42 The Cellect decision, however, was boiled down to establishing the rule that “when it comes to evaluating ODP on a patent that has received PTA, the relevant expiration date is the expiration date including PTA—not the original expiration date measured twenty years from the priority date.”43 Practitioners now know that Cellect does not require a patent to be invalidated by reference patents simply because it expires later. The doctrine of obviousness-type double patent serves to prohibit the extension of a first patent by subsequently filed patently indistinct patents; it does not serve to cut short first-filed patents with duly received PTA, simply because later-filed patents expire first.
This decision also follows a May proposal from the USPTO to implement a new rule on terminal disclaimers, such that a terminal disclaimer would include a provision aiming to reduce the costs associated with challenging patent families under ODP.44 The rule proposed that when filing a terminal disclaimer, a patentee must agree that a patent subject to a terminal disclaimer would only be enforceable if it was not tied through such a disclaimer to a patent which had otherwise been held unpatentable or invalid.45 The rule avoids the issue of having to invalidate multiple related patents separately, and if implemented, may significantly impact how practitioners approach continuation patents and handle large patent families within a portfolio. We may see a decrease in continuation applications, and instead see applications claiming much broader scopes and an increase in divisional applications.
Astellas Pharma v. Sandoz46 & Patent Eligibility
Holding: Courts may not sua sponte consider patent eligibility as grounds for patent invalidity.
In September, the Federal Circuit made clear that issues of patent eligibility under Section 101 cannot be decided sua sponte by district courts. Known as the principle of party presentation, there are circumstances in which a court may take “a modest initiating role” in shaping litigation,47 but addressing patent eligibility when not raised by a party is not one such circumstance. Here, patent eligibility was never raised during the course of the litigation, but the court considered it anyway in its final decision.48 While the district court phrased its decision in such a manner that parties may not “consent around the bounds of patent eligibility,” the Federal Circuit Judges Lourie, Prost, and Reyna made clear that patent eligibility is not a threshold issue akin to subject-matter jurisdiction, but instead is entitled to the presumption of validity, as is the case with other grounds of validity.49 While perhaps this decision offers greater direction to courts than counsel, it serves as a polite reminder to practitioners that any invalidity defense not raised is waived.
The topic of patent eligibility was particularly ripe in 2024, and continuing into 2025, especially with the growth of artificial intelligence (AI). Although not a topic that is overly adjacent to Hatch-Waxman litigation, counsel for both innovator and generic companies should remain cognizant of updated guidance from the USPTO, such as that which issued in July.50 A full summary of the guidance can be found here. Generic companies do appear to be raising § 101 invalidity grounds less frequently in recent years; however, counsel should nonetheless stay informed on both procedural and substantive developments in patent eligibility jurisprudence.
Galderma Laboratories v. Lupin51 & Bioequivalence Data and In Vitro Testing
Holding: The district court did not err in holding that the plaintiff had not proven infringement by relying on its in vitro testing and bioequivalence.
As one of two December ANDA decisions in 2024, the Federal Circuit analyzed whether in vitro testing and bioequivalence were sufficient to establish literal infringement or infringement under the doctrine of equivalence. The result? They aren’t. Although likely not a hard-and-fast rule that in vivo and in vitro results are not comparable, the Federal Circuit found no clear error in the district court’s conclusion as such in this particular case, finding that Galderma improperly drew conclusions about in vivo behavior from in vitro testing.52 Evidently, the issue was a failure of proof, rather than scientific incomparability.53 Further, unique to the facts of this case, although with a slightly broader applicability generally, under a doctrine of equivalents analysis, a showing of bioequivalence, at most, shows substantially the same result, but fails to show substantially the same function or substantially the same way, as is required under the “function, way, result” test.54 This decision highlights the importance of accurate and reliable testing to prove infringement, as well as fulsome expert testimony relaying as such.
Teva v. Amneal Pharmaceuticals55 & Orange-Book Listings
Holding: Patents directed towards inhaler devices were improperly listed in the Orange Book.
Wrapping up 2024, the Federal Circuit addressed a key issue pressing innovator pharmaceutical companies: the propriety of Orange Book listings. In this case, Teva had listed patents directed to inhaler devices in the Orange Book in order to delay the entry of generic products to the market.56 Because such patents “contain no claim for the active ingredient at issue,” Judges Prost, Taranto, and Hughes affirmed the district court’s delisting order.57 In what ultimately came down to issues of statutory interpretation, the Federal Circuit rejected arguments that a patent is properly listed if it “reads on” the approved drug or claims any component of a drug.58 Practitioners now know this is not the case. First, “the fact that an NDA could infringe a patent does not mean that the patent ‘claims’ the underlying drug within the meaning of the listing provision.”59 And second, “[t]o list a patent in the Orange Book, that patent must, among other things, claim the drug for which the applicant submitted the application and for which the application was approved,” i.e., the active ingredient.60 While NDA holders are keen to protect their products from generic entry into the market, this decision from the Federal Circuit affirms that there is a limit to the Orange Book, and NDA holders would be wise to ensure any such listings do in fact claim the active ingredient at issue.
This decision comes in the wake of threats by the Federal Trade Commission and new de-listing policies. For example, in September 2023, the FTC issued a new policy61 stating that improper Orange Book listings may constitute a violation of Section 5 of the FTC Act, and in November 2023, the FTC announced a plan62 to challenge over 100 Orange Book Listings and a further 300 listings in April 202463. Many companies have received warning letters from the FTC, only some of whom have voluntarily delisted at-risk Orange Book patents however. The financial detriment of doing so is clear, and other companies have therefore pushed back, arguing compliance with the listing provisions. The FTC appears to be predominantly targeting medical device patents, such as those in Teva v. Amneal, but for the most part, action by the FTC remains limited to issuing policies and sending letters to NDA holders. Further, it has yet to be determined whether this is an appropriate exercise of agency power, especially in the wake of the Supreme Court’s goodbye to Chevron deference.64
To conclude, many of the Federal Circuit’s Hatch-Waxman decisions in 2024 reshaped how pharmaceutical companies and their counsel address patent prosecution, litigation, and portfolio management, especially in view of the broader regulatory, legislative, agency-based changes that may occur in 2025 and beyond. As patent law continues to evolve, these cases will serve as critical touchstones in understanding the future of pharmaceutical patents and the broader implications for drug pricing and accessibility in the years to come.
1 LexMachina stats showing 312 federal district court cases with “Patent:ANDA” case tag, filed between ”2024-01-01 and 2024-12-31″) (Compare with LexMachina stats showing 259 federal district court cases with ”Patent:ANDA” case tag, filed between ”2023-01-01 and 2023-12-31″.2 LexMachina stats showing 283 federal district court cases with “Patent:ANDA” case tag, terminated between ”2024-01-01 and 2024-12-31″.3 Compare supra with LexMachina stats showing 284 federal district court cases with “Patent:ANDA” case tag, terminated between ”2023-01-01 and 2023-12-31″.4 LexMachina stats showing 91 findings in cases with “Patent:ANDA” case tag, with ”Infringement, Invalidity, No Infringement, No Invalidity, No Unenforceability, or Unenforceability” as patent findings, with findings decided between ”2024-01-01 and 2024-12-31″.5 LexMachina stats showing 91 findings in cases with “Patent:ANDA” case tag, with ”Infringement, Invalidity, No Infringement, No Invalidity, No Unenforceability, or Unenforceability” as patent findings, with findings decided between ”2023-01-01 and 2023-12-31″.6 Edwards Lifesciences Corp. v. Meril Life Scis. Pvt. Ltd., 96 F.4th 1347 (Fed. Cir. 2024).7 Amgen Inc. v. Hospira, Inc., 944 F.3d 1327, 1338 (Fed. Cir. 2019).8 Momenta Pharm., Inc. v. Teva Pharm. USA Inc., 809 F.3d 610, 619 (Fed. Cir. 2015).9 Supra, note 6, at 1351.10 Id. at 135311 Id. at 1355.12 Classen Immunotherapies v. Biogen IDEC, 659 F.3d 1057, 1070 (Fed. Cir. 2011).13 Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 202 (2005).14 See, e.g., Madey v. Duke Univ., 307 F.3d 1351 (Fed. Cir. 2002).15 89 Fed. Reg. 53963.16 35 U.S.C. § 271(e)(1).17 7 U.S.C. § 2544.18 Salix Pharms., Ltd. v. Norwich Pharms. Inc., 98 F.4th 1056 (Fed. Cir. 2024).19 Grunenthal GMBH v. Alkem Lab’ys Ltd., 919 F.3d 1333 (Fed. Cir. 2019).20 Pharmacyclics LLC v. Alvogen, Inc., No. 2021-2270, 2022 WL 16943006 (Fed. Cir. Nov. 15, 2022).21 Supra, note 18, at 1065.22 Id. at 1066-67.23 Id. at 1060.24 Id. at 1068-69.25 Id. at 1069.26 Id. at 1068.27 Id. at 1069.28 Amarin Pharma, Inc. v. Hikma Pharms. USA Inc., 104 F.4th 1370 (Fed. Cir. 2024).29 Id. at 1377.30 Id. at 1372-74.31 Id. at 1377.32 Id. at 1378.33 Id. at 1381.34 GlaxoSmithKline LLC v. Teva Pharms. USA, Inc., 7 F.4th 1320 (Fed. Cir. 2021).35 Final Response Letter from FDA CDER to Novartis Pharmaceuticals Corporation, Docket FDA-2022-P02228 (24 Jul. 2024), https://downloads.regulations.gov/FDA-2022-P-2228-0015/attachment_1.pdf. 36 See id.37 Novartis Pharms. Corp. v. Becerra, No. 24-CV-02234 (DLF), 2024 WL 4492072 (D.D.C. Oct. 15, 2024).38 Sens. Hickenlooper, Welch, Cotton, & Collins, Skinny Labels, Big Savings Act, https://www.hickenlooper.senate.gov/wp-content/uploads/2024/12/Skinny-Labels.pdf.39 Allergan USA, Inc. v. MSN Lab’ys Priv. Ltd., 111 F.4th 1358 (Fed. Cir. 2024).40 In re: Cellect, LLC, 81 F.4th 1216 (Fed. Cir. 2023).41 Supra, note 39, at 1368.42 Id. at 1366.43 Id. at 1369.44 89 Fed.Reg. 4043945 Id.46 Astellas Pharma, Inc. v. Sandoz Inc., 117 F.4th 1371 (Fed. Cir. 2024).47 United States v. Sineneng-Smith, 590 U.S. 371, 376 (2020).48 Supra, note 46, at 1376.49 Id. at 1378.50 89 Fed.Reg. 5812851 Galderma Lab’ys, L.P. v. Lupin Inc., 122 F.4th 902 (Fed. Cir. 2024).52 Id. at 908.53 Id. at 908.54 Id. at 910.55 Teva Branded Pharm. Prods. R&D, Inc. v. Amneal Pharms. of New York, LLC, No. 2024-1936, 2024 WL 5176737 (Fed. Cir. Dec. 20, 2024).56 Id. at *5-*6.57 Id. at *7, *17.58 Id. at *10-*11.59 Id. at *12.60 Id. at *15.61 Federal Trade Commission, “Federal Trade Commission Statement Concerning Brand Drug Manufacturers’ Improper Listing of Patents in the Orange Book,” (14 Sept. 2023), https://www.ftc.gov/system/files/ftc_gov/pdf/p239900orangebookpolicystatement092023.pdf.62 Federal Trade Commission, “FTC Challenges More Than 100 Patents as Improperly Listed in the FDA’s Orange Book,” (November 7, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/11/ftc-challenges-more-100-patents-improperly-listed-fdas-orange-book.63 Federal Trade Commission, “FTC Expands Patent Listing Challenges, Targeting More Than 300 Junk Listings for Diabetes, Weight Loss, Asthma and COPD Drugs,” (April 30, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-expands-patent-listing-challenges-targeting-more-300-junk-listings-diabetes-weight-loss-asthma.64 Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024).
FDA Proposes New Front-of-Pack Nutrition Label for Packaged Foods
The FDA has announced a proposal to require a new nutrition label on the front of packages for most packaged foods. The label design, shown below, would give consumers readily visible information about a food’s saturated fat, sodium, and added sugars content—three nutrients the FDA states are directly linked with chronic diseases when consumed in excess. The proposed “Nutrition Info box” rates packaged food as being “Low,” “Med,” or “High” in saturated fat, sodium, and added sugars. It was designed after the FDA conducted an experimental study in 2023 of nearly 10,000 U.S. adults to further explore consumer responses to three different types of front-of-pack labels. The new Nutrition Info box is intended to complement the FDA’s existing Nutrition Facts label.
If finalized, the proposed rule would require food manufacturers to add the Nutrition Info box to most packaged food products three years after the final rule’s effective date for businesses with $10 million or more in annual food sales and four years after the final rule’s effective date for businesses with less than $10 million in annual food sales. Comments on the proposed rule can be submitted electronically to http://www.regulations.gov by May 16, 2025.
HHS OCR Settlements: Last Week in Review
During the week of January 6, 2025, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) entered into resolution agreements and corrective action plans with Elgon Information Systems (“Elgon”), Virtual Private Network Solutions, LLC (“VPN Solutions”) and USR Holdings, LLC (“USR”) for violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Security Rule.
The proposed resolutions with Elgon and VPN Solutions are the eighth and ninth ransomware investigation settlements announced by OCR. Elgon is required to pay $80,000 to OCR and will be subject to its monitoring for three years to ensure compliance with HIPAA. VPN Solutions is required to pay $90,000 and will be subject to one year of monitoring. The corrective action plans also lay out certain steps each entity is required to take to resolve potential violations of the HIPAA Privacy and Security Rules.
The proposed resolution with USR, announced on January 8, 2025, stems from a data breach, during which an unauthorized third party/parties were able to access a database containing the electronic protected health information (“ePHI”) of over 2,900 individuals and able to delete ePHI in the database. The resolution agreement requires USR to pay $337,750 to OCR and take steps to resolve potential violations of the HIPAA Privacy and Security Rules. USR will be subject to OCR monitoring for two years to ensure compliance with HIPAA.
Last week’s flurry of settlements is in keeping with a broader trend of OCR Security Rule enforcement activity in the past year. These agreements underscore how it is critical that organizations of all sizes that handle ePHI ensure their compliance with the HIPAA Security Rule, which requires administrative, physical and technical safeguards to ensure the confidentiality, integrity and availability of ePHI.
EPA Releases Draft Risk Assessment of PFOA and PFOS in Biosolids, Will Hold Webinar on January 15, 2025
The U.S. Environmental Protection Agency (EPA) announced on January 14, 2025, a draft risk assessment of the potential human health risks associated with the presence of perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) in biosolids, also known as sewage sludge. According to EPA, the findings show that there may be human health risks associated with exposure to PFOA or PFOS with all three methods of using or disposing of sewage sludge — land application of biosolids, surface disposal in landfills, or incineration. The draft risk assessment focuses on those living on or near impacted sites or those that rely primarily on those sites’ products (e.g., food crops, animal products, drinking water). EPA notes that the draft risk assessment does not model risks for the general public. EPA states that once prepared in final, the assessment will help EPA and its partners understand the public health impact of per- and polyfluoroalkyl substances (PFAS) in biosolids and inform any potential future actions to help reduce the risk of exposure. EPA has posted a pre-publication version of the Federal Register notice announcing the availability of the draft risk assessment. Publication of the notice in the Federal Register will begin a 60-day comment period. EPA will hold a webinar on January 15, 2025, at 12:00 p.m. (EST) to provide information on the draft risk assessment. The webinar will include an opportunity for questions and answers. EPA will post a recording of the webinar.
Keeping Fraud Out of Research: Government Grant Whistleblower Awarded Over $200,000
A whistleblower recently played a pivotal role in exposing research misconduct, leading to a $4 million settlement from Athira Pharma Inc. under the False Claims Act. This case highlights the importance of safeguarding government-funded research and enforcing transparency in scientific investigations. Whistleblowers contribute to protecting taxpayer dollars, and under the qui tam provision of the False Claims Act, they may be entitled to 15-25% of the government’s recovery.
The Case Against Athira Pharma Inc.
The Bothwell, Washington-based biotechnology company allegedly failed to disclose research misconduct to the National Institutes of Health (NIH) and the Department of Health and Human Services (HHS) Office of Research Integrity. Athira’s former CEO, Leen Kawas, allegedly manipulated scientific images in her dissertation and published works. These publications were then referenced in multiple grant applications submitted to the NIH, one of which led to a successful grant award in 2019. The timeline of the alleged misconduct spans from January 1, 2016, to June 20, 2021, during which Athira violated its regulatory obligations to disclose these concerns.
The Role of the Whistleblower in Exposing Fraud
Whistleblower Andrew P. Mallon, Ph.D. filed the case under the qui tam provisions of the False Claims Act. The False Claims Act allows private individuals to act on behalf of the U.S. government and bring attention to fraudulent claims submitted to government programs. For his role in uncovering the misconduct, Dr. Mallon is set to receive $203,434 as part of the settlement.
Taxpayer Dollars and the Impact of Research Misconduct
This case underscores the need for ethical conduct in government-funded research programs. When federal agencies such as the NIH distribute grants, they trust recipients to provide accurate and truthful information. Any form of fraud, including the manipulation of research data, not only undermines the scientific process but also wastes public funds. As the Principal Deputy Assistant Attorney General said about the case, “The partnership between the scientific community and the federal government is built on trust and shared values of ethical scientific conduct.”
Why the False Claims Act Matters
The False Claims Act remains one of the U.S. government’s most effective tools for recovering taxpayer funds lost to fraud. Originally enacted to combat fraud against military supplies during the Civil War, the False Claims Act has since evolved to encompass broader areas of misconduct, including government research grants, healthcare programs, and other federally funded activities.
French Insider Episode 38: Securing the Future: Cybersecurity & Data Privacy in the Trump Era with Jonathan Meyer, Liisa Thomas and Carolyn Metnick of Sheppard Mullin [Podcast]
In this episode of French Insider, Sheppard Mullin partners Jonathan Meyer, Liisa Thomas and Carolyn Metnick join host and French Desk Co-Chair, Valérie Demont, to explore the evolving landscape of cybersecurity and privacy under a new Trump administration.
What We Discussed in This Episode:
What is CISA and what is its role in cybersecurity?
What can we expect from the Trump administration regarding cybersecurity?
Could we see less regulation but greater enforcement?
Might there be more stringent regulation with respect to cyber attacks and private ransomware?
Where does the United States currently stand in terms of privacy law?
What is the current status of state and federal privacy laws in relation to the healthcare industry?
In terms of privacy, where could enforcement be headed under the incoming administration?
How do the various state attorneys general and federal agencies coordinate on enforcement?
What enforcement trends should businesses be aware of, and what do they need to focus on?
What specific enforcement trends are we seeing in the healthcare space?
Generally speaking, what types of penalties could result from enforcement actions?
Could a company’s officers and directors face personal liability, either criminal or civil?
How might class action litigation originate from a cybersecurity or privacy incident?
What should businesses prioritize in terms of cybersecurity and privacy compliance?
Massachusetts: New Year, New Law — Governor Signs “An Act enhancing the market review process” (House Bill No. 5159)
On January 8, 2025, Governor Maura Healey signed into law H.B. 5159, “an Act enhancing the market review process.” This new law promises sweeping reform to reshape how health care businesses operate and grow. With stricter oversight, expanded reporting obligations, and new licensing requirements, the legislation signals an uptick in regulatory oversight of health care transactions and operations in Massachusetts. These changes have wide-ranging implications for stakeholders across the health care space. Many provisions of the new law will become effective once the applicable agencies issue implementing regulations. This is an expansive set of statutory changes, and this blog highlights only a few of the material provisions. Foley will provide several issue-specific analyses in the coming weeks, including implications for investors.
Here is what stakeholders need to know — and how to prepare.
Key Changes at a Glance
Increased Oversight of Health Care Transactions: The Massachusetts Attorney General, the Health Policy Commission (HPC), and the Center for Health Information and Analysis (CHIA), have greater authority to scrutinize mergers, acquisitions, and other significant market changes. The HPC will now have oversight over a number of other actors and activities in the local market, including private equity players, sale/leaseback transactions.
New Licensing Categories: Office-based surgical centers and urgent care centers face stricter licensing requirements. Implementing regulations must be issued by October 1, 2025.
Massachusetts False Claims Act: Imposes liability on owners and investors that know about and fail to disclose violations of the Massachusetts False Claims Act.
Required Assessments from Health Care Entities: Non-hospital provider organizations, pharmaceutical manufacturing companies and pharmacy benefit managers are now required to pay estimated expenses of the HPC (in addition to acute hospitals and ambulatory surgical centers).
Expanded Reporting Obligations: Requirements to include additional information regarding private equity (PE) investors, management services organizations (MSOs) relationships, and real estate leaseback arrangements in 2025 Provider Organization Registration Program renewals and registrations to enhance market transparency throughout the Commonwealth.
Office for Health Resource Planning: A new office will be established within the HPC to develop a state health resource plan. The office will be tasked with studying many aspects of the sector, including “health care resources”, which are expansively defined to include “any resource, whether personal or institutional in nature and whether owned or operated by any person, the commonwealth or political subdivision thereof, the principal purpose of which is to provide, or facilitate the provision of, services for the prevention, detection, diagnosis or treatment of those physical and mental conditions, which usually are the result of, or result in, disease, injury, deformity or pain; provided, however, that the term “treatment”, as used in this definition, shall include custodial and rehabilitative care incident to infirmity, developmental disability or old age.”
Expanding Studies on Health Care: Establishes a primary care task force to address access, provider, and payment issues in the primary care setting that shall issue its first report to legislature by September 15, 2025, and expands the scope of CHIA’s functions.
Prohibitions on Hospitals Leasing its Main Campus from a real estate investment trust (“REIT”). This exempts hospitals that had a main campus/REIT arrangement prior to April 1, 2024.
These sections reflect the legislature’s efforts to balance the changing landscape of health care and consumer protection, but they also create challenges for businesses navigating this complex regulatory environment.
HPC’s Expanded Role in Oversight Measures
For the past decade, the HPC has overseen health care transactions in the Commonwealth through the Notice of Material Change process. “Providers” or “Provider Organizations” (including organizations in the business of health care management) that plan to undergo “Material Changes” to their operations or governance structure must submit notice to the HPC 60 days prior to closing. “Material Changes” include:
A Provider or Provider Organization entering into a merger or affiliation, or acquisition of, by, or with a carrier or involving a hospital or hospital system;
Any other acquisition, merger, or affiliation of, by, or with another Provider or Provider Organization that would result in:
an increase in annual Net Patient Services Revenue of the Provider or Provider Organization of US$10 million dollars or more, or
the Provider or Provider Organization having a near-majority of market share in a given service or region.
A clinical affiliation between two or more Providers or Provider Organizations that each had annual Net Patient Service Revenue of US$25 million or more in the preceding fiscal year; or
Creating an organization to administer contracts with carriers or third-party administrators or perform current or future contracting on behalf of one or more Providers or Provider Organizations.
Upon receipt of a completed notice to the HPC, the HPC is required, within 30 days, to conduct a preliminary review to ascertain whether the Material Change may result in a “significant impact” on the Commonwealth’s health care cost growth benchmark goals, or on the competitive market. If the HPC determines that there will be a significant impact by the Material Change on the health care cost growth benchmark, or on the market, the HPC may initiate a cost and market impact review.
The new law expands the scope of regulated transaction by revising “Materials Changes” to also include:
Significant expansions in provider or provider organization’s capacity;
Transactions that involve a significant equity investor, which result in a change of ownership or control of a Provider or Provider Organization;
Significant acquisitions, sales, or transfers of assets including, but not limited to, real estate sale lease-back arrangements; and
Conversion of a Provider or Provider Organization from a non-profit entity to a for-profit entity.
While the new law has not set thresholds for these new categories, we expect additional clarity in forthcoming guidance and regulations.
The HPC will be also seeking far more intrusive access to the financial and operational conditions of significant equity investors, including but not limited to “information regarding the significant equity investor’s capital structure, general financial condition, ownership and management structure and audited financial statements.”
Notably, the statute exempts from the definition of “significant equity investor” venture capital firms “exclusively funding startups or other early-stage businesses,” which terms are not defined.
The role of the HPC is expanding well-beyond the state legislature’s initial intent. Rather than just being an advisory review body that looks at initial material change transactions, it will now have ongoing oversight for a period of five years following the completion of a material change, including the right to request additional documentation “to assess the post-transaction impacts of a material change.” Cost and market impact reviews are also being tasked to ask deeper questions than before including quality of care and patient experience as well as referral patterns. Similarly, the statute empowers CHIA to require registered provider organizations to provide additional annual internal and financial and operational information to the HPC.
Massachusetts False Claims Act Liability of Owners and Investors
In a broad statutory challenge to the historic protections of the corporate veil that insulates shareholders from underlying liability, the new law imposes liability under the state false claims act on shareholders with an ownership or investment interest in a violating entity, who knows about the violation, and fail to disclose the violation to the Commonwealth within 60 days of identifying the violation. This change is directly related to a high-profile case brought by the Office of the Attorney General resulting in $25MM settlement paid by investors in a behavioral health company in Massachusetts in 2021. Investors will now have a more direct risk of liability for the activities of their portfolio companies.
Licensing Changes
The law also established two new license types: Office-Based Surgical Centers and Urgent Care Centers. The law has delegated broad discretion to the Massachusetts Department of Public Health (DPH) to create and implement specific licensure requirements for each of the new categories. Many medical practices historically offered urgent care under the historic exception to licensure for physician practices. This new law will require physician-based urgent care centers to submit to DPH regulatory and licensure oversight. Once regulations are drafted and implemented, any person or entity that “advertises, announces, establishes, or maintains an office-based surgical center [or urgent care center] without a license” will be subject to a fine of up to US$10,000.
(1) Office-Based Surgical Centers, which provide:
“ambulatory surgical or other invasive procedure requiring: (i) general anesthesia; (ii) moderate sedation; or (iii) deep sedation and any liposuction procedure, excluding minor procedures and procedures requiring minimal sedation, where such surgical or other invasive procedure or liposuction is performed by a practitioner at an office- based surgical center.”
This category is distinct from ambulatory surgical centers, which are already subject to clinic licensure by DPH and follow the federal definition.[1] Licensed hospitals are also exempt from obtaining an office-based surgical center license, though their affiliated physician organizations may need to be exempted through rulemaking.
(2) Urgent Care Centers, which are clinics not affiliated with a licensed hospital that provide urgent care services:
“a model of episodic care for the diagnosis, treatment, management or monitoring of acute and chronic disease or injury that is: (i) for the treatment of illness or injury that is immediate in nature but does not require emergency services; (ii) provided on a walk-in basis without a prior appointment; (iii) available to the general public during times of the day, weekends or holidays when primary care provider offices are not customarily open; and (iv) is not intended and should not be used for preventative or routine services.”
Licensed hospitals (and entities “corporately affiliated with hospitals”), clinics, limited service clinics, and community health centers receiving federal grants are exempt from obtaining an urgent care center license. In other words, this new oversight is directed to urgent care centers offered in a freestanding physician office and “friendly PC” environment.
Other Notable Provisions and Exclusions
It appears that the New Year brought about a spirit of compromise, as some of the changes previewed this summer in S.B. 2881, “an Act enhancing the market review process” discussed in our prior blog, “Massachusetts Health Care Act Dies at the End of Legislative Session But Previews Sweeping Changes for the Health Care Industry,” were excluded from the new law. Most notably, restrictions on (i) who can employ registered practicing clinicians (physicians, advanced practice providers, psychiatric nurse mental health clinical specialists, nurse anesthetists, nurse-midwives, psychologists, and licensed clinical social workers) and (ii) the corporate practice of medicine were excluded from the enacted version of the law.
While the emphasis of the law expands the scope and scale of what stakeholders are subject to state oversight, the law also establishes and expands the Commonwealth’s ability to monitor and study primary care services, access, delivery, cost, and payment, to name a few.
What Happens Next?
Stakeholders should apprise themselves of these new requirements and be on the lookout for forthcoming regulations as increased governmental scrutiny has come to the Commonwealth.
[1] 42 CFR 416.2 “Ambulatory surgical center or ASC means any distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization and in which the expected duration of services would not exceed 24 hours following an admission. The entity must have an agreement with CMS to participate in Medicare as an ASC, and must meet the conditions set forth in subparts B and C of this part.”
Health Care Providers Should Seriously Consider Claims Under Two Antitrust Class Actions
Now is the time for health care providers to consider participating in the recent Blue Cross Blue Shield (BCBS) antitrust class action settlement and the newly filed antitrust cases alleging widespread price fixing for out-of-network claims by MultiPlan and health insurers.
Health care provider antitrust litigation challenging health insurer anticompetitive conduct is on a recent hot streak, with health care providers securing billions of dollars in a class action settlement with BCBS health plans for alleged anticompetitive price-fixing in the prices they pay health care providers. Additionally, last year, health care providers filed antitrust suits seeking damages from MultiPlan and health insurers due to MultiPlan’s alleged price-fixing of out-of-network medical claims.
These two cases deserve providers’ attention right now before important deadlines pass.
First, a nationwide settlement was preliminarily approved in the class action of providers alleging that BCBS health plans around the country conspired to fix payment rates to providers. The details of the settlement are available at www.bcbsprovidersettlement.com.
Key deadlines in the BCBS settlement are coming up soon:
March 4, 2025: Opt Out/Objection Deadline
July 29, 2025: Provider Claims Submission Deadline
July 29, 2025: Final Approval Hearing
As a result, it is critical that health care providers — both facilities and physicians — promptly consider:
Whether they have claims at issue subject to the settlement.
Whether they want to participate in the settlement or opt out.
If they choose to participate, what information and data they need to obtain and should submit that could increase their settlement payment.
Analyze the scope of the class action settlement releases and how those provisions may impact future legal claims against the settling BCBS health plans.
Meanwhile, another potentially massive antitrust class action is gearing up right now in In re Multiplan Health Insurance Provider Litigation, Civ No. 1:24-CV-06795 (N.D. Ill.), where the American Medical Association and dozens of health care facilities and providers allege that nearly all of the largest US health insurers engaged in price-fixing for the payment of out-of-network claims by using a single vendor, MultiPlan, to share pricing information and set common, low prices. These cases are still quite early in the litigation process. But health care providers with out-of-network claims affected by the alleged price-fixing could recover a significant monetary award or settlement if the litigation proceeds and is successful.
If you have significant commercial health plan out-of-network claims exposure, now is the time to evaluate participating in the MultiPlan litigation in Illinois federal court.
NNCO Releases NNI Supplement to President Biden’s 2025 Budget
On December 19, 2024, the National Nanotechnology Coordination Office (NNCO) released The National Nanotechnology Initiative Supplement to the President’s 2025 Budget, which also serves as the annual report for the National Nanotechnology Initiative (NNI). According to the report, President Biden’s fiscal year (FY) 2025 budget requests over $2.2 billion for NNI, with cumulative funding totaling over $45 billion since the inception of NNI in 2001 when Congress approved increased funding for nanotechnology in FY 2021 appropriations. The funding includes over $900 million in annual investments by the National Institutes of Health alone (along with other important contributions from the U.S. Food and Drug Administration, Centers for Disease Control and Prevention, Biomedical Advanced Research and Development Authority, and basic research agencies, e.g., the U.S. National Science Foundation and U.S. Department of Energy), as nanotechnology-enabled diagnostic and therapeutic technologies for a wide variety of human health threats successfully compete for funding. The report includes examples of how NNI participating agencies are harnessing nanotechnology research and development and education programs to reduce barriers and inequities, from workforce development to economic progress in historically underserved communities. The report states that NNI participating agencies support applied research, experimental development, pre-commercialization, and standards-related efforts that build economic competitiveness, facilitating the adoption of a wide range of nanotechnologies, and helping create good-paying jobs across the country, including in both traditional and emerging industries. The report notes that the coordination provided through NNI has facilitated the proactive responsible development of new technologies, thereby streamlining their adoption.
Rethinking Alcohol Labels: The Surgeon General Calls for Change
In a recent advisory, U.S. Surgeon General Dr. Vivek Murthy underscored the connection between alcohol consumption and increased cancer risk. Citing alcohol as the third leading preventable cause of cancer in the U.S., the advisory links it to at least seven types of cancer, including breast and colorectal cancers. Despite this, according to Dr. Murthy, less than half of Americans recognize alcohol as a cancer risk factor. Dr. Murthy notes that alcohol is implicated in around 100,000 cancer cases and 20,000 cancer deaths annually, exceeding alcohol-related traffic fatalities. The advisory recommends updating the health warning label on alcohol beverages, reassessing recommended limits for alcohol consumption, strengthening public educational awareness, and promoting alcohol screenings in the clinical setting.
The health warning label on alcohol products, mandated pursuant to 27 U.S.C. 215, has remained unchanged since 1988. Although Dr. Murthy provides his recommendation to update the warning, his advisory admits that the “power to change the label statement lies with Congress.” Notably, Dr. Murthy’s advisory does not provide a sample of the language he would recommend to add to the existing health warning label on alcoholic beverages. However, his advisory points out that Ireland has a new health label going into effect in 2026 that will state that “there is a direct link between alcohol and fatal cancers”. Given the existing research showing some benefit from limited consumption of some alcohol, we expect that if Congress adopted such language, it would be challenged in the courts.
While the advisory calls for a reassessment of alcohol consumption guidelines and increased public health education, critics might question whether the recommendations adequately consider the complexity of cancer risk factors. The advisory also suggests a significant role for health care providers in informing patients about the risks, which may be challenging given the nuanced nature of individual risk factors. Dr. Murthy explains the cancer risk is also heavily determined by complex factors– biological, environmental, social, and economic factors. For example, as explained in the advisory, individuals of East Asian descent have a genetic variant that results in flushing, producing a higher biological risk for certain alcohol-related cancers. Social factors includes social norms, such as cultural norms. Asking individuals to commit to long-term quitting could be difficult due to the role alcohol plays in different social backgrounds and cultures. Additionally, the practicality of implementing widespread label changes and public awareness campaigns could face logistical and economic hurdles, potentially limiting the advisory’s effectiveness. The effectiveness could also be limited by incomplete or conflicting scientific findings, as noted above.
Alcohol is not alone in being targeted for health warnings by government actors. For instance, recently the sugar-sweetened beverage segment undertook a multi-year fight against an ordinance passed in San Francisco requiring that outdoor signs advertising sugar-sweetened beverages include a warning label, covering twenty percent of the sign, advising of the negative health impact of consuming such products. Round one of that litigation ultimately went for industry, with the Ninth Circuit ruling that the ordinance likely violated industry’s First Amendment rights. In response, San Francisco passed a new ordinance in 2020 that imposed a similar warning requirement but which reduced the size requirement to ten percent. Litigation again ensued, but this time resulted in San Francisco repealing the ordinance in 2021.
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Government Outlines Qui Tam’s Constitutionality in Detailed Brief to Eleventh Circuit
On January 6, the U.S. federal government filed a brief in U.S. ex rel. Zafirov v. Florida Medical Associates urging the U.S. Court of Appeals for the Eleventh Circuit to reverse a district judge’s ruling in a qui tam whistleblower case. In September, the U.S. District Court for the Middle District of Florida ruled that the False Claims Act’s qui tam provisions are unconstitutional, threatening to undermine the United States’ number one anti-fraud law.
The district court ruling found that the qui tam provisions were unconstitutional because they violated the Appointments Clause of Article II. The court ruled that by filing a qui tam lawsuit alleging Medicare fraud, whistleblower Clarissa Zafirov was granted “core executive power” without any “proper appointment under the Constitution.”
In its brief, the government claims that “other than the district court here, every court to have addressed the constitutionality of the False Claims Act’s qui tam provisions has upheld them.” It therefore urges the Eleventh Circuit to “join that consensus and reverse the district court’s outlier ruling.”
The government points to the Supreme Court decision in the 2000 case Vermont Agency of Natural Resources v. United States ex rel. Stevens, which held that the False Claims Act’s qui tam provisions are consistent with Article III. This decision “makes clear that relators do not exercise Executive power when they sue under the Act,” the brief states. “Rather, they are pursuing a private interest in the money they will obtain if their suit prevails. As private litigants pursuing private interests, relators are not enforcing federal law in a manner inconsistent with the Vesting and Take Care Clauses and need not be appointed in the manner required by the Appointments Clause.”
The brief further clarifies that while a relator’s qui tam suit “may also vindicate a federal interest in remedying and deterring fraud on the United States” “they are distinct from the government’s enforcement efforts even though they can supplement those efforts.”
The government additionally argues that qui tam relators are not government officers; do not exercise significant government authority due in part to the numerous statutory constraints which allow the government to “ensure that qui tam actions are consistent with its own priorities for the enforcement of federal law;” and do not occupy a continuing position since their role “is limited in time and scope, confined to a particular case, and fundamentally personal in nature.’
Further referencing Stevens and the Supreme Court’s emphasis on the long history of qui tam statutes in that decision, the government details “the prevalence of early qui tam statutes and the body of evidence that such statutes were understood to be constitutional.”
“The historical record.. suggests that all three branches of the early American government accepted qui tam statutes as an established feature of the legal system,” the brief states.
Overall, the government provides a detailed and comprehensive overview of the constitutionality of the False Claims Act’s qui tam provisions, rooted in both prior court precedent and the historical record.
Healthcare Preview for the Week of: January 13, 2025 [Podcast]
Final Week of Biden Administration
During the Biden Administration’s final week, congressional Republicans are moving full steam ahead with Senate confirmation hearings for Trump-nominated officials and with ongoing budget reconciliation discussions. Nomination hearings this week include Doug Collins for secretary of Veterans’ Affairs and Russell Vought for Office of Management and Budget (OMB) director. Hearings have yet to be scheduled for Robert F. Kennedy Jr., nominated for Health and Human Services (HHS) secretary, and other HHS agencies.
We are waiting to see if certain Biden Administration proposed rules, some of which have cleared OMB review, will be finalized this week, before President-elect Trump is inaugurated on January 20, 2025. These proposed regulations include the Marketplace Notice of Benefit and Payment Parameters, a regulation that would require coverage of over-the-counter contraception without cost-sharing or a prescription, and a rule on telemedicine prescribing of controlled substances, among others. Other proposed regulations with comment periods still open, including the 2026 Medicare Advantage policy and technical rule, could be substantially changed when Trump takes office.
Looking ahead to the new Administration, congressional Republicans are eyeing healthcare policies as potential savers for their forthcoming budget reconciliation, which is expected to target significant cuts in federal spending. At a December 2024 Republican conference meeting, $2.5 trillion in mandatory spending cuts were put on the table in exchange for a $1.5 trillion increase in the debt limit. The Congressional Budget Office (CBO) recently released options for reducing the deficit; CBO periodically releases such options, providing legislators with price tags for various policies. Healthcare options outlined by CBO include a version of Medicare site neutral payment reforms, Medicaid per capita caps, and a reduction in payment rates for 340B entities. The House Budget Committee also circulated a spending reform options document late last week detailing up to $5.7 trillion in savings. Healthcare is a primary target for savings as it makes up almost $3.5 trillion of the total figure, with $2.3 trillion coming solely from Medicaid savings.
The key House and Senate healthcare committees (Senate Finance; Senate Health, Education, Labor and Pensions; House Energy and Commerce; and House Ways and Means) are officially formed for the 119th Congress, with new members on both sides of the aisle for all four committees. The House Rules Committee is still without a chair, however, and other committees, including the House Education and Workforce Committee, are not yet formed.
Today’s Podcast
In this week’s Healthcare Preview podcast, Debbie Curtis joins Maddie News to discuss the final week of the Biden administration and the week ahead in the 119th Congress, with the Senate focused on confirmation hearings for Trump-nominated officials, and Congressional Republicans eyeing healthcare policies as potential savers for upcoming legislation.