Upholding a 2021 jury verdict against a hedge fund adviser accused of making fraudulent statements to drive down Ligand Pharmaceuticals Inc.’s stock price, the U.S. Court of Appeals for the First Circuit shot down Gregory Lemelson’s arguments that his statements related to the company and its lead drug, Promacta (eltrombopag), were opinions protected by the First Amendment and that they were not material.
The U.S. Office of Inspector General examined the volume of tests for allergies and respiratory pathogens conducted during the COVID-19 pandemic, and found a few outlier testing labs that billed a conspicuous volume of such tests. While the agency recommended that the CMS examine these claims more closely, the results also suggest that enforcement action may be en route for the more than 160 labs identified as having filed a higher than typical volume of claims for these tests.
The U.S. Federal Trade Commission (FTC) has moved decisively in the area of mergers and acquisitions recently, but the agency also has a footprint in the enforcement space for health data disclosure. The FTC’s Ronnie Solomon said in a Dec. 1 public meeting that the agency will begin “thinking outside the box about what health information is in the 21st Century,” adding that the FTC is eyeing a more stringent enforcement regime regarding personal health data disclosures in the coming new year.
The U.S. Government Accountability Office (GAO) recently published a report on the pandemic-driven expansion of telehealth for Medicare beneficiaries, and pointed to some privacy and security risks of which patients may be unaware. However, GAO also noted that the CMS does not yet have a good handle on the rate of telehealth fraud and has not yet collected reliable data on telehealth outcomes, two gaps that will have to be filled if Congress is to comfortably vote to make permanent some of these pandemic-driven telehealth policies.
The Biden administration’s views of mergers and acquisitions have veered sharply from those of the previous administration, but Jonathan Kanter, assistant U.S. attorney general, said recently that there is more to come. Kanter said the Department of Justice (DOJ) and the Federal Trade Commission (FTC) will shortly publish draft guidelines that would place the burden on the parties to these M&A transactions to prove the transaction is not anticompetitive, upending the historical presumption that the plaintiff is liable for demonstrating the anticompetitive nature of the proposed transaction.
Alain Bouaziz, a French citizen and resident of the United Arab Emirates, pleaded guilty Aug. 12 to one count of lying to the U.S. FDA in an attempt to steal a discontinued Novartis AG weight loss drug. The charge carries a maximum prison term of five years and a fine of up to $250,000, or twice the gain or loss caused by the offense, whichever is greatest.
Several U.S. government agencies have been involved in the enforcement action directed toward Medifirst Solutions Inc., of Freehold, N.J., including the Department of Justice, but the Securities and Exchange Commission (SEC) has had its say as well. The SEC recently announced that a final consent judgment has been entered against a former Medifirst stock promoter, although there is still no word as to the fate of the company’s former CEO.
Two study coordinators at the Miami-based Tellus Clinical Research Inc. pleaded guilty July 20 in connection with a conspiracy to falsify data in trials evaluating treatments for medical conditions including opioid dependency, irritable bowel syndrome and diabetic nephropathy.
News of government prosecutors actively going after individuals for defrauding the U.S. health care system has become commonplace, but the government’s focus on criminally prosecuting fraud against Medicare, Medicaid and other government programs could make biopharma companies’ patient assistance programs a more attractive target.
Publicly traded companies in the life sciences face a number of sources of litigation, including lawsuits over alleged securities fraud, and a new report by Dechert LLP highlights a diminishing number of such lawsuits across the U.S. economy. However, the proportion of such lawsuits directed at drug and device makers has not diminished, making clear that companies in the life sciences must tread carefully when disclosing information such as the status of products in development for fear that a perceived misrepresentation could spark expensive and time-consuming litigation.
