Health Care Law Blog

The statutes governing controlled substance prescribing, which were enacted in 2018, require a physician or other prescriber to establish a “bona fide prescriber-patient relationship” before prescribing any controlled substances.

In response to growing concerns about misuse and abuse of opioid medications, Michigan has enacted three statutes amending the Public Health Code.  The new statutes impose specific requirements on physicians, dentists, physician assistants, and nurse practitioners (“prescribers”) who prescribe controlled substances and on pharmacists who fill those prescriptions.

For the past decade, health care has remained one of the most tumultuous and dynamic industries; uncertainty, along with opportunity, are likely to continue in 2017. This three-part series will discuss some of the most important health care trends. This section will focus on some of the largest factors affecting costs and reimbursement in health care: 1) MACRA Implementation; 2) Medicaid Reimbursement; 3) Shifting Payment Models; and 4) Drug Pricing.

Recently, the Centers for Medicare & Medicaid Services (“CMS”) issued a final rule (“Final Rule”) updating the Medicare Conditions of Participation (“CoPs”) for long-term care (“LTC”) facilities. It is the first time in over 15 years that substantial LTC CoP revisions have been released.

LTC facilities affected by the Final Rule include skilled nursing facilities for Medicare and nursing facilities for Medicaid, or those facilities that are duly certified. The Final Rule took effect on November 28, 2016, however CMS has planned for a phased implementation. LTC providers must complete the three implementation phases by November 28 in the years 2016, 2017 and 2018, respectively. CMS has estimated that the costs of compliance will be $62,900 in the first phase of implementation, and $55,000 per year for phases two and three.

On August 5, 2014, the Michigan Supreme Court (the "Court") declined to reconsider its decision to reject two class actions and a qui tam action against CVS Caremark Corporation, Rite Aid of Michigan, Inc., and several other pharmacies. The lawsuits were based on allegations that the companies had overcharged Medicaid for generic prescription drugs.

The underlying case was argued before the Court on January 16, 2014, and the Court ruled against the plaintiffs on June 11, 2014. The plaintiffs argued that the pharmacies violated Michigan Public Health Code, MCL 333.17755(2), which requires a pharmacist to “pass on the savings in cost” when dispensing a generic drug instead of a brand name drug.

Omnicare Inc., the nation's largest dispenser of prescription drugs in nursing homes, announced on October 23, 2013, that it has agreed to pay $120 million to settle a whistleblower lawsuit alleging kickbacks to nursing homes.

The whistleblower in the case, an Ohio pharmacist named Donald Gale, worked for Omnicare from 1993 until 2010. The lawsuit, filed in federal court in Cleveland in 2010, accused Omnicare of giving discounts for prescription drugs to nursing homes for certain Medicare patients in return for referrals of other patients at higher prices paid for by the federal government.

On June 17, 2013, the U.S. Supreme Court ruled that brand name drug makers can be sued for paying generic drug makers to delay the introduction of low-cost versions of popular medicines to the marketplace. The Court's 5-3 ruling is a victory for the Federal Trade Commission (“FTC”), and reverses a lower-court ruling that shielded drug makers from liability.

So-called "pay-for-delay" or reverse payment arrangements between brand name and generic drug makers result in payments being made to generic drug makers in order delay the launch of competing generic drugs. These settlements often stem from litigation, or threatened litigation, brought by brand name drug makers against generic drug makers who try to sell products prior to the patent expiration period. In this case, the FTC argued that pay-for-delay agreements cost consumers as much as $3.5 billion per year, while the pharmaceutical industry alleged that such deals are legitimate means of settling patent disputes.

On Tuesday, June 11, 2013, the Drug Enforcement Administration (“DEA”) announced that it had reached an $80 million civil settlement agreement, the largest in DEA history, with Walgreen Co. (“Walgreens”) to resolve allegations involving an “unprecedented number” of record-keeping and dispensing violations under the Controlled Substance Act (“CSA”). According to the DEA’s Press Release, Walgreens negligently allowed controlled substances, including Oxycodone and other prescription painkillers, to be diverted into the black market.