Health Law Advisor

Drug manufacturer Eli Lilly has filed suit against four companies involved in making, prescribing, and/or selling compounded versions of its weight loss and diabetes drugs ZEPBOUND® and MOUNJARO®. Lilly’s drugs, injected under the skin, are the only FDA-approved medicines containing tirzepatide in the United States.

Two complaints, filed April 23 in the U.S. District Court for the Northern District of California, contend that the founders and chief executive officers of Mochi Health Corp. (“Mochi Health”) and Fella Health exerted control over multiple affiliated entities, including medical groups, in violation of California law prohibiting unlicensed individuals and corporations from practicing medicine (generally known as the “Corporate Practice of Medicine” or “CPOM” laws). The plaintiffs allege unfair competition and false advertising under state law and the Lanham Act; and assert state CPOM claims through supplemental and/or diversity jurisdiction.

This latest development on the drug compounding front comes at a time when states are keeping a sharp eye on private investment in the health care space—increasingly proposing legislation to strengthen CPOM laws and also increase oversight on corporate transactions involving health care entities. The majority of U.S. states have some form of CPOM restriction, and some, including Oregon, Texas, and Washington, are considering taking steps advocates say will strengthen theirs—with proposals, for example, to prevent private equity groups or hedge funds from interfering with health care decisions and limiting or eliminating common forms of affiliation with professional medical practices.

A federal appeals court panel in New Orleans is poised to uphold a lower court ruling enjoining the enforcement of the Affordable Care Act's (ACA) requirement that most private health insurance cover recommendations of the United States Preventive Services Task Force (Task Force).

On March 4, 2024, the U.S. Court of Appeals for the Fifth Circuit heard oral arguments in Braidwood v Becerra, a case challenging the constitutionality of the ACA requirement that most forms of private health coverage include certain recommended preventive services. The panel of three judges ...

On March 15, the Centers for Medicare and Medicaid Services (CMS) released guidance on the drug price negotiations provisions of the Inflation Reduction Act (IRA). The guidance contains CMS’s interpretations for a range of elements in the drug price negotiation process, including the manufacturer specific data elements that it will review in potential adjusting its view of the appropriate price. 

While other data elements also deserve manufacturers’ attention, CMS’s approach to accounting for manufacturer costs associated with research, development and manufacturing will have profound implications for biopharmaceutical manufacturers. The agency’s proposed factors omit substantial investments while improperly treating others as sunk costs. As innovators prepare to comment on CMS’s guidance, they will want to convey the need for more fulsome consideration of these investments in the upcoming negotiations.

In its recent decision in U.S. House of Representatives v. Burwell,[1] the U.S. District Court for the District of Columbia ruled that the Obama administration's payment of cost-sharing subsidies for enrollees in plans offered through the Affordable Care Act's Exchanges is unauthorized for lack of Congressional appropriation. The decision would affect future cost-sharing subsidies, though the court immediately stayed the decision pending its outcome on appeal.[2]

In its decision, the court found in favor of the members of the House of Representatives, based upon its ...

2016 is poised to be a major year in network adequacy developments across public and private insurance markets.  Changes are ahead in the Medicare and Medicaid managed care programs, the Exchange markets and the state-regulated group and individual markets, including state-run Exchanges.  The developing standards and enforcement will vary significantly across these markets.

Through 2014 and 2015, major news stories discussed concerns over the growing use of narrow provider networks by issuers on the Affordable Care Act's insurance exchanges ("Exchanges").  Others reported on ...