Effective Cyberliability Insurance Coverage

According to a recent study, the median amount of time between a breach of a company’s cybernetwork and the discovery of that breach is 229 days. Given this lengthy amount of time, companies should consider the benefits of an expanded cyberliability insurance policy period, particularly if the company is switching from one insurance provider to another. As discussed in “Hackers Don’t Care About the Terms of Your Insurance Policy: The Importance of Retroactive Dates and Extended Reporting Periods in Effective Cyberliability Insurance Coverage,” a client alert written by Reed Smith partners Brian Himmel, Andrew Moss, David Weiss and Cristina Shea, two such options for expanding the policy period are retroactive dates (shifting the effective date of coverage back, to capture events that occurred or were occurring but were not yet discovered when the policy was purchased) and extended reporting periods (which provide additional time to report events that are not discovered until after the end of the policy period).

To read the client alert, click here.

Proposed Rule Re Submitting Clinical Trial Registration and Results, Including Adverse Event Information, To ClinicalTrials.gov Database

As mentioned on our Health Industry Washington Watch blog, the National Institutes of Health has released a proposed rule designed to provide clarity on the requirements surrounding the submission of information to ClinicalTrials.gov, as mandated by the Food and Drug Administration Amendments Act of 2007.

Among the proposed requirements is summary results submission for clinical trials involving all pharmaceuticals, medical devices and biological products, regardless of whether they have been approved, licensed or cleared by the Food and Drug Administration, timetable restrictions for the registration of a clinical trial and submission of summary results, and guidelines for the reporting of adverse events.

The proposed rule will officially be published on November 21, 2014, and comments will be accepted for 90 days thereafter.

To read the entire post, click here.

Proposed HELP Committee Bill Aims to Incentivize Development of Ebola Treatments and Vaccines

In light of the recent Ebola outbreak and concerns over health safety, members of the U.S. Senate’s Health, Education, Labor, and Pensions (HELP) Committee have introduced a bill that would add Ebola to the Food and Drug Administration’s (FDA) priority review voucher program, which is designed as an incentive for developers of treatments and vaccines for neglected tropical diseases. Senators Tom Harkin (D-IA), Chairman of the HELP Committee, and Lamar Alexander (R-TN), Ranking Member of the HELP Committee, both expressed hope that passing this bill would encourage developers to devote knowledge and effort towards treating and preventing Ebola.

The HELP Committee is scheduled to vote on the bill on November 19th. To read the HELP Committee’s press release discussing the bill, click here.

A 50-State Survey of the Heeding Presumption

The Drug & Device Law bloggers have taken an in-depth look at how each U.S. state (plus Washington, D.C. and Puerto Rico) has opted to address the concept of the heeding presumption—whether it is presumed that the learned intermediary would have “heeded” a different warning had it been given, and if so, how that presumption operates.

As Reed Smith attorney Jim Beck points out, there are plenty of differences in approach, from states that employ the heeding presumption, to those that recognize it in a limited capacity, and those that reject it entirely. To see the survey, click here.

OCR Releases Ebola Bulletin

This post was written by Jennifer Pike.

The recent Ebola outbreak has prompted the US Department of Health and Human Services, Office for Civil Rights (“OCR”), the agency responsible for enforcing the Health Insurance Portability and Accountability Act (“HIPAA”), to release a new bulletin for covered entities and business associates regarding their privacy obligations in emergency situations. The bulletin, entitled “HIPAA Privacy In Emergency Situations,” provides an overview of the limited ways in which covered entities and business associates may use and disclose protected health information in emergencies, such as the Ebola outbreak. The bulletin is available at http://www.hhs.gov/ocr/privacy/hipaa/understanding/special/emergency/hipaa-privacy-emergency-situations.pdf.

The Learned Intermediary Rule Scores a Win in West Virginia

Over on the Drug & Device Law blog, Reed Smith partner Jim Beck applauds the recent decision in Tyree v. Boston Scientific Corp., a case filed in the Southern District of West Virginia. Tyree manages to narrow the scope of the 2007 decision in State ex rel. Johnson & Johnson v. Karl, in which the court stated that the learned intermediary rule did not apply in West Virginia, making it the only U.S. state to reject the rule as a valid defense for manufacturers. In Tyree, the court has ruled that the Karl decision does not apply to medical device manufacturers that never engaged in direct-to-consumer (DTC) advertising. As a result, the learned intermediary rule’s invalidity in West Virginia has now been restricted to cases involving “drug manufacturers that engage in DTC advertising.” Read the full post here.

Insurance Coverage for False Claims Act Lawsuits?

The number of qui tam actions brought under the False Claims Act (FCA) has increased dramatically over the past several years, as the incentives for bringing such claims have grown.

Reed Smith attorneys Brian Himmel and Natalie Metropulos have authored “Insuring Against FCA Suits in the Health Care Industry” in Corporate Counsel discussing the steps that health care service providers should take to insure themselves against allegations of FCA violations. Recommendations include assessing current insurance coverage for defending and resolving such claims, and additional types of policies that can provide FCA coverage.

To read the article, click here.

Updates to Adverse Event Report Cheat Sheet on Drug & Device Law Blog

The bloggers at Drug & Device Law regularly keep up-to-date scorecards and cheat sheets on a host of topics useful to drug and device manufacturers in product liability litigation. Their adverse event report cheat sheet is one such resource, citing cases from across the country that have addressed whether adverse event reports (AERs) are admissible evidence on causation. Reed Smith associate Kevin Hara has updated this cheat sheet with the most recent decisions, and it is worth a look. In a post summarizing these updates, Kevin mentions the Wendell v. Johnson & Johnson decision, in which the court ruled that AERs cited by experts were insufficient in demonstrating medical causation. Such rulings support a legal tenet that is both simple and fair – if a plaintiff cannot prove that a particular product is even capable of causing an adverse event, the case should be decided in the defendant’s favor. Read the full post here.

Innocent Co-Insureds Coverage Not Void Under Fake Doctor's Application

Reed Smith’s Policyholder Perspective blog recently posted about an October 21, 2014 ruling in the U.S. District Court in South Carolina that sounds as if it came from a Hollywood film. In Evanston Insurance Company v. Agape Senior Primary Care, et al., 2014 WL 5365679, the court held that despite a false application for professional liability insurance submitted by an applicant pretending to be a doctor, the insurance afforded to the company and other doctors and nurses identified as named insureds under the policy remained in force, and was not void ab initio as to the innocent co-insureds. To read the full alert by Reed Smith attorneys Kevin Dreher and Natalie Metropulos, click here.

Insights About Future Use of Protected Health Information Under HIPAA

How will Protected Health Information (PHI) be used in the future? Reed Smith partner Brad Rostolsky strives to answer this question in “HIPAA Enforcement: The Next Step,” an interview and accompanying article that appeared on HealthcareInfoSecurity on October 14th. The article discusses a number of trends predicted for the near future stemming from the HIPAA Omnibus Rule introduced last year, such as an increase in the number of investigations by the Department of Health and Human Services’ Office for Civil Rights regarding the illegal use, disclosure, and sale of PHI without patient authorization, particularly when used for marketing and fundraising purposes. The article also provides recommendations for companies preparing for HIPAA compliance audits, privacy concerns related to the use of consumer health information on social media, and potential HIPAA privacy issues involving wearable consumer health devices.

To listen to the interview and read the article, click here.

Reed Smith Team Analyzes OIG's Proposed Rule Amending Anti-Kickback Safe Harbors, CMP Rules & Gainsharing Regulations

The Office of Inspector General (OIG) of the Department of Health and Human Services published a major proposed rule on October 3, 2014 amending the Anti-Kickback Statute (AKS) safe harbors and the Civil Monetary Penalty (CMP) rules to protect a number of payment practices not previously allowed under those regulations. The proposed rule and the effects it would have on the AKS safe harbors and CMP rules are analyzed in a client alert written by Reed Smith attorneys Elizabeth Carder-Thompson, Scot Hasselman, Bob Hill, Carol Loepere, Paul Pitts, Sal Rotella, Susan Edwards, Katie Hurley, and Katie Pawlitz, and senior health policy analyst Deb McCurdy.

Among the payment practices that would be covered by the amended AKS safe harbors are certain cost-sharing waivers, manufacturer discounts for drugs provided to Medicare Coverage Gap Discount Program beneficiaries, and certain free or discounted local transportation services incentives. In addition, the CMP rules would clarify the definitions of “remuneration” to allow for, among other things, decreased copayments for certain hospital outpatient services, certain retailer reward programs, and waivers of copayments for the initial fill of a generic drug. The proposed rule also includes a proposal to codify the “gainsharing” CMP rule, which prohibits certain hospitals from intentionally compensating physicians to reduce or limit services to Medicare or Medicaid patients.

The authors note that a rule of this nature appears to be an acknowledgment by the OIG that the evolution of health care delivery in the United States has required the agency to become more flexible in regards to enforcing certain aspects of fraud and abuse regulation.

Comments on the proposed rule are being accepted by the OIG through December 2, 2014.

To read the client alert, click here.

Recognition of Preemption For Design Defect Claims

Over on the Drug & Device Law blog, Reed Smith partner Eric Alexander calls attention to Booker v. Johnson & Johnson, 2014 WL 5113305 (N.D. Ohio Oct. 10, 2014), a recent decision from the Ortho Evra multi-district litigation (MDL) extending the U.S. Supreme Court’s decision in Mutual Pharmaceutical Co. v. Bartlett, 133 S.Ct. 2466 (2013) from warnings-based claims to design-based claims. Booker recognized that Georgia law was preempted under Bartlett because it was impossible for the pharmaceutical company to comply with both the state law (which mandates that the product’s design be changed) and the federal law (which mandates that the product’s design not be altered after commercial released). The Drug & Device Law blog had predicted that design-defect preemption would be a natural extension or application of Bartlett, and Booker now provides legal authority for that proposition. Read the full post here.

Omnicare's Appellate Victory Upheld by U.S. Supreme Court

The February 2014 decision (discussed in an earlier blog post) in which the U.S. Court of Appeals for the Fourth Circuit dismissed the False Claims Act (FCA) charges brought in United States ex rel. Rostholder v. Omnicare, Inc. was confirmed on October 6, 2014, when the U.S. Supreme Court declined to review the Rostholder decision. The case – in which Omnicare had been represented by Reed Smith – involved alleged violations of the FCA stemming from reimbursement claims for drugs that were purportedly improperly packaged according to federal guidelines. The Fourth Circuit ruled that approval of a drug is sufficient for reimbursement qualification and, as a result, reimbursement claims for approved drugs cannot be considered “false” under the FCA solely for being “processed in violation of FDA safety regulations."

To read the Reed Smith client alert about the Supreme Court’s dismissal, click here.

New California Amendment Aims to Increase Breach Responsibility and Accountability

Reed Smith’s Global Regulatory Enforcement Law Blog features a post on a California bill recently signed into law which expands the scope of requirements for entities that own, license, and maintain personal data or information about a California resident. “Did California Just Impose a First-in-the-Nation Requirement for Breaching Companies To Offer Identity Theft Prevention and Mitigation Services?” written by Reed Smith attorneys Paul Bond, Lisa Kim, and Leslie Chen, focuses on the three sections of the California Civil Code affected by the amendment:

  1. An entity that “maintains” an individual’s data or information – such as a retailer – is required to employ appropriate anti-breach protection. Previously this was only required of companies who “owned” or “licensed” personal information;
  2. An entity identified as the source of a breach of social security numbers or driver’s license numbers must offer affected individuals appropriate anti-breach protection and mitigation services for a period of at least one year; and
  3. An entity is disallowed – except in particular circumstances – from selling, advertising, or offering for sale an individual’s social security number.

The amendments will go into effect on January 1, 2015, after which point entities that do not follow these regulations will be at risk for legal action brought by affected individuals.

To read the full post, click here.

Applying the Attorney-Client Privilege to Outside Media Consultancy Communications

While attorney-client privilege is a well-established concept in the U.S. legal system, application of the policy becomes murky when the communications in question are between a client and an outside public relations firm hired to advise on issues related to forthcoming high-profile litigation. What makes this issue particularly tricky is that legal precedent is limited.

Reed Smith attorneys Colleen Davies, Andrew Stillufsen, and I (Lisa Baird) authored an article on the subject, “PR That’s Protected,” which appears in the October edition of Corporate Counsel. The article provides several recommendations for in-house counsel to minimize the chances of having communications with an outside media consultancy become part of the discovery or subpoena processes. Among these recommendations are a strict adherence to good document practices, the creation of a carefully-worded confidentiality agreement to be signed by the media consultancy and its members, and a clear distinction between public relations advisement for issues related to the litigation matter and public relations advisement for non-litigious issues – even if that entails the hiring of multiple media consultancies.

To read the article, click here.