Lessons from the Competition Appeal Tribunal Hearings in Merricks v. MasterCard and Gibson v. Pride Mobility Scooters

The UK held the first two hearings under its new opt-out class action procedure. The precise rules governing UK class actions will be developed over time from the general guidelines in the statute. There are significant similarities between the U.S. and UK rules on a number of topics related to collective proceedings, and barristers and judges alike cited U.S. law at the recent hearings. The critical questions faced by plaintiffs and their experts at the hearings reflect significant hurdles for the plaintiffs and insights about future claims that might face an easier path to continue as collective proceedings. Additionally, the UK’s current rules allow only competition law claims to proceed as class actions, but class actions may be available for other types of substantive legal claims in the future.

For more information, please read our Reed Smith client alert.

New Regulations Reshape Transparency-Related Obligations in France, Could Impact Life Sciences Companies

In France, transparency requirements are regulated by two main sets of laws: “The French Anti-Gift Law” regulates the provision of gifts, discounts and other incentives to health care providers by life sciences companies, while “the French Sunshine Act” imposes disclosure obligations on companies relating to benefits granted to, and agreements concluded with, health care providers.

While the French Sunshine Act has been frequently amended to reflect subsequent changes brought by implementing decrees, orders, and circulars, the Anti-Gift Law has been less subject to change, at least until now.

The recently-adopted Ordinance No. 2017-49 aims to extend the scope of the Anti-Gift Law, modify transparency procedures, and double fines for non-compliance, all of which could significantly affect life sciences companies,

For a detailed look at these changes and discussion of their impact, please read our client alert, “France: Again the life science industry will have to take a close look at a new set of regulations reshaping transparency-related obligations.”

Final Rule on Amending the Anti-Kickback Safe Harbors and Civil Monetary Penalty Rules on Beneficiary Inducements

On December 7, 2016, the Office of Inspector General of the Department of Health and Human Services published a final rule amending the safe harbors to the Anti-Kickback Statute (AKS) and the Civil Monetary Penalty (CMP) rules prohibiting beneficiary inducements. These changes protect certain practices and arrangements from criminal prosecution or civil sanctions under the AKS and/or the CMP law. The rule finalizes, with certain modifications, all of the AKS safe harbors and beneficiary inducement CMP exceptions noted in a proposed rule published on October 3, 2014.

To learn more about the final rule, read our Reed Smith Client Briefing here.

Unified Patent Court Could be Operational as Early as December 2017

As we discussed in a prior post, the introduction of the Unified Patent Court (UPC) will be a significant change to the European patent landscape and will have a profound effect on how life sciences companies set about their patent strategies – from filing through exploitation to enforcement.

Consequently, life sciences companies should take note that the Unified Patent Court (UPC) Preparatory Committee announced last week that it is now working on “the assumption that the Provisional Application Phase (PAP) will start end of spring 2017, presumably in May, and that the Agreement on the Unified Patent Court (UPCA) can enter into force and the court become operational in December 2017.” (The timetable does come with the “clear disclaimer that there are a number of factors that will dictate whether it is achievable.”)

What does this mean for patent owners? Some practical points include the following:

  • The UPC Preparatory Committee specifically announced that the start of the sunrise-period for opting out European patents from the UPC system will be in early September 2017. This will provide a minimum of three months for patent owners who wish to opt out their patents to do so before the UPC becomes operational in December 2017.
  • This is the first time even an indicative date has been given to the start of the opt-out sunrise period. Patent owners should therefore prioritize their analysis of their portfolios to identify which patents should be opted out, if any.
  • Patent owners should also be reviewing patent licenses and the extent to which licensees can unilaterally litigate in the UPC without needing the patent owner’s permission, as commencing litigation in the UPC will subject the patent to the UPC’s jurisdiction. Any such licenses will need to be amended.

For more information on the Unified Patent Court, its impact for patent owners, and factors that could affect its timeline to being operational, please read my recent Reed Smith client alert, “Provisional start date announced for the Unified Patent Court.”

Revised International Enforcement Guidelines Prescribe Increasing Collaboration Between U.S., Foreign Competition Agencies to Investigate, Prosecute Antitrust Violations

Companies, including those in the pharmaceutical and medical device industries, with multinational operations should expect increasing collaboration between U.S. and foreign competition agencies to investigate and prosecute alleged antitrust violations.  In light of recent and ongoing investigations by U.S. and UK competition agencies into generic and sole-source drug pricing, the revised guidelines are expected to encourage further information sharing across jurisdictions.

The Federal Trade Commission (“FTC”) and Department of Justice (“DOJ”) have published a revised edition of their Antitrust Guidelines for International Enforcement and Cooperation. These guidelines, first published in 1995, shed light on the agencies’ enforcement policy on international business activity, including the extraterritorial application of U.S. antitrust laws, cooperation with foreign authorities, and investigative tools applied to international investigations.

Effective January 13, 2017, the revised guidelines acknowledge a more globalized economy and the need for coordination and cooperation among the various competition agencies across the world. FTC Chairwoman Edith Ramirez stated, “With the continued expansion of cross-border commerce around the world, the agencies’ international antitrust enforcement policies and practices are becoming more and more important in protecting U.S. consumers and businesses.”

Specifically, the revised guidelines feature the following additions and updates:

  • A new chapter on international cooperation, including information on confidentiality, information exchanges and criminal investigations
  • Revised guidance on the extraterritorial effect or application of U.S. antitrust law to conduct involving foreign commerce, the Foreign Trade Antitrust Improvements Act, foreign sovereign immunity, foreign sovereign compulsion, the act of state doctrine and petitioning of sovereigns
  • Updated examples that illustrate common issues faced by the agencies

The updates in these guidelines come as no surprise in light of the current enforcement landscape. Global cartel fines in foreign jurisdictions set new records in 2016, and coordinated dawn raids between the DOJ and European or Asian competition authorities are now commonplace in high-profile investigations. Now more than ever, it is critical for companies to work with experts at law firms with both global capabilities and local experience to coordinate among various jurisdictional authorities.

This alert is also posted on the Reed Smith website.

Upcoming Free CLE Webinar: Hosting and Managing User Generated Content (UGC)

Reed Smith’s Life Sciences Health Industry Group will be hosting an upcoming CLE webinar, “Hosting and Managing User Generated Content (UGC)” on Thursday, January 19, 2017 at 12 p.m. ET. This webinar will address the legal liability and responsibility of a drug or device company that incorporating any user generated content (UGC) features on websites or within social media channels owned or controlled by the company.

Among other things, attendees will learn about the Communications Decency Act (CDA), a federal law that makes an Internet service provider immune from liability related to UGC under many circumstances, as long as the provider is not controlling the statements to such a degree it makes them its own. FDA policy, and statements regarding the CDA and social media will also be explored, as well as the interplay between the CDA and the Food, Drug, and Cosmetic Act.

This program is free and presumptively approved for 1.5 general CLE credit in California, Illinois, New Jersey, Pennsylvania, Texas and West Virginia. For lawyers licensed in New York, this course is eligible for 1.5 credit under New York’s Approved Jurisdiction Policy.

You can register by clicking here.

FDA Advances LDT Dialogue with New Discussion Paper Containing Updated CMS/FDA Oversight Proposal

On January 13, 2017, the Food and Drug Administration (FDA) released a discussion paper concerning an updated proposed framework for oversight of laboratory developed tests (LDTs).  According to FDA, the updated proposal is the result of ongoing engagement with industry stakeholders.   Under the proposal, the FDA generally stands by its position that a complementary risk-based oversight framework that involves both the FDA and the CMS Clinical Laboratory Improvements Amendments (CLIA) program is the preferable alternative to a CMS-only framework.  However, the updated proposal generally scales back FDA’s involvement in the framework and emphasizes the need for regulatory flexibility.

FDA’s new discussion paper does not represent the formal position of FDA, nor is it enforceable.  The paper is meant merely to “advance the public discussion” by providing “a possible approach to spur further dialogue.”

Do not let this disclaimer (or the upcoming change in White House administration) dissuade you from reading the new paper.  Change is coming for LDTs and diagnostics generally, regardless of who is in the White House.  If your business relates in any way to LDTs and diagnostic tests currently regulated by FDA, then we suggest taking the time to read FDA’s updated proposed oversight framework and considering how this could impact your business operations and projections over the next decade and beyond.

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Join Us: Free CLE Webinar on Best & Worst Drug/Medical Device Decisions of 2016

Reed Smith’s Life Sciences Health Industry Group will be hosting an upcoming CLE webinar, “The Good, the Bad and the Ugly: The Best and Worst Drug/Medical Device Decisions of 2016” on Wednesday, January 18, 2017 at 12 p.m. ET.

Each year since 2007, James Beck, Reed Smith’s Senior Life Sciences Policy Analyst and the founder of the popular Drug and Device Law blog, has compiled and posted lists of the 10 best and 10 worst drug and medical device court decisions for that year, with the input of his fellow Drug and Device Law bloggers. These cases are selected based on their likely precedential value, their importance to drug and device manufacturers, and their inherent (and subjective) merit.

In this webinar, James – along with Reed Smith partners and fellow Drug and Device Law bloggers Eric Alexander and Steven Boranian — will explain the significance, whether good or bad, of each case and provide insight into how the cases will likely be influential in the future.

This program is free and presumptively approved for 1.5 general CLE credit in California, Illinois, New Jersey, Pennsylvania, Texas and West Virginia. For lawyers licensed in New York, this course is eligible for 1.5 credit under New York’s Approved Jurisdiction Policy.

You can register by clicking here.

Radiopharmacies Celebrate the New Year with Long-Awaited FDA Guidance

On December 29, 2016, the U.S. Food and Drug Administration (“FDA”) surprised many in the radiopharmacy industry by issuing a long-awaited draft guidance entitled “Compounding and Repackaging of Radiopharmaceuticals by State-Licensed Nuclear Pharmacies.”  The guidance addresses conditions under which the FDA does not intend to take action for violations of 505, 502(f)(1) and 501(a)(2)(B) of the Food, Drug and Cosmetic Act (“FD&C Act”) when a 503A state-licensed nuclear pharmacy that is not a 503B outsourcing facility compounds or repackages radiopharmaceuticals for human use.  Although the guidance will need some tweaking and it fails to acknowledge ongoing distribution problems in the radiopharmacy supply chain, it is a very welcome development given that the most recent official Agency guidance on this topic was issued in 1984.

Yes – 1984.  For this reason alone, please join us and many others across the country as we ring in the New Year with a toast to FDA.  Cheers!

As a threshold issue, the guidance acknowledges that although radiopharmaceuticals are generally not eligible for the 503A exemptions, there are certain circumstances under which the FDA will not take action for violations of the FD&C Act.  Specifically, the guidance sets forth two major categories of these circumstances: (1) “minor deviations” and repackaging; and (2) compounding other than minor deviations.

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Key Provisions of 21st Century Cures Act – Interest to Drug/Device Clients

On December 13, 2016, President Obama signed into law the 21st Century Cures Act (Cures Act). It is hoped that provisions in the new bill, and the $6.3 billion it provides for medical research over the next decade, will spur innovation and new progress in medical treatments for the patients who need them.

This Client Briefing summarizes and analyzes the provisions in the Cures Act related to drug, device, and biologic development and approval. A companion Client Briefing focuses on provisions of the Cures Act that have not received as much attention but are equally significant, those affecting the Medicare and Medicaid programs. In addition, our recent blog post addresses the Cures Act provisions regarding mental health and substance abuse, and funding for combating opioid abuse.

To read more about the major drug, device, and biologic development and approval provisions contained in the Cures Act, read our full Client Briefing here.