Category: Uncategorized

FDA Toughens Enforcement of Homeopathic Products

FDA recently announced that it was taking two significant actions with respect to products marketed as homeopathic drugs, suggesting that increased enforcement related to these products is imminent. Homeopathy is a form of alternative medicine that is based on the idea that illnesses and their symptoms can be treated by small doses of ingredients that produce similar symptoms in healthy people.

First, the Agency has withdrawn Compliance Policy Guide (CPG) Sec. 400.400, entitled “Conditions Under Which Homeopathic Drugs May be Marketed.” The CPG was issued in 1988 and described an enforcement policy that permitted unapproved homeopathic drugs to be marketed if certain conditions related to labeling, ingredients, manufacturing, and other considerations were met. In withdrawing the CPG, the Agency observed that products that seemed to meet the criteria described in the CPG nonetheless caused or could have caused serious harm.

Second, the Agency has revised its draft guidance entitled “Drug Products Labeled as Homeopathic.” The revised draft guidance describes enforcement priorities for homeopathic drugs marketed without required approval. According to the revised draft guidance, these priorities include:

•Products with reports of injury that, after evaluation, raise potential safety concerns.  For example, MedWatch reports on other information submitted to the Agency can indicate or signal a potential association between the product and an adverse event, medication errors, or other safety issues.

•Products that contain or purport to contain ingredients associated with potentially significant safety concerns. For example, potentially significant safety concerns are raised by products that contain or purport to contain:

– An infectious agent with the potential to be pathogenic;

– A controlled substance, as defined in the Controlled Substances Act, 21 U.S.C. 812;

– Multiple ingredients that, when used in combination, could result in possible interactions, synergistic effects, or additive effects of the various ingredients; and,

– Ingredients that pose a risk of toxic, or other adverse effects, particularly when the ingredients are concentrated or in low dilution presentations (e.g., 1X, 2X, or 1C), or are not adequately controlled in the manufacturing process.

  • Products for routes of administration other than oral and topical. . . .
  • Products intended to be used for the prevention or treatment of serious and/or life-threatening diseases or conditions. . . .
  • Products for vulnerable populations. . . .
  • Products with significant quality issues. . . .

The revised draft guidance stresses that “nothing in the FD&C Act exempts homeopathic drug products from any of the requirements related to approval, adulteration, or misbranding, including labeling requirements.” It further emphasizes that “any homeopathic drug product that is being marketed illegally is subject to FDA enforcement at any time.”

©2019 Greenberg Traurig, LLP. All rights reserved.

For more FDA regulations, see the National Law Review Biotech, Food & Drug law page.

CMS’s Request for Information Provides Additional Signal That AI Will Revolutionize Healthcare

On October 22, 2019, the Centers for Medicare and Medicaid Services (“CMS”) issued a Request for Information (“RFI”) to obtain input on how CMS can utilize Artificial Intelligence (“AI”) and other new technologies to improve its operations.  CMS’ objectives to leverage AI chiefly include identifying and preventing fraud, waste, and abuse.  The RFI specifically states CMS’ aim “to ensure proper claims payment, reduce provider burden, and overall, conduct program integrity activities in a more efficient manner.”  The RFI follows last month’s White House Summit on Artificial Intelligence in Government, where over 175 government leaders and industry experts gathered to discuss how the Federal government can adopt AI “to achieve its mission and improve services to the American people.”

Advances in AI technologies have made the possibility of automated fraud detection at exponentially greater speed and scale a reality. A 2018 study by consulting firm McKinsey & Company estimated that machine learning could help US health insurance companies reduce fraud, waste, and abuse by $20-30 billion.  Indeed, in 2018 alone, improper payments accounted for roughly $31 billion of Medicare’s net costs. CMS is now looking to AI to prevent improper payments, rather than the current “pay and chase” approach to detection.

CMS currently relies on its records system to detect fraud. Currently, humans remain the predominant detectors of fraud in the CMS system. This has resulted in inefficient detection capabilities, and these traditional fraud detection approaches have been decreasingly successful in light of the changing health care landscape.  This problem is particularly prevalent as CMS transitions to value-based payment arrangements.  In a recent blog post, CMS Administrator, Seema Verma, revealed that reliance on humans to detect fraud resulted in reviews of less than one-percent of medical records associated with items and services billed to Medicare.  This lack of scale and speed arguably allows many improper payments to go undetected.

Fortunately, AI manufacturers and developers have been leveraging AI to detect fraud for some time in various industries. For example, the financial and insurance industries already leverage AI to detect fraudulent patterns. However, leveraging AI technology involves more than simply obtaining the technology. Before AI can be used for fraud detection, the time-consuming process of amassing large quantities of high quality, interoperable data must occur. Further, AI algorithms need to be optimized through iterative human quality reviews. Finally, testing the accuracy of the trained AI is crucial before it can be relied upon in a production system.

In the RFI, CMS poses many questions to AI vendors, healthcare providers and suppliers that likely would be addressed by regulation.  Before the Federal government relies on AI to detect fraud, CMS must gain assurances that AI technologies will not return inaccurate or incorrect outputs that could negatively impact providers and patients. One key question raised involves how to assess the effectiveness of AI technology and how to measure and maintain its accuracy. The answer to this question should factor heavily into the risk calculation of CMS using AI in its fraud detection activities. Interestingly, companies seeking to automate revenue cycle management processes using AI have to grapple with the same concerns.  Without adequate compliance mechanisms in place around the development, implementation and use of AI tools for these purposes, companies could be subject to high risk of legal liability under Federal False Claims Act or similar fraud and abuse laws and regulations.

In addition to fraud detection, the RFI is seeking advice as to whether new technology could help CMS identify “potentially problematic affiliations” in terms of business ownership and registration.  Similarly, CMS is interested to gain feedback on whether AI and machine learning could speed up current expensive and time-consuming Medicare claim review processes and Medicare Advantage audits.

It is likely that this RFI is one of many signals that AI will revolutionize how healthcare is covered and paid for moving forward.  We encourage you to weigh in on this on-going debate to help shape this new world.

Comments are due to CMS by November 20, 2019.

©2019 Epstein Becker & Green, P.C. All rights reserved.

For more CMS activities, see the National Law Review Health Law & Managed Care page.

University Of Surrey Announces New Study On Microbial Organisms To Digest Plastic Waste

On October 16, 2019, the University of Surrey, United Kingdom, announced that its researchers have partnered with colleagues from France, Germany, and Spain to start working on a new technique to tackle plastic waste. According to the university’s article, this novel technique may revolutionize the recycling industry. The plan is to create engineered microbial communities that will digest two types of plastic polymers — polyethylene terephthalate (PET) and polyurethane (PU) — and transform them into molecules that can be used to develop a more environmentally friendly material called Bio-PU. This more environmentally friendly material is often used as a construction and insulation material.

According to the University of Surrey, current physical or chemical methods to degrade PET and PU are inefficient. Impurities in PET polymers and high energy costs associated with the high temperatures required to break down the material make its degradation very difficult. Similarly, degradation of PU is limited due to the difficulty in breaking down urethane bonds in the material. Given these challenges, University of Surrey Senior Lecturer in synthetic biology Dr. Jose Jimenez highlights that “[m]oving away from the reliance on single use plastics is a positive step; however, the problem of how we deal with current plastic waste still needs to be addressed.” Hence, the project will investigate the ability of microorganisms to digest plastic waste and turn it into a more environmentally friendly material that can be recycled.

©2019 Bergeson & Campbell, P.C.

For more plastics pollution activities, see the National Law Review Environmental, Energy & Resources law page.

Hackers Eavesdrop and Obtain Sensitive Data of Users Through Home Smart Assistants

Although Amazon and Google respond to reports of vulnerabilities in popular home smart assistants Alexa and Google Home, hackers continually work hard to exploit any vulnerabilities to be able to listen to users’ every word to obtain sensitive information that can be used in future attacks.

Last week, it was reported by ZDNet that two security researchers at Security Research Labs (SRLabs) discovered that phishing and eavesdropping vectors are being used by hackers to “provide access to functions that developers can use to customize the commands to which a smart assistant responds, and the way the assistant replies.” The hackers can use the technology that Amazon and Google provides to app developers for the Alexa and Google Home products.

By putting certain commands into the back end of a normal Alexa/Google Home app, the attacker can silence the assistant for long periods of time, although the assistant is still active. After the silence, the attacker sends a phishing message, which makes the user believe had nothing to do with the app that they interacted with. The user is then asked for the Amazon/Google password and sends a fake message to the user that looks like it is from Amazon or Google. The user is then sent a message claiming to be from Amazon or Google and asking for the user’s password. Once the hacker has access to the home assistant, the hacker can eavesdrop on the user, keep the listening device active and record the users’ conversations. Obviously, when attackers eavesdrop on every word, even when it appears the device is turned off, they can obtain information that is highly personal and can be used malevolently in the future.

The manufacturers of the home smart assistants reiterate to users that the devices will never ask for their account password. Cyber hygiene for home assistants is no different than cyber hygiene with emails.

Copyright © 2019 Robinson & Cole LLP. All rights reserved.

For more hacking risk mitigation, see the National Law Review Communications, Media & Internet law page.

Cannabis Coming to the Northeast? Governors of NY, NJ, CT and PA Adopt “Core Principles” to Implement Adult-Use Legislation.

On October 17, 2019, Governor Cuomo of New York, Governor Lamont of Connecticut, Governor Murphy of New Jersey and Governor Wolf of Pennsylvania co-hosted the first Cannabis Regulation and Vaping Summit to create a set of uniform principles each state can implement through its adult-use legislation to standardize regulations across the region.

The summit resulted in an agreed-to set of core principles for rolling out adult-use legislation, including (1) market regulation and empowerment, (2) public health, (3) public safety and enforcement, and (4) vaping best practices. Also attending the summit were representatives from Rhode Island, Massachusetts and Colorado.

Market Regulation and Empowerment

When creating adult-use legislation and regulation, the states will implement agreed-to guidelines to set cannabis tax structures and to ensure that social justice initiatives are key components of the legislation. The guidelines discussed include:

  • Implementing social equity initiatives to ensure industry access to those disproportionately impacted by the war on drugs
  • Maintaining awareness of the need to ensure a fair and competitive market by deploying strategies such as limiting the number of licenses or license types
  • Implementing a similar overall tax structure for cannabis products between the four states
  • Providing guidance to open up banking to the industry
  • Implementing meaningful social justice reform such as expediting expungements or pardons and waiving associated fees.

Public Health

Concerned that decreasing production costs might lead to inexpensive high-potency products, the four governors agreed to standardized product safety and testing requirements and impose restrictive advertising requirements to ensure youth are not targeted. These principles include:

  • Prohibiting advertising and product forms that target minors
  • Restricting advertising to audiences that are for the most part over the age of 21
  • Banning adverting and products that appeal to youth, such as flavored cannabis products
  • Restricting cannabis sales to purchasers over the age of 21
  • Collecting and sharing cannabis use data to better understand public health outcomes
  • Limiting the cannabis possession amount and limiting the overall THC content of products to discourage over-consumption and accidental overdose.

Public Safety and Enforcement

To help ensure highway safety and improve options for testing cannabis impairment in the field, the states agreed to the following guidelines:

  • Uniform treatment of drug recognition expert evidence
  • Uniform standard for blood or saliva tests
  • Training for drug recognition experts
  • Methods for sharing information on suspected “bad actions” in legal markets
  • Law enforcement strategies to police the illicit market.

Vaping Best Practices

The states agreed to principles to regulate the entire vaping industry, including vapes containing nicotine, CBD and THC. Using the following guidelines, the states will share strategies and solutions for investigating illicit THC vape pens and regulating filler oils and carrier fluids:

  • Banning or regulating the sale of flavored vapes to reduce use among youth
  • Implementing vape product safety standards for nicotine and cannabinoids that include diluents, excipients and cutting agents
  • Regulating temperature control for vape heating mechanisms
  • Increasing enforcement actions to prevent sale to minors.

New York will aim to pass adult-use legislation during the 2020 legislative session, which begins in January. It is expected that Governor Cuomo will include a cannabis plan in his budget proposal, as he did last year.

© 2019 Wilson Elser

For more cannabis regulation, see the National Law Review Biotech, Food & Drug Law page.

FDA Recommends New Warnings for Breast Implants Alleged to Cause Cancer

On October 24, 2019, the United States Food and Drug Administration (“FDA”) issued a draft guidance addressing textured breast implants that have been linked to breast implant-associated anaplastic large cell lymphoma (“BIA-ALCL”).”

Part of that guidance recommends a Black Box Warning, the most serious level of warning, in the device’s labeling to help ensure women receive and understand information regarding the serious risks of textured breast implants. Part of that warning should include:

  • breast implants are not lifetime devices;

  • the chances of developing complications increase the longer a patient has the implant, and additional surgery may be required to address the complications; and

  • breast implants have been associated with the risk of developing breast implant-associated anaplastic large cell lymphoma (BIA-ALCL) and may be associated with systemic symptoms (like fatigue or joint pain).

Additionally, the draft guidance recommends that textured breast implant manufacturers include a patient decision checklist at the end of a patient informational booklet or brochure. A patient decision checklist gives patients the opportunity to acknowledge individual risks of textured breast implants and can be used to help guide discussion during a patient’s consultation with a surgeon. The proposed checklist specifically addresses the risk of BIA-ALCL.

Finally, the FDA confirmed that it is coordinating with the American Society of Plastic Surgeons and the Plastic Surgeons Foundation, to develop the Patient Registry and Outcomes for Breast Implants and Anaplastic Large Cell Lymphoma Etiology and Epidemiology, which collects data from patients with a confirmed diagnosis of BIA-ALCL. The FDA contends that this will contribute to a better understanding of textured breast implants and BIA-ALCL, as well as improve FDA communication updates to the public regarding textured breast implants and BIA-ALCL.

COPYRIGHT © 2019, STARK & STARK

For more FDA medical device regulation, see the National Law Review Products Liability law page.

London–IBOR’s Falling Down, Falling Down

The IRS has released proposed regulations that provide a fluid transition to the use of references rates other than the interbank offered rates, such as the London Interbank Offered Rate (LIBOR), in debt instruments and financial products. In July 2017, the UK Financial Conduct Authority announced that the LIBOR might be phased out after 2021. The announcement came amid concerns of manipulation, a decline in the volume of funding from which the LIBOR is calculated, and recommendations for the development of a reference rate based on transactions in a more robust market. The Alternative Reference Rates Committee (ARRC), a group of private-market participants convened by the Federal Reserve Board and the New York Fed, recommended the Secured Overnight Financing Rate (SOFR) as a replacement to the LIBOR, and petitioned the IRS for guidance on the tax consequences of the transition from the LIBOR to the SOFR.

In an effort to “minimize potential market disruption and . . . facilitate an orderly transition in connection with the phase-out” of the LIBOR and other similar reference rates, the IRS issued flexible proposed regulations based on the ARRC’s recommendations. The regulations address seven key areas of the Internal Revenue Code and Treasury Regulations impacted by the change in reference rates. These areas include: (1) the potential gain recognized on modification of debt instruments to change the reference rate; (2) the dissolution of integrated instruments as a result of termination or legging out of an integrated hedge; (3) the source and character of one-time payments used as an alternative to an adjustment to the spread between the LIBOR and SOFR; (4) the conversion of grandfathered debt instruments to registration-required obligations; (5) whether debt-instruments referencing the SOFR will qualify as variable rate debt instruments; (6) the preclusion of “regular interest” classification in a real estate mortgage investment conduit; and (7) foreign bank corporations’ use of the SOFR to calculate interest expense allocable to excess US-connected liabilities.

The regulations generally allow the SOFR to be a replacement for the LIBOR and provide guidance that ensures the tax impacts of the transition from LIBOR to SOFR will be minimal. For example, the parties may generally modify debt instruments to change the reference rate without triggering potential gain or loss that may normally result from material changes to the interest rate of a debt instrument under the significant modification rules.

Taxpayers may rely on these proposed regulations for changes made to debt instruments on or after October 9, 2019.

© 2019 Jones Walker LLP

Update on the Public Charge Rule

Despite litigation that enjoined USCIS from proceeding with the implementation of the Public Charge Rule, Department of State (DOS) seemed ready to proceed with it at Consulates abroad.

But, as of this week, DOS is no longer “fast-tracking” the Public Charge Rule. It withdrew its request for emergency review of its new public charge form, DS-5540, that it proposes to use to determine if applicants are “self-sufficient and not a strain on public resources” and, on October 24, 2019, began a 60-day comment period.

Once the comment period is over, Office of Management and Budget (OMB) review will take place. How long that review will run is hard to know. If the experience with the OMB review of another controversial Trump Administration rule – the rescission of the H-4 EAD Rule – provides any indication, the review could go on for months.

Jackson Lewis P.C. © 2019
For more developments, see the National Law Review Immigration law page.

Court Finds Medical Bill Reimbursement Claim Subject to “Biblically-Based Mediation and Arbitration”

A Mississippi federal court granted a motion to compel arbitration of a claim for reimbursement of medical expenses from the defendant, a company that provides health care sharing plan alternatives to those of Christian faith. The plaintiff had signed a membership agreement stating that he would abide by the defendant’s guidelines, under which members, such as the plaintiff, were required to exhaust an “appeals” process for challenging bill-sharing decisions before resorting to any sort of legal procedures against the defendant. If the appeals process did not resolve the dispute, a “biblically-based mediation and arbitration” clause in the guidelines stated that any and all disputes arising out of the membership agreement shall be settled by “biblically-based mediation.” If that mediation fails, the member may submit the dispute to an independent and objective arbitrator for binding arbitration but otherwise waives his or her right to file a lawsuit.

Addressing the defendant’s motion, the court first held that the provision above constituted a valid arbitration agreement and that the subject dispute fell within the scope thereof. The court noted that the plaintiff had indeed agreed that he “will bring no suit, legal claim or demand of any sort … in the civil court system, with the sole exception of enforcing any favorable arbitration award or mediated agreement.” As such, the court explained that arbitration was required unless a federal statute or policy rendered the plaintiff’s claim non-arbitrable. Because the plaintiff failed to identify any such statute or policy, the court granted the defendant’s motion to compel arbitration.

Pettey v. Medi Share, No. 2:19-cv-00059 (S.D. Miss. Oct. 1, 2019).

©2011-2019 Carlton Fields, P.A.

ARTICLE BY Alex B. Silverman of Carlton Fields.

Predicting Old Man Winter and Energy Outlooks: Is it Anyone’s Guess?

Whether we have a strong winter impacts many things.  From our road conditions driving to work, the extent of demand for home heating fuels, how our livestock will fair, and our ski season (including vital tourist revenue that results from ski season), predicting the degree of the intensity of the winter season can be important.

But this year it looks like it could be anyone’s guess…some degree of certainty would be nice, as it can have a major impact on energy forecasts as well.  For example, natural gas and propane demand.

The U.S. Energy Information Administration (“EIA”) released its Short-Term Energy Outlook (“STEO”) earlier this month, which can be found here.  The October STEO contains a lot of interesting information, including, but not limited to, that the “EIA expects downward oil price pressure to emerge in the coming months as global oil inventories rise during the first half of 2020.”

However, what really caught my eye in the October STEO was the EIA’s prediction as to the upcoming winter.

In my neck of the woods, cattle ranchers are bracing for a big winter – folks are beefing up (pun intended) winter structures in their pastures to give their cows some protection from intense snow storms, and old timers are warning to push calving season later this year to avoid calves being born during the worst of the early spring snow storms.  Many people in my home state of Wyoming have already buttoned up their summer homes in the mountains and have had snowfall since the beginning of the month.  According to The Weather Channel article entitled, It’s a Record-Snowy Start For the Northern Rockies and Plains and Winter Is Still Over 2 Months Away, some areas have already been pounded by record-dumping snowstorms.

In fact, The Old Farmer’s Almanac similarly predicts in its winter 2019-2020 forecast, which can be found here, “below-normal winter temperatures” through most of the U.S. coupled with significant snowfall.  The 2020 Old Farmer’s Almanac predicts a “snow-verload” of “frequent snow events – from flurries to no fewer than seven big snowstorms coast to coast, including two in April for the Intermountain region west of the Rockies.”

The October STEO takes a different stance – The EIA forecast as to the winter fuels outlook is based upon a mild winter.  Indeed, the October STEO provides the following winter fuels outlook:

  • “The [EIA] forecasts that average household expenditures for all major home heating fuels will decrease this winter compared with the last.  This forecast largely reflects warmer expected winter temperatures compared with last winter.”

The National Oceanic and Atmospheric Administration (“NOAA”) also released the following prediction:  Winter Outlook: Warmer than average for many, wetter in the North, which forecasts “warmer-than-average temperatures…for much of the U.S. this winter.”  NOAA predicts that “[n]o part of the U.S. is favored to have below-average temperatures this winter.”

The Weather Channel seems to take the middle road in its forecast entitled, Winter 2019-20 Will Likely Be Warmer Than Average in Southern U.S. & Colder Than Average in Parts of Northern Tier, and also includes the following disclaimer: “Given some of the conflicting factors listed above, this forecast will likely change, so be sure to check back to weather.com for updates.”

What will this winter be like and what will the weather’s impact be on the domestic energy outlook?  It is anyone’s guess!

© Steptoe & Johnson PLLC. All Rights Reserved.

For more on the energy industry, see the National Law Review Environmental, Energy & Resources law page.