Justia Government & Administrative Law Opinion Summaries

A biotechnology company developed a gene therapy for two hereditary blood disorders, which may negatively affect patients’ fertility. To address potential deterrence due to fertility concerns, the company created a program offering up to $70,000 for fertility services to patients receiving the therapy. The program was initially limited to privately insured patients, as the company was concerned it might violate federal healthcare statutes if extended to federally insured patients. To clarify the legality, the company requested an advisory opinion from the Department of Health and Human Services (HHS), arguing that the program did not violate relevant statutes and, alternatively, qualified for statutory exceptions.After significant delays and exchanges, HHS issued an unfavorable advisory opinion, concluding the program violated both the Anti-Kickback Statute (AKS) and the Beneficiary Inducement Statute (BIS), and denied immunity from enforcement. The company sued HHS and its officials in the United States District Court for the District of Columbia, challenging both the advisory opinion and the regulations governing timing for advisory opinions. The district court granted summary judgment to HHS, finding that the program violated the AKS and deferring to HHS’s reasoning regarding the BIS exception, while dismissing the challenge to the timing regulations as moot after the opinion was issued.On appeal, the United States Court of Appeals for the District of Columbia Circuit reviewed the district court’s decision de novo. The court affirmed summary judgment for HHS regarding the AKS, holding that the program constituted prohibited remuneration intended to induce patients to purchase the therapy. However, it reversed as to the BIS, finding HHS’s determination arbitrary and capricious due to its failure to explain why the statutory exception did not apply. The court also held that the company had standing to challenge HHS’s timing regulations and that those regulations unlawfully evaded the statutory deadline. The judgment was affirmed in part, reversed in part, and remanded. View "Vertex Pharmaceuticals Inc. v. HHS" on Justia Law

A pharmaceutical company that manufactures both branded and generic drugs challenged the federal agency rules implementing the Medicare Drug Price Negotiation Program created under the Inflation Reduction Act of 2022. Specifically, the company objected to two rules: first, the agency’s grouping of two drugs with the same active ingredient and manufacturer, but approved under separate applications, as one “qualifying single source drug” for price negotiation; and second, the agency’s requirement that a generic drug must be engaged in “bona fide marketing” to be considered as marketed, which affects when a branded drug exits the negotiation program. The company argued that these rules exceeded the agency’s statutory authority and that the program deprived it of protected property interests without due process.The United States District Court for the District of Columbia reviewed the case. It found that the statutory bar on judicial review did not prevent the company’s challenges to generally applicable agency guidance. On the merits, the district court upheld the agency’s definition of a qualifying single source drug, ruled that the challenge to the “bona fide marketing” standard was not yet ripe, and rejected the due process claim due to lack of a protected property interest. The company appealed.The United States Court of Appeals for the District of Columbia Circuit reviewed the case de novo. The appellate court held that the statutory review bar precludes review only of drug-specific determinations, not generally applicable legal standards. On the merits, it concluded that the statute permits the agency to treat drugs with the same active ingredient and manufacturer as one statutory drug. The court found that the due process challenge failed because the company lacked a protected property interest. However, it determined that the challenge to the “bona fide marketing” requirement was ripe and remanded that issue to the district court for further proceedings. The court thus affirmed in part, reversed in part, and remanded. View "Teva Pharmaceuticals USA, Inc. v. Kennedy" on Justia Law

A pharmaceutical company acquired the rights to a cancer drug called Tibsovo from another manufacturer in April 2021, including the drug’s existing stock and its New Drug Application (NDA). After the acquisition, the company sold the previously manufactured Tibsovo tablets to Medicare Part D patients for the remainder of 2021. While the company began producing its own Tibsovo tablets that year, those were not dispensed to any Part D patient until February 2022. The company had no other Part D drug sales in 2021.When the company sought to participate in the Medicare Manufacturer Discount Program, which requires manufacturers to offer discounts on certain drugs but allows “specified manufacturers” and “specified small manufacturers” a more gradual phase-in, the Centers for Medicare & Medicaid Services (CMS) determined that the company qualified only as a specified manufacturer. CMS found that, although the company owned Tibsovo’s NDA and had manufactured new tablets in 2021, none of those were dispensed to Part D patients during the relevant period; all Tibsovo dispensed in 2021 was manufactured by the prior owner. As a result, the company had zero qualifying sales for 2021 and could not meet the additional requirement for specified small manufacturers.The United States District Court for the District of Columbia granted summary judgment for the government, holding that CMS’s decision was lawful and rejecting the company’s statutory and administrative challenges.On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed. The court held that to qualify as a specified small manufacturer, a company must have actually produced, prepared, propagated, compounded, converted, or processed the units of the drug dispensed to Part D patients in 2021. Mere ownership or responsibility for the drug was not enough. The court also rejected challenges to CMS’s use of labeler codes as a means of identifying manufacturers. The district court’s judgment was affirmed. View "Servier Pharmaceuticals LLC v. Kennedy" on Justia Law

A pharmaceutical company developed a medication for a sleep disorder that primarily affects blind individuals. The company’s drug label included the brand name and dosage in both regular print and braille, along with instructions for pharmacists not to cover the braille and to dispense the drug in its original container. When a competing manufacturer sought approval from the Food and Drug Administration (FDA) to market a generic version, its proposed label omitted the braille and related instructions. The FDA approved the generic’s label without these features. The original manufacturer objected, arguing that omitting the braille and instructions violated statutory requirements for generic drugs to have labeling “the same as” the brand-name product, except for changes required due to a different manufacturer.The United States District Court for the District of Columbia granted summary judgment in favor of the FDA and the generic manufacturer, holding that the omission of braille and the accompanying instructions fell within the statutory exception for changes required due to a different manufacturer. The court also rejected arguments that the FDA acted arbitrarily or capriciously.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and held that the statutory exception for changes “required” by a different manufacturer applies only to changes that are mandatory, not merely optional or safe. The court concluded that omitting the brand name in braille was required, but omitting the dosage in braille and the related pharmacist instructions was not shown to be necessary due to the manufacturer change. The court vacated the grant of summary judgment on this issue and remanded the case for the agency to determine whether the generic label, without braille dosage or instructions, still meets the requirement of being “the same as” the brand-name label. The court otherwise affirmed the district court’s judgment. View "Vanda Pharmaceuticals, Inc. v. FDA" on Justia Law

The plaintiff participated in a clinical trial for an experimental COVID-19 vaccine manufactured by AstraZeneca in November 2020. Before receiving the vaccine, she signed an informed-consent form stating that AstraZeneca would compensate her for injuries caused by the vaccine, including providing medical care and reimbursement, and that the company had an insurance policy to cover such costs. The form also disclosed that federal law may limit her right to sue for vaccine-related injuries, referencing the Public Readiness and Emergency Preparedness Act (PREP Act), which provides broad immunity to vaccine manufacturers during a public health emergency.After suffering debilitating medical injuries from the vaccine, the plaintiff requested compensation and care from AstraZeneca, which was denied. She then filed suit in the United States District Court for the District of Utah, alleging breach of contract and breach of the contractual duty of good faith and fair dealing. AstraZeneca moved to dismiss the complaint, arguing that the PREP Act immunized it from liability. The district court denied the motion, holding that the PREP Act’s immunity provision applies only to tort claims, not to contract-based claims. The court further reserved judgment on whether AstraZeneca had waived its statutory immunity in the informed-consent form.The United States Court of Appeals for the Tenth Circuit reviewed the case and reversed the district court’s ruling. The appellate court held that the PREP Act’s immunity provision applies to “all claims for loss,” including those arising from breach of contract, provided they bear a causal relationship to the administration or use of a covered countermeasure like a vaccine. The court remanded the case for the district court to consider whether AstraZeneca waived immunity in the informed-consent form. View "Dressen v. AstraZeneca AB" on Justia Law

A pharmaceutical manufacturer participating in the federal 340B Drug Pricing Program challenged a Missouri law that prohibits manufacturers from restricting the delivery of discounted 340B drugs to contract pharmacies associated with covered entities. The manufacturer argued that its policy of limiting deliveries to only one contract pharmacy conflicted with Missouri’s statute, which requires delivery to all contract pharmacies designated by covered entities. The manufacturer sought declaratory and injunctive relief, claiming the Missouri statute violated the dormant Commerce Clause and was preempted by federal law.The United States District Court for the Western District of Missouri granted a motion to dismiss the manufacturer’s preemption claims, finding Missouri’s statute did not conflict with federal patent or drug exclusivity laws or the 340B Program, and that Eighth Circuit precedent foreclosed the field preemption argument. The court denied the motion to dismiss the dormant Commerce Clause claim, but ultimately denied the manufacturer’s motion for a preliminary injunction, concluding the manufacturer was unlikely to succeed on the merits of its claims, had not shown irreparable harm, and that the balance of equities and public interest weighed against preliminary relief.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s denial of preliminary injunction under the abuse of discretion standard. The appellate court affirmed the district court’s decision, holding that the Missouri statute regulates only in-state delivery of 340B drugs and does not impermissibly control extraterritorial commerce, discriminate against interstate commerce, or impose excessive burdens in relation to local benefits. The court also found the manufacturer’s preemption claims foreclosed by Eighth Circuit precedent and concluded the statute is neither field nor conflict preempted. The district court’s denial of preliminary injunctive relief was affirmed. View "Novartis Pharmaceuticals Corp. v. Hanaway" on Justia Law

Norwich Pharmaceuticals sought to market a generic version of Xifaxan, a drug invented by Salix Pharmaceuticals for treating irritable bowel syndrome with diarrhea and hepatic encephalopathy. Norwich submitted an Abbreviated New Drug Application (ANDA) to the FDA, identified as number 214369. Salix believed this ANDA infringed its patents and sued Norwich in the United States District Court for the District of Delaware. That court found Norwich’s ANDA infringed Salix’s patents related to hepatic encephalopathy, while the patents for irritable bowel syndrome were invalid as obvious. The court’s final judgment barred FDA approval of Norwich’s ’369 ANDA until Salix’s hepatic encephalopathy patents expired in October 2029.Following the judgment, Norwich amended its ’369 ANDA to remove the indication for hepatic encephalopathy and requested the Delaware District Court modify its judgment to allow immediate FDA approval of the amended ANDA. The court denied this motion, reasoning that Norwich could not change its ANDA after final judgment to circumvent the prior ruling. Norwich appealed to the United States Court of Appeals for the Federal Circuit, which agreed the judgment restricted approval of the entire ANDA, including non-infringing indications, until 2029, and affirmed the Delaware District Court’s decision.After the FDA declined to grant final approval of Norwich’s amended ANDA, instead issuing only tentative approval, Norwich sued in the United States District Court for the District of Columbia, arguing the FDA acted arbitrarily and capriciously. The court granted summary judgment to the FDA and Salix. On appeal, the United States Court of Appeals for the District of Columbia Circuit held that the Delaware District Court’s judgment applied to Norwich’s ANDA as amended, so the FDA correctly delayed final approval until October 2029. The appellate court affirmed the district court’s judgment. View "Norwich Pharmaceuticals, Inc. v. Kennedy" on Justia Law

After the Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization returned abortion regulation to the states, the Food and Drug Administration (FDA) changed its rules to allow the abortion drug mifepristone to be prescribed online and sent by mail, eliminating the prior requirement for in-person doctor visits. The State of Louisiana, joined by an individual plaintiff, challenged this 2023 regulation (the “2023 REMS”) under the Administrative Procedure Act (APA), arguing that the FDA’s decision was not supported by sufficient data and resulted in illegal abortions and increased Medicaid costs within the state.The United States District Court for the Western District of Louisiana found that Louisiana had standing, was likely to succeed on the merits, and was suffering irreparable harm. However, the district court declined to stay the regulation, reasoning that the balance of equities and public interest favored denying immediate relief. Instead, the district court stayed the litigation to allow the FDA to complete its ongoing review of mifepristone’s safety protocols, which the FDA admitted had previously lacked adequate consideration.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed whether a stay of the 2023 REMS pending appeal was warranted under 5 U.S.C. § 705. The Fifth Circuit concluded that Louisiana was strongly likely to succeed on the merits because the FDA’s removal of the in-person dispensing requirement was arbitrary and capricious, relied on insufficient data, and was inadequately explained. The court further found that Louisiana faced ongoing irreparable harm to its sovereign interests and financial losses. The appellate court determined that neither the FDA’s nor the manufacturers’ interests outweighed Louisiana’s injuries or the public interest, and that a stay of the regulation was appropriate. The court therefore granted Louisiana’s motion for a stay pending appeal. View "Louisiana v. FDA" on Justia Law

A group of businesses and consumers involved in the sale and manufacture of consumable hemp products containing manufactured delta-8 THC challenged actions taken by the Texas Department of State Health Services and its commissioner. Following federal and state legislative changes in 2018 and 2019 that removed “hemp” and certain tetrahydrocannabinols (THC) in hemp from the definition of controlled substances, the Texas commissioner objected to a federal rule that would have further decontrolled hemp-derived extracts, including delta-8 THC. The commissioner then amended the state schedules to clarify that manufactured delta-8 THC remained a Schedule I controlled substance, leading to substantial business disruption for the vendors who had entered the delta-8 market.The vendors sued in district court, arguing that the commissioner exceeded her authority both procedurally and substantively under Texas law by modifying the schedules in a way that contradicted the Texas Farm Bill, and that the Department’s website statement about delta-8 THC was an invalid rule under the Texas Administrative Procedure Act (APA). The trial court denied the Department’s plea to the jurisdiction (challenging standing and sovereign immunity) and issued a temporary injunction against enforcement of the amended schedules and the website statement. The Court of Appeals for the Third District of Texas affirmed, concluding that the vendors had standing, the claims were justiciable, and a temporary injunction was appropriate.The Supreme Court of Texas held that the vendors had standing and their claims were ripe for review. However, it concluded that the commissioner acted within her broad statutory discretion and followed proper procedures under Health & Safety Code § 481.034(g) in objecting to the federal rule and amending the schedules. The court also held that the website statement was not an APA “rule.” Accordingly, it reversed the injunction and rendered judgment for the Department, with the only affirmed portion being the finding of standing. View "TEXAS DEPARTMENT OF STATE HEALTH SERVICES v. SKY MARKETING CORP." on Justia Law

A group of pharmaceutical manufacturers that participate in the federal 340B drug pricing program challenged a new West Virginia law, S.B. 325, which imposed restrictions and penalties on manufacturers regarding the delivery of discounted drugs to contract pharmacies. The 340B program is a federal scheme where drug manufacturers provide discounts to designated health care providers (“covered entities”) in exchange for access to the Medicaid market. Dissatisfied with the federal program’s scope, West Virginia enacted S.B. 325, which specifically barred manufacturers from restricting delivery of 340B drugs to any location authorized by a covered entity (including contract pharmacies), and from requiring data submission as a condition for delivery, with significant penalties for violations.The manufacturers sued in the United States District Court for the Southern District of West Virginia seeking to enjoin enforcement of S.B. 325, arguing that it was preempted by federal law. The district court found that the manufacturers were likely to succeed on the merits of their preemption claim, that they faced irreparable harm, and that the balance of equities and public interest favored injunctive relief. The court granted a preliminary injunction against enforcement of the statute.On appeal, the United States Court of Appeals for the Fourth Circuit addressed whether S.B. 325 was preempted by federal law. The Fourth Circuit held that S.B. 325 likely interferes with the federal 340B program by imposing additional conditions on manufacturers solely because of their participation in a federal program, thereby intruding into a domain reserved for federal regulation. The court found that Congress had struck a careful bargain in the 340B program and that West Virginia’s law sought to alter that bargain in a way that conflicted with federal objectives and the enforcement scheme administered by the Department of Health and Human Services. The Fourth Circuit affirmed the district court’s preliminary injunction, barring enforcement of S.B. 325. View "Pharmaceutical Research & Manufacturers of America v. McCuskey" on Justia Law