Singularity Health Law Blog

ATTORNEY GENERAL WANTS TO FIX DRUG SENTENCING

Attorney General Eric Holder announced today that he wants to change the mandatory sentencing guidelines adopted in the 1980s to restrict the discretion of trial judges in imposing lenient sentences on criminal offenders.  The United States has about 5 percent of the world’s population and about 25% of the world’s population that is behind bars, which is straining federal and state budgets and accomplishing very little other than warehousing for the non-violent offenders.

 

IRS SPOILS PHYSICIAN RECRUITMENT CONTRACTS

One of the hallmarks of physician recruitment contracts offered by hospitals and physician groups is the incentive of "foregiveness" of "loans" offered t phy;sicians who are financially underwritten as an inducement to relocate and entier profesioal practice ina particular location. Typically, there is a subidiy of the practice for a few years followdd by a three year or so period of continuing practice ofbligaiton in the community, during which the origional subsidy "loan" is written of over time and the physician is given Form 1099C (cancellation of dept) in the later years of the guarantee arrangement.

Last April, a United States District Court judge in the State of Washington, agreed with the Internal Revenue Service that those kinds of "loans" were in fact compensation and not loans at all. It held that the physician group was liable for failure to withhold from the payments to its physicians. The case was The Vancouver Clinic, Inc. v. The United States of America, 111 AFTR 2d paragraph 2031-632 (2013 DC Wash.).

The Hon. Rondal B. Leighton entered summary judgment in favor of the IRS,holding that because both the group and the physician at the inception had no expectatoin that the incentives would be repaid and that there would never be a repayment of the "loan", it was not in fact a loan.

These kind of incentive arrangments will in the future likely to be designed to have the look and feel of actual loans with effective promissory notes and periodic payments over the term of the loan agreements, including the early years. This is just aother level of complexity in the three dimensional chess game of the multiagency oversight regulation of health care systems.

ON LINE PRODUCTS HELP OFFENDERS PASS DRUG AND ALCOHOL TESTS.

Late last month in St. Charles, Missouri, a 34 year old man named Sydney Levin, on probation for illegal substance possession and felony stealing, was discovered using a prosthetic product known as the Whizzinator to pass synthetic medical grade urine in lieu of his own. He was charged with possessing a “forging instrument” and released on a $25,000. bond. The Whizzinator contains an artificial penis connected to a 4 oz. bag to contain the synthetic urine.  There are heating elements in the apparatus that elevate the temperature to human body levels.  The device comes in three colors, white, black and brown. The product is advertised at $149.95 plus shipping and handling. Rapid Clean Clean Pee is advertised at $15.95 a pack.

CALIFORNIA GAY CURE LAW GOES TO APPEALS COURT

Last year California Governor Jerry Brown signed into law California SB 1172, which makes it illegal to provide “conversion” or “reparative” therapy to homosexuals under the  age of 18 in the state. The issue is whether this an unremarkable and rational exercise of the police power of the state or an infringement of First Amendment rights.   Supporters of the bill assert that the “antigay” therapy is worthless pseudoscience and has the potential of harming young homosexuals who are struggling with identity and self worth issues.  They claim that homosexuality is not a disease or an assumed condition, but an intrinsic or genetic positioning on a natural scale of human sexuality.

 

SCOTUS REELS IN “STATE ACTION” ANTITRUST IMMUNITY DEFENSE

The United States Supreme Court, in a unanimous opinion written Justice Sotomayor, overturned an Eleventh Circuit Court of Appeals and Georgia District Court finding “state action” antitrust immunity in the case of FTC v. Phoebe Putney Health System, Inc. et al, No. 11-1160. Had they ruled otherwise there would have opened a huge whole in the FTC’s ability to regulate anticompetitive conduct by state sub-entities under a general grant of state authority. Georgia like many states has a hospital authorities law that permits counties and or municipalities to create quasi governmental entities with broad grants of powers to operate health care facilities.

WHEN WILL COMPUTERS THINK?

The Obama Administration recently announced the formation of the “Brain Activity Map Project” to be funded by the National Institutes of Health and other public and private foundations and organizations to undertake a ten year study of the human brain. The effort, which is similar to the organized effort to map the human genome is expected to cost at least 300 million dollars a year over the ten years. It is anticipated by scientists that it will be much for complex and difficult to undertake than the genome project. The hope is to develop a complete model of brain activity and the process of neuron firings that lead to cognition.

 

ARE GENE’S PATENTABLE?

The United States Supreme Court will decide the question of whether genes are patentable in the coming term. The decisions has broad implications for the biotechnology industry, for researchers and for patients.  The case at hand is Association for Molecular Pathology v. Myriad Genetics, Inc. originally filed in the U.S. District Court for the Southern District of New York by the ACLU and the Public Patent Foundation.  The object of the case is to challenge a number of patents granted to Myriad, a Utah biotechnology company, by the U.S. Patent and Trademark Office. The patents granted were on DNA isolated from two human genes that increase the risk to women for breast and ovarian cancer.

 

TROUBLING U.S. HEALTH CARE STATS.

The Institute of Medicine and the National Research Counsel announced the pre-publication release of their report on their recent comparison of health care data between the U.S. and 16 other countries which crosses all age categories. The other countries include Canada, Japan, Australia, Germany, Austria, Denmark, Finland, Norway, Portugal, Sweden, Switzerland, the Netherlands, the United Kingdom and Spain. This is a fascinating read entitled U.S. Health in International Perspective: Shorter Lives, Poorer Health is currently available to read on line for free at the National Academies Press website. The U.S. generally finished near the bottom in most categories for the population under the age of 75.  Our post 75 population, outscores their peers elsewhere. 

THE NEW ANTITRUST FRONTIER: “WAXMAIL?”

First, there was blackmail, then there was greenmail, and now there is "Waxmail", a new form of extorted payments arising from the dark corners created by the Hatch-Waxman Act also known as the Drug Price Competition and Patent Term Restoration Act. The original purpose of H-W was to provide incentive for generic drug manufacturers to challenge weak patent claims by pharmaceutical companies by providing an exclusive 180 day right of challenge to the first generic company to raise a challenge to a pharmaceutical patent prior to its expiration. As an unintended consequence of the Act, generic companies are settling their patent suits for multi-million dollar payments that provide that the generic companies will sit on their generic products without bringing them to market for an agreed upon period of time. These are called "reverse payment" agreements. Most federal courts of Appeal to have reviewed these agreements have found them not to constitute violations of the Federal Trade Commission Act, contra to the position taken by the FTC, as long as the time of deference did not extend beyond the scope of the face of the patent.

 

“OFF LABEL” DRUG PROMOTION CONVICTION VIOLATES 1ST AMENDMENT

160 Common U.S. Food and Drug Administration (“FDA”) approved drugs which are used for “off label” purposes represent approximately 21 percent of all prescriptions in the United states. Physicians may prescribe FDA approved drugs for any therapeutic use that is appropriate in their medical judgment. The FDA, however, prohibits pharmaceutical companies and their employees from promoting the use of FDA approved drugs for “off label” use. Although there is no express prohibition in the Food Drug and Cosmetic Act or its regulations prohibiting the promotion of drugs for off label use, the government uses a criminal statute which prohibits the introduction of “misbranded” drugs into interstate commerce ( 21 U.S.C. 331(a) and 333(a)(1) to prosecute pharmaceutical companies, their employees and sometimes physicians who are “promoting” the off-label use of drugs.