United States: State AGs In The News - August 20th, 2015

Hot News

Commissioner Joshua Wright to Leave FTC

  • The Federal Trade Commission (FTC) announced this week that Commissioner Joshua D. Wright, a Republican member of the FTC, will resign his position on Monday, August 24, 2015.
  • Wright, who has been with the agency since January 2013, will return to George Mason University School of Law as a Professor of Law.
  • The announcement was made less than a week after the FTC issued official guiding principles on its Section 5 enforcement authority, which we talked about in last week's post.

Antitrust

Pharmaceutical Companies Settle With FTC Over Generic ADHD Drug Allegations

  • Concordia Healthcare Corp. and Par Pharmaceutical Holdings Inc. settled with the FTC this week regarding Federal Trade Commission (FTC) allegations that the companies engaged in anticompetitive conduct.
  • The FTC alleged that Concordia and Par entered into an agreement in which Concordia and Par agreed not to compete in the sale of the generic version of Kapvay, which treats attention deficit hyperactivity disorder. According to the FTC complaint, Concordia agreed not to sell the generic drug in exchange for a share of Par's revenues, resulting in higher prices for consumers.
  • Under the settlement, among other things, the companies are prohibited from continuing the alleged anticompetitive practice and both companies are prohibited from entering agreements to bar, or delay entry of an authorized generic drug.
  • In June, we reported a similar settlement where Cephalon Inc. and its parent company, Teva Pharmaceutical Industries Ltd., agreed to pay $1.2 billion to settle FTC allegations that Cephalon reached agreements with drug manufacturers that blocked generic drug competition.

Consumer Protection

Forty-nine States and the District of Columbia to Share $71 Million Settlement

  • Numerous State Attorneys General (eg., here, here and here) announced a $71 million multistate settlement this week with Amgen Inc. to resolve allegations that the pharmaceutical company violated consumer protection laws through alleged deceptive and misleading marketing of its Enbrel and Aranesp medications.
  • The states alleged, among other things, that the company unlawfully promoted its anemia drug Aranesp and its arthritis and psoriasis drug Enbrel for off-label uses that were contrary to Food and Drug Administration (FDA) approval and made unapproved and unsubstantiated claims related to the drugs. As part of the Consent Judgment, Amgen must change its marketing and promotional practices and not make any false, misleading, or deceptive claims in promoting Enbrel or Aranesp.
  • West Virginia Attorney General Patrick Morrisey said "[t]his settlement is a win for West Virginia consumers. We enforce our consumer protection laws in a vigorous yet fair manner, and this settlement will help ensure West Virginia doctors and patients aren't deceived by unlawful drug marketing practices."

Data Privacy

Target Settles With Visa Over Data Breach

  • Target Corporation reportedly has reached a settlement agreement with Visa, agreeing to reimburse costs related to its 2013 data breach to Visa and the financial institutions that issued the cards. While Target has not announced a dollar amount, sources say that the retail giant has agreed to pay up to $67 million.
  • The data breach exposed 40 million debit and credit card accounts and Target reportedly has incurred $162 million in net expenses related to the breach as of January of this year. Some financial institutions have sued Target, saying they have spent billions of dollars replacing compromised cards and increasing customer service operations because of the data breach.

False Claims Act

Missouri Hospital Agrees to Pay $5.5 Million to Settle Alleged False Claims Act Violations

  • The Department of Justice (DOJ) announced that Mercy Health Springfield Communities, formerly known as St. John's Health System Inc., and its affiliate, Mercy Clinic Springfield Communities, formerly known as St. John's Clinic, have agreed to pay $5.5 million to settle allegations that they violated the False Claims Act.
  • The DOJ alleged that the hospitals submitted false claims to the Medicare program for services rendered to patients referred by physicians who improperly received bonuses based on the value of those referrals. While there was no determination of liability by the DOJ, the hospital agreed to pay $5.5 million to settle the allegations.
  • A lawsuit filed by a whistleblower, a physician employed by the hospital, under the qui tam provisions of the False Claims Act, sparked the DOJ investigation and is part of DOJ's Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, that began in 2009. The case is United States ex rel. Moore v. Mercy Health Springfield Communities f/k/a St. John's Health System, Inc., et al., Case No. 13-3019-CV (W.D. Mo).

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