Category: Laura Karas

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The Ongoing Step Therapy Debate

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By Laura Karas

Senator Lisa Murkowski’s (R-AK) reintroduction this February of a federal bill, the Safe Step Act, has revived the debate over the prudence of step therapy protocols.

Step therapy is an insurer utilization-management tool imposed in response to high drug prices. As its name implies, step therapy requires “steps” before a patient can receive his preferred medication (i.e., the one his provider has prescribed). Typically, a patient must “try and fail” a less costly medication or series of medications before becoming eligible for insurance coverage of the medication in question. In effect, step therapy allows an insurer’s “preferred therapy” to supersede patient and provider preference.

The need for step therapy is closely bound to the problem of high drug prices. But the crux of the step therapy debate boils down to the following: Who should decide which pharmaceutical drugs your health plan covers? You and your doctor, or your insurer?

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Pharmaceutical Patents on Manufacturing Methods: Groundless or Well-Supported?

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By Laura Karas

Are manufacturing method patents — patents not on a pharmaceutical drug itself, but on a method of production of a drug — warranted intellectual property protections, or groundless obstacles to competition?

Patents protect and reward innovation by permitting the patent-holder the exclusive right to make, use, and sell the invention for a twenty-year period. Pharmaceutical companies have attracted scrutiny, criticism, and legal challenges for amassing large numbers of patents on pharmaceutical drugs, especially high-priced and high revenue-earning drugs.

Here I explore the topic of pharmaceutical patents on methods of production and translate into layman’s terms some thought-provoking recent scholarship by innovation scholars W. Nicholson Price and Arti Rai.

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When “Pay-for-Delay” Becomes “Delay-Without-Pay”: Humira Antitrust Claims

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By Laura Karas

In June 2020, the U.S. District Court for the Northern District of Illinois dismissed state and federal antitrust claims against AbbVie, maker of Humira (adalimumab), for accruing more than 130 patents on the top-selling drug and asserting allegedly unmeritorious patent infringement claims against makers of adalimumab biosimilars. AbbVie then settled the patent infringement litigation by entering into agreements with eight drug makers to allow adalimumab biosimilars to enter the U.S. market in 2023 and the European market in 2018.

In my last post, I discussed the district court’s memorandum opinion finding that “the vast majority” of AbbVie’s conduct was not “objectively baseless petitioning” and was therefore immunized under the Noerr-Pennington doctrine. In this post, I explore several problematic aspects of the court’s reasoning for rejecting the claims of pay-for-delay and market allocation.

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Graphic Warnings on Cigarettes: Public Health vs. Corporate Speech

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By Laura Karas

The latest attempt of the U.S. Food and Drug Administration (FDA) to make a dent in the country’s intractable tobacco problem is a set of color graphic warnings that will appear on cigarette packages and advertisements beginning in June of 2021.

The legal battle surrounding the graphic warnings and other attempts to regulate commercial speech in the food and drug context illustrate the courts’ enduring failure to appreciate the full extent and substantiality of the government’s interest in promoting public health.

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Pill pack.

Fortifying the US Pharmaceutical Supply Chain

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By Laura Karas

The COVID-19 pandemic triggered supply chain disruption across the globe. The United States, in particular, is susceptible to interruptions in the supply chain for pharmaceutical drugs because many of the raw materials, active pharmaceutical ingredients, and manufacturing processes needed to produce domestically marketed prescription drugs have been outsourced beyond U.S. borders.

Is it time to bring some of these processes back to our shores? This post will demystify the pharmaceutical supply chain and explore some key considerations as we head toward 2021.

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Pill bottles.

During the COVID-19 Pandemic, the Opioid Epidemic Continues

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By Laura Karas

“The boy’s first outcry was a rueful laugh,

As he swung toward them holding up the hand

Half in appeal, but half as if to keep

The life from spilling. Then the boy saw all—

Since he was old enough to know, big boy

Doing a man’s work, though a child at heart—

He saw all spoiled. . . .

He lay and puffed his lips out with his breath.

And then—the watcher at his pulse took fright.

No one believed. They listened at his heart.

Little—less—nothing!—and that ended it.

No more to build on there. And they, since they

Were not the one dead, turned to their affairs.”

This except from Robert Frost’s 1916 poem “Out, Out—,” which portrays the sudden death of a young boy after a woodcutting accident and the onlookers’ casual acceptance of his tragic death, is particularly apropos today, more than one hundred years later, in an America that looks very different than that of Frost’s time. Between the opioid crisis and the COVID-19 pandemic, America now suffers from a surplus of needless, untimely deaths.

Just as the protagonist of Frost’s poem became the casualty of a tragic accident, so too do the many victims of the opioid epidemic become casualties in a losing battle — lives “spoiled” by substance use disorder and cut short by tragic overdose. In this post I explore the status of the opioid epidemic in light of the COVID-19 pandemic and ongoing initiatives to address opioid use disorder (OUD).

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The Opioid Multidistrict Litigation, Federal Rule 23, and the Negotiation Class

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By Laura Karas

A recent Sixth Circuit decision dashed hopes of a faster resolution to the federal opioid multidistrict litigation (MDL).

The MDL (In re National Prescription Opiate Litigation, Docket No. 1:17-md-02804) consolidated many thousands of suits against opioid makers and distributors.

Thus far, action in the MDL has presaged the enormity of corporate responsibility for the opioid crisis. Roughly one year ago, the first bellwether trial in the MDL, involving two Ohio counties, was averted due to a last-minute settlement by Teva Pharmaceuticals and the “Big Three” drug distributors (AmerisourceBergen, Cardinal Health, and McKesson). A $465 million verdict last year against Johnson & Johnson “abated” one year’s worth of damage to the state of Oklahoma from the opioid crisis, which was held to be a public nuisance under Oklahoma law. And another bellwether trial involving pharmacy chains including Walgreens and CVS is scheduled to take place next year, despite the pharmacy chains’ strong pushback.

As part of the MDL, the U.S. District Court for the Northern District of Ohio had certified a new kind of class, distinct from a litigation or settlement class — a “negotiation class” of cities and counties throughout the United States — under Federal Rule of Civil Procedure 23, the Federal Rule that governs class actions.

But on September 24, a decision by the U.S. Court of Appeals for the Sixth Circuit reversed this decision.

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Following the Yellow Brick Road Toward Hospital Price Transparency

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By Laura Karas

The Center for Medicare and Medicaid Services (CMS) scored a victory on the price transparency front in June of this year with the D.C. Circuit decision in American Hospital Association v. Azar, No. 1:19-cv-03619-CJN.

The CMS final rule at issue in the suit requires price transparency for hospital items and services. The legal victory will begin to remedy the information asymmetry that has kept patients in the dark about hospital prices for far too long.

As the final rule states, its aim is to empower patients to become “active consumers” of health care “so that they can lead the drive towards value.” The rule is part of a federal effort to improve the ability of patients to make informed choices based on price and gain leverage to negotiate unreasonable hospital charges.

The American Hospital Association, the Association of American Medical Colleges, and several other groups brought suit to contest the CMS final rule mandating that hospitals make public and update annually certain “standard charges” for hospital “items and services.”

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