On September 28, 2024, California governor Gavin Newsom vetoed AB 3129, a bill that, among other things, would have required private equity firms and hedge funds to provide 90 days’ prior written notice to, and for some transactions, obtain consent from, the state attorney general prior to proceeding with certain health care transactions.
In a
Private equity investments in health care to be subject to increased oversight from federal and state regulators, including antitrust officials
Federal and state governmental regulation of health care transactions continues to increase rapidly. At the federal level, there is increased focus on the role of private equity in health care and the perceived impact on access to care, quality of care and pricing. At the same time, a growing number of states have passed and continue to propose legislation that increases state oversight of health care transactions. As a result of this increase in regulatory scrutiny from federal and state regulators, parties interested in conducting health care transactions must consider various regulatory requirements and the factors regulators take into account when analyzing proposed health care transactions. Continue Reading Health Care Transactions Facing Increased Federal and State Regulatory Scrutiny
On April 26, 2024, the Federal Trade Commission (FTC) announced that it had finalized changes to the Health Breach Notification Rule (HBNR). These changes, which go into effect on June 25, 2024, are intended to modernize aspects of the HBNR such that the HBNR applies to entities not covered under the Health Insurance Portability and Accountability Act (HIPAA). The updated HBNR follows the FTC’s previously stated intention in a 2021 policy statement to broaden the interpretation of the HBNR to address the growing number of digital health applications, websites, and consumer-facing technology that were not subject to HIPAA. The scope of the finalized rule therefore aims to apply the HBNR to health care technology and digital health companies that obtain personal health records (PHR) and PHR identifiable health information.Continue Reading FTC Finalizes Broader Changes to the Health Breach Notification Rule
On June 1, 2023 the U.S. Supreme Court vacated and remanded two Seventh Circuit decisions involving the False Claims Act (FCA), holding in a unanimous opinion that the FCA’s scienter element turns on a defendant’s subjective belief and intent, not by an after-the-fact analysis of whether the defendant’s actions were “objectively reasonable.”
The two cases at issue, United States et al. ex rel. Schutte et al. v. SuperValu Inc. et al. and United States et al. ex rel. Proctor v. Safeway Inc., alleged that respondents SuperValu and Safeway separately defrauded Medicaid and Medicare by offering discount programs to their customers while knowingly submitting claims for the higher retail prices exceeding the “usual and customary prices” customers paid. Ruling in favor of SuperValu and Safeway, the Seventh Circuit applied an “objectively reasonable” scienter standard, determining that SuperValu and Safeway would be liable for submitting false claims only if their respective interpretation of the FCA’s “usual and customary” language was not “objectively reasonable.”Continue Reading U.S. Supreme Court Clarifies Usage of Subjective Standard for FCA Scienter Element
The FDA has recently stepped up its enforcement activity with respect to animal and pet food manufacturing. On February 8, 2023, the FDA announced an expansion of a voluntary recall for a Nestlé Purina dog food product. On March 10, 2023, the FDA announced a voluntary recall of cat and dog supplements distributed by Stratford Care USA due to elevated levels of vitamin A found in the supplements. And on March 14, 2023, the FDA published a warning letter issued to Primal Pet Foods, Inc. in relation to the company’s recall of its dog food product, stating the company had not taken sufficient steps to address operational and manufacturing deficiencies found during an FDA inspection of the manufacturing facility.Continue Reading Navigating FDA Manufacturing Guidelines for Animal and Pet Food Products