Category: Blog

The Federal Trade Commission filed another ambitious lawsuit on September 20, 2024, against three major pharmaceutical benefit managers (PBMs) that serve as middlemen between pharmaceutical manufacturers and commercial insurers. The defendants are CVS Health’s CareMark, Cigna’s Express Scripts, and UnitedHealth’s OptumRx, who together control the affordability and accessibility of 80% of prescriptions in the U.S. The FTC’s administrative complaint alleges that the PBMs violated The FTC Act 15 U.S.C. § 45 which prohibits “unfair or deceptive acts or practices in or affecting commerce.” The FTC argues the three PBMs have engaged in unfair practices by creating exclusive drug formularies that favor including drugs with higher rebates and fees which drives insulin inflation and harms vulnerable patients.

Exclusive drug formularies created by PBMs have flipped the pharmaceutical industry competitive market upside down to where competition drives insulin prices upwards, instead of down. Around 2012, PBMs implemented these formularies to ensure covered drugs which they resold to commercial insurers were safe and effective. However, the exclusivity of formularies forced pharmaceutical manufacturers to raise list prices of drugs to maintain their profits while increasing the rebates for PBMs. Manufacturers that do not raise drug prices or offer larger rebates risk losing millions of dollars in drug sales. Therefore, uninsured patients must fund larger rebates by paying increased drug prices or else forgo essential pharmaceutical treatment. Patients are also harmed by PBMs favoring high-list price (usually name brand) drugs when creating their formularies. Because pharmaceutical manufacturers can offer larger rebates for name brand drugs, PMBs exclude cheaper generic drugs to increase their profits. Consequently, insured patients are forced to spend more than necessary for critical drugs which they purchase frequently such as insulin.

Exclusive drug formularies specifically harm diabetic patients who cannot reasonably choose to discontinue purchasing insulin, switch insulin products, or switch health plans to avoid these harmful practices by PBMs. They unfairly force vulnerable patients to bear the financial burden of increasing PBM profits or risk great bodily harm from stopping medication.

Insulin has been used for more than a century to manage diabetic blood sugar levels and has been reasonably priced for 85 years prior to 2012. However, when PBMs began implementing exclusive drug formularies, between 1999 to 2017, prices increased steeply. During this time there was a 1200% increase in the list price of insulin from $21 to $274. U.S. consumer spending on insulin has also tripled since 2012, from $8 billion to $22.3 billion. Insulin is relied upon by 8 million diabetic Americans for disease management and is inexpensive to manufacture, yet its list price is inexplicably and unjustly exorbitant.

Although the Inflation Reduction Act has capped costs for patients with Medicare, increased insulin list prices have harmed uninsured patients. These uninsured diabetics are forced to pay the list price for insulin out-of-pocket. PBMs are aware that approximately one-quarter of patients can no longer afford insulin and reported that 1 million Americans ration their insulin which can have severe consequences, including death.

To be held liable for “unfair acts or practices in or affecting commerce” under The FTC Act, the three PBMs practices must be found to have (1) caused or were likely to cause substantial injury to consumers, (2) not have been reasonably avoidable by consumers, and (3) not been outweighed by countervailing benefits to consumers or to competition. If the three PBMs charged with violation of The FTC Act are found to have used unfair practices when implementing exclusive drug formularies, there are implications for the whole pharmaceutical industry which could hugely reign in drug pricing.

The future of the case against the three PBMs could hinge on the results of the 2024 Presidential election. Vice President Harris has shown interest in holding PBMs accountable for their actions in drug pricing inflation while former President Trump has yet to mention drug price inflation during his 2024 campaign. Further adding to the uncertainty of the suit is the divide among Republican officials over whether the FTC is overreaching, or PBMs should be held accountable.

Regardless of the election results, action is needed to prevent further harm from befalling vulnerable patients forced to pay the full list price for critical drugs like insulin.

In July 2021, President Biden issued an Executive Order directed at promoting competition in the American economy. A portion of that order directed changes to address drug pricing, and some provisions directed the Food and Drug Administration (“FDA”) and the United States Patent and Trademark Office (“USPTO”) to communicate regarding drug pricing. The USPTO is the government entity that grants patent applications, including those on pharmaceuticals and medical devices, while the FDA reviews and approves drug, biologic, and medical device applications for use and sale in the United States. The FDA additionally grants exclusivities which prevents the agency from reviewing any applications of competitor products for a period defined by statute.

The landscape of pharmaceutical patents and drug approvals has led to some negative effects including anti-competitive promotion of patented drugs and unbalanced research and development. This problem can occur when manufacturers report statements to the FDA during the drug approval process that conflict with those made to the USPTO during the process of obtaining a patent (“patent prosecution”). Because most of the information going to the FDA is confidential, it is usually not available to the USPTO during patent prosecution, and most patent examiners are untrained on using the FDA’s information to determine patentability.

The Executive Order was issued to address these issues between patents and other laws being misused to delay or prohibit competition between generic drugs and branded pharmaceuticals. In addition to the Executive Order, Senators Leahy and Tillis have asked the USPTO to take action. As the system currently stands, the solution to these conflicting statements has been to invalidate patents using the inequitable conduct doctrine, but the confidential nature of the FDA information makes the doctrine difficult to apply. The inequitable conduct finding renders all claims on a patent unpatentable or invalid under a USPTO statute.

In response to the order and the ongoing problems, the FDA and the USPTO began communications. They have held various seminars, including cross-training on patents and drug approval pathways in March and July 2023. In addition, the USPTO held a virtual panel on the duty of disclosure and reasonable inquiry in relation to patent prosecution as well as a joint virtual and in-person collaborative listening session with the FDA in 2023 for the public to weigh in.

One of the more recent developments was in June 2024, when the USPTO published results from a drug patent and exclusivity study. The study was designed to investigate the current timeline from the initiation of a New Drug Application (“NDA”) to the entrance in the market of a generic drug. The study found that in some cases, the generic launch was not impacted by patent and exclusivity calculations but by other factors, although the time period from filing an NDA to a generic launch is influenced by the relations between patents and FDA regulations.

            In the United States, the right-to-die through physician-assisted-suicide (“PAS”) and euthanasia has been hotly debated for years.  Scholars define PAS as the “prescription of lethal medication to be voluntarily self-administered.”  Conversely, euthanasia is defined as the “deliberate, direct causation of death by a physician.”  Although “medical assistance in dying” is legal in various countries, including Canada, PAS is only legal in eleven jurisdictions in the United States.

            Research has shown that by 2020, “about 5,330 people in the U.S. have died with medical assistance.”  Of the individuals who requested PAS, 95.6% were non-Hispanic White and 75% had been diagnosed with cancer.  According to a 2020 Gallup poll, 74% of Americans favor euthanasia, while 61% favor PAS.  Thus, while more Americans favor euthanasia than PAS, overall, Americans tend to support individuals’ right-to-die.

There are compelling ethical arguments for legalizing individuals’ right-to-die.  For example, advocates of PAS argue that PAS allows individuals to retain autonomy when making end-of-life decisions.  Moreover, medical professionals who perform PAS show individuals compassion because they prevent individuals from suffering.  Conversely, critics argue that the Hippocratic Oath forbids medical professionals from performing PAS because medical professionals must “do no harm.”  Thus, critics argue that medical professionals should not perform PAS because medical professionals serve as healers and PAS is antithetical to healing.

            The Supreme Court first analyzed the right-to-die under the Due Process Clause of the U.S. Constitution in Cruzan v. Missouri Department of Health.  In Cruzan, the Court held that individuals who lack decision-making capacity do not have the right-to-die unless there is “clear and convincing evidence” of their end-of-life care wishes.  The right-to-die was further examined in Washington v. Glucksberg, where the Supreme Court held that PAS is not a “fundamental right” protected by the Constitution.  Similarly, in Vacco v. Quill, the Court held that a state could outlaw PAS without violating the Equal Protection Clause.

            Advocates have pushed for change following the Supreme Court’s decisions in Cruzan, Glucksberg, and Quill.  For example, Dr. Jack Kevorkian, also known as “Dr. Death,” was an adamant supporter of PAS, after having performed approximately 130 PAS during his career.  Dr. Kevorkian, who was sentenced to prison in 1999, had “goaded prosecutors into coming after him so that the legality of assisted suicide and euthanasia could have a full airing in court – and in the news media.”  Following Dr. Kevorkian, other advocates have included Derek Humphry, who published his bestselling book, “Final Exit,” and Brittany Maynard, who requested PAS after being diagnosed with terminal brain cancer.

            Policymakers have made recent efforts to legalize PAS.  In February, the Illinois legislature considered SB3499, which would permit “aid-in-dying medication that will allow the patient to end the patient’s life in a peaceful manner.”  Additionally, the Pennsylvania legislature is considering legalizing PAS.

Although there are many states that remain opposed to PAS, advocates should continue to push for individuals’ freedom to choose their end-of-life care.  Ultimately, individuals should have the right-to-die in a safe and compassionate manner, provided that all safeguards are undertaken to prevent undue influence.

Federal efforts to rein in prescription drug costs have attracted media coverage and legal opposition. Now, innovative state efforts to limit drug price increases are attracting significant legal scrutiny. At the end of March, Amgen filed a lawsuit in the United States District Court for the District of Colorado seeking to stop the state’s Prescription Drug Affordability Review Board (“PDAB”) from implementing a price cap on its arthritis drug Enbrel. The lawsuit highlights a growing push among states to create affordability boards to limit drug price increases, nine of which have passed similar laws as of late 2023.

In February 2024, PDAB unanimously declared that Enbrel was unaffordable, allowing the board to consider setting a price cap on transactions involving the drug. The decision came just weeks after Amgen announced that Enbrel produced fourth-quarter sales of more than $1 billion for the company. Amgen argued the statute authorizing PDAB was unconstitutional, providing four reasons to support the company’s claim. First, the company argued that the statute violated the United States Constitution’s Supremacy Clause by conflicting with federal patent laws. Second, the company argued that PDAB violated the Due Process Clause of the Fourteenth Amendment since it lacked a specific standard to determine whether a drug is unaffordable or when to implement a price cap. Third, the company alleged that PDAB violated the Supremacy Clause through the authorizing statute allowing PDAB to impose a payment limit that would apply to Medicare reimbursement. Fourth, the company argued that the statute’s regulation of transactions outside Colorado violated the Commerce Clause.

While Amgen’s actions have significant implications for the regulation of drug prices in Colorado, the lawsuit will be closely watched by states that have created similar boards or are contemplating doing so in the future. As of late 2023, nine states have passed legislation to create similar drug pricing boards, and other state legislatures have introduced more than 200 bills to create such boards. The attempts are designed to address the increasing cost of prescription drug prices but vary in their methods. Some, such as Colorado, allow for the establishment of upper payment limits to directly control the prices of what they deem to be unaffordable drugs, while others are only authorized to make recommendations to the state’s legislature. Colorado’s board is also notable in the sense that it can exert authority over commercial health plans, not just state health plans. In addition to varying levels of authority, the Commonwealth Fund noted that other important considerations in how the boards are structured have included ensuring a sustainable funding source, how members of the board are appointed, and the board’s ability to access data on the drugs it reviews.

The economic and legal outlook for Colorado’s attempt to rein in drug prices, and those of its fellow states, remains uncertain. Due to many states being in the early stages of the review process, it may be a while before policymakers and stakeholders get a good sense of whether these boards can create downward pressure on prices.

Similarly, the legal outlook for these boards remains clouded as well. Scholarly publications have noted the relatively novel legal issues that these boards present to the courts, with the only clues in a healthcare context provided dating back to a related Maryland effort. In 2017, the United States Circuit Court of Appeals for the Fourth Circuit struck down Maryland’s attempt to prohibit certain price increases on the grounds that the statute interfered with the federal government’s authority to regulate interstate commerce.

Amgen’s lawsuit in the District Court for Colorado will likely provide more clues as to whether these latest attempts to broaden access to unaffordable prescription drugs will present a viable and legal tool to lower prices. Regardless, it is clear that solutions, be they federal, state, or otherwise, are urgently needed to address what can only be called a crisis of affordability for drugs that provide life-changing results to patients across the country.

Four years since the beginning of the COVID-19 pandemic, experts are already planning for the next one. In addition to strengthening disease detection systems, pandemic preparedness should prioritize improving the condition of rental housing in the U.S. to eradicate health disparities and better position the tenant population to weather the coming virus.

Black patients are hospitalized for COVID-19 at a rate three times higher than White patients. For Hispanic patients, this number is four times higher. Native American patients are twice as likely to die of COVID-19 than White patients, and across all races, Asian patients face the highest relative risk of hospitalization and death. Social determinants of health, including transportation, education, and employment, provide a partial explanation for these disparities. But one of the most important social determinants of health is housing. Specifically: who has it, and what it looks like.

Through 2020 and 2021, even with a federal moratorium on evictions and a concomitant decrease in filings, evictions were still happening across the country. We now know these evictions were associated with increased infection and death rates, and that most tenants who were evicted were people of color, particularly Black and Latinx renters. In some cities, homeless mortality rates due to COVID-19 were 75% higher than the mortality rates of housed people, and most experts contend that homeless deaths were vastly undercounted. But even for tenants who remained housed, the threat of COVID-19 did not disappear, because it was in their homes.

In addition to facing a higher rate of evictions, renters of color are disproportionately impacted by poor housing conditions. Substandard housing can include asbestos, peeling lead paint, and rodent infestations, to name just a few. The health impacts of these conditions are pervasive and severe. Mold can produce allergens and exacerbate preexisting conditions such as asthma. Poor ventilation can increase exposure to smoke and is associated with higher mortality rates. Even the stress of living in an uninhabitable home is tightly linked to poor mental health, particularly for low-income women. Experts estimate that more than 4 million children across the U.S. live in substandard housing, thereby exposing them to illnesses that could determine their health for the rest of their lives.

The health conditions created by substandard housing, including poor respiratory capacity, impeded the ability of low-income renters to survive COVID-19. Across the country, counties with a higher percentage of households living in poor conditions also had higher incidence and mortality rates due to COVID-19. Looking ahead, the combination of substandard housing and Long COVID is potentially deadly. The pandemic pushed an already splintering healthcare system to its breaking point, such that there are now fewer physicians available to study and treat Long COVID and its nebulous impacts, even though the disease is estimated to affect almost 7% of the adult U.S. population. If the healthcare system is to survive the next pandemic, it must prioritize treating lingering respiratory conditions such as Long COVID, especially among low-income renters of color.

Improving housing conditions should be a top priority for policymakers seeking to improve U.S. pandemic preparedness. Tenant advocates and attorneys have long pushed for stricter enforcement of housing codes and common law standards like the implied warranty of habitability, which grants many tenants the contractual right to live in a home that is inherently suitable for human habitation. Some have even argued that enforcing a warranty of habitability would place downward pressure on rents and thereby save renters money at the expense of slumlords.

In the wake of 2020, which saw an unprecedented explosion of popular support for renters’ rights, policymakers should capitalize on this political moment. Not only will strengthening habitability standards create safer homes, it will also reduce health disparities across race, class, and gender, thereby better preparing vulnerable communities to defend themselves against the next virus.

The use of psychedelic substances to heal the mind and body is anything but new. For millennia, Indigenous peoples across the globe have used plants with psychedelic properties for “medicinal, ceremonial, and divinatory purposes.” However, Western medicine has been slow to embrace psychedelics and psychedelic-assisted psychotherapy (PAP).

The United States’ Tense History with Psychedelics

Psychedelics are psychoactive substances defined by their ability to induce altered states of consciousness, including changed or enhanced sensory perception, cognitive process, and mood. Common psychedelic substances include lysergic acid diethylamide (LSD), psilocybin (aka, magic mushrooms), 3,4-methylenedioxymethamphetamine (MDMA), dimethyltryptamine (DMT), ketamine, ayahuasca, ibogaine, and mescaline (the active compound in the peyote plant).

The United States started researching potential therapeutic uses of psychedelics in the mid-twentieth century. Between the 1950s and 1970s, researchers administered psychedelics like LSD and psilocybin to thousands of patients to treat conditions like addiction, depression, anxiety, and end-of-life distress. However, research came to an abrupt halt when President Nixon signed the Controlled Substances Act and categorized psychedelics as Schedule 1 drugs, declaring they had no acceptable medical use and had a high potential for abuse. This Act started the infamous war on drugs and stilted scientific research on the therapeutic uses of psychedelics. These substances remain classified as Schedule 1 drugs and it is still a felony for individuals to possess or use these substances.

The Re-Emergence of PAP in the United States

Inspired by the national wave of successful measures to legalize cannabis for medical and/or recreational use, psychedelics have recently made a comeback. Recognizing the positive effects of psychedelic drug use on treating depression, anxiety, substance use disorders, and post-traumatic stress disorder (PTSD), advocates are successfully changing the conversation about PAP becoming an accessible treatment option.

Across the country, one psychedelic substance is making localized headway at an impressive speed: psilocybin. In May 2019, Denver, Colorado became the first city to decriminalize psilocybin. This opened the floodgates for states and localities to embrace similar policy changes or authorize work groups to research possible medical use. However, the movement did not stop at decriminalization or work groups. Two states have taken significant strides to make PAP accessible within their borders: Oregon and Colorado. 

The Oregon Model

In November 2020, Oregon became the first state in the Country to legalize PAP when voters approved Ballot Measure 109, (now codified as ORS 475A), authorizing the Oregon Health Authority (OHA) to create a program permitting administration of psylocibin-producing mushroom and fungi products to persons at least 21 years of age. Importantly, the law allows anyone over 21 to self-select to receive treatment without requiring a prescription, medical referral, or proof of state residence.

The Colorado Model

In November 2022, Colorado voters passed Proposition 122, which adopts a framework similar to Oregon’s and establishes a regulatory structure and timeline for other psychedelics, including DMT, ibogaine, and mescaline, to be considered for decriminalization and use for PAP. This would further revolutionize access to PAP as it means that people seeking treatment could select the psychedelic substance they believe is best for them.

Will This Boom Also Bust?

With broad public support, the DEA and FDA on board with permitting research on psychedelic substances, and with the worsening mental health crisis in the United States, it is unlikely that the current state-led shroom boom will bust. While there will undoubtedly be legal battles over patents, inequitable access to treatment, and a need for more training for therapists, facilitators, physicians, nurses, and social workers, the nation can look to Oregon and Colorado to assess the benefits of PAP in real time.