Originally published March 2010
The new national health care reform law is only the latest in a series of actions that have created a more complex regulatory environment and led to increased state regulation and enforcement against pharmaceutical and medical device companies.
A new report by the law firms of Nutter McClennen & Fish LLP and Saul Ewing LLP examines, state by state, what the 11 New England and Mid-Atlantic states and the District of Columbia are doing in this area, including new regulations, increasingly sophisticated and aggressive enforcement tactics and multi-state enforcement actions and settlements.
"There was a time when pharmaceutical and medical device companies only had to worry about what the federal government was doing," said Allison Burroughs, a partner in Nutter's Government Investigations and White Collar Defense practice. "Now states are increasingly where the action is."
The report finds that passage of the Deficit Reduction Act of 2005 (DRA) was a major spur to new state regulation and enforcement, especially by allocating resources to state law enforcement initiatives, such as the expansion of state AG Medicare Fraud Control Units (MFCUs).
The report details many of the statutory, regulatory and enforcement actions initiated by the eleven states and Washington, D.C. Several of those states have taken the lead in imposing detailed reporting requirements on pharmaceutical and medical device companies. And AGs in these states are utilizing all of the new tools at their disposal, including well-staffed MFCUs, stronger state false claims statutes and civil penalties for code of ethics violations to target these firms and extract large fines and settlements.
"States are increasingly anxious to collaborate with each other and willing to act independently of federal authorities, said Burroughs, "and this shift is creating a much more complex and perilous legal and regulatory environment for life sciences companies."
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