Category: Authors

CMS Proposing Major Changes to Medicaid Drug Rebate Program

Merle M. DeLancey, Jr. ●

While you were at a Memorial Day barbeque, the Centers for Medicare & Medicaid Services (“CMS”) proposed major changes to the Medicaid Drug Rebate Program (“MDRP”). 2023-10934.pdf (federalregister.gov). Comments on the proposed rules are due July 25 but we recommend that you start working now.

The proposed rules are 187 pages and address drug misclassification and drug pricing and product data misreporting by pharmaceutical manufacturers. Also important for manufacturers, the rules propose program integrity and program administration changes, including limiting the time within which a manufacturer can initiate an audit of a State Medicaid Program’s drug utilization for purposes of Medicaid rebate obligations; clarifying requirements to accumulate or “stack” price concessions when a manufacturer determines best price; and providing for drug price verification and transparency through data collection.

Increased Transparency of Prescription Drug Costs

CMS is proposing to verify certain drug prices reported by manufacturers through an annual Medicaid Drug Price Verification Survey. According to CMS, verifying drug prices and publishing non-proprietary information about drug prices will increase public transparency for high-cost drugs allowing state Medicaid agencies to negotiate covered outpatient drug (“COD”) prices more effectively with manufacturers. This sounds eerily similar to the purposes behind a multitude of State drug pricing transparency programs.

Continue reading “CMS Proposing Major Changes to Medicaid Drug Rebate Program”

TechCrunch: Western Sanctions against Russia: Tips for Tech Companies Managing Compliance Risk

Anthony Rapa ● TechCrunch ● May 8, 2023 ●

As the war in Ukraine rages on, authorities are cracking down on the smuggling of U.S. technology in support of Russia’s war effort, an initiative with implications for the tech industry. One significant example of this is Russia’s drone program, with a December 2022 expose describing U.S. chips, circuit boards, and amplifiers found in downed Russian drones, and mapping part of the supply chain trafficking such items to Russia in spite of Western sanctions.

This has prompted broader concerns regarding the diversion of Western technology to Russia in support of illicit end-uses, such as, for example, the Russian government’s use of facial recognition technology to crack down on dissidents.

In response to this, the United States and its partners recently imposed new sanctions against Russia to coincide with the one-year anniversary of the invasion of Ukraine, including expanded export controls over drone components, electronics, industrial equipment, and other items. The U.S. government followed this up with an advisory warning companies of the risk of third parties diverting their products to Russia.

Suppliers of electronics, drone components, and other sanctioned items face the risk that third parties will divert their products to Russia’s defense industrial base or to the battlefield in Ukraine, given the Russian military’s continued demand for battlefield equipment. Companies can mitigate this risk by conducting due diligence on counterparties and by auditing sales channels.

Read more on our website.

Two Recent Blank Rome Team Recognitions

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We’re pleased to share two recent accomplishments of our Government Contracts attorneys.

They’ve Got Next: Government Contracts Fresh Face Elizabeth Jochum

Blank Rome partner Elizabeth N. Jochum has been featured in Bloomberg Law’s “They’ve Got Next” series, which spotlights young lawyers who are “raising the bar in various practice groups.”

Elizabeth is one of five attorneys featured in the government contracts installment. The featured attorneys “work at the intersection of litigation, regulation, and government procurement” as they navigate and defend clients against bid protests.

Read more, including an excerpt of Elizabeth’s “They’ve Got Next” spotlight, as published in Bloomberg Law, on our website.

Justin A. Chiarodo Named to Law360’s 2023 Aerospace & Defense Editorial Advisory Board

Blank Rome LLP is pleased to announce that partner Justin A. Chiarodo, who serves as chair of our firm’s Aerospace, Defense & Government Services industry team and Government Contracts practice group, has been named to Law360’s 2023 Aerospace & Defense Editorial Advisory Board.

Learn more about the board and Justin on our website.

Dominique L. Casimir Named Section Chair’s Special Recognition Award Recipient by the ABA Section of Public Contract Law

Blank Rome LLP is pleased to announce that partner Dominique L. Casimir, who serves as co-chair of the firm’s General Litigation group, received the American Bar Association Section of Public Contract Law‘s (“the Section”) Section Chair’s Special Recognition Award. 

Please visit our website to learn more about Dominique’s award.

Federal Contractor Vaccine Mandate to End

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Merle M. DeLancey Jr. and Samarth Barot ●

Samarth Barot headshot image

After several Federal District Courts issued injunctions against the federal contractor vaccine mandate in December 2021, the Federal Government issued guidance fully suspending its enforcement of the federal contractor mandate. Despite the guidance, the future of the federal contractor vaccine mandate continued to remain in a state of limbo. This was best demonstrated two weeks ago when the Ninth Circuit sided with the Federal Government by lifting the district court’s preliminary injunction of the federal contractor vaccine mandate. The Ninth Circuit’s decision created a split with the Fifth, Sixth, and Eleventh Circuits that have enjoined the mandate. This Circuit split was likely headed to the United States Supreme Court.

On May 1, 2023, all of this changed. The Biden Administration announced its plan to end its federal contractor vaccine mandate on May 11, 2023, the same day the public health emergency ends. Accordingly, the Administration plans to issue an Executive Order “rescinding the vaccination requirement for federal employees and COVID-19 safety protocols for federal contractors, effective at 12:01 am on May 12, 2023.” For Federal Contractors | Safer Federal Workforce. Until then, the guidance suspending the enforcement of the federal contractor mandate remains in effect.

This should be the end of the federal contractor vaccine mandate; however, we will know more by May 11, 2023. Stay tuned for further developments.

60-Second Sustains: Life Science Logistics, LLC

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Elizabeth N. Jochum ●

Life Science Logistics, LLC
B-421018.2, .3

  • The protester alleged that GSA failed to conduct meaningful discussions by not raising, in pre-corrective action discussions, significant weaknesses that resulted in the proposal being rated unacceptable in a post-corrective action evaluation.
  • GAO has held that, when an agency seeks revised proposals and performs a new evaluation, that reevaluation may identify flaws in a materially unchanged proposal that the agency would have been required to discuss with the offeror, had the flaws been identified when the proposal was initially evaluated.
  • In that situation, the agency must reopen discussions in order to disclose its concerns.
  • GSA argued Life Science’s pre- and post-corrective action proposals were materially different, but GAO found that the content that gave rise to the significant weaknesses was present in both proposals but had been overlooked in the initial evaluation.
  • Since the Agency did not advise Life Science of the significant weaknesses in its initial proposal when conducting discussions, GAO sustained the protest and recommended GSA reopen the procurement, conduct meaningful discussions, and evaluate revised proposals.

Exporters Take Note: The Commerce Department Really, Really Wants You to Disclose Suspected Violations of the EAR—Both Yours, and Your Competitors’ Too

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Justin A. Chiarodo and Anthony Rapa ●

We wrote earlier this year about the growing web of regulation and enforcement attention around export controls. In another key development in this area, the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) issued a memo to all of its export enforcement employees on April 18,2023, both reemphasizing the importance of corporate export control compliance, and clarifying its enforcement policies in two key areas. These two developments—one a stick and one a carrot—are designed to promote more (and more significant) disclosures to BIS with respect to violations of the Export Administration Regulations (“EAR”).

The first item in the memo addresses what happens when a company discovers, but does not report, a “significant possible violation” of the EAR. This marks a major policy change. Going forward, the deliberate non-disclosure of such “significant” possible violations of the EAR will be treated as an aggravating factor when BIS considers penalties. The memo explains that “significant” violations are those that “reflect potential national security harm” as compared to more technical violations. This policy emphasizes the BIS settlement guidelines that focus on the adequacy of a company’s export control program. BIS cautions companies that they face sharply increased risks if they do not make a voluntary disclosure after discovering a “significant” suspected violation.

Continue reading “Exporters Take Note: The Commerce Department Really, Really Wants You to Disclose Suspected Violations of the EAR—Both Yours, and Your Competitors’ Too”

Four Tools of Modern Economic Statecraft

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The Impact of Modern Economic Statecraft on Cross-Border Trade and Investment: Sanctions, Export Controls, Investment Screening, and Supply Chain Rules

 ● PLI Chronicle: Insights and Perspectives for the Legal Community, March 10, 2023 ●

Anthony Rapa ●

Geopolitical risk is top of mind for companies these days, and it seems that every week brings a new proposed sanction, trade control, or investment restriction. Increasingly, companies and investors are discovering that their cross-border movement of goods, technology, and capital implicates regulatory restrictions of some kind and is subject to governmental scrutiny.

In modern parlance, such measures fall under the rubric of “economic statecraft.” The pace of change is dizzying, and the stakes are high, with each new economic statecraft tool holding the power to cut off business with targeted markets, trigger regulatory scrutiny of transactions, and impact business planning.

Economic statecraft is not new. The earliest recorded example dates back to the 5th century BC, when the Athenian Empire banned the people of Megara, a town allied with Sparta, from trading in harbors and marketplaces controlled by the empire. Another notable example is Napoleon’s Continental System, in which the French emperor sought to prohibit trade between the European continent and Great Britain. A further historical instance, with modern-day implications, is the U.S. embargo of Cuba, which dates back to the early 1960s.

While economic statecraft is not new, what is new is the power of the U.S. government and, increasingly, other governments, to respond swiftly to geopolitical events with economic countermeasures. In the modern landscape, such measures are often multilateral and reinforced through governmental bodies and market gatekeepers such as financial institutions.

Given the prevalence of economic statecraft tools and the geopolitical trends prompting their promulgation, it is important for economic operators engaged in cross-border trade and investment, and those advising them, to understand the nature and scope of the tools at governments’ disposal.

Read more on our website.

Russia Sanctions: 5 Key Points for Companies

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Anthony Rapa ●

The United States, the European Union, and the United Kingdom recently imposed new sanctions on Russia to coincide with the one-year anniversary of Russia’s invasion of Ukraine, a measure that the European Union described as its “10th package of sanctions against Russia” to date.

So, one year in, after 10 rounds of sanctions against Russia, where do things stand? Here are five key points for companies to consider:

1. For any remaining business with or involving Russia, it is imperative to manage compliance carefully.

Although Russia has been described as “the most sanctioned country in the world,” this is not exactly accurate, as there remains a range (arguably, a substantial range) of business with Russia that is permissible. For companies engaged in such business, it is of paramount importance to manage the various vectors of Russia-related risk, including sweeping export controls, sanctions on Russia’s financial system, and the web of multijurisdictional restrictions.

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What Is “Knowing” under the FCA? Supreme Court to Consider Impact of Ambiguous Regulations

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Jennifer A. Short, Bridget Mayer Briggs, and Tjasse L. Fritz ●

Jennifer A. Short headshot image
Bridget Mayer Briggs headshot image
Tjasse L. Fritz headshot image

A successful False Claims Act (“FCA”) claim must show that the defendant submitted a false claim or statement “knowingly.” The “knowing” element—the scienter prong—depends on whether the defendant actually knew that the claim or statement was incorrect, or recklessly disregarded the facts or legal requirements that rendered the claim “false.” But, of course, government regulations, contract terms, and grant requirements can be incredibly complex and difficult to understand. When the ground rules are unclear, how does a company “know” that its claims for payment may be false under the FCA?

What does the FCA say about “knowing”?

The FCA defines “knowing” as (1) having “actual knowledge of the information;” (2) acting “in deliberate ignorance of the truth or falsity of the information;” or (3) acting “in reckless disregard of the truth or falsity of the information.” 31 U.S.C. § 3729(b). A “specific intent to defraud” is not required for liability under the FCA. 

Continue reading “What Is “Knowing” under the FCA? Supreme Court to Consider Impact of Ambiguous Regulations”
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