Will HHS’s Safe Importation Action Plan Affect How the Federal Government Purchases Drugs?

Merle M. DeLancey Jr.

On July 31, the Department of Health and Human Services (“HHS”) and the Food and Drug Administration (“FDA”) announced their latest plan to reduce the prices Americans pay for prescription drugs. The Safe Importation Action Plan identifies two pathways for the importation of drugs.

Pathway 1 allows states, wholesalers, and pharmacists to submit plans to HHS for demonstration projects, which test and measure the effect of potential program changes, that allow for the importation of certain drugs from Canada. Importing drugs from Canada is not a new concept. In 2003, Congress gave the Secretary of HHS the authority to permit drug importation from Canada. To implement a drug importation plan, however, the Secretary was required to certify to Congress that the importation program poses “no additional risk to public health and safety” and the program will result in a “significant” reduction in costs of products to American consumers. No HHS Secretary has ever made such a certification to Congress. Implementation of importation plans under Pathway 1 will most likely take considerable time. HHS intends to implement Pathway 1 through a formal Rulemaking process with Notice and Comment. Then, importation plans will need HHS approval before going “live.” Continue reading “Will HHS’s Safe Importation Action Plan Affect How the Federal Government Purchases Drugs?”

Trade Agreements Act Enforcement Loses a Couple More Teeth

Merle M. DeLancey Jr.

Two recent judicial decisions involving the Trade Agreements Act (“TAA”) build on a trend reflecting a more favorable enforcement climate for contractors grappling with domestic preference regimes. Earlier this year, the U.S. District Court for the District of Columbia dismissed a qui tam action that alleged fraud in connection with country of origin requirements imposed by the TAA. United States ex rel. Folliard v. Comstor Corp., 308 F.Supp.3d 56 (D.D.C. 2018) (finding the relator failed to adequately plead that the alleged TAA noncompliance was “material” to the Government’s payment decision). The decision marked a welcome early defeat of a False Claims Act case based on the enhanced materiality and scienter requirements of the Escobar decision (as we wrote about here).

Two recent federal court decisions appear to extend the trend of taking some of the bite out of TAA enforcement, and potential exposure for alleged noncompliance. Despite this welcome news, domestic preference programs remain a key legal obligation for government contractors (and an area likely to remain under scrutiny with the Administration’s professed focus on Buy American and Hire American initiatives). Continue reading “Trade Agreements Act Enforcement Loses a Couple More Teeth”

Trade Agreements Act Compliance: Some Welcome News for Some Federal Contractors, But Will It Last?

Merle M. DeLancey Jr.

Recently, the United States District Court for the District of Columbia dismissed a qui tam action involving allegations of fraud in connection with country of origin requirements imposed by the Trade Agreements Act (“TAA”). United States ex rel. Folliard v. Comstor Corp., 308 F.Supp.3d 56 (D.D.C. 2018).

Comstor involved a False Claims Act (“FCA”) action filed by a serial whistleblower who alleged two contractors violated the FCA by selling non-TAA compliant products on their General Services Administration (“GSA”) Federal Supply Schedule (“FSS”) contracts to federal government customers. Depending on the dollar value of the acquisition, most procurements are subject to either the Buy American Act (“BAA”) or TAA. Currently (2018), the BAA applies to supply procurements valued at or below $180,000. Accordingly, the TAA currently applies to such procurements valued in excess of $180,000. GSA has determined the TAA applies to FSS contracts. Continue reading “Trade Agreements Act Compliance: Some Welcome News for Some Federal Contractors, But Will It Last?”