James A. Boiani, Member of the Firm in the Health Care and Life Sciences practice, in the firm’s Washington, DC, office, was quoted in Law360, in “What Hospitals Need To Know Before Forming A Drug Co.” by Dani Kass. (Read the full version – subscription required.)

Following is an excerpt:

A group of hospital systems recently decided to address rising prices and shortages of generic medications by forming a nonprofit drug company, but industry attorneys warn that land mines like unfamiliar regulations and fraud concerns could trip the members up as they execute this novel plan. …

“Entering into the [U.S. Food and Drug Administration] regulatory space is a completely different animal than the standard hospital operating regulations,” Epstein Becker Green member James Boiani said. …

Several attorneys warned that if this plan isn’t carefully structured, the hospitals run a high risk of violating the False Claims Act when charging drugs they’ve made to government healthcare programs.

“The idea of making drugs and selling them to yourself and getting reimbursements can cause all sorts of concerns,” Boiani said, although he added that it’s a manageable risk.

He said that if the hospital systems profit from these reimbursements, questions could come up about whether there were any kind of kickbacks. The many existing FCA suits dealing with blurred relationships between providers and drugmakers put an extra spotlight on this relationship.

Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.