Health Care Contracting

Last week, President Trump issued an executive order aimed at encouraging the expansion American manufacturing of essential medical products — Executive Order on Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States (August 6, 2020) (the “Order”).  The Order sets forth an ambitious plan requiring extensive agency action on a tight timeline that suggests a significant impact.  Closer examination of the Order raises significant questions about the practicalities of implementation and the realistic impact of the Order once the substantial stated exceptions are taken into account.

The List

The heart of the Order is a list of Essential Medicines, Medical Countermeasures (“MCMs”), and Critical Inputs to which the Order’s requirements apply — but the key components of this list do not yet exist.  Instead, the Order directs the Food and Drug Administration (“FDA”) to produce the list within 90 days and to include on the list Essential Medicines, MCMs, and Critical Inputs “that are medically necessary to have available at all times in an amount adequate to serve patient needs and in the appropriate dosage forms.”

The Order provides the following definitions that give some insight into what may be on the FDA’s eventual list:
Continue Reading Trump Administration Increases Uncertainty for Pharmaceutical Manufacturing

On July 2, 2020, the Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) promulgated a final rule resolving long-standing uncertainty regarding its enforcement authority over health care providers participating in TRICARE, a federal program that provides health care to service members, veterans, and their families.[1] The rule officially removes OFCCP’s regulatory authority over TRICARE providers by amending the definition of “subcontract” set forth in the governing Department of Labor regulations.  Although the amendment carves out TRICARE providers from OFCCP authority by name and leaves the rest of the “subcontractor” definition unchanged, OFCCP expressly raised the possibility that it would issue additional sub-regulatory guidance concerning its jurisdiction over Federal Employees Health Benefit Program (“FEHBP”) and Veterans Administration Health Benefit Program (“VAHBP”) providers.
Continue Reading OFCCP Promulgates Final Rule Eliminating Its Authority Over TRICARE Providers

The government’s response to the coronavirus pandemic implicates a host of authorities of interest to contractors, from those under the Stafford Act to its recently invoked Defense Production Act powers.  The government has another critical, and perhaps under-examined, set of tools at its disposal to meet the demands of the pandemic:  FAR Part 18, “Emergency Acquisitions,” catalogues authorities that give the government greater ability to acquire goods in a streamlined, accelerated manner.  Contractors should take note of FAR Part 18 given the government’s urgent needs for COVID-19 related supplies and services.

Continue Reading Emergency Contracting During COVID-19: A Guide to FAR Part 18

The Department of Health and Human Services published a notice on March 30, 2020 — effective March 25, 2020 — designating certain COVID-19-related personal protective equipment (“PPE”) and materials as “scarce” or “threatened” materials subject to the Defense Production Act’s (“DPA”) anti-hoarding provisions.  As a result of this notice, the DPA now prohibits the accumulation of these materials in excess of reasonable demands of business, personal, or home consumption.  The notice also results in a prohibition of the accumulation of these materials for the purpose of resale at prices in excess of the prevailing market rate.

Continue Reading Defense Production Act Anti-Hoarding Provisions Invoked for Coronavirus

Following up on our post earlier this week giving a general overview of the Defense Production Act of 1950 (“DPA”), 50 U.S.C. §§4501 et seq., this post comments on President Trump’s March 18, 2020 Executive Order on Prioritizing and Allocating Health and Medical Resources to Respond to the Spread of COVID-19 (the “COVID-19 E.O.”) and provides some key considerations that companies should keep in mind if they are concerned about receiving prioritized or rated contracts or allocation orders or directives under the DPA.
Continue Reading The Defense Production Act and the Coronavirus Executive Order: Key Considerations

As a followup to our recent post on the implications of the PREP Act for government contractors working to respond to the COVID-19 outbreak, this post will provide an overview of the Defense Production Act—including its key powers that the federal Government might invoke to counter the pandemic.
Continue Reading A Coronavirus Contractor’s Guide to the Defense Production Act

We’ve covered several topics already this week on the U.S. Government’s varied responses to the COVID-19 outbreak and how these responses will affect contractors that do business with the government, including BARDA’s EZ-BAA for COVID-19 diagnostics, mission-essential services during the outbreak, and how excusable delay provisions may help federal contractors affected by the outbreak.  But one area that has yet to receive in-depth discussion is the federal government’s mechanisms for addressing liability concerns raised by the use and distribution of countermeasures to the virus.  After all, while contractors are no doubt responding with appropriate speed and diligence in developing and deploying various COVID-19 countermeasures, no contractor wants to be the subject of a product liability, warranty, or negligence lawsuit later down the road.

Thankfully, Congress anticipated this concern and addressed it in 2005 by passing the Public Readiness and Emergency Preparedness Act (“PREP Act”), codified at 42 U.S.C. § 247d-6d.  Since enactment, the PREP Act has been used to issue declarations covering various countermeasures, including therapeutics, diagnostics, devices, vaccines, and constituent materials for pandemic influenza, acute radiation syndrome, smallpox, Botulism, anthrax, Zika, nerve agents, certain insecticides, and Ebola.  And earlier this week, the Secretary of the U.S. Department of Health and Human Services (the “Secretary”) issued a declaration pursuant to the PREP Act specifically for COVID-19 countermeasures.

This post will cover the PREP Act generally before discussing the implications of the COVID-19 declaration.
Continue Reading A Coronavirus Contractor’s Guide to the PREP Act

In the latest World Health Organization daily situation report, as of March 11, 2020, the WHO reported 118,326 COVID-19 cases confirmed and 4,292 deaths worldwide, and the U.S. Centers for Disease Control and Prevention (CDC) reported 938 cases and 29 deaths in the United States.  The same day, WHO characterized COVID-19 as the first global pandemic sparked by a coronavirus.  Additionally, the Secretary of the U.S. Department of Health and Human Services (HHS), issued a Declaration under the Public Readiness and Emergency Preparedness Act (PREP Act) to provide liability immunity for entities against any claim of loss caused by, arising out of, relating to, or resulting from the manufacture, distribution, administration, or use of covered medical countermeasures (MCMs).  Prioritized pathways are now available to expedite review of new, responsive technology proposals for MCMs from diagnostics to therapeutics.

Continue Reading Expanding the Coronavirus Disease 2019 (COVID-19) Response through Diagnostic Development

Earlier this month, the United States Court of Appeals for the Tenth Circuit issued a decision that provided further clarity on the False Claims Act’s standard for materiality.  The decision, United States ex rel. Janssen v. Lawrence Memorial Hospital, further demonstrated that materiality should be viewed through the eyes of the government customer rather than an hypothetical bystander.  The decision also reconfirmed that the FCA is not a “general antifraud statute” and that contractual or regulatory language conditioning payment on compliance will not necessarily prove that noncompliance was material.  Lawrence therefore serves as an important reminder to government contractors, practitioners, and other stakeholders about the significance of the materiality element in FCA litigation.

Continue Reading Tenth Circuit Provides New Material on FCA’s Materiality Standard

As of February 10, 2020, the World Health Organization (WHO) reported that 40,554 cases of the Novel Coronavirus (2019-nCoV) have been confirmed globally, with twelve cases confirmed in the United States.  The WHO has been issuing situation reports on a daily basis since January 21, and each report in February alone has identified more than 2,000 to 3,000 new cases each day.

Due to the lack of approved therapeutics, vaccines, and diagnostics for this threat, developing new products and testing products already approved for other uses is a high priority for the U.S. interagency response effort—the Medical Countermeasure (MCM) Task Force.  The Biomedical Advanced Research and Development Authority (BARDA), under the Office of the Assistant Secretary for Preparedness and Response (ASPR) in the U.S. Department of Health and Human Services (HHS), is leading this Task Force in partnership with U.S. Department of Defense, Food and Drug Administration, Centers for Disease Control and Prevention, and National Institutes of Health.

BARDA is currently looking at the effectiveness of existing countermeasures for similar viruses, as well as potential new responsive technologies, including vaccines, diagnostics, therapeutics, and medical supplies.  BARDA is serving as the sole point of entry for product and technology submissions to ensure there is an expedited process for receipt and review of proposed solutions for 2019-nCoV.  In this capacity, BARDA has released two opportunities to submit potential solutions for the 2019-nCoV response discussed below: (1) the EZ-BAA for 2019-nCoV diagnostics and (2) market research packages for any and all potential products and supplies.  Covington encourages those with technology that could be potentially useful to respond.


Continue Reading U.S. Government Seeks Industry Solutions in Novel Coronavirus Response