FTC Commission Upholds POM Wonderful Decision Regarding Deceptive Claims

As we previously reported, on September 27, 2010, the Federal Trade Commission (“FTC“) filed an administrative complaint against POM Wonderful LLC (“POM“) for allegedly making unsubstantiated claims, which were also false or misleading in violation of Sections 5(a) and 12 of the Federal Trade Commission Act (“FTC Act“). In its Complaint, the FTC alleged that POMs claims that its products prevent, reduce the risk of, or treat heart disease, high blood pressure, prostate cancer, and erectile dysfunction (“ED”) were not supported by competent and reliable evidence. Additionally, the Complaint contained a proposed cease and desist order that would require, among other things, U.S. Food and Drug Administration (“FDA“) approval of certain disease claims for POMs products.

On May 17, 2012, an FTC Administrative Law Judge (“ALJ”) held in an Initial Decision that POMs claims that its products could treat, prevent, or reduce the risk of heart disease, prostate cancer, and ED were deceptive because these claims were not supported by sufficient competent and reliable evidence. However, the Decision rejected the FTCs theory that competent and reliable scientific evidence for the disputed claims could only be satisfied with two double-blind, randomized placebo-controlled clinical trials (RCTs). Instead, the ALJ found that competent and reliable scientific evidence could be established without RCTs. The ALJ also held that FTCs proposed requirement that POM be prohibited from making any disease claim in the future unless the claim had been pre-approved by FDA “would constitute unnecessary overreaching.”

On June 18, 2012, both POM and the FTC appealed the Initial Decision to the FTC Commissioners. POM appealed all portions of the Decision relating to the finding of liability. The FTC appealed the ALJs decision arguing that (1) all advertisements challenged in the Complaint violated the FTC Act, (2) the substantiation of disease efficacy claims should require well-designed, well-conducted RCTs, and (3) the ALJ erred in not requiring FDA approval for all future claims. The appeal briefs for POM and the FTC can be read here and here respectively. For more information regarding the POM and FTC appeals please see our previous report here.

On January 10, 2013, the FTC Commissioners issued a Final Order approving the Initial Decision 5-0 that POM made deceptive claims about treating, preventing or reducing the risk of heart disease, prostate cancer and ED. However, the Final Order differs in some respects from the Initial Decision. The Commissioners rejected the ALJs conclusion that “RCTs are not required to convey information about a food or nutrient supplement where . . . the safety of the product is known; the product creates no material risk of harm; and the product is not being advocated as an alternative to following medical advice.” The Commissioners also rejected the ALJs determination that the level of substantiation may vary depending on whether the advertiser offers the product as a replacement for traditional medical care.

The Final Order requires POM to possess two RCTs in order to substantiate claims regarding a products effectiveness in the diagnosis, treatment, or prevention of any disease. The Commissioners noted that “[a]lthough [the Commissioners] did not need to decide how many RCTs are necessary to substantiate [POMs] disease claims in order to establish liability, [they] specify a two RCT requirement in the Order for two reasons. First, such a requirement is consistent with Commission precedent.” Second, POM has “demonstrated propensity to misrepresent to their advantage the strength and outcomes of scientific research, as reflected by [the Commissions] conclusion that [POM] made false and misleading claims about serious diseases, including cancer, in a number of the advertisements.”

The Commissioners agreed with the ALJs conclusion that FDA pre-approval is not warranted as part of the remedy. The Commissioners concluded that FDA pre-approval is unnecessary because the goals are sufficiently accomplished by requiring POM to possess at least two RCTs. Significantly, the Commissioners left open the issue regarding FTCs authority to require FDA pre-approval for disease claims. It remains to be seen whether the FTC will continue to include provisions regarding FDA pre-approval in FTC consent orders in other cases. However, as we have previously reported, the FTC has increasingly included FDA pre-approval provisions in consent decrees with companies such as Dannon and Iovate. Our reports can be found here and here, respectively.

POM has 60 days to appeal the Commissions Final Order to a United States Circuit Court of Appeals. See 5 U.S.C. § 45(c). Fuerst Ittleman David & Joseph, PL will continue to monitor the development of the POM case. For more information about food and dietary supplement claims or to have Fuerst Ittleman David & Joseph, PL complete a label and website review of your products, please contact us at (305) 350-5690 or contact@fidjlaw.com.

Eleventh Circuit Upholds Florida’s “Patient Self-Referral Act of 1992” as Constitutional

On January 10, 2013, the United States Court of Appeals, Eleventh Circuit, issued a ruling upholding Floridas “Patient Self-Referral Act of 1992” (Fla. Stat. §456.05) as constitutional. The full text of the Courts ruling in Fresenius Medical Care Holdings, Inc., et. al. v. Florida Department of Health, et. al., 11-14192 (11th Cir. 2013) may be found here.

The “Patient Self-Referral Act of 1992” (the “Florida Act”) was enacted in 1992 after the Florida legislature recognized a potential conflict of interest stemming from the referral of patients by one health care provider to another health care provider in which the referring provider maintained an investment interest. Fla. Stat. §456.05(2). The Legislature noted that “these referral practices may limit or eliminate competitive alternatives in the health care services market, may result in overutilization of health care services, may increase costs to the health care system, and may adversely affect the quality of health care.” Id. The Florida Act was, therefore, implemented to regulate physician self-referrals.

Congress had already passed similar legislation. Known as Stark I (passed in 1989) and Stark II (passed in 1993) (collectively “Stark laws”), Congress sought to contain health care costs and reduce conflicts of interest inherent in the referral of Medicare and Medicaid patients to business entities in which the referring physician (or their immediate family members) had a financial interest. See 42 U.S.C. §1395nn.

Both the Florida Act and Stark laws had several exemptions to the physician self-referral bans. One such carve-out found in both the Florida Act and Stark law exempted physicians in the renal dialysis industry from the self-referral prohibition. In 2002, however, the Florida legislature repealed the renal dialysis physician exemption, while the Stark laws retained the exemption.

Following Floridas repeal of the above-noted exemption, the Florida Act was challenged by three kidney care/dialysis providers (“Appellants”) who argued before the United Stated District Court, Northern District of Florida that the Florida Act was unconstitutional because it was “(1) preempted by Federal law, (2) violative of the dormant Commerce Clause and (3) violative of substantive due process.” Appellants reason for filing the action stemmed from their desire “to use a vertically integrated business model in Florida, referring all their [End-Stage Renal Disease] patients blood work to associated laboratories after providing the patients with dialysis treatment at their clinics.”

Appellants first argued for federal preemption. Federal preemption is the principle enumerated by the U.S. Constitution (and its progeny) which states (generally) that Federal law shall trump or “preempt” state law in the event of a conflict. See U.S. Const., Art. VI., cl. 2. While the Appellants argued that the Stark laws preempted the Florida Act, the Eleventh Circuit (along with the district court) rejected the argument concluding that, inter alia, that Federal conflict preemption did not apply to Floridas more restrictive Florida Act.

Appellants next argued that the repeal served to violate the dormant Commerce Clause. The dormant Commerce Clause “empowers Congress to regulate interstate commerce.” Relevant to Appellants argument in the case sub judice, the dormant Commerce Clause serves to, inter alia, prohibit states from implementing laws or measures “designed to benefit in-state interest by burdening out-of-state competitors.” Appellants argued that the Florida Act had the practical effect of discriminating against out-of-state commerce. The Eleventh Circuit, however, found that the “law operates to burden in-state and out-of-state [End Stage Renal Disease] health care providers alike” such that the Florida Act did not violate the dormant Commerce Clause.

Appellants final argument focused on a violation of substantive due process. The Eleventh Circuit noted that, “[u]nder the rational basis standard, the law requires only that the Florida Acts prohibition on physician self-referrals be rationally related to the Florida Legislatures goal of reducing conflicts of interest, lowering health care costs, and improving the quality of health care series.” Here, the Eleventh Circuit agreed with the district court stating, “the Florida Act passes rational basis-scrutiny because, no matter how ineffective the law might actually be, it was not irrational for the Florida Legislature to conclude that the amendments to the law would accomplish the legislative objections identified in Fla. Stat. §456.053(2).”

Based on the Eleventh Circuits reasoning above, the Court affirmed the district courts entry of summary judgment in favor of the State of Florida and against the three (3) kidney care/dialysis providers deeming the Florida Patient Self-Referral Act of 1992 constitutional.

Fuerst Ittleman David & Joseph, PL will continue to monitor developments in both the Stark laws and Florida Patient Self-Referral Act of 1992. For more information, please feel free to contact us via email at contact@fidjlaw.com or via telephone at 305.350.5690.

Uncertainty Regarding the Future Regulation of Compounding Pharmacies

As we previously reported, the nationwide outbreak of fungal meningitis linked to contaminated injections produced by New England Compounding Center (“NECC”), a compounding pharmacy in Framingham, Massachusetts, prompted calls by the public for better oversight and tighter regulation of compounding pharmacies. In response, Congress and states proposed new legislation in hopes of preventing another public health disaster.

Generally, the operations of compounding pharmacies are regulated by State Boards of Pharmacy, whereas drug manufacturers are regulated by the U.S. Food and Drug Administration (“FDA“). Consequently, drugs produced by compounding pharmacies are not subject to premarket review by the FDA or any other regulatory body, unless state laws so require. The activities of the compounding pharmacy in the NECC case, which involved the manufacture and shipping of drug products across the country, appear to have been much more akin to traditional notions of drug manufacturing than compounding. However, the line separating compounding and manufacturing can be blurry, and in this case it appears to have created a regulatory vacuum. Federal and state lawmakers alike are working aggressively to prevent a similar incident from ever happening again.

In a recent press release, U.S. Representative Ed Markey (D-MA) stated that he is preparing to re-introduce legislation, entitled Verifying Authority and Legality in Drug (VALID) Compounding Act, that aims to increase federal regulatory oversight of compounding pharmacies. The bill, originally introduced on November 2, 2012, died in the previous session of Congress. Overall, the bill preserves state authority to regulate small compounding pharmacies. However, larger compounding pharmacies would be regulated by the FDA as drug manufacturers. In order to determine if a compounding pharmacy is manufacturing drugs, the bill proposes to consider the extent to which such pharmacy sells drugs across state lines, the quantity of the drugs sold, and any other factors deemed appropriate by the Secretary of the Department of Health and Human Services (“HHS“).

In a January 4, 2013 press release, Massachusetts Governor Deval Patrick announced plans to file legislation that would strengthen the states regulation of compounding pharmacies. The proposed legislation would establish strict licensing requirements for compounding sterile drugs; authorize the state Board of Pharmacy to assess fines against pharmacies that violate state policy, regulations, or laws; establish whistle-blower protection for pharmacists and pharmacy staff; and reorganize the state Board of Pharmacy to include more members who are independent of the pharmacy industry. Governor Patrick stated that the proposed legislation, in addition to random, unannounced inspections of compounding pharmacies, would help ensure the safety of compounded drugs.

Although lawmakers seem eager to find ways to prevent another regulatory oversight like the one in Massachusetts from happening in the future, it remains to be seen what steps Congress and states will take to address gaps in the present regulatory scheme. Fuerst Ittleman David & Joseph, PL will continue to monitor any developments in the regulation of compounding pharmacies. For more information, please feel free to contact our offices by email at contact@fidjlaw.com or by phone at (305) 350-5690.

FDA Releases Two More Rules Implementing the Food Safety and Modernization Act

As we previously reported, President Obama signed the Food Safety and Modernization Act (“FSMA”) in January 2011 to help ensure the safety and security of foods in the United States.  On January 7, 2013, the U.S. Food and Drug Administration (“FDA“) issued two proposed rules implementing the FSMA. Generally, the first proposed rule would require food manufacturers to develop a formal plan for preventing their food products from causing foodborne illness. The second rule proposes enforceable safety standards for the production and harvesting of produce on farms. Interested persons may submit comments by May 16, 2013.

The first proposed rule, entitled “Preventive Control for Human Food,” would revise current good manufacturing practice (“cGMP”) regulations for domestic and foreign facilities that are required to register under the Federal Food, Drug, and Cosmetic Act (“FDCA”). If implemented, the proposed rule would establish hazard analysis and risk-based preventive controls for human food. Additionally, the proposed rule would require plans for correcting any problems that arise. These requirements are similar to Hazard Analysis and Critical Control Points (“HACCP”) systems required for juice and seafood. See 21 C.F.R. §§ 120 and 123.

The second proposed rule, “Standards for Produce Safety,” would establish science- and risk-based minimum standards for safe growing, harvesting, packing, and holding of domestic and imported produce in order to reduce the likelihood of microbial contamination. The proposed rule would establish standards in the following areas: worker training health and hygiene; agricultural water sanitation; treatment of biological soil of animal origin; equipment sanitation. Certain produce, however, are exempt under the proposed rule, such as commodities that are rarely consumed raw.

The Standards for Produce Safety rule also provides specific standards applicable only to sprouts. Notably, since 1996, there have been at least 30 reported outbreaks of foodborne illness associated with different types of raw and lightly cooked sprouts caused mostly by Salmonella and E. coli. As we previously reported, the International Sprout Growers Association (“ISGA“) urged the FDA to issue new safety standards for the production of sprouts.

The FDA press release assured that three other key draft rules that remain under review at the Office of Management and Budget (“OMB“) will be released soon. The additional rules include (1) requirements for new foreign supplier verification, (2) preventive controls for animal food facilities, and (3) third party audit certification.

Fuerst Ittleman David & Joseph PL will continue to monitor new rules issued by the FDA under the FSMA. For more information regarding the new rules, please contact us at contact@fidjlaw.com or (305) 350-5690.

ZPICs and Skilled Nursing Facilities: Medicare’s Wild Wild West

I. General Background

Fraud and abuse in the Medicare system undoubtedly increases healthcare costs for healthcare providers and healthcare beneficiaries. Healthcare providers, as a whole, can appreciate the efforts of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services (“CMS”) to ferret out abuses in the Medicare system. However, these efforts must be rational and reasonable so as not to interfere with the duty to provide reasonably necessary healthcare treatment and services.

In 2008, CMS began consolidating its third-party audit contracts into multi-million dollar Zone Program Integrity Contractor (“ZPIC”) contracts in an effort to “address fraud, waste and abuse” in the Medicare system  “by performing regional Medicare data analysis, complaint resolution and investigative activities.” According to a ZPIC contractor’s website:

The ZPIC contracts include work for all claim types including Part A, Home Health, Hospice, Part B, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS), Managed Care (Part C), Part D Medicare Prescription Drug, and Medicare and Medicaid Data Matching. Part A cost report audit and reimbursement will also added under the scope of a ZPIC contractor.2

In order to accomplish its goal, the United States was divided into seven (7) zones, with Florida in Zone 7. Figure 1, below, identifies the entities to which CMS awarded ZPIC contracts and the contract amounts:

Figure 1

Zone

Government-Contracted ZPIC auditorRegionContract Amount ($)
1SafeGuard Services, LLC3

Zone 1: California, Nevada, American Samoa, Guam, Hawaii, the Northern Mariana Islands, Palau, Marshall Islands, and the Federated States of Micronesia.

$72,809,122.00
2NCI, Inc. (previously AdvanceMed)4

Zone 2: Alaska, Washington, Oregon, Montana, Idaho, Wyoming, Utah, Arizona, North Dakota, South Dakota, Nebraska, Kansas, Iowa and Missouri.

$81,329,449.00
3 & 6Cahaba Safeguard Administrators5

Zone 3: Minnesota, Wisconsin, Illinois, Indiana, Michigan, Ohio and Kentucky; Zone 6: Pennsylvania, New York, Maryland, DC, Delaware, Maine, Massachusetts, New Jersey, Connecticut, Rhode Island, New Hampshire and Vermont.

$91,704,564.00
4Health Integrity, LLC6

Zone 4: Texas, Oklahoma, Colorado, and New Mexico.

$84,929,432.00
5AdvanceMed Corporation7

Zone 5: West Virginia, Virginia, North Carolina, South Carolina, Georgia, Alabama, Mississippi, Tennessee, Arkansas, and Louisiana.

$107,957,737.00
7SafeGuard Services, LLC8

Zone 7: Florida, Puerto Rico, and the U.S. Virgin Islands

$78,684,443.00

TOTAL

$517,414,747.00

Considering the Federal government is spending over one half of a billion dollars on ZPIC contracts, healthcare providers should expect nothing less than highly aggressive ZPIC auditors justifying their contracts. ZPICs are targeting everyone, including top-rated and reputable skilled nursing facilities (a/k/a nursing homes). Moreover, ZPICs are executing their mandate through a variety of practices (discussed below), none of which appear to be authorized by the Medicare Act (42 U.S.C. § 1395hh(a)(2)), none of which have been promulgated through the rulemaking procedures required by the Administrative Procedures Act (5 U.S.C. § 553), and all of which severely restrict a skilled nursing facility’s ability to operate. It is only a matter of time before the nursing home residents begin to feel the adverse impact of these audits.

II. A Firsthand Sampling of ZPIC Abuses against Skilled Nursing Facilities

A sampling of the practices employed by ZPIC auditors are set forth below:

A. Unannounced Visits

Nursing homes are accustomed to unannounced surveys and audits from federal and state agencies. However, ZPIC auditors in Florida have taken the unannounced visit to a new level. When ZPICs Zone 7 auditor, SafeGuard Services, LLC (“SafeGuard”), targets a facility, not only are the visits unannounced, but the visits are also accompanied by demands for immediate access to voluminous and confidential patient medical records, related and unrelated billing records, proprietary corporate business and financial information, and employees (for interview purposes) ”” all without regard to federally mandated staffing levels, the requirements of resident care, and the orderly operation of the skilled nursing facility. Moreover, Safeguard has regularly sought to preclude the skilled nursing facilities’ abilities to procure legal advice to discern how to respond to the demand for instantaneous and boundless access to records and personnel.  When nursing homes question the ZPIC auditors’ tactics, ZPIC auditors have become hostile, and over time, have developed a reputation that has instilled fear in every nursing facility under its “jurisdiction.”

B. Unknown and/or Deficient ZPIC Auditor Qualifications

ZPICs are charged with the task of ensuring that only reasonably necessary medical services are compensated.  However, actual ZPIC auditors charged with the day-to-day task of “policing” the dispensation of medical services have been exposed to lack formalized auditor training and/or corresponding medical, therapeutic or other clinical backgrounds. That said, it appears as though experience in the medical profession does not appear to be a prerequisite to conduct the purported audits, which, among other things, focus on medical necessity.

In one instance, a ZPIC audit resulted in an “initial” denial of therapy claims9 for an individual who, just one week prior, had his leg amputated, was receiving two (2) separate intravenous antibiotics and had physicians orders for medically necessary therapy in order to strengthen his lower body so that he would be strong enough for a prosthetic leg. Despite such grave health issues, a ZPIC auditor with no known medical background or other formalized medical training or education, made the astonishing and troubling determination, without any explanation, that therapy in this situation was unnecessary and/or unwarranted, thereby disallowing reimbursement for the physician ordered treatment. In a separate instance, approximately $2,800,000.00 of claims were denied as being “medically unnecessary.” The ZPIC auditors came to this decision by using computer-driven extrapolation methods which stripped $2,800,000 of compensation for care already given by reviewing a grand total of”¦ten (10) records. Telling, not one of those ten records appeared to have been reviewed by physicians or medical professionals.

Despite half of a billion dollars being paid to third-party contractors, there appears to be no substantive effort to actually find fraud and abuse in the Medicare system. In the former scenario, the facility had no choice but to shoulder the entire financial burden of complying with the physician’s orders and providing such medically necessary therapy, including intravenous antibiotics as needed.  That same provider  must somehow find the resources to stay in business while it wastes time and resources slowly working through the appellate process.

If the ZPIC auditors are permitted to continue as they have been, many nursing facilities will simply have no choice but to stop providing treatment until such time as CMS formally approves the procedure. Needed care will be not be dispensed, at least on a timely basis. Businesses cannot operate on an accounts receivable basis with the persistent threat of indiscriminate, inexplicable challenges to the services already provided. After all, who is going to make payroll to the employees? Who will pay the vendors? Who will make the lease payments? Who will make the licensing fees? The skilled nursing facilities cannot (and should not be required to) shoulder these financial burdens, whether prospectively or retrospectively, without proper reimbursement under the Medicare program.

C. Unreasonable Scope of Document Requests

Section 1833(e) of the Social Security Act states that Medicare auditors are only entitled to “information as may be necessary in order to determine the amount due such provider.” Yet, requests by ZPIC auditors, in particular SafeGuard, go well beyond the scope of information which may lawfully be requested. In one known instance, SafeGuard made one hundred and fifty four (154) separate requests for six (6) months of patient files10, along with two years of confidential and proprietary business and financial information (including, but not limited to, credit card statements, Facility floor plans, board meeting minutes, organizational charts, chart of accounts, Facility check registers, lists of entities doing business with the Facility, profit/loss statements, journal entries/descriptions, balance sheets, general ledgers, financial statements (audited and summary), backup financial data for cost reports, etc.).

In the face of questioning as to why the entire scope of such information was relevant, or upon what authority SafeGuard claimed to be entitled to it, Safeguard retreated to the “because we said so” argument. SafeGuard has been unable (or unwilling) to engage in a substantive dialogue concerning the basis for such requests, or to in any way elucidate a rationale for why such proprietary and confidential information is relevant in determining amounts due to the provider.   Instead, Safeguard rests on its earned reputation of fear and intimidation to coerce the production of such protected documents.

D. Unreasonable and Arbitrary Compliance Deadlines

In addition to the unreasonable scope of the requests, the ZPIC auditors place skilled nursing facilities in a position where compliance with their over-bearing and voluminous requests is impossible. As it relates to the voluminous request noted above, the nursing facilities were given fifteen (15) days to comply, accompanied by the warning that “[n]o extensions shall be granted.” Thus, ZPIC mandates, without regard to expense of compliance, that the nursing facility stop providing care to its residents and instead focus every effort to copying tens of thousands of documents in order to meet a deadline with no extensions. Of course, ZPIC does not compensate for such a labor-intensive task, nor for that matter, the loss of revenue caused by the redistribution of the facility’s labor force.11

E. Restrictions on the Presence of an Attorney or Corporate Officer

As described above, SafeGuard simply appears at its target facility with no notice and demands access to various employees for private interviews, without the presence of a corporate officer or attorney. Of course, information garnered by SafeGuard from employee interviews could be used, in part, (a) to form the basis of a prepayment suspension and (b) as evidence against a facility in later appellate proceedings. Without the presence of a corporate representative or an attorney to, at a minimum, monitor employee interviews or without any reliable transcript/recording of the interviews, the facilities are severely prejudiced and will remain at a disadvantage in any subsequent appeal. When a facility demands, at a minimum, that its counsel be present during the course of such interviews, SafeGuard refuses, albeit with no explanation whatsoever for its purported right to unfettered access to the facility’s employees. Instead, SafeGuard threatens sanctions and retribution.

F. Delays in Producing Audit Findings; Prepayment Suspensions

Again, despite the truncated response deadlines, SafeGuard auditors lack any sense of urgency in actually reviewing the produced documents in a timely manner. Indeed, there are no known regulations governing the time ZPIC auditors have to issue findings. This is exceedingly problematic because ZPIC auditors (through MACs) appeared to initially have the ability to place all nursing homes undergoing a ZPIC audit on a prepayment suspension.

In laymans terms, before ZPIC auditors make a finding or determination related to the purported audit, the nursing homes Medicare receivables remain arbitrarily suspended and Medicare cash flow slams to an halt. (UPDATE:  CMS issued guidance to change the ZPIC audits from a pre-payment to a post-payment review system). This is where the importance of a timely ZPIC determination comes into play. Surprisingly, the Medicare Administrative Contractor (“MAC”) (the third party entity contracted by CMS to handle “claims processing, customer service, provider audit and reimbursement, provider enrollment and financial management functions for CMS)12 ”” in Florida, First Coast Services Options, Inc. ”” seems to comply with every ZPIC request to restrict a facilities’ receivables. In fact, if you inquire with the Medicare Administrative Contractor (“MAC”) as to why claims are not being process and why funds are restricted, often times, they either do not know, need additional time to look into the matter, or direct the facility to consult with the ZPIC auditor ””who then typically refers you back to the MAC. The facilities are left with their hands tied, only to figure out a way to comply with each request, jump through every hoop and meet every appeal deadline, all while figuring out ways to maintain resident care and meet payroll obligations.13

III. Conclusion

If these ZPIC practices become the industry norm, facilities will have no means to remain in the business of providing top-rated care. Federal and state budgetary cutbacks have already caused a substantial hole in the level of compensation paid for necessary treatment and care; the industry cannot fiscally stomach any further disruption. The ZPIC audits have demonstrated the unchecked abuse and disruption to the healthcare system. Unacceptable levels of future closings will take place, and those in need of the nursing home care will be at a total loss.  Armed with over Five Hundred Seventeen Million U.S. Dollars ($517,000,000.00) of taxpayer money, and empowered with unchecked authority, ZPIC auditors have placed unregulated burdens, demands and deadlines on skilled nursing facilities such that compliance is impossible, while at the same time financially crippling a facility’s ability to defend itself against attack.

Fuerst Ittleman David & Joseph, PL will continue to monitor the ZPIC landscape, vigorously defend against all perceived abuses of scope and authority, and work tirelessly with its clients through every stage of the investigations, including the five (5) stages of appeal, to ensure receipt of all funds due and owing. If your organization is the subject of a ZPIC audit, contact our firm’s litigation department by calling 305.350.5690, or by emailing us  at contact@fidjlaw.com.

1https://www.safeguard-servicesllc.com/faqs.asp

2https://www.safeguard-servicesllc.com/zpic.asp

3https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=83502d7b1098492dcc1b9d530a82ca7c&_cview=0

4https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=f15c85127b9a7cf0cb0217916aa955fd&_cview=0

5https://www.fbo.gov/index?s=opportunity&mode=form&id=fbc47c90f4347f601c2d96f44c8b0e21&tab=core&_cview=1

6https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=2d80a098b5d0d2acf9dec553ed3d538b&_cview=0

7https://www.fbo.gov/index?s=opportunity&mode=form&id=3b25ef7cc31e18e67c8c61d28f1e242e&tab=core&_cview=1

8https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=25cbacceb657c406dc18d2a8a34b77a3&_cview=0

9To fully appreciate how taxing such a denial is to the provider, one must appreciate that an “initial” denial is continual in nature until such time as the entire ZPIC audit process, which may include five (5) separate stages of appeal, is exhausted. Thus, despite providing obviously necessary medical treatment, the ZPICs “initial” denial causes the disastrous absence of funds to the provider, funds which are particularly necessary, and scarce, given the federally mandated cut-backs to the Medicare and Medicaid recipients. A detailed discussion concerning the five (5) stages of appeal is beyond the scope of this entry.

10Patient files may involve a magnitude of detailed documents, including, but not limited to, Physical Therapy Notes, Occupational Therapy Notes, Speech Therapy Notes, Nursing Notes, Podiatry Notes, Psychology Notes, Psychiatry Notes, Dietary Notes, Activity Notes, Social Service Notes, Care Plans, Minimum Data Sets (MDS) (a 65 page document which must be completed on day 5, 14, 30, 60, 90 of a residents stay or every time there is a change in therapy), Resident Assessment Protocols, Medication Administration Records (MARs), Treatment Records, Wound Assessments, Falls Assessments, Bowel and Bladder Assessments, Smoking Assessments, General Admissions Paperwork, Billing Records, Physicians Orders, Physician Progress Notes, Telephone Orders, Nutrition Assessments, Hydration Assessments, Restraint Assessments, Position Assessments, ADL flow sheets, etc.

11In one instance, a facility actually made the effort to comply with the demands and offered to produce the tens of thousands of pages sought to SafeGuard. Confused by the fact that a facility actually moved heaven and earth to comply with its demands, SafeGuard refused the production, instead demanding that the documents be produced exclusively in digital form (on a CD or removal storage drive). When the facility demurred to this new demand, SafeGuard threatened the facility with the ultimate sanction of the immediate removal from the Medicare program!

12https://www.fcso.com/

13As it relates to prepayment suspensions, Dr. Peter Budetti, M.D., J.D., Deputy Administrator and Director, Center for Program Integrity, Centers for Medicare & Medicaid Services, Department of Health and Human Services issued correspondence to Ms. Elise Smith, Senior Vice President, Finance Policy and Legal Affairs, American Health Care Association dated August 23, 2012 stating, “CMS has determined that we can accomplish the appropriate oversight without continued prepayment review and have instructed our contractors to stop prepayment review in these facilities effective August 23, 2012.” (Emphasis added). Dr. Budettis August 23, 2012 correspondence appeared, on its face, to be a source of relief for nursing homes struggling to care for residents and meet payroll in light of the prepayment suspensions. In practice, however, even when presented with this correspondence, SafeGuard continued to restrict cash flow (on a prepayment basis), restrict bad debt payments and re-open four years of cost reports retroactively deny all Medicare claims contained therein, all without any findings, determinations or notices of any kind.

Class Action Lawsuits Attack Yogurt Products for Nonconformance with Standards of Identity

Over the past eight months, numerous class action lawsuits have been filed by consumers against yogurt manufacturers regarding the use of milk protein concentrate (“MPC”) as an ingredient in yogurt products. Generally, the lawsuits allege that the yogurt and Greek yogurt products are not actually yogurt because they do not comply with the required standard of identity for yogurt due to the use of MPC as an ingredient. Such lawsuits have been filed against General Mills Yoplait Greek yogurt, Cabot Greek-style yogurt, Dannon Activia yogurt, and Lucerne Greek yogurt.

The plaintiffs in these various suits allege that the products do not meet the FDA-approved standards of identity because the products contain MPC, which is not permitted in yogurt. MPC is often used as a filler to create a thicker product and increase the amount of protein. Plaintiffs also allege that because the products do not conform to the standard of identity for yogurt, the products are misbranded in violation of state law and the Federal Food, Drug and Cosmetics Act (“FDCA”).

Standards of identity define certain food products and govern the ingredients that must be used, or may be used, in the manufacture of those food products. The standard of identity for yogurt describes the permissible ingredients for yogurt, and components and processes that can be used to manufacture yogurt. The standard of identity for yogurt, nonfat yogurt and low fat yogurt are defined in 21 C.F.R. 131.200, 21 C.F.R. 131.203 and 21 C.F.R. 131.206, respectively.  As noted in the complaints, MPC is not expressly listed or described as a permitted ingredient in the applicable standards of identity for yogurt.

Pursuant to Section 403(g)( 1) of the FDCA, a food product is misbranded if: (i) it does not conform with the applicable standard of identity; or (ii) its label does not bear the name of the food specified in the definition and standard. 21 U.S.C. § 343(g). Moreover, courts have held that foods which purport to be standardized products, but contain ingredients not recognized in the standard of identity, are misbranded even if the label accurately describes the product’s ingredients. Libby, McNeill & Libby v. United States, 148 F.2d 71 (2d Cir. 1945) (affirming United States v. 306 Cases Containing Sandford Tomato Catsup With Preservative, 55 F. Supp. 725 (E.D.N.Y. 1944)).

According to the complaints, the use of MPC as an ingredient in these products renders the products misbranded pursuant to the FDCA, 21 U.S.C. § 343, because the products are represented as yogurt for which the standard of identity had been prescribed by regulation and the use of MPC in these products does not conform to the standards.

Significantly, manufacturers whose products are deemed by the FDA to be misbranded are subject to enforcement action. Enforcement actions can include the issuance of Warning Letters, injunctions or criminal penalties.  21 U.S.C §§ 332, 333. Previously, the FDA has warned dairy food product manufacturers that when MPC is not listed as an optional dairy ingredient in products governed by a standard of identity, the use of MPC is not permitted and would render the product misbranded. The FDAs Warning Letter can be found here. FDA Warning Letters notify recipients and the public that the FDA believes that a particular firm has violated federal law. Thus, given the bad publicity that these letters generate, it is advantageous for firms to correct possible violations as quickly as possible. The recipients of Warning Letters typically have 15 days to address the issues presented by the Warning Letter and to develop specific corrective actions. Failure to do so may put the recipient in jeopardy of facing product seizures or formal legal action by the FDA. Please see our previous reports here and here, discussing whether, and if so how, the recipients of Warning Letters may respond or challenge the Warning Letters in court in light of the United States Supreme Courts recent ruling in Sackett v. EPA.

Notably, on December 10, 2012, Judge Susan Richard Nelson of the U.S. District Court in Minnesota dismissed the General Mills Yoplait Greek yogurt lawsuit. In the ruling, Judge Nelson invoked the doctrine of primary jurisdiction, concluding that the FDA was best suited to handle the dispute. Under the doctrine of primary jurisdiction, a court has discretion to retain jurisdiction or stay litigation and refer issues that fall within the special competence of an administrative agency to that agency for its decision. See Access Telecomms. v. Sw. Bell Tel. Co., 137 F.3d 605, 608 (8th Cir. 1998). Courts generally apply the doctrine to promote uniformity and consistency within the particular field of regulation. Here, the Court determined that the underlying issue is whether MPC is a proper, permitted ingredient in yogurt as governed by the standard of identity for yogurt, and the resolution of this question falls squarely within the competence and expertise of the FDA, pursuant to the authority granted to the Agency by Congress. See 21 U.S.C. §§ 301, et seq.

It remains to be seen how quickly the FDA will act to address the ambiguities regarding the standard of identity for yogurt. Fuerst Ittleman David & Joseph will continue to monitor the FDAs regulation of food products. The attorneys in the Food, Drug, and Life Sciences practice group are well-versed in the complex FDA regulatory framework. For more information, please email us at contact@fidjlaw.com or call us at (305) 350-5690.

FDA Exhibits Increased Authority under Food Safety and Modernization Act

In early September of 2012, the U.S. Food and Drug Administration (“FDA“) and Centers for Disease Control and Prevention (“CDC“) announced an investigation into a multi-state outbreak of Salmonella Bredeney infections linked to peanut butter manufactured by Sunland, Inc. The outbreak sickened 42 people in 20 states according to the CDC. As part of the investigation in late September, the FDA and CDC briefed Sunland on the status of the investigation and the company volunteered to recall approximately 100 products, which included peanut butter and other products made with nuts and seeds. A list of those products can be found in Sunlands recall announcement.

During the investigation, the FDA discovered multiple sanitation violations at the Sunland manufacturing facility. FDA testing revealed the presence of Salmonella in raw peanuts from the peanut processing facility. The FDA also found that Sunland had knowingly released contaminated products onto the market between 2009 and 2012. A copy of the FDAs inspection report can be found here.

In response to the outbreak, the FDA suspended the food facility registration of Sunland on November 26, 2012. Registration with the FDA is required for any facility that manufactures, processes, packs, or holds food for consumption in the United States. 21 CFR 1.225. If a facilitys registration is suspended, that facility is prohibited from introducing food into interstate or intrastate commerce. The suspension, however, is only temporary, and does not prevent Sunland from continuing to manufacture foods while the registration is suspended.

Significantly, this was the FDAs first use of its registration suspension authority pursuant to the Food Safety Modernization Act (“FSMA”). 21 U.S.C. § 350d(b). As we have previously reported, the FSMA contains various sweeping provisions that expand the FDAs power to regulate food facilities. The new authority enables the Agency to suspend registration when food manufactured, processed, packed, received, or held by a facility (1) has a reasonable probability of causing serious adverse health consequences or death to humans or animals; or (2) the facility knew of, or had reason to know of, such reasonable probability, and packed, received or held such food.

On December 20, 2012, the U.S. Department of Justice (“DOJ“) filed a complaint against Sunland and its president, Jimmie D. Shearer, in the U.S. District Court in the District of New Mexico seeking a permanent injunction. The suit was filed on behalf of the federal government by US Attorney for the District of New Mexico Kenneth Gonzales. The DOJ press release can be found here.

According to FDAs press release, on December 21, 2012, U. S. District Court Judge William P. Johnson signed a consent decree imposing requirements on Sunland to keep potentially harmful products from entering the marketplace. The consent decree requires that Sunland retain an independent sanitation expert to develop a sanitation control program that the company must then implement in compliance with current good manufacturing practice (“cGMP”) regulations. According to the consent decree, the FDA has determined that adequate grounds no longer exist to continue the suspension and will reinstate Sunlands food facility registration. However, the company cannot process or distribute food from its peanut butter plant until it has complied with the consent decrees requirements to the Agencys satisfaction and obtained written authorization from the FDA.

This case highlights the FDAs increased authority under the FSMA to take enforcement actions against non-compliant food facilities. Fuerst Ittleman David & Joseph will continue to monitor the FDAs measures under the FSMA. For more information regarding the FSMA, FDA enforcement measures, or other compliance issues, please contact us at contact@fidjlaw.com or (305) 350-5690.

How Can FDA More Reasonably Regulate Autologous Stem Cell Procedures?

In the December 26, 2012 edition of the Food & Drug Law Institutes (FDLI) Policy Forum, Andrew Ittleman of Fuerst Ittleman David & Joseph took on the question of how FDA may more reasonably regulate autologous stem cell procedures. In the article, Mr. Ittleman concludes that FDA, under certain circumstances described in the article, should exercise “enforcement discretion” with respect to autologous stem cell procedures. Mr. Ittleman also describes how FDA has interpreted the concepts of “minimal manipulation,” and “homologous use,” and discusses FDAs regulation of autologous stem cell procedures as being in direct conflict with traditional notions of the practice of medicine. A copy of the article is available here.

United States v. Caronia: Second Circuit Rules Manufacturers Cannot Be Criminally Prosecuted for Off-Label Promotion of Drugs Under FDCA

On December 3, 2012, the United States Court of Appeals for the Second Circuit issued a landmark decision in United States v. Caronia, holding that “the government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful, off-label use of an FDA-approved drug.” In its opinion, available here, the court rejected the Governments interpretation of the FDCA as prohibiting manufacturer promotion of off-label uses and held that such a prohibition on manufacturers speech is an unconstitutional violation of the First Amendment. This decision is significant because it could change the way the FDA continues to regulate drugs under the misbranding and adulteration provisions of the FDCA.

Regulatory Framework

Under 21 U.S.C. § 355(a) of the FDCA, a drug must be approved by the FDA for specific use prior to being distributed into interstate commerce. Once the FDA approves a drug for distribution, physicians can prescribe the drug for both FDA-approved and unapproved (or “off- label”) uses. Courts and the FDA have long recognized the public value in allowing physicians to, in their best judgment, prescribe drugs for off-label use when in the best interest of the patient.

According to the FDA, the FDCA permits off-label prescription by physicians but does not allow “misbranding” by manufacturers through off-label promotion. The FDA has interpreted off-label promotion to be misbranding, stating that “[a]n approved drug that is marketed for an unapproved use (whether in labeling or not) is misbranded because the labeling of such drug does not include Ëœadequate directions for use.” (See FDAs Draft Guidance for Industry here.) It is important to note, however, that the FDCA and its associated regulations do not expressly prohibit the “promotion” or “marketing” of drugs for off-label use.

Factual Background

Alfred Caronia, an employee of Orphan Medical, Inc. (“Orphan”), now known as Jazz Pharmaceuticals, was found guilty of conspiracy to introduce a misbranded drug into interstate commerce in violation of the FDCA. Orphan manufactured the drug Xyrem, a central nervous system depressant, which contained gamma-hydroxybutryate (“GHB”), otherwise known as the “date rape drug”. Orphan obtained FDA approval for Xyrem for two indications: 1) to treat narcolepsy patients who experience cataplexy and 2) to treat narcolepsy patients with excessive daytime sleepiness. Due to the serious safety concerns related to the use of Xyrem, the FDA required Orphan to use a “black box” warning on its label stating that the drugs safety and efficacy were not established in patients under 16 years of age.

Mr. Caronia was hired by Orphan as a Specialty Sales Consultant to promote Xyrem. Under Orphans procedures, sales consultants were not permitted to respond to questions regarding the off-label use of Xyrem. Instead, sales consultants were required to fill out “medical information request forms” and Orphan would send information to the inquiring physicians. Any physician employed by Orphan as a promotional speaker, however, was permitted to answer off-label use questions. In 2005, the federal government launched an investigation of Orphan and Dr. Peter Gleason, a physician promotional speaker. The federal governments investigation was specifically focused on the off-label promotion of Xyrem. With the assistance of a government cooperator, who posed as a prospective Xyrem customer, the federal government audio-recorded Mr. Caronia and Dr. Gleason promoting Xyrem for unapproved uses. Specifically, Mr. Caronia was recorded as promoting Xyrem for use in the treatment of muscle disorders, chronic pain, and Fibromyalgia, as well as for treatment in patients under age sixteen. Xyrem was not approved for use in the treatment of these conditions or in patients under the age of sixteen. As a result of these statements, Mr. Caronia was charged and convicted with conspiracy to introduce and introducing a misbranded drug into interstate commerce in violation of 21 U.S.C. §§ 331(a) and 333(a)(2). Mr. Caronia appealed, arguing that the misbranding provisions of the FDCA prohibit off-label promotion, and therefore unconstitutionally restrict speech.

U.S. v. Caronia: Decision and Legal Rationale

The question before the Second Circuit Court of Appeals was whether the governments prosecution of Mr. Caronia under the FDCA for promoting an FDA-approved drug for off-label use was constitutionally permissible. In a 2-1 decision, the court found that “a conviction obtained under the governments application of the FDCAwould run afoul of the First Amendment” and vacated Mr. Caronias criminal conviction. In reaching its decision, the court relied heavily on the reasoning of the United States Supreme Court in IMS v. Sorrell. In that case, the Supreme Court first held that “[s]peech in aid of pharmaceutical marketingis a form of expression protected by the Free Speech Clause of the First Amendment.” In reaching this conclusion, the Court engaged in a two-step inquiry. First, the court considered whether the government regulation restricting speech was content and speaker-based. Second, the Court considered whether the government had shown that the restriction on speech was consistent with the First Amendment under the applicable level of scrutiny. The Court determined that because the statute set forth content- and speaker-based restrictions, it was subject to heighted scrutiny. Specifically, the Court held that the law, which prohibited pharmaceutical companies from using prescriber-identifying information for marketing purposes, disfavored speech with a particular content (marketing) when expressed by certain disfavored speakers (pharmaceutical manufacturers). Therefore, because “the creation and dissemination of information are speech within the meaning of the [Constitution],” the Supreme Court held that the Vermont law unconstitutionally restricted speech.

In reaching its decision in U.S. v. Caronia, the Second Circuit, like the Supreme Court in IMS v. Sorrell, engaged in a two-step inquiry: 1) whether the government regulation restricting speech was content-and speaker-based; and 2) whether the government had shown that the restriction on speech was consistent with the First Amendment under a heightened level of scrutiny. First, the court found that the governments interpretation of the FDCAs misbranding provisions as prohibiting off-label promotion is content-based because it distinguishes between “favored speech” and “disfavored speech” on the basis of ideas. Specifically, the court found that under the governments interpretation of the FDCA, speech about government-approved use of drugs is permitted, while certain speech about the off-label use of drugs is prohibited. Second, the court found that the governments regulation restricting speech only targeted one kind of speaker (pharmaceutical manufacturers), while allowing others to speak freely without restriction. Under the FDCA, off-label prescriptions and drug use are legal, which means that physicians and academics, for example, can speak about off-label use without consequence, while the same speech is prohibited when delivered by pharmaceutical manufacturers. The FDAs “construction Ëœthus has the effect of preventing [pharmaceutical manufacturers]”and only [pharmaceutical manufacturers]”from communicating with physicians in an effective and informative manner.” Therefore, the governments construction of the FDCAs misbranding provisions is content- and speaker-based, and subject to heightened scrutiny under Sorrell.

The court then examined the constitutionality of the governments restriction on commercial speech under the test set forth in Central Hudson Gas & Electric Corp. v. Public Service Commission. In applying the Central Hudson test, the court determined that the governments regulation of Mr. Caronias off-label promotion is unconstitutional because it does not directly advance the governments interest in drug safety and public health and is more extensive than necessary to achieve those interests.

The opinion explained that because the FDA contemplated and accepted off-label prescription and drug use as part of its regulatory framework, “it does not follow that prohibiting the truthful promotion of off-label drug usage by a particular class of speakers would directly further the governments goals” of preserving the FDAs drug approval process and reducing patient exposure to unsafe and ineffective drugs. Moreover, the court explained that selectively prohibiting manufacturer commercial speech “paternalistically” interferes with the ability of physicians and patients to receive treatment information, which could “inhibit, to the publics detriment, informed and intelligent treatment decisions.” Therefore, the governments construction of the FDCA “provides only ineffective or remote support for the governments purpose” because it “essentially legalizes the outcome”off-label use”but prohibits the free flow of information that would inform that outcome.”

Moreover, the court found that the governments construction of the FDCA “to impose a complete and criminal ban on off-label promotion by pharmaceutical manufacturers is more extensive than necessary to achieve the governments substantial interests” because other, less speech-restrictive alternatives are available. For example, according to the Second Circuit, the government could create other limits, such as ceilings or caps on off-label prescriptions to minimize off-label use or to address manufacturer evasion of the drug approval process. Alternatively, the government could further develop guides to help physicians and patients differentiate between misleading and false promotion, exaggerations and embellishments, and truthful or non-misleading information. Lastly, the court suggested that the government could even prohibit off-label use altogether if the use of off-label drug use is exceptionally concerning.

The court did limit the scope of its decision: “Our conclusion is limited to FDA-approved drugs for which off-label use is not prohibited, and we do not hold, of course, that the FDA cannot regulate the marketing of prescription drugs.”

Because the First Amendment mandates that the regulation of speech “be a last”not first”resort,” the court held that the government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech that promotes the lawful, off-label use of an FDA-approved drug. In its opinion, the court also explained that it construed the misbranding provisions of the FDCA as not prohibiting or criminalizing truthful promotion of off-label usage.  For these reasons, the court vacated Mr. Caronias criminal conviction and remanded the case to the district court.

At present, the U.S. v. Caronia decision is only binding on courts within the jurisdiction of the Second Circuit. However, we expect the government to petition for a rehearing or rehearing en banc in the Second Circuit, or for writ of certiorari to the United States Supreme Court. Because it is highly unlikely that the government will do nothing and simply allow the decision to stand, the constitutionality of off-label promotion of approved drugs is far from resolved, even in the Second Circuit. This decision is one that favors members of the pharmaceutical and life sciences industries; however, it remains unclear how, or whether, other courts will join the Second Circuit in finding that manufacturer off-label promotional speech warrants protection under the First Amendment.

Fuerst Ittleman David & Joseph will continue to monitor any developments in the regulation of off-label promotion of FDA-approved products. For more information, please feel free to contact us via email at contact@fidjlaw.com or via telephone at 305.350.5680.

U.S. Lifts Ban on Imports from Burma: Continued Efforts to Ease Burma Back into the Global Economy

Just one day before President Barack Obama embarked on the first-ever trip to Burma by a sitting U.S. president, on November 16, 2012, the U.S. government removed most import restrictions on goods from Burma. This joint effort between the Department of State and the U.S. Department of Treasury will waive portions of the Burmese Freedom and Democracy Act of 2003 to allow most Burma-origin goods into the American market for the first time in nearly a decade. These actions will be implemented by General License No.18 authorizing all Burma-origin imports except for jadeite, rubies, and any commodities specifically designated on U.S. black lists.

This lifting of certain trade restrictions marks the latest of several efforts by the United States and the international trade community to reintegrate Burma into the global marketplace, following severe trade restrictions that were initially placed on the country in the late 1980s for its government’s violent responses to opposition groups.

Canada, for example, lifted its ban on trade and investment in Burma in the Spring of 2012, including prohibitions on imports, exports, investment, the docking and landing of ships and aircraft, and the provision or acquisition of financial services.  It should be noted, however, that Canada has maintained an arms embargo and prohibitions against designated Burmese persons. Similarly, European foreign ministers approved a one-year suspension of the E.U. economic sanctions against Burma.

While companies have urged the present administration to formulate a plan to lift trade restrictions across all sectors of the Burmese economy, the U.S. is slightly more reluctant to move as swiftly as Canada and the E.U. in lifting Burmese sanctions. The Obama Administration has expressed intentions to pursue a calculated step-by-step process to reward the leaders in Burma for further reforms and to give the U.S. the flexibility to slow the process if Burmese reforms are delayed or reversed. As of April 4, 2012, the U.S. had lifted restrictions only on certain financial transactions in support of humanitarian, religious, and other non-profit activities authorized by the U.S. Department of Treasury.

The United States has recognized and rewarded Burma’s continued democratic and humanitarian reforms including the country’s April elections, release of political prisoners, increased press freedom and cease-fire agreements with armed ethnic groups. While the U.S. acknowledges these progressive steps, the most recent lift of import restrictions is a change in enforcement and not a full repeal of the legal framework that has authorized U.S. sanctions against Burma for almost 25 years. In a joint statement released by the U.S. Departments of State and Treasury, the agencies noted that “the U.S. government is closely monitoring and supporting Burma’s progress on reform, and the core authorities underlying our sanctions remain in place[d]espite positive changes, [we] remain concerned about corruption, remaining political prisoners, continued military ties to the Democratic People’s Republic of Korea and ethnic conflict.”

In a statement by House Ways and Means Committee Chairman, Dave Camp (R-Michigan), he noted, “While we’ve seen positive developments in Burma over the past few months, much work remains ahead. I encourage the Burmese Government to continue on its forward-looking trajectory and implement significant political and economic reforms in order to foster a truly free and prosperous Burma.” Democratic Senator Max Baucus (Montana) echoed these thoughts stating, “Burma has made real progress advancing democracy, but we need to maintain pressure to guarantee it continues.”

The President’s visit to Burma, an unthinkable prospect just two years ago, marked a “pivotal moment in Burmese history that embraced the progress that has been made and further encouraged the government and its people to move forward with their transition to democracy” said Deputy National Security Advisor for Strategic Communications, Ben Rhodes on a November 15th conference call regarding the presidents visit. Hopefully, the lifting of trade restrictions will be mutually beneficial for U.S. foreign relations and policy, Burmese domestic political infrastructure, and global trade as a whole.

Fuerst Ittleman David & Joseph, PL, has significant experience in trade law, sanction compliance programs, and in counseling our clients as to the best means to reap the benefits of changes in U.S. policies.  Contact us today for a free consultation.