Last-minute medical law rulings provide mixed results

A federal judge has halted the implementation of a new California law after it was challenged by dialysis patients and nonprofits.

AB 290, set to take effect Jan. 1, would place new regulations on third-party payments to health insurers. The plaintiffs in the two cases claimed the law would interfere with organizations that provide financial assistance to people in need of dialysis. Doe et al. v. Becerra, 8:19-cv-02105-DOC-ADS (C.D. Cal., filed, Nov. 1, 2019) and Frensenius Medical Care Orange County, LLC et al. v. Becerra 8:19-cv-02130-DOC-ADS (C.D. Cal., filed, Nov. 5, 2019).

U.S. District Judge David O. Carter in Santa Ana ruled Monday the law addresses a legitimate state concern that companies were steering dialysis patients in ways that resulted in "unjust enrichment of providers, [and] higher out-of-pocket costs to patients."

However, Carter ruled the law could result in patients facing "potentially life-threatening disruptions in treatment and displacement from transplant waiting lists." This, he wrote, justified maintaining the status quo while the case proceeds.

Meanwhile, a federal judge in Sacramento declined to block a new law barring pay-to-delay deals between pharmaceutical companies and generic drug makers. Association for Accessible Medicines v. Becerra, 2:19-cv-02281-TLN-DB (E.D. Cal., filed Nov. 12, 2019).

AB 824 closes a loophole in the law critics said allowed companies to pay off the first generic drug maker to file a patent for a cheaper version of a medicine, potentially keeping the competitor off the market for additional months or years.

The plaintiff, a trade group representing generic drug makers, claimed the law would raise prices and interfere with the federal government's efforts to regulate the drug industry. But in an order issued Tuesday, U.S. District Judge Troy L. Nunley wrote the group had standing but failed to prove its claims of ripeness and irreparable harm. The case is ongoing.

"Speculation of how the market will react to the bill's implementation is not enough to support a preliminary injunction," Nunley wrote.

-- Malcolm Maclachlan