Click or swipe to read our partners’ perspectives on:
- Intellectual Property
- Anticorruption
- Private Equity
- Mergers and Acquisitions
- Employment Challenges
INTELLECTUAL PROPERTY
What has been the impact of patent litigation on the way that companies manage their IP? What is the next line of defense?
Melanie Rupert
New York
In the decade that I have been practicing in the life sciences space, I have seen a definite trend toward our clients evaluating their patent portfolios long before they expect any patent challenges. Our pharmaceuticals clients, in particular, are able to predict the earliest date that they could receive a patent challenge on their marketed products with relative certainty, due to the relevant statutory and regulatory framework for branded versus generic drug cases. One of the most strategic parts of my practice is collaborating with our clients on this “due diligence” process, which allows us to identify, and hopefully resolve, possible weaknesses in their patents in a very proactive manner — and long before a potential adversary could be describing them to a judge.
Preston Ratliff
New York
Senior management has never been more focused on leveraging and maximizing the value of intellectual property critical to protecting their companies’ revenue streams. For example, in the field of life sciences, patents protecting new drugs and novel treatments for disease are must-have assets for innovative companies threatened by a growing marketplace of generic drug makers. As a result, in-house counsels have increasingly placed importance on partnering with outside counsel to help educate senior management on the nature of patent litigation as well as aligning it to meet company goals and objectives. Moreover, while litigation budgets have tightened in most areas, the acute appreciation of the value of patent litigation has led to sustained and/or increased budgets.
Next, read about Anticorruption
ANTICORRUPTION
What are the main challenges that the Foreign Corrupt Practices Act poses for the life sciences sector?
Tara Giunta
Washington, DC
The life sciences sector faces significant challenges in complying with anticorruption laws globally. Our work with health care, pharmaceutical, and medical device companies has helped them to identify, manage, and mitigate compliance risks, particularly in high-risk markets. In this environment companies need to develop and enhance processes that address compliance risks but tailor them to both corporate structure and risk profile and ensure they are manageable from an implementation perspective. We have found the compliance risks presented by the high number and differing types of third-party intermediaries involved in their businesses require carefully tailored due diligence procedures and oversight mechanisms, including internal audit. Global anticorruption compliance is, and will remain, a rapidly expanding risk area for life sciences companies. It is also an area where we have been very much at the forefront.
Morgan Miller
Washington, DC
Pharmaceutical and other life sciences companies continue to face rigorous enforcement by the Securities and Exchange Commission and Department of Justice under the Foreign Corrupt Practices Act, as well as by other international regulators that have stepped up pressure under their own anticorruption laws. Perhaps no other industry faces greater challenges, given the vast number of their employees engaged in daily interactions with foreign officials, including the wide array of doctors associated with public healthcare institutions spanning the globe. While U.S. authorities press forward and expand the breadth of their industry-wide inquiry, it is critical for the life sciences sector to remain vigilant in responding to concerns of potential improper payments. A proactive, risk-based approach is crucial, grounded on regular review and enhancement of internal controls, consistent monitoring and oversight, and adequate resources devoted to anticorruption compliance and internal review.
Next, read about Private Equity
PRIVATE EQUITY
What is driving deal activity in the healthcare industry?
Brian Richards and Christopher Sheaffer
Chicago
In the U.S., healthcare reform and uncertainty regarding its implementation are creating risk and opportunity that are driving deal activity. The Affordable Care Act is expected to significantly increase consumption of healthcare goods and services, while changing reimbursement regimes will reallocate revenue and new costs will be imposed on certain providers. Investors are seeking to move away from businesses whose growth is at risk from these trends and into opportunities that address macro themes of reform — achieving better healthcare outcomes and lowering system costs. Helping our clients navigate this shifting landscape was the hallmark of our practice in 2012 and will continue to be this year and beyond.
Next, read about Mergers and Acquisitions
MERGERS AND ACQUISITIONS
What impact is regulation having on M&A in the U.S. healthcare sector?
James Owens
Los Angeles
Phillip Street
Atlanta
Merger and acquisition activity in the U.S. healthcare sector should continue at an intense pace for the foreseeable future as a result of the passage and Supreme Court validation of the Affordable Care Act, among other things. The increase in the number of individuals with healthcare insurance mandated by the Affordable Care Act, along with an aging U.S. population, will lead to increased demand for healthcare services. This increase in demand, along with regulatory developments pertaining to payment reform, will continue to create opportunities for strategic transactions among healthcare providers, payors, suppliers, lenders, and investors. Well-advised and sophisticated players will have the best advantage to successfully pursue these strategic initiatives and to successfully navigate the compliance challenges of an already highly regulated healthcare business environment.
Next, read about Employment Challenges
EMPLOYMENT CHALLENGES
What are the biggest challenges facing pharmaceutical companies in managing their workforce?
Barbara Johnson and Neal Mollen
Washington, DC
Pharmaceutical companies face many of the same employment law issues as other industries, but often with a unique twist. Retaliation claims are being filed at ever-increasing rates, and pharmaceutical companies are especially vulnerable. Whistleblower programs implemented as part of compliance procedures often leave whistleblowers feeling immune from criticism. They often bring whistleblower claims when complaints are followed by adverse employment actions.
Pharmaceutical companies also struggle with employees who file qui tam actions and receive huge settlements, yet remain in the workplace. It has sometimes proved easier to pay these employees to leave.
Contract employees who supplement sales efforts significantly increase risks. Significant control, including training and/or monitoring, is needed to ensure contractors comply with increasingly demanding regulation. However, this also increases the risk that regulators will deem the contractor’s employees to be employees of the pharmaceutical company. State and federal agencies are closely scrutinizing these arrangements.
While Christopher v. SmithKline Beecham Corp. squelched the onslaught of federal wage and hour misclassification pharmaceutical sales representative cases, numerous wage and hour issues remain and pharmaceutical companies must stay alert to more stringent state requirements. Finally, pharmaceutical companies, like other large employers, should expect increased gender and race discrimination class actions, especially over pay equity.
