Marshall E. Jackson, Jr.
Associate
Office: Washington, DC
Year at Firm: 4

What is your favorite part about practicing healthcare law at McDermott? 

My favorite part of practicing healthcare law at McDermott is working with clients that are out in front tackling very interesting and unique issues. The healthcare industry continues to evolve, and our clients are at the forefront. The changes in the industry have required clients to navigate areas of uncertainty, and our clients look to us to help them navigate that uncertainty. I have been blessed to sit shoulder to shoulder with a dynamic McDermott team helping our clients tackle new and unprecedented issues. No day is a dull day.

What is the biggest opportunity and greatest challenge facing clients in your area of focus today? 

Many of our clients face the challenge of balancing the need to deliver affordable, quality healthcare to people when and where they need it, while maximizing return on investment for their business within a hot healthcare market. While one side seems provider-centered and the other investor-centered, providers and investors alike grapple with this balancing act. In addressing this balance in the context of an ever-changing industry, our clients are seizing opportunities to embrace new ways to deliver healthcare, and forming strategic partnerships and collaborations to strike the balance. We are increasingly seeing the industry embrace the use of digital heath technologies to allow providers to reach patients and address growing healthcare concerns. We are also seeing providers, payors, retailers, tech companies, and investors collaborating in new ways to spearhead innovation within the industry. It has been great to work with clients to address this challenge through innovative approaches.

Continue Reading Five Questions with a Health Lawyer: Marshall E. Jackson, Jr.

Healthcare is facing a time of transformation as regulators, providers and other stakeholders take action to improve care coordination and increase the use of technology to deliver care. Hospital and health system innovation centers are increasingly acting as the catalyst to fuel growth and expansion through technology and data. In this episode of the Collaborative Transformation podcast series, McDermott partners Kerrin Slattery and Krist Werling discuss:

  • Opportunities for innovation centers and other collaborative arrangements in healthcare
  • Top regulatory and compliance challenges innovators face and ways to navigate them
  • Organizational and cultural issues for healthcare leaders to consider when making innovation a strategic priority
  • Investment structures and unique due diligence concerns to address when designing or investing in innovative deals
  • Key considerations when executing cross-border transactions in healthcare and life sciences

Click here to listen to the full episode. 

Kerrin and Krist, alongside other McDermott partners and executives from some of healthcare’s most innovative organizations, will address more topics related to collaboration and industry innovation at McDermott’s Hospital & Health System Innovation Summit on October 24 in New York. Click here to learn more about this program. 

Name: James A. Cannatti III
Practice Focus Area: Healthcare Fraud & Abuse
Office: Washington, DC
Years at Firm: 1

What is your favorite part about practicing healthcare law at McDermott?

My favorite part of working in the McDermott Health practice, and at the Firm generally, is the team approach to advising clients. Each of us has unique subject matter knowledge and experience in different areas of law. Very often, our clients require advice that cuts across multiple areas and issues. By working together across different disciplines within the Firm and within the Health practice we can provide comprehensive advice and counsel to our clients – not just advice on one discrete issue – and approach things from a broader, strategic perspective to help meet their needs.

What is the biggest opportunity and greatest challenge facing clients in your area of focus today?

I work in the healthcare regulatory space, focusing on federal and state fraud and abuse issues. As the healthcare industry has evolved and focused more on delivering value, many fraud and abuse laws, which were written decades ago, have not kept pace and have been seen as barriers to innovation. Over the last few years regulators have signaled a willingness to rethink how some of the laws should be applied to novel arrangements and approaches to care. The evolving regulatory landscape and the potential removal of some of the barriers posed by the fraud and abuse laws presents a significant opportunity for clients to pursue transformative approaches to care within our healthcare system. At the same time, change creates uncertainty and when there’s uncertainty there is also risk. Those who are able to manage the uncertainty and take advantage of new opportunities will be well positioned for success.

Continue Reading Five Questions with a Health Lawyer: James A. Cannatti III

In today’s highly competitive healthcare environment, investors may find themselves in an auction process where they must conduct due diligence pre-exclusivity. With limited time and mounting pressure, it can be difficult to know what issues to prioritize. Here are some practical tips for focusing your due diligence efforts strategically in a pre-exclusivity setting:

  • Quality of Earnings: Against the backdrop of high valuations, quality of earnings should be a key diligence focus, particularly in the context of high-complexity transactions  such as corporate carve-outs, partnerships with corporates and public-private pairings. For example, it is critical to examine the pro forma EBITDA to see if it excludes costs or includes questionable adjustments or add-backs.
  • Timeline: How competitive is the auction process and when are bids due? Does the buyer plan to conduct a full due diligence review pre-exclusivity, or instead look for big ticket liabilities that have a potential to impact valuation or derail the transaction?
  • Legal Showstoppers: Keep an eye out for legal showstoppers—issues that go to the core of the business, are not isolated incidents and are not fixable through purchase price adjustments, indemnification, escrow or enhanced compliance measures. For example, referral relationships that are based on illegal arrangements, systemic upcoding, quality of care issues, tenuous relationships with hospital partners, untenable and promised salary increases, a culture of non-compliance, or a retiring physician workforce without adequate succession planning.

As you plan your due diligence, keep in mind these additional factors that can inform how you structure your efforts:

Continue Reading Tips for Conducting Effective Due Diligence in an Auction Process

The Food and Drug Administration (FDA) has communicated a commitment to ensuring that firms marketing dietary supplements are not misleading particularly vulnerable consumers (e.g., elderly, cancer patients, or children) with baseless disease treatment or prevention product claims. Prior FDA leadership was vocal about the need to closely monitor the dietary supplement industry because of the significant footprint the industry has established. Couple the bustling supplement industry with the awakening cannabis and cannabis derived industry, and there is colossal business opportunity. The opportunity, however, must be married with measured restraint, particularly in advertising and marketing claims.

Trailing the 2018 Farm Bill, FDA is pushing forward with its information-gathering efforts to determine if it will embark on a rule making process to allow the marketing of cannabidial (CBD) as a dietary supplement. Currently, dietary supplement products containing CBD cannot be legally marketed in the United States. As previously explained, under current federal law, marketing is prohibited because CBD is an active ingredient in an FDA approved drug that was the subject of substantial clinical investigations.

On July 22, Curaleaf Inc., a Massachusetts firm, received a warning letter from the FDA, citing the company for marketing products containing CBD (i.e., CBD lotion, pain-relief patch, tincture and vape pen) in violation of the Food Drug and Cosmetic Act (FD&C Act). Curaleaf operates online and has dispensaries in 12 states. The company markets medical marijuana and sells dietary supplement products containing CBD derived from hemp, under its Curaleaf Hemp brand and Bido brand for pets. This is the fourth letter this year that the agency has issued to a firm that markets products containing CBD. The Agency’s letter identified a number of statements from Curaleaf’s website that FDA says establishes that the “products are drugs under section 201(g)(1) of the FD&C Act, 21 U.S.C. 321(g)(1), because they are intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease and/or intended to affect the structure or any function of the body.” The FDA specifically called out product claims and social media promotion that touted these products as treating Alzheimer’s disease, anxiety, depression, cancer, opioid withdrawal and Parkinson’s disease. Curaleaf was also cited for marketing CBD products for use in pets that suffer from arthritis and pain associated with aging.

Continue Reading FDA Regulatory Check-Up: CBD and Dietary Supplements

Nora Klein
Associate
Office: Chicago
Years at Firm: 2

What is an interesting fact about yourself that others may not know?

I played college golf at University of Illinois and in September 2019 I will be competing in the United States Women’s Mid-Amateur National Championship in Flagstaff Arizona. This will be the 33rd annually national championship for female golfers over 25 years old. The United States Golf Association runs 16 National Championships a year and to be able to play in one is every golfer’s dream. I feel so grateful to work at a place that quite literally supports me on and off the golf course.

What is the biggest opportunity and greatest challenge facing clients in your area of focus today?

The biggest challenge for our clients is also the biggest opportunity – how to grow in the revolutionary and highly profitable yet competitive life sciences industry, which is continuously expanding into new and often groundbreaking subsectors. Navigating these issues makes working at McDermott an enjoyable challenge. We not only need to assist our clients in finding innovative ways to grow their enterprises and remain compliant with healthcare rules and regulations, but also provide thoughtful, forward-looking solutions and plans that allow them to grow as these new subsectors emerge.

Continue Reading Five Questions with a Life Sciences Lawyer: Nora Klein

In 2016, Congress passed the 21st Century Cures Act (Cures Act), which contained provisions to help accelerate medical product innovation while reducing regulatory burden, as well as to increase efforts for critical research and increase the involvement of patients and their perspectives in research and the product development process. The Cures Act specifically provided the US Food and Drug Administration (FDA) authority to modernize product development and review, and create greater efficiencies and predictability in product development and review. In June 2018, in response to this congressional mandate and corresponding new authorities, as well as reauthorizations of FDA’s user fee agreements, FDA made a series of announcements for a proposal to modernize new drug development.

Highlights of FDA’s initial proposal included:

  • Focusing on recruiting talent across disciplines;
  • Building multidisciplinary teams for more efficient collaboration;
  • Prioritizing operational excellence through a single and consistent review process;
  • Improving knowledge management through enhancements to information technology and honed expertise within review divisions;
  • Emphasizing safety and risk-benefit analysis before and after approval; and
  • Incorporating the patient voice into product development.

As articulated by former FDA Commissioner Scott Gottlieb, “[a] principal aim of these proposed changes is to elevate the role of . . . scientists and medical officers to take on even more thought leadership in their fields.”  The agency contemplates implementing organizational and structural changes that make drug review divisions more therapeutically-focused to promote efficient review and transparency in – as well as patient and stakeholder access to – the review process. According to the agency, these and other changes that are part of the Cures Act will result in a 20 percent improvement in efficiency.

Continue Reading Modernizing FDA’s New Drugs Regulatory Program – Reviewing the Guidance Ecosystem and Implications for Life Sciences Companies

Rachel Stauffer
Director, McDermott+Consulting
Focus Area: Health Policy Advocacy and Lobbying
Years at McDermott+Consulting: 1.5

What is your favorite part about your health policy work at McDermott+Consulting? 

We have a deep bench of experts on a wide variety of health policy issues. This allows our team to be involved in so many different aspects of health policy – and that is my favorite part. There is no “normal” or “typical” day here. We work on different types of projects (advocacy, stakeholder engagement, strategic planning, for example) for different clients, including hospital systems, diagnostics, rural health, physician groups and others, in any given day. It keeps me on my toes and gives me an opportunity to learn new things every day.

What is the biggest opportunity and greatest challenge facing clients in your area of focus today? 

The biggest opportunity and greatest challenge facing clients today is the same: the unsettled health policy landscape. The politics around health policy are not as clear cut as they used to be, even just a few years ago. This puts clients in a unique position to shape and influence policy in ways that were not necessarily available a few years ago. On the other hand, there is little ability to predict what happens next. , It can be challenging to navigate and understand where to focus and how to deliver your message when the politics become murky but, that is what we are here for!

Continue Reading Five Questions with a Health Policy Specialist: Rachel Stauffer of McDermott+Consulting

Drew Elizabeth McCormick
Associate
Office: Boston
Years at Firm: 2

What is your favorite part about practicing health care law at McDermott? 

I get to work with world class lawyers on cutting edge issues and help our clients navigate the challenges of succeeding in a very dynamic, heavily regulated industry. I am constantly being challenged and learning new things, all while having the honor of helping guide our clients in transforming health care.

What is the biggest opportunity and greatest challenge facing clients in your area of focus today? 

Definitely the ability to take on risk and succeed in a value-based payment paradigm. We are seeing many shifts in the industry, which are largely being driven by fundamental changes in reimbursement structures away from fee for service. Compounding this, the regulatory framework is lagging behind in many regards, creating tensions and uncertainty that our clients lean on us to help them resolve.

Continue Reading Five Questions with a Health Lawyer: Drew Elizabeth McCormick

The current environment for healthcare transactions is fiercely competitive with high prices, tough deal terms and limited time for proper due diligence. In terms of both value and number of deals, 2018 was the biggest year for health care private equity (PE) since the financial crisis. More large cap PE firms are moving into the small and mid-cap space, increasing competition. At the same time, non-health-care entrants are competing with US and international PE, especially in the area of physician practice management and other related health care services.

Faced with this stiff competition, sponsors are getting more creative in their healthcare partnerships, whether that means partnering with management teams on new strategies, partnering with large strategics or even with one another.  These innovative collaborations can open up more investable opportunities, including public to privates and secondary trades among sponsors.

Even with these creative new opportunities, submitting a winning bid for a health care services business in a hotly contested auction can be a Herculean task. When outbidding the competition is not an option, here are some tips to help differentiate your offer:

Continue Reading Tips for Winning Competitive Health Care Auctions