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Justin Gallagher, associate publisher of The American Journal of Managed Care. Welcome to This Week in Managed Care, From the Managed Markets News Network.

Five years after the Supreme Court blocked most personal-injury lawsuits against makers of generic drugs, a rule designed to strengthen patient protections have (has) stalled, leaving what consumer groups warn is a safety gap for millions of users...More than 88% of the prescriptions dispensed in the United States are for generic drugs...these drugs also have what some advocates describe as a hidden risk...Only makers of brand-name drugs have a legal duty to update their warning labels if they learn of new risks or side effects, the high court ruled in a 5-4 decision five years ago. By contrast, justices said that FDA rules forbid generic makers from acting on their own to update their warning labels...The...majority reasoned that because generics must be the same as the approved brand-name drugs, their makers are not to free to add new warnings. At the same time, they ruled that generic makers may not be sued by injured patients who contend they and their doctors were not warned of a drug’s serious new risks...In response to public petitions, the FDA proposed to change its rule so generic makers would have the freedom and a legal duty to update their warnings to patients and doctors. But the proposal ran into fierce opposition from industry leaders who said it would be costly and possibly confusing. If several generic versions of a drug were being sold, doctors and pharmacists could be confused if their warning labels differed, they said.

The European Medicines Agency...recommended suspending the sale of dozens of generic medicines — many of which are sold by Novartis and Teva Pharmaceuticals — over concerns about "flawed" studies that were conducted by an Indian clinical research organization...The move comes three months after the US Food and Drug Administration alerted an untold number of drug makers of problems at the Semler Research Center...in Bangalore. An inspection...found "significant instances of misconduct and violations of federal regulations, including the substitution and manipulation of study subject samples."...the World Health Organization had issued a notice to Semler for the same reasons...regulators in each EU country will have to determine the extent to which specific medicines that were tested by Semler are critically needed before proceeding with suspensions. The EMA noted there is no evidence, to date, that any patients were harmed or that any of the drugs were not effective.

U.S. antitrust officials on Thursday moved to block an unprecedented consolidation of the national health insurance market, filing suit against Anthem Inc's proposed purchase of Cigna Corp and Aetna Inc's planned acquisition of Humana Inc...The U.S. Department of Justice said the two mergers would reduce competition, raise prices for consumers and stifle innovation if the number of large, national insurers were to fall from five to three..."We will not hesitate to intervene. We will not shy away from complex cases," U.S. Attorney General Loretta Lynch told a news conference. "We will protect the interests of the American people."

...AstraZeneca is growing impatient with the U.K. government for not making available the new lung cancer med Tagrisso (osimertinib)...Already available through health programs in France, Germany, Sweden and several other European countries, Tagrisso this week bested chemo in a Phase III trial in advanced EGFR mutation-positive non-small-cell lung cancer. It’s already EU- and FDA-approved, but has so far failed to gain support from NICE (National Institute for Health and Care Excellence), which said on a preliminary basis last month that the drug shouldn’t be included in England’s National Health Service...Anson (AstraZeneca’s U.K. head Lisa Anson) renewed a call for the government to reform NICE, growing the chorus of displeasure among AZ’s pharma peers who have seen effective new drugs turned down on price concerns...

The U.S. Food and Drug Administration has become something of a bogeyman for India’s stock market...An inspection blitz on Indian drug factories that supply to the U.S. helped push the broader index of Indian health-care stocks down by as much as 20 percent earlier this year from its all-time high in 2015 after some top firms received warning letters for failing to meet the regulator’s standards...But even as the FDA has increased scrutiny of India, it’s been approving generic drug applications from the country’s firms at a record pace...Everything sounds negative around Indian pharma, but practically it’s just a few companies...India’s growing importance in the U.S. supply of generic medicines -- India Ratings & Research estimates it accounted for 31 percent of all new drug approvals last year -- prompted the FDA to increase its workforce in the country to 19 from 12 in recent years...

Cate Douglass, PTNN. This weekly video program provides our readers with an in-depth review of the latest news, product approvals, FDA rulings and more.

...federal prosecutors unsealed an indictment against three Miami-area residents, charging the suspects with conspiracy, obstruction, money laundering and healthcare fraud estimated at $1 billion...This is the largest single criminal healthcare fraud case ever brought against individuals by the Department of Justice...Philip Esformes...operated a network of more than 30 skilled nursing and assisted living facilities in South Florida...He is charged with Medicaid and Medicare fraud for providing "medically unnecessary" services to perhaps thousands of beneficiaries who did not qualify for federal reimbursement...In order to hide the kickbacks...(they)...were often paid in cash, or were disguised as payments to charitable donations, payments for services and sham lease payments...

A Johnson & Johnson subsidiary has agreed to pay $18 million to resolve charges of causing health care providers to submit false claims to Medicare and other federal health care programs, which then paid for a device that was illegally marketed...The settlement...comes...two days after a pair of former executives at...Acclarent, were found guilty of several misdemeanor charges of distributing a misbranded and adulterated device. A federal court...found the executives marketed the Stratus device for a use that was not approved by the Food and Drug Administration... Acclarent won FDA approval to market its Stratus device (Relieva Stratus Microflow Spacer) to be used only with saline to maintain sinus openings following surgery. But the feds alleged the company intended to market Stratus as a drug-delivery device for prescription corticosteroids and maintained the device was specifically designed and engineered for this use...The episode stems from a whistleblower lawsuit that was filed...by Melayna Lokosky, a former Acclarent sales rep...Her lawsuit described the steps that Acclarent had taken to promote the device and allegedly deceive physicians about its efficacy. She is expected to receive about $3.5 million from the settlement.

GlaxoSmithKline is recalling a "small" number of batches of its Bactroban antibiotic following a harsh rebuke from US regulators about contamination at a key plant. The move comes after the US Food and Drug Administration sent a stern warning letter late last month to the drug maker about a host of quality-control problems at the facility, which is located in...the United Kingdom...The FDA issued its missive...and found what it called "significant deviations" from good manufacturing practices...The FDA...also noted that the drug maker provided an inadequate response, despite having halted production of the antibiotic and recalling product from wholesalers last year...The letter is the latest attempt by the FDA to bolster the viability of the pharmaceutical supply chain amid a rash of quality-control gaffes. The agency has been attempting to crack down on manufacturers and ingredients suppliers — particularly in India and China — in response to various episodes that led to product recalls and import bans...