What We're Reading: FTC Files Lawsuit Over Pay-to-Delay Deals

What we're reading, April 1, 2016: Federal Trade Commission files lawsuit to stop pay-to-delay deals; CMS' bundled payment initiative for joint replacement takes effect; and scientists confirm link between Zika virus and microcephaly.

The US Federal Trade Commission has filed a lawsuit to stop pay-to-delay deals for generic drugs. The agency going after 4 drug makers for allegedly paying generic rivals to delay the launch of painkillers, and this is the first lawsuit that argues the deal thwarted competition, according to STAT. The legality of these deals is not concrete. The Supreme Court ruled these deals may be subject to antitrust review, but whether cash is the only questionable deal was left open to interpretation.

Today, CMS’ bundled-payment initiative for hip and knee replacement takes effect for nearly 800 hospitals in 67 metropolitan areas. These chosen hospitals will now be held accountable for all costs related to hip and knee replacement for 90 days, reported The Wall Street Journal. CMS is estimating that the program will save $343 million over the next 5 years. Hospitals have a target price to meet and if payments are less than the target, CMS will pay the hospital the difference. However, in the second year of the program, hospitals with payments exceeding the target will owe CMS the difference.

As top US health officials gather in Atlanta to address the possibility of local transmission of the Zika virus, the World Health Organization announced that a connection between the virus and microcephaly has been found. Scientists confirmed the link and that Zika is linked to the condition in which babies are born with small heads and brain damage, according to NPR.