Monday Morning Recap: The Week (9.8.14-9.14.14) in Drug & Device Law & Policy

September 15, 2014 by · Leave a Comment
Filed under: Drugs & Devices, Monday Morning Recap 

Picture3Well, once again it’s been two weeks since we last did a Monday Morning Recap, the post where we call out recent drug and device law and policy developments that caught our eye and made us think. And there’s been a lot going on…

1. The September issue of The Milbank Quarterly contains an original empirical study by Genevieve Pham-Kanter analyzing the effects of the financial ties that members of the Food and Drug Administration’s advisory committees have with drug manufacturers.  Among her very interesting findings is the fact that while a committee member with ties to one manufacturer was more likely to recommend approval of that manufacturer’s drug, committee members with ties to multiple manufacturers did not show an overall bias in favor of approval. Aaron Carroll wrote about the study at the New York Times, here, and David Schlaes wrote about it here. Per Schlaes: “The take-home lesson to me is that experts are actually experts.  Those that are in demand by multiple companies for help in analyzing or developing their products are more likely to be the kind of experts the FDA is seeking and less likely to let their financial and other relationships with sponsors get in the way of their expertise.”

2. The contentious debate between the drug and device industry and the Department of Justice over where to draw the line between protected  speech, on the one hand, and punishable fraud, on the other, continues. In an article at FiercePharmaMarketing this week, Tracy Staton calls attention to a brief the government filed at the end of August. Staton writes: “In essence, the brief asks the court to determine that ‘speech that serves as a conduit for violations of the law’ isn’t protected by the First Amendment. PhRMA, of course, is asking for the opposite. It wants the court to decide that the law only prohibits ‘at most, false speech,’ which would give reps the chance to talk about off-label use of meds, as long as they’re telling the truth.”

3. Also this week also brought news that a supervisory pharmacist at the New England Compounding Center was arraigned and pled not guilty to a single count of mail fraud. Denise Lavoie of the AP reports: “Chin, a supervisory pharmacist, is accused of participating in a scheme to fraudulently cause one lot to be labeled as injectable, meaning it was sterile and fit for human use. The drug was shipped to Michigan Pain Specialists in Brighton, Michigan, and injected into patients. As a result, 217 patients contracted fungal meningitis, and 15 died. Chin is the first person to be charged criminally in the case, but prosecutors have said the prosecution is part of a larger criminal investigation of Chin and others.

4. At the New England Journal of Medicine, Rita Redberg argues that “[b]linded, randomized, controlled trials (RCTs), in which the proposed therapy is compared with a placebo or a ‘sham’ (nontherapeutic) intervention,”which are currently “rare for medical devices” need to become more common. Dr. Redberg recommends that “the risk associated with performing unnecessary procedures … be weighed against the risk of mistaking a placebo effect for therapeutic benefit and therefore subjecting thousands or millions of patients to a procedure that actually does them no good.”

5. Finally, at the New Yorker this week, Andrew Solomon discusses the “terrifying dilemma” confronting women with depression who must weigh a dizzying array of known and unknown risks when deciding whether to pursue treatment with antidepressant medication. Solomon writes:

The debate rages, and the choice is a difficult one: to be depressed during pregnancy, with troubling consequences, or to be on medication during pregnancy, with unclear ramifications. It is not helpful when the complexity of the decision is belittled. ‘Everyone’s happier with this idea that the medications are O.K.,’ [Roni Caryn] Rabin wrote, quoting an expert. Everyone is second most happy learning, as Rabin suggests, that the medications are poison but depression is fine—because clarity and simplicity make life easy. If the meds help more than they harm, you take them; if they harm more than they help, you don’t take them. The problem is that this is a highly nuanced question to which there is no consistent answer, and about which we know too little. That makes everyone excruciatingly uncomfortable.

In this article I wrote several years ago, I review some of the reasons for the dearth of information about the risk-benefit ratio of drugs when used during pregnancy and make recommendations for policy responses.


Discrimination on the Basis of Health Status in Health Insurance: “Market-Norm or Necessity”?

Kate Greenwood Portrait

Cross-Posted at Bill of Health

In recent months, advocates have alleged that discrimination on the basis of health status in health insurance continues, notwithstanding the Affordable Care Act’s attempts to level the playing field for people with chronic health conditions. How the government and industry should respond to the allegations is not clear, however, in part because what constitutes “discrimination” is not clear in this context. As Jessica Roberts has noted, there is an “intrinsic tension between an antidiscrimination framework and the practices of the private, for-profit health-insurance industry.” This tension makes it difficult to pinpoint where permissible cost-consciousness ends and impermissible discrimination begins.

As has been widely reported, at the end of May, the National Health Law Program, along with the Tampa-based organization The AIDS Institute, filed an administrative complaint with the United States Department of Health and Human Services’ Office of Civil Rights in which they allege that four qualified health plans offered through the federally-facilitated marketplace in Florida discriminate by “charg[ing] inordinately high co-payments and co-insurance for medications used in the treatment of HIV and AIDS.” The complainants go on to allege that because “[o]ther issuers vary tiering or place HIV drugs on more affordable tiers,” “the practice of placing all anti-retrovirals on the highest tier is not a market-norm or necessity.”

The complaint’s emphasis on whether the plans’ actions reflect a “market-norm or necessity” tracks the Centers for Medicare & Medicaid Services’ 2015 Letter to Issuers in the Federally-Facilitated Marketplaces, in which CMS writes that “to ensure nondiscrimination in [qualified health plan ("QHP")] benefit design, CMS will perform an outlier analysis on QHP cost sharing (e.g., co-payments and co-insurance) as part of the QHP certification application process.” CMS goes on to specify that, with regard to prescription drugs, a plan will be considered an “outlier” if it has “an unusually large number of drugs subject to prior authorization and/or step therapy requirements in a particular category and class.”

As Sarah Rosenbaum has noted, “CMS does not provide a review methodology or define what is ‘unusually large’.” Even if it had, what if subjecting a large number of drugs to prior authorization or step therapy requirements did not make a plan unusual? Would that mean that doing so was not “discrimination”? A study released in June that was funded by the trade organization PhRMA found, among other things, that:

in seven of 19 classes of medicines for serious illnesses, such as cancer, HIV/AIDS, autoimmune diseases such as rheumatoid arthritis and multiple sclerosis, and bipolar disorder, more than 20 percent of Silver plans require coinsurance of 40 percent or more for all drugs in those classes. Similarly, in 10 of the 19 selected classes, at least 20 percent of Silver plans require coinsurance of 30 percent or greater for drugs in the classes.

A letter sent in late July by the I Am (Still) Essential campaign to the Secretary of the United States Department of Health and Human Services, Sylvia Mathews Burwell, similarly raised concerns that cut across chronic health conditions and might even be considered “market-norms”:

Based on reports of enrollee experiences during the first year of Marketplace implementation, we have identified a number of concerns. These include discriminatory benefit designs that limit access, such as restrictive formularies and inadequate provider networks; high cost-sharing; and a lack of plan transparency that may deprive consumers of information that is essential to making informed enrollment choices.

It seems to me that the benefit designs that PhRMA and the I Am (Still) Essential campaign complain of could be discriminatory even if they were a market-norm. The Affordable Care Act’s prohibition on discrimination on the basis of health status would be much less meaningful if discrimination were defined to exclude actions taken by all or a substantial portion of the issuers in the market, or by a single issuer with regard to all or a substantial portion of chronic health conditions. This raises the question of how to determine if a plan is discriminating if not by reference to whether it is an outlier. In its 2015 Letter to Issuers, CMS suggests an answer, stating that, in addition to performing an outlier analysis, it will review plans for “[d]iscriminatory cost-sharing language,” which, it says, ” would typically involve reduction in the generosity of a benefit in some manner for subsets of individuals other than based on clinically indicated common medical management practices.”

In a policy brief on tiered pharmacy benefit designs released last month, Sally McCarty and David Cusano discuss the potential for such designs  to violate the Affordable Care Act’s anti-discrimination provisions. McCarty and Cusano write that “state insurance regulators do not always have the staff or other resources to detect discriminatory designs during the form review process[.]” They suggest that “advocates and other supportive groups may be able to offer assistance by promoting legislative efforts and developing new and creative resources to examine tiered formularies with specific groups or conditions in mind, much like the analysis conducted by the groups that filed the complaint against the Florida insurers.” To the extent that concerns about cost-sharing are market-wide, however, advocacy groups will likely also want to join together, in efforts like the I Am (Still) Essential campaign, to support state and federal legislative initiatives (McCarty and Cusano highlight a number of these at p. 4 of their brief) that would limit cost-sharing across issuers, across health conditions, and across plan designs.


Seton Hall Law’s Kathleen Boozang at Jotwell

September 10, 2014 by · Leave a Comment
Filed under: Fraud & Abuse, Seton Hall Law 

dean-kathleen-boozang-176x220This week, Seton Hall Law’s Kathleen Boozang published a blog post at Jotwell reviewing Joseph Yockey’s article Choosing Governance in the FCPA Reform Debate, which was published in the Journal of Corporation Law.

Dean Boozang writes:

In the end, Yockey suggests a climate that is not unlike that of healthcare enforcement more generally: ‘Some firms likely remain undeterred by the present FCPA enforcement climate, whereas the risk and expense associated with even modest FCPA scrutiny can cause socially responsible firms to seek check-list solutions to compliance challenges that they (and regulators) often do not fully understand. This dynamic does not help firms that seek to remain law-abiding, nor does it help regulators operating with limited capacities find ways to reduce overall levels of bribery.’

Yockey suggests a solution to this state of affairs in new governance, whereby firms would work in a consultative manner with regulators to create compliance programs that are context-specific and therefore more likely to be effective in combating corruption. This conversation seems quite timely, as life science companies are discussing whether it is more effective in resisting corruption to adopt a single template compliance program or tailor made programs specific to each region. Some support for the context-specific approach can be found in the October 2013 European Union Study on Corruption in the Healthcare Sector, which suggests that, because the triggers for corruption vary by economy, a one-size-fits-all solution does not best address corruption, the form of which also varies by member state.

You can read Dean Boozang’s entire post here.


Seton Hall Law Alum David Gibbons on Hospira v. Burwell and FDA’s Authority to Order Drug Recalls

Last week, Seton Hall Law alum David Gibbons of Hyman, Phelps & McNamara published a blog post at the firm’s FDA Law Blog on a very interesting legal question, whether a court can order the FDA to order a drug manufacturer to recall a drug. In a suit brought by Hospira challenging the FDA’s approval of generic versions of one of Hospira’s drugs, a federal district court in Maryland recently reversed itself on this point. The court vacated its earlier–unprecedented–ruling that would have required the FDA to order the generic drug manufacturers to recall the generic versions of the drug at issue. As Gibbons explains:   

Generally speaking, FDA cannot compel a mandatory recall, except in very limited circumstances as authorized by statute, none of which apply to drugs…

FDA states clearly and succinctly in its Brief: “FDA cannot order recalls.”  The Agency goes on to argue that the recall ordered in the Hospira TRO could not even be requested by FDA because the basis for the recall was a patent dispute and not a matter of product safety or efficacy.  FDA says: “consumers should believe that recalled products present a risk to health or are grossly deceptive. That is decidedly not the case here.”  The Agency admitted that “[i]f a company chooses not to comply with an FDA request to recall, FDA has no mechanism to enforce its request because it does not have statutory authority to order drug recalls.”

Read the entire post here.


Medicaid Expansion Under the ACA Just Makes Sense

Adam Mitchell

By Adam Mitchell

I am not a proponent of big government or social welfare programs. I did not vote for Obama or support the Affordable Care Act. However, after researching the current Medicaid expansion debate, I am having a hard time supporting the “opt out” point of view. Ultimately, opting out of Medicaid expansion is only going to further disadvantage the poor and keep them from receiving early and preventative care.

Originally the ACA called for a mandatory state Medicaid expansion. If a state refused to expand Medicaid, the federal government could withhold all federal Medicaid funding until the state complied. However, in NFIB v. Sebelius, the Supreme Court struck down this “gun to the head” provision when it held that the federal government could not rescind existing Medicaid funding as a consequence for a state’s failure to expand Medicaid.

In short, Sebelius gave states the choice to opt in or to opt out of the ACA’s Medicaid expansion.  As of June 10, 2014, as shown in this Kaiser Family Foundation graphic, 26 states plus Washington, D.C. have opted in and expanded Medicaid, leaving 3 states considering expansion, and 21 not expanding at the current time:


The states opting out of the expansion have left many uninsured who would otherwise have qualified for Medicaid under the ACA. These “opt out” states cite future costs of expansion as their main objection. They argue that even though the federal government will cover 100% of the expansion costs up front and gradually step it down to 90% by 2022 ,  that even the 10% left to the states will not be financially sustainable. The opt-out states also argue that the government is unreliable and may not be able to fulfill its financial commitment in the future, leaving the states with the bill for the expanded coverage. For example, Florida Gov. Rick Scott has used this argument to defend his decision not to expand Medicaid in Florida. (Scott, of course, subsequently came to favor expansion.)

However, these arguments ignore the reality that medical bills for the uninsured are already being paid by the state and the taxpayer. The counter to the arguments of Rick Scott and other opt-out proponents follow a more logical form of thinking. The uninsured do not receive preventative care or regular check-ups. Furthermore, any ailment is not of concern until it reaches a point where it becomes an emergency room-worthy condition. The uninsured also utilize emergency room services in lieu of a primary care provider. Therefore, insuring these individuals so that they may be treated before they develop an emergency room worthy-condition would be the logical step in reducing health care related costs, not increasing them. This Kaiser Commission on Medicaid and the Uninsured graph analyzing 2011 NHIS data illustrates this point:


On the whole, those with health insurance (private or Medicaid) v.s. the uninsured are significantly more likely to have a usual source of care and significantly less likely to postpone or forgo care due to cost. This equates to the insured seeking and receiving early and preventative care which is far more effective and less expensive than ignoring the problem until emergency care becomes a necessity simply because you are uninsured. Insurance also allows individuals to seek medical care from a primary care provider rather than utilizing emergency room services for conditions that are not emergencies. The old adage, an ounce of prevention is worth a pound of cure, appropriately summarizes this position.

Furthermore, even if opt-out states refuse to change their position, their Medicaid enrollment is likely to grow nonetheless because of other ACA provisions. For example, as a result of the individual mandate, many signing up for health care on a state exchange will find that they are eligible and sign up for Medicaid. Also, Medicaid enrollment will climb due to an increase in part-time positions as a result of employers not wanting to offer health care to full-time workers as required under the ACA. Therefore Medicaid is going to grow from pre-ACA levels regardless of whether states opt in or out. How much it grows and the amount of federal funding for said growth remains the decision of the individual states but currently the smart move is to expand Medicaid.

Adam Mitchell is a Juris Doctorate student at Seton Hall University School of Law. We are very pleased to welcome him to the blog today.


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