Filed under: Drugs & Devices, Litigation and Liability, Recommended Reading
Cross-Posted at Bill of Health
As I have blogged about before, last year, in Kaiser v. Pfizer, the First Circuit joined the handful of courts to have approved a causal chain of injury running from a pharmaceutical company’s fraudulent promotion, through the prescribing decisions of thousands of individual physicians, to the prescriptions for which a third-party payer paid. To establish but-for causation in the case, Kaiser submitted an expert report and testimony from Dr. Meredith Rosenthal, a health economist at the Harvard School of Public Health. Dr. Rosenthal conducted a regression analysis to determine the portion of physicians’ prescribing of the drug Neurontin that was caused by the defendant’s fraudulent promotion, arriving at percentages ranged from 99.4% of prescriptions for bipolar disorder to 27.9% of prescriptions for migraine.
Pfizer argued that Dr. Rosenthal’s regression analysis should not have been admitted (and at least suggested that such an analysis should never be admitted in a third-party payer case) because regression analysis could not “take into account the patient-specific, idiosyncratic decisions of individual prescribing physicians.” Dr. Rosenthal’s report, the company argued, “merely demonstrated ‘correlation’ and not ‘causation.’” The First Circuit disagreed, upholding the lower court’s determination that the challenged evidence was admissible under Federal Rule of Evidence 702, because “regression analysis is a well-recognized and scientifically valid approach to understanding statistical data” and because it “fit” the facts of the case.
Eric Alexander, a partner at Reed Smith, made a similar argument to Pfizer’s when he critiqued a decision issued in July in a third-party payer case in the Eastern District of Pennsylvania. Writing at the Drug and Device Law blog, Alexander criticized the court for failing to address “the fundamental—to us—issue of whether an economist [Dr. Rosenthal was the plaintiff’s expert in that case, too] can ever determine why prescriptions were written.” Alexander points out that “[t]o get to millions of dollars of revenue from prescriptions, many physicians have to prescribe the drug to many patients[,]” and those physicians can “pretty much do what they want[.]” Economists, Alexander argues, should not be allowed to by-pass this complexity and simply “assume” causation.
I would argue that, as idiosyncratic as physician decision-making may be, it is not uniquely so. As the First Circuit noted in Kaiser v. Pfizer, “courts have long permitted parties to use statistical data to establish causal relationships” in antitrust, employment discrimination, and other types of cases. In their article The Use and Misuse of Econometric Evidence in Employment Discrimination Cases, which is forthcoming in the Washington and Lee Law Review, Joni Hersch and Blair Druhan explain that plaintiffs have used regression analyses in employment discrimination cases for more than thirty-five years, to establish a prima facie case of disparate treatment or disparate impact. Plaintiffs in these cases use such analyses to “show that, all other qualifications equal, being a member of a protected class decreased the plaintiff’s expected wage or likelihood of receiving a promotion or being hired.” In class action cases, plaintiffs can also use regression analyses “to establish commonality between the members of the class as required by statute.”
In their article, Hersch and Druhan evaluate the three most common challenges to regression analyses—that they “suffer from omitted variables, a small sample size, and a lack of statistical significance”—and explain that there are “very few circumstances” under which these challenges are meritorious. The authors go on to describe the results of a regression analysis they performed to try to understand the consequences of courts’ considering econometric critiques in a sample of employment discrimination cases. Their analysis revealed that “if [an] opinion mentions any of the econometric critiques … then the plaintiff is 28.3 percentage points less likely to have a favorable result.” This is concerning in light of the examples Hersch and Druhan present of courts that are not “aware of the tricks that expert witnesses argue when attempting to impugn the reliability of valid statistical evidence presented by plaintiffs.” Hersch and Druhan recommend that “court[s] exercise [their] gatekeeping function by either acting under Daubert or establishing a peer-review system to guarantee that only valid challenges to regression results enter the courtroom.”
Hersch and Druhan suggest that their article could be helpful to judges evaluating statistical evidence in employment discrimination cases; I think its usefulness extends further. As plaintiffs continue to turn to regression analyses to establish causation and injury in third-party payer cases brought against pharmaceutical companies, courts will continue to be challenged to evaluate the reliability of such analyses, and to evaluate the reliability of defendants’ challenges to them. Hersch and Druhan’s article can help. Causation is causation, and doctors are no more—in fact, one would hope they would be less—idiosyncratic than employers.
By Marissa A. Mastroianni
The war on tobacco took an interesting turn when CVS announced its latest move to improve public health. As of last month, CVS banned the sale of all tobacco products in 7,700 CVS locations. The decision cost CVS an estimated $2 billion annually. This choice came as a shock to many as it is not often a multi-billion dollar company voluntarily foregoes substantial profits for the public good. The plot thickened on October 20, 2014 when CVS announced the second phase of the fight against tobacco: bringing Caremark into the mix and effectively making tobacco much less profitable for its competitors. In the midst of heated public debate over the Affordable Care Act and health reform, CVS exemplifies what big business could accomplish without needing any consensus from Washington, D.C.
In February 2014, CVS vowed to stop selling tobacco products in an effort to support customer health. The decision to stop selling tobacco stunned many regarding CVS’s willingness to forego large profits in a competitive market. However, CVS deemed its new policy “simply the right thing to do ….” CVS has fostered something often more challenging to attain than pure profits—a positive public image—which is always good for business. In fact, CVS’s name (formerly CVS Caremark) recently underwent a makeover as it became the newly dubbed CVS Health.
CVS’s decision to include Caremark in the war on tobacco is strategic. Caremark, CVS’s pharmacy benefits manager (PBM), is one of the largest PBM service providers in the United States. Caremark manages drug coverage for health plans and employers with a national network of about 68,000 retail pharmacies. As a result of CVS’s big move, Caremark will soon require customers to make additional co-payments of up to $15 for prescriptions filled at pharmacies selling tobacco products. The increased co-payment will deter customers from using such pharmacies and will instead lead them straight through CVS pharmacy doors. Caremark and CVS, owned by the same parent company, can now both share the goodwill created by the fight against tobacco.
CVS completed a study showing that eliminating tobacco products at retail pharmacies in Boston and San Francisco yielded up to a 13.3% decrease in buyers of such products. In an article published in the Journal of the American Medical Association, CVS’s Chief Medical Officer Troyen Brennan explained that pharmacies have been heavily criticized by public health advocates for selling tobacco products in light of efforts taken by the pharmacy industry to become integral to the health care system.
The conditions proved to be just right in persuading CVS executives to commit to tobacco-free pharmacies. Helena Foulkes, President of CVS/pharmacy, noted the decision was consistent with the company’s purpose in helping people attain better health. Including Caremark in this plan is just plain business savvy.
CVS is currently in the process of identifying pharmacies within its network that are tobacco-free to implement the new increased co-payment plan. A list will be provided to Caremark plan members before any changes are instituted that will include CVS pharmacies and all other local or regional pharmacies that have already begun the war on tobacco. In fact, Philadelphia is the first city to join CVS by creating the Preferred Health Network. The network will identify all tobacco-free pharmacies in the city and any non-union city employee who fills prescriptions outside of the network will face a $15 surcharge.
The new plan to integrate Caremark into the fold has left some disillusioned with the original seemingly selfless decision to eliminate tobacco products in all CVS pharmacy locations. For example, the President of the Independent Pharmacy Alliance of America, Inc. recently asserted the strategy represented “unfair competitive practice.”
Irrespective of the criticism, the events reflect integration of the health care system into big corporations with the power to effectuate big changes. CVS’s willingness to give up $2 billion annually shows potential for more health reform in the coming years from what some might consider an unlikely source—big business. In a time where Congress and State legislatures cannot agree on health reform, CVS’s war on tobacco demonstrates the potential for the private sector to pick up the mantle.
We are very pleased to welcome Marissa A. Mastroianni to Health Reform Watch today. Marissa is in her third year at Seton Hall University School of Law where she is a member of the Seton Hall Law Review.
Filed under: Drugs & Devices, Monday Morning Recap
It’s Monday morning, time for our 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.
1. Seton Hall Law School’s Kathleen Boozang appeared on Bloomberg Radio this past week, discussing pending litigation brought by the Kentucky Attorney General against Purdue Pharma over its allegedly fraudulent marketing of Oxycontin in the state. Purdue has appealed an adverse state court procedural decision to the state’s Supreme Court; a decision is expected by early next year. If the case goes to trial, Bloomberg journalist David Armstrong writes, the company fears “a catastrophic $1 billion judgment against it, based on the state’s allegations as well as the potential for punitive damages and pre- and post-judgment interest.”
2. Also last week, at the New York Times Donald G. McNeil Jr. reported on a recently-released study “of more than 100,000 pregnant women in Argentina, Guatemala, India, Pakistan, Kenya and Zambia” that found that “[g]iving steroids to women who are about to give birth prematurely — a standard lifesaving medical practice in richer countries — may be useless or even dangerous in poor countries[.]“ Tragically, “the rate of stillbirths [in the study group given steroids] was about 10 percent higher, and so was the likelihood of [the baby dying in its] first month. And substantially more mothers who received steroids appeared to develop infections after giving birth.”
3. The week before last, Express Scripts, the largest pharmacy benefit management organization in the United States, released the second in its series of Exchange Pulse reports, and it is worth reviewing. Express Scripts found that the individuals it serves who purchased insurance on an Affordable Care Act exchange used 59% more high-cost specialty drugs than the individuals it serves who accessed insurance through an employer. This “is largely attributed to a higher prevalence of HIV and hepatitis C. … More than 56% of all specialty drug claims in health exchange plans are for HIV medications, nearly three times higher than health plans.“
4. On the subject of specialty drugs, in this article at JAMA, which came out last week in print but was published earlier this month online, Peter Bach recommends “indication-specific” pricing of cancer drugs. Per Bach, while our current system is not set up to track the indication for which a drug is used, and thus could not support indication-specific pricing, the system could be modified. Bach writes:
The primary reason to pursue this enhancement to the system is to make it possible to rationalize drug pricing. There would be some secondary benefits, consistent with important current trends in health care toward more electronic documentation and richer data on health care encounters. The cancer care system would become more transparent with regard to the utilization of cancer drugs by physicians, and the data would create an infrastructure for real-world outcomes analyses as relevant information about indication could be captured as part of the clinician’s workflow. Off-label prescribing could be identified, and outcomes data from those uses might be used to price those indications. Overall, the transparency of oncology care would be meaningfully enhanced, as the utilization of drugs and their indications would both be identified as a matter of routine care.
5. Finally, in the category of technical but important, the week before last Terry Mahn of Fish & Richardson wrote a piece at Pharmaceutical Compliance Monitor about the “legal conundrum whereby a skinny labeled generic goes to market with an FDA-approved drug label that, in fact, induces infringement of a brand patent listed in the Orange Book. And because courts are loathe to enjoin the sale of low cost generic drugs once on the market, brand drugs protected by use patents are in a potentially precarious position.“
Filed under: Drugs & Devices, Monday Morning Recap
It’s Monday morning, time for our 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…
1. Making the news this week was a release by WikiLeaks of “a second updated version of the Trans-Pacific Partnership (TPP) Intellectual Property Rights Chapter[,]” which will have significant implications for access to medicines. Public Citizen has released a detailed analysis of the pharmaceutical issues that remain under negotiation, here. Public Citizen notes that the negotiating countries are still wide apart on some issues and are, for example, “debating a range of possible monopoly periods for biotech drugs, ranging from zero years to twelve.”
2. Ebola drug development continued to make the news this week. This article by Peter Loftus and Betsy McKay at the Wall Street Journal provides a very helpful overview. Loftus and McKay quote Food and Drug Administration Commissioner Margaret Hamburg who “said the agency has shifted more employees to help speed the development of drugs, vaccines and diagnostics. ‘We’ve been up in the middle of the night in order to make product available’ on an emergency basis to infected patients in the U.S., she said in an interview this week.
3. Turning now to diseases for which safe and effective vaccines have been developed and are widely available, this week Karen Kaplan at the LA Times analyzes new Centers for Disease Control data on vaccine coverage among children in kindergarten. Kaplan highlights the fact that, “[a]cross the country, the median rate of MMR vaccination for kindergartners in the 2013-2014 school year was 94.7% for the MMR vaccine[,]” with “seven states and the District of Columbia [reporting] rates below 90%. At those rates, some communities are in danger of losing herd immunity – having enough people vaccinated to protect the small number of those who can’t get shots for medical reasons.”
4. At Forbes John Osborne reported that “Chairman Fred Upton (R-Michigan) and some of his colleagues on the House Energy & Commerce Committee want to talk about the off label issue.” Osborne notes that Congress could “direct the FDA to establish a new pathway under which truthful information outside the scope of the approved label would be able to be discussed with physicians. … Congress also could simply declare that the FDA may not regulate the communication of truthful information, and that may (or may not) limit the Justice Department’s determination to apply the False Claims Act to cases where off label prescribing is prevalent.” Osborne writes that “Chairman Upton plans to introduce an omnibus reform bill in the new Congress. If the off label issue is addressed, it would represent a historic change in attitude and behavior within the United States government that would clearly have significant implications for the way in which the FDA regulates drug, biotechnology and device company communications.“
5. Finally, not this week but still worth noting, earlier this month the Office of Inspector General of the Department of Health and Human Services published a proposed rule which “would amend the safe harbors to the anti-kickback statute and the civil monetary penalty (CMP) rules under the authority of the Office of Inspector General (OIG).” The rule “would protect certain payment practices and business arrangements from criminal prosecution or civil sanctions under the anti-kickback statute[,]” “codify revisions to the definition of ‘remuneration,'” and “add a gainsharing CMP[.]“ This McDermott Will & Emery summary of the proposed rule provides helpful context. Comments on the rule are due December 2, 2014.
Journalist Beth Fitzgerald wrote an article about Seton Hall Law’s Sentinel Project that ran in yesterday’s NJ Biz. Fitzgerald writes:
Seton Hall Law School professor John Jacobi said the project is looking at ‘the extent to which people who get health insurance are actually successful in getting the care they need.’ He noted that ‘Health coverage is not the same as access, and we are hoping to learn how the insurance plans offering care in the individual and small group markets are doing when it comes to connecting people to appropriate care.’
He said the project began earlier this year and will continue through 2015. Tuesday, the Sentinel Project began publicizing its website and encouraging individuals and employers who have encountered problems with health care access to contact them.
Jacobi said that, so far, ‘The areas of concerns raised most often have to do with access to behavioral health services and to services for people with developmental disabilities.’ He said work on these areas is ongoing and ‘We are following up and hoping we get to the point where we understand where the problems are.’