United States v. Caronia: Some Preliminary Thoughts on the Second Circuit’s Decision Invalidating the Ban on Off-Label Promotion
Filed under: Advertising & Lobbying, Health Law, Pharma
Earlier this week, the Second Circuit Court of Appeals at last issued its decision in United States v. Caronia and it is momentous (and predicted to be heading to the Supreme Court). A two-judge majority of the Circuit Court held that Alfred Caronia, a pharmaceutical sales representative, “was convicted for his speech – for promoting [the central nervous system depressant Xyrem] for an off-label use – in violation of his right of free speech under the First Amendment.”
The majority’s decision begins with a threshold question. Was Caronia convicted for conspiracy to misbrand Xyrem because he engaged in off-label promotion qua off-label promotion, that is, for his speech? Or, was his speech simply “evidence that the ‘off-label uses were intended ones for which Xyrem’s labeling failed to provide [the required] directions[,]” as the government argued on appeal? The former would implicate the First Amendment, but the latter would not. The Supreme Court has held that “[t]he First Amendment … does not prohibit the evidentiary use of speech to establish the elements of a crime or to prove motive or intent.” As the Caronia dissent (colorfully) explained, “Abby and Martha [do not have] a First Amendent right to offer arsenic-laced wine to lonely old bachelors with the intent that they drink it. … And any statements Abby or Martha made suggesting their intent—even if all of the statements were truthful and not misleading—would not be barred from evidence by the First Amendment…”
The majority found that Caronia was convicted for his speech alone, pointing to the lower court’s instructions to the jury and to a number of statements that the government made at trial including “[Caronia] conspired through some act of misbranding, and that act of misbranding … was the promotion on October 26th and November 2nd[,] marketing [a] drug for unapproved uses.” Caronia’s conviction must therefore be vacated, the majority concluded. The Food Drug and Cosmetic Act does not “criminaliz[e] the simple promotion of a drug’s off-label use because such a construction would raise First Amendment concerns.” The majority did not disagree with the general proposition that speech may be used as evidence of intent, and it expressly declined to decide the specific question whether the FDCA violates the First Amendment by “defin[ing] misbranding in terms of whether a drug’s labeling is adequate for its intended use, and permit[ting] the government to prove intended use by reference to promotional statements made by drug manufacturers or their representatives.” Even if the Second Circuit’s decision stands, then, the government may be able to argue that Caronia is a case about an erroneous jury instruction with limited practical effect
The majority went on to hold that a ban on off-label promotion qua off-label promotion—like the Vermont law barring drug companies from using physician-specific prescribing data to craft physician-specific sales pitches at issue in the Supreme Court’s 2011 decision in Sorrell v. IMS Health (which I discussed on this blog here)—is unconstitutional regardless of whether strict or intermediate scrutiny applies. The majority gave short shrift (no shrift, really) to the argument that the ban on off-label promotion is necessary to preserve the integrity of the FDA’s drug approval process, suggesting that the government could “minimize … manufacturer evasion of the approval process” by imposing “ceilings or caps on off-label prescriptions.”
The majority did not elaborate on how ceilings or caps on off-label prescriptions would work, on the grounds that the First Amendment puts the burden on the government to demonstrate that they would not. Here, too, there may be an opening for the government, to make a stronger case to the Supreme Court than it did before the Second Circuit (in its briefs or at oral argument) that ceilings or caps would not be “administrable, feasible, or otherwise effective” and that the ban on off-label promotion therefore provides a direct, narrowly-tailored, and crucial incentive to clinical research into already-approved drugs. As the dissent suggested, “[a] ceiling on off-label prescriptions would require collecting data from countless numbers of doctors and patients and, given the medical uncertainties involved, could needlessly (and simultaneously) result in the denial of some effective treatments and the overprescription of ineffective and even dangerous ones.”
Filed under: Advertising & Lobbying, Drugs & Medical Devices, Pharma
In Case you missed it: Research Fellow & Lecturer in Law, Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy, Kate Greenwood, on American Law Journal TV regarding Pharmaceutical Off-Label Marketing and Free Speech. A regular blogger here at HRW, Kate Greenwood appeared along with attorneys Hope Freiwald of Dechert, LLP and Brian J. McCormick, Jr., of Sheller, P.C.
Filed under: Advertising & Lobbying, Proposed Legislation
Christmas has just passed and Hannukah now draws to its candled conclusion as Kwaanza begins, heralding the start of a brand new year. These times naturally encourage reflection, and with my twenty-year old prodigal daughter, Lexi, about to return to Occupy D.C. after a holiday respite, I find myself considering the positions of her compatriots who think, foremost, that the influence of big money should be removed from politics–they are championing a constitutional amendment to do so, and there are close to 300,000 signatures petitioning as a prelude to such change. It’s an ambitious and interesting thought this– what would the political landscape look like if legislators and executives voted their conscience without having to calculate the impact upon scores of their largest benefactors? What would health reform look like?
Of the Maine Clean Election Act, Matthew Edge of the Occupy Albany Political Strategy Working Group told Lehrer that “It allows for everyone running for office to essentially have the same amount of money to run. So they can win based on their ideas, and not based on just how much money they can raise. And once they’re elected, since agreeing to opt into the public funding system, the clean elections system requires them to agree not to accept any private contributions. So that seems to be — while it’s not the end all, be all — the first step.”
The Maine Clean Election Act? This is how the Act is described by the State of Maine at http://www.maine.gov/ethics/mcea/index.htm
The Maine Clean Election Act (MCEA) established a voluntary program of full public financing of political campaigns for candidates running for Governor, State Senator, and State Representative. Maine voters passed the MCEA as a citizen initiative in 1996. Candidates who choose to participate may accept very limited private contributions at the beginning of their campaigns (seed money contributions). To become eligible, candidates must demonstrate community support through collecting a minimum number of checks or money orders of $5 more made payable to the Maine Clean Election Fund (qualifying contributions). After a candidate begins to receive MCEA funds from the State, he or she cannot accept private contributions, and almost all goods and services received must be paid for with MCEA funds.
It is, notably, a voluntary program–though participation has markedly increased since the Act’s inception: legislative candidates in the year 2000 totaled 33% (116 of 350); in 2006 & 2008 that number rose to 81% (313 of 386 and 303 of 373 respectively); and in 2010 the number leveled out to 77% (295 of 385). Participation by state senate candidates is even higher, and interestingly, the participation rate of incumbents is high as well–even for those who had won in close races the previous cycle.
Equal money? Consider this from OpenSecrets.org about the 2008 elections:
In 93 percent of House of Representatives races and 94 percent of Senate races that had been decided by mid-day Nov. 5, the candidate who spent the most money ended up winning, according to a post-election analysis by the nonpartisan Center for Responsive Politics. The findings are based on candidates’ spending through Oct. 15, as reported to the Federal Election Commission.
Continuing a trend seen election cycle after election cycle, the biggest spender was victorious in 397 of 426 decided House races and 30 of 32 settled Senate races. On Election Day 2006, top spenders won 94 percent of House races and 73 percent of Senate races. In 2004, 98 percent of House seats went to the biggest spender, as did 88 percent of Senate seats.
But of course, as the Maine Ethics Commission responsible for overseeing the MCEA has recently noted,
In June 2011, the U.S. Supreme Court ruled in Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett that the way Arizona awarded matching funds to candidates was unconstitutional. The Court’s decision upheld the constitutionality of publically funded campaigns but ruled that the “triggering” of matching funds based on the spending by other candidates or independent spenders was a violation of the First Amendment. Maine, like Arizona, has a full public funding program for candidates; therefore, the Supreme Court’s decision had an impact on Maine’s MCEA program.
A retooling is said to be underway for the MCEA. As it stands, matching funds have been jettisoned. According to the Maine Commission: “The loss of matching funds presents a challenge for the program. In the last four election cycles, 40% – 50% of legislative MCEA candidates received some matching funds. However, the core function of the program remains unchanged.”
Given the reality of an electorate system in which money seems to almost guarantee office, coupled with the strictures of Arizona Free Enterprise Club’s Freedom Club and Citizens United– is calling for a constitutional amendment outlandish?
Filed under: Advertising & Lobbying, Pharma, Prescription Drugs
Last spring, the Food and Drug Administration (FDA) launched the Truthful Prescription Drug Advertising and Promotion Program (known more accessibly as the “Bad Ad Program“). The goal of the program is to enlist the help of health care professionals, consumers, and industry representatives in noting FDA violations and reporting activities and messages that are false or misleading. Common drug marketing violations include omitting or downplaying risk, overstating effectiveness, promoting off-label uses and making misleading drug comparisons. The program is run by the FDA’s Division of Drug Marketing, Advertising, and Communications (DDMAC), which is responsible for “ensuring truthful advertising and promotion of prescription drugs.”
The FDA published a year-end report in May noting that the program has been successful in raising awareness. DDMAC received 328 reports of potentially untruthful or misleading promotions in one year, with the majority of those submitted by health care professionals (188 reports) and consumers (116 reports). The report notes that prior to the Bad Ad program, the FDA received an average of about 104 reports per year.
And the Bad Ad tips are still coming in. Just at the end of last month, DDMAC issued a reprimand letter to Pfizer’s Vice President of US Regulatory Affairs regarding misleading advertising of drugs on the company’s Lipitor website. A complaint to the Bad Ad program observed that the links from the Lipitor site led to pages for the drugs Caduet (for high cholesterol and blood pressure), Norvasc (for high blood pressure), and Chantix (for smoking cessation). But each of those pages failed to note any of the risk information associated with the drugs, which is a violation of the Federal Food, Drug, and Cosmetic Act.
The FDA states that “by omitting the most serious and frequently occurring risks associated with Caduet, Chantix, and Norvasc, the webpage misleadingly suggests that these drugs are safer than have been demonstrated.” The letter ends with a request that Pfizer immediately stop the dissemination of violative promotional materials for the drugs. The company was to have submitted a written response to the complaint by September 14th that states how they will comply with the request.
While the Bad Ad program may be working to raise awareness among health professionals and consumers, one violation may not be enough to induce compliance from pharmaceutical companies. In fact, DDMAC already chided Pfizer in March of 2009 for omitting risk information for Caduet and Chantix. In that case, Pfizer sponsored links for the drugs on Internet search engines. The sites linked to did not mention any risk information and therefore, presumably, can be said to have also represented the products in a manner which, as above, suggests that these drugs are safer than have been demonstrated.” The most recent letter states that “DDMAC is concerned that Pfizer is continuing to promote its products in a similarly violative manner.” A citizen’s task force is a good way for the FDA to multiply their eyes and ears to keep tabs on misleading and/or violative advertisement. We’ll see what further successes the next year-end report for the Bad Ad program can show. Or, perhaps, success might also be measured in the absence of violations.
Last month, the Food and Drug Administration (FDA) released new regulations for sunscreen manufacturers to update rules from over 30 years ago. The new regulations, which will take effect in 2012, require that sunscreen manufacturers prove certain labeling claims before they can be used on packaging. In an effort to avoid consumer confusion, the FDA is regulating when sunscreens can claim broad-spectrum protection or water resistance and is also setting a sun protection factor (SPF) cap at 50.
According to the new rules, only sunscreens that block both ultraviolet A (UVA) and ultraviolet B (UVB) rays can be labeled to have broad spectrum protection. While UVB rays are the primary cause of sunburn, UVA rays contribute to skin cancer risk and premature aging. Sunscreens that are not broad spectrum or with SPF values less than 15 will be given the following warning label:
Skin Cancer/Skin Aging Alert: Spending time in the sun increases your risk of skin cancer and early skin aging. This product has been shown only to help prevent sunburn, not skin cancer or early skin aging.
In addition, sunscreens can no longer be labeled as waterproof or sweatproof, and manufacturers cannot use the term “sunblock” on their packaging. The FDA remains concerned with exaggerated claims, as no sunscreen can block the sun entirely, nor are any of them completely waterproof. Instead, sunscreens can be called “water resistant” and must be marked as either 40 or 80 minutes, depending on how long the SPF protection will last. Finally, the FDA is requiring any sunscreens with rates above SPF 50 be labeled as “SPF 50+”, given that data suggest no additional protection above that level.
In issuing these new regulations, the FDA is targeting rising skin cancer rates among Americans. The Centers for Disease Control and Prevention (CDC) reports that skin cancer is the most common form of cancer in the United States with 58,000 new cases diagnosed and around 8,000 deaths per year. The hope is that the new regulations will make it easier for consumers to choose the best sun protection and that this will help decrease the incidence of skin cancer.
As welcome as these new regulations are, they are subject to two major criticisms. The first is that the amount of sunscreen used by manufacturers to determine SPF values is not consistent with actual use by consumers. In testing, two milligrams of lotion are used for every square centimeter of skin. Scientific American reports that most people use only one fifth to one half of that quantity, meaning that their skin is not fully protected at the labeled SPF level. Secondly, the FDA assumes for designation purposes that consumers will always follow the directions on their sunscreen products. In practice, sunscreen users fail to reapply as often as directed (which is at least every two hours during sun exposure).
Even with these limitations, the new system is a marked improvement to the 1978 regulations. Consumers can protect themselves even before the new regulations take effect in 2012– the FDA recommends that individuals use sunscreen with an SPF of at least 15 and a broad spectrum rating to protect from the full range of sunlight. In addition to purchasing the right sunscreen products and following directions, the FDA encourages that people wear proper clothing and limit sun exposure to help protect skin from UV rays.
The Junk Food Marketing Debate: A First Amendment Right or Just Making Sure Kids Aren’t What They Eat?
Filed under: Advertising & Lobbying, Children, Public Health
Remember the Omnibus Appropriations Act of 2009 (H.R. 1105) that President Obama signed on March 11, 2009? No? Good, me neither, but my excuse is that I was busy applying to law schools. If you and I had been paying closer/any (take your pick) attention, we would have seen that the Act included, among other things, a provision calling for the Federal Trade Commission, the Centers for Disease Control and Prevention, the Food and Drug Administration, and the Department of Agriculture to create an Interagency Working Group on Marketed Food to Children (“Working Group”) composed of representatives from each agency. The Working Group would research and recommend standards for the marketing and advertising of food to children age 17 years and younger. These recommendations would be presented to Congress down the road.
Well, a couple of years passed, but in April 2011 the Working Group released its 26-page “Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts” for public comment (which you can submit by clicking here before July 14). The Working Group notes that
… in the FTC’s 2008 study on Marketing Food to Children and Adolescents, three food categories — breakfast cereal, restaurant foods, and snack foods — represented approximately 70% of food marketing expenditures directed to children under 12. Similarly, three categories of foods — carbonated beverages, restaurant foods, and non-carbonated beverages — represented 69% of the food marketing expenditures for adolescents ages 12-17 year…. [Overall] [t]he categories most heavily marketed to children and adolescents, ages 2 -17 years are: breakfast cereals; snack foods; candy; dairy products; baked goods; carbonated beverages; fruit juice and non-carbonated beverages; prepared foods and meals; frozen and chilled deserts; and restaurant foods. The Working Group is therefore recommending that the food industry focus its efforts on ensuring that any advertising or marketing of food products within these ten categories meet the nutrition principles set out below. (Emphasis added.)
The Working Group focuses on two nutritional principles “that both improve the nutritional quality of foods marketed to children and can be feasibly implemented by industry with sufficient time to accomplish reformulation,” namely, “Meaningful Contribution to a Healthful Diet” (Principle A) and “Nutrients with Negative Impact on Health or Weight” (Principle B). Principle A ensures that foods marketed to children contain two or more of the following food groups: “fruit, vegetable, whole grain, fat-free or low-fat milk products, fish, extra lean meat or poultry, eggs, nuts and seeds, or beans.” Principle B ensures that foods marketed to children have limited amounts of saturated fat, trans fat, sodium, and added sugars. The Working Group makes sure to point out (several times in fact) that its recommendation are based on the 2010 Dietary Guidelines for Americans.
Really, this all sounds quite sensible, if not a little over-protective… but considering, as The Washington Post has reported, that Type 2 diabetes has significantly increased among people age 20 years and younger, what else can this country do to curb obesity and poor eating habits? Even if we could reduce the cost of nutrient-rich and quality foods so that everyone could afford them, how do we neutralize the marketing of junk food to children? In a report last month, NPR noted how
[the Working Group] broke from the past by seeking to include 12- to 17-year-olds in its guidelines. Traditionally, limits on marketing focused on the very young. But the government sought to expand them to older children, in part because they are heavy consumers of social media, cell phone messages and online games — the new frontier for ads.
That new frontier of advertising to children through online games — also known as “advergaming” (forgive my use of Wikipedia but Merriam-Webster doesn’t list the word) — includes Asylum 626 and Hotel 626, two advergames sponsored by Doritos. As NPR reported,
“[w]hat we’re talking about are very complicated and very subtle forms of marketing that aren’t always clear as such,” says Kathryn Montgomery, a professor of communications at American University and an advocate for limiting food ads to teens.
Montgomery says such ads work subliminally and use friends to influence other friends.
But efforts to restrict ads to teens draw lots of opposition from the food and advertising industries. The industries say the overlap between teen and adult audiences makes the proposed restrictions impractical.
Critics, including the U.S. Chamber of Commerce, have questioned the constitutionality and logic of the Working Group’s nutritional proposals. The Hill’s Healthwatch has reported that some critics see a First Amendment issue because
“[w]hat they’re doing is trying to simultaneously … suppress speech, while insulating it from judicial review,” said Northwestern law Professor Martin Redish, one of the panelists at a Chamber of Commerce discussion Thursday. “Because if these regulations were truly just advisory, there would be no case or controversy.”
“Industry’s rights are being violated here,” Redish said, “but there’s something deeper and darker that’s going on: The government is treating us like sheep.”
While constrained to commercial speech, Redish said that attitude has broader implications. People, he said, “can’t be sheep in the commercial realm and then all of a sudden, in the political realm, they’re free-thinking adults who can make basic choices.”
NPR has reported that other critics question the logic behind the proposal and the implicated age range.
Elaine Kolish directs an industry-funded program called the Children’s Food and Beverage Advertising Initiative. For the past five years this initiative sponsored its own voluntary standards that focus only on the 12-and-under set.
“You know, we let kids drive and we let them hold jobs when they’re 16. They can get married in some states, and they can join the military with permission, and they can be held criminally responsible for their actions in a number of situations,” she says. “So I think that the notion that you’d have to have nutrition standards that say you can’t let a kid see an ad for a french fry but you can let them join the military doesn’t really make a lot of sense.”
So where do we go from here? Is industry self-regulation the answer to making products that better fit on MyPlate? As I’ve noted in a previous post about McDonald’s Happy Meal toys, sometimes the answer can be stricter parenting (just say “no”). Yet how can parents instill and maintain healthy eating habits in their kids when advertisements for unhealthy food bombard them through television, social media, and online games?
An article recently published in the New York Times focuses on the complexities of modern-day food labeling. It seems that almost every product in the grocery store touts a label boasting of some health benefits, from supporting heart health to lowering cholesterol levels. These items are referred to as functional foods or nutraceuticals, and they are foods that claim to provide health benefits beyond the traditional nutrients they contain. Functional foods are one of the fastest growing areas in the food industry.
While companies cannot claim that functional foods actually prevent or cure diseases, they can market foods with having health-promoting or wellness-maintaining properties. The article explains how economists refer to items like functional foods as credence goods. For these foods, most consumers are unable to assess the utility of health claims and therefore rely on advertisements to be true. Misleading marketing and advertising can leave consumers confused about what they are buying and about just how helpful some products are in maintaining overall health.
The Federal Trade Commission (FTC) oversees food advertising and has filed recent complaints of deceptive marketing against Kellogg and Dannon. Frosted Mini-Wheats can no longer claim that they are clinically shown to improve children’s attentiveness by nearly 20 percent, and boxes of Rice Krispies are no longer emblazoned with a claim that they support children’s immunity. Dannon was forced to remove claims that its Activia yogurt improves intestinal transit time, as the FTC found no scientific proof for such a claim.
The Food and Drug Administration (FDA), which oversees food labeling, has also noted the problems with false or misleading claims on functional foods. Commissioner Margaret Hamburg wrote an open letter to the industry urging them to examine product labels to avoid violating established labeling standards. But the issue seems too complicated for an open letter to solve. As the FDA’s deputy commissioner for foods Michael Taylor wrote last year,
“Going after [misleading marketers] one-by-one with the legal and resource restraints we work under is a little like playing Whac-a-Mole, with one hand tied behind your back.”
The Deputy Commissioner appears to be right, and not all food companies are willing to give up false or misleading claims or labeling without a fight. In 2010, the FDA found that the makers of POM Wonderful pomegranate juice had violated the Federal Food, Drug, and Cosmetic Act by making therapeutic claims that “establish that the product is a drug because it is intended for use in the cure, mitigation, treatment, or prevention of disease.” When POM did not retract its claims, the FTC filed a complaint against the maker for deceptive advertising based on unsubstantiated scientific claims. POM was initially defiant (calling the FTC complaint unwarranted), but eventually settled and changed their advertising.
The company did, however, file a federal lawsuit against the FTC for acting outside its authority and violating the right to free commercial speech. As NYU Professor Marion Nestle pointed out in an article, POM’s suit is being brought “not because they are claiming they have science on their side, but because they think their health claims, believable or not, are protected by the First Amendment.”
There are other ways to confront misleading ‘healthy’ claims before they are printed on products and sold to consumers. The article notes the approach of the European Food Safety Authority, an independent panel of experts to whom food makers submit applications of scientific evidence backing their desired claims. The panel reviews each case and issues an opinion on the evidence, and will create a list of approved health claims for companies to use in the future.
The FDA’s approach is focused on the other end of the product line, and encourages consumers to learn to read nutrition labels and make wise purchasing decisions. This includes updating the Nutrition Facts Panel printed on the back of food packages, adding calorie counts to restaurant menus, and pushing the Let’s Move initiative to combat childhood obesity. A smarter consumer is an admirable and essential goal, but with the amount of money put into advertising on a global scale, the FDA must issue stricter guidelines for food companies. Hopefully, the outcome of the POM lawsuit will help empower the FDA to do just that.
Recent news about House GOP efforts to push through a bill nicknamed the “Repealing the Job-Killing Health Care Law Act” that would scale back healthcare reform has reminded me of a passage from Shakespeare’s Romeo and Juliet:
“What’s Montague? it is nor hand, nor foot,
Nor arm, nor face, nor any other part
Belonging to a man. O, be some other name!
What’s in a name? that which we call a rose
By any other name would smell as sweet;
So Romeo would, were he not Romeo call’d.”
So Juliet Capulet reasons through her love for Romeo Montague, who comes from a rival family, and suggests the two set aside their family names and rivalries for the sake of their love. Okay, so the situation here isn’t quite the same and I daren’t suggest that certain political characters set aside their rivalries for the sake of the American people’s health and well-being (although, heaven forbid, it might be in our best interest!). Yet the discussion of names — in terms of how the people associated with them can bring us together or tear us apart, branding, and even media spin — seems appropriate for our current political and social climates. Starting with the Protected Patient Affordable… wait, errr… Obamacare… no, wait, got it, the Patient Protection and Affordable Care Act, also known as the “Affordable Care Act.”
In “Why The Affordable Care Act Needs A Better Name: ‘Americare’” (Health Affairs, August 2010), William Sage, vice provost for health affairs at UT-Austin, makes the most sensible suggestion of rebranding the healthcare law so it “become[s] something that beneficiaries would not only accept, but would also defend.” Professor Sage proffers “Americare” as a name that:
would assert a collective interest in health system value and efficiency. It would build courage to do more than tinker at the margins with new payment methods, organizational structures, and professional skills. Most important, a shared identity would signal our decision to rein in special interests and begin a social conversation about redesigning health care delivery to produce the most cost-effective results.
Promoting a new name that fosters a collective identity — and, furthermore, that is catchy and inspiring — is not only sensible, but obvious (consider the “No Child Left Behind Act” — the policy may have its critics, but the name sure is catchy and who would argue in favor of leaving a child behind?). So obvious, in fact, that I don’t know how the healthcare reform proponents missed the boat (Professor Sage considers three reasons why), because their opponents not only caught the boat, but started steering it right at them: “Obamacare” (which, even if you believe it’s a friendly term (and I don’t), still focuses on the individual – the President – rather than the collective health of the American people), ”death panels,” and the “Repealing the Job-Killing Health Care Law Act.”
The AP recently reported on some statistics forecasting healthcare-related job losses that are wildly circulating around our nation’s capital. The nonpartisan Congressional Budget Office (CBO) projected that the current healthcare law “will reduce the amount of labor used in the economy by a small amount –roughly half a percent– primarily by reducing the amount of labor that workers choose to supply” because people won’t be trapped in a job just to get the health benefits. A recent report by House GOP leaders has cited the CBO projections and has interpreted them to mean some 650,000 jobs could potentially be in jeopardy.
Yet far from cutting the number of available jobs, the current law enables people to voluntarily leave the workforce (by retiring earlier) or continue to work in less demanding jobs. AP reporters found that:
the law’s penalties on employers who don’t provide health insurance might cause some companies to hire fewer low-wage workers, or to hire more part-timers instead of full-time employees…. But the main consequence would still be from more people choosing not to work.
So what has the CBO (actually) said about the “Repealing the Job-Killing Health Care Law Act” (before more numbers start wildly circulating)? In a letter to Speaker of the House John Boehner, the CBO analyzed, among other things, the bill’s potential impact on federal budget, discretionary spending, and the number of insured. With respect to the effects on the number of insured, the letter states that under the bill:
about 32 million fewer nonelderly people would have health insurance in 2019, leaving a total of about 54 million nonelderly people uninsured. The share of legal nonelderly residents with insurance coverage in 2019 would be about 83 percent, compared with a projected share of 94 percent under current law (and 83 percent currently).
That projected difference of 32 million in the number of uninsured people in 2019 reflects a number of differences relative to circumstances under current law. Approximately 24 million people who would otherwise purchase their own coverage through insurance exchanges would not do so, and Medicaid and the Children’s Health Insurance Program would have roughly 16 million fewer enrollees. Partly offsetting those reductions would be net increases, relative to the number projected under current law, of about 5 million people purchasing individual coverage directly from insurers and about 3 million people obtaining coverage through their employer.
Even if the Senate doesn’t approve the bill, CNN reports that healthcare law opponents, such as House Majority Leader Eric Cantor (R-VA), promise to, at the very least, defund and delay healthcare reform provisions. Either way, healthcare law proponents must rethink their campaign to maintain (or rally, depending on how things go) support among the American people… starting with an inspiring, new name.
(My thanks to my dad for emailing me the AP article that inspired this post and to Kate Greenwood for directing my attention to Professor Sage’s article).
Filed under: Advertising & Lobbying, Cost Control, Medicare
Earlier this month, Ian Ayres questioned Medicare’s procurement auction rules. The Center for Public Integrity recently released an article that suggests Medicare’s process for deciding physician payments may also need a second look. Just as critics have charged that HHS relied excessively on a physician-allied group (the Council on Graduate Medical Education) in determining future health care work force needs, the CPI report makes a case that too much responsibility has been devolved from governmental decisionmakers to a private sector group, the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC). RUC’s dominant role in suggesting payment levels raises hard questions about price-setting in the health care sector.
Administered pricing can be a important tool of health care cost containment. However, the process of setting prices for various health care services is always at risk of capture by those who would profit from overpayments. By way of background, here is an excerpt on the resource-based relative-value scale [RB-RVS] that gave rise to committees like the RUC:
Filed under: Advertising & Lobbying, Drugs & Medical Devices, Prescription Drugs
I wrote the other day that I was “generally suspicious of the pharmaceutical zeitgeist. And terribly so as it concerns myself.” The following, I suppose, is that zeitgeist’s underbelly. Reuters reports:
U.S. officials reported a 400 percent increase over 10 years in the proportion of Americans treated for prescription painkiller abuse and said on Thursday the problem cut across age groups, geography and income.
The dramatic jump was higher than treatment admission rates for methamphetamine abuse, which doubled, and marijuana, which increased by almost half, according to figures from the Substance Abuse and Mental Health Services Administration.
They said 9.8 percent of hospital admissions for substance abuse in 2008 involved painkillers, up from 2.2 percent in 1998. The percentage of people admitted to treatment for alcohol dropped by 5 percent and for cocaine dropped by 16 percent over the same period.
Filed under: Advertising & Lobbying, Children, Law
Late last month, a consumer advocate group called the Center for Science in the Public Interest (CSPI) announced its intention to sue McDonald’s for using toys to market Happy Meals to children. In an open letter to McDonald’s, CSPI litigation director Stephen Gardner alleged the toys were part of an unfair and deceptive marketing tactic which gave children “pester power” and taught them unhealthy eating habits. Mr. Gardner further alleged the company violated Massachusetts, New Jersey, Texas, and California consumer protection laws. Apparently McDonald’s recent Shrek 3 toy promotion was the final straw (and, somehow, the risk of cadmium exposure isn’t a concern here). In a follow-up press release, Mr. Gardner also compared McDonald’s to:
… the stranger in the playground handing out candy to children. McDonald’s use of toys undercuts parental authority and exploits young children’s developmental immaturity — all this to induce children to prefer foods that may harm their health. It’s a creepy and predatory practice that warrants an injunction.
McDonald’s must decide later this month whether it will continue its Happy Meal toys or succumb to pressure. So far the company believes that “[g]etting a toy is just one part of a fun, family experience….”
Before you completely write-off this lawsuit and characterization as over-the-top theatrics, just remember that CSPI already has a proven track record. In 2006, the group sued KFC for using partially hydrogenated oils to deep-fry its food. KFC subsequently switched to a trans-fat-free frying oil. That same year CSPI also negotiated a settlement agreement with the Kellogg Company which set certain nutrition standards for marketing to children. Better not tell CSPI about Cracker Jack and removable tattoos or Topps baseball cards and chewing gum.
In all fairness, CSPI isn’t the only group focusing on marketing to children. Earlier this year in California, the Santa Clara County Board of Supervisors banned the inclusion of toys with meals numbering 485 calories or more. Granted, Supervisor Donald Gage voted against the ordinance because “[i]f you can’t control a 3-year-old child for a toy, God save you when they get to be teenagers.” The Los Angeles Times has reported on the increasing number of fast food television advertisements directed at children, particularly non-white children. Likewise, CNN has reported on successful junk food marketing campaigns through the use of cartoon characters. Perhaps CSPI and its supporters should go after DreamWorks and other studios whose agents negotiate these marketing agreements. Just a thought.
This concern over McDonald’s Happy Meals and developing good eating habits in children coincides with the Trust for America’s Health (TFAH) report “F as in Fat: How Obesity Threatens America’s Future 2010.” The report found that 38 states have adult obesity rates above 25 percent, a sharp increase from 20 years ago when no state had an obesity rate above 20 percent. (Click here to see how your state weighs in.) According to TFAH executive director Jeffrey Levi:
[o]besity is one of the biggest public health challenges the country has ever faced, and troubling disparities exist based on race, ethnicity, region, and income…. Millions of Americans still face barriers — like the high cost of healthy foods and lack of access to safe places to be physically active — that can make healthy choices challenging.
The report suggested a connection between income disparities and adult obesity: “35.3 percent of adults earning less than $15,000 per year were obese compared with 24.5 percent of adults earning $50,000 or more per year.” The report also showed that “more than 12 million children and adolescents are considered obese” and half of Americans believe this is an important issue to address. However, rather than suggesting that consumers sue fast food and junk food companies, the report recommended investing in public health initiatives and prevention programs.
I’m not a parent, so I won’t preach about better parenting skills when it comes to “pester power” and how a child’s eating habits are determined as much by their parents as the cartoon characters selling the food. I’ll just say that there was seldom any debate with my parents over the foods that I ate as a child. Admittedly, there sometimes are no other alternatives. Whether you’re a high school athlete on the road, a parent with no time to make dinner, or looking for an inexpensive meal, fast food is the cheap and easy way to go. Perhaps the key is moderation?
Does this mean CSPI should hold the fast food (and junk food) companies responsible for the development of our eating habits, from childhood to adulthood? The TFAH report also referred to obesity liability laws in 24 states protecting restaurants, manufacturers, and marketers from weight-related lawsuits. Take note, CSPI. (And you, dear reader, take note of Michael Ricciardelli’s post containing some staggering numbers relating to the healthcare costs of managing Type-2 diabetes, in which obesity plays a factor, and Professor Pasquale’s beverage tax utilitarian calculus.)
Filed under: Advertising & Lobbying, Pharma, Prescription Drugs
Very interesting point made over at Gary Schwitzer’s Health News Review Blog regarding Industry funding of Continuing Medical Education (CME) for Nurse Practitioners (if you’ve never visited Mr. Schwitzer’s blog you should, he is informative, well written and generally brief).
Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy issued a White Paper last year, “Drug and Device Promotion: Charting a Course for Policy Reform,” which called for a cessation of industry funding of CME. The Center noted:
Reforming Funding for Continuing Medical Education (CME). Most states require physicians to undertake continuing medical education to maintain their medical license. The drug and device industry currently funds over half of the accredited CME courses available to physicians. The Center recommends that industry funding for continuing medical education should be phased out, and replaced by an educational process driven by physicians.
- Ninety-four percent of physicians have some kind of financial relationship with industry, as reported in a major recent national study.
- Commercial support for accredited CME, nearly all of it from drug and device manufacturers, grew from $302 million in 1998 to $1.2 billion in 2006.
But what about nurse practitioners? Schwitzer, who attended the recent Georgetown Conference, “Prescription for Conflict: Should Industry Fund Continuing Medical Education?” noted that:
There are more nurse practitioners (147,000) than there are family physicians (100,000) in the US.
These advance practice nurse professionals can write prescriptions, and it’s estimated that the average nurse practitioner writes more than 6,000 a year.
And about 70-80% of those nurses who regularly attended lunch or dinner “continuing education” events sponsored by drug companies said they were more likely to prescribe the drugs that were highlighted in the lunch.
The presenter was nurse-researcher Elissa Ladd, PhD, RN, Asst. Clinical Professor, Massachusetts General Hospital Institute of Health Professions, who says the possible pharma influence on nurse-prescribers has largely flown “under the radar.”
A little quick and basic math will give us some inkling of just how much flies under that radar. We’ll use the minimum figure in all estimates. So…
147,000 Nurse Practioners each writing 6,000 prescriptions per year = 882,000,000 prescriptions. Yes, that’s 882 million prescriptions per year– conservatively estimated.
“More likely to prescribe the drugs that were highlighted in the lunch” we can estimate at 51%. We wind up with a potentially influenced 449,820,000 prescriptions. Again, conservatively estimated.
So now the only question is just what percentage or how many Nurse Practitioners “regularly attended lunch or dinner ‘continuing education’ events sponsored by drug companies?”
With a total pool of over 882 million prescriptions per year available– at least 450 million of them potentially swayed over lunch–my guess is that Pharma’s answer would be “As many as possible.”
Filed under: Advertising & Lobbying, Global Health Care, Pharma
Earlier this week, the Access to Medicine Foundation released its 2010 Access to Medicine Index, “a ranking of the world´s largest pharmaceutical companies on their efforts to increase access to medicine for societies in need.”
In a change from the 2008 Index, which was the first to be issued, the 2010 Index includes measures designed to assess companies’ commitment to, and practice of, ethical marketing behavior. Per the report accompanying the Index, “[t]he marketing and promotion of drugs can have a significant influence on the type of medicines that patients receive. Particularly in Index Countries [88 countries with low or medium levels of development] with less robust regulatory enforcement and consumer protection, the marketing behavior of pharmaceutical companies can shape access to both appropriate and affordable medicines. Unethical marketing can lead to suboptimal clinical decisions, prescription of more expensive drugs and irrational use of medicines by consumers, which can result in reduced treatment efficacy and other complications, such as adverse drug reaction and drug resistance.”
The Index ranks pharmaceutical companies’ marketing behavior along three axes: (1) commitments, (2) transparency, and (3) performance. In the commitments category, companies are assigned points for the marketing codes and standards they have adopted and that they require their local third party sales agents to adopt. For example, “originators,” i.e., research-based pharmaceutical companies, receive 5 points on a scale of 1-5 for committing to the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) Code of Pharmaceutical Marketing Practices, the WHO Ethical Criteria for Medicinal Drug Promotion, “or an equivalent industry code.” Originators that have not committed to any external codes but that have an internal code which covers the same core principles receive 2.5 points. (The scoring is different for generics on this measure because they do not have a “viable up to date and auditable external code.”) With regard to third party sales agents, both originator and generic companies can receive all 5 points if they make “specific ethical marketing demands” of their sales agents and then audit the agents’ practices to ensure compliance.
For transparency, the Index gives points to companies that “publicly disclose detailed information regarding [their] marketing and promotional programs in the Index Countries, such as payments to physicians or other key opinion leaders and also its promotional activities for other healthcare providers, distributors, etc.” None of the companies earned any points in this category. While some have started to disclose payments made in the United States, no company has disclosed payments made in any of the Index Countries. According to the report, three companies — GlaxoSmithKline, Merck, and Roche — have pledged to disclose payments made in the Index Countries soon. Companies can also earn disclosure points for revealing breaches of marketing codes and marketing-related litigation in the Index Countries.
For the third category, performance, companies lose points if they breach the IFPMA Code or if they are sued or subjected to fines for marketing behavior. Companies can earn points for including binding ethical marketing requirements in their agreements with their sales agents and by establishing employee codes of conduct in the Index Countries equivalent to the codes they have in place in other markets. Despite the fact that issues have been raised “about pharmaceutical marketing practices in the Index Countries, especially regarding clear mention of … adverse side effects,” none of the companies studied lost any points in this category.
As the title of this post suggests, I think that the Index’s attempt to rank companies’ commitment to and practice of ethical marketing practices is important. Anyone who works in a law school knows how influential rankings can be — for better or for worse. It is easy to imagine the Access to Medicine rankings providing an additional nudge to companies to begin disclosing payments to healthcare providers around the world not just here in the United States. At the same time, there is ample room for refinement. In the performance category, for example, measures, in addition to breaching the IFPMA Code/being sued/ being fined, are needed to expose differences that surely exist in companies’ approaches to marketing in the Index Countries.
Gradgrind is alive and well, as this exchange on soda taxes explains:
This discussion between Greg Mankiw and David Leonhardt reads a bit like an economics textbook gone rogue. At issue is whether a soda tax makes sense. David Leonhardt says it does: There’s good evidence that it will reduce obesity, which will reduce health-care costs. Au contraire, says Mankiw: You have to “net out the appropriate budgetary savings from shorter lifespans.” In other words, maybe it’s not worth it, as the obese live shorter lives and so cost the government less.
Ezra Klein goes on to describe how the calculation of survivors’ costs (without offsetting valuation of survival benefits) “disadvantages the quality/value agenda as compared with the cost-control agenda.”
I would add a couple more points to complicate the analysis:
First, Mankiw may be interested in exploring the benefits of the “plus-size” clothing market. As the NYT reports, “The plus-size market increased 1.4 percent while overall women’s apparel declined 0.8 percent in the 12 months leading up to April 2010 versus the same period a year earlier, the most recent figures available, according to NPD Group, a market research firm.” Certainly taxes that discourage the development of this growth industry should be scrutinized carefully.
Second, for team Leonhardt, we might think of the tax as a way of deterring anti-beverage tax ads which have glutted the tri-state airways over the past few months. We could all do with a little less of the rent-seeking featured below:
Filed under: Advertising & Lobbying, Drugs & Medical Devices, FDA
Earlier this month, the FDA launched a new initiative — the Bad Ad Program — to “help health care providers recognize misleading prescription drug promotion and provide them with an easy way to report this activity to the agency.” In an article appearing earlier this week in Advertising Age, advertising executives and others decry the program as a “publicity stunt” with the potential to lead to physician “vigilantism” and to become “unbridled and messy.” Also quoted in the article is PhRMA Senior Vice President Ken Johnson, who states that PhRMA views the Bad Ad Program as “another step to help educate — and receive feedback from — healthcare providers about prescription drug advertising and promotion.” The Advertising Age article, correctly I think, characterizes this statement as offering only “tepid support.”
There appear to be two central criticisms of the Bad Ad Program: (1) that it is not as low-cost as it seems because it will take up physicians’ time and create more work for the FDA’s already overburdened Division of Drug Marketing, Advertising, and Communications (DDMAC) and (2) that it will be an ineffective compliance tool either because doctors cannot tell the difference between compliant and noncompliant advertising or because doctors will “go on personal jihads on ads they don’t like – ads that very well might be in perfect compliance.”
Both concerns seem overblown. Doctors do not have to participate if they do not have the time or inclination — it seems likely that most will not — and pharmaceutical companies have been reporting each other’s marketing abuses to DDMAC for years, so the Division has experience sifting through more and less credible information. Doctors may well have difficulty discerning which ads are compliant and which are not — see, e.g., this study revealing that doctors could not accurately identify the FDA-approval status of a significant percentage of the drugs they prescribe — but this is not an argument against the FDA’s effort to educate them.
The bottom line is that while pharmaceutical companies track what happens in physician offices in multiple ways, including through sales rep call notes and sales message recall studies, they do not, at least not consistently and/or voluntarily, use the information gathered in service of compliance, as opposed to sales, goals. In the words of Arnie Friede, to the extent that the FDA’s Bad Ad Program creates “an additional incentive for a company to closely monitor and control communications by their sales people” it is “an understandable, perhaps even brilliant move.”