Doctors’ Decision-making: Regression Proof?

Kate Greenwood Portrait

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.


Recommended Reading: AHLA White Paper “Beneficiary Inducements in an Evolving Market: Assessing the Risks, Understanding the Benefits and Drawing the Lines”

April 25, 2014 by · Leave a Comment
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CaptureThis white paper reports on a convener session held by AHLA’s public interest committee in October 2013.  The session brought together a diverse array of individuals from government, industry, providers, patient advocates, and academia, including Seton Hall Law Professor John V. Jacobi, to discuss the federal Anti-Kickback Statute and Civil Money Penalty Law’s prohibitions on inducements to beneficiaries and whether any changes to existing law or additional guidance may be appropriate.  In particular, the session considered the applicability of the prohibitions on inducements to a variety of current industry practices that offer the promise of improving health care delivery and access, including wellness programs, patient assistance programs, transportation and lodging assistance, promotion of adherence to treatment regimens, incentives to remain in network, readmission reduction, and end of life–palliative care programs.  Building on the new exception to the Beneficiary Inducement CMP Law in the ACA that protects remuneration that promotes access to care and poses a low risk of harm to patients and federal health care programs, the white paper identifies a number of benefits and safeguards that the government should balance when considering whether to permit beneficiary inducements in certain circumstances.   It reports that “there was a strong sentiment that clearer guidance in this area will enable providers to implement beneficiary inducements that assist the Programs, improve patient care and promote the goals of health care reform.”


Recommended Reading: Houston Law Review Frankel Lecture and Commentaries Offer Valuable Analysis of the Affordable Care Act and Guideposts for Continued Reform

April 23, 2014 by · 1 Comment
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Tara RagoneAs the ACA’s first open enrollment period closes, a trio of articles in the recent Houston Law Review offers critical analyses of what health reform has accomplished and important reminders of what remains to be done:

1. Mark A. Hall’s Frankel Lecture, Evaluating the Affordable Care Act: The Eye of the Beholder, seeks to provide “a dispassionate analysis of the law’s actual effects . . . to inform those with open minds (however few they might be) about how this major piece of market and social engineering is actually performing.”  To accomplish this analysis, Hall relies on available information to assess the ACA’s progress towards its primary goals “to increase coverage and preserve a decent range of choice in the private market.”  He also evaluates whether the ACA created any unintended consequences, such as employment and insurer effects.  The varied ways states are implementing the law has created a natural, albeit complex, experiment “that should reveal whether health care access and consumer protections improve or worsen in states that fully embrace the law as compared to states that actively oppose it” – so stay tuned.

2. In David Orentlicher’s Commentary, The Future of the Affordable Care Act: Protecting Economic Health More than Physical Health?, he seconds Hall’s data-driven approach to assessing the ACA’s impacts.  But given evidence of a tenuous link between having insurance and being healthy, Orentlicher questions whether the ACA will improve health.  Instead he discusses evidence that socieoeconomic status may bear more on health status than access to health care.  He also faults the ACA for pouring too much money into treatment of disease and investing too little on effective public health interventions.

3. William M. Sage’s Commentary, Putting Insurance Reform in the ACA’s Rear-View Mirror, similarly examines “the pros and cons of connecting insurance reform to health care and health.”   While Titles I and II of the ACA are about expanding health insurance coverage and improving affordability, Title III aims to improve health care delivery and Title IV focuses on improving underlying health.  Like Orentlicher’s observation above, however, Sage notes that health insurance and healthcare are not coterminous and “health care is not the major determinant of health.”  What he views as the ACA’s radical breakthrough — trying to make medical care better and more efficient and to improve public health – may also overreach, given the complexity of each goal. Sage urges us to move beyond insurance reform as swiftly as we can so we can focus on addressing delivery system reform and underlying health, and his conclusion offers some ideas.

In a similar vein to these articles, the Seton Hall Law Center for Health & Pharmaceutical Law & Policy and New Jersey Appleseed Public Interest Law Center are collaborating on a two-year project funded by the Robert Wood Johnson Foundation to assess the ACA’s implementation in New Jersey.  The Sentinel Project moves beyond questions of eligibility for insurance to focus on how effectively health insurers in New Jersey are delivering mandated essential health benefits to consumers under the ACA.  In addition to providing legal advice to consumers who are having trouble securing the medical care they need, the Project also will collect and analyze information from consumers throughout the state to highlight implementation trouble spots and develop recommendations for improving access to essential health benefits. Consumers may contact the Sentinel Project by calling (973) 991-1190 or by sending an email to


Recommended Reading: Recent Special Education Law Scholarship

January 8, 2014 by · Leave a Comment
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kate-greenwood_high-res-2011-compI put Karen Syma Czapanskiy’s article Special Kids, Special Parents, Special Education, which is forthcoming early this year in the Michigan Journal of Law Reform, on my To Read list when she  blogged about it (here and here) back in August.  This week, I finally read it, and I am glad I did.  In the article, Professor Czapanskiy sets forth her belief that the special education system should be made more “more parent-friendly or parent-oriented, particularly in terms of supporting parental competence and conserving parental resources.”  To that end, she suggests three reforms, one of which struck me as particularly thought-provoking.

As Professor Czapinskiy explains, despite the Individuals with Disabilities Education Act’s (IDEA’s) requirement that students with disabilities receive individualized education programs, school systems “have standardized approaches to educational plans for children with particular issues[,]” approaches that are “well-known to school employees with special education responsibilities and to other repeat players[,]” but not to parents.  Professor Czapinskiy argues that standardization itself is not necessarily problematic and in fact has much to recommend it.  Done right–that is, democratically and transparently–standardization would reduce the burden the current system imposes on parents and have a number of other salutary effects.  The most compelling potential effect, I think, is that standardization could reduce inequality, because “[t]he only way to achieve the gold standard for one child would be to successfully advocate for a gold-standard for all children with similar conditions.”

Moving from the current individualized, private process to a standardized, transparent one would have myriad potential implications for school districts, including, potentially, affecting their exposure to liability.  In his interesting article, IDEA Class Actions After Wal-Mart v. Dukes, which is forthcoming in the University of Toledo Law Review, Mark C. Weber predicts that, in response to Wal-Mart v. Dukes, in which the Supreme Court overturned the certification of a class of female employees alleging sex discrimination in employment, special education litigants will, among other things, “fram[e] classes around specific system-wide policies[.]”  Professor Weber writes:

“One can easily imagine that plaintiffs in a case alleging violations of IDEA child-find will try to find an email or other directive telling teachers not to refer children for evaluation, or not to refer them after a certain point in the school year.  Similarly, they may look for evidence of a quota system for referrals, or a system by which an administrator in no position to make informed, individualized determinations has to approve referrals.  Or plaintiffs might seek evidence that teachers receive bad evaluations or are penalized in some other way if they make too many requests that children be evaluated for special education.”

Of course, none of this digging would be necessary if the plaintiffs were up against a school district that adopted a standardized program in a formal and transparent manner, as recommended by Professor Czapanskiy.  Such a district could, therefore, be more vulnerable to a class action suit.  This would be mitigated to the extent that standardization reduced the large number of individual suits that are currently brought challenging students’ education programs.  As Professor Weber notes, the IDEA is “no small source of business for the federal and state courts.”

Those interested in the issues Professor Czapanskiy and Weber discuss will likely also be interested in Joanna Birenbaum and Kelly Gallagher-Mackay’s article From Equal Access to Individual Exit: The Invisibility of Systemic Discrimination in Moore, which came out last year in the Journal of Law & Equality.  In their article, Birenbaum and Gallagher-Mackay analyze a 2012 decision of the Supreme Court of Canada upholding an award of monetary damages to parents who were told by their son’s principal and by representatives of the school district that “if they wanted [their son] to read and write at a level necessary for functional literacy, the only option was to enroll [him] in private school[.]”  The parents did as recommended, and paid for private school out-of-pocket “from grade four until graduation in grade twelve[.]”  While the Supreme Court upheld the parents’ damages claim against the school district, it rejected their claim against the province of British Columbia for “fail[ing] to properly fund, support and monitor special education[.]”  The Court also overturned “all the systemic remedies ordered by the Tribunal against the Province and the District.”  Birenbaum and Gallagher-Mackay find this aspect of the Court’s decision dismaying, arguing that “systemic discrimination calls for systemic remedies, consistent with the substantive equality purposes of human rights legislation.”  They acknowledge that the prospect of individual damages awards can in some circumstances motivate systemic change, but argue that “it is unclear how the individual remedy of compensation for private school tuition will achieve the systemic equality result of meaningful access to public school education for children with learning disabilities.”  In addition to being “unlikely to foster comprehensive change”, they contend, the Court’s limited remedy “may undermine substantive equality if school boards decide it is cheaper to pay damages to the squeaky wheels than to fix the system.” 


Recommended Reading: New Scholarship from Benjamin Roin on Incentives for Pharmaceutical Innovation

kate-greenwood_high-res-2011-compI highly recommend Benjamin Roin’s two most recent articles to anyone with an interest in the incentives for innovation set by our current, intellectual property-based system.  Roin’s articles will be of particular interest to those interested in the incentives for developing new drugs and for discovering new uses for existing drugs.

In Intellectual Property versus Prizes: Reframing the Debate, which is forthcoming in the University of Chicago Law Review, Roin focuses on the longstanding debate among scholars over whether the government should replace our intellectual property-based system with a system of prizes.  In the case of drugs, a system of prizes would, advocates argue, allow us “to avoid the social costs of high drug prices while still providing the same (or better) incentives for socially valuable drug development.”  Under a prize-based system, the government would award a drug developer a monetary prize instead of a patent.  In the absence of an intellectual property right, generic copies of the drug would soon come on line, driving the drug’s price towards its marginal cost of production and expanding access to it.  According to Roin, the “unifying theme” of the prize literature is that “if the government can measure and base its incentives on the social value of an innovation without consulting intellectual property, then prizes should replace patents in order to avoid the deadweight loss attributable to [the monopoly pricing that patents make possible]” (emphasis mine).

Roin’s central argument is that prizes should not necessarily replace patents, because in the real world the distinction between our current system and a prize-based system often collapses.  Health insurance that covers prescription drugs reduces the deadweight loss from drug patents.  In addition, “[t]he government can and often does institute policies along side the intellectual property system that are structurally similar to prizes, including subsidies for consumer purchases of inventions, direct government purchases, and price controls.”  This can be seen most clearly in countries with national health insurance systems, in which “drug patents are never used to reveal consumers’ willingness to pay and inform a market-based reward for innovation.”  Instead, the government of such a country  “effectively sets the reimbursement rate given its substantial buying power as the only buyer in the market in that country[,]” much as it would set the prize amount in a prize-based system.  If accepted, Roin’s contention that the differences between our current system and a prize-based system are under many circumstances just theoretical could have important implications for public policy.

Roin’s second article, Solving the Problem of New Uses, is of equal potential significance.  Roin explains “the problem of new uses” as follows:

“[a]lthough the patent system currently provides firms with monopoly rights over [new uses for existing drugs], those legal rights are difficult or impossible to enforce without knowing which patients are using the drug for the patented indication as opposed to some other use.  Physicians and often insurers have this information, but pharmaceutical companies rarely have access to this type of data. … This gap in the patent protection for drugs is the single most widely recognized distortion in the incentives for pharmaceutical innovation[.]“

As signaled by the article’s bold title, Roin has a solution in mind.  He proposes that the government close the information gap he identifies by requiring that physicians submit with each electronic prescription the indication for which they are prescribing a drug.  As Roin notes, other scholars have called on the government to make better use of electronic prescribing, albeit for purposes unrelated to pharmaceutical companies’ intellectual property rights.  Jennifer Herbst, for example, has recommended that patient diagnosis codes be made a condition of payment under Medicare and Medicaid Part D for pharmacovigilance purposes.

Under Roin’s proposed solution, if the indication for which a drug was prescribed was a patented new use, the pharmacy filling the electronic prescription would be required to dispense the pharmaceutical company’s brand-name drug.  Pharmaceutical companies would be given access to patients’ de-identified electronic prescription information and electronic medical records as needed to ensure that physicians were accurately reporting drugs’ indications and that pharmacists were filling prescriptions for patented new uses with brand-name drugs.  One advantage to Roin’s solution is that it could, in his estimation, be implemented with just “a few minor policy changes.”  It also has the advantage of not requiring companies to sue physicians or patients to vindicate their patent rights.  As Rebecca Eisenberg put it in her article The Problem of New Uses, “few industries prosper by suing customers[.]“


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