Professional Licensing Boards and Antitrust Liability

Cross-Posted at Bill of Health

Should state professional boards, which regulate a growing and diverse array of professions and often are composed of professionals from the regulated community, be immune from federal antitrust liability if they engage in anticompetitive conduct?  The Federal Trade Commission thinks not in all cases, the Fourth Circuit agreed, and the North Carolina Board of Dental Examiners has asked the United States Supreme Court to review this decision.

Sasha Volokh recently devoted a 5-part series of blog posts to the major legal issues in play in this case.  He provides an overview of the antitrust state action immunity doctrine here, summarizes the facts underlying the case, North Carolina Board of Dental Examiners v. FTC, here, outlines the differing tests used in the circuits when applying the state action immunity doctrine to professional boards here, offers his opinion on how the Supreme Court ought to resolve these conflicts here (he leans towards the Fourth Circuit’s analysis), and suggests a possible way for the Board to work around the FTC’s injunction (by simply rephrasing its letters to threaten litigation) here.  Sasha’s posts provide an accessible and helpful primer on the case and relevant antitrust case law and are worth a read.

While we wait to learn if the Supreme Court will review this case, Professors Aaron Edlin and Rebecca Haw tackle the question of whether the actions of state professional licensing boards should be subject to antitrust scrutiny in their article, “Cartels by Another Name: Should Licensed Occupations Face Antitrust Scrutiny?” (available on SSRN and forthcoming in the University of Pennsylvania Law Review).  Although they use a question mark in their title, their characterization of licensing boards as cartels is a powerful tipoff to their ultimate conclusion – that licensing boards composed primarily of competitors regulating their own profession should not escape antitrust review: Read more

Monday Morning Recap: The Week (2.17.14-2.23.14)) in Drug & Device Law & Policy

What follows is a weekly feature here at Health Reform Watch.  Each Monday, we provide a recap of the drug and device law and policy developments over the previous week that caught our eye and made us think.  Credit for the format goes to Seton Hall Law alum Jordan T. Cohen, who used it to great effect in his series of Reform Rodeo posts.

1. Earlier this month, the Food and Drug Administration announced that it had approved Vimizim (elosulfase alfa), which treats Mucopolysaccharidosis Type IVA (Morquio A syndrome) and which “is also the first drug to receive the Rare Pediatric Disease Priority Review Voucher - a provision that aims to encourage development of new drugs and biologics for the prevention and treatment of rare pediatric diseases.”  I blogged about the expansion of the PRV program to rare pediatric diseases in 2012, here.  Kurt Karst offers helpful context for the Vimizim approval here, while Ron Leuty reports here that Vimizim will cost $380,000 a year, a price its manufacturer said was “consistent with other enzyme replacement therapies.”

2. Also on the subject of the cost of specialty drugs, Avalere Health issued a report this week on the specialty drug benefit provided by health insurance plans sold through the new health insurance exchanges.  Per Dan Mendelson, Avalere Health’s CEO: “Health plans operating in the exchanges are using significant cost-sharing to meet actuarial values set forth in the law and limit premium costs. However, these formulary designs often result in high costs for patients with chronic illness who need biologics and other products on the specialty tier[.]  Tracking these patients to ensure that they are getting appropriate care is a critical quality need.”

3.  Also this week, the FDA requested comment on a proposed study that “will investigate the impact of limiting the risks presented in [direct-to-consumer (DTC)] prescription drug television ads to those that are serious and actionable, and including a disclosure to alert consumers that there are other product risks not disclosed in the ad.”

4. And the FDA announced that it will hold a public hearing “to obtain information and comments from the public on the strengths and weaknesses of the current [Over-The-Counter] Monograph Process, and to obtain and discuss ideas about modifications or alternatives to this process.”  The FDA writes: “We believe that the biggest challenges of the current system are: [(1)] the large number of products marketed under the OTC Drug Review for which there are not yet final monographs, [(2)] limitations on FDA’s ability to require, for example, new warnings or other labeling changes to address emerging safety or effectiveness issues for products marketed under the OTC Drug Review in a timely and effective manner, and [(3)] the inability of the OTC Drug Review to easily accommodate innovative changes to products regulated under the OTC Drug Review.”

5. Finally, at the Boston Globe Tracy Jan reports on the debate over whether generic painkillers should be required to be abuse-resistant.  Jan writes:  “The pharmaceutical industry has developed pills that are strongly resistant to being crushed — and are therefore difficult for addicts to abuse. But industry profit margins, battles over patents, caution over a still-emerging technology, and a ponderous federal bureaucracy have kept such abuse-resistant pills from widespread adoption in the market.”

This Oscar Is No Grouch: Can Oscar Health Succeed in Making Health Insurance Fun?

Cross-Posted at Bill of Health

On Wednesday night, I went to a panel presentation sponsored by the group NYC Health Business Leaders on the roll out of New York State’s health insurance exchange.  Among the speakers was Mario Schlosser, the co-founder and co-CEO of the venture-capital-backed start-up health insurance company Oscar Health, which offers a full range of plans through New York’s exchange.  As NPR reported last month in a story about Oscar, “it’s been years since a new, for-profit health insurance company launched in the U.S.”, but the Affordable Care Act created a window of opportunity for new entrants.

Schlosser began his talk by giving us a tour of his personal account on Oscar’s website, www.hioscar.com.  Among other things, he showed us the Facebook-like timeline, updated in real time, which tracks his two young children’s many visits to the pediatrician.  He typed “my tummy hurts” into the site’s search engine and the site provided information on what might be wrong and on where he might turn for help, ranging from a pharmacist to a gastroenterologist, with cost estimates for each option.  Additional searches yielded information on covered podiatrists accepting new patients with offices near his apartment and on the out-of-pocket cost of a prescription for diazepam (which was zero, since there is no co-payment for generic drugs for Oscar enrollees).

As an audience member noted, none of this is new exactly.  What is new is to have this kind of data-driven, state-of-the-art user experience being offered by a health insurer.  Schlosser told the audience that Oscar’s pharmacy benefit manager and other vendors are providing the company with real-time data that other insurers have not demanded.  And, according to Schlosser, Oscar’s customers are responding.  Nearly all of them have used the company’s website.  A surprising five percent of them use the company’s website every day.

In addition to an improved user experience that incorporates increased price transparency, Oscar heavily emphasizes telemedicine, with the goal of giving every customer the feeling of having “a doctor in the family.”  As Forbes reported last year, Oscar has “a unique partnership with the telemedicine company TeleDoc” which will allow its customers to speak to a doctor at any time of the day or night without incurring any out-of-pocket expense.  With regard to the physicians in Oscar’s network, Schlosser explained that the company does not intend to incentivize or require physician compliance with quality measures, as some insurers do.  Oscar will instead use its core function—reimbursement—to encourage, for example, email and phone communications between doctors and their patients.

Oscar’s service area is currently limited to New York’s nine downstate counties, but the company hopes to expand.  It will be very interesting to see if it succeeds.  Schlosser emphasized that Oscar has its genesis in the frustration that he and his co-founders felt dealing with their previous employer-provided health insurance plans.  He joked about Explanation of Benefits forms that do anything but explain what your benefits are.  The idea of putting these frustrations in the rear-view mirror is a very attractive one.

In the end, Oscar’s success may hinge on its ability to earn and sustain its customers’ trust.  Will customers trust the advice given to them by an insurance company-paid doctor whom they have never met?  Will they trust that the physicians Oscar’s website directs them to are chosen with customers’ interests in mind?  Will they trust Oscar to use the additional data it collects in ways that serve, or at least do not harm, their interests?  An audience member’s joking reference to the National Security Agency—Schlosser responded with a smile that one of Oscar’s employees in fact did use to work for the NSA—suggests that I was not the only one thinking about questions of data and trust.

Potential Effects of Clinical Trial Data Sharing on Biopharmaceutical Innovation

We are very pleased to welcome Dana Darst, a Master of Science in Jurisprudence candidate in Health Law and Intellectual Property Law here at Seton Hall, to the blog today.

In recent years, biopharmaceutical research and development organizations have established partnerships with academic institutions and start-up biotechnology companies to drive external innovation, complementary to their own in-house advancements in life sciences.  Companies such as Pfizer, Johnson & Johnson and Bayer have opened innovation centers of excellence globally, in start-up biotechnology- and academia-rich hubs such as Boston, San Francisco and Shanghai, as part of an effort to accelerate new product development and commercialization.  

More recently, the industry has commenced driving innovation via sharing clinical study protocols and patient-level treatment information at the request of qualified external researchers.  An objective of this undertaking is to enhance public health via data transparency.  This may increase efficiencies by helping researchers avoid unnecessary use of resources for new studies, when relevant clinical outcomes data exists from previous studies.  In addition, it may reduce risks for future research subjects.

On January 30, 2014, Janssen Research and Development, LLC (a Johnson & Johnson subsidiary) and The Yale School of Medicine’s Open Data Access Project (YODA) announced a pioneering partnership model for sharing clinical trial data.  Under their agreement, YODA will review all clinical trial data requests on Janssen’s behalf, as an independent third-party.  In a press release, J&J’s Chief Medical Officer, Joanne Waldstreicher, MD, stated that their collaboration will “[e]nsure that each and every request for access to [their] pharmaceutical clinical data is reviewed objectively and independently.”  She further stated that “[t]his represents a new standard for responsible, independent clinical data sharing.”  Other biopharmaceutical companies sharing clinical trial data do so by reviewing data requests directly as they are received from qualified external researchers.  Also, some have voluntarily adopted the Principles For Responsible Clinical Trial Data Sharing, jointly published by the Pharmaceutical Research Manufacturers of America (PhRMA) and European Federation of Pharmaceutical Industries and Associations (EFPIA), and implemented on January 1, 2014. 

Under the PhRMA-EFPIA guidelines, “Biopharmaceutical companies are committed to enhancing public health through responsible sharing of clinical trial data in a manner that is consistent with the following Principles”: (1) Safeguarding the privacy of patients, (2) Respecting the integrity of national regulatory systems, and (3) Maintaining incentives for biomedical research.  The guidelines provide a framework for life sciences companies to request patient-level data and study protocols.  Additionally, the U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMA) have proposed policies to increase transparency of clinical trial data.  As Carl Coleman discussed here, both agencies have addressed the importance of patient and study de-identification.

So, what potential implications might clinical trial data sharing have on biopharmaceutical innovation? The Institute of Medicine (IOM) et al. recently published a report, Discussion Framework for Clinical Trial Data Sharing: Guiding Principles, Elements and Activities, as a framework for further discussion and public comment on how data from clinical trials might best be shared.  It provides four guiding principles for consideration which include (1) respecting individual participants, (2) maximizing benefits to participants in clinical trials and to society, while minimizing harm, (3) increasing public trust in clinical trials, and (4) carrying out sharing of clinical trial data in a manner that enhances fairness. 

The report does not provide conclusions or recommendations, which are expected to be developed and published approximately 17-months from the project’s start in August 2013. However, the IOM Committee, which includes a diverse group of representatives from government, charitable foundations, academia, healthcare institutions and private industry, has posed several potential implications of trial data sharing for consideration. 

Potential Benefits

From a societal perspective, sharing clinical trial data could increase accuracy, reduce bias and provide a more comprehensive picture of a drug’s benefits and risks.  In addition, data sharing could potentially improve efficiency and safety of the clinical research process.  For example, it could reduce potential duplication of efforts and costs of future studies, and help to avoid unnecessary harm to patients.  Furthermore, it may provide additional information to healthcare professionals and patients that can be utilized to make better informed decisions. 

Potential Harms

Alternatively, data sharing could lead to invasions of patient privacy or breaches of confidentiality, which may ultimately harm participants, either socially or economically.  Moreover, it could reduce incentives for study sponsors to invest their limited resources (e.g. time, budget, FTEs) on additional trials, which could ultimately inhibit innovation.  As the IOM Committee explains:

For example, data sharing might allow confidential commercial information (CCI) to be discerned from the data.  Competitors might use shared data to seek regulatory approval of competing products in countries that do not recognize data exclusivity periods or that do not grant patents for certain types of research. 

Conclusion

Sharing clinical study protocols and patient-level trial data could have benefits for society and healthcare, which outweigh the risks.  The IOM is planning to include an analysis of risks and benefits in their final report.  As academic, life sciences and start-up biotech entities increasingly share industry-driven trial data, a prudential approach should be taken to protect the confidentiality and intellectual property of all stakeholders involved.  Specifically, data should be adequately redacted prior to disclosure to eliminate confidential information—as recommended by the EMA and U.S. FDA.  Biopharmaceutical Innovation is driven by authors and inventors that rely on exclusive, protected rights granted for limited times.  As the IOM committee works toward establishing guidelines, adherence to their guiding principles to address these protected rights will be vital.  

To obtain additional information or provide public comments on the IOM project, visit their website at: http://www8.nationalacademies.org/cp/projectview.aspx?key=49578.

Monday Morning Recap: The Week (2.10.14-2.16.14)) in Drug & Device Law & Policy

What follows is a weekly feature here at Health Reform Watch.  Each Monday, we provide a recap of the drug and device law and policy developments over the previous week that caught our eye and made us think.  Credit for the format goes to Seton Hall Law alum Jordan T. Cohen, who used it to great effect in his series of Reform Rodeo posts.

1. A randomized study calling into question the value of mammography was one of the biggest stories this past week.  Aaron Carroll of The Incidental Economist covers the study in this post and and in this one.  The debate over mammography is longstanding.  Valerie Gutmann Koch addressed an earlier flare-up in this Health Reform Watch post from 2009.

2. At the HealthLawProf blog, Elizabeth Pendo brings needed attention to the problem of medical and diagnostic equipment that is inaccessible to people with mobility disabilities, including obesity.  This Modern Healthcare article by Sabriya Rice from last week quotes a healthcare risk management expert who opines that there is a business case for making the necessary changes:  “From an economic perspective, when we mismanage large patients, it’s costly in terms of increased lengths of stay, injuries related to mobility issues—like falls or the development of pressure ulcers—and higher 30-day readmission rates[.]”

3. At JAMA, Robert T. McCormack, Joanne Armstrong, and Debra Leonard review the findings of the Institute of Medicine’s Roundtable on Translating Genomic-Based Research for Health.  They conclude that “[t]he present environment for the codevelopment of a [companion diagnostic] test with a therapeutic agent is not sustainable, and no easy solution is apparent. … Therapeutic and CoDx test stakeholders must address the financial differences and policy issues that are essential to transform codevelopment into a coordinated, value-based model for both parties.”

4.  Also at JAMA, a helpful piece by Bridget Kuehn on efforts “to put naloxone, sold under the trade name Narcan, into as many hands as possible—chronic pain patients taking prescription painkillers, law enforcement, loved ones of individuals with prescription or illicit opioid abuse problems, and community groups.”  Also of interest, from Susan Sharon at NPR: “It’s Proven To Save Lives, So Why Is Maine Opposed To Narcan?”.

5. Finally, the GAO issued a report on drug shortages, the number of which “remains high, with almost half of critical shortages involving generic sterile injectable drugs. Provider association representatives identified challenges in responding to drug shortages without adversely affecting patient care.”  Nicholson Price comments on the report at Bill of Health, here.

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