FDA Recalls and Selective Analysis

Researchers at the National Research Center for Women & Families and the Cleveland Clinic published a controversial report in the Archives of Internal Medicine in February.   The research team, led by Diana Zuckerman, analyzed high-risk medical device recalls from 2005 to 2009.  The report concludes that “reform of the [510(k)] regulatory process is needed to ensure the safety of medical devices.”

510(k) Process: Cause for Concern?

Zuckerman’s team determined that of the 113 recalls from 2005 through 2009, eighty (71%) medical devices — or the vast majority of those recalled — passed through the 510(k) process.  Twenty-one (19%) medical devices had passed through the more rigorous premarket approval process and eight (7%) were exempted from review.

Consumer advocates and the study authors argue that the disproportionate number of medical devices recalled after being reviewed under the 510(k) process demonstrates the need to reform the review process.   But do these statistics demonstrate a flaw in the 510(k) process?

Advanced Medical Technology Association (AdvaMed), an industry lobbying group says no.  It calls the study flawed.  Why?  The vast majority of devices (~90%) are cleared through the 510(k) process.   Therefore, it would be expected that more recalls are for 510(k) cleared devices.  A 2010 AdvaMed report, analyzed the recall rates for the PMA approval and 510(k) clearance processes.  The report demonstrated that the overall recall rate was very low for both — less than 1% and that PMA approved devices were more likely to be recalled.

In fact, during the Zuckerman study period, 19,000 devices were cleared through the 510(k) process, making the overall recall rate for 510(k) cleared devices approximately 0.4%.

When NPR asked Zuckerman to compare her study with the AdvaMed study, she agreed that most devices had not been recalled. “But I’m taking the public health perspective. How many people have been harmed by these products? We know that 112.6 million devices have been recalled in the last five years. That’s a lot of products. We know thousands of people have died. And those are deaths that did not have to happen.”

But what about all the lives saved?  Mark Adelman, MD, of the NYU Langone Medical Center in New York City, counters, “While some lives have been lost by expedited approval, many lives have been saved by getting better devices to market quickly. How many lives have been saved by the 510(k) fast track?”  Public health advocates, like Zuckerman, would offer a more complete analysis if they took account of both the risks and the benefits in their evaluation of the FDA approval processes.

Misclassification and Proper Review Path?

What if the processes are adequate, but some devices get thrown in the wrong review bucket?  Physicians Rita Redberg and Sanket Dhruva of USC San Francisco wrote in the invited commentary that “Zuckerman and colleagues demonstrate the dangers to patient safety posed by these innumerable device misclassifications.”  The Zuckerman report focused on “high-risk” recalls, or “those that could cause serious health problems or death.”

The report states that “[o]f the recalled devices cleared for market through the 510(k) process, 12% were marketed for risky or life sustaining Class III indications, which are required by law to undergo a full PMA regulatory review.”  In an email to MedPage Today, study author Steven Nissen, MD, of the Cleveland Clinic, elaborated:

There should be NO recalls for ’serious injuries or death’ amongst 510(k) approved devices. The FDA is supposed to require a PMA for Class III devices, those used to sustain life or preserve health. If a PMA is required for devices used to support or sustain life, why were so many of the devices recalled for ’serious injury or death’ originally approved using 510(k)?

Unfortunately, Nissen conflates risk of injury with the life-sustaining capacity of the device.  Although the failure of a Class III device will more likely result in serious injury or death, medical devices in all three Classes may cause serious injury or death if improperly designed or manufactured.  But maybe there is something to this.

Strengthening 510(k) process

What about the steps the FDA has already taken to improve the process?  In late 2009, the FDA began a review of its 510(k) process.  Last August, 55 recommendations were issued by two working groups.  In January, the FDA announced the adoption of 25 changes to the 410(k) process to take place this year.

According to Dr. Jerry Avorn, a professor of medicine at Harvard Medical School in Boston, “The current FDA leadership has been trying to improve the carefulness of device review, and that is very good for patients. But those attempts have been met by self-serving complaints from the device industry that better review and surveillance will somehow stifle innovation, which is not the case.”  Avorn suggests that both industry innovation and consumer safety can be achieved.

Meanwhile, the Institute of Medicine is working on a comprehensive report, commissioned by the FDA, on what’s wrong with medical device regulation. That’s due later this year.

Left to Our Own Devices?

Lucia Burgos sued Satiety, Inc. after an experimental stomach stapling device perforated her esophagus.  Her first complaint was dismissed on preemption grounds, but she was given permission to “replead her claims as state-law parallel claims.”  So called “state-law parallel claims” are state law tort claims where the duty that the defendant manufacturer is alleged to have violated stems from the Food Drug & Cosmetic Act or its implementing regulations.  Such claims are not preempted because they do not impose additional duties on defendants, beyond those imposed by Congress and the Food & Drug Administration.

Ms. Burgos amended her complaint to state two new claims, including a state law negligence cause of action founded on Satiety’s alleged failure to manufacture the device in conformance with the requirements of its investigational device exemption (IDE).  Ms. Burgos believes that it was the device (as opposed to human error) that caused her injury because of an incident report filed by her treatment team, but, because the documentation supporting the FDA’s grant of an IDE is confidential, her complaint does not specify how the device deviated from the IDE.  On April 5, 2011, Judge John Gleeson of the Eastern District of New York held that Ms. Burgos had stated a claim for negligence and that, despite the lack of specifics, her suit could proceed “to a brief and strictly-cabined period of discovery in order to determine the terms of Satiety’s IDE, and to explore whether or not the specific device used in her procedure was manufactured in accordance with the IDE.”

The Burgos case is of interest to civil procedure buffs because of what the BNA Medical Research Law & Policy Report characterized as Judge Gleeson’s “liberal approach” to the pleading of parallel claims, but it is important to the rest of us, too, because of what it tells us about the state of the products liability backstop to FDA’s oversight of medical devices.  In the words of Ms. Burgos’ attorney, there is only a “narrow window” for parallel claims.

The limited recourse that those injured by medical devices have in court makes the FDA’s pre-market clearance and approval processes and its post-market surveillance and recall oversight efforts that much more important.  Testimony given earlier this month by Marcia Crosse, Health Care Director at the Government Accountability Office, before the Senate’s Special Committee on Aging suggests that there is cause for concern.  As Ms. Crosse explained, in January 2009 the GAO issued a report in which it “found that a significant number of high-risk devices-including device types that FDA has identified as implantable; life sustaining; or posing a significant risk to the health, safety, or welfare of a patient-were cleared for the U.S. market through FDA’s less stringent 510(k) review process.”  Section 510(k) of the FD&C Act allows for streamlined review and clearance of devices that are shown to be substantially equivalent to devices already on the market.  Data from clinical trials is typically not required to make this showing.

The FDA agreed with the GAO’s 2009 recommendations.  If the devices at issue did not actually belong in the highest-risk class, Class III, they should be re-classified.  On the other hand, if they did belong in Class III, they should be subject to the more stringent premarket approval process, which typically requires clinical data in support of an agency determination that a device is safe and effective for its intended use.  In her testimony, Ms. Crosse noted that, to date, the FDA has issued a final rule reclassifying one device — a blood test for herpes — from Class III to Class II.  Rules regarding the classification of another five devices are pending.  “There are still 26 types of high-risk devices, including, for example, automated external defibrillators and implantable hip joints, that can enter the market via 510(k).”  Moreover, since January 2009, “FDA cleared at least 67 individual submissions that fall within 12 of these class III device types through the 510(k) process.”

While the GAO has not completed its review of the FDA’s post-market activities, Ms. Crosse testified that their “preliminary findings suggest that shortcomings in FDA’s oversight of the medical device recall process may limit the agency’s ability to ensure that the highest-risk recalls are being implemented in an effective and timely manner. These shortcomings span the entire range of the agency’s oversight activities-from the lack of a broad-based program to systematically assess trends in recalls, to inconsistencies in the way FDA ensures the effective completion of individual recalls.”

After Makena: Could a Risk Corridors Approach Balance Incentives and Access?

The past few weeks have been worrying ones for expectant mothers who wanted a hormonal treatment designed to stop preterm births. As Rob Stein of the WaPo explains,

A form of progesterone known as 17P was used for years to reduce the risk of preterm birth. . . Because no companies marketed the drug, women obtained it cheaply from “compounding” pharmacies, which produced individual batches for them [at about $20 each]. Doctors and regulators had long worried about the purity and consistency of the drug and were pleased when KV won FDA’s imprimatur for a well-studied version, which the company is selling as Makena.

The list price for the drug, Makena, turned out to be a stunning $1,500 per dose. That’s for a drug that must be injected every week for about 20 weeks, meaning it will cost about $30,000 per at-risk pregnancy. . . . The approval of Makena gave the company seven years of exclusive rights, and KV immediately fired off letters to compounding pharmacies, warning that they could no longer sell their versions of drug.

A day after Stein’s article appeared, the FDA made it clear that it “does not intend to take enforcement action against pharmacies that compound” 17P, “in order to support access to this important drug, at this time and under this unique situation.”

This is a fascinating, and in some ways, troubling response to the accusations of price-gouging by KV. Compounding pharmacists had already averred that “many of [KV's] assertions that the compounding of an FDA approved product is prohibited are not supported by the legal citations it references.” Though the FDA’s letter preserves access to 17P for now, that access could be revoked at any time. As the FDA states on its website:

FDA understands that the manufacturer of Makena, KV Pharmaceuticals, has sent letters to pharmacists indicating that FDA will no longer exercise enforcement discretion with regard to compounded versions of Makena. This is not correct. In order to support access to this important drug, at this time and under this unique situation, FDA does not intend to take enforcement action against pharmacies that compound hydroxyprogesterone caproate based on a valid prescription for an individually identified patient unless the compounded products are unsafe, of substandard quality, or are not being compounded in accordance with appropriate standards for compounding sterile products. As always, FDA may at any time revisit a decision to exercise enforcement discretion.

Moreover, the problem persists for at least one other drug, colchicine. As Arthur Allen explains at Slate,

The colchicine and [17P] stories have their roots in the FDA’s historically complex relationship with the drug industry. Since 1962, the agency has required that all new drugs be proven safe and efficacious before hitting the market. Many drugs marketed before 1962, however, remain on sale without having been formally approved by the FDA and are technically illegal. In 2006, the FDA launched the Unapproved Drugs Initiative, aimed at getting rid of as many of these drugs as possible. . . .

The FDA campaign has two approaches. In some cases, the agency simply warns companies to stop producing and shipping unlicensed drugs by a given date. In other cases the FDA warns a group of companies producing a particular class of drug, notifying them that it plans to crack down on their unapproved substances. The idea here is to give the companies an opportunity to submit their drugs to the rigorous testing required for FDA approval. This is what happened with . . . at least 86 newly approved drugs. The problem is that after submitting such drugs to expensive testing, drug makers typically jack up the prices, in a position to do so under congressional patent incentives aimed at producing innovative drug research. The FDA has no say in how a drug is priced.

As the Post notes, KV says it “is spending more than $200 million to develop the drug and conduct follow-up studies that the Food and Drug Administration demands.” Had it kept its pricing power, it was estimated that Makena would cost the US health care system $4 billion per year. Assuming that 3/4 of that would be revenue to Makena, and it lasted for the full 7 years of exclusivity, that would be a $21 billion return on a $0.2 billion investment. That seems excessive, especially given that KV didn’t develop the drug. On the other hand, if the Makena price were to be reduced one hundredfold, that’s a $0.21 billion return on a $0.2 billion investment. Unless we hit some serious deflation, that doesn’t cover the time value of the money invested in studies and development.

Are there any better models here? Stein’s story says that “experts said the FTC could sue KV if it concludes the company is illegally impairing competition,” but I don’t see the theory there. The FTC has lamented post-merger price hikes for life sustaining drugs (see FTC v. Lundbeck), but has precious little authority over price hikes here. Perhaps liberal constitutional law professors could fuse the “medical self-defense” theory of Eugene Volokh with the expansive Yoo/Vermeule/Posner theories of executive power, and find inherent executive authority here to save preemies? Probably not; the current Supreme Court is only receptive to creative con law from one side of the political spectrum.

Another idea is for legislation to create “risk corridors” for researchers who engage in the FDA’s Unapproved Drugs program, as CMS has for prescription drug insurance plans in Medicare Part D. As Kip Piper explains,

Using a system of risk corridors that compares actual incurred drug benefit costs to estimated costs submitted in bids, Medicare limits the profits and losses of Part D drug plans. Specifically, if a Medicare drug plan’s actual benefit costs exceed expected (bid) levels by a sufficient degree, the plan will receive an additional federal payment to cover a portion of the loss. However, if a drug plan’s actual spending falls sufficiently below projections, the plan must share some of the profit with the feds. Risk corridors apply to actual and expected drug benefits costs but exclude plan administrative costs and federal reinsurance payments.

Unfortunately, estimates of the value of testing unapproved drugs vary widely. The FDA’s director of the FDA’s Office of New Drugs and Labeling Compliance insists on the importance of these programs. But, looking specifically at colchicine, an Austin rheumatologist said “Doing one trial in patients and a few drug interaction studies doesn’t justify marketing exclusivity and a 50-fold increase in price.” As Allen puts it, we need “legislative remedies to improve the drug supply without costing the public an arm and a leg.”

In health care finance, the “cost-shift” hydraulic is a familiar model. When policymakers cut reimbursements for, say, Medicare or Medicaid, providers still have the same income target, and respond by raising prices for the privately insured. One scholar estimated that the privately insured pay over 120% of costs, while Medicare payments are between 95 and 99%. We might think of pharmaceutical patents as another manifestation of “cost-shifting,” from the future (which will enjoy drugs in the public domain) to the present (which must pay the monopolist’s price). Other forms of exclusivity can also lead to that type of cost-shift, as the Makena controversy makes clear. Perhaps the people most benefited by a regime of pharmacovigilance and evidence-based medicine should be asked to pay something for that new reassurance. But they shouldn’t be price gouged. A risk corridors approach might better balance patients’ interests in research on, and reasonable prices for, unapproved drugs.

Report Raises Questions About ‘Fast Track’ FDA Device Approvals

A report was published last month that seriously calls into question the effectiveness of the FDA’s regulation of medical devices. Authored by Diana Zuckerman Ph.D. et al., in the Archives of Internal Medicine, the report investigates the two-pronged process that governs medical device regulation under the FDA.

The first prong, known as the premarket approval (PMA) pathway, requires a device company to prove that its medical device is safe and effective. PMA applies to Class III devices which are defined by regulation to include those devices that support or sustain human life, are of substantial importance in preventing impairment of human health, or which present a potential, unreasonable risk of illness or injury. Class III devices include heart valves, pacemakers, and artificial hips.

The second (and less stringent) prong is what is known as the 510(k) pathway. As the FDA states:

A 510(k) is a premarket submission made to FDA to demonstrate that the device to be marketed is at least as safe and effective, that is, substantially equivalent, to a legally marketed device . . . A legally marketed device . . . is a device that was legally marketed prior to May 28, 1976 (preamendments device), for which a PMA is not required . . . or a device which has been found [substantially equivalent] through the 510(k) process.

The upshot is that as long as the device manufacturer can demonstrate that their device is “substantially equivalent” to a “predicate device” that has presumably passed the more stringent PMA process, they are subject to far less exacting standards. Most notable is the fact that these iterations of devices approved through the 510(k) pathway do not require specific evidence of clinical safety and effectiveness; they can bootstrap off of the predicate.

Zuckerman’s study examined the recalls of medical devices and whether those devices were approved under the PMA or 510(k) process. The authors found that:

There were 113 recalls from 2005 through 2009 that the FDA determined could cause serious health problems or death. Only 21 of the 113 devices had been approved through the PMA process (19%). Eighty were cleared through the 510(k) process (71%), and an additional 8 were exempt from any FDA regulation (7%). Cardiovascular devices comprised the largest recall category, with 35 of the high-risk recalls (31%); two-thirds were cleared by the 510(k) process (66%; n = 23). Fifty-one percent of the high-risk recalls were in 5 other device categories: general hospital, anesthesiology, clinical chemistry,neurology, or ophthalmology.

The authors conclude that:

Most medical devices recalled for life-threatening or very serious hazards were originally cleared for market using the less stringent 510(k) process or were considered so low risk that they were exempt from review (78%). These findings suggest that reform of the regulatory process is needed to ensure the safety of medical devices.

Not surprisingly, the medical device industry doesn’t  agree with Zuckerman’s findings. Stephen J. Ubl, the CEO of the Advanced Medical Technology Association, has pointed to “three recent studies [that] have all found that the 510(k) process has a remarkable safety record with extremely low recall rates–one study reported a rate of less than two-tenths of one percent.”

Aside from the issue of whether 510(k)-approved devices pose a greater risk of recall, health care professionals have underscored a more systemic problem relating to the paucity of evidence-based medicine supporting medical devices.  Orthopedic surgeon Dr. Andrew Pearle told ABC News in a recent report that,  ”[s]ince patients are exposed to new products through direct-to-patient marketing, they assume these products have been time-tested and well-established. But often there is little clinical data to support the marketing claims.”

The FDA believes there is enough of an issue to warrant a reevaluation of the 510(k) process. This past January the FDA announced that it will be revisiting the 510(k) process. A press release describes the key actions to include:

• Streamlining the “de novo” review process for certain innovative, lower-risk medical devices,
• Clarifying when clinical data should be submitted in a premarket submission, guidance that will increase the efficiency and transparency of the review process,
• Establishing a new Center Science Council of senior FDA experts to assure timely and consistent science-based decision making.

Meanwhile, individuals with recalled artificial hips manufactured by DePuy Orthopaedics are determining whether to undergo a new operation to replace the recalled equipment. Somewhat ironically, DePuy just unveiled a new line of artificial hips last month that also received approval through the fast-tracked 510(k) pathway.

Professor Emeritus Margaret Gilhooley: “Drug User Fees, Health Priorities, Politics, the Deficit and Reform Directions”

Professor Emeritus Margaret Gilhooley of Seton Hall Law has posted “Drug User Fees, Health Priorities, Politics, the Deficit and Reform Directions” to SSRN. The paper examines the FDA’s funding mechanism in relationship to industry and raises questions as to the appropriateness of the arrangement as presently configured. The abstract alone is telling:

Abstract:
The Food and Drug Administration now depends on user fees paid by drug companies to support more than half the salaries of the medical reviewers who advise the agency on the appropriateness of approving a drug. The funding creates a substantial risk of “capture” of the agency by the industry. Under the program, which started in 1992, drug companies pay a fee that permits the agency to hire additional reviewers to make more timely reviews on whether a drug can be approved. Under the law, the agency seeks to meet performance goals for the timing of reviews, giving the program the appearance of having a fee-for-service basis.

The legislative authorization for the fees expires every five years, and the agency and the industry negotiate behind closed doors on the renewal and the performance goals for the reviews. The need for renewal creates an opportunity for the passage of laws that might not have been enacted separately. Some believe the Administration may accept measures of debatable merit to avoid having to layoff needed reviewers. Limiting the user fee support to half the Government appropriation for the program, and making the program permanent can alleviate the capture and linkage problems.

This paper maintains that reforms and changes in the policy rationale for the program are needed before locking-in a permanent funding commitment at a time of debate about growing budget shortfalls. Instead of a fee-for-service rationale, the program should be based on a health review rationale. A study is needed to identify better priority rankings and goals for drug reviews, rather than the simple categories and negotiations that now exist. To avoid the risk of capture, the revenues from the fees should not exceed the Government funding for the program. Making the fee program permanent would address the linkage problem but providing permanent funding can undercut Congress’ responsibility to determine important budget allocations in a time of concern about deficits. If the program is made permanent, the law should make clear that Congress can reduce the funding level for the fees to deal equitably with funding cutbacks in other programs made in light deficit considerations. Congress should also have to approve any major increases in the fee levels. The significance of the user fee program and the reforms needed, before it is made permanent, warrant wide attention.

Lawsuit Against Guidant for Making False Statements (Again)

As we reported a little while back, the Department of Justice obtained what FDA Commissioner Hamburg declared “the largest criminal penalty ever imposed on a device manufacturer for violating the Food, Drug and Cosmetic Act” against Boston Scientific subsidiary, Guidant LLC.

Following this record breaking performance, the Department of Justice filed suit against Guidant LLC on January 27, 2011.  Yes, that is correct — Guidant is once again subject to a federal claim resulting from false statements made regarding three models of its implantable cardioverter defibrillators that were recalled for short-circuiting failures.  This time, however, it is alleged that “Guidant knowingly caused the submission of false or fraudulent claims for implants of faulty… devices to the Medicare program” in violation of the False Claims Act.

John R. Marti, First Assistant U.S. Attorney for the District of Minnesota was quoted in the Department of Justice press release stating:

When companies like Guidant request and receive federal dollars for products they know to be defective, the United States is committed to aggressively seeking the recovery of those payments. That is especially true when the defective products endanger human lives. In today’s environment, it is essential that Medicare and other public health care programs be made whole to ensure their continued vitality for future generations.

Well that makes sense.  But why bring the False Claims Act claim separately from the claims for violations of the Food, Drug and Cosmetic Act (”FDCA”)?  The most obvious reason is as follows: the Department of Justice did not bring the False Claims Act claim against Guidant.  The United States joined a lawsuit filed by qui tam relator James Allen, a patient who allegedly received a defective device.

The complaint alleges that approximately 2,000 false claims were submitted to the Medicare program.  It also includes ten examples of individual false claims ranging from $20,201.14 to $ 46,130.20.  With treble damages and civil penalties of not less than $5,500 and up to $11,000 for each violation, the recovery could range anywhere from $132 million to $298 million.  The record-breaking $296 million in fines and forfeitures for violations of the FDCA standing alone looked formidable; coupled with this latest volley, it is staggering– a potential total minimum of $428 million, maximum  of just shy of $600 million.

According to Fox News, Boston Scientific “is disappointed that the federal government, after reaching a criminal resolution with Guidant LLC, has chosen to seek additional money in a civil lawsuit.  However, the company believes that the ultimate resolution of this matter should not have a significant financial impact.”

Res Ipsa Loquitur

Do I Need 9 Lives Just to Get a Cat Scan?

Tonight’s post will be relatively brief, as I wish only to call attention to another post and a particularly disturbing number contained therein. The post was published over at The Health Care Blog by Robert Wachter, MD, a leading figure in the modern patient safety movement. It is entitled “A Game-Changing Statistic: 1 in 250.” It is. Or at least it should be. You should take a minute or two to read it– it’s provoking, and not in a good way.

The 1 in 250 refers to the odds of getting cancer from a single CT scan.

Wachter writes:

Last month, my colleague Rebecca Smith-Bindman, professor of radiology, epidemiology, and ob/gyn at UCSF and one of the nation’s experts in the risks of radiographs, gave Medical Grand Rounds at UCSF. Her talk was brimming with amazing statistics, but this is the one that took my breath away:

A 20-year old woman who gets an abdominal-pelvic CT scan (i.e., just about any young woman coming to the ED with belly pain) has a 1 in 250 chance of getting cancer from that single scan.

Did that fully register? One CAT scan, which until recently most of us ordered with no more restraint than we exhibit when asking the Starbucks barista for a tall latte, will cause cancer in one out of every 250 patients. Two-hundred fifty: that’s the number of students in my college Bio 101 class. Wow.

Wachter adds fuel to that disturbing fire and reports that his above mentioned colleague found both increased radiation dosage (66% greater than that which is the usually quoted dose) and wide variation in dosage among different scanners in 4 Bay area hospitals.

If the variation and increased dosage isn’t scary enough, perhaps this nugget from Wachter regarding the usual dose is:

• A multiphase abdominal/pelvic CT scan has the same radiation wallop as 500 transcontinental flights, 450 chest radiographs, and 74 mammograms.

The effects? Well, there’s the 1 in 250 number, but Wachter is kind enough to give us an aggregate estimate:

• The best estimates are that radiation from CT scans causes 29,000 excess cancers each year in the U.S., mostly in women.
• Researchers estimate that 15,000 people will die from the direct effects of the 72 million CT scans performed in 2007 alone.

And if that weren’t enough, it seems the death and danger are accompanied by widespread ignorance–

• A 2004 study found that less than 50 percent of radiologists, and 9 percent of ER docs, were aware that CT scans could increase the subsequent risk of cancer.

Unfortunately, quite a few CT scans are done each year. And the number has risen dramatically over the last few decades–a more cynical man (or perhaps just a man who has read Atul Gawande and Adam Smith) might think the increase in usage might bear some relationship to the high cost of purchase for a CT scan machine-Buy it and they will come. Wachter tells us that

• One in five Americans will receive a CT scan in any given year; some experts suggest that at least one-third of those scans are unnecessary.

Even if only one-fifth were unnecessary, with a 1 in 250 chance of getting cancer from a single scan, the odds are ugly– and at least in some cases, amount to a dire risk without any merit whatsoever. In other cases, we risk greatly for minimal gain–and, perhaps, most disturbingly, that risk is often called for by doctors and radiologists who are sans knowledge of the risk. Yes,  a 1 in 250 chance of getting cancer from a single scan–when you perform 72 million of them per year–should be a game changer.

Pharma Coupons: Enriching the Drug Companies

A recent New York Times article highlighted an increasing trend in pharmaceutical consumerism.  Many drug companies are providing copayment or coinsurance payment assistance.  These subsidies now exist “for about half of the top 100 brand-name drugs sold in this country,” according to health analyst Richard Evans of Sector & Sovereign Research.  Some patients receive copayment cards or coupons from their physicians while others find them on the internet.

So what’s the big deal?  Insurance companies use cost sharing to encourage patient selection of less-costly therapeutic options.  Pricing differences influence consumer choices; The American Journal of Managed Care reported in 2005 that most studies of cost sharing and prescription purchasing estimate that a 10% increase in price would decrease consumer use by 1-4%.  As NPR reported, “[t]he copay strategy worked so well that in 2003, more than half of all drugs picked up at pharmacies were generics.”

In mid-2006, pharmaceutical companies introduced coupons to reduce beneficiaries’ out-of-pocket costs for expensive drugs.  The “pharmaceutical subsidies” act as a counter-incentive, steering patients toward more expensive drugs–which wind up costing the consumer less– or zero–out-of-pocket.  As a result, the use of pharmaceutical copayment cards or coupons has tripled since their inception.

Financial Assistance or Greedy Marketing?

According to the NY Times, “[d]rug companies say the [copayment assistance] plans help some patients afford medicines that they otherwise could not.”  However, this seemingly altruistic explanation rings–shall we say– like something less than the entire truth.  For starters, these coupons are widely available on the internet and physicians who distribute the cards do not screen patients for financial need.  As the NYTimes reports,

Executives at Medicis, the company that sells Solodyn, have told investors that the co-payment card is used by an “overwhelming majority” of patients, and is largely responsible for doubling use of the drug, to 26,000 prescriptions a week.

That sounds like brilliant marketing, not need-based financial assistance.

Also, when we think of those who are most in need, we often think (rightly or wrongly) of the uninsured, the poor and the elderly — none of whom benefit from the pharmaceutical subsidy!  As the Amgen First Step Program website states, it is “a medical benefit co-pay coupon program to help commercially insured eligible patients with their deductible, co-insurance, and/or co-pay requirements” for listed drugs.  Excluded from the program are the uninsured or those in publicly funded health insurance plans.

It is unsurprising that the uninsured are excluded from participation.  According to Joshua Schimmer, a biotechnology analyst, “it seems the best strategy for a pharmaceutical company is to price their drug as high as they possibly can and offer that co-pay assistance broadly.”  For example, over the past five years, Jazz Pharmaceuticals has quadrupled the price of its narcolepsy drug Xyrem, while increasing copayment assistance to a maximum $1,200 a month.  In order for the pricing system to work, pharmaceutical companies rely on consumers to choose the subsidized drug and insurers to foot the increased bill.

It is likewise unsurprising that the publicly insured are excluded, but for a very different reason; to offer subsidies to Medicare or Medicaid patients would be illegal.  Under 42 U.S.C. § 1320a-7b (1),(2), the knowing and willful offer, payment, or receipt of any remuneration in return for the purchase of any good “for which payment may be made in whole or in part under a Federal health care program” is a felony punishable by up to $25,000 or five years imprisonment.  Illegal remuneration includes “waiver of coinsurance and deductible amounts (or any part thereof)…”  (§ 1320a-7a (i)(6)).

So What’s the Big Deal?

The pharmaceutical copay cards and coupons are a big problem.  First, they circumvent the cost sharing structures established by health insurance plans, raising systemic health costs.  As the NYTimes reported:

“The member is somewhat insulated from the cost of the prescription,” said Kevin Slavik, senior director of pharmacy at the Health Care Service Corporation, which runs Blue Cross and Blue Shield plans in Illinois and three other states. “In essence, it drives up the total cost of providing the prescription benefit.”

That increased cost is passed on to the privately insured in the form of increased premiums and to the public through increased taxes.  As Eileen Wood, vice president of the Capital District Physicians’ Health Plan, told NPR in 2009:

those coupons come with a consequence. If everyone started using coupons to get the more expensive drugs, “we’d have to raise premiums,” she says. “There’s no question about that.”

Furthermore, publicly funded plans must also pay the increased price of prescription drug benefit, which is passed on to taxpayers.  Any benefit to the coupon user in the form of reduced out-of-pocket expenses is diminished by higher premiums and taxes.  In the final analysis, the only real beneficiaries of these “pharmaceutical subsidies” are the drug companies who offer them.

Moving Forward

This issue is not one that is likely to disappear.  Currently, Massachusetts is the only state that does not allow pharmaceutical coupons; it is possible that other states or the federal government will follow suit.  As for insurers, some may begin requiring patients to try generic drugs first, as Capital District Physicians’ Health Plan has, or simply drop coverage of these drugs altogether.  Either way, drug company coupons will remain a topic to watch in 2011.

Spinal Fusion Controversy Underscores Extent of Conflicts of Interest

The Wall Street Journal recently published a report that outlines the extensive financial benefits that surgeons are receiving for spinal fusion surgeries. The “bounty” — a term used by the WSJ — comes from Medicare reimbursement as well as royalties for the intellectual property contributed by the surgeons to the spinal fusion procedures. Presumably the surgeons also receive money from speaking and training fees.

In short, spinal fusion is a surgical procedure whereby two or more vertebrae are fused together. The fusion is accomplished by creating a bridge between the vertebrae that is usually constructed out of bone taken from other parts of the body. The bone is inserted between the vertebrae, and is secured by rods, screws, and plates. This reduces the movement of each vertebrae that is connected to the bridge, thereby relieving stress on the injured vertebrae, disks, and nerves. Spinal fusion may be a necessary treatment in the face of trauma or debilitating diseases affecting the spine, such as scoliosis. However, the application of spinal fusion to treat certain types of back pain has been questioned.

In light of the dearth of comparative effectiveness research regarding nearly all surgical procedures, why then is spinal fusion so controversial? There appear to be two factors: the high price of the surgery, and  the strong ties between the surgeons performing the spinal fusions and the medical device manufacturers that produce the hardware used in the procedure.

In particular, the royalty payments are staggering. In the first three quarters of 2010, the WSJ reports that each of five spinal surgeons at Norton Hospital in Louisville Kentucky received more than $1.3 million from Medtronic — the leading manufacturer of spinal fusion devices. Norton Hospital — and its surgeons — are certainly not alone in profiting from the procedures.

Though the device manufacturers like Medtronic pay out large sums to physicians that develop, utilize, and promote spinal fusion treatments, the manufacturers clearly come out ahead after taking into account the price they charge hospitals for the spinal fusion devices. Not surprisingly, this money often comes from Medicare reimbursement.  According to the WSJ’s analysis of Medicare claims, spinal fusion went from costing Medicare $343 million in 1997 to $2.24 billion in 2008.  And as the Journal points out, the screws used in spinal fusion implants can cost between $1,000 to $2,000 a piece for reimbursement but actually turn out to cost less than $100 to make. Spinal surgeon Charles Rosen is quoted as stating that “You can easily put in $30,000 worth of hardware in a person during a fusion surgery.” A Los Angeles Times report in 2010 found that complex spinal fusion surgeries can end up costing $80,888 in hospital charges as compared to $23,724 for spinal decompression surgery — the latter referring to a group of procedures that can relieve painful pressure on the spine, but without the extensive implantation required by spinal fusion.

Nevertheless, it is true that there there are many expensive surgical procedures wherein the value to the patient justifies the high price. But it is more than the wise allocation of resources that is at issue. In the Journal of the American Medical Association’s April 2010 issue, Dr. Eugene Carragee M.D., professor of spinal disease and orthopaedic surgery at Stanford University School of Medicine summarized the clinical difficulties facing complex spinal fusion surgery, especially in older individuals:

…the complex reconstruction of spinal deformity in older patients remains a difficult and dangerous enterprise. Complication rates have declined but remain concerning (30%-40%) and the reoperation rates, in a population for whom there is a high risk of both medical and anesthetic complications with additional surgery, remains at 10% to 20% in the most optimistic reports. Moreover, despite these major interventions, this approach is still not effective in 30% to 40% of patients.

When asked about the need for spinal fusion surgeries, Dr. Steven Glassman — one of the Norton Hospital surgeons that has received millions to implant spinal fusion devices — stated that he and his colleagues were “leaders among spine surgeons nationally in comparative effectiveness research.” This is a troubling statement, precisely because of the significant royalty agreements between Dr. Glassman and Medtronic that are described in the WSJ report. Dr. Glassman is therefore incentivized — at least economically speaking — to interpret research findings in such a way that maximizes the contexts in which spinal fusion surgery can be recommended.

To combat these conflict of interest claims, Medtronic claims that it refrains from paying out royalties to the collaborating surgeons on the devices they personally use in their patients. This would appear to reduce the incentive for Dr. Glassman to personally churn out spinal fusion operations in the hope that he will get royalties for those instances where he implants hardware in which he holds a royalty agreement with Medtronic. This certainly helps to combat violations of the Federal Anti-Kickback Statute, which prohibits Medtronic from inducing surgeons to purchase their devices. But this policy does little to curb the general conflicts of interest of the general spinal surgery community when determining whether to recommend complex spinal fusion surgery. Even if a contributing surgeon does not receive royalty payments for the specific surgeries where his manual contributions are utilized, they still have an incentive to keep Medtronic “happy” by increasing demand for the spinal fusion hardware. And certainly one can envision a scenario in which a surgeon so situated might suggest such a surgery but then refer the procedure itself to a colleague, thereby allowing the royalty payments to flow unencumbered by the guise of propriety.  What does appear certain is that demand for complex spinal fusion operations has increased. Citing a study by Deyo and colleagues in the same JAMA issue, Dr. Carragee points out that:

…the rate of spinal stenosis surgery in the Medicare population has remained more or less stable, but the rate of complex surgery for this disease has increased from negligible levels in 2002 to nearly 15% of all spinal stenosis surgeries in 2007. These more complex surgeries are also reported to be independently associated with increased perioperative mortality, major complications, rehospitalization, and cost.

The findings do not provide explanations for the increase in complex surgery that has occurred during the past 6 years. Ideally, because the complex surgical techniques are used to treat complex deformities, the data should show that patients undergoing these procedures usually have these complex deformities. The diagnoses reported, however, do not support this “ideal” explanation; 50% of these new complex fusion operations were performed in patients with spinal stenosis alone and no deformity. Spinal stenosis with scoliosis by coding, accounted for only 6% of the complex fusions performed.

In other words, there has been an increase in the rate of a complex surgical procedures prone to severe complications, but with no concomitant increase in the rate of the severe conditions that would ostensibly warrant such surgery. Regardless, this demand pays dividends in the royalty agreements that the surgeons receive when the U.S. spinal surgery community implant the hardware that the contributing surgeons developed– and dividends to the manufacturer.

Currently, there appears to be little, if any, countervailing force that militates against the doctors recommending this complex and expensive procedure. By conducting the complex fusion operation, the surgeon and the hospital both make money through the handsome reimbursement from Medicare and private insurance, while Medtronic is handsomely paid by selling more devices. Those hurt, financially speaking, are the taxpayers in terms of Medicare, and those insureds in private plans whose premiums have risen because of the increased costs of this procedure. Private insurance plans are unable to combat this, as any limit on spinal fusion surgery will be framed as corporate greed coming at the expense of treatment. This is precisely what has occurred after Blue Cross and Blue Shield of North Carolina announced that it would place tighter restrictions on spinal fusion surgery. In response to the restrictions, Dr. John Wilson, a neurosurgeon at Wake Forest University Baptist Medical Center and president of the North Carolina Neurological Society stated that “If this intrusion into the physician-patient relationship goes unchallenged, other insurers will follow suit…It will be a progression of ever-more restrictive policies that will handcuff us as we try to treat patients.” Dr. Wilson was one of nine physicians to write a letter to Blue Cross urging the insurer to alter the new rules. Interestingly, the letter repeatedly supports its position by citing the studies of Dr. Daniel Resnick, a spine surgeon who is listed by the Congress of Neurological Surgeons as receiving grant money from Medtronic.

60 Minutes, Glaxo’s Bad Day & Why Compliance is So Terribly Important

In case you missed it: 60 Minutes segment with whistleblower Cheryl Eckerd, a former manager of global quality assurance for GlaxoSmithKline. She describes her experience inspecting Glaxo subsidiary, Cidra, in Puerto Rico. It views like an in-house counsel’s nightmare and a PR professional’s worst day. CBS states:

“But in November, we found out just how much could go wrong at one of the world’s largest drug makers. A subsidiary of GlaxoSmithKline pleaded guilty to [a felony] distributing adulterated drugs.

“There was reason to believe that some of the medications were contaminated with bacteria, others were mislabeled, and some were too strong or not strong enough.”

Ms. Eckerd brought suit under the Federal Whistleblower Act, with the government ultimately recovering $750 million; Ms Eckerd who was “downsized” by Glaxo, received $96 million as her share of the recovery. In addition, when Ms. Eckerd made the information she had gathered about the plant in Puerto Rico available to the FDA, federal agents executed a search warrant and seized drugs worth “hundreds of millions of dollars.”

Seton Hall Law Online Graduate Certificate in Pharmaceutical & Medical Device Law & Compliance - Class Begins January 23, 2011

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First Class begins January 23, 2011. Submit your application now.

What is the Online Graduate Certificate in Pharmaceutical & Medical Device Law & Compliance?

The Online Graduate Certificate in Pharmaceutical & Medical Device Law & Compliance is a non-degree program designed for individuals who seek in-depth knowledge about legal, regulatory, and ethical issues related to the pharmaceutical and medical device industries.  Taught exclusively online, it offers students a targeted immersion in key substantive issues along with the practical skills necessary to research and communicate effectively about the law.  It is an intensive program geared to students who want to cover a significant amount of material in a relatively short period of time.

Who should consider enrolling in the program?

The Online Graduate Certificate is open to students who have earned a baccalaureate degree from an accredited college or university.  It is specifically designed to meet the needs of mid- to senior-level professionals in the pharmaceutical and medical device industries, but highly motivated students from other backgrounds are also welcome to apply.  It is not necessary to have prior academic or work experience in the pharmaceutical or medical device industries in order to do well in the program.

Why distance learning?

Many professionals in the pharmaceutical and medical device industries are eager to learn about the legal aspects of their professions but cannot realistically commit to spending time attending live classes on a set schedule.  Online education offers the ideal solution because students can do their coursework at any time that is convenient for them, day or night.  In addition, many students find that they enjoy the interactivity and individualized feedback available through an online educational experience.

Why study pharmaceutical and medical device law at Seton Hall School of Law?

Seton Hall Law School has specialized in health law for more than a decade, and its health law program is consistently ranked among the top ten in the nation by U.S. News & World Report.  The Law School’s health law faculty specialize in a wide range of health law topics, including healthcare organizations, nonprofit governance, healthcare financing, healthcare fraud and abuse, food and drug law, research with human subjects, genetics and the law, public health law, and bioethics.  In addition to training future lawyers, Seton Hall Law offers a Master’s of Science in Jurisprudence degree for individuals working in the health care industry, as well as an innovative compliance certification program for pharmaceutical and medical device professionals.  Seton Hall Law is also a center for scholarship and public policy development related to health care, particularly through its Center for Health & Pharmaceutical Law & Policy, whose mission is to foster informed dialogue among policymakers, consumer advocates, the medical profession, and industry.

Is Seton Hall University accredited?

Seton Hall and its online programs are accredited by the Middle States Association of Colleges and Schools.  Seton Hall is a member of the Sloan Asynchronous Learning Network Consortium, an association of accredited institutions offering online degree or certificate programs committed to quality distance education, and is recognized by the U.S. Department of Defense’s education network of Defense Activity for meeting military requirements for Non-Traditional Education Support (”DANTES“).

Seton Hall is fully accredited by the American Bar Association (”ABA”), although, in accordance with Standard 308 of the ABA Standards for Approval of Law Schools, the ABA does not approve any law school program other than the first degree in law (JD).  Thus, the ABA accreditation does not extend to any program offered by the Law School other than the JD degree.

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First Class begins January 23, 2011. Submit your application now.

Continuing [Surgical] Education Poses Compliance Challenges

While the drug and device industries are frequently lumped together, there are differences that can pose challenges for compliance professionals and regulators.  I was reminded of this while watching an interesting video interview of Damon Marquis, the Director of Education & Member Services for The Society of Thoracic Surgeons, conducted by Murray Kopelow, the Chief Executive of the Accreditation Council for Continuing Medical Education, in which Mr. Marquis discusses the steps his organization takes to protect the continuing medical education (CME) they provide from undue industry influence.

On the drug side, it is relatively easy for specialty societies and other providers to accept industry support for CME while maintaining at least the appearance of independence and objectivity.  Once the check is cut, there is no need for the funding company to have any further involvement with the funded program, which typically follows a lecture format.

Things are quite different on the device side.  As Mr. Marquis explains, a core part of The Society of Thoracic Surgeons’ mission is to provide “education on procedures using … devices.”  The CME offered at the Society’s annual meeting includes 12 “wet labs.”  (While Mr. Marquis does not define wet lab, a browse of the web suggests that the surgeons are given the opportunity to practice procedures or techniques on animal or human organs.)  Each wet lab is taught by two experienced surgeons with, ideally, expertise in different devices; the Society’s goal is “to incorporate all the products or as many of the products as we possibly can that are available for that procedure.”

Overall, the 12 wet labs use products from over 40 device companies, all provided at no cost to the Society.  And industry involvement extends beyond this in-kind support.  Before the meeting, the companies are asked to weigh in on what devices and materials are needed for each procedure to be demonstrated.  At the meeting, “industry will come in and set up their devices and their materials.  We don’t know how to set that up.  They do.  They have the technical skills.”  One company representative is permitted to remain in the lab area once the set up is complete to observe; Mr. Marquis does not explain why.  More than one representative may remain if they are needed to run a device or devices.  (The representatives are not permitted to do any teaching; they wear a different colored gown from the participating surgeons to aid enforcement of this rule.)

At the conclusion of the interview, Mr. Marquis discussed the Society’s efforts to comply with the ACCME’s commercial support reporting requirements.  The Society relies on its industry sponsors to provide prices for the devices used, but “most of the companies have not added into there the staff time that they literally donate for setting the product up on site.”  Mr. Marquis posits that, from industry’s perspective, the time donated is de minimis, because “they bring people off of the exhibit hall floor … so they think well they’re going to be there already.”  This scenario — sales reps moving from the exhibit hall floor, where their job is to sell their device, to the wet lab, where they are asked to use their technical expertise in support of the surgeons’ educational experience, and then back to selling again — is just one of many examples of compliance challenges unique to the device side.

Seton Hall Law Report Shows U.S. Military Routinely Administered Controversial Drugs to Detainees in Guantanamo Bay

Findings suggest detainees were unnecessarily dosed with a medication known to induce hallucinations, paranoia and psychosis

Seton Hall University School of Law’s Center for Policy and Research has issued a report, Drug Abuse: An Exploration of the Government Use of Mefloquine at Guantánamo, documenting the medically inappropriate use of a dangerous pharmacological treatment on Guantánamo Bay detainees.

According to the report, the U.S. military routinely administered mefloquine, a controversial malaria treatment, at five times the standard prophylactic dose. Mefloquine, even at the standard dose, is known to cause adverse side effects such as paranoia, hallucinations, aggression, psychotic behavior, memory impairment, convulsions, suicidal ideation and possibly suicide.

The prophylactic dose of mefloquine is 250 mg. On arrival at Guantánamo, as a matter of standard operating procedure, detainees received 1250 mg of mefloquine. The larger dose of mefloquine was administered without taking a patient history of any kind.

Dr. G. Richard Olds, tropical disease specialist and founding Dean of the Medical School of the University of California at Riverside, commented on the long-lasting effects of the drug: “Mefloquine is fat soluble, and as a result, it does build up in the body and has a very long half-life. This is important since a massive dose of this drug is not easily corrected and the ’side effects’ of the medication could last for weeks or months.”

The Centers for Disease Control and Prevention reports, and the U.S. military concedes, that malaria is not a threat in Guantánamo. For that reason, U.S. military personnel and contractors are not prescribed any prophylactic anti-malarial medication.

“Mefloquine was administered to detainees contrary to medical protocol or purpose,” commented Professor Mark P. Denbeaux, Director of the Seton Hall Law Center for Policy and Research. “The record reveals no medical justification for mefloquine in this manner or at these doses. On this record there appears to be only three possible reasons for drugging these men: gross malpractice, human experimentation or ‘enhanced interrogation.’ At best it represents monumental incompetence. At worst, it’s torture.”

Dean Olds concluded, “In my professional opinion there is no medical justification for giving a massive dose of mefloquine to an asymptomatic individual. I also do not see the medical benefit of treating a person in Cuba with a prophylactic dose of mefloquine.”

Professor Stephen Soldz, Director of the Center for Research, Evaluation, and Program Development, Boston Graduate School of Psychoanalysis and President of Psychologists for Social Responsibility, added, “For years there has been an almost complete lack of transparency regarding medical practices and procedures at Guantánamo. The military has failed to provide credible explanations for its procedures. Detainees and their attorneys have been denied access to their own medical records, an egregious ethical violation. All health providers should join the call for Guantánamo to respect fundamental rules regulating medical ethics everywhere.”

The report, Drug Abuse: An Exploration of the Government Use of Mefloquine at Guantánamo, may be found here.

TruthOut.org published an article independent of the Seton Hall Law report. Read it here.

Seton Hall University School of Law, New Jersey’s only private law school, and a leading law school in the New York metropolitan area, is dedicated to preparing students for the practice of law through excellence in scholarship and teaching, with a strong focus on clinical education. The Center for Policy and Research enables students to gain practical experience while engaging in research and analysis that promotes respect for the rights of individuals worldwide. The students examine primary sources pertaining to national security law and practices of the U.S. government, as well as the reliability of forensic evidence for criminal investigations and prosecution. Seton Hall Law is located in Newark, NJ and offers both day and evening degree programs. For more information, visit http://law.shu.edu.

Propublica, Pharma Payments to Physicians

Newly compiled data on payments to physicians from pharmaceutical companies has kindled mainstream media conversation on the ethics of such practices. NPR station WNYC ran this feature, showing the top physician earners in New York, and the radio piece, “Physicians on Pharma’s Payroll.” You can hear the radio piece immediately below. It is interesting in that in addition to giving  background, the piece also features interviews of physicians on the receiving end of those payments. One of those doctors describes the process of recruitment– wherein Pharma reps track doctors’ prescription records to see who is using their wares, and then approaching those doctors to see if they’d be interested in being paid presenters– or educators– depending I suppose upon your frame of reference.

Seton Hall University Interim Vice Provost, Law Professor and regular contributor to HRW, Kathleen M. Boozang, appeared in the Star Ledger regarding the ramifications of Pharma payments totaling millions of dollars to physicians in New Jersey. The article was prompted by a Pro Publica database which has compiled information from court documents detailing payments by six pharmaceutical companies to physicians, as well as the voluntary disclosure of two quarters of such payment information by Merck. The database tracks these payments for the period between January, 2009 and June 2010; it is sortable by state and amount.

Within the above named limitations, seven New Jersey doctors received more than $100,000 during the timeframe shown, from the pharmaceutical companies named.

In addition, The Ledger reports:

Overall, seven pharmaceutical companies wrote 1,215 checks totaling $8.3 million to doctors in New Jersey, the 10th highest total in the nation, according to ProPublica.

Doctors nationwide earned $258.7 million for speaking and consulting, according to information culled from court documents involving six companies and records from Whitehouse Station-based Merck, which voluntarily disclosed two quarters of payment information. And that’s just a taste of the $1.2 billion doctors earn on the speaking circuit annually, according to a 2008 article in the Journal of the American Medical Association….

Kathleen M. Boozang, law professor at Seton Hall University’s Center for Health & Pharmaceutical Law and Policy, said new requirements to publicly disclose how much doctors are paid by drug companies aren’t enough to protect patients, noting many won’t look up their doctor on databases.

Boozang said while doctors may be in the best position to teach each other how to make decisions about which drugs or devices should be used, drug companies shouldn’t be paying them.

The Center last year issued a report calling for an end to “commercial support for continuing medical education,” suggesting medical schools and physician associations should take over the role of educating doctors. “We have blurred the line between promotion and education,” Boozang said. “It shouldn’t be the obligation of patients to protect themselves from conflicts of interest.”

Read the Star Ledger article, “Drug companies paid N.J. doctors millions to promote their products”

FDA and CMS Propose Parallel Review of Medical Products

On September 17, the Centers for Medicare and Medicaid Services (CMS) and Food and Drug Administration (FDA) announced their consideration of a parallel review “process for overlapping evaluations of premarket, FDA-regulated medical products,” and their intention to create a pilot program for parallel review of medical devices.

According to the request for comments published in the Federal Register, the new process would be initiated when “the product sponsor and both agencies agree to such parallel review.”  This collaboration is among the first fruits of a June memorandum of understanding between both departments of Health and Human Services (HHS),which is intended to “promote initiatives related to the review and use of FDA-regulated drugs, biologics, medical devices, and foods, including dietary supplements.”

Among the goals set out by the agreement, the FDA and CMS sought to “[b]uild infrastructure and processes that meet the common needs for evaluating the safety, efficacy, utilization, coverage, payment, and clinical benefit of drugs, biologics and medical devices.”  The proposed parallel review process would do just that.

The proposed process is intended to reduce the time delay between “FDA marketing approval or clearance decisions and CMS national coverage determinations.”  Currently, medical products are first reviewed by the FDA for safety and effectiveness; then, CMS begins the process of making its coverage determination and payment rate, which can take up to a year.  Although CMS is only one of many third-party payors, many others follow CMS’ lead in making their own coverage decisions.  A reduction in the approval-to-payment time by CMS will positively impact the rate at which all coverage decisions are made.

The parallel process will potentially benefit patients and sponsors.  A parallel process that reduces the “approval-to-payment” time will produce savings for sponsors and lead to timely patient access to new products.   Furthermore, by reducing the time to return on investment, the parallel process may be an incentive for increased investment in innovation.

Hurdles to a Parallel Process

There are significant differences between FDA and CMS review that must be overcome.  The FDA generally reviews safety and effectiveness through various application processes (premarket approval, premarket notification, etc.).  CMS, on the other hand, must make multiple decisions regarding a medical product under the “reasonable and necessary” standard, including: “what items and services it can and should pay for; how it should accomplish the payment; and how much to pay.”

Because the FDA and CMS apply different standards in their review processes, a clinical study that demonstrates the FDA requirements of safety and effectiveness may neglect to address CMS’ “questions concerning the impact of the technology on Medicare beneficiary health outcomes.”  Ideally, the parallel process will guide sponsors to design clinical studies that simultaneously address both FDA and CMS questions.

Moving from a serial to parallel process must be carefully staged in order to preserve agency resources.  There is the potential for CMS waste if coverage decisions are begun (or even worse, completed) for products that are subsequently denied approval or clearance by the FDA.

The Call for Comments

The FDA has asked the public to comment on seventeen different issues, including:

• How parallel review should be implemented and when in the FDA review process it should start
• Whether anyone other than the product sponsor should be able to initiate a request for parallel review
• Which classes of products would benefit most from parallel review
• Whether there exist regulatory, legal or scientific barriers to review, and how they may be overcome.
• The criteria for granting a parallel review request

The FDA and CMS will publish their decisions regarding the proposed parallel review process after December 16, when the comment period closes.

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