Medical Education & Health Reform

[Ed. note: As noted in the post above, we are very pleased to welcome Associate Dean & Professor of Law Kathleen M. Boozang, J.D., LL.M., to Health Reform Watch today.]

The news has been much absorbed by the “scandals” associated with physician conflicts of interest arising out of their relationships with the pharmaceutical and medical device industries. Concerns include the potential biases created by industry funding of continuing medical education, the impact on patient care of physician activities as paid industry consultants and promotional speakers, as well as the impact on the integrity and patient safety of industry-funded research.  Analogous issues emerge from industry funding of medical schools themselves.

A pervasive conception of systemic health care reform would provide the opportunity to address many of these problems.  Academic medicine’s drive for money arises not only from the amount of uncompensated care they provide to the under- and uninsured, but from the structural flaws of the funding mechanisms for medical education and research in the United States.  According to the June MedPac Report on medical education,  it is unclear how much it actually costs to train new physicians, partly because of the multiplicity of funding sources.  While it could be that the funding is sufficient, medical school faculty and deans nonetheless find themselves under tremendous pressure to raise money from government grants, industry relationships, and clinical practice to support themselves. This pressure increases as constrained state budgets contribute less to public universities. Income from physician practice plans is leveling off as academic medical centers become unappealing participants in managed care plans — they too frequently focus insufficiently on primary care, and managed care increasingly balks at contributing to the costs of medical education which are built into academic hospital rates. Further, many academic medical centers are less nimble and efficient than the multi-practice plans and surgi-centers pervasive in many communities.

While greed and poor judgment are certainly factors driving some physicians’ relationships with industry, academic medicine’s over-reliance on “alternative revenue” streams can also be explained by the irrationality of the extraordinarily complex mechanisms for funding medical education and research. More frustrating is Medicare is spending $9 Billion annually to new train physicians to function in a health care system that is hopefully short-lived in its current form.  Meaningful healthcare reform will rest on reform of the delivery and finance systems — new health care professionals must be educated to perform in this reformed environment, which should involve increased collaboration between physicians and allied healthcare professionals; treatment of patients outside of the hospital; and knowledge of comparative effectiveness of alternative therapeutic options.

Health care reform should condition future financing of medical education on the absence of collaborations that create conflicts of interest that threaten the integrity of the medical profession.  It should also jumpstart radical reform of the content, methodology and quality of educating medical students, residents, and physicians, who are the linchpin to changing how we deliver healthcare.  The plan for systemic reform should compel a reconceptualization and expansion of allied health care professionals’ roles in health care delivery to address cost, access, quality, and error avoidance.  Finally, the vision for the future should commit to resolving the inequities in the health care status of all who live in the United States, an issue whose solution is inextricably linked to producing a sufficient number and variety of health care providers available in every part of the country who have a broader conception of health care, with the knowledge and skills to achieve the goals of health for all.

Medical Science Liaisons: Walking the Line between Scientific Exchange and Promotion

[Ed. note: As noted in the post above, we are very pleased to welcome Kate Greenwood, J.D., to the blog today.]

As the Wall Street Journal recently reported, at a time when the ranks of pharmaceutical sales representatives are thinning, the number of medical science liaisons (MSLs) is (or was until very recently) growing.  MSLs are doctors, pharmacists, or scientists employed by drug companies to disseminate scientific information about the companies’ drugs — including information about off-label uses of those drugs — usually to physicians who are key opinion leaders.  MSLs are, at most companies, part of the medical affairs or research and development departments and, unlike sales reps, they are not typically evaluated or compensated based on increases in market share or prescription volume in their regions.  Still, as suggested by this PharmExec article on permissible metrics for measuring the value to companies of both MSLs and the thought leaders they court, it is not always clear how the work MSLs do differs from that of a sales rep.

FDA regulations ban companies from “represent[ing] in a promotional context that an investigational new drug is safe or effective for the purposes for which it is under investigation” but explicitly allow companies to engage in “the full exchange of scientific information.”  Sales reps cannot take advantage of the scientific exchange safe harbor to discuss off-label uses with physicians, but MSLs can, as long as they do so in response to a physician’s unsolicited request.  Jeff Patrick, who holds a doctorate in pharmacy and is Director of Medical Scientists at the biopharmaceutical company Dyax, explained to the Wall Street Journal that, unlike a sales rep, he could respond to a question like “Were there pediatrics in your trial?” even if the drug being evaluated was not approved for pediatric use.

Because MSLs are out in the field engaging doctors in free-ranging and difficult to police discussions, they present evident compliance challenges for companies attempting to follow the rules regarding off-label promotion.  On the other hand, their scientific expertise and established relationships with thought leaders may also present compliance opportunities.  For example, earlier this year, the FDA approved the use of MSLs in the Risk Evaluation and Mitigation Strategy (REMS) for UCB’s Cimzia, a drug used to treat Crohn’s disease and rheumatoid arthritis which carries with it a risk of serious infection.  The Cimzia REMS requires as part of its communication plan that the company’s MSLs make a presentation about the drug’s risks to all of the nation’s approximately 500 gastroenterology key opinion leaders.

Synthes Legal Troubles –Again

[Today's Post is by Maansi K. Raswant, a Seton Hall Law student pursuing the Health Law concentration. She is a research assistant to the Center for Health & Pharmaceutical Law & Policy and an intern at the NYC Health and Hospitals Corporation.]

Recently, the Synthes corporation has been garnering a lot of attention, but for all the wrong reasons. A June 17^th indictment comes a little over a month after the New Jersey Attorney General announced that the medical device maker had entered into a settlement agreement for failing to disclose financial conflicts of interests held by physicians conducting clinical trials for its products (see prior post, “Clinical Research: When the Compensation Begs the Answer“). Filed by the United States Attorney for the Eastern District of Pennsylvania, the recent 52-count indictment alleges that from May 2002 to Fall 2004, the Swiss company Norian, and its parent company Synthes, (both based in West Chester, Pennsylvania) conspired to conduct unauthorized clinical trials of Norian XR and Norian SRS, bone cement products used in surgery to treat vertebral compression fractures of the spine. Not only did the trials lack FDA authorization, but the FDA had specifically warned Synthes against using Norian XR for spinal surgery due to safety concerns.

The indictment explains that preliminary studies using human blood in test tubes found that the bone cement products chemically reacted with the blood to create blood clots. In further studies of the prod in a pig, the clots became wedged in the lungs. Despite this knowledge, Synthes continued to market the Norian products for use in spinal surgery, and did not stop doing so until after three patients had died on the operating table.  According to the indictment, rather than recall the products following the patient deaths, the company engaged in a cover up by lying to FDA officers during an official inspection in May and June 2004.

The two recent legal actions against Synthes break new ground, and represent significant inroads by prosecutors in the arena of clinical research. Among other remedies, the settlement with the State of New Jersey required Synthes to disclose all relevant financial interests of its investigators on a public website, and barred the company from compensating investigators with stock, a practice the Attorney General called widespread in the industry. The latest indictment contains not just the usual charges against the corporations, but also criminal charges against four corporate executives charged with shipment of unauthorized devices. If found guilty, each executive faces up to a year in prison.

Rationing or Cost Effectiveness?

In today’s Wall Street Journal, Scott Gottlieb, a former senior official with both the FDA and the Centers for Medicare and Medicaid Services (CMS), warns that “Government Health Plans Always Ration Care.” Aside from recasting the same old aspersions about “rationing,” Gottlieb warns that if reform efforts can’t tame health care costs, the “government will turn to a less appealing but more familiar tool to cut costs: the regulation of access to drugs and medical services.”

Of course, “access” can mean many things. Theoretically, Americans have “access” to the best medical technologies in the world. But practically, most Americans-including those with health insurance-don’t actually access this type of care and couldn’t even if they tried. The bottom line is that every health insurer in the world, public or private, has to “ration” for the simple fact that health care resources are not unlimited. Only wealthy citizens truly have “access” to the best medical care money can buy, regardless of the country they live in or the health system they live under. That won’t change with or without major health reform.

Gottlieb is worried that reformers might formally embrace recommendations by the Medicare Payment Advisory Committee (MedPAC), which currently has a broad statutory mandate to advise Congress on the Medicare program. He also warns that rationing is “a European import,” as if no health insurer in the United States has ever had to draw the line somewhere and decide what not to pay for. For example, Gottlieb warns about organizations like the Committee for the Evaluation of Medicines in France and the Institute for Quality and Efficiency in Health Care in Germany. He doesn’t mention the National Institute for Health and Clinical Excellence (NICE) in the United Kingdom, but it drew similar scorn after the economic stimulus package funded comparative effectiveness research here in the United States. Gottlieb cautions that European countries “aren’t shy about rationing.”

Gottlieb is correct in one aspect: these organizations are prevalent in Europe. However, he misses three important points.

First, the countries in Europe that Gottlieb warns about spend considerably less than we do on health care (and don’t suffer negative health consequences for it).

Second, wealthy residents in pretty much all of these countries can purchase services and technologies over and above what the organizations that Gottlieb warns us about approve.

And third, we’re not exactly strangers to these organizations in the United States. Gottlieb is concerned about European imports, but he’s ignoring our home grown organizations, like the Agency for Healthcare Research and Quality (AHRQ), which makes new technology assessments for Gottlieb’s old agency, CMS, and supports comparative effectiveness research. Or the Medicare Evidence Development and Coverage Advisory Committee (MEDCAC), which also performs new technology assessments. In fact, it’s no secret in Washington that Medicare has long considered some amalgam of cost effectiveness and comparative effectiveness in its coverage decisions, even if nothing in the Medicare statute explicitly allows it to do so. (CMS has long stretched the definition of “reasonable and necessary” in section 1862(a)(1)(A) of the Social Security Act to fit its fiscal realities, even if CMS or its precursor, HCFA, haven’t been successful in cementing cost effectiveness as a formal criterion, as evidenced through failed rulemaking in 1989 (54 Fed. Reg. 4,302) and 2000 (65 Fed. Reg. 31,124)).

And just as importantly, private insurers make cost and comparative effectiveness determinations too, either by following Medicare’s lead, as expressed through national and local coverage determinations (NCDs and LCDs), or by setting up their own new technology evaluation systems, like BlueCross BlueShield has with its Technology Evaluation Center. Though the offical duties and decisionmaking processes of these organizations differ, the health care community generally understands these decisions as implicitly factoring in cost effectiveness or at least clinical effectiveness-thus doing precisely what the anti-reformers like Gottlieb warn about.

Of Doughnut Holes and Simple Math, or, “Even if I Pay Half Price For Brand Name Drugs, Won’t That Still Be $4,350 Out of Pocket Until Medicaid Kicks In?”

Forgive me if I sound naïve, or perhaps a wee bit skeptical, but I’m somewhat perplexed as regards the bottom line of PhRMA’s well cheered announcement to offer a 50% discount on name brand prescription drugs to seniors stuck in the money pit known as the Medicare “Doughnut Hole.”  The New York Times has said that the “Federal Saving From Lowering of Drug Prices Is Unclear” and the Washington Post has said that  ”It was not clear how much of the savings would accrue to the government side of the ledger and how much would represent lower out-of-pocket payments for consumers.” Unclear as it may be, it may be worth a look. This is not to say that this move announced by PhRMA is not a step in the right direction, just that a closer gauge of the step, as it appears at present, would seem to be in order.

First things first, in its 2008 fact sheet, “Prescription Drug Trends, September 2008,” Kaiser Family Foundation found (pdf. page 2) that

“The average brand name prescription price in 2007 was over 3 times the average generic price ($119.51 vs. $34.34).

Kaiser also found that “For products with a large number of generics, the average generic price falls to 20% of the branded price and lower.” And that “Approximately three-quarters of FDA-approved drugs have generic counterparts.”

When considering the approximately 25% of FDA-approved drugs which do not have generic counterparts, and which would figure largely in any savings under the new PhRMA discount plan, it is probably important to remember that pharmaceutical companies often  engage in what is known as “pay-for-delay:” the practice of paying generic drug manufacturers not to market generic drugs which would compete with their own branded drugs.

Might I suggest that without a concomitant decrease in the breadth of the lapse in coverage known as the “Doughnut Hole,” or some after purchase rebate scheme which allows the full price of the discounted drug to count towards satisfaction of the Doughnut Hole requirement, the net result for many of the hardest hit  seniors will be fairly limited? That they will still have to pull approximately $4,350 per year out of their pockets?

What’s a Doughnut Hole?

The PhRMA discount goes to the price of brand name prescription drugs after the initial cap is met on the Medicare prescription drug benefit. This initial cap on prescription benefit coverage can result in what CMS refers to as “the coverage gap” or what is often referred to as the Medicare Part D “doughnut hole.”

As we reported in a post back in February,

The Dallas Morning News has offered this explanation of “the doughnut hole”

Seniors with Medicare’s standard drug benefit for 2008 pay the full price once their total drug expenses — both Medicare’s costs and their own out-of-pocket deductibles and co-payments — reach $2,510.

They are then on their own for the next $3,216, until their total drug spending exceeds $5,726. At that point, catastrophic coverage kicks in, and Medicare pays 95 percent of their drug costs.

Some seniors are able to avoid the doughnut hole because they qualify for extra government help or buy extra insurance. But everyone else has to mind the gap, which lawmakers included in Medicare’s drug benefit to hold the line on federal costs.
The WSJ Health Blog reports that in 2009, “The coverage gap will open up after beneficiaries and their drug plans have spent a total of $2,700 on medications…. Seniors are then on the hook for the next $4,350.”

We also noted that “In response to that expense, the Kaiser Foundation has shown that many seniors cease or diminish the use of their medications.”

Some simple, if not rudimentary, math
In order to make a complex matter slightly easier, allow me the liberty of making the numbers even: we’ll use $2,500 for an initial cap, and we’ll use $4,500 for the out of pocket or “on the hook number” — that which one must pay until Medicaid kicks in and pays 95% of the cost. [Because of the wide variation in coverage plans, the actual numbers can vary as well, and there is some fluctuation in the amounts reported.]

Again for even number ease sake, consider someone with a large, constituting catastrophic, $12,000 per year brand name prescription bill. That person, regardless of the discount, will still have to take $4,500 out of his or her own pocket during the Doughnut Hole period of non-coverage-unless the Donut Hole itself is changed or eliminated. Looking at the calendar year, if the Doughnut Hole is not changed or eliminated, with or without the discount, the initial cap ($2500 @ 1000 per month) will be met at around the middle of March. The primary difference with the discount is that instead of making it only to August before Medicaid picks up the tab for the consumer, Medicaid will not kick in until December. Under this scenario, the brand name consumer stands to ultimately save roughly $200 as a result of the 5% Medicaid co-pay,  and Medicaid will have to make a payment for the brand name pharmaceuticals for roughly 3 weeks worth of supply. But the consumer’s out of pocket $4,500 still went to the brand name  pharmaceutical. Read more

Clinical Research: When the Compensation Begs the Answer

The New York Times reports that New Jersey Attorney General Anne Milgram announced a settlement agreement with medical device maker, Synthes, for failing to disclose the financial conflicts of interest of doctors researching its products. Synthes is the maker of the ProDisc, an artificial spinal disk.

The settlement agreement with Synthes was described in the AG’s press release, which quoted Ms. Milgram, as “the first of its kind because of its disclosure provisions, as well as its ban on compensating clinical researchers with company stock. She said the latter provision runs counter to widespread industry practice — a practice she called unacceptable.” Notably, the state pursued the case as a matter of consumer fraud. The premise being that the failure to fully disclose such conflicts constituted such for both human trial subjects and the purchasing public.

In a letter to the FDA, critical of the FDA and cc’d to key members of Congress, Ms. Milgram described the results of the AG’s investigation into the business and research practices of Synthes. The letter states:

The investigation revealed that a majority of the physicians who participated in these clinical trials had significant investments in the products -investments that would have been worthless had the product failed to obtain regulatory approval from the FDA. And, the investigation revealed that Synthes, which acquired ProDisc while the clinical trials were underway, failed to disclose these financial conflicts of interest to the FDA.

Yet, despite the fact that Synthes’ failure to adequately disclose these interests should have been obvious from even a cursory review of its FDA submissions, the FDA did nothing to regulate these conflicts. A number of the disclosure forms were signed and dated, but were otherwise left blank. Others indicated that the clinical investigator had a significant equity interest in the product, but did not attach the requisite details. But the FDA approved Synthes’ applications for premarket approval without any delay or further inquiry into this issue.

Leaving aside for the moment the criticism of the FDA (the State of New Jersey joins a long list of increasingly vocal complainants, including the Program on Government Oversight (citing “dramatically reduced inspections of ‘good laboratory practices’ at facilities that do the earliest testing of medical devices. Such inspections declined from 33 in 2005, to seven in 2007, to just one last year”),  and FDA scientists from the Center for Devices and  Radiological Health, who have openly proclaimed that the FDA “is fundamentally broken.”), it’s worth a moment to consider that Synthes has agreed to “stop paying doctors who are conducting clinical trials of its products with stock or stock options,” and that AG Milgram described the compensation of research doctors with stock as being “apparently common” and a “widespread industry practice.”

Compensating a  doctor with stock or stock options financially tied to the results of his research may well be the antithesis of an impetus for objective clinical research.

The basic proposition is this: you, doctor, are charged with investigating whether or not this medical device is safe and fit and shows efficacy for human use. For doing so, we will give you a portion of the company (stock or stock options) which owns the medical device. If the medical device is efficacious and fit for human use, the company will stand to profit. As a holder of stock and/or stock options in the company, you will be paid a portion of that profit and/or the value of your holdings in the company will increase correspondent to your determination of safety for human use and efficacy. If you determine that the device is not safe for human use and/or not efficacious, your holdings in the company will be worth much less, if not worthless. “Is the device safe for human use and efficacious?” Does an answer of “Yes” surprise anyone?

It is also not an answer to say that the doctors may have merely been compensated in cash and then later converted that cash into stock or stock options independently. My guess is that in constructing these compensation packages, as with most securities matters, timing and knowledge is important. That the stock or stock options must be issued or at least contracted for by the researcher simultaneous with the hiring so as to avoid SEC difficulty regarding the particulars of the researchers’ “inside” and “confidential” knowledge regarding the device and the research itself. Researchers who have purchased interested stock (or who have had stock purchased by others) before news of their research has been made public have often paid a price.

And obviously, once the doctor’s research has been made public, any positive results will have been already reflected in the market price of the stock, all but foreclosing the research doctor from reaping profits tied directly to his research determinations.

As part of A.G. Milgram’s “Assurance of Voluntary Compliance agreement (the Synthes case was handled by Deputy Attorney General Megan Lewis, Chief of the Division of Law’s Affirmative Litigation Section, and Deputy Attorney General Michelle T. Weiner) Synthes must disclose any future payments made by the company to physicians conducting clinical trials on its devices, as well as any investments held by such physicians in the devices they test. A $3 billion global company, Synthes has also agreed to stop paying clinical trial physicians with company stock or stock options.”

Attorney General Milgram said that “the Synthes agreement should serve as a template for the entire industry,” and in her letter to the FDA remarked that she was “hopeful the Synthes terms will become “best practices” for disclosure among medical device makers.”

In addition to signifying her hope, Ms. Milgram announced that her office issued subpoenas “to five major medical device manufacturing companies seeking information about their business practices.”

PhRMA Shows Its Committment to Transparency With Revised Principles on Conduct of Clinical Trials

The Pharmaceutical Research and Manufacturers of America (PhRMA) Board of Directors announced yesterday their unanimous endorsement of revised principles to increase transparency in medical research through their newly revised PhRMA Principles of Conduct of Clinical Trials and Communication of Clinical Trial Results.  The revised principles are part of an effort to encourage behavior that benefits the healthcare community and the public through objectivity in research and strengthened transparency in medical studies.

PhRMA states that the Principles of Conduct, which are to take effect on October 1, 2009, will:

Fortify our commitment to patients and healthcare professionals by increasing transparency in clinical trials, enhancing standards for medical research authorship and improving disclosure to manage potential conflicts of interest in medical research.

The pharmaceutical and biotech industries have been under recent pressure to become more transparent, specifically concerning the disclosure and publication of clinical trial results, the disclosure of physician payments/reimbursement for conducting clinical trials, and authorship standards.

Read more

The FDA to Evaluate 25 Medical Devices Marketed Before 1976 Without Premarket Approval

The FDA announced last week that they are requiring the makers of 25 medical devices marketed before 1976 to submit safety and effectiveness information regarding their devices.   These devices were allowed onto the market without undergoing the current FDA testing and classification because they were first manufactured before the Medical Device Amendments to the Food, Drug, and Cosmetic Act of 1976, and include many of the riskiest devices — defibrillators, pacemakers accessories, and heart valves.

The FDA classifies medical devices into three categories, with class III being the riskiest devices– as such, they require premarket approval.  Currently, the 25 pre-amendment devices in question are class III, but based on the 1976 law these devices were not required to undergo premarket approval at the time.

The FDA will use the submitted safety and effectiveness data to review the devices and classify them into what they deem to be the appropriate risk category.  According to the FDA, if a device is found to be a class III device, the manufacturer will need to submit a premarket approval application.  If the device is moved to class I or II, it will not require premarket approval.

The FDA’s announcement comes after the Government Accountability Office reported in January that the FDA was not doing enough to thoroughly evaluate the safety and effectiveness of many medical devices marketed before 1976.  They urged the FDA to review the devices and said that “it is imperative that FDA take immediate steps” to fix this review and approval process for devices.

Daniel G. Schultz, M.D., director of the FDA’s Center for Devices and Radiological Health, said regarding the FDA’s new requirement:

We are taking the necessary steps to complete this very complex process while continuing to protect public health by thoroughly reviewing and evaluating all medical device submissions presented to the agency.  New premarket notification submissions for devices of these 25 types will continue to receive an appropriate level of scrutiny to ensure safety and effectiveness.

This decision to evaluate these devices and further public safety comes after recent criticism of the agency, such as the opinion expressed publicly by a number of  FDA scientists that the “FDA is fundamentally broken.”  We have blogged about the much maligned agency on numerous occasions, with specific emphasis upon the Center for Devices and Radiological Health and a decline in medical device lab inspections.

U.S. District Court Says FDA Decision on Plan B Was Influenced by Political Pressure

A U.S. District Court ordered yesterday that the Food and Drug Administration (FDA) allow for the sale of the Plan B morning-after pill to females 17 years old and older without a prescription.  Since 2006, based on a FDA decision during the Bush administration, Plan B has been available over the counter only to women over the age of 18.  The FDA must comply with the order within 30 days.  Plan B is a back-up birth control pill that can reduce the chance of pregnancy when taken within 72 hours of unprotected sex or contraceptive failure.  It is manufactured by Duramed, a subsidiary of Barr Pharmaceuticals.

Judge Edward Korman of the Eastern District of New York wrote in his decision that the FDA was influenced by political pressure and their conclusion was not based on the scientific evidence available concerning the drug.  Judge Korman wrote that:

These political considerations, delays, and implausible justifications for decision-making are not the only evidence of a lack of good faith and reasoned decision-making.  Indeed, the record is clear that the FDA’s course of conduct regarding Plan B departed in significant ways from the agency’s normal procedures regarding similar applications to switch a drug product from prescription to non-prescription use.

Judge Korman’s statements echo similar sentiments expressed as of late that the “FDA is fundamentally broken.” We have blogged about the subject, and the alleged political influences on FDA, in a number of posts most recently.

The WSJ Health Blog wrote today that the ruling specifically blasts past and current FDA officials such as acting Surgeon General and acting Secretary for Health and Human Services, Dr. Steven Galson, and then-FDA Commissioner Lester Crawford.

The FDA is reviewing the decision and the WSJ reports that “If the Obama White House doesn’t appeal the ruling, it would mark the fourth significant departure from Bush administration positions on controversial health-care issues since President Barack Obama took office.”

Susan Woods was a top FDA official who resigned in 2005 due to the delays surrounding a FDA decision on the pill.  The Associated Press quoted her as saying:

What happened with Plan B demonstrated that the agency was off track, and was not being allowed to do its job properly.  This is telling the FDA to move forward with a focus on good science.

The President and CEO of the Reproductive Health Technologies Project, Kristen Moore, said “This ruling validates what we have known all along - politicians trumped the scientists when it came to the FDA’s handling of Plan B.”

Naturally, many conservative groups are angered over the ruling.

Unpublished 1997 Study Linked Drug to Weight Gain and Diabetes, Now Thousands Sue Claiming They Were Not Warned of Side Effects

The Washington Post reported today on the “silenced drug study” of AstraZeneca’s antipsychotic drug, Seroquel.   The study, known as Study 15, was conducted in 1997 and showed an increase in weight gain and diabetes among Seroquel users.  The results were never published and the information was not released to the public or physicians.  The study was, however, provided to the FDA but they did not have the authority to publish the results.  Seroquel was approved by the FDA in 1997 after they received the study’s findings.

AstraZeneca contends that they did disclose the drug’s health risks on the label, as required by the FDA.  Spokesperson Tony Jewell wrote in an email to The Washington Post that the results of Study 15 “did not identify any safety concerns.”  Study 15 compared Seroquel to another similar drug, Haldol.  Jewell also wrote that “A large proportion of patients dropped out in both groups, which the company felt made the results difficult to interpret.”

Over 9,000 lawsuits have been filed against the drug by patients who experienced weight gain, hyperglycemia and diabetes.  It is through these lawsuits that internal documents and details regarding the buried study have emerged.  Internal documents show that AstraZeneca was well aware of the results indicating significant weight gain and worked to spin the results favorably.  The company presented information that Seroquel caused patients to lose weight at two meetings in 1999. This data was based on a much smaller company-sponsored study even though AstraZeneca had concerns with the study and the doctor who conducted it.

The Washington Post says:

The saga of Study 15 has become a case study in how drug companies can control the publicly available research about their products, along with other practices that recently have prompted hand-wringing at universities and scientific journals, remonstrations by medical groups about conflicts of interest, and threats of exposure by trial lawyers and congressional watchdogs.

An obvious concern with unpublished or silenced studies is that they may lead physicians to make medical decisions without all the information that should be available to them.  As the Center for Health and Pharmaceutical Law & Policy recommends in its recently-released whitepaper:

All those engaged in medical research and publication, including medical professionals and institutions, medical journals, and industry, should undertake reforms to ensure the integrity of the medical literature.  Transparency in the relationship of industry and physicians would be critical tool in this effort.

The Life Cycle of Objectionable Drug Marketing Practices

[This is a guest post by Nathan Cortez, assistant professor of law at the Dedman School of Law at Southern Methodist University. Cortez has published in the peer-reviewed Food and Drug Law Journal and teaches international health, pharmaceutical and administrative law. I've learned a lot from his work, and I'm happy he's agreed to let me post this here.]

By Nathan Cortez

The pharmaceutical industry spends some serious coin on sales and marketing-anywhere between $30 billion and $57 billion per year. And this money funds much more than the ubiquitous ad campaigns to which we’ve grown accustomed (sing along if you know the “Viva Viagra” jingle). Over the years, sales and marketing departments have conjured up increasingly creative marketing practices of questionable legality. For example, drug companies have funded “research” and “educational” grants of questionable validity, sponsored continuing medical education (CME), paid ghost writers to generate favorable journal articles, provided free gifts, meals, and entertainment to prescribers, paid prescribers as speakers, consultants, or preceptors, and even hired former college cheerleaders to gain access to prescribers. Most of these practices have been condemned, and many have been prosecuted, resulting in billions in settlements for federal and state governments. The pharmaceutical industry can’t even give away free drugs without being punished.

Last Monday, the New York Times highlighted yet another objectionable drug marketing practice: targeting medical schools. As the article explains, drug companies have long had ties to medical schools and their students by funding endowed chairs, faculty prizes, research grants, capital improvements, and even volunteering employees to teach classes. Students get showered with enough free pizza and trinkets to think that they might already have prescribing privileges. More recently, the Times reports that the faculty at Harvard Medical School has come under fire for its ties to drug companies that hire faculty as speakers, consultants, or even board members. More than 200 Harvard Med students have objected, leading the school to convene a 19-member panel to reevaluate the school’s conflict-of-interest policies (meanwhile, the University of Minnesota Medical School is loosening them).

In the “Life Cycle of Objectionable Drug Marketing Practices,” we’re currently at the “media coverage and public outrage” phase. Gradually, most of the practices listed in the initial paragraph have either disappeared or have lost their allure. Media coverage and public outrage is quickly followed by government outrage (possibly even Congressional hearings) and promises of self-regulation by the drug companies to preempt more stringent regulation. Self-regulatory efforts like the PhRMA Code and the AMA Ethical Guidelines provide some bright-line standards for complying with ridiculously broad laws like the federal anti-kickback statute and its complicated safe harbors. If companies still don’t get the hint, the government simply tells drug companies what not to do.

And if none of these events ends the Life Cycle of the Objectionable Drug Marketing Practice, litigation usually does. Pretty much every major pharmaceutical company has settled a Corporate Integrity Agreement with the government for violating federal drug marketing laws-the latest being a staggering $1.4 billion settlement paid by Eli Lilly to settle claims that it illegally marketed its anti-psychotic drug Zyprexa. By settling, companies thus avoid the “death penalty”–being excluded from Medicare and Medicaid.

Although the drug companies never die, the practices usually do, precipitated by an avalanche of government investigations, whistleblower suits, shareholder suits, and even marginally-related product liability suits. Federal and state lawmakers also pile on. In the last few years, nine states have enacted (and dozens have considered) pharmaceutical marketing laws, requiring disclosures of marketing payments made by drug companies to potential prescribers, in addition to caps on payments, disclosure of sales representative activities, and other prohibitions. Indeed, the Senate Finance Committee is currently considering a federal bill that would explicity preempt state laws.

Thus, the Objectionable Drug Marketing Practice dies a violent death. It can rest in peace, but the sales and marketing departments can’t. Because they have to find new ways to drive market share.

Biopharmaceutical Companies Continue to Advance and Invest In Rough Economic Times

A recent press release from the Pharmaceutical Research and Manufacturers of America (PhRMA) reports that pharmaceutical and biotech companies continue to invest substantial amounts of money into research & development, despite the dismal current economic situation.  Research from PhRMA and Burrill & Company shows that “pharmaceutical research and biotechnology companies invested a record $65.2 billion last year in the research and development of new life-changing medicines and vaccines — an increase of roughly $2 billion from 2007.”  There are almost 30,000 medicines in development in the country right now.

In a time when most other industries are struggling and the unemployment rate is the highest it has been in 25 years, it is encouraging to see that the biopharmaceutical industry, one whose existence and success directly impacts the health of our nation, is continuing to invest and advance.  For example, this week we saw Merck make a serious investment through its $41.1 billion merger with Schering-Plough.    In addition, as we posted in December, Merck announced its plan to enter the biosimilars market, which will cost an estimated $1.5 billion.

Biopharmaceutical companies are continuing to spend on R & D, and the great majority of their investments are within the US.  According to “The Biopharmaceutical Sector’s Impact on the U.S. Economy: Analysis at the National, State, and Local Levels”, a study out this month by Archstone Consulting and Dr. Lawton R. Burns, this industry creates millions of US jobs and contributed three times as much to the GDP than the average of other industries and sectors in 2006.

Besides the struggling economy, drug companies face other challenges.  As we recently reported, President Obama’s health reform plan may negatively impact pharmaceutical companies through an increased discount to Medicaid (from 15.1% to 22.1% of avg. manufacturer’s price).   Despite the economic crisis and health care reform changes, it is hopeful to hear the industry’s continued commitment to progress. Said PhRMA President and CEO, Billy Tauzin:

America’s pharmaceutical research and biotechnology companies are not immune to the challenges presented by our current economic crisis.  However, the important work that we do every day in the battle with disease cannot stop. The U.S. is the world’s hotbed of medical innovation, and throughout the country, we remain committed today to finding tomorrow’s cures, despite the incredible challenges that are posed by the current economy.

Supreme Court Rules that Preemption Does Not Exist in Drug Labeling Case

The Supreme Court held today, in a 6-3 decision, that FDA federal approval of drug warning labels does not preempt state regulations and therefore does not prohibit claims of insufficient drug warnings brought under state law.  The ruling in Wyeth v. Levine upheld a $6.7 million award to Diane Levine, whose arm was amputated after a flawed injection of Wyeth’s anti-nausea drug, Phenergan.

The case centered on the drug’s labeling, as Ms. Levine argued that the label did not warn of the risks associated with administering the drug through “IV push” and that it must contain these warnings in accordance with Vermont law.   The NY Times reported that Wyeth wrote in their brief that they “could not change Phenergan’s labeling to comply with Vermont law without violating federal law.”   They argued that because the drug label was approved by the FDA, a federal agency, Levine’s state law claims were preempted by federal regulations.  The Supreme Court disagreed with this argument, holding that Wyeth could have complied with both state and federal regulations, and reaffirmed the ruling of the Vermont Supreme Court.

Senate Judiciary Committee Chairman Senator Patrick Leahy (D-Vt.) filed an amicus brief for this case in August, 2008.  Today he issued the following statement regarding the Court’s decision:

This decision to uphold the Vermont Supreme Court’s ruling in Wyeth v. Levine has far-reaching effects on the ability of countless Americans to seek justice in their courts. Diana Levine’s life and career have suffered irreparable - yet preventable - damage. The Court’s decision soundly rejects the anti-consumer position of the Bush administration, and reaffirms Congress’ primacy concerning the extraordinary power to preempt state law. Most of all, the decision reclaims for all American citizens the ability to seek justice in their courts of law.

In the 110th Congress, the Senate Judiciary Committee held several hearings to examine the way in which federal agencies have overstepped their authority in the area of preemption, and, given what I viewed as an untenable position by the drug maker and the former administration, I filed an amicus brief with the United States Supreme Court in Ms. Levine’s case. I am gratified that the Court has spoken so clearly on this issue. While recent Supreme Court decisions have shielded big business from accountability and have undermined stronger state consumer protections, this ruling alters that earlier course and affirms that Congress never intended to preempt state laws in the way claimed by Wyeth and the Bush-Cheney administration, claimed. This is a clear victory for Ms. Levine, and for all American consumers. It is also a clear vindication for our own laws and courts in Vermont.

Wyeth’s comments on the decision can be found here.

Medical Imaging: Why Are We Spending So Much?

It is not only the sheer number of medical imaging tests (necessary and unnecessary), such as MRIs, CT scans, and PET scans, that is contributing to the overall cost of medical imaging.  Other factors adding to the fact that insurers’ expenditures on medical imaging are growing at 18-20% annually are the use of older imaging machines, the growing trend of physicians who have ownership interests in imaging machines, and radiologists’ high compensation.

Currently, imaging centers are not required to, but may choose to, become accredited by The American College of Radiology.   Therefore, the age of an imaging machine is not regulated and older machines may produce blurry or poor scans.  This leads to repeat tests and misdiagnoses, which can result in an illness remaining undetected or even unnecessary surgery, as is depicted in the NY Times article.

In the current system, compensation is not based on the quality of the scan and therefore there is no incentive for the facility or physician to purchase a new and very costly imaging machine.  As the Wall St. Journal Health Blog points out radiologists read the scans and the insurer who pays for the scan never sees it to determine its quality. Read more

As the Obama Budget Unfurls, Details About Health Care Reform Emerge

The New York Times has published an article, “Obama Offers Broad Plan to Revamp Health Care” which ably outlines the contours of the emergent health plan–and the way we’ll pay for it. Or at least the way President Obama proposes we’ll pay for it. According to the Times, “Mr. Obama asked Congress to set aside $634 billion in a ‘reserve fund for health care reform.’”

Suffice it to say, for the moment, that there are winners:

Cancer research, a multi-year plan designed to double it; Biosimilars (generic versions of biotech drugs), speeded approval through “a new regulatory pathway” at the Food and Drug Administration;” low-income women, increased access to family planning through Medicaid; and doctors, who will not be subjected to the Medicare cuts in payments scheduled to take effect in 2010 under current law (21% in 2010, 5% for a few years thereafter);

And there are losers:

Drug Companies, an increased discount to Medicaid (from 15.1% to 22.1% of avg. manufacturer’s price); Private Insurers, a cut in payments to Medicare Advantage providers; higher income Medicare recipients, increased prescription drug premiums; Hospitals, a decrease in Medicare payments for those hospitals with a high proportion of re-admits within 30 days of initial release (said to be indicative of  poor initial performance); home health agencies, a $37 billion cut over the next 10 years.

Of course, “loser” is a relative term; and sometimes a gored ox, if it lives, is better than no ox at all. And I would imagine that is easier to bear the loss of  some oxen than it is others: specifically, an increased discount in Medicaid prescription drug pricing, is not the ability of Medicare to bargain for the price of prescription drugs. A topic we wrote about in early January, and a reform which the Obama Health Care campaign plan promised:

“At present, Medicare is itself unable to negotiate drug pricing. In Obama’s campaign health plan, he stated that he would

‘Allow Medicare to negotiate for cheaper drug pricing. The 2003 Medicare Prescription Drug Improvement and Modernization Act bans the government from negotiating down the prices of prescription drugs, even though the Department of Veterans Affairs’ negotiation of prescription drug prices with drug companies has garnered significant savings for taxpayers. Barack Obama and Joe Biden will repeal the ban on direct negotiation with drug companies and use the resulting savings, which could be as high as $30 billion, to further invest in improving health care coverage and quality’ (footnotes omitted).”

My guess is that this is an ox the drug companies are trying to save.

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