The Australian government has announced a new scheme that will compensate living organ donors with cash payments during their recovery period. This is said to be intended not as a payment for the organ, but as a way to minimize the financial burden of donation. The plan should be seen as a step in the right direction for those who favor legalizing payment for organ donation in the United States, and Congress should seriously consider authorizing a similar pilot program.
Australia’s new program has several features, designed to mitigate fears and concerns about paying organ donors. First, the plan reduces the fear that individuals will look to donate their organs out of desperation and economic necessity. This is accomplished by limiting the payments to the currently employed, including self-employed and part-time workers. Additionally the compensation is not extravagant, topping out at $606 a week for up to six weeks. This limited compensation is unlikely to attract financially distressed donors who would otherwise choose not to donate, though it may make it easier for those who are not well-off to commit to a process that will entail significant time off from work. That being the case, most donors would find themselves afterwards in relatively the same financial situation as before they donated.
Second, the money comes from the Australian government, rather than from the recipients themselves. This reduces the appearance of a cash-for-organs system that might be unpopular and ethically problematic. A third party payment system for bone marrow is already developing in the US. The group moremarrowdonors.org has led the effort for such after the 2012 decision of Flynn v. Holder held that payment for donating bone marrow by apheresis is allowed under the current law. If third parties, be they charitable organizations or the US government, make payments to donors a gap is created between the donor and the recipient. This gap will, presumably, allow donors to still feel that they have actually donated and not sold their organ. And, if the altruistic component of donation can be preserved while reducing the financial burden to the donor then it is unlikely that this new scheme will drive away potential donors who do not like the idea of selling their organs.
If this scheme were adopted by the United States it has the potential to drastically increase the supply of kidneys, especially in minority communities. There is currently a huge gap between the supply and demand for kidneys. For racial minorities this gap is even wider. Modest payment for missed work time, coupled with an awareness campaign, would allow low-income individuals to donate their organs without placing themselves in financial jeopardy from missed work. If the amount of money paid to the donor was kept modest, like the Australian scheme, claims of exploitation would be less persuasive.
The US government should closely monitor the Australian pilot program to see if it is effective. If so, it should be rapidly adopted by the US. If not, then consideration should be given to other means of increasing organ donation, including larger cash payments to donors. A US program similar to the new Australian scheme would go a long way to closing the gap between the need for kidneys and the supply of living donors.
Filed under: Drug Pricing, Drugs & Medical Devices, Health Law, Seton Hall Law
Here at Seton Hall Law, the halls are filled with the sounds of students again, which means our summer-long blog hiatus has come to an end. We’re excited to get back to blogging at Health Reform Watch!
As always, the blog will feature analysis and commentary from Seton Hall’s health law faculty and Recommended Reading posts highlighting the health law scholarship we’ve been reading and enjoying. It will also include contributions from the students in our health law program as well as announcements of program activities.
Guest posts on health and pharmaceutical law and policy topics are welcome, so please contact me, Kate Greenwood, at firstname.lastname@example.org if there’s something you’d like to share.
. . .
From the beginning, the content of Health Reform Watch has been driven by the diverse interests and expertise of Seton Hall’s health law faculty. In my case, that’s maternal and child health, drug and device law and policy, and, most especially, the intersection of the two. In recent months, I have focused on the regulation of orphan drugs (a video of me opining about the same can be found here), and so yesterday’s news that the Australian government has decided to pay the $110,000 per-course-of-treatment price for Bristol-Myers Squibb’s melanoma drug Yervoy caught my attention. What’s newsworthy is not Australia’s decision to pay – other countries are, too – but rather its plan for making sure it is getting its money’s worth. As reporter Wendy Carlisle explains, Australia’s Pharmaceutical Benefits Advisory Committee will for the first time be conducting its own epidemiological study.
As is the case with many orphan drugs, Yervoy was approved on the basis of clinical trials that were relatively small. A 2011 review conducted by Aaron Kesselheim, Jessica Meyers, and Jerry Avorn of all new oncology drug approvals from 2004 through 2010 in oncology revealed that “the FDA ha[d] approved alternative trial designs that allowed most orphan cancer drugs to be approved on the basis of single-group, nonrandomized trials that enrolled comparatively small numbers of patients.” EvaluatePharma recently estimated that regulators require a median phase III trial size of 528 patients, at an estimated average cost of $85 million, for orphan drugs, as compared to 2,234 patients, at an estimated average cost of $186 million, for non-orphan drugs.
When it comes to clinical trials, smaller is not better. As the chair of Australia’s Pharmaceutical Benefits Advisory Committee, Dr. Suzanne Hill, explains, “[i]f we are going to look at new products and try to judge them on the basis of smaller clinical trials – which is what is happening – then we are going to be less confident about the clinical trial data when we see them for making recommendations[.]“ To shore up the Committee’s confidence in Yervoy, it will be tracking “who gets prescribed it, what happens to them, how long do they get treatment for, how is the treatment … put in the context of other treatments that they have and what happens to the outcome?” The Committee’s ultimate goal is to determine whether “we get the survival benefit in the community that we saw in the trials[.]”
The number of orphan drugs, many of which cost in excess of $100,000, is climbing and is expected to continue to do so. EvaluatePharma estimates that “the worldwide orphan drug market is set to grow to $127 [billion], a compound annual growth rate of +7.4% per year between 2012 and 2018[,]” which “is double that of the overall prescription drug market, excluding generics, which is set to grow at +3.7% per year.” Given these expected trends, there is no doubt that regulators and payers will increasingly look to post-marketing studies to supplement the available clinical trial data about orphan drugs, whether they conduct the studies themselves, as Australia is doing, or require manufacturers to shoulder the burden. Care must be taken to ensure that manufacturers remain incentivized to develop treatments for rare diseases, but there is evidence to suggest that regulators have room to maneuver. EvaluatePharma reports that “[t]he current stock of Phase III/Filed orphan products is expected to yield a return on investment of x10.3,” while the current stock of non-orphan products is only expected to yield a return on investment of x6.0.
NY/NJ CLE credits available
This four-day educational program, held twice a year, immerses attendees in the statutes, regulations, and other guidance that comprise the body of law known as “fraud and abuse law,” as well as other healthcare-related laws and regulations, to help them understand the legal underpinnings of the compliance programs they develop and enforce.
Who Should Attend
Pharmaceutical and medical device professionals in compliance, legal, regulatory and medical affairs, sales, marketing, grants and related areas, as well as outside counsel who represent healthcare companies.
Cost & Registration
Tuition for the Program: $2,400. To register, go to http://law.shu.edu/hccp.
- Program faculty include high-level government and private lawyers who are experts in pharmaceutical and medical device fraud and abuse issues.
- Session topics include Federal and State False Claims Acts, Federal Anti-Kickback Statute, the Food, Drug & Cosmetic Act (FDCA), Data Privacy (HIPAA, HITECH, and others), Food & Drug Administration Amendment Act of 2007 (FDAAA), Foreign Corrupt Practices Act (FCPA), Prescription Drug Marketing Act of 1987 (PDMA), PhRMA Code and AdvaMed Code, The Federal Sunshine Law, federal and state marketing and disclosure laws, OIG compliance guidance, and much more.
- Attendees receive extensive resource materials which will aid them in their ongoing compliance efforts.
- Attendees will receive a certificate issued by Seton Hall Law School upon completion of the Program, and may apply for approximately 26 CEUs for HCCA and SCCE certification and/or NY and NJ CLE credit.
For more information regarding the Program, please contact Sara Simon at email@example.com or call 973-642-8190.
When patients undergo surgical or other medical procedures, they hope to receive optimal care provided by experienced physicians. They are rarely concerned about proper sterilization of surgical instruments and other medical equipment as it is likely assumed that the health care facility has applied this standard precaution. Unfortunately, however, not every medical center is adequately sterilizing its equipment, yet this is a crucial element of successful medical care.
According to a report by The Center for Public Integrity, a patient who underwent a routine rotator cuff repair surgery at a Texas hospital in 2009 was readmitted weeks later due to an infection from the deadly bacteria known as P. aeruginosa. An investigation conducted by the Centers for Disease Control and Prevention (CDC) and the hospital revealed that the arthroscopic shaver utilized for the surgery contained the deadly bacteria even after the sterilization process.  A more recent incident occurred in March of this year where a routine inspection at an oral surgeon’s office in Tulsa, Oklahoma exposed sterilization issues, including cross-contamination problems. The Department of Health stated, “more than 60 former patients [of the oral surgeon] tested positive for hepatitis and HIV.”
Medical device manufacturers originally sold “single-use” devices because of the demand for disposable equipment. In the late 1970s, hospitals began reusing medical devices intended for or labeled as “single-use” as a cost control measure. The FDA explains that “single-use” devices are to be used once or on one patient during a single procedure whereas reusable medical devices are those that can be reused to treat several patients.
Contaminated reusable medical devises can lead to infections but a method known as “reprocessing” involves meticulous sterilization intended to prevent infections. Reprocessing generally includes the following steps: 1) preliminary decontamination and cleaning in the area of use such as the operating room to inhibit drying of blood and other contaminants on the devises; 2) transfer of the devise to the reprocessing area where careful cleaning occurs and 3) final disinfection or sterilization to allow the devise to be reused. The FDA further explains that problems arise for reprocessing when sterilization instructions by the manufacturer are “unclear, incomplete, difficult to obtain from the manufacturer, or impractical for the clinical environment.”  Manufacturer designs that render proper cleaning difficult in addition to scantily paid sterilization technicians are other sources of concern.
There are some diseases that preclude the reuse of medical devices, specifically Creutzfeldt-Jakob Disease (CJD). CJD is a neurodegenerative disorder that causes rapidly advancing dementia, deteriorating memory, drastic changes in behavior, and coordination and visual issues. It is 100% fatal; patients with CJD usually die within one year of disease symptom onset. CJD results when normal brain proteins are transformed into abnormal and infectious forms known as prions. Infected pituitary hormones, dura mater transplants, cornea grafts, and neurosurgical instruments are some examples of materials that can transmit the disease to patients. Most disinfectant and sterilization procedures do not eliminate the infected prions. Importantly, although fatality normally occurs within one year of symptom onset, the disease has an incubation period of up to 50 years, it is not readily detectable until symptoms occur, and is seemingly capable of transmission to others during the incubation period.
The World Health Organization (WHO) released infection control guidelines for health facilities handling patients with CJD. Essentially, any reusable surgical instruments that come into contact with “high infectivity areas” including the brain, spinal cord, and eye should be disposed of and incinerated. But the difficulty, of course, is knowing who is infected with this infectious fatal disease with the disturbingly long incubation period.
Ensuring that hospitals follow proper sterilization is integral, but technician certification is also an important aspect of the overall sterilization scheme. As the director of sterilization at a healthcare facility in New York so accurately stated, “The people who do your nails, they have to take an infection control course before they can apply for a license …Yet the people who deal with lifesaving equipment, they are required to have zero education.” Currently, New Jersey is the only state that makes certification mandatory for sterilization technicians.
As the provision of health care becomes more transparent, patients not only have the ability to choose where to obtain services based on price and reputation of a facility, but they are also, presumably, able to learn about various quality measures. By filtering a search based on location or hospital name, the Centers for Medicare & Medicaid Services’ (CMS) Hospital Compare Website enables patients to view quality measures such as readmission, complication, and mortality rates. There, patients are able to examine the facility’s rates in comparison to the national average. Therefore, improper sterilization leading to increased infection rates will likely be exposed to the public, however attenuated, which could cause patients to seek care elsewhere—at least in time, among consumers able to bring choice to the equation (non-emergency, non-insurance dictated) and who have the ability to comprehend the data. But seemingly, more direct measures can be taken to ensure patient safety.
 http://www.publicintegrity.org/2012/02/22/8207/filthy-surgical-instruments-hidden-threat-americas-operating-rooms, http://www.today.com/health/today-investigates-dirty-surgical-instruments-problem-or-1C9382187
Last week, the Jersey Journal reported that a jury recently awarded a former employee of Bayonne Medical Center over $2.1 million in his whistleblower suit against the hospital. The employee, Ceferino Doculan, alleged that the hospital violated New Jersey’s whistleblower statute, the Conscientious Employee Protection Act (CEPA), by terminating his employment as a technician in the hospital’s blood bank because he had complained to hospital personnel that his new supervisor was not qualified to hold that position under New Jersey law.
Although the hospital argued it had terminated Doculan for other reasons, the jury apparently accepted Doculan’s view of the predominant reason for his firing. According to the article, the jury awarded him about $120,000 in compensatory damages (lost wages and pain and suffering) and $2 million in punitive damages. The hospital intends to appeal.
The case offers several lessons regarding whistleblower liability risks for hospitals and other healthcare providers. One broad takeaway is that management of whistleblower risks cannot be disentangled from other compliance matters. So, in addition to the concerns about how to respond to a whistleblower appropriately, Bayonne Hospital had an actual legal problem – the supervisor was not qualified under New Jersey law. CEPA and most other whistleblower laws do not limit protection to complaining employees who are correct about the law; typically, the employee’s report must merely be made in good faith. Yet, intuitively, if the employer has in fact broken the law, the employee may have an easier time establishing her wrongful termination claim, in part because the existence of the legal violation will potentially make the whistleblower more credible in her lawsuit. Thus, vigilance about compliance with the law in the employer’s operations in general – in this case, on a human resources-related matter – is a key component in reducing whistleblower liability risks.
Second, keep in mind that, with rare exception, whistleblower laws protect only reports of illegal conduct or conduct that poses some kind of direct and serious risk to the public. Whistleblower laws do not protect employee reports of violations of employer policies, nonlegal disputes with the employer, or other purely internal matters. But, in highly regulated industries like healthcare, actions that might not otherwise implicate the law often do. For example, in most industries, the law does not require a license, special training, or other credentials to serve as a supervisor; in healthcare, things are different. Compliance personnel in the healthcare context therefore should know that whistleblower liability risks linger in the background of many human resources and other kinds of decisions. Employee complaints and reports regarding such decisions – even those that might seem standard or run-of-the-mill – therefore should be taken seriously and treated like those that obviously involve legal mandates.
Finally, hospitals and other healthcare providers potentially confront multiple whistleblower regimes. High-profile whistleblower litigation in this area often involves federal law, most notably, the False Claims Act (including “qui tam” actions for alleged overbilling of the government). See examples here and here. And the new whistleblower provisions found in the Affordable Care Act are garnering much attention. But, as the CEPA claim in this case suggests, many states provide statutory and common-law whistleblower protections that sweep more broadly, potentially protecting employees who report a wide variety of alleged legal violations. Each of these federal and state regimes has its own set of legal requirements, limitations, and remedies. A working familiarity with these various regimes can enhance compliance and risk management.
For those interested in learning more about federal and state whistleblower regimes, Seton Hall Law School now offers an eight week online course on managing whistleblower risks. The course is designed to introduce human resources and compliance personnel to the laws protecting employees who report alleged misconduct of their employers. If you would like more information, please visit the course website or call 973-642-8482.