Renewed Efforts to Reduce Industry Funding of CMEs

Last week’s Journal of the American Medical Association (JAMA) reported on the challenges that certain medical schools and medical centers across the country are facing as they decrease or eliminate industry funding of their continuing medical education (CME) programs.  These institutions have shown concern over the potential conflicts of interest when pharmaceutical and medical device companies fund educational programs which could bias future prescribers/customers toward their targeted products.  The adoption of industry-free CMEs could help filter out any potential marketing messages, and leave behind a balanced and evidence-based perspective.  After all, as the New York Times has reported, there are over 700 accredited CME providers in the United States and CME spending hovers around $2.5 billion per year, nearly half of which is paid by pharmaceutical and medical device companies.

Last year, three medical schools declined industry support for their CMEs: the University of Missouri-Kansas City School of Medicine, Nova Southeastern University College of Osteopathic Medicine, and Touro University Nevada College of Osteopathic Medicine.  This past June, the University of Michigan Medical School (UMMS) announced an actual policy change, effective January 1, 2011, whereby the school will no longer accept industry funds, which presently comprise almost 45% of its total CME funding.  UMMS believes contributions from various departments will help offset this sizable loss, as will higher CME registration fees and “less glamorous venues.”  UMMS is the first medical school to introduce such a policy and does so noting “we should take pride in our position as a national leader on this issue.”

This is all well and good, but in light of the enormous industry contributions, the $64,000 question really becomes: “Is Industry-free CME a Sustainable Model?“  And that’s exactly what speakers and attendees asked at the June 25, 2010, PharmedOut Conference entitled “Prescription for Conflict: Should Industry Fund Continuing Medical Education.” The conference was held at Georgetown University (PharmedOut is a Georgetown University Medical Center project funded by the Attorney General Consumer and Prescriber Education grant program.  Its team of physicians and academics lecture on the physician-pharma relationship, and provide access to online and industry-free CMEs).  Dr. Robert Wittes, Physician-in-Chief at Sloan-Kettering’s Memorial Hospital for Cancer and Allied Disease (”Memorial Hospital”), told his colleagues during the Conference that:

[t]here is life in CME after you do something like this.  But you have to be willing to prioritize the activity, such as putting institutional funds toward the balance [previously covered by commercial funds] and/or charge registration fees for CME activities that involve outside physicians.

Memorial Hospital stopped accepting industry money for its CMEs in 2007.  Dr. Wittes acknowledged that “[w]e don’t have these things in hotels in mid-Manhattan anymore; we have them on our own premises.”  Yet he cautioned against any institution from completely severing ties with the industry because there are positive interactions which can result in improved products and commercial science.

For further reading, check out Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy’s whitepaper on “Drug and Device Promotion: Charting a Course for Policy Reform.”  The Center makes several recommendations for overhauling the CME funding mechanism.  It also points out that accountants, lawyers, and other professions pay for their continuing education programs.   Be sure to check out Michael Ricciardelli’s post on industry funding of CMEs for nurse practitioners and Kate Greenwood’s post on ACCME Standards for Commercial Support too.

Trouble Brewing for Pharmaceutical Companies

Bribery and recalls.  Federal agencies are turning up the heat on pharmaceutical companies.  Were you surprised by the eight recalls of Johnson & Johnson products this year?  Maybe you shouldn’t be.  As HealthReformWatch.com reported in We May Need More Than a Spoonful of Sugar to Help Our Medicine Go Down, drug recalls reached a record high 1,742 in 2009 — more than four times the amount in 2008.  Bowman Cox, managing editor of the Gold Sheet (which first broke the story) told CNN Money that in light of the 296 recalls issued in the first six months of 2010, there could be 600 or more recalls this year.

Why So Many Recalls?

Analysts and legislators are examining the recall statistics to find sources and solutions to the pharmaceutical safety issue.

1.   Drug repackaging

Advantage Dose, a now-defunct Shreveport, LA based drug repackager, was responsible for more than 1,000 of the 2009 recalls. Companies like Advantage Dose repackage and relabel drugs into smaller units for resale or distribution to health care facilities. After excluding Advantage Dose from the count, there still remains a 50% jump in recalls from 2008 to 2009.

2.   The generic rush

Gold Sheet’s Cox suggests that generic manufacturers cut drug design costs in their rush to be first to market after a branded-drug’s patent protection expires, decreasing quality.  “The first applicant typically gets the lion’s share of the business for the new drug… So they get the application. They make and market the drug, but they could still have problems down the road if they haven’t really understood the optimum way to make that drug.”  One example of a design failure is Caraco Pharmaceutical Laboratories’ “tablet thickness” recalls in March 2009.

3.   Manufacturing lapses

Some experts say the biggest culprits include the quality of raw materials and contamination. Approximately one month ago, HealthReformWatch.com reported in Pharmaceutical Outsourcing: Trading Quality for Lower Costs? that India’s largest pharmaceutical manufacturer had been cited several times in recent years for manufacturing violations.  Additional recalls include vaccines produced by Shantha Biotechnics for Sanofi-Aventis and injectible drugs made by Claris Lifesciences for Pfizer.  The FDA stated its intent on May 5, 2010 to “propose stronger regulation for pharmaceutical companies that outsource manufacturing, putting more responsibility on the companies to ensure the purity and safety of the products…”

4.   Increased FDA scrutiny of manufacturing facilities

Which came first, the chicken or the egg?  Increased FDA oversight may or may not have led to the increased number of recalls; however, the recalls will probably lead to increased FDA regulatory power.

As Jennifer Jascoll reported, Senator Michael F. Bennet (D-CO) proposed the Drug Safety and Accountability Act of 2010 on August 3, 2010.  According to Bennet’s press release, “[t]he bill would strengthen manufacturer quality standards, enhance the FDA’s ability to protect Americans through improved tracking of foreign manufacturing sites, and give the FDA much-needed authority to recall potentially dangerous drugs.” Currently, the FDA is empowered to issue warnings and recommend that a manufacturer issue a recall.

Two prior bills would also increase FDA powers to mandate a recall:

• The Protect Consumers Act of 2009 (sponsored by Rep. Betty Sutton, D-OH) would require the Secretary of HHS implement a recall if it is determined to be necessary.
• H.R. 6740 (sponsored by Rep. Edolphus Towns, D-NY) would provide the Secretary of HHS with the ability to mandate a recall “if the Secretary has reason to believe that the use or consumption of, or exposure to, a drug (or an ingredient or component used in any such drug) may cause serious adverse health consequences or death to humans or animals.”

According to CNN Money, the FDA has not identified any alarming pattern.  FDA spokeswoman Elaine Gansz Bobo stated, “[s]ince every recall situation is unique, it would be difficult to assess whether there are any trends or increases in recalls this year… At this time, however, we have not identified any trends.”  Despite the FDA’s lack of concern, other federal agencies are interested in the practices of pharmaceutical companies.

Further Federal Investigations

According to the N.Y.Times, federal prosecutors and securities regulators are investigating pharmaceutical companies for potential violations of the Foreign Corrupt Practices Act (FCPA).   The FCPA is an anti-bribery law which bars companies from offering foreign government officials items of value for profit.  For instance, Pfizer disclosed in April “that it paid $35m over six months to 4,500 doctors in private practice for education and the development and marketing of new drugs.”  Although this practice is legal in the U.S., such payments are illegal in many foreign countries where physicians are employed by the government.

On November 17, 2009, Assistant Attorney General Lanny A. Breuer stated that the Department of Justice intended to focus its attention on the pharmaceutical industry:

In some foreign countries and under certain circumstances, nearly every aspect of the approval, manufacture, import, export, pricing, sale and marketing of a drug product may involve a “foreign official” within the meaning of the FCPA. The depth of government involvement in foreign health systems, combined with fierce industry competition and the closed nature of many public formularies, creates, in our view, a significant risk that corrupt payments will infect the process. Our remarkable FCPA unit and our terrific health care fraud unit will be working together to investigate FCPA violations in the pharmaceutical industry in an effort to maximize our ability to effectively enforce the law in this high-risk area.

“Corrupt practices” under the FCPA are not limited to cash in envelopes.  Inappropriate payments for lavish hospitality, consulting, licensing agreements, and even charitable donations may raise red flags for government investigators.

Could bribery be contributing to decreased quality and the sudden rise in recalls?  According to the Financial Times, the DoJ is focusing its efforts elsewhere:

[T]he DoJ is particularly interested in corrupt payments that may have influenced the reliability or integrity of data in clinical trials performed outside the US. A recent report by the Department of Health and Human Services found 80 percent of marketing applications for drugs approved by the Food and Drug Administration in the US had relied on at least one foreign trial.

It appears that the DoJ’s scrutiny of clinical trials is not without merit.  The N.Y.Times reports that “[l]ast month, a federal drug official reported that he found repeated instances in a landmark clinical trial of Avandia, a controversial diabetes medicine, in which patients taking Avandia appeared to suffer serious heart problems that were not counted in the study’s crucial tally of adverse events.”  The clinical trials for Avandia included many foreign trial sites, which were submitted in support of the drugs’ application to enter and remain on the U.S. market.  GlaxoSmithKline, the trial’s sponsor, has not been accused of fraud.

According to recent regulatory filings, the following companies are under investigation for possible violations of the FCPA:

• Merck is cooperating with a federal investigation of company activities in multiple foreign nations.
• Medtronic is cooperating with investigations of company activities in Greece, Poland, Germany, Turkey, Italy, and Malaysia.
• Eli Lilly is cooperating with the investigations of subsidiaries in several countries, including Poland.
• Federal investigators are looking into improper payments related to the sale of Zimmer products abroad.
• Johnson & Johnson voluntary disclosed the possibility that company subsidiaries abroad had made improper payments to government officials in two countries relating to the sale of medical devices.
• Pfizer and Bristol-Myers Squibb have also disclosed that they are subject to federal investigations. AstraZeneca, GlaxoSmithKline, and Baxter SciClone have also received inquiries from federal enforcement agencies.

We May Need More Than A Spoonful Of Sugar To Help Our Medicine Go Down

Today CNNMoney reports that drug recalls quadrupled from 426 in 2008 to a record 1,742 in 2009.  The recalls have been attributed to “manufacturing lapses” in raw material quality, labeling and packaging, and contamination.  Generic and over-the-counter drugs have been affected the most.  CNNMoney notes that the race to put generic products on the market and the pressure to cut costs have caused drug companies to

sometimes fail to spend enough time learning how best to make the drug….  And since generic and over the counter drugs aren’t as lucrative for drugmakers as prescription drugs, companies may not be investing enough resources to make high-quality, safe products.

One such cost-cutting measure involves outsourcing production to foreign manufacturing sites and this measure seems to have received the most attention.  (Check out fellow blogger Jae W. Joo’s post on outsourcing.)

Earlier this month, Senator Michael Bennet (D-Colorado) introduced the Drug and Safety Accountability Act of 2010 which seeks to ensure the safety and efficacy of drugs sold in America, regardless of their manufacturing location.  The bill would require, among other things, that:

• manufacturers have quality management plans which the FDA can inspect;
• manufacturers maintain supply chain documentation;
• the Secretary of Health and Human Services track facilities manufacturing drugs or active ingredients for the American market; and
• the FDA be given more power to ensure drug safety, including the authority to enact mandatory recalls for batches of drugs that pose risks and to assess civil penalties for violations of the Federal Food, Drug, and Cosmetic Act.

Click here for more details about the bill and here for Sen. Bennet’s own promotion of it.  Sen. Bennet has lamented how:

[f]or too long, the FDA has lacked the proper authority to adequately safeguard our drug supply.  Americans need to be able to trust that the drugs in their medicine cabinets are safe, no matter where they’re made.

A father of three, Sen. Bennet has said that the recent McNeil recall of over-the-counter children’s medicine spurred him into action.

Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Ken Johnson has issued a statement in response to the bill, saying that:

[t]he lifeline of America’s biopharmaceutical research companies is the safety and integrity of the products they develop.  Brand-name pharmaceutical companies make tremendous investments in quality control systems and take extensive measures to help protect patient safety and to help prevent adulterated ingredients from entering into America’s prescription drug supply.

In addition, drug manufacturing for the U.S. market — regardless of where it occurs — is regulated under Good Manufacturing Practices (GMP) by the Food and Drug Administration (FDA).  These GMP requirements help to assure the safety, quality and purity of drug ingredients that are used in the U.S. prescription drug supply.

The U.S. regulatory system for prescription drugs is the toughest and safest in the world….

Okay.  But other people here don’t think so.  (Click here to read a good opinion by Dr. Lynn Parry, Chair of the Colorado Prescription Project, on why this bill should pass.)

According to a recent Pew Prescription Project poll, less than 10% of Americans feel confident about medications manufactured in India and China.  89% of Americans support Congressional action to introduce new drug safety measures.  How many of those people realize that approximately 80% of the materials used to make or package drugs sold in America comes from foreign sources?  I didn’t, but then, is such high a percentage really that surprising?

Reading through the CNNMoney report, I was reminded a little of a scene from a seventh season episode of Friends:

Phoebe: It’s amazing! My headache is completely gone! What are those pills called?
Monica: Hexadrin.
Phoebe: Oh, I love you, Hexadrin!  Oh look!  It comes with a story!
Monica: No, Phoebe, those are, like, the side effects and stuff.
Phoebe: Say what?
Monica: You know, the possible side effects.
Phoebe: Oh my God!  Dizziness, nervousness, drowsiness, facial swelling, nausea, headache…  Headache! Vomiting, stomach bleeding, liver damage!  Now, okay, I don’t recall any of this coming up when you gave me these little death capsules! Oh, I’m sorry, extra-strength death capsules!

Admittedly, the scene concerns how potential side effects can be worse than the problem being treated (and that’s a whole other blog post).  Yet it’s also a reminder of how we can forget about the other potential hazards of these potent drugs, delivered in easy-to-swallow capsules/tablets/liquids, if there are quality control or other manufacturing issues.  It’s as easy to forget as it is to pop them, well, like candy.

Limit Physicians’ Off Label Prescribing Practices?

Off label prescribing has become fairly common practice for many medical professionals.  Once a drug has been approved by the Food and Drug Administration (FDA) for a specific purpose, physicians are given the freedom to prescribe the approved drug “off label” for other beneficial uses of the drug.  There is a great interest for physicians to retain this autonomy of  prescribing drugs off label as the practice expands treatment options.  Both the American Medical Association and the FDA have recognized that physicians are in the best position to determine the method of treatment for their patients.

However, the practice of off label prescribing has not been without controversy.  Many politicians and regulators view off label prescribing as a way to avoid clinical testing and FDA approval process.  In addition, studies have shown that many physicians prescribe off label with little or no scientific rationale.  According to the Daily News Central, an example can be found in a particular study: “in all, the study estimated that 1 in 7 prescriptions were written [by doctors] without good medical evidence that they would work.”

A LA Times article has recently highlighted the problems of off label prescriptions.  In the article, it has come to light that the off label use of statins, one of the world’s most prescribed medication, may not have the efficacy that many doctors had previously thought.  The LA Times reports,

Statins were initially approved by the Food and Drug Administration for the prevention of repeat heart attacks and strokes in patients with high cholesterol who had already had a heart attack. And used for that purpose — called “secondary prevention” — the drugs are powerful and effective medications, driving down patients’ risk of another heart attack or stroke by lowering their levels of LDL (or “bad”) cholesterol.

Then physicians came to believe statins could also reduce the risk of a first heart attack in people who have high LDL cholesterol but are nonetheless healthy. This use of statins — called “primary prevention” — has driven the growth in the market for statins over the last decade.

Statins certainly decrease rates of heart attack in people who have clear signs of cardiovascular disease but it’s not so clear they work that way in people who are healthy. In spite of that uncertainty, statins’ use for primary prevention has sky rocketed.

One wonders how so many physicians came to believe that statins could also reduce the risk first time heart attacks.  Dr. John Abramson, from Harvard Medical School, attributes statins’ off label growth to a “conspiracy of false hope.”  He states, “[t]he public wants an easy way to prevent heart disease, doctors want to reduce their patients’ risk of heart disease and drug companies want to maximize the number of people taking their pills to boost their sales and profits.”

So, with all these interests pushing for statins’ off label use, it should not be a great surprise that extensive research has not been performed regarding statins’ primary preventive effects– and conflicting results have emerged.  The LA Times reports,

In the first of three studies published in the Archives last month, medical researchers found that, contrary to widely held belief, statins do not drive down death rates among those who take them to prevent a first heart attack. A second article cast significant doubt on the influential findings of a 2006 study, called JUPITER, that has driven the expansion of statins’ use by healthy people with elevated blood levels of C-reactive protein, a measure of inflammation. A third article suggested potential ethical, clinical and financial conflicts of interest at work in the execution of the JUPITER study and concluded the widely hailed trial was “flawed” and raises “troubling questions concerning the role of commercial sponsors.”

Potentially, new findings regarding the efficacy (or lack thereof) of statins can have seismic effects.  If it is found that statins’ primary preventative effects are overstated or  nonexistent, this would amount to what has been a tremendous amount of healthcare waste (time, money, and effort) due to the popularity of the drug.  According to IMS Health, U.S. patients filled 201.4 million prescriptions for statins last year alone.

While there is a strong interest for physicians to retain their autonomy when assessing the best treatment for the patient, due to the potential of healthcare waste, there may be an equal or if not stronger interest for some regulation regarding the practice of prescribing off label drugs. As to industry funding of research, there seems little incentive for a pharmaceutical company with a blockbuster off label hit to do anything which would upset the apple cart– or should I say money cart?

Possible Repeal of Massachusetts Ban: A Gift to Prescribers, Patients or Industry?

Next month marks the second anniversary of the enactment of the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct, a law requiring pharmaceutical and medical device manufacturing companies to designate a compliance officer and implement a compliance program reflecting the commonwealth’s regulations on meals, CME sponsorship, use of non-patient identified prescriber data, gifts and other payments, etc.  The law, which went into effect on July 1, 2009, builds upon the Pharmaceutical Research and Manufacturers of America’s revised Code  on Interactions with Healthcare Professionals (”PhRMA Code“) and the Advanced Medical Technology Association’s revised Code of Ethics on Interactions with Healthcare Professionals (”AdvaMed Code“), two voluntary codes intended to eliminate any influence — perceived or otherwise — of the industry over healthcare professionals with respect to gifts, entertainment, recreation, educational programs, professional meetings, scholarships, and the like.

The Massachusetts law is more restrictive, however, than its PhRMA and AdvaMed counterparts.  It prohibits companies from sponsoring continuing medical education programs that do not meet Accreditation Council for Continuing Medical Education guidelines.  The PhRMA and AdvaMed Codes do not.  It prohibits any company employee from providing meals outside of a hospital or office setting.  The PhRMA Code only restricts sales representatives and their immediate supervisors to a hospital or office setting.  The AdvaMed Code does not impose any restrictions on the location of meals.

Furthermore, starting on July 1, 2010, the law requires companies to annually certify their compliance with commonwealth regulations and, among other things, to disclose any gifts or payments valued over $50 and given to anyone who can prescribe, purchase, or dispense drugs or devices.  Effectively, it’s a ban on all gifts to prescribers (and in so doing goes a step further than the PhRMA and AdvaMed Codes which make an exception for educational gifts).  Companies must also submit $2,000, payable to the commonwealth’s Department of Public Health, with each annual disclosure report.  Violations can result in penalties up to $5,000 per occurrence.  The first round of disclosures were due 16 days ago and covered activities for the July 1, 2009 to December 31, 2009 period.  Next year companies will be expected to report on their activities for the January 1, 2010 to December 31, 2010 period.  Or will they?

The Massachusetts House recently passed an economic development bill that repeals the disclosure requirement/gift ban (the bill also establishes a sales tax holiday and consolidates commonwealth economic agencies).  The Senate version of the bill does not include the repeal.  It’s a wait-and-see as to how the two chambers will work out the final bill through their conference committee.

Opponents of the gift ban claim it has adversely affected pharmaceutical clinical research as well as the restaurant and convention industries.  Almost two years ago, PhRMA Senior Vice President Ken Johnson expressed his disappointment over the law, saying:

[it is] very likely damaging for medical partnerships, clinical research and patients in Massachusetts….

Public disclosure of a pharmaceutical company’s arrangements with principal investigators of its clinical trials also could reveal sensitive, proprietary business information to a company’s competitors.  This could erode the independent decision-making of companies trying to bring science from research facilities to patient care setting….

The disclosure requirements subjects all of the physicians, academic institutions and hospitals involved in such trials to publicity in a form that may be difficult to understand and likely will generate unwanted and unnecessary public scrutiny.  This could make Massachusetts an unattractive place for academic scientists to live and work — and for pharmaceutical research companies to do business.  Such a policy clearly is not in the best interest of public health — and it flies in the face of the ongoing efforts to further cultivate the life sciences industry within Massachusetts.

Indeed, the Wall Street Journal and Boston Herald report that some medical groups either have threatened to take their annual meetings elsewhere or have actually done so in protest of the law.

Supporters of the law say otherwise.  Health Care For All, a Massachusetts-based advocacy organization, views banning gifts as a step in the right direction.  According to the organization:

[t]he pharmaceutical industry gives gifts to promote their drugs and make a higher profit.  Under the guise of promoting welfare for all, the industry maximizes their own revenue….

Experts living within the guidelines of the gift ban find that it is not interfering with their work or professional relationships according to Dr. David Coleman, Boston University School of Medicine.

‘The Massachusetts Gift Ban legislation is an important step in the process of reducing both biases in therapeutic decision-making and healthcare costs.  The Ban has not adversely impacted the important relationships of our physician-faculty with the pharmaceutical and device industries….’

Health Care For All also maintains there is no connection between the decrease in restaurant revenues and the law as:

[t]he Massachusetts Prescription Reform Coalition has researched the decrease in restaurant profits, and found sales are down across the country — including in states without a gift ban.   According to the trade paper, Restaurants & Institutions, sales at the nation’s top 100 independent restaurants were down 10% in 2009….

Massachusetts Senators, who recognize the value of the gift ban legislation, also see that these lost profits mirror similar recession-caused losses in the restaurant industry across the country.

Georgia Maheras, Private Market Policy Manager at the Massachusetts Prescription Reform Coalition, considers the current House bill to be a “significant step backward” in the fight to curb medical costs.

Massachusetts is not alone in attempting to reform pharmaceutical and medical device marketing practices.  Neighboring Vermont has a similar, and in fact more stringent, law which even allows the Attorney General’s office to track free samples given to physicians (though a reporter for the Times Argus, a Vermont newspaper, worries how a repeal in Massachusetts might have a ripple effect).  California, the District of Columbia, Maine, Minnesota, Nevada, and West Virginia also have some form of a marketing code.  The federal government’s Patient Protection & Affordable Care Act includes the Physician Payment Sunshine Provision (”Provision”) requiring disclosure of payments made to physicians and teaching hospitals by manufacturers of products covered under Medicaid, Medicare, and SCHIP (click here to read a summary).

So who has it right?  It would seem as though PhRMA and AdvaMed opened the door for state and federal government to codify modified versions of these industry codes.  From a compliance perspective, it must be quite inefficient — and headache inducing — to wade through state marketing disclosure laws that lack uniformity.  Starting January 1, 2012, the Provision will preempt state disclosure laws except for where the state requires additional information.  Maybe this will help, maybe it will add to the headache, or maybe this particular episode will no longer matter.   For now, though, from a patient perspective, a repeal of the Massachusetts disclosure requirement/gift ban, or that of any other state, would feel more like a gift to the industry and prescribers than a service to the “best interest of public health.”

The Center for Health & Pharmacy Law & Policy here at Seton Hall Law has issued two white papers addressing these issues: Conflicts of Interest in Clinical Trial Recruitment & Enrollment: A Call for Increased Oversight,” in which the Center proposes legal and policy changes to address conflicts of interest in the relationships between industry and doctors that can create unwarranted risks to trial participants and to the scientific integrity of research; and Drug and Device Promotion: Charting a Course for Policy Reform,” in which the Center proposes legal and policy changes to address conflicts of interest in the relationship of medicine and industry– including the recommendation “that industry funding for continuing medical education should be phased out, and replaced by an educational process driven by physicians.”

The Center has also recommended “the adoption of federal legislation to ban the use of gifts, meals, and other perks to promote drugs and devices. The states have taken the lead to date–Massachusetts, California, Minnesota, and the District of Columbia have passed laws to limit or ban gifts and meals that are now routine in marketing practices. Concluding that industry self-regulation is not sufficient, the Center calls for national legislation to create uniform practices by industry and physicians. As urged by Professor Boozang, ‘the benefits of drugs and devices should drive promotion and physicians’ decision to prescribe, not a marketing model that depends on gifts and meals.’”

Obviously, the adoption of additional federal standards in this regard will lessen the ability of industry to pit one state against another and make compliance easier. The Physician Payment Sunshine Provision is a step in that direction, the Massachusetts development bill is a step back.

Pharmaceutical Outsourcing: Trading Quality for Lower Costs?

With the waning economy, outsourcing has never been a more popular route for businesses to take.  Why pay more when you can get a similar product or service for less overseas?  Traditionally, outsourcing has been limited to low-end, back-office type of work. However, in the recent years, more companies have been outsourcing complex services such as medical diagnostics.

So it should be no surprise that India, a country with an abundance of cost effective labor, has emerged as a hot spot for pharmaceutical companies to outsource their drug manufacturing.  The NY Times reports,

India’s drug industry — on track to grow about 13 percent this year, to just over $24 billion — was once notorious for making cheap knockoffs of Western medicines and selling them in developing countries. But India, seasoned in the basics of medicine making, is now starting to take on a more mainstream role in the global drug industry, as a result of recent strengthening of patent law here and cost pressures on name-brand drug makers in the West.

Not limited to just manufacturing, India is projected to further expand into more sophisticated aspects of drug making such as pharmaceutical research and development. Due to its cheap labor, Indian drug companies are able to “discover new drugs at a tenth of the cost” incurred in the United States, according to Ajay G. Piramal, the chairman of Piramal Healthcare.

This pharmaceutical boom in India has been relatively recent.  Initially, pharmaceutical companies were hesitant to outsource their internal operations.  Sujay Shetty, an associate director with PricewaterhouseCooper in Mumbai, described pharma as  “an incredibly arrogant industry” and predicted that “everything in the value chain will move to different parts of the world that are cheaper.”

But, what risks are these pharmaceuticals companies taking?  Outsourcing, in general, can be riddled with quality problems and pharmaceutical outsourcing to India has been no exception.  According to the NY Times,

Recent growth, though, has been shadowed by quality problems. The F.D.A. cited Ranbaxy [India's largest pharmaceutical manufacturer] for manufacturing violations several times in recent years, and in February ordered a review of the company’s global manufacturing operations.

In May, Sanofi-Aventis recalled vaccines made by Shantha Biotechnics that were distributed to the World Health Organization after users complained about white sediment in the vials. In June, after floating matter was found in some plastic IV bags, Pfizer recalled injectible drugs made by Claris Lifesciences and sold in the United States.

Maybe pharmaceutical companies were justified in being cautious, even to the point of arrogance, in deciding whether to outsource in the past.  Drug manufacturing is a complex process that needs proper review practices to prevent errors.

Fortunately, the Food and Drug Administration (FDA) has taken note of India’s growing influence in the drug industry and has been cracking down to prevent substandard and contaminated drugs from entering the United States.  In the past two years, the FDA has opened two new offices in India, one in Delhi and the other in Mumbai.  And just last month, as reported by The Wall Street Journal, the FDA stated that “it will propose stronger regulation for pharmaceutical companies that outsource manufacturing, putting more responsibility on the companies to ensure the purity and safety of the products…”

Whether or not the FDA’s crackdown improves the quality of the outsourced drugs remains to be seen.  But, with lower costs and regulation avoidance said to be the primary motivation behind pharmaceutical outsourcing, it’s uncertain whether the quality problems mentioned by the NY Times will be the last.

Ethical Marketing Measures in Access to Medicines Index: An Important First Step

Earlier this week, the Access to Medicine Foundation released its 2010 Access to Medicine Index, “a ranking of the world´s largest pharmaceutical companies on their efforts to increase access to medicine for societies in need.”

In a change from the 2008 Index, which was the first to be issued, the 2010 Index includes measures designed to assess companies’ commitment to, and practice of, ethical marketing behavior.  Per the report accompanying the Index, “[t]he marketing and promotion of drugs can have a significant influence on the type of medicines that patients receive.  Particularly in Index Countries [88 countries with low or medium levels of development] with less robust regulatory enforcement and consumer protection, the marketing behavior of pharmaceutical companies can shape access to both appropriate and affordable medicines.  Unethical marketing can lead to suboptimal clinical decisions, prescription of more expensive drugs and irrational use of medicines by consumers, which can result in reduced treatment efficacy and other complications, such as adverse drug reaction and drug resistance.”

The Index ranks pharmaceutical companies’ marketing behavior along three axes: (1) commitments, (2) transparency, and (3) performance.  In the commitments category, companies are assigned points for the marketing codes and standards they have adopted and that they require their local third party sales agents to adopt.  For example, “originators,” i.e., research-based pharmaceutical companies, receive 5 points on a scale of 1-5 for committing to the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) Code of Pharmaceutical Marketing Practices, the WHO Ethical Criteria for Medicinal Drug Promotion, “or an equivalent industry code.”  Originators that have not committed to any external codes but that have an internal code which covers the same core principles receive 2.5 points.  (The scoring is different for generics on this measure because they do not have a “viable up to date and auditable external code.”)  With regard to third party sales agents, both originator and generic companies can receive all 5 points if they make “specific ethical marketing demands” of their sales agents and then audit the agents’ practices to ensure compliance.

For transparency, the Index gives points to companies that “publicly disclose[] detailed information regarding [their] marketing and promotional programs in the Index Countries, such as payments to physicians or other key opinion leaders and also its promotional activities for other healthcare providers, distributors, etc.”  None of the companies earned any points in this category.  While some have started to disclose payments made in the United States, no company has disclosed payments made in any of the Index Countries.  According to the report, three companies — GlaxoSmithKline, Merck, and Roche — have pledged to disclose payments made in the Index Countries soon.  Companies can also earn disclosure points for revealing breaches of marketing codes and marketing-related litigation in the Index Countries.

For the third category, performance, companies lose points if they breach the IFPMA Code or if they are sued or subjected to fines for marketing behavior.  Companies can earn points for including binding ethical marketing requirements in their agreements with their sales agents and by establishing employee codes of conduct in the Index Countries equivalent to the codes they have in place in other markets.  Despite the fact that issues have been raised “about pharmaceutical marketing practices in the Index Countries, especially regarding clear mention of … adverse side effects,” none of the companies studied lost any points in this category.

As the title of this post suggests, I think that the Index’s attempt to rank companies’ commitment to and practice of ethical marketing practices is important.  Anyone who works in a law school knows how influential rankings can be — for better or for worse.  It is easy to imagine the Access to Medicine rankings providing an additional nudge to companies to begin disclosing payments to healthcare providers around the world not just here in the United States.  At the same time, there is ample room for refinement.  In the performance category, for example, measures, in addition to breaching the IFPMA Code/being sued/ being fined, are needed to expose differences that surely exist in companies’ approaches to marketing in the Index Countries.

Reform Rodeo: A Sick Wellpoint; Performance; EHRs; and More

1. Really?: Reuters released an exclusive story about Wellpoint’s recent push to rescind contracts for those suffering from breast cancer.

2. Specialists: The New England Journal of Medicine has a piece on the role of specialists in performance-incentive programs.

3. EeeeekHR: In the New York Times, Pauline Chen describes her experiences as a physician attempting to come to grips with the unforeseen changes that EHR-based health care delivery has introduced into the doctor-patient relationship.

4. Myths of Health Reform: On The Health Care Blog, Maggie Mahar discusses the myths of health reform, including the belief that the reform measure was a hand out to industry.

4. When Skepticism Becomes Quackery: Steven Novella at Science-Based Medicine calls attention to the often hyperbolic demonization of the pharmaceutical industry.

5. That’s Just Your Opinion: Kaiser Health News gathers the latest opinions and editorials about health care, including pieces about children’s health care, RomneyCare, and the nursing shortage.

6. Resources: For those studying PPACA, George Washington University has released, among other things, a thorough provision-by-provision comparison of PPACA and subsequent reconciliation.

Reform Rodeo

1. Big Pharma: The pharmaceutical industry is threatening to reverse their support of the health care reform legislation if the bill calls for a reduction in the number of years that a company’s biologics are protected from generics.

2. The Caddy Conundrum: NPR reports that organized labor appears to be on board with taxing Cadillac plans, with some movement in their favor regarding the thresholds triggering the tax.

3.  Health Insurance Exchanges: The Commonwealth Fund and the Alliance for health reform moderated a discussion on health insurance exchanges. Fantastic materials that outline the House and Senate plans can be found at the bottom of this page, which includes the extraordinary paper which Professor Timothy Jost presented.

4. Health Reform Discussions: The Health Care Blog has rounded up many of the discussions on health care reform.

5.  Play-or-Pay Problems: The NEJM has a thorough analysis of the “play-or-pay” provisions in health reform legislation, and the problems that may arise.

6. Multimedia: Atul Gawande chats with Charlie Rose on January 5th about health care, as well as Gawande’s new book “Checklist Manifesto”.

The Price of Sausage in Nebraska (and elsewhere)

“Laws, like sausages, cease to inspire respect in proportion as we know how they are made.” The quote, and a number of variants thereof, is most often attributed to Otto von Bismarck. The Boston Globe/A.P. does a nice job taking us through the cost– the spoils, if you will– of the votes requisite thus far to have taken the Senate’s Health Reform bill to its present status. The picture is not particularly pretty– with sizable benefits inuring to the holdout Senators and their constituents. The cost of 60 votes– filibuster-proof critical mass– is, one might say, the cost of doing business. But it is a risky business. By virtue of being so, the 60th vote,  Senator Ben Nelson of Nebraska, brought home the following pieces of bacon home for his constituents:

the federal government will pay the full cost of a proposed expansion of Medicaid, at an estimated cost of $100 million over 10 years; Blue Cross Blue Shield of Nebraska will be exempted from an annual fee on insurers; supplemental Medigap policies such as those sold by Mutual of Omaha are exempted from the annual fee on insurers; and a physician-owned hospital being built in Bellevue, Neb., could avoid a new ban on referrals from doctors who own such hospitals.

And what does the 23rd vote tell his constituents who will have to shoulder the costs of their state’s expansion of Medicaid?

The Boston Globe/A.P.  list is partial but telling. You can see it here.

For a more thorough look at the cost control and program implications of the bill, Professor Timothy Jost’s latest article in Health Affairs is a must read. In addition to a wealth of other information, Jost provides the following:

…the bill provides a cures acceleration program” to fund research for “high need cures” for which incentives in the commercial market are unlikely to result in timely development.  The Food and Drug Administration, the National Institutes of Health, and a new Cure Acceleration Network Board are supposed to work together to facilitate the discovery of such cures and to translate them from bench to bedside.  Grants can be made under the project of up to $15 million a year to eligible entities such as academic medical schools, biotech companies, and drug companies, who need only meet a $1 to $3 matching requirement.  $500 million is appropriated for this program for 2010.

This is all well and good and a great idea.  But nothing that I can see in the legislation gives the taxpayer any stake in this investment.  A drug or biotech company that in fact discovers a blockbuster drug or biologic through the federal government’s investment (perhaps for an off-label use) owes nothing in return.  Shouldn’t we the taxpayers get some return on  our investment, or at least the promise of reasonable prices?

Bismarck also is said to have said,  “Politics is the art of the possible.” To see that, you’ll want to read the rest of Professor Jost’s article.

Pharma Marketing, Advanced

With the Senate’s bill clearing late night hurdles, the coverage in the mainstream media is, at least for the moment, broad. But there was a segment on NPR’s All Things Considered in the midst of all that Health Reform bill coverage that is well worth a listen. The segment, “How A Bone Disease Grew To Fit The Prescription,” (transcript linked, audio below) functions as a sort of biography of the evolution of both a drug and a disease– which was not, it seems, an entirely independent process.

The drug is Merck’s Fosomax, the disease is Osteopenia. Fosomax had sales in 1996 of $281.8 million; by 2005, on the heels of what qualifies as a comprehensive and wildly successfull marketing effort, the drug had sales of $3.2 billion.  Osteopenia derives its origin as somewhat of an afterthought, when in 1992 “a group of osteoporosis experts gathered under the auspices of the World Health Organization” and drew a somewhat arbitray bright line to determine what level of bone mass loss was normal and what amount constituted a disease. The term “Osteopenia” was coined, on the spot, to give clinical researchers a term which described those whose bone loss was considered normal, but was close to the line. They never imagined that Osteopenia would come to be considered a disease in itself, but it did. Millions of women are said to have it; millions treat it with Fosomax. The story of how this came to be (and the implications regarding the role of Pharma in health care) is fascinating.

Risks to Directors and Trustees of Health Care & Life Sciences Companies: Corporate Compliance in a Distressed Economy

“Risks to Directors and Trustees of Health Care & Life Sciences Companies: Corporate Compliance in a Distressed Economy,” was sponsored by Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy, Epstein Becker & Green P.C., and Navigant Consulting, Inc. The program urged profit and nonprofit health care organizations to prioritize effective corporate compliance programs, particularly in today’s economy.

Moderated by Professor Kathleen Boozang, the program featured keynote speaker Mark Anderson, the New Jersey Medicaid Inspector General, as well as presentations by Lynn Shapiro Snyder and Hervé Gouraige of Epstein Becker & Green P.C. and Sandra Piersol and Geoffrey Kaiser of Navigant Consulting, Inc.

The participants focused on the financial challenges and potential exposure for board members of health care and life sciences entities in maintaining an effective compliance program in order to minimize noncompliant behavior and corporate liability risks.  Current trends in HHS Corporate Integrity Agreements (CIA’s) have shown a movement toward imposing personal liability on boards of directors for failure to ensure that a company has an effective corporate compliance program.

Inspector Anderson first addressed the 2007 statute governing the New Jersey Office of Medicaid Inspector General, focusing in particular on the statute’s broad definitions of “fraud” and “abuse,” which allows his office broad discretion.  Asking the key question, “is your compliance compliant?”, he emphasized that effective compliance programs go beyond simple written policies and procedures, but are specific to the entity’s need to prevent fraud and abuse, and are supported at every level of management — with the tone set “at the top.”  He concentrated on one specific element of compliance programs — self-disclosure of problems within one’s own organization — and stressed that self-disclosure is essential to compliance and is in the company’s best interest, as his office provides incentives to health care entities to self-disclose.  These incentives include forgiveness or reduction of interest payments, waiver of penalties and/or sanctions, timely resolution of overpayment, and a decrease in likelihood of imposition of an OMIG Corporate Integrity Program.

Lynn Shapiro Snyder, Co-Chair of the Health Care Fraud Practice Group at Epstein Becker & Green, spoke about the looming threat of enforcement activities aimed at board members of health care and life sciences entities, and noted that, until recently, the risk has been reputational rather than legal.  She highlighted the blurred line between governance and management obligations, and questioned whether boards need their own consultants to determine whether to sign off on a company’s compliance program.  Later, suggesting a simple, cost-effective way to examine the effectiveness of a compliance program, she recommended that compliance officers file (and follow) a “dummy report” within their own organization, thereby bringing to light gaps and issues in the company’s program.

Sandra Piersol, a Director with the Healthcare Disputes and Investigators practice at Navigant Consulting, addressed how directors and trustees can determine whether they have an effective corporate compliance program.  Discussing the seven elements of an effective compliance program, she emphasized ensuring that the compliance officer has direct access to the board of directors, setting the “tone at the top,” and the need for ongoing training and communication.  She provided a list of structural and operational questions to be considered when examining whether an entity’s corporate compliance program is effective, and concluded with the recommendation that boards should request the performance of an objective and comprehensive review of the program activities performed by persons independent of the compliance program.

Hervé Gouraige, Co-Group Leader of the National Litigation Practice at Epstein Becker & Green, spoke about the risk to board members of personal liability for an ineffective compliance program.  After an overview of the law as it relates to board oversight of compliance, Gouraige discussed the requirement that companies have a process established to address compliance risks within the organization.  Second, he underscored that the process must be executed by the chief compliance officer and monitored by the board.  Finally, he explained that the board must be involved in the selection of a chief compliance officer who is capable of, and willing to, stand up to the board.  He stressed that the chief compliance officer should not also be the general counsel, due to the conflicting duties and obligations of those positions.  He also suggested that there be a separate board committee — which includes the CEO, general counsel, and chief compliance officer — to monitor the compliance program.  Annually, this committee should meet without the CEO and general counsel as well.  Finally, Gouraige suggested that in order to learn about — and address — problems before a prosecutor does, compliance officers periodically spot check internal emails between employees.

Geoffrey Kaiser, Managing Director in the Healthcare Dispute, Compliance and Investigations Practice at Navigant Consulting, focused on the benefits of having an effective compliance program.  He noted that, although it is difficult to quantify the harm avoided by any program, an effective program can reduce or mitigate the risk of violations, particularly through education, which is a cost-effective way to sensitize employees to risk.  Second, having an effective voluntary information and reporting system allows a board of directors to introduce corrective measures proactively.  Third, having an effective corporate compliance program in place can influence prosecutorial discretion.  In addition, having an effective compliance program can reduce the severity of penalties facing an organization at sentencing — not only affecting the amount of the fine, but also the range in which the fine will be imposed.

Overall, each speaker highlighted the cost-effectiveness and benefits of devoting resources to an effective compliance program.  Inspector Anderson, stating that the economic environment cannot dictate compliance policies, emphasized that cutting such programs is short-sighted and a future compliance violation could potentially decimate a company in the long run.  Gouraige explained that it would be a terrible mistake to cut compliance, due to the “wisdom of the long-term investment.”  The speakers, in a question and answer session moderated by Professor Boozang, addressed effective ways to increase board attention to corporate compliance, including focusing on corporate compliance as one of the many legal requirements required by boards and underscoring the investment — rather than the cost — of implementing an effective corporate compliance program.  As attendee Eve Costopoulos of Merck aptly stated, “if you don’t pay today, you’ll pay tomorrow.”

All Photos by Sean Sime

A Hat Tip to Pharmalittle

Health Reform Watch wishes to congratulate the folks over at Pharmalittle for being named one of the Top 100 Pharma Blogs. They deserve it–and if you’ve never checked out their site– I highly encourage you to do so. Upon the dissolution of Ed Silverman’s Pharmalot, which was hosted here in Newark by the Star Ledger, a group of contributors and commenters banded together to pick up the mantle. For those of you who have a keen interest in Pharma (and who doesn’t?), you’ll find truly insightful and often witty commentary over at Pharmalittle. As an example, this post of theirs announcing their Top 100 status is classic:

HAT TIP TO OURSELVES….

Pharmalittle to be Honored at White House

OK, so we lied. It’s all part of the same strategy. As the impressive badge on the left (suitable for framing) shows, this blog has been named one of the top 100 pharma blogs. Did anyone know there were that many pharma blogs?

Anyway, a lot of people out there will wonder how we accomplished this. It’s simple. We followed basic marketing principles:

1. We promoted the blog for off-label uses. For example, it makes a great eye chart and may help slow the growth of cataracts.

2. We gave kickbacks to everyone on the internet. Really.

3. We buried studies 34, 57, and 105.

4. We changed the endpoints in study 35 and left out the last six months of data.

5. We delayed the appearance of generic Pharmalittle (liloxazorx) through a bunch of nuisance suits.

6. We intimidated people who read other blogs.

7. We hired Key Opinion Leaders like Anonymous to talk us up.

8. We funded studies showing all the dangers of other pharma blogs.

9. We convinced people that failure to read Pharmalittle will result in the end of innovation in the industry and the complete dissolution of life-saving medications.

10. We avoided being bought by Pfizer.

11. There is no evidence reading Pharmalittle leads to weight gain, morbid obesity, and diabetes. And anyone who thinks differently will never find Study 57 anyway.

12. We don’t believe in morbid obesity. If you’re going to be obese, at least be up-beat about it.

And stuff like that.

Read more from Pharmalittle here.

Under the Radar: Health Care Reform & Drug Advertising & Marketing

At the Food and Drug Law Institute’s 21^st Annual Advertising & Promotion Conference John Kamp of the pro-industry Coalition for Healthcare Communication discussed four proposals addressing drug advertising and marketing issues that may be incorporated into the final health care reform bill but have not been widely debated.  Mr. Kamp’s presentation is available here.  

Off the Table (For Now)

Of most concern to industry is an oft-floated proposal to eliminate the tax deduction for drug advertising.  (See, for example, bills sponsored by Representative Jerrold Nadler (D-NY) and Representative Daniel Lipinski (D-IL) here and here.)  Most recently, on September 11, 2009 Senator Bill Nelson (D-FL), a member of the Senate Finance Committee, announced his plan to put forth an amendment to the Baucus Bill that would eliminate the “tax break drugmakers get for TV advertising.”

Direct-to-consumer advertising is a prime target because, as the New York Times put it, for many “the ads are a daily reminder of a health care system run amok,” which “prompt people to diagnose themselves with chronic quality-of-life problems like insomnia or restless leg syndrome; lead people to pressure their doctors for prescriptions for expensive brand-name drugs to treat these conditions; and steer people away from cheaper generic pills.”   There is also concern that DTC ads do not present an accurate picture of drug risks and benefits and that they drive uptake of new drugs before their safety is fully known.

Another obvious driver is the need to pay for health care reform.  Senator Nelson echoed a claim made earlier this year by Congressman Charles Rangel (D-NY) that eliminating the tax break for TV ads would free up $37 billion over the next ten years.  Industry representatives contest the $37 billion figure, arguing that drug companies spend far too little on direct-to-consumer advertising to achieve that level of additional tax revenue.  They contend that Congress would have to eliminate the tax deduction for physician advertising and other marketing expenditures to garner $37 billion.

Less than a week after he announced it, Senator Nelson backed off his plan, perhaps under pressure from other members of Congress who come from districts with a strong media presence and have spoken out against eliminating the deduction.  According to Mr. Kamp, however: “Somebody else will raise this again before it’s over, you bet … Baucus says the reforms will cost $850 billion, the Congressional budget office $750 billion. Three-quarters of a trillion dollars is a lot of real money in Washington. The $37 billion will continue to be in the buffet of options as they try and figure out healthcare.”  

Still on the Table

Three proposals related to drug and device promotion are still on the table, with varying chances for inclusion in the final health care reform bill.

First, health care reform bills in both the House and the Senate contain transparency provisions akin to those in the Physicians Payments Sunshine Act of 2009 introduced in January by Senator Chuck Grassley (R-IA).  Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy recommended that disclosure of drug and device company payments to doctors be federally mandated in its January 2009 white paper.  As the Sunshine Act has widespread support, including from industry, transparency provisions are likely to be included in the final bill.

Second, Section 138 of the health care reform bill reported out of the House Education and Labor Committee   bans the commercial use of “prescription information containing patient identifiable and prescriber identifiable data,” essentially adopting as federal law New Hampshire’s ban on prescription data mining which survived a First Amendment challenge in the First Circuit.  If passed, Section 138 would end drug reps’ current practice of tailoring their sales messages to each doctor’s prescribing history, which many believe creates undue pressure on doctors to prescribe newer more expensive medications.

Third, a bill sponsored by Senator Jack Reed (D-RI) would authorize the FDA to evaluate whether use of a “drug facts box” format for presenting a drug’s benefits and risks would improve healthcare decision making and, if so, to promulgate regulations requiring that drug facts boxes be added to drug labels.  Senator Reed’s bill also empowers the FDA to set standards for comparative clinical effectiveness information included in drug labeling and advertising.

It is difficult to predict whether the data mining ban or Senator Reed’s bill will be included in the final health care reform bill.  Mr. Kamp calls Senator Reed’s bill’s chances a “toss up;” regarding the data mining ban, he has “no idea.”

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.

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