Online Graduate Certificate Program in Pharmaceutical & Medical Device Law & Compliance, ‘Bringing Products to Market,’ to Start on Oct. 7, 2012

Through its Center for Health & Pharmaceutical Law & Policy, Seton Hall Law School offers 3 graduate certificate programs in Pharmaceutical & Medical Device Law & Compliance. These flexible, 8-week certificate programs are designed for professionals seeking to enhance their knowledge about legal, regulatory, and ethical issues within the pharmaceutical and medical device industries. Featuring intensive, individualized feedback, the programs provide both an immersion in key substantive issues and an opportunity to develop the practical skills necessary to research and communicate effectively about the law. Online classes for the Bringing Products to Market Certificate start on October 7, 2012.

Bringing Products to Market Certificate

Topics Covered

The Pharmaceutical & Medical Device Law & Compliance Certificate: Bringing Products to Market covers the following topics:

1. The FDA approval process
2. Pharmacovigilance
3. Products liability and FDA preemption
4. Advertising and promotion
5. Life science companies and the First Amendment

Time Commitment

It takes 8 weeks to complete the certificate program.  All coursework must be completed in the sequence in which it is offered. Students should plan to spend 6-8 hours per week on online coursework, including reading assignments, research and writing projects, and online discussions.

Start Dates

Seton Hall Law School’s online Graduate Certificate Programs are offered during our Spring, Summer, and Fall semesters.  Start dates for upcoming offerings of the Bring Products to Market certificate and are indicated in the Certificates At-A-Glance section.

Do I need to be in a certain profession to be admitted?

No. While the program is specifically designed to meet the needs of mid- to senior-level professionals in the pharmaceutical and medical device industries, it is also open to qualified students from other backgrounds.

Application requirements

Applicants must submit the following:

1. Online application
2. Application fee of $50
3. Official baccalaureate degree transcript from an accredited college or university
4. Current resume
5. A 500-word statement explaining why you want to study Pharmaceutical & Medical Device Law & Compliance with a focus on Bringing Products to Market

No entrance exam is required for admission. However, international applicants who are not native speakers of English must submit a TOEFL score.

Apply now. Click here.

Another Multi-Billion-Dollar Settlement for Pharma

As reaction to the Supreme Court’s decision on the Affordable Care Act (“ACA”) continues to make headlines with mind-numbing political arguments surrounding the distinction (or lack thereof) between a “tax” and a “penalty,” healthcare fraud enforcement rolls on unchanged.  This week brought news of yet another pharmaceutical company entering into an eye-popping settlement following damning allegations that it fraudulently marketed their drugs and misled the FDA.

In another record-breaking settlement amount, GlaxoSmithKline agreed to pay the U.S. government $3 billion – a criminal fine of $1 billion and civil fine of $2 billion – for fraudulent promotion of Paxil, Wellbutrin, and six other drugs, and for failing to notify the FDA of safety information on Avandia, its blockbuster diabetes drug.

Particularly, GSK’s marketing staff is alleged to have illegally paid doctors in an effort to increase usage of its drugs.  This allegedly included speaking engagements, vacations (including hunting trips, spa vacations, and trips to Hawaii), and tickets to entertainment events – including a Madonna concert.  The government also alleged that GSK marketed Paxil for use in children, for which it was never approved, and marketed Wellbutrin for sexual dysfunction and weight loss, two conditions for which it was not approved.  Regarding Avandia, the Justice Department alleged that GSK did not notify the government of post-approval studies that indicated that taking the drug may result in heart disease and/or heart attacks.

However, as the New York Times reported, GSK made $10.4 billion on Avandia, $11.6 billion on Paxil, and $5.9 billion on Wellbutrin during the years covered by the settlement – totaling nearly $28 billion in profits on these three blockbuster drugs.  We’ve seen this before.

As Professor Katrice Bridges Copeland has impressively written in her article Enforcing Integrity in the Indiana Law Journal, and as this blog has noted in the past, corporate integrity agreements (“CIAs”) and large fines continue to hold questionable – if not very little – deterrent value.  As Copeland has argued, pharmaceutical companies continue to expect to be subject to fines and a new CIA following each new fraud offense.  As long as the company does not get excluded from any of the federal healthcare programs, none of its executives go to jail, and the monetary penalties make up only a fraction of the profits the pharmaceutical company makes on the drug, there are few incentives for companies to change their fraudulent practices.

Unfortunately, the ACA does relatively little to bring about change in healthcare fraud enforcement.  Sure, there are some statutory changes (e.g., now an Anti-Kickback statute violation explicitly constitutes a predicate offense for the False Claims Act), and it provides more funding for anti-fraud efforts, but the underlying structural problems that have failed to prevent or curtail healthcare fraud remain.  Put simply, the amount of offenders and settlement amounts continue to grow.  Indeed, the ACA may have altered the healthcare landscape, but the industry’s major enforcement challenges remain.

Kate Greenwood on American Law Journal TV Regarding Off-Label Promotion

In Case you missed it: Research Fellow & Lecturer in Law, Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy, Kate Greenwood, on American Law Journal TV regarding Pharmaceutical Off-Label Marketing and Free Speech. A regular blogger here at HRW, Kate Greenwood appeared along with attorneys Hope Freiwald of Dechert, LLP and Brian J. McCormick, Jr., of Sheller, P.C.

Recommended Reading: Recent Scholarship on Drug and Device Regulation

In Patients Over Politics: Addressing Legislative Failure in the Regulation of Medical Products (forthcoming in the 2011 volume of the Wisconsin Law Review and available on SSRN), Efthimios Parasidis proposes a significant expansion of drug and device companies’ responsibility to engage in “active post-market analysis” of drugs and devices, to be coupled with a new rule that only companies that conducted such analysis would benefit from preemption of state tort claims.  Professor Parasidis’ article includes a nuanced and revealing analysis of the historical and other reasons for the Food and Drug Administration’s heavy focus on pre-market review of drugs at the expense of post-market surveillance, as well as useful updates on both the caselaw regarding the preemption of claims involving branded drugs, generic drugs, devices, and vaccines and the ongoing efforts to use health information technology to glean information about the safety and efficacy of marketed products.  Most notable, though, is the article’s thorough explication of Professor Parasidis’ interesting proposal that “preemption laws, which often are enacted pursuant to industry lobbying efforts [be linked to] protocols that further the public health.”

In Enforcing Integrity (forthcoming in the 2011 volume of the Indiana Law Journal and available on SSRN), Katrice Bridges Copeland makes a strong case for her conclusion that neither the exclusion of pharmaceutical manufacturers from Medicare and Medicaid — a punishment which the government is reluctant to impose because it would spell the end for the company — nor the use of corporate integrity agreements coupled with large fines — which manufacturers agree to in order to avoid exclusion — works to deter illegal marketing activities.  As Professor Copeland notes, numerous companies have learned that “the punishment for multiple offenses is simply another CIA and another fine.”  She recommends that the government consider a number of alternative penalties for repeat offenders, including (1) requiring that manufacturers fund clinical trials studying the off-label uses for which they promoted their products, (2) requiring that they license the product or products at issue to other manufacturers, (3) holding high-level individuals criminally liable under the responsible corporate officer doctrine, and (4) amending the Social Security Act to allow for the exclusion of particular drugs (as opposed to entire companies) from Medicare and Medicaid.

Finally, I recommend Seton Hall Law’s own Jordan Paradise’s fascinating article, Claiming Nanotechnology: Improving USPTO Efforts at Classification of Emerging Nano-Enabled Pharmaceutical Technologies (forthcoming in the 2011 volume of the Northwestern Journal of Technology and Intellectual Property and available on SSRN), in which she argues that the United States Patent and Trademark Office’s system for classifying patents on nanotechnology-related inventions, “[w]hile undoubtedly helpful for internal purposes,” cedes too much to the courts.  Reviewing the facts of the recent case Elan Pharma International v. Abraxis Bioscience, which involved a dispute over two patents describing nano or near-nano scale versions of the same existing cancer-fighting agent and was tried to a jury verdict, Professor Paradise points out several ways in which the patents’ claims potentially overlap.  She argues that the courts are “a clumsy forum” for sorting out the “complex patent law issues that arise based on scale, size, and interactions at the nanoscale that transcend previously envisioned physical and chemical boundaries[,]” and offers concrete recommendations for steps the USPTO can take to improve its classification efforts to reduce the number of patents with potentially overlapping claims thereby making court involvement less necessary.

Does the Ban on Off-Label Promotion Bar On-Label Promotion?: The Case of Call Plans

As predicted, in the wake of the Supreme Court’s decision in Sorrell v. IMS Health pharmaceutical companies have raised First Amendment challenges to the ban on off-label promotion on a number of fronts.  Most recently, Par Pharmaceutical sued to invalidate the ban to the extent that it “criminalize[s] Par’s truthful and non-misleading speech to healthcare professionals concerning the FDA-approved use of its FDA-approved prescription drug.”  How is it that the ban on off-label promotion could be interpreted to bar the on-label promotion in which Par wishes to engage?  At the heart of Par’s dispute with the government are the “call plans” that pharmaceutical companies develop using the prescriber-specific prescription data at issue in Sorrell.

Call plans set forth which physicians pharmaceutical sales representatives should visit and how often.  In an article in the current issue of Next Generation Pharmaceutical magazine, Matthew Linkewich and Jay Margolis of IMS Health explain that a “properly conceived and configured … call plan directs reps to those physicians whose practice characteristics, constellation of prescribing behaviors and attitudes are conducive to supporting the brand goals.”  Because call plans embody “brand goals,” the government has focused on them as evidencing companies’ intent to engage in off-label promotion.

For example, in a December 15, 2010 press release announcing a $214.5 million settlement with Elan Corporation, the Department of Justice highlighted the fact that Elan’s “off-label marketing efforts” for its anti-epilepsy drug Zonegran “targeted non-epilepsy prescribers.”   A January 28, 2011 press release announcing the formal sentencing of Novartis in a case involving off-label promotion of its anti-epilepsy drug, Trileptal, similarly noted that the company “decided to market and promote Trileptal as a treatment for [two off-label indications, bipolar disease and neuropathic disease] and directed its sales force to visit doctors who would not normally prescribe Trileptal due to the nature of their practice.” Novartis’ plea agreement explains that while epilepsy is treated by epileptologists and neurologists, the company’s call plan included psychiatrists and pain doctors.

The corporate integrity agreement that Novartis entered into as part of the settlement of the Trileptal-related claims against it provides for independent review of “the bases upon which [health care providers] and [health care institutions] belonging to specified medical specialties are included in, or excluded from, the Call Plans based on, among other factors, expected utilization of Government Reimbursed Products for FDA-approved uses or non-FDA-approved uses[.]“  The corporate integrity agreement requires a similar review of the company’s sampling strategy and goes so far as to bar the company from delivering samples to health care providers identified by the company as “belong[ing] to a specialty group that is unlikely to prescribe” the sampled product on-label.

Currently, Par Pharmaceutical’s call plan for its appetite stimulant Megace, which is FDA-approved for the treatment of AIDS-related wasting, does not include oncology practices or long-term care facilities.  With the help of an outside consultant, Par determined that physicians in those settings “reasonably may encounter patients suffering from AIDS-related wasting, and thus may have occasion to prescribe [Megace] for its on-label use,” but all agree that they would be much more likely to prescribe the drug off-label to treat wasting in cancer and geriatric patients.  In the concluding paragraphs of Par’s complaint, it explains that the U.S. Attorney’s Office for the District of New Jersey, which is investigating the company’s marketing practices, has informed the company that before it promotes a drug for its on-label use to doctors who prescribe the drug off-label it must “confirm that there are presently a sufficient number of patients being treated for whom the drug could be prescribed on-label.”

As Par points out, the government has offered no guidance regarding the number of on-label patients that a doctor must treat before he or she can be included in a company’s call plan.  On the one hand, this is to be expected because the call plan is only one factor that the government considers in determining a company’s intent.  On the other hand, it leaves companies like Par without a clear course to follow and, after Sorrell, likely to sue.

Power, Knowledge, and Big Pharma: Preliminary Reflections on the Sorrell Vacuum

I have previously commented on Sorrell v. IMS Health, as a co-author of an amicus brief, a Pharma FaceOff panelist, and a blogger. I’m disappointed by the Sorrell ruling, for reasons largely elaborated in Justice Breyer’s dissent. As he observes, the majority opinion “reawakens Lochner’s pre-New Deal threat of substituting judicial for democratic decision-making where ordinary economic regulation is at issue.” But I’m not surprised at the Lochner revival, given the First Amendment maximalism of the Citizens United Court. For this Court, “free expression” will have to do in the information age what “freedom of contract” did for the early decades of the 20th century: erase even small and incremental steps toward a fairer social order.

Bill McGeveran has characterized Kennedy’s majority opinion in the case as relatively limited, a surgical strike against an overreaching and incompetent state legislature. I want to respond to his interpretation in a future post, after I’ve digested the opinion a bit more. But for now, I’d like to focus a bit of attention on the types of problems Vermont was addressing, to give the case more of a human face. For behind all the familiar Kennedy rhetoric about sacred speech, deeply disturbing industry practices motivated Vermont’s law.

Both PhRMA and IMS Health want us to believe that the case is about the life-saving power of a marketer to recommend drugs to oblivious doctors once it has access to their prescribing records. Never mind that, as Dr. David Orentlicher notes, “For $98 a year . . . physicians can subscribe to The Medical Letter on Drugs and Therapeutics, a respected and independent, biweekly newsletter that provides evaluations of prescription (and over-the-counter) drugs.” Maybe detailing, on occasion, saves lives. But, as the dissent observes, Vermont’s law allowed doctors to permit distribution of their prescribing records in order to receive personalized solicitations. They only needed to opt in.

Now why did Vermont doctors petition the state to limit access to prescriber records? And why might a rational physician choose not to opt in? Hundreds of pages of empirical studies show the problems caused by detailing; many are cited in Breyer’s dissent. But to make the situation a little more concrete, consider some of the literature a physician who rarely prescribes, say, pscyhotropic drugs, may now be reading. These examples are all drawn from two recent pieces by Marcia Angell in the NYRB:

A large survey of randomly selected adults, sponsored by the National Institute of Mental Health (NIMH) and conducted between 2001 and 2003, found that an astonishing 46 percent met criteria established by the American Psychiatric Association (APA) for having had at least one mental illness within four broad categories at some time in their lives. . . . The new generation of antipsychotics, such as Risperdal, Zyprexa, and Seroquel, has replaced cholesterol-lowering agents as the top-selling class of drugs in the US. . . . [Author Robert Whitaker] is outraged by what he sees as an iatrogenic (i.e., inadvertent and medically introduced) epidemic of brain dysfunction, particularly that caused by the widespread use of the newer (“atypical”) antipsychotics.

***

The pharmaceutical industry influences psychiatrists to prescribe psychoactive drugs even for categories of patients in whom the drugs have not been found safe and effective. [There has been an] astonishing rise in the diagnosis and treatment of mental illness in children, sometimes as young as two years old.

The FDA approves drugs only for specified uses, and it is illegal for companies to market them for any other purpose—that is, “off-label.” Nevertheless, physicians are permitted to prescribe drugs for any reason they choose, and one of the most lucrative things drug companies can do is persuade physicians to prescribe drugs off-label, despite the law against it. In just the past four years, five firms have admitted to federal charges of illegally marketing psychoactive drugs. AstraZeneca marketed Seroquel off-label for children and the elderly (another vulnerable population, often administered antipsychotics in nursing homes); Pfizer faced similar charges for Geodon (an antipsychotic); Eli Lilly for Zyprexa (an antipsychotic); Bristol-Myers Squibb for Abilify (another antipsychotic); and Forest Labs for Celexa (an antidepressant).

Despite having to pay hundreds of millions of dollars to settle the charges, the companies have probably come out well ahead.

Whereas IMS Health’s counsel described detailing in oral arguments as “information about lifesaving medications where the detailer goes in and talks about double blind scientific studies that are responsible for the development of drugs that have caused 40 percent of the increase in the lifespan of the American public,” Angell marshals an impressive array of evidence on the unreliability of pharma marketing, and even the underlying studies some of it is based on. Angell also compiles surprising details about the pervasive role of pharmaceutical firm influence over the social construction of mental illness. When you consider the industry’s targeting of “key opinion leaders” (professors and practitioners at elite medical centers), civil society groups, and the DSM, Vermont’s law seems an almost trivial response to a juggernaut of profit-driven promotions for mind cures. And yet even that small step (toward allowing physicians more control over how they are approached by detailers) offended the delicate sensibilities of the majority.

The Breyer dissent’s litany of regulated industry information practices should have dampened Kennedy’s abstracted enthusiasm for a “commercial marketplace” that “provides a forum where ideas and information flourish.” But in the vacuum of First Amendment fundamentalist thought, the complex ecology of fair information practices and calibrated disclosure cannot survive. It’s all-or-nothing: as soon as some parties gain access to prescriber data, everybody has to have it. Doctors can’t choose to structure their interactions with detailers based on profiling of their practices; rather, they face the stark choice of letting in marketers with access to all the prescribing practice data the state requires pharmacies to maintain, or not to talk to them at all.

In Sorrell, privacy and free expression become clashing rights, rather than social values that have long been reconciled (and occasionally reinforced one another) in complex regulatory schemes. We need to maintain that tradition of nuance in information law. Sadly, Sorrell turns its back on it.

The Identity Theft Smoke Screen: Data Mining of Prescription Drug Records and Personal Data Privacy

[Ed Note: We are pleased to welcome a guest article from Christopher J. Asakiewicz, J.D. He graduated from Seton Hall Law in 2011 with a concentration in Health Law, recently passed the New York Bar Exam (congratulations!) and works for ImClone Systems Corporation, an affiliate of Eli Lilly and Company, drafting and negotiating various clinical documents and patient disclosures with both US and ex-US institutions as well as central and local investigational review boards (IRBs). During law school he worked  at Saint Vincents Catholic Medical Centers of New York (SVCMC) in the department of legal affairs, and prior to pursuing a legal education, managed phase IIIB/IV international clinical trials for Pfizer Inc. in the areas of neurology and neurodegenerative diseases.]

Personal data privacy once again has taken front stage in Sorrel v. IMS Health, Inc.[1] Vermont passed the Vermont Confidentiality of Prescription Information Law that allows doctors which prescribe drugs to patients, to decide whether pharmacies can sell their prescription drug prescription records.[2] IMS Health as well as other health information companies contested the law, arguing that the law poses a restriction on commercial speech as access to such information helps pharmaceutical companies market their drugs effectively to doctors. The Supreme Court is now tasked with determining the constitutionality of the restriction on access to prescription information with regards to our First Amendment. [3]

However, this post is focused on the secondary effects asserted in amici curiae briefs supporting the petitioners of allowing companies to purchase such information, specifically the concern of data privacy and patient re-identification. [4] Under the Health Information Portability and Accountability Act (HIPAA), personal health information is de-identified by your local pharmacy prior to such information being shared with any third party. By de-identifying the data, your personal data cannot, it is believed, be linked or traced back to you. De-identifying your health information is a way for covered entities to share your information without your consent or authorization and in accordance with the law. The information once shared is completely anonymized. After the transfer to a third party, like IMS Health, your information is solely data of zeros and ones that translate to dates of dispensing and drug names. No longer does your prescription record list your name or month or day of birth. [5]

Briefs in the case assert that data mining firms could, hypothetically, create profiles based on these de-identified prescription records. Such prescription profiles would constitute certain patient's prescription habits, including an individual's medication types, pharmacies visited and dates dispensed. The briefs argue that linking and mining further public information to these drug profiles could result in patient re-identification.

IMS Health, Inc., of course, asserts that it has no knowledge of any patient re-identification and it protects such records with all the security privacy measures set forth under HIPAA and as strengthened by Health Information Technology for Economic and Clinical Health Act (HITECH). So what is the issue, I ask?

A pharmaceutical company does not need nor want to know who you are. Aggregate data is more beneficial to a marketing company, rather than just one record with your name on it. What benefit would a company get from a record that says, John Doe, DOB: 01-Jan-1984? The company could send you a mailer, but under the current regulations, you can opt out of the marketing material and it stops there. However, what helps a pharmaceutical company is aggregate datasets that say Dr. Jane Doe, MD writes 100 scripts for Lipitor ® a month. No one cares if the patients are unidentifiable, and most likely, the pharmaceutical company wants to keep it that way. Not only will the de-identified data be cheaper to buy, but it also assures the third party purchasing the data that it is not aiding a HIPAA violation.

Last, it is also asserted that there is no penalty for re-identification of personal health data, but there are stark penalties under HIPAA for "a person who knowingly ... (1) uses or causes to be used a unique health identifier; (2) obtains individually identifiable health information relating to an individual; or (3) discloses individually identifiable health information to another person." [6] If the offense is committed with the intent to sell, transfer or use the individually identifiable health information for commercial advantage, the penalty could be up to $250,000 and 10 years imprisonment. [7] If claims are brought against companies, like IMS Health, the companies will surely argue they are not covered entities subject to the penalties under HIPAA; however, this does not prevent civil lawsuits against them.

What will happen if a breach occurs due to patient re-identification? Most likely, the current healthcare environment where many companies are acting under corporate integrity agreements or deferred prosecution agreements, promotes reporting, if not out of altruistic purpose at least a compliance purpose. With this said, once reported to both the Department of Health and Human Services, Office of Civil Rights, as well as, in most states, the Secretary of state, privacy and confidentiality laws require notification to be provided to the patient that has been re-identified. This patient whose privacy rights have been infringed can then bring an individual civil claim against the organization responsible for the disclosure of their health information as well as the collateral damages caused by the unauthorized disclosure. Now, what company today wants to get involved with this type of bad publicity?

In conclusion, just because the possibility exists that a patient can be re-identified with data mining practices, does not mean that our current environment will foster such. The nine Justices of the Supreme Court need to be more concerned with the First Amendment and the commercial speech implications of their ruling, rather than amici curiae briefs supporting public policy positions based on unwarranted fears of patient information disclosure.[8]

I therefore urge you to put yourself in the role of your favorite Justice and consider if you should be more concerned that a company is going to buy your prescription records and try to determine that you took amoxicillin for a sinus infection when you were five years old, or if that company would rather purchase all the information you posted on Facebook ® or other social networking sites, including all the locations you have checked in. Which do you think is more useful to market its products? It is with this mindset that you must consider if the regulation directly advances the governmental interest "in protecting the public health of Vermonters, ... the privacy of prescribers and prescribing information" and is no more extensive than necessary to serve that interest. [9]

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[1] Petition for Writ of Certiorari, Sorrel v. IMS Health, Inc., 131 S. Ct. 857, No. 10-779, Dec. 13, 2010.

[2] Vt. Stat. Ann. tit. 18, § 4631 (2010).

[3] See Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of N.Y., 447 U.S. 557 (1980).

[4] Brief of Electronic Privacy Information Center (EPIC) et. al. as Amici curiae supporting Petitioners, Sorrel v. IMS Health, Inc., 131 S. Ct. 857, (2011) (No. 10-779), 24-9, available at, http://www.atg.state.vt.us/assets/files/10-779%20EPIC%20amicus%20Sorrell.pdf; Latanya Sweeney, Simple Demographics Often Identify People Uniquely (Carnegie Mellon University, Data Privacy Working Paper No. 3, 2000), available at, http://dataprivacylab.org/projects/identifiability/paper1.pdf.

[5] Privacy Rule of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Pub. L. No. 104-191 (1996), 45 C.F.R. §§ 164.312(e)(2)(ii), 164.514(b)(2)(i) (2010).

[6] 42 U.S.C. § 1320d-6(a)(1)-(3).

[7] Id. § 1320d-6(b).

[8] Brief of Electronic Privacy Information Center (EPIC) et. al. as Amici curiae supporting petitioners, Sorrel, 131 S. Ct. 857, (No. 10-779).

[9] See Vt. Acts & Resolves No. 80, § 17 (2007) (Confidentiality of Prescription Information); Vt. Acts & Resolves No. 89, § 3 (2008) (amending Act 80).

Pharmaceutical Promotion, Prescriptions, Payors: Chain, Chain, Chain?

On February 16, 2011, Magistrate Judge Ramon E. Reyes issued a Report & Recommendation in Sergeants Benevolent Assn. Health & Welfare Fund v. Sanofi-Aventis U.S. LLP, Case No. 1:08-cv-00179-SLT-RER (E.D.N.Y. Feb. 16, 2011), recommending that the district court not certify a class of union health and welfare funds and other third-party payors claiming that they paid for prescriptions for the antibiotic Ketek that doctors would not have written but for the defendant Sanofi-Aventis’ fraudulent marketing.  Jim Edwards at Placebo Net summarizes the plaintiffs’ fraud allegations as follows:  “Basically, Sanofi knew in October 2001 that one of its main researchers on the drug was probably faking her data. That researcher was indicted for research fraud in April 2003. Yet in April 2004, the FDA approved Ketek for sale even though both it and Sanofi knew the data on which the approval was based was entirely bogus. In 2007, after 53 cases of liver failure including four deaths, the FDA all but withdrew Ketek from the market.”

Judge Reyes’ R & R is just the latest in a string of decisions rejecting plaintiffs’ attempts to fit the peg of fraudulent or illegal promotion of drugs and devices into the hole of a civil Racketeering Influenced and Corrupt Organizations Act (RICO) class action.  Writing in Defense Counsel Journal in April of 2010, J. Gordon Cooney, John P. Lavelle, and Bahar Shariati explain the reasons why civil RICO is attractive to class action plaintiffs.  The Food Drug & Cosmetic Act does not have a private right of action, so those harmed when a drug is promoted fraudulently or illegally (for an off-label use, for example) cannot simply allege a violation of the FDCA.  Frequently, they claim instead that the promotion at issue constituted mail or wire fraud, both of which count as racketeering activity under the RICO statute, and that the defendant was guilty of conducting a RICO enterprise.  The civil RICO vehicle has several advantages for plaintiffs, including the possibility of treble damages, broad choice of venues, and “[p]erhaps most importantly in the class action context, civil RICO claims conceivably allow plaintiffs to sidestep the predominating choice-of-law issues that typically prevent nationwide class actions based on fraud or deceptive practice law[.]”

As the authors of the defense-oriented blog Drug and Device Law explain, however, third-party payors like the union health and welfare funds who brought the Ketek case have encountered difficulty at the class certification stage.  This is because they have been unable to convince courts that the members of the class could rely on common evidence to prove their claims.  In particular, courts have held that class certification is not appropriate because each plaintiff would have to put on individualized prescription-by-prescription evidence to establish that the promotion in question caused it to pay for prescriptions that would not otherwise have been written.

As Jim Edwards puts it, Judge Reyes held that “[t]he doctor’s decision to write a Ketek prescription removes the ‘proximate cause’ necessary to establish that the plaintiffs paid for the drug based on fraud — even though the only reason the drug was on the market was because of Sanofi’s fraud, and individual doctors are in no position to know whether drugs are backed by fraudulent data or not.”  Edwards suggest that “[i]f Congress wanted to find a cost-free way of reducing government spending on medical bills, then loosening the legal definitions of fraud, kickbacks and false statements to include common sense interpretations of bad behavior would be one way to do it.”

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.

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.”

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.