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.

Would You Like Statins With That?

As we wrote on this blog the other day about research which raised questions about the efficacy of statins for those who have not yet experienced a heart attack– an off label prescription–the WSJ pointed to a new paper in the American Journal of Cardiology from authors at  Imperial College, London, U.K., which suggests that  statins should be made available free of charge to consumers along with the purchase of fast food. The press release from Imperial College can be found here.

Low level doses of statins may be purchased over the counter in England.

In a prior post, I  wrote about meeting with a cardiologist who suggested I commence taking statins because of my various cardio risk factors. A point, however uncomfortable at the time, made ultimately moot by the favorable results of my stress test, echocardiogram and calcium scoring. I had, prior to my surprisingly clean bill of cardiac health, relented mentally to the prospect of what would become a life long prescription. Of statins, I wrote:

“If one has risk factors, it is prophylactic and is prescribed to reduce the risk of heart attack, stroke and other heart diseases. It is doubtful whether once I start taking this drug I will ever stop. There is no foreseeable time (while alive) that I will wish to stop reducing the risk of heart attack or stroke. And that I suppose is the essence of the onset of age– piling up prescriptions. A daily regimen that will follow one to the grave–only the dosages or the brand names changing as each day welcomes a regimen of pills. In short, this prescription feels like the onset of dependence. The forward guard, if you will. A harbinger of a pharmaceutical future.”

One might say I didn’t take the news well. But crucial to my decision to relent were the words of my cardiologist and another heart doctor. I wrote:

Seeing my, shall we say, chagrin, the cardiologist told me that, like over 50% of the cardiologists he knows, he takes a statin. “We’ve seen the data.” Another recently told me  “Yeah, I take it. They should put it in the water.”

And now, apparently, in burgers.

But, we wrote of some  important (and conflicting) recent findings regarding statins here at HRW last week:

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.”

So??? Statins anyone?

“The alternate approach to medical marijuana distribution,” an op-ed by Kate Greenwood featured in The Record

[Ed. Note: This op-ed piece was featured in The Record's Sunday Editorial Page and on North Jersey.com. It was written by Center for Health & Pharmaceutical Law & Policy Research Fellow and regular Health Reform Watch blogger, Kate Greenwood]

WE FEEL there is no question about it: The careful, legal distribution of medicinal marijuana to those in need is a good thing. The New Jersey Legislature agreed and passed legislation permitting distribution last January. Then-Gov. Jon Corzine signed the measure before leaving office.

But Governor Christie has requested a delay in its implementation, and a proposal to modify the system of distribution is cause for concern.

More than a year ago, Seton Hall Law’s Center for Health and Pharmaceutical Law and Policy distributed a position paper to New Jersey lawmakers urging passage of the marijuana measure, called the “New Jersey Compassionate Use Medical Marijuana Act.” The center did so citing the inclusion of “multiple measures designed to reduce the risk of abuse or diversion” and noting that “the medical literature supports the conclusion that smoked marijuana can provide relief to patients suffering from debilitating medical conditions for whom conventional treatments have failed.”

Implementation delayed

The act was to have taken effect this month, but, in response to a request from Christie, the Legislature pushed back the effective date to October.

As passed, the act provides that medical marijuana be grown and distributed by six not-for-profit “alternative treatment centers.”

But now, the New Jersey Council of Teaching Hospitals has proposed that the act be amended — before it is even implemented to provide that medical marijuana instead be grown by Rutgers University and distributed by the state’s teaching hospitals.

While hospitals are, as the Council of Teaching Hospitals points out, experienced dispensers of medicine, the act should not be rewritten to require them to dispense medical marijuana.

The passage of the act affects the rights and responsibilities of patients and providers of medical marijuana under New Jersey law; it does not change the fact that distribution and use of marijuana are illegal under federal law.

Although Attorney General Eric Holder has pledged not to prosecute patients and providers who comply with applicable state laws, and hospitals could thus dispense medical marijuana without fear of criminal prosecution, they would still be violating federal law.

Condition of participation

This is a problem because compliance with federal law is a condition of participation in the Medicaid and Medicare programs. Hospitals depend heavily on Medicaid and Medicare funding; the Compassionate Use Act’s alternative treatment centers would not.

Read More

Prescription Drug Abuse Up– Dramatically

I wrote the other day that I was “generally suspicious of the pharmaceutical zeitgeist. And terribly so as it concerns myself.” The following, I suppose, is that zeitgeist’s underbelly. Reuters reports:

U.S. officials reported a 400 percent increase over 10 years in the proportion of Americans treated for prescription painkiller abuse and said on Thursday the problem cut across age groups, geography and income.

The dramatic jump was higher than treatment admission rates for methamphetamine abuse, which doubled, and marijuana, which increased by almost half, according to figures from the Substance Abuse and Mental Health Services Administration.

They said 9.8 percent of hospital admissions for substance abuse in 2008 involved painkillers, up from 2.2 percent in 1998. The percentage of people admitted to treatment for alcohol dropped by 5 percent and for cocaine dropped by 16 percent over the same period.

The report, which is brief and chock full of interesting charts and graphs, can be found here.

Access to HIV/AIDS Medicines

The Campaign for Access to Essential Medicines explains why UNITAID’s efforts to develop a patent pool of HIV/AIDS treatments are so important:

Meanwhile, the US health care finance system appears to be getting into a bit of a standoff with HIV/AIDS drug makers:

Without reliable access to the medications, which cost patients in the AIDS Drug Assistance Program an average of $12,000 a year, people with H.I.V. are more likely to develop full-blown AIDS, transmit the virus and require expensive hospitalizations. Eleven states have closed enrollment in the federal program, most recently Florida, which has the nation’s third-largest population of people with H.I.V.

The need for programs like the Health Impact Fund is more urgent than ever.

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.

Nurses, Prescriptions and Pharma Influence– Under the Radar?

Very interesting point made over at Gary Schwitzer’s Health News Review Blog regarding Industry funding of Continuing Medical Education (CME) for Nurse Practitioners (if you’ve never visited Mr. Schwitzer’s blog you should, he is informative, well written and generally brief).

Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy issued a White Paper last year, “Drug and Device Promotion: Charting a Course for Policy Reform,” which called for a cessation of industry funding of CME. The Center noted:

Reforming Funding for Continuing Medical Education (CME). Most states require physicians to undertake continuing medical education to maintain their medical license. The drug and device industry currently funds over half of the accredited CME courses available to physicians. The Center recommends that industry funding for continuing medical education should be phased out, and replaced by an educational process driven by physicians.

And that

• Ninety-four percent of physicians have some kind of financial relationship with industry, as reported in a major recent national study.

• Commercial support for accredited CME, nearly all of it from drug and device manufacturers, grew from $302 million in 1998 to $1.2 billion in 2006.

But what about nurse practitioners? Schwitzer, who attended the recent Georgetown Conference, “Prescription for Conflict: Should Industry Fund Continuing Medical Education?” noted that:

There are more nurse practitioners (147,000) than there are family physicians (100,000) in the US.

These advance practice nurse professionals can write prescriptions, and it’s estimated that the average nurse practitioner writes more than 6,000 a year.

And about 70-80% of those nurses who regularly attended lunch or dinner “continuing education” events sponsored by drug companies said they were more likely to prescribe the drugs that were highlighted in the lunch.

The presenter was nurse-researcher Elissa Ladd, PhD, RN, Asst. Clinical Professor, Massachusetts General Hospital Institute of Health Professions, who says the possible pharma influence on nurse-prescribers has largely flown “under the radar.”

A little quick and basic math will give us some inkling of just how much flies under that radar. We’ll use the minimum figure in all estimates. So…

147,000 Nurse Practioners each writing 6,000 prescriptions per year = 882,000,000 prescriptions. Yes, that’s 882 million prescriptions per year– conservatively estimated.

“More likely to prescribe the drugs that were highlighted in the lunch” we can estimate at 51%. We wind up with a potentially influenced 449,820,000 prescriptions. Again, conservatively estimated.

So now the only question is just what percentage or how many Nurse Practitioners “regularly attended lunch or dinner ‘continuing education’ events sponsored by drug companies?”

With a total pool of over 882 million prescriptions per year available– at least 450 million of them potentially swayed over lunch–my guess is that Pharma’s answer would be “As many as possible.”

CVS & HHS: Partners in Compromising Your Privacy

On January 16, 2009, the Department of Health and Human Services (HHS) and CVS entered into a resolution agreement requiring CVS to pay a $2.25 million fine and implement a corrective action plan for “potential violations of the HIPAA [The Health Insurance Portability and Accountability Act of 1996] privacy rule.”  Why?  CVS had allegedly been placing prescription bottles and labels into dumpsters that were accessible to the public.  The bottles/labels contained protected health information (PHI), which CVS was required to safeguard under federal law.

Although HHS appears to regard the settlement as a success, given its prominence on the HIPAA enforcement section of HHS’s website, it is nothing of the sort.  The agreement provides that CVS “expressly den[ies] any violation of HIPAA or the Privacy Rule, and further den[ies] any wrongdoing,” while HHS does not concede that CVS is “in compliance with the Privacy Rule.”  HHS did agree with itself, however, releasing an FAQ (accompanying the press release) stating that under its Privacy and Security Rules: “covered entities are not permitted to simply abandon PHI or dispose of it in dumpsters or other containers that are accessible by the public or other unauthorized persons.”

Why is this old news important?  This week I had a prescription filled at my local CVS pharmacy in Livingston, New Jersey.  While standing at the pharmacy I noticed that all of the filled prescriptions were stored directly behind the counter in plain view of any customer.  Each prescription was inside a small bag to which a customer receipt was attached.  The receipts in the front row of the storage bins were readable from the counter.  The receipts contain protected health information (PHI) that is subject to the Privacy and Security Rules of HIPAA including:

1) Full name,

2) Address,

3) Telephone number,

4) Day and month of birth,

5) Drug name and dosage, and

6) Prescriber.

HHS maintains the authority for civil enforcement of violations of the Privacy and Security Rules promulgated pursuant to HIPAA.  So, why is it that CVS allows the public to view its customers’ PHI in violation of HIPAA even while still subject to the corrective action plan for its prior alleged violations?  Well, I asked the pharmacist on duty.  The pharmacist acknowledged that it was a problem that the PHI could be viewed from the counter.  However, CVS was expecting to remodel and “hopefully” the shelf would be placed farther away to render the PHI unreadable.  Upon requesting the contact information for CVS’s privacy officer, the pharmacist readily provided such information and stated that she would “appreciate” someone actually reporting the apparent violation.

HHS was recently provided with additional enforcement tools under the HITECH provisions of the American Recovery and Reinvestment Act of 2009.  Unfortunately, it does not appear that HHS is serious about enforcing its own regulations or resolution agreements; nor, if the flagrantly violative placement of prescriptions is indicative of mindset,  is CVS serious about HIPAA compliance.

Comment on Medicare Advantage and Prescription Drug Benefit Programs: Final Marketing Provisions (Parts III & IV)

[Ed. Note: This post is a continuation of a post we published the other day regarding "modifications and additions to initial marketing regulations implementing The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 ("MMA"), which "established the Medicare Prescription Drug Benefit Program (Part D) and made revisions to [] provisions” of the Medicare Advantage Program.” The initial post, detailing the modifications, can be found here.]

By Michael Rabasca

PART III

The strongest argument against these final regulations is that they prevent eligible enrollees “from learning about their full range of healthcare options” and, thus, unduly hinder the market for Part C and Part D plans. (Federal Register, Volume 73, No. 182 at p. 54214). In order for consumers to make informed healthcare decisions, they need to have ready access to information. Marketing is all about the strategic distribution of information, and placing restrictions on plan marketing activities limits the information available to potential enrollees. Thus, regulating the marketing activities of Part C and Part D plans could lead to consumer ignorance and severely limit the choices of Medicare eligible individuals.

These new rules significantly hinder the ability of potential Part C and Part D plan participants to both obtain plan information and enroll in plans. Many individuals who are eligible for Medicare are hospitalized or living in nursing homes where healthcare is delivered. Under these rules, Part C and Part D plans would be unable to make marketing presentations, distribute enrollments applications, or collect completed applications from these individuals. Unfortunately, these potential enrollees are often the people who would benefit the most from enrolling in these plans and these regulations severely limit their ability to do so.

PART IV

I think that government oversight of Part C and Part D plans’ marketing activities provides vital protection to the individuals who are eligible to participate in these plans. I feel that Medicare participants are particularly vulnerable to questionable marketing practices, and these final regulations provide important modifications and additions and to CMS’s marketing regulatory scheme. Nevertheless, I am not convinced that these rules do enough to deter Part C and Part D plans from engaging in impermissible marketing activities. Although CMS may impose civil monetary penalties or marketing/ enrollment sanctions on plans that violate its marketing regulations, these penalties are merely discretionary. I agree with one commenter who suggested that CMS should mandate civil monetary penalties for plans that violate the marketing rules in order to ensure that violators are punished. (Federal Register, Volume 73, No. 182 at p. 54211). Additionally, I feel that CMS should provide some sort of financial incentive for both individuals and competing plans who report marketing violations in order to increase the likelihood that violations are discovered and reported. These additional enforcement tools would help to ensure that the new final marketing regulations serve their purpose by effectively protecting individuals who are eligible to participate in Part C and Part D plans from inappropriate marketing tactics.

Solving the Mysteries of Pregnancy

In last week’s JAMA, the Pandemic H1N1 Influenza in Pregnancy Working Group reported that their analysis of nationwide data on 2009 influenza A (H1N1) in pregnant women revealed that “early antiviral treatment appeared to be associated with fewer admissions to an ICU and fewer deaths.”  Pregnant women who were not treated with antiviral medication until 3-4 days after they began experiencing flu symptoms were more likely to die than those who were treated within 2 days of symptom onset.  Women who were first treated with medication more than 4 days after symptom onset were 54 times more likely to die than those who were treated within 2 days.

The authors speculate that the “reasons for delayed treatment … could include reluctance of pregnant women or clinicians to use antiviral medication because of concern for risk to the fetus, despite available evidence suggesting that treatment benefit likely outweighs the potential risk.”  Given the shocking 54-fold increased risk of death associated with late initiation of antiviral medication, the authors’ use of the qualifiers “suggesting” and “likely” is noteworthy.  They are forced to hedge because, as a group of experts convened by the CDC acknowledged in late 2009, “[l]ittle is known about the effects of the four currently available influenza medications on the fetus.”

In my article The Mysteries of Pregnancy: The Role of Law in Solving the Problem of Unknown But Knowable Maternal-Fetal Medication Risk (forthcoming in the University of Cincinnati Law Review), I point out that this information gap is not unique to antivirals.  We lack data on the efficacy or safety or both of most drugs when used by pregnant women.  A frequent shorthand explanation for the dearth of information is that you cannot test drugs on pregnant women because of ethical concerns.  Without denying or dismissing the real moral conundrums that arise in maternal-fetal medicine, the information gap is deeper and wider than that.  As Ruth Faden puts it: “Everyone thinks, Oh, my God, research on pregnant women!  All kinds of ethical flags go up.  We don’t have to start with high drama.  [There's enough] low-hanging fruit that we could keep lots of medical researchers busy for a long time.”

Two FDA-led efforts promise to begin connecting the dots: the Medication Exposure in Pregnancy Risk Evaluation Program, which will conduct epidemiological research using data on approximately 1 million births gathered by the 11 participating research sites, and the Sentinel Initiative, which is creating a national electronic system with the goal of, among other things, allowing for prompt investigation of the safety of newly-approved drugs in pregnant women.  Other government agencies also have roles to play.  For example, the house committee report accompanying the Departments of Labor, Health and Human Services and Education Fiscal 2010 Appropriations measure encouraged the NIH “to  expand research on pregnant women with the goals of better understanding the long-term health effects on women of disease states in pregnancy, the proper therapeutics for pharmacologic treatments for pregnant women who face illness, and the safety and efficacy of medications administered to pregnant women and fetuses.”   Finally, industry can and should do more.  Congress should empower FDA to require pharmaceutical companies to sponsor maternal-fetal medication research in appropriate cases, authority the agency already has in the pediatric arena.

Comment on Medicare Advantage and Prescription Drug Benefit Programs: Final Marketing Provisions (Parts I & II)

By Michael Rabasca

Part I

These rules represent modifications and additions to initial marketing regulations implementing The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (”MMA”), which “established the Medicare Prescription Drug Benefit Program (Part D) and made revisions to [] provisions” of the Medicare Advantage Program (Part C). (Federal Register, Volume 73, No. 182 at p. 54208). The Centers for Medicare and Medicaid Services’ (”CMS”) enacted these final regulations pursuant to §§ 1851(h) and 1860D-1(b)(1)(B)(vi) of the Social Security Act, which empower the CMS to “implement standards consistent with ‘fair marketing.’” (Federal Register, Volume 73, No. 182 at p. 54210).

The most significant aspect of these final regulations is the new restrictions they place on Part C and Part D plans’ marketing activities. Specifically, these rules prohibit the following:

(1) unsolicited direct contact with potential enrollees, including telemarketing (42 C.F.R. §§ 422.2268(d), 423.2268(d));

(2) selling non-healthcare related products during a plan marketing event or presentation (42 C.F.R. §§ 422.2268(f), 423.2268(f));

(3) conducting marketing presentations or distributing and/or collecting enrollment applications “in provider offices or other areas where healthcare is delivered to individuals, except . . . where such activities are conducted in common areas in healthcare settings” (42 C.F.R. §§ 422.2268(k), 423.2268(k));

(4) conducting marketing presentations or distributing and/or collecting enrollment applications at “educational events”  (42 C.F.R. §§ 422.2268(l), 423.2268(l)); and

(5) offering meals to potential plan enrollees at marketing events (42 C.F.R. §§ 422.2268(p), 423.2268(p)).

These regulations also implement new rules regarding CMS’s procedure for reviewing Part C and Part D plan marketing materials. Generally, Part C and Part D plans must submit all marketing materials to CMS at least forty-five days before distribution. (42 C.F.R. §§ 422.2262(a), 423.2262(a)). However, the regulations provide for an abbreviated “file and use” procedure, under which CMS deems certain materials approved five days after submission. (Federal Register, Volume 73, No. 182 at p. 5410). Previously, Part C plans could use the “file and use” procedure to obtain approval of marketing materials if: 1) the plan had a record of continued exemplary performance in CMS reviews of its marketing materials; or 2) the plan certified that the marketing materials in question did not contain “substantive content” or, alternatively, only used “model language already reviewed and approved by CMS.” (Federal Register, Volume 73, No. 182 at p. 54210).  Part D plans, on the other hand, could only obtain “file and use” approval through plan certification. (Federal Register, Volume 73, No. 182 at p. 54210). However, these final regulations “eliminate file and use status based on an organization’s track record” for Part C plans, and implement “a uniform policy of applying the file an use policy to marketing materials that either use model language without substantive modification, or materials identified by CMS as not containing substantive content warranting CMS review” for both Part C and Part D plans. (Federal Register, Volume 73, No. 182 at p. 54210-54211).

Additionally, these final regulations implement licensure requirements for plan marketing representatives. Specifically, the rules require Part C and Part D plans to exclusively use State licensed marketing representatives to conduct direct marketing activities targeted at potential plan enrollees. (42 C.F.R. §§ 422.2272(c), 423.2272(c)). Plans must also notify states that they are using licensed representatives in a manner that is “consistent with the appointment process provided for under State law.” (42 C.F.R. §§ 422.2272(c), 423.2272(c)).

Finally, these rules mandate that Part C and Part D plans make certain disclosures to plan participants. Under these final regualtions, plans must now disclose the information specified in §§ 422.111(b) and 423.128(b) to all plan participants both “[a]t the time of enrollment and at least annually thereafter, 15 days before the annual coordinated election period.” (42 C.F.R. §§ 422.111(a)(3), 423.128(a)(3)).

PART II

The best argument in support of these final regulations is that they provide necessary consumer protections. Generally, individuals age sixty-five and older, and people with disabilities are eligible for Medicare programs. This group of potential enrollees is particularly vulnerable to dubious marketing tactics. Allowing insurers to market their Part C and Part D plans unchecked could be harmful potential participants. Indeed, permitting plans to distribute information and solicit enrollment applications at any place and in any manner they chose has the potential to confuse potential enrollees and, in some cases, could result in plans coercing individuals into participating. Thus, a free market philosophy as to plan marketing practices is inappropriate in the Part C and Part D setting, and strict regulation is required.

These new rules protect consumers by: 1) prohibiting certain problematic marketing activities; and 2) limiting the places where plans may conduct marketing activities. Indeed, prohibiting Part C and Part D plans from offering meals or selling non-healthcare related products to potential participants prevents hurried “enrollments without personal attention to the appropriateness of the plan.” (Federal Register, Volume 73, No. 182 at p. 54215). Additionally, prohibiting plans from conducting marketing activities and soliciting enrollments at educational events and anywhere healthcare is delivered prevents plans from targeting individuals for enrollment when they are vulnerable to suggestion, and avoids the appearance that individual providers and facilities recommend or support specific plans.

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.

New Jersey Medical Marijuana Legislation Update: Poised to Pass?

Supporters are hopeful that before Governor-Elect Chris Christie takes office next month, the New Jersey legislature will pass — and current Governor Jon Corzine will sign — medical marijuana legislation.  In February 2009, the “New Jersey Compassionate Use Medical Marijuana Act,” which would allow patients suffering from “debilitating medical conditions” to treat their symptoms with marijuana without fear of state criminal reprisals, passed the state Senate.

In June 2009, Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy issued a position paper calling on the full legislature to pass the Act, arguing that it would “allow New Jersey residents with debilitating medical conditions access to marijuana to ease their suffering without creating an undue risk of abuse or diversion.”  Soon thereafter, the Act cleared the Assembly Health, Human Services and Senior Citizens Committee, albeit with a number of amendments, including several bolstering the Act’s already strict safeguards against abuse and diversion.  (For a detailed summary of the differences between the Senate and Assembly versions of the Act, see below.)

According to an article in the New Jersey Law Journal, a legislative aide “says they are trying to get the [Act] posted for a floor vote on Dec. 7, Jan. 7 or Jan. 11, the remaining voting sessions in the current term.  The Assembly is expected to pass it.”  Due to the amendments added by the Assembly Committee, the Senate would need to pass the Act again before it would reach the Governor’s desk.  Even if the Act is not passed during the current lame-duck session, however, there is hope for its passage in sessions to come. Governor-Elect Christie has indicated that, with sufficient restrictions in place, “he would be supportive of such legislation.”

Summary of Differences between Assembly and Senate Versions

Change to definition of “bona fide physician-patient relationship.”

The Senate’s version of the Act (S119) requires that patients who wish to use medical marijuana obtain a “written certification” from a physician with whom they have a “bona fide physician-patient relationship.”  Such a relationship is said to exist whenever a physician has completed a full assessment, including a physical examination, of a patient.  The Assembly’s version (A804) includes a significantly narrower definition, providing that only the physician with “ongoing primary responsibility” for treating a patient’s “debilitating medical condition” can approve that patient to use marijuana.  Such a physician must be “board-certified, if available” in the specialty appropriate for caring for the condition which qualifies the patient to use marijuana.

Changes to list of eligible “debilitating medical conditions.”

• Whereas S119 would have granted eligibility for marijuana to patients suffering from “severe and persistent muscle spasms, including, but not limited to, those characteristic of multiple sclerosis or Crohn’s disease,” A804 limits eligibility to those with “intractable skeletal muscular spasticity,” which would, it would seem, include some patients with multiple sclerosis, but exclude those with Crohn’s disease.
• Whereas S119 made all patients with cachexia or wasting syndrome, severe nausea, or severe or chronic pain eligible, under A804 patients with those conditions are only eligible if their symptoms are the result of AIDS or cancer. Concomitantly, neither AIDS nor non-terminal cancer render a patient eligible unless they cause cachexia or wasting syndrome, severe nausea, or severe or chronic pain.
• A804 adds to the list of those eligible for marijuana, patients suffering from amyotrophic lateral sclerosis and multiple sclerosis. Patients with cancer that is “terminal” and glaucoma that is “resistant to conventional therapy” are also eligible; under S119 all cancer and glaucoma patients were eligible.
• Notably, both versions include a provision allowing for additional medical conditions to be added by regulation.

Changes to rules governing “medical marijuana alternative treatment centers.”

Under A804, eligible patients will no longer be permitted to grow marijuana.  The statute’s protection will only apply to patients who obtain marijuana from New Jersey Department of Health and Senior Services-approved “medical marijuana alternative treatment centers.”  A804 adds as a requirement of approval that such centers be operated on a nonprofit basis.  They do not have to be recognized as such by the IRS but they do need to comply with all state nonprofit laws.  Perhaps in an effort to mitigate hardship that might arise as a result of these, more restrictive, provisions, A804 exhorts DHSS to “seek to ensure the availability of alternative treatment centers throughout the State, including, to the maximum extent practicable, at least two each in the northern, central, and southern regions of the State.”

Other potentially-significant changes.

• Unlike S119, A804 does not protect patients and others from arrest or prosecution; its protection is limited to waiver of applicable “civil or administrative penalties.”
• A804 also eliminates protection for caregivers who assist patients with medical marijuana use. Instead, it provides that “[t]he commissioner shall adopt regulations to: (1) provide for the use by a registered qualifying patient of a designated individual in an emergency situation to transport marijuana to the patient who is otherwise unable to obtain marijuana from an alternative treatment center[.]“

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.”

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