Controlling the Controllers of Controlled Substances

Despite their name and extensive government regulation, controlled dangerous substances (”CDS”) are far from controlled.  Licensed  health care providers are essential cogs in the prescription drug control machine.  Many faithfully execute their responsibility to prescribe CDS only where necessary and appropriate to relieve patient pain.  But sadly, some professionals are aggravating the situation.  Significant percentages of the professional licensing cases that I prosecuted in my previous position as a deputy attorney general in New Jersey involved abuse of prescribed CDS by patients and licensed professionals.

Some professionals are completely complicit, brazenly selling prescriptions (and their professional integrity) from their offices or cars.

Others aid and abet misuse by writing prescriptions too freely, for varying reasons and to varying degrees of culpability.  Some wear rose-colored glasses and miss tell-tale warning signs or just like to make people happy and have trouble confronting their patients.   Still others lack the training to know what types of questions to ask to identify drug-seeking behavior or how to effectively and safely combine different drugs to treat patients’ particular problems. Patients can be very skilled at keeping their providers in the dark, so some providers simply do not know that they are feeding a habit.   Others rationalize that it is better to keep their patients coming back for treatment than to send them to the streets for illegal drugs.

And, of course, others conscientiously wrestle with how to balance the need to relieve the very real pain they or their patients are experiencing with the reality that they or their patients are developing addictions.  It’s a thorny thicket, for sure.

No matter the reason, the problem of prescription drug abuse is intensifying, and we need to try something new.  This Spring, the Office of National Drug Control Policy (ONDCP) unveiled “Epidemic: Responding to America’s Prescription Drug Abuse Crisis,” which is “a multi-agency plan aimed at reducing the ‘epidemic’ of prescription drug abuse in the U.S. — including the FDA-backed education program that zeros-in on reducing the misuse and misprescribing of opioids.”  This plan has four main components: improving education of patients and health care providers; expanding state-based prescription drug monitoring programs; improving means for proper disposal of unused CDS from homes; and stepping up enforcement to reduce “pill mills” and doctor-shopping.

As part the education part of the plan, the FDA is working to implement a “Risk Evaluation and Mitigation Strategy (REMS)” for extended-release and long-acting opioid products, such as OxyContin and Duragesic (full list of drugs available here).  As FDA’s consumer update regarding this initiative summarizes, “[t]he new REMS plan focuses primarily on: educating doctors about proper pain management, patient selection, and other requirements and improving patient awareness about how to use these drugs safely.”  On May 16, 2011, FDA met with an Industry Working Group to discuss these ideas, including how to assess the effectiveness of the REMS plan.

Although generally I applaud any effort to better educate practitioners about the dangers of CDS, I worry how valuable this plan will be once implemented.  For one, it requires drug companies to prepare the educational materials.    Each has an interest in presenting its drug in the best light so that doctors are not afraid to prescribe it.  Would not government-funded, unbiased academic detailers, expert in pain and addiction medicine, be more effective?

In addition, the REMS plan does not require doctor training.  If we don’t even lead the horse to water, how can we ever quench its thirst?   How can we hope to affect the prescribing practices of health care providers who do not receive critical training?  It seems indisputably reasonable to require training in CDS prescribing before a practitioner is entrusted with the phenomenal responsibility to write prescriptions for CDS.   (According to a November 18, 2010 article by Susan Okie, M.D. in the New England Journal of Medicine, two FDA advisory committees agree with this requirement.)   This is especially crucial in states like New Jersey, where a medical license is plenary, and thus any licensed physician, regardless how little training in pain management s/he has had, may prescribe pain medicine.

Reportedly, other federal agencies are lobbying Congress to require mandatory physician training as a condition to receiving the Drug Enforcement Administration registration number that doctors must have to prescribe controlled substances.  But generally, the federal DEA registration process looks to state law.  If state law permits a physician to prescribe CDS, there normally is not a separate federal requirement.  This policy respects that licensing is among the states’ traditional police powers.  I expect that Congress is well aware that individual state licensing boards would bristle at Washington dictating the rules governing the practice of professions within their borders.

Not surprisingly, then, some states are not waiting for Congress to act.  According to Dr. Okie, the licensing boards in California, Rhode Island, and West Virginia require some degree of pain-management training.  We need to know what their experiences have been.  Is the training making a difference?  Is there any evidence that requiring training is discouraging doctors from prescribing CDS to patients in pain?

Dr. Okie’s article also details a law that is scheduled to go into effect in Washington state in mid-2011 that will require doctors who prescribe opioids to enter their patients’ clinical responses to treatment in a statewide database and to consult with a pain specialist if the prescribed dose exceeds a threshold.  The hope is that physicians who have thus far not changed their prescribing in response to voluntary educational programs and treatment guidelines may respond if their treatment success is being measured.  But some fear there are too few pain specialists to satisfy the demands imposed by this law.  Some practitioners and patients fear this will just drive patients to street drugs like heroin.

Florida, too, which reportedly is the source of eighty-five percent of the nation’s oxycodone and is known as the nation’s “Pill Mill Capital,” is taking bold steps to address prescription drug abuse.  In addition to increasing oversight of clinics, pharmacies, and wholesale distributors of CDS, its new statute signed into law on June 3, 2011 subjects physicians to administrative and criminal penalties for violating prescriptive regulations governing CDS prescribing.  For example, doctors will face a minimum of a six month suspension and $10,000 fine if they overprescribe CDS.  The law also requires certain doctors to register with the State and restricts their ability to prescribe certain controlled substances.  Doctors also must meet more exacting requirements for record keeping, prescription writing, and treatment plans for those receiving CDS.

The Florida law also authorizes the state to create a prescription-drug monitoring database that will help law enforcement track which providers may be indiscriminately prescribing CDS.  Upon request, treating physicians will have access to this data to inform their treatment decisions.  Approximately 34 other states are operating similar databases, although each has its own rules regarding what entities may access the data, what drugs must be reported, etc.

It is beyond the scope of this post to address the policy pros and cons of all of the provisions in Florida’s new law.  With respect to the prescription drug monitoring database, however, I long have thought it would be valuable to provide prescribing providers access to integrated pharmacy records.  I investigated many physicians who had their patients sign agreements promising only to receive CDS from that doctor.   Investigative pharmacy sweeps helped me learn that this doctor was one of many the patients were using to feed their habit.  But doctors in New Jersey have not had any access to this information unless their patients granted it to them.

But that is about to change.  Although it took years to enact, N.J.S.A. 45:1-45 - 1-52 authorizes New Jersey’s prescription monitoring program.  Section 1-46 specifically permits New Jersey physicians to access the program’s data concerning their patients (although physicians are not required to do so).  The same section also permits New Jersey to enter interoperability agreements with other states so that each state may access the other’s data.  The database is not up and running yet, but on April 7, 2011, New Jersey awarded a four-year contract to a company in Ohio to develop the database.

Once this database is operating, it will offer NJ doctors an opportunity to identify which patients are doctor-shopping and tailor their treatment accordingly.  Undoubtedly, there are risks with this system.  Patients may resent that their doctor did not trust them, for example.  In addition, doctors who primarily treat patients in chronic pain could trigger greater scrutiny from regulators because their prescribing of CDS will outpace other providers.  Regulators will need to carefully exercise their investigative powers so as not to discourage physicians from prescribing appropriate CDS.  These risks, however, seem worth the benefit of identifying patients in need of addiction counseling and treatment and reducing diversion.

But we should not rest on assumptions and hopes.  Rather, we should keenly watch what happens in places like California, Rhode Island, West Virginia, Washington, and Florida to evaluate what works and doesn’t.  Professors Diane Hoffmann (see, e.g., here and here [subscription required]) and Anita J. Tarjian (see, e.g., here) at the University of Maryland and Interim Dean Sandra Johnson at Saint Louis University School of Law (see, e.g., here), among others, raise significant concerns that aggressive enforcement of CDS restrictions can discourage physicians from prescribing CDS, which leaves un- and under-treated patients in pain.  This is unacceptable.  We should regulate with an appreciation for the strides achieved by efforts like the Mayday Pain Project to provide better care to patients suffering in pain.  By taking measured steps and being willing to tinker with our enforcement regimes as we learn, we may ensure we do not deprive patients of needed medications or scare ethical, competent pain physicians from serving their patients’ needs.

Perhaps the Federation of State Medical Boards will help lead this effort to learn from these varied efforts at the state and federal level.   According to its 2011 Annual Report, over 40 state boards have adopted the Federation’s Model Policy for the Use of Controlled Substances for the Treatment of Pain.  Clearly, state boards, without ceding their independence, look to the Federation for guidance, akin to how states view the ABA’s Model Rules of Professional Conduct.  Its policy paints in relatively broad strokes and has not been updated in more than seven years.  It would be helpful if the Federation would update its policy to reflect the current state of law and research in this area, including the impact of various reform efforts, to help state boards find balance between reining in indiscriminate CDS prescribing and the need to provide medically appropriate palliative care to patients in need.

Review of Reconsidering Law and Policy Debates: A Public Health Perspective

Reconsidering Law and Policy Debates: A Public Health Perspective, edited by John Culhane, is a superb collection of thought-provoking essays which features some of the most well-regarded health law scholars in the US. It also includes contributors from schools of public health, public affairs, and public administration. The chapters are uniformly well-written and instructive. Though I cannot in this brief review give consideration to all of the essays, I will try to highlight contributions related to some of my own areas of interest in the intersection between public health and medico-legal research.

Several authors focus on the difficult questions raised by extreme inequality. For example, Vernellia R. Randall’s Dying While Black in America reflects on the disturbing disparity between white and black death rates in the US. A black American male can expect to live seven years less than a white American male, and black women face a four-year gap. Randall explores a number of potential explanations, including discriminatory policies and practices, lack of language and culturally competent care, inadequate inclusion in healthcare research, and hidden discrimination in rationing mechanisms. Randall argues that these disparities will never be addressed effectively until the legal system develops doctrines that can deter not only intentional discrimination, but also “negligent discrimination in healthcare:”

Negligent discrimination in healthcare would occur when healthcare providers failed to take reasonable steps to avoid discrimination based on race when they knew or should have known that their actions would result in discrimination. An example of this would be decisions to close inner-city hospitals and move them to the suburbs. (86)

Randall expertly characterizes race as a key “social determinant of health” in the United States. Countering the many current legal doctrines that promote the legitimation of discrimination, Randall envisions the type of guarantees of equality that will be necessary to realize the antisubordination and antisubjugation principles that animate the 14th Amendment properly understood.

Diane E. Hoffman also addresses stunning inequalities, this time on a global level. Hoffman’s long engagement with end-of-life care informs a consistently sensitive and insightful public health perspective. Considering the situation in the United States, Hoffman concludes that “it is not as all clear that we would want to give the state a public health justification for taking on end-of-life care,” because “we might have trouble reining in the government and preventing it from implementing increasingly more coercive measures” (59). This judgment is particularly pertinent in a political environment where extreme inequality and ever-lower taxes on the wealthiest have imperiled many important health programs for the aged.

However, Hoffman comes to a different conclusion in the case of many developing countries, where the question is less one of rationing access to life extending technologies than it is one of extending access to basic treatments for pain. In a sobering series of statistics, Hoffman presents a tragic panorama of human suffering. In India, only 1% of the 1.6 million people enduring cancer pain each year are likely to receive any type of pain medication. Morphine dispensaries are rare; Calcutta, with 14 million residents, has only one. Though nearly half its population is extremely poor, India is not an outlier. While developing countries account for 80% of world population, they use only 6% of the morphine consumed each year. Sometimes, shortages of medical personnel help explain the problem: for example, in Sierra Leone, there is only one doctor for every 54,000 people (as opposed to a 1:350 ratio in the US). But Hoffman gives several examples of easily preventable policies and business practices that keep painkillers out of the hands of the world’s poorest individuals. This is a truly neglected global crisis, generating levels of suffering that are rarely encountered or even imagined in the developed world.

Returning to the US, the last two chapters in the book are very interesting contributions to ongoing debates about the nature and role of tort doctrine. Elizabeth Weeks Leonard expertly deconstructs the usual dichotomy between tort law’s individualism and the population focus of public health. As she notes, cases involving asbestos, lead paint, silicone breast implants, the Dalkon shield, hazardous autos, tobacco, firearms, Phen-Fen, OxyContin, and Vioxx have all combined efforts by individuals to secure compensation for injuries with broader strikes against destructive products and practices. Weeks succeeds in demonstrating the “counterintuitive fit between tort law and public health law” (189), arguing that each “offers approaches to addressing inevitable conflicts in organized society between individual interests and community needs.”

Jean Macchiaroli Eggen tries to make the fit better by focusing on punitive damages. Toward the end of her chapter, she proposes that states solve the “plaintiff windfall problem” in punitive damages by requiring that “the portion of the punitive award the plaintiff does not receive [due to split-recovery statutes and other measures] be allocated to a state or private program that will enhance the deterrence of the conduct that gave rise to the warden the particular case.” The contributions of both Weeks Leonard and Macchiaroli Eggen would be of great interest to tort classes and seminars considering the difficult issues raised by judicial efforts to address public health concerns.

John Culhane is to be commended for bringing together such an illustrious group of contributors to address public health, an issue that has been neglected in law schools. Knowing full well that factors like income, race, pollution, and even commute length may have a far greater impact on health than, say, dispute resolution methods used by insurance companies, law professors nevertheless tend to focus on purely legal topics. (I am as guilty of this as anyone, and credit this book (and many interventions by Daniel Goldberg) for pushing me to do more to consider the social determinants of health in my own work.) Well after the sturm und drang surrounding the constitutionality of the ACA has dissolved, we will still face problems of balancing liberty, equality, and welfare that this book’s thoughtful contributors address. Their voices deserve to be heard in those future, more substantive, debates.

Missing Care, Missing Drugs: Canaries in the Medical Coal Mine

While Washington has been focusing on repealing or rolling back parts of the Affordable Care Act, persistent embarrassments of the American health system show how untenable the status quo is. Both lower and middle class families are facing serious problems as they contend with providers’ and insurers’ cost constraints.

I’ll first address the familiar issue of health disparities. According to a recent news report, Lauren E. Wisk of the School of Medicine and Public Health at University of Wisconsin, Madison “examined data from the 2001-2006 Medical Expenditure Panel Surveys on 6,273 families with at least one child.” Wisk’s study shows that excessive financial burdens from cost-sharing are keeping many children from getting the care they need:

Families aren’t choosing to spend their money on going to the doctor when someone is sick because of how much it cost them to see the doctor last time. They’re sacrificing their health because it costs too much to be healthy. . . . We expect that if people aren’t getting the care they need, they’ll be sicker as a result. When you put this all together and look at the big picture, the cost of health care in the U.S. could actually be causing Americans to be sicker.

We might wonder: how can this be? Isn’t the economy in recovery? But we’ve seen this picture before, in the developing world. Growth does not help everyone. India, for example, has had astonishing economic growth, but it “is home to about a third of the world’s underweight and stunted children under the age of 5,” and “the impressive economic growth of the past decade has made only a modest dent into the obstinately high incidence of severe underweight and stunting of children in the country.” As Amartya Sen has shown, not only China, but also Bangladesh, are ahead of India in reducing the number of underweight children, despite the fact that “GNP per capita of $1,170″ in India, “compared with $590 in Bangladesh.” The critical number really is median GNP, and beyond that, real allocation to the sectors and concerns that matter. As the US surpasses Ivory Coast and Pakistan in inequality, don’t count on gains from growth to go to the people who need it.

It’s not just poor patients who need to worry about misplaced priorities in the health care system. We are increasingly seeing shortages of important drugs in the US. (Apparently this issue first caught mass media attention when prisons had a difficult time finding a key barbiturate used in executions.) Given that Congress is busy planning to cut funding for the statistical abstracts of the US and energy research (adding to prior DOJ cuts to studies of industrial concentration in the US), we shouldn’t be surprised to learn that “no one is systematically tracking the toll of the shortages.” Not many journalists are left to report on the government’s failure to report, either. But the head of FDA’s Drug Shortages Program is worried: “This is affecting oncology drugs, critical-care drugs, emergency medicine drugs.” It turns out that much-ballyhooed globalization has some downsides, too:

“We’ve certainly reached a very global supply chain for drug products, with the active ingredients typically made outside of the United States,” said [a] vice president for regulatory sciences at the Generic Pharmaceutical Association. “It could be Europe, India — some cases China. If there’s a problem at a facility in Italy or India, it leads to disruption of the drug supply in the United States.”

And a whole new triage system has developed to address an entirely avoidable crisis:

“We have heard some horror stories where patients are really begging to get the drugs from other sources and where practices or institutions are forced to kind of triage patients and save the drugs for those — quote — most curable, where they have the best prognosis and using substitutes where there isn’t a cure possibility,” [said the] president-elect of the American Society of Clinical Oncology.

A moving piece by Hagop M. Kantarjian describes the dilemmas facing some leukemia doctors:

Recently I sent out a plea on this national crisis to 8,000 oncologists who subscribe to a monthly e-mail newsletter published by the leukemia department at the MD Anderson Cancer Center. Within 12 hours, my in-box was jammed with replies from doctors in more than 25 states, each with his or her own horror story. . . . Take, for example, the 43-year-old Kentucky father who got a substandard dose of cytarabine because his doctor used all the doses he could find but still didn’t have enough. “I don’t know what I’ll do next,” the doctor told me.

Or the 45-year-old retired Air Force lieutenant colonel from Colorado, father of an incoming Air Force Academy cadet, whose leukemia came back after six months. His doctor looked all over the state for cytarabine with no luck and so was forced to give his patient second-line therapy. Or the 15-year-old boy from Florida who is in remission but can’t get the therapy that will cure him.

I see two takeaways from this sad situation. First, the next time someone says that generic “health care costs” are too high, consider whether they really mean we need to reallocate funds from less productive sectors to this, life-threatening crisis. Second, we need to reconsider the wisdom and necessity of far-flung, fragile supply chains for critical products. Barry Lynn has been making this point for some time. His book Cornered argues that “the drive to reduce costs has led to several competing manufacturers relying on a single overseas supplier for certain components and that this makes the whole system vulnerable to an event like an earthquake, a strike, or a war that might put the single supplier temporarily out of business.” Even for those skeptical of Lynn’s thesis in, say, the automotive or computer sector, his warnings should be salient for the food and health care industries. Too many lives have been put at risk by supply chains that are not robust enough to handle predictable challenges.

The FDA’s Move to Combat Prescription Drug Abuse: Educating Patients and Physicians

The Food and Drug Administration (FDA) announced a new risk-reduction program this month to help curb abuse of prescription painkillers. The program, called the Risk Evaluation and Mitigation Strategy (REMS), is targeted at manufacturers of long-acting and extended-release opioids. It requires that these manufacturers develop new medication guides for patients and educational materials for prescribing physicians. Each company has 120 days to submit materials to the FDA for review.

According to the FDA, the focus of the REMS plan is to educate doctors about proper pain management and patient selection, and to improve patient awareness about how to use these drugs safely. The medication guides for patients should include consumer friendly language that explains safe use and disposal. The drugs targeted by the REMS plan include oxycodone, methadone and morphine.

As the plan stands now, physicians are not required to review the educational materials. To help generate interest, the FDA plans to offer continuing education credits for physicians who receive the education. The ultimate goal is to make this training mandatory through congressional approval that would link the training to licensing for physicians who prescribe controlled substances.

The FDA hopes that REMS education will cut down the misuse of prescription painkillers without restricting access. There are an estimated one million emergency room visits a year as a result of prescription drug abuse, and the FDA estimates that more than 33 million Americans misused opioids during 2007. That same year, deaths from drug overdose were second only to motor vehicle crashes among leading causes of unintentional injury death in the U.S.

Encouraging safe disposal of medications is key. Over half of all nonmedical painkiller users get their pills “from a friend or relative for free.” Doctors have also been found to prescribe more doses of painkillers than patients actually use, and patients don’t always dispose of unused medications properly.

What can you do to help combat prescription drug abuse? The Drug Enforcement Administration is sponsoring the second National Prescription Drug Take-Back Day this Saturday. You can find a collection site near you by clicking here. Last year, more than 121 tons of prescription drugs were collected at nearly 4,100 locations. It’s a good reason to extend that spring cleaning to your medicine cabinet!

Rethinking IMS Health v. Sorrell: Privacy as a First Amendment Value

Today the Supreme Court will hear oral arguments in IMS Health v. Sorrell. The case pits medical data giant IMS Health (and some other plaintiffs) against the state of Vermont, which restricted the distribution of certain “physician-identified” medical data if the doctors who generated the data failed to affirmatively permit its distribution.* I have contributed to an amicus brief submitted on behalf of the New England Journal of Medicine regarding the case, and I agree with the views expressed by brief co-author David Orentlicher in his excellent article Prescription Data Mining and the Protection of Patients’ Interests. I think he, Sean Flynn, and Kevin Outterson have, in various venues, made a compelling case for Vermont’s restrictions. But I think it is easy to “miss the forest for the trees” in this complex case, and want to make some points below about its stakes.**

Privacy Promotes Freedom of Expression

Privacy has repeatedly been subordinated to other, competing values. Priscilla Regan chronicles how efficiency has trumped privacy in U.S. legislative contexts. In campaign finance and citizen petition cases, democracy has trumped the right of donors and signers to keep their identities secret. Numerous tech law commentators chronicle a tension between privacy and innovation. And now Sorrell is billed as a case pitting privacy against the First Amendment.
Read more

Discount Prescription Program Available To Some Locals

Listen up, Hoboken, Newark, and Orange residents.  There’s a new prescription discount program in town: Coast2Coast Rx Card.  Well, the program isn’t all that new to the area: Newark launched it last year and Hoboken launched it in January.  However, I didn’t learn about Coast2Coast Rx Card until I filled a prescription at my local CVS last month.  Since my prescription wasn’t covered by my health insurance (I always joke to the pharmacist that it kind of defeats the purpose of having health insurance, but I never get any laughs), I was bracing myself for the out-of-pocket cost.  So imagine my surprise when the pharmacist said that I owed $35 instead of $50.  When I pointed out the “mistake,” I was handed a Coast2Coast Rx Card.

While it isn’t a substitute for health insurance, the free Card does offer discounts on prescription drugs, laboratory tests, and imaging tests.  Specifically, the Card boasts such features as:

• 59,000+ participating pharmacies including all major chains and most independents
• Over 60,000 drugs included in formulary
• Save up to 65% on a brand name or generic drugs
• Overall annual savings range from 30% to 45%
• Card is good for an entire family
• Cardholder pays no fees for the card
• No paperwork to fill out — card is ready to use
• There are no health, age or income restrictions; everyone qualifies
• Card has no expiration date and can be used as often as needed
• Card can be used to fill pet prescriptions at participating pharmacies
• Card is primarily for uninsured although insureds can use the card if they have a high deductible
• Insureds can use the card if their drug isn’t covered by their insurance
• In some instances the card can be used during the Medicare Part D “donut hole.”
• Cardholder information is held confidential and is not used for any other purpose.
• The card includes 50%-80% discounts on lab and imaging tests

According to The Florida Times-Union, Financial Marketing Concepts, Inc. (FMC), a Florida-based company, issues the Card on behalf of WellDyneRx, a national pharmacy benefit management company.  In the past three years, FMC has secured agreements with 57 cities and counties in Alabama, Arizona, California, Florida, Illinois, Massachusetts, Mississippi, Missouri, New Jersey, New York, Ohio, Pennsylvania, Tennessee, and Texas (which may or may not look something like this.)  These agreements give FMC a small fee for each prescription filled through the program.  FMC in turn passes along a royalty to the city or county.

If you’re like me, you may already be in the habit of calling pharmacies and comparing the cost of prescriptions, regardless of whether or not your health insurance covers them — and it’s surprising how the cost can vary.  So if you live in Hoboken, Newark, or Orange, be sure to check out whether the Card gives you any discounts.  Can’t hurt.

After Makena: Could a Risk Corridors Approach Balance Incentives and Access?

The past few weeks have been worrying ones for expectant mothers who wanted a hormonal treatment designed to stop preterm births. As Rob Stein of the WaPo explains,

A form of progesterone known as 17P was used for years to reduce the risk of preterm birth. . . Because no companies marketed the drug, women obtained it cheaply from “compounding” pharmacies, which produced individual batches for them [at about $20 each]. Doctors and regulators had long worried about the purity and consistency of the drug and were pleased when KV won FDA’s imprimatur for a well-studied version, which the company is selling as Makena.

The list price for the drug, Makena, turned out to be a stunning $1,500 per dose. That’s for a drug that must be injected every week for about 20 weeks, meaning it will cost about $30,000 per at-risk pregnancy. . . . The approval of Makena gave the company seven years of exclusive rights, and KV immediately fired off letters to compounding pharmacies, warning that they could no longer sell their versions of drug.

A day after Stein’s article appeared, the FDA made it clear that it “does not intend to take enforcement action against pharmacies that compound” 17P, “in order to support access to this important drug, at this time and under this unique situation.”

This is a fascinating, and in some ways, troubling response to the accusations of price-gouging by KV. Compounding pharmacists had already averred that “many of [KV's] assertions that the compounding of an FDA approved product is prohibited are not supported by the legal citations it references.” Though the FDA’s letter preserves access to 17P for now, that access could be revoked at any time. As the FDA states on its website:

FDA understands that the manufacturer of Makena, KV Pharmaceuticals, has sent letters to pharmacists indicating that FDA will no longer exercise enforcement discretion with regard to compounded versions of Makena. This is not correct. In order to support access to this important drug, at this time and under this unique situation, FDA does not intend to take enforcement action against pharmacies that compound hydroxyprogesterone caproate based on a valid prescription for an individually identified patient unless the compounded products are unsafe, of substandard quality, or are not being compounded in accordance with appropriate standards for compounding sterile products. As always, FDA may at any time revisit a decision to exercise enforcement discretion.

Moreover, the problem persists for at least one other drug, colchicine. As Arthur Allen explains at Slate,

The colchicine and [17P] stories have their roots in the FDA’s historically complex relationship with the drug industry. Since 1962, the agency has required that all new drugs be proven safe and efficacious before hitting the market. Many drugs marketed before 1962, however, remain on sale without having been formally approved by the FDA and are technically illegal. In 2006, the FDA launched the Unapproved Drugs Initiative, aimed at getting rid of as many of these drugs as possible. . . .

The FDA campaign has two approaches. In some cases, the agency simply warns companies to stop producing and shipping unlicensed drugs by a given date. In other cases the FDA warns a group of companies producing a particular class of drug, notifying them that it plans to crack down on their unapproved substances. The idea here is to give the companies an opportunity to submit their drugs to the rigorous testing required for FDA approval. This is what happened with . . . at least 86 newly approved drugs. The problem is that after submitting such drugs to expensive testing, drug makers typically jack up the prices, in a position to do so under congressional patent incentives aimed at producing innovative drug research. The FDA has no say in how a drug is priced.

As the Post notes, KV says it “is spending more than $200 million to develop the drug and conduct follow-up studies that the Food and Drug Administration demands.” Had it kept its pricing power, it was estimated that Makena would cost the US health care system $4 billion per year. Assuming that 3/4 of that would be revenue to Makena, and it lasted for the full 7 years of exclusivity, that would be a $21 billion return on a $0.2 billion investment. That seems excessive, especially given that KV didn’t develop the drug. On the other hand, if the Makena price were to be reduced one hundredfold, that’s a $0.21 billion return on a $0.2 billion investment. Unless we hit some serious deflation, that doesn’t cover the time value of the money invested in studies and development.

Are there any better models here? Stein’s story says that “experts said the FTC could sue KV if it concludes the company is illegally impairing competition,” but I don’t see the theory there. The FTC has lamented post-merger price hikes for life sustaining drugs (see FTC v. Lundbeck), but has precious little authority over price hikes here. Perhaps liberal constitutional law professors could fuse the “medical self-defense” theory of Eugene Volokh with the expansive Yoo/Vermeule/Posner theories of executive power, and find inherent executive authority here to save preemies? Probably not; the current Supreme Court is only receptive to creative con law from one side of the political spectrum.

Another idea is for legislation to create “risk corridors” for researchers who engage in the FDA’s Unapproved Drugs program, as CMS has for prescription drug insurance plans in Medicare Part D. As Kip Piper explains,

Using a system of risk corridors that compares actual incurred drug benefit costs to estimated costs submitted in bids, Medicare limits the profits and losses of Part D drug plans. Specifically, if a Medicare drug plan’s actual benefit costs exceed expected (bid) levels by a sufficient degree, the plan will receive an additional federal payment to cover a portion of the loss. However, if a drug plan’s actual spending falls sufficiently below projections, the plan must share some of the profit with the feds. Risk corridors apply to actual and expected drug benefits costs but exclude plan administrative costs and federal reinsurance payments.

Unfortunately, estimates of the value of testing unapproved drugs vary widely. The FDA’s director of the FDA’s Office of New Drugs and Labeling Compliance insists on the importance of these programs. But, looking specifically at colchicine, an Austin rheumatologist said “Doing one trial in patients and a few drug interaction studies doesn’t justify marketing exclusivity and a 50-fold increase in price.” As Allen puts it, we need “legislative remedies to improve the drug supply without costing the public an arm and a leg.”

In health care finance, the “cost-shift” hydraulic is a familiar model. When policymakers cut reimbursements for, say, Medicare or Medicaid, providers still have the same income target, and respond by raising prices for the privately insured. One scholar estimated that the privately insured pay over 120% of costs, while Medicare payments are between 95 and 99%. We might think of pharmaceutical patents as another manifestation of “cost-shifting,” from the future (which will enjoy drugs in the public domain) to the present (which must pay the monopolist’s price). Other forms of exclusivity can also lead to that type of cost-shift, as the Makena controversy makes clear. Perhaps the people most benefited by a regime of pharmacovigilance and evidence-based medicine should be asked to pay something for that new reassurance. But they shouldn’t be price gouged. A risk corridors approach might better balance patients’ interests in research on, and reasonable prices for, unapproved drugs.

Pharma Coupons: Enriching the Drug Companies

A recent New York Times article highlighted an increasing trend in pharmaceutical consumerism.  Many drug companies are providing copayment or coinsurance payment assistance.  These subsidies now exist “for about half of the top 100 brand-name drugs sold in this country,” according to health analyst Richard Evans of Sector & Sovereign Research.  Some patients receive copayment cards or coupons from their physicians while others find them on the internet.

So what’s the big deal?  Insurance companies use cost sharing to encourage patient selection of less-costly therapeutic options.  Pricing differences influence consumer choices; The American Journal of Managed Care reported in 2005 that most studies of cost sharing and prescription purchasing estimate that a 10% increase in price would decrease consumer use by 1-4%.  As NPR reported, “[t]he copay strategy worked so well that in 2003, more than half of all drugs picked up at pharmacies were generics.”

In mid-2006, pharmaceutical companies introduced coupons to reduce beneficiaries’ out-of-pocket costs for expensive drugs.  The “pharmaceutical subsidies” act as a counter-incentive, steering patients toward more expensive drugs–which wind up costing the consumer less– or zero–out-of-pocket.  As a result, the use of pharmaceutical copayment cards or coupons has tripled since their inception.

Financial Assistance or Greedy Marketing?

According to the NY Times, “[d]rug companies say the [copayment assistance] plans help some patients afford medicines that they otherwise could not.”  However, this seemingly altruistic explanation rings–shall we say– like something less than the entire truth.  For starters, these coupons are widely available on the internet and physicians who distribute the cards do not screen patients for financial need.  As the NYTimes reports,

Executives at Medicis, the company that sells Solodyn, have told investors that the co-payment card is used by an “overwhelming majority” of patients, and is largely responsible for doubling use of the drug, to 26,000 prescriptions a week.

That sounds like brilliant marketing, not need-based financial assistance.

Also, when we think of those who are most in need, we often think (rightly or wrongly) of the uninsured, the poor and the elderly — none of whom benefit from the pharmaceutical subsidy!  As the Amgen First Step Program website states, it is “a medical benefit co-pay coupon program to help commercially insured eligible patients with their deductible, co-insurance, and/or co-pay requirements” for listed drugs.  Excluded from the program are the uninsured or those in publicly funded health insurance plans.

It is unsurprising that the uninsured are excluded from participation.  According to Joshua Schimmer, a biotechnology analyst, “it seems the best strategy for a pharmaceutical company is to price their drug as high as they possibly can and offer that co-pay assistance broadly.”  For example, over the past five years, Jazz Pharmaceuticals has quadrupled the price of its narcolepsy drug Xyrem, while increasing copayment assistance to a maximum $1,200 a month.  In order for the pricing system to work, pharmaceutical companies rely on consumers to choose the subsidized drug and insurers to foot the increased bill.

It is likewise unsurprising that the publicly insured are excluded, but for a very different reason; to offer subsidies to Medicare or Medicaid patients would be illegal.  Under 42 U.S.C. § 1320a-7b (1),(2), the knowing and willful offer, payment, or receipt of any remuneration in return for the purchase of any good “for which payment may be made in whole or in part under a Federal health care program” is a felony punishable by up to $25,000 or five years imprisonment.  Illegal remuneration includes “waiver of coinsurance and deductible amounts (or any part thereof)…”  (§ 1320a-7a (i)(6)).

So What’s the Big Deal?

The pharmaceutical copay cards and coupons are a big problem.  First, they circumvent the cost sharing structures established by health insurance plans, raising systemic health costs.  As the NYTimes reported:

“The member is somewhat insulated from the cost of the prescription,” said Kevin Slavik, senior director of pharmacy at the Health Care Service Corporation, which runs Blue Cross and Blue Shield plans in Illinois and three other states. “In essence, it drives up the total cost of providing the prescription benefit.”

That increased cost is passed on to the privately insured in the form of increased premiums and to the public through increased taxes.  As Eileen Wood, vice president of the Capital District Physicians’ Health Plan, told NPR in 2009:

those coupons come with a consequence. If everyone started using coupons to get the more expensive drugs, “we’d have to raise premiums,” she says. “There’s no question about that.”

Furthermore, publicly funded plans must also pay the increased price of prescription drug benefit, which is passed on to taxpayers.  Any benefit to the coupon user in the form of reduced out-of-pocket expenses is diminished by higher premiums and taxes.  In the final analysis, the only real beneficiaries of these “pharmaceutical subsidies” are the drug companies who offer them.

Moving Forward

This issue is not one that is likely to disappear.  Currently, Massachusetts is the only state that does not allow pharmaceutical coupons; it is possible that other states or the federal government will follow suit.  As for insurers, some may begin requiring patients to try generic drugs first, as Capital District Physicians’ Health Plan has, or simply drop coverage of these drugs altogether.  Either way, drug company coupons will remain a topic to watch in 2011.

Mefloquine at GTMO Interview by Leonard Lopate on NPR’s WNYC

A little while back, we wrote about a report, Drug Abuse: An Exploration of the Government Use of Mefloquine at Guantánamo, issued by Seton Hall Law’s Center for Policy & Research. Renowned for its series of Guantánamo Reports, the Center’s most recent report documents the medically inappropriate use of a dangerous pharmacological treatment on detainees.

According to the report, the U.S. military routinely administered mefloquine, a controversial malaria treatment, at five times the standard prophylactic dose. Mefloquine, even at the standard dose, is known to cause adverse side effects such as paranoia, hallucinations, aggression, psychotic behavior, memory impairment, convulsions, suicidal ideation and possibly suicide.

Today, Professor Mark P. Denbeaux, Director of the Seton Hall Law Center for Policy and Research, was interviewed about the report on NPR’s New York City station, WNYC, by Leonard Lopate. You can listen to the interview here

60 Minutes, Glaxo’s Bad Day & Why Compliance is So Terribly Important

In case you missed it: 60 Minutes segment with whistleblower Cheryl Eckerd, a former manager of global quality assurance for GlaxoSmithKline. She describes her experience inspecting Glaxo subsidiary, Cidra, in Puerto Rico. It views like an in-house counsel’s nightmare and a PR professional’s worst day. CBS states:

“But in November, we found out just how much could go wrong at one of the world’s largest drug makers. A subsidiary of GlaxoSmithKline pleaded guilty to [a felony] distributing adulterated drugs.

“There was reason to believe that some of the medications were contaminated with bacteria, others were mislabeled, and some were too strong or not strong enough.”

Ms. Eckerd brought suit under the Federal Whistleblower Act, with the government ultimately recovering $750 million; Ms Eckerd who was “downsized” by Glaxo, received $96 million as her share of the recovery. In addition, when Ms. Eckerd made the information she had gathered about the plant in Puerto Rico available to the FDA, federal agents executed a search warrant and seized drugs worth “hundreds of millions of dollars.”

An Ounce of Prevention: Coverage Battles Rage Over the Biologic Synagis

Yesterday, I got a note from my son’s kindergarten teacher alerting me that the class had run out of hand sanitizer and tissues and needed donations to replenish their supply.  Proof positive that cold and flu season is upon us.

Less commonly known is that, in most or all of the country, it is also respiratory syncytial virus (RSV) season.  RSV is a widespread respiratory virus; almost everyone gets it by the time they turn two and it doesn’t usually result in anything more than a common cold.  As the CDC explains, however, RSV can cause lower respiratory infections such as bronchiolitis and pneumonia and these can be severe.  The virus is the number one cause of hospitalization in babies under one in the United States.

While there is no RSV vaccine, the biologic Synagis (palivizumab) can help prevent the development of severe illness in high risk children.  According to the American Academy of Pediatrics’ influential Red Book, this includes children under two with chronic lung disease, babies under one born at 28 weeks gestation or earlier, babies under six months born at 29-32 weeks gestation, and babies under six months born at 32-35 weeks with at least one of a number of enumerated risk factors such as daycare attendance.

There is a catch.  Synagis costs $900 or more per injection and each injection lasts just one month.  Because a season’s worth of protection from RSV costs many thousands of dollars (one payor puts it at $7,030 per patient), it is perhaps unsurprising that there is ample anecdotal evidence of baseless denials of coverage, by both private insurance companies and Medicaid.  The law student who blogs at Nonsense and Frippery has written three searing posts about her family’s Herculean efforts to secure Synagis shots — first from her private insurance company and then from Medicaid — for her son who was born at 25 weeks gestation in April 2010.  (The posts (which contain some strong language) are here, here, and here.)

With the passage of health reform, the United States has, for the first time, an abbreviated approval pathway for biologic drugs that are “biosimilar” to or “interchangeable” with already-approved biologics.  Its passage creates hope that less expensive versions of at least some biologics will be available here at some point in the future.  As the FDA concedes, however, there are many “issues and challenges associated with the implementation of the Biologics Price Competition and Innovation Act of 2009.”  Monoclonal antibodies like Synagis are likely to prove particularly challenging, for industry and regulators, because they are immensely complex molecules.  In Europe, where there has been an abbreviated approval pathway for biologics since 2004, the European Medicines Agency has yet to approve a biosimilar “mAb”.  This is expected to change, though.  In November, the EMA released a draft guideline for biosimilar “mAbs” and generic versions of rituximab, a drug used to treat non-Hodgkin’s lymphoma and rheumatoid arthritis, are in development.

While biosimilars may someday provide some relief to payors, in the meantime, one may merely seek to hold those payors accountable for baseless denials of Synagis and other expensive, but cost-effective, medicines that they purport to cover.

Seton Hall Law Report Shows U.S. Military Routinely Administered Controversial Drugs to Detainees in Guantanamo Bay

Findings suggest detainees were unnecessarily dosed with a medication known to induce hallucinations, paranoia and psychosis

Seton Hall University School of Law’s Center for Policy and Research has issued a report, Drug Abuse: An Exploration of the Government Use of Mefloquine at Guantánamo, documenting the medically inappropriate use of a dangerous pharmacological treatment on Guantánamo Bay detainees.

According to the report, the U.S. military routinely administered mefloquine, a controversial malaria treatment, at five times the standard prophylactic dose. Mefloquine, even at the standard dose, is known to cause adverse side effects such as paranoia, hallucinations, aggression, psychotic behavior, memory impairment, convulsions, suicidal ideation and possibly suicide.

The prophylactic dose of mefloquine is 250 mg. On arrival at Guantánamo, as a matter of standard operating procedure, detainees received 1250 mg of mefloquine. The larger dose of mefloquine was administered without taking a patient history of any kind.

Dr. G. Richard Olds, tropical disease specialist and founding Dean of the Medical School of the University of California at Riverside, commented on the long-lasting effects of the drug: “Mefloquine is fat soluble, and as a result, it does build up in the body and has a very long half-life. This is important since a massive dose of this drug is not easily corrected and the ’side effects’ of the medication could last for weeks or months.”

The Centers for Disease Control and Prevention reports, and the U.S. military concedes, that malaria is not a threat in Guantánamo. For that reason, U.S. military personnel and contractors are not prescribed any prophylactic anti-malarial medication.

“Mefloquine was administered to detainees contrary to medical protocol or purpose,” commented Professor Mark P. Denbeaux, Director of the Seton Hall Law Center for Policy and Research. “The record reveals no medical justification for mefloquine in this manner or at these doses. On this record there appears to be only three possible reasons for drugging these men: gross malpractice, human experimentation or ‘enhanced interrogation.’ At best it represents monumental incompetence. At worst, it’s torture.”

Dean Olds concluded, “In my professional opinion there is no medical justification for giving a massive dose of mefloquine to an asymptomatic individual. I also do not see the medical benefit of treating a person in Cuba with a prophylactic dose of mefloquine.”

Professor Stephen Soldz, Director of the Center for Research, Evaluation, and Program Development, Boston Graduate School of Psychoanalysis and President of Psychologists for Social Responsibility, added, “For years there has been an almost complete lack of transparency regarding medical practices and procedures at Guantánamo. The military has failed to provide credible explanations for its procedures. Detainees and their attorneys have been denied access to their own medical records, an egregious ethical violation. All health providers should join the call for Guantánamo to respect fundamental rules regulating medical ethics everywhere.”

The report, Drug Abuse: An Exploration of the Government Use of Mefloquine at Guantánamo, may be found here.

TruthOut.org published an article independent of the Seton Hall Law report. Read it here.

Seton Hall University School of Law, New Jersey’s only private law school, and a leading law school in the New York metropolitan area, is dedicated to preparing students for the practice of law through excellence in scholarship and teaching, with a strong focus on clinical education. The Center for Policy and Research enables students to gain practical experience while engaging in research and analysis that promotes respect for the rights of individuals worldwide. The students examine primary sources pertaining to national security law and practices of the U.S. government, as well as the reliability of forensic evidence for criminal investigations and prosecution. Seton Hall Law is located in Newark, NJ and offers both day and evening degree programs. For more information, visit http://law.shu.edu.

Propublica, Pharma Payments to Physicians

Newly compiled data on payments to physicians from pharmaceutical companies has kindled mainstream media conversation on the ethics of such practices. NPR station WNYC ran this feature, showing the top physician earners in New York, and the radio piece, “Physicians on Pharma’s Payroll.” You can hear the radio piece immediately below. It is interesting in that in addition to giving  background, the piece also features interviews of physicians on the receiving end of those payments. One of those doctors describes the process of recruitment– wherein Pharma reps track doctors’ prescription records to see who is using their wares, and then approaching those doctors to see if they’d be interested in being paid presenters– or educators– depending I suppose upon your frame of reference.

Seton Hall University Interim Vice Provost, Law Professor and regular contributor to HRW, Kathleen M. Boozang, appeared in the Star Ledger regarding the ramifications of Pharma payments totaling millions of dollars to physicians in New Jersey. The article was prompted by a Pro Publica database which has compiled information from court documents detailing payments by six pharmaceutical companies to physicians, as well as the voluntary disclosure of two quarters of such payment information by Merck. The database tracks these payments for the period between January, 2009 and June 2010; it is sortable by state and amount.

Within the above named limitations, seven New Jersey doctors received more than $100,000 during the timeframe shown, from the pharmaceutical companies named.

In addition, The Ledger reports:

Overall, seven pharmaceutical companies wrote 1,215 checks totaling $8.3 million to doctors in New Jersey, the 10th highest total in the nation, according to ProPublica.

Doctors nationwide earned $258.7 million for speaking and consulting, according to information culled from court documents involving six companies and records from Whitehouse Station-based Merck, which voluntarily disclosed two quarters of payment information. And that’s just a taste of the $1.2 billion doctors earn on the speaking circuit annually, according to a 2008 article in the Journal of the American Medical Association….

Kathleen M. Boozang, law professor at Seton Hall University’s Center for Health & Pharmaceutical Law and Policy, said new requirements to publicly disclose how much doctors are paid by drug companies aren’t enough to protect patients, noting many won’t look up their doctor on databases.

Boozang said while doctors may be in the best position to teach each other how to make decisions about which drugs or devices should be used, drug companies shouldn’t be paying them.

The Center last year issued a report calling for an end to “commercial support for continuing medical education,” suggesting medical schools and physician associations should take over the role of educating doctors. “We have blurred the line between promotion and education,” Boozang said. “It shouldn’t be the obligation of patients to protect themselves from conflicts of interest.”

Read the Star Ledger article, “Drug companies paid N.J. doctors millions to promote their products”

FDA and CMS Propose Parallel Review of Medical Products

On September 17, the Centers for Medicare and Medicaid Services (CMS) and Food and Drug Administration (FDA) announced their consideration of a parallel review “process for overlapping evaluations of premarket, FDA-regulated medical products,” and their intention to create a pilot program for parallel review of medical devices.

According to the request for comments published in the Federal Register, the new process would be initiated when “the product sponsor and both agencies agree to such parallel review.”  This collaboration is among the first fruits of a June memorandum of understanding between both departments of Health and Human Services (HHS),which is intended to “promote initiatives related to the review and use of FDA-regulated drugs, biologics, medical devices, and foods, including dietary supplements.”

Among the goals set out by the agreement, the FDA and CMS sought to “[b]uild infrastructure and processes that meet the common needs for evaluating the safety, efficacy, utilization, coverage, payment, and clinical benefit of drugs, biologics and medical devices.”  The proposed parallel review process would do just that.

The proposed process is intended to reduce the time delay between “FDA marketing approval or clearance decisions and CMS national coverage determinations.”  Currently, medical products are first reviewed by the FDA for safety and effectiveness; then, CMS begins the process of making its coverage determination and payment rate, which can take up to a year.  Although CMS is only one of many third-party payors, many others follow CMS’ lead in making their own coverage decisions.  A reduction in the approval-to-payment time by CMS will positively impact the rate at which all coverage decisions are made.

The parallel process will potentially benefit patients and sponsors.  A parallel process that reduces the “approval-to-payment” time will produce savings for sponsors and lead to timely patient access to new products.   Furthermore, by reducing the time to return on investment, the parallel process may be an incentive for increased investment in innovation.

Hurdles to a Parallel Process

There are significant differences between FDA and CMS review that must be overcome.  The FDA generally reviews safety and effectiveness through various application processes (premarket approval, premarket notification, etc.).  CMS, on the other hand, must make multiple decisions regarding a medical product under the “reasonable and necessary” standard, including: “what items and services it can and should pay for; how it should accomplish the payment; and how much to pay.”

Because the FDA and CMS apply different standards in their review processes, a clinical study that demonstrates the FDA requirements of safety and effectiveness may neglect to address CMS’ “questions concerning the impact of the technology on Medicare beneficiary health outcomes.”  Ideally, the parallel process will guide sponsors to design clinical studies that simultaneously address both FDA and CMS questions.

Moving from a serial to parallel process must be carefully staged in order to preserve agency resources.  There is the potential for CMS waste if coverage decisions are begun (or even worse, completed) for products that are subsequently denied approval or clearance by the FDA.

The Call for Comments

The FDA has asked the public to comment on seventeen different issues, including:

• How parallel review should be implemented and when in the FDA review process it should start
• Whether anyone other than the product sponsor should be able to initiate a request for parallel review
• Which classes of products would benefit most from parallel review
• Whether there exist regulatory, legal or scientific barriers to review, and how they may be overcome.
• The criteria for granting a parallel review request

The FDA and CMS will publish their decisions regarding the proposed parallel review process after December 16, when the comment period closes.

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.

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