Seton Hall Law School’s Center for Health & Pharmaceutical Law & Policy Issues White Paper Calling for Major Reforms in the Financing and Oversight of Clinical Research

Seton Hall University School of Law’s Center for Health & Pharmaceutical Law & Policy has called for major substantive reforms in the financing and oversight of clinical research. In a White Paper entitled “Conflicts of Interest in Clinical Trial Recruitment & Enrollment: A Call for Increased Oversight,” the Center proposes legal and policy changes to address conflicts of interest in the relationships between industry and doctors that can create unwarranted risks to trial participants and to the scientific integrity of research.

Kathleen Boozang, a dean who oversees the Law School’s Center, explains that “Some of the ways that drug and device trial sponsors pay the physicians who lead clinical trials can tempt them to recruit individuals for clinical trials who would be better off receiving conventional therapy. This is of particular concern if physicians encourage their own patients to enroll in trials that these same physicians are overseeing.”

Over 60% of testing of experimental drugs and medical devices now occurs in physicians’ private offices; unlike years past, industry funds a much higher percent of clinical trials than government, frequently paying researchers significantly more than government does.  For some physician practices, conducting clinical trials represents a significant portion of their income.

According to Carl Coleman, a Seton Hall Law professor who collaborated on the White Paper, “A different kind of problem arises if people are enrolled in trials who don’t meet the criteria for who should participate - these individuals’ health can be put at risk, and their participation can skew the results of the trial, which is bad for everyone.”

Federal regulations in this area have not kept up with the rapid changes in how research occurs, and even those regulations that exist are poorly enforced, according to recent government studies.  Understanding that the collaboration among industry, government, and medicine in the pursuit of clinical research is critical to driving scientific progress, particularly as industry increasingly replaces the government as the primary source of research funding, the Center’s recommendations include:

1) Establishing a norm of financial neutrality between treatment and research. Ensuring that physicians receive comparable compensation for treatment and research will help ensure that their decisions to conduct research, as well as to recommend that a particular individual participate in a clinical trial, are grounded in reasons unrelated to their personal financial interests. This will be best accomplished, in the first instance through regulations that ban certain kinds of research compensation, and provide examples of acceptable payment methodologies that industry can follow. Reform by prosecution signals what practices government dislikes, but does not provide a clear vision of ideal approaches to managing conflicts of interest related to the conduct of research.

2) Establishing federal guidelines as to the principles or methodology by which to determine fair market value of physician time spent in clinical work. Federal regulations should be promulgated that establish a benchmark formula for determining fair market value of physicians’ time, effort and expenses for clinical research. Such regulations would promote the goal of financial neutrality between treatment and research. Physicians cannot be underpaid for research either - compensation for clinical trial work should therefore include reimbursement for any additional expenses that are unique to the research environment.

3) Banning payments with equity interests; disqualification of investigators who hold direct interests in the outcome of the research. Federal regulations should prohibit compensation for research in the form of an equity interest in the sponsor of a clinical trial. The law should preclude researchers who have investments that give them a direct interest in the outcome of the research from leading clinical trials.  Where absolutely necessary, such individuals might appropriately serve as consultants.

4) Banning payments of finder’s fees and bonuses for recruitment and retention of trial subjects. Certain forms of compensation create conflicts of interest that can incentivize investigators to enroll individuals in a clinical trial who are too healthy or too sick to participate, or to deemphasize information that might discourage individuals from consenting to trial enrollment. Federal law should ban such compensation methods, including finder’s fees and bonuses for meeting recruitment and retention goals.

5) Reforming federal regulations to compel and better guide the evaluation of relationships between industry and would-be physician investigators prior to the commencement of research.   The White Paper includes overlapping but sometimes distinctive recommendations for federal regulation to evaluate and oversee investigator or institutional conflicts of interest, both for research within and without academic medical centers.  Specific to research outside of academic medical centers, federal regulations should spell out clearly the obligation of community-based physicians acting as investigators or institutions acting on their behalf to report information about compensation for research and other financial interests to Institutional Review Boards.

Summarizing the importance of this White Paper, Boozang states, “The pharmaceutical and medical device industries save millions of lives each year with their innovations.  It is imperative that we maintain the integrity of research, and the public’s trust in the process.”

Seton Hall Law School’s Center for Health & Pharmaceutical Law & Policy. The Center is a think tank that fosters dialogue, scholarship, and policy solutions to critical issues in health and pharmaceutical law. As part of its mission, it convenes policymakers, consumer advocates, the medical profession, industry, and government in the search for concrete solutions to the ethical, legal, and social questions presented in the health and pharmaceutical arenas. The Center also runs a compliance training program covering the state and federal laws governing the development and marketing of drugs and medical devices. The White Paper, “Conflicts of Interest in Clinical Trial Recruitment & Enrollment: A Call for Increased Oversight,” may be found 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 Law School’s health law program has been ranked as one of the top programs in the country. Founded in 1951, Seton Hall Law School is located in Newark and offers both day and evening degree programs. For more information visit law.shu.edu.

Communication and Transparency: An Answer to Our Health Care Woes?

This past week, I had the good fortune to attend two fascinating but very different — in terms of content and setting– talks by preeminent health experts.  The first was by Princeton University Professor Uwe Reinhardt at a Woodrow Wilson School of Public & International Affairs alumni event, entitled “The U.S. Economy and Health Care: Implications for Health.”  Professor Reinhardt spoke briefly and generally on health care and insurance reform, touching on the necessary changes on both the “demand side” (insurance reform) and the “supply side” (health care delivery). The second talk was by Dr. Atul Gawande as part of the New Yorker Magazine’s 10th Annual festival, entitled “The Death of the Master Builder: A Story of Risk, Medicine, and Skyscrapers.”  Dr. Gawande’s talk, in which he expounded his 2007 New Yorker article The Checklist, argued for the implementation of a basic 19-item surgical checklist, citing a marked reduction in complications from surgery (the World Health Organization’s 2009 Surgical Safety Checklist, implementation manual, and Guidelines for Safe Surgery are all available online).

Despite addressing very different issues, I took away from these two talks a very important message: little can be accomplished in fixing our broken health care system without communication and transparency, with which come increased accountability and discipline.

While addressing the changes necessary on the health care delivery side in order to fix health care, Professor Reinhardt called for “[g]reater transparency on, and accountability for, the use of resources and outcomes.”  As an example of such transparency, he cited his proposals as chair of the New Jersey Commission on Rationalizing Health Care Resources.  In its January 2008 report, the Commission recommended to Governor Corzine that New Jersey require that nonprofit hospitals’ governance documents– IRS form 990s (including financial reports and submissions), board composition, and meeting minutes– be made available to the public on the entities’ web pages (for-profit hospitals routinely post their annual financial reports and submissions to the SEC on their websites).  Such full transparency would ostensibly lead to increased accountability on the part of managers of non-profit hospitals by allowing the public insight into their finances and economics.

In his talk, Dr. Gawande focused on the fact that one of the most useful aspects of the checklist is the introduction step (”Before skin incision, the entire team (nurses, surgeons, anesthesia professionals, and any others participating in the care of the patient) orally: Confirms that all team members have been introduced by name and role.”).  According to Dr. Gawande, this simple introduction fosters discipline because when everyone knows their roles and fulfills their designated functions, coordination and trust are increased — and both are very important when time is short and the stakes are high.

Of course, these calls for increased communication and transparency are nothing new — and they pervade almost every aspect of health care reform and improved medical delivery.  For example, this summer, Tim Jost espoused the benefits of the public plan, but noted that no research comparable to the data that has emerged from the Dartmouth research group on variations in health care spending “can be done on the under 65 population because private insurers regard whatever data they have to be proprietary.”  He hopes that “a public plan could make anonymized data available to researchers and be open with its subscribers about coverage and utilization policies.”  Likewise, just last week, in his “Principles for the Homestretch” for health reform, Frank Pasquale called for more competition and transparency in insurance markets.  Moreover, appeals for greater communication and transparency, and, in turn, accountability and discipline, is indicative of the larger movement to the medical home model, which “provid[es] comprehensive primary care… that facilitates partnerships between individual patients, and their personal  physicians, and when appropriate, the patient’s family.”  Increased communication and sharing of information across health care providers has been known to reduce adverse drug-drug reactions, lower medical errors, and bring attention to alternative care possibilities.

It is important to note that increased communication and transparency is not a panacea for all of our health care woes — particularly without balancing openness with ways of addressing privacy concerns.  However, as I gleaned from the talks by Professor Reinhardt and Dr. Gawande, the evidence speaks to the value of a policy of openness in many aspects of health care and medical reform.

Jost on the Public Plan

Timothy S. Jost is one of the leading figures of the American health law academy. He has unparalleled knowledge of comparative health law, which he’s applied to the American debate in an impressive series of articles and books.

When I heard that Jost was writing on current debates, I really wanted his insights on our blog. Here is the first part of an essay he wrote making a case for a public option, which 83% of Americans support.

Why Public Plan Choice?
by Timothy Stoltzfus Jost

One of the most significant and innovative proposals of the 2009 health-reform debate has been the concept of public plan choice. Although the exact features of a public plan have not been specified, the public plan concept offers several significant benefits:

Cost control. Health reform cannot happen unless we can control the continual upwards spiral of health care costs. The public plan would control costs in three ways. First, it would be able to keep its costs down by not having to make a profit and by avoiding many of the administrative costs incurred by private insurers. Second, it would introduce competition into the health insurance industry. Although there may be, as Karl Rove asserted yesterday, 1300 health insurers in the United States, health insurance markets are segmented into the large group, small group, and nongroup markets and within each of those categories competition is exceedingly local. In 36 states, 65% of the small group market is controlled by 3 insurers; in 16 states one insurer controls half of the market. In any one locality, moreover, the market is even more concentrated. In my home town of Harrisonburg, Va., one insurer controls 86% of the market.

Private insurers simply do not compete; they simply take prices from providers and pass them on to consumers, driving the health care price spiral. A national public plan would introduce vigorous competition into every part of the country, forcing private insurers to compete for business and to bring down their premiums. Third, a national public plan would also have the bargaining clout to make providers moderate the increase in their prices, bringing down the cost of health care itself.

Choice. Right now the only choice available to most Americans is private insurance and, in many markets, small businesses have only a choice of one or two insurers. Americans want to have alternatives to choose among to best meet their needs. A public plan offers this.

Delivery System Reform. A national public plan could drive delivery system reform and improve the quality of care, as Medicare has been doing through its demonstration projects, payment reforms, and consumer information initiatives.

Transparency and Accountability. One of the most important developments in the health care reform debate over the past decade has been the data that has emerged from the Dartmouth research group on variations in health care spending. This data, discussed by Atul Gawande in his widely noted recent article on health care costs and the President in his speech at Green Bay, could only be collected because Medicare data are available to researchers. No comparable research can be done on the under 65 population because private insurers regard whatever data they have to be proprietary. Private insurers are also much more secretive about their coverage and utilization review policies. A public plan could make anonymized data available to researchers and be open with its subscribers about coverage and utilization policies.

A National Strategy. We have waited for decades for the states to make affordable health care available to Americans. A few have tried, most have failed. None have developed an effective alternative to private insurance. All Americans are experiencing the same problems with health care–lack of access, high costs, and uneven quality. We need a national strategy for health care reform that will help all Americans, not just some. We also need a national public plan that offers uniform benefits to all Americans and national bargaining power.