Thursday, November 27, 2008
Tuesday, November 25, 2008
11. CEO Bonuses. My Father (See also: My Hero) was an early, unfortunate victim of a large company’s massive, sweeping layoffs. While he’s never been happier, there is twisted idiocy embedded in the fact that the company’s former CEO received $29.5 million on his way out the door. Enjoy your mansions and your toys Mr. Golden Parachute. The rest of your cast-offs will get by okay buddy. All of that money won’t do you any good when your time is up, but your unscrupulous decision making skills that left scores of thousands unemployed may come into play. Good luck explaining all of that. (In case you are wondering, I’m not bitter.)
14. Train doors that don’t open. Me, CIS founding Partner Toni Barsh and dynamo consultant Chrissy Spicer (collectively 3 pretty smart folks) recently missed our train stop a few weeks ago and had to be ‘carried back’ to our stop. An hour of our lives we all want back.
7. Good IT People. No lie, I once had an IT guy tell me that the situation was a PEBCAC. Problem Exists Between Computer And Chair. If you haven’t gotten this yet, please stop reading.
Bonus: Compliance Implementation Services. What a kick arse company we have! Thanks to all of my co-workers for your support, teamwork and for affording me the ability to learn an awful lot from you.
Happy Thanksgiving to all!
For Your Space,
Monday, November 24, 2008
On November 18, 2008, a Federal Court in Boston upheld a New Hampshire State Court decision to allow states to prohibit the sale of doctor-specific prescribing data, which is widely used in pharmaceutical marketing efforts. This looks to be only a minor loss to large pharmaceutical companies, because market share data will still be available at zip code level. Yet, this decision may benefit the consumer in more ways than one.
For one, this may have a small impact on lowering the price States pay for Medicaid. In fact, this was one reason behind the push for this ban. Representative Cindy Rosenwald of Nashua, sponsored the New Hampshire legislation in 2006, stating she was motivated partly by high state Medicaid drug costs, which she said had been driven up by pharmaceutical marketing. With New Hampshire leading the way, more states will surely follow in their path to pass similar laws.
Another benefit to the passing of this law is a more widespread approach to giving the most up to date data of new drug products to a greater number of physicians. “Drug companies buy the detailed information on prescribing histories from companies like IMS Health and Verispan and use it for everything from tailoring doctor-specific sales pitches to calculating compensation for sales reps.” By limiting the ability of drug companies to focus solely on high prescribers, smaller physicians who may not have been visited previously, will now be privy to the best information the drug representatives have to offer. “This really does remove the interference in the physician-patient relationship,” says Marcia Hams, assistant director of the Prescription Project, which filed a brief supporting the data-mining ban. 
Although the ban may hurt pharma companies slightly, and could be devastating to the data mining companies providing this service, it is another step forward for the consumers in the world of big pharma. With measures such as this law, and the push to clean up corruption within the industry, it would truly seem that both the Government and pharma are making the consumer their first priority.
 “Court Upholds New Hampshire Data-Mining Ban”, by Ed Silverman, November 18, 2008; http://www.pharmalot.com/2008/11/court-upholds-new-hampshire-data-mining-ban/
 “Federal Court Upholds Drug Privacy Law”, by Stephanie Saul, Published: November 18, 2008; http://www.nytimes.com/2008/11/19/business/19drug.html?_r=1&ref=business
 “New Hampshire Prevails on Law Guarding Prescription Privacy”, posted by Jonathan D. Rockoff; http://blogs.wsj.com/health/2008/11/18/new-hampshire-prevails-on-law-guarding-prescription-privacy
Friday, November 21, 2008
Important topics, to be sure, but I think this blog has ignored a basic truth about medical devices: some of the new ones are so awesome.
I decided to write this post after reading about the Philips intelligent pill (iPill), which packs a wireless RF transceiver, a fluid pump, a drug reservoir, a pH sensor, a temperature sensor, a battery, and a microprocessor into a shell that’s the same size and shape as an ordinary pill. The developers at Philips hope that the iPill can be used to treat digestive tract diseases like Crohn’s disease, colitis, and colon cancer by releasing the appropriate drugs at the site of the problem. Targeting the drug release to the precise site of need could allow existing drugs to impart the same benefits in significantly smaller doses – this could reduce side effects and minimize the burden on the patient’s liver and kidneys.
A medical device like the iPill raises a lot of interesting questions:
· Would a device taken orally which passes naturally through the digestive system be considered implantable for regulatory purposes?
· How much diagnostic data could the pH sensors and radio provide? How could that data be used?
· How much would the iPill cost (this question is especially relevant because it’s presumably a single-use device)? FiercePharma suggests that the iPill, “will likely cost around $1,000 a pop.” The Register confirms the $1,000 figure as the upper limit for the initial price, adding, “Eventually, though, the price could come down to about $10.”
o Once the price is determined, what conditions could justifiably be treated with the iPill
· After usage, what disposal method(s) can be used for the iPill? Can it safely be flushed or should an alternate disposal method be used?
· Could this technology be used to treat other conditions?
· How much of an improvement does the iPill represent over existing drug delivery methods, if any?
I’d guess that the iPill will be classified as a Class III restricted medical device, which means that it wouldn’t be available in the US until it was approved by the FDA (if it even gets that far). But before the testing, evaluation, and approval stages, before discussing the finer points of regulatory law as applicable to this device, before making fun of the iPill for its silly, derivative name, step back for a minute and consider this:
We’re talking about a capsule the size of a standard pill that contains a wireless RF transceiver, a fluid pump, a drug reservoir, a pH sensor, a temperature sensor, a battery, and a microprocessor, a pill that tracks its own progress through the body, measuring acidity and broadcasting the data for diagnostic analysis, delivering its payload precisely where it’s needed most.
How awesome is that?
Thursday, November 20, 2008
Energy costs have been discussed a lot lately, as they are affecting everyone and causing changes across many industries. Even though oil prices dropped this week to their lowest since 2007 (1), they will most likely rise again. That is why medical institutions are evaluating their energy usage, and why some are going “greener by swapping out old equipment for more energy-efficient systems of heating, cooling, lighting and dehumidifying” (2). Not only can changes reduce energy costs by 20% to 25%, but these changes could help slow global warming. The warming climate, “say epidemiologists, will lead to an increase in infectious and chronic conditions, such as allergies and respiratory disease,” which will especially affect “the nation's 78 million baby boomers” as they age (2). Therefore, the healthcare industry cutting back on energy usage can help slow global warming, which will also improve global health.
President George W. Bush is in his last 100 days in office, and is going to push some final regulation changes through before the end of his term (3). During his administration, there were no significant changes to legislation on climate change. President Elect Barack Obama will have “to play catch-up starting Jan. 20 on a dusty list of green issues; to name a few: national action on capping carbon, reengaging with the United Nations climate change treaty process, America's addiction to foreign oil, water shortages in the Southwest and accelerated species loss.” (4) “Barack Obama has pledged to invest $150 billion in clean tech over 10 years if he's elected President. The recent economic bailout leaves the next Administration with less to spend, but Obama at least thinks green investment will create new industries and jobs that can't be outsourced.” (5) The creation of green jobs will not only lower the unemployment rate, but can help lower energy costs for companies, which could also help slow global warming.
Restaurants such as McDonalds and Chipotle, and stores like Wal-Mart have been building environmentally friendly outlets, with water- and energy-saving gadgets, so why shouldn’t other industries (6)? “The medical industry needs to rethink how it uses energy and, more important, figure out how it can get by on less — something that will become an inevitability when oil prices start creeping up again” (2).
Wednesday, November 19, 2008
It has been just two weeks since the presidential election, but we already see action being initiated on health care reform. Max Baucus, Democratic senator from Montana and chairman of the Senate Finance Committee, has stepped out to the forefront of health care reform by issuing a detailed proposal on November 12. His plan, which he hopes will be afforded serious consideration in Congress, would allow America to join all other developed countries in providing health care coverage for all citizens. In addition to coverage for all, the Baucus plan details proposals for improving health care quality, and increasing cost-efficiencies.
I would like to focus here on the first key element of this plan – providing health care coverage for all. The Baucus plan calls for creation of the Health Insurance Exchange, a national insurance pool that would provide all Americans access to affordable health care coverage. Those in need of coverage could shop around within the Exchange to choose a plan that meets their needs and budget. All plan options in the Exchange would cover preventive care services. Private insurance companies would be allowed to participate in the Exchange, but would not be allowed to deny coverage based on pre-existing conditions. In addition, families and small businesses could qualify for premium subsidies. The plan also calls for improved Medicare and Medicaid coverage, with enhancements to other federal insurance programs. Of particular note is that, under this plan, all individuals under the poverty line would be provided access to Medicaid coverage.
The Baucus plan essentially mandates that all individuals possess health care coverage, either through their employers or through the Exchange. Controversy continues to exist around the idea of mandating health care coverage, and there is no doubt that a lengthy debate over the Baucus plan lies ahead. However, obtaining consensus on any health care reform plan, whether initiated by Max Baucus, the president-elect, or any other, will be an arduous task. It is not only a matter of taking care of the 46 million Americans who are already insured, it is also a matter of improving health care quality and controlling costs, allowing America to compete more effectively in the international economy. Health care reform is one of America’s biggest challenges, and it is one that must be addressed sooner rather than later. Keeping this in mind, it is good to see someone like Senator Baucus taking a proactive approach to achieving health care reform.
Call to Action, Health Reform 2009 (Senator Max Baucus)
The Wall Street Journal
Tuesday, November 18, 2008
We have all heard horror stories of counterfeit drugs making it into the hands of unsuspecting victims (patients), and it seems that the FDA cannot warn the public enough about the dangers of purchasing medications online. The best way to protect the public is through education, the best way to educate the public is through the medical community, and the best source for reaching out to the medical community is the pharmaceutical industry.
Most patients can’t tell you how to get in touch with the FDA, but the general population can name a wide variety of drugs that dominate media advertising. Offers for these drugs find their way into a countless number of email in-boxes, providing familiar drugs at a fraction of the cost, often, the purchases can be made without a prescription. One can understand why people find the temptation to purchase low-cost drugs hard to resist, especially if they really need the drug. While most practitioners don’t need to be educated regarding the dangers of medications received from illicit websites, the industry would do well to provide practitioners with tools to communicate those dangers to patients.
On-line shopping isn’t going away, but an industry-wide effort to educate the public regarding the do’s and don’ts of online pharmaceutical shopping can be a part of the DTC (Direct to Consumer) marketing campaigns that we are already bombarded with on a daily basis. The efforts can include mirroring the warnings established by the FDA and with the reach of the DTC marketing campaigns the public would not only be better served, but would serve as an added effort to curb the illegal and counterfeit drug markets.
What are the warnings put out by the FDA for purchasing medications online? (Can't answer? See what I mean? The FDA messages aren’t reaching all of us...) The first thing the FDA tells the public is to buy from a reputable website, which sounds simple enough, but what does it really mean?
A site may look legitimate and sophisticated, but that does not mean it is legally selling prescription drugs. If a prescription isn’t needed, if prices are dramatically lower than the competition, if there is no way to reach the site’s pharmacy by phone, or if the site is not located in the United States, the legitimacy of the site and the drugs being sold should both be questioned.
A legitimate website will know or ask for a patient’s medical history, details about their current illnesses or conditions, and what other medications they may be taking as a means to identify potentially dangerous drug interactions and warn the patient. Illegal sites often will deal in counterfeit drugs of unknown quality or origin, expired or mislabeled drugs or drugs that have been compromised due to unsafe handling or storage. Protecting one’s personal information is also a risk when dealing with an illegal site. If a site sells counterfeit and compromised products it is not likely that a patient’s personal information will be protected.
Additionally, patients can be given information that helps them research the legitimacy of a site. The National Association of Boards of Pharmacy's (NABP) Verified Internet Pharmacy Practice Sites™ Seal, also known as VIPPS® Seal, gives a seal of approval to legitimate internet pharmacy sites that meet certain criteria including state licensure requirements. The public can be confident in a VIPPS-approved website and can find a list of sites that have the VIPPS® seal at http://www.vipps.info/, but it has to be better publicized.
Including the VIPPS® Seal and website to DTC advertising and marketing pieces would be a good start, and adding a description of the product (color, texture, taste, shape, etc) and packaging would only strengthen the efforts. This would be especially helpful for patients who get prescription refills through an online pharmacy, and would alert them to be cautious if the medication they receive through the mail is not exactly the same as the medication taken in the past.
Most of this may seem like common sense, but when someone needs or wants something badly enough, sometimes common sense goes out the window. Pharmaceutical companies would do well to communicate safe ways to purchase prescription medications, and the dangers of illegal distribution channels and counterfeit drugs to patients. Not only would this precaution keep patients safe, it would ensure that they continue to purchase the ethical drug rather than a counterfeit product. It’s a win-win situation.
Monday, November 17, 2008
As we grew up, we were taught to accept responsibility for our actions; if we caused an accident it was up to us to correct the situation. On the surface this sounds like a simple concept, but from experience we all know that it is not always that easy. The pharmaceutical industry, like most industries, has had its share of accidents, but assigning blame is difficult in these cases because fault is not always clear cut. These high profile civil cases are clear examples of this difficulty to assign blame.
Wyeth vs. Levine is an example of one of these cases. To quickly summarize the case, a patient was given a common nausea drug, Phenergan, in an IV Push. However, the IV inadvertently punctured an artery leading to gangrene and the ultimate amputation of the patient’s arm. The patient claims that Wyeth knew there were risks in administering this drug with the IV Push, but did nothing about it. The patient is suing Wyeth under state law.
Wyeth agrees that there were risks associated with the IV Push, but counters that the FDA had approved the drug. According to Wyeth’s interpretation of the Federal Drug and Cosmetic Act (FDCA), manufacturers cannot change product labels (including warnings) without FDA approval. Furthermore, Wyeth is arguing that state law should not hold a company liable for a product that has been approved by the FDA. In addition to Wyeth’s arguments, the US Justice Department has submitted a brief stating that state laws cannot override Federal oversight by claiming that "liability under state law turns on whether a drug, as labeled, is 'unreasonably dangerous.' … Any such finding would directly conflict with FDA’s determination that the drug is safe and effective under the conditions prescribed, recommended, or suggested in the labeling."
This case was recently heard before US Supreme Court and, as you can imagine, the pharmaceutical industry and the business community are watching closely for the outcome. The ruling in this case could have significant ramifications to the interpretation of the FDCA and labeling requirements, as well as the ability for state law to supercede Federal oversight.
Another case that has captured the headlines is the accidental Heparin overdose given to the infant twins of actor Dennis Quaid. In this case, the twins (and other infants) were given overdoses of Heparin, a blood thinner. Different strength vials were marked correctly, but were similar in appearance. Misreading of drug vial labels led to pharmacists creating solutions with up to 10,000 units of heparin, instead of the 10 units prescribed. As with the case above, how do you assign guilt and liability because the drug and labeling was approved by the FDA, but the labeling led to accidental overdoses? Are the FDA, the manufacturer, or the pharmacists to blame?
Both of these cases demonstrate how difficult it can be to assign blame in the event of an accident and, more importantly, how to correct the situation to prevent future accidents. Unfortunately, these cases have so far raised more questions than answers. Can state law supersede Federal oversight? What is the correct interpretation of the FDCA and how should it affect product labeling going forward? Like you, we here at CIS will be paying close attention to the resolution of these cases.
Friday, November 14, 2008
Everyone needs a pharmacist. They are the professionals who prescribe us prescription drugs we need when we are sick. They are the dispensers and gate-keepers of these drugs. They protect us and help us live long, fulfilling lives. But currently, our need for pharmacists outweighs the number of these professionals.
Due to this shortage, many new schools are opening up to train pharmacists to fill the void. However, there is one more problem. Who is going to take up teaching to provide students with the knowledge they need to become pharmacists? Lucinda Maine, Executive Vice President of the American Association of Colleges of Pharmacy (AACP), states “The shortage of pharmacy faculty, now and in the future, represents a serious public health threat in the face of the rapidly growing consumer demand for prescription drugs.” According to the American Foundation for Pharmaceutical Education, “In 2006, the AACP reported an 11 percent faculty vacancy rate. Even with vacancies at this level, pharmacy schools are expanding enrollments to meet increased demand, and at least nine new pharmacy schools are scheduled to open by 2010, two factors that will only exacerbate the problem.”
One of the main problems is that there is a shortage of pharmacists. With this shortage, professors are leaving the teaching field behind to pursue a more lucrative job as a pharmacist. Students are also seeing the higher salary as a pharmacist, instead of considering a job in education. As reported by Ed Silverman, “by the year 2020, the AAPS [American Association of Pharmaceutical Scientists] says nearly 40 percent of faculty positions at US pharmacy schools will be unfilled. And as vacancies increase, future pharmacists and scientists needed for clinical trials and pharmaceutical research to develop new drugs may not be able to receive the necessary training, which will in turn impact the future of health care.” For a projection of how the shortage will affect schools of pharmacy in the next few years, see the following chart: Vacant Positions at Schools of Pharmacy.
This problem could really affect the future of the pharmacy profession. If there is no one to teach students to become proper pharmacists, how are we to trust them in dispensing prescription drugs to the general public? If there is no one to provide the necessary training needed to become a pharmacist, how will it affect and impact the future of our health care system. These are questions that the higher powers will need to consider when evaluating the fate of the pharmacy profession.
 Faculty Shortage Calls Some Pharmacists Back to School
 Looming Shortage in Pharmacy School Faculty
Thursday, November 13, 2008
As an individual with responsibility for the ongoing commitment to compliance within your company, you are well aware of the risks of non-compliance. Bad PR, civil and criminal penalties, non-compliance, and even compliance gaps can expose your company to risk. Being “Audit Ready,” and ensuring that your company achieves a favorable audit outcome, is your ultimate goal.
External parties, charged with enforcing compliance requirements, assess compliance through Audits and Investigations. These enforcement agencies look to ensure that sufficient documentation and proof of compliance exists, and that companies have an infrastructure able to support ongoing compliance. Therefore, companies take great care to retain documentation supporting their efforts to comply with applicable statute and guidance, in what I refer to as having an “Audit/Investigations Trail.” However, in the event of an audit or investigation, the Audit Trail alone is not enough. Being able to respond in a timely, complete, accurate, and appropriate manner is equally as important.
“Audit Planning” and “Audit Savvy” describe what I consider to be two additional components of Audit Readiness, which are equally as important as a documented Audit Trail. Audit Planning is having a clear protocol for audit/investigation response. This includes proactively identifying individuals with responsibilities related to a given compliance function, identifying where data and documentation reside, and ensuring that standard audit/investigation protocols are in place. Audit Savvy, which goes hand in hand with Audit Planning and Audit Trail, is the process by which a company ensures that its staff is able to respond to an audit or investigation, and appropriately interact with Auditors.
Audit Planning and Audit Savvy are often overlooked when ensuring that a company is Audit Ready, but they should also be integral components of your company’s proactive compliance risk mitigation program. No matter how strong an Audit Trail you develop, if you are unable to facilitate Auditor requests, and provide information in a timely and complete manner, your efforts to develop a sufficient Audit Trail may be in vain.
When looking forward to evaluating risks in 2009, remind yourself that compliance audits are no longer performed solely based on cause. As fiscal pressures force State and Federal enforcement agencies to look for new sources of income, compliance audits are likely to become even more frequent. Ensure your Audit Readiness today by educating your staff to be Audit Savvy, ensuring that your organization has a clear Audit Plan, and confirming that your Audit Trail is in place. These components, working together, will help ensure that you achieve a positive audit outcome.
Wednesday, November 12, 2008
You may wonder how the intense audit and investigative environment of Medicaid came to be, and why it is such a risk area today. I pulled together a few thoughts below – If you are a GP Professional, these are the types of points you may want your senior management to understand related to Risk Management at your company.
Here is a brief history of some key milestones in the development of Medicaid as a high profile, high risk area:
- 2003 – The OGA Report to Congress identifies Medicaid as a high risk program.
- 2003 – The OIG’s Recommendations to Pharmaceutical Manufacturers identifies integrity of data reported to the government as one of the 3 key risk areas in the industry.
- 2005 – The Deficit Reduction Act (DRA) defines the Medicaid Integrity Program; DRA promotes the State False Claims act by increasing the State share of False Claims Act (FCA) investigation fines and penalties.
- 2006 - CMS develops a data mining group.
2006 - The King Pharmaceuticals Government Program Corporate Integrity Agreement (CIA) and DOJ Press Release establishes application of FCA in the case, where there was no intent of wrongdoing (a precedent setting case, in my opinion).
- 2007 - The CMS Final Rule establishes revised Medicaid Program requirements, and requires CEO/CFO Certification.
- 2008 - The OIG Audit Work plan establishes a budget for proactive Medicaid Audits.
- 2008 - 150 currently open Pharmaceutical Qui Tam Cases (as per the DOJ) with an average of 43 new cases per year – (This includes areas across Pharmaceutical Compliance. It is of note that the Government has established a relationship between areas, such as Grant Activity, Off Label, and Medicaid.)
The other key consideration that is topical in today’s environment is the fiscal situation at the State level. At the recent PCF Conference in D.C., I took down some notes from several presentations, including that of James Sheehan, the New York State Medicaid Inspector General (New York alone has a Medicaid budget of $48 Billion) Please keep in mind, these are rough notes:
- At the State level, Medicaid is usually the largest item in the state budgets.
- The States face increased demand on the Medicaid Program, and are facing difficult budget issues
- Recent investigative history has demonstrated that States can recoup significant funds through audits and investigations
- Economics are driving urgency in Medicaid Audits.
- An effective Medicaid Compliance Program requires risk assessment, audit and data analysis capabilities and the ability to establish remedial measures.
- The states (NY in this case) have developed the technology to conduct forensic audits, and Pharma provides strong data mining opportunities.
For more information on how your company can deal with the challenges of Medicaid, call CIS and let us help you make sure you’re audit ready!
Tuesday, November 11, 2008
Since it is Veteran’s Day, I thought a small detour from health care and pharmaceuticals would be OK and I’m taking my cue from one of my favorite television shows, “CBS Sunday Morning.” How often do any of us say, “Thanks” to a veteran or an active duty service member? If you’re like me, not often enough…
The events of September 11, 2001 raised the level of Americans’ combined patriotism. We all felt a little closer to one another, with differences put aside, and were more willing to join together to stand up to the rest of the world. Somehow, over the last seven years, things have slid backwards in this regard. We are all still proud to be Americans and will stand up to those who seek to tear us down, but there are other issues that have distracted us and in some ways, divided us back into our “old camps” of liberals and conservatives, white collar and blue collar, etc. The longest election in US history has just concluded, Wall Street and Main Street are both suffering significant financial issues, layoffs are making almost daily headlines and the housing market continues to sputter. Add to all of this the individual concerns of things such as job security, 401K values and education expenses, and it’s no wonder that we forget the reality that America is a country at war.
It’s so easy to get caught up in our own daily lives but we should not forget that there are men and women fighting on behalf of all of us who are fortunate enough to worry about the values of our 401Ks.
According to “CBS Sunday Morning,” as of November 7, 2008, in Iraq and Afghanistan, 4,780 Americans have been killed, 30,000 Americans have been wounded and there are currently over 100,000 Americans stationed in Iraq and Afghanistan. Regardless of your personal opinion of either war (or war in general), the Americans who are part of these groups deserve our appreciation, gratitude and utmost respect.
One person who is saying, “Thank You” in an amazing way to those who have served in Iraq and/or Afghanistan is Sheldon Adelson. He owns the Venetian Hotel in Las Vegas and is treating wounded veterans and their spouses to a free stay at his hotel, including travel to and from Las Vegas on one of his 14 private planes. Most of us will never come close to having Mr. Adelson’s wealth but we can and should say, “Thank You” in our own way. Many people hang a flag on a day like today, teachers organize children to write letters to those serving overseas, care packages are sent during the Holidays. We’ve all heard about these wonderful stories and yet I would venture to say that the majority of Americans pause for a moment to think what a great thing it is, wonder what they can or should do to help and then continue in their lives, never giving it another thought until the next story comes to light.
I don’t know what any one person should do, and to be honest, I don’t know what I will do, but I am now thinking about it and I guess that’s a start. I just hope that it’s not the end… If it is, shame on me.
From all of us at CIS and the Pharma Compliance Blog, we say a very big “Thank You,” to all Americans who have served, or are currently serving their country. We honor you and are grateful for the sacrifice you and your families have made.
Monday, November 10, 2008
For someone new to the pharmaceutical industry, one of the most difficult tasks is learning the industry-specific language that is mainly spoken in acronyms. Instead of fighting the “acronym-ization” of the industry, I figured I would join the fun and remind big pharma of new and improved acronyms that may be overshadowed by the FDA’s, OIG’s, and GP’s of the world. The ‘new’ acronym is HLOGA which stands for the Honest Leadership and Open Government Act. As of January 1, 2008 HLOGA amended (and, perhaps ‘improved’) the Lobbying Disclosure Act (LDA) of 1995 which attempted to provide greater public disclosure of who is lobbying on what issues, on behalf of whom, and for how much. The goal of HLOGA was to create a more transparent and, as the title so aptly explains, a more honest and open Congress.
This is a particularly important acronym for big pharma for two reasons. The first reason is that in 2007, the pharmaceutical industry was the biggest lobby on the hill to a tune of $168 million. The $168 million price tag represents the amount of lobbying activity that should be reported pursuant to the LDA. Being the biggest lobby logically leads to reason number two for the pharma industry to pay attention to the LDA: the penalties imposed on the company and/or the individual lobbyist for failing to comply with law. The LDA reads, “Whoever knowingly fails: (1) to correct a defective filing within 60 days after notice of such a defect by the Secretary of the Senate or the Clerk of the House; or (2) to comply with any other provision of the Act, may be subject to a civil fine of not more than $200,000, and whoever knowingly and corruptly fails to comply with any provision of this Act may be imprisoned for not more than 5 years or fined under title 18, United States Code, or both.”
So, if you are one of the 40 pharmaceutical companies that contributed to the $168 million lobby, here are a few of the changes made to the LDA:
1. The new act requires quarterly filings due April 20th, July 20th, October 20th and January 20th (or the next business day if the filing date falls on a weekend or holiday).
2. Organizations that employ in-house lobbyists that incur greater than $10,000 in expenses for lobbying activity in a given quarter must file a registration for reporting purposes under the LDA.
3. Registrants and each of their lobbyists (who were active for the entire or part of the semi-annual period) must file separate semi-annual reports which detail various expenses including FECA contributions, honorary contributions, presidential library contributions, and payments for event costs. In addition, the filer must certify that the filer has read and understands the Rules of the House and Senate relating to gifts and travel and has not provided, requested, or directed a gift with knowledge that it would violate either House or Senate Rules.
For more guidance on the new LDA requirements you can visit the senate website: http://www.senate.gov/legislative/resources/pdf/S1guidance.pdf or, feel free to contact CIS regarding your company’s efforts to comply with the new LDA.
Friday, November 7, 2008
FDA - CDER:
What You Should Know about Prescription Drug Advertisements
HHS - CMS:
The CMS Quarterly Provider Update - October 2008
The New York Times:
Scientists Decode Set of Cancer Genes
Who will take over at the FDA, HHS?
The Washington Post:
A Butler Well Served by This Election
(A touching article, even if it has nothing to do with pharma...)
Thanks, and have a great weekend!
For Your Space,
Thursday, November 6, 2008
At the 9th Annual Pharmaceutical Regulatory and Compliance Congress and Best Practices Forum, the Office of Inspector General (OIG) presented on the public concerns and scrutiny of pharmaceutical industry practices, recent settlements and future trends. Additionally, the OIG provided the industry with concise recommendations for improving existing compliance programs.
The OIG identified the relationship between the pharmaceutical industry and healthcare professionals as the key area of public interest and scrutiny. Due to recent investigative activities, resulting in hefty settlements, the following industry practices are continually on the OIG radar and their legitimacy is often challenged:
2. Conflict of interest between physicians and pharmaceutical manufacturers
3. Proper disclosure of research data and outcomes
The OIG focused its presentation on the increasing regulatory trend of state lawsuits related to pricing and consumer protection cases. The Deficit Reduction Act (DRA) of 2005 articulates that the False Claims Act (FCA) should be enacted by each state. The enactment of state FCAs would give states an additional source of retribution, thus resulting in more settlements. In response to the DRA of 2005, to date, 12 states have enacted a False Claims Act.
The OIG also stressed the importance of transparency in pharmaceutical activities and relationships, especially since investigations and settlements are on the rise. The majority of cases have resulted from the following violations, with off-label violations leading the pack in volume:
3. Medicaid Drug Rebate;
4. Average Wholesale Price (AWP) Pricing.
In the future, the OIG indicated that the industry can expect enhancements to traditional Corporate Integrity Agreements (CIAs), and cited Cephalon’s CIA as a case in point. The unique attributes of the Cephalon CIA include:
1. Board of Director and Management Team Certification: An annual certification that the applicable area of authority is compliant with Federal Healthcare requirements.
2. Cephalon must also post payments to physicians on an easily accessible page on their website.
3. A notification to Healthcare Providers that outlines the terms of the global settlement with the United States, including an explanation of the conduct to which Cephalon pled guilty, and also provides the HCPs with an avenue for reporting misconduct.
The OIG concluded by providing recommendations to enhance and coordinate compliance efforts. These recommendations included:
1. Eliminate inconsistencies between Compliance Message and Business Strategies/ Practices;
2. Eliminate inconsistencies between HQ and Field Practices;
3. Minimize incentives for improper promotion;
4. Embrace transparency.
Pharmaceutical manufacturers should, at the very least, think about the recommendations above, and quickly obtain an understanding of how to enhance their compliance programs. With 150 current pending cases spanning across approximately 600 products, these recommendations should be embraced and proactively implemented.
Source: Presentation title: “Office of Inspector General Update,” Pharmaceutical Regulatory and Compliance Congress and Best Practices Forum, October 27, 2008.
Wednesday, November 5, 2008
It’s finally over. No more speculation. No more 24 hour election coverage. No more debates. No more rallies. And best of all, no more “I’m Barack Obama/John McCain, and I support this message.” After a long and grueling 3 months, Barack Obama has been elected the next President of the United States. Whether the person you voted for won or not, I’m sure you are happy it’s November 5th and the election has come to a halt. So now the question is, “What happens next?”
Health care was a huge issue in this election. Now that we know who the next President is going to be, we can speculate (wait I thought we were done speculating) about what will happen to our health care system over the next 4 years. Here are some of the things that we may see:
- Barack Obama’s most significant proposal is to create and implement a national insurance plan. This would cover individuals who do not have employer-provided health care as well as those who do not qualify for other existing federal programs. This does not mean individual coverage for all Americans, but requires coverage for all children. (1)
- As for employer contributions toward heath care costs; "Employers that do not offer or make a meaningful contribution to the cost of quality health coverage for their employees will be required to contribute a percentage of payroll toward the costs of the national plan." (2) However, small businesses will be exempt from this and could receive a tax credit to reduce health care costs. (1)
- The new President plans to contribute $10 billion a year over the next 5 years towards standards-based electronic health information systems. (1)
- Obama’s plan would allow Americans to purchase drugs from other developed countries if they are deemed to be safe and the prices are lower. (1)
Whether you like them or not, these would be significant changes to our current health care system. But will all of these promises that we’ve heard in every debate and campaign ad be fulfilled? Will this new health care plan take a back seat to fixing our ailing economy or ending the War in Iraq? Who knows? All we can do for now is speculate (there’s that word again).
Tuesday, November 4, 2008
Did you know that 2009 will be considered a first year calculation for the Federal Ceiling Price? This was an important topic discussed at the VA’s Federal Health Care Industry Conference on October 8-9, 2008. I thought it would be helpful to summarize what was presented on how the first year calculation will work, provide some tips on how manufacturers can meet new deadlines, and talk about new initiatives that will assist you in the entire process:
Some interesting facts:
· There will be no dual calculation or CPI-U limiter for the 2009 FCP calculation
o If OGA price is less than FCP, OGA price becomes the
price for all authorized users of the FSS contract
· Dual Price option will continue on the second and subsequent years
· 2009 FCP calculation is very straightforward since it is the “First Year” calculation
o .76 x annual NFAMP minus Additional Discount
· The first year of Public Law will be every 5 years… so 2009, 2014, 2019, etc. regardless of
what year your current FSS contract is in
What you can do to assist with meeting the January 1st effective date:
· Comply with due dates outlined in October 20th “Dear Manufacturer” letter
· Send PBM any changes to “old NFAMP” by 10/31/2008
· Submit all requests for extension of NFAMP to the Office of General Counsel (OGC) prior to 11/17/2008
· Update your electronic FSS pricelist with any pricing updates and submit to the
Contracting Officer by December 5th
· Send updated Pharmaceutical Pricing Amendment to the CO by December 31st
· Ensure company e-mail system can accept e-mails from the VA: firstname.lastname@example.org
· Ensure NAC CO has updated contact information
· Ensure any FCP appeals are sent to the OGC immediately
What the NAC is doing to assist in meeting the January 1st effective date:
· New web-based initiatives for submitting NFAMP and modifications are being worked on
· Introduction of a new modification format
· Introduction of a new FSS Pharmaceutical Website: (http://www1.va.gov/oamm/oa/nac/fsss/pharmfss_65IB_42-2A.cfm)
For information on the new changes, and for copies of the presentations from the conference, please visit the VA website mentioned above.
Monday, November 3, 2008
Four years ago I was working for a top ten pharmaceutical manufacturer, and I remember that any time the presidential election came up, the unofficial but overwhelming message was: If you want what is best for this company, you will vote Republican. At the time it made sense. President Bush had a good relationship with the pharmaceutical industry, his tax cuts favored big business, and he had a penchant for relaxing regulations (including those governing the FDA). So four years later, you can imagine my surprise that pharma seems not to be supporting Senator John McCain, who by his own account voted with President Bush 90% of the time, but Democratic candidate Barack Obama.
Although there has been no ringing endorsement from PhRMA, and no major companies have taken an official stance, the numbers don’t lie. According to OpenSecrets.org, a “nonpartisan, independent, and nonprofit” organization that tracks campaign donations and how they affect elections, Senator Obama has received $1,662,280 from the Pharmaceutical and Health Products industry since October 27, 2008. That’s almost three times the $579,013 the industry has given Senator McCain. Even Hillary Clinton received more from pharma ($594,660), and she didn’t make it past the primary.
So what explains this apparent shift in allegiance? One explanation could be Senator McCain’s history of taking on the pharmaceutical industry. At a Republican primary debate in January, Massachusetts Governor Mitt Romney warned McCain “Don’t turn the pharmaceutical companies into the big bad guys.” McCain’s response? “Well they are.” And the Senator doesn’t seem to be changing his tune. An ad introduced this summer claimed: “Only McCain has taken on big tobacco, drug companies, fought corruption in both parties.” I don’t know about you, but being told that my industry (an industry striving to cure disease and improve quality of life) ranks somewhere between killer tobacco and Washington corruption, doesn’t make me want to open my wallet.
To be fair, Barack Obama is not exactly the pharmaceutical savior some had hoped for. He opposes tax breaks for large corporations in favor of relief for small businesses, and like John McCain, he has supported drug re-importation from Canada. But Senator Obama’s dream of healthcare for all may have struck a chord with drug-makers. After all, the more people have comprehensive coverage, the more people will visit the doctor, and the more patients a doctor sees, the more prescriptions he or she will write. It makes sense.
At the IIR conference in September, CIS Senior Compliance Specialist Clarissa Crain held a mock election to see how the candidates would fare in the GP space. Barack Obama won by 2 votes, or about 4% of approximately 50 attendees who cast their ballots. As of today, the day before the election, Pollster.com reports that Obama is ahead by a slim 5% margin. Is it possible that a handful of “GP Geeks” could turn out to be an effective bellwether of this very tight election? I guess we will just have to wait and see.
And now for my own public service announcement: No matter which candidate you support, make sure to get out there and vote! I’ll see you at the polls!
For Your Space,
 OpenSecrets.org – Our Mission: Inform, Empower, and Advocate
 OpenSecrets.org – Pharmaceuticals/Health Products Industry Total to Candidates, October 27, 2008
 Bloomberg.com – McCain’s Attacks Shift Drug-Industry Giving to Democrat Obama
 John McCain 2008 Launches New TV Ad: “Broken”
 US: Obama 50, McCain 45 (Hotline 10/31-11/02)