Friday, May 29, 2009

The Role of Affect in your Culture of Compliance

By: Joe Calarco, CIS Senior Manager
joecalarco@cis-partners.com

The Fox Television Drama “Lie to me” tells the story of a “leading deception expert who studies facial expressions and involuntary body language to discover not only if someone is lying, but why.”[1] The show is based on the recent scientific work of Paul Ekman, Ph.D. [2] and a theory developed by the late Silvan S. Tomkins Ph.D. called Affect Theory[3].

We all have experiences that forever change the way we view our world and the study of affect theory had that impact on me about ten years ago when studying human behaviour. The theory helps explain everything from the raw facial expressions of a newborn to the scripted behavioural norms of the world’s differing cultures. Seeing affect theory used to support a major network drama is evidence of the theory’s growing acceptance, and has prompted me to write about the importance of affect in the business world.

For those who seek more information about affect theory, a book (1992) by Donald Nathanson, M.D. entitled “Shame and Pride” is an excellent introduction. For the purpose of this blog article, I ask you to trust that humans are born with nine innate affects, from which all experiences are filtered. They are listed below with corresponding facial/behavioral expressions. Some are listed in low/high intensities.

Positive:
Enjoyment/Joy - smiling, lips wide and out
Interest/Excitement - eyebrows down, eyes tracking, eyes looking, closer listening

Neutral:
Surprise/Startle - eyebrows up, eyes blinking

Negative:
Anger/Rage - frowning, a clenched jaw, a red face
Disgust - the lower lip raised and protruded, head forward and down
Dissmell (reaction to bad smell) - upper lip raised, head pulled back
Distress/Anguish - crying, rhythmic sobbing, arched eyebrows, mouth lowered
Fear/Terror - a frozen stare, a pale face, coldness, sweat, erect hair
Shame/Humiliation - eyes lowered, the head down and averted, blushing

Affects assign importance to the infinite amount of information bombarding the Central Nervous System at any given moment, and are the basic building blocks of emotion and scripted behavior. One may liken them to the role of letters in building words or notes in a musical composition. Most importantly, affect is contagious and, as a result, is a critical part of our non verbal communication.

So why is all this important to Compliance? Let’s me develop a hypothetical situation to make my point. Your team is frantically processing data for a critical path trial for a filing that is mission critical to your company’s success over the next five years. Are you feeling the distress yet? How about the fear? Now let’s throw in a surprise FDA audit of your data. Is your group prepared to manage this pressure? In my experience, teams that know what to expect during an audit typically have the game plan (or scripted responses) to effectively manage such a scenario. The point here is that compliance mistakes may occur unintentionally when we are under significant distress.

Affect and Scripts play a significant role in normal operations and crisis management. In the next several months, I will expand upon this concept and the role affect theory plays in developing your culture of compliance.

Sources:

[1] FOX Broadcasting Company (April 10, 2009) Lie to me
http://www.fox.com/lietome/

[2] http://www.paulekman.com/

[3] Wikipedia (April 10, 2009) Affect Theory
http://en.wikipedia.org/wiki/Affect_theory

Thursday, May 28, 2009

CIS and ExL Pharma Present:

Mastering the Government Programs Systems Environment:
Assessing Your Current Toolset and Evaluating Your Options
Wednesday, June 3, 2009
1:00 PM - 3:00 PM, EDT

Leaders:
Bill Baxter, Strategic Advisor, Government Affairs, CIS
Chris Cobourn, Vice President of Regulatory Compliance, CIS
Joseph DelPonte, Sr. Director of Price Reporting & Contract Operations, Stiefel Laboratories, Inc.
Catrina Hirschauer, Manager of Government Pricing and Reporting, Xanodyne Pharmaceuticals, Inc.
Todd Leduc, Sr. Government Sales Analyst, Contract Pricing and Reimbursement, Solvay Pharmaceuticals, Inc.
Marika Thiessen, Director of Sales Operations, Sirion Therapeutics

Webinar Summary:
Multiple regulatory agencies publish statutory calculation guidance across Medicaid,
Medicare Part B, the PHS program, the VA program and now Tricare. Each manufacturer
has to be able to understand the guidance as it applies to them, develop appropriate calculation
methodologies for each of the calculation types, and then have the right toolset to perform the calculations. In this seminar, we evaluate your options and discuss the challenges and issues that manufacturers face. This includes budgetary and resourcing challenges faced by small and mid-market companies, as they try to find a practical balance between compliance and operational costs while ensuring that they are reporting accurately to the Federal and State Governments.

A Note from Chris Cobourn:
All companies have some “system” for performing their calculations, whether using spreadsheets or other tools, implementing a commercial GP system, or having a third party perform the calculations. Companies may be evaluating their options and trying to determine the appropriate path for them, or they may want to know how to evaluate the compliance of their current systems. I have had discussions with many companies on this topic, so I thought it would be good to have a forum where companies could hear from CIS and their industry counterparts.

In our Webinar next week, we will discuss the core components and requirements of a good GP system, and have industry representatives talk about the approaches they selected and why.

I hope that you will consider attending, it should be a good discussion, and will definitely give you some food for thought as you evaluate your current toolset and options. Feel free to reach out to me with an email if you would like to know more about the Webinar.

Chris
chriscobourn@cis-partners.com

5 Easy Ways Register:
Mail: ExL Events, Inc., 555 8th Ave., Ste. 310, New York, NY 10018
Email: register@exlpharma.com
Phone: 866-207-6528
Fax: 888-221-6750
Online: www.exlpharma.com

Wednesday, May 27, 2009

An Update on the False Claims Act

By: Meredith Taylor, Esq., CIS Senior Compliance Manager
meredithtaylor@cis-partners.com

On May 20, 2009, the Fraud Enforcement and Recovery Act of 2009[1] (“FERA”) was signed into law by the President. FERA amends the Civil False Claims (FCA) by imposing liability on any person or entity who submits a false claim to the government, with or without overt intent, in exchange for payment, whether the claim was submitted to the government directly or indirectly, and whether the Government ever actually paid the claim.

The FCA, prior to the amendment, imposed liability on anyone who:

(1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government;
(3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid;[2]

Recently, the Courts have interpreted the FCA to narrow the scope of liability, and Congress has made multiple attempts o to amend the FCA to expand its scope and overturn those Court decisions. Until last week, none of those Bills were successful. S.2041 and. H.R.4854, both known as “the False Claims Corrections Act,” and H.R.3180, known as “The Whistleblower Recovery Act of 2007” failed to make it out of session. After these failures Senators Chuck Grassley (R-Iowa) and Patrick Leahy (D-Vermont) drafted a Bill which finally passed.

Senate Bill S.386 (amended by the House) was passed by the Senate and amended by the House, and has been signed by the President. According to the Bill’s proponents, S.386 was crafted from portions of the unsuccessful Bills and was fueled by the desire to undo the “harm” that was done by the Allison Engine[3] case.

In the Allison Engine case, the Court ruled that a government contractor was not liable under the FCA because it did not intend to present a false claim to the federal government. In that case, a subcontractor used false information to receive payment, but from another contractor, not directly from the government. The Court held: “it is insufficient for a plaintiff asserting a § 3729(a)(2) claim to show merely that “[t]he false statement's use ... result[ed] in obtaining or getting payment or approval of the claim,” 471 F.3d 610, 621 (C.A.6 2006) or that “government money was used to pay the false or fraudulent claim,” id., at 622. Instead, a plaintiff asserting a § 3729(a)(2) claim must prove that the defendant intended that the false record or statement be material to the government's decision to pay or approve the false claim.[4] This case requires a clear showing of intent to defraud the government.

The first S.386 passed by the Senate on April 28, 2009, included these changes to the FCA:


  • Presentment - The requirement that the false statement be presented to a representative of the federal government would be done away with. Now, the false statement could be provided to a government contractor or a third party.
  • Claim – What used to require requests or demands for money directly from the government would now include money provided by the government, in whole or part, for work in furtherance of a government interest.
  • Material – The false statement used “to get” a false claim paid would now only require that the false statement was “material” to the false claim. An influence of the false claim could be enough.
  • Reverse false claims – An addition of FCA violations for knowingly and
    intentionally avoiding a repayment of money owed to the government, as a result of an overpayment.
  • Retroactivity - This section of the Bill seeks to reach back to Allison Engine
    and those cases that relied on Allison Engine as precedent, and apply this new
    Bill to those facts, to essentially reverse many decisions.

The amended S.386 passed by the House on May 6, 2009, included these amendments to
the Senate Bill:

  • Qui Tam Intervention - The government can join suit with realtors by filing its own
    complaint, or by amending the Qui Tam complaint to clarify or add detail to the
    claims. The government’s complaint relates back to the realtor’s filing date.
  • Civil Investigation Demands – The Attorney General, or a designee, can
    share information with the realtor if appropriate to investigate the claim.
  • Anti-retaliation – An employee who is terminated or demoted as a result of lawful acts done in furtherance of reporting or stopping FCA violations is entitled to
    reinstatement with the same authority.
Finally, the President signed the Bill on May 20, 2009. It should be noted that the final version of FERA states that the amendments to the FCA take effect on the date of the enactment, May 20, 2009, and apply to conduct on or after that date, but there are limited exceptions. As such, the retroactivity amendment above in the Senate Bill did not survive.

FERA will lead to more liability because it will take less to prove a violation of the FCA. The fraudulent claim, statement, or information does not have to be directly presented to the government for payment. Now, if false information submitted indirectly to the government is material in the false claim, liability could attach.

Sources:
[1] P.L. 111-21
[2] 31 USC 3729
[3] Allison Engine Co., Inc. v. United States ex rel. Sanders, 128 S. Ct. 2123 (2008).
[4] Id. at 2128-2130

Tuesday, May 26, 2009

Massachusetts Marketing Code of Conduct and the Effects on Drug and Device Marketing Research

By: Jess Ebert, CIS Compliance Associate
jessicaebert@cis-partners.com

On March 11, 2009 the Massachusetts Public Health Council released the new Marketing Code of Conduct to regulate the interactions between healthcare practitioners and pharmaceutical and medical device manufacturing companies. The regulations require mandatory reporting of the “value, nature, purpose and the recipient of any fee, payment, subsidy, or economic gift” with a value of $50 or more, that is provided through the company or by company agents for sales and marketing activities. The new regulations also apply to payments to healthcare practitioners participating in marketing surveys. [1]

The Marketing Research Association (MRA) has stated that the regulations will severely impact research with practitioners. [2] Pharmaceutical and medical device manufacturers are required to publicly disclose the name of the participant, which will make practitioners less likely to participate in important and beneficial marketing research. The MRA states that reduced participation will lead to less research being performed, which can have a number of adverse implications down the line, including loss of jobs and a significant decrease in income for the state of Massachusetts (medical conventions held in Boston generate millions of dollars in visitor spending per year, but some groups have already canceled their convention, and others have stated that they are avoiding Boston because of the uncertainty with the law). [3]

The intent of the regulations is to prevent undue influence in the relationship between manufacturers and healthcare practitioners. However, the MRA has issued a statement advocating that marketing research incentives be exempt from the reporting requirements. The MRA states that the “regulation will severely hinder survey and opinion research with healthcare professionals, whose participation is often tied to sizeable research incentives, because of the high demands on and cost of their time” and that the “regulation will damage the quality of research by injecting bias [because] in most research the participants – and often the interviewers – are unaware of who sponsored the study.” They also point out that publicly disclosing personally identifiable information undermines the ethical code of survey and opinion research to maintain confidentiality of participants. [4]

The statement also highlights the value that marketing research brings to the public and patients, including patient compliance, prevention of medical errors, and simulations that ensure patient safety.

While there is a need for transparency in the relationship between healthcare practitioners and drug and device manufacturers, the MRA has made a valid argument for marketing research incentives to be exempt from the reporting requirements.

To read more about the MRA and their position on the Massachusetts Marketing Code of Conduct, visit their website: http://www.mra-net.org/.

Sources:
[1] http://www.cmor.org/ga/gaArticle04_09.cfm
[2] http://www.policymed.com/2009/04/marketing-research-association-to-massachusetts-slow-down.html
[3] http://meetingsnet.com/medicalmeetings/news/massachusetts_law_medical_conventions_0109/
[4] http://www.cmor.org/pdf/mra_issue_paper-mass_healthcare_reg.pdf
*

Friday, May 22, 2009

Articles of the Week!

Courtesy of Debbe Saez, CIS Senior Compliance Manager
debbesaez@cis-partners.com

For those of you still in the office today, here are some interesting articles to help you kill those last few hours before the long weekend. Enjoy!

Vermont Acts to Make Drug Makers’ Gifts Public
http://www.nytimes.com/2009/05/20/business/20vermont.html?_r=1&ref=health

HHS Makes $75 Million Available to States to Expand Health Insurance Coverage
http://newsroom.hrsa.gov/releases/2009/stateaccessmay.htm

Senate Finance Committee's Health Reform 'Options Paper' Prompts Swift Academy Response
http://www.aafp.org/online/en/home/publications/news/news-now/government-medicine/20090520options-response.html

New Online Features Translate Vision Science to Everyday Life
http://www.nih.gov/news/health/may2009/nei-18.htm

Daschle Still Key Player on Health Care
http://www.usatoday.com/news/washington/2009-05-20-daschle_N.htm
*

Thursday, May 21, 2009

Vermont Act 80 - Expect Your Letter in the Mail

By: Amy VanDeCar, CIS Compliance Manager
amyvandecar@cis-partners.com

If you recently received a letter from the Office of Vermont Health Access and aren’t quite sure why they’re asking your company for money, here’s some background information that may help…

In 2007, Vermont passed into law Act 80.[1] You may be familiar with the Act in the context of its restrictions on “prescriber-identifiable” prescribing data, and the subsequent lawsuit filed by IMS Health, Wolters Kluwer Health and Verispan.[2] What you may not know is that the Act also requires pharmaceutical manufacturers who participate in Medicaid, and related programs in Vermont, to pay a fee to the Office of Vermont Health Access (OVHA). The 0.5% fee, based on the amount OVHA spent on your company’s prescription drugs, will fund:


(1) Collection & analysis of information on pharmaceutical marketing activities;
(2) Analysis of prescription drug data needed by the attorney general’s office for enforcement activities; and
(3) An evidence-based education[3] program that will provide information on the therapeutic and cost-effective use of prescription drugs.
Pharmaceutical Research and Manufacturers of America (PhRMA) challenged the constitutionality of imposing a fee on prescription drug manufacturers in order to fund an education program into which the manufacturers have no input, and whose message would be determined by private entities. While the lawsuits were pending, Vermont did not attempt to collect the fees. On April 23, 2009, however, the US District Court for the District of Vermont upheld Vermont Act 80, as amended by Act 89,[4] ruling that there is insufficient evidence at this time to strike down the sections of the Act challenged by PhRMA and the data providers. In his ruling,[5] US District Court Judge J. Garvan Murtha noted that the (Vermont) Department of Health is responsible for the content of the education program and, therefore, that any input into the message by private entities is “irrelevant.”

Now that the case has been decided in US District Court, Vermont has wasted little time in requesting payment of the fees for 2007 and 2008 from manufacturers. If you’ve received the letter, the invoice will soon follow; payment dates are scheduled for one month after the billing dates.

In addition, another invoice from Vermont may soon be coming your way…. Vermont Bill S.48,[6] which includes an annual fee of $500 from “each manufacturer of prescribed products with marketing expenditures” in Vermont, has passed both houses of the Vermont General Assembly. The purpose of the proposed fee may sound familiar – the fee will be used to “fund collection and analysis of information on activities related to the marketing of prescribed products.”

Sources:
[1] http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2008/acts/ACT080.htm
[2] http://www.imshealth.com/deployedfiles/imshealth/Global/Content/StaticFile/Vermont/Legal_Complaint_for_Vermont.pdf
[3] http://www.leg.state.vt.us/statutes/fullsection.cfm?Title=18&Chapter=091&Section=04622
[4] http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2008/acts/ACT089.htm
[5] http://www.wcl.american.edu/pojip/go/ims-v-sorrell
[6] http://www.leg.state.vt.us/docs/2010/bills/Passed/S-048.pdf

Wednesday, May 20, 2009

The Convergence of Pharmaceutical and Medical Device Regulations

By: Matt Hotz, CIS Senior Associate
matthotz@cis-partners.com

Pharmaceutical regulations and medical device regulations have been converging. This strengthening of the linkage between drugs and devices statutes has implications for companies in both industries.

The Medical Device Safety Act of 2009, introduced in the House of Representatives by Rep. Frank Pallone [D-NJ], would remove the preemption clause from the Medical Device Amendments of 1976, allowing state and local governments to enforce standards more stringent than the FDA. There is no comparable preemption clause for the pharmaceutical industry, a fact that was reinforced in the recent Supreme Court decision in the case of Wyeth v. Levine. With the proposal of the Medical Device Safety Act, lawmakers hope to close this regulatory gap between drugs and devices, giving state and local governments the same standing in the device industry as they have in the drug industry.

Another bill which illustrates this trend towards using the same regulatory standard in both the pharmaceutical and the medical device industry is the Physician Payments Sunshine Act of 2009, introduced in the Senate by Chuck Grassley [R-IA] and Herb Kohl [D-WI]. In this bill, the term, “drug,” is used sixteen times, and in fifteen of those sixteen instances, the term “drug” is immediately followed by the term, “device.” The lone outlier is the proper name of the regulatory body, the Food and Drug Administration. The two terms are used essentially as inseparable parts of the same whole.

This trend isn’t limited to Congress, either: in a January 2009 report entitled, “The Food and Drug Administration’s Oversight of Clinical Investigators’ Financial Information,” the OIG defined the term, “investigational products,” as a blanket term to cover drugs, medical devices, and biological products. Effectively, the OIG drew no distinction between drugs, medical devices, or biological products with regards to FDA oversight of potential conflicts of interest.

What does this trend mean for pharmaceutical companies and medical device companies? Manufacturers in each industry should expect distinctions between their industry and the other to continue to shrink. Manufacturers should also expect the more stringent standard to be one adopted in cases where the regulations between the two industries differ significantly.
*

Tuesday, May 19, 2009

Preemption and the Distinction between Drugs and Devices

By: Matt Hotz, CIS Senior Associate
matthotz@cis-partners.com

On March 4, 2009, the Supreme Court issued their decision on Wyeth v. Levine, one of the most important court cases in recent history for the pharmaceutical industry. The central issue in the case presented to the Supreme Court is preemption – the idea that federal law trumps state law in cases where the two potentially conflict.

The Supreme Court ruled that Federal Drug Agency (FDA) approval of the warnings on pharmaceutical product labels does not preempt state court decisions in civil suits claiming that those warnings are inadequate. Interestingly, a year earlier, in the case of Riegel v. Medtronic decided on February 20, 2008, the Supreme Court ruled that premarket approval from the FDA preempted common-law claims challenging the safety or effectiveness of a medical device.

Why did the Supreme Court rule that FDA approval preempts state law for medical devices but not for pharmaceutical products? As the NY Times explained, “the discrepancy reflects the different legal issues in the two cases.” While this is true that each of these cases brought different issues before the Supreme Court, the differences can be attributed to the fact that some of the decades-old regulations underlying the medical device industry differ from those underlying the pharmaceutical industry. The 1976 Medical Device Amendments (MDA) to the Federal Food, Drug, and Cosmetic Act explicitly bar state and local governments from imposing requirements on medical devices that differ from the requirements established by the FDA. No pharmaceutical equivalent to this preemption provision exists.

In the wake of the Supreme Court’s decision in Wyeth v. Levine, the Medical Device Safety Act of 2009 (H.R. 1346) was introduced in the House of Representatives by Rep. Frank Pallone [D-NJ]. If passed, this bill would, “prohibit specified provisions preempting state and local requirements for medical devices intended for human use from being construed to modify or otherwise affect any action for damages or the liability of any person under state law.”

In short, this bill would reverse the Supreme Court’s decision in Riegel v. Medtronic and, “place medical devices and drugs on a level playing field with respect to patient lawsuits,” according to an editorial in the New England Journal of Medicine. This change would not only apply to future claims – it would also be applied retrospectively. The language of the Medical Safety Act of 2009 states that it would:

(1) take effect as if included in the enactment of the Medical Device Amendments of 1976 (Public Law 94-295) and
(2) apply to any civil action pending or filed on or after the date of enactment of this Act.

In practice, this bill would give standing to pending medical device cases that probably would have been dismissed in the wake of Riegel v. Medtronic. The retroactive removal of preemption protection in these cases would obviously have enormous ramifications for the medical device industry. Bizarrely, the actions set into motion by the Supreme Court decision in Wyeth v. Levine may have a larger impact on the medical device industry than the pharmaceutical industry.

Whether the Medical Device Safety Act of 2009 passes or not, its introduction is part of a trend to reduce the regulatory differences between the pharmaceutical industry and the medical device industry. Companies in the pharmaceutical and medical device industries should note this trend and adjust their corporate compliance programs accordingly.
*

Monday, May 18, 2009

The Pharmaceutical Industry Has Convinced Me That I am a Bad Mother

By Judy Fox, CIS Senior Compliance Manager
judyfox@cis-partners.com

Despite enjoying a wonderful Mother’s Day with my family, our industry often makes me feel like a bad mother. This month it’s the folks at Pharmaceutical Formulation & Quality (PFQ) who are calling my motherly aptitude into question through no fault of their own. Thank goodness my children are grown, or the pressure from our industry to spare them yucky tasting medicines would be too much to bear. Instead I am just questioning the way I treated them when they were sick, and find myself feeling guilty about not feeling guilty, which is a big burden for an Italian-Catholic.

I read an industry article in the April/May 2009 issue of PFQ entitled, “The Taste of Success – Choose your drug flavor carefully to improve patient compliance.” 1 I am fascinated by the flavor business and the studies on patient compliance based on the taste and flavor of medicines, especially those for children. After all, there is genuine science to the patient’s response to certain flavorings and aromas in medications. My local pharmacy even has a sign instructing all of the good parents to ask about the variety of flavorings offered to make their children’s medication more appealing. If it tastes bad there are parents who will go back to the pediatrician and ask for something else. I used to work for a pediatric pharmaceutical company, and the taste of medicine was a weighty issue. We held frequent taste tests for reformulations and product launches. The taste and flavor was also a selling point emphasized in the marketing materials for the medications we manufactured. The interesting thing is that our medicines were indicated for children as young as two months old. That’s the age that children drink baby formula – have you ever tasted that stuff? I don’t think even the good parents of the world have ever asked their pediatrician for a better tasting baby formula.

While my children are all healthy adults, we did have our share of illnesses and hospitalizations. Some serious – two cases of bacterial meningitis, several illnesses that required hospitalization, and a few operations - and plenty of cases of strep throat, mono, ear infections, and even one combined case of Lyme disease and West Nile virus just to keep us on our toes and test our sanity. My point in mentioning the details is that these illnesses were treated with medicines we had to administer at home. I don’t remember any of my three sons ever saying, “Yum! That tastes good!”, nor do I remember caring if they liked the taste. What I do remember was going through the same ritual that I went through as a kid; the boys would hold their nose with one hand and hold a glass of water in the other. For really foul tasting stuff, they were treated to a Popsicle.© I thought offering my kids a Popsicle© was especially smart of me when I was treating strep throat. I never even considered calling the pediatrician to see if there was any tastier medication on the market. I wanted them to get better, so the matter was not up for discussion. I will admit, other than an asthma inhaler, they never had to take anything for an extended period of time, so maybe that would have made a difference in their long term “compliance.” I reason it out like the allergy shots that my oldest had to have for 4+ years. He got used to it. There are cultural foods that many people refer to as an “acquired taste,” and while I never understood why you would keep eating something you didn’t like until you acquired a taste for it, maybe medications can be an acquired taste as well.

I like to think that I would have been somewhat concerned if the taste of their medicine was really good, because then I would have worried about them wanting it all the time. I admit that I didn’t have the special locks on the toilets and medicine cabinet. I just didn’t let them play in the bathroom – or under the kitchen sink for that matter. I know that things can happen in the blink of an eye and you can never be too careful, but there is a degree of worry that seems like overkill and there is a degree of pampering our children that I just don’t understand. I may have missed the memo, but when did kids start deciding whether or not they were going to take their medicine?

In the mean time, I will have to second guess my kids’ childhood until they all start presenting my husband and me with grandchildren to babysit. I will make sure that I do everything right this time. I may not have been the ever-vigilant mother, but there is not a chance that I will risk being anything but the world’s greatest grandma! If they want bubble gum flavored medicine, they will get it. Heck I may even give them a Popsicle© too!

Source:
1 Pharmaceutical Formulation & Quality, Volume 11, Number 2, April/May 2009. “The Taste of Success, Choose your drug flavor carefully to improve patient compliance.” by David Tisi.

Wednesday, May 13, 2009

See-Through Clinical Trials

By: Karen Brown, CIS Marketing Director
karenbrown@cis-partners.com

In a continued effort to push for more transparency around clinical trial data, Pharmaceutical Research and Manufacturers of America (PhRMA) has updated the 2002 Principles of Conduct of Clinical Trials and Communication of Clinical Trial Results. [1]

The revised voluntary Principles, which take effect on October 1, 2009, require PhRMA’s member companies to record “the timely registration of all interventional clinical trials involving patients – including some early Phase 1 studies – on a public website, to help patients who need medical care to enroll in relevant studies.” [2]

According to the Principles, “timing” is within 21 days of enrollment of the first patient. With regards to Phase I studies, it’s a little more ambivalent, and is best described in this PhRMA Q&A:

Q: Company D has completed an exploratory, controlled clinical trial in healthy
adults of a product involving a novel and highly proprietary study design.
Should Company D communicate the results of this trial?

A: Perhaps.
Exploratory trials conducted in healthy adults rarely provide information of
significant medical importance. However, if such a trial did provide significant
medical information, sponsors should work with the investigators to communicate
the results of the trial. [1]

PhRMA also notes that this commitment extends to “all interventional clinical trials involving patients – regardless of whether the medicines are approved or the particular research programs have been discontinued.” [2]

Under these Principles, if the clinical trial results are thought to be of significant medical importance, the sponsor should work with investigators to communicate the results of the trial through posting or publication.

And, when it comes to publishing results, changes involving research paper authorship include:
  • Adoption of the International Committee of Medical Journal Editors (ICMJE). Under these revised Principles, only individuals who make substantial contributions to medical manuscripts will be recognized as authors.
  • Further alignment with ICMJE standards regarding disclosure in medical journal manuscripts of all financial or personal relationships that might present a conflict of interest – whether in an article or a letter. What’s more, authors of medical journal manuscripts should describe the role of sponsors in designing the study, collecting and interpreting data, and writing the report. [2]

Sources:
1. http://www.phrma.org/files/042009_Clinical%20Trial%20Principles_FINAL.pdf
2. http://www.phrma.org/news_room/press_releases/revised_clinical_trial_principles_reinforce_phrma%92s_commitment_to_transparency/

Tuesday, May 12, 2009

How to Address the TRICARE Retail Refund Program

By: Dave Rice, CIS Director of Federal Contracting
daverice@cis-partners.com

The clock is ticking… the deadline to make a decision on what your company wants to do regarding TRRx refunds is fast approaching. We are at T-minus-14 days until the Tricare Final Rule's Effective Date of May 26, 2009 - 14 days until retail refunds, and any requests for full or partial compromise, are due. The Tricare Management Authority (TMA) has taken a carrot and stick approach to influence companies to voluntarily participate in this mandatory program. The stick is the threat of assigning Tier 3 status to your products, and requiring prior authorization on products not voluntarily made part of the program. These actions would result in a significant loss of sales in the retail market. The carrot is the implied assurance that retroactive rebates are open to negotiation and compromise, allowing companies to avoid all or a portion of their retroactive liability.

Because of the vague direction provided by the TMA, and the lack of clarity related to compromise approval criteria, protocol, and approval authority, many companies have struggled with how they want to deal with the requirements imposed by the TRICARE Final Rule. It was the intent of TMA (presumed) to incent companies to voluntarily participate (avoiding costly and lengthy litigation) in the program by offering an opportunity to negotiate retroactive refunds for the period of January 28, 2008 to May 26, 2009. However, the criteria for compromise, paradoxically, requires companies to litigate or threaten litigation for a compromise to be considered. TMA has authority to approve compromises up to $100,000; amounts greater than that require approval by the Department of Justice (DOJ). It is unclear what direction has been provided to the DOJ, or what recommendations TMA may have made to influence the criteria to be used by the DOJ in granting compromise requests. It is also unclear whether the DOJ will take a hard line stance and reject all requests for compromise, forcing companies to litigate.

CIS has developed different strategies for manufacturers to use, based on size of their liability, and their willingness to compromise on retroactive refunds. One strategy will be to sign a Pricing Agreement, preserving Tier 2 status and avoiding a Prior Authorization, and request a full or partial compromise of the retroactive liability based on TMA approval authority. We believe this will give companies with liabilities less than $100,000 the greatest chance for a expeditious settlement with minimal costs.

Companies with liabilities significantly exceeding TMA’s authority may want to consider a delay strategy. This would require signing a Pricing Agreement, and requesting a compromise on the full retroactive liability. This would preserve Tier 2 status with no Prior Authorization, and delay a decision on the retroactive refunds due. The compromise request would not be evaluated until the August P&T committee meeting, where it would be referred to the DOJ, most likely delaying a ruling until late Fall. This delay could provide us time to see how the Courts will rule on the Coalition of Government Procurement’s pending litigation on this matter, and how TMA and/or the DOJ may rule on compromise requests submitted by those who are up first.

CIS is partnering with Joe Metro, Esq. at Reed-Smith, LLP to provide assistance to companies that wish to preserve their Tier 2 status, avoid a Prior Authorization, minimize payment of retroactive refunds (with or without litigation), and comply with the requirements of the Tricare Final Rule. The clock is ticking… contact CIS immediately for assistance in formulating your compromise request strategy and compromise request documentation.

For more information, please feel free to contact Steven Moore, CIS Director of Business Development.
stevenmoore@cis-partners.com
484-445-7207
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Monday, May 11, 2009

HHS Articles of the Week

Courtesy of Dana Zelig, CIS Senior Compliance Associate
danazelig@cis-partners.com

On April 29, 2009 Kansas Governor Kathleen Sebelius was sworn in as Secretary of the Department of Health and Human Services (HHS). During her first few weeks in office Sebelius has been busy, handling issues ranging from health care reform to the recent H1N1 flu outbreak. To bring you up to speed on the work being done by HHS and the Agency for Healthcare Research and Quality, we have compiled the following recently published articles:

HHS Releases New Report: Hard Times in the Heartland: Health Care in Rural America
http://www.hhs.gov/news/press/2009pres/05/20090504a.html

Statement by HHS Secretary Kathleen Sebelius and by Acting CDC Director Dr. Richard Besser Regarding the Change in CDC’s School and Child Care Closure Guidance
http://www.hhs.gov/news/press/2009pres/05/20090505a.html

Secretary Sebelius Highlights Two New Reports on Health Care Quality, Says Improving Quality is Key Component of Health Reform
http://www.ahrq.gov/news/press/pr2009/qrdr08pr.htm

HHS Secretary Sebelius Welcomes Deputy Secretary Bill Corr, Indian Health Service Director Dr. Yvette Roubideaux
http://www.hhs.gov/news/press/2009pres/05/20090507a.html

HHS Announces Members of Committees That Will Advise on Implementation of Health IT
http://www.hhs.gov/news/press/2009pres/05/20090508a.html

Secretary Sebelius Announces HHS Office of Health Reform Personnel
http://www.hhs.gov/news/press/2009pres/05/20090511a.html
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Thursday, May 7, 2009

Transparency Implications on Industry Support for Continuing Medical Education

By: Jess Ebert, CIS Compliance Associate
jessicaebert@cis-partners.com

At a time when transparency is being called for in many different aspects of the pharmaceutical and medical device manufacturing industry, it’s important to realize the effects that such transparency can have on physicians and patient care. The Physician Payments Sunshine Act of 2009 requires the public disclosure of payments to physicians and physician-owned entities related to marketing, education and research with a value of $100 or more, with a few exceptions. How is physician education tied into this?

Continuing Medical Education (CME) is required of every physician, but has recently come under fire from “public interest” critics and a few leading members of Congress. Pharmaceutical and medical device manufacturers are responsible for funding approximately half of CME activities, and many critics believe that the support creates bias, and unjustly influences the physicians to use their products. The need for transparency in this area is understandable, but it’s important to establish regulations that do not impede the exchange of valuable information between pharmaceutical and device manufacturers and physicians.

The Center for Medicine in the Public Interest (CMPI), a non-profit public policy group that is dedicated to promoting solutions that advance medical progress, and the Coalition for Healthcare Communication, a drug marketing group that defends the right of healthcare professionals and consumers to receive truthful information regarding pharmaceutical and medical products, released a report in April 2009 titled ‘Industry Support for Continuing Education of Healthcare Professionals – An Evidence-Based Evaluation.’ The report contains the views of physicians and others who organize and conduct private sector CME programs that were brought together in a conference to discuss how recently proposed legislation will impact physicians and patients.

The general message of each participant was that commercially supported medical education is greatly benefiting physicians and patients alike. Manufacturers have a responsibility to present information concerning their product’s safety and efficacy, whether favorable or not. Supporting CME is the best way to keep physicians updated on the latest medical advances, and in turn, the physicians are able to use this information to offer new therapies to their patients [1].

Marissa Seligman, Senior VP of the Pri-Med Institute, a for-profit education company, also participated in the conference, and spoke about how physicians would be impacted if industry support was no longer available. Pri-Med’s analysis revealed through a survey that 92% of physicians said banning commercial support for CME activities is not a good idea. “Physicians stated that loss of commercial support would increase their personal cost of getting CME and their resources to do this are limited. Second, it would decrease the quality of CME out there by eliminating the ability of providers to do the education that matters, and it would also provide them with fewer opportunities” [1].

In addition to the large number of physicians that favor industry support, several professional associations are also in agreement with the CMPI’s report, including the American College of Cardiology. Jack Lewin, M.D. and CEO of the American College of Cardiology was also a participant in the conference, and stated that “were we not to have these additional services which we believe rapidly advance the education of our members and the translation of science to the point of care, the patients and doctors who serve them will be harmed’ [2].

Another concern of several participants is the effect that reducing industry support will have on the underserved communities. “Underserved” implies inner city practitioners who are working in clinics, with scarce resources, and for little pay, offering care to the homeless and those with insufficient or no insurance coverage. Offering industry supported CME is critical to these practitioners, who otherwise would not have the resources to pay for CME, further lessening the quality of care they are able to provide [2].

Those interviewed for the report do not deny that there have been some problems and abuse within the current system, and some even agree that transparency is a good idea. If not ‘overdone’, the Physician Payments Sunshine Act, and other similar legislation, could be beneficial.

The report contains many more supporting arguments and information on the issues discussed above, and is certainly worth reading to gain a better perspective on how industry support of CME is beneficial to both physicians and patients.

Sources:
[1] http://cmpi.org/uploads/File/CMPI_CME_Report.pdf
[2] http://www.policymed.com/2009/05/cme-commercially-supported-medical-education-benefits-those-who-need-it-most.html
For prior PCB coverage of the Physician Payments Sunshine Act, see: http://pharmacomplianceblog.blogspot.com/search?q=sunshine

Friday, May 1, 2009

Current Healthcare Policy and its Potential Impact on Government Programs

By: Chris Cobourn, VP of Regulatory Compliance
chriscobourn@cis-partners.com

Change is coming to the healthcare industry in the United States, and it appears very likely that it will impact the way we view Federal and State Programs. There will be a change in the way we view the Government as a customer, as well as how we view the business and financial impact of this growing customer base.

Let’s look at three key converging factors:

1) Increased Need - the socio-economic factor: An aging baby boomer population will soon become Medicare eligible. Economic issues, such as the rising unemployment rate, will cause an increase in Medicaid eligibility (this includes the crisis of the Dual Eligibles, 8 million people in 2007, who are both Medicare and Medicaid eligible, and represented $239 Billion in healthcare spending in 2008).

2) Financial Crisis: A Financial crisis at the Federal and State level presents a challenge of how to fund existing programs, let alone plan for the expanded need.

3) Political Traction: With the Democratic party controlling both the executive branch and legislative branch of the Federal Government, and with their public advocacy of healthcare reform, it is certain that some, or many, budget and legislative initiatives will take place.

The discussion is evolving daily, and will surely evolve dramatically over the next few months, and Senators Baucus and Kennedy reiterated these issues in a letter to the President on April 20, in which they committed to “moving health reform legislation in the Senate this year, and announced that their committees will mark-up comprehensive health care reform legislation in early June.” (1)

Keep in mind, as well, the important factor of Senator Arlen Specter moving to the Democratic Party. His shift, combined with the potential of Al Franken taking the Senate seat for Minnesota, and with the two independent senators voting with the Democrats, you have the potential of a Filibuster-proof Senate.

So, what does this have to do with Federal Programs as we understand them today?

First:

Let’s look at the President’s proposed budget, which includes a $633.8 Billion Health Care Reserve Fund and a $316 Billion dollar “Financing Component,” to finance part of the reserve fund. When you look at the details of the Financing Component in the budget, it looks like a lot of it will impact Pharma, including:
  • Increasing the minimum Medicaid prescription drug rebate from 15.1 to 22.1 percent of the Average Manufacturer Price, and applying it to new drug formulations,
  • Allowing states to collect rebates from Medicaid Managed Care plans,
  • Reducing drug prices, establishing a pathway for FDA approval of generic biologics, preventing drug companies from blocking generic drugs from consumers,
  • Strengthening Program Integrity by adding dedicated resources to CMS to improve oversight and program integrity.
Second:

Look at the legislation currently on the House and Senate Floor, keeping in mind that much of it represents legislation from prior sessions that never came to a vote, and are now in a potentially Filibuster-proof and reform-minded Congress. This includes over 15 pieces of legislation, covering areas such as:
  • Expanded SCHIP participation (passed),
  • Extending Medicaid Rebates to Medicaid Managed Care,
  • Government negotiation of Medicare Part D Rebates and Government sponsored Medicare Part D plans,
  • Increased use of Generics,
  • Broadening and enhancing the 340B Program, with expanded eligibility and enhanced administrative components,
  • Drug importation,
  • Requirements that manufacturers participate in State programs.
In Summary:

This is a business issue as much as it is a compliance and operational issue. 50% of Americans are expected to receive benefits through publicly funded programs by 2016. The Government may soon represent one of your largest customers, and the legislative action that is on the floor now may very well impact some of the price points of that customer base.

The tone of an administration that includes Nancy-Ann DeParle, Counselor to the President and Director of the White House Office of Health Reform, seems to be that Healthcare Reform, this time around, will be a more collaborative and cooperative process. What this means to me is that the concept of Universal Health Care is on hold over the short term. What is practical and realistic over the next few years will be to take incremental steps, through budget and legislative action, to change the eligibility and financing components of our current programs.

It is important that manufacturers have the ability to step back and look at how these pending changes may impact their products and their customers. The changes will impact branded, generic, and biotech companies very differently. Legislative changes in the programs over the next year or two may impact your business model over the next five to ten years. These changes, combined with the consideration that the government may eventually become a larger (if not your predominant) customer, makes this a topic well worth watching.

Concurrent to these changes is the message coming from the OIG and the States of an increased need to audit and monitor fraud and abuse. This translates to another key financing consideration, as the Federal government is seeing a 17 to 1 return on investment on their audit and investigative activity, and is continuing to pursue a collaborative process between the OIG, the DOJ and the States. (2)

The question, ultimately, is not whether there will be key changes to the Federal and State programs, it is whether we can be prepared for the inevitable changes and manage them from both a business and a compliance perspective.


Sources:
1. http://kennedy.senate.gov/newsroom/press_release.cfm?id=1D9CB1D9-42F6-4FA0-81A8-00F645381877

2. http://oig.hhs.gov/testimony/docs/2009/4-22-09HomelandSecurity.pdf
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