Ohio Health Lawyer & Attorney : Jayne Juvan : Benesch Friedlander Law Firm : Serving Columbus, Cleveland, Cincinnati, Toledo, Akron, Dayton, Parma, Youngstown, Canton, and Lorain OH

Following up on my earlier promises to track the 2008 presidential candidates as they make their bids for the White House, this post provides a list of the leading candidates, along with links to their web sites and the specific pages on their sites that discuss health care. 

When creating the chart that follows, I had a simple mission--to provide my readers with the names of candidates and links to their pages that deal with health care.  I found, however, that, generally speaking, the candidates' statements about the issues (not only health care, but many of the other leading issues as well) tend to be short and underdeveloped.  Indeed, there are a few who do a better job than others (for the sake of objectivity, we won't name names).  While I generally avoid opining on these issues, I must say that, for the most part, the posts are, well, pathetic  Let's hope that the candidates come forward with substantive ideas as we get closer to the election so that we actually have something to talk about!

Please note that we were unable to located specific pages that deal directly with health care for a few of the candidates.  If you are able to locate these pages, please contact me at jjuvan@bfca.com.

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The Health Rythym Society has reported that a preliminary study has indicated that iPods and other MP3 players may interfere with pacemakers.  According to the press release,

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The Healthcare Update News Service has made available a presentation entitled "Business Strategy in the Medicare Market: The Wall Street Perspective."  The presentation was given at the Medicare Congress in October 2006 by three individuals deemed to be a few of Wall Street's finest health care analyists, including:

• Charles Boorady, Managing Director, Citigroup Investment Research, New York, NY;
• Benjamin Edmands, Principal, JP Morgan Partners LLP, New York, NY; and
• Christopher McFadden, Healthcare Analyst, Goldman Sachs, New York, NY.

The panel discussion focused, at least in part, on investments in the health care sector, valuation of health care businesses and whether you can "trust the government as a partner," whether the government will pursue a single payer system, and insight into Wall Street chatter about the health care sector.  The speakers also touched on issues affecting the pharmaceutical industry, including Medicare Part D.

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According to Newt Gingrich, a likely presidential candidate, his competition is afraid to take the impending health care crisis on directly.  Quoted in Crain's Cleveland Business, Mr. Gingrich stated  before a group of health care executives at a forum sponsored by Kaiser Permanente, “It’s not a high-profit area for politicians. It’s too complicated.”  Politicians, he said, are concerned that by voicing their views, they will alienate everyone, including individual voters, doctors, insurance companies and hospitals.  While the article doesn't provide a lot of details about Gingrich's plan to reform the system, it does say that Gingrich recommended that the system be "changed to resemble the airline and automotive industries, where pricing, quality and accessibility become the greater factors, and negotiated contracts between insurers and health care providers do not determine how a patient is treated. "

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About a week ago, the Senate passed S.1082, which is also known as the Food and Drug Administration Revitalization Act (the "Act").  The following is a well done report posted by the RFID Law Blog that details a provision included in the Act that strikes a blow to the RFID industry.

Last week, the US Senate passed legislation that reauthorized the federal user fees on pharmaceuticals that help fund the FDA. Buried in the legislation was a provision -- posted earlier on this blog site -- authored by Senator Judd Gregg of New Hampshire, that would require Internet pharmacies selling to US citizens to use tracking technology to minimize the risk of counterfeiting.
An amendment to that language, offered by Senator Michael Enzi of Wyoming, legislates a specific technology solution - and it's not RFID. Indeed, it specifically excludes anti-counterfeiting technologies like RFID or barcodes that require readers, scanners or other devices to verify authenticity -- replacing the FDA's preferred tools with anti-counterfeiting technologies akin to those used on US currency.

I'd highly recommend that you check out the site to read the entire blog post.  RFID Update also offers interesting spin in its article New Law Serves as Warning to RFID Industry and cautions that the industry must take Washington and the lobbying scene very seriously if it intends to be a true player.  The article states, "While this internet pharmacy provision is unlikely to cause long-term detrimental harm to RFID adoption, it can be viewed as a lesson of what can happen if the industry does not more actively engage with Washington." 

The Act has yet to be considered by the United States House of Representatives.

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I have agreed to participate in a Q & A on drug pedigree laws sponsored by CIO Magazine and CSO Online.  Here's the description that has been published: 

Have a question about the legal requirements for RFID and e-pedigree in the pharmaceutical supply chain? Jayne Juvan, an attorney at Benesch Friedlander Coplan & Aronoff in Cleveland, is available to answer reader questions throughout May. Juvan specializes in the healthcare industry and represents pharmaceutical companies throughout the supply chain, as well as hospitals, physician groups and other related services.

 

 

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Ask James Christian from Novartis AG whether he believes that RFID is the "solution" to halting drug counterfeiting, and, based upon his remarks at the recent IQPC/Pharma IQ e-pedigree conference, I'd surmise that he'll likely question whether the word "solution" should be used at all.  Shay Reid chuckled as he introduced himself at the conference not long after Christian concluded his remarks, as he is AmerisourceBergen's vice president of integrated solutions. 

So, contrary to what Christian may contend, is RFID in fact the solution to the drug counterfeiting problem?  In CIO Magazine, Sarah Scalet, a senior editor for the publication, takes this question head on as she reveals the following five myths about RFID:

1. RFID tags are anticounterfeiting devices.  Wrong, she says, "[t]hey're made by semiconductor companies for inventory purposes," quoting Roger Johnston.
2. RFID technology is necessary to track the movement of legitimate drugs.  As explained by Reid both in the article and at the recent IQPC counterfeiting conference, RFID is only one small component of a strong anti-counterfeiting system.  ABC's track and trace pilot project incorporates many other technologies, including 2-D barcodes and VeriSign's authentication registry.
3. RFID technology can be used to mark pills, tablets and elixirs themselves.  Scalet cites to Christian in refuting this myth, who states that only the packaging is being tagged, not the pills.  What's more is that, because current regulations allow for repackaging, "[i]f a pharmaceutical company invests a great deal of money into putting security devices in packaging, the product could easily be transferred legally to a package with no security device."
4. RFID technology will let consumers verify that they have purchased legitimate products.  No one, including the FDA, has proposed a system that would allow consumers to ensure products they purchase are authentic, and privacy concerns are prompting the disabling of tags prior to dispensing the drugs to the end user.
5. The pharmaceutical industry is this close to widespread RFID adoption.  I'm not sure that the pharmaceutical industry is this close to anything when we're talking about pedigree.

Adam Fein, one of the leading authorities on pharmaceutical supply chain matters, has expounded on Scalets myths on his blog Drug Channels.  In addition to providing valuable comments on Scalet's article, Fein also exposes interesting inaccuracies contained in statements in a leading industry publication.

 

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Michele Nance, a law school professor who specializes in health and constitutional law, has announced that Seton Hall Law School will be hosting a health care compliance forum.  Here are the details from the law school's web site: 

June 29, 2007 - Friday - 8 a.m.

Single Day Compliance Program: Focus on State Compliance Issues

This is a single-day follow-up program to our Health Care Compliance Certification Program. This program will address those current compliance issues facing the pharmaceutical and medical device industries in dealing with the variety of state regulations. Topics will include: state regulations, state False Claims acts, Pedigree laws, and state pricing disclosures. More details and a full agenda will be forthcoming.

This event is for past participants of the Health Care Compliance Certification Program and other individuals dealing with compliance in the pharmaceutical and medical device industries.

For further information please call (973) 642-8863.  Registration is required.

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Chris Fleming posted an interesting article on the Health Affairs Blog this week entitled "PHARMA: McClellan Predicts Resurgence of Rx Drug Access Concerns."  Fleming begins the article by discussing the Senate's passage of the Food and Drug Administration Revitalization Act sponsored by Ted Kennedy and Michael Enzi.  According to Enzi's press release, "the bill establishes a system of active surveillance for drugs already on the market, and explicitly gives the FDA new authority through Risk Evaluation and Mitigation Strategies (REMS) to respond quickly and appropriately when previously unknown risks arise."

In the article, Fleming details remarks given by former CMS administrator and head of the FDA Mark McClellan at the National Press Club.  According to Fleming, McClellan called the bill "the biggest set of changes in post-market drug regulations since at least 1962."  McClellan described the so-called tug of war between access to drugs on the one hand and safety concerns on the other.  While, given the Vioxx debacle, the focus has shifted to safety, soon attention will shift back to access concerns, McClellan predicted.

Indeed, McClellan has rightfully portrayed the tension between market access and drug safety.  On the one hand, it is of the utmost importance that life saving drugs make their way to the market as quickly as possible, and on the other, the devastating losses suffered when a drug goes terribly awry, causing life altering or ending side effects, are often difficult to justify.  Interestingly, at the same time that the Vioxx litigation presses on, the Abigail Alliance case proceeded forward in effort to get the courts to determine that terminally ill patients have a constitutional right to potentially life saving treatments, treatments that may in fact neither be safe nor effective.  In both cases, the FDA is criticized. 

Knowledge is power, but sometimes we all have to make decisions when a life is at stake and we have less than the most desireable information available.  When my mother was diagnosed with breast cancer, she opted to take Herceptin, a relatively new biotech drug manufactured by Genentech.  The drug was not FDA approved for women with early stage breast cancer at the time.  I read every clinical trial available, drilled her oncologist with questions about safety and efficacy of the drug and conducted a risk/benefit analysis.  At the end of the day, however, I found that, when you find yourself fighting an aggressive disease and the science places you in an area that's terribly gray, you're more likely to roll the dice.  Perhaps the simple answer is that both the delays to market entry and drug safety ought to be evaluated in light of the severity of the illness at issue. 

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With the presidential campaign full speed ahead, coverage of the candidates' views on health care has dramatically increased.  Unfortunately, though news coverage has increased, according to leading news organizations, as is often the case, many of the candidates are weary about presenting too defined of a plan for universal health care in fear that they may turn off certain supporters they desperately need  to win.  Focusing on the lackluster attention universal health care has gotten by the candidates in recent days, USA Today reports that

• Mitt Romney has refrained from highlighting plans for universal health care in speeches;
• Hillary is cautious in approaching the subject because of the negative press she received over her 1993-94 attempts at reform; and
• Others are concerned about balancing the need for universal health care against the backlash they might receive from insurance interest groups.

Attempting to differentiate himself from other candidates, John Edwards has gotten positive press for his calls to cure the system.  Recently, as quoted by the Associated Press, Edwards stated, "I believe this in my soul:  That no matter who your daddy is or where you live, or what the color of their skin is, every single one of us has value."  He continued, "But if we believe those things, we have to act on them.  If we believe that, we should have universal healthcare in our country." 

Perhaps the subject of universal health care hits closest home to Edwards, whose wife Elizabeth was recently diagnosed with an incurable recurrence of breast cancer.  When I asked Ms. Edwards about the Edwards plan for universal health care at a campaign stop to Cleveland after the news hit, Ms. Edwards stated that she understood that the worries from a devastating diagnosis are significantly exacerbated by financial woes when a patient lacks health care coverage. 

While some of the candidates are unwilling to be forthcoming with their plans, a few with less to lose politically took significant steps to reform the system last week.  Senator Edward M. Kennedy and Representative John Dingell introduced a bill that would extend Medicare coverage to all Americans, including those who are currently not eligible because of their age.  In a press release, Kennedy stated, "The nation's health care has reached such a crisis point that the American people are looking for bold action. . . . I believe that the best plan for the nation is to build on a program that all Americans know and respect by creating Medicare for All.  Medicare administrative costs are low.  Patient satisfaction is high . . . . And all Americans will be free from the fear of medical expenses that enable them to seek the best possible care when illness strikes." 

If you are interested in the subject of universal health care, see also Does Universal Health Care Have a Chance?

**Though this article provides a positive note about the Edwards campaign, Juvan's Health Law Update will aim in future posts to also highlight positives for the other candidates.

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The Department of Health and Human Services has launched a new web page designed to provide information regarding compliance with and the enforcement of the HIPAA Privacy Rule.  The Privacy Rule is enforced by the Office of Civil Rights and, as noted on the web page, purportedly aims at the protection of the confidentiality of a patient's medical records.  The page provides specific case examples, an overview of the enforcement process and highlights from enforcement actions.

Interestingly, since April 14, 2003, 4,447 cases against pharmacy chains, major medical centers, health plans, hospital chains and small provider offices required corrective action, 2,155 of the cases found no violation and the remaining 13,875 of the cases were not eligible for enforcement (most of these cases were dismissed for lack of jurisdiction, failure to timely file or to pursue a complaint, or because the disclosure was permissible).   To date, a total of 26,408 complaints have been received, and 22% of the complaints filed remain pending. 

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The FDA has continued to aggressively fight the injunction issued by the District Court for the Eastern District of New York in Rx USA Wholesale v. Department of Health and Human Services, Food and Drug Administration.  The injunction issued in the case prohibits the FDA from requiring that secondary wholesale distributors of pharmaceuticals pass a pedigree that tracks each prior sale of a drug, a requirement that secondary wholesalers claim is impossible given that the statute and accompanying regulation do not impose a concomitant obligation on authorized distributors, or those distributors that have entered into an agreement with the manufacturers.

The FDA has appealed the lower court's ruling and most recently filed a brief urging the Second Circuit Court of Appeals to overturn the injunction.  The brief argues that (1) congressional intent is clear on the face of the statute that drug pedigrees must track the chain of custody back to the manufacturer, (2) the statute and regulations comport with the protections in the equal protection and due process clauses, as they are rationally related to Congress's desire to curtail pharmaceutical counterfeiting and consistent with Congress's findings that "non-authorized distributors were the avenue through which most diverted drugs entered the retail market and created public health dangers," and (3) the scope of the preliminary injunction is far too broad because it prohibits the FDA from requiring that drug pedigrees include the information set forth in subsections (1) through (5) of the regulation.  In the brief, the FDA states with respect to the latter argument that "Plaintiffs have not, and cannot, claim that it is impossible for them to supply this additional information, as it is readily apparent on the face of the drugs' labeling."

With the hold on the federal drug pedigree regulations requiring secondary distributors to trace the chain of custody back to the manufacturer currently in place, the focus has shifted to the states.  Last week, I received a call from an individual from the Texas legislature informing me of progress of the Texas drug pedigree legislation.  For those who are interested in tracking the legislation on a state by state basis, you can follow the developments of the proposed Texas law on the state legislature web site.  

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On Wednesday, the Department of Health and Human Services named Robert Kolodner as the permanent leader of the Office of the National Coordinator for Health Information Technology.  Kolodner has served in the post as the interim coordinator since September 20, 2006.  In this capacity, Kolodner will advise Michael Leavitt, Secretary of the Department of Health and Human Services, about health information technology projects and related issues and will lead the effort for the implementation of interoperable health information technology by medical providers.

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Last week, I attended and presented at the Pharma IQ conference entitled "e-Pedigree and Business Strategies for Drug Supply Security" held in Philadelphia, Pennsylvania.  At the conference, Tim Marsh from Pfizer, Inc. discussed Pfizer's anti-counterfeiting strategies, Dennis Luken, a detective with the Warren county, Ohio drug task force and the National Treasurer of the National Association of Drug Diversion Investigators reviewed the problem of drug diversion and counterfeiting in 2007, while Jim Christian from Novartis AG emphasized that RFID and track and trace technologies are not "solutions" to the counterfeiting problem.  Shay Reid, Vice President from Amerisource Bergen Corp., discussed Amerisource Bergen's attempts to become compliant with California's pedigree laws by 2009, and Robert Drucker from Rx USA Wholesale informed the audience about events that caused him to sue the FDA to prohibit the enforcement of regulations requiring secondary wholesalers to provide pedigrees tracing back to the manufacturer that fail to impose a concomitant obligation on authorized distributors.  Attorney Michael Levine also discussed his involvement in the case and the status of the injunction.  For those of you who are following the case, if you haven't already, I urge you to review the Pharmaceutical Market Access and Drug Safety Act of 2007, which includes language that, if implemented, would require manufacturers and authorized distributors of pharmaceuticals to likewise pass a pedigree.

While I was away in Philadelphia, the following stories made headlines:

• CMS Issues Proposed Decision Memorandum for Medicare National Clinical Trial Policy.  CMS has proposed revisions to its coverage policy for items and services furnished in a clinical trial.  As stated in the press release, the changes would include the following:
  • Renaming the policy as the Clinical Research Policy; 
  • Adding FDA post-approval studies and coverage with evidence development (CED) to studies that would qualify under this policy;
  • Requiring all studies to be registered on the NIH ClinicalTrials.gov website before enrollment begins;
  • Requiring studies to publish their results;
  • Paying for investigational clinical services if they are covered by Medicare outside the trial or required under an CED through the NCD process; and
  • Expanding the “deeming” agencies to all DHHS Agencies, the Veterans Administration, or the Department of Defense.  Deeming agencies are agencies that can “deem” whether a trial has met the general standards outlined in the policy.

See also the Proposed Decision Memorandum, available on the CMS web site.

• Kaiser Family Foundation Reports that Health Care Has Become an Important Campaign Issue.  The Kaiser Family Foundation summarized articles in leading newspapers reporting that health care has become a focus on the 2008 presidential campaign trail.  I would also recommend that readers review the New York Times Article "For Democrats, Health Care is a Rite of Passage."  As the election nears, Juvan's Health Law Update will begin tracking the views of the candidates on both sides of the aisle.

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On February 8, 2005, President Bush signed into law the Deficit Reduction Act (the "DRA").  Among the most noteworthy provisions included in the DRA is a provision that requires employee education about the False Claims Act ("FCA") and applicable laws that protect, and even reward, employees who act as whistleblowers. The DRA specifically requires entities that receive or make annual payments of at least $5,000,000 pursuant to any state Medicaid program to establish written policies for employees that explain the provisions of the FCA, any state false claims laws and the applicable administrative remedies. The policies must also include a description of whistleblower protections and an explanation of internal policies that aim to prevent fraud and abuse. An employer must include a discussion of these matters in the employer's employee handbook. Entities that fail to comply risk exclusion from the Medicaid program.

Despite the fact that the deadline for compliance has passed, many in the industry have complained that the law included far too many ambiguities.  In response, the Centers for Medicare and Medicaid Services has issued answers to frequently asked questions.  The sixteen page guidance document covers many issues, including providing a more clear definition of the term "entity" and describing whether health systems with subsidiaries having less than $5,000,000 in payments but that exceed this amount collectively must have in place the required policies.

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On April 2, 2007, the Centers for Medicare and Medicaid Services ("CMS") announced the implementation of a contingency plan for entities, except small health plans, that are unable to meet the May 23 deadline for compliance with the National Provider Identifier rules.  For a period of one year, expiring May 23, 2008, CMS will not take enforcement action against those entities that have been making a good faith effort to comply if certain requirements are met.  

CMS will hold a roundtable on Wednesday, April 18, 2007 from 2:30 p.m. to 4:00 p.m. EST to discuss the new guidelines.  Registration is required, and registration information is available online.   Please note that registration for the call will close at 1:00 p.m. EST on April 17, 2007.

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Due to an unavoidable circumstance, Juvan's Health Law Recap was not published for the last two weeks.  Juvan's Health Law Recap will resume publication on Sunday, April 15, 2007.  I apologize for any inconvenience this may have caused.

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Here's a review of some of the stories that captured the headlines last week:

• Money, Money, Money!  The Joint Commission on Taxation has reported that President Bush's proposal to create a standard tax deduction of either $15,000 for families or $7,500 for health insurance and categorize funds used for health insurance as taxable income would increase taxes paid by nearly $334 billion dollars in ten years.  Responding to the findings, Pete Stark stated that the conclusions "provide ample reason to doubt the plan's effectiveness and raise concerns about its cost." See also the CBO's Analysis of the Proposal. 
• FDA to Toughen Advisory Committee Membership Requirements.  Again taking a defensive posture, the FDA announced last week that it will implement a more stringent protocol to screen advisory committee participants to root out financial conflicts of interest.  Speaking of the new approach, Randall Lutter, the acting deputy commissioner for policy at the FDA, stated, "FDA is committed to making the advisory committee process more rigorous and transparent so that the public has confidence in the integrity of the recommendations made by its advisory committees . . . . Today's draft guidance document should provide more consistency in the consideration of who is eligible to participate in advisory committee meetings and would simplify the process."  See also the Draft Guidance; the FDA's Comment Submission Page; the FDA's Page on Advisory Committees; and Mark Senak's Review of the Requirements.
• Joint Commission.  The Joint Commission has released a report entitled Improving America's Hospitals: A Report on Quality and Safety.  Make sure to check it out!

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On Friday, Michael Leavitt, the Secretary for the Department of Health and Human Services, outlined a plan for "personalized health care," which is defined in the press release as "gene-based medical care combined with health information technology."  Speaking of this new initiative, Leavitt stated, "Personalized health care will combine the basic scientific breakthroughs of the human genome with computer-age ability to exchange and manage data . . . . Increasingly, it will give us the ability to deliver the right treatment to the right patient at the right time--every time."  While Leavitt advocates for advances to this program, privacy rights activists would likely prefer that the phrases "gene-based medical care" and "health information technology" not be used in combination.

Leavitt's announcement also outlined several steps that must be taken to reap the benefits of this powerful combination, including the following:

• reviewing the implications on privacy protection and the "anticipated effect on the confidentiality, privacy and security of individually identifiable health information";
• taking steps to ensure that genetic tests are accurate and reliable;
• developing "consistent policies for [HHS] agencies regarding access to and security of federally supported research"; and
• receiving recommendations from the American Health Information Community for health information technology standards applicable to genetic testing information.

Leavitt called the development of a personalized health care system one of his priorities for the next two years. 

Additional Resources:

United States Department of Health and Human Services Personalized Health Care Page

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FDA News reported last week that Michael Leavitt, the Secretary of the Department of Health and Human Services, speaking at the annual PhRMA board meeting,recommended that the United States health care system be modeled after Medicare Part D, calling the new prescription drug program a "resounding success."  Specifically, Leavitt asserted that competition and quality standards should control and that consumers should have the ability to compare prices.  Moreover, experts "should establish an average price for an episode of care--a combination of procedures that a patient may need."

Leavitt is correct in stating that Medicare Part D has been a success and that competition has driven prices down significantly.  In theory, modeling the entire health care system against Medicare Part D sounds promising.  Nevertheless, Medicare Part D has been criticized because the program's complexity requires that seniors have assistance from someone with significant knowledge of the intricacies to enroll and therefore is a barrier to those who have insufficient resources.  At least arguably, this complexity may only be exacerbated if the same formula is applied to the entire health care system.  While Medicare Part D could serve as a starting point for think tanks, it seems premature to have the program serve as a model for the entire health care system. 

 

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The Medical Humanities Blog recently featured Juvan's Health Law Update.  The blog is written by Daniel Goldberg, a second-year student in the Ph.D program in medical humanities at University of Texas Medical Branch's Institute for Medical Humanities.  Daniel is also an attorney and currently serves as a Research Professor with the Health Law and Policy Institute at the University of Houston Law Center.  Along with top-notch commentary, the blog  includes links to many worthwhile medical humanities and health law and policy sites.  Here's a look at Daniel's article:

Generic & Brand-Drug Agreements to Delay Market Entry

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Generics--Drug Sales--Quality of Care

Here's a look back at a few noteworthy stories from last week...

• Biotech Generics.  Last week, FDA Commissioner Andrew von Eschenbach delivered a blow to makers of generics when he noted that generic versions of biotech drugs, which are generally more complex than chemical-based drugs and therefore more difficult to copy, will only be considered "similar" to brand name drugs.  As reported by the Washington Post, von Eschenbach stated at the PhMRA annual meeting, "We recognize that the end point would be what could be best described as similarity. Similarity in the sense that when a doctor gives you the product _ delivered it to a patient _ it will achieve an effect that is similar to the effect that we expected from the innovative . . . compound."  While the FDA is developing guidelines to evaluate generic versions, the Generic Pharmaceutical Association pointed out that the FDA does in fact have the "scientific knowledge to approve knockoffs, just as it now can sign off on the changes made by brand-name biotech companies in how they produce their drugs." 
• Drug Sales Increase in 2006.  IMS Health reported a 8.3% increase in drug sales last year and projects growth by 6-9% through 2010.  Diana Commy, corporate director, IMS Market Insights, commented on last year's growth by saying, “This growth was driven by factors that include an aging population and the introduction of the Medicare prescription drug benefit, which increased prescription coverage to the previously uninsured and underinsured, and provided generous plan benefits to seniors.” 
• JAMA Highlights Health Care Access and Quality of Care Issues.  On Wednesday, as reported by the Kaiser Family Foundation, the Journal of the American Medical Association published articles discussing access to health care and quality of care.  Here's a few of the conclusions reached in the articles:
  • "Patients without health insurance are less likely to receive treatment after injuries or diagnoses of chronic diseases."
  • "Patients in many cases do not receive necessary follow-up care, regardless of whether they have health insurance."
  • "Physicians should work in teams and measure the quality of care provided to patients to help reduce costs and reduce other problems in the U.S. health care system."
  • Spending on emergency care for recent documented and undocumented immigrants accounted for less than 1% of the North Carolina Medicaid budget annually between 2001 and 2004."

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Most recent news releases discussing the reputation of the FDA have failed to combine the words FDA, integrity and accountability.  Instead, many news stories have included words that convey the opposite message, including, for example, the words deficiencies and "culture of approval."  But alas, for critics, at least, it appears that the barrage of negative media spin and congressional testimony has grabbed the attention of FDA Commissioner Andrew von Eschenbach, forcing him to issue a response.

Seemingly  to combat recent allegations, von Eschenbach announced the creation of the FDA Office of Integrity and Accountability at PhRMA's board meeting held on March 15.  According to FDA News, von Eschenbach stated at the meeting that the mission of the new office will be to ensure that the FDA is "scientific in perspective" and brings "precision to regulations."  The deputy commissioner of policy will oversee the office. 

Indeed, given the steady attacks launched against the FDA, such an office seems to be necessary, appropriate and perhaps, at least according to critics, even overdue.  Whether the new office will actually achieve its mission and calm the criticism, however, remains to be seen.

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Last week, the FDA approved Tykerb, a targeted therapy for the treatment of women with advanced Her-2 positive breast cancer.   While similar Herceptin, Genentech's Her-2 blockbuster, Tykerb differs from Herceptin in a meaningful way.    "Unlike, for example, trastuzumab [Herceptin]--a monoclonal antibody, which is a large protein molecule that targets the part of the HER2 protein on the outside of the cell--Tykerb is a small molecule that enters the cell and blocks the function of this and other proteins."  Tykerb will be distributed by GlaxoSmithKline.

Commenting on the new drug, Steven Galson, Director of FDA's Center for Drug Evaluation and Research, stated, "New targeted therapies such as Tykerb are helping expand options for patients." 

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Welcome to daylight savings time, which has been moved up from April!  Hopefully, the extra sunshine will calm the nerves of those whose blackberries are still an hour behind and whose calendar appointments are incorrect.  My calendar, for example, has shifted all of my lunch appointments to 10:00AM--so I'll either be finding myself drastically early for lunch or having brunch with acquaintances whose calendars are likewise confused.  If only the weather in Cleveland could also be affected by the change and undergo an early 50 degree shift in temperature...

On a more serious note...Generics, Generics, Generics! Generics made news on several fronts last week.  First, on Wednesday, the Senate Committee on Commerce, Science and Transportation Subcommittee on Interstate Commerce, Trade and Tourism reviewed the safety of drug importation.  At the hearing, Billy Tauzin, President and CEO of PhRMA,  stated that the closed system that blocks importation is the only way to ensure a safe supply chain.  Tauzin also launched attacks against those who argue that the cost savings of importation benefits consumers when he stated that "[m]ost of the savings would likely go to third party payers, such as insurance companies and HMOs."  Likewise, Randall W. Lutter, Acting Deputy Commissioner for Policy at the Food and Drug Administration, stated that the risk of receiving counterfeits is drastically increased when drugs are purchased online and that drugs purchased from foreign markets often have similar names but different active ingredients.  So--how is this news item tied to generics?  In his testimony, Lutter emphasized that generics, not imports, are the answer to cost control. 

In related legislation, lawmakers are also continuing to consider whether to ban negotiations between generic drug companies and makers of brand name drugs that effectively delay or prohibit the entry of lower cost drugs to the market.  The details of the hearing are set forth more fully in the post linked to above. 

Finally, lawmakers considered a bill last week that would provide the FDA with the authority to approve generic forms of biotech drugs.  Currently, the FDA lacks this authority because of the difficulty of creating generic equivalents of these drugs, which are made with living organisms.  As reported by the Kaiser Family Foundation, the proposed legislation requires that the drugs be comparable or interchangeable and that the principal molecular features be highly similar to the brand name. 

Merger mania revived!  Caremark RX, Inc. and CVS inched forward toward completion of their merger plan last week when a new proposal offered to increase by an addition $1.50 a special cash dividend, bringing the total to $7.50 per share.  As reported by the Wall Street Journal, the company post-merger would also "commence a cash tender offer for 150 million, or 10% of outstanding shares at a fixed price of $35 each."  The Wall Street Journal views this new offer as bringing "the competing proposals largely in line on a dollar basis" and giving CVS "a significant advantage in its ability to close the deal quickly."  While rival company Express Scripts has also raised its offer, Express Scripts currently does not have regulatory approval of its proposed deal from the Federal Trade Commission. 

Interested in an update on the NLRB's Oakwood decision?  On March 7, the BNA Daily Labor Report, which discussed the early impact of the Oakwood decision, stated that the fallout has thus far not been quite as severe as would have been originally anticipated.  However, while management attorneys speaking at a conference held by the American Bar Association stated that the "decision has not had much impact on supervisory determinations," union attorneys speaking at the same conference claim "that the full impact has yet to be felt." 

As previously discussed on Juvan's Health Law Update,  the NLRB held in Oakwood that charge nurses employed by an acute care hospital executed supervisory authority within the meaning of Section 2(11) of the NLRA because they assigned responsibilities to other nurses and exercised independent judgment in making these assignments.  

 

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With the Democrats taking over Congress, brand name drug companies could find themselves unable to negotiate with makers of generics to delay market entry, Bloomberg reports.  Consumer focused legislation backed by the Federal Trade Commission is gaining momentum and could potentially prohibit brand name drug companies from settling patent litigation by paying generic drug makers for delaying their products.  The Senate Judiciary Committee recently approved the proposed ban, and the House will soon be taking up the topic. 

Consumer group advocates have argued that the current system favors both generic and brand name companies while detrimentally impacting consumers who are forced to front the high cost of brand named drugs while the delay is in effect.  Others, such as Bill Tauzin, a former Republican congressman from Louisiana, believe that such deals are actually pro-consumer.  In the Bloomberg article, Tauzin is quoted as saying that the payments "can benefit consumers'' by ending costly patent litigation that can cause longer delays in marketing generic drugs and can exhaust the litigants' "valuable resources." 

Perhaps only time will tell whether this legislation can actually get through both the House and the Senate and meet with the approval of the President.

For more information on this topic, make sure to check out the well done Orange Book Blog written by attorney Aaron Barkoff.  The blog highlights stories "at the intersection of  patent law and FDA law."

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As reported by the Kaiser Family Foundation and the American Health Lawyers Association, health care reimbursement and the financing crisis occupied health care news last week.  Here's a look at a few financing/reimbursement related stories: 

(1) New Physician Reimbursement Formula Proposed.  The Medicare Payment Advisory Commission issued a report on physician reimbursement that proposes a shift from the Sustainable Growth Rate formula (which, if continued, would cause a decrease of 40% over the next eight years) to an alternative reimbursement approach.  The Commission also suggested, inter alia, that physicians should receive more information regarding their overuse of procedures, that incentives should be adopted to encourage teamwork between providers, thereby increasing coordination, and that incentives should be adopted to encourage providers to provide more preventive care.

(2) Most Would Pay Increased Taxes to Fund Universal Health Care.  The New York Times and CBS issued results of a survey indicating that at least 60% of  adults would agree to pay higher taxes to fund universal health care.

(3)  9/11 First Responders Should Receive Medicare Benefits.  Lawmakers claimed that additional funding should be allocated to treat first responders to the 9/11 attacks.  To further that end, Senator Clinton and Representative Nadler will propose legislation to provide Medicare benefits to individuals with illnesses resulting from the aftermath of the attacks. 

(4) Spitzer Defends Health Care Cuts.  New York Governor Eliot Spitzer launched an ad campaign that defends his proposal to reduce spending on health care by $1 billion dollars. 

(5)  Medicare Part D Is Financially Irresponsible.  U.S. Comptroller General David Walker discussed the financial irresponsibility of Medicare Part D when he stated that "Medicare--barring vast reform to the program and the nation's healthcare system--is already on course to possible bankrupt the treasury and adding the prescription bill just makes the situation worse." 

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The FDA has recently published a guidance document entitled "Drug Safety Information--FDA's Communication to the Public" that discusses the procedure by which the FDA disseminates drug safety information.   The FDA noted that it has been taking a more comprehensive approach to reporting drug safety information to the public and may make safety announcements even before the FDA has decided to take regulatory action.    The FDA acknowledged, however, that "[t]here will always be some tension between the goal of having people informed about potentially important information as early as possible and the goal of having that information thoroughly substantiated."  To address this tension, the FDA will consider multiple factors when determining whether to make information available, including the following:

(1)  Reliability of data;

(2)  Magnitude of the risk;

(3)  Seriousness of the event relative to the disease being treated;

(4)  Plausibility of a causal relationship between the use of a drug and the adverse event;

(5)  Extent of patient exposure;

(6)  Potential to prevent or mitigate the risk in the patient population;

(7)  Effect on clinical practice; and

(8)  Disproportionate impact on particular populations.

The FDA qualified the guidance document by stating that the FDA reserves the right to modify its current approach and to amend the guidance document in the future.

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The Healthcare Update News Service has made available the keynote presentation given by Robert S. Galvin, Director of Global Healthcare at General Electric Company, at the National Pay for Performance Summit held on February 14, 2007.  In the presentation, Galvin discusses the recent positive momentum behind pay for performance, recent attacks launched against the program and the difficulties that lie ahead.

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Last week, I visited Orlando, Florida for the American Health Lawyers Association Long Term Care in the Law Conference.  This week's Health Law Recap will focus on a few themes and trends identified at the Conference. 

• Shift in Long Term Care Reimbursement.  Leslie Norwalk, the Acting Administrator for the Centers for Medicare and Medicaid Services (CMS), focused on the increased pressure on the federal government resulting from the health financing crisis.  In response, federal reimbursement for long term care will shift in favor of home health agencies and away from skilled nursing facility care.
• Employee Education About False Claims Act.  Many attorneys expressed to representatives of CMS that there continues to be substantial and noteworthy ambiguities in connection with the Deficit Reduction Act employee education requirements.  One attorney noted that the requirement applies to an entity that has less than 5 million dollars in Medicaid payments if the entity is affiliated with other entities that receive 5 million or more in such payments.  Representatives for CMS have promised that further clarification will follow shortly.
• Plaintiffs' Lawyers Use Web Sites, E-Mail Addresses to Pierce the Corporate Veil.  There has been a strong trend for parent companies who acquire nursing home facilities to form separate subsidiaries to act as holding companies and operating companies for each nursing facility acquired.  One prominent defense attorney noted that plaintiffs' lawyers have begun to cite to web sites and e-mail addresses to build a case for veil piercing.  The lawyer cautioned that employees in each separate company should have different e-mail addresses. For example, if the parent company is named "Health Care Solutions, Inc.," one subsidiary is named "Brecksville Health Care Solutions, Inc."  and the other is "Madison Health Care Solutions, Inc.," the employees at the parent and both subs should not have their e-mail address as "employeename@healthcaresolutions.com."  Instead, the following e-mail addresses would help to show that the three entities are separate legal entities:
  • Parent Company:  employeename@healthcaresolutions.com
  • Brecksville Health Care Solutions, Inc:  employeename@brecksvillehealthcare.com
  • Madison Health Care Solutions, Inc:  employeename@madisonhealthcare.com

In addition, the attorney noted that legal counsel should review a company's web site and that the web site should clearly state that each facility is owned by a separate legal entity.

• Medicaid Fraud Enforcement Is on the Rise.  Many representatives of the federal government emphasized that, in the upcoming years, the government will have increased budgets to implement Medicaid fraud controls and pursue Medicaid fraud investigations.  In the past, Medicaid has not received the same scrutiny as have other federal health care programs. 

 

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The Kaiser Family Foundation has made available a webcast entitled "The Future of Medicaid:  Is It Sustainable, and Should It Be Reformed?"  The webcast features the following speakers:

John Iglehart Founding Editor, Health Affairs National Correspondent, New England Journal of Medicine Session Moderator

David Rousseau, M.P.H. Principal Policy Analyst, Kaiser Family Foundation's Commission on Medicaid and the Uninsured Director, statehealthfacts.org

Richard Kronick, Ph.D. Professor and Chief Division of Health Care Sciences University of California, San Diego

John Holahan, Director, Health Policy Center, Urban Institute

Alan Weil, J.D. Executive Director National Academy for State Health Policy

Jean Lambrew, Ph.D. Senior Fellow, Center for American Progress  Associate Professor for Health Policy, George Washington University

Howard Cohen, Attorney HC Associates

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The Healthcare Update News Service has made available a speech given by former FDA Commissioner Jane Henney, M.D.  The speech is entitled "Reflections of a Former FDA Commissioner" and was given at the Second Annual FDA Regulatory and Compliance Symposium--Managing Risks: From Pipeline to Patient held in August 2006 at Harvard. 

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