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:

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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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Last week, Clevelanders spent most of their time digging out from the Valentine's Day Blizzard.  On Wednesday, the latest snowfall count in Northeast Ohio totaled eighteen inches, and today we received another six more.  To my friends who are glad that they don't live in a snow belt, there is an upside:  the snow was so bad on Wednesday that most businesses shut down and called it a snow day (the downside--most Valentine's Day deliveries were postponed until Thursday)!  Fortunately, I'll be leaving all of the snow behind and joining some of my friends in Florida who are laughing at our misfortune when I fly out to Orlando for a conference held by the American Health Lawyers Association.

Here's a look back at a few noteworthy events of the last week:

• The Delaware Chancery Court blocked the important Caremark/CVS merger vote, at least temporarily, thereby granting additional time to Express Scripts to launch its rival bid and gain antitrust clearance.
• Parade Magazine published an article about counterfeit drugs entitled Is Your Medicine Dangerous to Your Health? The article highlights that, while only 1% of drugs in the U.S. are counterfeits, counterfeiting is growing rapidly, several Americans have died from fake drugs and counterfeiters have taken in nearly $35 billion in profits.  However, as reported by Adam Fein, a lead author and expert on the issue of fake drugs, the article falls short in citing to RFID as the miracle cure for the problems in the supply chain.
• Lawmakers introduced legislation bringing Tobacco regulation within the FDA's jurisdiction, though there's still no clear indication that the FDA can handle its current responsibilities.

Looking to the upcoming weeks, the U.S. Court of Appeals for the District of Columbia will reconsider the Abigail Alliance case on March 1.  The case addresses whether terminally ill patients have a constitutional right to obtain access to experimental medications.

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If you have an employee who isn't performing, would you expand the scope of the employee's duties?Apparently, some of our lawmakers would.  

Last week, the House Subcommittee on Oversight and Investigations held a hearing to discuss the many deficiencies of the FDA's drug review process.  At the hearing, David Ross, a ten year employee of the agency, stated that the FDA manifests a "culture of approval to get a drug product on the market as soon as possible."  He further referenced a drug that made its way to market despite evidence of fraud, liver damage and death.  While the transcript of the hearing is not yet available, you can listen to the testimony by visiting the Subcommittee's web site.   

At the same time, another group of lawmakers introduced legislation that would provide the FDA with the authority to regulate tobacco.  Among other things, as reported by the Kaiser Family Foundation, the legislation would allow the FDA to regulate the "sale, distribution and promotion of tobacco products."  In a Los Angeles Times article, Representative Henry A. Waxman is quoted as saying, "This bill is long overdue, and this is the year, I believe, that regulation of tobacco by the Food and Drug Administration is going to become law."

As highlighted in the Subcommittee's hearings, many believe that the FDA has ineffectively regulated drugs and devices.  Can the FDA handle this new mandate of tobacco regulation if it gains the force of the law?

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For those of you who are following closely the developments with respect to the PDMA, I wanted to alert your attention to an article by Pharmaceutical Commerce released in December that highlights developments in fifty states regarding drug pedigree requirements.  The article, entitled Red State, Blue State--and Green, Yellow and Orange Too,  provides the following fifty state summary: 

• Two states have passed legislation and approved regulations;
• Ten states are in the process of finalizing regulations;
• Five states have passed legislation but have not drafted regulations;
• Twelve states, including Ohio, have not approved such legislation; and
• Twenty-one states are at various other stages. 

As the article rightfully points out, "[f]or a pharma distributor intending to distribute to more than a few states, there's one word for the map: ugly.  The problem, basically, is that the number of variations for requirements are multiplying . . . ." 

As noted above, this article was released in December, and the current status of each state's legislation may not be accurately reflected.  Wholesalers should take care to comply with all applicable state and federal laws and regulations and to track developments closely.

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The Wall Street Journal reported today that the Delaware Chancery Court has postponed the shareholder vote on CVS Corp.'s ("CVS") takeover bid of Caremark Rx Inc. ("Caremark").  According to the article, the Chancery Court also suggested that Caremark should enter into negotiations with Express Scripts Inc. ("Express Scripts"), whose $27.3 billion dollar bid has been rejected.  At the earliest, the shareholder vote on the CVS deal will take place on March 9. 

Caremark has long rejected the competing proposal of Express Scripts on the grounds that the deal would violate antitrust laws.  Indeed, the merger of these two companies would unite two of the largest pharmacy benefit managers in the country.  Nevertheless, the judge questioned this rationale, stating that such concerns did not prevent Caremark from entering into negotiations with Express Scripts in the past.  

Responding to the move by the Chancery Court, Caremark stated in a press release,

Caremark will inform shareholders as promptly as possible regarding the new date of the special meeting to approve the CVS merger. With the tripling of the special cash dividend to $6.00 per Caremark share announced earlier today, the CVS merger now offers Caremark shareholders even greater near-term value than it did before, in addition to longer-term strategic benefits and growth opportunities. The Company looks forward to obtaining shareholder approval as soon as possible and promptly closing this merger, which has already received regulatory clearance.
     

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Last week, the FDA cleared the way for the MammaPrint test, a diagnostic test designed to predict the likelihood of breast cancer recurrence.  As a person with a family member who has battled this terrible disease, I can attest personally to the fact that breakthroughs such as this continue to bring renewed hope to survivors.  While we all debate reimbursement rates, the impending health financing crisis and the like, one thing is certainly true:  positive developments in modern medicine truly do have the ability to change lives.

In addition to FDA clearance for MammaPrint, President Bush last week proposed reducing Medicare and Medicaid spending by $101 billion over five years.  In a controversial move, Bush has proposed to require wealthier seniors to pay higher Medicare premiums.  Some have criticized Bush for failing to address a reduction in underlying costs and instead simply "just lopping off the top."

Looking forward to the week ahead, make sure to watch for news from the House Subcommittee on Oversight and Investigations hearing on FDA drug review deficiencies.  The hearing is scheduled for Tuesday.

Finally, please note that, a few weeks ago, a reader alerted me to the fact that the comment feature on Juvan's Health Law Update was not enabled.  This was a minor glitch that occurred when the blog was shifted from Typepad to Lexblog.  Please note that comments have now been enabled.  I encourage all of you to participate in commenting in the future, and I apologize to those whose comments were not timely published.

Jayne

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Interested in reviewing recently introduced Pharma legislation?  Well, I'd suggest that you head over to Eye on FDA, where Mark Senak provides a thorough review of recently introduced Pharma bills and resolutions. 

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On February 13, the House Subcommittee on Oversight and Investigations will hold a hearing to investigate the deficiencies in the FDA's review process.  Among others, the list of witnesses includes the following:  (1) Senator Chuck Grassley (R-Iowa); (2) former FDA medical team leader in the CDER's Division of Anti-Effective Products David Ross; (3) John Powers, former lead medical officer for the Antimicrobial Drug Development and Resistance Initiatives; and (4) Steven E. Nissen, chairman of the Cleveland Clinic's Department of Cardiovascular Medicine.  In the past, Grassley has accused the FDA of withholding evidence of improprieties, and Ross has insisted that the FDA discourages dissent, shuns transparency and pressures reviewers.

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Breast cancer survivors were given new hope last week when the FDA cleared for marketing the MammaPrint test, a test developed by Agendia, a lab in the Netherlands, that predicts the likelihood of distant metastatic breast cancer recurrence within five to ten years.   Because cancer recurrence is partially attributable to the behavior of genes, the test profiles genetic activity and, according to the FDA, the resulting analysis positively assists doctors in making treatment decisions and formulating a plan of care for their patients.  The product has been on the market in the Netherlands for about two years. 

Data submitted by Agendia that assessed the tumors of 302 node negative early stage (stage I and II) breast cancer patients under age 61 confirmed that the test effectively predicted time to distant metastasis.  Within the next 60 days, the FDA plans to publish a special controls guidance document describing the data that supports genetic profiling claims.

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Just when you thought the PDMA pedigree requirements set forth in 21 C.F.R. section 203.50(a) had retreated into the distance, the FDA attempted to breath new life into the law when it filed a notice of appeal before the Court of Appeals for the Second Circuit last week.  While the FDA has fought back, there's no indication whatsoever from RX USA Wholesale that it intends to back down from the suit. 

If the standard cited to in Magistrate Tomlinson's Report and Recommendation is in fact correct, it appears that the FDA has an uphill battle to fight to overturn the injunction.  The Report and Recommendation, citing other Second Circuit cases, states that the decision to grant a preliminary injunction rests in the district court's sound discretion.  A decision will only be overturned if the lower court abused its discretion.  Abuse of discretion occurs if a lower court "applies the wrong legal standard, rests its decision on a clearly erroneous finding of fact, or issues an injunction containing an error of form or substance."  The FDA will have to make a strong showing on at least one of these points to overturn the grant of the injunction. 

In other news from the FDA last week, the FDA has officially responded to a report issued by the Institute of Medicine last year that launched multiple criticisms against the agency.  The FDA further announced that it would begin sharing information with the Veterans Health Administration, a measure that many perhaps thought was already occurring.

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As part of a reinforced commitment to drug safety, the FDA announced last week that it signed a memorandum of understanding with the Veterans Health Administration to share information about drugs, biologics and medical devices regulated by the FDA.  According to the FDA, the "goals of the collaboration are to explore ways to enhance postmarket medical product safety data collection and risk communication through more robust interagency activities.  It will promote efficient use of tools and expertise for medical product risk identification, validation and analysis [and] will help build infrastructure and processes that meet the common needs for evaluating the safety, efficacy, and use of medical products."

As pointed out by Mark S. Senak, author of the hit blog "Eye on FDA," however, this new collaboration "is perhaps most noteworthy because one would have assumed that this was going on all along." 

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Last week, the FDA responded to the Institute of Medicine's 2006 report entitled "The Future of Drug Safety:  Promoting and Protecting the Health of the Public."  In the FDA's press release, the FDA noted plans to increase drug safety by taking actions in support of the following (as taken directly from the press release):

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Yesterday, the FDA filed a notice of appeal in RX USA Wholesale, Inc. v. Department of Health and Human Services.  The measure seeks to have the United States Court of Appeals for the Second Circuit overturn the order issued by the United States District Court for the Eastern District of New York enjoining the FDA from implementing the pedigree requirements set forth in 21 C.F.R. section 203.50.

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It's hard to believe that January is already coming to a close.  I immediately realized that we are full speed ahead into 2007 when I arrived at the gym this week, only to find that the parking lot was half full and that many of the good intentioned New Years resolutioners had dropped off!

President Bush's State of the Union address occupied the media last week.  I covered President Bush's proposed solution to the health care insurance crisis a week ago, so I will not delve too deeply into these issues again.  The Washington Post has followed the fall-out of Bush's proposal in two articles, one of which discusses the winners and losers in the plan (those who would buy individual insurance plans and those with employer-sponsored plans, respectively), and another of which states that the President's proposal received a "frosty reception from the Democrats."  Bush's proposal may be falling on deaf ears, as his support is waning.  As the bid for the White House looms closer, Juvan's Health Law Update will follow objectively (to the greatest extent possible) each of the candidate's views on health care. 

Last week I also had the most sincere pleasure of meeting Rita Schwab, author of the popular health care blog known as the MSSPNexus Blog, which I highly recommend.  For those of you who are unfamiliar, "MSSP" stands for medical staff service professional.  Rita currently works in provider credentialing at the Cleveland Clinic.  In addition to hosting the Health Wonk Review in the past (and receiving many accolades for her incredible coverage, I might add), Rita also covers provider credentialing, Joint Commission accreditation and patient safety concerns on her blog. 

Rita and I had a wonderful conversation over lunch at the "Blog Cafe," as she calls it.  We discussed issues affecting physicians and patients such as malpractice concerns and how the patient and physician communities might be brought more closely together.  We also discussed our love for blogging and how incredible it is to connect to new found friends from all over the globe.  I feel extremely fortunate to have met Rita, and so many other friends, through blogging!

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Recently, a friend introduced me to Linked In, a web site that assists professionals to grow and expand their networks.  I have since registered and would like to invite you join my network.  Basic registration is free and easy.

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In this technology age, most of us are wired, and many of us stay connected to the outside world for more hours than we care to admit.  We have blackberries and cellphones, many have their own blogs and some of us even produce our own podcasts.  Whether we are in the car, the grocery store or in a meeting, we're listening to our I-Pods, checking our blackberries or talking on the phone.  If you do decide to put your cell phone or blackberry away even for a few hours, you may feel a sense of regret, as it takes a significant of time to catch up on the hundred e-mails that came in and the several voice mails received.  The new age 24 hour economy often makes execs and employees feel run down and worn out, but, in America at least, most of us just pop a few pills to feel better and go on our way....

....Except for Katherine Ellison and about ten million other Americans, that is.  Like Ellison, many Americans have taken up meditation and yoga to reduce stress and enhance quality of life.  Ellison, who had thyroid surgery and brain surgery within three months and broke both arms not long thereafter, dealt with the physical and emotional trauma by meditating.  Speaking of the growing popularity of Asian healing and spirituality, in a recent Washington Post article, Ellison writes, "As our big demographic bulge of boomers hits the years when mortality truly starts to sink in, Asian spirituality has suddenly become more mainstream than ever." 

Ellison also writes of a woman who, like her, turned to meditation during a time of suffering.  Though the woman said that she initially resisted meditation, writing it off as "New Agey" and weird, and concerned about potential brainwashing, her opinion changed after her first experience, when meditating "brought [her] mind and body into the same timezone, [giving her] a sense of wholeness and peace [she'd] never experienced before."  She also experienced several other defining moments.  During one moment, she recognized the reality of her own mortality and questioned, "So what am I going to do with my life?  Am I doing the right thing with the short time I have on Earth?"

Indeed, as the article suggests, meditation, as well as integrative medicine therapies, can serve to help patients cope with illnesses and individuals in good physical health to deal with the daily stresses of life and emotional traumas.  Meditation, yoga, massotherapy, reiki, and Therapeutic Touch, for example, are just a few non-traditional (at least in a Western sense) therapies available.  I personally have experienced the benefits of these therapies, as I practice yoga to decrease stress and level out energy fields.  My mother, a Her-2 positive breast cancer survivor, also turned to reiki and meditation through her Adriamycin/Cytoxan chemotherapy treatments.  Still to this day, she cites to these treatments when she discusses her treatment experience, saying that they helped her to cope with the horrifying side effects of chemo and the emotional pain that accompanies a cancer diagnosis.

From a legal perspective, though many integrative medicine therapies are safe and may even be effective, the current legal and regulatory scheme in the United States makes it difficult for patients to gain access to these therapies.  Most insurance companies do not provide coverage for integrative therapies.  States and medical boards also fail to license and credential complementary and alternative medicine providers in a fashion similar to that of physicians and other providers of conventional medicine. Such legislative recognition, however, could bring increasing credibility to these practices.  Traditional Western medicine providers can also face direct liability for referrals to CAM providers.  Michael H. Cohen, the leading scholar and authority in the United States on the legal issues facing CAM, provides a table of potential CAM liability grounds on his Complementary and Alternative Medicine Law Blog.  For example, clinicians and associations may be liable for referrals to CAM providers on vicarious liability grounds, for patient abandonment, negligent referral or delay of effective conventional medical treatments.

Cohen has worked tirelessly to bring credibility to CAM and integrative medicine therapies and to bring about change in the law in the United States so that these therapies are made available to more individuals.  In addition to being an assistant professor at Harvard Medical School and the Harvard School of Public Health, he is also the founder of the Institute for Integrative and Energy Medicine.

If you are interested in furthering the development of the Institute, please contact Michael H. Cohen directly.

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The Healthcare Update News Service has made available a presentation by The New York Times ethicist Randy Cohen given in November 2006 at the Seventh Annual Pharmaceutical Regulatory and Compliance Congresses and Best Practices Forum.  In the speech, after discussing the ethics of Benjamin Franklin, Aristotle and the pursuit of "Happiness" (yes, that's Happiness with a capital "H"), Cohen suggested that physicians are insulted by the insinuation that pharmaceutical companies' luxurious gifts have an effect on decision making.  Scoffing at the notion that physicians can truly make independent decisions if they are given gifts by pharmaceutical companies (if gifts do not impact decisions, then are pharmaceutical companies providing them simply because they are altruistic?), Cohen questions whether the character of individual physicians is really what is at the root of the problem.  Is the problem that individual physicians who allow gifts to impact decisions simply have poor character?  Or is the real problem instead that the medical community has failed to set appropriate ethical standards and has ineffectively regulated, thereby leading to unethical decisions and corruption?

Instead of character determining behavior, circumstances and communities, he suggests, are what determine how human beings behave.  If you place good apples in a bad barrel, Cohen says, the bad barrel corrupts everything.  On the other hand, if you create moral and ethical communities, it's amazing how well people will behave.  Most human beings behave in a similar way as their neighbors--the so-called "community effect." 

If what Cohen says is true--that communities determine behavior--then the solution to the issue of the damaging impact of gifts by pharmaceutical companies to physicians requires a moral and ethical regulatory structure.  Additionally, outside oversight (when someone from an outside community comes in and suggests that change is necessary), he suggests, helps.  Decisions cannot be left only to individual judgment.

Moral conduct, Cohen concludes, is a function of circumstances.  Good conduct is possible, but only in a just society.

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Last week,  many news stories centered around proposals by both the public and private sectors to provide coverage to the millions of uninsured.  President Bush, preparing for his State of the Union address, foreshadowed his proposal in his weekly radio address, and a large coalition of companies also launched a multi-phase proposal to expand coverage.  Meanwhile, Senator Grassley, in a defensive move, is preparing to filibuster the legislation recently passed by the House of Representatives that requires direct negotiation of Medicare Part D covered drugs, and Senator Leahy introduced legislation prohibiting reverse payments, or payments by brand-name drug companies to generic drug companies in return for a promise to delay market entry of generic equivalents. 

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Recently, the House of Representatives passed legislation requiring direct negotiation with pharmaceutical companies for lower-priced prescription drugs covered under the Medicare Part D program.  As reported by FDA News, Senator Chuck Grassley (R. Iowa) is now considering a filibuster to stop the measure because he believes the legislation may have sufficient bi-partisan support for passage.  Apparently, Grassley believes that he has the requisite backing to make such a move.

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On Saturday, President Bush previewed a plan to provide a financial incentive to Americans to purchase health insurance during his weekly radio address.  Bush stated, "Today, the tax code unfairly penalizes people who do not get health insurance through their job.  It unwisely encourages workers to choose overly expensive, gold-plated plans.  The result is that insurance premiums rise and many Americans cannot afford the coverage they need." 

As reported by the Washington Post, Bush's plan would "add a new tax on employer-provided health-care plans worth more than $15,000 to subsidize those who buy modestly priced plans out of their pockets."  Bush also hopes to provide Medicaid waivers that allow states to shift Medicaid funds away from nursing homes and hospitals instead grant funds to individuals so that they can purchase health insurance.  Bush is expected to provide further details of his plan in his State of the Union Address on Tuesday evening.

Commenting on the proposal Post writer Michael A. Fletcher states that Bush's most recent proposal is his "most ambitious attempt to address the health-care crisis." 

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On Wednesday, Senate Judiciary Committee Chair Patrick Leahy (D-Vt.) introduced legislation that would effectively prohibit brand-name drug companies from entering into agreements with generic drug companies to delay the entry of generics to the market. 

Portions of the 1984 Hatch-Waxman legislation encourage generic drug companies to challenge brand-name drug patents by awarding a six month market exclusivity period if successful.  In response to suits filed, oftentimes brand name drug makers contract with generic makers to postpone market entry, leading to a win-win situation for both parties.  Many have attacked these arrangements, however, arguing that they are harmful to consumers because they delay the entry of lower priced generics. 

Commenting on the settlements reached between these two market forces, at a Senate Judiciary Committee Hearing, FTC Commissioner Jon Leibowitz stated that these settlements "restrict competition at the expense of consumers, whose access to lower-priced generic drugs is delayed, sometimes for years."  Bruce Downey, CEO of Barr Pharmaceuticals, fired back in a Bloomberg/Winston-Salem Journal article, stating "It's not the settlement that keeps the product off the market, it's the patent."

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Last week, a coalition of sixteen organizations put forth a plan that would provide health insurance coverage for half of America's nearly 47 million uninsured.  According to a press release issued by the Health Coverage Coalition for the Uninsured, the proposal was developed over a two year period. 

The plan proposes providing easier access to SCHIP and Medicaid programs for parents so that they may enroll their children when they simultaneously apply for other assistance programs, such as low cost lunches and food stamps.  Additionally, tax credits for those who earn up to three times the poverty level (or $60,000 for a family of four) would be available.  In addition, states would receive additional funding to enroll additional children and there would be a competitive grant program that would award funds to states that develop innovative approaches to expand coverage.

The second phase of the program expands Medicaid eligibility for adults and creates a refundable credit to help individuals pay for private insurance. 

The coalition organizations include the following:  AARP, American Academy of Family Physicians, American Hospital Association, American Medical Association, American Public Health Association, America's Health Insurance Plans, Catholic Health Association, Families USA, Federation of American Hospitals, Healthcare Leadership Council, Johnson & Johnson, Kaiser Permanente, Pfizer, Inc., United Health Foundation, U.S. Chamber of Commerce and Search for Common Ground-U.S. Consensus Council.

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On January 10, Senators Dorgan (D-ND) and Snowe (R-ME) and Representatives Emerson (R-MO) and Emanuel (D-IL) introduced the Pharmaceutical Market Access and Drug Safety Act (the "Act"), drafted to allow the importation of drugs from FDA registered and approved pharmacies abroad.  The news release issued by Senator Dorgan indicated more than thirty groups support the move (including the AARP) and that savings that could total up to $50 billion dollars in the next ten years.

Making the case for the proposal, the findings in Section 2 claim that

• Americans pay the highest price in the world--up to five times the price that consumers worldwide pay--for prescriptions;
• A drug is neither nafe nor effective if an individual cannot afford the cost; and
• Allowing the importation of drugs would promote competitive pricing, result in savings, and make for greater access to therapy.

The Act allows for the importation of certain "qualifying drugs" in which there is a "U.S. Label Drug" equivalent.  Such drugs may be imported not only from exporters in Canada, but also from other countries as designated by Secretary of the Department of Health and Human Services.

Commenting on the Act, Dorgan stated, "Currently, the big drug manufacturers can monopoly price their medicines here and, as a result, American consumers pay the highest prices in the world for prescription drugs.  The fact is, miracle drugs perform no miracles for people who can't afford them."  Likewise, Senator Snowe stated, "This legislation leaves no stone unturned to assure that the importation of prescription drugs will be safe and meet the requirements of the Food and Drug Administration, while delivering real savings to American consumers." 

Others have criticized the Act, however.  Dr. Adam Fein of the hit blog Drug Channels, in his article "Real News About Fake Drugs," references prior articles covering the dangers of reimportation and states that he finds "it highly ironic that the proposed legislation includes 'drug safety' in its title."   

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Last week, the FDA released a preliminary proposal to increase user fee collections by $87.4 million to enhance postmarket surveillance of drugs, drug development and review of television advertising.  The proposal will only take effect if the FDA ultimately submits the proposal to Congress and Congress, reauthorizing the FDA's Prescription Drug User Fee Act (PDUFA), adopts the FDA's recommendations.  

The FDA intends to allocate $29 million of the increase to postmarket surveillance, allowing the FDA to, among other measures, hire an additional 82 employees, and $6.2 million to fund review of direct-to-consumer advertising, allowing the agency to hire 27 new employees.  An additional 4.6 million would fund the implementation of the guidance for the FDA's reviewers, and $4 million would be spent on the shift to an "all-electronic environment." 

In addition to increasing the user fees, the FDA also recommends that Congress eliminate the statutory provision that allows the FDA to use PDUFA fees only during the first three years after a product receives FDA approval.

The Federal Register Notice is available online.  The FDA will hold a pulic meeting on February 16, 2007, to present its proposals.  Comments are due on February 23, 2007.

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The National Medicare Congress has made available speeches of Congressman Pete Stark and former CMS Administrator Tom Scully given at the Third National Medicare Congress on October 15 through 17, 2006, three weeks before the November 2006 elections.  In his speech, Congressman Stark predicted that, given the divide in power between Democrats and Republicans, there will be no major legislation for the next two years.  With respect to his objectives, Congressman Stark stated that he desires to ensure that Medicare and Social Security do not end as an entitlement and desires to prevent the privatization of these programs.  Former CMS Administrator Scully's speech focuses on the "Role of the Private Sector in the Implementation of Part D," and he states that he's "amazed about how Medicare Part D has turned out." 

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Last week, the National Association of Independent Pharmaceutical Wholesalers (NAIPW) and the Association of Independent Pharmaceutical Wholesalers of America (AIWPA) issued recommendations for national pedigrees.  The NAIPW and the AIWPA were both founded by Robert C. Drucker, President and CEO of RX USA Wholesale, Inc. and Mark S. Scovotti. 

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On Friday, Congressman Dingell, on behalf of himself and 189 co-sponsors, introduced H.R. 4 to amend the Social Security Act to require the negotiation of prices for Medicare Part D covered drugs. 

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A study conducted by the Kaiser Family Foundation and the Harvard School of Public Health found that 56% of seniors enrolled in a Medicare prescription drug plan have a favorable impression of the drug benefit. 

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 According to 42 C.F.R. section 423.504(b)(4)(vi), prescription drug plan sponsors approved to provide Part D benefits must have compliance plans that articulate (1) commitment to comply with applicable laws; (2) designation of a compliance officer and committee; (3) effective training and education of employees and agents; (4) effective lines of communication between the compliance officer and the employees and agents; (5) the enforcement of standards through publicized disciplinary guidelines; (6) procedures for audits and internal monitoring; (7) the procedures for ensuring prompt response to detect offenses and development of corrective action; and (8) a comprehensive plan to prevent and detect fraud and abuse, which includes procedures to voluntarily self report fraud or misconduct.  The OIG undertook a review of stand-alone prescription drug plan sponsors' compliance plans to determine compliance with these eight elements, along with the seventeen requirements set forth in CMS's Prescription Drug Benefit Manual. 

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Recently, the Department of Health and Human Services filed its Answer in RxUSA Wholesale, Inc. v. Department of Health and Human Services.  The FDA has also issued industry guidance about the injunction, a brief description of which is contained in this article.

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The Centers for Medicare & Medicaid Services ("CMS") will host a briefing about the requirement mandated by the Deficit Reduction Act of 2005 that certain employers educate their employees about the False Claims Act.  The briefing will take place on Thursday, January 11, 2007, at 1:00 p.m. EST.  The call will last ninety minutes.  To participate on the call, dial 1-888-677-1819 and enter the password "provider."  You will also need to reference the call leader's name, Aaron Wesolowski.

Guidance on the DRA's section 6032 mandate was issued to State Medicaid Directors on December 13, 2006.

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Jayne E. Juvan will be speaking at the upcoming seminar entitled "Anti-Counterfeiting Business Strategies for Pharmaceuticals." The seminar will take place in Philadelphia, Pennsylvania from April 11, 2007 through April 13, 2007. 

At the seminar, Juvan will offer a special feature presentation: "Understand The Case That Kept The Stay on the PDMA to Best Prepare for Upcoming Regulations." Following Juvan's presentation will be a Q&A with Robert Drucker, President and CEO, RxUSA Wholesale.  Here's the description of Juvan's speech:

As the pharmaceutical industry prepared for what was surely to be a historic moment of lifting the stay on 1987s Prescription Drug Marketing Act, several wholesalers were preparing for a win of monumental proportions: to stop the industry in its tracks by suing the FDA. In this session, attorney Jayne E. Juvan will cover:

          *The details of the case

          *The meaning of Judge Seybert's ruling for the industry's future

          *What this means for your company when preparing for future federal and state regulations

For more information about the conference, including registration information, visit http://www.iqpc.com/cgi-bin/templates/genevent.html?topic=237&event=12172&. 

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The FDA has published its interpretation of the preliminary injunction ordered on December 5, 2006 by the Eastern District of New York in RX USA Wholesale, Inc. v. HHS.  A brief analysis of this guidance will follow in a subsequent post.  See also the FDA's Backrounder re: RX USA Wholesale, Inc. v. HHS.

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• Pharmaceutical Companies Take Note:  Lawmakers Are Encouraging Bush to Strengthen Oversight of DTC Ads.  In November, the Government Accountability Office released a report entitled "Prescription Drugs: Improvements Needed in FDA's Oversight of Direct-to-Consumer Advertising."  The report criticized the FDA, stating that the agency's reviews of ads take too long and are becoming less effective.  The report further highlighted that the FDA also has thus far failed to implement a system to prioritize its reviews.  Last week, as reported by FDA News, Senator Herb Kohl drafted a letter to President Bush encouraging increased funding to tighten the review of these ads.  When the Democrats take control in January, Kohl will take over the subcommittee that oversees the FDA's funding.  Outgoing Majority Leader Bill Frist has echoed these comments, stating in a release, "Americans are besieged today with advertising for prescription medications.  Therefore, it is necessary for Congress to fully review the advertising practices of the pharmaceutical industry and federal regulatory practices to ensure patients are getting safe and effective prescription drug treatment."
• Merck Wins Another Vioxx Case.  An Alabama jury rejected Plaintiff Gary Abright's claim that the drug Vioxx caused his heart attack in 2001.  Responding to the verdict, an Associated Press article quotes Executive VP and General Counsel Kenneth C. Frazier as stating, "Juries continue to determine that Merck acted responsibly in its research of Vioxx and provided the appropriate information about Vioxx to patients and the medical community."
• GlaxoSmithKline Begins Phase III Clinical Trials for Herceptin Rival Tykerb.  Reuters reports that GlaxoSmithKline has begun a Phase III clinical trial to test Tykerb in early-stage women with Her-2 positive breast cancer.  The drug may receive FDA approval for women with late stage breast cancer sometime early next year, though FDA approval of the drug for women with early-stage breast cancer is still "many years away."  GSK also announced last week that it will acquire the UK's Domantis for $454 million, a deal that "doubles its presence in the biotech world but isn't expected to add materially to its revenue in the near future."
• Data Backup Tapes of Large Health Insurer Stolen in Ohio.  Last week, a large health insurer reported that data backup tapes that contained personal information for about 130,000 members were stolen from a vendor.  While accessing the information requires special commercial equipment, in an interview with Juvan's Health Law Update, James A. Kandrac, President of United Computer Group, Inc. based in Cleveland, Ohio, stated entities that store protected health information should consider over-the-wire encryption that can be transmitted electronically and vaulted off-site. Kandrac stated, "[T]o prevent the threat of non-encrypted data theft or loss, firms may consider a solution such as VAULT400, which safely and securely compresses and encrypts data for storage in an off-site electronic vault."

Please note that Juvan's Health Law Recap will not be published on December 24, 2006 and December 31, 2006.  Juvan's Health Law Recap will resume on January 7, 2007.

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Today, RFID Update announced that the injunction issued in RX USA Wholesale, Inc. v. Department of Health and Human Services could "slow momentum for RFID e-pedigrees."  The author notes that, "[w]hile RFID had not been a requirement for the pedigrees, industry observers agreed that pedigree enforcement generally was a positive step toward the ultimate adoption of RFID-based e-pedigrees . . . . [W]ith the FDA pedigree requirement now postponed, momentum behind RFID e-pedigree adoption may be slowed."  The article also quotes yours truly in a section discussing the legal analysis of the case.

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As promised, the following are a few pertinent points from the order issued by Judge Seybert today:

• Irreparable Harm.  The court rejected the Defendants' argument disputing that the Plaintiffs will suffer irreparable harm by denial of the injunction because their argument "is circuitous."  Instead of disputing the Plaintiffs' arguments, the court stated that the Defendants actually acknowledged that the Plaintiffs will suffer irreparable harm and only disputed the source of the harm.
• Likelihood of Success on the Merits--Applicable Standard.  The court clarified that the law does not require a finding that the Plaintiffs will, with "absolute certainty," succeed on the merits of their claims.  Instead, a party "need only make a showing that the probability of [the party's] prevailing is better than fifty percent.  There may remain considerable room for doubt."  Accordingly, a finding that the Plaintiffs have overcome their burden with respect to the rational basis test at this juncture only serves to demonstrate that the Plaintiffs are slightly more likely than not to succeed on their claims.
• PDMA Rational Basis Review.  The court rejected the portion of the Report and Recommendation finding that there was no rational basis for the PDMA.  Nevertheless, the court also rejected the Defendants' arguments on this point, stating, "This entire regulatory scheme and anomalous result that would occur if the Rule went into effect appears arbitrary in light of the FDA's previous position and interpretation of the PDMA. . . . [N]one of the drugs ultimately going to the American consumer would contain pedigree information because the drugs would be provided solely through authorized distributors who are exempt from the pedigree requirement."
• Public Interest Analysis.  In the final decision, the court included an analysis of the effect granting the injunction would have on the public, an analysis the Report and Recommendation failed to include.  Such an analysis makes not only good legal sense, but also good logical sense.  Essentially, the court stated that, when a preliminary injunction has an effect on the public interest, a court should balance the interests involved.  In a statement that gets at the heart of the decision, Judge Seybert wrote, "By granting Plaintiffs' motion for the preliminary injunction, this Court simply maintains the status quo and the current practice in the industry."  Alternatively, if the court were to deny the Plaintiffs' motion, (1) many unauthorized distributors could go out of business, leading to underserved markets, and (2) only authorized distributors, who are not covered by the pedigree requirement, would be supplying information.  Maintaining the status quo, however, would not prejudice the Defendants' rights, as the Defendants have waited for twelve years to implement the rule.

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A party related to RX USA Wholesale v. Department of Health and Human Services kindly forwarded to me this morning the pdf of Judge Seybert's Order Adopting Report and Recommendation.   According to the source, the decision was handed down on Friday evening and was filed on the Court's electronic filing site at 10:17 AM EST this morning.  I will update this post later this evening with an analysis of the decision and will continue to track developments in the case.

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On Monday, December 4, 2006, Judge Joanna Seybert adopted in part the Report and Recommendation of Magistrate Judge Kathleen Tomlinson issued only days earlier on November 30 in RX USA Wholesale v. Dep't of Health & Human Services and granted the preliminary injunction requested by the Plaintiffs.  The lawyers had only one day to scramble to file their objections to Magistrate Judge Tomlinson's decision, but nevertheless zealously advocated for their positions.  Adam J. Fein of Drug Channels has covered the impact the injunction will have on manufacturers and wholesalers.  For those following the case, a brief legal analysis of the Report and Recommendation, along with a discussion of the arguments of the parties in response, is set forth below.

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• Andrew von Eschenbach Approved as FDA Commissioner.  Finally, after political maneuvering and multiple tactics to stop the appointment, the Senate voted on Friday to approve President Bush's nomination of Andrew von Eschenbach to the FDA's commissioner post.  The approval came despite holds placed on the nomination by Senators David Vitter (R.-La.) and Charles Grassley (R-Iowa).  Senator Jim DeMint also promised to place a hold on the nomination unless the FDA took action to remove Mifeprex, a medical abortion drug, from the market.  Senator Hillary Clinton (D-N.Y.) and Senator Patty Murray (D-Wash.) dropped holds they previously placed after the approval of the application submitted by Barr Laboratories for nonprescription sales of the Plan B emergency contraceptive.   
• Congress Repeals 5.1% Medicare Payment Cut Applicable to Physicians.  Members of the 109th Congress were often criticized for having difficulty finding their way to work in the last session.  Their procrastination forced them to hold a frenzied, last minute meeting to catch up on work that could have been completed earlier.  They met in their last hours to consider HR 6408.  Among other actions, members of Congress voted to block the 5.1% cut in Medicare reimbursement rates applicable to physicians.  The bill now awaits approval by President Bush.  Some physicians aren't quite pleased with the change, however.  One physician, commenting on the popular blog "Kevin M.D.," argues that the the action still serves as a cut in payment to providers and states as follows:
  
  

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As reported by Modern Healthcare:  "House and Senate negotiators reached a compromise bill that would eliminate a scheduled 5% Medicare rate cut for physicians in 2007 and establish a 1.5% incentive increase for doctors who report on quality measures. A House vote on the bill is expected later today, while the Senate may vote late tonight or tomorrow."

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The United Press International article "Analysis: FDA Approving More Drugs" reports that, although the FDA "has been picking up its pace for approving new drugs," a factor that could bode well for the pharmaceutical industry in 2007, tighter controls launched next year by the Democratic majority could slow the drug approval process.  Thus far, October has been the busiest month of 2006, with fifteen new drug application approvals and five new molecular entity approvals.   

Despite the shift in power, some projections still estimate that the industry could see five to six percent growth, but new product launches may remain constant.  The article also speculates that health information technology companies will benefit from stronger regulatory measures.

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• Pfizer Ends Clinical Trials for Torcetrapib.  Over the weekend, Pfizer announced the cessation of clinical trials for Torcetrapib, a drug that researchers planned to use in combination with statins such as Lipitor and Zocor for the treatment of heart disease.  While Lipitor and Zocor are designed to reduce "bad" cholesterol, researchers had hoped that Torcetrapib could be used to raise levels of "good" cholesterol.  Pfizer's chief executive Jeffrey B. Kindler once hailed the drug as "one of the most important compounds of our generation." Recent data from Phase III clinical trials involving 15,000 patients linking the drug to heart problems and deaths prompted the move.  See also the FDA Statement "Pfizer Stops All Torcetrapib Clinical Trials in Interest of Patient Safety."
• State of Virginia Commits to HHS Nationwide Initiative for Quality Care at a Reduced Cost.  Previously, Secretary of Health and Human Services Michael Leavitt made a call to the business community for its support of value driven health care by encouraging the adoption of four "cornerstone" actions including "public reporting of the quality of care delivered by health care providers; public reporting of the price of care; commitment to health information technology standards; and commitment to use incentives for high quality care, competitive costs and consumer choice."  On Friday, Virginia became one of the first states to join the nationwide initiative.  At the signing of the executive order by Virginia Governor Timothy M. Kaine, Leavitt said,   "At this point, aggressive efforts are underway to invite all of America's public and private sector employers to join the federal government in committing to four cornerstone actions to achieve better health care and lower health costs. Employers can help their employees identify and select high quality health care at competitive prices. And when a substantial number of employers commit to these improvements, our health care system as a whole will improve for all Americans."  The federal government was first to support the plan with an executive order signed by President Bush back in August. 
• New York Health Commission Recommends Closing Multiple Hospitals. On Tuesday, the New York Commission of Health Care Facilities in the 21st Century (the "Commission") advocated the closing of nine hospitals and the reconfiguring of forty-eight.  The recommendations came on the heels of a report by the New York Department of Health that New York State has a surplus of 20,000 licensed beds in the State.  According to the report, the surplus of bed leads to longer than necessary stays. The Commission estimates that this move, which will have the force of the law behind it unless Governor Pataki or the New York State Legislature strike it down, will result in increased revenue of approximately $720 million per year distributed to unaffected facilities and an annual savings of approximately $800 million to insurers, including Medicare and Medicaid.  Many hospital executives and labor unions have already begun to attack the recommendations, stating, "This is a sad day for New York's health care community."

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On Sunday, Juvan's Health Law Update included a post entitled ""Harvard School of Public Health Poll Finds Cancer Care Lacks Appropriate Coordination."  The post sparked an interesting conversation via e-mail with a breast cancer survivor from Canada I met a few months ago.  Juvan's Health Law Update has decided to include portions of this e-mail communication below because of the unique insight offered of Canada's health care system from a patient's perspective.  While the source requested to remain anonymous (we'll call her "Hope"), Juvan's Health Law Update has documentation substantiating the conversation.

On the U.S. and Canadian health care systems, Hope says,

[F]rom my point of view, US health care has the best and the worst of all worlds. It has some of the BEST health care in the world . . . and the worst.

This accounting and billing for every band aide and needle and tracking it all must be a stunning expense for your system - and clearly ridiculous for the patients. One Canada is definitely superior on.

I also read about the lack of coordination with all the doctors, and I was quite shocked to hear about this. In Canada, the "team" approach is very heavily emphasized with the doctors having set days in their calendars to get together and discuss not only all their cases in common, but also any difficult cases so that group's combined expertise and experience can come to bear on the patient's situation. The information, conclusions, exams and medical treatments are centrally filed and electronically accessible in everyone's office. And that means everything - all the data on my scans, MUGAs, blood work are available. It saves duplication since a test result might be useful to my regular GP to answer a different question than it was originally taken for by my oncologist. I can also access the information myself at no charge.

It does seem to me, though, for all it's flaws, that very superior medical treatment is available in the United States. But it appears that you have to be a good researcher, a strong advocate and have been smart enough to get the right kind of insurance to access the benefits. So the psychological stress on both patient and caregiver are much higher in the States........but that isn't as measurable as cash, is it?

One of the biggest problems with the Canadian health care system is access to care. The government rations access by creating waitlists that can be many months to years long. Years can be a long time to wait in a debilitated state for a joint replacement, for instance. People lose their jobs, quality of life and physical condition as they are stuck waiting in a chair or bed at home for their name to be called. The most urgent cases are always bumped to the front of the queue so that treatment is assured to the desperate, but who wants to BECOME the desperate?

Also the queue is regularly abused by connected queue jumpers. Politicians, celebrities, RCMP, certain ranks of civil servants - all jump to the front of the queue. Also, if you are injured on the job and are covered by worker's compensation - worker's compensation pays directly (not the government), so they jump to the front, while the great unwashed masses wait ever longer for their betters to be cured.

The worst abuse comes to those who are over the age of 70 who are deemed the least valuable. Rest assured that this ranking is not publicly acknowledged, but with a little bit of google, you can definitely verify my comments.

So our system offers increased coordination, but it isn't equally open to all.

Juvan's Health Law Update has not independently verified each of these statements.  Juvan's Health Law Update simply provides this commentary to show a view of the Canadian health care system from a patient's perspective.

Special thanks to Hope for authorizing Juvan's Health Law Update to publish this correspondence.

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As posted by the Complementary and Alternative Medicine Law Blog:

Cleveland Clinic's Preventive Cardiology team and the Canyon Ranch Institute are hosting a national conference highlighting the integration of conventional, complementary and alternative medicine and its impact on heart health.

"An Integrative Approach to Prevention & Regression of Coronary Artery Disease" will be held at the InterContinental Hotel & MBNA Conference Center Cleveland, Nov. 30-Dec. 2.

From the press release:

"Heart disease is the number one killer in the United States and we're struggling on how to effectively teach patients and practitioners about cardiovascular prevention," said Leslie Cho, M.D., Director, Women's Cardiovascular Center, Medical Director, Preventive Cardiology & Rehabilitation. "This conference will focus on the latest research as well as provide effective tools to help practitioners lower risk factors for heart disease, including treatments for obesity and smoking cessation techniques."

Tieraona Low Dog, M.D., a renowned integrative medicine expert, will serve as the event's key note speaker. She is Director of the Education Program in Integrative Medicine and a Clinical Assistant Professor in the Department of Medicine at University of Arizona College of Medicine. Dr. Low Dog promises to 'get to the heart of health' with her presentation "Integrative Medicine: A Bridge to the Future." She is scheduled to speak at the conference's opening dinner on Thursday, Nov. 30, at 7:00 p.m. in the Intercontinental Hotel and MBNA Conference Center Ballroom, second floor. This event is open to the public.

Dr. Low-Dog is Current Chair of the USP Dietary Supplements and Botanicals Expert Committee. Her honors and distinctions include a Presidential Appointment to the White House Commission on Complementary and Alternative Medicine in 2000 by Former President Bill Clinton. She was featured by Time magazine as 2001 Innovator of the Year in Complementary and Alternative Medicine and was appointed to the executive Advisory Board for the National Institute of Health's National Center for Complementary and Alternative Medicines in 2003.

The Cleveland Clinic-Canyon Ranch conference is expected to draw more than 250 cardiologists, internal medicine and family practice physicians, and nurse practitioners, to discuss the latest in diagnosis and therapeutic interventions in preventing heart disease. Through a series of didactic lectures, panel discussions and small group break-out sessions, the conference will focus on traditional and emerging testing and treatments for hyperlipidemia, hypertension, metabolic syndrome and diabetes. Moreover, it will focus on integrative approaches to the treatment of obesity, depression and smoking cessation.

"We're extremely proud to be participating in such an extensive meeting of the minds, and we're particularly excited about the conference's emphasis on integrative and preventive medicine," said Stephen Brewer, M.D., medical director of Canyon Ranch in Tucson. "For more than two decades, Canyon Ranch has worked to educate people on the importance of making lifestyle changes that lead to longer, healthier lives. This conference will highlight the benefits of this proactive approach, as well as the science behind it."

The nationally and internationally recognized experts also scheduled to speak throughout the conference include Leslie Cho, M.D., Director of the Women's Cardiovascular Center at Cleveland Clinic; Steve Nissen, M.D., Chairman, Cardiovascular Medicine, Cleveland Clinic; Stanley Hazen, M.D., Section Head, Preventive Cardiology, Director, Center for Cardiovascular Diagnostics and Prevention, Cleveland Clinic; and Marc Penn, Director, Bakken Heart-Brain Institute; Stephen Brewer, M.D.; and Mark Liponis, M.D., Corporate Medical Director, Canyon Ranch.

The conference opens Thursday, Nov. 30 at 8 a.m. with opening remarks by Delos M. "Toby" Cosgrove, M.D., CEO and President of Cleveland Clinic. A series of series of lectures will be given the morning of Friday, Dec. 1, while a variety of smaller break out sessions will bring the conference to a close.

For an agenda or for more information about the Cleveland Clinic and Canyon Ranch "Integrative Approach to Prevention & Regression of Coronary Artery Disease" conference, visit http://www.clevelandclinicmeded.com/summit/preventcardio06/default.htm.

About Cleveland Clinic
Cleveland Clinic, located in Cleveland, Ohio, is a not-for-profit multispecialty academic medical center that integrates clinical and hospital care with research and education. Cleveland Clinic was founded in 1921 by four renowned physicians with a vision of providing outstanding patient care based upon the principles of cooperation, compassion and innovation. U.S. News & World Report consistently names Cleveland Clinic as one of the nation's best hospitals in its annual "America's Best Hospitals" survey. Approximately 1,500 full-time salaried physicians at Cleveland Clinic and Cleveland Clinic Florida represent more than 100 medical specialties and subspecialties. In 2005, there were 2.9 million outpatient visits to Cleveland Clinic. Patients came for treatment from every state and from more than 80 countries. There were nearly 54,000 hospital admissions to Cleveland Clinic in 2005. Cleveland Clinic's Web site address is www.clevelandclinic.org.

***
Law Offices of Michael H. Cohen offers general corporate legal services, litigation consultation, and expertise in health law, with a unique focus on alternative, complementary, and integrative medical therapies.

Michael H. Cohen is also President of the the Institute for Integrative and Energy Medicine, also known as the Institute for Health, Ethics, Law, Policy & Society. The Institute serves as a reliable forum for investigation and recommendations regarding the legal, regulatory, ethical, and health policy issues involved in the judicious integration of complementary and alternative medical therapies (such as acupuncture and traditional oriental medicine, chiropractic, massage therapy, herbal medicine) and conventional clinical care.

The most recent book written by Michael H. Cohen on health care law, regulation, ethics and policy pertaining to complementary and alternative medicine and related fields is an interdisciplinary collection of essays entitled, Healing at the Borderland of Medicine and Religion. This is the fourth book in a series, the first being Complementary and Alternative Medicine: Legal Boundaries and Regulatory Perspectives (1998).

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Except for the D.C. Circuit's order vacating the May 2, 2006 ruling in the Abigail Alliance case, last week was a relatively quiet week on the news front (though a quite busy week on the work front, as clients called continually looking for results before the holiday) because most of us retreated to celebrate Thanksgiving.  Nevertheless, I have summarized a few interesting stories below:

• Harvard School of Public Health Poll Finds Cancer Care Lacks Appropriate Coordination.  A Harvard School of Public Health, USA Today and Kaiser Family Foundation poll found that fifty percent of patients and family members surveyed have difficulty coordinating cancer care.  While some respondents reported being confused about their prescriptions, others reported being sent for duplicate tests and receiving conflicting information.  In a USA Today article reporting the findings, one caregiver, who stated that a technician almost performed a CT on her son's stomach instead of a brain scan, said, "It was my first lesson in being an advocate for my child."  Another caregiver, a former oncology nurse at the National Institute of Health who left her job when her husband was diagnosed with lukemia, reported compiling all test results before appointments so that doctors would not have to scramble to locate the appropriate information.  She states, "I wanted to concentrate on [my husband's] care, not chasing paper trailes and filling people in on what was going on because his chart wasn't there." 

Gabriel Hortobagyi, president of the American Society of Clinical Oncology and chair of breast medical oncology at the M.D. Anderson Cancer Center, summarizes the problem when he says, "Patients say, 'I have five or six doctors, but no one is in charge of the show.'  This is the perfect scenario for disrupted and piecemeal care."  Hortobagyi reports that patients who receive treatment from comprehensive care centers may ultimately have better results at least in part because they are able to meet with all of their doctors together.  While this may be an optimal situation, the article reports that only about ten percent of patients obtain their care from comprehensive care institutions such as the M.D. Anderson Cancer Center.  To bridge the gap, Hotyobagyi reports that ASCO is developing care models and hopes to release these models in the Spring.  Although such models may assist with increased coordination, development of care plans is often met with resistance because insurance companies generally do not pay physicians to coordinate care.

Ellen Stovall, president and CEO of the National Coalition for Cancer Survivorship, states that every patient should be provided with at least the following documents:  (1) a care plan outlining the doctors' plan to treat the patient's cancer; (2) a treatment summary that includes a listing of all necessary surgeries, raditation treatments and drugs and their specific doses; and (3) an ongoing care plan setting forth the steps patients should take to monitor their health.

USA Today published three related articles, including the following:  (1) "Cancer Hurts Caregivers, Too," finding that a third of respondents surveyed by the Harvard School of Public Health/Kaiser Family Foundation/USA Today reported that caregivers experienced emotional and psychological trauma associated with their loved one's illness; (2) "Cancer Patients Keep on Working," reporting that one in ten cancer patients subsequently change positions or jobs because of their illness; and (3) The Upside of Cancer: A New Outlook on Life, reporting that many cancer patients are positively changed from the experience.  See also Survey Results at the Kaiser Family Foundation's Web Site and the Harvard School of Public Health's Press Release.

• Ohio Company Recalls Turkey and Ham.  According to USA Today, HoneyBaked Foods, Inc. voluntarily recalled 46,941 pounds of turkey and ham products sold in Toledo, Ohio and on the internet that may be contaminated with listeria monocytogenes that could cause a potentially life threatening disease known as listeriosis.  Infants, the elderly and individuals with HIV are the most susceptible to the disease.  Thus far, there have not been any related reports of illness.

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I highly recommend that readers of this blog interested in the pharmaceutical industry visit Drug Channels, a blog hosted by Adam J. Fein, founder and president of Pembroke Consulting, Inc. based in Philadelphia.   Fein includes incisive commentary about the pharmaceutical industry, including most recently unique perspectives on the profitability of generics and Wal-Mart's $4 generic program.  The following is a list of recent posts:

• The Attack on Generic Profits in Drug Channels;
• Wal-Mart Raises the Stakes; and
• New York Times Editors Read This Blog.

While he certainly seems to be an expert in the field, Fein is as humble as they come, stating at the end of one post, "Hey, I'm just one voice out there, so please don't forget Newton's Second Law of Consulting: For every expert, there is an equal and opposite expert."

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Last week, the United States Court of Appeals for the District of Columbia Circuit granted a rehearing and vacated the May 2, 2006 decision of a three judge panel holding that a terminally ill mentally competent adult excluded from Phase II clinical trials has the right, under the Fifth Amendment Due Process Clause, to use post-Phase I investigational drugs that do not have FDA approval for commercial distribution.  Chief Counsel for the Washington Legal Foundation speculates that all ten judges for the D.C. Circuit will hear the case sometime next summer. 

In 2003, Abigail Alliance brought suit against Andrew C. von Eschenbach, acting Commissioner of the FDA, and Michael O. Leavitt, Secretary of the U.S. Department of Health and Human Services, after the FDA rejected Abigail Alliance's formal request to make post-Phase I drugs available to terminally ill patients who are not clinical trial participants.  After the FDA's rejection of the proposed policy, Abigail Alliance filed a Citizen Petition challenging the FDA's decision.  While the FDA acknowledged the receipt of the Citizen Petition, the FDA failed to respond within the requisite 180 day time period, thereby entitling Abigail Alliance to seek judicial review.   Abigail Alliance then brought suit to enjoin the FDA from enforcing its current policy that bans the use of post-Phase I investigational drugs by terminally ill patients excluded from Phase II clinical trials.

The May 2, 2006 appellate court opinion in the Abigail Alliance case, filed by a three judge panel, applied the substantive due process test established in Washington v. Glucksberg, 521 U.S. 702, 710 (1997), which includes a two-fold analysis to determine whether a right is fundamental and warrants due process protection. The Glucksberg test requires a court to first determine whether the right asserted is "objectively, deeply rooted in this Nation's history and tradition." Second, the court must evaluate whether the asserted right is "implicit in the concept of ordered liberty, such that neither liberty nor justice would exist if [it] were sacrificed." 

Examining the first inquiry, the court stated that, "[d]espite the FDA's claims to the contrary, . . . it cannot be said that government control of access to potentially life-saving medication 'is now firmly ingrained in our understanding of the appropriate role of government' . . . so as to overturn the long-standing tradition of the right of self-preservation."  Regarding the second inquiry, the court held that the right asserted by Abigail Alliance could be inferred from the Supreme Court's ruling in Cruzan v. Director, Missouri Dept. of Health, 497 U.S. 261 (1990), which found that individuals have a constitutionally protected right to refuse life saving medical treatment.  Accompanying this right, the court stated, is "the right to access potentially life-sustaining medication where there are no alternative government-approved treatment options . . . . [T]he key is the patient's right to make the decision about her life free from government interference." 

After concluding that the right asserted by Abigail Alliance merits due process protection, the court remanded the case to the district court to determine whether the FDA's current policy withstands the application of the rigorous strict scrutiny review--essentially, to determine whether the policy is narrowly tailored to serve a compelling governmental interest.

Blogosphere Confusion

As noted by How Appealing, apparently there was some confusion in the blogosphere about the D.C. Circuit's ruling. On the same day that the D.C. Circuit issued the order vacating its decision, the three judge panel also denied the defendants' request for a panel rehearing.  While the D.C. Circuit posted online the panel's explanation for denying rehearing, the "D.C. Circuit did not post online as a published opinion the court's order granting rehearing en banc in the case."   Because the order granting a rehearing en banc was not published but the order denying panel rehearing was published, "[a]nother law blogger depicted yesterday's D.C. Circuit developments as a loss for the federal government, which was correct based on available information but absolutely incorrect once the previously unknown grant of the federal government's petition for rehearing en banc became public."  The other blogger referenced maintains that the post was in fact correct, but nevertheless, this was very confusing.

Accordingly, How Appealing argues that "all federal appellate courts should begin to follow the approach of the Fifth and Ninth Circuits in posting online as published opinions those courts' orders granting rehearing en banc. A federal appellate court's decision to grant rehearing en banc in a case is a significant development that should not remain hidden from the public inside a password-required PACER docket."

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• FDA Approves Silicone Gel Implants.  On Friday, the Food and Drug Administration announced the approval of silicone gel-filled breast implants after allegedly undertaking a "rigorous scientific review" that, at least it seems, yielded strikingly similar information to that which has been known for more than the last decade.  Women report that they prefer these implants, which the FDA banned about fourteen years ago, because they are purportedly more natural and appealing than saltwater filled implants.  While the FDA claims that a majority of the women who participated in clinical trials for these devices were satisfied with their results, safety concerns still abound, as "complications [were] reported in the core studies includ[ing] hardening of the area around the implant, breast pain, change in nipple sensation, implant rupture and the need for additional surgery."  Responding to these safety concerns, the FDA indicated that appropriate patient labeling will sufficiently warn consumers of the risks associated with the use of these devices.  As a result, warnings must state that (1) these devices are not lifetime devices; (2) consumers will probably need additional breast surgeries later in life; (3) changes that occur to a woman's breast as a result of the implants are likely irreversible; and (4) because there is a strong likelihood that these implants will rupture and that such ruptures are generally "silent," a woman should have an MRI to detect a silent rupture three years after surgery and every two years thereafter.  The FDA further suggested that, if a rupture is detected, the implant should be removed and replaced.  Despite the FDA's report, is it really likely that the average consumer will be sufficiently informed to appreciate the risk?  Will the average consumer be in a position to obtain the level of care necessary later in life? 
• Forbes Reports Earnings for Pharma Stocks.  "Pharma Stocks Gain on M&A, FDA Approvals," Forbes reported at the close of last week.  According to Forbes, the Nasdaq Biotech Index closed up 1.90% and the AMEX Pharmaceutical Index rose 2.2%.  Forbes also reports that Johnson & Johnson announced the acquisition of Conor Medsystems, a company that markets a drug-eluting stent in Europe that will likely be on the market in the U.S. sometime in 2008.  Meanwhile, Merck posted a 4.5% increase, possibly attributable to its victory in a Vioxx suit brought by a New Orleans man who argued that the drug caused his non-fatal heart attack. While Genentech received good news last week with the expanded FDA approval of its "miracle drug" Herceptin for patients with early-stage breast cancer, RBC Capital Markets believes the approval will not translate to better-than-expected sales since the drug has, for the past year, been used in these patients. 
• Results of Ohio's Med Mal Study Released.  Ohio's tort reform legislation required the tracking of data to substantiate claims that lawyers and jury verdicts were the cause of substantial increases to med mal insurance rates.  On Tuesday, the Ohio Department of Insurance released the results of 5,000 med mal cases.  The study found that about twenty percent, or 1,046 out of 5,051, of the cases filed resulted in an award to the plaintiff.  The average award, either through settlement or jury verdict, totaled about $270,000, though claims filed in Northeast Ohio received payments totaling around $300,000.  All in all, the amounts awarded reached $281,764,938.  Sixty-five of the claims resulted in a payout of over $1 million.
• Bush Criticized for HHS Family Planning Programs Appointment.  Last week, the Bush Administration announced the appointment of Eric Keroack, a previous medical director who worked for an organization that views contraceptives as "demeaning to women."  Democrats quickly fired back at this nomination, arguing that the move parts with Bush's post-election promises of bi-partisanship.  According to the Washington Post, the appointment does not require Senate confirmation. 

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Today, the FDA announced the expanded approval of Herceptin (also known as trastuzumab), a targeted therapy, for the treatment of women with early stage Her-2 positive breast cancer, a form of breast cancer previously known for its resistance to certain types of chemotherapy regimens. 

In 1998, after showing positive results in clinical trials, Herceptin received FDA approval for use in women with Her-2 positive metastatic breast cancer.  Researchers thereafter conducted clinical trials assessing the use of Herceptin in combination with chemotherapy treatments such as Adriamycin, Cytoxan, Taxol or Taxotere in women with early stage breast cancer.  In 2005, several of these trials were halted early due to findings that the percentage of women with disease free survival improved drastically.  Because of these findings, the use of Herceptin in women with early stage breast cancer has been the standard of care for about the past year.

Speaking about Herceptin, Dr. Edward Romond, professor of hematology/oncology at the University of Kentucky, said, "This is the largest improvement in outcome for any group of women with breast cancer in 25 years." 

If you are interested in hearing success stories directly from women touched by Her-2 positive breast cancer and diagnosed at all stages of the disease, tune in to www.her2support.org. 

This post is dedicated to Diane Juvan.  Special thanks to Michael H. Cohen for alerting me to this development.

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Benesch Friedlander Coplan & Aronoff, LLP announced today that Jayne Juvan's podcast entitled "Blogging for Lawyers" will air on DJ Flash Ferenc's radio show this Saturday morning between 10 and 11 a.m. on WERE.  Make sure to tune in! 

Benesch's podcast series "The Benesch Beat" was developed by Mark Avsec, an Intellectual Property lawyer at Benesch who is known for being a former keyboardist for Wild Cherry and a Grammy nominee for the hit song "Play that Funky Music, White Boy." 

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Yesterday, Michael H. Cohen, author of the Complementary and Alternative Medicine Law Blog, reported that "Scientists have taught dolphins to combine both rhythm and vocalisations to produce music, resulting in an extremely high-pitched, short version of the Batman theme song."  While the headline is amusing to some, Cohen questions the activity, asking "why dolphins are taught to sing the theme from Batman and not Beethoven's Ninth."

He continues,

Maybe the discrepancy has to do with the fact that I've placed this post under the heading of "ethical issues," whereas others have questioned whether recording the dolphins will raise intellectual property issues.

I noticed that a related article is entitled, Dolphins better at networking than the Web. Which is where my intuitive leap had intially gone: the question for science is not what songs dolphins can learn from the warped parts of our minds . . . . The question is rather what tunes we can learn from the dolphins.

"People who develop complex networks, like the World Wide Web or electricity grids, could learn a lot from the social behaviour of dolphins, a New Zealand zoologist has found.

David Lusseau, a zoologist at the University of Otago spent seven years observing a community of 64 bottlenose dolphins in Doubtful Sound, New Zealand, and found they have a social structure similar to human and human-made networks.

Cohen concludes,

Our dolphin friends may just be a leap or two ahead of our own ability to communicate through the five senses. Training dolphins to repeat commercialized popular culture for our own entertainment seems like throwing the precious pearl of consciousness to the swine of instant gratification.

***
Michael H. Cohen is the President of the the Institute for Integrative and Energy Medicine, also known as the Institute for Health, Ethics, Law, Policy & Society. The Institute serves as a reliable forum for investigation and recommendations regarding the legal, regulatory, ethical, and health policy issues involved in the judicious integration of complementary and alternative medical therapies (such as acupuncture and traditional oriental medicine, chiropractic, massage therapy, herbal medicine) and conventional clinical care.

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Merck & Co., Inc., vowing to fight individually each of the 24,000 suits against it alleging that the company failed to adequately warn consumers about the harmful side effects of Vioxx, an arthritis drug, and that Vioxx caused heart attacks, received a favorable verdict from a New Orleans jury today.  Vehemently opposing the claim that Vioxx caused Charles Mason's heart attack, attorneys for Merck argued that Merck complied with all reporting obligations and that other health factors were at the root of the cause of Mason's condition.  Phil Beck, an attorney for Merck, reflected on the victory, stating, "We thought the evidence showed clearly that first, Mr. Mason had not taken Vioxx for several days before his heart attack, and second, that there was no (blood) clot that could have come from Vioxx."

Thus far, Merck has successfully won seven out of eleven cases that have gone to trial, though in one the court ordered a new trial because additional evidence subsequently surfaced.  The Dean of Williams University School of Law David Logan has speculated that Merck will allow several more suits to go forward before deciding whether to settle with plaintiffs collectively.

News of the verdict hit before the NYSE closed.  Merck finished off the day at 44.15, up slightly, but still down from the 52 week high of 46.37.

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Not even a week out from elections, and amid cries for bipartisanship and teamwork, Democrats and Republicans have already begun sparring.  Yesterday, Juvan's Health Law Update reported that Nancy Pelosi, the future Speaker of the House, has called for negotiations with pharmaceutical companies over drug pricing.  Today, the New York Times reported that the Bush Administration stepped forward to express its strong opposition to Pelosi's proposed change.  Speaking on behalf of Republicans, Health and Human Services Secretary Michael Leavitt went on the record announcing his opposition to the Democrats' plan, stating, "Government negotiation of drug prices does not work unless you have a program completely run by the government.  Democrats say they want the government to negotiate prices.  What they really want is government run health care."

Pharmaceutical companies have also voiced their opposition, raising the concern that this new initiative will result in the government receiving the "best price" for drugs.  Similarly, former president of Anthem Prescription Management James Lang stated, "For this to work, the government would have to take over price negotiations.  It would have to take over formularies.  You can't do one without the other."

While some have urged the Democrats to adopt a "go slow approach," Democrat Pete Stark responded by saying that there's no good reason to wait and that "quick congressional action might save a life."  He thereafter added, "I believe we must start work immediately to improve this incomprehensibly complicated plan, which overpays and deregulates private plans to the detriment of beneficiaries and taxpayers."

And thus, the promises of bipartisanship quickly retreat into the background, perhaps only to emerge again in the next election.

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Last week, with the elections, the Dems taking over control of both the House and the Senate, and the resignation of Defense Department powerhouse Donald Rumsfeld, was a busy week for many health care lawyers who found themselves fielding multiple calls and inquiries from clients about the effect the shift in power will have on health care providers and companies.  A few potential changes are noted below, along with a short recap of the FDA's new post-market monitoring program of medical devices.

• Democrats May Cut Medicare Payments to HMO Plans.  The Boston Globe reports that Representative Pete Stark, a Democrat from California, wants to remove the boost to Medicare HMOs granted in 2003.  Currently, the HMO payments are about 11% higher than those paid by Medicare to doctors and other providers.
• Future Speaker of the House Nancy Pelosi Vows to Seek Discounts for Medicare on Prescription Drugs.  The Washington Post reports that Nancy Pelosi, the first lady Speaker of the House, has promised legislation allowing Medicare to negotiate the price of drugs directly with pharmaceutical companies.  Ira Loss, an analyst quoted in the article, stated that "[t]he drug industry is on the top of the list of industries that would be uncomfortable if Democrats are successful in the elections."  Pharmaceutical companies have responded that Pelosi's proposal "equates to price controls."  Quoted in a report by the Kaiser Family Foundation, Catherine Bennett, a pharmaceutical industry lobbyist, stated that allowing direct negotiation "would just be chilling."  Bennett continued, "If the federal government is suddenly setting the cost of your product, you might get short-term savings in the Medicare program, but where do you get the money for the next generation of innovative drugs?"

On Wednesday, shares of Pfizer, Inc. tumbled to $26.62, a 43 cent decline, Eli Lilly & Co. closed at $56.48, down fifty cents and Merck & Co. fell to $44.34, a $1.56 loss.  On Friday, the losses continued, as Pfizer closed at $25.71, Eli Lilly at $54.14 and Merck at $43.12.

• FDA to Strengthen Post-Market Monitoring for Medical Devices.  Last week, the FDA announced that it will strengthen post-market monitoring of medical devices.  Scott Gottlieb, M.D., the Deputy Commissioner for Medical and Scientific Affairs, stated in a press release, "Many of today's medical devices are smaller and more complex than ever, offering new medical opportunities that have benefited literally millions of people. But this technical sophistication sometimes means the margin for error with device manufacturing shrinks and so we need to be working even harder, after devices and engineering changes are approved, to monitor for potential safety problems."  As reported by the FDA, the changes include the following:
  • creating a cross-cutting organizational structure within CDRH to better integrate pre-market, post-market and enforcement efforts;
  • developing internal performance measurements to track the center's handling of post-market issues, such as recalls;
  • pursuing the development of a unique identifier system to identify a device and the information associated with that device throughout its lifetime;
  • proposing mandatory use of electronic reporting for required adverse event reports and revising the current system that records reported adverse events for devices (the Manufacturer and User Facility Device Experience Database or MAUDE system);
  • increasing the use of Medical Product Safety Device Network (MedSun) programs--a network comprised of more than 350 hospitals that have been recruited and specifically trained to identify and report device problems, and help provide "real time" data on signals and safety problems;
  • enhancing risk/benefit communication efforts so health practitioners, patients and consumers receive clearer and more timely information on public health news; and
  • increasing the coordination among the agency's compliance and enforcement programs.

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This week, Michael H. Cohen, Assistant Clinical Professor of Medicine, Harvard Medical School and Assistant Professor, Harvard School of Public Health, announced on the Complementary and Alternative Medicine Law Blog  that the Institute for Integrative and Energy Medicine (the "Institute") is "reaching critical mass toward sustaining its mission," which is "[t]o provide leadership for the transformation of global healthcare toward compassionate and caring models, supported by law and social policy, that bridge our physical, psychological and spiritual selves." 

As reported at www.ihelps.org, the Institute collaborates with international scholars and organizations to develop models of health care that:

• draw on and respect our planetary heritage of healing;
• acknowledge the rights, interests, and needs of patients and families;
• understand health and healing as spiritual and emotional as well as physical journeys; and
• regard human transformation as central to a compassionate, caring healthcare system.

While originally a Wall Street lawyer who worked in securities, banking, mergers and acquisitions, Cohen shifted his focus, breaking from traditional corporate legal practice, and spent the last several years of his career writing and reflecting about complementary and alternative medicine (CAM). Cohen's shift occurred after taking up the study of Ericksonian hypnotherapy, Gurdjieff Work, and other tools for investigating consciousness, and following graduation from the New Seminary in New York and the Barbara Brennan School of Healing in Florida.

Cohen defines CAM therapies as "those therapies traditionally outside those provided through conventional, biomedical care in hospitals."  CAM methods include, for example, acupuncture, aromatherapy, chiropractic, homeopathic medicine, naturopathic medicine, Qi gong, Reiki and therapeutic touch.  "Integrative healthcare," he writes, "refers to emerging models of health care that integrate CAM into conventional medical settings, endeavor to create optimal healing environments, and bridge the entire spectrum of therapies." 

Cohen has spent much of his time discussing deficiencies in the legal framework that hinder CAM providers from gaining general acceptance.  States and medical boards, for example, fail to license and credential CAM providers in a fashion similar to that of physicians and other providers of conventional medicine.  Legislative recognition of these providers is important, however, because, as Cohen and several of his colleagues write, "legislative recognition trumps medical recognition:  State legislatures can license providers and thereby grant citizens access to certain therapies, even if scientific debate has not concluded in favor of those modalities." Similarly, in another article, Cohen and others explored the malpractice implications of referrals to CAM providers.  "Referrals can generate direct liability (the decision to refer was itself considered to be negligent, resulting in patient injury) and vicarious liability (the referring physician becomes legally responsible for the treating practitioner's negligence)." Accordingly, because of the risk of malpractice exposure, physicians have become hesitant to refer to patients to CAM providers.

The failure to have consistently applied standards serves as an impediment to patients who desperately need complementary therapies that provide a sense of hope and empowerment--the sense of actively combating and taking control of the disease that resides within them.  Cohen, for having the audacity to delve deep into CAM, has assumed a noble role. My recent conversations with Cohen have also led me to believe that he is a great mind and a deeply compassionate soul. 

With Cohen's theories, writing and advocacy, Cohen has the ability to increase the availability and credibility of CAM therapies, thereby helping to bring about a transformation for those whose illness initially held them captive and in a state of despair.

Juvan's Health Law Update will continue to follow the Institute's progress and will keep you apprised as developments occur.  If you are interested in furthering the development of the Institute, please contact Michael H. Cohen directly.

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Star Ledger Joins Bandwagon Criticizing the FDA

Today, the Star Ledger joined FDA critics when it released an article claiming that the FDA "fails to measure drug risks."  The article criticized the FDA's current approach to monitoring drugs, which relies upon drug manufacturers to report serious adverse events to the FDA within 15 days of learning about the events.  The article quoted Curt Furberg, a member of the drug safety and risk management advisory committee at the FDA and a Wake Forest University professor, who stated, "Fundamentally, it is a 1950s-era approach . . . . There is enormous underreporting of adverse events, which leads to delays in detecting problems, and many of the types of adverse events reported are not really relevant."  Furberg reports that only approximately 10% of serious adverse events actually get reported to the FDA.  The article also quoted FDA Deputy Commissioner Scott Gottlieb, who stated, "We need to do more to actively collect information, and not just rely on passive databases that report information sometimes months--and maybe years--after actual events have occurred."

Though the Institute of Medicine called for stronger enforcement powers for the FDA, new labeling requirements, advertising limits and further clinical trials after market approval, it still seems as though there is still no clear plan of action to address the FDA's deficiencies.

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• Pharmaceutical Companies Face Decreased Earnings As Generics Enter the Market.  FDA News reports that the entry of generic drugs to the market has had detrimental effects to the earnings of certain pharmaceutical companies.  Bristol-Myers Squibb, for example, lost substantial revenues when its drug Plavix, a blood thinner, faced competition from generics.  To make matters worse, the company is now under investigation by the United States Department of Justice (the "DOJ").  The DOJ is investigating whether the company's proposed settlement with Apotex, the generic maker of the drug, violated an agreement the company had with the Securities and Exchange Commission.  In the settlement, Bristol-Myers Squibb offered a reverse payment to Apotex, whereby Bristol-Myers Squibb would pay Apotex to refrain from marketing its generic version of the drug until 2011, when the patent expires.  Likewise, FDA News reports that Pfizer has also announced that it is seeking to lower operating costs and has likewise lowered revenue projections because, among other reasons, the company has faced a substantial amount of competition from generics.
• Modern Healthcare/AP Report Frightening Data Loss by Indiana Hospital.  Last week, Modern Health Care and the Associated Press reported as follows:

An Indiana-based hospital system has started notifying at least 260,000 patients of its Indiana and Illinois hospitals that a medical records contractor had lost CDs containing their Social Security numbers and other personal information.

Officials of the Sisters of St. Francis Health Services, however, say the lost CDs were recovered and that they do not believe any of the information was improperly accessed.

A letter to patients of the Mishawaka, Ind.-based St. Francis, which operates 10 hospitals in Indiana and two in Illinois, said that in July an employee of a medical billing contractor copied the data onto several CDs and placed them in a new computer bag to work on the data from home.

That employee later decided the bag was too small and exchanged it at a store, accidentally leaving the discs inside, the letter said.

Lisa Decker, a spokeswoman for St. Francis subsidiary Greater Lafayette Health Services, said the person who later bought the bag immediately returned the discs to the company and that officials were confident the data was not accessed. -- by Associated Press

This supports the concern of some in the medical profession who have asserted that the shift to e-records could jeopardize patient privacy.

• CMS Proposes Requiring Sprinkler Systems in All Long Term Care Facilities.  While current rules only require sprinkler systems in new facilities or facilities that undergo renovations, last week, CMS proposed a new rule that, if adopted, would require all facilities to be equipped with these systems.  Click here to view the Proposed Rule.  Don't like the Proposed Rule or want to suggest a change?  Submit comments to CMS for consideration no later than December 26, 2006 by 5:00 PM.
• JAMA Reports Racial Minorities Fail to Receive Similar Care.  Only about a week ago, I participated in the Cleveland Bar Association's 3Rs program that seeks to place lawyers in high school classrooms around Cleveland.  The program is simply awesome, as it attempts to demonstrate to students the value of higher education in the hope that they will continue on to college after earning their high school diploma. 

The topic of discussion for this past session was the Equal Protection Clause of the Fourteenth Amendment.  In my class, we discussed the United States Supreme Court's ruling that "separate is not equal" in Brown vs. Board of Education.  Our team of teachers asked students to ponder a society in which rights are distributed based on a variety of factors such as race or gender.  The students, many of whom were minorities, were encouraged by the current state of the law and the increased opportunities that are available to all.

Despite the progress that we've made, its almost perplexing that, all of these years after the Court's ruling in Brown, studies are showing that minorities still do not have equal access to the same high quality health care that their white counterparts have.  Christopher Lee, a Washington Post staff writer, reported last week on two studies released by the Journal of the American Medical Association that found that "[r]acial minorities are less likely to undergo major surgeries at the hospitals where those operations are done best, and black patients at Medicare HMOs fare worse than whites on several health measures regardless of plan quality."  Lee thereafter asserted that "[t]he two studies in today's issue of the Journal of the American Medical Association, plus a third showing that black women are less likely than their white counterparts to survive breast cancer, add to the voluminous evidence that the U.S. health-care system works differently for minorities than for whites despite years of efforts to erase racial disparities."

Indeed, as some may suggest, these studies may simply be reporting that which we already know.  However, it seems to me as though it is time to put together think tanks with teeth that have the ability to assess the problem, are able to come up with an action plan to address it and that must report results periodically and have them analyzed to determine effectiveness.  All of our kids deserve this!

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Here's a look back at a few stories of interest from last week:

• Researchers Say Voters View Health Care as a "Second Tier" Issue.  In recent days, news agencies have dramatically increased their coverage of the upcoming election. Thus far, the issue that probably received the most of the media's attention was the Mark Foley scandal, dubbed by many reporters as the "Foley Factor."  Discussion of health care issues has certainly not taken center stage.  This is probably due to the fact that, as reported by a few researchers, while voters view health care as an issue more important than education and the environment, it is a "second tier issue", ranking behind Iraq, the economy and gasoline prices.  Lou Dobbs is one reporter who has focused on the health care crisis, telling the story of a middle class family without health insurance who were forced to file for bankruptcy after they drowned in medical bills incurred after they obtained medical treatment for their ill son.
• More Shame Brought to the FDA as Former Head Lester Crawford Pleads Guilty to Charges.  On Tuesday, Lester Crawford, who headed the FDA for only two months in 2005, pled guilty to conflict of interest charges and charges that he failed to disclose some of his stock holdings.  Crawford will be sentenced in mid January and potentially could face jail time. 
• Generic Drugs May Enter the Market Sooner.  The Kaiser Family Foundation reported that the FDA will "accelerate reviews for the first generic versions of brand-name medications that no longer have patent or market exclusivity."  In response, Kathleen Jaeger, the head of Generic Pharmaceuticals Manufacturers Association, stated that this move by the FDA, which will bring generics to the market much more rapidly, will save consumers millions of dollars.

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• Doctors Make Little Use of E-Records Systems, Study Finds.  The Washington Post reports that a study found that only about 25% of doctors use electronic health records systems. 

Since their inception, whether doctors should in fact adopt e-records systems has been the subject of much debate.  Supporters of these systems argue that e-records will bring better care to patients because doctors will be able to have greater access to their medical records.  "[S]tandardized electronic records that can be shared among care providers would improve patient care, reduce errors, curb unnecessary tests and cut paperwork," advocates argue.  But privacy rights activists reject these arguments, citing the high risk that information gathered could be compromised or exploited. 

Indeed, the possibility of having a person's entire medical history exposed to the world as a result of a data breach or the loss of a laptop is a rather frightening proposition, and the fear of this prospect may be making some hesitant to shift.  As one commenter to the Post's article stated, "Some doctors are reluctant to adopt EHRs because if a breach occurs, such as a stolen computer, lost USB flash drive or revenge from a disgruntled employee, the act of notifying all of the patients in the practice is almost sure to bankrupt the business."

Only time will tell whether doctors will buy in to this new way of treating patients.

• Privatizing the Role of the FDA?  The FDA has most certainly come under attack in recent months.  Last week, not long after a damning report by the Institute of Medicine was released claiming that the perception of crisis has called into question the FDA's credibility and that the FDA does not consistently demonstrate transparency or accountability, The New England Journal of Medicine published an editorial endorsing the report.  Many others have likewise claimed that they are tired of waiting for the FDA to solve its problems.  But one entrepreneur has decided to take matters into his own hands. 

Meet Daniel Palestrant, founder and CEO of Sermo Inc. ("Sermo"), the entity that owns sermo.com, an Internet site that allows doctors to post information about off-label uses of drugs.  On this site, credentialed doctors not only have the right to post about the side effects of drugs, but they are actually paid $30 to $50 to post.  Other credentialed doctors are paid to rank the credibility of the observations posted.  Since its debut, postings have alleged that Pfizer's Lipitor causes nightmares and that Amylin Pharmaceuticals' and Eli Lilly's diabetes drug Byetta is linked to sudden death in 50 patients. 

Sermo claims that it launched the site in the hope to have the opportunity to work with the FDA so that dangerous drugs are taken off of the market.  The site also markets itself to Wall Street investment companies, stating that it is a forum that assists these companies to anticipate swings in the stock of drug companies.  Such investment companies may subscribe to the site for an unspecified fee. 

This new site has received criticism from both pharmaceutical companies and advocacy groups that urge the FDA to remove dangerous drugs from the market.  One of Pfizer's vice presidents, Gregg Larson, was quoted in an article from the Boston Globe as stating, "This is such a strange situation with this website. . . . It's not scientifically based.  It's not clinically based."  Advocacy groups are concerned that such sites could attempt to replace the FDA's role as the watchdog.  Dr. Sidney Wolfe, the director of one such group, was quoted in the same article as stating that "[i]t's a function too important to be left to venture capitalists and the drug industry."

The site is backed by Longworth Venture Partners of Waltham, which provided a $3 million dollar capital infusion to the company.  Sermo is currently looking for additional investors, hoping to receive an additional $8 to $10 million. 

• NPI Roundtable Transcript Is Now Available.  CMS has made the transcript for the 9/26 NPI Roundtable available on its web site.  Click here to view the transcript.

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CMS Attempts to Set Medicare Reimbursement Rates in Close Proximity to Market Rates

Beginning on November 15, power wheelchair suppliers will receive a 35% cut in Medicare reimbursement rates--a decrease so large that it almost shocks the conscience.  While the current reimbursement rate is $6,130 for standard power wheelchairs, the new rate will be a mere $3,800.  Discussing the rate cut, Ellen Griffith, spokesperson for CMS, quoted in a release from the Kaiser Family Foundation, stated, "Medicare was paying for the equipment at a much higher rate than what it was being sold on the market, and the beneficiary was paying a higher co-payment as a result."

Many suppliers are up in arms over the new cuts, alleging that their current profit margins will not allow them to sustain the decrease.  These suppliers argue that beneficiaries will ultimately pay, as they will have decreased access to the equipment.

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• Bernanke Asks Whether, Given the Impending Health Financing Crisis, We Will "Treat Future Generations Fairly."  This week, speaking before the Washington Economic Club, Ben Bernanke, the Chair of the Federal Reserve, reiterated that the baby boomers will have a major impact on the government's budget in the not too distant future.  "As the population ages," he said, "the nation will have to choose among higher taxes, less non-entitlement spending, a reduction in outlays for entitlement programs, a sharply higher budget deficit, or some combination thereof."  The increased health care spending will have an adverse effect on future generations and the "long-run productive potential of the U.S. economy." 
• Clinical Trials Today Examines Patient and Physician Motivation.  This week, Clinical Trials Today examined whether reports of the unethical recruitment of patients and manipulated findings have driven patients and physicians away from participation in clinical trials.  The study, based on over 700 patient surveys and over 7,000 physician surveys, found that patients are generally most concerned about flexible hours.  Risk level associated with procedures and the risk of side effects ranked second, the availability for public transportation to take them to the appropriate site ranked third, and the fear of receiving the placebo ranked fourth.  Generally, participants reported that they entered clinical trials in the hope of being cured of their disease and to advance science for the benefit of others.  Seventy percent of participants stated that they received excellent care, and eight-seven percent stated that they would recommend participation in a clinical trial to a family member or friend.  Physicians responded that their top concern was having access to sufficient information about the investigational drug.  The report concluded that, "despite the great deal of scrutiny being paid to clinical trials, very few physicians or volunteers seem deterred or even concerned about the potential for harmful outcomes."
• October Is Breast Cancer Awareness Month.  Last week marked the first week of breast cancer awareness month.  The focus on early detection, the investment of substantial amounts of money, and the sheer desire of so many to find a cure to this disease have all contributed to making it very treatable if detected early.  Recently diagnosed women now have many options that help them to wage successful battles against this type of cancer.  Many women are able to live normal lives after diagnosis due, at least in part, to research that has discovered successful chemotherapy and radiation combinations.  Relatively new hormone therapy treatments are now available for women with ER/PR positive breast cancer.  Also, women with Her-2 positive breast cancer have found new hope due to Genentech's Herceptin.  Juvan's Health Law Update would like to do its part in helping to spread awareness.  Here's a few facts that every woman should know (as reported by www.breastcancer.org):

• About one in seven women in the United States will have breast cancer in her lifetime
• "Most women who get breast cancer do NOT have an inherited abnormal breast cancer gene"
• Smoking increases a women's risk from being 14% to 32%
• Yearly mammograms substantially increase the likelihood that cancer will be detected in its earliest, most treatable stage

What can you do if someone you know is diagnosed with breast cancer?

• Offer to accompany her to doctor's visits
• Make a meal for her
• Hire someone to clean her house while she is undergoing treatment (this will help to save her time and ensure that she is in a sterile environment, thereby reducing the threat of infection)
• Talk with her when she so desires
• Buy her beautiful scarves and hats
• Throw a party for her as she reaches each milestone
• Let her know that there is always hope

This announcement is in recognition of all of those women who must battle this terrible disease, including, but not limited to (as lawyers always say), my mother, my dear friends Barb, Debbie, Carol, Theresa, Jeanette and Jo Ann and all of the amazing ladies at www.her2support.org.

Juvan's Health Law Update would like to extend its most sincere gratitude to all of those courageous women who have entered clinical trials.  These participants are pioneers.  They're soldiers on the front lines seeking to not only beat the disease for themselves, but to also provide hope to all of their sisters.

Juvan's Health Law Update would also like to thank Benesch Friedlander Coplan and Aronoff, LLP for lending support to people who must battle this disease and for its support of the Gathering Place, an organization that provides services to those with cancer.

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On Tuesday, the National Labor Relations Board ("NLRB") rendered three decisions that clarified the test applicable to determine whether an individual qualifies as a "supervisor" or an "employee" under the National Labor Relations Act ("NLRA").  One of the NLRB's decisions in particular has left many nurses outraged. 

Under Section 2(11) of the NLRA, the term "supervisor" includes "any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment" (emphasis added).  The distinction regarding whether an individual is a supervisor or an employee under the NLRA is a meaningful one because, while employees have the right under the NLRA to collectively bargain, supervisors do not have the same rights and protections. 

Until these three decisions were handed down, the NLRB rather narrowly construed the term "supervisor."  In a 2001 United States Supreme Court decision, NLRB v. Kentucky River Community Care, 532 U.S. 706 (2001), the Court addressed the status of similar types of employees and criticized the NLRB's interpretation of the term "independent judgment."  The NLRB has now seized upon the opportunity to clarify its interpretation of the phrase "independent judgment" and at the same time also altered its interpretation of the terms "assign" and "responsibility to direct."   

In Oakwood Healthcare, Inc., 348 NLRB No. 37 (Sept. 29, 2006), the NLRB held 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 such assignments.  Specifically, the charge nurses in Oakwood independently exercised their own judgment in "assigning nursing personnel to patients."  The NLRB did, however, distinguish between these nurses and rotating nurses, holding that, because the rotating nurses in this case did not exercise supervisory authority a substantial amount of the time, they were properly characterized as employees under the NLRA. 

The NLRB stated that "assign" means to designate "an employee to a place (such as a location, department or wing), appointing an individual to a time (such as a shift or overtime period), or giving significant overall duties, i.e. tasks, to an employee . . . and refers to the . . . designation of significant overall duties to an employee, not to the . . . ad hoc instruction that the employee perform a discrete task."  An individual has the "responsibility to direct" other employees if the individual "decides what job shall be undertaken next or who shall do it," as long as the individual is also "responsible" and carries out the tasks with "independent judgment."  Finally, an individual exercises "independent judgment" if the individual exercises judgment that is not controlled by another authority and if the degree of discretion arises above the "routine or clerical."

The NLRB has applied this new interpretation in two companion cases.  In Croft Metals, Inc., 348 NLRB No. 38 (Sept. 29, 2006), the NLRB held that lead persons at a manufacturing plant were not supervisors because their employer retained so much control over their decisions that the direction they gave to other employees was simply routine and clerical.  Similarly, in Golden Crest Healthcare Center, 348 NLRB No. 39 (Sept. 29, 2006), the NLRB concluded that the charge nurses at issue were not supervisors because they did not have the authority to assign tasks to other nurses, to require other nurses to stay beyond their shift or to call in off-duty nurses.  Moreover, the annual rating of these nurses based upon their ability to direct other nurses was insufficient to establish that these nurses were actually accountable for the job performance of other nurses.

Many nurses have already begun to revolt against this new interpretation.  The Sacramento Business Journal reports, for example, that over 30,000 nurses have signed pledges promising to strike if their employers attempt to exploit the decision. 

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• Uncle Sam Holds Medicare Payments.  Medicare payments took center stage last week, as a nine day hold on these payments, as mandated by Section 5203 of the Deficit Reduction Act of 2005, was in full force and effect.  Though the government claims that it gave plenty of notice about this hold, many expressed their outrage and asked whether they could likewise place a hold paying their creditors, including their employees.  Fortunately, this nine day hold has expired, and we can all return to business as usual. 
• Physicians May Receive a Pay Raise.  Though physicians were plagued by the nine day hold, the news for physicians from last week was not all bad.  The Washington Post reports that Congress will likely soon act to reverse the planned 5.1% cut to physician Medicare reimbursement rates, thereby costing the federal government approximately $13 billion dollars over the next five years.  Under a draft proposal prepared by House Energy and Commerce Committee Chair Joe Barton, a Republican from Texas, over the next three years, physicians would receive a .5% increase.  Additionally, they would also receive a .25% increase in 2008 and 2009 if they report quality data to the government.  So, you may ask, where will the government obtain the money to support this increase?  HMOs that manage Medicare benefits, of course.  As expected, the health insurance industry has already begun to launch attacks against this funding scheme. 
• Vioxx Debacle May Have Slowed Drug Approval Process.  The New York Times reports that, as a result of the Vioxx recall that occurred back in 2004, FDA reviewers are taking more precautions before approving drugs and are requesting more data than before.  Lee Simon, a former head of the FDA, has stated, "I speak to reviewers, and they all feel worried that the decisions they make may come back to haunt them."  Some say that only time will tell if the FDA's drug approval criteria has really stiffened.

Feel free to post additional stories of interest.

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Make sure to obtain your copy of the October 2006 issue of Inside Business, which offered an article about Juvan's Health Law Update (see page 20).  The latest issue also included many other interesting articles, such as an article about Jack Landskroner, an attorney who brought a class action suit on behalf of plaintiffs who were injured when they had medical procedures performed that included the use of illegally harvested tissue, bones and organs, and a write-up on Dr. Delos "Toby" Cosgrove, the CEO and President of the Cleveland Clinic.

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Welcome to our new site!  This new blog allows  for the availability of an increased number of resources and links, provides viewers with the opportunity to subscribe to feeds and has many, many more capabilities.  The team at Juvan's Health Law Update sincerely hopes that you enjoy the new layout!

The following individuals substantially contributed to the design of this new site:

• Joni M. Bowen, Senior Reporter and Editor, Juvan's Health Law Update.  Joni has a Bachelor of Arts in Journalism from Malone College and is a seasoned reporter.  She currently works at The Alliance Review.  Prior to joining The Alliance Review, she was the Editor-in-Chief of The Aviso, the Malone College newspaper.  Joni will be bringing you stories written from a reporter's perspective from time to time.
• Daniel D. Depenbrok, Graphic Designer, Juvan's Health Law Update.  Dan has a Bachelor of Fine Arts in Illustration from the Columbus College of Art and Design.  He has his own graphic design and freelance business, and he also currently designs advertisements and the web site for MGI, Inc.  Dan will periodically update the graphics, layout and design of Juvan's Health Law Update.

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Modern Healthcare has reported the following: "HHS Secretary Mike Leavitt named Leslie Norwalk as acting administrator for the CMS effective Oct. 15. Norwalk has served as deputy administrator for the agency that oversees $740 billion in federal spending on Medicare and Medicaid. She replaces Mark McClellan, who resigned from the CMS on Sept. 5."

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Just a few days ago (and not long after the announcement of a possible 5.1% cut in Medicare payments to physicians was announced), the Institute of Medicine released a report calling for an across the board reduction in Medicare payments to providers and the creation of a fund that pays "bonuses" for strong performances. The committee chair and a professor of health care at the University of California, San Francisco, Steven A. Schroeder, offered his support of the proposal when he stated that "Medicare beneficiaries are not getting the highest possible quality of care because the program's payment system encourages volume rather than efficiency and quality." The comittee acknowledged, however, that there is little data available suggesting that pay-for-performance systems have a positive impact on patient care.

In and of itself, this proposal seems like a sound, logical solution to the so-called problem. The logic goes something like this: (1) The prospect of the receipt of a monetary benefit encourages all human beings to perform at their highest levels. (2) Providers are human beings. (3) Therefore, offering providers a monetary benefit will encourage them to perform at their highest levels.

This logic may not take into consideration the current climate, however. Given that providers are already under a substantial amount of pressure to avoid malpractice suits and already face another cut to their Medicare payments, such quality measures accompanied by an across the board cut may only serve to drive an even stronger wedge between those providers who care about patients and patients who deeply desire to have a good relationship with those responsible for providing their medical care.

When proceeding with reforms, care should be taken to ensure that the divide between physicians and patients is not strengthened and that changes made do not lead to increased resentment between the parties.

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Modern Healthcare just announced the following: "Officials are expected to announce that Robert Kolodner, chief health informatics officer at the Veterans Health Administration, has been named HHS' acting national coordinator for health information technology, sources said. Kolodner would replace David Brailer, the first occupant of the post, who resigned in May."

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Here's a look back at a few important headlines from last week:

• Stanford Bans Gifts from Pharmaceutical Companies. The New York Times reported that Stanford University has announced that it will, following the lead of Yale and the University of Pennsylvania, ban its physicians from accepting gifts from pharmaceutical sales representatives. The new policy prohibits not only the receipt of large gifts, but also the receipt of small gifts such as pens and mugs. Apparently, an article published in the Journal of the American Medical Association prompted the creation of this new policy.
• Cleveland Clinic to Build Specialty Hospital and Clinic in Abu Dhabi. Modern Healthcare's Daily Dose reports that the Cleveland Clinic, which often works with medical centers in other countries, has recently revealed a new joint venture with an investment firm in the United Arab Emirates for the development of a new specialty hospital and clinic in Abu Dhabi. The Clinic plans to open the doors to the new facility in three years.
• Tenth Circuit Rules FDA May Enforce Ephedra Ban. The Tenth Circuit overturned a federal trial court ruling enjoining the FDA from implementing a ban on ephedrine-alkaloid dietary supplements (also known as "Ephedra"). The court rejected an argument presented by Nutraceutical Corporation that the FDA acted outside of the scope of the authority granted to it under the Dietary Supplement Health and Education Act when it banned the supplement. The Tenth Circuit also stated that the FDA was not arbitrary or capricious in determining that any dose of ephedra poses an unreasonable risk.

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An anonymous blogger alerted me to an interesting article published by Robert J. Samuelson in The Washington Post. In the article, Samuelson asserts that Medicare is the "monster in our future." He takes to task economists who believe that increased health care spending is worthwhile and nonthreatening. Essentially, Samuelson questions whether Americans really ought to prefer health care spending, which purportedly results in longer lifespans, to "a third car [or] yet another television." After citing a few of the benefits of health care spending, including advances in Alzheimer's disease, Parkinsons and cancer, Samuelson writes, "But the present explosion in health spending is increasingly wasteful and socially corrosive. It may ultimately lower economic growth--a side effect of the high taxes needed to pay for Medicare and Medicaid--and already depresses take-home pay, squeezes other public services and redistributes income from the young to the old."

Is Samuelson correct? Is Medicare really the "monster in our future?" By helping those who are elderly to live longer lives, are we depriving the young? Is such spending "wasteful" and "socially corrosive?" How do we overhaul the system, but still nevertheless ensure that those needing health care receive high quality care and that research and development continues on effectively so that we find more cures to debilitating and life threatening diseases?

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Recently, the moratorium prohibiting Medicare payments for services rendered pursuant to a referral to specialty hospitals in which the referring physician has a financial interest expired. Responding to the lifting of the ban, the Department of Health and Human Services ("HHS") released a strategic and implenting plan that called for revisions to payment schedules and increased transparency to address concerns raised by critics that specialty hospitals focus more on the profitability of patients than on providing high quality care. Specialty hospitals provide care for patients with cardiac conditions, orthopedic conditions or patients in need of surgical procedures.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 created the moratorium. Though the moratorium was originally scheduled to last for eighteen months, upon expiration, CMS announced a new policy that prohibited regional offices and contractors from enrolling these hospitals in the Medicare program. Subsequently, the Deficit Reduction Act of 2005 extended the moratorium for an additional six months.

The lifting of the moratorium is not a complete victory for physicians. The plan released by HHS calls for improvements to the accuracy of the hospital payment system and increased transparency. Discussing the plan, Mark B. McClellan, quoted in a CMS press release, stated, "We are bringing transparency to physician investments in hospitals, to help ensure that investment and compensation are appropriate, and to make sure that any such financial arrangements are disclosed to patients." CMS believes that the implementation of major changes to the current hospital inpatient prospective system and the ambulatory surgical center payment systems will eliminate improper incentives. Additionally, the plan calls for increased disclosure of physician investments and compensation arrangements.

Before physicians enter into this type of an arrangement, they should contact an experienced health care attorney to ensure that the proposed arrangement does not violate any state or federal fraud and abuse laws.

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On Tuesday, September 26, the Centers for Medicare and Medicaid Services ("CMS") will host a roundtable to discuss the transition to the National Provider Identifier system. To participate, call 1-877-203-0044 and enter pass code 4795739.

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On Tuesday, President Bush signed an executive order entitled "Promoting Quality and Efficient Health Care in Federal Government Administered or Sponsored Health Care Programs." The Bush administration reports that this executive order aims to provide consumers with increased access to information about their doctors, hospitals and the prices of their procedures. The executive order requires federal agencies that administer health care programs to publish the costs paid for treatment, implement pay-for-performance reimbursement models and develop quality measurements. The executive order also requires federal agencies to use interoperable health information technology systems to facilitate the exchange of health information.

To view the executive order, visit http://www.whitehouse.gov/news/releases/2006/08/20060822-2.html.

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The Centers for Medicare and Medicaid Services ("CMS") recently announced that "getting an NPI is free--not getting one can be costly."

The Health Insurance Portability and Accountability Act of 1996 ("HIPAA") mandates the adoption of a standard unique identifier number system. In a January 2004 final rule, the Secretary of the Department of Health and Human Services announced that HIPAA covered providers must obtain a National Provider Identifier ("NPI") by May 23, 2007. As of August 23, 2006, providers only have nine months to obtain their NPIs. Medicare will delay or reject claims submitted without an NPI after this compliance deadline. Small health providers have an additional year--until May 23, 2008--to obtain their NPIs.

Medicare will begin accepting NPIs starting October 1, 2006. CMS highly recommends, however, that providers submit both their legacy identifiers and their NPI on claims.

To obtain an NPI, visit https://nppes.cms.hhs.gov. Alternatively, call to request a paper application at 1-800-465-3203. Do not wait until the last minute to submit your application, as application processing could take several weeks or even months.

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The Food and Drug Administration ("FDA") recently announced that it entered into an agreement with the Massachusetts Institute of Technology to develop a new safety monitoring system designed to more quickly identify problems with drugs and medical devices. The Associated Press reports that this new system will "scour federal and private health care databases in real time for unusual and emerging patterns that could indicate potential safety concerns." In further attempt to improve patient safety, the FDA also intends to regularly issue reports to physicians that inform them of potential risks associated with drugs and devices.

Currently, the FDA manually assesses reports submitted voluntarily. The FDA has stated that this safety monitoring system leaves many known problems unreported.

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Recently, the Centers for Medicare and Medicaid Services ("CMS") announced a 3.1% increase in the Medicare payment rates for skilled nursing facilities ("SNFs") and issued a proposal to increase the payment rate for home health agencies ("HHAs") by 3.1%. These payment increases will take effect starting January 1, 2007 and will result in approximately $560 million dollars in additional payments to SNFs and $460 million dollars in additional payments to HHAs.

Along with these payment increases, CMS announced the implementation of several initiatives designed to improve quality of care and eliminate unnecessary spending. With respect to nursing homes, CMS announced that it is in the process of developing a "Nursing Home Value Based Purchasing Demonstration." Under this program, nursing homes will have the opportunity to receive additional payments based upon their performance on quality measures. CMS also intends to initiate a "Nursing Home Quality Campaign" designed to positively impact the quality of life of SNF residents and increase the efficiency of the delivery of SNF services.

While CMS's announcement regarding the SNF increase simply mentioned the creation of quality initiatives, CMS's proposed rate increase for HHAs actually makes the increase contingent on the receipt of quality data. Currently, as mandated by the Omnibus Budget Reconciliation Act of 1987, HHAs collect and report Outcome and Assessment Information Set ("OASIS") data. Under the proposed rule, if an HHA does not submit the requisite OASIS data, CMS will reduce the amount of the HHA's increase by two percentage points.

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The Office of the Inspector General ("OIG") of the United States Department of Health and Human Services has reported that the Food and Drug Administration's ("FDA") National Drug Code Directory (the "Directory") contains thousands of errors. The OIG's inspection uncovered that over 9,000 prescription drugs are missing from the Directory and the Directory included almost 35,000 drugs that are no longer on the market or are listed in error. The OIG attributes these errors, at least in part, to the FDA's failure to include drugs reported by drug companies and the failure of many drug companies to submit the requisite FDA reporting forms.

The Directory assists the FDA with implementing compliance programs and health initiatives. For example, the FDA references the Directory when it recalls drugs and undertakes bioterrorism efforts. The OIG recommends several measures that the FDA should take to improve its process, including implementing a mechanism to uncover errors and omissions and penalizing drug companies that fail to report and update their information. To view the OIG's report, visit http://oig.hhs.gov/oei/reports/oei-06-05-00060.pdf

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This message is intended to serve as a reminder that, from September 22, 2006 though September 30, 2006, as mandated by Section 5203 of the Deficit Reduction Act of 2005, a hold will be placed on Medicare payments for all claims, including initial claims, adjustment claims and Medicare Secondary Payer claims. All health care providers billing Medicare potentially are subject to this hold. During these nine days, no payments will be made to providers, interest will not accrue or be paid and late penalties that generally apply are inapplicable. Claims held during this nine day period will be paid on October 2, 2006.

This policy does not apply to full denials and no-pay claims, periodic interim payments, home health requests for anticipated payments, cost reports settlements and other non-claim payments. This policy only applies to claims subject to payment.

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On August 1, 2006, Michael Leavitt, Secretary of the Department of Health and Human Services, announced new exceptions to the Stark Law ("Stark") and new safe harbors to the Anti-Kickback Statute ("AKS") designed to encourage physicians to implement electronic prescribing and interoperable health records systems. Ordinarily, the provision of such technology may trigger Stark and AKS investigations, fines and potential criminal liability. Under the new e-prescribing technology rules, if applicable criteria are met, certain entities such as hospitals and group practices may donate items and services, including hardware, software internet connectivity training and support, to qualifying physicians. The new interoperable health record systems rules are similar to the e-prescribing rules, except that an entity may not donate hardware, and physicians must pay 15% of the donor's costs. The new HIT rules expire December 31, 2013.

Proponents have argued that these rules will contribute to the reduction in the total number of errors made and will improve efficiency and overall patient care. Critics have emphasized that e-prescribing and e-health records may jeopardize patient privacy.

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Effective January 1, 2007, Health Care Providers Must Arm Employees with False Claims Act Education

On February 8, 2005, President Bush, strengthening his commitment to reducing the national debt, signed into law the Deficit Reduction Act (the "DRA"). In addition to cutbacks to other federally funded programs, the DRA aims to reduce Medicare and Medicaid expenditures and to recoup losses and overpayments made to health care providers. 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 blow the whistle on their employers for violating these laws. 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 by January 1, 2007 risk exclusion from the Medicaid program.

Essentially, these provisions constitute a recognition by the federal government that employees often play key roles in federal FCA investigations. These provisions increase the likelihood that employees lurking within, armed with full knowledge of their rights (and the millions of dollars they may recover if successful), will bring qui tam actions. Despite the fact that health care providers covered by these provisions may be hesitant to comply, they have no choice, as exclusion from the Medicaid program would be devastating.

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