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

Yesterday, in a devastating blow to terminally ill patients seeking use of experimental drugs, the United States Supreme Court refused to hear an appeal of a ruling by a divided federal appeals court that denies the right of access. 

Juvan's Health Law Update has been following the case for some time.  For coverage of the case by this blog, see D.C. Appeals Court Rules Against Abigail Alliance and D.C. Circuit Vacates Abigail Alliance Decision, Orders Rehearing.

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It is well known that most health care providers are subject to complex laws and regulations.  Unlike traditional health care providers, however, pharmaceutical representatives have generally successfully positioned themselves beyond the scope of the health care rules, making the requirements and accompanying penalties for noncompliance inapplicable.  In a noteworthy move, however, council members in Washington D.C. have taken aim at this profession by passing a measure that requires pharmaceutical representatives to obtain licenses and prohibits these representatives from knowingly providing false information to providers.  The legislation now brings the profession within the complex web of health care laws and rules applicable to traditional health care providers.

In the press release discussing the legislation, councilman David Catania stated that  pharmaceutical representatives "have come to play a huge role in our health care system, and it's time to start treating them as healthcare providers." He further stated that "[t]he current system promotes the use of the latest, most expensive drugs at the expense of the best, most effective ones.  This is a major problem for our overall healthcare system." 

Will this be the tipping point that causes other state legislatures to adopt similar measures?

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The United States Department of Health and Human Services, Office of the Inspector General ("OIG") posted an advisory opinion (Advisory Opinion No. 07-17) last week that addressed whether an individual excluded from federal health care programs who owns the intellectual property to certain technology may legally license the technology to an "unrelated" third party. 

I have often heard OIG officials indicate that they consider their ability to exclude providers from federal health care programs to be their greatest weapon to combat fraud and abuse.  This advisory opinion, perhaps even more than others, addresses how far-reaching this power in fact is--that is, whether the exclusion applies to intellectual property licensed to a third party company in which the excluded individual bears no relation, has no ownership interest, and would receive no remuneration in exchange, and whether ownership of the third party company by the excluded individual's children would have an impact on the analysis.

In the case before the OIG, the requestor pled guilty to a misdemeanor under Section 1128(b)(a)(2) of the Social Security Act, was sentenced to three years probation, fined $2,000,000 and excluded from participation for a mandatory five year period.  The requestor owned the intellectual property rights to an invention and proposed to license the technology to a company formed and wholly owned by the requestor's three children.

The OIG noted that federal health care programs will not pay for items or services furnished directly or indirectly by excluded providers.  The indirect furnishing of such items means that an excluded provider sells items to a distributor who ultimately sells the items to providers that bill federal health care programs for their costs. 

The OIG concluded that the requestor's relationship was attenuated because the requestor would have no ownership interest in the new company and would receive no payments made by federal health care programs for the items provided to program beneficiaries. 

Interestingly, the OIG could have extended its power of exclusion to cover both an excluded individual's children and the license of technology, but the OIG declined to do so.  The OIG called the new company and distributors "intervening entities" that apparently cause a break in the chain.  The OIG also commented on the fact that the requestor's children would own the new company, but decided that the filial relationship does not pose a substantial risk because the parties certified that funds would not flow to the requestor.

 

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Late last week, the Food and Drug Administration ("FDA") issued an alert warning against the consumption of certain products originating in China.  The FDA warned that products packaged and distributed by Shangai Distributor, Inc. of Coamo, Puerto for treatment of erectile dysfunction including RicoSuper Shangai, Strong Testis, Shangai Ultra, Shangai Ultra X, Lady Shangai, and Shangai Regular, also marketed as Shangai Chaojimengnan, contain undeclared active ingredients of FDA-approved prescription drugs and therefore are illegal.  The alert further informs the public that "FDA may take further regulatory actions to protect consumers from these illegal products," but provides no insight as to the nature of these additional regulatory actions.

For additional reading on this alert, see Viagra Ingredient in Chinese Supplements published by the Washington Post.

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In comparison to the Food and Drug Administration, "OIG investigators can more appropriately handle sensitive internal employee misconduct inquiries because OIG investigators are entirely independent of the programs and officials being investigated," wrote Daniel Levinson, Inspector General of the United States Department of Health and Human Services to Andrew C. von Eschenbach,  Commissioner, Food and Drug Administration, on September 6.  Further slapping the Commissioner on the wrist, the letter boldly declares to von Eschenbach the Inpector General's intention to terminate the Memorandum of Understanding between the two parties negotiated in 1998.  The letter states, "Increased congressional and media scrutiny regarding allegations of potential criminal violations of Federal conflict-of-interest statutes and regulations involving FDA and other officials in the Department has resulted in OIG's devoting increased attention and resources to ethics issues.  As a result, OIG investigators and attorneys have developed significant expertise in handling these complex cases."  

Commissioner von Eschenbach was unwilling to accept Levinson's decision without offering a carefully crafted reply.  Though von Eschenbach is willing to discuss implementation of the decision, he felt the need to put the Memorandum of Understanding "in historical perspective and to correct some of the misleading impressions your note to me may create to readers who are not familiar with the facts."

November 30 became the effective date of the change.  In a press release, Senator Chuck Grassley noted, “Cutting the tie is good for the public. It strengthens the role of the Inspector General. And in our system, the Inspectors General are vitally important independent watchdogs within the federal bureaucracy.”

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Projections estimated that the Medicare Part D drug program in 2006 would cost the federal government approximately $59 billion dollars.  However, according to a report released just over a week ago by the United States Department of Health and Human Services, Office of Inspector General, actual costs for 2006 came in surprisingly low at $47 billion dollars--that's right--$12 billion dollars less than the estimates.  

So, what accounts for the discrepancy? 

According to the report, generic drug utilization makes up the difference.  Generic drugs cost about 71% less than their brand name equivalents.

Continue Reading...

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In The Age of Turbulence,[1]  Alan Greenspan offers a lengthy assessment of the development of China over the past several years.  He contemplates not only the success experienced by China, but, especially in Chapter 14, entitled "The Choices that Await China," undertakes a review of challenges that may lie ahead. 

Specifically, Greenspan identifies the development of property rights as continuing to elude China.  Though "the National People's Congress passed a more comprehensive right of ownership that grants the same legal protection of property that is granted to the state . . . . the right to own property," he says, "still falls far short of the status of property rights in developed countries."  He continues,

Property rights require not only a statute but an administrative and judicial system that enforces the law.  In this regard, China lags.  An impartial judiciary is still a goal on the Chinese horizon.  There are breaches, especially in intellectual property rights:  complaints by foreign joint venture investors are rife that technology brought to a new plant turns up duplicated in a plant wholly owned by Chinese in direct competition. . . . I have no doubt that the Communist Party of China can maintain an authoritarian, quasi-capitalist, relatively prosperous regime for a time.  But without the political safety valve of the democratic process, I doubt the long-term success of such a regime.  How those choices evolve will have profound implications not only for China but also for the world at large . . . .

The status of Chinese law and enforcement generally, and intellectual property protections in China in particular, no doubt will have an impact on many of the readers of this blog.  Given this blog's continued focus on pharmaceutical counterfeiting issues, and in light of Greenspan's remarks, a review Chinese intellectual property law along with measures companies can take to increase the likelihood of intellectual property protection is in order.  It is with this in mind that I offer the article that follows, which I drafted several months ago in response to an issue that arose in connection with my practice.

Continue Reading...

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On October 4, the United States Food and Drug Administration announced that it will hold a meeting on November 14, 2007 at the National Transportation Safety Board Conference Center from 8:00 to 5:00 to review the creation of a new category of drugs--"behind the counter" drugs.  Currently, drugs are divided into two classes, including over-the-counter drugs, or non-prescription drugs, and prescription drugs.  Access to the drugs in this new class would be available without a prescription, but only after a pharmacist intervenes and offers approval.  Supporters argue that the behind the counter classification will benefit patients without health insurance who otherwise would not have access to drugs they need.

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Yesterday, the United States Court of Appeals for the District of Columbia Circuit, overturning a panel decision of judges in the same court in a case filed in 2003 by the Abigail Alliance for Better Access to Developmental Drugs, found that there is no fundamental right "deeply rooted in this nation's history and tradition" to access experimental medications before they receive approval from the United States Food and Drug Administration. 

Related Reading:

New York Times, Court Rejects the Right to Use Drugs Being Tested

Washington Times/Associated Press, Terminally Ill Lose Case for Shot at Experimental Drugs

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If you are interested in tracking incidents involving counterfeit drugs, SafeMedicines.org covers international counterfeit drug developments.  For example, the site provides links to a Washington Post article covering China's attempts to strengthen safety controls, along with discussion of China's recent discovery of 18,000 fake Viagra pills and Health Canada's new anti-counterfeiting strategy launched in response, at least in part, to the death of a woman who took counterfeit anxiety drugs purchased online and the deaths of four Ontario residents who took counterfeit heart drugs.

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Targeted Genetics Corporation ("Targeted Genetics") has alerted the Food and Drug Administration ("FDA") that a patient who received an investigational drug for the treatment of active inflammatory arthritis died shortly after injection.  The clinical trial is now on hold, meaning that enrollment is currently closed and the more than one hundred current participants will no longer receive doses of the drug. 

Describing the drug, the FDA states,

The product that was being studied uses a particle called a vector that is designed to deliver treatment genes to target cells. The vector used is a recombinant adeno-associated virus (AAV) derived vector and delivers the gene for Tumor-Necrosis Factor -Receptor, with the intent to inhibit a key mediator of inflammation. In the study, the gene therapy was administered into the joint affected by the disease to reduce inflammation and disease in patients with active inflammatory arthritis.

The FDA, with the assistance of the National Institutes of Health, is investigating whether the event was related to the treatment and stated that Targeted Genetics is cooperating with the investigation. 

 

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On July 12, Representative Peter DeFazio and other co-sponsors introduced H.R. 3023, also known as the "Drug and Medical Device Company Gift Disclosure Act," which proposes to mandate that drug and medical device companies disclose annually, and the Food and Drug Administration to publicize on its web site, the value, nature, and purpose of any marketing or promotional gift over $50 given to health professionals.  Supporting the legislation, Representative DeFazio's press release states, "There's a difference between educating doctors on the uses and effects of new drugs and enticing healthcare professionals with lavish gifts.  This bill will keep the pharmaceutical industry honest." 

The bill defines the term “gift” to mean “any gift, fee, payment, subsidy, amenity, object, service, or other economic benefit.”  Several items are exempted from the definition, however, including free drug samples and scholarships for medical students and residents. 

If passed in its current form, stiff penalties will apply for noncompliance, including civil monetary penalties of not more than $10,000 for each violation.

 

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On Monday, the Food and Drug Administration ("FDA") advised consumers to refrain from purchasing prescription drugs over the internet, citing multiple safety concerns, including risks associated with improper labeling and packaging.  The press release warned consumers that certain drugs available online have been withdrawn by the FDA in response to safety and efficacy concerns and suggested that generic drugs may actually be cheaper than the costs charged online by internet sellers, as many national pharmacy chains offer drugs for $4 per prescription.   

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"Oncologists do not usually need bodyguards when they present scientific data at a medical symposium," writes Rob Stein of the Washington Post, "[b]ut when Howard I Scher of Memorial Sloan-Kettering Cancer Center and Maha Hussain of the University of Michigan spoke at a recent meeting of the American Society of Clinical Oncology, they were in fear of their safety." 

According to Stein, the two physicians encouraged the Food and Drug Administration ("FDA") to delay approval of Provenge, a drug designed to treat advanced prostate cancer, causing some investors, patients and patient advocates to voice their dismay.  Some, he reports, have placed "vitriolic postings" on the internet, while, according to the two doctors, others have threatened them.  Of the threats, Hussain stated, "We have been harassed and trashed for giving our opinion in an area of our expertise. . . . It's been a nightmare, to say the least." 

Frank Burroughs, a spokesperson for Abigail Alliance, the group that sued the FDA in attempt to obtain increased access to experimental medications for the terminally ill, voiced support for allowing access to the drug for terminally ill patients.  He stated, "What we're saying is that when you have a drug like Provenge, you should let people have access to it who have run out of options."

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I have been on a short hiatus due to finishing major projects for clients and traveling to the east coast on business (special thanks to my friends at the New York City office of Crowell & Moring for their hospitality), but haven't stopped tracking developments on the drug counterfeiting front.  For my readers following these issues closely, if you haven't already done so, I would suggest that you review the posts listed below from two knowledgeable, savvy bloggers:

• Pfizer Questions RFID, published by Dr. Adam Fein, author of Drug Channels.  The post discusses an interview with John Theriault, Pfizer's vice president of global security, published by the Star Ledger.
• Counterfeit Drugs and the American Enterprise Institute, published by Eric Turkewitz of the Turkewitz law firm.  The post profiles an article entitled Bad Medicine in the Market written by Roger Bate and Kathryn Boateng. 

 

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The U.S. Food and Drug Administration ("FDA") has published a final rule establishing regulations for dietary supplements that require current good manufacturing practices (cGMP).  According to the FDA's press release, the "rule ensures that dietary supplements are produced in a quality manner, do not contain contaminants or impurities, and are accurately labeled."  Speaking of the new rule, Commissioner Andrew von Eschenbach, M.D. stated, "This rule helps to ensure the quality of dietary supplements so that consumers can be confident that the products they purchase contain what is on the label."  Commissioner von Eschenbach further noted that, at year end, the FDA will require reporting of adverse events involving these products.

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As many of my readers know, particularly including those who are lawyers, tracking pending legislation affecting the pharmaceutical and medical device industries on both a state by state and federal basis can be an especially daunting task.  Obviously, these industries are highly regulated, and as each new issue presents itself, the federal and state legislatures do what they do best:  legislate some more!  The result is a highly complex, almost rainbow-like color scheme of regulations that are often inconsistent, contradictory and sometimes, well, nonsensical (my apologies in advance to the decision makers).

With the help of Matthew Samsa, a summer associate at Benesch, I have located a fabulous tracking source that I can't help but share.  I'd suggest that you check out the 2007 Prescription Drug State Legislation tracker, hosted by the National Conference of State Legislatures, which is the "Forum of America's Ideas."  So, for example, what does Colorado have to say about pedigree legislation?  According to the site, legislation was just passed that "[w]ould regulate prescription drug wholesalers; including requiring criminal history background checks of applicant representatives, updating requirement for maintaining and retaining "pedigree" records to prevent or diversion to unauthorized buyers." The site further mentions the following status information:  "Filed 3/6/07; passed Senate 4/2/07; passed House 4/12/07; amended and sent to governor 5/15/07."

Of course, I can't make any representations or warranties about the accuracy of the content and how often the site is updated (if only I could write without including a disclaimer).  I can say, however, that this site may make tracking state legislation affecting the pharmaceutical industry a far more manageable task.  If you're at all like me, you probably feel like a kid in a candy store right now.  Enjoy!

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The 2006 report issued by the Institute of Medicine entitled The Future of Drug Safety: Promoting and Protecting the Health of the Public recommended that Congress create a committee to review the FDA's communication of the safety and efficacy of drugs and other medical products.  In reponse, on Monday, the FDA announced the creation of the Risk Communication Advisory Committee. 

In the press release, acting deputy commissioner for policy Randall Lutter, Ph.D, stated, “Communicating the risks and benefits associated with FDA-regulated products is essential to help consumers and health care professionals make informed decisions.  The Risk Communication Advisory Committee will bring together a broad range of experts and views to help improve FDA’s communication of the science-based information about product risks and benefits that the public needs to make informed decisions.”

The FDA has charged this new committee with taking action to

• help FDA better understand the communication needs and priorities of the general public;
• advise FDA on the development of strategic plans to communicate product risks and benefits; and
• make recommendations to FDA on what current research suggests about crafting risk and benefit messages, as well as how to most effectively communicate specific product information to vulnerable audiences.

 

 

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"Unauthorized" or "secondary" wholesalers have continued to demonstrate their commitment to overcoming federal pedigree laws that impose an obligation on them to track the chain of custody of drugs back to the manufacturer.  An organized group of these parties recently filed an amicus curiae brief with the United States Court of Appeals for the Second Circuit, arguing that the law violates the United States Constitution for failing to place the same pedigree requirements on authorized distributors, or those distributors that have entered into distribution agreements with manufacturers.  The brief argues that the law would, in effect, put these companies out of business because compliance would be impossible. 

The National Coalition of Pharmaceutical Distributors, Inc. filed the brief.  Without going into too many of the legal arguments set forth therein, essentially, the brief elaborates on several of the points made in the plaintiffs' filings to date and argues that the injunction put into place by the district court that has temporarily prohibited the enforcement of the implementing regulations ought to remain in effect. 

For those readers who are unfamilar,  "amicus curiae"  is a latin phrase that means "friend of the court."   An amicus curiae brief allows a person who is not a party to a case to file a document that provides additional information on a point of law a court is considering in attempt to provide guidance.  Academics also may file treatises with a court that present an academic discussion.

While these secondary wholesalers have refused to back down, many supporting the "big three" authorized distributors have consistently argued that the secondary market poses the greatest risk to the safety of the supply chain and therefore ought to be subject to the most stringent requirements.     

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In an effort to better inform the public about drug and patient safety information, PhRMA has launched new web site pages.   In its press release about the new web pages, PhRMA states as follows:

• Patient safety is our highest priority. We need a strong and effective FDA with the resources and personnel necessary to ensure the safety of the U.S. drug supply and continued access to innovative medicines.
• Patient welfare should be at the center of any effort to enhance drug safety and ensure that benefit and risk are balanced.
• Drug safety and effectiveness monitoring must be comprehensive and continuous. PhRMA supports efforts that seek to continually improve these activities.
• Patients and health care providers must have accurate, timely, and useful information on which to base their decisions.  

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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,

Continue Reading...

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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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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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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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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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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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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 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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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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