Life Science Compliance Update

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14 posts from September 2008

September 30, 2008

Physician Payment Sunshine: Cephalon Agreement to Act

Every industry has its bad actors.  In the case of pharmaceutical companies the bad actors fall into two categories; those who in the past have given kickbacks to physicians and those who actively promote off label uses for their products.

In the case of Cephalon they were using their sales force and marketing practices to promote off label uses for three of their drugs:

Provigil, Gabitril and Actiq

Cephalon even dedicated part of their sales forces to physicians that would have no reason to prescribe their drugs for approved purposes.  The promotion showed: over 80% of the scripts written were for off label uses.

Cephalon has agreed to a $425 million Qui Tam settlement and guilty to one misdemeanor charge. Cephalon Corporate Integrity Agreement  "Qui tam" is Latin for "who is as the king," and the False Claims Act allows people to sue on behalf of the government if they have evidence of wrongdoing. 

What makes this case unique is that it's the first time, in the absence of substantial kickbacks, that the federal government has used the False Claims Act to go after a pharmaceutical company for marketing drugs for off-label indications for which there were no credible published scientific research supporting these drugs' safety or effectiveness," said Peter W. Chatfield, a Washington, DC, attorney with Phillips & Cohen LLP.

It is an interesting case in that a sales person for Cephalon complained to the FDA and wore a wire to a sales meeting in the investigation.

The Corporate Integrity Agreement includes policies around reporting payments to physicians and disclosing grants including educational and charitable grants.

Some key points in the settlement:

            Cephalon agreed to a written code of conduct that included:

A)   Compliance with all federal and FDA requirements

B)   All personnel, suppliers and consultants will shall be expected to comply with all federal and FDA requirements

C)   Reporting of suspected violations to the Cephalon Chief Compliance Officer

D)   Consequences for failure to comply and report

E)   Disclosure program

Policies and Procedures:

A)   Adherence to the “Code of Conduct

B)   Appropriate conduct of promotional and product services functions to meet all federal program requirements including “kickback laws

C)   Appropriate conduct of promotional and product services towards FDA requirements

D)   Mechanism for handling off label requests for information including a database of questions and answer and requesters.

E)   Development of sales call plans for provider types consistent with FDA approvals.

F)   Consultants and other fee-for-service arrangements including (advisory boards, speaker programs, advisory boards) with Healthcare Providers are used for legitimate and lawful purposes, in accordance with FDA and federal healthcare programs.

G)   Employee and Field Force Education of Policies and Procedures

H)   Sponsorship or Funding of grants (including educational grants and charitable contributions) designed to ensure that Cephalon funding satisfies all applicable federal healthcare and FDA requirements. 

I)     In Regard to Grants:

a.    Cephalon will disclose its financial support of Third Party Educational Activity and any financial relationships with faculty, speakers, or organizers at such activity;

b.    as a condition of funding, the third party shall agree to disclose Cephalon' s financial support of the Third Party Educational Activity and any financial relationships that Cephalon might have with faculty, speakers, or organizers at such Activity;

c.    any faculty, speakers, or organizers at the Third Party Educational Activity disclose any financial relationship with Cephalon;

d.     the Third Patyr Educational Activity have an educational focus;

e.     the content, organization, and operation of the Third Party Educational Activity be independent of Cephalon on control;

f.     Cephalon support only Third Party Educational Activity that is non-promotional in tone/nature; and

g.    Cephalon's support of a Third Party Educational Activity shall be contingent on the provider's commitment to provide information at the Educational Activity that is fair, balanced, accurate and not misleading;

J)    Review of promotional materials by (regulatory, medical and/or legal personnel) to ensure adherence to regulations

K)   Funding of Medical Research complies with FDA and federal requirements

L)    Compensation for relevant covered persons to ensure that these financial incentives do not inappropriately motivate to engage in proper sales and marketing

M)  Disciplinary Policies for Violation of Policies and Procedures

Reporting of Physician Payments

By January 31, 2010 Cephalon will post on their website in a searchable website the value of payments to physicians who received any (directly or indirectly) in 2009. For the year 2010, they will have to post quarterly.  Reporting will be in $10,000 increments ($0-$10,000, $10,000- $20,000…)

This is the first case of a pharmaceutical company being required to report payments to physicians by their corporate integrity agreement.

This case shows that the system of checks and balances is working.  This settlement sets an example that companies who violate the law will pay huge penalties ($425 million is huge; roughly equal to $100 million more than the Cephalon’s entire net income for 2007) and cannot afford to make those same mistakes again. Others who are watching will be quick to make changes to their policies and procedures to avoid such penalties.

Key Resources

Wall Street Journal: Cephalon Agrees to Greater Oversight

AP: Cephalon to pay $425M for improper drug marketing

Cephalon Corporate Integrity Agreement

Philips and Cohen Press Release

Kenney Egan McCafferty & Young, P.C. Press Release

Kenney Cephalon 2003 Complaint

Cephalon Corporate Q&A

WSJ: Narcotic 'Lollipop' Becomes Big Seller Despite FDA Curbs

Pfizer Cardiovascular: The End of an Era

Pfizer announced WSJ: Pfizer Plans to Abandon Heart-Drug Development  that they are giving up on the Cardiovascular business and no longer developing compounds in cardiovascular disease, instead focusing on oncology and other areas. 

 This is quite a statement coming from Pfizer, given the long history in cardiovascular disease with block busters in the last ten years such as Norvasc, Caudura, Viagra, Acupril and Lipitor.   Pfizer was a CV power house,  and they bought Warner Lambert just so they could get even bigger in CV, and now they leave the field. (amazing)

Admittedly Pfizer has a huge problem with their labs, there have been no CV drugs developed since Viagra, but Pfizer has been very good at licensing CV compounds and selling them like no one else could.

This must be a shock to BMS their partner on oral anti-clotting therapy—apixaban, that they would be abandoning the space, but perhaps this is not the end, and they are just giving up on development, which is not their strong suite. 

This probably explains some of their high minded proclamations (i.e. we don’t have any money to spend so let’s blame it on everyone else).

Even though they are leaving their presence will be missed.

September 26, 2008

Letters from Grassley: NIH Check this Out

This week Senator Grassley sent some more letters, Grassley asks NIH to account for employment of expert advisor, this time he is concerned that National Institutes of Health may be trying to get around its own policies to prevent conflicts of interest by hiring medical experts with ties to industry as contractors rather than full-time employees.

Grassley based his questions for the Director of the NIH, Elias Zernouni, MD on the case of a senior advisor for the National Heart, Lung and Blood Institute within NIH.   

Marvin Kostam, MD who is Chief of  Cardiology s of Tufts University School of Medicine and Tufts-New England Medical Center, while also acting as a high profile advisor and advocate for a cardiac device company and serving as a consultant to NIH.

Dr Kostam is a legend in the heart failure community and the company he is listed as medical director for Orquis Medical is in early stage development of devices for heart failure. (Not exactly a commercial enterprise yet).

At one point the senator raises questions about a press release that was sent out last week discussing first in man trials on one of their devices.  The confusion for the senators staff comes in that he is listed in the press release as Chief of Cardiology at Tuffs.  Another point of contention for the Senator was a month after his appointment at NHLBI,  Dr. Kostam was listed as Chief of Cardiology at Tuffs in a journal article in circulation one month after he started at NIH.  He also listed his Tuff’s affiliation for an FDA panel.

Partially this all can be explained in that Dr. Kostam is on a one year leave of absence from his position at Tuffs to serve as a consultant to NIH, which is only recently investing in heart-failure research.   This entitles him to keep his title at Tuffs.  So the Articles and FDA panel affiliation would be accurate.

My bet on the Orquis press release is they are a very small company and that the title of Medical Director is not a compensated position for the year he is at NIH, this is only speculation but I would doubt this is much more than a labor of love for Dr. Kostam, espically given that he has been with them since 2003 and they are no where close to having a commerical product.

Senator Grassley raises the fact that in 2006, questions raised by Grassley about the practices of an NIH institute leader led to the official’s departure from the NIH.  (if it worked then perhaps it can work again) Grassley also is working to get the National Institutes of Health to meet its obligation as a trustee of tax dollars to do whatever it can to achieve accurate disclosure of the financial relationships between the pharmaceutical and device industry and doctors who conduct medical research with the $24 billion in federal grants awarded each year.

Again the senator is using the tactic of sending out press releases about inquiry letters, this has devastating effects on the physicians in question, and in the end may amount to nothing.

Also on the same day Elias Zerhouni, MD resigned as Director of the NIH, under Doctor Zerhouni, the NIH has increased in size (though not in the last four years due to funding from congress), and instituted conflict of interest policies so that their staff no longer consults or speaks on behalf of industry.  Several newspapers applauded Dr, Zerhouni including the New York Times for his efforts to make the NIH more efficient.

My guess is he has had enough letters from Senator Grassley.


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