Policy and Medicine

Institute of Medicine Report Medical Devices and the Public’s Health: The FDA 510(k) Clearance Process at 35 Years

 
Today, the Institute of Medicine (IOM) Committee on the Public Health Effectiveness of the FDA 510(k) Clearance Process released its long awaited, 245-page report, entitled, “Medical Devices and the Public’s Health The FDA 510(k) Clearance Process at 35 Years.”

The premarket notification, or the 510(k) clearance process, named after Section 510(k) of the authorizing legislation passed by Congress in 1976, is the primary pathway to market for Class II devices. More than 80% of 510(k)-cleared devices are categorized as Class II device types. Some Class I and Class III device types also are cleared through the 510(k) process.

The report and recommendations are focused on strengthening the science base needed to make better-informed regulatory decisions and on giving FDA the tools that it needs to identify and remove problematic devices from the market. The committee believes that taking the recommended steps will generate the information needed to design a robust regulatory framework for Class II devices. The new framework would increase the public’s confidence that safe and effective medical devices are being made available in a timely manner.

As described below, the IOM report on the 510(k) process contains broad recommendations that may have significant consequences and impacts on the medical device industry.  Specifically, IOM concluded that the 510(k) process “cannot be transformed into a premarket evaluation of safety and effectiveness as long as the standard for clearance is substantial equivalence to any previously cleared device” and that “the 510(k) clearance process is not intended to evaluate the safety and effectiveness of medical devices with some exceptions.”

Moreover, the report asserts that, FDA's finite resources would be better invested in developing a new framework that uses both premarket clearance and improved postmarket surveillance of device performance to provide reasonable assurance of the safety and effectiveness of Class II devices throughout the duration of their use, the committee said.  The report also maintains that FDA should ensure that the new process allows devices to reach the market in as rapid and least burdensome a fashion as possible. 

"It's not clear that the 510(k) process is serving the needs of either industry or patients, and simply modifying it again will not help," said committee chair David Challoner, emeritus vice president for health affairs, University of Florida, Gainesville.  "The 510(k) process cannot achieve its stated goals -- to promote innovation and make safe, effective devices available to patients in a timely manner -- because they are fundamentally at odds with the statutes that govern how FDA must implement the process.  While current information is not adequate to immediately start designing a new framework, we believe the agency can get the necessary data and establish a new process within a reasonable time frame."

As we noted yesterday, there is legal concern mounting already about the composition of the IOM committee as it pertains to the Federal Advisory Committee Act and the lack of fair balance representation.    

Without clear evidence the committee is recommending that the 510K process of approving substantially equivalent devices be scrapped in favor of adding additional studies and potentially delaying approval of competitive devices.

Background

In September 2009, the 510(k) Working Group and the Task Force on the Utilization of Science in Regulatory Decision Making were formed to address critical challenges facing the Centers for Devices and Radiological Health (CDRH),  and external constituencies.

Industry had raised concerns that the 510(k) program had become less predictable, consistent and transparent thereby stifling innovation and sending companies and jobs overseas, and that CDRH reviewers had become less responsive and more risk averse. Jeffrey Shuren, MD, JD, Director of CDRH noted that “an unpredictable environment discourages investment and stifles innovation, which, in turn, can spur companies to go overseas.”

Consumers, third-party payers, and some healthcare professional groups were concerned that, for some devices, the 510(k) program did not provide adequate assurances of safety and effectiveness nor did it provide sufficient information for healthcare providers and patients to make well-informed treatment or diagnostic decisions. 

Several high-profile mass-media reports and consumer-protection groups have profiled recognized or potential problems with medical devices cleared through the 510(k) clearance process. The medical-device industry and some patients have asserted that the process has become too burdensome and is delaying or stalling the entry of important new medical devices to the market.

CDRH employees expressed concerns that the current 510(k) program failed to adapt to the increasing complexity of devices, and that reviewers’ ability to make well-informed decisions was undermined by the poor quality of 510(k) submissions. In addition, an increasing workload was straining an already overburdened program.  

In August 2010, FDA’s CDRH released for public comment the preliminary reports from these committees.  At the time, CDRH proposed three key changes:

• A streamlined pathway for lower-risk denovo devices;
• A new subclass (Class IIb) for moderate-risk devices; and
• The creation of an internal CDRH Science Council

In addition to these changes, CDRH asked IOM to carry out a parallel, complementary assessment of the 501k changes they proposed in their report.  Subsequently, in January 2011, CDRH released its new actions for the 510(k) program, which included:

• Streamlining the review process for innovative, lower-risk products, called the “de novo” process;
• Publishing guidance for industry to clarify when clinical data should be submitted to  increase predictability and transparency;
• Developing a network of external experts who can use their knowledge and  experience to help the agency address important scientific issues regarding new  medical device technologies;
• Establishing a new Center Science Council of senior FDA experts within the  agency’s medical device center to assure more timely and consistent science based decision making; and
• Improving training for CDRH staff and industry

The FDA also said it would:

Establish a public database of important device information, such as medical  device labeling and summaries of the basis for the FDA’s decision to clear  specific devices; and

Require a brief description of scientific information regarding the safety and effectiveness known to the manufacturer for select higher-risk devices on a case by-case basis through device-specific guidance. 

At this time, FDA also released an implementation plan that outlined 25 specific actions and the timelines for completion or reaching a major milestone in 2011 to make the 510(k) program a blueprint for smarter medical device oversight; one that drives innovation and brings important technologies to the public.    

Consequently, FDA received comments on seven of the recommendations that stakeholders found problematic. As a result, FDA asked IOM to offer comments on the following recommendations:

• CDRH should consolidate the terms “indication for use” and “intended use” into a single term, “intended use”;
• CDRH should expand its statutory authority to consider off-label use when determining the intended use of a device;
• CDRH should issue guidance on when a device should no longer be available for use as a  predicate; 
• CDRH should issue a regulation on its rescission authority;
• CDRH should require manufacturers to keep one unit of a device available;
• CDRH should issue guidance to create a “Class IIb”; and 
• CDRH should seek greater authorities to require postmarket surveillance studies as a condition of clearance for certain devices.

Specifically, FDA stated to the IOM that the goals of the 510(k) clearance process are to “make available to consumers devices that are safe and effective” and to “promote innovation in the medical device industry.”  Accordingly,  FDA asked IOM to review the 510(k) clearance process and to answer two questions:

Does the current 510(k) clearance process optimally protect patients and promote innovation in support of public health?

If not, what legislative, regulatory, or administrative changes are recommended to optimally achieve the goals of the 510(k) clearance process?

FDA and Medical Device Regulation Background

In reviewing the legislative and regulatory history of the 510(k) program, the committee found that it was designed in 1976 to provide only a determination of the substantial equivalence of a new device to an already marketed (predicate) device; it was not designed to determine whether a new device provides a reasonable assurance of safety and effectiveness or whether it promotes innovation.

Prior to the Medical Device Amendments (MDA) of 1976, medical devices generally had not undergone premarket review by FDA. The MDA created three classes of device types on the basis of the risks posed and the ability of postmarket controls to manage them. Each device type includes a number of devices.

As originally contemplated, the high-risk category (Class III) would require FDA review and approval, through the premarket approval (PMA) process, before a device could be marketed. The moderate-risk and low-risk categories (Class II and Class I, respectively) would not require as rigorous a review. Rather, device manufacturers would be required to notify the FDA at least 90 days before they marketed such a device. This premarket-notification requirement was contained in Section 510(k) of the Federal Food, Drug, and Cosmetic Act and is commonly referred to as 510(k) notification or 510(k) clearance.

A device not on the market at the time of the enactment of the MDA (a “postamendment” device) would be required to demonstrate through a 510(k) notification that it was “substantially equivalent” to a “preamendment” device and, for Class II devices, complied with the applicable performance standard promulgated by the FDA.

Congress’s interpretation of substantial equivalence, as stated in the Safe Medical Device Amendments (SMDA), is that: the term “substantially equivalent” or “substantial equivalence” means, with respect to a device being compared to a predicate device, that the device has the same intended use as the predicate device and that [FDA] by order has found that the device –

Has the same technological characteristics as the predicate device, or

Has different technological characteristics and the information submitted that the device is substantially equivalent to the predicate device contains information, including clinical data if deemed necessary by [FDA], that demonstrates that the device is as safe and effective as a legally marketed device and (II) does not raise different questions of safety and efficacy than the predicate device.

The term “different technological characteristics” means, with respect to a device being compared to a predicate device, that there is a significant change in the materials, design, energy source, or other features of the device from those of the predicate device.

If the new device were substantially equivalent, it would be cleared for marketing subject to the same terms and conditions as that preamendment device (for example, conformance to a performance standard). Postamendment devices that were not substantially equivalent to any preamendment device would be automatically placed in Class III and would require either PMA or reclassification by the FDA to Class I or Class II to enter the market.

The SDMA of 1990 permitted substantial equivalence to be established to marketed postamendment, in addition to preamendment, “predicate” devices, except for devices approved by PMA.

The Food and Drug Administration Modernization Act (FDAMA) of 1997 eliminated the requirement for 510(k) clearance for most Class I and some Class II device types, narrowed the array of issues that the FDA may consider in a 510(k) review, and directed the FDA to limit, to the “least burdensome” level, the scientific evidence requested to determine substantial equivalence of devices that involved new technologies.

In 2002, in an effort to address insufficient resources of the 510(k) and PMA programs, Congress passed legislation to create a 5-year user-fee program—the Medical Device User Fee and Modernization Act (MDUFMA). The user-fee program was renewed in 2007 for another 5 years.

IOM’s Conclusions

In a letter to CDRH Director Dr. Shuren, Dr. Challoner, Chair of the IOM Committee, noted that because of time constraints, the IOM committee was unable to study fully the seven recommendations referred to it by FDA. 

Dr. Challoner did note however, that the committee was able to address many of the broader issues related to CDRH’s 510(k) and Science Report Recommendations. The committee evaluated components of the 510(k) process and other relevant factors, including:

• The legislative history of the 510(k) program.
• The 510(k) regulatory framework that resulted from legislation.
• How the 510(k) process fits into the larger medical-device regulatory framework. (The 510(k) clearance process is an integrated component of the larger medical-device regulatory framework. The committee evaluated the 510(k) program in the context of this larger framework.)
• How the 510(k) process is implemented by the FDA.
• Available postmarket information on the safety and effectiveness of 510(k)-cleared devices.
• Other factors that affect medical-device regulation (for example, the process of innovation and the environment in which medical devices are developed and commercialized).

On the basis of its review and evaluation of legislative, regulatory, and administrative components of the 510(k) clearance process and other related components of medical-device regulation, the committee came to two major conclusions.

Conclusion 7-1 The 510(k) clearance process is not intended to evaluate the safety and effectiveness of medical devices with some exceptions. The 510(k) process cannot be transformed into a premarket evaluation of safety and effectiveness as long as the standard for clearance is substantial equivalence to any previously cleared device.

By law, the 510(k) process uses substantial equivalence to any previously cleared device as the standard for clearance with some exceptions. In practice, the assessment of substantial equivalence generally does not require evidence of safety or effectiveness of a device. According to the FDA and the Supreme Court, when the FDA finds a device substantially equivalent to a predicate device, it has done no more than find that the new device is as safe and effective as the predicate.

Importantly, devices that were on the market before the enactment of the 1976 MDA—the origin of all predicate devices for the 510(k) process—have never been systematically assessed to determine their safety and effectiveness. Because the preamendment device to which equivalence was established was not itself reviewed for safety or effectiveness, the committee found that clearance of a 510(k) submission was not a determination that the cleared device was safe or effective.

The 1990 SMDA permitted the FDA to require evidence of safety and effectiveness, including clinical studies, when necessary to determine whether a difference in technologic characteristics between a new device and its predicate renders the new device less safe or effective than the predicate or raises different questions of safety and effectiveness from the predicate.

If, despite the change in technologic characteristics, the new device is as safe and effective as the predicate, it will be found substantially equivalent. Nearly all 510(k) submissions for devices that have new technologic characteristics receive a determination of substantial equivalence.

The committee found that available information on postmarket performance of devices does not provide sufficient information about potential harm or lack of effectiveness to be a useful source of data on the safety and effectiveness of marketed devices.

The committee did not believe, however, that there is a public-health crisis related to unsafe or ineffective medical devices. Although the safety and effectiveness of preamendment Class II devices have not been systematically reviewed, their continued use in clinical practice provides at least a level of confidence in their safety and effectiveness.

Conclusion 7-2 Information that would allow an understanding of the extent to which the 510(k) clearance process either facilitates or inhibits innovation does not exist.

The committee noted that it is not necessary for a Class II device to be demonstrated to be innovative to be cleared for marketing. The FDA should not be the arbitrator of what constitutes innovation, nor should it seek to channel device development and premarket review toward agency-determined public-health priorities.

Accordingly, the committed noted that FDA’s role in facilitating innovation in Class II medical devices through premarket review should be to create a regulatory framework that sets appropriate thresholds for bringing products to the market. Those thresholds should be stringent enough to satisfy the agency’s objective of ensuring that marketed medical devices will be safe and effective throughout their life cycles but realistic enough to permit timely entry of new devices that may offer improvements over already marketed devices. Rather than be charged with promoting innovation, the committee believes that the FDA should seek to facilitate it.

To assess how innovation is affected by medical-device regulation, the committee studied the legislative history and implementation of the 510(k) process. It is unclear—and the committee argues that it is indeterminable, given current data—whether legislative, regulatory, and administrative changes over the last 35 years have had a positive or negative effect on innovation.

The committee noted that while FDA has procedures for developing, adopting, and implementing guidance and standards, the agency however, is persistently hindered in fully developing those materials by a lack of or limitations on human, fiscal, and technologic resources and capabilities. IOM acknowledged that the lack of clear guidance affects the timeliness and consistency of 510(k) device submissions provided by industry and the ability of reviewers to evaluate them.

RECOMMENDATIONS

CDRH’s proposed recommendations 1–3 are related to FDA’s postmarket authorities for medical devices. As stated in its report, the IOM committee found that the FDA has a broad array of tools available to address safety concerns in the postmarket period but that the agency does not use these tools extensively. However, IOM asserted that FDA has not adequately explained the limitations of the tools and why it has not used them more widely.

 As a result, the IOM committee recommended in its report that the FDA identify the limitations of its current regulatory tools and seek to address the limitations.

The IOM committee supports the concept of allowing conditional clearance based on postmarket surveillance in appropriate cases and has suggested this option as a potential component of a modified de novo process.

CDRH’s proposed recommendations 4–7 are related to FDA’s authorities for the 510(k) program. The IOM committee’s report concludes that the 510(k) process generally is not intended to evaluate the safety and effectiveness of medical devices and, furthermore, cannot be transformed into a premarket evaluation of safety and effectiveness. The report’s recommendations are focused not on making improvements in the 510(k) process but rather on the steps needed to develop a more rational medical-device regulatory framework.

The IOM committee does not believe that the FDA should use its sparse resources to modify the 510(k) clearance process. Instead, it believes that the FDA’s resources would be put to better use in obtaining information needed to develop a new regulatory framework for Class II medical devices and addressing problems with other components of the medical-device regulatory framework.

The committee recognized that scarce resources in the FDA could affect its ability to implement the recommendations and, therefore, has directed the recommendations toward activities that are useful in both the short term and the long term to conserve scarce resources.

With regard specifically to CDRH’s proposed recommendation 5, the IOM committee’s report includes an extensive discussion of issues related to the lack of clarity in the phrases intended use and indications for use. It is not clear to the IOM committee how combining these regulatory phrases would lead to more consistency and transparency.

Designing a New Medical Device Regulatory Framework

Recommendation 7-1 FDA should obtain adequate information to inform the design of a new medical-device regulatory framework for Class II devices so that the current 510(k) process, in which the standard for clearance is substantial equivalence to previously cleared devices, can be replaced with an integrated premarket and postmarket regulatory framework that effectively provides a reasonable assurance of safety and effectiveness throughout the device life cycle. Once adequate information is available to design an appropriate medical-device regulatory framework, Congress should enact legislation to do so.

The committee believes that a move away from the 510(k) clearance process should occur as soon as reasonably possible but recognizes that it will take time to obtain the information needed to design the new framework.

The new regulatory framework must be based on sound science and be developed in harmony with other components of the FDA’s medical-device regulatory system. The committee does not believe that available information is adequate to inform the design of an appropriate framework.

On the basis of its findings, the committee identified several topics to which the FDA should give particular consideration as it develops a new framework. A number of existing and emerging technologies (for example, combination products, software, nanotechnology, and medical robotics) merit detailed thought as part of the development of the new framework.

The committee stated that the FDA should consider integrating some elements of the quality-system regulations, especially those related to design controls and product-release criteria, into the premarket review process of the new framework to demonstrate that devices will perform as represented by their manufacturers. The FDA should also consider, as part of the new framework, including a more extensive review of device labeling and a system of tracking of labeling changes.

The committee urged FDA to create a regulatory framework that closely matches the ideal regulatory framework outlined by the committee:

• The process should be based on sound science.
• The process should be clear, predictable, straightforward, and fair.
• The process should be self-sustaining and self-improving.
• The process should facilitate innovation that improves public health by making medical devices available in a timely manner and ensuring their safety and effectiveness throughout their lifecycle.
• The process should apply relevant and appropriate regulatory authorities and standards throughout the life cycle of devices to ensure safety and effectiveness.
• The process should be risk-based.

Postmarketing Surveillance

The committee found substantial weakness in postmarketing surveillance of medical devices. The inadequate postmarketing surveillance systems, both those in the FDA and those that are privately funded, and the resulting lack of useful, consistent, and reliable data make it impossible to draw confident conclusions about the performance of medical devices that are now on the market.

Recommendation 7-2 FDA should develop and implement a comprehensive strategy to collect, analyze, and act on medical-device postmarket performance information.

IOM recommended that FDA give priority to postmarketing surveillance as an invaluable investment in short-term and long-term oversight of medical-device safety and assessment of device effectiveness. They stated that Congress should support the capacity of the FDA’s postmarketing surveillance programs by providing stable and adequate funding.

In particular, the committee noted that FDA should develop a postmarketing surveillance strategy to meet the following objectives: providing performance information for use in the premarket review process, informing the development and use of postmarketing tools (that is, general and special controls2) to manage the risk-benefit ratio throughout the life cycle of devices better, and informing the design of a new regulatory framework.

Postmarket Regulatory Authorities

The FDA reports that there are “important limitations” on the use of postmarket authorities, but does not describe them. The committee identified the procedural requirements that the FDA must fulfill to exercise the authorities, but the requirements do not in themselves appear to explain the agency’s perception that there are limitations on its use of postmarket tools.

Recommendation 7-3 The Food and Drug Administration should review its postmarket regulatory authorities for medical devices to identify existing limitations on their use and to determine how the limitations can be addressed.

IOM stated that FDA should analyze barriers to efficient and effective use of the authorities and identify means of mitigating them. If it is required, Congress should pass legislation to remove unnecessary barriers to the FDA’s use of postmarket regulatory authorities.

A Modified De Novo Process

The de novo process is a mechanism by which the FDA can down-classify, to Class I or Class II, devices that have no predicates but are deemed to be of low to moderate risk. The process avoids having novel, low- to moderate-risk devices go through the PMA process. In the de novo process, a 510(k) submission for the device is sent to the FDA, which issues a determination of “not substantially equivalent” and indicates to the applicant that the device may be eligible for the de novo process. Special controls generally need to be developed for the device. The general and special controls must be sufficient to provide reasonable assurance of safety and effectiveness.

IOM stated that the de novo process offers a potential basis of a better regulatory model for premarket review of Class II devices. In its current state, however, the de novo process is time-consuming and difficult for both the FDA and manufacturers to navigate.

Recommendation 7-4 The Food and Drug Administration should investigate the viability of a modified de novo process as a mechanism for evaluating the safety and effectiveness of Class II devices.

A pilot program of a modified de novo process would allow the FDA to determine its feasibility as a replacement for the 510(k) clearance process. As part of a modified de novo process, IOM recommended that the FDA explore ways to expedite development of special controls, develop guidance, and adopt standards for devices. The agency also should consider expanded use of external expertise and preinvestigational device-exemption meetings with submitters and use of conditional clearances (such as postmarketing surveillance or use of registries) for devices on which there is little premarket performance information.

A Continuous Quality-Improvement Program

The committee assessed that the FDA lacks a continuous quality-assurance process for regulation of medical devices. As a result, the FDA cannot effectively address new issues as they arise.

Recommendation 7-5 The Food and Drug Administration should develop and implement a program of continuous quality-improvement to track regulatory decisions on medical devices, identify potential process improvements in the medical device regulatory framework, and address emerging issues that affect decision-making.

The committee found evidence that the inadequate information technology and management infrastructure in the FDA affects not only the 510(k) program but the agency’s other programs for regulating medical devices. For example, because data systems are inadequate, the FDA does not have the ability to trace the history of 510(k) decisions. Prior 510(k) clearances are legally binding on the FDA when making 510(k)-clearance decisions.

Thus, any unsafe or ineffective devices are embedded in the system and as both a legal and a practical matter may be used as predicates for new devices until the predicates are removed from the market. It may be difficult for the FDA to remove devices from the market because it has no systematic way to identify them. By developing a business model grounded in continuous quality improvement, the FDA will be better able to identify problems with devices and develop the information and capacity to address them in a data-driven, transparent manner.

Facilitating Innovation in the Medical Device Industry

The FDA’s role in facilitating innovation with respect to Class II devices is to create and enforce a regulatory framework for which the threshold to market provides reasonable assurance that medical devices are safe and effective throughout their life cycle while permitting timely entry of new devices that may offer improvements over already marketed devices. The committee did not find assessments of how much and in what way (that is, facilitating or inhibiting) innovation is influenced by the 510(k) clearance process.

Recommendation 7-6 FDA should commission an assessment to determine the effect of its regulatory process for Class II devices on facilitating or inhibiting innovation in the medical-device industry.

The recommended study should include various ways to measure innovation beyond “time to market” or the number of devices of a particular type on the market and instead focus on a broader understanding of the relationship among regulation, innovation, and patient health and safety throughout device life cycle.

Software

Manufacturers are increasingly using software in devices, software as devices, and software as a tool in producing devices. The committee found that current guidance on software validation is insufficient for preventing serious software-based device failures.

Recommendation 7-7 FDA should develop procedures that ensure the safety and effectiveness of software used in devices, software used as devices, and software used as a tool in producing devices.

The FDA should develop a better understanding of the roles of software in medical devices, analyze its potential effects on the safety and effectiveness of the devices, and insist on evidence-based procedures that ensure device safety and effectiveness. The committee believes that the FDA should review and update its guidance on software validation.

Preamendment 510(k)-Eligible Class III Devices

After 35 years, the FDA has not completed the task of calling for PMAs for or reclassifying preamendment Class III device types. Until the FDA completes that task, those devices are allowed to enter the market through the 510(k) clearance process. Congress in 1990 directed the FDA to complete this task in a timely manner. Twenty-six Class III device types remain eligible to enter the market through the 510(k) process.

The FDA has begun a five-step process to require PMAs or to down-classify those device types. As of April 2011, the FDA had assessed the risks and benefits associated with 21 device types (step 2 of the process) and had received and reviewed public comments on five device types (step 4 of the process). The agency has not issued final rules requiring PMAs or reclassifying the devices for any of the 26 device types. The committee recognizes the resource constraints that have prolonged the process, but it nevertheless urges the FDA to give high priority to completing the task.

Recommendation 7-8 FDA should promptly call for PMA applications for or reclassify Class III devices that remain eligible for 510(k) clearance.

This recommendation though not explained in the report will potentially add years to the approval of several important devices.

Discussion

Overall the recommendations are broad and in many places of the report vague.  It is disappointing that rather than answer the questions that the FDA asked to be answered the committee for the most part went down a road of strategic vs. tactical recommendations.   Not only did they not answer the questions they focused on the legislative history of the FDA and the 510K clearance.

What this report does is require that all class II devices that are substantially equivalent will now have to go through extensive studies and additional approval process.  It is not clear that there is evidence to make these recommendations.

Much of this as previously noted can be accounted for by the lack of inventor and industry representation on the committee.   You can clearly tell from reading the report the complete lack of understanding of current 510K approval process or have spent time filing a 510K.

The report does recognize the vast majority of device manufactures are small businesses with 50 or fewer employees and “Delays during any of those phases (regulatory and insurance reimbursement) extends the “burn rate” of capital (that is, the amount of funds spent in a given period) and can create financial difficulties for companies, particularly startup companies, which often have limited financial resources”. 

Throwing out the 510K process in favor of a more rigorous review process in the absence of evidence that there is an unacceptable risk posed by current class II devices has the potential to cause considerably more harm than good.  It was clear given this restraint that additional regulations especially in the pre-market arena will result in vastly fewer devices coming to market.  This result will help neither inventors nor patients.

Institute of Medicine FDA 510K Advisory Committee Fails to Meet US Fair Balanced Standards

 
On Friday of this week, the Institute of Medicine will release their recommendations on the FDA 510K process. The IOM recommendations may determine the fate of all future medical device approvals.  Unfortunately the panel has no industry or inventor representation which may constitute a violation of federal laws on fair balance in advisory committees to the federal government.

 Recently, the Washington Legal Foundation (WLF) urged the Food and Drug Administration (FDA) not to use any advice or recommendations provided by the Institute of Medicine committee (the“IOM Committee”) assembled for the purpose of assessing whether changes are need in the 510(k) approval process, the process by which most medical devices reach the market.

In a Citizen Petition filed with FDA, WLF argued that FDA’s use of advice or recommendations from the IOM Committee would violate § 15 of the Federal Advisory

Committee Act (FACA). Section 15(a) provides that an agency may not use any advice or recommendation developed by the committee unless the committee has complied with all the requirements of § 15 – including § 15(b)(1)’s requirement that the committee membership be “fairly balanced.”

WLF charged that the IOM Committee is not fairly balanced, and thus, Section 15(a) of FACA prohibits FDA from “us[ing] any advice or recommendation provided by” any IOM committee that is not “fairly balanced.”

WLF’s Citizen Petition argued that § 15 of FACA does not permit FDA simply to rely on assurances from the IOM that the Committee is fairly balanced, but rather it must determine for itself that the Committee is indeed fairly balanced before it can consider any recommendation from such a committee.

WLF asserted that it is particularly important for FDA to ensure that the Committee meets the fair balance requirement, even if the result is to require the appointment of individuals with conflicts of interest.

“Using advice from a committee that lacks fair balance encroaches upon Congress’ mandate that each Advisory Committee should be representative of a broad range of viewpoints and should include affected individuals,” said WLF Chief Counsel Richard Samp after filing WLF’s Citizen Petition.

“The IOM Committee is not ‘fairly balanced’ under any plausible definition of that term; numerous persons and groups directly affected by the Committee’s work are totally unrepresented on the Committee’s membership,” Samp said.

Background

Courts examining FACA have concluded that the “‘fairly balanced’ requirement was designed to ensure that persons or groups directly affected by the work of a particular advisory committee would have some representation on the committee.

Congress provided a fair degree of guidance regarding what a “fairly balanced” committee entailed and what it hoped to accomplish by requiring fair balance. It stated, for example, that:

•  Advisory committees should avoid “the charge of favoritism” by ensuring that “a particular region, university, industry, company, or discipline” are not “overrepresented”;
• Rather than relying on “personal acquaintances,” agency “clientele,” or individuals who are “close” to the agency, an agency should broaden advisory committee membership to include “[i]ndividuals with ideas, knowledgeable people, and affected individuals” (emphasis added);
• Committee members should “be representative of a broader range of interests . . . than has been the case”; and
• Agencies should avoid the pre-FACA state of affairs, under which many agencies were “receiving their advice from sources which have special or limiting viewpoints.”

Congress was particularly concerned with the requirement that a broad range of viewpoints be included on advisory committees, even (and especially) unpopular viewpoints. Such diversity of viewpoints is especially important when (as here) the issues being considered by a committee are policy-oriented.

Where the functions to be performed are not “narrow and explicit,” but instead involve “diverse and far-reaching issues that affect others,” broader representation on the committee is required. This is especially true of committees whose purpose is “to study the effects of a particular type of regulation . . . on the public, which is exactly what FDA asked IOM to do regarding the 510(k) program does.

According to their press release, WLF filed its brief with the pro bono assistance of Robert Klepinski, an attorney from Minneapolis, Minnesota.

FDA and IOM Committee for 510(k)

In 2009, FDA commissioned the IOM to conduct a detailed analysis of the § 510(k) system. FDA referred several issues to the IOM Committee, including these principal questions: (1) whether the current § 510(k) process optimally protects patients; and (2) whether it promotes innovation in support of public health.  FDA asked the IOM Committee:

•  To consider defining the scope and grounds for the exercise of the Center’s authority to fully or partially rescind a 510(k) clearance.
• To seek greater authority to require post market surveillance studies as a condition of clearance of certain devices.
• To develop guidance defining “Class IIb” devices for which clinical information, manufacturing information or, potentially, additional evaluation in the postmarket setting would typically be necessary to support a substantial equivalence determination.
• To clarify when a device should no longer be available for use as a predicate.
• To consolidate the concepts of “indication for use” and “intended use” into a single term, “intended use.”
• To consider the possibility of requiring each 510(k) submitter to keep at least one unit of device under review available for CDRH to access upon request.
• To explore the possibility of pursuing a statutory amendment that would provide the agency with the express authority to consider an off-label use when determining the “intended use” of a device.

FDA has made clear that it intends to act upon any advice and recommendations it receives from the IOM Committee. It should be noted that after these seven additional questions were posed to the Committee, FDA has sought no further input from the medical device industry or patient groups regarding the questions posed. Nor have any of the IOM Committee meetings conducted during this time period been open to the public.

WLF Citizens Petition to FDA

The IOM Committee is composed of twelve members. The composition of the committee is as follows: five doctors, three lawyers, and several academics with a variety of technical backgrounds. Although each member has impressive qualifications, the committee lacks individuals with experience in areas of critical importance to the Committee’s work.

For example, not present on the committee are innovators, inventors or any product developers who are familiar with the clearance process. In particular, the IOM

Committee’s membership includes no one with any experience in seeking to use the 510(k) process to obtain FDA marketing approval for a new medical device.  There are no individuals who routinely prepare § 510(k) applications, or any professionals from the medical device industry.

Even more striking is the fact that committee does not include any representatives of patients and patient advocacy groups that have benefitted from the development of innovative medical devices. Nor does it include any representatives of patients, who have a strong interest in ensuring that the 510(k) program continues to permit the speedy approval of new, life-saving medical products.

Additionally, there are no entrepreneurs, venture capitalists, investment bankers, or angel investors with experience financing medical device innovations, even though one current controversy surrounding the § 510(k) program is its effect on investment in new companies, and even though the second of FDA’s initial two questions to IOM related to the program’s effect on innovation.

In addition to the absence of members with the expertise/backgrounds enumerated above, the IOM Committee does not appear to include members from a wide variety of policy perspectives. The § 510(k) program has been criticized from all sides of the ideological spectrum. Some view the program as too lax from a safety perspective; they charge that the program has allowed medical devices to be marketed with insufficient attention being paid to whether the product is safe for its intended use. Others view the program as overly bureaucratic and one that unnecessarily delays the marketing of innovative products.

The former perspective is well-represented on the Committee. Indeed, one member has worked for 20 years at Public Citizen Litigation Group, a public interest law firm that has been highly critical of the § 510(k) process and has asserted that dangerous medical devices have been allowed to enter the market because devices are approved too quickly.

But no member of the Committee is publicly identified with the latter perspective. The inclusion of a Public Citizen lawyer makes all the more inexplicable the IOM’s failure to include an industry representative or anyone else with practical experience in navigating the § 510(k) program.

The IOM does not contest that such an absence exists. Rather, the IOM evidently takes the position that inclusion of individuals with meaningful experience in the development of innovative medical devices and/or navigating the § 510(k) process would risk violating FACA’s conflict-of-interest requirements.

FACA Conflict-of-Interest Rules

Numerous interested parties have contacted the IOM to express their dismay over the unbalanced nature of the IOM Committee and to urge the IOM to broaden the Committee’s composition. For example, in a February 17, 2010 letter to the IOM, the Medical Device Manufacturers Association (MDMA) stated that “the current makeup of the committee does not adequately reflect all relevant stakeholders in the process” and urged the IOM to “take the necessary steps to ensure the committee’s review of the 510(k) process is fair, balanced and inclusive by including representatives of key stakeholder groups to participate as members of the committee.” Despite such entreaties, the IOM took no steps to balance the IOM Committee’s membership by adding members with backgrounds not represented on the Committee.

WLF argued that the conflict-of-interest rules do not prevent the appointment of committee members with ties to firms doing business in the field, particularly if individuals are from a background that otherwise would go unrepresented on the Committee.

 Moreover, WLF recognized that nothing in FACA authorizes the National Academy of the Sciences (NAS) to ignore the “fairly balanced” requirement in order to avoid conflicts of interest among committee members. Indeed, FACA § 15(b)(1) indicates that in the event of a direct conflict between these two provisions, it is the conflict-of-interest provision that is to give way.

 The Academy’s own internal policies regarding committee selection recognize the need to include individuals with diverse points of view. Those policies explicitly permit committees to include members who are biased or have expressed a strong opinion on a particular issue of interest. According to the Academy guidelines governing the committee appointment process, “[a] point of view or bias is not necessarily a conflict of interest. The IOM recognizes that member bias is not only permissible, it is sometimes necessary.

 According to the NAS Policy on Committee Composition and Balance, “[f]or some studies . . . it may be important to have an ‘industrial’ perspective” if such a perspective is “vital to achieving an informed, comprehensive, and authoritative understanding and analysis of the specific problems and potential solutions to be considered by the committee.” However, the IOM must balance these perspectives to produce an overall objective committee and avoid bias or the perception of bias. If these individuals have conflicts of interest, they may nevertheless be included on the committee to provide needed expertise, knowledge, balance, or perspective. In such cases, the conflict of interest is “unavoidable” and simply must be disclosed.

Consequently, WLF pointed out that “conflict-of-interest rules have not prevented numerous other committees established by the IOM at the behest of FDA from including industry representatives and others from far more diverse backgrounds than IOM Committee members.” In fact, out of ten current or recent FDA sponsored IOM activities, at least half contain members with industry background and at least three committees contain members with disclosed conflicts of interest.

Clearly, individuals with industry background or connections are frequently deemed valuable and necessary for IOM committees to fulfill their functions, despite obvious conflicts of interest. Thus, it is not unusual that individuals with “unavoidable” conflicts of interest are included on IOM committees.

Conclusion

Ultimately, the IOM has explicitly recognized – both in its own internal policies and in its past committee appointment practices – that conflict-of-interest rules do not prevent the appointment of committee members with ties to firms doing business in the field, where such individuals’ backgrounds will provide the committee with expertise in areas that would otherwise be absent. In light of that recognition, the IOM cannot plausibly maintain that conflict-of-interest rules justified its failure to appoint a “fairly balanced” committee in this instance.

Accordingly, WLF first requested that FDA either proceed with its comprehensive review of the § 510(k) program without obtaining any input from IOM, or else request that IOM reconstitute its committee so as to come into compliance with the “fair balance” requirement.

Second, WLF suggested to FDA that it issue guidelines that would help other advisory committees comply with the requirement of “fair balance” and avoid a similar situation where FDA would not be able to use an advisory committee’s report because the committee failed to comply with § 15 of FACA. Finally, WLF requested that FDA issue a guidance document explaining FDA’s obligations under FACA, and what advisory committees must do in order to permit FDA to make use of any advice or recommendations provided to the agency.

HHS Proposes Changes to Rules Governing Human Subject Research

 
For the first time in 20 years, the Department of Health and Human Services (HHS) “proposed sweeping revisions to rules governing scientific research involving human subjects with the intent of extending protections to a larger number of people while simultaneously streamlining the oversight and paperwork required of scientists.”

According to the Washington Post, “the proposed changes would be the first in two decades to the “Common Rule” (45 CFR 46) that governs nearly all human-subject research financed by American taxpayers.” The Common Rule has been in place since 1991.

The Common Rule dates back to a the 1978 "Belmont Report," which was prompted by the infamous Tuskegee syphilis study, in which impoverished African-American sharecroppers in Alabama who had syphilis were enrolled in a study to monitor the natural progress of syphilis. They were given free medical care, meals, and burial insurance, and never told they had syphilis.

The Belmont Report laid the ethical framework for the government's stance on human research and includes principles such as treating all participants with courtesy and respect, allowing for informed consent, and adhering to the philosophy of "do no harm" while maximizing research benefits and minimizing risks to the subject.

Proposed Changes

The changes would try to address features of the research landscape that were uncommon 20 years ago, such as:

-       The proliferation of clinical experiments conducted at multiple sites;

-       The growth of research by drug companies; and

-       The collection of biological specimens for permanent archiving.

In an ANPRM Frequently Asked Questions (FAQs) produced by HHS, the agency asserted that they are considering changes for two reasons:

-       The human subject research landscape has changed dramatically since the early 1980s when the current regulations were first being formulated and

-       In light of that, there is a need to address effectiveness and the efficiency of the regulations for human subject protections in the current research environment.

Howard K. Koh, MD, MPH, an assistant secretary of HHS asserted that, “these proposals are designed to modernize, simplify and strengthen the current system.” Dr. Koh added that, “this regulatory review effort is primarily about enhancing protections for human subjects” and “the changes under consideration offer the promise of updating and enhancing those protections to keep pace with current challenges.”

The changes, which can be revised after 60 days of comment by the public, got an early warm welcome according to the Post. Accordingly, the government is seeking the public’s input on an array of issues related to the ethics, safety, and oversight of human research. Comment is sought on the following:

1. Revising the existing risk-based framework to more accurately calibrate the level of review to the level of risk.
2. Using a single Institutional Review Board review for all domestic sites of multi-site studies.
3. Updating the forms and processes used for informed consent.
4. Establishing mandatory data security and information protection standards for all studies involving identifiable or potentially identifiable data.
5. Implementing a systematic approach to the collection and analysis of data on unanticipated problems and adverse events across all trials to harmonize the complicated array of definitions and reporting requirements, and to make the collection of data more efficient.
6. Extending federal regulatory protections to apply to all research conducted at U.S. institutions receiving funding from the Common Rule agencies.
7. Providing uniform guidance on federal regulations.

Discussion

Heather Pierce, an official at the Association of American Medical Colleges (AAMC) noted that the proposed changes “will have quite a significant response from the research community,” and will “be seen as moving human-research oversight into the 21st century.”  The proposed rule "acknowledges that biospecimens are inherently identifiable," explained Kathy Hudson, PhD, deputy director for Science, Outreach, and Policy at the National Institutes of Health (NIH).

The Common Rule lays out a single set of requirements for informed consent, ethical oversight and human-subject protection at 15 federal departments and agencies, such as the National Institutes of Health (NIH), the Department of Defense (DOD) and the U.S. Agency for International Development (USAID).

The rule must also be followed in research funded by those agencies but done elsewhere, such as at universities and medical schools.

Under the proposed changes, the Common Rule would cover all research at institutions that get money from one of the 15 federal agencies, even studies paid for entirely by other sources, such as drug companies or private foundations. The effect would be to capture nearly all the biomedical experiments not already covered.  HHS provided a full table of the regulatory changes they are proposing, comparing the current rule to changes being considered, and describing the rationale for the proposed change.

The rule would also require that a single “institutional review board” (IRB) oversee a study that enrolls subjects at many hospitals and clinics (as is the case with most big clinical trials of drugs and procedures). Currently, each hospital’s board generally reviews the experimental protocol and makes suggestions — a process that researchers call burdensome and government overseers find confusing.

However, boards in foreign countries would still review proposals for research enrolling their own citizens because, according to an HHS document, “it might be difficult for an IRB in the U.S. to adequately evaluate local conditions in a foreign country that could play an important role on the ethical evaluation of the study.”

"Being able to shrink the time from having a protocol in hand and being able to recruit patients is key," Hudson said.

The proposal would also exempt from board review research that involves surveys and interviews that poses little or no risk to people — a change expected to be especially welcomed by social scientists. The revisions intend to make the consent forms that lay out a study’s risks and possible benefits clearer, shorter and more standardized.

Last week’s announcement acknowledges the revolution in computer information technology and in understanding the human genome that’ has marked the last 20 years of medical research.

A single Web site would be created where all “adverse events” from clinical studies would have to be reported. Today, notification of such problems is sent to various agencies on different schedules. Having a single database would not only be more efficient, it might increase the chance of catching rare and severe complications more quickly.

Volunteers in studies in which biological material, such as blood or tissue, is collected would be asked whether they agree to have the material used in future research. Today, archived blood can be studied long after collection as long as researchers strip it of information that identifies the donor. But the concept of “anonymity” has changed in an era of cheap and easy gene sequencing.

“This acknowledges that with today’s technology that biospecimens are inherently identifiable,” said Hudson. Asking permission to use their specimens — including their DNA — in future research “expresses a very high level of respect to those research participants,” she said.

Information and to Respond

The Advance Notice of Proposed Rulemaking can be found here.  Comments are due no later than 5 p.m. on September 26, 2011. Comments can be submitted online through http://www.regulations.gov. Be sure to enter Docket No: 2011-18792. Click here for instructions on how to submit comments.  

For further information contact Jerry Menikoff, M.D., J.D., Office for Human Research Protections (OHRP), Department of Health and Human Services, 1101 Wootton Parkway, Suite 200, Rockville, MD 20852; telephone: 240-453-6900 or 1-866-447-4777; facsimile: 301-402-2071; e-mail: jerry.menikoff@hhs.gov

Association of Clinical Researchers and Educators: Claiming Lost Ground -- Advancing Patient Care

 
Late last week, the Association of Clinical Researchers and Educators (ACRE) held a conference to discuss the importance of physician-industry collaboration.

ACRE is an organization of physicians and colleagues engaged in promoting excellence in medical service, education, and innovation. ACRE members have records of achievement in these endeavors.

The second ACRE meeting took place at the Weill Cornell Medical Center in New York City, New York.  This year’s ACRE 2011 meeting covered a number of areas and topics and included speakers and representatives from across the health care industry.  Slides and presentation materials are posted on the meeting site. Topics included:

• The History of the Conflict of Interest “Mania”
• Issues in the field of continuing medical education (CME)
• Why Academia/Industry Collaboration is under attack
• Academic Medical Centers
• The Importance of Academic-Industry Collaboration for Patients; and
• Washington and Innovation

The meeting was covered by the New York Times, which noted how the conference started by addressing the term “conflicts of interest.” Several presenters noted that, “conflict of interest” is a “pejorative term” and that a better term is “overlap of interests,” because the drug and device companies want to market products to help people, and the researchers and professors want to help them find new cures and spread the word.

Another panel during the meeting looked at why academic-industry collaboration is under attack by not only “politicians, deans and the media” but also medical journal editors, the Association of American Medical Colleges, the Institute of Medicine of the National Academy of Sciences, the National Institutes of Health, the American Medical Association, the United States Department of Justice, and of course the media.

Dr. Thomas P. Stossel, a Harvard medical professor and co-founder of the group, said that drug companies, years ago, reported their financial support for professors and researchers to honor them.

“Now, it’s a confession of guilt,” he said of the lengthy financial disclosures that many speakers flashed on the screen. Most of them said the industry support proved their value.

He noted that several academic organizations that received media in their announcements of strict policies have since backed off these policies due to push back from faculty, the implacability of the proponents of the rules and difficulty of implementation of these strict policies.

Dr. J. Michael Gonzalez-Campoy, chief executive of a Minnesota obesity center and past president of that state’s medical association, said the growing pressure to disclose financial ties with drug and device makers is leading further, too far, to outright bans of such ties in the leadership of some medical societies.

The collaborative research and marketing, he said, help to bring drugs to patients that prolong and save lives.

Dr. Michael A. Weber, another cofounder of the group and professor of medicine at the SUNY Downstate Medical Center in Brooklyn, said ACRE plans to push back by drafting its own guidelines for what is proper in industry-academic collaborations.

A panel of grateful patients was led by Montel Williams, a former talk show host who is battling multiple sclerosis, raising funds for medical causes, and recently received experimental treatment with what he described as great success.   It was encouraging that Montel pushed the audience to be proud of the work they do with the medical products industry and not cower back because of criticisms.

Mr. Williams urged the beleaguered professors and researchers to stand up to critics and make it clear they are life-savers.

“Do your job!” he said to applause.

ACRE

The responsibility of ACRE is to re-establish the partnership of academia, industry, clinicians, and patients in the United States. Among its goals is educating the lay public as well as the medical community about the value to patients of the research and educational collaborations between academia and industry.

Another of ACRE’s main tasks is to set up codes of conduct or guidelines designed to ensure that relationships between academic physicians and industry are ethical and clearly targeted at improving outcomes for our patients. ACRE also represents a voice that is heard and quoted when these industry-academia relationships are attacked, as they have been in the past.

Additionally, ACRE provides education for health care professionals and patient advocates to empower them to fight those policies that undermine productive collaboration.” The organization is also charged with training our current and next generation physicians so they can promote true excellence in medical education and innovation.

It is the responsibility of physicians and organizations like ACRE to argue the value to patients of cooperation between academia and industry in medical education as well as in research.

The slides for many of the presentations are available on the ACRE website:

ACRE 2011 Slides (Underline and Green)

In the near future the full program will be available in streaming video and MP3 audio files.

CVS Caremark Under Pressure to Dissolve from Their “Friends”

 
 
CVS Caremark is coming under increasing pressure from consumer groups and shareholders to split up, at the same time that federal and state regulators are looking into accusations of anticompetitive behavior by the merged company, according to a recent article from the New York Times.

The four-year-old merger of the drugstore chain and the pharmacy benefit manager is the subject of an investigation by the Federal Trade Commission (FTC) and a multistate inquiry by the attorneys general of 24 states, according to earlier disclosures by CVS Caremark.

Carolyn Castel, a company spokeswoman, asserted that the company is “cooperating fully” with the inquiries and “remains confident that their business practices and service offerings are being conducted in compliance with antitrust laws.”

Interestingly, the leadership team of CVS Caremark team includes an unexpected individual, Troyen A. Brennan, M.D., M.P.H., who serves as the Executive Vice President and Chief Medical Officer. What is somewhat surprising about his membership on this team is that Brennan is the author of the community catalyst paper, which called for the end of academic relationships with industry.  It is somewhat paradoxical that Brennan could be calling for an end of physician-academic relationships with industry, while at the same time sitting in an extremely influential position within the very industry he seeks to place severe restrictions on.

In fact, Brennan recently emphasized CVS Caremark’s emphasis on working with health care practitioners to improve non-adherence to prescription medication.  This kind of industry-physician collaboration seems at odd with the 2006 paper Brennan pen that called for the end of such relationships.

Consequently, last week, five consumer groups wrote a letter to Jon Leibowitz, FTC chairman, claiming “there is strong evidence that the CVS Caremark merger has harmed consumers.” The groups, which called for breaking up the $27 billion merger, also accused the company of using confidential patient information from Caremark, which manages prescription benefits for health plans, to steer consumers to CVS pharmacies.

“The company’s practices effectively gave CVS an unfair advantage over other pharmacies, reducing competition and limiting consumer choice, according to the letter, which was signed by Community Catalyst, Consumer Federation of America, Consumers Union, the National Legislative Association on Prescription Drug Prices and U.S. Pirg.”

Additionally, the consumer groups charged the merged company had engaged in unfair practices that favored company-owned pharmacies, including sharing information Caremark obtained in processing prescriptions to help solicit non-CVS customers to fill their prescriptions at CVS drugstores.

Sharon Anglin Treat, a Democratic legislator in the Maine House of Representatives, explained that the situation is one in which a pharmacy benefit manager, which manages prescription benefits, is “using the information to steer people to their own pharmacies.”  Tate, who is also the executive director of the National Legislative Association on Prescription Drug Prices, a consumer group that signed the letter, notted that, “it really does appear that CVS has been unable to avoid a very significant conflict of interest.”

Mark N. Cooper, the director for research at the Consumer Federation of America, one of the groups that signed the letter, said that the “merger was a mistake” and that FTC should review the original grounds — including efficiencies, cost savings and consumer benefit — for the merger and determine whether the union had been justified.

The Times noted that, “CVS Caremark denied accusations that it had engaged in improper business practices, saying the charges were “false, unfounded and misleading.” It defended its privacy protections, saying it maintained a firewall to ensure that Caremark and CVS did not share “certain competitively sensitive information,” Ms. Castel also told the Times that the company did not improperly steer patients to CVS pharmacies, and “there are no plans to split up the company.”

CVS Caremark says the merger is helping its customers by reducing costs and improving health outcomes. “The innovative products we have introduced into the marketplace since the merger are gaining traction,” Ms. Castel said, and will “enhance shareholder value.”

The company also said it “places a high priority on protecting the privacy of its customers and plan members.” Ms. Castel said CVS Caremark used patient data internally for “appropriate purposes,” like identifying potentially adverse drug reactions.

In addition, some investors say the sharing of patient information is central to any claims by CVS Caremark that the combination of the drugstore chain and pharmacy benefit manager can better serve patients by coordinating information and reducing costs

American Society of Plastic Surgeons Adopts Balanced Collaboration Policy

 
The American Society of Plastic Surgeons (ASPS) is the largest organization of board-certified plastic surgeons in the world.  Representing more than 7,000 physician members, the Society is recognized as a leading authority and information source on cosmetic and reconstructive plastic surgery.  ASPS comprises more than 94 percent of all board-certified plastic surgeons in the United States. 

Consequently, the ASPS recently adopted new guidelines designed to promote ethical interactions between its member physicians and the medical industry.   

The new guidelines, published in a document entitled, “Considerations for Interactions with Industry,” provide detailed recommendations for appropriate collaborations between individual plastic surgeons and pharmaceutical, biotechnology, or medical device companies in an effort to prevent industry support from biasing a physician’s professional activities or judgments. 

In announcing the new recommendations, ASPS President Phillip Haeck, MD, recognized that, “collaborations between physicians and industry are necessary as they enhance the practice of medicine.” Accordingly, Dr. Haeck noted that, “following these new guidelines will help to ensure that interactions with industry will be for the benefit of patients and remain consistent with AdvaMed and PhRMA Industry guidelines.” 

The document details standards related to the acceptance of gifts, educational products, meals and entertainment from industry; protocols for seeking industry support for educational programs; consulting arrangements; promotional speaking -- and the regulations associated with each. 

Dr. Haeck further noted that, “the new guidelines are voluntary and serve as a recommendation for behavior that ASPS members should adhere to.”  He asserted that, ASPS “members’ primary duty is to act in the best interest of patients and it’s vital they be independent and industry’s ability to influence professional judgements be limited.” 

ASPS Recommended Guidelines 

In the preamble of the guidelines, ASPS recognized that, “pharmaceutical, biotechnology, and medical device companies (“Industry”) develop, produce, market, or distribute drugs, devices, therapies, or services used to diagnose, treat, monitor, manage, and alleviate health conditions that allow individuals to live longer and healthier lives.”  Moreover, ASPS acknowledged that, “industry can help serve the interests of patients through beneficial collaborations with Members.” 

Additionally, the preamble recognizes that, “ethical relationships between ASPS members and industry are necessary to ensure public confidence in the objectivity of ASPS members which is critical for them to carry out their mission of serving patients.”  Accordingly, ASPS adopted the Considerations for Interactions with Industry to reinforce the core principles that help ASPS maintain actual and perceived independence, and ensure ethical relationships between our members and industry. 

Basis of Interactions with Industry 

ASPS asserted that interactions and relationships with industry are already regulated by multiple entities and are intended to benefit patients and to enhance the practice of medicine. Accordingly, they noted that such interactions should be focused on receiving information about products, technologies and services that allow us to serve the best interests of ASPS Members’ patients. 

Receiving Items of Value from Industry 

The guidelines state that ASPS members should not accept the following from Industry: 

• Items that do not advance treatment education, including pens, note pads, mugs, and similar “reminder” items with company or product logos.
• Items intended for the personal benefit of healthcare professionals (such as floral arrangements, artwork, music CDs, or tickets to a sporting event) Payments in cash or cash equivalents (such as gift certificates) should not be accepted either directly or indirectly, except as compensation for bona fide services.  

It is appropriate to receive a reasonable quantity of product samples for patient use for purposes of product education, evaluation, and demonstration. 

Receiving Educational Items from Industry 

ASPS members, where permitted by law, may accept from Industry items designed primarily for the education of patients or healthcare professionals if the items are not of substantial value ($100 or less) and do not have value to Members outside of his or her professional responsibilities. For example, an anatomical model for use in an examination room is intended for the education of the patients and is appropriate.  Items designed primarily for the education of patients or healthcare professionals should not be accepted by Members on more than an occasional basis. 

Entertainment and Recreation 

ASPS Members should not accept, any entertainment or recreational items, such as tickets to the theater or sporting events, sporting equipment, or leisure or

vacation trips. Such entertainment or recreational benefits should not be accepted, regardless of (1) the value of the items, (2) whether Industry engages the healthcare professional as a speaker or consultant, or (3) whether the entertainment or recreation is secondary to an educational purpose. 

Informational Discussions and Meals with Industry 

The guidelines recognize that “informational discussions with Industry representatives and others speaking on behalf of a company provide ASPS Members with valuable scientific and clinical information about products, technologies, treatments, and services that may lead to improved patient care. 

Accordingly, the guidelines state that In order to facilitate these “important scientific and medical discussions, while respecting Members’ abilities to manage their schedules and provide patient care, Industry representatives may take the opportunity to present information at mealtimes. 

Additionally, ASPS noted that, “in connection with such presentations or discussions, it is appropriate for occasional meals to be offered by Industry as a business courtesy to Members as well as members of their staff attending presentations, so long as the presentations provide scientific or educational value and the meals

• Are modest
• Are not part of an entertainment or recreational event, and
• Are provided in a manner conducive to informational communication.

ASPS members cannot bring a spouse or other guest in a meal accompanying an

informational presentation made by or on behalf of an Industry representative is not appropriate.  In addition, accepting “take-out” meals or meals to be eaten without an Industry representative being present (such as “dine & dash” programs) is not appropriate.

Continuing Medical Education

The ASPS recommendations acknowledge that continuing medical education (CME) “helps physicians and other medical professionals to obtain information and insights that can contribute to the improvement of patient care, and therefore, financial support from Industry is appropriate. Such financial support for CME is intended to support education on a full range of treatment options and not to promote a particular product.”

Accordingly, ASPS recommends that any financial support from Industry should be given to the CME provider (ASPS), which, in turn, can use the money to reduce the overall CME registration fee for all participants. ASPS noted that, “industry should respect the independent judgment of the ASPS as the CME provider and should follow standards for commercial support established by the Accreditation Council for Continuing Medical Education (ACCME) or other entity that may accredit the CME activity.”

In addition, this guideline recognizes that, “when companies underwrite CME, responsibility for and control over the selection of content, faculty, educational methods, materials, and venue belongs to the CME provider in accordance with their guidelines.” As a result, ASPS noted that,  “industry should not be asked to provide any advice or guidance to the CME provider or Members involved in the CME program regarding the content or faculty for a particular CME program funded by Industry.”

Additionally, ASPS recommends that Members should not accept direct financial support from Industry for the costs of travel, lodging, or other personal expenses related to attending CME programs. Similarly, funding should not be accepted by Members to compensate for the time spent by Members attending the CME program.

It is appropriate for Members serving as faculty at ASPS educational programs to receive honorarium and financial support for travel, lodging, and related expenses from ASPS (as the CME Provider) in accordance with its written policies governing faculty reimbursement. Members serving as ASPS faculty should not accept additional financial support directly from Industry for their role as faculty

Industry Support for ASPS Meetings

The guidelines also recognized that educational conferences or professional meetings of ASPS or its Members can contribute to the improvement of patient care, and therefore, financial support from Industry is appropriate. A conference or meeting is any activity, held at an appropriate location, where:

•  The gathering is primarily dedicated, in both time and effort, to promoting objective scientific and educational activities and discourse (one or more educational presentation(s) should be the highlight of the gathering); and
• The main incentive for bringing attendees together is to further their knowledge on the topic(s) being presented.

Similar to CME, any financial support should be given to the conference’s sponsor (ASPS), which, in turn, can use the money to reduce the overall conference registration fee for all attendees.

Financial support should not be accepted by Members for the costs of travel, lodging, or other personal expenses of Members attending third-party scientific or educational conferences or professional meetings. Similarly, funding should not be accepted by Members to compensate for the time spent attending the conference or meeting.

Serving as a Consultant for Industry

The ASPS guidelines recognize that “consulting arrangements with Industry allow companies to obtain information or advice from medical experts on such topics as the marketplace, products, therapeutic areas, and the needs of patients. Industry uses this advice to inform their efforts to ensure that the products they produce and market are meeting the needs of patients.”

Accordingly, the guidelines assert that it is appropriate for Members who provide advisory services to be offered reasonable compensation based on fair market value for those services and reimbursement for reasonable travel, lodging, and meal expenses incurred as part of providing those services.

However, ASPS Members should not participate in recreational or entertainment events in conjunction with these meetings and it is not appropriate to accept honoraria or travel or lodging expenses for spouses or guests of Members attending Industry-sponsored consultant meetings.  Modest meals or receptions may be appropriate during Industry-sponsored meetings with healthcare professional consultants, but token consulting or advisory arrangements should not be used to justify compensating Members for their time or their travel, lodging, and other out-of-pocket expenses.

Serving as a Promotional Speaker for Industry

ASPS guidelines also recognize that members participate in Industry-sponsored speaker programs “in order to help educate and inform other healthcare professionals about the benefits, risks, and appropriate uses of Industry products.”  The guidelines note that Member engaged by a company to participate in such external promotional programs should be selected based on their medical expertise and reputation, knowledge and experience regarding a particular therapeutic area, and communications skills. Industry and Members should not enter speaking arrangements as inducements or rewards for prescribing or using a particular medicine or product.

 Speaker training is an essential activity because the FDA holds speakers accountable for presentations made on behalf of Industry. It is appropriate for Members who participate in programs intended to train speakers for Industry-sponsored speaker programs to be offered reasonable compensation for their time, considering the value of the type of services provided, and to be offered reimbursement for reasonable travel, lodging, and meal expenses. Such compensation and reimbursement should only be accepted by Members when

 The participants receive extensive training on the company’s drug products or other specific topic to be presented and on compliance with FDA regulatory requirements for communications (including prohibition of promoting “off label”)

• This training will result in the participants providing a valuable service to the company; and
• The participants meet the general criteria for bona fide consulting arrangements.

Any compensation or reimbursement for a speaking arrangement should be reasonable and based on fair market value. Speaker programs may include modest meals offered to attendees and should occur in a venue and manner conducive to informational communication. ASPS also recognized that speaker programs are distinct from CME programs, and speakers and their materials should clearly identify the company that is sponsoring the presentation, the fact that the speaker is presenting on behalf of the company, and that the speaker is presenting information that is consistent with FDA guidelines.

US House Energy and Commerce PDUFA Hearing: Transformation of the FDA

 
Earlier this month, the House of Representatives Energy and Commerce Subcommittee on Health held a hearing on the reauthorization of the Prescription Drug User Fee Act (PDUFA). The hearing, entitled, “PDUFA V: Medical Innovation, Jobs, and Patients,” was held in room 2123 of the Rayburn House Office Building.

Background

Congress first authorized PDUFA in 1992 and last reauthorized the user fee in the Food and Drug Administration Amendments Act of 2007 (FDAAA).   Under the user fee authority, FDA collects funds from drug sponsors to help expedite the human drug approval process.  In FY 2009, FDA spent a total of $855 million on the review of human drug applications.  $512 million of that total came from user fees.

As part of its agreement with industry on these fees, FDA committed to attain certain performance goals, including reviewing 90 percent of priority new human drug applications within 6 months and standard new human drug applications within 10 months.

The funds collected come from the following three basic types of user fees: application review fees, establishment fees and product fees. Under the application review fee, drug manufacturers pay fees for FDA’s review of new or supplemental drug approval applications and biologic license applications.

For FY 2011, the fees are $1,542,000 for each application requiring clinical data, $771,000 for applications not requiring clinical data and $771,000 for supplements requiring clinical data. Another user fee is the establishment fee under which a manufacturer must pay an annual fee for each manufacturing establishment. This fee is just under $500,000 for each establishment. The third fee is the product fee. Under this fee, the manufacturer must pay an annual fee of approximately $87,000 for certain products.

Following the process prescribed by statute, FDA and industry recently negotiated an agreement regarding the size and scope of the user fee for FY 2013-2017. On September 1, 2011, FDA will publish the details of the agreement recommendations on its website. A public meeting on the recommendations will follow in October 2011.

By January 15, 2012, FDA must send its final recommendations to the Committee and the Senate HELP Committee as required by statute.  PDUFA IV expires on September 30, 2012,

In the past, these user fee reauthorizations have been viewed as opportunities to examine and improve the FDA regulatory process. The hearing presents a chance for Members to hear from FDA and other witnesses on the issues that the Committee should consider in reauthorizing PDUFA.

Health Subcommittee

In his opening statement, Health Subcommittee Chairmen Joseph Pitts (R-PA) asserted that the reauthorization of PDUFA “is too important to leave to the last minute” because the drug industry employs thousands of people in the United States and provides good jobs that America cannot afford to lose.

Energy and Commerce Chairmen Fred Upton (R-MI) also submitted an opening statement, in which he acknowledged the importance of addressing concerns about the lack of predictability and certainty at FDA, which appear to be stifling American innovation, costing American jobs, and hurting American patients.  Mr. Upton also noted that the Committee would review the risk/benefit analysis used by FDA when approving drugs and whether the agency is striking the right balance on this delicate issue. He note that there are concerns that FDA is failing to consider the views of patients who need access to life-saving drugs, including those drugs that carry some risk.

Moreover, Upton note that the Committee would evaluate provisions of FDAAA, including those affecting advisory committees and Risk Evaluation and Mitigation Strategies (REMS), as well as the rigid and unrealistic conflict of interest provision that has prevented FDA and its advisory committees from utilizing some of science’s best minds and left advisory committee slots unfilled. He noted that the committee must also look at implementation of FDAAA’s REMS provision and whether it has caused delays in the approval process.

Conflict of Interest Rules and FDA Advisory Panels

During the hearing, Republicans focused on rolling back new conflict-of-interest rules they say are depriving the FDA of needed expertise from the drug industry.  Democrats, focused largely on the safety of imported drugs.

Congress tightened the FDA's conflict-of-interest rules in 2007, as part of the last FDA reauthorization.  But Republicans on the House Energy and Commerce Committee said they may try to loosen the standards in the next reauthorization, which needs to pass next year.

Committee Chairman Fred Upton (R-Mich.) said the upcoming bill should reverse "rigid, unrealistic conflict-of-interest provisions" that have delayed drug approvals. The rules govern who can participate in FDA advisory panels, which study safety and effectiveness issues.

"No longer can we afford to sideline experts simply because of their ties to the pharmaceutical industry," Rep. Phil Gingrey (R-Ga.) said during the hearing.

Janet Woodcock, the director of FDA's drug center, said the limits have slowed down the advisory committee process. The agency sometimes goes through the long haul of finding experts in a given field only to discover ties to the pharmaceutical industry toward the end of the process, she said.  Below is a summary of her testimony.

Hearing

There were two panels during the hearing.  The first panel consisted of Janet Woodcock, M.D., Director of the Center for Drug Evaluation and Research (CDER) at FDA.  We will have a summary of the second panel next week, which included:

Paul J. Hastings, President and CEO, OncoMed Pharmaceuticals, Inc., on behalf of Biotechnology Industry Organization (BIO)

Jonathan Leff , Managing Director, Warburg Pincus LLC

Marc Boutin, Executive Vice President and COO, National Health Council

Ellen Sigal, Ph.D., Chair and Founder, Friends of Cancer Research

Allan Coukell, Director of Medical Programs, Pew Health Group, The Pew Charitable Trusts

Janet Woodcock, MD

Dr. Woodcock first emphasized how PDUFA has produced significant benefits for public health, providing patients faster access to over 1,500 new drugs and biologics since enactment in 1992, including treatments for cancer, infectious diseases, neurological and psychiatric disorders, and cardiovascular diseases.

She noted research from the Tufts Center for the Study of Drug Development, which showed that the time required for the FDA approval phase of new drug development has been cut by 60 percent since the enactment of PDUFA, from an average of 2.0 years for the approval phase at the start of PDUFA to an average of 1.1 years today.

She asserted that the increased resources provided by user fees have enabled FDA to provide a large body of technical guidance to industry that clarified the drug development pathway for many diseases, and to meet with companies during drug development to provide critical advice on specific development programs. In the past five years alone, she noted that FDA has held over 7,000 meetings within a short time after a sponsor’s request.   In FY 2009, more than half of the meetings FDA held with companies at the early investigational stage and midway through the clinical trial process were with companies that had no approved product on the U.S. market.

Dr. Woodcock explained that improvements in the efficiency of the drug review process and the quality of new drug applications is evident in the trends toward greater first-cycle approvals for novel drugs, known as “priority” new molecular entities (NMEs). She noted that the average first-cycle approval rate for priority NMEs has increased from 46 percent in PDUFA I to 68 percent to date in PDUFA IV. First-cycle approval rates have also increased for standard NMEs from an average of 30 percent in PDUFA I to 38 percent to date in PDUFA IV.

She recognized that PDUFA provides FDA with a source of stable, consistent funding that has made possible FDA’s efforts to focus on promoting innovative therapies and help bring to market critical products for patients.  She also noted how PDUFA funds help support the use of existing mechanisms in place to expedite the approval of certain promising investigational drugs and also to make them available to the very ill as early in the development process as possible, without unduly jeopardizing the patients’ safety.

One such program she noted is accelerated approval, instituted in 1992. She noted that over 60 critical products have been approved under accelerated approval since the program was established.

Consequently, Dr. Woodcock noted however that new authorities granted to FDA under FDAAA put strains on the review process time frames agreed to, as well as on post-market review activities, which compete for the same resources.  In addition, the significant increase in the number of foreign sites included in clinical trials to test drug safety and effectiveness has created additional challenges for completion of FDA’s review within the existing PDUFA review performance goals.

Accordingly, Dr. Woodcock briefly summarized FDA’s top priorities identified by public stakeholders, the top concerns identified by industry, and the most important challenges identified within FDA

A Review Program for New Drug Applications (NDA,) New Molecular Entities (NME), and Original Biologics License Applications (BLA)

To address the desire for increased communication and greater efficiency in the review process, an enhancement being considered in FDA’s review program for NME NDAs and original BLAs in PDUFA V would include pre-submission meetings, mid-cycle communications, and late-cycle meetings between FDA and sponsors for these applications.

To accommodate this increased interaction during regulatory review, FDA’s review clock would begin after the 60-day administrative filing review period. The impact of these modifications on the efficiency of drug review for this subset of applications would be assessed during PDUFA V.

Enhancing Regulatory Science and Expediting Drug Development

Dr. Woodcock explained five enhancements to focus on regulatory science and expediting drug development.

1. Promoting Innovation Through Enhanced Communication Between FDA and Sponsors During Drug Development

This enhancement involves a dedicated drug development communication and training staff, focused on improving communication between FDA and sponsors during development. This staff will be responsible for identifying best practices for communication between the Agency and sponsors, training review staff, and disseminating best practices through published guidance.

2. Methods for Meta-analysis

With the growing availability of clinical trial data, an increasing number of meta-analyses are being conducted based on varying sets of data and assumptions. If such studies conducted outside FDA find a potential safety signal, FDA will work to try to confirm—or correct—the information about a potential harm that will create uncertainty for patients and health professionals. To do this, FDA must work quickly to conduct its own meta-analyses to include publicly available data and the raw clinical trial data submitted by drug sponsors that would typically not be available to outside researchers. PDUFA V enhancements being considered include the development of a dedicated staff to evaluate best practices and limitations in meta-analysis methods. Through a rigorous public comment process, FDA would develop guidance on best practices and the Agency’s approach to meta-analysis in regulatory review and decision-making.

3. Biomarkers and Pharmacogenomics

PDUFA V enhancements being considered include augmenting the Agency’s clinical, clinical pharmacology, and statistical capacity to adequately address submissions that propose to utilize biomarkers or pharmacogenomic markers. The Agency would also hold a public meeting to discuss potential strategies to facilitate scientific exchanges on biomarker issues between FDA and drug manufacturers.

4. Use of Patient-reported Outcomes (PRO)

Assessments of study endpoints known as patient-reported outcomes (PROs) are increasingly an important part of successful drug development. PROs measure treatment benefit or risk in medical product clinical trials from the patients’ point of view. PDUFA V enhancements being considered include an initiative to improve FDA’s clinical and statistical capacity to address submissions involving PROs and other endpoint assessment tools, including providing consultation during the early stages of drug development. In addition, FDA will convene a public meeting to discuss standards for PRO qualification, new theories in endpoint measurement, and the implications for multi-national trials.

5. Development of Drugs for Rare Diseases

FDA’s oversight of rare disease drug development is complex and resource intensive. Another PDUFA V enhancement being considered includes FDA facilitation of rare disease drug development by issuing relevant guidance, increasing the Agency’s outreach efforts to the rare disease patient community, and providing specialized training in rare disease drug development for sponsors and FDA staff.

Enhancing Benefit-Risk Assessment

PDUFA V enhancements include expanded implementation of FDA’s benefit-risk framework in the drug review process, including holding public workshops to discuss the

application of frameworks for considering benefits and risks that are most appropriate for the regulatory setting. FDA would also conduct a series of public meetings between its review divisions and the relevant patient advocacy communities to review the medical products available for specific indications or disease states that will be chosen through a public process.

Enhancement and Modernization of the FDA Drug Safety System

The enhancements being considered for PDUFA V include two post-market, safety focused initiatives.

1. Standardizing REMS

 

FDAAA gave FDA authority to require REMS when FDA finds that a REMS is necessary to ensure that the benefits of a drug outweigh its risks. Some REMS are more restrictive types of risk management programs that include elements to assure safe use (ETASU). PDUFA V enhancements being considered would initiate a public process to explore strategies and initiate projects to standardize REMS with the goal of reducing burden on practitioners, patients, and others in the health care setting. Additionally, FDA would conduct public workshops and develop guidance on methods for assessing the effectiveness of REMS and the impact on patient access and burden on the health care system.

2. Using the Sentinel Initiative to Evaluate Drug Safety Issues

FDA’s Sentinel Initiative is a long-term program designed to build and implement a national electronic system for monitoring the safety of FDA-approved medical products. PDUFA V enhancements would enable FDA to initiate a series of projects to establish the use of active post-market drug safety surveillance in evaluating post-market safety signals in population-based databases. By leveraging public and private health care data sources to quickly evaluate drug safety issues, this work may reduce the Agency’s reliance on required post-marketing studies and clinical trials.

Required Electronic Submissions and Standardization of Electronic Application Data

The predictability of the FDA review process relies heavily on the quality of sponsor submissions. PDUFA V enhancements would include a phased-in requirement for standardized, fully electronic submissions during PDUFA V for all marketing and investigational applications.  Through partnership with open standards development organizations, the Agency would also conduct a public process to develop standardized terminology for clinical and nonclinical data submitted in marketing and investigational applications.

 

User Fee Increase for PDUFA V

Implementing the PDUFA enhancements being considered would add $40.4 million to the estimated PDUFA user fee revenue amount in FY 2012. This translates to a modest 6 percent increase, and a total estimated base of $712.8 million in FY 2013.4

PDUFA V Enhancements for a Modified Inflation Adjuster and Additional Evaluations of the Workload Adjuster

In calculating user fees for each new fiscal year, FDA adjusts the base revenue amount by inflation and workload as specified in the statute. PDUFA V enhancements being considered include a modification to the inflation adjuster to accurately account for changes in its costs related to payroll compensation and benefits as well as changes in non-payroll costs. In addition, FDA would continue evaluating the workload adjuster that was developed during the PDUFA IV negotiations to ensure that it continues to adequately capture changes in FDA’s workload.

Additional Initiatives to Encourage Development of New Therapies

In closing, Dr. Woodcock noted how both FDA and the pharmaceutical industry are facing economic and scientific challenges in drug development. She recognized that only a profitable industry can continue to fund the research and development necessary to find new cures.

As a result, she acknowledged that it is critical for FDA to “work with industry and other stakeholders to take steps to reduce uncertainty and increase the success in the other phases of drug development.” She noted that, to promote the development of innovative new therapies, FDA is working on advancing our scientific base.

She also acknowledged how FDA will transform itself over the next decade from a domestic Agency, operating in a globalized world, to a truly global Agency fully prepared for a regulatory environment in which product safety and quality knows no borders. To achieve this transformation, the Agency is developing an international operating model that relies on improved information sharing and gathering, data-driven risk analytics, and the smart allocation of resources through partnerships.

UK Bribery Act: More Companies May Restrict International Travel Payments

 
As we noted last month, AstraZeneca announced that it will be “scrapping payments for doctors to attend international medical congresses.”  According to Reuters, “the move follows increased scrutiny ...and could put pressure on rivals to follow suit.”

A recent article from Fox Business explained, Congresses are held in Europe and the U.S. every year on subjects like diabetes, heart and lung disease and cancer, during which hundreds of specialist physicians are flown in at the expense of drug makers--a practice that has become increasingly criticized as healthcare costs have risen.  About half of all the congresses held around the world are related to life sciences.

AstraZeneca chief executive David Brennan announced the change of policy in low-key fashion at an industry conference in Istanbul in June.  Brennan told Reuters that the company has decided to no longer pay for doctors to attend international scientific and medical congresses but will instead focus their educational efforts on local educational opportunities for healthcare professionals.

In addition, Brennan said he took the step because “AstraZeneca should not do anything that could be seen as an inducement to prescribers to use its products.”

An AstraZeneca spokesperson said that the company “wanted to tighten things up even further than the industry codes currently required or voluntarily suggest, because they never want to do anything that can be misinterpreted.”  The spokesperson also recognized that the company was “the first to go to this extent.”

Richard Bergstrom, the director general of the European Federation of Pharmaceutical Industries and Associations, said that the decision to scrap payments for doctors to attend international medical congresses is “ground breaking but necessary if the pharmaceutical industry wants to improve its tarnished image.”  He predicted that “others will follow.” Bergstrom also asserted that industry needs to find “ways of interacting which is more acceptable to society at large.”

In addition, Bergstrom acknowledged that companies also do not want to be seen “breaching new anti-bribery laws.”  He explained that, “AstraZeneca's move probably reflects concern that such practices might run foul of legislation in the U.S., and now the new bribery act in the U.K., depending on how you do this, and depending on how you invite these physicians.”

He called this change a “a wake-up call for the medical community and healthcare professionals who have gotten used to the fact the industry is paying for all this."

Accordingly, he asserted that, “Congress organizers must realize that we're in this together, and realize that we need to take away the unnecessary things that are still remaining--the unnecessary social activities, and the gala dinners--they're just giving the wrong impression of a high science meeting.”

Consequently, “some doctors associations are responding very negatively, suggesting they regard this as something that they have a right to--getting the pharmaceutical industry's money to pay for their education.”

Britain's biggest drug maker, GlaxoSmithKline PLC (GSK), said it will continue funding trips for selected doctors to attend international medical congresses.

In the end, “large, world-class, academic conferences such as ASCO [American Society of Clinical Oncology], ADA [American Diabetes Association] and ERS [European Respiratory Society] act as leading forums for discussion around serious diseases areas such as oncology, diabetes and respiratory disease." If companies continue in AstraZeneca’s footsteps, this could pose significant challenges to physicians because for many international healthcare professionals, the costs involved in attending these conferences may prove prohibitive without support.

Physician Payment Sunshine Provisions of Affordable Care Act: Main Event or Side Show?

 

Several organizations are speaking out as to the potential side effects of the physician payment sunshine provisions in the Affordable Care Act.

Despite the overwhelming benefits created by physician-industry relationships, such as new drugs and devices, these relationships will soon “be under the microscope because of legislation forcing public revelation of such relationships and any ways they may have affected a doctor’s decisions.”

Under the Physician Payments Sunshine Act (PPSA) included in President Obama’s health care law, manufacturers of drugs, devices, and biological and medical supplies are required to keep a yearly report of all payments to physicians or physician-owned organizations over a cumulative value of $100. These reports will be made available to the public starting in 2013.

The new federal law does not ban gifts—such as research funding, consulting fees, and travel and lodging for conferences—but it will make public the companies’ formerly private interactions with physicians. The federal database will include explanations of services the physicians provided in return for the payments, however it is unclear how detailed these explanations will be (i.e. it could just say “consulting” or “education”).

A recent article from Health Care News discussed how “the battle over reporting of relationships between doctors and device manufacturers and drug companies has been going on for more than two decades,” according to Dr. John Dunn, a policy advisor for the American Council on Science and Health.

Dr. Dunn explained that what the Sunshine Act does “is prevent companies from hiring experts on their drugs from becoming guest lecturers to hype their products.”  He acknowledged that, “most responsible doctors report their conflicts dutifully without such regulation.”

He further asserted that whenever doctors “speak in front of a group or write an article in an academic journal, it’s expected you will declare your conflicts. It’s worthwhile that whenever someone in a white coat gets up and speaks, that we know his conflicts and are able to judge his research based on the merits.”

The problem however with the Sunshine Act is that it will “likely add to bureaucratic and administrative costs for doctors and the industry,” says Devon Herrick, a senior fellow with the National Center for Policy Analysis.

Herrick recognized that the “intent of the Sunshine Act is to create a database that can link the smallest financial considerations between doctors and medical device and drug companies. The intention may be good, but it is not the $100 gift that is going to influence doctors,” says Herrick. “I don’t think it will have the effect that proponents hope.”

Herrick asserted that, “it’s ludicrous to expect doctors and researchers to avoid contact with others in their field” because “it is natural for top doctors and researchers in a given field to collaborate with drug and medical device makers and have research contracts with them.”

Jane Orient, executive director of the Association of American Physicians and Surgeons, agreed with Herrick and noted that the PPSA will just make for higher costs for everybody.

 “It will be a reporting nightmare full of landmines and traps for the drug companies and device manufacturers. This will ultimately just make health care more expensive for everyone. As a physician, it’s a good thing the suppliers are responsible for keeping the paperwork, because if I had to report everything I received, I wouldn’t be able to accept any of it,” Orient says.

Although the PPSA may prevent device manufacturers and drug companies from improperly influencing doctors, Dunn note that it leaves out a major source of conflict of interest, and that is the conflict of interest the government is involved in every time it doles out money.

For instance, Dunn notes, more than $100 million a year in taxpayer funding goes to the American Medical Association (AMA) for a contract for medical coding.  “I think the government basically gave the AMA a franchise [in exchange] for their public support for ObamaCare. The idea that private industry and drug companies are the only ones giving out favors and buying influence is ludicrous,” says Dunn.

 Discussion

For some, PPSA is a way for the Obama Administration to push some of the more ambitious provisions, such as the Independent Payment Advisory Board (IPAB).  For example, Dr. Roger Stark, a physician and health care policy analyst at the Washington Policy Center, note that following the money through PPSA will “lead right to IPAB, an unelected board of 15 officials, is tasked with reining in Medicare’s costs beginning in 2014.

Dr. Stark further elaborate that “the Obama administration has been trying to make medical doctors and pharmaceutical companies  look like the bad guys so it can ride in on a white horse and save the patient by telling him which device he needs or which drugs he can have.” His suspicion is that PPSA and IPAB is all “designed to take the decision-making from the doctors in order to reduce costs.”

Ultimately, as Orient noted, conflict of interest regulations such as PPSA “are a sideshow distracting from the real problems in health care today.”  Orient asserted that, “people should be able to accept a lunch for attending a presentation.”  The idea that small payments for meals and travel is a huge issue is a “trivial problem compared to what else health care is facing right now. There are enormous problems that need solving, and Congress is worried about sandwiches.”

Background on the Independent Payment Advisory Board (IPAB)

 
Last week the House Energy and Commerce Committee held a hearing on one important aspect of the Affordable Care Act (ACA or health care reform) the Independent Payment Advisory Board (IPAB).  But many wonder what is IPAB and why is it so concerning to so many people.

Background

One of the largest—and also most controversial—pieces of the Affordable Care Act is the Independent Payment Advisory Board which was created in an effort to help restrain growth in Medicare expenditures and the purpose of the Board is to reduce the per capita rate of growth in Medicare spending.  This is where the $500 billion in savings for the Affordable Care Act was going to come from.

IPAB has the authority to develop proposals to save costs in the Medicare program that become law unless Congress acts to adopt alternative cost saving proposals that would save at least as much as the IPAB proposals. IPAB is required to consult with the Medicare Payment Advisory Commission (MedPAC) and with the Department of Health and Human Services (HHS) when making such proposals, and is required to submit its proposals to the President and Congress.  They will also develop advisory reports and issue recommendations pertaining to Medicare payments to providers and suppliers not subject to “proposals” and also pertaining to private or public/non-federal health care programs.

After the November 2010 elections, “the drug industry, hospitals and doctors’ groups set their sights on the elimination of IPAB that some experts identify as the biggest cost-cutter of all,” according to the New York Times.  Consequently, in an effort to sell the plan to Americans, HHS Secretary Kathleen Sebelius penned an article in POLITICO to “set the record straight” about IPAB.

Sebelius first laid out the two plans she sees that address Medicare’s future finances.  One approach is IPAB, which she claimed will bring down underlying costs in the health care system by improving care.  The other approach, supported by congressional Republicans, shifts the cost burden to seniors and Americans with disabilities, while allowing health care costs to continue spiraling out of control.

The Secretary pointed out that critics of IPAB believe the Board will “ration care and put bureaucrats in charge of the health care system.”  However, Sebelius asserted that “nothing could be further from the truth.”

She explained how IPAB is made up of 15 health experts, appointed to six-year terms by the President, including doctors, other health care professionals, employers, economists and consumer representatives. She noted that members will be recommended by Congress, appointed by the president and confirmed by the Senate. Contrary to critics’ contentions, “the board’s work will be transparent, independent and accountable to Congress and the president.”

The Chair of the IPAB is appointed by the President, and the Secretary of HHS, the Administrator of CMS, and the Administrator of the Health Resources and Services Administration (HRSA) are specified as ex-officio members of the Board.  The Chair is authorized to appoint an Executive Director and staff for the IPAB.

In addition, there will be a 10-member Advisory Committee appointed by the Comptroller General to advise the IPAB.  The Advisory Committee will comprise one member for each of the 10 HHS geographic regions.  The Advisory Committee must meet at least twice per year.

IPAB is also required to issue an annual report—beginning July 2015—on system-wide health care costs, patient access to care, utilization and quality-of-care that compared by region, services and providers, across both private payers and Medicare. 

The Government Accountability Office (GAO) is required to issue reports studying the effect of changes recommended by IPAB on access, affordability, quality and on payers other than Medicare beginning July 2015, and periodically thereafter.

Sebelius noted that each year, board members will recommend improvements to Medicare. IPAB proposals affecting providers (e.g., hospitals, skilled nursing facilities) will not be implemented before 2020.  IPAB proposals affecting other suppliers (e.g., physicians) may commence in 2015. Proposals from IPAB must include:

-       A recommendation for savings;

-       The rationale for believing the proposal will achieve the target savings;

-       Legislative language to implement the proposal; and

-       An actuarial opinion to support the belief that the targeted savings are   expected to be achieved with the proposal. 

The health reform law instructs the IPAB to develop proposals that:

-       Improve the health care delivery system and health outcomes;

-       Protect and improve Medicare beneficiaries’ access to necessary and evidence-based items and services; and

-       Target reductions in Medicare program spending to sources of excess cost growth.

IPAB proposals cannot recommend:

-       Rationing health care;

-       Raising revenues and Medicare beneficiary premiums;

-       Increasing Medicare beneficiary cost-sharing (including deductibles, coinsurance and copayments); or

-       Otherwise restrict or reduce benefits or modify eligibility criteria

Moreover, Congress will still have some input on the final decision on any changes. Starting in 2014, Medicare will have specific spending benchmarks. If Congress keeps Medicare spending growth low, nothing will happen with the board’s recommendations. If spending growth is too high, and Congress acts to slow it, nothing will happen with the board recommendations.

The target rate of growth is set out in the law, for years prior to 2018, as the average of the consumer price index for all urban consumers (CPI-U) and the medical care component of the CPI-U.  For years 2018 and thereafter, the target rate of growth is set as the Gross Domestic Product plus 1.0 percent. 

If these growth targets are exceeded, the proposals developed by the IPAB must be designed to achieve savings targets, which Congress specified as the lesser of the excess growth rate (projected growth minus target growth) or a defined percentage of program spending (0.5 percent in 2015, 1.0 percent in 2016, 1.25 percent in 2017 and 1.5 percent in 2018 and beyond). The three-year time horizon for IPAB proposals is set forth below:

-       Year 1 - Determination Year: Beginning in 2013, IPAB determines that estimated expenditures looking over 5 year period ending with the Implementation Year (Year 3) will exceed target rate of growth

-       Year 2 - Proposal Year: Beginning in 2014, IPAB issues proposal to reduce expenditures to achieve target savings; and

-       Year 3 - Implementation Year: Beginning in 2015, IPAB proposal goes into effect unless Congress passes law with greater savings

IPAB’s recommendations would take effect only if Medicare spending growth is out of the set boundaries and Congress chooses not to act.  “But given the difficulty of enacting changes to Medicare,” Sebelius asserted that, IPAB “provides a backstop to ensure that rising costs don’t accelerate out of control, threatening Medicare’s stability.” 

She pointed out that “economists and the Congressional Budget Office believe this approach will work” and that “the president’s deficit reduction framework strengthens the advisory board, to ensure that we protect Medicare’s future without resorting to radical changes — like those proposed by House Republicans.”

Sebelius asserted that the Republican “plan would end Medicare as we know it, turning it into a voucher program starting in 2022. People who join Medicare would have no guaranteed benefits, just a guaranteed amount of money to spend with a private insurance company that would be free to ration care.”

Under the Republican plan, Sebelius noted that “a typical senior would pay $6,400 more starting the first year of the voucher program — an amount that would rise until year 10, when seniors would pay 70 percent of their own health care bills.”  She argued that the “Republican plan represents the bluntest approach possible: shifting the costs onto seniors without tackling the underlying causes of the rising cost of care.”

Instead, she maintained that IPAB will slow rising costs of care for all Americans and will promote quality, care coordination, prevention and lower prices for prescription drugs.

Discussion

Some of the concern about IPAB comes from the fact that if the Actuary of the Centers for Medicare and Medicaid Services (CMS) determines that Medicare expenditures will exceed a target rate of growth, the IPAB is required to develop proposals to save costs to achieve a minimum reduction in excess expenditures.  In other words, IPAB “could cut payments to health care providers.”

Senator John Cornyn, (R-TX), introduced legislation last July to eliminate the board, called the Health Care Bureaucrats Elimination Act. The American Hospital Association has endorsed the legislation, but PhRMA has not taken a position on it, although Wes Metheny, senior vice president of PhRMA told the Times that IPAB was “definitely a priority.”

To reduce Medicare expenditures while maintaining quality and access and without raising out-of-pocket costs for Medicare beneficiaries, IPAB will be forced to propose reductions in provider and supplier payments, as McDermott Will & Emery noted. 

As a result, they predicted that reductions will be targeted in areas considered to be drivers of cost growth, such as high-volume and high-cost services.  Accordingly, they recommended that Medicare providers and suppliers—as well as vendors who sell items and services to them—monitor carefully MedPAC reports and reports by other organizations looking at drivers of Medicare utilization and cost, as items and services identified in those reports as cost drivers are likely to be early targets of the IPAB. 

Their newsletter also anticipates that the IPAB will target providers and suppliers under payment methods that are structured in ways that more easily allow for program savings (e.g., items and services under national fee schedules). 

Consequently, the fact that Sebelius is resorting to press and media to convince the public of IPAB portrays a understanding that this part of ACA may be in serious trouble.  As more health care stakeholders are made aware of the potential impact IPAB could have on reimbursement and the trickle down effects payment issues have in health care, it is likely that opposition will only continue to grow, and public sentiment will be easily charged against this board given it’s clear potential to appear as if it ration’s care and makes decisions about what not to cover.