Life Science Compliance Update

« March 2014 | Main | May 2014 »

29 posts from April 2014

April 30, 2014

FDA Proposes Expedited Approval Process for Medical Devices

The US Food and Drug Administration (FDA) proposed a new program to expedite medical device approvals for patients whose serious medical needs are unmet by current technologies.

FDA has been criticized, occasionally by us, for slowing patients' access to innovative new devices with overly burdensome regulations. The "Expedited Access Premarket Approval Application" (EAP) program seeks to remedy that in part through a "collaborative approach to facilitate product development under the agency's existing regulatory authorities."

Thus, while the proposed program is "not a new pathway to market" for medical devices, EAP features "earlier and more interactive engagement with FDA staff." As part of the EAP program, FDA looks to provide more "interactive communications" during device development and more interactive review of Investigational Device Exemption applications and premarket approval applications. In addition, FDA states that it "intends to work interactively with the sponsor to create a data development plan specific to the device."

FDA notes that while "other existing device programs have focused on reducing the time for the premarket review, EAP also seeks to reduce the time associated with product development." The agency's plan hinges on the involvement of senior management and a collaboratively developed plan for collecting the scientific and clinical data to support approval. FDA's Safety and Innovation Act (FDASIA) allows FDA to collect substantial fees from pharmaceutical and device manufacturers to fund the regulatory review of new products. These user fees may have allowed FDA to beef up the resources necessary for their EAP proposal.

From a look at the proposal, devices must meet potentially challenging criteria to be eligible for "EAP Designation."

  • First, the device must be intended to treat or diagnose a life-threatening or irreversibly debilitating disease or condition.
  • Second, the device must meet at least one of the following criteria for addressing an unmet need:
    • (1) The device represents a "breakthrough technology" that provides a clinically meaningful advantage over existing technology; or
    • (2) No approved alternative treatment or means of diagnosis exists; or
    • (3) The device offers significant, clinically meaningful advantages over existing approved alternatives; or
    • (4)The availability of the device is in the best interest of patients (e.g., addresses an unmet medical need).
  • Third, the sponsor submits an acceptable draft Data Development Plan that has been approved by FDA.

In addition to the three prong test to qualify for the EAP program, device companies have to be prepared for some hands on collaboration with FDA. Health Data Management interviewed Bradley Merrill Thompson, a D.C.-based attorney, who questioned the value of EAP: "The possible speed of the approval--and there are no guarantees of course that it will in fact turn out to be quicker--comes at the cost of FDA looking over your shoulder the entire way," he stated.

Wide Variance in Performance Found Among FDA's Drug Reviews

The FDA proposal came out at the same time the Manhattan Institute for Policy Research (MIPR) published a research report entitled "An FDA Report Card: Wide Variance in Performance Found Among Agency's Drug Review Divisions." Interestingly, the MIPR found a wide gap in the approval rates of different drugs. RAPS notes that "[s]ome review divisions, such as the Center for Drug Evaluation and Research's (CDER) oncology and antiviral divisions, approved drugs with nearly twice the speed as the next-fastest divisions, and nearly four times as quickly as CDER's slowest division." Indeed, the Neurology division took nearly 600 days to approve a drug, and the two fastest units, Oncology and Anti-Viral, took under 200 days.

The authors of the study, Joseph A. DiMasi, Christopher-Paul Milne, and Alex Tabarrok, examined disparities in review and approval times across 12 review divisions within the FDA's CDER. The study concluded:

Our analysis of performance has revealed large differences among the FDA divisions. High-performing divisions are several-fold better on output measures than low-performing divisions, and they perform better without commensurately greater resources or less complexity of tasks or reduced safety. Inconsistent performance across divisions is thus a strong indication of inefficiency, but also of opportunity. A careful comparison of the performance of the agency's drug review divisions suggests that agency performance can be dramatically improved at little cost to taxpayers.

The authors note that more study is needed to identify best practices at work in the most productive divisions of the FDA. It will be interesting to see whether FDA's new EAP proposal utilizes inter-divisional best practice analyses in addition to its hands on approach to expedite drug approval.

April 29, 2014

Qui Tam Lawyers Mining the Medicare Database for Potential Fraud

The press had a field day with the newly released Medicare payment data. We recently discussed the fact that many of these news outlets provided less context than we would have hoped. While the media merely scratched the surface of Medicare data, another group is perhaps digging way too deep into the numbers. Qui tam, or whistleblower, attorneys are reportedly mining the data for signs of fraud.

Reuters reports that members of Taxpayers Against Fraud, a nonprofit advocacy group with around 400 whistleblower lawyers, have already been analyzing the data "to see if doctors are prescribing an unusually high amount of the pharmaceutical company's product." Reuters interviewed Pennsylvania lawyer Marc Raspanti who noted that such anomalies "could bolster allegations that something is amiss." Before CMS released the payment data, Raspanti and other whistleblower attorneys would have had to subpoena the government for documents to support his clients' knowledge of suspect billings. "Now I have (the data) at my fingertips," he said.

In February, we wrote an article on how qui tam attorneys could use the Physician Payments Sunshine Act to bolster fraud claims. The Sunshine Act requires drug manufacturers to provide the Centers for Medicare and Medicaid Services (CMS) with data on all of the transfers of value over $10 that the company makes to physicians. Attorneys could use this information to argue, for instance, that certain physician payments constituted kickbacks to doctors who prescribed a lot of a company's drugs.

We reported that at the very least, Sunshine data will provide facts to beef up a plaintiff's complaint. Rule 9(b) of the Federal Rules of Civil Procedure requires that for "alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." The exact dates of a questionable transactions and the precise amounts of payments would add that required specificity. Additionally, the data could support an inference of off-label marketing. If a pharmaceutical company's main products are oncology drugs, and the company has substantial payments to doctors who practice in cardiology, attorneys don't have to reach too far to make off-label allegations.

The Medicare payment data provides similar information. Reuters notes that if an attorney "were representing a pharmaceutical sales manager accusing his company of paying kickbacks to certain doctors, the data could point to other providers using the company's products who could serve as witnesses or be added as defendants if the billings suggest wrongdoing."

Or attorneys could use the data to come up with cases. "When red flags emerge – a doctor bills Medicare an unusually high amount for a particular drug, say – lawyers could investigate what might explain the aberrant figure. That could turn up a possible fraud."

As we noted in the previous qui tam article, lawyers still need to find clients who have insider knowledge of alleged fraud. The False Claim Act contains a "public disclosure bar," which is triggered when the fraud allegations were in the public domain before a qui tam relator filed suit. Since Medicare data is now in the public domain, whistleblowers still need some firsthand information.

However, no company will want to be an outlier when it comes to Medicare billing. Once the Sunshine Act payment data is public, we suspect that attorneys will be able to correlate (and perhaps manipulate) the Medicare and Sunshine information to make an allegation of fraud. For example, the Medicare database could show that a doctor prescribed Drug X a hundred times in 2013. The Sunshine database would reveal that the company who manufactured Drug X also paid the prescribing doctor $1,000 in meals or other transfers of value during the same year.

As we've seen from various news articles, the money doesn't have to be big for the press to question a doctor's prescribing practice. Even scarier are the attorneys who will simply look at two spreadsheets of data and have an articulable case that a company provided kickbacks to high-prescribing doctors.

 

April 28, 2014

UC Regents Settles $10 Million Whistleblower Case Stemming From Industry-Physician Relationships

The University of California Board of Regents agreed on a $10 million settlement with a UCLA physician who alleged that the school allowed doctors to take industry payments. The Los Angeles Times reports that Robert Pedowitz, originally recruited to UCLA in 2009 to run the orthopedic surgery department, sued UCLA, the UC Regents, fellow surgeons, and senior university officials because they failed to act on his complaints about conflicts of interest. Pedowitz alleged that they later retaliated against him for speaking out.

According to the LA Times story, Pedowitz stated he became "concerned about colleagues who had financial ties to medical-device makers or other companies that could unduly influence their care of patients or taint important medical research." Pedowitz raised concerns about the financial dealings of several doctors, including an orthopedic surgeon that testified at trial about receiving $250,000 in consulting fees in 2008 from device maker Medtronic. Pedowitz also took issue with physicians who included UCLA logos on personal websites without getting official permission (Patch.com).

After raising his concerns, however, Pedowitz said he was pressured to step down as department chairman in 2010. He accused the university of retaliation, stating he was denied patient referrals and prevented from participating in grants and other activities, LA Times reports. In 2012, Pedowitz sued the regents and several UCLA doctors in Los Angeles Superior Court for whistleblower retaliation as a result of coming forward.

However, UCLA maintains that they followed up on Pedowitz's complaints. Indeed, UCLA conducted "[m]ultiple investigations by university officials and independent investigators [who] concluded that conduct by faculty members was lawful," according to their public statement. "UCLA adheres to stringent ethical and procedural guidelines and will continue efforts to do so," they stated. "Enhancements to UCLA's compliance policies and procedures have been under way for several years and have included the hiring of a nationally recognized chief compliance officer who remains on staff and has expanded the compliance review team."

In settling the case, UCLA settled the case "to end a prolonged conflict and permit UCLA Health Sciences to refocus on its primary missions of teaching, research, patient care and community engagement."

Potential conflicts at a time when there is growing government scrutiny of industry payments to doctors.

Starting this fall, the federal Physician Payments Sunshine Act, part of President Obama's healthcare law, requires public disclosure of financial relationships between healthcare companies and physicians.

Many doctors and universities defend long-standing industry arrangements as essential for carrying out cutting-edge research and top-flight medical education.

"These are serious issues that patients should be worried about," Pedowitz said in an interview with the newspaper. "These problems exist in the broader medical system and they are not restricted to UCLA."

What next?

It's a common tenent of employment law that you can't retaliate against an employee for raising compliance concerns. Thus, while UCLA's $10 million settlement suggests that at least some of Pedowitz' allegations about retaliation are true, the case gets to the tougher subject of what exactly Pedowitz raised his initial concerns about. The answer, it seems, is perhaps perfectly legal industry-physician relationships. Complex compliance programs already provide an enormous firewall for improper industry-physician relationships. Additional—unnecessary—red tape could lead to an unbelievable chill on these important collaborations.

Mark Quigley, Pedowitz's attorney, said the case could have been avoided if California's system enforced the policies it already had in place.

But is that true?

UCLA stated that they conducted "[m]ultiple investigations by university officials and independent investigators [who] concluded that conduct by faculty members was lawful." That is a lot of financial resources to expend attempting to weed out conflicts of interests. And the school still had to pay a multi-million dollar settlement. It's likely this case will result in many expensive wild goose chases for alleged conflicts. Plus, schools will spend more money recording and documenting their investigative efforts going forward. It will be interesting to follow other medical schools around the country to see if similar cases start cropping up.

 

Newsletter


Preview | Powered by FeedBlitz

Search


 
Sponsors
August 2017
Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31