Life Science Compliance Update

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27 posts from July 2017

July 31, 2017

Canadian Health Minister Considering Forced Transparency


We recently wrote about ten Canadian pharmaceutical companies that are voluntarily disclosing payment amounts to the general public. Now, the Ontario Health Minister, Eric Hoskins, is thinking about mandating that pharmaceutical companies disclose payments made to doctors.

He made the announcement in mid-June, and will hold consultations before making any decision. Hoskins applauded the earlier voluntary transparency decision made by the ten Canadian companies, noting that “Our system is strongest when patients and the public have access to appropriate information so they can make informed decisions about their health care.” He further noted – perhaps tellingly – that, “[o]ur government is committed to strengthening transparency across the health care sector.”

Not only does this follow the voluntary disclosure made, it also follows an independent review of Canada’s new prescription guidelines by federal Health Minister Jane Philpott. The review was ordered because of revelations that a doctor had received financial compensation from companies that make and market opioids. That doctor was part of a committee of medical experts who voted on whether to accept the guidelines.

Annie Bourgault, head of ethics and compliance at GSK Canada, welcomes the announcement and hopes that it prompts other companies to disclose their payments. She believes that “it’s really essential to build patient trust through transparency.” Bourgault said GSK is ready to release physician-specific payment information, but the proper model of disclosure needs to be determined first. To determine that model, there needs to be input from the government, the public, and drug and medical device makers.

There have been numerous editorials written on the subject, mostly from the viewpoint that the information needs to be disclosed. A recent editorial in Social Policy in Ontario goes so far as to say,

The initiative is long overdue, but to be effective, it must be broader, backed with adequate enforcement, significant penalties for those who break the law, and further conditions for payment transparency.

Sunshine rules only do so much. We must examine the damage done by industry-related financial conflicts of interests on health care, and restore integrity that wins back the public’s trust.

What strikes as odd in this instance is that the authors of the editorial are asking for more regulation, and more penalties, without even knowing what the law will be. It’s almost as though some have the belief that no matter what is done, and how strict/broad the law is, there will always be some critics who don’t believe the law goes “far enough” to “punish” those who break it. Naturally, more regulation is the answer for these folks who don’t believe companies – and people in general – can be trusted to do the right thing on their own.

As far as we can tell, no conferences have been set up by the Minister of Health.

Punting on the Issue of FCA and Statistical Sampling


In a much-anticipated U.S. Court of Appeals decision, the Fourth Circuit on February 14, 2017, in evaluating the issue of whether the government has veto power over False Claims Act (FCA) settlements, particularly where liability is established by use of statistical sampling, opted to forego rendering a decision on such issue, and leaving wide open the use and appropriateness of statistical sampling in FCA related cases.

In May of 2016, we briefly highlighted the case of United States ex rel. Michaels v. Agape Senior Cmty., Inc. It was case involving a qui tam action that alleged a network of “twenty-four nursing homes located throughout South Carolina” engaged in “a widespread fraudulent scheme of submitting false claims to the federal healthcare programs of Medicare, Medicaid, and Tricare, seeking reimbursement for nursing home-related services.”

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July 28, 2017

FDA Orphan Drug Modernization Plan Released



In late June 2017, the U.S. Food and Drug Administration (“FDA”) unveiled a strategic plan to both eliminate the agency’s existing orphan designation request backlog and ensure timely responses to all new requests for designation with firm deadlines.


This Orphan Drug Modernization Plan comes hot on the heels of FDA Commissioner Scott Gottlieb’s testimony before a Senate subcommittee, where he made a commitment to (1) eliminate the current backlog within ninety days and (2) respond to all new requests for designation within ninety days of receipt.


Authorized under the Orphan Drug Act, the Orphan Drug Designation Program provides orphan status to drugs and biologics that are defined as “those intended for the safe and effective treatment, diagnosis or prevention of rare diseases,” which are generally defined as diseases that affect fewer than 200,000 people in the United States. Various incentives, including tax credits for clinical trial costs, relief from the prescription drug user fee, and eligibility for seven years of marketing exclusivity are some of the incentives for manufacturers to develop orphan drugs.


Currently, the FDA has roughly 200 orphan drug designation requests pending review. The number of orphan drug designation requests has steadily increased over the past five years: in 2016, the FDA’s Office of Orphan Products Development received 568 new requests for designation – more than double the number of requests received in 2012.


“People who suffer with rare diseases are too often faced with no, or limited, treatment options, and what treatment options they have may be quite expensive due in part to significant costs of developing therapies for smaller populations,” said FDA Commissioner Scott Gottlieb, M.D. “Congress gave us tools to incentivize the development of novel therapies for rare diseases and we intend to use these resources to their fullest extent in order to ensure Americans get the safe and effective medicines they need, and that the process for developing these innovations is as modern and efficient as possible.”


This is the first of several efforts the FDA plans to undertake under its “Medical Innovation Development Plan,” which is aimed at ensuring that the FDA’s regulatory tools and policies are modern, risk based, and efficient. The goal of the plan is to seek ways the FDA can help facilitate the development of safe, effective and transformative medical innovations that have the potential to significantly impact disease and reduce overall health care costs.


To ensure all future requests receive a response within 90 days of receipt, the agency will take a multifaceted approach. These efforts include, among other new steps: reorganizing the review staff to maximize expertise and improve workload efficiencies; better leveraging the expertise across the FDA’s medical product centers; and establishing a new FDA Orphan Products Council that will help address scientific and regulatory issues to ensure the agency is applying a consistent approach to regulating orphan drug products and reviewing designation requests.


The agency intends to communicate around the successful elimination of the backlog by mid-September and will soon provide more information about the Medical Innovation Development Plan. 


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