Life Science Compliance Update

November 19, 2015

American Medical Association House of Delegates Joins Prescription Drug Price Debate Calling for Price Control Measures on Pharmaceutical Products and Banning DTC

At this week's American Medical Association (AMA) House of Delegates meeting in Atlanta the AMA adopted recommendations that put them in direct odds with the life science industry. Including recommendations to endorse a ban on direct-to-consumer advertising, pharmaceutical price transparency, direct negotiation of drug prices by CMS and cutting the exclusivity period of biologic drugs.

Drug Pricing

On Tuesday November 17th, The AMA House of Delegates voted to adopt several recommendations in support of regulating drug pricing, including a recommendation that the AMA encourage the Federal Trade Commission to limit anticompetitive behavior by pharmaceutical companies attempting to reduce competition from generic manufacturers through manipulation of patent protections and abuse of regulatory exclusivity incentives.

The AMA had previously agreed to encourage cost transparency, but this session, the House of Delegates agreed to refine that further, stating cost transparency would be encouraged between pharmaceutical companies, pharmacy benefit managers and health insurance companies.

The AMA has also agreed to support several different legislative proposals. One, if legislation comes up to shorten the patent exclusivity period for biologics, the AMA would throw their support behind that. The AMA would also support legislation that gives the Secretary of the Department of Health and Human Services authority to directly negotiate contracts with manufacturers of covered Part D drugs, and work toward eliminating Medicare prohibition on drug price negotiation.

A speaker from PhRMA present at the AMA meeting raised concerns about these changes, highlighting a difference in statutory interpretation of the Affordable Care Act pertaining to market versus data exclusivity of biologics. The AMA House of Delegates talked their way around that difference and stated that they intend to reduce the market exclusivity that an innovator biological has relative to a follow-on biosimilar, not as PhRMA suggested, relative to a competing innovator biological.

The AMA has launched a Directive to Take Action to convene a task force of AMA Councils, state medical societies and national medical specialty societies to develop principles to guide advocacy and grassroots efforts aimed at addressing pharmaceutical costs and improving patient access and adherence to medically necessary prescription drug regimens.

Lastly, relating to drug pricing, the AMA will launch an advocacy campaign in an attempt to engage physicians and patients in local and national advocacy initiatives to bring attention to the rising price of prescription drugs and put forward solutions. The AMA is hoping to have a report for the 2016 Interim Meeting on the progress of this campaign.

Direct to Consumer Advertising

On Monday, November 16, the AMA House of Delegates passed a measure showing AMA support for a ban on direct-to-consumer (DTC) advertising for prescription drugs and implantable medical devices. The AMA states that this measure was adopted in an attempt to make prescription drugs more affordable and address member concerns about "the negative impact of commercially-driven promotions and the role that marketing costs play in fueling escalating drug prices."

The AMA released a press release stating that this new policy "recognizes that the promotion of transparency in prescription drug pricing and costs will help patients, physicians and other stakeholders understand how drug manufacturers set prices. If there is greater understanding of the factors that contribute to prescription drug pricing, including the research, development, manufacturing, marketing and advertising costs borne by pharmaceutical companies, then the marketplace can react appropriately."

The AMA wishes to support a ban on DTC advertising because, according to Reference Committee K, the United States is only one of two countries in the world that allows DTC advertising and they believe that ultimate goal of advertising is to drive choice and demand for product, not to educate potential patients and their caregivers. Some physicians at the meeting opined that the "proliferation of ads is driving demand for expensive treatments when cheaper alternatives exist." The AMA Reference Committee K does understand, however, that some patients may be prompted to visit a physician based on their increased awareness of a specific drug mentioned in DTC advertising.

The AMA, however, did not go as far as rescinding its policy on DTC advertising, Policy H-105.988. While Reference Committee K asked for the rescission of Policy H-105.988, the House of Delegates denied the request, instead referring the recommendation for a decision, meaning this rescission issue can come up again in future meetings. Policy H-105.988 was last brought up for discussion at the AMA's annual meeting in 2007, when it was reaffirmed.

Policy H-105.988 outlines eleven guidelines for product-specific DTC advertisements, including: the advertisement should be indication-specific and enhance consumer education; the advertisement should convey a clear, accurate, and responsible health education message by providing objective information about the benefits and risks of the drug or implantable medical device for a given indication; the advertisement should present information about warnings, precautions, and potential adverse reactions associated with the drug or implantable medical device product in a manner such that it will be understood by a majority of consumers; and the advertisement should be targeted to age-appropriate audiences. The policy also requires, among other things, that the FDA approve all DTC advertisements to ensure compliance with FDA regulations and consistency with FDA-approved labeling. The policy also mandates that the AMA support the concept that when companies engage in DTC, they assume an increased responsibility for the informational content and an increased duty to warn consumers.

According to John Kamp, the Executive Director of the Coalition for Healthcare Communication, DTC advertising plays an important role in the healthcare system and lays out the following points in support of DTC:

• DTC helps patients and caregivers recognize symptoms and possible solutions for health issues.  Indeed, one of the AMA dissenters to the new policy pointed out the role of early antidepressant advertising to help patients recognize their difficulty and seek medical help.

• DTC currently is the most aggressively regulated advertising available. This is clear from the careful and lengthy side effect disclosures in every broadcast ad. Eliminating these ads would keep consumers in the dark about both the benefits and side effects of medicines.

• Numerous studies have demonstrated that patients who seek out information and have robust conversations with their doctors are more likely to adhere to directions and achieve better health results.

• PhRMA and its members closely follow a DTC advertising code of self-regulation that emphasizes full and fair balanced information, as well as a delay in the commencement of consumer advertising until professionals have had an opportunity to learn about new drugs.

PhRMA spokeswoman Tina Stow also spoke out against these decisions by the AMA, stating that the goal of DTC advertising is "providing scientifically accurate information to patients so they are better informed about their healthcare and treatment options. Research shows that accurate information about disease and treatment options makes patients and doctors better partners."

This decision by the AMA is an interesting one, in that physicians have for a long time expressed dismay at patients who bring up therapeutic recommendations they see on TV. It has been suggested that the proposed ban would be considered a violation of the first amendment. Only passing reference during the physician's discussion at the House of Delegates was the acknowledgement to how DTC has helped patients identify symptoms and ultimately increased visits to physician offices.

Resolutions Adopted by the AMA House of Delegates November 2015

Support legislation that gives the Secretary of the Department of Health and Human Services authority to directly negotiate contracts with manufacturers of covered Part D drugs, and work toward eliminating

Medicare prohibition on drug price negotiation.

Support Legislation to Shorten Patent Exclusivity for Biologic Drugs

Encourage cost transparency between pharmaceutical companies, pharmacy benefit managers and health insurance companies

Encourage FTC to Limit "Anti Competitive" Behavior in the Pharmaceutical industry

Support Legislation Banning Direct to Consumer Advertising

Convene a task force of AMA Councils, state medical societies and national medical specialty societies to develop principles to guide advocacy and grassroots efforts aimed at addressing pharmaceutical costs and improving patient access and adherence to medically necessary prescription drug regimens.

AMA will monitor pharmaceutical company mergers and acquisitions, as well as the impact of such actions on drug prices


These adopted recommendations by the AMA House of Delegates represent a change in direction for the AMA which will put them at odds with the life science industry and its employees. There is a real issue with increases in generic drug prices and some prices being quite high, a dialog should be pursued, it is unclear that the path AMA is taking will in the end get them what their patients are demanding, which are better cures at a reasonable cost.

It also seems as though the AMA is planning to continue this increased scrutiny on the pharmaceutical industry by "monitor[ing] pharmaceutical company mergers and acquisitions, as well as the impact of such actions on drug prices." We will keep up with any additional changes the AMA makes with regard to the pharmaceutical industry.

Reference Documents

Reference Committee J -annotated - Pharma Pricing Section

Reference Committee K - annotated DTC Ban


November 21, 2014

Maintenance of Certification: AMA Adopts New MOC Principles


During last week’s 2014 AMA Interim Meeting in Dallas, AMA House of Delegates voted to update the AMA’s policy on maintenance of certification (MOC). The adopted policy outlines principles that emphasize the need for an evidence-based process that is evaluated regularly to ensure physician needs are being met and activities are relevant to clinical practice.

Download AMA MOC Resolution

The MOC principles will now include:

  • MOC should be based on evidence and designed to identify performance gaps and unmet needs, providing direction and guidance for improvement in physician performance and delivery of care.
  • The MOC process should be evaluated periodically to measure physician satisfaction, knowledge uptake, and intent to maintain or change practice.
  • MOC should be used as a tool for continuous improvement.
  • The MOC program should not be a mandated requirement for licensure, credentialing, payment, network participation or employment.
  • Actively practicing physicians should be well-represented on specialty boards developing MOC.
  • MOC activities and measurement should be relevant to clinical practice.
  • The MOC process should not be cost-prohibitive or present barriers to patient care.

The policy encourages specialty boards to investigate alternative approaches to MOC and directs the AMA to report annually on the MOC process. 

One of the unadopted resolutions (Resolution 928) asked the AMA “strongly advocate for the cancellation of the current Maintenance of Certification (MOC) program and promote physician utilization of continuing medical education as currently required due to the overwhelming consensus of physicians that the current MOC program is ineffective, time-consuming, and economically burdensome.”

While this extreme measure was not adopted, the AMA principles show increased scrutiny over MOC programs. The new principles make it clear that MOC may not be a "mandated requirement for licensure." Furthermore, the MOC process may not be "cost-prohibitive" or "present barriers to patient care." Many of these principles have been points of critique against MOC recently

The American Board of Medical Specialties (ABMS) is the organization responsible for developing the MOC process. ABMS works with its 24 member boards in the ongoing evaluation and certification of physicians.

View the AMA's previous policy here

Per AMA Wire, “AMA policy supports physician accountability, life-long learning and self-assessment. The AMA will continue to work with the appropriate organizations to ensure the MOC process does not disrupt physician practice or reduce the capacity of the overall physician workforce.”

In June, the AMA and ABMS convened stakeholders in Chicago to discuss Part III of the MOC exam, focusing on the value of MOC Part III and innovative concepts that could potentially enhance or replace the current thinking around the secure exam requirement of MOC.


AMA's resolutions come soon after a recent MOC study published online in JAMA Internal Medicine, where physicians in focus groups agreed that the maintenance of certification process is unnecessarily complex and is "of little benefit to physicians, patients, or society."


November 11, 2014

Electronic Health Records: AMA Offers Blueprint to Improve Meaningful Use Program


As physicians continue to adopt electronic health records as a part of the Meaningful Use program, we have provided updates from the Centers for Medicare & Medicaid (CMS) and the National Coordinator for Health IT (ONC). Recently, the continued struggle physicians face meeting Meaningful Use requirements prompted the American Medical Association (AMA) to release a blueprint guide with the goal of revamping the program. In October, the AMA sent the blueprint to CMS Administrator Marilyn Tavenner and Karen DeSalvo, the National Coordinator for Health IT.

Stakeholders continue to raise concerns that many organizations have been unable to show evidence that they will meet Meaningful Use requirements. AMA has argued for additional flexibility in all stages of the Meaningful Use program, with the goal of encouraging physicians to continue integrating electronic health records (EHRs) into their practices. The flexibilities include the removal of penalties for physicians who are making an effort to take part in Meaningful Use but are not meeting 100 percent of the program's requirements. The AMA recommends that physicians who meet at least 50 percent of the requirements in the current stages be able to avoid financial penalties and that Stage 3 include just ten required measures.

AMA Meaningful Use Blueprint

The AMA recommends adopting a more flexible approach for meeting Meaningful Use (MU), adding additional hardship exceptions for all stages of the program and to more physicians, improving quality reporting, and addressing usability challenges such as removing the requirement that only licensed medical professional and credentialed medical assistants be allowed to enter orders.

The blueprint highlights ways CMS and ONC can improve the Meaningful Use program. As a part of its recommendations, the AMA is asking the Administration to make objectives physicians find demanding an optional requirement. Furthermore, the AMA recommends that CMS and ONC take the opportunity with Stage 3 to make the Meaningful Use program less primary care centric by expanding options within the health IT objectives to meet the needs of specialists and requiring physicians to meet no more than ten requirements.

The Big Picture

The AMA’s essential purpose in this blueprint is the recognition that Meaningful Use requirements were designed to increase patient choice and quality of care. However, the AMA argues that many requirements are actually decreasing the efficiency of patient visits. The blueprint raises four major points: Physician adoption of EHRs and participation in reporting programs; Evidence on Meaningful Use; Cost to meet Meaningful Use; and the Path forward for Meaningful Use.

Physician Adoption of EHRs and Participation in Reporting Programs

As reported by data from the National Center for Health Statistics, 78 percent of office-based physicians are using some form of an EHR, but only 23.5 percent are using one that is considered “fully functional.” Not surprisingly, large physician practices are employing EHR use than solo practitioners. The AMA cites that estimates show only 18 percent of physicians will be eligible for MU incentives.

Evidence on Meaningful Use

An article in JAMA Internal Medicine found mixed results comparing outcomes of physicians at Brigham and Women’s hospital in Boston who participated in MU compared to those not participating. The article concludes participation in the MU program was “associated with marginally better quality for two measures, worse for two measures, and not associated with better or worse quality for three measures.”

Additionally, the AMA blueprint also cites an analysis in the Annals of Internal Medicine that found mixed results concerning the impact of health information technology on patient outcomes. The study notes that health information technology has been shown to improve quality by increasing adherence to guidelines, enhancing disease surveillance, and decreasing medication errors, but the effects of EHRs on efficiency and cost were mixed to negative.

Cost to Meet Meaningful Use

The AMA’s concern is that the costs of Meaningful Use outweigh incentives provided under the program and also the costs estimated by CMS to purchase and maintain EHRs. Physicians incur “significant expenses” updating EHRs and as recently reported in Health Affairs, physicians experience a negative return on investment—averaging a $43,743 loss over five years.

The AMA’s concern is that neither CMS nor ONC has studied the cost of purchasing and maintaining an EHR, multiple interfaces, and the expenses incurred to exchange data. The additional burden of financial penalty is unlikely to further motivate physicians and may impede progress in adopting and using the new technology. AMA urges “CMS and ONC to study the total costs of compliance with MU to understand the impact this program is having on practices.”

Path Forward for Meaningful Use

The AMA’s blueprint argues that without reforms, MU will negatively impact the quality and access to care for patients in several ways. First, it will jeopardize patient safety by mandating the use of technology before it is thoroughly tested and evaluated. Second, there will be increasing administrative burdens such as overly prescriptive data collection mandates and measures. Third, if physicians and patients are unable to access data stored in a previous EHR system, access to patient information will be interrupted, hindering care coordination. Fourth, physicians will see decreasing efficiency, since some MU requirements add new tasks and EHRs require additional time to input data, translating to fewer patients seen.

Furthermore, there is concern EHRs may inhibit access to innovative technology, as they are designed to meet a voluminous number of MU criteria, instead of specifically targeted at adopting revolutionary technology. Additionally, MU may hinder other innovation solutions if physicians are too focused trying to meet program requirements and cannot dedicate time to develop health care improvements for their specific specialty or practice. Due to these challenges, AMA is concerned that MU will slow the movement to alternate payment/delivery models of care.

The blueprint concludes with a warning, but optimistic look toward the future: “If changes are not made, we fear the prescriptive nature of both the MU program and the EHR certification requirements will continue to stifle innovation and fuel a growing frustration among physicians. In the end, the loser will be not only the doctor, but the patients they serve. There is, however, cause for optimism if we use the experiences gained to date to shape the program moving forward.”


The AMA blueprint moves beyond merely raising warnings and into solutions by offering specific improvements to the MU program. The AMA recommends MU policy modifications in four areas: (1) adopting a more flexibility approach for meeting MU; (2) expanding hardship criteria; (3) improving quality reporting; and (4) addressing physician usability challenges.

Adopt a More Flexible Approach for Meeting Meaningful Use

The blueprint calls MU’s “all-or-nothing approach” the single greatest barrier physicians face to meeting program requirements. The program requires 100 percent compliance at all times to earn an incentive and avoid a penalty, but AMA points out that only certain measurements are relevant in some care settings and that EHR technology may create barriers in meeting some requirements.

To add more flexibility, the AMA recommends removing the existing all-or-nothing approach by adopting a 50 percent threshold for incurring a penalty and 75 percent threshold for earning an incentive for MU Stages 1-2. The AMA also calls for optional measures, notably ones that have been the most challenging for the vast majority of physicians. This includes MU Objectives for a patient to be able to view, download, and transmit” health information; “transitions of care,” and “secure messaging.” Click here for a chart detailing the requirements for meaningful use.

AMA’s flexible approach addresses other specific measures in the MU program. Notably, the blueprint calls for the removal of percentage/thresholds for measures and the concept of “menu vs. core” for Stage 3. It also asks for the inclusion of new health IT measures in the MU program to expand options for specialist participation in Stage 3. The AMA wants MU requirements to allow physicians to meet no more than 10 measures under Stage 3.

Expand Hardship Criteria

The Health Information Technology for Economic and Clinical Health Act (HITECH) allows the Secretary to grant hardships to physicians, subject to annual renewal, to avoid a financial penalty if certain circumstances are met. AMA’s blueprint believes additional hardship categories should include: (1) establish a quality hardship; (2) expand the “unforeseen circumstances” hardship; (3) continue the exemption for anesthesiologists, radiologists, and pathologists; (4) provide an exemption for hospitalists; and (5) provide an exemption for physicians close to retirement.

The AMA has requested ONC and CMS align the quality reporting requirements of the PQRS and the EHR, but proposed rules have not yet addressed the problem. As such, AMA asks CMS to provide an exemption for physicians from having to meet the MU quality requirements if they have successfully participated in the PQRS program. Furthermore, the current hardship application is narrowly construed and the variety of challenges facing physicians, such as practice closure, bankruptcy, and EHR vendor issues all threaten their ability to meet MU. AMA wishes to expand the “unforeseen circumstances” hardship category to cover such circumstances.

Specialists, like some physicians, also face difficulties complying with MU requirements. The blueprint outlines burdens on specialists, including the current state of commercially available EHRs, particularly with respect to standalone specialty system products, certification of technology appropriate for these specialists, workflow challenges, nature of the patient relationship, and patient data needs. To address this burden, the blueprint requests an assured continuation of the hardship exception for anesthesiologists, pathologists, and radiologists. Finally, AMA recommends that CMS create a hardship category for hospitalists or observation care, or request that CMS remove observation patients from the mix of outpatient services counting toward the emergency physician threshold.

Improve Quality Reporting

Health IT infrastructure challenges are an additional burden on meeting MU requirements. AMA’s blueprint urges CMS not to expand quality reporting requirements until these challenges are resolved, more flexibility is instituted, and quality measures are updated more frequently to comply with clinical practice guideline changes. To address these challenges, the blueprint offers recommendations in six areas: (1) improve alignment with PQRS; (2) lack of a quality infrastructure; (3) new eCQMs (electronic clinical quality measures); (4) core measures; (5) eCQM rulemaking cycle; and (6) registry participation and interoperability.

For MU quality reporting to count towards PQRS, physicians must take into consideration a significant number of detailed rules and requirements. Therefore, the AMA recommends a number of improvements to streamline reporting with PQRS. For example, the blueprint proposes to deem physicians who successfully participate in PQRS, regardless of the reporting mechanism, to have successfully met the MU quality measure requirements. Other recommendations are similarly aimed to increase flexibility for physicians to successfully meet MU requirements.

Through the blueprint, AMA expresses its concerns with the HIT Policy Committee, CMS, and ONC, arguing that all three are not focusing on resolving underlying challenges with reporting quality measures before recommending more advanced measures and the “Innovation Pathway” (starts at slide 18), an alternative way for meeting MU quality reporting requirements. Many proposed measures made by the HIT Policy Quality workgroup assume interoperability and that the advanced stages of MU are in-place. Therefore, argues the blueprint, before any measures go forward there should be real-world testing in multiple types of physician practice settings and sizes to ensure the EHR can capture and calculate the measures without putting an undue burden on physicians.

The blueprint’s recommendations also focus on clinical measurements and rulemaking. Specifically, before new electronic clinical quality measures go forward, AMA writes there should be real-world testing in multiple types of physician practice settings and sizes to ensure the EHR can capture and calculate the measures without putting an undue burden on physicians. To further improvement quality measurements, the blueprint also urges CMS to continue to allow physicians to report on a menu set of measures for compliance with the quality objective. AMA also reiterates the need for CMS to scale down the number of required quality measures due to the lack of eCQMs in the program. Finally, in terms of rulemaking, CMS and ONC should develop a process to eliminate measures that no longer follow the latest clinical evidence and more clearly define what constitutes a minor specification change that can be incorporated into CMS’ implementation guides versus a major change that requires rulemaking.

Address Physician Usability Challenges

The AMA is understandably concerned by physician frustration with MU, and believes it may lead to lower participation levels. A recent IDC Health Insights survey found that 58 percent of ambulatory physician users were not satisfied with their EHR technology and that “despite achieving meaningful use, most office-based providers find themselves at lower productivity levels than before the implementation of their EHR. Workflow, usability, productivity, and vendor quality issues continue to drive dissatisfaction.” Additionally, an article published in the American Journal of Emergency Medicine found that documentation takes 30-40 percent of a workday, with electronic charting taking 30 percent longer than paper charts. 

The AMA concedes that not all workflow issues are directly related to EHR software design. The blueprint cites that some stem from limited training and sub-optimal implementation required by practice or organizational policy. Additionally, regulatory requirements including overly proscriptive MU requirements and demands imposed by commercial payers play a role. The AMA’s essential point is that workflow disruptions are likely to get worse as the MU program becomes increasingly challenging.

The blueprint raises additional concerns, including federal requirements EHR vendors must meet to obtain certification, pointing out that these mandates hinder their ability to address usability concerns and develop more user-friendly products. Furthermore, a number of repots have indicated growing concerns over patient safety related to EHR usability. The blueprint cites a disconnection with EHR design, implementation, and the clinician’s workflow as major contributors to patient safety issues and events.

AMA concludes with a variety of suggestions, offering that further MU stages may need to be held back until there is sufficient guidance and testing of new standards or the required use of new technology is incorporated into aspects of the program which do not interfere with direct patient care. The blueprint finally recommends several steps to improve EHR technology, with the end goal to incorporate well-developed data management principles to promote consumer choice and EHR flexibility.


The AMA’s blueprint comes on the heels of growing stakeholder concern about the Meaningful Use program, especially as it progresses beyond the initial stages. The AMA is frustrated by physicians’ struggles to meet the requirements and the blueprint is an opportunity to modify possible roadblocks facing EHR adoption in the United States. By offering additional flexibilities for physicians, the AMA believes the ultimate goal of Meaningful Use—improving patient care—will be realized. We will monitor EHRs and Meaningful Use as it continues to impact medical practices around the country.


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