Policy and Medicine

FDA CDRH – MDUFA Agreement and Strategic Priorities for 2012

The FDA and industry recently came to an agreement in principle for the Medical Device User Fee Act (MDUFA), costing the device industry $595 million over the next 5 years.  With hearings scheduled in the house for next Thursday on MDUFA we should be learing more in the days ahead.  

The Center for Devices and Radiological Health (CDRH) at the Food and Drug Administration (FDA) recently released its strategic priorities for the 2012 year, saying it plans to focus on 4 areas.  CDRH said it plans to concentrate on fully implementing a "total product life cycle approach," enhance its internal and external communication and transparency, strengthen its workforce, and "proactively facilitate innovation."

Before listing this year’s Strategic Priorities, CDRH reported on its accomplishments from 2011.  CDRH noted that it had completed work on fifty action items in 2011. Highlights of the significant amount of work our staff accomplished in 2011 include:                 

• Plan of Action for Implementation of 510(k) and Science Recommendations and completed many of actions in the Plan as well as undertook several additional efforts to improve our pre‐market programs.
• Report, “Regulatory Science in FDA's Center for Devices and Radiological Health: A Vital Framework for Protecting and Promoting Public Health," to provide a broad overview of the many scientific activities in which our staff are currently engaged, as well as what we see as important regulatory science targets in the future as science and technology continue to evolve.
• Guidance on regulatory expectations for in vitro diagnostic devices and therapeutic products developed together such that the therapeutic product depends on the diagnostic test to direct the use of the therapeutic product.
• Critical role on the establishment of the International Medical Device Regulators Forum (IMDRF), a voluntary group of medical device regulators from around the world charged with future direction in medical device regulatory harmonization.
• Completion of the pre‐market reviewer competencies and began a Reviewer Certification Program (RCP) pilot.
• Launched an initiative to identify and promote best‐quality device manufacturing practices. This includes a report, "Understanding Barriers to Medical Device Quality," that reviews the challenges that the FDA and industry face in supporting well‐integrated, best‐quality manufacturing practices and strategies that industry and the FDA can take to overcome these barriers.
• Completed database requirements; began the design and development phase of a unique device identification system. We also sent the draft rule to OMB.
• Launched the Innovation Initiative, which proposed actions the Agency could take to help accelerate and reduce the cost of development and regulatory evaluation of innovative medical devices in a way that maintains or improves patient safety and is based on sound science.  

2012 Strategic Priorities  

In 2012 CDRH will have four priority areas: (1) Fully Implement a Total Product Life Cycle Approach, (2) Enhance Communication and Transparency, (3) Strengthen Our Workforce and Workplace, and (4) Proactively Facilitate Innovation to Address Unmet Public Health Needs. It includes timeframes associated with each strategy, and specific actions CDRH will take to meet those goals or make significant progress towards achieving those goals.

FULLY IMPLEMENT A TOTAL PRODUCT LIFE CYCLE APPROACH 

CDRH said it will make well‐supported regulatory decisions that take into consideration all of the relevant information available to the Center, at any stage of a product’s life cycle to assure the safety, effectiveness, and quality of medical devices, and the safety of non‐device radiation‐emitting products.  

Strategy 1.1. Enhance and Integrate Premarket, Postmarket, and Compliance Information and Functions.  CDRH will have in place strong, mutually reinforcing organizational components supported by integrated knowledge management systems, that work with a unity of effort toward our mission, and that are equipped to anticipate and address changes in the scientific and global‐market landscape.  CDRH said it will strengthen premarket review by continuing to implement its action plan. 

• By April 1, 2012, begin the Triage of Pre‐market Submissions Pilot to increase submission review efficiency and better manage the pre‐market review workload.
• By December 31, 2012, publish a proposed rule to clarify the circumstances under which CDRH could rely on clinical studies conducted in and for other countries.
• By December 31, 2012, finalize all guidance documents issued as part of the plan to improve our premarket programs.
• By December 31, 2012 conduct an evaluation of CDRH staffing, infrastructure, policies, and practices pertaining to medical software 

In 2012, CDRH will continue to take steps to address Class III device types currently allowed to enter the market through the 510(k) process.                  

• By December 31, 2012, clear within CDRH proposed rules for all remaining Class III pre‐amendment medical devices.  

Address Challenges Associated with Globalization.  By September 30, 2012, CDRH will have in place mechanisms to further harmonization efforts and exchange medical device information with foreign regulatory authorities.

• By March 31, 2012, hold the first meeting of the International Medical Device Regulators Forum.
• By September 30, 2012, participate in at least two harmonization activities with one or more foreign regulatory authorities. 

Enhance Compliance Capability.  By December 31, 2012, CDRH will begin to implement its business‐case‐for‐quality initiative to address best‐quality manufacturing practices, including mechanisms for FDA‐industry engagement and increased transparency of device quality data.                 

• By June 30, 2012, select and begin to implement 2012 actions in support of the business‐case‐for‐quality initiative.  
• By December 31, 2012, select actions to be implemented in 2013 in support of the business‐case‐for‐quality initiative.  

By October 31, 2012, CDRH will take steps to enhance the efficiency and clarity of the medical device and radiation‐emitting product recall processes.                 

• By September 30, 2012, develop methods and procedures for the systematic analysis and use of medical device recall information.  
• By October 31, 2012, develop and begin to implement criteria for terminating recalls, including online posting of recall terminations.  

Enhance Collaboration Through Reorganization.  In 2012, CDRH will continue to implement its reorganization plan to enhance and integrate premarket, postmarket, and compliance information and functions.                 

• By December 31, 2012, provide at least two updates to staff on the status of the reorganization.  

Implement a Knowledge Management Strategic Plan.  By October 31, 2012, CDRH will develop and begin to implement a Knowledge Management Strategic Plan to make the best use of information collected or developed by CDRH.                

• By March 31, 2012, hire a Knowledge Management Director.
• By October 31, 2012, finalize and begin to implement CDRH’s Knowledge Management Strategic Plan.  

Assess Real World Device Performance.  By October 31, 2012, CDRH will develop a comprehensive strategy to assess real world device performance.                 

• By April 30, 2012, post on the web a proposed strategy to assess real world device performance and seek public input.  
• By October 31, 2012, develop a comprehensive framework for the timely evaluation and management of significant postmarket signals.  

Enhance CDRH’s Quality Assurance Program.  By December 31, 2012, strengthen CDRH quality assurance framework for periodically auditing the Center’s regulatory programs and decisions and providing recommendations for improvement. 

• By June 30, 2012, hire an Assistant Director for Quality Assurance.
• By December 31, 2012, implement a Center‐wide quality assurance program.  

ENHANCE COMMUNICATION AND TRANSPARENCY 

To improve public health and foster trust among our employees and with our constituencies, CDRH will provide meaningful and timely information about the products we regulate and the decisions we make, through strategic outreach and systems that support transparency and two‐way communication. 

Enhance Communication and Transparency with Our Stakeholders  

CDRH will develop and distribute timely information about medical device and radiation‐emitting electronic products that is useful to our external constituencies, using methods that meet their needs, while giving them opportunities to engage in a dialogue with the Center about the issues important to them.

 In 2012, CDRH will continue to take steps to strengthen information exchange and improve gathering feedback from our external constituencies.                 

• By December 31, 2012, take steps towards establishing a national forum for engaging with patients, consumers and health care professionals in a dialogue about issues of interest to them.  

Improve Internal Communications  

CDRH staff will have access to timely information about what the Center is working on, completed projects, organizational information and will have opportunities to engage dialogue, share ideas and make suggestions to enhance CDRH’s ability to successfully achieve our mission.

By December 31, 2012, CDRH will establish an internal communication program to improve communication of information and ideas to and from CDRH Staff.               

• By September 30, 2012, issue standard operating procedures (SOPs) for sharing information with CDRH Staff. 
• By December 31, 2012, with input from staff, develop and begin to implement a plan to improve internal communication. 

PRIORITY 3. STRENGTHEN OUR WORKFORCE AND WORKPLACE 

CDRH will be a thriving organization with the knowledge, skills, and technical expertise we need to fulfill our mission; a collaborative employee culture; efficient administration of CDRH programs; and a workplace environment that supports productivity.

Continue to support the Life Cycle Approach to CDRH Employee Education.  CDRH employees will have access to high quality educational tools and programs, assuring that we accomplish our mission and meet the anticipated demands of the future.  

By December 31, 2012, CDRH will launch the Experiential Learning Program (ELP) to enhance premarket reviewer knowledge of how medical devices are designed, manufactured, and utilized by providing real‐world learning opportunities.               

• By March 31, 2012, begin the ELP pilot.
• By December 31, 2012, fully implement the ELP.  

By December 31, 2012, CDRH will launch the CDRH Leadership Enhancement and Development Program (LEAD) to provide CDRH managers and supervisors information and tools to assure effective leadership.                 

• By March 31, 2012, begin the LEAD pilot.
• By December 31, 2012, fully implement LEAD.  

Enhance Employee Satisfaction  

CDRH will recognize the value of our employees and provide a workplace environment that supports productivity.  By September 30, 2012, CDRH will make recommendations on how to adequately recognize good employee performance and address poor performance.                 

• By February 28, 2012, form an internal, cross‐Center, staff‐led work group to develop recommendations.
• By September 30, 2012, share with Center staff the work group’s recommendations and seek their input.  

By September 30, 2012, CDRH Offices will make recommendations on what resources are necessary to ensure staff are successful in performing their work.                 

• By May 31, 2012, Offices will solicit recommendations from staff on what resources are necessary to ensure staff are successful in performing their work.
• By September 30, 2012, Offices will share their recommendations and an action plan for implementation with staff.  

PRIORITY 4. PROACTIVELY FACILITATE INNOVATION TO ADDRESS UNMET PUBLIC HEALTH 

CDRH will further enhance our efforts to anticipate emerging technological trends and public health challenges and partner with federal and external stakeholders to facilitate the development of innovative, safe and effective medical devices and advance regulatory science. 

Foster the Development of Innovative Medical Devices. CDRH will work with our federal government partners and external constituencies to facilitate the development of innovative, safe and effective medical devices.  By September 30, 2012, CDRH will create processes and tools that will improve the pipeline for innovative medical devices and transform the way CDRH works with medical device innovators.                 

• By March 31, 2012, using the Entrepreneurs in Residence Program, begin to pilot the Innovation Pathway 2.0.
• By September 30, 2012, assess implementation of the Innovation Pathway 2.0.  

Further Develop a Personalized Medicine Program.  CDRH will work collaboratively with our federal government partners and external constituencies to assure the appropriate regulatory oversight of therapeutics and diagnostics when their safety and effectiveness are intimately tied to one another. 

By September 30, 2012, CDRH will continue to develop policies and procedures to assure that safe and effective diagnostic products that are either innovative themselves or provide innovative uses reach the public. 

• By June 30, 2012, clear within CDRH the final guidance on Companion Diagnostics.
• By December 31, 2012, clear within CDRH draft guidance on co‐development of drugs or biologics and devices.  

Strengthen Regulatory Science.  CDRH will work collaboratively with our federal government partners and external constituencies to advance medical device regulatory science. 

By December 31, 2012, CDRH will have in place mechanisms to enable collaborative work between FDA, our federal government partners and external constituencies to advance medical device regulatory science.                 

• By December 31, 2012, establish a public‐private partnership between industry, the FDA, and academia to advance regulatory science.  

By September 30, 2012, CDRH will expand computer modeling and simulation efforts to support regulatory science.                 

• By September 30, 2012, finalize a strategy for validating and incorporating computer models that are part of the Virtual Physiological Patient Project into a publicly accessible library that can be used in device development and regulatory applications.


State of the Union, Bio Pharmaceutical Jobs and Innovation

Tonight, President Obama is set to make his State of the Union Address.  Many have speculated that with the United States Supreme Court set to determine the constitutionality of the Patient Protection and Affordable Care Act (PPACA) in late March, Obama should use his Address to defend health care reform and to highlight some of the benefits that have already been achieved.  Consequently, a recent article from the National Journal discussed a few of the issues dealing with health care reform that President Obama should address. 

First, Doug Peddicord Executive Director of the Association of Clinical Research Organizations, noted that the President “should absolutely defend this accomplishment (health care reform) in his speech and use this chance to make a pitch in front of the SCOTUS.”  He said that the President should remind people that because of PPACA, “no one will be rejected for health insurance, even if they have, what the insurance industry liked to call ‘pre-existing conditions.’”   

He noted how health care reform is “making healthcare more accessible and affordable through insurance exchanges and accountable care organizations (ACOs) that ensure physicians are working together to provide patients quality care and not worrying about how many tests they should run.”  Peddicord also noted how PPACA closes the so-called ‘donut hole’ under Medicare Part D to lower the cost of prescriptions for seniors. 

Despite these important initiatives, Peddicord recognized that the ACA is not perfect.  Specfically, he asserted that, he would “work with anyone, Republican or Democrat, to make sure this landmark legislation doesn’t stifle job creation and innovation.”  In particular, he noted that Section 6002, better known as the Physician Payment Sunshine Act, deserves specific scrutiny.” 

He noted how the Sunshine Act was “not part of my original health care reform proposal and, ironically, it was slipped into the health reform bill without full and thoughtful consideration.”  He quoted the proposed regulations that were issued a few weeks ago to demonstrate the ridiculousness of the legislation:

“For example, if once during the calendar year, a sales representative from an applicable manufacturer brings $25 worth of bagels and coffee to a solo physician's office for a morning meeting, regardless of the number of individuals who partake, the per covered recipient cost is $25. Since this falls above the $10 minimum threshold for reporting a payment or other transfer of value…this meal must be reported. However, if the practice group includes five physicians, then the per-covered recipient cost is $5 (regardless of whether all five physicians actually consumed any of the food provided), so the payment would not need to be reported.” 

Based on this provision and his other analysis, Peddicord correctly recognized that the Sunshine Act “does nothing to increase access to care or improve outcomes – two things that inspired me to work so hard on health reform. Rather, it’s indicative of the government overreach that has left so many Americans frustrated. We should not – and, if I have anything to do with it, we will not – have government bureaucrats counting bagels!” 

In addition to Peddicord’s comments, John Castellani President and CEO of the Pharmaceutical Researchers and Manucatrers of America (PhRMA) offered his advice about what President Obama should speak about in his State of the Union Speech.  He maintained that Obama should talk about jobs and the economy. 

Castellani noted that, “the biopharmaceutical sector is particularly interested” in what Obama will propose to create more jobs and fix the economy, since innovative industries such as the life sciences industry are job-creators and tremendous contributors to our nation’s economic growth. 

He noted how, “innovation and economic growth go hand-in-hand.”  For this reason, it is his hope that the President also spends significant time talking about the value of innovation.  The PhRMA President said the companies “are very interested in hearing specific policy proposals on how we can ensure that America remains the world-leader in innovation, particularly medical innovation.”  

He asserted that, President Obama should use this “opportunity to propose ideas that will foster medical innovation in the long-term rather than focusing on short-term policies that do not encourage, and in some cases may detract from, future medical progress.”  Additionally, he maintained that , “at a time when our economy is still fragile, it is essential that government and industry work together to help create jobs and improve the economic outlook – and a sound innovation agenda is critical to meet these important goals.” 

Accordingly, he laid out “Four inter-connected policy pillars that he believes are important to sustain the economic and scientific eco-system, advance medical innovation and protect U.S.-based biopharmaceutical jobs are the following: 

1. A regulatory framework to spur innovation – meaning a predictable, consistent and robust regulatory system supported by the best, experienced regulators using the latest, best science;
2. A thriving public/private scientific ecosystem – meaning better collaboration and cooperation;
3. A business environment that embraces biomedical progress – meaning an understanding that the science, while potentially amazing, is difficult, the investment costs high and the rewards are uncertain;
4. A healthcare system that better recognizes the value of medicines – meaning innovative medicines contribute both to improving patient health and can help control short- and long-term healthcare costs. 

Ultimately, as we all watch the State of the Union speech tonight, hundreds of millions of Americans will begin to see and wonder how the President, almost two years later, will defend his health care reform bill and how he will ensure that Americans realize the goals and promises the landmark legislation hoped to achieve. 

Lupus Education Initiative Funded in 2012 Appropriations

Legislation signed by White House addressed Early Lupus Diagnosis and Treatment.  A top legislative priority of the Lupus Research Institute (LRI) -- funding for a nationwide lupus education effort for healthcare providers -- was included in the Fiscal 2012 omnibus appropriations bill (H.R. 2055) signed into law on December 23, 2011 by President Obama after passing in the House of Representatives and the Senate.

Affecting more than 1.5 million Americans, lupus is a chronic, complex and prevalent autoimmune disease, in which the body's immune system creates antibodies that can attack any organ or tissue -- the kidneys, brain, heart, lungs, blood, skin, and joints. Nine out of ten lupus sufferers are women, mostly young women between the ages of 15 to 44, and women of color are especially at risk. There is no one test to diagnose lupus, and because its symptoms can be mistaken for other diseases or conditions, it can take months or years to identify and treat.

LRI is the world's leading private supporter of innovative research in lupus, pioneers discovery and champions scientific creativity in the hunt for solutions to this complex and dangerous autoimmune disease. Founded by families and shaped by leading scientists, the LRI mandates sound science and rigorous peer review to uncover and support only the highest ranked novel research to prevent, treat and cure lupus.

Nearly $1 million is allocated to advancing the current federal lupus education initiative begun in 2010, to provide healthcare professionals with comprehensive training to be able to diagnose lupus promptly and treat appropriately. The education program is led by the Office of Minority Health in the federal Department of Health and Human Services in partnership with the U.S. Surgeon General and the Office of Women's Health.

The Lupus Research Institute, with it’s National Coalition of advocates from the state and local lupus organizations, identified the need for medical education on lupus and led the national effort on Capitol Hill. As a result of the LRI's aggressive advocacy efforts, a major report from the Secretary of Health and Human Services to the U.S. Congress documented the need for a comprehensive national provider health education program to help eliminate the barriers of racial disparities in the early medical diagnosis and treatment of lupus.

LRI President and CEO Margaret Dowd said her organization was “deeply grateful for the continued support of Congress for providing healthcare professionals with the necessary tools to be able to recognize, diagnose and treat the disease promptly and effectively.”  "The passage of this Bill signifies that we have succeeded in raising the plight of people suffering with lupus to a national priority.”

“The significant appropriations granted to lupus despite funding cuts in other areas will improve both initial and continuing medical education (CME) in this nation in an effort to reduce racial and health disparities in lupus diagnosis and treatment."

The appropriations bill contains additional funding targeted to lupus. The Centers for Disease Control and Prevention is allocated more than $4.4 million to continue the Lupus Patient Registry, a registry study assessing the prevalence and incidence in the United States of lupus among high-risk populations in selected states.

The Defense appropriations section of the bill includes lupus along with 21 other disease conditions in the $50 million Peer Reviewed Medical Research Program, a competitive application research activity run by the Army Medical Research and Materiel Command in Ft. Detrick, MD.

Senator Kay Hagan Encourages FDA to Consider Faster Approval Pathway for Orphan Disease Treatments

A recent article from Bloomberg noted that, “Congressional talks to renew the fees drugmakers pay to fund Food and Drug Administration (FDA) reviews include proposals to fast-track evaluations of medicines for conditions with no approved cures.”

Plans by Senator Kay Hagan, a North Carolina Democrat, and the Biotechnology Industry Organization (BIO) in Washington would let manufacturers bypass customary clinical trial requirements before bringing products to market, according to drafts of both proposals.

The proposals are factoring in Congressional talks to reauthorize the fee system pharmaceutical companies use to fund FDA reviews, known as the Prescription Drug User Fee Act (PDUFA).  Hagan and BIO’s proposal may be wrapped into the PDUFA renewal. FDA and the drug industry have agreed to a 6 percent fee increase as part of a plan that would run through fiscal 2017. Drugmakers would pay $712.8 million in fiscal 2013 under the deal Congress must approve before Sept. 30, 2012.

While the FDA occasionally grants exemptions, “the experience of many biotechnology companies is that the criteria for utilizing this type of regulatory flexibility are unclear and unpredictable,” according to the biotech industry group’s document, a copy of which was obtained by Bloomberg.

Diseases that may be targeted are rare disorders affecting fewer than 200,000 patients in the U.S. About 360 drugs exist for 7,000 such conditions, according to the National Organization for Rare Disorders in Danbury, Connecticut.

Faster Reviews

Hagan’s plan, based on the biotech group’s proposal, would expand on an FDA accelerated-approval program used mainly for AIDS and cancer treatments, according to a draft proposal.

As the article from Bloomberg explained, :Manufacturers under accelerated approval can conduct shorter trials on patients based on a measured effect of a drug instead of an actual clinical outcome. For some cancer medicines, tumor shrinkage is considered a sufficient sign of survival to justify approving a product. The agency requires companies to prove the anticipated benefit once the treatment is cleared.”

Hagan would allow agency approvals based on the second of three phases of clinical trials, when data cannot be “ethically, feasibly or practicably generated,” according to the draft.

Tools In Place

The FDA already has many tools in place to expedite approval of promising drugs, said Karen Riley, an agency spokeswoman, in an e-mail. The regulator also allows patients access to unapproved medicines through clinical trials and physician-submitted applications, she said.

The FDA has approved 85 rare-disease treatments since 2006, 75 percent of which were based on more-limited trials, John Jenkins, director of the agency’s Office of New Drugs, told a conference in Washington last month.

The FDA’s “orphan drug” program offers tax breaks and a seven-year market monopoly for rare illnesses that affect fewer than 200,000 patients. “I’m worried that a policy where we define flexibility will lock us in,” Jenkins said at the rare disease conference, discussing unspecified calls for faster reviews.

‘Exceptional Promise’

FDA officials discussed the possibility of expediting approvals for treatments showing “exceptional promise” in an innovation report the agency released Oct. 5.

The report said the agency plans to release guidelines for an expedited pathway for high-risk breast cancer treatments. The President’s Council on Jobs and Competitiveness backed a progressive approval system in its interim report last month.

The faster trials envisioned won’t compromise patient safety, said Marc Dunoyer, head of Glaxo’s rare disease unit, in an interview.  “I’m trying to bring earlier access to patients, it doesn’t decrease the work,” Dunoyer said. “You don’t want to compromise on safety and effectiveness.”

The European Union has a program of expedited reviews for rare diseases, emergency situations and debilitating or life- threatening diseases.   “I think it is impossible to have all the response upfront that you want on a drug,” Dunoyer said. “Regulators, companies, physicians need to agree that at one point in time you won’t know everything.”

Patient Access to Medical Innovation Act Introduced

U.S. Senator Al Franken (D-Minn.) introduced the bipartisan Patient Access to Medical Innovation Act (S. 1865) to get innovative medical devices to market more quickly and safely. Senators Lamar Alexander (R-Tenn.), Kay Hagan (D-NC) and John Kerry (D-Mass.) are the lead cosponsors of Sen. Franken’s legislation. 

More importantly, Senator Franken’s bill proposes changes to Food and Drug Cosmetics Act (FDC Act) Section 712, Conflicts of Interest. 

As explained by the FDA Law Blog, currently, section 712 limits the number of conflict-of-interest waivers that FDA may provide to experts that it would like to serve on its advisory committee.  The result of this restriction has been that FDA is often unable to obtain industry’s most qualified experts to serve.  As we have noted over the past several months, reports have estimated that almost one third of seats on FDA advisory committees in 2010 were vacant. 

The language in Senator Franken’s bill would require FDA to “ensure that each [waiver] considers the scope and magnitude of the financial interest at issue with the public health need for the expertise of the member on the advisory committee.”  This is intended to allow FDA to access a broader range of experts who would be unable to serve under the current legislation, and balance the potential conflict-of-interest against the need for participation by experts in a particular field.  Such expert consultation can play a critical role in bringing products to market.  

Essentially, the bill would require FDA to use the same conflict of interest policy as the National Institutes of Health (NIH) and all other federal agencies. 

The Boston Globe noted that, “the FDA requires up to 18 advisory panels be summoned to evaluate new medical technologies when the agencies lacks their own experts to do so. But stringent restrictions on panel members now often prevent the best experts from reviewing specific devices or technologies, according to Kerry’s staff, and thus significantly slow the approval process.” 

Franken’s bill joins several other bipartisan FDA bills recently introduced to change the FDA conflict of interest rules, including The “Medical Device Regulatory Improvement Act (S. 1700), introduced by Senators Amy Klobuchar (D-MN), Richard Burr (R-NC), and Michael Bennet (D-CO).  S. 1700 would restore the appropriate balance to conflicts of interest requirements by requiring the FDA to be subject to the same conflicts of interest requirements as the rest of the federal government, under the Federal Advisory Committee Act. 

Additionally, Congressman Michael Burgess, M.D., (R-TX) introduced The Cultivating Scientific Expertise to Foster Innovation for Patients Act of 2011 (H.R. 3206) to help FDA obtain expert advice on advisory committees by eliminating limits on the number of conflict of interest waivers FDA can issue.  The bill would instruct the Department of Health and Human Services (HHS) Secretary, when considering potential conflicts of interest, to consider the totality of the type, nature and magnitude of any financial interest, without focusing on any one factor over another. 

Senator Franken (D-MN) Bill 

As noted by the StarTribune, Franken’s bill would make it easier for some medical experts to serve on FDA panels that offer recommendations on medical devices for rare diseases. Franken said he believes the current structure of the panels is "subjected to overly stringent rules" that make it difficult for them to use outside experts because of perceived conflicts of interest with the private sector. 

Franken said his proposal would have the panels comply with other conflict-of-interest rules that the National Institutes of Health uses.  "As a nation, we need to do more to support this industry so it can continue to expand and provide high-quality jobs -- not to mention life-saving technologies -- to our markets and our hospitals," Franken said in a statement.

 

“After speaking with countless patients, doctors, and members of the medical device industry in Minnesota, I’ve learned that certain barriers in the regulatory process are making it harder to get patients the medical devices they need,” said Sen. Franken in a press release announcing the bill. “My legislation would remove unnecessary barriers so that these critical medical devices get to the patients that need them as quickly and safely as possible.”  

Patient Access to Medical Innovation Act would:

•  Promote the development of devices to treat patients with rare diseases;
• Help improve the federal Food and Drug Administration’s (FDA) approval process for medical devices by allowing the agency to more easily consult with experts;
• Lift the current profit cap on "humanitarian use devices"-- devices that treat rare conditions-- that go through a special approval process. Eliminating this red tape will support the development of treatments for people with rare conditions. 

Last week, Franken visited Medtronic in Mounds View, MN, and met with several hundred company officials and employees to discuss his new legislation. While there he also met with doctors and patients who may be helped by his legislation. They all agreed on the need for these reforms during his visit.  Franken also recently participated in a hearing on medical devices in the Senate health committee, of which he is a member. 

A summary of Franken’s bill on FDA Law Blog noted that it will accomplish two main goals: first, to allow manufacturers of products granted a humanitarian device exemption ("HDE") to profit from development of devices used in both adult and pediatric populations and, second, to ease conflict of interest restrictions on FDA advisory committee members.

Manufacturers may obtain an exemption from the effectiveness requirements for a device if 

1. the device is “designed to treat or diagnose a disease or conditions that affects fewer than 4,000 individuals in the United States,”
2. the device would not be available to a person with the disease or condition unless FDA granted the exemption, and there is no comparable device available to treat or diagnose the condition, and
3. “the device will not expose patients to an unreasonable or significant risk of illness or injury and the probable benefit to health from the use of the device outweighs the risk of injury or illness from its use.”  FDC Act § 520(m)(2).  

Senator Franken’s bill retains these requirements for obtaining an HDE.  What it changes is the manufacturer’s ability to profit from sale of an HDE device.  Currently, the law prohibits a manufacturer from selling the device “for an amount that exceeds the costs of research and development, fabrication, and distribution of the device,” unless the device “is intended for the treatment or diagnosis of a disease or condition that occurs in pediatric patients or in a pediatric subpopulation, and such device is labeled for use in pediatric patients or in a pediatric subpopulation in which the disease or condition occurs.”  FDC Act §§ 520(m)(3), 520(m)(6)(A)(i)(I).  Senator Franken’s proposal would allow manufacturers to profit from the sale of any device granted an HDE, regardless of the intended patient population. 

Senator Franken’s bill also includes language that would make the legislation retroactive.  This means that manufacturers who currently market a product under an HDE, and who are unable to profit from the sale of such device, will be able to profit after the legislation is enacted, even if they obtained the HDE prior to its enactment. 

“This summer when FDA Commissioner Hamburg joined me in Boston to hear from Massachusetts industry leaders, we talked about building a new relationship where our innovators work with federal regulators to get the best medical breakthroughs to the patients that need them most,” Kerry said in a statement. 

“This legislation strengthens the approval process while cutting the red tape that keeps these critical devices from the hospitals, doctors, and nurses who can use them to save lives. Massachusetts has long been at the heart of these technological innovations, and I’ll continue to do all I can here in the Senate to protect and encourage that innovation.” 

Conclusion 

With greater momentum to change conflict of interest rules at FDA, and more bipartisan support from Congress, it is likely that congressional officials will push for these bills to be included in the Prescription Drug User Fee Act V negotiations, which will likely be finalized sometime this spring or early summer.  Moreover, now that several bills have appeared addressing the conflict of interest policy issue, we could see a congressional hearing in the next few months to address these concerns head on. 

Lyme and Tick-Borne Disease Prevention, Education and Research Act of 2011

This past summer, freshman Senator Richard Blumenthal (D-CT) introduced the Lyme and Tick-Borne Disease Prevention, Education and Research Act of 2011 (S. 1381).  The Legislation was introduced along with Senators Jack Reed (D-RI), Kristen Gillibrand (D-NY), Sheldon Whitehouse (D-RI), Joseph Lieberman (I-CT), and Al Franken (D-MN).  

Senators Susan Collins (R-ME), Frank Lautenberg (D-NJ), and Charles Schumer (D-NY) later co-sponsored the legislation.   The bill was referred to the Committee on Health, Education, Labor, and Pensions (HELP).  No hearings on this legislation have been scheduled as of today’s date.

Lyme disease is caused by bacteria called Borrelia burgdorferi (B. burgdorferi). Blacklegged ticks carry these bacteria.  The ticks pick up the bacteria when they bite mice or deer that are infected with Lyme disease. You can get the disease if you are bitten by an infected tick.

Lyme disease was first reported in the United States in the town of Old Lyme, Connecticut, in 1975. In the United States, most Lyme disease infections occur in the following areas:

• Northeastern states, from Virginia to Maine
• North-central states, mostly in Wisconsin and Minnesota
• West Coast, particularly northern California

The purpose of the legislation is to “provide for the expansion of Federal efforts concerning the prevention, education, treatment, and research activities related to Lyme and other tick-borne diseases, including the establishment of a Tick-Borne Diseases Advisory Committee.”  At the beginning of the legislation, the bill sets forth a number of findings related to Lyme disease, including: 

• If Lyme disease does not receive treatment, such individuals can develop severe heart, neurological, eye, and joint problems
• Ticks that spread Lyme disease also spread other diseases, such as anaplasmosis, babesiosis, and tularemia, and carry Bartonella and other strains of Borrelia.
• The Centers for Disease Control and Prevention (CDC) reported more than 38,000 confirmed and probable Lyme disease cases in 2009. Over the past decade, the incidence of Lyme disease has increased by 84 percent. 

Establishment of a Tick-Born Disease Advisory Committee

The legislation would instruct the Secretary of Health and Human Services (HHS) to create within the Office of the Secretary, a Tick-Borne Diseases Advisory Committee (“Committee”).  The HHS Secretary is responsible for appointing members of the Committee who in general must be individuals who are not officers or employees of the Federal Government.  Voting members would include the following:

• Not less than 4 members within the scientific community related to Lyme and other tick-borne diseases.
• Not less than 2 representatives of tick-borne disease voluntary organizations.
• Not less than 2 health care providers, including not less than 1 full-time practicing physician, with relevant experience providing care for individuals with a broad range of acute and chronic tick-borne diseases.
• Not less than 2 patient representatives who are individuals who have been diagnosed with a tick-borne disease or who have had an immediate family member diagnosed with such a disease.
• At least 2 representatives of State and local health departments and national organizations that represent State and local health professionals. 

The Secretary will also designate, as nonvoting, ex officio members of the Committee, representatives overseeing tick-borne disease activities from each of the following Federal agencies: 

• The Centers for Disease Control and Prevention (CDC)
• The National Institutes of Health (NIH)
• The Agency for Healthcare Research and Quality (AHRQ)
• The Food and Drug Administration (FDA)
• The Office of the Assistant Secretary for Health.
• Such additional Federal agencies as the Secretary determines to be appropriate. 

Notably, it does not appear that there will be any industry representatives present on the Committee.  Additionally, it is unclear whether individuals, who have worked developing, researching or consulting about drugs, treatments, or devices related to Tick-Borne diseases, will be able to serve on the Committee.  Presumably, all members will have to meet the federal requirements for conflicts of interest for advisory committees, which will likely mean that many qualified experts in Tick-Borne diseases will be excluded from service.  These rules however, are currently under scrutiny, particularly at the FDA, where the requirement of “fair balance” has been raised.   

The Committee will be Co-Chaired by the Assistant Secretary of Health as well as a Co-Chair selected by the appointed members of the Committee.  Members of the committee are appointed for four (4) year terms.  Additionally, the Committee would be responsible for advising the Secretary and the Assistant Secretary for Health regarding the manner in which such officials can: 

• Ensure interagency coordination and communication and minimize overlap regarding efforts to address tick-borne diseases;
• Identify opportunities to coordinate efforts with other Federal agencies and private organizations addressing such diseases;
• Ensure interagency coordination and communication with constituency groups;
• Ensure that a broad spectrum of scientific viewpoints are represented in public health policy decisions and that information disseminated to the public and physicians is balanced; and
• Advise relevant Federal agencies on priorities related to Lyme and other tick-borne diseases; and

The Committee would also be responsible, in coordination with relevant agencies within HHS, to regularly review published public and private treatment guidelines and evaluate such guidelines for effective representation of a wide diversity of views. 

Meetings, Report, and Appropriations  

The Committee will hold public meetings and must meet at least twice a year with additional meetings subject to the call of the co-chairpersons.  Agenda items with respect to such meetings may be added at the request of the members of the Committee, including the co-chairpersons. 

No later than 1 year after the bill is enacted, and annually thereafter, the Committee, acting through the members representing the CDC and NIH, must submit a report to the Secretary.  Each such report must contain, at a minimum: 

• A description of the Committee's functions;
• A list of the Committee's members and their affiliations; and
• A summary of the Committee's activities and recommendations from the previous year. 

No set amount of money is set out in the bill to carry out this legislation.  It only states, “such sums a may be necessary for each of the fiscal years 2012 through 2016.”  The legislation does note that expenses and per diem costs incurred by the Committee must be in accordance with the Federal Advisory Committee Act except that no voting member of the Committee will be a permanent salaried employee. 

Diagnosis, Surveillance, Prevention and Research 

The HHS Secretary, in coordination with the other federal health agencies, will provide for certain activities and the coordination of all Federal programs and activities related to Lyme disease and other tick-borne diseases.  Activities will include: 

The development of diagnostic tests including

• The development of sensitive and more accurate diagnostic tools and tests, including a direct detection test for Lyme disease capable of distinguishing active infection from past infection;
• Improving utilization of diagnostic testing currently available; and
• Providing timely evaluation of promising emerging diagnostic methods.

Surveillance and Reporting, including:

• Accurately determining prevalence of Lyme and other tick-borne diseases;
• To evaluate the feasibility of developing a reporting system for the collection of data on physician-diagnosed cases of Lyme disease that do not meet the CDC surveillance criteria; and
• To evaluate the feasibility of creating a national uniform reporting system including required reporting by laboratories in each State.

Prevention

• The provision and promotion of access to a comprehensive, up-to-date clearinghouse of peer-reviewed information on tick-borne diseases;
• Increased public education related to Lyme and other tick-borne diseases through the expansion of the Community Based Education Programs of CDC to include expansion of information access points to the public;
• The creation of a physician education program that includes the full spectrum of scientific research related to Lyme and other tick-borne diseases, and, in coordination with the Advisory Committee, the publication of an annual report that evaluates published guidelines and current research available on Lyme disease, in order to best educate health professionals on the latest research and diversity of treatment options for Lyme disease; and
• The sponsoring of scientific conferences on Lyme and other tick-borne diseases, including reporting and consideration of the full spectrum of clinically based knowledge, with the first of such conferences to be held not later than 24 months after the date of enactment of this Act.

-          Clinical Outcomes Research

• The establishment of epidemiological research objectives to determine the long-term course of illness for Lyme disease; and
• Determination of the effectiveness of different treatment modalities by establishing treatment outcome objectives. 

The Secretary must submit to Congress no later than 18 months after the legislation is enacted, a report on the activities, including: 

• Significant activities or developments related to the surveillance, diagnosis, treatment, education, or prevention of Lyme or other tick-borne diseases, including suggestions for further research and education;
• A scientifically qualified assessment of Lyme and other tick-borne diseases, as well as published peer reviewed data, that must include recommendations for addressing research gaps in diagnosis and treatment of Lyme and other tick-borne diseases and an evaluation of treatment guidelines and their utilization;
• Progress in the development of accurate diagnostic tools that are more useful in the clinical setting for both acute and chronic disease;
• The promotion of public awareness and physician education initiatives to improve the knowledge of health care providers and the public regarding clinical and surveillance practices for Lyme disease and other tick-borne diseases; and
• A copy of the most recent annual report issued by the Tick-Borne Diseases Advisory Committee and an assessment of progress in achieving the recommendations included in the Committee's report.

Pharmacy Benefit Managers Proposal to Super Committee: Cut Everyone but Us

 

In an effort to deflect cost cutting heat from PBM's last month, Mark Meritt, President & CEO of the Pharmaceutical Care Management Association (PCMA), wrote a letter to Senator Patty Murray (D-WA) and Representative Jeb Hensarling (R-TX), Co-Chairs of the Joint Select Committee on Deficit Reduction, to offer “debt-reducing solutions that could save the federal government more than $100 billion dollars over ten years in prescription drug costs.” 

PCMA represents America’s pharmacy benefit managers (PBMs), who administer prescription drug benefits for more than 210 million Americans with health coverage provided through Medicare, Medicaid, Fortune 500 employers, health insurers, labor unions, and the Federal Employees Health Benefits Program (FEHBP). 

The letter noted that as administrators of Part D, “PBMs have helped the program beat budget projections and lower expected premiums for seniors.” According to Medicare Trustees, Part D costs came in $53 billion dollars under Congressional Budget Office (CBO) projections in 2010, or 47 percent less than expected. In addition, the average beneficiary premium is roughly 30 percent lower than projected. 

Using innovative cost-saving tools and technologies, PCMA asserted that, “PBMs have worked closely with payers in designing drug benefits that lower costs and expand access to prescription drugs. These tools – including pharmacy networks, home delivery, utilization management (such as step therapy and prior authorization), and formularies – help make prescription drug benefits more affordable.”  PCMA also offered the following recommendations: 

• Modernize Medicaid Pharmacy. Over the next decade, the federal government could save $21 billion – without cutting benefits or payments to doctors and hospitals – by modernizing Medicaid pharmacy benefits. Currently, the program uses fewer generic drugs and pays drugstores more than double the dispensing fees that Medicare or private insurers pay.  
• Maximize Generic and Therapeutic Substitution in Part D. Fully realize the potential savings available as outlined by CBO to increase generic and therapeutic interchange opportunities in Part D by shifting spending from the most expensive single source drugs to equally effective lower cost options. 
• Expedite the Approval of Biogenerics. Increase competition for biologic drugs by reducing the number of years a drug company has “exclusivity” or monopoly pricing power. As the number and costs of these expensive biologic drugs drastically increases, so does the urgency to begin the approval pathway for biogenerics as quickly as possible.  
• Allow Part D Plans to Negotiate Greater Discounts on All Drugs. Increase price competition among brand drug manufacturers by removing the mandate that “all or substantially all” drugs in six protected classes be covered. Manufacturers with a guarantee that their drug is covered have no incentive to offer a discount to Part D plans or beneficiaries.  
• Ban a Tax Deduction for Direct-to-Consumer (DTC) Drug Advertising. DTC drug advertising is a key tool used by brand drug manufacturers to drive consumers to take brand medications and the costs of this advertising are tax deductible. While the First Amendment allows for such advertising, it does not require taxpayers to subsidize promoting the most expensive drug treatments.  
• Encourage Chronic Care Pharmacy and Home Delivery. Currently, due to restrictions in Medicare Part D, beneficiaries in private-sector retiree plans use home delivery four times more often than those in Part D plans. Home delivery is popular with patients because it offers less expensive 90-day prescriptions and is more convenient than driving to the drugstore. With mail-service pharmacies, patients can get private counseling over the phone from trained pharmacists seven days a week, 24 hours a day. Removing Medicare’s restrictions on home delivery and encouraging beneficiaries to get their maintenance medications by mail could improve drug adherence and save Medicare hospital and physician costs.  
• Ban Pay-for-Delay Drug Settlements. Currently, brand drug companies are making deals with generics to delay offering a competing generic, allowing the more expensive brand drug to stay on the market for a longer period of time, resulting in higher costs. Prohibiting pay-for-delay agreements would facilitate quicker access to lower-cost generics.  

While it is certainly noble of PCMA to propose such ideas to reduce the deficit, some of their recommendations are problematic because they put the health of patients at risk and make it more difficult for the life sciences industry to do business in America.  As we are already seeing clinical trials and companies move jobs and manufacturing sites outside of the US, following some of PCMA’s recommendations would lead to further job loss and Americans would lose the taxes and earnings companies would produce.  

Specifically, we should not be motivated by saving money and switching patients onto generics if that puts a patient at risks. Putting patients onto generics is a decision that a physician makes with his or her patient, not because an unelected bureaucrat wants to save a few pennies.

Moreover, advertising is a crucial part of making the public and doctors aware of new products and treatments for patients created by the pharmaceutical and medical device industry.  Advertising on major cable networks and publications is extremely expensive.  Taking away the tax break for this kind of advertising—without any substitution, such as the use of online advertising, for which there is no FDA guidance—would mean higher costs for companies, which could lead to even higher drug costs. In addition, this should be of small concern to PCMA considering at least 75% of all medicines prescribed in the US are generics, and thus, such advertising has minimal effect on the prescribing of brand name drugs.

We all agree that Congress needs to control spending in America and reduce our deficit. However, this should not come at a cost to patients or to the companies that are trying to save Americans lives and make us healthier.  The pharmaceutical and medical device industries are two of the strongest sectors in America and the world.  The jobs they produce are high quality and the products they make are lifesaving and changing.

Instead of thinking about ways to squeeze more money out of these companies, thereby sending their investments, spending, and jobs abroad, Congress should be thinking about how to attract life science companies into our markets to encourage job and market growth, which will help with the deficit.

The Prescription Drug Cost Reduction Act

In an attempt to address federal spending and budget concerns, United States Senator Herb Kohl (D-WI) recently introduced legislation seeking a wide range of drug cost cuts, including a proposal to require drug manufacturers to provide Medicare Part B with the same discounts Medicaid receives. 

In a letter he sent to Senator Patty Murray (D-WA) and Representative Jeb Hensarling (R-TX), Co-Chairs of the Joint Select Committee on Deficit Reductions, Kohl offered eleven policy proposals, which he claimed “would reduce federal spending by well over $140 billion” to help address the Joint Committee’s mandate to cut $1.5 trillion.

The legislation, known as “The Prescription Drug Cost Reduction Act,” provides a number of opportunities to significantly reduce the cost of health care without pushing those costs onto consumers or limiting access to care," Kohl said.  The bill along with a proposal to close a tax loophole on life settlements transactions are included as recommendations to the Joint Committee from Kohl in his capacity as chairman of the Committee on Aging.  

Kohl's Prescription Drug Cost Reduction Act includes six cost-cutting policies that were considered as part of a Senate Special Committee on Aging hearing in July as well as language that would require drug manufacturers to provide Medicare Part B with the same rebates Medicaid receives.

Under the current law, the Centers for Medicaid and Medicare Services (CMS) Office of the Actuary projects the total cost of Medicare Part B drugs at $170.4 billion over the next 10 years. If a 21 to 26 percent savings was realized for all drugs under Medicare Part B, the resulting rebate savings would total between $36 billion and $44 billion over the next 10 years.

“Cost-Saving Policies”

In addition to the Medicare Part B proposal, Prescription Drug Cost Reduction Act includes six other cost-cutting policies that would:

Get generics to the market sooner by ending pay-for-delay settlements.  Kohl pointed to the “bipartisan Preserve Access to Affordable Generic Drugs Act (S. 27), which would combat pay-for-delay settlements used to keep lower-cost generic drugs off pharmacy shelves.”  The bill would make such deals illegal and give the Federal Trade Commission (FTC) the authority to challenge them in court.

Allow Medicare to directly negotiate drug prices in Medicare Part D.  The Prescription Drug Price Negotiation Act (S. 44) would allow “the negotiation of Medicare Part D prescription Drugs, and would give the Secretary of HHS negotiation authority.

Require prescription drug manufacturers to provide discounted medications to low-income Medicare recipients.  The Medicare Drug Savings Act (S. 1206) would increase the discounts Medicare receives on prescription drugs for low-income individuals enrolled in Medicare Part D.  Kohl projected this provision would save $112 billion over 10 years.

Require drug manufacturers to pay rebates for Medicare Part B drugs.  Kohl noted that an analysis done by Department of Health and Human Services Office of Inspector General (HHS OIG), showed that up to $2.4 billion would have been saved on just the 20 costliest drugs last year if the manufacturers of Medicare Part B drugs had been required to pay the same rebates required under Medicaid. These savings represent up to 26 percent of the $9.2 billion that Medicare and its beneficiaries paid for the 20 drugs in 2010.

Allow Medicare to negotiate drug prices in Medicare Part B when it is the majority purchaser.  Current law bars CMS from negotiating the prices for physician-administered drugs within the Medicare Part B program, even when the government is the primary consumer of a specific drug-sometimes over 90 percent of the market share.  This policy would allow the federal government to negotiate with a pharmaceutical company when Medicare is the majority purchaser of their drug.

Allow CMS to pay the same price for drugs that are similar.  For 15 years, Medicare used an authority called "least costly alternative" (LCA) to ensure that CMS, beneficiaries and taxpayers did not pay more for a drug when a similar, cheaper drug produced the same result.  Unfortunately, a recent court decision held that CMS lacked the statutory authority to exercise LCA.  This policy would provide CMS with the authority to use the LCA policy for pricing similar drugs in Medicare.  A report by the HHS OIG estimated a savings of $40 million per year with the institution of an LCA for just two drugs used to treat prostate cancer - Lupron and Zoladex.  

Reduce incentives for doctors to prescribe high cost drugs over safe, effective and cheaper generic drugs. Currently, doctors receive a payment of 6 percent of the price of a drug administered to a patient under Medicare Part B. This provides a strong incentive to use the most expensive, brand name drug available instead of the less expensive generic drug, and raises the cost of drugs for Medicare recipients, taxpayers, and the federal government.  This policy would create a more equitable payment structure for the drugs that eliminates the disincentive to prescribe lower-cost, equally efficacious drugs.

Minimize costs by requiring transparency from Pharmacy Benefits Mangers (PBMs).  By acting as the middlemen between insurers and drug companies, PBMs manage drug benefits for the federal government and most employers.  PBMs negotiate drug prices, formularies and pharmacy payments for health plans.  Drug companies often pay PBMs to promote their drugs within formularies and to increase the utilization of a drug - but PBMs are under no obligation to disclose these payments to their clients. These payments can lead to higher drug costs for taxpayers and consumers, and some states have already pursued savings in this arena.  This policy would require PBMs to disclose payments received from drug companies to employers or the federal government and would boost transparency and help to minimize costs.

Guard against the unnecessary prescription of dangerous and costly drugs for nursing home residents. This policy would require physicians to complete a written certification form before prescribing atypical antipsychotics for nursing home residents.  This policy in response to a report from HHS OIG, which found that nearly 1.4 million Medicare claims for atypical antipsychotic drugs were prescribed off-label for elderly nursing home residents, costing taxpayers hundreds of millions of dollars for these drugs over a six-month period.

Expand a current drug discount program (340B) to long term care programs and safety net hospitals. This policy would allow the federal integrated care program for dually eligible beneficiaries Program of All-Inclusive Care for the Elderly (PACE) to directly purchase pharmaceuticals through the "340B" discount program, which is used by Community Health Centers to purchase drugs. The program provides drugs at a much lower cost than Medicare and, in some cases, at costs lower than Medicaid. This policy is structured so that most of the savings would be realized by Medicare, with a portion available for PACE plans meeting certain requirements.

Discussion 

While the policy proposals contained in Kohl’s letter provide a starting point for the government to try to reign in health care costs, a number of these bills are problematic.  

First, to give doctors disincentives for prescribing brand name drugs is troublesome for a few reasons.  In America, we already prescribe over 75% of generic drugs, so brand name drugs are not the problem.  Moreover, the cost of drugs only accounts for 10 cents out of every dollar spent on healthcare, so reducing these 10 cents is also not significant.  More importantly however, is the fact that the federal government is now putting external and economic pressure on physicians to choose their prescriptions. 

In effect, the government is telling doctors, which drugs to prescribe and not, a mild form of government controlled health care.  Doctors who are already facing low reimbursement rates and high costs for insurance and other resources will be forced to choose drugs under a plan that will give them the best reimbursement, which does not necessarily mean they are best for the patient.  

Finally, what is problematic about just this proposal is that it could potentially lead to newer treatments and products being delayed.  It can take up to a decade for a new drug, device, product or treatment to go from the bench to the bedside and be fully implemented into practice.  Education, training, research, journals, and numerous other aspects of a new product must get into practice before a doctor can implement new treatments.  This legislation would impose a significant burden on the process of disseminating new information to doctors if those clinicians are faced with a strong economic incentive not to learn or use new treatments.  This will slow down the pace of science, medicine and healthcare, and could ultimately lead to greater costs to our system for not adopting the newest and best treatments. 

As industry, insurance, and trade organizations begin to analyze these provisions, we will provide updates on the comments and responses to these broad and sweeping proposals. 

While it is important to control spending and costs, sacrificing the freedom and ability to have the best treatments and products should not be an option.  Doctors need the freedom to do what is best for their patients, without worrying about even more controls on reimbursement and pricing.  Patient-centered care must come first.  The priority should be how to best improve the health and life of a patient.  Controlling the healthcare system through an economic lens will lead to rationed care and a focus on the dollar, not the patient.

MedPac Recommends Ending The Doc Fix by Reducing Specialists Pay

Recently, the Medicare Payment Advisory Commission (MedPac) voted 15 to 2 to recommend a "doc fix" for the Medicare reimbursement crisis that organized medicine views as the makings of another crisis.

MedPac is an independent Congressional agency established by the Balanced Budget Act of 1997 (P.L. 105-33) to advise the U.S. Congress on issues affecting the Medicare program. The Commission's statutory mandate is quite broad: In addition to advising the Congress on payments to private health plans participating in Medicare and providers in Medicare's traditional fee-for-service program, MedPAC is also tasked with analyzing access to care, quality of care, and other issues affecting Medicare.

The MedPac plan, which requires Congressional approval, would repeal the controversial sustainable growth rate (SGR) formula for setting physician reimbursement and avert an SGR-triggered pay cut of 29.5% on January 1.

Several large medical groups including the American College of Cardiology (ACC), American Medical Association (AMA), and the American Osteopathic Association (AOA) have come out against the MedPac proposal already.

MedPac Proposal

To offset the estimated $300 billion price of this "doc fix," as it is called on Capitol Hill, MedPac recommended freezing reimbursement rates for primary care physicians for 10 years while cutting rates for specialists by 5.9% for 3 straight years, followed by zero growth during the next 7 years.

According to an article in Medscape, written by Peter Carmel, MD, “pinching Medicare rates this way would raise roughly $100 billion toward financing the doc fix.  MedPac comes up with another $235 billion in proposed cuts to Medicare Part D drug plans, post–acute care facilities, hospitals, laboratories, suppliers of durable medical equipment, Medicare Advantage plans, and other providers, along with reduced benefits for seniors.”

MedPac recommended this package of measures despite dire warnings from organized medicine that the proposed cut-and-freeze approach to rates would drive many of their members out of Medicare and jeopardize access to care for seniors. Medical societies have routinely predicted the same scenario if SGR-triggered pay cuts were to take effect.

In an October 3 letter to MedPac, AMA and 42 other medical societies criticized the proposal, pointing out that since 2001, Medicare reimbursement rates have increased by 4%, but practice costs have grown 6 times as fast, at 24%.  The commission's reimbursement proposal, they argued, would put physicians further in the hole as practice costs continue to rise, making it harder for them to invest in the kind of care coordination, chronic disease management, and quality improvement envisioned in healthcare reform.

Compounding the payment cuts proposed by MedPac are other Medicare policies that could reduce physician reimbursement, according to the medical societies.  Some of those could take the form of penalties for not reporting quality measures to the Centers for Medicare and Medicaid Services (CMS) or for not adopting electronic health record technology, both of which require physician investment.

Response to MedPac Proposal

Medical societies have responded in disapproval to the MedPac proposal.  American College of Cardiology (ACC) CEO, Jack Lewin, MD, asserted that the ACC “strongly opposes the MedPAC proposal as a solution to the flawed SGR physician payment formula.”  He maintained that the “proposal is not an acceptable or sustainable solution to the SGR and does nothing to promote quality or resource stewardship.” 

He further added that the proposal “somewhat misaligns the interests of primary and specialty doctors, rather than focusing on incentives to work together to improve quality, efficiency, coordination of care, and outcomes.”  Instead, he called on Congress to replace the SGR with “a payment system that promotes high quality, cost effective care,” and to look “for a more viable solution to the SGR since if implemented, the proposal will cause some real problems by placing a major divide in medicine, hurting Medicare beneficiaries’ access to medical care, and inevitably leading to higher costs of care.”

It was noted that, “Dr. Lewin's remarks reopen a traditional rift between primary care physicians and their specialist kin about who is getting a fair shake in Medicare reimbursement policy. The MedPac plan places most of the financial sacrifice on specialists, because the services subject to 3 straight years of cuts account for 92% of Medicare spending on physician services.”

Similarly, “The American Osteopathic Association (AOA) believes that this proposal would have a chilling effect on our health care system, particularly on Medicare and its beneficiaries.”  AOA was troubled that the proposal “would divert so dramatically from its longtime position that all physicians participating in the Medicare program should receive annual increases in their payments.”  Specifically, AOA opposes cuts to other physician services as a means of financing such increases. 

Other medical societies have argued that instead of asking physicians to make unreasonable sacrifices, Congress could finance a doc fix with other budget offsets already identified by the Congressional Budget Office, the Senate "Gang of Six, and the presidential deficit reduction commission.

"The AMA strongly opposes the Medicare physician payment recommendation voted on by MedPAC," said AMA President Peter Carmel, MD, in a press release. "Offsetting part of the cost of [the SGR formula] repeal through drastic cuts and long-term freezes to physicians falls far short of what is needed to preserve patients' access to care.

The American College of Emergency Physicians, the American College of Physicians, the American College of Surgeons and the American Psychiatric Association, also sent MedPac a letter urging a revision of the commission’s September proposal.  The groups asserted that they could not “support this plan in its present form because it retains many of the SGR’s flaws, undermines physicians’ ability to participate in payment and delivery reforms and calls for payment rates that the Commission itself has previously said could reduce Medicare beneficiaries’ access to medical care.”

The president of ACP noted that, under MedPAC's proposal, “primary care physicians would actually experience a net loss, as their payment updates would not be aligned with inflation. In addition, ancillary services and possibly hospital visits by primary care physicians would experience a cut of almost 17 % over the next three years.”

Opponents also fear that implementing the MedPAC Proposal “could hurt the new payment systems Medicare is trying out, such as accountable care organizations (ACOs).  “Even at currently projected benchmarks based on today's payment rates, interest in forming ACOs has been limited," the letter argued. "It is hard to see how a benchmark that assumes a 10-year freeze in physician updates would improve the prospects for shared savings that might mitigate the impact of payment reductions."

Conclusion

There is a reasonable chance that the Congressional Joint Select Committee on Deficit Reduction, the so-called super committee, which is tasked with recommending $1.5 trillion in savings that Congress must enact by December 23, will take up the MedPac proposal.  However, “organized medicine is lobbying the super committee to repeal the SGR formula, but not pay for it MedPac-style.”

Patient Groups Encourage Congress to Remove Burdensome FDA Rules

Patient organizations are encouraging congress to drop burdensome conflict of interest quotas on FDA advisory panels which are causing severe shortages of qualified committee members. 

Earlier this month, a group of patient foundations expressed their “deep concerns” about the issue of “current conflicts of interest statutory provisions and their impact on the appointment of experts, particularly researchers and patients, as Special Government Employees (SGE’s) on Food and Drug Administration (FDA) Advisory Committees and as otherwise needed.” 

Specifically, a coalition of over 80 organizations sent a letter to Senators Tom Harkin (D-IA) and Michael Enzi (R-WY), the Chairman and Ranking Member of the Senate Committee on Health, Education, Labor and Pensions (HELP). 

Each of these “organizations promote efforts to bring better treatments and cures to those struggling with diseases” however, “many of these conditions have no adequate treatments and, therefore, it is imperative that we challenge hurdles that impede the quality and efficiency of the treatment development process.” 

The groups recognized the importance of having protections in place when persons are appointed to positions where their own financial interests might influence their service to the federal government.  Nevertheless, they maintained that, “the current conflicts of interest statutes that apply to FDA have resulted in a system that is out of balance to the point that conflict avoidance is the primary driver of who serves on Advisory Committees, regardless of the extent of the conflict, the uniqueness of their expertise, or the government’s need for their services.” 

The groups explained how FDA SGE’s are subject to an additional layer of statutory conflict of interest provisions beyond those that already govern SGE’s for all other departments and agencies in the executive branch.  Specifically, under current law, the FDA must analyze potential committee members pursuant to Section 712 of the Food, Drug, & Cosmetic Act (FDCA), in addition to the government-wide provisions found in the Federal Advisory Committee Act and the Ethics in Government Act of 1978. 

The letter asserted that, “This additional FDA-specific provision appears to drive the FDA to look only for individuals to serve as SGE’s who have virtually no financial ties to any issue that might be addressed by a given Advisory Committee.” 

“While that may sound wise at first glance, in fact those with expertise in a given area often have foreseeable and unavoidable ties to the community as a result of their expertise,” the groups asserted. “Yet, under the current structure, the FDA is not allowing those individuals to serve as SGE’s, despite the fact that by doing so the FDA is being deprived of expertise by those who are best qualified.” 

Two years ago, 218 positions of the 600-plus on FDA's 49 advisory committees had yet to be filled, in part because the FDA tightened guidelines in 2007 to minimize industry ties that could sway a panelist's view.  This kind of absence rate is extremely disturbing for patients who are waiting for new treatments and products to be approved. 

While supporters of the tightened rules said they were necessary to protect the public from bias and to remain objective, a study published over five years ago dispelled these concerns.  Specifically, a study published in 2006 in the Journal of the American Medical Association (JAMA) examined a total of 221 meetings held by 16 drug advisory committees.  Overall, the study reported that the meeting-level analysis did not show a statistically significant relationship between conflict rates (“index conflict,” “competitor conflict,” or “any conflict”) and voting patterns.  From these findings, the researchers concluded that excluding advisory committee members and voting consultants with “conflicts” would not have altered the overall vote outcome at any meeting studied.

In the past few weeks and months, we have seen a renewed focus on FDA’s conflict of interest rules, with FDA Commissioner Dr. Hamburg and Janet Woodcock, Director of the Center for Drug Evaluation and Research (CDER), coming out publicly and announcing that the agency needs to address these provisions.  In fact, Woodcock acknowledged that, “the [conflict of interest] limits have slowed down the advisory committee process.” 

Moreover, several pieces of legislation in both the Senate and House were recently introduced, which would restore the appropriate balance to conflicts of interest requirements by requiring the FDA to be subject to the same conflicts of interest requirements as the rest of the federal government, under the Federal Advisory Committee Act.   

Consequently, these patient groups added their support “to eliminate the additional conflicts of interest restrictions that apply only to the FDA.”  Specifically, the groups maintained that, “the existing provisions in the Federal Advisory Committee Act and the Ethics in Government Act of 1978 are adequate to safeguard against conflicts of interest, while still allowing those with the necessary expertise and perspective to serve on these very important committees.” 

Moreover, the groups acknowledged that, “the specific standard for SGE’s found in 18 U.S.C. 208(b)(3) recognizes that potential SGE’s may have conflicts of interest, but allows for their service nevertheless when the need for their services outweighs the potential for a conflict of interest created the financial interest involved.” 

This “standard is clear, reasonable, and balanced and appropriately recognizes that some potential SGE’s may come to the FDA with ties to the community that may pose some conflict of interest, but that the primary issue must be the government’s need for their services.” 

Ultimately, the groups recognized that, “The main goal of these committees, after all, is to help the FDA to make the best decisions possible” and “FDA can only do that if it has the best, most well-informed researchers, clinicians, and patients advising it.”

As more patient groups, legislators, and healthcare stakeholders begin to press FDA and Congress to change the current conflict rules at FDA, it is becoming more likely that the currently proposed legislation noted above will be included in the PDUFA V negotiations, especially given FDA’s recent proposals to increase and enhance innovation.