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

Conclusion

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

 

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