Life Science Compliance Update

June 05, 2017

PhRMA Expels Members from Its Ranks


Recently, industry group Pharmaceutical Research and Manufacturers of America (PhRMA) expelled twenty-two members who did not meet new criteria for membership. On May 9, 2017, the PhRMA board of directors approved the new criteria for membership, which requires biopharmaceutical companies to now meet new research and development requirements in order to be eligible to join PhRMA.

Over the last three months, the leadership of the PhRMA board of directors conducted a comprehensive review of its membership criteria to ensure the association represents companies that are dedicated to researching and developing new, cutting-edge therapies for patients. Following this review, the board voted to eliminate the “associate” category of membership and to require companies to meet the following to be eligible to join the association:

  • A three-year average global R&D to global sales ratio of 10 percent or greater; and
  • A three-year average global R&D spending of at least $200 million per year.

The new membership criteria go into effect immediately.

Because the “associate” category of membership has been eliminated entirely, those 15 companies are no longer members, though they have the option of applying for full membership if they are eligible. In addition, seven existing full member companies are no longer eligible for membership, because they do not meet the new criteria. These numbers are based on membership as of January 1, 2017. Companies can reapply for membership as they meet the new criteria.

Some believe this is an attempt by PhRMA to distance itself from companies that are most likely to come under fire for drug pricing practices. While not all of those that were dropped have price-pushing reputations, the practices of some that were dropped are particularly notorious for their methods.

Notably, however, most PhRMA member companies invest significantly more in R&D than required by the new criteria. On average, PhRMA members invest 20 percent of their revenue in R&D, and the biopharmaceutical sector accounts for 17 percent of all domestic R&D funded by U.S. businesses – far more than the software (13 percent), automobile (5 percent) and aerospace (4 percent) industries.

Advances in biopharmaceutical science are the result of a long, complex, and costly R&D process. It takes, on average, more than a decade and $2 billion to research and develop a new medicine, and 9 out of 10 medicines entering clinical trials never make it to patients.

Some of the companies that are no longer considered members of PhRMA include: Horizon Pharma plc, Mallinckrodt Pharmaceuticals, ACADIA Pharmaceuticals Inc., Ferring Pharmaceuticals Inc., and Shionogi Inc.

According to Joaquin Duato, PhRMA board chairman and worldwide chairman, pharmaceuticals, Johnson & Johnson, “By putting in place new membership criteria, the board is sending a clear message that being a member of PhRMA means being committed to doing the time-intensive, scientifically sound research it takes to bring bold new advances in treatments and cures to patients.”

“We believe our association is best positioned to represent companies that are swinging for the fences and making the long-term investments needed to tackle the biggest challenges facing patients,” said Stephen J. Ubl, president and chief executive officer of PhRMA. “Advances in medical discovery are the result of collaboration across the complex ecosystem. There is a lot of exciting science happening at emerging biopharmaceutical companies, and as those companies grow and build out their R&D infrastructure, we hope they will choose to join PhRMA.”

May 12, 2017

MedPAC Discussed Medical Devices at April Meeting


During the Medicare Payment Advisory Commission (MedPAC) April meeting, Commissioners discussed the medical device market. Since the medical device market is not a primary focus of the Commission, MedPAC staff made sure to introduce statistics on the industry at the beginning of their presentation. The discussion on possible policy changes revolved around four issues: unique device identifiers (UDIs); gainsharing; price transparency; and physician-owned distributorships (PODs). While no immediate action is expected from the Commission, commissioners were generally in favor of considering policy changes in all four areas, especially with respect to implantable medical devices (IMDs).

During the discussion, Commissioner Rita Redberg, Professor of Clinical Medicine at the University of California of San Francisco, took a sharp tone, stating that the United States “uses more devices and pays more for them” than comparable industrial countries. One reason for that dilemma, she explained, was the slow approval process at the Food and Drug Administration (FDA) and the Medicare requirement for randomized controlled trials before devices hit the market. She noted that post-market trials were a good idea to speed the process, but that more data was needed on the devices’ failure rate and their impact on health outcomes.

The language used by Commissioners against PODs was consistent and vigorous, as Commissioners took issue with their general existence. Commissioner Warner Thomas of Oschner Health System urged the Commission to take a “harder approach” on PODs and noted that he could see no way that they were helpful for the program or beneficiaries. Commissioner Jack Hoadley of the Health Policy Institute at Georgetown University summed up the Commission’s thoughts by saying that “many of us are wondering if there’s any good reason for PODs to exist.” Chairman Jay Crosson, a former executive at Kaiser Permanente, said that addressing PODs may be “one of the easier areas” to address through MedPAC.

While the Commissioners did not like PODs, they were generally supportive of an increased use of UDIs, though they did not endorse a particular method. Chairman Crosson said that “bang for buck” will be an important consideration going forward. Vice Chairman Jon Christianson of the University of Minnesota said that UDI was a “quality issue” and that it was “clear” that the Commission needed to find a way to connect Medicare and the medical device industry.

Commissioners also largely endorsed the notion of aligning incentives for physicians and hospitals in device procurement, with Chairman Crosson saying that the Commission should “make suggestions on how it could be improved.” In addition, Commissioner Thomas said that Commission should consider a 340B program for medical devices similar to the current program that allows certain hospitals to purchase drugs at a discounted rate.

Chairman Crosson and Executive Director Mark Miller also noted their belief that the Commission could focus on the IMD market, given the costs involved. Commissioner Paul Ginsburg of the Brookings Institution said that price transparency would depend on the concentration of the market and that MedPAC should explore whether Medicare can collect price data and share it confidentially to hospitals and providers. He also endorsed mandatory warranties from manufacturers to help offset costs for hospitals dealing with the fallout of failed devices.

April 19, 2017

New Documentary on Difficulties Faced by Patients With Chronic Pain


Dr. Lynn Webster of Utah recently produced a documentary about pain treatment. The documentary, “The Painful Truth,” can be found online and on public television stations across the country and provides insight into the difficulties patients run into when trying to find effective treatment for chronic pain.

The patients featured in “The Painful Truth” include some who are fearful of losing access to opioid treatment, as well as those who say some doctors have refused to treat them and pharmacies have balked at filling their prescriptions. The apprehension among some pain patients that they won’t be able to get opioids has been reported in several media outlets, including STAT.

Webster acknowledged that several of the patients in his documentary are “miserable” even while taking opioids, and the documentary makes the point that better treatments are desperately needed. For now, however, he said opioid medications are often the best of several flawed options.

“With all of the focus on opioid addiction, we are forgetting many people with pain who have benefited,” he said. “It’s the only thing that keeps them from suicide.”

Critical Article from STAT

I was a fan of the author David Armstrong when he wrote for Wall Street Journal. However, his recent article on Lynn Webster’s documentary starts out with guilt by association. Roughly a year ago, Lynn called me and asked for advice on how to promote this documentary. At that time, he was passionate about the way pain management patients and their physicians are being unfairly shunned by society. 

Armstrong notes that Dr. Webster and several of the experts he quotes in the program have long-standing financial relationships with pain medicine makers. When asked why these relationships are not disclosed to viewers, Webster told STAT that he did not receive any drug industry funding for the documentary. He said it was funded entirely by himself and his wife.

“I am cognizant of that issue, but I think I dealt with it as carefully as I could,” he said in an interview. If viewers want to know whether any of the individual doctors associated with the documentary have financial relationships with pharmaceutical makers, Webster said they can search for that information on the web.

Dr. Webster Paid for the Documentary Himself

I encourage the media to call Lynn and hear why he did this documentary and paid for it out of his own pocket.  Yes, Lynn worked for industry but that is by no means his primary motivation to do this documentary. Go spend some time in a pain clinic and meet some patients who are truly in pain, this is by no means a binary issue.

“There are dozens of important stories about people with opioid addiction almost daily but rarely is there a story about people in pain,” Webster said in an email to STAT.

Does the Media Own Some Part of the Opioid Crisis?

It hit me recently that the Media needs to take some responsibility for the Opioid crisis, in 2004 when the Cox 2 inhibitors were slammed as “unsafe” there was no thought to what other alternative therapies that were available to alleviate pain.  Had the media or the medical community for that matter, paid just a little attention and thought, the best Cox 2 inhibitors would have been hugely successful and companies would have reaped the benefit, but the opioid crisis might never have happened.

Comments from Tom Fogarty, MD

We reached out to Tom Fogarty, Founder of the Fogarty Institute and inventor of the catheter, who stated,

Opioid addiction is a serious and worldwide problem that is ever increasing.  The reasons are multi-factorial, unfortunately a minority of physicians are responsible for this.  A doctor’s sole purpose is to relieve pain and suffering and the vast majority adhere to that doctrine. The minority who knowingly do not, should be investigated and corrected.  Continued excessive use of opioid prescriptions (easily documented) should be followed by fines and some other forms of punishment imposed upon the responsible physician.  Chronic addiction to opioids and other drugs should be handled by specialists in the field of pain management.  Dr. Lynn Webster and others should be looked to for resolution of these problems.  The majority should not be punished, that is our patients, by inappropriate laws or recommendations.

Viewpoints Should Not Be Discounted Because of Past Work History

It always bothers me when I see someone’s viewpoints discounted simply because they have worked for industry in the past. The author is capable of doing better work.

Further, Aaron Pruitt, director of content at MontanaPBS, said he was “not aware” of any financial connections between Webster and companies that make opioid pain relievers. “If there is some evidence of that, I have seen nothing,” he said. After being directed to public disclosures of those relationships, Pruitt wrote in an email, “As far as I can tell, he has been working with companies to find safer, less addictive treatments for patients.”

In a pitch to television stations offered the documentary, the distributors write that “NETA and MontanaPBS have carefully reviewed The Painful Truth, and the credentials of Dr. Webster. We have found Dr. Webster to be one of the country’s experts on pain treatment, a past president of the American Academy of Pain Medicine, and an advocate for the safe prescription of opioids.”

Disclosure: the company I own, Rockpointe, receives grants from pharmaceutical and device manufacturers for accredited educational programs.


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