Life Science Compliance Update

November 11, 2016

A Win for Patients: Prop 61 in California Rejected


We recently wrote about Proposition 61 in California – a measure that would have required drug makers to provide large discounts to state agencies that serve HIV patients, retirees, inmates, and low-income residents. On Election Day, after months of campaigns (both for and against the Proposition), California voters rejected the measure by a vote of 54% to 46%.

As we have previously noted, the law, while it may sound good in theory, had the potential to force the pharmaceutical industry to raise drug prices for veterans and others who benefit from public assistance programs in California.

Diverse Viewpoints

Known as one of the most expensive ballot propositions in the history of California, proponents pulled out all their stops in an attempt to pass the measure, even airing television ads and bringing Bernie Sanders in to hold rallies in Los Angeles and Sacramento. During a November 7 rally, Sanders closed his remarks by saying Proposition 61 “could be the shot heard ‘round the world,” referring to the domino effect in pricing that the measure’s proponents had been touting. Proponents felt that if they pegged California state agencies to the VA’s price scale for drugs, that it would serve as an example to all state Medicaid programs in the country, and thereby indirectly lower the prices for drugs paid by private insurers.

It wasn’t just the pharmaceutical industry that opposed the measure, however. California citizens who opposed the measure believed that the pharmaceutical companies would have shifted their losses onto the backs of consumers who would not be covered by the measure. Many patient advocacy groups also came out against the measure, as it was entirely possible to them that they settle on drug pricing of medicines that are less costly, more easily accessible, and dangerous to patients.  

Rollercoaster of Polls

As recently as just two months ago, the proponents were ahead by a 2-to-1 margin, according to a USC Dornsife/L.A. Times poll conducted September 1 through September 8. That poll found that a full two-thirds of California voters supported Proposition 61.

Following that poll, pharma and its partners “turned up the heat” and spent an additional $22.3 million in advertising against the proposition. It wasn’t just Pharma that opposed the proposition, however. The California Medical Association, representing the interests of over 43,000 California physicians, as well as essentially every veterans organization, who argued that the measure would have prompted drug companies to boost their prices on veterans, even though federal law protects veterans from price hikes on medicine.

Even in the end, the defeat was surprising to many that were paying attention, especially when you take into consideration that polls taken earlier in the falls showed widespread support for the initiative. The measure was introduced in the midst of the widespread backlash to rising drug prices.


According to Darius Lakdawalla, a health economist at the University of Southern California, “there are so many forces that are aligning for some kind of public policy or regulation on pharmaceutical devices. I don’t think this “no” vote really stops that. There’s too much frustration.”

November 10, 2016

FDA Off-Label Hearing: Day One


Yesterday, the Food and Drug Administration (FDA) kicked off a two-day public meeting to review the extent to which off-label information about medicines may be disseminated to physicians. The meeting opened with Dr. Robert Califf, Commissioner of the FDA, making brief opening remarks, followed by a slew of individual presentations.

The presentations were limited to eight minutes (joint presenters were given 16 minutes) and included speakers such as Mr. Michael Labson of Covington & Burling LLP, on behalf of Pharmaceutical Research and Manufacturers of America (PhRMA); Ms. E. Cartier Esham with the Biotechnology Innovation Organization (BIO); Ms. Khatereh Calleja of the Advanced Medical Technology Association (AdvaMed); Dr. Andrew Koenig of Pfizer Inc.; Dr. Edith Perez with Genentech; Dr. John Kamp with the Coalition for Healthcare Communication; and Ms. Jennifer Graff of the National Pharmaceutical Council.

The public hearing comes amongst a growing tide of court decisions and settlements that affirm the First Amendment right of pharmaceutical and medical device companies to engage in truthful, non-misleading speech about approved products, including off-label conditions of use.

Concerns of Both “Sides”

One of the FDA’s chief concern is that public health may be compromised if a company communicates an unapproved use that has not been confirmed to be safe or effective. According to Michael Carome, director of Public Citizen’s Health Research Group, “It is tremendously important that the FDA strongly regulate manufacturer communications regarding unapproved uses of approved or cleared medical products to protect public health. Without strong limits on such industry communications, our long-standing regulatory framework for ensuring that drugs and medical devices are safe and effective for their intended uses would be undermined, threatening patient health.”

Industry, on the other hand, is concerned that public health may be compromised if a company is not permitted to communicate relevant, truthful, non-misleading and clinically-proven information – even if the use is unapproved.

Deputy general counsel of BIO, Deborah M. Shelton, believes, “Removing current regulatory barriers, and clarifying the ability of companies to share truthful and non-misleading information about medicines, is essential to our collective ability to realize the full potential of 21st century medicines and helping to ensure that patients are able to get the right medicines at the right time for them.”


What is the FDA Looking For?

The FDA sought responses to a variety of questions, including: (1) how increased communications from firms about unapproved uses impact the public health and how it might differ across different categories of medical products and categories of communications; (2) what kind of information or systems currently exist to help the FDA determine how firms’ increased communication of information about unapproved uses could affect prescribing and medical product development and research; (3) whether or not there should be different approaches for different categories of medical products (i.e., human drugs and biologics, medical devices, animal drugs), or for different disease areas or patient populations; (4) what standards should apply to unapproved use communications to minimize the potential of these communications to be misleading or otherwise cause harm; and (5) what standards should the FDA otherwise use to determine whether or not the communications are truthful and non-misleading, including disclosures.

Consumer Reports

A Consumer Reports survey showed that a majority of Americans do not like the idea of allowing pharmaceutical companies to advertise a drug for a use that has not been approved by the FDA. Consumer Reports spoke at the meeting, calling on the FDA to maintain its ban on the “off-label” promotion of drugs and medical devices.

PhRMA Statement Released

In addition to Mr. Labson’s comments at the hearing, PhRMA president and CEO Stephen Ubl released a statement, noting that,

As the U.S. health care system evolves to become increasingly focused on value, patients, payers and providers seek more science-based safety, effectiveness and economic information about existing and emerging treatments for patients. The market for medicines is changing rapidly as alternative payment models proliferate and novel decision tools like value frameworks are being applied. Increasingly, prescribing decisions are made not by independent physicians, but influenced by the integrated delivery systems in which they practice or by financial incentives created by powerful health plans. In this changing environment, it is important that biopharmaceutical companies be able to share appropriate science-based information with population health decision makers, yet the U.S. Food and Drug Administration’s (FDA) current federal regulations have not kept up with this new reality.

Ubl continued, noting,  

Given our increasingly data-driven, value-based health care system, we hope the FDA will adopt a stepwise approach in defining new and clearer regulatory standards to permit responsible sharing of information and data about medicines with other parties in the health care system. The FDA should start by clarifying rules around information sharing with insurance companies and other population health decision makers by the end of the year. Such clarification – also requested by stakeholders in the insurance industry – will help improve the efficiency of our health care system and facilitate increased value-based care.


While any policy changes will not be immediate, the public meeting shows that the FDA is interested in listening to stakeholders, allowing them face time to speak and meet with FDA officials. Any change – even a small change – has the power to influence what kind of information patients receive on drugs and devices, and industry and the FDA have a responsibility to ensure public health remains a priority.

October 31, 2016

Open Payments Having an Adverse Effect on Physician-Rep Relationships


Open Payments, a program created by the Physician Payments Sunshine Act (part of the Affordable Care Act) has started to come between drug representatives and physicians. For quite some time, physicians and pharmaceutical reps have had a warm relationship, with the latter coming to the offices of the former, bringing food, small gifts (i.e., pens), and educational material.

The relationships between reps and physicians started to come under scrutiny prior to the first release of Open Payments data, which keeps track of payments drug and device companies make to physicians and teaching hospitals for things like travel, research, gifts, speaking fees, and meals. The data also includes ownership interests held by physicians or their immediate family members in drug and device companies.

Since the release of Open Payments data, many studies have been done, purporting to show a negative link between the relationships pharma and physicians have. Myriad negative press followed those studies, making doctors and pharma out to be bad people for their interactions. We have written many times on the subject, including why we feel as though the relationships between doctors and pharma can actually be beneficial.

Now, however, it seems as though the bad press the relationships received is starting to have an effect. According to a new survey by SK&A, the percentage of physicians who do not allow access to medical industry salespeople has grown to 36.5% in 2016, up from just 22.9% in 2010.

Interestingly, for physicians employed by hospitals and health systems, the no-access rate tops 50%. This may be in part because physicians working for such employers tend to not make their own rules on seeing drug reps, the employers do.

Site ownership

The study also found that the ability of drug reps to get inside a physician’s office varies considerably by region. The no-access rate is highest in the West and lowest in the South. The state with the highest rate of physicians not granting access to drug reps is Vermont, with 63.7%, while the lowest state is Mississippi, with only 24.6% of its physicians denying access to drug reps.


The survey did find one trend that seems to run counter to the rest of the results, however: as the no-access rates increase, the requirement for appointments seems to be trending downward. The percentage of those who don’t require, or prefer, an appointment with a rep has fallen, from 49.8% in 2010 to 35.2% in 2016.

Such high rates of no-access may not be the best thing for the health care industry as a whole. While we do not think that physicians should look to pharma for lavish dinners out or speaking fees at events that don’t exist, we do believe that physicians should not feel like they are being blacklisted because a rep comes to visit their office and brings Papa Johns for the office. Such visits from drug and device reps can be beneficial to doctors and their staff, as it provides a time for them to ask questions of the rep to see if the offered device or prescription is a good fit for any of their patients.


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