Life Science Compliance Update

February 15, 2017

Product Price Hikes - When Business and Compliance Collide


2016 was the year of the price increase, as leading industry players experienced significant public outrage over what appeared to be extreme price increases. What is compliance’s role when it comes to price increases? Does the ethics and compliance function get to weigh in on how decisions to raise the prices of products are reached, or does this function lie solely with the business? This article explores those questions.

It is safe to say that in the life sciences regulatory world, 2016 was the year of the price increase, as leading industry players experienced significant public outrage over what appeared to be extreme price increases. 

Investigations, subpoenas and congressional hearings led to settlements and fines, as in early December 2016, Pfizer was charged a record £84.2 million fine by the UK’s Competition and Markets Authority (CMA) for the overnight price increase of 2,600% for an epilepsy drug. The CMA did not stop there, and went further to also fine the distributor Flynn Pharma £5 million for its part in the pricing scheme. Although Pfizer is currently appealing the findings, it is alleged that prices for the drug in the UK were many times higher than elsewhere in Europe and that “the companies deliberately exploited the opportunity offered by de-branding to hike up the price for a drug which is relied upon by many thousands of patients”. CMA added that “these extraordinary price rises have cost the NHS and the taxpayer tens of millions of pounds”.

Read the full article in the February 2017 issue of Life Science Compliance Update

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February 13, 2017

Avoiding the Patient Assistance Program Spotlight


In efforts to understand the rising cost of some drugs, Patient Assistance programs, particularly independent foundations, have become a focus of government investigations. This article explains what PAPs are, why they may be viewed as suspect and provides tips for providing patient assistance in a compliant manner.

While Patient Assistance Programs (“PAPs”) have existed for many years, lately, industry support of PAPs has come under increased government scrutiny. Before 2013, PAPs were under the radar as the government focused its Anti-Kickback Statute (“AKS”) violation investigations on hospitals and physicians.

The continuing drug pricing controversy has shifted the focus of AKS investigations, spurred by the proposed correlation between drug prices and donations to PAPs. Recently, PAPs have become a target of both the United States Department of Justice (“DOJ”) and the Department of Health and Human Services Officer of the Inspector General (“OIG”).

Read the full article in the February 2017 issue of Life Science Compliance Update

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January 27, 2017

Politico Healthcare Briefing: What’s Next for Drug Costs?


Late last year, Politico Pro’s Health Care Team, along with CVS Health, held a conversation on the future of prescription drug costs, and how to reduce healthcare spending under a new administration. The briefing featured a panel of health care industry experts: Peter Bach, MD, Director of Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center; Jenny Bryant, Senior Vice President of Policy and Research at PhRMA; Ceci Connolly, President and CEO at the Alliance of Community Health Plans; and Chip Davis, President and CEO of the Generic Pharmaceutical Association (GPhA).

The panel discussion focused on the report, “Tackling High Drug Costs in the Trump Era,” and was followed by a discussion with Representative Jan. Schakowsky, concerning efforts on Capitol Hill to reform health care spending.

Panel Discussion

Dr. Bach argued that there was a “fundamental disconnect” between efforts to reduce costs of coverage and bring top treatments to patients. He expressed support for drug price negotiations under the Affordable Care Act, stating that such efforts have saved taxpayers over $10 billion. He also warned that if high-deductible health plans remain popular, tools will need to be developed to indicate to physicians when their prescribing patterns are negatively affecting their patients and have open conversations about the affordability of the drugs they are prescribing.

Ms. Bryant expressed hope that lawmakers can work together to reach an agreement to “move forward to advance pro-market and pro-science solutions.” She stated that drugs have the potential to avert more health care spending for a patient in the future than they cost in the present, and challenged the idea that rising pharmaceutical costs are to blame for increased health care spending. Ms. Bryant challenged the premise that the repeal of the Affordable Care Act (ACA) would be a “looming problem,” instead stating that price negotiations for pharmaceuticals under government programs would not be exclusive to the ACA. She noted that cost-sharing was actually counter-productive for the health care industry, and that the perceived value of a drug is extraordinarily personal, and it is nearly impossible to determine the “average value” for pharmaceuticals.

Ms. Connolly discussed her belief that the drug pricing debate is quickly fading as the new administration approaches, noting that many of President-Elect Trump’s larger ideas are taking focus away from the debate, and that the core of the drug pricing issue (the lack of transparency) should be more thoroughly addressed. Ms. Connolly declared that the debate no longer focuses on specialty drugs, but now also includes drugs for common ailments. She discussed reauthorization of the prescription drug user fee law as a potential vehicle to address pricing transparency, but that event transparency may not be enough to reign in health care spending. She requested that lawmakers focus on mandating transparency so that patients can make more informed decisions with their physicians about which drugs they are prescribed, and encourage affordable treatment options.

Mr. Davis cautioned lawmakers and others that a policy issue as complex as the drug pricing debate cannot be solved with a broad approach, and that by allowing complete transparency of the pharmaceutical industry could wind up forcing competition out of the industry. He encouraged lawmakers to include all aspects of the market in discussions surrounding transparency, and to not discount the opinions of the drug manufacturing industry.

Discussion with Representative Schakowsky

Representative Schakowsky expressed her belief that lawmakers should hold President-Elect Trump to his promises regarding health care and work together to pass legislation that discourages price increases and promotes transparency in drug pricing. She reminded attendees that Trump favored allowing Medicare to negotiate drugs and the re-importation of prescription drugs as two methods to combat rising drug prices and spending. She mentioned her legislation, the FAIR Drug Pricing Act, drafted with Senator Tammy Baldwin, which attempts to shed light on how drug prices are initially decided and influenced, and where profits are being spent.


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