Life Science Compliance Update

April 17, 2017

Maryland Sends Bill to Governor on Drug Prices

12b85a8d363c8737e0ea2d8fc5cdde87

The Maryland House recently passed a bill – House Bill 631 – with the goal of “prohibiting a manufacturer or wholesale distributor from engaging in price gouging in the sale of an essential off-patent or generic drug.”

Under the legislation, the Maryland Medical Assistance Program is instructed to notify Maryland Attorney General if a generic drug’s price spikes by 50% or more in one year, or if its price increases while there are three (or less) companies making the prescription. Once the Attorney General Receives that notice, he or she is able to request a report from manufacturers, detailing production costs, rationale for the price hike, and efforts made to expand access.

If the Attorney General determines that the company violated the pricing law, he or she can request that a local circuit court force it to roll back the price and return money to consumers. That court can also impose a fine of up to $10,000.00 for each violation under the law.

Chester Davis, Jr., President and CEO of the Association for Affordable Medicines, has issued a statement asking for a veto of the bill, stating, “it is threatening the savings patients and taxpayers receive from affordable generic drugs.” He further notes, “in 2015 generic drugs delivered $227 billion in savings to the U.S. healthcare system, and $1.6 trillion in savings over the last decade. For that same calendar year, generic drugs comprised 89% of all prescriptions written in the United States, but accounted for only 27% of total prescription drug costs.”

Davis expresses concern about unintended consequences, “While the desire to take action against bad actors in the industry is understandable, what has been utterly lost in the debate over prescription drug costs in Maryland this session is the law of unintended consequences; namely, that by giving the Attorney General this unbounded and unprecedented level of authority to control pricing in a competitive free market, generic companies will be exposed to a level of risk in Maryland that will require them to evaluate whether they want to continue to market affordable medicines within the state.”

The current Maryland Attorney General, Brian Frosh, applauded the legislation. In a statement released by his office, he stated that the legislation gives Maryland a “necessary tool to combat unjustified and extreme price increases for medicines that have long been on the market and that are essential to our health and well-being.”

Maryland Governor Larry Hogan has not yet signed the bill.

Other State Actions

In New York, Governor Andrew Cuomo has proposed the idea of creating a board to control the costs of drug by allowing that board to determine a “fair price.” This idea has been introduced several times before the Legislature, each time soundly defeated.

Last year, California voters turned down a ballot initiative that would have limited industry’s power to create their own pricing. Now, industry is preparing for a fight in Nevada. A state senator recently introduced a measure to control prices on certain drugs, and the industry is enlisting lobbyists for the fight, according to the publication.

At the national level, President Donald Trump has repeatedly pledged to lower costs through increasing “competition,” while Congress considers proposals for drug importation and Medicare price negotiations. Rep. Elijah Cummings, an influential congressman from Maryland, has been involved in those talks and met with Trump to share his importation proposal earlier this year.

April 06, 2017

Senators Ask GAO to Investigate Potential Orphan Drug Act Abuse

1200px-US-GovernmentAccountabilityOffice-Seal.svg

In a March 3, 2017, letter to the United States Government Accountability Office, Senators Orrin Hatch, Chuck Grassley, and Tom Cotton raised the idea that regulatory or legislative changes might be needed to “preserve the intent of this vital law” that gives drug makers lucrative incentives to develop drugs for rare diseases.

The letter notes that, “[w]hile few will argue against the importance of the development of these drugs, several recent press reports suggest that some pharmaceutical manufacturers might be taking advantage of the multiple designation allowance in the orphan drug approval process.”

The senators ask for a list of drugs that have been approved or denied orphan status by the Food and Drug Administration (FDA), also asking whether resources at the FDA have been able to keep up with the “number of requests” from drug makers and whether there is consistency in the department’s reviews.

The senators also expressed concern about patients, saying in their letter that “we feel it is important to include the patient voice in your review.”

Few senators are in a position to alter the law. However, the three authors of this letter are in such a position. Hatch, a longtime advocate of the rare disease community, said late Monday in a statement that there was little evidence to suggest the Orphan Drug Act needs to change.

Hatch is chairman of the Senate Finance Committee, which oversees 50 percent of the federal budget, including Medicaid and Medicare spending. He said the letter is requesting “the first GAO study exclusively reviewing the Orphan Drug Act, and such oversight will ensure those critical innovations are continued into the future.”

Grassley, the senior senator from Iowa, chairs the Judiciary Committee and has jurisdiction over anti-competitive and patent-related issues. Grassley last month announced an inquiry into the Orphan Drug Act in response to KHN’s investigation.

Cotton, a strong conservative voice, chairs the subcommittee on economic policy under the committee on banking, housing and urban affairs. In a floor speech last month, he announced that he would find a legislative solution to price hikes associated with the orphan drug program.

Kaiser Health News Investigation

This letter comes on the heels of a January investigation published by Kaiser Health News (KHN) that found the orphan drug program is being manipulated by drug makers to maximize their profits and protect niche markets for particular medicines.

Recently, orphan drugs have come under fire (along with the rest of the industry) for high prices. The investigation by KHN found that many drugs that now have orphan status are not entirely new – more than seventy were drugs that were first approved by the FDA for mass-market use. Others (roughly numbering eighty) are drugs that have received multiple exclusivity periods for two or more rare conditions.

Marathon Pharma Hikes Emflaza Price

Senators have been incensed by actions taken by Marathon Pharmaceuticals, manufacturer of Emflaza, a corticosteroid approved to treat Duchenne muscular dystrophy. Marathon recently announced an $89,000 annual list price for the drug, which many U.S. patients have purchased overseas for $1,000 to $1,600 a year.

Marathon responded in February by delaying the rollout of the drug, saying it will talk with stakeholders, including patients, about the price.

Eight senators sent a letter to Marathon CEO Jeff Aronin demanding information on the private drug maker’s pricing strategy. Marathon spokeswoman Wanda Moebius released a statement saying the company is committed to ensuring that all patients who need this drug have access to it and will continue to work with the Duchenne community.

April 04, 2017

JAMA Harps on PAOs

Pill_bottles_cash

JAMA Internal Medicine recently published an article, “Patient Advocacy Organizations, Industry Funding, and Conflicts of Interest.” The article focused on the nature of industry funding of patient advocacy organizations (PAOs) in the United States.

As the basis for the article, a survey was conducted from September 1, 2013, to June 30, 2014, of a nationally representative random sample of 439 PAO leaders, representing 5.6% of 7865 PAOs identified in the United States. Survey questions addressed the nature of their activities, their financial relationships with industry, and the perceived effectiveness of their conflict of interest policies.

Of the 439 surveys mailed to PAO leaders, 289 (65.8%) were returned with at least 80% of the questions answered. The PAOs varied widely in terms of size, funding, activities, and disease focus. The median total revenue among responding organizations was $299 140 (interquartile range, $70 000-$1 200 000). A total of 165 of 245 PAOs (67.3%) reported receiving industry funding, with 19 of 160 PAOs (11.9%) receiving more than half of their funding from industry. Among the subset of PAOs that received industry funding, the median amount was $50 000 (interquartile range, $15 000-$200 000); the median proportion of industry support derived from the pharmaceutical, device, and/or biotechnology sectors was 45% (interquartile range, 0%-100%). A total of 220 of 269 respondents (81.8%) indicated that conflicts of interest are very or moderately relevant to PAOs, and 94 of 171 (55.0%) believed that their organizations’ conflict of interest policies were very good. A total of 22 of 285 PAO leaders (7.7%) perceived pressure to conform their positions to the interests of corporate donors.

The study found that roughly two-thirds of a national sample of patient advocacy organizations (most of which were not for profit), reported receiving funding from for-profit companies. Twelve percent received the majority of their funding from industry; a median proportion of just under fifty percent of industry funding was derived from the pharmaceutical, device, and/or biotechnology sectors.

The authors of the study felt as though patient advocacy organizations engage in wide-ranging health activities. Although most PAOs receive modest funding from industry, a minority receive substantial industry support, raising added concerns about independence. Many respondents report a need to improve their conflict of interest policies to help maintain public trust.

Conclusion

As noted above, the article found that most advocacy organizations receive money from industry. Therefore, the authors of the study concluded that increased transparency and robust conflict of interest policies and practices are needed to help the non-profit organizations maintain their independence.

However, as we have noted time and time again, conflict of interest policies and practices (along with transparency efforts) are not always the answer, and are not usually required to help non-profit (or even for-profit) organizations maintain their independence.

Additionally, the sample size for the study was only 5.6% of the 7865 PAOs identified in the United States. This is such a small sample size, and any results assumed from such a small sample size, nationally representative or not, should not be taken as an impetus for change. Transparency is confusing to the general population, who typically care about getting the healthcare they need, when they need it. Patience assistance organizations play a large role in helping those who need healthcare and other related items get what they need – they should not be targeted as the new “bad guy.”

Newsletter


Preview | Powered by FeedBlitz

Search


 
Sponsors
May 2017
Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31