Life Science Compliance Update

July 19, 2016

D.C. Detailer Law Provides New Definition of 30 Consecutive Days

We have previously written about the change in the Washington, D.C. pharmaceutical detailer license requirements. The change made it so that if you were engaged in detailing for less than thirty consecutive calendar days per year, you no longer needed a detailing license.

However, that change led to some confusion as the definition of "consecutive" was not clearly delineated. As we noted in the aforementioned article, some companies opted to interpret the definition as meaning that reps who were dedicated and assigned to Washington, D.C. would continue to obtain licensure while district managers and reps assigned to multiple areas (including the District) would not.

Apparently picking up on the fact that many companies were confused by the change and were going to make the best of it, the D.C. Department of Health issued a short FAQ sheet, which can be found here.

The FAQ sheet clears up the confusion a bit, by noting that the law "allows individuals, such as speakers at a conference, who come to the District once a year, or other persons that come once a year for a short duration of time of less than 30 consecutive days." However, the FAQ states that the law does not allow "someone who comes to the District for a few days a month to avoid licensure, if the person will return to the District again within the same calendar year."

The FAQ also takes on a strange definition of "thirty consecutive days," stating that if a detailer were to start detailing in D.C. on January 1st, he or she would be required to either cease detailing in the District or obtain a license come January 31st. Such an interpretation is strange, as it would force a district manager who comes to check on their team twice a year, once in January for a few days, and again in July for a few days, to obtain licensure.

Another issue is, in clarifying their aim of the exemption, the D.C. DOH may have made it so a speaker who attends two conferences in one year has to receive licensure in the District, even when they typically engage in detailing in another, far off, state like Montana.

As we stated earlier in the year, it is nice to have one less regulation to worry about, but this new definition almost makes more work than no exemption does. District managers, speakers, and others who visit twice (or more) a year for a day or two at a time may find themselves only able to stop in once per year or run the risk of running afoul of the law.

June 14, 2016

Pricing Bills Are Popping Up Everywhere – Review of State Prescription Drug Pricing Proposals

The price of prescription drugs has created much controversy in recent years. This article examines why the pharmaceutical industry is under such scrutiny despite the fact that expenditures for drug costs have remained steady, explores State and federal legislative response to this perceived problem, and posits the future regulatory landscape regarding prescription drug pricing.

Are prescription drug prices out-of-control? According to the Centers for Disease Control and Prevention's National Center for Health Statistics, the percent of national health expenditures in 2013 for prescriptions drugs accounted for 9.3%, while personal medical expenses related to that percentage equates to $271.1 billion. Media outlets and politicians often grab headlines with only one of those numbers, but it is important to keep things in perspective and realize that overall, the national health expenditures for prescription drug costs have remained relatively the same since 1960, when compared to other health consumption expenditures.9 The largest expense can be attributed to hospital care, which accounts for 32.1% overall or $936.9 billion, by professional services (i.e., physician and clinical services, etc.) at 26.6% or $777.9 billion.10 Based on this data, why is the pharmaceutical industry such a target then?

Read Full Article in the June Issue of Life Science Compliance Update

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June 09, 2016

Vermont Governor Signs Drug Price Transparency Bill

On Friday, June 3, 2016, Vermont Governor Peter Shumlin signed into law a bill that aims to require greater transparency on behalf of drug manufacturers when they increase the prices of prescription medicine.

The law, S.216, will require state health care regulators to develop an annual list of fifteen drugs for which "significant health care dollars" are spent and where the wholesale acquisition costs (i.e., list prices) rose by fifty percent or more over the previous five-year period, or for which the list prices rose by fifteen percent or more over a twelve-month period. The Green Mountain Care Board of Vermont will work with the Department of Vermont Health Access to develop that list.

Select manufacturers will then need to disclose "all the factors that have contributed to a price increase" and justify the price increase to the Attorney General's office, which could take companies to civil court if they decline to provide the requested information. Each violation also carries a $10,000 penalty.

The law also requires Vermont's Medicaid program to use the 340B drug pricing formula to save money on prescription drugs, and require health insurance companies to provide information for consumers on what they may need to pay for their prescriptions.

In addition, the bill requires health insurance companies through the state's Health Connect program to set up interactive websites for patients so they can find out how much their prescription drugs cost before going to get the prescription filled at the pharmacy.

In a statement issued by Governor Shumlin's office, he noted that "This bill is about accountability. The reality is that we have pharmaceutical companies raising prices on lifesaving drugs five thousand percent. When asked about those outrageous increases, CEOs are literally laughing in front of Congress. That needs to change."

What Governor Shumlin does not seem to recognize is that Martin Shkreli, presumably the aforementioned CEO, does not represent the pharmaceutical industry on the whole. Unfortnately there are going to be a few organizations that game the system, and painting all pharma execs in the same light at Shkreli does everyone a disservice.

Many of the drugs that the bill targets actually save health care costs by enabling patients to avoid more expensive procedures. It is possible that by revealing competitor pricing, or the perception that such information could be revealed in the aggregate in the Green Mountain Care Board's report, could lead to disincentivizing deeper discounts and rebates.

At an April Vermont House Health Care Committee meeting, PhRMA submitted written testimony, noting that the information on pricing may not actually be relevant because companies do not sell drugs to doctors and pharmacies and in many cases, manufacturers are actually "not privy to the final price paid in Vermont." The testimony also noted that forcing companies to disclose prices may "chill the incentive" for drug makers to give discounts to those groups.

PhRMA recommends that legislators in other states who are contemplating similar legislation instead focus "on giving patients and families what they actually need: predicable and accessible information about the out-of-pocket costs they will face and enforceable, common-sense rules that prevent discrimination and remove barriers to receiving care."

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