Life Science Compliance Update

April 21, 2016

Washington State Convenes Task Force on Drug Prices

"Don't stop trying" that is the theme of the Washington State legislature as overrode a governor's veto to push through a scaled down version of a pharmaceutical pricing bill .

The state legislature of Washington State had an extended special session this year to come up with a balanced budget. However, state legislators had an even bigger idea in mind: override vetoes by Governor Jay Inslee of twenty-seven bills in early March. Gov. Inslee actually vetoed these bills out of frustration that the legislature did not complete their work during the regular session, i.e. coming up with a balanced budget. In his March 10, 2016, veto message he stated, "This is a worthy bill, but it has preceded the passage of the 2016-2017 supplemental operating budget, which is a greater legislative priority. Until a budget agreement is reached, I cannot support this bill."

One bill Gov. Inslee vetoed is SB 6569, "An Act Relating to the creation of a task force on patient out-of-pocket costs." The House and Senate re-passed the bill again, following the veto, with enough votes to make the bill become law. Following the March 28th and 29th veto votes, the bill was filed with the Secretary of State and will become effective June 28, 2016.

This particular bill was drafted because, according to the drafters, 43% of people in fair or poor health and 38% of those taking four or more medications a year say that it is either somewhat difficult or very difficult to pay for their medications. The legislature did give credit where credit is due, noting that pharmaceutical companies provide many patients financial assistance in paying for their medications. However, the legislature had difficulty with the fact that these programs do not – and cannot – provide relief from "extraordinary out-of-pocket costs for all affected patients."

By July 1, 2016, the Washington state Department of Health will convene the task force, which shall be comprised of various groups – including pharmaceutical companies, prescribers, pharmacists, hospitals, the office of the insurance commissioner, the healthcare authority, a business association, and biotechnology – and coordinate task force meetings. It is encouraged that potential participants submit a letter of interest to the department of health, and the secretary shall invite representatives of interested groups to participate in the task force.

The task force shall meet and discuss and evaluate factors that are contributing to the out-of-pocket costs for patients, including but not limited to: prescription drug cost trends and plan benefit design. The task force is also asked to consider patient treatment adherence and the impacts on chronic illness and acute disease, considering long-term outcomes and patient costs.

By December 1, 2016, the task force shall present their recommendations, or a summary of task force discussions, to the appropriate committees of the legislature. This is a change from the original bill, which gave the task force an additional year, until December 1, 2017, to provide this information to relevant committees.

We estimate next year that the legislature will reintroduce SB 6471 (annual reporting for manufacturers with a wholesale price of $10k or more per year or per course of treatment) or something similar.

Thanks to Nico Fiorentino at G&M Healthcare LLC for bringing this to our attention.

April 18, 2016

District of Columbia Makes Changes Transparency Law to Align with Open Payments

Late last week with only a photo attachment, the District of Columbia Department of Health announced to the pharmaceutical industry that the District is changing its gift reporting requirements to meet the requirements with the new Open Payments reporting.

Chapter Eighteen of the District of Columbia Municipal Regulations requires manufacturers and labelers of prescription drugs dispensed in the District who engage in marketing in D.C. to report to the Department of Health their costs for pharmaceutical drug marketing in the District. Each manufacturer or labeler is required to report their annual prescription drug marketing costs in a report filed with the Department of Health on or before July 1 of each year.

This year, the aforementioned changes will be reflected in the Nature of Payment, Form of Payment, and Primary Purpose sections. The categories will have to align with Open Payments categories. Some responses will now be limited to the updated set of values.

While payments made to physicians or teaching hospitals must be reported to the United States Department of Health and Human Services (HHS), companies are not required to report this information to the District of Columbia. However, payments made to recipients other than physicians and teaching hospitals must be reported to the District of Columbia. Reporting requirements for aggregate and advertising expenses remain unchanged.

The D.C. Department of Health recommends that companies who have filed reports in previous years use the Microsoft Excel file published online, as it will reflect changes and updates in the law. Complete instructions for filling out the forms are found in the PDF document, as well as on the fifth tab of worksheet of the Excel document.

The Company Information, Gift Expenses, Advertising Expenses, and Aggregate Cost worksheets should be filled out electronically according to the instructions, and submitted in Excel format to The Company Information worksheet should also be printed and sent to the D.C. Department of Health, along with a $5,000 filing fee check made payable to "D.C. Treasurer."

This change was supposed to take place in 2013 when the Physician Payment Sunshine Act preempted state reporting. The District of Columbia is a little late to this change.


April 01, 2016

Massachusetts Medical Society Requires Social Media Disclosure by Physicians

The idea that doctors are promoting treatments on social media has gotten some attention from media outlets over the past few years, and associations and states are starting to take notice of the growing "concern." One of those states is Massachusetts, where in December, the Massachusetts Medical Society adopted a rule requiring its members to divulge all financial relationships regarding any medical procedure or service they review or discuss online. The rules even require physicians to disclose any free products or services they have received from drug companies.

The guidelines like this takes both the Sunshine Act and the American Medical Association guidelines regarding social media even further that one may have imagined. As stated in the Massachusetts Medical Society Social Media Guidelines for Physicians,

Physicians must disclose all relationships they have with regard to the maker or provider or products and services they review or discuss in online communities. This includes discussions and reviews of products and services provided to the physician for free.

This stands in contrast to the American Medical Association guidelines on social media, which are more focused on the patient-physician relationship on social media: that physicians should be aware of patient privacy and confidentiality standards and maintain them in all environments, including online environments; that physicians must maintain appropriate boundaries of the patient-physician relationship in accordance with professional ethical guidelines; and a warning that actions online and content they post may have an impact on physicians' reputation in the community among patients and colleagues, may have consequences for their medical careers, and may lead to an undermining of public trust in the medical profession.

Once concern with a rule like the one in Massachusetts is that disclosure is not feasible in some forms of social media. Twitter, for example, only allows users 140 characters to get their point across. Sure, physicians can tweet out a string of tweets, some of which get their point out there and others that make disclosure notes, but the layout of Twitter and the way users tend to read through their timeline don't really lend themselves to such use.

It is also arguable that in social media formats like Facebook, where it is feasible for a disclosure to be made at the outset or the close of a post, a variety of people will either not read the post after a disclosure, and a disclosure at the bottom of a post may result in readers not reading that far down, ignoring the disclosure all together.

And, of course, as with any form of additional disclosure, a valid concern is that disclosing such information will be a source of confusion for patients and colleagues. It is interesting that there is no request for disclosing financial relationships with referring hospitals, health systems or ambulatory surgical centers which also can be a strong interest for physicians.

The Massachusetts Medical Society claim that "Social Media is Different" because social media can connect patients with other patients, without any professional intermediation and that in social networks, everyone is a potential publisher, and that means that professionals are no longer the sole source of information. Similar lines can be drawn between friends interacting in person at social events, or even over the phone. Requesting disclosure on social media was the next logical step for the disclosure movement. Before long, physicians may have to read off a disclosure before they speak with anyone in public including their patients.

In full disclosure, the editor of Policy and Medicine was expelled from his school in the second grade for switching classes with his Identical twin brother. It has been downhill ever since.


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