Life Science Compliance Update

January 17, 2018

Nevada Posts FAQ and Reporting Requirements on Transparency Law

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As we posted last week, the Nevada draft regulations are up and starting to become a hot topic. The same day as our last post, Nevada updated the Frequently Asked Questions and the SB 539 Reporting requirements.  

Frequently Asked Questions

The two-page FAQ document provides some helpful answers to common questions, such as whether the reporting for pharmaceutical representatives is the responsibility of the individual or of the manufacturer. Nevada notes that it is the responsibility of both and then lists specific requirements. For example, manufacturers are required to submit a list of names of all pharmaceutical representatives who market prescription drugs in Nevada while each pharmaceutical representative is required to submit a report of all compensation or prescription drug that was provided to a provider of health care that is licensed, certified, or registered in this State, among others.

The FAQ also confirms that the law applies equally to all pharmaceutical representatives and not just those who are engaging in the sales and marketing of the diabetes-related treatments state on the website.

The FAQ also includes links to report formatting and other specifics for prescription drug manufacturers and pharmacy benefit managers.

Reporting Requirements

Drug Manufacturers

As required under the law, prescription manufacturers must submit a report to the Nevada Department of Health and Human Services (DHHS) with the below information, for prescription drugs posted on the DHHS website. This report must be submitted via email annually by April 1st of each year for the previous calendar year. DHHS then compiles a report and posts it in accordance with NRS 439.

Manufacturer requirements

Pharmacy Benefit Managers

PBMs are also required to submit a report to DHHS by April 1st of each year. The required information for that report is as follows.

PBM

Pharmaceutical Sales Representatives

Pharmaceutical sales reps that are on a list submitted to DHHS by drug manufacturers anytime during the previous calendar year must submit their report by March 1st of the year, including the below items.

Pharma Rep

January 12, 2018

Media Has it Out for Pharma…Still

Media

Many would say that the media is no friend to the pharmaceutical industry. However, CNN has recently started to (seemingly) build a case against Avanir Pharmaceuticals for its promotion and marketing of its pseudobulbar affect (PBA) drug, Nuedexta.

In October 2017, CNN published its first article on the subject, where it was noted that the company “aggressively targets frail and elderly nursing home residents for whom the drug may be unnecessary or even unsafe.” While PBA afflicts less than 1% of Americans, it is most commonly associated with patients who have multiple sclerosis (MS) or ALS.

Then, in December 2017, CNN published another article on the company, once again dinging them for payments made to physicians and alleging that physicians had criminal convictions in their history for illegal prescribing.

According to CNN, Nuedexta's financial success is being propelled by a sales force focused on expanding the drug's use among elderly patients suffering from dementia and Alzheimer's disease, and high-volume prescribing and advocacy efforts by doctors receiving payments from the company.

Avanir Pharmaceuticals paid nearly 500 doctors to speak or consult on its drug, Nuedexta, between 2013 and 2016, according to government data. Through a review of the top prescribers and top paid physicians in this group, CNN identified a dozen who have been disciplined by state medical boards. These offenses included the harmful treatment of nursing home residents and "grossly negligent acts" involving the inappropriate prescribing of dangerous and addictive drugs -- resulting in probation, suspension, fines and revoked licenses.

Between 2013 and 2016, Avanir and its parent company, Otsuka, paid doctors nearly $14 million for Nuedexta-related consulting, promotional speaking and other services, according to government data. Paying doctors for promotional speaking is legal and is defended as a way for experts in their fields to share important experience and information about medications, but it's long been a controversial practice.  

Since 2012, more than half of all Nuedexta pills have gone to long-term care facilities. The number of pills rose to roughly 14 million in 2016, a jump of nearly 400% in just four years, according to data obtained from QuintilesIMS, which tracks pharmaceutical sales. Total sales of Nuedexta reached almost $300 million that year.

CNN noted that between 2013 and 2016, Avanir and its parent company, Otsuka, paid doctors nearly $14 million for Nuedexta-related consulting, promotional speaking and other services, according to government data. Paying doctors for promotional speaking is legal and is defended as a way for experts in their fields to share important experience and information about medications, but it's long been a controversial practice.  

In an emailed statement, the company said PBA is often "misunderstood" and that the condition can affect people with dementia and other neurological disorders, which are common among residents in long-term care facilities. A company website states PBA can afflict up to roughly 40% of dementia patients -- a figure that is based on an Avanir-funded survey and was repeatedly disputed by medical experts interviewed by CNN, including some of those paid by Avanir.

Avanir said it "vehemently oppose(s) any mischaracterization" of its interactions with physicians and other members of the medical community, explaining that these relationships are ethical and are used as a way to share important information and raise awareness of medical conditions and treatments that could help patients.

In response to the articles, the Pharmaceutical Research and Manufacturers of America, which represents drug makers across the country, said companies should strive to work with speakers who meet ethical and professional standards. "In the rare instance where there is an outlier," the group said on its website, "companies take corrective action."

This is one example of the way the media can use Open Payments to support cases against pharma companies. The ease with which Open Payments can be found highlights the need for companies to vet to whom they give money.

January 11, 2018

Nevada Proposes Drug Transparency Regulations

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We have written many times on the Nevada law passed in Summer 2017 that requires patient advocacy organizations to report all payments they receive from industry, regardless of the nature of the payment.

The legislation was signed into law by Nevada Governor Brian Sandoval in June 2017 and now the Nevada Department of Health is working on regulations to implement the law.

The current draft regulations require manufacturers and pharmacy benefit managers to submit a report by April 1st of each year for the previous calendar year that outlines the costs and rebates related to drugs listed on the List of Essential Diabetes Drugs.

Pharmaceutical sales representatives that are registered with the Department during any point of the previous year are required to submit a report by March 1st.

The reports for manufacturers shall include the following elements:

  • costs of producing the drug;
  • the total administrative expenditures (including marketing and advertising costs);
  • the profit earned and percentage of total profit attributable to the drug;
  • total amount of financial assistance provided through patient assistance;
  • cost associated with coupons;
  • the wholesale acquisition cost;
  • history of any increase over the 5 years including percentage increase, date of increase, and explanation;
  • aggregate amount of all rebates provided to PBM’s;
  • any additional information prescribed by regulation by DHHS.

Further, for any drugs on the list for which there was a price increase, the report must include the following:

  • a list of each factor that contributed to the increase;
  • the percentage of total increase attributable to each factor;
  • an explanation of the role of each factor in the increase;
  • any other information prescribed by DHHS in regulation.

PhRMA and BIO Involvement

The Pharmaceutical Research and Manufacturers of America (PhRMA) and the Biotechnology Innovation Organization (BIO) filed a lawsuit in response to the law being signed by Governor Sandoval, asking that the Court declare provisions of the law to be preempted by federal law and in violation of the United States Constitution. They argue that the transparency acts as a “cap” by requiring manufacturers disclose the above information.

One argument the organizations make is that the law impedes Congress’ sole authority to set patent policy and that requiring manufacturers to detail the reason behind a price increase “in purpose and effect…punishes manufacturers for the price of their ‘essential’ diabetes drugs.” They further argued that the only way manufacturers can “avoid forfeiting trade-secret protection for the ‘factors’ of a price increase is by limiting its list prices.”

Another argument was that the law as signed by Governor Sandoval conflicts with federal trade and state trade secret laws – the Uniform Trade Secrets Act and the Defend Trade Secrets Act. They argued that because the Nevada law exempts trade secret protections for all of the information the manufacturer must provide in the report, manufacturers lose those protections as soon as the annual list of drugs is published, even before the information is turned over, of advertising, cost, marketing, production, and pricing information associated with the drugs.   

Did Nevada Respond?

Interestingly, included in the draft regulations is a provision for if a manufacturer or PBM believes that a data element in the report meets the standard of the Defend Trade Secrets Act (DTSA). In that case, they shall request to have the element declared confidential by writing to the Department of Health and providing a detailed explanation of why the data element qualifies as a trade secret under the DTSA. This explanation will be made available to the public upon request. Therefore, it seems as though Nevada may have believed PhRMA and BIO had a solid argument about the DTSA. However, only time will tell how the exemption works in practice and whether or not trade secrets are truly being protected.

News, updates, meetings, and public hearings will be uploaded to the Nevada Department of Health’s website here.

Take Action!

Of interest to many of our readers may be the Small Business Impact Survey, available here through January 22, 2018, at 5:00 pm PST. The survey analyzes the impact of the proposed regulation on business with less than 150 employees.

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