Health Law

The AP (1/9, Nicholson) reports, "Noridian Administrative Services LLC will handle more than 10 percent of the Medicare Part A and Part B claims nationwide after landing another big contract" with the Centers for Medicare & Medicaid Services (CMS). Under the deal, Noridian will hand "Medicare Part A and Part B administration in Illinois, Wisconsin, and Minnesota." In July 2006, the company "was awarded a similar contract for North Dakota, South Dakota, Montana, Wyoming, Utah, and Arizona." Each contract is estimated to be "worth about $1.4 billion over five years," according to the CMS. The contracts "are among 15 awarded under efforts to modernize Medicare." Noridian lost a similar "bid to win the Medicare A and B contract for the region that includes Washington, Oregon, Alaska, and Idaho" last May to National Heritage Insurance Corp. The company "has protested the bid-selection," however, "and expects a response by April," spokeswoman Denise Kolpack said.

Modern Healthcare (1/8, Lubell) reported, "The Medicare Payment Advisory Commission (MedPAC) recommended increasing payment rates for inpatient and outpatient hospital services at the full rate of inflation in 2010 concurrent with the implementation of a quality incentives program." According to the commission's chairman, Glenn Hackbarth, "the payment recommendation 'reflects the full marketbasket update minus what goes into pay-for-performance.'" In short, "hospitals will have to perform well on quality measures to get the full update, he said." Meanwhile, the "commission also made a recommendation to reduce the indirect medical education adjustment by one percentage point to help finance the quality incentives program for hospitals."

Government Health IT (1/8, Ferris) reported, "The National Association of State Medicaid Directors is asking federal Medicaid officials to bring Medicaid reporting in line with the national data standards the federal government has endorsed for health information technology." In a recent missive "to Kerry Weems, acting administrator of the Centers for Medicare and Medicaid Services (CMS), the state Medicaid directors" specifically "pointed to the Medicaid Statistical Information System tapes and the Minimum Data Set for the Nursing Home Quality Initiative as being out of line with President George W. Bush's 2006 executive order that directed federal agencies to meet recognized interoperability standards when they develop or acquire new health IT systems." Therefore, they "proposed that CMS work with state Medicaid agencies to establish common data definitions and standard formats that are in line with industry standards."

The Wall Street Journal (1/8, Mundy, Favole) reported that on Wednesday, "a group of scientists at the U.S. Food and Drug Administration (FDA)...sent a letter to President-elect Barack Obama's transition team pleading with him to restructure the agency, saying managers have ordered, intimidated, and coerced scientists to manipulate data in violation of the law."

        According to the AP (1/9), "In an unusually blunt letter, a group of federal scientists is complaining to the Obama transition team of widespread managerial misconduct." The letter, written on letterhead for the agency's Center for Devices and Radiological Health (CDRH), alleges that "the scientific review process for medical devices at the FDA has been corrupted and distorted by current FDA managers, thereby placing the American people at risk." The complaints "echo some of the complaints from the FDA's drug review division a few years ago during the safety debacle involving the painkiller Vioxx (rofecoxib)." Specifically, the letter alleges that top FDA managers "committed the most outrageous misconduct by ordering, coercing and intimidating FDA physicians and scientists to recommend approval, and then retaliating when the physicians and scientists refused to go along."

The Wall Street Journal (1/9, Mundy) reports that "drug-safety crusader" Sidney Wolfe "has been appointed to a four-year term on the FDA's Drug Safety and Risk Management Committee, which plays a key role in telling the agency which drugs are safe." According to the Journal, this is the realization of a "recurring nightmare" for the pharmaceutical industry, because, "over three decades, Dr. Wolfe, head of the health group at advocacy organization Public Citizen that Ralph Nader founded, has helped push 16 drugs off the market and slap restrictions on several multibillion-dollar products. He has been so hostile to the FDA under President George W. Bush that he decried its 100th-anniversary celebration in 2006 as a 'propaganda campaign' to hide its 'unprecedented assault on the American public.'" The Journal further paints Wolfe's appointment as part of a trend toward stronger regulation, and notes that his critics complain that he could obstruct helpful drugs from reaching the market.

UPI (1/8) reported, "The U.S. pharmaceutical industry, facing new U.S. government oversight prospects, unveiled a TV commercial Thursday touting health coverage for every American."  The president of the Pharmaceutical Research and Manufacturers of America trade association, told the Washington Post that "the commercial -- sponsored by the drug lobby, consumer and labor groups, and health providers -- is part of a multimillion-dollar campaign the industry is launching to align itself rhetorically with the health reform goals of President-elect Barack Obama and the Democratic Congress."

        The pharmaceutical "industry already boosted its campaign contributions to Democrats in 2008," Sarah Rubenstein wrote in the Wall Street Journal (1/8) Health Blog.  "The drug industry plans to spend tens of millions of dollars on the campaign...according to the" Washington Post.  "The industry's trade group has also moved to preempt regulatory efforts by voluntarily banning pens, coffee mugs, and other logo-laden trinkets that drugmakers have lavished on doctors, and by creating guidelines around direct-to-consumer marketing."  Some drugmakers "are taking their own steps, even if the whole industry isn't going along."  Merck, for instance, is "joining a coalition supporting health reform, including something that hasn't been the industry's favorite idea: comparing the price and performance of drugs."

The Washington Post (1/8, D4, Lazo) reported that Emergent BioSolutions "has dropped a bid to acquire Protein Sciences, the maker of a next-generation flu vaccine that Emergent sought to buy last year in an attempt to diversify. Emergent, a major supplier of an anthrax vaccine to the federal government, agreed to pay at least $75 million last May to acquire Protein Sciences." The transaction "was originally expected to close in June, but a Protein Sciences shareholder vote on the issue was postponed. Then in July, Emergent filed suit against Protein Sciences, based in Meriden, Conn., accusing the company of deception and fraud." Emergent claimed that Protein "had intended to use a bridge loan of $10 million from Emergent to continue doing business while it investigated ways of keeping the company independent."

The first of two Senate confirmation hearings for Tom Daschle, President-elect Barack Obama's pick to serve as Health and Human Services (HHS) Secretary, generated widespread coverage, with reports mainly focusing on his statements regarding the need for a comprehensive overhaul of the nation's healthcare system, and on the perceived congeniality he received at the hands of his former colleagues.

        The CBS Evening News (1/8, story 4, 0:15, Couric) reported that HHS "Secretary-designate Tom Daschle is the first of the Obama cabinet nominees to appear before a Senate confirmation hearing."

        According to the Washington Post (1/9, A6, Connolly), Daschle's hearing "resembled a homecoming more than a congressional grilling," and describes the former senator from South Dakota as "deferential...assuring lawmakers that he and his new boss will not forget their former colleagues as they craft sweeping healthcare legislation." Noting that he "also been tapped to lead a new White House Office of Health Reform," the Post adds that Daschle vowed to strive to "get it right," referring to Bill Clinton's "failed attempt" to overhaul the healthcare system. Daschle "encountered few probing questions" about Medicare, Medicaid, or the State Children's Health Insurance Program, all of which would fall under his purview as HHS Secretary.

        The AP (1/9) adds that Daschle promised to learn from "Bill Clinton's failed attempt to overhaul healthcare, an effort criticized as too long, secretive, and hard to understand." Daschle was in "friendly territory" and there were "few tough questions," the AP reports. In fact, "most analysts expect Daschle will have little problem winning confirmation as HHS secretary."

        The Wall Street Journal (1/9, Zhang) focused more heavily on Daschle's promise to "work with Congress to overhaul the U.S. healthcare system and...to take a science-based approach to food and drug regulation, as well as health research and public health." Meanwhile, "Daschle signaled significant changes will be made at HHS. ... Among other things, he said, the government might need to cut payments to private insurers who offer Medicare Advantage plans." The Wall Street Journal (1/8, Rubenstein) Health Blog also covered the story.

        Meanwhile, the New York Times (1/9, Pear) reports that Daschle said at the hearing that healthcare reform was "especially urgent, because many people were losing coverage, along with their jobs, in the recession." The Times suggests that the economic crisis cast "a pall" over his "friendly welcome," adding that he "spoke with passion about the hardship he had witnessed among people without insurance who he said 'can't get sick without total economic destruction.'"

        USA Today (1/9, Appleby), The Politico (1/9, Frates), the Washington Times (1/9, Lengell), The Hill (1/9, Young), Bloomberg News (1/9, Marcus), the Sioux Falls Argus Leader (1/8, Bremner), the New York Daily News (1/9, Bazinet), UPI (1/9), and AFP (1/9) all cover the story, as did MedPage Today (1/8, Walker) and the Hartford Courant (1/8, Hamilton).

Minnesota's Star Tribune (1/9, Wolfe) reports that even as Minnesota state officials prepare to address "a nearly $5 billion budget shortfall, groups representing nursing homes and the uninsured said Wednesday they will ask the Legislature for millions in additional health spending." The Minnesota Health Security Act, which is "backed by a coalition that includes the Children's Defense Fund Minnesota and a range of unions and other groups with 350,000 members," would provide coverage for "about 77,000 uninsured children by 2010," and "would be expanded to adults by 2012." It would also "ensure that no one would pay more than five percent of family income for health insurance." Meanwhile, "the state's 393 nursing homes...will ask for $80 million for the next two years to prop up their rates and give all long-term-care employees a 2.9-percent cost of living raise." Supporters claim that "both proposals would save money by reducing unnecessary hospitalizations and improving health."

Modern Healthcare (1/8, DerGurahian) reported, "Health information technology (HIT) proponents are asking for the federal government to increase IT spending as the next administration says it plans to boost the health technology budget."  In fact, in a document submitted to Congress, the Information Technology & Innovation Foundation explained "how a $30 billion investment in technology infrastructure would stimulate growth in jobs and productivity in healthcare."  Specifically, the "foundation recommends spending $10 billion each in broadband networks, health IT such as electronic health records, and a 'smart' power grid that uses advanced metering technology to manage the nation's energy system."

The Winston-Salem Journal (1/9, Craver) reports, "Baptist Hospitals Inc. has reached a preliminary settlement of a lawsuit accusing the hospital of requiring its employees to pay more in fees for a group health plan -- which it co-owns -- than other corporate clients." Under the settlement, Baptist has agreed "to increase discounts and lower co-payments in the MedCost plan." In addition, employees may be "compensated for damages, particularly overpayments, as far back as March 2002." These changes may "affect more than 8,000 current Baptist employees, along with current and former beneficiaries and employees connected to its provider network." The agreement stems from a suit filed by "a current employee and a former employee" in the Middle District of North Carolina for the U.S. District Court. The plaintiffs alleged that "Baptist 'violated the duties, responsibilities and obligations imposed upon them as a fiduciary' under the Employee Retirement Income Security Act (ERISA)." For its part, Baptist contends that "selection of MedCost was a plan sponsor function, not a fiduciary function, and therefore its actions were not governed by ERISA."

The AP (1/9) reported, "A pair of financially troubled Allentown companies that provide long-term care insurance are under control of the Pennsylvania Insurance Department following a court decision." Pennsylvania's "request to take over operations of Penn Treaty Network America Insurance Co. and American Network Insurance Co." was approved by Commonwealth Court on Tuesday. The state insurance commissioner will have "authority to protect the company's assets, oversee its finances, and pay claims." Insurance Commissioner Joel Ario noted that "coverage should not be affected" by the decision.

The Baltimore Business Journal (1/9, Schultz) reports that on Jan. 7, Bravo Health (formerly Elder Health), "a company that manages private health plans, signed a contract this week with Providence Hospital in Washington, D.C." Bravo "offers Medicare Advantage plans, which supplement Medicare coverage for senior citizens with additional services. Providence Hospital will now provide healthcare for members enrolled in the plans." The Journal notes that Bravo "offers Medicare Advantage plans in Delaware, Maryland, Pennsylvania, Texas, and Washington, DC," as well as offering "Part D prescription-drug plans in 46 states."

The Wall Street Journal (1/9, B6, Brin) reports that, due to "spending delays by its hospital customers Cardinal Health, Inc. lowered its fiscal-year earnings outlook." Despite that, the company says it is adhering to its "plan to spin off its clinical and medical-products business this year." According to Cardinal chairman and CEO R. Kerry Clark, "the drug wholesaler and medical-equipment supplier plans to file appropriate forms by the end of the current quarter, and 'will be ready to proceed by this summer.'" Clark said the "unfreezing in the credit markets 'continues to keep us fairly optimistic that we are going to be able to execute this plan.'"

Life Sciences Law

Bloomberg News (1/8, Greene) reported, "More than 70 weight loss pills sold in the U.S. as dietary supplements contain drugs that aren't disclosed on the labels and can harm consumers, regulators said, expanding an earlier list." According to a statement released by the Food and Drug Administration (FDA), "the products, sold under names including Imelda Fat Reducer, Powerful Slim, and 24 Hours Diet, may cause high blood pressure, seizures, heart attacks, or strokes. ... The products illegally contain drugs that must be sold by prescription, and in some cases the pills contain medicines that haven't been approved in the" United States. On Dec. 22, the agency "released a list of more than 25 products."

The AP (1/8) reported, "Eli Lilly & Co. said Wednesday the Food and Drug Administration (FDA) is withholding approval on the long-acting version of schizophrenia treatment olanzapine." The agency "is not requiring additional studies and the company said it is preparing a risk evaluation and mitigation strategy, to be submitted in the near future."

        Some analysts may have been tipped off about FDA's decision on Zyprexa. Dow Jones Newswires (1/9, Loftus) reports that a select group of Wall Street analysts were notified on Nov. 6 by Eli Lilly about the Food and Drug Administration's (FDA) decision to withhold approval of Zyprexa (olanzapine). On Nov. 7, Lilly issued a press release on the FDA's decision. "On Tuesday, Lilly's investor-relations department emailed some analysts to say the Indianapolis company had received a letter from the [FDA] in December, in which the agency said it wanted more information from Lilly before it could approve the drug, a long-acting formulation of the antipsychotic Zyprexa." The company "says the information in question was 'immaterial' to Lilly's current and future operations, and thus didn't violate Regulation Fair Disclosure, more commonly known as Reg FD, the eight-year-old Securities and Exchange Commission rule that bars companies from tipping off analysts and big shareholders about important news before notifying the public."

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