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Teaching Hospital Update - May 10-14, 2010


Email Alert

May 14, 2010

By Allison Cohen and Leah Voigt*

Specialty Societies Set New Policy on Drug Company Influence

Under scrutiny from politicians and physician critics, some medical specialty societies are pledging to disclose the industry funding they receive and say what that money pays for. The promise comes as part of a code approved in April by the Council of Medical Specialty Societies, whose member organizations together represent more than 650,000 American physicians. The pressure on physician organizations to tell the public about industry support and limit the companies' influence on their educational, research, and advocacy activities has been building over the last year.

In April 2009, doctor-led expert-panel reports published by the Institute of Medicine and the Journal of the American Medical Association called on physician organizations to fundamentally change how they interact with industry, emphasizing greater disclosure and tighter management of financial conflicts. The health system reform law enacted in March includes "sunshine" provisions which, starting in 2013, mandate disclosure of any industry payments or gifts of $10 or more to physicians and teaching hospitals.

Several drug-makers already disclose their payments to individual physicians, and many academic medical centers tell the public about their doctors' financial ties to industry. After the Association of American Medical Colleges issued guidance in 2008, many medical schools have banned faculty from serving on industry-sponsored speakers' bureaus.

In addition to disclosing industry support, the council's new voluntary code also bars society presidents and journal editors-in-chief from having financial relationships with for-profit health companies. It says that the majority of physicians serving on guideline-writing panels should have no ties to drugmakers or other health companies. The council's chief executive officer said that he expects most of the thirty-two member organizations to adopt the code by the year's end. He said that all the societies are at least considering the code, and none has rejected it yet.

Kevin B. O'Reilly, Specialty Societies Set New Policy on Drug Company Influence, Am. Med. News (May 10, 2010).

Drug Makers Enter Crucial Phase in Search for Alzheimer's Disease Treatments

After decades of research and multiple failed attempts to find a treatment, the pharmaceutical industry is entering a crucial phase in the search for a drug that can slow or stop the progression of Alzheimer's disease. Drugmakers see huge money-making potential because of the aging population. Alzheimer's afflicts more than five million Americans and is one of the leading causes of death in the United States, according to the Centers for Disease Control and Prevention (CDC). The market of patients globally is estimated to rise from about thirty million in 2010 to 120 million by 2050, opening the door to billions of dollars in sales.

There are an unprecedented five drugs being developed to modify the insidious disease that are in the Phase 3 final stage of U.S.-approved clinical trials. These "interventional drugs," if approved, would be markedly different from what is available, including Pfizer Inc.'s much-promoted Aricept, which temporarily treats symptoms of Alzheimer's. Exactly when one of these experimental treatments might be submitted to the U.S. Food and Drug Administration (FDA) for approval is unclear, and there is no guarantee that they will reach consumers. But researchers and some Wall Street analysts are speculating that a disease-modifying product could be on the U.S. market within five years.

Bruce Japsen, Drug Makers Enter Crucial Phase in Search for Alzheimer's Disease Treatments, L.A. TIMES (May 11, 2010).

Walgreens Won't Sell Over-the-Counter Genetic Test After FDA Raises Questions

The nation's largest drug store chain backed out Wednesday of plans to sell a test that promised to scan a customer's DNA to assess his or her risk for breast cancer, heart attacks, and a host of other diseases. Walgreens had planned to offer the Pathway Genomics test at more than 6,000 of its 7,500 stores nationwide beginning Friday, but it reversed course after FDA questioned whether the test could be sold legally without the agency's authorization.

The Washington Post reported Tuesday about plans by Pathway and Walgreens to start selling the over-the-counter test. Pathway claimed that its Insight test could evaluate a propensity for developing medical conditions such as Alzheimer's disease, diabetes, and obesity; the likelihood of parenting a baby with cystic fibrosis, Tay-Sachs, and other genetic disorders; and the possible reaction to caffeine, cholesterol-lowering drugs, blood thinners, and other medications. Other companies have been selling on the Internet tests that can analyze genes for a person's risk of some diseases, and genetic tests for paternity and ancestry have been widely available in stores. But the plan by Pathway Genomics of San Diego represented the boldest move yet to bring personalized genomic science to the mass market.

It was welcomed by those who hope that deciphering the genetic code will launch a new era in biomedical science. But it raised objections from those who worried that the average consumer would have problems interpreting the results, leading to dangerous complacency about some diseases or unnecessary alarm, as well as opening the door to privacy violations, genetic discrimination, and other problems.

An FDA official told the Post on Monday that the test required the agency's authorization because it involved consumers collecting their own DNA. Company officials disputed that, saying the test was exempt from FDA oversight because the testing was actually being done at its own lab. But in a letter to Pathway released by FDA late Wednesday, another FDA official notified the company that the test "appears to meet the definition of a device" under federal law, therefore making it subject to the agency's review. "If you do not believe that you are required to obtain FDA clearance or approval . . . please provide us with the basis for that determination," the letter stated.

Experts have long called for the FDA to regulate the burgeoning field of genetic testing more aggressively, and some speculated that the agency's move could mark a change in policy.

Rob Stein, Walgreens Won't Sell Over-the-Counter Genetic Test after FDA Raises Questions, WASHINGTON POST (May 12, 2010).

HHS Office for Civil Rights "Vigorously" Enforcing Security Rule, Agency Official Says

The U.S. Department of Health and Human Services Office for Civil Rights (OCR) has been "vigorously" enforcing the Health Insurance Portability and Accountability Act (HIPAA) Security Rule since it assumed oversight responsibility for the regulation in July 2009, an agency official said May 11, 2010. As authorized under the Health Information Technology for Economic and Clinical Health Act, OCR opens compliance reviews for all data breaches involving data for 500 or more individuals, a health information privacy specialist at OCR said at a HIPAA Security Rule conference in Washington. OCR and the National Institute for Standards and Technology sponsored the conference.

The official said that covered entities involved in large data breaches should be prepared to respond to OCR compliance reviews with information about how the entities determined the root causes of the data breaches, including documentation of a risk assessment, and evidence that the root causes of breaches were addressed by the entities. The official also said that OCR was working with covered entities involved in large data breaches to identify gaps in compliance with the Privacy and Security rules that led to breaches. OCR has enforced the HIPAA Privacy Rule since 2003. HIPAA-covered entities were required to comply with the Security Rule beginning in April 2005; initially, the Centers for Medicare & Medicaid Services enforced that rule. On May 7, 2010, OCR issued draft guidance to covered entities on ways to conduct risk analysis for securing protected health data in compliance with HIPAA standards. The guidance is the first in a series of guidance documents that OCR intends to publish for covered entities, according to its website.

Kendra Casey Plank, HHS Office for Civil Rights 'Vigorously' Enforcing Security Rule, Agency Official Says, BNA's Health Care Daily Report, May 14, 2010, (NOTE: registration is required to view this content).

Cancer Costs Double in Less Than Twenty Years

Over a period of nearly two decades, the medical costs of cancer care almost doubled in constant dollars, but remained proportional to other medical costs, researchers said. Over the same time—from 1987-2005—cancer costs shifted away from inpatient care, according to the CDC researchers. Meanwhile, the share of cancer costs picked up by private insurers and Medicaid increased while private, out-of-pocket expenditures declined slightly, they reported online in Cancer.

Much of the increase in cancer-care costs has been driven by a growing caseload—fueled in turn by an aging population, rather than a rise in per-case costs—researchers said. A health economist who was not involved in the study said that the increase "appears to be essentially in line with—proportional to—other increases in medical costs." Expressed in 2007 dollars, the total annual medical cost of cancer rose from $24.1 billion in 1987 to an average of $48.1 billion during the 2001-2005 period—a 98% increase. However, they found that the share of total medical costs represented by cancer did not change markedly— 4.8% in 1987 and 4.9% in 2001-2005.

In real terms, total inpatient spending on cancer dropped from $15.9 billion to $13.2 billion, essentially because the probability of receiving inpatient cancer treatment decreased markedly for every payor, the researchers said. At the same time, outpatient costs attributable to cancer increased nearly fourfold, from $7.5 billion to $30.3 billion.

The researchers used nationally representative data from the 1987 National Medical Expenditure Survey and the Medical Expenditure Panel Survey conducted from 2001-2005. The authors said that their analysis is limited by the original surveys, both of which captured only a fraction of total national health expenditures (excluding, for example, long term care facility residents). Both studies also relied on self-reported data, the authors cautioned, and patients with advanced disease might not have taken part, which could lead to an underestimate of costs.

Michael Smith, Cancer Costs Double in Less than 20 Years, MedPage Today (May 10, 2010).

Patterns: Lighter Load for Nurses May Aid Patients

A California state law requires hospitals to maintain certain minimal levels of nurses on duty. Now, a study suggests that the requirement may be saving lives. The study, published online last month by the journal Health Services Research, compares the outcomes of 1.1 million general surgery patients in 2005-2006 in more than 800 hospitals in three states—California, where nurses in medical-surgical units are limited to five patients at a time; and New Jersey and Pennsylvania, where nurses' patient loads averaged more than six patients.

Researchers concluded that 225 New Jersey hospital deaths, or 13.9% of all deaths in general surgery, and 200 Pennsylvania deaths, or 10.6%, could have been averted with rules similar to California's. The study's lead author acknowledged that the analysis did not prove that the California rules improved patients' outcomes. But she said that it was the most likely explanation. The researchers also surveyed more than 22,000 nurses and reported that those in California were less likely than nurses in the other states to say that they were dissatisfied with their job or planned to leave the profession.

Patterns: Lighter Load for Nurses May Aid Patients, N.Y. TIMES (May 10, 2010).

AHLA Teaching Hospital Updates are intended to provide quick summaries of cutting-edge issues of interest to teaching hospitals and their counsel. Additional information and more in-depth coverage on these topics may be available from AHLA Health Lawyers Weekly and appropriate AHLA Practice Groups.

*We would like to thank Allison Cohen, Esquire (Health Law and Policy LLM Candidate at American University Washington College of Law, Washington, DC), and Leah Voigt, Esquire (Squire Sanders & Dempsey LLP, Washington, DC), for providing this week's update.

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