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Teaching Hospital Update - November 29-December 3, 2010

Email Alert

December 3, 2010

By Amy Kaufman and Leah Voigt*

Drug Industry Ties to Doctors Weaken as Disclosure, Gift Rules Spread

Increased scrutiny of the potential conflicts of interest posed when physicians accept gifts and payments from industry—combined with greater pay disclosure and a sputtering pharmaceutical pipeline—have led to a significant drop in doctors' financial ties to drugmakers. Among the indicators of a declining link between physicians and industry: commercial support for continuing medical education dropped 20%, from a little more than $1 billion in 2004 to $856 million in 2009, according to the Accreditation Council for Continuing Medical Education; the amount drugmakers spent on drug rep details dropped 10% from $6.9 billion in 2005 to $6.3 billion in 2009, the health data firm IMS Health reports; and nearly a quarter of physician practices refuse to see drug reps, according to an ongoing survey of 237,000 U.S. clinics conducted by SK&A, a prescriber-profiling firm. Nearly half of practices see reps only with an appointment, up from 40% in February 2009.

The latest evidence demonstrating the changing relationship between physicians and industry comes from a May 2009 survey of nearly 1,900 doctors whose results were published in the November 8 issue of the Archives of Internal Medicine. The article, a follow-up to a 2004 survey of more than 1,600 doctors, reports that across the board physicians are taking fewer gifts and payments from the pharmaceutical industry.

Most doctors still accepted drug samples and free lunches from industry, but the number of physicians who took samples dropped 20% from 2004, while 13% fewer doctors ate industry-provided meals. About half as many physicians accepted industry-subsidized admissions to CME events or were reimbursed for meeting expenses such as food and lodging. The percentage of physicians taking industry pay to serve on advisory boards and speakers' bureaus and as consultants fell by more than half. Consulting relationships declined the most, dropping 61% between 2004 and 2009. Fewer than 10% of doctors reported agreeing to any of these financial arrangements in 2009.

The weakening in physician-industry financial ties has emerged as influential organizations such as the Institute of Medicine and the Association of American Medical Colleges issued guidelines calling for closer scrutiny of, and in some cases outright bans on, practices such as accepting drug rep-provided meals and serving on industry speakers' bureaus. Adding another layer of scrutiny: greater disclosure of industry payments to physicians—by choice among a growing number of medical centers and drugmakers during the last few years and by federal mandate under the "sunshine" provisions of health system reform.

Kevin O'Reilly, Drug Industry Ties to Doctors Weaken as Gift Rules Spread, Am. Med News (Nov. 29, 2010).

HHS Launches Healthy People 2020

With 2010 nearly over, the Department of Health and Human Services (HHS) has updated its Healthy People program to reduce health risk factors and disparities, providing new topics and objectives for 2020. The Healthy People initiative began in 1979 with a Surgeon General's report, which set public health targets to be reached by 1990. It has been revised in ten year increments ever since.

The 2020 version identifies nearly 600 objectives, ranging from homicides to smoking cessation attempts, in forty-two topic areas. In announcing the update, HHS called the new targets and objectives "ambitious yet achievable." For example, the department set a national goal for new-onset diabetes of 7.2 cases per 1,000 adults in 2020, compared with the current baseline of 8.0.

The goal setters noted that a wide range of interventions and services are available to meet the goal, such as community-based programs to promote physical activity and healthy diets. But much of the Healthy People track record fails to support HHS' optimism.

In announcing the new update, the department claimed that "the country has either progressed toward or met" 71% of the Healthy People 2010 targets. However, a MedPage Today review of data posted on the Healthy People 2010 website indicated that most of this progress was minimal and few of the objectives were met completely.

Among the successes: significant increases in pediatric pneumococcal vaccination rates and reductions in the number of emergency department visits for asthma among children and adults. Perhaps the most important achievement was in reducing coronary heart disease deaths. The Healthy People 2010 target was 162 per 100,000 population, starting from 203 when that goal was set in 2000.

John Gever, HHS Launches Healthy People 2020, MedPage Today (Dec. 2, 2010).

Report: New Science, Expectations Complicate Industry's FDA Relationship

Growing public demand for increased medical device and drug safety, as well as the need to develop medical products faster, is complicating the current regulatory approval process and the relationship between the life sciences industry and the Food and Drug Administration FDA), according to a report published this week by PricewaterhouseCoopers LLP.

The report, Improving America's Health V-A Survey of the Working Relationship Between the Life Sciences Industry and FDA, found that life sciences companies feel communication with FDA has improved steadily since passage of the FDA Modernization Act of 1997, but new expectations are fueling frustration with the regulatory review process. The report provides feedback from fifty sciences companies, including the makers of biologics, drugs, medical devices, and diagnostics.

Specifically, the report found that 38% of the companies surveyed said they feel that the overall working relationship with FDA has improved over the past two years; 80% said that FDA is providing better guidance about its expectations and 68% said they are incorporating this feedback into product development; and 64% of companies said that meeting with FDA before submitting review materials improved the quality of their applications, and 87% said it expedited their applications, but industry did not always take advantage of the meetings and only about half said FDA consistently encouraged these meetings.

According to the report, six out of ten companies expressed frustration that FDA had changed its positions during the review of a product and four out of ten felt that some products were denied approval because of FDA's inadequate review resources. The industry also feels that FDA is not keeping up with rapidly advancing technology, the report said. Only 8% of drug and device makers think FDA is doing enough to advance personalized medicine. Additionally, 56% of respondents who are familiar with FDA's Critical Path Initiative think that FDA currently lacks the capability to implement the initiative. The goal of the Critical Path Initiative is to bring innovative, high priority therapies to market quickly.

Report: New Science, Expectations Complicate Industry's FDA Relationship, BNA's Health Care Daily Report (Dec. 1, 2010) (note: Registration is required to view this content).

Doctors, Hospitals to Get Advice from U.S.

The U.S. Department of Justice (DOJ) said it will ease the transition under the new federal healthcare law for doctors and hospitals by helping them avoid antitrust violations when they form professional organizations. DOJ will provide an "expedited" review of proposed accountable care organizations (ACO) under the new law, Sharis Pozen, chief of staff of the department's antitrust division, told a House judiciary subcommittee in Washington today. "[DOJ] intends to offer whatever guidance and clarity may be needed to ensure that providers pursue beneficial integrated ACOs without running afoul of the antitrust laws," she said.

Doctors and hospital organizations, including the American Medical Association, the American Hospital Association and Premier Inc., a Charlotte, North Carolina-based group purchaser of medical supplies and a consultant for hospitals, have been pressing for quicker reviews.

ACOs are a centerpiece of the healthcare overhaul passed by congress this year. They could save Medicare at least $4.9 billion through 2019, according to the Congressional Budget Office. DOJ and the Federal Trade Commission (FTC) must determine whether the proposed alliances of doctors and hospitals, designed to cut costs, will stifle competition or promote price-fixing. The last federal guidance on physician organizations was issued fourteen years ago. While FTC is open to revising the guidelines, recent agency letters and speeches have helped clarify antitrust law in a way that is "well-understood," said Richard Feinstein, director of the FTC Bureau of Competition.

Jeff Bliss and Alex Wayne, Doctors, Hospitals to get Advice from U.S., Bloomberg News (Dec. 1, 2010).

Lawmakers Rally Behind Med-Tech Industry

Minnesota's senators and congressmen want a say in any Food and Drug Administration (FDA) device-approval changes. Eight bipartisan members of Minnesota's congressional delegation are raising concern about proposed changes in the way most medical devices are cleared for use in patients. The group said in a letter to FDA Commissioner Margaret Hamburg that any changes to the agency's 510(k) approval process "should not be made unless there is clear evidence that the changes are necessary to address a demonstrated public health concern."

FDA is contemplating vast changes to the 510(k) approval pathway that would presumably toughen regulations for companies seeking to launch their products in the United States. Currently, these firms need to prove their product is substantially similar to one already on the market—often without clinical studies on patients. Minnesota's formidable medical technology industry—with help from local members of Congress—has loudly protested some of the changes, saying excessive regulation will stifle the development of new and innovative products, as well as quash the creation of lucrative jobs that propel the state's economy.

The November 24 letter was signed by Democratic senators Amy Klobuchar and Al Franken, Republican Reps. Erik Paulsen, John Kline, and Michele Bachmann, as well as Democratic Reps. Betty McCollum, Keith Ellison, and Collin Peterson. Many of the same bipartisan players rallied earlier this year to cut in half a proposed $40 billion tax on medical device companies that was designed to help pay for healthcare reform.

Janet Moore, Lawmakers Rally Behind Med-Tech Industry, Star Tribune (Nov. 29, 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 Amy Kaufman, Esquire (Nashville, TN), and Leah Voigt, Esquire (Squire Sanders & Dempsey LLP, Washington, DC), for providing this week's update.

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