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Teaching Hospital Update - September 27-October 1, 2010

Email Alert

October 1, 2010

By Donnalee Donaldson and Leah Voigt*

FDA Issues Final Rule on Reporting Safety Info During Drug Clinical Trials

The Food and Drug Administration (FDA) this week issued a final rule that clarifies what safety information must be reported during clinical trials of investigational drugs and biologics. The final rule was published in the September 29 Federal Register. It requires that certain safety information that previously had not been required to be reported to FDA must be reported within fifteen (15) days of the drug company or investigator becoming aware of an occurrence, the agency said. These reports include findings from clinical or epidemiological studies that suggest a significant risk to study participants; serious suspected adverse reactions that occur at a rate higher than expected; and serious adverse events from bioavailability and bioequivalence studies, which are typically conducted for generic drugs to determine what percentage of drug is absorbed by the bloodstream and whether the drug has the same strength and affects people the same way as the brand name drug.

The final rule, which was proposed in 2003, also provides examples of evidence that would suggest that an investigational product may be the cause of a safety problem, the FDA said. Under current regulations, drug sponsors often report all serious adverse events, even if there is little reason to believe the product caused the event. Such reporting complicates and delays FDA's ability to detect a safety signal, the agency said. The examples address when a single event should be reported or when there is need to wait for more than one occurrence.

Additionally, the final rule revises definitions and reporting standards so that they are consistent with two international organizations, the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use and the World Health Organization's Council for International Organizations of Medical Sciences. The changes are designed to help ensure harmonized reporting of globally conducted clinical trials, FDA said.

Along with the final rule, FDA also issued a draft guidance for industry and investigators that provides information and advice about the new requirements and other information. The name of the document is Safety Reporting Requirements for INDs and BA/BE Studies.

FDA Issues Final Rule on Reporting Safety Info During Drug Clinical Trials, Healthcare Daily Report (Sep. 29, 2010) (note: registration is required to view this event).

Hospital Mergers Increase Cost of Healthcare

Industry experts are predicting a continued surge in the number of hospital merges as a response to the recently enacted health reform law. The acquisitions have been most noticeable in the Mid-Atlantic region and are diminishing the number of independent doctors and hospitals. The most prominent academic medical center among these mergers has been Johns Hopkins which acquired a hospital in Maryland last year and is currently awaiting approval to acquire another Washington, D.C. hospital.

In other parts of the nation, hospital mergers have been associated with increased healthcare costs. These costs take the form of higher insurance premiums which employers have been transferring to their employees in the form of lower wages or reduced benefits. Even the Federal Trade Commission (FTC) has become alarmed by the associated costs of mergers. In 2008, the FTC forced two Chicago hospitals that had merged to negotiate with insurers separately after prices increased to an unacceptable level. The FTC also filed a complaint against a healthcare system which planned to acquire another Virginia hospital, allowing to control over 75% of the Northern Virginia market. The FTC argued that the merger would lead to increased costs for employees, insurers and consumers.

Hospital administrators say that health reform laws favor integrated systems and are an incentive for mergers. In addition, more doctors want to be directly employed by hospitals in order to have stability and job security. Independent hospitals are often not financially capable of employing large numbers of doctors so consolidation becomes an attractive option. Proponents of consolidation point to the ease of getting more capital and the long-term efficiency that can be achieved by merging. However, consolidation has had a negative effect on the relationship between hospitals and insurers. As insurers continue to demand rate decreases, hospitals insist on payment increases. At least one health system has already taken its insurer to court over related contract disputes.

While some experts look forward to the long-term savings and efficiency to be derived from mergers, others are not so optimistic. As one hospital head noted, "For all the costs you jettison for economies of scale, you get new costs for being a system."

Julie Appleby, As They Consolidate, Hospitals Get Pricier, Kaiser Health News (Sep. 26, 2010).

Drugmaker, FDA, Both Admit to Mistakes in Recall

A Food and Drug Administration (FDA) official and a Johnson and Johnson executive both admitted mistakes were made during a 2009 "phantom recall" of defective packets of Motrin.

The House Oversight and Government Reform Committee on Thursday again heard testimony from executives at Johnson and Johnson about recalls and problems with over-the-counter cold medicine that have plagued the company over the past year. "We made a mistake," William Weldon, chairman and CEO of Johnson and Johnson, said, referring to the company's attempt to quietly remove Motrin products from shelves last year by sending contractors posing as customers into stores to buy up paper two-packs of adult Motrin, which were determined to have issues with solubility.

The so-called phantom recall was revealed at a May hearing before the same committee, during which Josh Sharfstein, MD, principal deputy commissioner of the FDA, announced that the agency's criminal division was considering criminal action against Johnson and Johnson for its repeated problems. After the FDA learned about the secretive recall from a state pharmacy board, the agency asked Johnson and Johnson about the action, leading Johnson and Johnson subsidiary McNeil to issue a recall of about 88,000 units of adult Motrin products in July of 2009.

During the May congressional hearing, Johnson and Johnson's head of consumer products, Colleen Goggins— who is retiring next year—pleaded ignorance about what, exactly, Johnson and Johnson hired contractors to do. The FDA knew that the company was buying back the products, Goggins said.

On Thursday, Sharfstein said the FDA did know McNeil was purchasing some products back from stores, but that the company greatly downplayed how many affected products were on store shelves. Also, the FDA had no idea that McNeil hired contractors to pose as customers and to make no mention of a recall, Sharfstein said. "We didn't know about the "phantom" of the phantom recall," Sharfstein said. "There isn't evidence that FDA knew about that." Still, the FDA knew there was a problem with a certain Motrin product and could have acted sooner, Sharfstein told the panel.

Emily Walker, Drugmaker, FDA, Both Admit to Mistakes in Recall, MedPage Today (Sep. 30, 2010).

Court Lifts Preliminary Injunction That Prevented Federally Funded Research

In a move praised by the White House, a federal appeals court this week lifted a preliminary injunction that prevented use of federal funding of research on human embryonic stem cells (hESC), thus allowing the National Institutes of Health to continue funding this research pending appeal (Sherley v. Sebelius, D.C. Cir., No. 10-5287, stay granted and motion to intervene denied September 28, 2010).

In a one-page order, the U.S. Court of Appeals for the District of Columbia Circuit lifted the administrative stay it had issued September 9, 2010, and granted the government defendant-appellants' motion for stay pending appeal of the preliminary injunction, stating that they "have satisfied the standards required for a stay pending appeal." The order indicated that the appeal will be expedited and that the parties will be notified by separate order of the briefing schedule and oral argument.

The U.S. District Court for the District of Columbia issued the injunction August 23, holding that the plaintiffs—two scientists who conduct research using adult and pluripotent stem cells—likely would succeed on the merits of their claim that the Dickey-Wicker Amendment to the Balanced Budget Downpayment Act prohibits all federal funding of hESC research on cell lines not in existence before passage of the amendment. The plaintiffs' complaint specifically targeted enforcement of NIH guidelines implementing President Obama's 2009 Executive Order, which revoked the policy set by former President George W. Bush's administration and provided scientists access to a greater number of embryonic stem cell lines compared with the twenty-one lines available under the Bush policy.

The University of California (UC) filed a motion on September 20, 2010 with the appeals court to intervene in the litigation, stating that none of the current parties adequately represents the interest of grantees. In its motion, UC said that its interests are not adequately represented by the existing parties since the defendant-appellants represent only the grantors and not the grantees and the plaintiff-appellees are neither grantors nor grantees. Both the plaintiff-appellees and government defendant-appellants filed responses September 23 objecting to UC's intervention. The government argued that UC's interests were indistinguishable from other NIH grantees and applicants who perform hESC research that is affected by the district court's preliminary injunction and that the government adequately represents UC's interests. The government did recommend that the university be allowed to file an amicus curiae brief.

On the day of the oral arguments, the appeals court denied UC's motion to intervene on appeal and ordered, on the court's own motion, to permit UC to participate on appeal as amicus curiae. That will allow the university to offer its opinions before the court, but it will not have the same rights of reply and potential oral argument that a full party would.

John Aquino, Court Lifts Preliminary Injunction That Prevented Federally Funded Research, BNA's Healthcare Daily Report (Sep. 30, 2010) (note: registration is required to view this event).

Mammogram Benefit Seen for Women in Their 40s

Researchers reported Wednesday that mammograms can cut the breast cancer death rate by twenty-six percent (26%) for women in their forties. But their results were greeted with skepticism by some experts who say they may have overestimated the benefit.

The study's authors include an epidemiologist at the University of London and a professor of radiology at the University of Uppsala School of Medicine in Sweden, who have long been advocates of mammography screening. Their paper is published online in the journal Cancer and will be presented on Friday at a meeting sponsored by the American Society for Clinical Oncology and five other organizations.

The study's conclusions contrast with those of a report last year by the United States Preventive Services Task Force, an independent group that issues guidelines on cancer screening, questioning the benefit of screening women younger than fifty (50). The new study took advantage of circumstances in Sweden, where since 1986 some counties have offered mammograms to women in their 40s and others have not, according to the lead author. The researchers compared breast cancer deaths in women who had a breast cancer diagnosis in counties that had screening with deaths in counties that did not. The rate was 26% lower in counties with screening.

Gina Kolata, Mammogram Benefit Seen for Women in Their 40s, New York Times (Sep. 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 Donnalee Donaldson (JD Candidate, Emory University School of Law, Atlanta, GA), and Leah Voigt, Esquire (Squire Sanders & Dempsey LLP, Washington, DC), for providing this week's update.

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