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Massachusetts’ Ban on “Prescribing and Dispensing” Zohydro: The Arguments For and Against Preemption

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By Kate Greenwood

Cross-Posted at Health Reform Watch

As Kurt Karst reported at FDA Law Blog, here, drug maker Zogenix has filed a Motion for Temporary Restraining Order and Preliminary Injunction challenging Massachusetts’ decision to “prohibit the prescribing and dispensing” of the company’s extended-release hydrocodone capsule, Zohydro ER. At a hearing on Tuesday, Judge Rya Zobel told the parties that she is likely to decide in the company’s favor. While Zogenix argues that Massachusetts’ action is unconstitutional for a number of reasons, including that it violates the dormant Commerce Clause and the Contracts Clause, Karst predicts that Judge Zobel will grant Zogenix’ motion on preemption grounds.

Zogenix argues in its Memorandum that “[t]he emergency declaration issued by Governor Patrick, and related order by the Commissioner of the Department of Public Health (DPH), purported to ban Zohydro™ ER based on safety concerns that squarely conflict with – and are therefore preempted by – FDA’s determination that Zohydro ER® is safe and effective and may be marketed and sold in the United States.”  Zogenix notes that the reason Massachusetts gave for banning Zohydro—that the drug lacks abuse-deterrence features—was expressly considered by the Food and Drug Administration during the course of the approval process.  FDA concluded that Zohydro’s benefits, in particular the fact that it contains no acetaminophen, outweighed the risks posed by its lack of such features.

Zogenix acknowledges that the Supreme Court’s decision in Wyeth v. Levine stands for the proposition that when the FDA approves the contents of a drug’s label, the agency merely establishes “a ‘floor’ upon which state tort requirements may build.” But, the company argues, “this is not a labeling case; it is a case about the safety and efficacy vel non of a drug already found to be safe and effective.”  If Massachusetts’ ban is upheld, Zogenix concludes, “Congress’s objectives to promote the public health through FDA drug approvals could be directly contravened by a potential flood of state policy disagreements.”

While Massachusetts has not yet filed papers in opposition to Zogenix motion, there are a number of strong counter arguments it could make. Read More

Pom Wonderful v. Coca-Cola: Will the Supreme Court’s Decision Have Implications Beyond “Pomegranate Blueberry Flavored Blend of 5 Juices”?

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By Kate Greenwood

Cross-Posted at Health Reform Watch

On April 21st, the Supreme Court will hear oral argument in Pom Wonderful v. The Coca-Cola Company, a case in which Pom sued Coke under Section 43(a) of the Lanham Act arguing that Coke’s product “Pomegranate Blueberry Flavored Blend of 5 Juices” was misleadingly named.  Coke countered that the suit should be dismissed because the name was specifically authorized by the Food and Drug Administration’s regulations governing flavored juice blends, and both the District Court and the Ninth Circuit Court of Appeals agreed.

In its opening brief filed last week, Pom argues that neither the provisions of the Food, Drug and Cosmetic Act governing food and beverage labeling generally, nor the regulations that specifically address juice blends, precludes the application of the Lanham Act to Coke’s misleading juice label.  This conclusion, per Pom,

“follows inexorably from this Court’s holding in Wyeth v. Levine … that FDA’s approval of a drug label does not displace state failure-to-warn suits challenging the adequacy of the warning. … Following Wyeth, there can be no serious argument that the provisions of the FDCA are in ‘irreconcilable conflict’ with the Lanham Act.  FDA does not even generally review—much less approve—particular food labels; nothing even arguably prevented Coca-Cola from designing its label to avoid misleading consumers; and FDA has given no indication that its juice-naming rules set the outer bounds of labeling regulation.” 

In its brief opposing Pom’s petition for certiorari, Coke distinguished Wyeth, noting that the provisions of the FDCA governing drug labeling do not expressly preempt state regulation.  The provisions of the FDCA governing food and beverage labels, by contrast, “expressly supplant State laws—including those that imposed more ‘stringent’ requirements[.]”  This, Coke argued, shows that the food and beverage statutory provisions and their implementing regulations “were not intended as a ‘floor’ but rather as the exclusive body of regulation to which food and beverage labels would be subject.”

In her latest article, The Magical Thinking of Food Labeling: The NLEA as a Failed Statute, Diana Winters decries the time and money courts deciding food and beverage labeling cases must spend “negotiating the interaction between federal and state law, with inconsistent outcomes”.  Read More

Clinical Trials of Primary Care Drugs: Could Smaller Be Better?

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By Kate Greenwood

Cross-Posted at Heath Reform Watch

Lately it seems that each passing day brings another article about the cost of orphan drugs.  Earlier this week at FiercePharma, Tracy Staton reported that the United Kingdom’s National Institute for Health and Clinical Excellence (NICE) has asked Alexion Pharmaceuticals to justify the price of its drug Soliris which is, per Staton, “the most expensive drug in the world” at around $569,000 a year.  Specifically, NICE seeks “‘clarification from the company on aspects of the manufacturing, research and development costs’” of the drug.  According to Staton, this latest development in a review process characterized by “halting progress” is “a departure from NICE’s usual calculations, which typically focus on quality-of-life years and the like.”

Pushback by NICE and other payers notwithstanding, the orphan drug market is growing.  As I blogged about here, in 2013 EvaluatePharma estimated that “the worldwide orphan drug market is set to grow to $127 [billion], a compound annual growth rate of +7.4% per year between 2012 and 2018[,]” which “is double that of the overall prescription drug market, excluding generics, which is set to grow at +3.7% per year.”  In a recent article in the New England Journal of Medicine, venture-capital investors Robert Kocher and Bryan Roberts note that “more than half of the 139 drugs approved by the FDA since 2009 are for orphan diseases” and suggest that there is a risk of “systematically underinvesting in other important areas of medicine.”

Kocher and Roberts’ explain that one reason that orphan drugs attract investment is that their development costs are low.  The problem or potential problem of underinvestment in diseases like depression and diabetes could therefore be addressed, they contend, by bringing the cost of developing treatments for these common conditions in line with the cost of developing treatments for rare diseases.  And, they argue, one promising approach to doing so is to reduce clinical trial costs by reducing the size of clinical trials. Read More

Professional Licensing Boards and Antitrust Liability

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[Blogger’s Note: I am very pleased to share this post by my colleague at Seton Hall Law, Tara Adams Ragone, in which she discusses North Carolina Board of Dental Examiners v. FTC, drawing on both her scholarly work on the intersection of health care and antitrust law and on her deep experience prosecuting medical licensing actions for the state of New Jersey.]

By Tara Adams Ragone

Cross-Posted at Health Reform Watch

Should state professional boards, which regulate a growing and diverse array of professions and often are composed of professionals from the regulated community, be immune from federal antitrust liability if they engage in anticompetitive conduct?  The Federal Trade Commission thinks not in all cases, the Fourth Circuit agreed, and the North Carolina Board of Dental Examiners has asked the United States Supreme Court to review this decision.

Sasha Volokh recently devoted a 5-part series of blog posts to the major legal issues in play in this case.  He provides an overview of the antitrust state action immunity doctrine here, summarizes the facts underlying the case, North Carolina Board of Dental Examiners v. FTC, here, outlines the differing tests used in the circuits when applying the state action immunity doctrine to professional boards here, offers his opinion on how the Supreme Court ought to resolve these conflicts here (he leans towards the Fourth Circuit’s analysis), and suggests a possible way for the Board to work around the FTC’s injunction (by simply rephrasing its letters to threaten litigation) here.  Sasha’s posts provide an accessible and helpful primer on the case and relevant antitrust case law and are worth a read.

While we wait to learn if the Supreme Court will review this case, Professors Aaron Edlin and Rebecca Haw tackle the question of whether the actions of state professional licensing boards should be subject to antitrust scrutiny in their article, “Cartels by Another Name: Should Licensed Occupations Face Antitrust Scrutiny?” (available on SSRN and forthcoming in the University of Pennsylvania Law Review).  Although they use a question mark in their title, their characterization of licensing boards as cartels is a powerful tipoff to their ultimate conclusion – that licensing boards composed primarily of competitors regulating their own profession should not escape antitrust review: Read More

This Oscar Is No Grouch: Can Oscar Health Succeed in Making Health Insurance Fun?

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By Kate Greenwood

Cross-Posted at Health Reform Watch

On Wednesday night, I went to a panel presentation sponsored by the group NYC Health Business Leaders on the roll out of New York State’s health insurance exchange.  Among the speakers was Mario Schlosser, the co-founder and co-CEO of the venture-capital-backed start-up health insurance company Oscar Health, which offers a full range of plans through New York’s exchange.  As NPR reportedlast month in a story about Oscar, “it’s been years since a new, for-profit health insurance company launched in the U.S.”, but the Affordable Care Act created a window of opportunity for new entrants.

Schlosser began his talk by giving us a tour of his personal account on Oscar’s website, www.hioscar.com.  Among other things, he showed us the Facebook-like timeline, updated in real time, which tracks his two young children’s many visits to the pediatrician.  He typed “my tummy hurts” into the site’s search engine and the site provided information on what might be wrong and on where he might turn for help, ranging from a pharmacist to a gastroenterologist, with cost estimates for each option.  Additional searches yielded information on covered podiatrists accepting new patients with offices near his apartment and on the out-of-pocket cost of a prescription for diazepam (which was zero, since there is no co-payment for generic drugs for Oscar enrollees).

As an audience member noted, none of this is new exactly.  What is new is to have this kind of data-driven, state-of-the-art user experience being offered by a health insurer.  Schlosser told the audience that Oscar’s pharmacy benefit manager and other vendors are providing the company with real-time data that other insurers have not demanded.  And, according to Schlosser, Oscar’s customers are responding.  Nearly all of them have used the company’s website.  A surprising five percent of them use the company’s website every day. Read More

Treating Addiction in Pregnant Women and New Mothers: A Promising Application for Social Impact Financing?

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By Kate Greenwood

Cross-Posted at Health Reform Watch 

Last week, vtdigger.org ran an interesting article by Laura Krantz on the difficulties pregnant women and new mothers who are addicted to drugs have accessing not just drug treatment but also all of the other services and supports they need. Krantz reported on a hearing before the Human Services Committee of the Vermont House of Representatives at which a new mother in recovery from addiction, “a neonatalogist, a substance abuse clinician, a Health Department employee and a representative from the Phoenix House, a residential treatment facility in Brattleboro … all said women need not only treatment, but housing, transportation and help finding jobs.”

Alice Larned, a substance abuse clinician at the Lund Family Center in Burlington, told Krantz that spaces in residential detoxification facilities are increasingly scarce. The demand for transitional housing for women who have completed inpatient detoxification also exceeds the supply. Add to this the sad fact that women can wait a year or more for an appointment with a physician who can treat them with methadone or buprenorphine. Larned told Krantz that many of the women who start treatment with her are taking buprenorphine they bought illegally, an “indication they want help ‘yet we don’t have the legitimate means for them to get this medication[.]’”

In another story that ran last week on NPR, Steve Zind spoke with Harry Chen, the Commissioner of the Vermont Department of Public Health, who emphasized the complexities inherent in treating addiction in pregnant women and new mothers. To do so successfully, Commissioner Chen explained, “requires so many different systems working together well: the social service system, the health care system, the substance abuse system and even to some extent the correctional system.”

I confess that one reason that these two articles caught my attention is that Alice Larned is my sister.  Another reason, though, is that the problem described in the articles seems like a promising application for social impact financing, something that has been in the news here in New Jersey in recent weeks.

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A “Torrent of Studies” on Direct-to-Consumer Advertising: Is FDA Shoring Up Its Defenses?

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By Kate Greenwood

Cross-Posted at Health Reform Watch

At Regulatory Focus earlier this week, Alexander Gaffney wrote about what he characterized as “a torrent of studies” that FDA is conducting or has proposed conducting on prescription drug promotion, and, in particular, on direct-to-consumer advertisements.  The studies include, among others, a survey study aimed at sussing out “the influence of DTC advertising in the examination room and on the relationships between healthcare professionals and patients”, a study exploring similarities and differences in the responses of adolescents and their parents to web-based prescription drug advertising, and a study that will use eye tracking technology to collect data on the effect of distracting audio and visuals on participants’ attention to risk information. 

Gaffney speculates that “the proposed studies could indicate coming changes in FDA’s regulatory approach toward advertising[.]”  Another possibility is that the studies are part of an effort by FDA to build up the evidence base supporting its current regulatory approach.  In a Tweet commenting on Gaffney’s article, Patricia Zettler–a  Fellow at Stanford Law School’s Center for Law and the Biosciences who was formerly an Associate Chief Counsel for Drugs at FDA’s Office of Chief Counsel–asks whether the data generated by the studies could help insulate FDA from First Amendment challenges. Read More

The Co-Pay Coupon Controversy: Time for Detente?

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By Kate Greenwood

Cross-Posted at Health Reform Watch

At the end of last month, the Secretary of Health and Human Services Kathleen Sebelius made headlines when, in a letter addressed to Representative Jim McDermott (D-WA), she announced that “[qualified health plans], other programs related to the Federally-facilitated Marketplace, and other programs under Title I of the Affordable Care Act” were not “federal health care programs under section 1128B of the Social Security Act”.  One implication of the Secretary’s interpretation is that the “anti-kickback act”, which is found in Section 1128B, does not apply to qualified health plans.  And that, in turn, means, among other things, that individuals insured under those plans, unlike individuals on Medicare or Medicaid, will be able to use drug company coupons to defray the cost of their prescription drugs.

Prescription drug coupons have been a source of controversy, favored by branded manufacturers and patients, and opposed by generic manufacturers, health insurers, third party payers, and pharmaceutical benefit managers.  Joseph Ross and Aaron Kesselheim studied a large number of coupons advertised on the website www.internetdrugcoupons.com and found that “62% (231 of 374) were for brand-name medications for which lower-cost therapeutic alternatives were available.”  Ross and Kesselheim argue that the coupons are costly at the population level, but also for individual patients.  This is because the coupons are nearly always time-delimited and the short-term savings do not typically outweigh the long-term cost of taking a branded drug.  On the other hand,  in an article in last week’s JAMA, Leah Zullig and colleagues pointed out that reducing co-payments has been proven to improve medication adherence, a problem which there “is an increasing business case for addressing[.]”

The coupon controversy has carried over into the courts.  On March 7, 2012, seven lawsuits were filed in district courts by third party payers against a number of drugmakers, alleging that prescription drug coupons violate antitrust, commercial bribery, and racketeering laws.  (This post at FDA Law Blog includes links to the seven complaints, and this one provides an update on the status of the litigation as of late June 2013.)

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Stillbirth: Still Not There*

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By Kate Greenwood

Cross-Posted at Health Reform Watch

As I have blogged about before, including in this post from 2010, and this one from 2009, about 1 in every 160 deliveries in this country ends in a stillbirth, and all too frequently no one can say why.  An article by Robert Goldenberg and colleagues in this month’s issue of the American Journal of Perinatology suggests that the knowledge gap is likely to persist.

As Goldenberg explains, the three tests that provide the most information about what caused a stillbirth are (1) an autopsy, (2) an examination of the placenta, fetal membranes, and umbilical cord, and (3) a karyotype (a test for chromosome abnormality).  Of the members of the American College of Obstetricians and Gynecologists who responded to a 2011 survey, however, 23.3 reported that they infrequently ordered an autopsy when a stillbirth occurred (0.4 percent reported that they never did) and 24.8 percent reported that they infrequently ordered a karyotype (0.3 percent reported that they never did).  These results comport with the findings of a qualitative study published in 2012 in BMC Pregnancy & Childbirth.  The authors, Maureen Kelley and Susan Trinidad, reported that obstetrician-gynecologists in two focus groups “would not routinely offer an autopsy to the parents, but would conduct one if requested. Some would offer/order lab work on the placenta if the cause of the stillbirth were not known.”

A surprisingly high 30.2 percent of the doctors who responded to Goldenberg’s survey indicated that they frequently, but do not always, review the results of post-stillbirth testing; an additional 11.9 percent admitted that they infrequently review such results.  The survey also revealed that “the large majority of stillbirth certificates are filled out prior to the return of all test results”, some “by providers other than the physician”, “making it “highly likely that that the vital statistic cause of death reports are inaccurate.” Read More

Kaiser v. Pfizer and the Question of Who Pays When Fraudulent Pharmaceutical Promotion Has Its Intended Effect

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By Kate Greenwood

Cross-Posted at Health Reform Watch

On April 3, 2013, the First Circuit issued decisions in three cases in which third-party payers sought compensation from Pfizer for damages sustained as a result of fraudulent pharmaceutical promotion.  The decisions were noteworthy because in them the First Circuit lent its imprimatur to a causal chain of injury running from a pharmaceutical company’s fraudulent promotion, through the prescribing decisions of thousands of individual physicians, to the prescriptions for which a third-party payer paid.  In the lead case, brought by Kaiser Foundation Health Plan and Kaiser Foundation Hospitals, the  appellate court upheld a jury verdict that, after trebling, came to $142 million.

Not surprisingly, Pfizer has petitioned for certiorari, arguing that the First Circuit’s decisions “warrant review because they…raise important and recurring questions concerning the proper test for proximate cause under RICO and the permissibility of aggregate statistical proof in collective fraud cases.”  Amici briefs filed by BIO, PhRMA, and the Washington Legal Foundation echo these arguments, leaning heavily on the spectre of a “staggering” increase in suits founded on “pharmaceutical companies’ alleged off-label promotion.”  In addition to the financial burden posed by the “likely surge”, amici argue that it would chill their “truthful and constitutionally protected speech concerning beneficial off-label uses of FDA-approved drugs.”

Civil RICO claims cannot be predicated on “off-label promotion”, however.  To state a claim, a plaintiff has to allege that the defendant pharmaceutical company engaged in one of the predicate acts enumerated in the RICO statute, typically mail or wire fraud.  In this case, the jury found that Pfizer promoted the anti-seizure drug Neurontin as a safe and effective treatment for indications for which Pfizer knew it was no more effective than a placebo.  On appeal, Pfizer did not contest the jury’s finding that it committed fraud.  This distinguishes this case from those decided by other circuits and suggests that the First Circuit’s decisions may not open the floodgates quite as wide as Pfizer and its amici claim.

There is also reason to question the claim that the First Circuit adopted a new, more “relaxed” standard of causation in the case. Read More