Institutional Corruption, Conflicts of Interest and Commitment, and Online Courses

I am writing this post from a terrific conference on Institutional Financial Conflicts of Interest In Research Universities, hosted at Harvard Law by the Petrie-Flom Center and the Edmond J. Safra Center for Ethics.

One set of fascinating questions that has been raised is when the university should reign in the ability of faculty members to take on directorships and other outside activities. While these issues have been well-known in the sciences and medicine, increasingly it has come home to roost in the law and other faculties. The Harvard Law School  recently adopted a new conflicts of interest policy, as part of a Harvard-wide revision of its policies.

Here is a question that has received less discussion from what I have seen, though it may become more pressing given Coursera, EdX, and other online teaching venues.  The New Yorker profile of my Harvard Business School colleague and world-renowned teacher Clayton Christensen reported that he has recorded videos lectures (complete with good-looking young men and women actors playing students and laughing at the right moments, what a perk!) for the University of Phoenix’s lecture series, for significant remuneration. Imagine that this series (or one of these other non-Harvard platforms) were to offer to pay half a million dollars to me to teach a 4-hour Civil Procedure (or health law or bioethics and the law course) that would in part mirror the teaching I do of the course at Harvard Law School. Should Harvard have a veto right over me doing so? Should it demand “a piece of the action” and revenue sharing agreements as a condition of letting me participate? After all, I am in some ways trading on my capitol for teaching at Harvard, and potentially also diluting the reputational value of Harvard instruction (the informercial would go “You don’t need to go to Harvard to get a lecture from a Harvard Prof! Only $9.99!”) How can the rules governing patent and other IP ownership in the  life and other sciences help us develop a sensible policy? Would or should things be different if I gave these lectures for free on YouTube rather than selling them? [Disclosure: Harvard DOES have a policy on conflicts of commitment, though I am unaware of it speaking specifically to these issues about online lectures, but happy to be corrected].

Pharmacy Compounding: Federal Law in Brief

by Jonathan J. Darrow

Until recently, most ordinary people had never heard of “pharmacy compounding.”  Then, a number of deaths and illnesses caused by a drug that was compounded in a Framingham, Massachusetts pharmacy propelled drug compounding to the national spotlight (see, e.g., Denise Grady et al., Scant Oversight of Drug Maker in Fatal Meningitis Outbreak, N.Y. Times, Oct. 6, 2012).

Compounding is the practice of preparing a drug for an individual patient’s needs, and is used when those needs cannot be met by a mass-produced drug.  See Thompson v. Western States Medical Center, 535 U.S. 357, 360 (2002).  For example, if a patient is allergic to a particular excipient (inactive ingredient) in an FDA-approved medicine, a doctor may order a special compounding pharmacy to prepare the medicine without that excipient. Because of the very small scale of compounding, Congress in 1997 attempted to exempt (via 21 U.S.C. § 353a) the industry from a number of provisions of the Food Drug and Cosmetic Act, including the requirement to submit a new drug application prior to interstate sale (21 U.S.C. § 355), the requirement that the drug labeling bear “adequate directions for use” (21 U.S.C. § 352(f)(1)), and the need to strictly follow good manufacturing practices, or GMP (see 21 U.S.C. § 351(a)(2)(B)).  A number of controls on compounding were included, however, such as the requirement that there be a valid prescription from a licensed practitioner (21 U.S.C. § 353a(a)(1)), that the drug be compounded by a licensed pharmacist (or physician) (21 U.S.C. § 353a(a)(1)), and that the drug be compounded from ingredients that meet certain quality standards (21 U.S.C. § 353a(b)(1)(A)–(B)).

However, § 353a—and with it, all of the provisions and exemptions just mentioned—was held unconstitutional in its entirety in Western States Medical Center v. Shalala, 238 F.3d 1090 (9th Cir. 2001), aff’d 535 U.S. 357 (2002), on the basis of certain restrictions on free speech that were also contained within the statute and which, according to the Ninth Circuit, could not be severed from the remaining provisions because “Congress intended to exempt compounding from the FDCA’s requirements only in return for a prohibition on promotion of specific compounded drugs.” See 535 U.S. at 366. Thereafter, the FDA promulgated a policy by which it would primarily “defer to state authorities regarding less significant violations” but would enforce a number of provisions relating to ingredient standards, unapproved substances, commercial scale production, adulteration, and promotion.  The FDA made clear that its enforcement activities “need not be limited to” these or any particular areas, however, thus negating any expectations that Congress’ now-invalidated exemptions might nevertheless provide a safe harbor through the weight of influence, if not law. Since then, the FDA has in fact exercised oversight of compounding pharmacies, as is evident from the handfuls of warning letters that it sends to non-compliant facilities each year.  These letters have addressed, for example, promotion that made unsubstantiated efficacy claims, contamination, and the large-scale manufacture of what were essentially copies of FDA-approved drugs.

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Quality Control on the Back-End via the ACA and on the Front-End via Tort Litigation

By Vickie J. Williams

I am back after a brief hiatus for the Jewish holidays. L’Shanah Tova to all my readers who have just celebrated the Jewish New Year.

The first Monday in October is, of course, a special day for all of us legal eagles–the Supreme Court is back in session. The other significant thing about October 1 for those interested in health law is that hospitals will now be fined if too many of their Medicare patients are readmitted within 30 days of discharge due to complications. As reported by the Associated Press, this is part of the Affordable Care Act’s push to incentivize quality improvement while trying to save taxpayers money. Right now, admissions for only three medical conditions are subject to the penalty: heart attacks, heart failure and pneumonia. Penalties are held to a maximum of 1% of the hospital’s Medicare payments for now, but will rise to a maximum of 3% of Medicare payments over several years. This attempt to control quality of care on the back-end constitutes a marked contrast with the way reimbursement policy has worked over the last several decades to discourage hospitals from keeping patients in beds for “social” reasons, such as having nobody to care for them at home if they are discharged. Many Medicare hospital readmissions are due to non-compliant behavior by fragile patients with few resources to help them once they leave the hospital, something that is not really subject to the hospital’s control, and says nothing about the hospital’s quality of care for the patient. For decades, Medicare payment policy, which generally pays hospitals the same amount for caring for a patient regardless of how long he or she is in the hospital, has encouraged speedy discharges. This is touted as a way to save costs. Apparently, the new policy on payments for readmission is an acknowledgement that there is both a financial and a human cost to treating medically and socially fragile people in the express lanes of health care. It remains to be seen whether the penalties result in better quality care, or significant savings, but surely they will result in increased work for hospital social workers and discharge planners. Read More

Al Roth – Nobel Prize Winner!

Congrats to our blogger, Al Roth, for his Nobel Prize in economics (alongside Lloyd S. Shapley of UCLA)!  Al built on Shapley’s theories about the best ways to match “agents” in markets — for example, students matched with schools or organ donors with patients needing organs — and conducted experiments to further illuminate Shapley’s work.  Al presented a really fascinating paper (with his colleague Judd Kessler) at one of last year’s Harvard Health Law Policy workshops on organ allocation policy and the decision to donate, and you can find lots more about his interesting work over at his Market Design blog.

Congrats again, Al! (Probably the best 4AM wake up call a person could get!)

Commentary from OPTN/UNOS Kidney Transplantation Committee Chair, John Friedewald

Related to Nikola’s post below on the proposed revisions to the deceased donor kidney allocation policy, Al Roth has posted some interesting commentary from OPTN/UNOS Kidney Transplantation Committee Chair John Friedewald (in response to a query on a list serve):

“The current proposal for kidney allocation from the UNOS kidney committee is what it is not because it was the first thing we thought of, and “wow, it’s perfect” but rather it is the product of 8 years of trial and error, consensus building, and compromise.  To state that EOFI takes into account both equity and efficiency would seem to suggest that the current UNOS proposal does not.  How could this be?  We have tried over 50 different methods of allocation and simulated them (which has not happened yet with EOFI).  And with each simulation, we view the results and how the system affects all sorts of different groups (NOT just age, but blood type, ethnic groups, sensitized patients, the effects on organ shipping, the effects on real efficiency in the system (the actual logistics).  And we have seen that some methods of allocation can generate massive utility (or efficiency in your terminology).  We can get thousands of extra life years out of the current supply of organs.  But in each instance, we have made concessions in the name of equity.  The current proposal does not increase or decrease organs to any age group by more than 5% (compared to current).   This has been our compromise on equity.  What we see in utility/efficiency is an extra 8000+ years lived each year with the current supply of organs.  So the current policy has done a tremendous amount to balance equity and utility.  And we have left thousands of life years lived on the table in the name of equity.  Now you may argue that we have not done enough in that regard, but rest assured, we have given equity hundreds of hours of consideration.

UNOS Proposes a New Kidney Allocation System

By Nikola Biller Andorno

The Kidney Transplantation Committee of the Organ Procurement and Transplantation Network (OPTN)/United Network for Organ Sharing (UNOS) has put forward a proposal that would substantially revise the existing national allocation system for kidneys from deceased donors. It would also dissolve alternate local kidney allocation systems, which were put in place to study various allocation methods, some of which have been incorporated into the new proposal.

The proposal contains a number of provisions. Whereas the current allocation system is focused on the time a patient has been on the waiting list for a kidney, the new proposal suggests a tiered system: The 20% of kidneys that are ranked highest with regard to the likely duration of functioning once transplanted will be matched with the 20% of candidate recipients who are expected to have the longest time to benefit from a transplant. The logic behind this suggestion – like many others driving health policy considerations these days – is an attempt to maximize utility. Although the attempt to extract the most benefit out of a precious, scarce resource is certainly in keeping with good stewardship, the proposal raises concerns about fairness: What about patients who have a lower life expectancy due to age, disability, coexisting conditions, or socioeconomic status? Will they be deprioritized, with an increased risk of either dying before they get a transplant or of receiving a transplant that may not last for long? This would mean a departure from current policy, which focuses on waiting time, and it would also diverge from policies for other organs, such as livers, in which urgency is of primary concern and very sick patients are prioritized. On the other hand, stratifying organs for transplantation is not entirely new: in an attempt to reduce the number of discarded organs, several European countries have established so-called ‘old-to-old’ programs, which match the kidneys of donors 65 years of age or older with recipients of a similar age.

At the same time, the OPTN/UNOS proposal aims to promote equality of opportunity for the remaining 80% of potential recipients, by calculating their waiting time from the onset of end-stage kidney failure rather than from the date when they were added to the waiting list and by correcting for biological factors such as uncommon blood type or high immune-system sensitivity.

The proposal can be expected to undergo careful scrutiny by the different stakeholders. There is a period for public comment running through December 14, 2012. Have a look at http://optn.transplant.hrsa.gov/news/newsDetail.asp?id=1579 and contribute to the debate.

Some Thoughts on Sandel’s “What Money Can’t Buy”

By Cansu Canca

Last Wednesday, I went to Michael Sandel’s lecture introducing his new book What Money Can’t Buy: The Moral Limits of Markets. His talk focused on two main arguments: There should be certain norms that govern our relationship with certain goods; and markets corrupt these norms.

I think Sandel’s position fails in three respects:

  1. The book does not provide a theoretical basis for these norms. In other words, the book does not explain where these norms come from, which norms are suitable for which relationships, or how they are violated.
  2. Given the lack of theoretical basis, the book cannot identify a stopping point for its suggestion to preserve and cultivate virtues related to these norms. There would seem to be many more activities to which the book’s suggestions could be expanded, yet even Sandel does not seem willing to go there. To the extent one accepts it, Sandel’s argument thus proves too much.
  3. Instead of presenting a theoretical basis, the book proceeds by analogy. But the analogies seem unconvincing in that their source and target situations seem materially different.

Let me flesh out these points.

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TODAY – Deceased Organ Donation and Allocation: 3 Experiments in Market Design

Sorry for the late notice, but we just learned that Al Roth will be giving a talk with this title TODAY @ 3:30 at Stanford.  More info here.

Al has also pointed us to two relevant posts over at his Market Design blog:

Allocating deceased donor kidneys for transplant: problems, some proposed changes, and how can we get more donors?

Two recent NY Times stories discuss the allocation of deceased donor kidneys:

A few different things are intertwined here: the long waiting lists, the congested process of offering kidneys and having them accepted or rejected and offered to the next person on the list, and the ordering of the list, which in turn might influence how often people need a second transplant, which comes back to how long the waiting lists are…There are lots of interesting and important questions about how to most efficiently allocate the scarce supply (see e.g. Zenios et al.)But organ allocation has an unusual aspect: how organs are allocated may also influence the supply, by changing donation behavior. [And this is the topic of Al’s talk today.]

Older kidneys work fine (thank you for asking:)

Older Kidneys Work Fine for Transplants“Using data from more than 50,000 living donor transplants from 1998 through 2003, researchers at the University of British Columbia concluded that the age of the donor made no difference to the eventual success of the transplant — except for recipients ages 18 to 39, who were more likely to succeed with a donor their own age. Patients in this group accounted for about a quarter of all the patients studied. The scientists also analyzed lists of people waiting for a kidney from a deceased donor and found that the probability of becoming ineligible for donation within three years was high, varying from 21 percent to 66 percent, depending on age, blood group and severity of disease. Waiting can be fatal, the authors contend, and an offer of a kidney should not be rejected simply because of the donor’s age.”