Latest Drugwonks' Blog

Psst -- Wanna see some DNA?

  • 02.16.2017
  • Peter Pitts
Via Forbes

The Privacy Delusions Of Genetic Testing
BY: Peter Pitts

Mr. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.

Genetic testing promises a revolution in healthcare. With just a few swabs of saliva, diagnostics can provide an unprecedented look into a person’s family history and potential health risks. Within a decade, global sales of genetic tests are expected to hit $10 billion. Direct-to-consumer companies such as 23andMe and Genos have proven particularly popular, with tens of thousands of people purchasing at-home testing kits every year.

But the industry’s rapid growth rests on a dangerous delusion: that genetic data is kept private. Most people assume this sensitive information simply sits in a secure database, protected from hacks and misuse.

Far from it. Genetic-testing companies cannot guarantee privacy. And many are actively selling user data to outside parties.

The problem starts with the Health Insurance Portability and Accountability Act (HIPAA), a 1996 federal law that allows medical companies to share and sell patient data if it has been “anonymized,” or scrubbed of any obvious identifying characteristics.

In 2013, 23andMe CEO Anne Wojcicki speaks at an announcement for the Breakthrough Prize in Life Sciences on UCSF’s Mission Bay. In 2015 the Google-backed genetic testing company pledged to reintroduce some health-screening tools that regulators had forced off the market, due to concerns about accuracy and interpretation.

The Portability Act was passed when genetic testing was just a distant dream on the horizon of personalized medicine. But today, that loophole has proven to be a cash cow. For instance, 23andMe has sold access to its database to at least 13 outside pharmaceutical firms. One buyer, Genentech, ponied up a cool $10 million for the genetic profiles of people suffering from Parkinson’s. AncestryDNA, another popular personal genetics company, recently announced a lucrative data-sharing partnership with the biotech company Calico.

Customers are wrong to think their information is safely locked away. It’s not; it’s getting sold far and wide. Many testing firms that generally don’t sell patient information, such as Ambry and Invitae, give it away to public databases. Such transfers, as privacy consultant Bob Gellman puts it, leave a “big gap in protections.” Hacks are inevitable. Easily accessible, public genetic depositories are obvious targets.

If genetic data does fall into the hands of nefarious actors, it’s relatively easy for them to de-anonymize it. New lab techniques can unearth genetic markers tied to specific, physical traits, such as eye or hair color. Sleuths can then cross-reference those traits against publicly available demographic data to identify the donors.

Using this process, one MIT scientist was able to identify the people behind five supposedly anonymous genetic samples randomly selected from a public research database. It took him less than a day. Likewise, a Harvard Medical School professor dug up the identities of over 80% of the samples housed in his school’s genetic database. Privacy protections can be broken. Indeed, no less than Linda Avey, a cofounder of 23andMe, has explicitly admitted that “it’s a fallacy to think that genomic data can be fully anonymized.”

Once genetic data has been linked to a specific person, the potential for abuse is vast and frightening. Imagine a political campaign exposing a rival’s elevated risk of Alzheimer’s. Or an employer refusing to hire someone because autism runs in her family. Imagine a world where people can have their biology held against them. Such abuses represent a profound violation of privacy. That’s the risk inherent in current genetic-testing practices.

For their part, direct-to-consumer testing companies have been less than forthright about these dangers, usually burying privacy disclaimers deep in their contracts and refusing to disclose how long they keep customer data or how it can be used.

23andMe customers have to wade through pages of fine print before finding out that their information may be “shared with research partners, including commercial partners.” AncestryDNA’s contract claims a “perpetual, royalty-free, worldwide, transferable license to use your DNA.” New research published in the journal Nature found that genetic-testing companies frequently fail to meet even basic international transparency standards.

Genetic testing has tremendous benefits. We are provided a closer look at our own biology. Medical researchers develop a deeper understanding of the origins of disease and can create powerful new treatments. But today, far too many donors are operating under a false sense of security, handling profoundly intimate data without appropriate protections.

Panicking PBMs

  • 02.15.2017
  • Peter Pitts
No wonder PBMs are scared. When their profits and practices are made transparent they should be afraid – very afraid. BioCentury reveals the extent of their panic.

PBMs launch attack on drug companies

PBMs have launched an aggressive campaign to persuade the Trump administration to attack drug company profits while leaving the PBM business model untouched. The strategy was outlined in a leaked email and documents sent by Pharmaceutical Care Management Association (PCMA) President and CEO Mark Merritt to the organization's board on Feb. 6.

PBMs want to discourage the Trump administration from replacing private sector drug price negotiations with government negotiations. Much of the industry’s strategy is aimed at countering messages from PhRMA and its members that drug price complaints are the result of a bloated supply chain and insurance plan designs that place too much financial burden on consumers. 
PCMA, a trade association for PBMs, has sent the Trump administration a list of proposals for lowering drug prices.

With a few exceptions, it reads like a drug industry nightmare. The list includes reducing biologic exclusivity to seven years, eliminating pay-for-delay deals and ending tax deductions for expenses related to direct-to-consumer advertising.
PCMA also wants CMS to eliminate protected classes from Medicare Part D, create a competitive acquisition program for Part B drugs, and sharply limit the use of manufacturer coupons. PCMA estimates that over a ten-year period, ending tax deductions for direct-to-consumer ads would save $37 billion, while reducing the biologics exclusivity period and implementing the Part B acquisition program would each yield $4 billion in savings.

Merritt wrote that PCMA was rolling out the new strategy before key Trump administration health officials were in place because quick action was needed, "given the political uncertainty, headline risk, and other unique challenges that come with a President more inclined toward quick, instinctive action than the traditional, deliberative decision-making process."

He outlined efforts to build relationships with top White House staff to counter drug companies' influence, and said PCMA may try to reach the president through television. "Given the President’s interest in a select number of news programs, PCMA will also explore other forms of advertising that target those particular venues."

The trade association also plans to use a "grassroots" coalition it created with “more than 73,000 recruited allies who can be leveraged as needed to help drive our message in key districts around the country,” Merritt wrote.
PCMA declined to comment on the leak.

PhRMA and PCMA are also operating from the same advertising playbook. In massive campaigns targeting policymakers and key opinion leaders, both have promoted their messages online, in print and through video. As of Feb. 6, PCMA said it was attracting 1,100 viewers a day to its website, and digital ads launched on Jan. 16 had received 14 million views, including three million who watched video ads. 
PCMA and drug companies share some common ground. The PBM industry is pushing to exempt insurance plans in Affordable Care Act exchanges from the Medicaid best price requirement in order to allow value-based pricing. Like PhRMA and BIO, PCMA also has proposed an FDA safe harbor for drug companies and payers to discuss drugs prior to approval.

When Marathon Pharmaceuticals announced the list price for deflazacort – a steroid that helps kids with Duchenne Muscular Dystrophy maintain muscle strength – I am betting it didn’t expect to be headline news for anything other than taking a generic medicine in short supply and making it widely available in an FDA approved form.  

After all, it explained that the $89000 list price would wind up being sold to PBMs for $54000 and that after additional discounts and cost sharing most patients would pay about $20 a month for the product.  And it explained that as a company that was making the drug available for free under an expanded access program during its development, that was not going to be profitable for year and was already repurposing other generic drugs for rare conditions, the money had to come from somewhere. 

Didn’t matter.   Marathon got hammered.  And worse, if the news accounts are accurate, the list price surprised and concerned the patient groups that it had been supporting and working with to identify medicines to bring to market.  

But Marathon has wisely decided to re-launch deflazacort with a different approach to pricing. 
Since the company has been receiving criticism for free, perhaps they would not mind being told – gratis – that it has a great opportunity to lead a drug pricing revolution.  Scrapping the initial pricing model was the first step.  Here are the rest:

1.    Pledge to make the drug available for $20 a month forever and with no price increases.
2.    Make the same pledge for any new medicines it develops
3.    Use the rebates, discounts and givebacks that cut the price to $54000 and use it to reduce consumer cost at point of sale.
4.    Use the rebates, discounts, etc., to give insurers and consumers a money back guarantee if the drug does not work.
5.    Partner with specialty pharmacies that get paid for dispensing the drug and helping patients stick to regimens, report outcomes, etc., vs paying off Express Scripts, CVS and the bunch.
6.    Partner with health plans and provider networks to come up achievable outcomes from using the drug.  Studies suggest that maintaining muscle strength in kids with DMD reduces other health care costs by about $40000 a year.   It gives the kids, parents and caregivers more independence.   Then figure out how factor in the cost of the drug.  Marathon could even finance part of the cost with the freed up rebates.
7.    Use the money raised from the sale of its FDA priority review voucher (a ticket that gets you to market faster) to invest in its other pipeline products.

In doing so, Marathon could break the chokehold rebates are having on access and how they skew drug pricing.  It could focus on making sure its medicine was used in ways that generate the most value to its customers.   And best of all, it could shut up Bernie Sanders (Love the Bern but less is more).  I’d pay real money for that!

The Pharmaceutical Care Management Association, the lobbying group for pharmacy benefit management companies, produced a memo outlining a strategy to fight back against efforts to disgorge them of the rebates that are the only reason for PBMs existing.

Here's the essence of the PCMA memo:  

Dear President Trump and Congress,

We save you money so give us even greater control who gets what drugs and at what price. 
Forget the fact that we will make you money in the following manner:
We will increase the use of switching meds on people without telling them, forcing them to stop using drugs that have worked for them for years. 
We will increase step therapy protocols that maximize profit and limit choice.  We will increase the number of patients begging for medicines that work.
And we will increase the cut of retail pharmacy profits we take.
If patients get sicker and cost more as a result, who cares.  That's not our problem. Or yours

We will provide you a cut of whatever we make.  Promise. 

Peace and love

The PBMs

No one can accuse the PBMs of not being transparent.  The memo is classic rent seeking.  

It still begs the question of the use of discriminatory benefit designs to extract $60-70 billion in rebates and patient cost sharing from the sickest patients.  

Express Scripts says that "the unit cost of specialty drugs, the most expensive category of medicines, rose by 6.2 percent after drugmaker discounts. That's the smallest increase in five years."  But list prices increased by about 11 percent from 2015-2016, the same increase in list prices for specialty Rx between 2014-105.   So if the 6.2 percent is net of rebates, that means Express Scripts just pocketed more rebate dollars.  Meanwhile, cost sharing for most specialty drugs increased.   

It still begs the question of why not let price competition flourish under other business models.   The fact is, instead of PBMs pocketing rebates and clawing back revenues of retail and specialty pharmacies after the fact, why not let the price competition occur at the point of service with the goal of eliminating cost sharing.  Prices throughout the supply chain would still be proprietary but would be transparent and predictable at the consumer level.    
The memo all calls for joining forces with AHIP.  THat's a natural ally because the biggest insurers get the most significant cut of the rebates PBMs collected.   
They -- along with the drug companies -- should be paid for how well they do, not because they exist.  

Finally, as I noted in my last blog: It's NOT their money.  It's ultimately pharma's $.   Getting rid of PBMs won't help consumers if pharma doesn't use the rebate money to reduce prices and cost sharing!
The pharmacy benefit management lobbying organization and Express Scripts are running ads claiming that PBMs are reducing drug prices for consumers.

Express Scripts Fights Back Against Irresponsible Drug Pricing

"At Express Scripts, we put medicine within reach - making it more accessible and affordable for the employers and patients we serve. It's why we exist.

In a year where the high cost of prescription medications dominated headlines, Express Scripts delivered value beyond and practiced pharmacy smarter, protecting employers and patients by driving down costs and improving outcomes.

Our country needs affordable medicines, and Express Scripts is best positioned to deliver them. The proof is in the data."

That's false advertising.  Express Scripts didn't put medicines in reach.  Rather it manipulated prices and access to maximize rebates and out of pocket consumer costs. 

It's an incredibly rigged system.   Nearly $130 billion of drug spending goes to PBMs and insurers in the form of rebates.  And the spread between what PBMs get and what they pay for drug prices continues to soar:

Sources:  Berkley Research Group,  IMS-Quintiles

The industry says that amount reduces drug prices for consumers.

In fact,  the PBMs pocket the rebates and share them with insurers.  Very little, if any, of that money, goes to the patients whose prescriptions make the rebate revenue happen.

Even more,  the PBMs make the most rebate money on medicines for the sickest patients.   Of the $100 billion in brand rebates they get each year,  half are from medicines for cancer, MS, HIV, hepatitis C, etc. 

What's more, the spread between the net price increase of drugs and list price increase is growing.  

Source:  IMS, Express Scripts

In addition to pocketing these increasing margins, PBMs turn around and make the sickest patients pay up to 50 percent of the list price of a drug. 

Take diabetes for an example. Rebates for diabetes drugs average about 44 percent of list price. And they have been climbing as a share of list price since 2013.

The chart below shows how rigged the system is. The out of pocket cost of consumers is going up. Part of that increased is covered by drug companies. That means the drug companies give PBMs 44 percent of the list price of drugs in the form of rebates AND a percentage of the list price of the drug at the retail level.

The sickest one percent who use these specialty medicines pay about $10 billion a year.  That brings the total PMB revenue to $60 billion.  That's 60 percent of the price of the drug pocketed by PBMs.   
In essence, each patient (about 2.8 million) is being overcharged $23000.   That's delivering value to PBMs and their clients, not patients. 

Since cost sharing is associated with reduced use of medicines,  that means people are sicker than they should be and wind up costing more.

I estimate the medicines spent on the 1 percent are responsible for saving nearly 1 million life years since 2005.   We could have saved even more if drugs weren't put out of reach by rebate rigging. 

While PBMs should be criticized, it's important to note that they are playing with house money.  That is,  the rebates come from drug companies.  There is no reason why drug companies couldn't pass rebates directly to patients AND eliminate high-cost sharing.   

The proof is in the data. 


Trump Misunderstands Drug Pricing

  • 02.02.2017
  • Peter Pitts
From the pages of the Washington Examiner:

President Trump misunderstands what government drug price negotiations entail
By Peter J. Pitts

President Trump recently pledged to let federal officials negotiate the prices of drugs covered under Medicare. He claims this will save taxpayers billions of dollars.

Nobody doubts that Trump and his team are shrewd negotiators. But the sorts of "negotiations" that Trump refers to have nothing in common with haggling over a real estate deal. Instead, the action that Trump has proposed — repealing the non-interference clause, originally drafted by Democratic Senators Ted Kennedy and Tom Daschle — would result in Medicare drug prices going up and patient choice going down.

This clause has been the key to Medicare's success. Between 2004 and 2013, the Medicare "Part D" prescription drug benefit program cost an extraordinary 45 percent less than initial estimates. Premiums for the program also are roughly half of the government's original projections. These unprecedented results are largely due to Part D's market-based structure. Beneficiaries are free to choose from a slate of private drug coverage plans, forcing insurers to compete to offer the best options to American seniors. This year, seniors can choose from among 746 plans nationwide, with an average monthly premium of around $35.

Such great choice and low costs have led to widespread support for the program. In fact, nine out of ten seniors report satisfaction with their Part D coverage, according to a recent survey.

Through their own negotiations with drug makers, private insurers that offer Part D plans have had great success in keeping pharmaceutical prices down. In fact, the Congressional Budget Office observed that Part D plans have "secured rebates somewhat larger than the average rebates observed in commercial health plans." The non-interference clause prohibits government officials from intruding in these negotiations.

Doing away with the non-interference clause, on the other hand, "would have a negligible effect on federal spending." In a report from 2009, the CBO reiterated this view, explaining that such a reform would "have little, if any, effect on [drug] prices."

In fact, allowing the feds to negotiate drug prices under Part D likely would have a negative effect on the program. The CBO explains that to achieve any significant savings, the government would have to follow through on its threats of "not allowing [certain] drug[s] to be prescribed."

In other words, the government might drop some drugs from Medicare's coverage. Patients who need those drugs would then be forced to pay for them out-of-pocket, which would make medicines vastly more expensive for the seniors that Trump wants to help.

If patients couldn't afford the prescription, then they might switch to a less effective drug or stop taking the medicine altogether. Their health would suffer.

Unfortunately, this isn't a hypothetical consequence. Just look at what's happening with the Veterans Affairs formulary, which permits government interference. The VA covers barely 80 percent of the 200 most popular drugs in the country. Medicare, which doesn't allow for government meddling, covers 95 percent of these medicines.

Letting Medicare go the way of the VA would be devastating for seniors. Senators Kennedy and Daschle knew what they were talking about. The president should pay close attention.

Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.
ICER released its proposed new value framework approach with the usual display self-congratulation and condescension. 

ICER stated, "To succeed in our mission, we constantly listen to patients and other stakeholders. This draft contains proposed updates to our Value Assessment Framework that are a direct result of the thoughtful input we have received, and of our ongoing conversations with all stakeholders.” 

Despite the conciliatory language, nothing's changed.   It's all smoke and mirrors and process,  a me-too version of ICER's anti-patient framework.  Cuba has changed more under Raul Castro. 

The update proposals will be open to further public comment for 60 days. But it doesn’t take even 6 hours to see that ICER’s clever combination of confusing statistics, assumptions and price controls remain dangerous and discriminatory.

1.    ICER will to ignore the value of new medicines to employers, caregivers, families, and patients. 

2.    ICER will continue to use the quality-adjusted life year (QALY) to measure the value of treatment for all patients. A QALY, often used in the UK where the availability of cancer therapeutics is limited by cost, equals one year in perfect health. That means anyone who is ill is measured as LESS than a QALY, diminishing the value of their treatment.  ICER uses the QALY, despite acknowledging that the QALY can vastly underestimate and devalue the quality of life and ignores patient perspectives.

3.    ICER claims that estimating rebates taken off of list drug prices will more accurately reflect cost.  It ignores the fact that rebates are pocketed by the PBMs and insurers funding ICER.  So under ICER's framework,  health plans and PBMs pocket rebates and the out of pocket share of the list price of a drug that patients must pay. 

4.     ICER still maintains that given the additional benefit these new drugs provide is worth no more than $150, 000 for each additional year of life,  an arbitrary ceiling on the cost of new therapeutics, no matter how much they achieve.

6.     ICER still assumes health systems shouldn't spend more than $900 million a year on each new medicine without cutting spending somewhere else. 

7.    ICER still assumes that new drugs will drive up insurance costs and crowd out pothole repair.  In fact, new medicines reduce the cost of treating disease over time and promote greater productivity and tax revenue. New therapeutics can save money AND save lives!

In short, ICER is therefore still a tool for discriminating against the sick.  The new ICER is the bad old ICER:

Virginia partners with Purdue on PMPs

  • 01.26.2017
  • Peter Pitts
Governor McAuliffe Announces Grant to Integrate PMP with Health Records
~ Purdue grant will help doctors spot potential opioid abuse ~

Richmond – Governor Terry McAuliffe today announced that the Prescription Monitoring Program has been awarded a grant to help integrate use of its data in doctors’ and pharmacists’ regular work flow.

The $3 million grant from PurduePharma will allow the Department of Health Professions to connect the state PMP with electronic health records (EHR ) used by Virginia doctors and pharmacies.

This is an additional step in Virginia’s fight against the epidemic of opioid addiction and overdose.

“The epidemic of opioid addiction is a public health emergency in Virginia, and combating it is a top priority for my administration,” said Gov. McAuliffe. “The Prescription Monitoring Program is a critical prevention tool that helps curb abuse of prescription medications, and I applaud this enhancement that makes the PMP easier and more likely for physicians to use.”

The Virginia PMP allows physicians and pharmacists to check a patient’s prescription history, through the PMP database, for certain prescriptions as reported by in-state and out-of-state pharmacies. Doctors and pharmacists already check the PMP database when prescribing or dispensing controlled substances both to enhance patient care and to help prevent “doctor shopping,” abuse, or diversion of prescription medications.

Integrating the PMP with EHR – through “NarxCare” technology developed by Kentucky-based Appriss – will make the step of checking the PMP easier for prescribers and pharmacists by integrating the PMP query into the existing workflow. The goal is to improve the performance, access and usability of the PMP program data for 18,000 prescribers and 400 pharmacies in the Commonwealth of Virginia by the end of 2017. Appriss is the vendor DHP uses to operate the PMP.
“The PMP is an important resource to help us track prescription data and spot potential abuse,” said Virginia Secretary of Health and Human Resources Dr. Bill Hazel. “Integrating that data with electronic health records strengthens the PMP and is an important step in our ongoing battle against the epidemic of opioid abuse.”

This upgrade of Virginia’s prescription drug monitoring program will allow health providers and pharmacists to more effectively flag at-risk patients and curb prescription drug abuse as we fight against our commonwealth’s drug abuse epidemic,” said Virginia Attorney General Mark Herring.

“Purdue Pharma has supported prescription drug monitoring programs to help reduce the overprescribing of opioids for more than a decade, through funding, and by working with state governments, regulatory agencies and healthcare organizations,” said Mark Timney, President and Chief Executive Officer, Purdue Pharma L.P. “We recognize the immediate need for technology innovations, such as this, to improve access to the PMP data through workflow integration.”
From Inside Health Policy ...

Attorney: FDA's Firm Line On Off-Label May Be Bid To Avoid Judicial Review

A controversial FDA memo released Wednesday (Jan. 18) defending the agency's oversight of off-label communication and raising concerns over the public health impact of such communication could be used as a tactic to stall potential future litigation against the agency, according to one key attorney. However, FDA argues the memo was written instead to follow up on, and further discussions, that occurred during a November 2015 public meeting on off-label communication.

The memo, issued in the final days of the Obama administration, reasserts FDA's stance against off-label communication, which has been opposed by industry and First Amendment advocates for years and which is expected to be revisited by the incoming administration.

The release of Wednesday's memo, “Public Health Interests and First Amendment Considerations Related to Manufacturer Communications Regarding Unapproved Uses of Approved or Cleared Medical Products,” prompted strong reaction from both industry and patient advocates, reminiscent of the debate during the public meeting held late last year.

Off-label communication advocate, Peter Pitts, president of the Center for Medicine in the Public Interest and former FDA associate commissioner, had harsh words for FDA.

“I wonder if this memo was written on an electric typewriter -- since it seems to represent thinking from the 1980s,” Pitts wrote to Inside Health Policy.

However, public health advocate, Diana Zuckerman, president of the National Center for Health Research, called the memo “a great summary of the issues,” which she argued “clearly explains how destructive off-label communication is to patients and to the health of all Americans.”

FDA cited discussions of First Amendment issues during its public meeting as an impetus for releasing Wednesday's memo.

“At our November 9-10, 2016, public meeting, a number of speakers addressed First Amendment considerations...To further this discussion, this section describes the different ways that courts and commentators have addressed the intersection of the FDA Authorities and the First Amendment,” FDA wrote.

However, others argued FDA had underlying motives for publishing the controversial memo.

Coleen Klasmeier, partner at Sidley Austin, told IHP that the memo was likely a litigation tactic, by which FDA could give the appearance of ongoing activity that would make it appear premature for a court to weigh in, possibly avoiding more blows against FDA's regulation of off-label communication.

FDA was recently dealt key blows over the constitutionality of its enforcement on off-label communication. Jurisprudence has shifted so significantly in recent years that one health law expert recently cautioned that restrictions on direct-to-consumer marketing of off-label uses could be loosened should the current First Amendment jurisprudence around commercial speech be taken to its logical end.

Pitts argued that the Obama administration may have put pressure on FDA to take a final stance on the issue. “What's most surprising about this memo is that it is so contrary to the spirit of what Drs. Califf and Woodcock have been saying over the past few months. My only conclusion is that the Obama HHS leadership gave the agency explicit direction as to tone, context and conclusions,” Pitts told IHP.

Lisa Dwyer, partner at King & Spalding and former senior policy advisor at FDA, also saw FDA's recent dump of documents on off label as the Obama administration’s last stand, but said the agency's arguments were not surprising.

“The series of documents that FDA issued this week related to the provision of off-label information to health care practitioners and the provision of healthcare economic information to payors are effectively the Obama’s Administration last statements defending their positions on those issues. The documents are helpful to the extent that they green light the sharing of certain information with health care practitioners and payors, which may have resided in gray areas previously. But, they do not articulate major policy shifts,” Dwyer wrote.

The agency stuck to its guns in laying out what it believes are the legal precedents protecting its current enforcement regime. Namely, FDA cites U.S. Supreme Court case Wisconsin v. Mitchell and district court case Whitaker v. Thompson to argue that FDA can use speech to establish a crime.

“Courts have held that the government’s reliance on speech as evidence of intended use under the FD&C Act does not infringe the right of free speech under the First Amendment based on Supreme Court precedent establishing that '[t]he First Amendment . . . does not prohibit the evidentiary use of speech to establish the elements of a crime or to prove motive or intent'...Under these rulings, the FDA Authorities do not directly prohibit or restrict speech by a firm about unapproved new uses of the firm’s medical products. Instead, the FDA Authorities regulate the introduction of unapproved, adulterated, or misbranded medical products into interstate commerce and the speech of firms may be relevant to establishing an element of a violation of those provisions,” the memo states.

The government had failed to convince a court of a similar argument in the high-profile case United States v. Caronia -- namely that the defendant's speech was used as evidence of intent, not that the defendant was being prosecuted for his speech. The court disagreed, vacating the conviction of the defendant and dealing a key blow to FDA's regulation of off-label speech.

“[T]he government's assertion now that it used Caronia's efforts to promote Xyrem for off-label use only as evidence of intent is simply not true. Even if the government could have used Caronia's speech as evidence of intent, the district court record clearly shows that the government did not so limit its use of that evidence. See Mitchell, 508 U.S. At 489-90,” the Caronia decision states.

Klasmeier similarly argued that Wisconsin v. Mitchell does not save FDA from their off-label woes. That case dealt with the use of speech as evidence of a crime, which does not offend the First Amendment, however, using speech as the source of illegality, rather than an element of the crime, does offend the First Amendment, explained Klasmeier.

FDA also took on the Caronia decision Wednesday -- namely the court's interpretation of a the key commercial speech case, Central Hudson Gas & Electric Corp. v. Public Service Commission, which laid out a four-part test for determining whether restrictions on commercial speech violate the First Amendment.

“There are several points worth noting regarding the Central Hudson evaluation conducted by the Second Circuit panel majority in United States v. Caronia. First, the panel majority limited its analysis to addressing the constitutionality of a specific ‘construction of the FDCA’s misbranding provisions to prohibit and criminalize off-label promotion’… rather than evaluating FDA’s implementation approach. Second, the panel majority did not consider multiple components of public health interests advanced by the FDA Authorities and FDA’s implementation approach,” the memo states.

FDA also argues that if the court had the opportunity to review a recently published study on adverse events tied to unapproved use, it may have come to a different ruling.

However, Klasmeier points out that the agency already brought up its issues with the Central Hudson interpretation in Caronia during another high-profile off-label case, Amarin v. FDA, and the judge in that case had dinged FDA for not appealing Caronia when it had a chance.

The agency also took on Wednesday what it saw as the public health risks associated with off-label use. First, FDA argued that unapproved uses increase risks to patients and lack evidence of effectiveness.

“More recent studies have similarly found that the majority of unapproved uses for which drugs are prescribed lack adequate evidence of effectiveness, and that the risk of adverse events is higher for unapproved versus approved uses, and even higher when the unapproved use is not supported by reliable scientific data,” the memo states.

FDA also disputed arguments that health care professionals can adequately discern an appropriate level of substantiation for off-label claims.

“Research has also shown that marketing of drugs toward health care providers drives prescribing practices, including prescribing for unapproved uses, and that commonly used marketing techniques can influence prescribing decisions in a manner that is not in the patient’s best interest. Studies have found that health care providers overestimate their knowledge of what uses are FDA-approved for drugs and assume that many unapproved uses are supported by sound scientific evidence when they are supported by uncertain or no evidence,” FDA continued.

Next, the agency expressed concern over protection of patients subject to off-label uses, highlighting comments made during the agency’s November public meeting.

“The same protections are not routinely provided when approved/cleared medical products are prescribed to patients for unapproved uses as part of their medical care. Several presenters at the November 9-10, 2016 public hearing who experienced adverse events associated with the unapproved use of approved or cleared medical products noted that they did not know, prior to using the product, that the use for which they were prescribed the product was unapproved,” the memo states.

Unapproved uses could also discourage clinical trial participation and programs, such as the Orphan Drug Designation and priority review programs, FDA argued.

“With regard to maintaining incentives for clinical trial participation, firms’ actions to promote widespread use of approved/cleared medical products for unapproved uses may undermine the clinical trial process, and thus ultimately impede the development of robust and reliable scientific data to better support medical decision-making,” FDA writes.

Zuckerman highlighted FDA's explanation of the potential research disincentives as a strength of the new memo.

“It makes it clear that off label communication takes away a company’s incentive to do needed research and therefore undermines the very fabric of the FDA as an agency designed to protect patients and consumers from unsafe and ineffective medical products,” Zuckerman wrote to IHP. “[I]t is a huge disincentive for companies -- why do research to see if the 'off label' use has benefits that outweigh the risks if the product can be promoted and widely sold without approval for that use? It’s not a coincidence that studies have found that off label uses are often ineffective and cause many complications,” Zuckerman continued.

However, Pitts slammed FDA for its critical view of the impact of off-label communication.

“The memo is written to show that allowing the truthful, accurate, and non-misleading of information will cause the earth to stop spinning on its access, research into new indications to cease, malpractice cases to explode, and misleading and misbranded communications to proliferate,” Pitts wrote.

FDA, however, also outlines how it believes off-label communication could advance public health, including supporting informed decision making for patient treatments and furthering scientific research, provided the information is scientifically valid and presented in a truthful, complete, balanced, transparent and objective fashion.

Some question whether FDA's newly hardened stance will survive a change of administrations.

“The FDA’s Memo on the First Amendment lays out the best case possible defending the current FDA policies on off-label. Indeed, it appears to be a statement that current policy is constitutional and FDA is prepared to continue to defend it in court. So far, that hasn’t worked. Meanwhile, we will have a new President and a new administration starting Friday. This is definitely not the last chapter in this novel,” John Kamp, ‎executive director at Coalition for Healthcare Communication, wrote to IHP.

Pitts also told IHP that the memo runs contrary to the philosophy of the incoming administration and that he is curious to see what impacts a change in leadership will have. 
From the pages of Inside Health Policy ...

Some Health Policy Experts Question FDA's New Deceptive Ad Studies

A former FDA associate commissioner and a free-speech advocate question two proposed agency studies to determine the extent to which health care professionals (HCPs) and consumers can detect and report deceptive prescription drug promotion. The experts also raise concerns about the agency's plan to create a program for consumers to directly report deceptive advertising to the agency. However, another former FDA official saw the announcement as par for the course for the agency's drug promotion office's growing research program.

FDA announced Jan. 4 its intention to conduct two studies to determine the ability of HCPs and consumers to identify deceptive advertising.

"Prescription drug promotion sometimes includes false or misleading (i.e., deceptive) claims, images, or other presentations; for instance, representations that a drug is more effective or less risky than is demonstrated by appropriate evidence. A number of empirical studies have examined the occurrence and influence of deceptive promotion, both in regard to prescription drugs…and other products...No research to our knowledge, however, has investigated the ability of consumers and healthcare professionals (HCPs) to independently identify deceptive prescription drug promotion," FDA wrote in the Jan. 4 agency notice.

The proposed project involves two studies, both of which will entail subjects viewing websites promoting fictitious drugs.

Study one will examine how the level of deception in promotion affects subjects' perceptions and behavior. The level of deception will be varied over three levels, which the agency defines as: none, fewer, and more.

The study will attempt to answer: the proportion of subjects that can identify a promotional piece as deceptive and whether the ability to identify deceptive promotion varies depending on the level of deception; whether the degree of deception affects consumers' and HCPs' actions, including reporting the advertising; and whether people who recognize information as deceptive adjust their "attitudes and intentions toward the product."

Study two will compare the impact of implicit deceptive claims, which "suggests or implies an unstated piece of information," versus explicit deceptive claims, which "fully and clearly expresses information and leaves nothing to be implied," according to the agency notice.

Subjects in study two will be shown three websites: an explicitly false web site, a factually true but implicitly misleading site and a website with no misleading information. The study will explore whether the ability to identify deception varies depending on the type of deception; if the type of deception affects subjects' behavior, including reporting to authorities; and if detection of deception impacts a person's actions.

The agency argues that people's ability to detect deception affects public health.

"The ability to identify such promotion has important public health implications. If unable to identify deceptive promotion, consumers may ask their HCPs to prescribe specific drugs that they would not otherwise request. Likewise, HCPs unable to identify deceptive promotion may prescribe specific drugs that they would not otherwise prescribe. In the case that consumers and HCPs are able to identify deceptive promotion, then they may instead be equipped to incorporate such information into their medication decisions, and perhaps even report deceptive promotion to appropriate government regulators who can take corrective action," the agency writes.

However, Peter Pitts, president of the Center for Medicine in the Public Interest and former FDA associate commissioner, questioned the usefulness of the planned studies. "I don't think the OPDP studies will make a difference to anything whatsoever," Pitts told IHP.

Pitts also told IHP he doesn't see the value in FDA studying fake ads, because actual ads already are reviewed by FDA. The agency's resources would be better spent looking at the impact direct-to-consumer ads play in patient and physician education, argued Pitts.

The former FDA official also maintained that FDA should be looking at marketing of dietary supplements, which he argued often cross the line into drug claims. "That needs to be slammed shut," Pitts told IHP.

Richard Samp, chief council at the Washington Legal Foundation, argued the new studies likely don't signal FDA will step up its enforcement of off-label communication. It's likely that FDA is instead trying to provide clearer guidance for companies to be in compliance with FDA regulations, Samp argued.

Samp, who recently urged "FDA to abandon its current, overly restrictive view of what constitutes truthful speech and to limit its speech-suppression efforts to speech that is truly false or misleading," told IHP that he applauds FDA for doing the studies. Samp maintained that the agency has recently been "[asking] a lot of very good questions."

Heather Bauelos, counsel at King & Spalding and a former associate chief counsel in the FDA's Office of the Chief Counsel, argued that the studies aligned with OPDP's ongoing research efforts.

"FDA's research on identifying deceptive drug promotion could potentially be related to these ongoing efforts, but strikes us as par for the course for OPDP. OPDP has a very active research program, which has been a growing area in recent years. The announcement and focus of this new study appears to fit neatly among other research priorities, particularly since the ability of consumers and HCPs to identify deceptive promotion is an area that OPDP has yet to investigate," Bauelos wrote to IHP.

When asked by IHP if the studies may impact FDA's regulation of off-label promotion, Bauelos argued that any enforcement activities that come out of the study would instead likely deal with issues such as risk minimization or unsubstantiated claims.

"Any use of the results of this research in enforcement activities would likely be related to misleading promotion and advertising, which might encompass off-label communications, but typically extend to issues of risk minimization, overstatements of efficacy and other unsubstantiated claims. Overall, the study results may likely provide more information about whether FDA oversight of prescription drug promotion and advertising is protecting the public health and related government interests," Bauelos wrote.

FDA also raised the possibility Jan. 4 of creating a deceptive advertising reporting program for consumers, similar to the "Bad Ad" program currently created for HCPs

"The FDA Bad Ad program, for example, encourages HCPs to report deceptive prescription drug promotion…a goal which requires that HCPs successfully identify such promotion when it appears in the course of their duties. Likewise, similar programs could be implemented for consumers to report deceptive prescription drug promotion to FDA. Reports of deceptive promotion are useful to FDA because they allow investigators to focus their efforts in an era where the amount of promotion far exceeds the resources available to monitor everything," the agency wrote.

Samp questioned whether a similar program for consumers would be worthwhile. "I suspect [consumers] are not in a position to identify so called bad ads," Samp told IHP. Samp also maintained that nothing currently prevents a consumer from contacting FDA if they feel they've been deceived.
Pitts called the original bad ad program "a complete waste of time," maintaining that FDA never really determined what was a bad ad, and that FDA should instead be focusing on regulating safety and efficacy. "FDA does not regulate creativity," Pitts added.

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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