Latest Drugwonks' Blog
Commentary from today's edition of The Wall Street Journal ...
Patent Remedy
By RONALD A. CASS
The European Union's trade commissioner, Peter Mandelson, recently joined the U.S. in protesting Thailand's effective theft of pharmaceutical companies' intellectual property. Despite efforts of health activists to portray the world community as accepting -- even endorsing -- Thailand's conduct, there is growing appreciation that trampling patents to allow a middle-income nation to cut its spending on drugs seriously threatens the world's system of protections for innovation.
The basic issues are relatively simple. Improvements in the way we treat diseases, communicate, store information and do so much else depend on innovation. To encourage innovators, laws give them the right to control the uses of their inventions for a period of time, to decide who makes products using their innovations, and to set the price for access to this "intellectual property."
The World Trade Organization's agreement on Trade-Related Aspects of Intellectual Property Rights (Trips) ties other trade rights to adequate respect for partners' patents, copyrights and trademarks. Compulsory licensing -- forcing patent owners to allow others to manufacture products using their innovations at prices set by the government -- is permitted under extraordinary conditions, such as when a critical patent is not being used to produce essential goods. This has always been understood as limited to a small set of special cases.
While the system of IP protections has worked well to encourage investment in innovations, some groups oppose protection of all property rights. Over the past decade, these groups have worked hard to alter the meaning of the Trips agreement and to encourage governments to use compulsory licensing to break IP protections.
These groups gained a small victory when the WTO said in 2001 that Trips encompassed "flexibilities" -- including compulsory licensing -- that allow governments to deal with health emergencies such as might be posed by epidemics of tuberculosis, malaria or HIV/AIDS in sub-Saharan Africa. WTO ministers agreed as well that there was not a single definition for all nations at all times of what constitutes an appropriate sort of emergency to justify compulsory licensing.
The activists used that declaration to argue that Trips authorizes any nation to impose compulsory licensing on any patent, especially any drug patent, for any reason. The military-backed Thai government's compulsory licensing initiative, pushed by its Public Health Ministry, is the first fruit of the activists' campaign -- a relatively developed nation facing no epidemic, just seeking to shift its spending priorities by taking someone else's property.
The U.S. clearly signaled its view that this works a radical change in the legal system for protecting IP. It put Thailand on the Priority Watch list for nations violating IP rights and formally protested Thailand's action. These moves could lead to trade sanctions on Thailand.
The EU's letter, adding Europe's voice, is especially interesting given the attacks that Neelie Kroes, the EU's competition minister, has launched on IP rights. While Ms. Kroes blithely assumes that her assertion of control over the uses and prices of IP created by firms like Microsoft won't harm innovation, Mr. Mandelson recognizes that any government's assault on the system of IP protections can unravel a thread that supports an increasing proportion of the global economy.
Having set the stage for a potentially disastrous turn in world protection of IP rights, Thailand has a chance to show leadership in a very different way. If its prime minister reins in its Public Health Ministry, Thailand can remind those in Europe and the U.S. who waver on protection for IP rights that the costs of undermining innovation vastly exceed short-term gains from cutting prices on patented drugs. Protecting the benefits from innovation and trade should matter more than pleasing the activists -- no matter how loudly they complain.
Mr. Cass is chairman of the Center for the Rule of Law, dean emeritus of Boston University School of Law and former vice chairman of the U.S. International Trade Commission.
Patent Remedy
By RONALD A. CASS
The European Union's trade commissioner, Peter Mandelson, recently joined the U.S. in protesting Thailand's effective theft of pharmaceutical companies' intellectual property. Despite efforts of health activists to portray the world community as accepting -- even endorsing -- Thailand's conduct, there is growing appreciation that trampling patents to allow a middle-income nation to cut its spending on drugs seriously threatens the world's system of protections for innovation.
The basic issues are relatively simple. Improvements in the way we treat diseases, communicate, store information and do so much else depend on innovation. To encourage innovators, laws give them the right to control the uses of their inventions for a period of time, to decide who makes products using their innovations, and to set the price for access to this "intellectual property."
The World Trade Organization's agreement on Trade-Related Aspects of Intellectual Property Rights (Trips) ties other trade rights to adequate respect for partners' patents, copyrights and trademarks. Compulsory licensing -- forcing patent owners to allow others to manufacture products using their innovations at prices set by the government -- is permitted under extraordinary conditions, such as when a critical patent is not being used to produce essential goods. This has always been understood as limited to a small set of special cases.
While the system of IP protections has worked well to encourage investment in innovations, some groups oppose protection of all property rights. Over the past decade, these groups have worked hard to alter the meaning of the Trips agreement and to encourage governments to use compulsory licensing to break IP protections.
These groups gained a small victory when the WTO said in 2001 that Trips encompassed "flexibilities" -- including compulsory licensing -- that allow governments to deal with health emergencies such as might be posed by epidemics of tuberculosis, malaria or HIV/AIDS in sub-Saharan Africa. WTO ministers agreed as well that there was not a single definition for all nations at all times of what constitutes an appropriate sort of emergency to justify compulsory licensing.
The activists used that declaration to argue that Trips authorizes any nation to impose compulsory licensing on any patent, especially any drug patent, for any reason. The military-backed Thai government's compulsory licensing initiative, pushed by its Public Health Ministry, is the first fruit of the activists' campaign -- a relatively developed nation facing no epidemic, just seeking to shift its spending priorities by taking someone else's property.
The U.S. clearly signaled its view that this works a radical change in the legal system for protecting IP. It put Thailand on the Priority Watch list for nations violating IP rights and formally protested Thailand's action. These moves could lead to trade sanctions on Thailand.
The EU's letter, adding Europe's voice, is especially interesting given the attacks that Neelie Kroes, the EU's competition minister, has launched on IP rights. While Ms. Kroes blithely assumes that her assertion of control over the uses and prices of IP created by firms like Microsoft won't harm innovation, Mr. Mandelson recognizes that any government's assault on the system of IP protections can unravel a thread that supports an increasing proportion of the global economy.
Having set the stage for a potentially disastrous turn in world protection of IP rights, Thailand has a chance to show leadership in a very different way. If its prime minister reins in its Public Health Ministry, Thailand can remind those in Europe and the U.S. who waver on protection for IP rights that the costs of undermining innovation vastly exceed short-term gains from cutting prices on patented drugs. Protecting the benefits from innovation and trade should matter more than pleasing the activists -- no matter how loudly they complain.
Mr. Cass is chairman of the Center for the Rule of Law, dean emeritus of Boston University School of Law and former vice chairman of the U.S. International Trade Commission.
This one showing that poor seniors who don't enroll in part D are more likely to have higher out of pocket costs than seniors that do enroll.
Imagine the brainpower it took to come to that conclusion.
Next study from Commonwealth: People with insurance have more coverage than people who don't have insurance.
Oh the humanity.
http://www.kff.org/medicare/med082107nr.cfm
Imagine the brainpower it took to come to that conclusion.
Next study from Commonwealth: People with insurance have more coverage than people who don't have insurance.
Oh the humanity.
http://www.kff.org/medicare/med082107nr.cfm
Info via the Pink Sheet (in plain text) with comments (in bold) courtesy of drugwonks.com.
German Health Reform Law Could Shake Up Pharmaceutical Market
Drug companies in the United States and Europe are warily watching a new law in Germany that could change the competitive landscape.
Sure it'll hit their pocketbooks -- but the folks who will really get screwed are patients and physicians.
The legislation - The Act for the Enhancement of Competition in Statutory Health Insurance - includes several provisions aimed at reducing drug costs. Most significantly, the measure requires that cost-benefit analyses be performed on certain drugs, the results of which will be used to set reimbursement ceilings. Drug companies are mainly worried about how these analyses will be conducted.
Worried, but not wondering, because the studies that will be used are the studies that are already being used -- RCTs that were neither designed nor intended to be used for comparative effectiveness purposes.
Other provisions also could change the market. The law, which came into effect in April, requires consumers to obtain a second opinion from a physician to receive prescriptions for drugs that are expensive or have significant risks, and it allows health insurance funds to set up biddings between drug manufacturers with the aim of establishing rebate contracts.
Does this mean a second opinion from the first doc, or does the patient have to seek out and consult with an additional physician? If the former, where's the hammer, if the latter, it's just the latest move to disempower physicians from the appropriate practice of medicine as they see fit.
The GBA (or Joint Federal Committee of Physicians, Dentists, Hospitals and Health Insurance Funds) is responsible for determining which drugs will be subject to reimbursement. Since 2004, it has directed the Institute for Quality and Economy in the Health Care System (IQWiG) to conduct drug benefit analyses. Under the new law, it now will ask the institute to perform cost-benefit analyses for certain drugs. If the IQWiG finds there is an advantage for patients to use a drug, the GBA will allow its reimbursement.
But "advantage" is in the eye of the government, aka "the payor." So, just whose "advantage" do you think takes precedence?
"The idea is to ban all drugs from reimbursement which are more expensive than others but do not have a therapeutic advance," said Ralf-Thomas Hillebrand, a spokesperson for the German Association of Research-Based Pharmaceutical Companies (VFA).
How do you say "incremental innovation" in German?
Drugs that are therapeutically superior to other medicines are not subject to reference pricing.
I'm sure that looks terrific on paper -- as did Mr. Chamberlain's infamous "piece of paper" -- but what percent of medicines do you think are subject to reference pricing in Germany? This is nothing more than health care appeasement -- "health care savings in our time."
The legislation is the latest in a string of German reforms intended to rein in drug costs and bolster the country's public statutory health insurance system - the SHI - which covers about 90 percent of the population. The system is funded through wage deductions.
You mean it's not ... free?
German Health Reform Law Could Shake Up Pharmaceutical Market
Drug companies in the United States and Europe are warily watching a new law in Germany that could change the competitive landscape.
Sure it'll hit their pocketbooks -- but the folks who will really get screwed are patients and physicians.
The legislation - The Act for the Enhancement of Competition in Statutory Health Insurance - includes several provisions aimed at reducing drug costs. Most significantly, the measure requires that cost-benefit analyses be performed on certain drugs, the results of which will be used to set reimbursement ceilings. Drug companies are mainly worried about how these analyses will be conducted.
Worried, but not wondering, because the studies that will be used are the studies that are already being used -- RCTs that were neither designed nor intended to be used for comparative effectiveness purposes.
Other provisions also could change the market. The law, which came into effect in April, requires consumers to obtain a second opinion from a physician to receive prescriptions for drugs that are expensive or have significant risks, and it allows health insurance funds to set up biddings between drug manufacturers with the aim of establishing rebate contracts.
Does this mean a second opinion from the first doc, or does the patient have to seek out and consult with an additional physician? If the former, where's the hammer, if the latter, it's just the latest move to disempower physicians from the appropriate practice of medicine as they see fit.
The GBA (or Joint Federal Committee of Physicians, Dentists, Hospitals and Health Insurance Funds) is responsible for determining which drugs will be subject to reimbursement. Since 2004, it has directed the Institute for Quality and Economy in the Health Care System (IQWiG) to conduct drug benefit analyses. Under the new law, it now will ask the institute to perform cost-benefit analyses for certain drugs. If the IQWiG finds there is an advantage for patients to use a drug, the GBA will allow its reimbursement.
But "advantage" is in the eye of the government, aka "the payor." So, just whose "advantage" do you think takes precedence?
"The idea is to ban all drugs from reimbursement which are more expensive than others but do not have a therapeutic advance," said Ralf-Thomas Hillebrand, a spokesperson for the German Association of Research-Based Pharmaceutical Companies (VFA).
How do you say "incremental innovation" in German?
Drugs that are therapeutically superior to other medicines are not subject to reference pricing.
I'm sure that looks terrific on paper -- as did Mr. Chamberlain's infamous "piece of paper" -- but what percent of medicines do you think are subject to reference pricing in Germany? This is nothing more than health care appeasement -- "health care savings in our time."
The legislation is the latest in a string of German reforms intended to rein in drug costs and bolster the country's public statutory health insurance system - the SHI - which covers about 90 percent of the population. The system is funded through wage deductions.
You mean it's not ... free?
Drug Industry Daily
Aug. 27, 2007 | Vol. 6 No. 168
PDUFA Provisions Could Harm FDA and Industry, Expert Say
Some of the provisions in the FDA Revitalization Act, S. 1082 and H.R. 2900, would be ineffective, could cripple the FDA and would put unnecessary burdens on pharmaceutical companies, Center for Medicine in the Public Interest President Peter Pitts said at the Third Annual FDA Regulatory and Compliance Symposium at Harvard University. “Political battles are trumping public health,†he added.
The most important part of the bill is a provision funding the Reagan-Udall Institute and the agency’s Critical Path Initiative, according to Pitts. “This is the single most important advance and change in FDA legislation, possibly ever,†he said. “It really sets the FDA on the path to a 21st century perspective in terms of both protecting the public health and advancing the public health.â€
The FDA’s recent label change for Coumadin (warfarin) to add information about genetic tests was “such an important advance,†Pitts said, adding that the agency should continue doing more with the Critical Path Initiative (DID, Aug. 17).
However, Pitts said some provisions in the legislation will be ineffective and could harm the FDA. He criticized a provision that would ban members with more than $50,000 in financial conflicts of interest from voting on advisory committees. The FDA recently issued a draft guidance of a proposed rule that would do the same thing (DID, March 22).
“All this will succeed in doing is allow the agency to recruit the second best and the almost brightest for advisory committees, and that is not acceptable,†Pitts said. He added that $50,000 is an arbitrary limit.
Pitts also criticized the bill’s Risk Evaluation and Mitigation Strategies (REMS) requirements. He noted that early drafts of the bill contained language that would have made it mandatory for each new drug application to contain an REMS. “That’s like saying every new product is equally risky,†Pitts said.
Giving the FDA the authority to require an REMS as part of a new drug application could encourage the agency to call for them more, even when they are unnecessary, he said.
However, the enhanced focus on safety and postmarketing surveillance is the industry’s fault for not living up to its commitments to conduct postmarketing studies, Pitts said. “Now they are reaping what they sowed,†he added. Companies should use the opportunity to conduct postmarketing studies for public health purposes, he said.
Pitts also criticized the provisions in the bill that would add a user fee for a voluntary review of direct-to-consumer advertisements. The FDA’s Division of Drug Marketing, Advertising and Communications has no predictability and will send companies warning letters even if they incorporated all of the agency’s suggestions in their advertisements, according to Pitts. “If the FDA wants to have an impact in quality and safety and appropriateness, they can’t change their minds after the fact, fee or no fee.†— Emily Ethridge
Aug. 27, 2007 | Vol. 6 No. 168
PDUFA Provisions Could Harm FDA and Industry, Expert Say
Some of the provisions in the FDA Revitalization Act, S. 1082 and H.R. 2900, would be ineffective, could cripple the FDA and would put unnecessary burdens on pharmaceutical companies, Center for Medicine in the Public Interest President Peter Pitts said at the Third Annual FDA Regulatory and Compliance Symposium at Harvard University. “Political battles are trumping public health,†he added.
The most important part of the bill is a provision funding the Reagan-Udall Institute and the agency’s Critical Path Initiative, according to Pitts. “This is the single most important advance and change in FDA legislation, possibly ever,†he said. “It really sets the FDA on the path to a 21st century perspective in terms of both protecting the public health and advancing the public health.â€
The FDA’s recent label change for Coumadin (warfarin) to add information about genetic tests was “such an important advance,†Pitts said, adding that the agency should continue doing more with the Critical Path Initiative (DID, Aug. 17).
However, Pitts said some provisions in the legislation will be ineffective and could harm the FDA. He criticized a provision that would ban members with more than $50,000 in financial conflicts of interest from voting on advisory committees. The FDA recently issued a draft guidance of a proposed rule that would do the same thing (DID, March 22).
“All this will succeed in doing is allow the agency to recruit the second best and the almost brightest for advisory committees, and that is not acceptable,†Pitts said. He added that $50,000 is an arbitrary limit.
Pitts also criticized the bill’s Risk Evaluation and Mitigation Strategies (REMS) requirements. He noted that early drafts of the bill contained language that would have made it mandatory for each new drug application to contain an REMS. “That’s like saying every new product is equally risky,†Pitts said.
Giving the FDA the authority to require an REMS as part of a new drug application could encourage the agency to call for them more, even when they are unnecessary, he said.
However, the enhanced focus on safety and postmarketing surveillance is the industry’s fault for not living up to its commitments to conduct postmarketing studies, Pitts said. “Now they are reaping what they sowed,†he added. Companies should use the opportunity to conduct postmarketing studies for public health purposes, he said.
Pitts also criticized the provisions in the bill that would add a user fee for a voluntary review of direct-to-consumer advertisements. The FDA’s Division of Drug Marketing, Advertising and Communications has no predictability and will send companies warning letters even if they incorporated all of the agency’s suggestions in their advertisements, according to Pitts. “If the FDA wants to have an impact in quality and safety and appropriateness, they can’t change their minds after the fact, fee or no fee.†— Emily Ethridge
Rumors are flying.
If true, what will this mean for Michael Moore's favorite health care system?
If true, what will this mean for Michael Moore's favorite health care system?
From the London Times...
From The TimesAugust 24, 2007
Britain the worst for deaths from strokes
Nigel Hawkes, Health Editor
"Patients who suffer strokes receive worse treatment in Britain than anywhere else in Western Europe .
More die and more are left disabled, a leading expert says in this week’s British Medical Journal, even though Britain spends as much as, if not more than, other countries on stroke care. "
On the bright side...the NHS has reduced waiting times for access to explosive belts down to zero.
Meanwhile liberals -- mostly in the form of The New Republic's Jonathan Cohn -- are wandering the globe in search of a health care system better than ours. They first went to Canada, then the VA, then the UK, then France, only to find or omitting real problems. Leave it to the Commonwealth Fund to remain steadfast in supporting the idea of shoving everyone into Medicaid or Medicare.
And as we speak the SCHIP proposal is tanking because -- strangely -- the idea of stealing Medicare money from poor seniors to pay for Medicaid for rich kids is not flying.
I can't wait for the health care debate in 2008.
From The TimesAugust 24, 2007
Britain the worst for deaths from strokes
Nigel Hawkes, Health Editor
"Patients who suffer strokes receive worse treatment in Britain than anywhere else in Western Europe .
More die and more are left disabled, a leading expert says in this week’s British Medical Journal, even though Britain spends as much as, if not more than, other countries on stroke care. "
On the bright side...the NHS has reduced waiting times for access to explosive belts down to zero.
Meanwhile liberals -- mostly in the form of The New Republic's Jonathan Cohn -- are wandering the globe in search of a health care system better than ours. They first went to Canada, then the VA, then the UK, then France, only to find or omitting real problems. Leave it to the Commonwealth Fund to remain steadfast in supporting the idea of shoving everyone into Medicaid or Medicare.
And as we speak the SCHIP proposal is tanking because -- strangely -- the idea of stealing Medicare money from poor seniors to pay for Medicaid for rich kids is not flying.
I can't wait for the health care debate in 2008.
Yesterday I had the privilege to attend and participate in the third annual FDA Regulatory & Compliance Symposium held at Harvard University. (Or as we Martlets call it, "The McGill University of the South.)
My panel focused on federal preemption and DTC advertising issues. The title of my presentation was "FDA: Advancing the Public Health or Being Led by Political Whims." Needless to say, it was hard to limit my remarks to the requisite 45 minutes.
Two of the other panelists were Alex Sugerman-Brozan (of the Prescription Access Litigation Project) and Lauren Guth Barnes of the law firm Hagens Berman Sobol Shapiro. Perhaps the most polite way to put it is that we didn't agree on most issues.
And that's okay. A feisty, robust -- and respectful debate is always worthwhile. And this panel was certainly all of those things.
Of the many differences, I'm sure you can fill in the blanks vis-Ã -vis our divergent views on both federal preemption and DTC issues. But what I found most disturbing was that both Alex and Lauren relied, almost exclusively, on partial research data, one-sided anecdotes, and rather selective legal citations.
Their presentations were as one-sided as they were narrow and they lacked any perspective as to the unintended consequences of (what I viewed as) simplistic alternatives. They spoke of solutions driven by adjudication and legislation -- with nary a nod to science.
(Although we did find some common ground on the need for better and more disease awareness advertising and the banishment of reminder ads.)
But (and here's the good news) while their ideas are wrong -- their hearts are in the right place. I really believe that. I hope that, with more conversation (both face-to-face and otherwise) we can all work to help advance the public health through a strong and better funded FDA.
My panel focused on federal preemption and DTC advertising issues. The title of my presentation was "FDA: Advancing the Public Health or Being Led by Political Whims." Needless to say, it was hard to limit my remarks to the requisite 45 minutes.
Two of the other panelists were Alex Sugerman-Brozan (of the Prescription Access Litigation Project) and Lauren Guth Barnes of the law firm Hagens Berman Sobol Shapiro. Perhaps the most polite way to put it is that we didn't agree on most issues.
And that's okay. A feisty, robust -- and respectful debate is always worthwhile. And this panel was certainly all of those things.
Of the many differences, I'm sure you can fill in the blanks vis-Ã -vis our divergent views on both federal preemption and DTC issues. But what I found most disturbing was that both Alex and Lauren relied, almost exclusively, on partial research data, one-sided anecdotes, and rather selective legal citations.
Their presentations were as one-sided as they were narrow and they lacked any perspective as to the unintended consequences of (what I viewed as) simplistic alternatives. They spoke of solutions driven by adjudication and legislation -- with nary a nod to science.
(Although we did find some common ground on the need for better and more disease awareness advertising and the banishment of reminder ads.)
But (and here's the good news) while their ideas are wrong -- their hearts are in the right place. I really believe that. I hope that, with more conversation (both face-to-face and otherwise) we can all work to help advance the public health through a strong and better funded FDA.
In Win for Drug Manufacturers, 3rd Circuit Rules Only FDA Can Regulate Ads
Shannon P. Duffy
The Legal Intelligencer
In a big win for drug manufacturers, the 3rd U.S. Circuit Court of Appeals has ruled that federal law bars a suit alleging false-advertising claims under state law because the U.S. Food and Drug Administration has "exclusive authority" to regulate prescription drug advertising.
"To allow generalized state consumer fraud laws to dictate the parameters of false and misleading advertising in the prescription drug context would pose an undue obstacle to both Congress' and the FDA's objectives in protecting the nation's prescription drug users," U.S. Circuit Judge D. Brooks Smith of the Western District of Pennsylvania, wrote in his 51-page opinion in Pennsylvania Employees Benefit Trust Fund, et al. v. Zeneca Inc.
But a dissenting judge complained that such "implied conflict pre-emption" of state law was unwarranted and wrong since the FDA doesn't have the power to require preapproval of pharmaceutical advertisements and lacks the resources to police the ads that run after drugs are approved.
Senior U.S. Circuit Judge Robert E. Cowen said he would have revived the suit because the claims it alleges don't challenge any of the drug maker's claims before the FDA during its labeling process, and therefore posed no conflict with the FDA's mission.
"Given that there are limitations to the FDA's oversight over prescription drug advertisements -- both congressionally imposed limitations, such as the lack of authority to require preapproval, and practical limitations attendant to the sheer volume of drug advertisements in the media, the supplementation of state-law remedies would seem to aid the FDCA's objectives and purposes, not frustrate them," Cowen wrote.
The ruling upholds the dismissal of a proposed class action suit accusing Zeneca of misleading consumers and doctors by advertising the acid reflux drug Nexium as an improvement over Prilosec because it knew that the patent for Prilosec was about to expire and a generic version would soon be hitting the market.
The suit, filed in U.S. District Court in Delaware, alleged claims under the Delaware Consumer Fraud Act as well as the consumer protection statutes of the 50 states for false, misleading and deceptive advertising. It also alleged claims for unjust enrichment and negligent misrepresentation.
Nexium and Prilosec are both proton-pump inhibitors -- drugs that treat gastroesophageal reflux disease, or GERD, and erosive esophagitis, conditions that are commonly known as acid reflux disease and frequent heartburn.
Prilosec was an especially profitable drug for Zeneca, with sales of more than $6 billion in 2000. But the patent for Prilosec was due to expire in 2001, at which point it would be available for sale as the generic drug omeprazole.
In February 2001, Zeneca obtained final approval from the FDA for its labeling on Nexium, the brand name for esomeprazole magnesium.
A clinical study of Nexium compared both 20 mg and 40 mg doses of Nexium with the approved 20 mg dose of Prilosec and showed that 40 mg of Nexium had a statistically significant healing rate over 20 mg of Prilosec.
But the suit alleged that the higher dose of Nexium was not needed for most patients, and that Zeneca's ad campaign was therefore misleading because a fair comparison of 20 mg of Nexium with 20 mg of Prilosec would not have proven Nexium to be superior.
The suit also alleged that Zeneca initially sold Nexium at a price below Prilosec in order to establish brand loyalty, but "then raised the price of Nexium while the price of Prilosec dropped." Nexium now sells for more than $4 per pill versus about 67 cents for Prilosec, the suit alleged.
But U.S. District Judge Sue L. Robinson dismissed the suit, finding that since the Nexium advertisements complied with the FDA-approved labeling, they were not actionable under the state consumer protection laws.
Robinson concluded that the suit was pre-empted because the state law claims conflicted with federal law.
On appeal, plaintiffs lawyers argued that Robinson's application of federal pre-emption was incorrect because there is no irreconcilable conflict between the state consumer fraud laws and the federal Food, Drug and Cosmetic Act. The FDA's approval of Nexium's labeling, they argued, did not extend to an assertion of Nexium's superiority over Prilosec.
Smith disagreed, finding that Robinson's analysis was correct because the FDCA and its implementing regulations include extensive rules governing pharmaceutical advertising. "The degree of discretion inherent in the regulations demonstrates that the FDA envisioned itself occupying an ongoing and extensive role in the supervision of prescription drug advertising,"
Smith wrote in an opinion joined by visiting 6th Circuit Judge Eugene E. Siler. In the claims against Zeneca under state consumer fraud laws, Smith said, the FDCA is not a "critical element" because the plaintiffs wouldn't have to show noncompliance with the FDCA to prevail.
Nonetheless, Smith said, "allowing these claims to proceed would unnecessarily frustrate the FDCA's purpose and FDA regulations, as the extent of agency involvement in regulating prescription drug advertising is extensive and specific."
Implied conflict pre-emption of the state consumer fraud laws was therefore required, Smith said, because both the FDCA and FDA regulations provide specific requirements for prescription drug advertising.
"The high level of specificity in federal law and regulations with respect to prescription drug advertising is irreconcilable with general state laws that purport to govern all types of advertising," Smith wrote.
In dissent, Cowen complained that his colleagues were ignoring the teachings of U.S. Supreme Court decisions that cautioned against "seeking out conflicts between state and federal regulation where none clearly exists."
Cowen said courts must "start with the assumption that the historic police powers of the states were not to be superseded by [a] federal act unless that was the clear and manifest purpose of Congress."
Although the FDA has exclusive power to approve the sale and labeling of drugs, Cowen argued that the agency does not have the exclusive power to regulate drug advertising. "This is not an area of the law inherently requiring national uniformity and ousting all related state law," Cowen wrote.
In the suit against Zeneca, Cowen said, the plaintiffs are complaining that ads for Nexium contained a false and misleading drug comparison -- an issue that was never addressed by the FDA in its approval of Nexium's labeling.
"As a result, there is no risk that a successful state-law claim, alleging that Nexium advertisements contain false and misleading drug comparisons, would conflict with the FDA's approval of the statements in the Nexium labeling," Cowen wrote.
Lead plaintiffs attorney Craig R. Spiegel of Hagens Berman Sobol Shapiro in Seattle could not be reached for comment.
Zeneca was represented in the appeal by Mark E. Haddad of the Los Angeles office of Sidley Austin, along with Jack B. Blumenfeld, Rudolph J. Scaggs Jr. and Lisa K. Whittaker of Morris Nichols Arsht & Tunnell in Wilmington, Del.
Shannon P. Duffy
The Legal Intelligencer
In a big win for drug manufacturers, the 3rd U.S. Circuit Court of Appeals has ruled that federal law bars a suit alleging false-advertising claims under state law because the U.S. Food and Drug Administration has "exclusive authority" to regulate prescription drug advertising.
"To allow generalized state consumer fraud laws to dictate the parameters of false and misleading advertising in the prescription drug context would pose an undue obstacle to both Congress' and the FDA's objectives in protecting the nation's prescription drug users," U.S. Circuit Judge D. Brooks Smith of the Western District of Pennsylvania, wrote in his 51-page opinion in Pennsylvania Employees Benefit Trust Fund, et al. v. Zeneca Inc.
But a dissenting judge complained that such "implied conflict pre-emption" of state law was unwarranted and wrong since the FDA doesn't have the power to require preapproval of pharmaceutical advertisements and lacks the resources to police the ads that run after drugs are approved.
Senior U.S. Circuit Judge Robert E. Cowen said he would have revived the suit because the claims it alleges don't challenge any of the drug maker's claims before the FDA during its labeling process, and therefore posed no conflict with the FDA's mission.
"Given that there are limitations to the FDA's oversight over prescription drug advertisements -- both congressionally imposed limitations, such as the lack of authority to require preapproval, and practical limitations attendant to the sheer volume of drug advertisements in the media, the supplementation of state-law remedies would seem to aid the FDCA's objectives and purposes, not frustrate them," Cowen wrote.
The ruling upholds the dismissal of a proposed class action suit accusing Zeneca of misleading consumers and doctors by advertising the acid reflux drug Nexium as an improvement over Prilosec because it knew that the patent for Prilosec was about to expire and a generic version would soon be hitting the market.
The suit, filed in U.S. District Court in Delaware, alleged claims under the Delaware Consumer Fraud Act as well as the consumer protection statutes of the 50 states for false, misleading and deceptive advertising. It also alleged claims for unjust enrichment and negligent misrepresentation.
Nexium and Prilosec are both proton-pump inhibitors -- drugs that treat gastroesophageal reflux disease, or GERD, and erosive esophagitis, conditions that are commonly known as acid reflux disease and frequent heartburn.
Prilosec was an especially profitable drug for Zeneca, with sales of more than $6 billion in 2000. But the patent for Prilosec was due to expire in 2001, at which point it would be available for sale as the generic drug omeprazole.
In February 2001, Zeneca obtained final approval from the FDA for its labeling on Nexium, the brand name for esomeprazole magnesium.
A clinical study of Nexium compared both 20 mg and 40 mg doses of Nexium with the approved 20 mg dose of Prilosec and showed that 40 mg of Nexium had a statistically significant healing rate over 20 mg of Prilosec.
But the suit alleged that the higher dose of Nexium was not needed for most patients, and that Zeneca's ad campaign was therefore misleading because a fair comparison of 20 mg of Nexium with 20 mg of Prilosec would not have proven Nexium to be superior.
The suit also alleged that Zeneca initially sold Nexium at a price below Prilosec in order to establish brand loyalty, but "then raised the price of Nexium while the price of Prilosec dropped." Nexium now sells for more than $4 per pill versus about 67 cents for Prilosec, the suit alleged.
But U.S. District Judge Sue L. Robinson dismissed the suit, finding that since the Nexium advertisements complied with the FDA-approved labeling, they were not actionable under the state consumer protection laws.
Robinson concluded that the suit was pre-empted because the state law claims conflicted with federal law.
On appeal, plaintiffs lawyers argued that Robinson's application of federal pre-emption was incorrect because there is no irreconcilable conflict between the state consumer fraud laws and the federal Food, Drug and Cosmetic Act. The FDA's approval of Nexium's labeling, they argued, did not extend to an assertion of Nexium's superiority over Prilosec.
Smith disagreed, finding that Robinson's analysis was correct because the FDCA and its implementing regulations include extensive rules governing pharmaceutical advertising. "The degree of discretion inherent in the regulations demonstrates that the FDA envisioned itself occupying an ongoing and extensive role in the supervision of prescription drug advertising,"
Smith wrote in an opinion joined by visiting 6th Circuit Judge Eugene E. Siler. In the claims against Zeneca under state consumer fraud laws, Smith said, the FDCA is not a "critical element" because the plaintiffs wouldn't have to show noncompliance with the FDCA to prevail.
Nonetheless, Smith said, "allowing these claims to proceed would unnecessarily frustrate the FDCA's purpose and FDA regulations, as the extent of agency involvement in regulating prescription drug advertising is extensive and specific."
Implied conflict pre-emption of the state consumer fraud laws was therefore required, Smith said, because both the FDCA and FDA regulations provide specific requirements for prescription drug advertising.
"The high level of specificity in federal law and regulations with respect to prescription drug advertising is irreconcilable with general state laws that purport to govern all types of advertising," Smith wrote.
In dissent, Cowen complained that his colleagues were ignoring the teachings of U.S. Supreme Court decisions that cautioned against "seeking out conflicts between state and federal regulation where none clearly exists."
Cowen said courts must "start with the assumption that the historic police powers of the states were not to be superseded by [a] federal act unless that was the clear and manifest purpose of Congress."
Although the FDA has exclusive power to approve the sale and labeling of drugs, Cowen argued that the agency does not have the exclusive power to regulate drug advertising. "This is not an area of the law inherently requiring national uniformity and ousting all related state law," Cowen wrote.
In the suit against Zeneca, Cowen said, the plaintiffs are complaining that ads for Nexium contained a false and misleading drug comparison -- an issue that was never addressed by the FDA in its approval of Nexium's labeling.
"As a result, there is no risk that a successful state-law claim, alleging that Nexium advertisements contain false and misleading drug comparisons, would conflict with the FDA's approval of the statements in the Nexium labeling," Cowen wrote.
Lead plaintiffs attorney Craig R. Spiegel of Hagens Berman Sobol Shapiro in Seattle could not be reached for comment.
Zeneca was represented in the appeal by Mark E. Haddad of the Los Angeles office of Sidley Austin, along with Jack B. Blumenfeld, Rudolph J. Scaggs Jr. and Lisa K. Whittaker of Morris Nichols Arsht & Tunnell in Wilmington, Del.
What a great use of FDA user fees:
"Federal regulators plan to study whether relaxing, upbeat images featured in TV drug ads distract consumers from warnings about the drugs' risks.
The announcement, posted Tuesday to the Food and Drug Administration's Web site, comes a week after a study published in the New England Journal of Medicine suggested the agency's drug-ad enforcement has steadily declined.
The FDA says it plans to study how 2,000 people react to television drug ads to determine whether they have an overwhelmingly positive impression of products despite audio warnings about potential side effects."
Matt Perrone of the AP zeroes in on my favorites...the Cialis ad which "features a middle-aged couple returning from a shopping trip while smooth jazz plays in the background. Toward the ad's end, a male voice lists common side effects, including headache, back pain and muscle aches." Note that the FDA put the kibosh on a female voice in ED drug ads...The agency found a female voice too....stimulating.
Leave it to the longest running joke in the so-called consumer movement, Sid Wolfe, to come up with what he thinks is a serious proposal but could be a great idea for a late night comedy sketch:
"If advertisers were really interested in getting information about drug risks out, they'd show pictures of those problems, but you almost never see that," said Dr. Sidney Wolfe of the advocacy group Public Citizen, which frequently criticizes drug industry marketing.
Yeah, I could see that. A couple in a hot tub about to engage in Clinton-like behavior only to have Sid Wolfe pop up from underneath the steamy H20 to begin reciting all the side effects.
Sid Wolfe in a hot tub droning on about drug safety. Now that's a good use of FDA user fees.
http://www.businessweek.com/ap/financialnews/D8R5I8900.htm
"Federal regulators plan to study whether relaxing, upbeat images featured in TV drug ads distract consumers from warnings about the drugs' risks.
The announcement, posted Tuesday to the Food and Drug Administration's Web site, comes a week after a study published in the New England Journal of Medicine suggested the agency's drug-ad enforcement has steadily declined.
The FDA says it plans to study how 2,000 people react to television drug ads to determine whether they have an overwhelmingly positive impression of products despite audio warnings about potential side effects."
Matt Perrone of the AP zeroes in on my favorites...the Cialis ad which "features a middle-aged couple returning from a shopping trip while smooth jazz plays in the background. Toward the ad's end, a male voice lists common side effects, including headache, back pain and muscle aches." Note that the FDA put the kibosh on a female voice in ED drug ads...The agency found a female voice too....stimulating.
Leave it to the longest running joke in the so-called consumer movement, Sid Wolfe, to come up with what he thinks is a serious proposal but could be a great idea for a late night comedy sketch:
"If advertisers were really interested in getting information about drug risks out, they'd show pictures of those problems, but you almost never see that," said Dr. Sidney Wolfe of the advocacy group Public Citizen, which frequently criticizes drug industry marketing.
Yeah, I could see that. A couple in a hot tub about to engage in Clinton-like behavior only to have Sid Wolfe pop up from underneath the steamy H20 to begin reciting all the side effects.
Sid Wolfe in a hot tub droning on about drug safety. Now that's a good use of FDA user fees.
http://www.businessweek.com/ap/financialnews/D8R5I8900.htm
I am a big believer in FDA-approved generic drugs. They are safe and effective and represent an enormous opportunity for health care savings -- and I applaud insurance company programs that seek to educate consumers about them. But I am a big opponent of forced switching. Disempowering physicians and patients results in bad outcomes.
I am a big believer in getting the right medicine to the right patient in the right dose at the right time. But I am a big opponent of the Me-Tooistas, who think that all drugs within the same therapeutic category are, more-or-less, the same.
I believe in honesty and ethical behavior, and I have strong feelings when it comes to the topic of insurance companies not being transparent about providing financial incentives to physicians in order to influence their prescribing habits -- while misleading patients along the way.
Sometimes the best of intentions have serious unintended consequences.
Consider the Blue Care Network of Michigan (BCN). A program (now discontinued) sent letters out to their participating primary care physicians offering a $100 payment “for each member in their panel with a BCN pharmacy benefit who fills a prescription for a generic lipid lowering agent.â€
Translation: We will pay you $100 for switching your patients to a generic statin.
According to a recent ABC investigative report, “Blue Care Network in Michigan paid 2,400 doctors $2 million to switch their patients from Lipitor to a generic version of its competitor, Zocor. They were paid $100 for each patient they switched from Jan. 1 through March 31, 2007.â€
Translation Update: We will pay you $100 to switch your patient to a generic statin that isn't even a generic version of what they are currently taking.
When asked by the ABC reporter if patients knew their doctors were receiving payments from the insurance company in return for a service that helps to increase the profits of the insurance company, the response from BCN was “not specifically.â€
Translation: No.
What ever happened to informed consent?
Here’s what BCN wrote to their customers being prescribed Lipitor:
“Our prescription claim records indicate you may be taking Lipitor® for high cholesterol. Another lipid lowering drug, Simvastatin, works as well as Lipitor® but is available as a generic and costs a lot less.â€
Please note – the preceding paragraph is a verbatim quote from the BCN letter.
A few comments:
* As to “ … as well as …â€, imagine if a pharmaceutical company tried to pull that one? They’d be hit by a DDMAC truck as fast as you can say, well, DDMAC.
Talk about an unlevel playing field.
* Seems to me (maybe it’s just me) that somebody's trying to make it sound like Simvastatin is a generic version of Lipitor. “… works as well as Lipitor® but is available as a generic …†You be the judge.
“Not specifically†seems to be more than an evasive answer to a journalist's question – it appears to also be a creative viewpoint on bioequivalence -- a flawed and dangerous one. Honestly folks, how will the average consumer read and understand such verbiage? It’s also interesting to note that nowhere in the consumer letter does it mention that doctors will be spiffed for making the switch.
Imagine if a pharmaceutical company engaged in such behavior? Can you say OIG investigation? Big fine? Congressional investigation?
Lastly (and by no means least), where are the medical guidelines on the best ways to monitor a patient (particularly an already stabilized one) being switched from one statin to another (specifically, from one molecule to another)?
Maybe the $100 payment paid for some CME on that count.
Or maybe, well, “not specifically.â€
Transparency please.
I am a big believer in getting the right medicine to the right patient in the right dose at the right time. But I am a big opponent of the Me-Tooistas, who think that all drugs within the same therapeutic category are, more-or-less, the same.
I believe in honesty and ethical behavior, and I have strong feelings when it comes to the topic of insurance companies not being transparent about providing financial incentives to physicians in order to influence their prescribing habits -- while misleading patients along the way.
Sometimes the best of intentions have serious unintended consequences.
Consider the Blue Care Network of Michigan (BCN). A program (now discontinued) sent letters out to their participating primary care physicians offering a $100 payment “for each member in their panel with a BCN pharmacy benefit who fills a prescription for a generic lipid lowering agent.â€
Translation: We will pay you $100 for switching your patients to a generic statin.
According to a recent ABC investigative report, “Blue Care Network in Michigan paid 2,400 doctors $2 million to switch their patients from Lipitor to a generic version of its competitor, Zocor. They were paid $100 for each patient they switched from Jan. 1 through March 31, 2007.â€
Translation Update: We will pay you $100 to switch your patient to a generic statin that isn't even a generic version of what they are currently taking.
When asked by the ABC reporter if patients knew their doctors were receiving payments from the insurance company in return for a service that helps to increase the profits of the insurance company, the response from BCN was “not specifically.â€
Translation: No.
What ever happened to informed consent?
Here’s what BCN wrote to their customers being prescribed Lipitor:
“Our prescription claim records indicate you may be taking Lipitor® for high cholesterol. Another lipid lowering drug, Simvastatin, works as well as Lipitor® but is available as a generic and costs a lot less.â€
Please note – the preceding paragraph is a verbatim quote from the BCN letter.
A few comments:
* As to “ … as well as …â€, imagine if a pharmaceutical company tried to pull that one? They’d be hit by a DDMAC truck as fast as you can say, well, DDMAC.
Talk about an unlevel playing field.
* Seems to me (maybe it’s just me) that somebody's trying to make it sound like Simvastatin is a generic version of Lipitor. “… works as well as Lipitor® but is available as a generic …†You be the judge.
“Not specifically†seems to be more than an evasive answer to a journalist's question – it appears to also be a creative viewpoint on bioequivalence -- a flawed and dangerous one. Honestly folks, how will the average consumer read and understand such verbiage? It’s also interesting to note that nowhere in the consumer letter does it mention that doctors will be spiffed for making the switch.
Imagine if a pharmaceutical company engaged in such behavior? Can you say OIG investigation? Big fine? Congressional investigation?
Lastly (and by no means least), where are the medical guidelines on the best ways to monitor a patient (particularly an already stabilized one) being switched from one statin to another (specifically, from one molecule to another)?
Maybe the $100 payment paid for some CME on that count.
Or maybe, well, “not specifically.â€
Transparency please.
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.
