Medtronic is taking another step towards transparency by voluntarily disclosing payments to physicians, beginning in 2011, according to a company release.
In 2008, the Fridley, MN-based company launched an Online Donations Registry to disclose donations to U.S. customers or organizations affiliated with customers, including patient groups and medical societies.
Under the new payment disclosure plan, Metronic will report the amount paid in consulting fees, royalties, or honoraria for physicians who receive payments of $5,000 or more in one year. The company plans to begin collecting data January 1, 2010 and will post the information annually beginning March 1, 2011. Metronic will hire a third party to audit the disclosures.
Medtronic has been under scrutiny for its payments to physicians since 2006 when it entered into a $40 million settlement to resolve allegations it paid kickbacks to physicians. In January, Senator Charles Grassley (R-IA) criticized the University of Wisconsin’s disclosure policy after revealing researcher and spinal surgeon Thomas Zdeblick, MD, accepted more than $19 million from Medtronic to help develop and promote spinal devices from 2003 to 2007.
Grassley and fellow senator Herb Kohl (D-WI) continue to push for national legislation requiring pharmaceutical and medical device companies to disclose payments to physicians. In January, they introduced the Physician Payments Sunshine Act of 2009, which would require pharmaceutical, biologics, and medical device companies to report annual payments to physicians of over $100.
Medtronic isn’t the only organization in the medical device field planning to increase transparency. In January, the North American Spine Society announced it would require physicians to disclose the actual dollar amounts of all relationships with medical device companies in the 12 months preceding disclosure. In December 2008, Edwards Lifesciences announced its plan to post information about physicians who receive $5,000 or more per year in consulting fees, royalties, or honoraria from Edwards, beginning this year.
Cardinal Health will thoroughly review all of its infusion pump products within 60 days and submit a corrective action plan to the FDA that outlines all planned modifications to any infusion pump products, according to a company release.
Cardinal Health has been operating under a consent decree for its Alaris SE pump since February 2007. As part of the agreement, Cardinal Health implemented a new quality system on April 2, 2008.
The modified consent decree is based on a January 2008 FDA inspection that found some Cardinal Health infusion pumps did not meet the standards of the Food, Drug, and Cosmetic Act (FDCA).
Under the modified decree, within 100 days an independent expert must inspect and certify whether the company’s:
- Infusion pump operations conform to the FDCA
- Recall procedures and all ongoing infusion pump recalls comply with the FDCA
Colorado’s Prescription Drug Ethics Act died after a 6-1 vote against it by a state senate committee, according to an article in the Rocky Mountain News.
The bill would have:
- Banned gifts from pharmaceutical companies to physicians
- Prohibited the sale of patient prescription information for marketing purposes
- Required disclosure of drug companies’ advertising and marketing budgets
- Prohibited persons with financial interests with pharmaceutical firms from participating in decisions to purchase pharmaceutical products
The Pharmaceutical Research and Manufacturers of America banned non-educational gifts to physicians in its updated Code of Ethics on Interactions with Healthcare Professionals, which went into effect in January.
Numerous states have disclosure requirements and Massachusetts enacted an ethics law in 2008. Senators Charles Grassley (R-IA) and Herb Kohl (D-WI) continue to push for national legislation requiring pharmaceutical and medical device companies to disclose payments to physicians. In January, The senators introduced the Physician Payments Sunshine Act of 2009, which would require pharmaceutical, biologics, and medical device companies to report payments they give to physicians over $100 every year.
The Department of Justice (DOJ) joined two whistleblower lawsuits filed against Johnson & Johnson and its subsidiary Scios, according to a DOJ release.
The whistleblowers, both former Scios sales managers, allege J&J and Scios promoted Natrecor for off-label uses and caused false claims to be filed.
In 2001, the FDA approved Natrecor for intravenous treatment of patients with congestive heart failure who had shortness of breath. The FDA based its approval on results from hospitalized patients who received Natrecor for an average of 36 hours. However, the whistleblowers claim Scios aggressively marketed Natrecor for scheduled, serial outpatient infusions for patients with less severe heart failure.
In 2005, a panel of cardiologists warned Scios to stop promoting the scheduled, serial outpatient use of Natrecor, according to the DOJ release. Scios acknowledged a lack of clinical evidence supporting the safety and efficacy for scheduled, serial outpatient use of the drug. In 2007, Scios released the results of a clinical study that showed no significant benefits of serial outpatient Natrecor infusions, according to the DOJ.
The unapproved uses of Natrecor cost Medicare “substantial amounts,” the DOJ said. Medicare only pays for an off-label use when the use is medically necessary.
FDA approval preempts patients’ rights to sue medical device manufacturers for potentially faulty devices, according to a February 17 Wisconsin Supreme Court decision.
Joseph Blunt had a Medtronic Marquis 7230 defibrillator implanted in 2004 to prevent heart failure. In 2005, Medtronic announced the battery in the Marquis 7230 could fail in one out of 10,000 patients, leading to a loss of power.
After having surgery to remove the device, Blunt sued Medtronic in Milwaukee County Circuit Court alleging negligence, strict liability, and loss of consortium. A judge and an appeals court both ruled in Medtronic’s favor. Blunt then appealed to the state Supreme Court, which also ruled for Medtronic, in part because of a 2008 U.S. Supreme Court ruling.
In February 2008, the U.S. Supreme Court ruled medical device makers are protected from liability for personal injuries if their devices passed the FDA’s most stringent pre-marketing review. Because of that ruling, the Wisconsin Supreme Court ruled unanimously for Medtronic.
The FDA is putting patient lives at risk by failing to enforce good laboratory standards (GLPs), according to the Project on Government Oversight’s (POGO) recent report, The FDA’s Deadly Gamble with the Safety of Medical Devices.
GLPs impose specific requirements for non-clinical testing of medical devices. Before the FDA approves a device as safe and effective, the manufacturer must meet GLP requirements. However, in August 2006, the FDA decided to ignore GLPs, according to POGO.
Inspections declined from 33 in 2005, to seven in 2007, to just one last year, POGO said. It reported no inspections are planned for this year. The group said not enforcing GLPs puts patients lives at risk, but does not claim the relaxed enforcement has directly lead to patient harm.
The report does not discuss inspections for Good Clinical Practices, which focus on human testing, or Good Manufacturing Practices, which cover the actual production of devices. In a letter to POGO, the FDA said manufacturers are required to submit results of non-clinical laboratory testing before the agency determines the device is safe and effective. The FDA added it believes focusing on clinical trials is the best way to protect patients.
A jury found Pfizer’s Pharmacia unit guilty of fraud for overcharging Wisconsin’s state Medicaid program by reporting inflated and fraudulent prices, according to a Wisconsin Department of Justice release.
Pharmacia violated Medicaid and consumer fraud laws and should pay the state $9 million, according to the jury. Of that amount, $7 million will compensate the state for monetary losses due to Medicaid fraud and the remaining $2 million is for violating the state’s consumer protection laws. Pharmacia will forfeit profits for violating the Medicaid fraud law more than 1.4 million times. A hearing to determine the amount of the forfeiture, which could reach as high as $21 billion, has not been scheduled.
Medicaid uses manufacturers’ reported average wholesale prices (AWP) to set reimbursement rates. By inflating the AWP, Pharmacia attracted business and increased its profits, according to the release. The inflated prices led to Medicaid reimbursing pharmacists at a higher rate, resulting in a loss of money for Medicaid.
The Wisconsin DOJ filed similar claims against 35 other pharmaceutical manufacturers. Amgen and Immunex agreed to a $1.7 million settlement with the state in December 2008.
Other states also sued pharmaceutical companies for pricing fraud. In February 2008, an Alabama jury found AstraZeneca guilty of Medicaid fraud and initially awarded the state $215 million in February 2008, but a judge later reduced the amount to $160 million.
Other 2008 settlements include:
- Dey LP and Takeda Pharmaceuticals settled pricing fraud cases in Alabama for a combined $6.5 million in January.
- Eleven pharmaceutical companies entered into a $125 million nationwide settlement to resolve pricing allegations in March.
- Boehringer Ingelheim agreed to a $1.8 million settlement for alleged pricing fraud with Massachusetts in September.
- Abbott entered into a $28 million fraud settlement with Texas in September.
- Schering-Plough agreed to pay $31 million in November to resolve pricing fraud allegations in Missouri.
FDA inspectors found significant deviations from current Good Manufacturing Practices (cGMP) at Taro Pharmaceuticals’ Brampton, Ontario, manufacturing facility, according to an FDA warning letter.
The agency considers the products misbranded because they were not manufactured, processed, packed, and held in compliance with cGMPs. While Taro implemented some corrective actions, the FDA said the company failed to adequately address multiple serious deficiencies.
Pharmaceutical companies can expect to see more state resources aimed at healthcare fraud enforcement, Delaware Deputy Attorney General Dan Miller, Esq., said during the Center for Business Intelligence’s Sixth Annual Pharmaceutical Compliance Congress in Washington D.C.
Healthcare fraud is an area “ripe for prosecutors to look at,” Miller said.
New allegations against pharmaceutical companies continue to arrive, says Michael Loucks, Esq., First Assistant US Attorney in Massachusetts. Some problematic conduct is trailing off, but Loucks’ office still sees some of the same questionable conduct continuing. Although investigations usually focus on past behavior, Loucks said it is “disturbing” to see the same conduct continuing in the present.
Updates to the PhRMA Code on Interactions with Healthcare Professional are not significantly impacting sales representatives’ ability to sell products, according to preliminary results of Cutting Edge Information’s ongoing “Reinventing Pharmaceutical Sales Forces” survey.
The overall survey results show the Code’s changes have not drastically affected sales representatives’ ability to access physicians, but individual companies are reporting significant impact from the revisions.
Has your company instituted all of the changes recommended in the revised PhRMA Code? Download our free white paper, Updates to the PhRMA Code: Opportunities and Challenges for the Pharmaceutical Industry, to learn more about the revisions.