Biotech Therapies Face Disclosure Requirements - Broader transparency in product prices and payments to researchers aim to curb conflicts of interest and rationalize drug expenditures. - BioPharm

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Biotech Therapies Face Disclosure Requirements
Broader transparency in product prices and payments to researchers aim to curb conflicts of interest and rationalize drug expenditures.


BioPharm International
Volume 22, Issue 3


Jill Wechsler
Transparency is the hot buzzword in Washington these days. Soon after his swearing-in on January 20, 2009, President Barack Obama issued a memorandum to all federal agencies calling for greater transparency in government actions. Obama also pledged that government officials would meet high ethical standards, a stance that helped derail the appointment of former Senator Tom Daschle as secretary of Health and Human Services (HHS).

Transparency is a main theme in health reform. Public access to health cost and quality information has potential to better inform treatment decisions by providers and patients. Expanded adoption of health information technology by physicians, combined with comparative effectiveness research, could facilitate data collection and disclosure.

Biopharmaceutical companies are all too familiar with transparency requirements in regulations governing drug research and marketing. Government agencies and consumer groups are making product price data public to curb inappropriate drug use and reduce national healthcare spending. Manufacturers face a proliferation of state and federal requirements for disclosing payments to researchers and medical professionals, and stiff penalties for failure to comply.

The Food and Drug Administration has established an online system to inform the public quickly about potential drug safety problems, as required by the FDA Amendments Act of 2007 (FDAAA), which expands public reporting of clinical research activity, research study results, and drug safety information. Recently posted quarterly lists of drugs with potential signals of serious risks, for example, cite concerns about Abilify (aripiprazole), marketed by Bristol-Myers Squibb (BMS, New York, NY) and Otsuka (Rockville, MD), and Novartis's (Basel, Switzerland) blood pressure drug Diovan (valsartan). The FDA is also issuing early communication notices on particularly important safety concerns. Last month, the agency announced it was working with Eli Lilly (Indianapolis, IN) to evaluate reports of serious bleeding associated with the sepsis treatment Xigris (drotrecogin) and in January 2009, issued a notice describing continuing efforts to examine serious interactions involving the blood thinner Plavix (clopidogrel), made by BMS and Sanofi-Aventis (Bridgewater, NJ). The drug safety transparency program has also raised questions about how extensively the FDA should assess preliminary reports on safety issues before going public because sounding false alarms may prompt patients to discontinue treatment.

REPORTING PRICES, PAYMENTS

A prominent thrust of the transparency campaign is public disclosure of prescription drug pricing data. Medicare is posting information on drug prices and rebates on its website to help beneficiaries understand differences in plan coverage and out-of-pocket costs. The scope of this information may expand as patient advocates seek more detailed information on beneficiary co-pays for high-priced biotech therapies and clearer explanations of coverage gaps between generic and brand name drugs.

Manufacturers also have to report a range of pricing information to state governments eager to ensure that their Medicaid programs get the best prices. California, Maine, New Mexico, Texas, and Vermont have adopted laws that require companies to submit information on drugs sold in the state to facilitate comparisons of average manufacturer prices and Medicaid rates.

States also are passing laws that require manufacturers to disclose payments and gifts to healthcare professionals. Such requirements have been enacted in Minnesota, Vermont, West Virginia, Maine, and most recently, Massachusetts. A long list of states is considering such laws, including California, Texas, Illinois, and New York. These programs generally want data on fees, gifts, and educational grants to health providers and organizations, but policies vary considerably as to which expenditures have to be disclosed and when.

In addition, federal and state enforcement officials are including disclosure requirements in corporate integrity agreements (CIAs) negotiated with drug and biotech companies to resolve allegations of fraudulent promotional and pricing practices. Prosecutors have put an emphasis on transparency in industry relationships with physicians and results from clinical trials, said US attorney Michael Loucks at CBI's Pharmaceutical Compliance Congress in January. Under a comprehensive CIA negotiated as part of Eli Lilly's record $1.4 billion settlement involving the schizophrenia drug Zyprexa, Lilly will post quarterly reports on payments to physicians on its website, including speaker and consulting fees, grants, gifts, food, and travel. Last year, Cephalon (Frazer, PA) similarly agreed to report all payments to physicians as part of its $375 million settlement with federal and state prosecutors resolving allegations of improper marketing practices involving three therapies. And BMS's 2007 CIA includes requirements for reporting listed prices to state Medicaid programs to ensure accurate pricing.

Diverse disclosure rulings from prosecutors and state legislators are building industry support for federal transparency legislation that would pre-empt state laws. In January, Senators Charles Grassley (R-IA) and Herb Kohl (D-WI) introduced an updated version of the Physician Payments Sunshine Act. The bill expands public disclosure of financial relationships between physicians and manufacturers of drugs and medical products that are covered by Medicare, Medicaid, or other government health programs. Manufacturers would have to file reports on payments to physicians that exceed $100 a year (down from a previous $500 threshold) and any substantial investment interests held by doctors.

The Medicare Payment Advisory Committee (MedPAC) supports a federal disclosure policy for industry payments to physicians in its March 2009 report to Congress. MedPAC also wants to collect information on drug samples distributed to doctors and other parties to determine whether providing some $20 billion in free medicines each year has an identifiable impact on prescribing decisions. All this information would go into a national database of physician–industry relationships that would allow public and private payers to uncover and assess relationships between industry payments and physician practice patterns.

The trade-off for manufacturers is supposed to be federal pre-emption of state disclosure laws that require differing information on payments to physicians. However, it's not clear how comprehensive that pre-emption will be in any final legislation.


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