Through the Looking Glass

March 1, 2009
Jill Wechsler, Pharm Exec's Washington Correspondent
Pharmaceutical Executive
Volume 0, Issue 0

The latest buzzword in pharma is "transparency"

Soon after his swearing-in, President Barack Obama issued a memorandum to all federal agencies advocating greater transparency in government actions. Obama also called for high ethical standards for government officials, a stance that helped derail the confirmation of Tom Daschle as Secretary of Health and Human Services (HHS).

Jill Wechsler

Reformers regard transparency in healthcare costs, provider practices, and drug and medical product performance as critical to informing prescribing decisions, driving down expenditures, and expanding access to affordable care. One problem with the nation's healthcare system is a lack of transparency in financing, pointed out Robert Reischauer, president of the Urban Institute, at a recent health policy meeting. "Few people understand what things cost or who pays the bill."

Proposals to expand adoption of health information technology and fund comparative-effectiveness research could also increase transparency. And objective comparisons of treatment effects would supplement basic safety and efficacy information required by FDA and support appropriate treatment.

The 411 on Safety and Pricing

Pharmaceutical companies are all too familiar with transparency requirements in drug research and marketing. Government agencies and consumer groups seek drug price and coverage data to curb inappropriate drug utilization and steer patients to cost-effective treatments. Manufacturers face multiple state and federal requirements for disclosing payments to researchers and medical professionals, and Congress wants to broaden reporting on industry–practitioner relationships to uncover conflicts of interest and discourage off-label marketing.

Too Much Transparency?

The FDA Amendments Act of 2007 (FDAAA) expanded manufacturer disclosure of clinical research activity, research study results, and drug safety information. FDA is responding by posting lists of drug safety signals and issuing "early" notices on important safety concerns. The agency recently announced that it is assessing reports on bleeding associated with Eli Lilly's sepsis treatment Xigris (drotrecogin) and potentially serious drug interactions involving the blood thinner Plavix (clopidogrel). However, these early communications raise questions about how extensively FDA should assess preliminary reports on safety issues before going public, as sounding false alarms can unnecessarily prompt patients to discontinue treatment.

Public disclosure of drug prices is also being encouraged. Medicare now posts cost and coverage information to help beneficiaries assess options. The scope of this information may expand as patient advocates examine beneficiary copays for pricey biotech therapies and plan policies that require patients to pay the difference between generic and brand-name drugs. Government involvement in negotiating Medicare drug prices may further expose marketers price and discount information to public scrutiny.

Payment Data and Public Domain

Requiring disclosure of company payments and gifts to healthcare professionals is another state strategy for assessing influences driving prescriber behavior. Minnesota, Vermont, West Virginia, Maine, and Massachusetts have all enacted reporting requirements, while California, Texas, Illinois, and New York, among others, are considering similar mandates. These statutes seek data on fees, gifts, and educational grants to healthcare providers and organizations, but policies vary considerably as to which expenditures have to be disclosed, and when.

Federal and state enforcement officials are also expanding drug company disclosures by including reporting requirements in corporate integrity agreements (CIAs) negotiated to settle allegations of fraudulent promotional and pricing practices. Prosecutors have put an emphasis on transparency in industry relationships with physicians and in 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 Zyprexa settlement, Lilly will report payments to physicians, including speaker and consulting fees, grants, gifts, food, and travel. Last year, Cephalon similarly agreed to report payments to physicians as part of its $375 million settlement involving marketing practices for three medications. And Bristol-Myers Squibb's 2007 CIA requires reporting of listed prices to state Medicaid programs.

A related trend involves broader disclosure of financial interests of investigators involved in clinical research. Here, the aim is to minimize the role of money in shaping drug development and utilization, and to ensure that potential financial rewards do not bias research results or medical opinions. FDA and the National Institutes of Health (NIH) have broadened financial disclosure requirements for clinical investigators, but there has been pressure to stiffen reporting policies and to enforce the rules more vigorously.

To boost financial reports from researchers involved in FDA-regulated trials, the HHS Office of the Inspector General (OIG) issued a report in January recommending that trial sponsors disclose investigator financial information to FDA before studies begin, instead of when the company files a new-drug application. Sen. Charles Grassley (R-IA) is also seeking expanded financial disclosure of industry payments to scientists receiving NIH grants. Grassley has uncovered prominent academics who failed to report millions in industry payments, particularly several leading psychiatrists involved in testing and promoting widely used antidepressants.

Setting a National Standard

This proliferation of reporting requirements has generated industry support for federal transparency legislation that would pre-empt state laws. In January, Grassley and Sen. Herb Kohl (D-WI) introduced an updated version of the Physician Payments Sunshine Act to expand public disclosure of financial relationships between physicians and medical product manufacturers. The revised bill calls for manufacturers to report payments to doctors that exceed $100 a year (down from $500), as well as substantial investment interests held by doctors.

In its March report to Congress, the Medicare Payment Advisory Committee (MedPAC) supported such reporting to better allow them to assess whether industry–provider financial relations have an impact on Medicare prescribing, drug utilization, and expenditures. MedPAC also wants data on drug samples distributed to doctors to determine whether billions of dollars in free medicines have an identifiable impact on prescribing decisions. FDA currently requires companies to keep records on samples handed out by sales reps to guard against illegal diversion, but does not routinely collect that information.

Under the Sunshine Act, all of this payment information would go into a national database of physician–industry relations. Public and private payers thus would be able to assess ties between industry payments and physician practice patterns. The trade-off for manufacturers is supposed to be federal preemption of state disclosure laws that require different information on payments to physicians. However, it's not clear how comprehensive that preemption will be in any final legislation.

Meanwhile, manufacturers are establishing their own transparency policies and programs. Eli Lilly, Merck, GlaxoSmithKline, and Pfizer have announced plans to post data on financial relationships with health professionals, and some companies are setting total annual caps on payments to individual physicians to reduce opportunities for undue influence.

Academic research centers and medical societies are also beefing up financial disclosure policies. The Cleveland Clinic plans to publicly report relationships of staff doctors and scientists with pharmaceutical and medical device makers. Stanford University, the University of Pennsylvania, and branches of the University of California in Los Angeles and San Francisco have adopted stricter conflict-of-interest policies. The North American Spine Society announced in January that the 5,000 spine surgeons in the organization will disclose all financial ties with medical product companies; psychiatrists are contemplating a similar move.

While pharma relations with researchers are critical for developing new technology, reformers hope to discourage inappropriate relationships by putting health professionals on notice that any links to pharmaceutical marketing will be known to all.

Jill Wechsler is Pharmaceutical Executive's Washington correspondent. She can be reached at jwechsler@advanstar.com