Navigating Restricted Waters

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As the great Yogi Berra once said, “The future ain't what it used to be…” That is especially true when looking at the multitude of changes facing the biopharmaceutical and medical device industries. What will 2008 bring in terms of how we communicate with our customers and patients? And what are some of the greatest challenges we face?

A group of BioPharma marketing leaders was recently asked what their greatest regulatory challenge is. Their answers to that question were summarized as follows:

n Understanding the new guidelines/codes/regulations and the implication to their business

n Distinguishing between guidelines/codes/regulations/standards

n Implementing company policy relating to those guidelines/codes/regulations

n Managing the relationship between legal, regulatory, and individual functions

n Helping clients and vendor partners to understand how the changes affect the business relationship and outcomes

Further discussion centered on the various organizations that have impact on marketing and communication practices within the healthcare environment. The major groups are the obvious players: the FDA, OIG, ACCME, AMA and PhRMA/BIO/AdvaMed. When discussing corporate policies related to these organizations, marketers are still confused about “who rules,” both internally and externally.

As we look into 2008 there are three areas of concern that members of the industry need to address. These include:

1. The FDA Amendments Act (FDAAA) of 2007

—The Prescription Drug User Fee Act (PDUFA)

—The Medical Device User Fee and Modernization Act                                                             (MDUFMA)

2. Senate Finance Committee Report on CME

3. ACCME Policy Updates

1. The FDA Amendments Act (FDAAA) of 2007

PDUFA and MDUFMA were reauthorized and expanded to take effect January 1, 2008. The new act enhances the FDA's authority to regulate marketed drugs, and the amendment is considered to be the most comprehensive reform by the FDA in decades. Patient safety is of the primary concern of the agency and the changes within the amendment reflect that concern. Key components of the FDAAA:

n PDUFA—allows FDA to collect fees from pharma companies to help fund reviews of new drugs. The act enables shorter review times and a more predictable review process, while still maintaining high-quality reviews.

n MDUFMA—allows for user fees, and will allow FDA to make significant improvements in the medical device review program.

n Best Pharmaceuticals for Children Act (BPCA)—encourages more studies in children and promotes the development of treatments for children.

n Pediatric Research Equity Act (PREA)—continues FDA's authority to require studies in children concerning certain medical products and under other specific circumstances.

Among other things, the law also provides for:

n Additional encouragement of specialized pediatric medical device development.

n The creation of a foundation (Reagan-Udall) to modernize product development, accelerate innovation, and enhance product safety.

n Advisory committee provisions

n Clinical trial registries

n Provisions intended to enhance drug safety

The amendments authorize a new program for the collection of user fees to support FDA review of TV ads directed at consumers.

The impact upon the industry includes the following:

             n Increased pediatric research

             n Additional restrictions on labeling

             n Post-approval surveillance studies

             n Risk evaluation and mitigation plans

             n Direct-to-consumer advertising

In assessing these changes, the results will include increased costs of drug development, in part due to the requirement for post-approval plans, surveillance studies, pharmaco-vigilance, risk evaluation and mitigation. There will be longer development time, more stringent regulatory reviews and a constrained ability to make marketing claims as a result of more restrictive labeling and tighter regulation of promotion and DTC messaging.

So what does this mean for specific healthcare entities? Compliance obviously rules as the FDA regulates our industry. At a minimum, the following applies:

Device Companies

n Track individual products to the lot and serial number


n Post-approval surveillance plans identified and implemented

All Companies

n More self-inspection, accountability and focus on safety

n Earlier discussions with the FDA on risk management plans and programs

n Clinical studies to be posted on a website registry

n Database for generic drug adverse events to be established

 2. Senate Finance Committee Report on CME

The authors of this document are Senators Max Baucus, chairman, and Charles Grassley, ranking member of the committee.

Why did the Senate Finance Committee decide to review the use of educational grants from the BioPharma and medical device industries? There are several possible reasons:

n The US Committee on Finance has exclusive jurisdiction over Medicare and Medicaid with 80 million Americans and a 2006 expenditure of over $700 billion.

n The committee is responsible to ensure program funds are spent properly (including prescription drug benefits).

n Drug marketing and utilization became a concern to the committee.

n The committee became aware that Pharma et al funds education programs to “help build market share.”

In addition, the committee articulated two primary concerns:

n New products tend to be more expensive than older/generic products which raises the costs of CMS expenditures.

n New products have less clinical history than older products which raises the concern of safety.

In June 2005, the committee wrote to 23 of the largest pharma companies to inquire about the use of educational grants. Pharma referred them to the ACCME. The committee also reviewed medical literature and information in the press.

The findings of the committee, released in 2007, identified:

n “Pharma uses education to increase the market for their products”

n Concern regarding off-label use (increasing drug utilization resulting in increased CMS expenditures)

n Companies have taken steps to separate independent grant process             funding from marketing

n Independent groups have guidelines to reduce the potential for influence of content

n These guidelines (ACCME) reveal inadequacies in monitoring/enforcing independence from commercial influence (ergo, opportunity for fraud and abuse)

Because these areas concern the Senate Finance Committee, it concerns the industry and those involved in medical education. There are some important steps that can be taken by companies involved in medical education (both client and service providers) to mitigate risk while still ensuring the delivery of quality, independent education programs:

n Separate the education functions from marketing and especially sales. This was initially stated by the OIG in 2003.

n Develop an objective grant approval process. Many BioPharma companies have moved to online grant submissions with blind reviews by committees independent of the sales and marketing organizations.

n Maintain a “hands-off” approach with CME

n Some companies are moving funds formerly dedicated to CME to activities perceived as “safer”

n Create internal compliance programs

Compliance departments with resulting programs and policies are becoming core functions within the BioPharma industry. That being said, Kenneth Berkowitz, Esq. has been quoted as saying: “It's not just having a compliance plan; it's having a plan that's living, breathing, and working. Just don't have this great document; it has to be implemented.” Elements for an effective compliance program include:

n Designating a compliance office and committee/department

n Implementing written policies and procedures

n Conducting education and training

n Developing effective lines of communication

n Performing internal monitoring and audits

n Enforcing policies through well-published disciplinary guidelines

n Responding promptly to identified problems and undertaking corrective action.


3. Accreditation Council for Continuing Medical Education (ACCME) Policy Updates

The ACCME is the organization that identifies, develops and promotes standards for physician education. They accredit for-profit and not-for-profit institutions and organizations that offer continuing medical education (example, medical education companies, hospitals, professional societies, etc). The ACCME evaluates these CME providers and ensures compliance with ACCME standards.

The Standards for Commercial Support are written for CME providers to ensure the independence of CME activities. They had previously been updated in 2004 and 2006. There is a general belief within the CME enterprise that the 2007 updates occurred as a result of :

n OIG became interested in education in 2003 and issued their OIG Compliance Guidance for Pharmaceutical Manufacturers

n In 2005 the Senate Finance Committee became interested in education because of the potential for fraud and abuse, inducement to prescribe, off-label discussions, and increased drug expenditures (see previous section)

n The committee queried the ACCME regarding its role in monitoring independence in certified CME programs

n The committee issued its findings in 2007, Use of Educational Grants by Pharmaceutical Manufacturers, one of which revealed inadequacies in monitoring/enforcing independence from commercial influence

n In 2006, drug manufacturers funded over $1.9 billion into CME.

Following the Senate Finance Committee report, the ACCME issued another revision of The Standards for Commercial Support in August of 2007. Major areas of concern to grantors as well as providers include:

n A commercial supporter cannot specify the manner in which a program will be developed. Example, a commercial supporter cannot recommend speakers or review content. Review of content is a concern to the BioPharma industry, specifically as it relates to product data and the accuracy of reporting such data. While grantors have understood that they cannot control content of a certified CME activity, in the past they have been able to review content for accuracy if requested by the provider. Again, this change becomes especially critical when there is new product data being presented and the grantor/BioPharma company may have the best resources for scientific review.

n Definition of commercial interest: “A ‘commercial interest' is any entity producing, marketing, re-selling, or distributing healthcare goods or services consumed by, or used on, patients.” No entity owned or controlled by a “commercial interest” can be accredited by the ACCME system, and there are no structural or organizational “firewalls” that could be put in place for a company that is owned or controlled by a “commercial interest” to suffice for accreditation.

n The major change in the definition is the addition of the word “marketing,” implying the restructuring of med ed companies to ensure separation from parent companies such as advertising agencies. This means, for example, that accredited medical education companies cannot remain as wholly-owned subsidiaries of an advertising firm. The change reflects the overwhelming concern of the ACCME to ensure independence of certified CME. However, while attempting to exclude medical education and communication companies, the ACCME continues to exempt other types of commercial supporters such as for- and not-for-profit hospitals, health insurance providers and others from the commercial supporter definition, in effect, promoting a two-tiered system.

n Conflict of interest continues to remain a hot-button for CME providers. Anyone who is in a position to control content must disclose their “relevant” financial relationships within the past 12 months that could create a conflict of interest. From the speaker perspective, this includes relationships with BioPharma including participation in clinical trials, serving in an advisory capacity, as a spokesperson, author, stockholder, etc. ACCME considers financial relationships to create a conflict of interest which could result in content bias. It is the provider's responsibility to resolve conflict of interest with speakers.

How will the industry respond to these changes in certified CME? BioPharma must not exert any influence over the grant-making process and provisions of certified CME. This has become very clear. Internal decisions regarding a company's involvement in education will evolve over time, with considerations including the cost-benefit of funding certified CME. Some companies are already allocating their funds to other forms of education, including on-label, promotional programs. Other companies are directing their funds to professional organizations, schools of medicine, and education foundations. And some companies are choosing not to fund certified CME. The message is clear that certified education must remain independent of commercial influence. Ongoing dialogue with stakeholders is critical to ensure the independence, accuracy and value of CME for physicians and their patients.


“The future ain't what it used to be.” This year will bring many challenges to companies including their response to these regulatory and other changes facing the BioPharma industry. What we know is that the industry will respond accordingly, to ensure their mission of providing safe and effective therapeutics for the improvement of patient care. And they will communicate this information with the most effective means of reaching healthcare providers, patients, and their caregivers. 


Linda Klein is president & CEO of Klein & Company

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