A Call for Transparency in Research and Marketing

March 2, 2009
Jill Wechsler
Jill Wechsler

Jill Wechsler is Pharmaceutical Technology's Washington Editor, jillwechsler7@gmail.com.

Pharmaceutical Technology, Pharmaceutical Technology-03-02-2009, Volume 33, Issue 3

Broader disclosure of drug prices and conflicts of interest are central healthcare reform issues.

Transparency is the buzzword in Washington these days. Soon after his swearing in on Jan. 20, 2009, President Barack Obama issued a memorandum to all federal agencies calling for greater transparency in government actions, including rapid online disclosure of information about government operations and decisions. Obama also called for high ethical standards for government officials, a stance that helped derail the appointment of former Senator Tom Daschle as secretary of Health and Human Services (HHS).

Jill Wechsler

Transparency is a main theme in healthcare reform efforts, which emphasize the importance of public access to healthcare cost and quality information. A serious problem with the nation's healthcare system is its lack of financial transparency, pointed out Robert Reischauer, president of the Urban Institute, at a health policy meeting in February 2009. "Few people understand what things cost or who pays the bill," he said.

Proposals to expand providers' adoption of health information technology (IT) and to fund comparative-effectiveness research also foster transparency in healthcare. A wired healthcare system is needed to obtain information about provider practices, costs and quality, and for communicating findings to the public. Objective comparisons of treatment options can supplement the basic safety and efficacy information that manufacturers develop to gain the US Food and Drug Administration's market approval for a product.

In Washington This Month

More drug disclosure

Pharmaceutical companies are all too familiar with transparency requirements involving drug research, production, and marketing. Government agencies and consumer groups continually disseminate information about drug prices and coverage to curb inappropriate use of medicines and to direct patients toward cost-effective treatments. Manufacturers face a growing range of state and federal requirements for disclosing payments to researchers and medical professionals, and Congress is seeking full reporting of industry–practitioner relationships to uncover conflicts of interest and discourage marketing of products for unapproved uses.

Disclosure is a prominent theme in the FDA Amendments Act of 2007 (FDAAA), which expands manufacturer disclosure of clinical-research activity, research study results, and drug-safety information. One objective of FDAAA is to inform the public quickly about potential drug risks and adverse events by posting safety information early.

In addition, FDA is issuing Early Communication notices about particularly important safety concerns that warrant immediate attention from practitioners. In February 2009, the agency announced it was working with Eli Lilly (Indianapolis, IN) to evaluate reports of serious bleeding associated with the sepsis treatment "Xigris" (drotrecogin). In January 2009, FDA issued notices updating efforts to assess possible serious drug interactions with the blood thinner "Plavix" (clopidogrel) to evaluate evidence linking asthma treatments to suicidality, and to examine how well certain statins lower cholesterol. The drug-safety transparency program has raised questions, though, about how extensively FDA should assess preliminary reports about safety issues before going public. The concern is that sounding false alarms may unnecessarily reduce prescribing and prompt patients to discontinue treatment.

Price reporting

A prominent thrust of the transparency campaign is public disclosure of drug-pricing data. Medicare and prescription-drug plans are posting information about drug prices and rebates to help beneficiaries understand differences in plan coverage and out-of-pocket costs. The scope of this information may expand as patient advocates seek detailed information about beneficiary copays for high-priced biotechnological therapies and clear explanations of some drug plans' policies that require patients to pay the difference between generic and brand-name drugs.

Pharmaceutical companies also must report pricing information to state governments eager to ensure that their Medicaid programs pay the lowest rates. California, Maine, New Mexico, Texas, and Vermont have adopted laws that require manufacturers to submit information about drugs sold in the state to facilitate the comparison of average manufacturer prices to Medicaid best prices. Several states also want to know financial terms, discounts, and other arrangements between manufacturers and pharmacy benefit managers.

Disclosures on docs

States 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, including California, Texas, Illinois, and New York is considering such laws. These statutes generally seek data about fees, gifts, and educational grants to healthcare 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 companies to resolve 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 2009.

Under a comprehensive CIA, negotiated as part of Eli Lilly's record $1.4-billion settlement involving "Zyprexa" sales and marketing, Lilly will post quarterly reports on its website about payments to physicians, 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 to resolve allegations of improper marketing practices for three medications. Bristol-Myers Squibb's 2007 CIA includes requirements for reporting listed prices to state Medicaid programs to ensure accurate pricing.

Disclosure demands from prosecutors and state legislators are building industry support for federal transparency legislation that would preempt state laws. In January 2009, 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. The revised bill calls for manufacturers to file reports on payments to physicians that exceed $100 a year (down from a previous $500 threshold) plus any substantial investment interests held by doctors. Companies also would compile annual reports of total payments and breakouts for each state.

Such expanded disclosure is supported by the Medicare Payment Advisory Committee (MedPAC) in its March 2009 report to Congress. The advisory group wants to collect more payment data to better assess whether industry–provider financial relations affect Medicare prescribing, drug use, and expenditures. MedPAC also wants information about drug samples distributed to doctors and other parties to determine whether providing $20 billion in free medicines each year has an identifiable impact on prescribing decisions. FDA currently requires companies to keep records on samples handed out by sales representatives to guard against illegal diversion, but does not ask for regular reporting of sampling activity.

Under the Sunshine Act, all this payment information would be stored in a national database of physician–industry relationships. Public and private payers and health plans thus would be able to uncover and assess relationships between industry payments and physicians' practice patterns. The trade-off for manufacturers is supposed to be federal preemption of state disclosure laws that require different information about payments to physicians. It's not clear how comprehensive that preemption will be in the final legislation, however. Though some MedPAC members recognize that industry–doctor relationships can help advance the development of new technology, the broad consensus is that making health professionals' links to pharmaceutical marketing known to all will discourage inappropriate relationships.

Research conflicts

The transparency movement similarly seeks to expand the disclosure of financial interests by investigators involved in clinical research on new drugs and medical products to minimize the role of money in shaping drug development and use and to ensure that potential financial rewards will not lead to fudged data or skewed results. FDA and the National Institutes of Health (NIH) have broadened financial-disclosure requirements for clinical investigators, but these bodies face pressure to expand disclosure and to enforce reporting requirements vigorously.

The Office of the Inspector General (OIG) issued a report in January 2009 recommending that sponsors of clinical trials disclose investigator financial information to FDA before studies begin, instead of when the company files a new drug application (NDA). FDA now advises manufacturers to collect financial information whenever they engage an investigator during the research process to be sure that no serious conflicts of interest could compromise study outcomes. But the OIG says that too few clinical investigators submit the requested financial information and that many NDAs lack required reports. Companies object that earlier filing would require reports about many investigators who are involved in studies that are never used to support efficacy.

Sen. Grassley and others also seek greater disclosure of manufacturer payments to scientists receiving NIH grants. NIH requires researchers to report payments from drug companies that exceed $10,000 to detect conflicts of interest, but Grassley has uncovered various prominent academics, particularly several leading psychiatrists involved in testing and making presentations about widely used antidepressants, who failed to report millions in industry payments. NIH officials agree that more must be done to police such activity, but are reluctant to examine the tax returns or income reports from thousands of researchers.

In anticipation of diverse and detailed tracking and disclosure requirements, manufacturers are establishing their own transparency policies and programs. An updated marketing code from the Pharmaceutical Research and Manufacturers of America (PhRMA) advises companies to disclose consulting arrangements with physicians who also serve on formulary committees. Pfizer (New York) recently joined Eli Lilly, Merck (Whitehouse Station, NJ) and GlaxoSmithKline (London) in announcing plans to post data about financial relationships with health professionals, and some companies are setting total annual caps on payments to individual physicians to reduce possibilities for excessive influence.

Healthcare systems and academic research centers also are promoting transparency in researcher–industry relationships. Harvard Medical School recently said it was reviewing its financial relations policy, and the Cleveland Clinic plans to publicly report the business relationships of its staff with pharmaceutical makers. Stanford University, the University of Pennsylvania, and branches of the University of California in Los Angeles and San Francisco have adopted strict conflict-of-interest policies.

Compliance with all the reporting requirements on the state and national levels is prompting manufacturers to implement data systems that track payments to health professionals. IT vendors have developed programs to compile a company's "aggregate spend" on research and marketing activities across corporate divisions and product lines. The aim is to collect in one place all company payments to a physician, which may involve clinical research, consulting, and medical education for different research programs and marketed products.

Privacy protection

The move to make public data about physician prescribing information, as well as payments from manufacturers, raises concerns among practitioners that broad public disclosure of prescribing records and practice patterns can be misinterpreted by the public and generate inappropriate criticism. The American Medical Association has taken the issue to court to block the release of physician-level Medicare claims data to a consumer organization seeking to compile physician report cards in local areas. A Federal Appeals court recently supported the doctors' position that such disclosure violated their right to privacy. Employers and insurers sided with the consumer group in arguing that transparency in healthcare quality and cost information can help identify high-quality and efficient care.

In a related area, though, consumer advocates agree with physicians that pharmaceutical companies should not gain access to physician prescribing information for marketing purposes. New Hampshire, Vermont, and Maine have enacted curbs to prevent pharmaceutical sales representatives from targeting marketing efforts to high prescribers. And a federal Appeals Court ruled in November 2008 that patient and prescriber privacy override the commercial speech rights of data-mining companies such as IMS Health, which collect and sell prescribing data. The issue may end up before the Supreme Court.

Such legal conflicts reflect the difficulties in establishing disclosure and reporting requirements across the nation's healthcare system. Physicians may be justified in fearing that superficial analysis of claims data might not recognize that a skilled doctor gets a low-quality rating because he cares for more high-risk patients. But health reformers regard transparency in healthcare costs, prices, provider practices, and drug and medical-product performance as critical to driving down healthcare expenditures and expanding access to affordable care.

Jill Wechsler is Pharmaceutical Technology's Washington editor, 7715 Rocton Ave., Chevy Chase, MD 20815, tel. 301.656.4634, jwechsler@advanstar.com