Recently in Financial Interest Category

August 1, 2013

Physician Gift Provisions of the Affordable Care Act Kick In Today

gift.pngStarting today, the reporting of all gifts or payments to physicians or teaching hospitals that total over $100 in a year will be required for drug and medical device companies per the new reporting requirements for the Affordable Care Act. These donations will be posted on a publically-accessible, Centers for Medicare and Medicaid Services ("CMS") Internet site starting in September 2014. By decreasing the reporting threshold, this new law will likely make it harder for ethically-suspect activities to slip under public perception, at a cost of greater reporting requirements and an increase in the possible number of false accusations of unethical behavior. Because the reporting is based on the activity of the companies, physicians need not take any affirmative action or even be aware of the activity for their name to be posted.

The detection and prevention of ethics violations presents a trade off between under- and over-diagnosis. As a society, we want a system where ethical lapses are identified and resolved. However, due to the powerful stigma of accusation, it is no surprise that many physicians would prefer to avoid situations that later could be misconstrued as ethically suspect. For example, no physician wants their attendance at an educational conference to result in a random charge of violation of professional responsibilities to patients. This concern may cause physicians to avoid certain educational or other activities rather than worry about the impact of reporting on their reputation. CMS has addressed some of these issues and provided guidelines on what activities are not required to be disclosed, however, there will continue to be uncertainty until the regulation has been practiced for a while and appropriate norms and procedures are developed and agreed upon.

Gifts or payments to physicians fall into a number of different categories with varying levels of public utility. On one side, the sponsorship of medical conferences, continuing education seminars, and research grants are examples of gifts that provide significant public benefit as well as significant personal benefit to physicians. Reducing corporate sponsorship of such events will increase the cost to participants, resulting in a reduced participation in such activities. Physicians are already giving up their time and incurring the opportunity costs to improve their skills and knowledge by attending such events. The reporting aspect may further reduce attendance and learning.

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November 19, 2010

GAO report on FDA's Response to Heparin Contamination Raises Questions of Seeking Input During a Crisis

by Howard E. Rosenberg, Ph.D.

GAO building.jpgOn November 9, the Government Accounting Office (GAO) released a report, "Food and Drug Administration: Response to Heparin Contamination Helped Protect Public Health: Controls that Were Needed for Working with External Entities Were Recently Added". The report was requested by House Energy and Commerce Committee Ranking Member Joe Barton (R-Texas). Among other things, GAO's report finds that FDA worked with several external scientists during the heparin crisis but failed to address certain risks to the agency for engaging two "volunteer" scientists that responded to oral requests for uncompensated services by FDA's Center for Drug Evaluation and Research ("CDER") staff.

According to FDA, it sought the advice of external scientists, because the agency felt it lacked the necessary instrumentation and expertise to identify and develop new testing methods to detect the specific contaminant issues. Both these volunteers, however, had professional and financial ties to heparin firms. They served as paid consultants to two of the primary firms associated with contaminated heparin. In addition, one of the scientists was a co-founder and member of the board of directors, as well as an equity interest holder, in a third firm, which, at the time of the crisis, had a pending application for a heparin product before FDA. This scientist obtained assistance from this third firm, which dedicated approximately 30 staff members for periods ranging from a few weeks to 3 months to assist in the effort to identify the contaminant in heparin. Although GAO's report does not identify any of the firms or individuals by name, it appears that the latter company is Momenta Pharmaceuticals ("Momenta"), whose co-founder and board member Ram Sasisekharan and co-founder and chief scientific officer Ganesh, Venkataraman co-authored several articles on heparin contamination with FDA officials in 2008, as reported by The Pink Sheet, on November 10.

FDA officials were aware of the scientists' ties to heparin manufacturers, but GAO's report pointed out that FDA did not take adequate steps to consider whether these relationships exposed the agency to the risks before engaging them, such as consulting with the Office of Chief Counsel, agency ethics officials, or following procedures described in FDA's The Leveraging Handbook. FDA believed that there was insufficient time to address these ties in the midst of the crisis and that the CDER staff could independently assess the input from these scientists through robust, detailed, and transparent discussions.

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April 23, 2010

Financial Interest and Transparency - Advisory Committee Information and Waivers

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On April 21, FDA announced draft guidance for public availability of advisory committee members' financial interest information and waivers. FDA is advised by almost 50 committees with more than 600 members that provide advice--but do not make decisions--on specific regulatory topics or proposed product approvals. Some meetings have the need for special members with expertise that may have financial conflicts of interest. By law, FDA can grant waivers for such conflicts for about 13% of advisory committee members but reportedly only grants waivers for less than 5% of the members.

The guidance differs from previous agency procedures by not only disclosing that a waiver was granted for a financial interest but also providing the name of the company or institution associated with the financial interest and posting this information on the Internet at least 15 days prior to committee meetings (or as soon as practical if FDA is aware of the information less than 30 days prior to the meeting). FDA must broadly provide FDA's rationale for the waiver--(i) the financial interest is not substantial enough to affect the member's integrity, (ii) the need for the member outweighs the potential for conflict, or (iii) the member's service is necessary to provide the committee essential expertise. The guidance also places would-be advisory committee members on notice the type and extent of information that will be provided to the public.

In mid 2009, FDA held a meeting to solicit comments for ways to increase FDA transparency and currently has a task force making recommendations, posting transparency blogs, and held three additional industry listening sessions in March 2010. FDA has an ongoing task force looking for ways to provide additional information to the public, while protecting confidential information as needed.