HealthLawProf Blog

Your ACO Primer Links

The ACO regulations are here. The DOJ/FTC proposed policy statement on antitrust is here. The HHS/OIG proposed rule is here. Finally, the New England Journal has published a commentary by Dr. Berwick, here. [NPT]

County Health Rankings Show That There Is More to Health Than Health Care

The Robert Wood Johnson Foundation and the University of Wisconsin released the new County Health Rankings today. The model for the rankings " is grounded in the belief that programs and policies implemented at the local, state, and federal levels have an impact on the variety of factors that, in turn, determine the health outcomes for communities across the nation."

These ranking are like an annual checkup for the country  -- you can look on the website and find the ranking for health of every county nationwide, not just on average lifespan and mortality, but also on factors like access to healthy foods, obesity and smoking rates, and air pollution levels.   

The Rankings allow anyone nationwide to get a snapshot of how healthy their county is, and how it stacks up to others.      

Check this out: In addition to the Rankings themselves, the Robert Wood Johnson Foundation has produced an interactive calculator app that explores the relationship between education and health in any county nationwide. The calculator lets you raise and lower the education rate or average income in a county, and see how the change would be predicted to affect mortality.  For instance: if adults in Wyandotte, Kansas – where 39% have some college education – had the same education levels as the top county in the state – Johnson at 78% -- more than one out of three deaths (38%) could be averted per year.

[KVT]

 

After Makena: Could a Risk Corridors Approach Balance Incentives and Access?

The past few weeks have been worrying ones for expectant mothers who wanted a hormonal treatment designed to stop preterm births. As Rob Stein of the WaPo explains,

A form of progesterone known as 17P was used for years to reduce the risk of preterm birth. . . Because no companies marketed the drug, women obtained it cheaply from “compounding” pharmacies, which produced individual batches for them [at about $20 each]. Doctors and regulators had long worried about the purity and consistency of the drug and were pleased when KV won FDA’s imprimatur for a well-studied version, which the company is selling as Makena.

The list price for the drug, Makena, turned out to be a stunning $1,500 per dose. That’s for a drug that must be injected every week for about 20 weeks, meaning it will cost about $30,000 per at-risk pregnancy. . . . The approval of Makena gave the company seven years of exclusive rights, and KV immediately fired off letters to compounding pharmacies, warning that they could no longer sell their versions of drug.

A day after Stein’s article appeared, the FDA made it clear that “does not intend to take enforcement action against pharmacies that compound” 17P, “in order to support access to this important drug, at this time and under this unique situation.”

This is a fascinating, and in some ways, troubling response to the accusations of price-gouging by KV. Compounding pharmacists had already averred that “many of [KV's] assertions that the compounding of an FDA approved product is prohibited are not supported by the legal citations it references.” Though the FDA’s letter preserves access to 17P for now, that access could be revoked at any time. As the FDA states on its website:

FDA understands that the manufacturer of Makena, KV Pharmaceuticals, has sent letters to pharmacists indicating that FDA will no longer exercise enforcement discretion with regard to compounded versions of Makena. This is not correct. In order to support access to this important drug, at this time and under this unique situation, FDA does not intend to take enforcement action against pharmacies that compound hydroxyprogesterone caproate based on a valid prescription for an individually identified patient unless the compounded products are unsafe, of substandard quality, or are not being compounded in accordance with appropriate standards for compounding sterile products. As always, FDA may at any time revisit a decision to exercise enforcement discretion.

Moreover, the problem persists for at least one other drug, colchicine. As Arthur Allen explains at Slate,

The colchicine and [17P] stories have their roots in the FDA’s historically complex relationship with the drug industry. Since 1962, the agency has required that all new drugs be proven safe and efficacious before hitting the market. Many drugs marketed before 1962, however, remain on sale without having been formally approved by the FDA and are technically illegal. In 2006, the FDA launched the Unapproved Drugs Initiative, aimed at getting rid of as many of these drugs as possible. . . .

The FDA campaign has two approaches. In some cases, the agency simply warns companies to stop producing and shipping unlicensed drugs by a given date. In other cases the FDA warns a group of companies producing a particular class of drug, notifying them that it plans to crack down on their unapproved substances. The idea here is to give the companies an opportunity to submit their drugs to the rigorous testing required for FDA approval. This is what happened with . . . at least 86 newly approved drugs. The problem is that after submitting such drugs to expensive testing, drug makers typically jack up the prices, in a position to do so under congressional patent incentives aimed at producing innovative drug research. The FDA has no say in how a drug is priced.

As the Post notes, KV says it “is spending more than $200 million to develop the drug and conduct follow-up studies that the Food and Drug Administration demands.” Had it kept its pricing power, it was estimated that Makena would cost the US health care system $4 billion per year. Assuming that 3/4 of that would be revenue to Makena, and it lasted for the full 7 years of exclusivity, that would be a $21 billion return on a $0.2 billion investment. That seems excessive, especially given that KV didn’t develop the drug. On the other hand, if the Makena price were to be reduced one hundredfold, that’s a $0.21 billion return on a $0.2 billion investment. Unless we hit some serious deflation, that doesn’t cover the time value of the money invested in studies and development.

Are there any better models here? Stein’s story says that “experts said the FTC could sue KV if it concludes the company is illegally impairing competition,” but I don’t see the theory there. The FTC has lamented post-merger price hikes for life sustaining drugs (see FTC v. Lundbeck), but has precious little authority over price hikes here. Perhaps liberal constitutional law professors could fuse the “medical self-defense” theory of Eugene Volokhwith the expansive Yoo/Vermeule/Posner theories of executive power, and find inherent executive authority here to save preemies? Probably not; the current Supreme Court is only receptive to creative con law from one side of the political spectrum.

Another idea is for legislation to create “risk corridors” for researchers who engage in the FDA’s Unapproved Drugs program, as CMS has for prescription drug insurance plans in Medicare Part D. As Kip Piper explains,

Using a system of risk corridors that compares actual incurred drug benefit costs to estimated costs submitted in bids, Medicare limits the profits and losses of Part D drug plans. Specifically, if a Medicare drug plan’s actual benefit costs exceed expected (bid) levels by a sufficient degree, the plan will receive an additional federal payment to cover a portion of the loss. However, if a drug plan’s actual spending falls sufficiently below projections, the plan must share some of the profit with the feds. Risk corridors apply to actual and expected drug benefits costs but exclude plan administrative costs and federal reinsurance payments.

Unfortunately, estimates of the value of testing unapproved drugs vary widely. The FDA’s director of the FDA’s Office of New Drugs and Labeling Compliance insists on the importance of these programs. But, looking specifically at colchicine, an Austin rheumatologist said “Doing one trial in patients and a few drug interaction studies doesn’t justify marketing exclusivity and a 50-fold increase in price.” As Allen puts it, we need “legislative remedies to improve the drug supply without costing the public an arm and a leg.”

In health care finance, the “cost-shift” hydraulic is a familiar model. When policymakers cut reimbursements for, say, Medicare or Medicaid, providers still have the same income target, and respond by raising prices for the privately insured. One scholar estimated that the privately insured pay over 120% of costs, while Medicare payments are between 95 and 99%. We might think of pharmaceutical patents as another manifestation of “cost-shifting,” from the future (which will enjoy drugs in the public domain) to the present (which must pay the monopolist’s price). Other forms of exclusivity can also lead to that type of cost-shift, as the Makena controversy makes clear.

Perhaps the people most benefited by a regime of more intense pharmacovigilance and evidence-based medicine should be asked to pay something for that new reassurance. But they shouldn’t be price gouged. A risk corridors approach might better balance patients’ interests in research on, and reasonable prices for, unapproved drugs.

 

Blocking Implementation of the Patient Protection and Affordable Care Act (PPACA)

Politico reports on successful efforts at the state level by health care law opponents to block creation of health insurance exchanges.  Of course, if the states do not set up exchanges, then the federal government will do it for them.  And polling data in March showed the public to be more favorable about PPACA than earlier in the year.  Still, officials at HHS and the White House undoubtedly would prefer to see greater acceptance of the law by now.

[DO]

Biosafety Protocol Improving with Age

The Secretariat of the Convention on Biological Diversity (CBD) has released the eighth issue of "Biosafety Protocol News." It commemorates the 10^th anniversary of the adoption of the Cartagena Protocol on Biosafety, the treaty governing the movements of living modified organisms (LMOs) related to biotechnology.  It is a useful report because it highlights future directions and the challenges of implementation. One of the greatest challenges is helping countries address illegal trade in possibly dangerous LMOs. The newsletter reports that secretariats of six Multilateral Environmental Agreements (MEA) and five international organizations are attempting to address this problem with the Green Customs Initiative, which appears to be making some headway. Also, information sharing has been improved. Since 1998, the International Centre for Genetic Engineering and Biotechnology (ICGEB) has managed and shared a bibliographic collection of articles of scientific studies relevant to biosafety and risk assessment of biotechnology. This is accessible through a Biosafety Clearing-House portal. There are many other encouraging developments described in the newsletter, but overall, it seems that with the rapid advances in biotechnology, more resources are needed to enable information sharing, better safety measures, and implementation capacity-building. The newsletter mentions additional protocols that are under consideration to improve the Cartegena Protocol.[MM]

They're Coming! The ACO Regulations are Coming!

We were promised the Accountable Care Organizations regulations before the end of March. That means this week, and rumors are flying about their bulk. Politico reports, here, that we may be staring at 1000 pages of regulations and that we will see them on Thursday (because HHS won't want to release them on April Fools Day!). [NPT]

Ronen Avraham, Market Solutions, and Practice Guidelines

Ronen Avraham (Texas) discussing malpractice reform and clinical practice guidelines in today's NYT, available here.

Instead of nonprofit groups producing free guidelines, or insurance companies producing ones that serve their own interests, the government should require health care providers to buy or license guidelines from what I call private regulators, for-profit companies with expertise in evidence-based medicine. Doctors would have immunity from malpractice cases if they followed the guidelines. However, the private regulators themselves would be liable if their guidelines were found to deviate from optimal care.

[NPT]

Voluntary Enrollment Strategies

The GAO has issued a new letter report, available here, that addresses strategies for encouraging voluntary health insurance enrollment (i.e., leaving on one side PPACA issues such as the individual mandate and insurance industry regulation). Based on interviews with analysts and stakeholders GAO reported the following strategies as likely having traction:

(1) Modify open enrollment periods and impose late enrollment penalties. (2) Expand employers' roles in autoenrolling and facilitating employees' health insurance enrollment. (3) Conduct a public education and outreach campaign. (4) Provide broad access to personalized assistance for health coverage enrollment. (5) Impose a tax to pay for uncompensated care. (6) Allow greater variation in premium rates based on enrollee age. (7) Condition the receipt of certain government services upon proof of health insurance coverage. (8) Use health insurance agents and brokers differently. (9) Require or encourage credit rating agencies to use health insurance status as a factor in determining credit ratings.

Notwithstanding these strategies for voluntary enrollment the mandate and regulatory elephants in the room were difficult to ignore. Of the four themes or frames cited by the interviewees, the second was "regardless of the particular approach taken to increase voluntary enrollment in the absence of an individual mandate, the availability of affordable, high-quality health care plans with a basic set of benefits, and full coverage of preventive care services is essential to encouraging voluntary enrollment in the coverage." [NPT]

 

John Petrila & Corine De Ruiter: "The Competing Faces of Mental Health Law: Recovery and Access versus the Expanding Use of Preventive Confinement"

John Petrila, Profesor at the University of South Florida, and Corine De Ruiter posted "The Competing Faces of Mental Health Law: Recovery and Access versus the Expanding Use of Preventive Confinement" on SSRN:

Mental illnesses are an enormously important public health issue. Many nations are struggling to create adequate treatment capacity, based on advances in treatment philosophies, treatment modalities, and the codification of the rights of people with mental illnesses. However, preventive confinement is increasingly used to indefinitely confine classes of individuals based on sometimes substandard clinical testimony on diagnosis and future risk. The expanding use of preventive confinement threatens to draw already scarce resources from the treatment of many people with serious mental illnesses to focus on a handful of individuals thought to be dangerous to society. This has serious implications for the future of public mental health care.

Gaia Bernstein: ""Direct-to-Consumer Genetic Testing: Gatekeeping the Production of Genetic Information"

Gaia Bernstein, Associate Professor of Law at Seton Hall University School of Law, posted "Direct-to-Consumer Genetic Testing: Gatekeeping the Production of Genetic Information" on SSRN:

Traditionally, the practice of genetic testing was governed by the Diagnostic Paradigm. Under the Diagnostic Paradigm an individual tested for a disease that was prevalent in his family and a medical professional guided the testing process. Yet, recently, a new genetic testing paradigm has emerged - the Consumer Paradigm. Under the Consumer Paradigm, direct-to-consumer genetic testing companies are offering online packages of multiple genetic tests that are bundled together. The individual purchases the package and undergoes testing for a large battery of tests usually without the guidance of a medical practitioner.

This Essay argues that the emergence of the Consumer Paradigm signals a new step in the genetic revolution and creates a need for an additional policy focus. While in the past legal discourse focused on the removal of barriers for innovation and access, it should now also consider the need to regulate and filter the production of genetic information. Specifically, this Essay underscores the necessity of having a medical professional as a gatekeeper of the production of genetic information.

This Essay argues for the need for a law mandating the guidance of a medical professional not only at the interpretation stage but also at the outset of the process - to guide individuals through the selection of tests. Not all genetic information is made equal and not all test results are similarly desirable for all people. A medical practitioner can guide individuals in selecting the genetic tests that reflect their preferences and produce the genetic information that is beneficial for them.

Richard J. Bonnie: "Responsibility for Addiction"

Richard J. Bonnie, Professor of Law at the University of Virginia School of Law, posted "Responsibility for Addiction" on SSRN:

Taking as its starting point the characterization of addiction as a "brain disease" by the nation’s leadership in public health and biomedical science, this paper explores the implications of recent developments in neuroscience for the concept of responsibility. The terrain is divided into three parts: responsibility for becoming addicted; responsibility for behavior symptomatic of addiction; and responsibility for amelioration of addiction. In general, the paper defends the thesis that recent scientific developments have sharpened but not erased traditional understandings in the first two areas, while recent legal developments have exposed new and intriguing theories of responsibility for managing.

Victoria Lazariu, Chengxuan Yu & Craig Gundersen: "Forecasting Women, Infants, and Children Caseloads: A Comparison of Vector Autoregression and Autoregressive Integrated Moving Average Approaches"

Victoria Lazariu, Chengxuan Yu and Craig Gundersen posted "Forecasting Women, Infants, and Children Caseloads: A Comparison of Vector Autoregression and Autoregressive Integrated Moving Average Approaches" on SSRN:

Under the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), each state receives a fixed federal grant for the operation of WIC in the upcoming federal fiscal year. Accurate forecasting is vital because states have to bear the expenses of any underestimation of WIC expenditures. Using monthly data from 1997 through 2005, this paper examined the performance of two competing models, autoregressive integrated moving average (ARIMA) and vector autoregression (VAR), in forecasting New York WIC caseloads for women, infants, and children. VAR model predicted over $120,000 less per month in forecast errors in comparison to the ARIMA model.

Raghav Gaiha, Raghbendra Jha & Vani S. Kulkarni: "Child Undernutrition in India"

Raghav Gaiha, Raghbendra Jha, and Vani S. Kulkarni posted "Child Undernutrition in India" on SSRN:

We have constructed a composite indicator of anthropometric failure (CIAF) that refines the Waterlow-3 tier classification, using a recent nation-wide household survey. The CIAF and its disaggregation into subcategories of undernourished 5 years old children reveal a grimmer story of child undernutrition than conventional anthropometric indicators do. Besides, simultaneous occurrence of anthropometric failures (e.g. stunting and underweight, and stunting, wasting and underweight) is pervasive. Our analysis of determinants of CIAF yields some new insights-specifically, the important role of food prices. Investigation of the links between different anthropometric failures and prevalence of infectious diseases (viz. Diarrhoea and acute respiratory infection), however, offers some justification for the disaggregated classification of undernourished children used here. Specifically, those with more than one failure were worse-off in this respect than children with no failure. There is a strong case for income growth together with food price stabilisation in curbing child undernutrition. Education has the desired effect but it is less strong than expected. Improvement in the quality of home environment makes a difference too but it is not conditional on income or wealth alone.

 

Robert A. Mikos: "A Critical Appraisal of the Department of Justice's New Approach to Medical Marijuana"

Robert A. Mikos, Professor of Law and Co-Director of the Program of Law and Government at Vanderbilt University Law School, posted "A Critical Appraisal of the Department of Justice's New Approach to Medical Marijuana" on SSRN:

The Obama Administration has embarked upon a much-heralded shift in federal policy toward medical marijuana. Eschewing the hard-ball tactics favored by earlier Administrations, Attorney General Eric Holder announced in October 2009 that the Department of Justice (DOJ) would stop enforcing the federal marijuana ban against persons who comply with state medical marijuana laws. Given the significance of the medical marijuana issue in both criminal law and federalism circles, this Article sets out to provide the first in-depth analysis of the changes wrought by the DOJ’s new Non Enforcement Policy (NEP). In a nutshell, it suggests that early enthusiasm for the NEP is misguided; on close inspection, the NEP represents at most a very modest change in federal policy. First, the NEP won’t necessarily stop federal agents from pursuing criminal prosecutions of marijuana dispensaries. In a twist of irony, the non-enforcement policy itself is not enforceable. It doesn’t create any legal rights a court could invoke to dismiss a criminal case. And the DOJ itself will have a difficult time ensuring that federal prosecutors comply with the agency’s stated policy. Second, even assuming the NEP would block criminal prosecutions, federal law could still obstruct state medical marijuana programs by imposing - or enabling others to impose - a wide range of civil and private sanctions on medical marijuana users and their suppliers. The problem is the NEP doesn’t repeal the federal ban on marijuana. Marijuana technically remains illegal under federal law, and the possession, cultivation, or distribution of the drug trigger a host of civil sanctions not addressed by the NEP. For example, the Department of Housing and Urban Development (HUD) can deny federal housing subsidies to medical marijuana users, and pharmaceutical companies could potentially bring civil RICO actions against marijuana dispensaries. What is more, the federal ban arguably preempts states from shielding marijuana users and dispensaries from sanctions imposed by private parties. For example, employers can likely skirt liability under state law for discriminating against employees who use marijuana for medical purposes. Metaphorically, the federal ban is a hydra, only one head of which has been severed by the NEP (and one that could too easily be regrown). The labor of ending federal prohibition is not yet complete.

Worth Reading This Week

Jeffrey Kahn & Douglas Kahn, Free Rider – A Justification for Mandatory Medical Insurance Under Health Care Reform? Michigan Law Review First Impressions/SSRN

June Carbone, Negating the Genetic Tie: Does the Law Encourage Unnecessary Risks? UMKC L.Rev./SSRN

Rebecca Dresser, Brain Imaging and Courtroom Deception, Hastings Center Report/SSRN

Tom Baker, Health Insurance, Risk, and Responsibility after the Patient Protection and Affordable Care Act, SSRN

[NPT]

 

If only Apple made EMRs

You don't need to be a geek to appreciate the value proposition of or to operate an iPad. In fact the opposite seems to be true, and may explain the incredible success of the device and its ecosystem. Most people don't love their computers and frequently find them difficult to work with. Why should we believe that a different relationship exists between doctors and EMRs? A new Perspective article in the New England Journal, available here, explores this very issue, arguing,

Although EHRs laudably provide immediate access to patient data and electronic messaging functions, clinicians have been frustrated by the difficulty of using them to support care delivery and coordination. Transforming EHRs into effective clinical tools rather than a means of capturing information primarily for documentation and billing purposes will require progress on multiple fronts.

Progress on several fronts is urged; interoperability, support for shared care, integration of clinical decision support systems, usability, and support. Absent such improvements "Today's EHRs do not sufficiently support aspects of care delivery that are vital to improving care and controlling costs." [NPT]

Tom Baker: "Health Insurance, Risk, and Responsibility after the Patient Protection and Affordable Care Act"

Tom Baker, Professor of Law at University of Pennsylvania Law School, posted "Health Insurance, Risk, and Responsibility after the Patient Protection and Affordable Care Act" on SSRN:

This essay explores the new social contract of healthcare solidarity through private ownership, markets, choice, and individual responsibility embodied in the Patient Protection and Affordable Care Act. This essay first explains the four main health care risk distribution institutions affected by the Act – Medicare, Medicaid, the individual and small employer market, and the large group market – with an emphasis on how the Act changes those institutions and how they are financed. The essay then describes the “fair share” approach to health care financing embodied in the Act. This approach largely rejects the actuarial fairness vision of what constitutes a fair share while pointing toward a new responsibility to be as healthy as you can. This new responsibility reflects the influence of health economics and health ethics, and it is part of the embrace of risk first described in the insurance as governance literature. There are challenges to achieving the solidarity through individual responsibility envisioned in the Act – most significantly ”risk classification by design” and non-compliance with the mandates – but the Act contains regulatory tools that the states, the new Exchanges, and the Department of Health and Human Services can use to address these challenges.

Jinkook Lee: "Data Sets on Pensions and Health: Data Collection and Sharing for Policy Design"

Jinook Lee, Senior Economist at RAND Corporation, posted "Data Sets on Pensions and Health: Data Collection and Sharing for Policy Design" on SSRN:

A growing number of countries are developing or reforming pension and health policies in response to population ageing and to enhance the welfare of their citizens. The adoption of different policies by different countries has resulted in several natural experiments. These offer unusual opportunities to examine the effects of varying policies on health and retirement, individual and family behaviour, and well-being. Realizing these opportunities requires harmonized data-collection efforts. An increasing number of countries have agreed to provide data harmonized with the Health and Retirement Study in the United States. This article discusses these data sets, including their key parameters of pension and health status, research designs, samples, and response rates. It also discusses the opportunities they offer for cross-national studies and their implications for policy evaluation and development.

Guest Blogger Jennifer S. Bard: Securities Law Case Helps Increase FDA Authority to Monitor Post-Market Adverse Events

The Supreme Court’s unanimous decision in Matrixx Initiatives Inc. v. Siracusano, No. 09-1156 that the makers of Zicam had to inform investors of information that its product caused permanent damage to some users’ sense of smell even though that information was not “statistically significant” is likely to prove very helpful to the FDA, and in turn consumers, in the Agency’s on-going efforts to pry information from drug companies about post-market adverse events.

Although an important Securities Regulation decision with wide implications for many different industries, Matrixx also serves as a way of increasing consumer access to information that up until now pharmaceutical companies usually kept to themselves.  Writing for the majority Justice Sotomayor noted that although there was no FDA reporting requirement at the time Matrixx was receiving the information but that “[In] 2006, Congress enacted legislation to require manufacturers of over-the-counter drugs to report any “serious adverse event” to the FDA within 15 business days. See 21 U. S. C. §§379aa(b), (c).”    Justice Sotomayor further wrote that, “[a] lack of statistically significant data does not mean that medical experts have no reliable basis for inferring a causal link between a drug and adverse events. As Matrixx itself concedes, medical experts rely on other evidence to establish an inference of causation. “

Based on the Court’s analysis in Matrix that serious “adverse events” need not be statistically significant, it is likely that this decision will prove a useful precedent for the FDA to argue that failure to disclose credible reports of serious adverse events are unlawful.

Although required to disclose “serious” information of adverse harm to the FDA, companies may well have been withholding information from the FDA as well as from shareholders on the grounds that it was not “statistically significant.”  So although not a “health law” case, the effect of this decision should be to increase the information available to the FDA and to consumers themselves.  

To put the decision in context, it is likely that the Court’s decision was influenced by the very public criticisms of Big Pharma by Iowa’s Senator Chuck Grassley  and others for withholding information about adverse events.  The most notable recent examples of this are the withholding of increased cardiac deaths from the drugs Avandia and Vioxx.  Although Avandia has been pulled from the market in Europe, it is still for sale in the U.S. with increased warnings and restrictions.    

I will soon be posting an article on SSRN considering ways to protect insiders who know of potential harms to come forward and this decision is likely to increase the flow of information by preventing companies from distinguishing between “statistically significant” and “non-statistically significant” reports of serious harm.

 -  Guest Blogger Jennifer S. Bard

Do Calorie Counts Matter?

In a provocative piece, Nicholas Bagley questions whether the new calorie count rules will help in the effort to reduce obesity in the United States.  A provision in the Patient Protection and Affordable Care Act (Section 4205) requires chain restaurants to post calorie counts for the foods they sell, and FDA will be issuing its proposed rules shortly.

The provision also applies to “similar retail food establishments,” that are part of a chain with 20 or more locations, and movie theaters are concerned that FDA will apply its rule to movie theater concession stands. 

[DO]