CMS Releases Proposed Stark Law Regulations

As previously discussed on our Health Industry Washington Watch blog, the Centers for Medicare & Medicaid Services (CMS) has proposed regulations “to reduce burden and to facilitate compliance” under the physician self-referral law known as the Stark Law. However, even with changes, the regulations will remain highly complex, with major implications for health care providers that misstep. Providers are encouraged to remain vigilant to ensure Stark Law compliance. CMS is soliciting comments on the proposed rule until 5 p.m. September 8, 2015.

For more information on the implications of CMS’ proposed changes to the Stark Law and the implications they may have for health care providers, read the full Client Alert written by Karl Thallner, Julia Krebs-Markrich, Tom Greeson and Elizabeth Carder-Thompson.

House Easily Passes 21st Century Cures Legislation, Includes Significant FDA Reforms

On July 10, 2015, the U.S. House of Representatives passed with an overwhelming majority (344-77), the 21st Century Cures bill (H.R. 6), a high-profile bipartisan bill intended to speed up and improve the process for approving innovative drugs and medical devices, and to address other issues, including those regarding clinical trial design, research funding, and interoperability of health technology (i.e., a health care system’s ability to connect with other systems).

If enacted into law in its current form, the bill will establish a Cures Innovation Fund to support biomedical research, providing $8.75 billion for the National Institutes of Health (NIH) and $550 million for the federal Food and Drug Administration (FDA).  It also will reauthorize funding for the NIH through fiscal year 2018.

The legislation includes a variety of offsets to pay for new costs, including provisions related to Medicare drug and durable medical equipment payment policy, Medicare imaging reimbursement, and civil monetary penalties in cases of Department of Health and Human Services (HHS) grant or contract fraud, among others (see our related posts on Health Industry Washington Watch).

Before coming to the House floor, the 352-page bill was subject to several drafts, spending more than a year in development at the Energy and Commerce Committee, where it unanimously passed last month 51-0 after series of hearings and roundtable discussions by lawmakers.

The bill as approved consists of four titles (Title I “Discovery”; Title II “Development”; Title III “Delivery”; Title IV “Medicaid, Medicare, and Other Reforms”).  Of particular interest to drug developers, health care IT professionals, and those involved in clinical trials, are the following sections of Title II “Development”:

  • Subtitle A, Patient-Focused Drug Development – Would require FDA to implement a “structured risk-benefit assessment framework” that incorporates “patient experience data” in the new drug development process.  Patient experience data means data collected by “patients, parents, caregivers, patient advocacy organizations, disease research foundations, medical researchers, research sponsors,” or other parties determined appropriate by FDA, that is intended to facilitate or enhance FDA’s risk-benefit assessments, “including information about the impact of a disease or a therapy on patients’ lives.”  Including patient experience data is intended to integrate patient experience with the development of potential treatments.
  • Subtitle B, Qualification and Use of Drug Development Tools – Would require FDA to establish a process for the qualification of “drug development tools” that can help “translate scientific discoveries into clinical applications.”  For the purpose of streamlining clinical trials, Subtitle B also would allow trial sponsors to request that the Secretary of HHS agree to an “accelerated approval development plan,” which must include agreement on surrogate endpoints, study design, and the magnitude of the effect of the drug on the surrogate endpoint that would be sufficient to demonstrate the safety and efficacy of the product.
  • Subtitle D, Modern Trial Design and Evidence Development – Would require FDA to investigate and issue final guidance to assist sponsors in incorporating adaptive trial design and Bayesian methods into proposed clinical protocols and new drug and biologic applications.  This subtitle also would require FDA to establish a program to evaluate the potential use of evidence from clinical experience to help support the approval of a new indication for a drug.
  • Subtitle G, Antibiotic Drug Development – Would create a process under which FDA and a sponsor could expedite the development and availability of treatments for serious or life-threatening bacterial or fungal infections in patients with unmet needs.
  •  Subtitle I, Orphan Product Extensions Now; Incentives for Certain Products for Limited Populations – Would extend the exclusivity period for six months for an approved drug already on the market when FDA approves a new indication for the drug for a rare disease or condition.  This subtitle also would reauthorize the priority review voucher incentive program for rare pediatric diseases.
  • Subtitle L, Priority Review for Breakthrough Devices – Would require FDA to establish a program to provide priority review for medical devices: (1) “representing breakthrough technologies”; (2) without any other approved alternatives; (3) offering significant advantages over existing approved or cleared alternatives; or (4) “the availability of which are in the best interest of patients.”
  •  Subtitle N, Sensible Oversight for Technology Which Advances Regulatory Efficiency – Would restrict FDA’s ability to regulate software that currently falls within the definition of a medical device under the Food, Drug, and Cosmetic Act.  Under this provision, FDA could regulate only “health software” that: (1) is “intended for use to analyze information to provide patient-specific recommended options to consider in the prevention, diagnosis, treatment, cure, or mitigation of a particular disease or condition”; or (2) FDA “determines poses a significant risk to patient safety.”  All other “health software” would be exempt from FDA regulation.
  •  Subtitle O, Streamlining Clinical Trials – Would require the HHS Secretary to harmonize differences between HHS Human Subject Regulations and the FDA Human Subject Regulations.  This subtitle also would permit the use of non-local institutional review boards for review of investigational device exemptions and human device exemptions.  In addition, it would waive the informed consent requirement for individuals participating in device and drug trials that pose no more than minimal risk to the participants.

H.R. 6 is now on its way to the Senate, which has held a number of hearings related to issues in the 21st Century Cures, but has yet to advance any legislation.  Stay tuned.

Summer Associate Yetundi Oni also contributed to this blog post.

Is Your SEM FDA Compliant? New Google SEM Policy Forces Pharmaceutical Industry to Adjust Paid Search Advertisements

Upcoming changes to Google AdWords’ ad formats will have a significant impact on pharmaceutical companies that engage in paid search advertising. In a letter to its major media agencies last month, Google announced that it will be removing two of its popular pharmaceutical advertising units.

Black Box Ad Format

On July 20, 2015, Google’s Black Box Ad Format will be removed because of changes to Google’s URL infrastructure. Google’s original Black Box Ad Format appears as follows:


The FDA requires some drug labeling and advertising to have “boxed” or “black box” warnings, which typically concern conditions about the drug that may lead to death or serious injury. FDA advertising standards prohibit such boxed drugs from having “reminder” ads that disclose a drug’s name, but do not include any representation regarding the drug, such as its indication or dosage recommendations. The use of reminder ads is important because they do not discuss the condition treated or how well the drug works. Thus a reminder ad does not need to contain a summary relating to the product’s side effects, contraindications or effectiveness.

In late 2014, the FDA indicated that boxed products could have “reminder-like” advertisements, provided the advertisements contained a “Please see …” statement (e.g., “Please see the full safety and prescribing information, including boxed warning”). For online ads, the FDA signed off on the Black Box Ad Format because the packaged insert containing the mandated disclosures was only one click away.

As a result of the Black Box Ad Format removal on July 20, 2015, pharmaceutical companies will now have to run their ads through Google’s standard text ad unit. The standard text ad unit will not display the full FDA-recommended disclaimer included in the last line of the Black Box Ad Format – “Click to see full safety and prescribing information, including boxed warning. More Info.” – or allow for an advertisement to link to multiple sites. Google has suggested that pharmaceutical companies follow the format below for boxed “reminder-like” ads:


However, whether this format will be acceptable to the FDA is unclear. Nor is it clear that the format is viewed as effective advertising by the pharmaceutical companies. For instance, FDA has already advised the pharmaceutical industry that reminder-like advertisements should include a clear reference (and second Internet link) directing consumers to the boxed product’s full prescribing information. By fiat, Google has eliminated that alternative. In addition, many companies will need to develop creative ways to address drugs with longer names that may not fit into Google’s standard header because of the character limit for headers. In such cases, the product’s active ingredient could be added on another line (adjacent). In all cases, however, the “reminder-like” advertisements must reference the “boxed” nature of the product, the product name, and the active ingredient. Below are a few examples:


Vanity URLs

Google also announced it would no longer permit pharmaceutical companies to use vanity URLs as of January 12, 2016.

Employing vanity URLs has been a long-time preference for pharmaceutical companies. Vanity URLs allow a company to create an unbranded “condition awareness” ad. In a typical scenario, a consumer will search for a physical condition, see an ad that addresses the condition and click on a generic URL. The generic URL will then re-direct the consumer to a product-specific, brand website site (such as linking to a blood pressure drug website). This SEM advertising technique emerged in 2009 after the FDA issued 14 enforcement letters to companies for their failure to include sufficient risk information in Google banner advertisements. The 2009 letters created shock waves throughout the industry, causing many companies to reassess their Internet marketing strategies. Notably, and likely related to FDA’s 2009 action, Google has historically prohibited vanity URLs for all industries except the pharmaceutical industry.

Google has provided pharma advertisers with three potential options in the display URL field:

  2. Corporate Company Name (without the .com)
  3. Static text that reads: “Prescription Treatment Website” or “Prescription Device Website”


The first two options could be problematic if the company’s name triggers an immediate association with a specific branded product. The third option – “Prescription treatment website” – may be the most logical adjustment, in part because the URL is directing a person to a product-specific, brand website. Although these formats are not currently supported and still need to be implemented, pharmaceutical companies should be mindful of the changes before the January 12, 2016, deadline.

BOTTOM LINE – If pharmaceutical companies have not already done so, they need to contact their media-buying agency and be certain the agency is aware of the changes and is implementing acceptable work-arounds.

FCC Finally Issues Omnibus Ruling on TCPA Litigation and Compliance

Ambiguities in the Telephone Consumer Protection Act (TCPA) have been a recent topic of interest. This past week, the FCC finally released the long awaited TCPA Omnibus Declaratory Ruling and Order resolving 21 petitions on many issues associated with the enforcement and interpretation of the Act. As the authors note in yesterday’s Reed Smith Client Alert, the Ruling unfairly places legitimate businesses in the same category with the telemarketing abusers that the Act was intended to deter. The FCC has an apparent lack of concern for most industries’ wellbeing when it comes to mitigating the recent wave of TCPA class action litigation. ACA International has already filed suit in the U.S. Court of Appeals for the D.C. Circuit – the same day the FCC’s Ruling was released. Stay tuned for further news on this and other appeals that will undoubtedly be filed.

For more details on the proposed changes, read the full Client Alert  written by Reed Smith attorneys Judith Harris, Henry Pietrkowski, David Reidy and Ashley Shively.

New Jersey’s DTC Advertising Exception to the Learned Intermediary Doctrine

When the New Jersey Supreme Court ruled in Perez v. Wyeth Lab, Inc. that if pharmaceutical manufacturer directly markets to consumers, the learned intermediary doctrine does not apply, it was deemed a “revolutionary,” decision. However, since the ruling, every New Jersey court which has confronted this issue has found that the DTC exception did not apply, due to the fact that the plaintiffs failed to show that the manufacturers ever engaged in DTC advertising, or, if they did, that the advertising had any impact on the plaintiff’s decision to use the drug. The overwhelming majority of states continue to apply the learned intermediary doctrine, and have rejected arguments that DTC advertising undermines the learned intermediary doctrine. With “vigilant monitoring of DTC advertising and repeated references to the physician’s role, this should continue to be the case into the future,” as noted in Reed Smith’s client alert, “The Revolution that Wasn’t: New Jersey’s Direct-To-Consumer Exception to the Learned Intermediary Doctrine.”

For more information on New Jersey’s DTC exception to the learned intermediary doctrine, read the full Client Alert.

Amarin Pharma v. FDA – More Briefs Filed Regarding Off-Label Promotion And The First Amendment

Our prior  posts  looked at the Amarin Pharma, Inc. v. United States Food and Drug Administration lawsuit, which raises issues regarding the First Amendment and how it applies to speech by drug and device manufacturers regarding “off-label” uses.  We provided links to amicus briefs by the Pharmaceutical Research and Manufacturers of America and the Washington Legal Foundation supporting Amarin’s request for a preliminary injunction to prevent the FDA from taking any enforcement action based on specific statements that Amarin wishes to make about its approved drug Vascepa.

Public Citizen’s has now filed an amicus brief, and predictably it opposes Amarin’s request for a preliminary injunction.  Amarin’s filings have explained that it wants to provide doctors with additional information about Vacepa supported by a clinical study, and to make statements about Vascepa that the FDA already permits manufacturers to make about equivalent products (EPA and DHA omega-3 fatty acids) sold as nutritional supplements.  But in Public Citizen’s view, “Amarin’s theory would threaten the entire structure of drug regulation under the FDCA.”   Public Citizen also argues that Amarin need not be allowed to make its proposed speech under First Amendment law, including Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (2011) and United States v. Caronia, 703 F.3d 149 (2d Cir. 2012).

For its part, Amarin’s latest filing is its reply brief in support of its motion for preliminary injunction.  Amarin notes the central paradox in the FDA’s position:  that the same statement—that “supportive but not conclusive research shows that EPA and DHA may reduce the risk of coronary heart disease”—supposedly is at once both false and misleading (as to Vascepa as a drug) and not false and misleading (as to Vascepa as a nutritional supplement).  The company also explains why the FDA’s prior letter submission and brief did not moot the live controversy about other speech it wishes to make about its prescription drug either.

Oral argument on Amarin’s motion for preliminary injunction is set for Tuesday, July 7, 2015 at 9 a.m. so there will be further developments—one way or the other—quite soon.

UPDATE:  Argument was held on Tuesday, July 7, 2015 regarding Amarin’s motion for preliminary injunction, but the matter was taken under submission and there is no ruling yet.

FDA Files Brief Regarding Off-Label Promotion In Amarin Pharma Lawsuit

As we mentioned in our prior post, the Amarin Pharma, Inc. v. United States Food and Drug Administration lawsuit pending in the Southern District of New York raises interesting issues regarding the First Amendment and how it applies to speech by drug and device manufacturers regarding “off-label” uses.  As we noted, on June 8, 2015, the FDA filed a copy of a letter it had sent to Amarin outlining its position about the statements Amarin wants to make about its FDA-approved prescription drug, Vascepa.

Most recently, on June 23, 2015, the FDA filed its brief in response to Amarin’s Motion for Preliminary Injunction, along with declarations from several officials: Janet Woodcock, Director of the Center for Drug Evaluation and Research (CDER), United States Food and Drug Administration; Ellen London, Assistant U.S. Attorney for the Southern District of New York; and Curtis Rosebraugh, Director of the Office of Drug Evaluation II, Office of New Drugs, Center for Drug Evaluation and Research (CDER), United States Food and Drug Administration.

The FDA’s brief calls the lawsuit “a frontal assault by Plaintiffs on the framework for new drug approval,” rather than a narrow, as-applied constitutional challenge.  In the FDA’s view, because Amarin seeks an order allowing it to distribute Vascepa “under circumstances which could establish that Amarin intends an unapproved new use for Vascepa,” its success “has the potential to establish precedent that would return the country to the pre-1962 era when companies were not required to prove that their drugs were safe and effective for each of their intended uses.”

Consistent with its letter, the FDA’s brief also states that the “FDA does not object to most of Amarin’s proposed communications” and suggests that the issue before the court is quite limited:  whether the Agency could consider it to be evidence that the company intends a new unapproved use for Vascepa if Amarin does “distribute Vascepa for use by patients with ‘high’ (as opposed to ‘very high’) triglyceride levels who either have or are at risk of coronary heart disease and are already being treated with statins.”

In recounting the statutory and regulatory background, FDA explains that it could consider such evidence to violate federal statutes or regulations in three ways:

First, “if the claim is made in ‘labeling’ and establishes a new intended use, Vascepa would be considered an unapproved new drug with respect to that intended use, and distribution of Vascepa for that unapproved new use would therefore be prohibited. 21 U.S.C. §§ 331(d), 355(a), 321(g), (m) & (p).”

Second, evidence of a new intended use “may also establish a violation of the FDCA’s misbranding provisions” because a drug is misbranded if “it lacks adequate directions for all intended uses, and the interstate distribution of misbranded products is illegal.  See 21 U.S.C. §§ 331(a), (b), (c), (g) & (k).”

Third, “to the extent any of Amarin’s communications, when taken in context, are misleading,” they might constitute “‘false or misleading’ labeling, rendering Vascepa misbranded” under 21 U.S.C. § 352(a), and its distribution in interstate commerce prohibited, 21 U.S.C. §§ 331(a), or might “constitute advertising that is ‘false, lacking in fair balance, or otherwise misleading,’” and thus misbranded under 21 C.F.R. § 202.1(e)(6), 21 U.S.C. § 352(n), and 21 U.S.C. § 321(n).

Perhaps highlighting why manufacturers like Amarin feel the need to seek preemptive court guidance about what they can and cannot say, the FDA’s brief states at the same time that:

The FDCA’s reach does not extend to all communications by drug manufacturers about uses that have not been approved. The dissemination of information about an unapproved use would not, by itself, cause a violation of the FDCA when such information is neither false nor misleading, and is not relevant, or sufficient, to infer a new intended use.

Amarin’s lawsuit raises these First Amendment free speech issues in a uniquely interesting context, because the FDA’s position is that Amarin cannot make a heart disease claim for Vascepa as a drug (namely, that “[s]upportive but not conclusive research shows that consumption of EPA and DHA omega-3 fatty acids may reduce the risk of coronary heart disease”), it could make this same heart disease claim for Vascepa if marketed as a nutritional supplement.  The FDA attributes this disparate treatment to the fact that “drugs present markedly different considerations from dietary supplements,” but it remains to be seen whether the court will find this distinction problematic from a constitutional standpoint.

More developments are sure to come.  Stay tuned.

Texas Hospital CFO Pleads Guilty To Making A HITECH Act False Statement

The HITECH Act—including the HITECH Final Rule’s provisions about HIPAA, data privacy, security, and breach notification—is an issue we have covered in detail previously.

According to a June 17, 2015 press release, the former CFO of the Shelby Regional Medical Center in Texas has pleaded guilty to making a false statement in “representing that the hospital was a meaningful user of electronic health records when the hospital did not meet the meaningful use requirements” and thus should not have received nearly $786,000 in electronic health record implementation incentive payments from Medicare.  The former CFO was sentenced to 23 months in federal prison, and ordered to pay restitution of nearly $4.5 million to Medicare’s Electronic Health Record (EHR) Incentive Program.

Reed Smith attorney, Brad Rostolsky was recently quoted in an article discussing the case, articulating his belief that the government will continue to be aggressive in its enforcement of “meaningful use” EHR attestations in circumstances that warrant a tough approach.  Although most providers undoubtedly take care to ensure their attestations are true and accurate, recommended practices include retaining detailed documentation that supports the representations made in “meaningful use” attestations, and thus the provider’s eligibility to receive EHR incentive payments, for seven years.

FCC Ruling Clarifies Ambiguities in the TCPA

For years  industry groups have been petitioning the Federal Communications Commission (FCC) to clarify ambiguities in the Telephone Consumer Protection Act (TCPA), which make it difficult for businesses to comply and leave them vulnerable to litigation. Finally, on June 18, 2015, the FCC responded. As discussed in a Client Alert by Reed Smith attorneys Judith Harris, Henry Pietrkowski, David Reidy and Ashley Shively FCC Commissioners voted 3-2 to issue a consumer-friendly ruling  that will have significant implications for businesses, including health care providers and pharmaceutical companies, when complying with the Act. Although it is unclear as to when the FCC’s Order will issue and what the exact wording will be, the changes will allow consumers more control over the texts and calls they receive.

For more details on the proposed changes, read the full Client Alert

FDA Sued By Drug Manufacturer Over Constitutional Right To Discuss Off-Label Uses

The FDA has long sought to ban manufacturers from promoting off-label uses of approved drugs and medical devices.  In taking the position that manufacturers and their agents cannot promote off-label uses, the FDA suggests they are safeguarding the public from misbranded medical products and ensuring that manufacturers do not circumvent the drug- and device-approval processes.

Critics, however, have long contended that the FDA’s position violates the First Amendment to the extent it prohibits truthful speech.  See Washington Legal Foundation v. Friedman, 13 F. Supp. 2d 51, 56 (D.D.C. 1998); Washington Legal Foundation v. Henney, 56 F. Supp. 2d 81 (D.D.C. 1999), appeal dismissed, 202 F.3d 331 (D.C. Cir. 2000).  And in 2012, the Second Circuit overturned a pharmaceutical sales representative’s criminal conviction for truthful off-label promotion on First Amendment grounds.  See United States v. Caronia, 703 F.3d 149 (2d Cir. 2012).

Most recently, in May 2015, a small drug manufacturer, Amarin Pharma, Inc., and a number of physicians filed a lawsuit against the FDA, Amarin Pharma, Inc. v. United States Food and Drug Administration, 15-cv-3588 (S.D.N.Y.) which may bring this issue to a head.

In 2012, the FDA approved Vascepa—a prescription omega-3 fatty acid commonly known as “EPA”—for use as an adjunct to diet to reduce triglyceride levels in adult patients with severe hypertriglyceridemia, at defined “very high” levels, to reduce the risk of pancreatitis.

Amarin, however, also wants to disclose to doctors—and the physician plaintiffs want to receive—additional information about Vascepa.  This addition information includes that “supportive but not conclusive research shows that consumption of EPA and DHA omega-3 fatty acids may reduce the risk of coronary heart disease,” results of a clinical trial (“ANCHOR”) demonstrating that Vascepa lowers triglyceride levels in patients with high triglyceride levels not controlled by diet and statin therapy, and the efficacy data from the ANCHOR study.  The information that Amarin wants to provide is truthful, and would be distributed along with the FDA-approved label and other information that would make it not misleading.

As the complaint noted, the FDA already permits omega-3 fatty acid product manufacturers to make the qualified health claim that Amarin wants to make about Vascepa—that “[s]upportive but not conclusive research shows that consumption of EPA and DHA omega-3 fatty acids may reduce the risk of coronary heart disease”—but only about omega-3 fatty acid products labeled as nutritional supplements.

Given concerns that the government would take action against Amarin if it were to distribute the specified information, the complaint seeks a declaratory judgment recognizing that Amarin “may engage in its proposed speech” and preliminary and permanent injunctions against enforcement action by the FDA.  Id.  Amicus briefs have been submitted by the Pharmaceutical Research and Manufacturers of America and the Washington Legal Foundation in support of Amarin’s position.

On June 8, 2015, the government filed a submission with the court enclosing a letter the FDA had sent to Amarin three days earlier regarding the complaint.  Perhaps seeking to avoid a ruling on the relief requested by Amarin, the FDA’s letter advised that it would not consider distribution of most of the information to be “evidence that Vascepa is intended for a use that would render [it] an unapproved new drug or misbranded.”  It also expressed the view that “virtually all of the communications” that Amarin proposes to disseminate” fall within the scope of existing FDA guidance documents, such as the Revised Draft Guidance for Industry, Distributing Scientific and Medical Publications on Unapproved New Uses—Recommended Practices (Feb. 2014). In addition, it also noted that is “currently engaged in a comprehensive review of its regulations and guidance documents regarding manufacturers’ dissemination of information regarding their medical products, and a new guidance will be forthcoming”—although no time frame was specified.

The government’s letter did not completely close the door on possible government action, however, as the FDA did state that it “would potentially consider” the inclusion of the qualified health claim—the statement that “[s]upportive but not conclusive research shows that consumption of EPA and DHA omega-3 fatty acids may reduce the risk of coronary heart disease”—to be “misleading or as evidence of an intent to market the product for an unapproved use” unless the product were “repackaged and re-labeled as a dietary supplement.”

The Amarin lawsuit accordingly merits close continuing observation, and may yet provide clear guidance about the First Amendment and how it applies to truthful speech regarding “off label” uses.