Life Sciences Legal Update : Life Sciences Lawyers & Attorneys : Reed Smith Law Firm : Healthcare, Food and Drug Law, Biotechnology, Privacy, Product Liability

On Tuesday, Senate Finance Committee Chairman Max Baucus and Ranking Member Chuck Grassley released a lengthy policy paper discussing for options for reducing health care costs and improving quality in the health care delivery system. The proposals are far-reaching, ranging from bundling of hospital and post-acute care, establishing appropriateness criteria for imaging services, and requiring drug/device manufacturers to report payments to physicians/physician investments. With regard to specialty hospitals, the “whole hospital” and rural exceptions to the general ban on self-referral would be eliminated, but a new exception would be created for hospitals that have physician ownership and a Medicare provider agreement in effect on July 1, 2009 and which meet certain criteria. The release is available at finance.senate.gov.

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On April 29, 2009, the Obama Administration released a report on HHS progress over the first 100 days of the Obama Administration. The report addresses implementation of the American Recovery and Reinvestment Act of 2009, efforts to promote health reform, regulatory review initiatives, and release of the President's proposed budget, among other things.  

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To promote transparency, HHS has established a new searchable database of communications with registered lobbyists on ARRA issues. HHS is reporting verbal and written communications within three business days of their occurrence.  

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The European Court of Justice ("ECJ") recently had the opportunity to opine on limits on the scope of advertising for medical products in the European Union, when a journalist who had reprinted factual information about a pain medication sold in Norway but prohibited in Denmark, was made an example under Danish legal provisions prohibiting advertising for medicinal products that are not lawfully marketed in Denmark. As exmplained by Paule Drouault-Gardrat, Julie Gottenberg and Juliette Peterka in "Advertising of medicinal products versus freedom of expression of a journalist - European Court of Justice Decision dated 2 April 2009 (C-421/07) 'Frede Damgaard' " (available also in French), the ECJ concluded the issue was a matter for the national court in the first instance, relying in part on a line of French cases holding that any publication praising the merits of a medicinal product must be considered as advertising whomever its author, regardless of whether the manufacturer sought or paid for publication.

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On April 20, 2009, Senate Finance Committee Chairman Senator Max Baucus and Senate Health, Education, Labor, and Pensions Committee Chairman Edward M. Kennedy reaffirmed their intention to move forward on major health care reform this year. In a letter to President Barack Obama, Baucus and Kennedy announced that their committees will mark-up comprehensive health care reform legislation in early June. 

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In a recent law journal article authored about FDA approved labels and off-label uses, authors Mark Herrmann (of the http://druganddevicelaw.blogspot.com) and Pearson Bownas demonstrate the folly of letting the standard of care in medical malpractice cases be defined by whether the doctor used a prescription product "on label" or "off label." The article succinctly explains how off-label use is a prevalent and necessary part of the practice of medicine, and that off label use is not and cannot be legally regulated by the FDA. Off label treatments are undeniably common, whether because manufacturers face prohibitive costs to obtain approval for certain uses when those uses are already accepted in the medical community, or because doctors are ethically obliged to provide the best treatment possible for their patients regardless of the indications for use approved by the FDA . Further, the authors point out that in many instances off-label use may be the standard of care for providing the "safest, most effective, state-of-the-art treatment." Thus, in light of the accepted and prevalent practice of off-label use, the authors point out that allowing FDA approved drug and device labels as "some evidence" of the standard of medical care should be outweighed by the significant risk of prejudice, confusion and time wasting that admission of evidence about the label indications for use would cause. Of relevance to the Life Sciences and Health Industry, the article provides a good overview of the reasons and authorities existing to mitigate the force of a product's label in failure-to-warn off-label use cases.

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This post was written by Antony B. Klapper and Jesse J. Ash.

On April, 8, 2009, the National Institute for Occupational Safety and Health ("NIOSH") and the Centers for Disease Control and Prevention ("CDC") submitted a notice for public comment in the Federal Register, requesting information to evaluate potential health risks associated with the use of carbon nanotubes ("CNTs"). 74 Fed. Reg. 15985-15986 (Apr. 8, 2009). NIOSH and CDC request by May 15, 2009, all information related to studies, workplace exposure data and information on control measures where companies manufacture CNTs in products. The agencies plan to use this information to formalize recommendations for the safe handling of products that contain CNTs.

Recent scientific reports have drawn parallels between CNTs and asbestos. CNTs are long, thin particles similar to the needle-like shape of some asbestos fibers. In fact, these reports suggest that CNTs can cause adverse effects on the lung function of mice. These reports, in part, likely form the rationale for NIOSH's and CDC's focus on CNTs. Suggesting a connection between CNTs and the human health questions associated with asbestos is a sure way to gain the public's and the government's attention, even though the reports do not answer the critical question of whether CNT exposure can cause adverse consequences in humans, and are limited in a variety of ways. Regardless, this Notice from NIOSH and CDC demonstrates that the government is now highly concerned about the effects of CNTs on human health, and that it is focused on the future regulation of its use.

Companies that manufacture, integrate or sell nanomaterials, including, in particular, CNTs, need to be mindful of the actions taken as a result of this Notice. Companies should evaluate whether to communicate their views and/or findings to NIOSH and CDC by May 9, either through associations or directly. Whatever information NIOSH collects, and any guidance it may promulgate, could become the floor that companies may need to adhere to or risk future liability.

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This post was written by Carolyn D. Duronio and Kristen M. Gurdin.

On February 12, 2009, the Internal Revenue Service (the “Service”) released its long–awaited Hospital Compliance Project Final Report (the “Report”). The Service commenced the Hospital Compliance Project in 2006 by sending out comprehensive questionnaires to 544 tax-exempt hospitals. The questionnaires focused primarily on hospitals’ current practices with respect to community benefits and executive compensation. The Report details the data the Service compiled from the 487 respondent hospitals and the 20 hospitals selected for examination from that group. The Report did not provide any conclusions on whether the federal tax rules regarding community benefits and executive compensation should be changed. IRS officials’ and lawmakers’ initial interpretation of the Report and its findings, however, suggests that exempt hospitals should expect significant scrutiny of the community benefit and compensation information that they provide on the revised IRS Form 990 and that stricter requirements may be forthcoming.

For additional information, please see Reed Smith's full alert.

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