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We are only a few months away from the August 1^st deadline to track payments made to healthcare practitioners and teaching hospitals.  As the date nears CMS has recently released informative fact sheets and a PDF file of covered teaching hospitals.

These fact sheets can be found here and are written for Manufacturers, Physicians, Teaching Hospitals and Group Purchasing Organizations (GPO’s).  These fact sheets can be utilized as an awareness tool for your employees, physician partners and distributors.

A research payment, fellowship support or space rental fees made to a facility by a manufacturer will also need to be tracked.  Utilization and integration of the PDF dataset of teaching hospitals into your physician transparency documentation processes is a necessity.  The CMS provided list identifies the recipients for whom payments will need to be tracked and the facility identification data which must be included in your submitted report.

CMS recently scheduled an Open Door forum on this topic.  Additional information and registration information can be found on the CMS website.

In reviewing the CMS OPEN PAYMENTS website it is also interesting to note that they have a specific section on audits and penalties.  It is very clear that CMS will conduct audits and any penalties “collected will be used by CMS to implement OPEN PAYMENTS”.  CMS has a clear incentive and need to impose penalties as this will fund the ongoing operations of the program.

An applicable manufacturer should ensure that they are currently collecting all the required data in an easily reportable format and can provide supporting records related to the transfers of value in the event of an audit.

To assist our clients MCRA has developed a low cost, web based, secure software solution that can not only efficiently aggregate all physician payment data but also manages the entire compliance program.

Key features include:

• Capture, Track and Report all Aggregate Spend
• Manage HCP Relationships and Contract
• Contains National Salary Data to Compute a FMV Hourly Rate
• Includes a 24 / 7 Compliance Hotline / Website
• Complete management of all elements of an effective compliance program, including tracking all policies and procedures, issues and other required elements of a compliance program.

Please contact me to schedule a brief complimentary discussion and demo surrounding this new service offering from MCRA.  I can be reached at 860-904-4451 or by email at cgingras@mcra.com.

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Last December, the 2^nd US Circuit Court of Appeals ruled that blocking drug companies from promoting truthful statements about off-label drug uses violates the First Amendment. The FDA decided to not pursue an appeal of this decision at this juncture, meaning that in New York, Connecticut, and Vermont, med-tech companies may give physicians information that they were previously prohibited from disseminating. In other states, this prohibition still applies.

Although the court did not clarify what promotion is allowed and what is prohibited under its decision (there was little transparency on what is still false and misleading), this ruling potentially opens the door to many marketing possibilities for the industry. As a result, this should allow the discussion of generally accepted off-label uses of devices. To be clear, this ruling certainly does not allow companies or their representatives to disseminate false or misleading information, especially when harm to patients is likely to result.

So why should the entire industry pay attention to this ruling? Does it have any practical effect on my company’s current situation? Is this a go-ahead to become more liberal when reviewing my marketing material? What are the potential consequences?

The industry wants answers to these questions and more, but reality is more qualitative than quantitative. Exact regulation and guidance for all situations that can arise in the industry is difficult for the FDA to generate.

Nevertheless, we believe that this decision should not be construed as allowing companies to create promotional materials for direct marketing of the off-label uses of their products. The ruling simply allows the open discussion of legitimate off-label uses between companies, their representatives, and physicians. This was previously only possible if the physician initially approached the company for information.

The reason for this is that by currently allowing off-label marketing on free speech grounds, the Appeals Court decision opens the door for companies to more broadly market their technologies based on un-vetted effectiveness claims, rather than stringently reviewed effectiveness evidence. On-label indications often have a body of clinical evidence in support, while off-label claims often do not have this same level of evidence review. As a result, the differentiation between what is a strong and valid claim and a misleading claim can be unclear.

There can be a number of unexpected consequences for companies which perform off-label marketing of their products, especially when they erroneously believe that these off-label uses are considered legitimate by the medical community. The FDA may still warn companies for the open marketing of off-label uses of products, and companies may still be held liable for invalid claims. In addition, it is possible for this appeals court decision to be reversed in the future.

How can you avoid off-label marketing risks in the medical device world?

Despite the seemingly looser requirements for marketing, the regulatory landscape still exists, and must be carefully followed. Though the door to off-label marketing has now been cracked open, there is still potential for it to be closed again in the future.

In order to avoid the potential costs associated with off-label promotion, medical device manufacturers should be sure to have their marketing materials reviewed by a regulatory expert to ensure that they are not promoting off-label claims. Alternatively, value may be created by dedicating resources to turn these off-label claims into on-label claims which pass regulatory muster.

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The recent release of the Foreign Corrupt Practices Act (FCPA) Resource Guide by the U.S. Department of Justice and the U.S.  Securities and Exchange Commission provides exceptionally helpful guidance to organizations on complying with various anti-bribery statutes.  It also provides another strong statement from the government relating to the importance of an effective compliance program that goes well beyond the FCPA.

In the accounting provision section of the FCPA, organizations are required to maintain strong internal controls that will provide reasonable assurances regarding the reporting of financial information.  One of the most critical internal controls that an organization MUST implement is an effective compliance program.  The presence of an effective compliance program will help prevent FCPA transgressions from occurring and will factor into the extent of the governmental punishment should an issue arise.

As indicated in the guidance, the government will ask three basic questions when evaluating the effectiveness of the organizations compliance program.  These are the exact same questions senior leadership and the Board should be asking of the Compliance Officer.

1. Is the company’s compliance program well designed?
2. Is it being applied in good faith?
3. Does it work?

Are you prepared to answer these questions with factual, independent data?

In order to adequately answer these questions an organization should conduct an independent assessment of their compliance program to ensure that it meets the standards expected by the government.   Upon completion, a report should be provided to senior leadership and the Board which will demonstrate adequate oversight of the compliance program.

A thorough assessment should start with an anonymous employee survey to gauge compliance program awareness.  These results will go a long way towards demonstrating program effectiveness and that the appropriate tone at the top has been set.  Afterwards, the assessment should thoroughly compare the existing program against governmental guidance and industry best practices.  The Office of Inspector General (OIG), U.S.  Securities and Exchange Commission (SEC), U.S. Sentencing Commission (USSC) and many other governmental entities have published a trove of helpful information.

In addition, audits of high risk areas such as anti-bribery and healthcare provider relationships should be conducted.   As an example, a Compliance Officer (or outside auditor) should conduct a comprehensive evaluation of the process to contract with healthcare professionals and contracts should be pulled to validate payments were made accurately with supporting documentation and an FMV analysis on record.

The value of a compliance program cannot be overstated and an audit provides organizational assurance that it is working effectively.

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The December 2009 (applicable March 21, 2010) amendments made to the Medical Device Directive (MDD 93/42/EEC) require all medical device manufacturers to include a clinical evaluation in their European device technical file. A clinical evaluation is used to obtain and evaluate all available clinical data on the medical device or equivalent devices in order to determine whether the device or system is both safe and effective, as well as, demonstrate compliance of said device with the essential requirements of the EC Medical Device Directive.

The clinical evaluation summarizes the safety, effectiveness, and risks and benefits of the device as supported by clinical data. Depending on the device classification, a clinical evaluation can include, but is not limited to, the following support data:

• literature review of published, clinical data on the subject device or similar systems*,
• internal manufacturer data,
• national and international device databases/registries data, and
• clinical investigation data.

*Evidence demonstrating system equivalence is required. Comparability data can include technology, indications and intended use, shape and dimensions, principles of operation, and materials.

Once the initial evaluation has been completed, the technical file has been reviewed by the notified body, and your device has been successfully CE Marked, the initial clinical evaluation must be actively updated at regular intervals with data obtained from Post Market Surveillance and newly published literature (as applicable).

A well-developed initial clinical evaluation can easily be updated with appropriate record-keeping of the literature search protocol including inclusion and exclusion criteria, literature search terms, a summary of the article selection process, reference listings, and organized, up-to-date documentation of post-market surveillance data (e.g., investigational plan, informed consent forms, relevant Ethics Committee(s) documentation, case report forms (CRFs), and adverse event information).

Device manufacturers benefit greatly from developing and maintaining a thorough and informative clinical evaluation document. Benefits include regulatory conformance and a better relationship with their notified body, ease of adhering to local reporting requirements, identifying new risk-benefit information that may affect device safety or labeling, and valuable insurance coverage data.

Is it time for your clinical evaluation to be updated?

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