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Waves of data dumps create strong undercurrents for biopharmaceutical companies

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By Mari Serebrov
Washington Editor

What with federal Sunshine reporting, state transparency rules and a Medicare data dump, drugmakers are awash in a sea of data that could come back to swamp them.

In addition to surfing the waves of compliance issues, drugmakers must be on the lookout for whistleblowers feeding in the new, deeper pools of physician payment data created by the Sunshine provisions of the Affordable Care Act and the recent Centers for Medicare & Medicaid Services (CMS) decision to release data on its payments to physicians under Medicare Part B.

To comply with the Sunshine provisions, drugmakers have to track physician payments of $10 or more to each recipient and then report aggregate payments of more than $100 to CMS. Although the first report was due March 31, CMS isn't expected to release the data until September. (See BioWorld Today, Aug. 1, 2013.)

Until CMS unveils its Sunshine database, drugmakers aren't sure how the data will look or what context will be provided, said Latarsha Stewart, director of legal and compliance at Millennium: The Takeda Oncology Co.

Industry's concern is that the importance of their relationships with physicians and teaching hospitals will drown in the data, she told BioWorld Today.

Another danger lurks in CMS' decision last month to proactively release its data on Part B payments – especially if whistleblowers can establish a link between drugmakers' payments and Medicare payments that will buoy up charges of False Claims Act violations, said Judy Waltz, a partner with Foley & Lardner LLP and a former CMS attorney. (In the past, CMS made the Medicare data available only to those requesting it under the Freedom of Information Act.)

Several whistleblower suits have foundered because they couldn't demonstrate that a drugmaker's actions led directly to false claims being submitted to the government. In Noah Nathan v. Takeda Pharmaceuticals Inc., for instance, the U.S. Court of Appeals for the Fourth Circuit upheld a lower court's dismissal of the qui tam suit.

The appellate court found that the former Takeda sales rep failed to show Takeda's off-label promotion of Kapidex, a proton pump inhibitor approved to treat various gastric conditions, led to actual false Medicare claims. (See BioWorld Today, Jan. 15, 2013, and Oct. 10, 2013.)

After asking the solicitor general to weigh in, the Supreme Court decided last month not to hear the case.

While the Sunshine and Part B databases may not provide the specific data the courts would require to establish proof of false claims, Waltz told BioWorld Today, the aggregate data from both sources may be enough for a whistleblower to survive a motion to dismiss. That would get whistleblowers to the discovery phase where they could do a deeper dive for specific Medicare claims.

To keep afloat, drugmakers are trying to anticipate how the data might be analyzed and interpreted, said Rosa Notaroberto, senior director of commercial operations for Millennium.

The Cambridge, Mass.-based company also is ensuring that the relationships underlying its payments to physicians remain ethical, Stewart said. That way the company can defend the payments if the data are misinterpreted or taken out of context.

In addition, drugmakers must stay on top of the growing swell of state and federal disclosure rules. While the Sunshine rule sets the seafloor for transparency, it was written to give states, and even counties, room to add more requirements, Stewart said.

For example, some states have expanded the reporting requirements to cover nurses and physician assistants. Other states have gift bans. As a result, a drugmaker could find itself having to do a dozen or more different transparency reports to comply with the various local, state and federal requirements, Stewart said.

Another concern is that the flood of data is dampening physician relationships with industry. It already is affecting how drugmakers interact with doctors, Waltz said, and it's discouraging doctors from participating in industry-sponsored continuing medical education programs. It also could limit doctors' involvement in drug development.

Waltz couldn't predict the cost this might have on the health care system. "It's hard to measure up a negative," she said, "because we won't know what we missed."

Looking ahead, her lifeline is that, in time, the public will come to understand the importance of these relationships and realize that they are a normal part of the drug-development process.

COPAXONE COPIES CAN RISK LAUNCH

Chief Justice John Roberts cleared the way for at-risk launches next month of generics of Teva Pharmaceuticals USA Inc.'s blockbuster multiple sclerosis drug Copaxone.

Although Teva has "shown a fair prospect of success on the merits" in its appeal to the Supreme Court, Roberts refused to stay a Federal Circuit ruling striking down the company's final patent on Copaxone (glatiramer acetate), which would expire Sept. 1, 2015. The other remaining patents on the drug expire May 24.

Teva had requested a stay until the Supreme Court ruled on its appeal. The high court isn't scheduled to hear Teva v. Sandoz until its October term, and its decision won't likely be released until next year. (See BioWorld Today, April 16, 2014.)

Roberts wasn't convinced that Teva would suffer irreparable harm if he denied the stay.

Should the Supreme Court hold that the manufacturing process patent is valid, Roberts said Teva would be able to recover patent infringement damages from generic drugmakers that risk a launch before the court rules.

Two generics are posed for launch.

One is partnered by Sandoz Inc. and Momenta Pharmaceuticals Inc.; the other was developed by Mylan Inc. and Natco Pharma Ltd.

While they could be held liable for treble damages if Teva prevails, the generic drugmakers may find the launch worth the risk – especially since Teva is encouraging physicians to switch patients from daily Copaxone injections to its next-generation formula that's dosed three times a week and has patent protection until 2030.

Each day generics are kept from competing, "Teva switches more patients and diminishes the potential market for generic products," Sandoz and Mylan said in a brief urging Roberts to deny the stay.