Medical Device Daily Washington Editor

The Senate Finance Committee has reacted to the clamor surrounding estimates of the cost of its healthcare reform legislation by dropping the idea of a public option for healthcare insurance, opting instead to offer tax credits to those who wish to enroll in a plan offered via a healthcare insurance cooperative. According to Congressional Quarterly, the plan would also not require employers to offer coverage, but employers would have to pay 50% of the national average cost of Medicaid for each employee who enrolls in the Medicaid program.

However, the cost containment effort did not end there. Sen. Max Baucus (D-Montana), chairman of the Senate Finance Committee, also reported last week that it had obtained an agreement with the Pharmaceutical Research and Manufacturers of America (PhRMA; Washington) that would require member drug makers to cover half the cost of prescription drugs that fall into the "doughnut hole" in Medicare Part D coverage.

The move on the part of the Finance Committee to drop a public option is intended in part to address estimates of the cost of the committee's initial plan, which some pegged at $1.6 trillion over 10 years. The health plans offered in the cooperative would come in four tiers, platinum, gold, silver and bronze, and participating insurers would have to offer at least gold and silver coverage. In addition to the 50% share of Medicaid costs for each employee, the proposal would require employers to cover half the cost of tax credits earned by employees who enroll in one of the cooperative plans.

The deal with PhRMA members, which the White House is said to have had a hand in, is projected to shave $80 billion from healthcare costs over 10 years and would require the Department of Health and Human Services to set up an administrative mechanism by July 2010 to administer the program. Drugmakers would have to submit to audits to ensure that the prices they offer "are appropriately set," according to the June 20 statement from Baucus's office.

Former Congressman Billy Tauzin, President/CEO of PhRMA, said in the statement that the agreement represents "a once-in-a-lifetime opportunity, and working together, we can make this hope for a better tomorrow a reality today." Baucus is quoted as saying that the agreement "helped fill a gap in coverage," a reference to Medicare Part D, "and finished the job."

FDA to study DTC ads

FDA announced yesterday in the Federal Register that it intends to take up a study of how the manner in which benefit information is presented in direct-to-consumer (DTC) ads affects the perception of benefit, with an eye toward comparing qualitative benefit information with quantitative benefit information.

As makers of drugs and devices know, risk and benefit information must be presented in a "balanced manner," regardless of the medium, and FDA expresses concern that benefit information "does not inform patients of the likelihood of efficacy and are simply variants of intended use statements." FDA cites two studies of DTC advertising for drugs, one of which, FDA says criticizes the ads for employing "best-case scenarios that can distort and inflate" expectations.

The agency notes that a drug box format can convey statistical data in a fashion that is accessible by lay persons and that a study of such presentations indicated that participants "were more likely to correctly choose the product with the higher efficacy." FDA states that while such outcomes are "intriguing, additional research is necessary."

Ergo, FDA will enroll the intended study population of 4,500 into two arms, one each for television ads and for print ads, running concurrently. The FR statement seems to suggest that FDA intends to use a sham cholesterol statin as the product of interest, but the announcement does not explicitly say so. Neither does it indicate whether subjects will be blinded as to the sponsor of the study.

The study will present data on the efficacy of both the sham article and an alternate with purportedly lower efficacy in data in a graphic format using one or more of three types, namely pie charts, bar charts and "pictograph" depictions. FDA does not indicate when it expects to complete the study.

Patent reform bill languishing in House

Advocates of patent reform have probably wondered whether healthcare reform would elbow aside the Patent Reform Act of 2009. If events to date are any indication, those fears have been at least partly realized. The question going forward is: "How long will it take for the House of Representatives to address their version of the bill?"

The Senate's version, S. 515, came out of the Judiciary Committee in April and is on the calendar for the full Senate, but the House version, H.R. 1260, has yet to come to a vote in the Judiciary Committee. The bill does not appear on the committee's web site as the subject of an upcoming hearing, and calls to majority and minority staff were not returned in time for this story.

One of the big sticking points for any reconciliation of the two bills is the ages-old matter of the language dealing with damages. Both bills originally invoked language that apportioned damages to the value of the infringed item to the overall value of the product, but the Senate dropped that language from its version earlier this year after a considerable amount of wrestling. The damages provision was also one of the two or three most controversial provisions that torpedoed the bill each of the past couple of years. The House bill, however, retains the apportionment language, sure to be a block to moving forward if the past is any indication.