Diagnostics & Imaging Week Washington Editor

Suddenly, it has become fashionable to give FDA more money.

After more than a decade and a half of diminishing resources, FDA is now the target of financial largess by both the executive and legislative branches of government as the recent approval of a budget of $2.1 billion by a House appropriations subcommittee demonstrates.

The House Agriculture Subcommittee last week approved a budget of roughly $2.1 billion for the FDA for fiscal 2009, which is $282 million more than the administration requested. The committee's chairwoman, Rosa DeLauro (D-Connecticut), said the move acknowledged that "the nation's food and drug safety system is broken."

Nonetheless, DeLauro insisted that "accountability procedures are going to be put in place" to ensure appropriate use of the funds. DeLauro said the agency "needs to move on what its Science Board said and on what the recalls have taught us."

The promise of more scrutiny comes on the heels of a June 25 press release by Rep. John Dingell (D-Michigan), who said he wants to hear from the agency regarding the reintroduction of a veterinary drug, ProHeart 6, to the market.

Assuming that sum survives the full Appropriations Committee, the House will have to reconcile its numbers with those of the Senate, which at present is working on a bill that would fund FDA with only $275 million more than the White House's proposed numbers.

Panel: more studies for contrast agents

An advisory committee recently recommended that FDA require makers of contrast agents for echocardiography to conduct larger studies to evaluate health risks.

FDA required that contrast agents made by GE Healthcare (Waukesha, Wisconsin) and Lantheus Medical Imaging (North Billerica, Massachusetts) include a black-box warning last year after receiving 200 reports of complications, including seven deaths, but backpedaled last month after doctors weighed in on the matter.

The panel recommended a randomized placebo-controlled study of thousands of patients for both new and existing products, but GE and Lantheus already have agreed to more closely scrutinize post-market data. Nonetheless, FDA's director of medical imaging products, Dwaine Rieves, said the recommendation could affect the agency's position on pre-market testing of future contrast agents.

House passes Medicare spending bill

Now that the proverbial 11th hour has arrived, Congress is busily scraping together a passel of bills designed to beat the August recess.

In a June 24 vote, the House passed the Medicare Improvements for Patients and Providers Act of 2008 by 355 to 59. Perhaps the most important feature of the bill, designated H.R. 6331, is that it puts the brakes on the scheduled 10.6% cuts to physician fees under Medicare Part B, which are slated to hit providers July 1. In lieu of those reductions, H.R. 6331 provides docs with a boost in pay of 1.1% for fiscal 2009.

The House measure also would delay the expected July 1 introduction of Medicare's competitive bidding program for medical equipment such as wheelchairs and walkers. A bipartisan measure was introduced in the Senate last week to suspend the program. Some suppliers have complained that the process for picking winning bids was flawed.

The Senate has yet to cobble together a response, and the House bill papers over the problem with Part B financing for only 18 months, which is subject to the sustainable growth rate mechanism unless Congress decrees otherwise.

Karen Ignagni, president/CEO of America's Health Insurance Plans (AHIP), criticized the bill, saying that the House "rushed through legislation that would require Medicare Advantage beneficiaries to pay for the increase in physician payments without considering the impact these cuts would have on vulnerable seniors."

Ignagni's comments were in reference to provisions in H.R. 6331 that cut funding to Medicare Advantage plans to the tune of almost $14 billion over five years. She said that "a recent survey found that most seniors – regardless of whether they are enrolled in traditional Medicare or Medicare Advantage – oppose cutting the Medicare Advantage program and believe these cuts will have a negative effect on seniors."

GAO says MA plans very profitable

Medicare Advantage (MA) plans have become very controversial due to perceptions that they needlessly inflate the nation's Medicare tab, and a June 25 report by the Government Accountability Office concluded that MA plans are spending a lower portion of revenues on care than previously projected.

GAO states that in February, MA plans "projected they would spend approximately 87% of their 2007 revenue on medical expenses, 9% on non-medical expenses, and that the remaining 4% would go to profits."

However, a recent audit of 2005 numbers indicated that "actual medical expenditures as a percentage of revenue were lower in 2005 than they had projected," coming in at 85% of total revenue after forecasting a bite of 90.2%.

The GAO report says that "CMS officials stated that projections submitted by MA organizations in 2005 may be less reliable than those submitted in 2006 and subsequent years because, among other factors, actuaries were not required to attest to the accuracy of projections until 2006." CMS also expressed the view that "differences between projected and actual expenses and profits did not affect Medicare payments to MA organizations or the benefits they would have provided," but GAO states, "the inaccuracy of projections could have impacted the types and costs of services that MA beneficiaries received."