DID - March 16, 2009 Issue

Vol. 8 No. 51

Massachusetts Modifies Industry-Physician Financial Reporting Rules

The Massachusetts Public Health Council has approved its final rules requiring drugmakers to report financial transactions with authorized prescribers, dispensers and purchasers of drugs and biologics in the state, exempting transactions for clinical trials and genuine research activities.

The council, which is authorized to issue most health regulations, approved the modified rules last week. They establish a marketing code of conduct, require disclosure of industry’s financial payments to healthcare practitioners and mandate employee training on gift-reporting regulations (DID, Dec. 11, 2008).

The rules implement a law enacted Aug. 10, 2008, requiring drug and device manufacturers conducting business in the state to report by July 1, 2010, all payments, including gifts worth more than $50, to authorized prescribers, dispensers and purchasers of drugs, biologics and devices in the state (DID, Aug. 12, 2008).

Before the final regulations were issued, companies sought clarification as to how to achieve transparency and eliminate conflicts of interest without impeding the development of new drugs or devices (DID, Jan. 20). The final regulations, which will take effect July 1, mostly mirror the proposed rules but include changes due to comments from industry, consumer groups and trade organizations.

Changes Based on Comments

Recognizing that some industry interactions with healthcare professionals are beneficial, the Massachusetts Department of Public Health amended the definitions of genuine research, clinical trials and hospital setting to reflect more accurately the conduct of research and training.

Reportable sales and marketing activities currently do not include clinical trials and genuine research in which the “primary purpose is to generate data in support of an application filed with the FDA seeking approval for a new drug, biologic or medical device or new use,” according to the regulations. Clinical trials registered with ClinicalTrials.gov also are exempt.

In response to consumer group concerns, the definition of “sales and marketing activities” subject to annual reporting was broadened to include research projects designed or sponsored by the marketing departments of manufacturers or undertaken to increase sales of a particular drug, biologic or device.

The final rules also exempt drug samples and price concessions — such as rebates, discounts and prescription drugs provided to a covered recipient solely and exclusively for use by patients — from the annual reporting requirements.

In addition, the regulations clarify that the $50 threshold for reporting fees, payments, subsidies or other economic benefits be calculated on an individual transactional basis rather than on an aggregated basis.

The final rules place more restrictions on the use of prescriber data. Before using such data for marketing purposes, drug- and devicemakers must give healthcare practitioners the opportunity to request their data be withheld from company sales representatives and not be used for marketing. It does not prohibit companies from using such data to conduct research, impart safety and risk information, track adverse events or comply with FDA risk-management requirements.

In response to visitor industry concerns — including convention centers and hotels — the rules permit scientific meetings for continuing medical education and third-party professionals to be held in convention centers, hotels or other special event venues, not just hospital settings.

Lastly, the $5,000 penalty provision was revised to include that all violations must be “knowing and willful.”

The first disclosure report, which will cover the period from July 1 through Dec. 31, is due July 1, 2010. The revised regulations can be viewed at www.mass.gov/Eeohhs2/docs/dph/legal/pharmacy_med_device_manufacturer_conduct_regs.doc. — Renee Frojo


Watson Set for Rapaflo Launch in Late March, Seeks Partners

Watson Pharmaceuticals is gearing up to launch its benign prostatic hyperplasia (BPH) treatment Rapaflo in late March and is looking for a co-promotion partner for the drug.

The FDA approved Rapaflo (silodosin) for the treatment of BPH symptoms last October. The company’s urology sales force will initially detail the product on its own, but the company is looking for a marketing partner for the drug, Patty Eisenhaur, a spokeswoman for Watson, told DID Friday.

Rapaflo is an alpha-1 adrenergic receptor antagonist, similar to Boehringer Ingelheim and Astellas’ Flomax (tamsulosin HCl). The launch of Rapaflo was not initiated right after approval because of a packaging change, which the FDA cleared last month.

Watson also is preparing for a late April launch of its overactive bladder (OAB) treatment Gelnique (oxybutynin chloride), the only topical gel for the condition, the company says. Watson’s specialty sales force will launch the product, but the company is looking for a co-promotion partner for Gelnique. — Christopher Hollis


AstraZeneca Removes Supply Restrictions for Brand Toprol-XL

AstraZeneca has ramped up production of its beta-blocker Toprol-XL and is removing certain restrictions on purchases of the drug because demand for the brand increased after recalls by generic competitors facing quality issues.

Toprol-XL (metoprolol succinate), which is indicated for the treatment of high blood pressure and angina, became subject to generic competition in 2007 when Novartis’ Sandoz unit and KV Pharmaceutical launched their versions of the drug. Both companies have had to recall the products because of issues related to good manufacturing practices (GMPs) (DID, Jan. 30).

AstraZeneca currently is the only manufacturer of the brand product and it supplies Par Pharmaceutical with the authorized generic. The company is removing the restrictions it placed on Toprol-XL purchases in the retail trade starting Monday, according to the FDA’s drug shortage website. Supplies of the brand to hospitals — and of Par’s authorized generic — still are being allocated, according to the website.

The average wholesale price for Toprol-XL is about $33 a month, and the company won’t increase the drug’s price because of the shortage, it told DID Friday. AstraZeneca is now producing enough of the product to meet “historical demand,” the company said.

Watson Pharmaceuticals is waiting for FDA approval of its generic version of Toprol-XL, the company told DID. Its ANDAs cover four dosage strengths, and the company is ready to introduce certain doses immediately.

Extended-release versions of metoprolol succinate are difficult to manufacture, requiring multiple production steps, Watson said.

KV probably will not be able to reintroduce its generic versions of Toprol-XL for quite some time because it has been placed under a consent decree for GMP violations (DID, March 3).

Not only did KV manufacture metoprolol succinate, it and Watson were the only two makers of potassium chloride capsules, known under the Micro-K brand, Watson said. KV made both the brand and a generic form of the drug, and Watson produced another version of the product. Watson since has ramped up production to meet market demand, the value of which is about $100 million annually, according to a company estimate. The company has raised its prices for the product.

Sandoz is working to reintroduce its generic Toprol-XL, the company says in a statement to DID. The company initiated a recall of the drug early last year because of documentation practices and in-process controls. It later expanded the recall after a detailed internal review, the company says.

Last year, the FDA cited the company over validation of processes for the drug (DID, Aug. 27, 2008).

“We are now repeating validation of the product from pellet through finished dosage form to provide the documented and appropriate evidence that the [production] controls implemented result in a well controlled and repeatable process,” the company says. — Christopher Hollis


GAO Sting Targets IRBs in Congressional Investigation

The Government Accountability Office (GAO) has confirmed that it conducted an undercover investigation of the institutional review board (IRB) system at the request of Congress.

 “We will discuss the results of our investigation at a March 26 hearing” before the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations, GAO spokesman Chuck Young told DID.

Before the GAO told DID it had conducted an undercover investigation, Coast IRB, a for-profit entity based in Colorado Springs, Colo., announced it had notified federal and state officials of a fraudulent clinical trial. CEO Daniel Dueber told DID that he was “dumbfounded” by what he called a “sting.”

The company says in a statement posted on its website last week: “Unless pursuant to a court order or under the auspices of the Department of Justice, the sting could be illegal, violating wire fraud, mail fraud, and state laws against fraud and false credentialing.”

Dueber said a company called Device Med Systems of Clifton, Va., contacted Coast IRB last October about a planned clinical trial of a device called Adhesiabloc, a gel that was supposed to be inserted postoperatively into female patients’ abdomens to prevent the formation of adhesions. The IRB agreed to oversee the trial, he added.

In late February, Dueber was invited to appear before the Subcommittee on Oversight and Investigations and testify about the Adhesiabloc study, the CEO said. He began reviewing the study in preparation for his testimony and quickly realized something was wrong.

The clinical trial was for a 510(k) device, “so I started looking for a predicate device online and couldn’t find one. The FDA number for the device they had given us was fraudulent,” Dueber said.

An internal audit by the company revealed that the address given for Device Med’s research site was that of a retail postal services company that rents post office boxes, located in a strip mall in Clifton, Va., according to Dueber. Moreover, the credentials of the principal investigator and medical director for the clinical trial were false, according to Coast IRB’s statement.

“Nothing in the internal audit appeared normal or legitimate,” Dueber said. Attempts to contact Device Med were unsuccessful and on Friday, March 6, Coast IRB convened an emergency board meeting, he said. Device Med didn’t return calls seeking comment from DID last week.

The IRB notified Device Med to stop the clinical trial and issued a press release last week, stating that it had notified the criminal fraud unit of Justice, the FBI, the FDA, and the Virginia Department of Health Professions of the fraud.

“Our main concern was the safety of any subjects who had been tested, but we don’t know if there were any,” Dueber told DID last week. “It’s frustrating.”

Device Med’s website gives a federalwide assurance number, indicating that an institution is in compliance with human research protection regulations known collectively as the Common Rule. The number and Device Med’s name appear in the online system maintained by the HHS Office for Human Research Protections (OHRP), which is responsible for issuing the assurances.

OHRP spokeswoman Patricia El-Hinnawy said that based on the information in the March 10 statement by Coast IRB, “it would appear that the research described is not federally funded and therefore does not fall within OHRP's jurisdiction.”

Nick Choate, a spokesman for House Subcommittee on Oversight and Investigations Chairman Bart Stupak (D-Mich.) told DID that there would be no comment before the hearing.

“All the facts will come out then,” Choate said. — Martin Gidron


Massachusetts Judge Refuses to Dismiss Mylan Pricing Case

A federal judge in Massachusetts has refused to dismiss a case against Mylan Laboratories in which the company is accused of overcharging the state Medicaid system for certain generic drugs.

The state filed the lawsuit in September 2003, alleging that Mylan and 12 other generic-drug makers “systematically and secretly” inflated prices of certain products purchased by the Massachusetts Medicaid program.

Mylan was accused of overcharging for its generic versions of Biovail’s anti-anxiety drug Ativan (lorazepam), Novartis’ schizophrenia treatment Clozaril (clozapine) and Parke-Davis’ anti-siezure drug Dilantin Kapseals (extended phenytoin sodium), according to court documents.

In the complaint, the state maintains the companies used “undisclosed discounts, rebates and other inducements” to lower the prices they charged wholesale customers for their generic products. The drugmakers reported higher drug prices to the state. As a result of the “concealed inducements,” the state to paid inflated prices for the medicines, the filing says.

Former State Attorney General Thomas Reilly asked the court for injunctive relief, restitution, treble damages, civil penalties, attorneys’ fees, and investigative and litigation costs, court documents show.

Roots of Present Decision

In February 2008, Mylan moved to have the state’s case dismissed. The company based its motion on a $100 million settlement it paid to states in 2002, including Massachusetts, to resolve a case over its alleged conspiracy to monopolize the market for lorazepam tablets.

To prove that the 2002 settlement covered the present action, Mylan had to show that the suits were sufficiently related. Judge Patti Saris decided the company did not meet that burden of proof. The claims were similar but the earlier complaint “focused on how Mylan had locked up the supply of chemicals to make the drugs, thereby raising the prices” and not on how it artificially raised the prices of its products in the current case, according to court documents.

Saris also pointed out that the first case covered the 1997–1998 period and the present action covered 1998–2003.

“The facts underlying the Commonwealth’s current claims are not related to the transaction out of which the earlier action arose, and thus the Commonwealth’s claims are not barred,” Saris ruled. The judge dismissed the case last week.

Barr Laboratories, Duramed Pharmaceuticals, Dey, Ivax, Ethex, Roxane Laboratories and Teva Pharmaceuticals USA all have settled with the state. The Commonwealth of Massachusetts v. Mylan Laboratories, Inc., et al. was filed in the U.S. District Court for the District of Massachusetts. — Elizabeth Jones


FDA: CDER Gets 2,210 PDUFA Meeting Requests Annually

More than 900 drugmakers request an estimated 2,210 formal meetings with CDER annually, and 144 biologics manufacturers ask CBER for an estimated 287 formal meetings to review their products under the Prescription Drug User Fee Act (PDUFA).

Preparing to submit a meeting request takes a company about 10 hours, according to figures based on data collected from the review divisions and offices within CDER and CBER. The statistics were released as part of an FDA estimate for the Office of Management and Budget review of the amount of time it takes companies to comply with information submission requirements.

In addition, the agency estimates that an estimated 774 drug companies submit about 1,705 information packages to CDER each year. The FDA estimates that 120 biologic companies submit about 198 information packages to CBER annually once a meeting has been scheduled but before it takes place. This takes the companies an estimated 18 hours per package, the FDA says.

The guidance on formal meetings with sponsors and applicants for PDUFA products can be accessed at www.fda.gov/cder/guidance/2125fnl.htm. — Martin Gidron


Advanced Cell Technology Readies IND for Stem Cell Trial

Advanced Cell Technology is preparing an IND for a clinical trial of an eye treatment using stem cells from a process that the company says doesn’t destroy human embryos.

The IND will be used to seek permission to conduct Phase I and II clinical trials of Advanced Cell’s retinal pigment epithelium (RPE) cell program to treat such diseases as age-related macular degeneration, the leading cause of blindness in U.S. adults older than 60. Macular degeneration represents a $28 billion market, Advanced Cell says in a statement.

The company obtained funding for the planned studies before disclosing it would file the IND.

The single blastomere technology Advanced Cell first announced in August 2006 produces stem cell lines by taking a single cell from a developing embryo that can continue to grow, the company says.

“We believe that the issue of whether the federal government should fund the destruction of human embryos has become unnecessarily politicized,” William Caldwell, chairman and CEO of Advanced Cell, says in a statement. He adds that while the company has received small grants from the NIH in the past, “we have been rebuffed in our efforts to utilize this particular technology in federally funded programs.”

President Barack Obama’s recent executive order lifting restrictions on funds for stem cell research has coincided with announcements of planned clinical trials in this area (DID, March 10). — Martin Gidron

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