FDA Cannot Prohibit the Promotion of Truthful, Off-Label Uses

Last week, a federal judge ruled that the Food and Drug Administration (FDA) cannot prohibit a pharmaceutical company from marketing its drugs for off-label uses if its claims are truthful and not misleading. This ruling, while not precedential, alters the traditional compliance regarding the legality of off-label marketing.

In 2012, the FDA approved Amarin’s drug, Vascepa®, for patients with very high triglyceride levels, a condition known to increase the risk of pancreatitis and cardiovascular disease. However, the FDA rejected a second use of the drug that would have allowed Amarin to market Vascepa to patients with persistently high triglycerides who also take statins (i.e., drugs used to lower cholesterol). Although it was undisputed that Vascepa was safe and effective in reducing such triglyceride levels, the FDA told Amarin it needed to submit additional data regarding whether lowering triglyceride levels for patients on statins actually translates to a reduced cardiovascular risk. Absent formal approval, the FDA contended that distributing information about the alternate use would constitute misbranding under the Federal Food, Drug, and Cosmetic Act (FDCA).

Amarin subsequently filed a lawsuit seeking declaratory and injunctive relief that would prevent the FDA from prosecuting it for truthful, non-misleading speech concerning Vascepa. Amarin argued that the FDA’s efforts to stop it from sharing “off-label” information would violate its free speech protections. In a 71-page opinion, Judge Engelmayer agreed with Amarin and ruled that, consistent with the First Amendment, Amarin “may engage in truthful and non-misleading speech promoting the off-label use of Vascepa.”

The FDA has 60 days to appeal Judge Engelmayer’s ruling. If the decision stands, it could continue to pave the way for pharmaceutical companies and medical device manufacturers to engage in the off-label marketing of drugs that is truthful and not misleading. While Amarin and Caronia signal a potential change in the way the government will have to approach off-label marketing cases, it is important to note that these decisions both come out of the Second Circuit, and it still is uncertain how other circuits will rule when presented with similar facts.

Healthcare Insurers Fighting Back Big Pharma Pricing

Health insurers are pushing to link the cost of specialty medicines to how well they work to improve a patient’s condition, a bid to contain prescription drug prices after decades in which pharmaceutical companies could charge whatever the market would bear.

 

The shift is coming as insurers absorb mounting bills for drugs with eye-popping prices and brace for a slew of new therapies for diseases such as hepatitis C, cystic fibrosis, breast cancer, lung cancer, and leukemia. Those emerging treatments could cost US government-paid health programs such as Medicare nearly $50 billion over the next decade, according to an estimate by an insurance industry trade group, America’s Health Insurance Plans.

Massachusetts biopharma companies are bracing for payment changes, fearful they could cut into profits or dampen the enthusiasm of investors. But they are also hoping to capitalize on the so-called pay for performance trend with a new generation of targeted therapies that can effectively treat a higher share of patients with specific genetic mutations.“Pay for performance is the Holy Grail,” said Genzyme president David Meeker. “The challenge is defining the outcome and being able to accurately track and record it.”Among those leading the drive for new pricing is Express Scripts, a company that bargains with drug makers on behalf of employers and insurers. It is advancing a plan that would offer different reimbursement rates for drugs that treat more than one type of cancer based on how long the drugs extend lives. Insurers, including Harvard Pilgrim Health Care and Blue Cross Blue Shield of Massachusetts, are examining that payment arrangement and others, such as rebates to patients and insurance plans in cases where drugs aren’t effective.

The new payment criteria are likely to emerge slowly and vary widely based on types of medications and payers, which include insurance companies and some government plans such as Medicaid. But proponents agree they need to rein in prices of specialty drugs, which can run up to tens of thousands or hundreds of thousands of dollars a year.

“We’re concerned about the sustainability of the health care system,” said Steve Miller, chief medical officer for St. Louis-based Express Scripts, the nation’s largest pharmacy benefit manager whose customers include Boston-based Blue Cross. “You can’t have double-digit increases in drug prices year after year, especially when you have 7,000 drugs in development.”

Concerns over drug prices were fueled by a popular $1,000-a-pill hepatitis C treatment from Gilead Sciences Inc. of Foster City, Calif., that took payers by surprise last year, curing thousands of patients but inflicting financial losses on Medicaid insurers across the country.

Those worries have been underscored by a string of business deals — such as last month’s $8.4 billion agreement by Connecticut’s Alexion Pharmaceuticals Inc. to buy Synageva BioPharma Corp. — that seemed to be premised on the companies’ plans to sell drugs for rare diseases at exorbitant prices.

“We’re either going to take this into our own hands or it’s going to be done to us,” said John Maraganore, chief executive of Alnylam Pharmaceuticals Inc., a Cambridge company developing a portfolio of rare disease drugs based on the gene-silencing science of RNA interference.

Both insurers and drug makers acknowledge there could be disagreements — over reporting and monitoring systems, and ultimately over prices — when they start to negotiate the new payment frameworks based on paying for value.

Unlike countries in Europe, where government agencies set prices for prescription drugs, US regulators approve therapies on the basis of safety and effectiveness, leaving drug makers to contract with many individual health insurers on price. The largest US payer, Medicare, which insures older Americans, is sidelined by a law preventing it from negotiating prices that might otherwise set a target for bargaining by smaller commercial insurers.

Biogen Inc. of Cambridge, which markets a portfolio of multiple sclerosis medicines, has already signed performance-based pricing contracts in other countries. In the United Kingdom, the company and three competitors are evaluated by the national Department of Health on a number of measures for helping patients with the neurodegenerative disease.

US health insurers, which have long talked about paying for a drug’s value, now see an opening. It remains difficult to quantify value for thousands of medications ranging from acute care drugs like antibiotics to chronic disease treatments for conditions like diabetes and high blood pressure. But advances in information technology are making it easier for doctors, hospitals, and insurers to keep track of patients and how they respond to prescribed therapies.

That will be critical as Express Scripts prepares to roll out its “indication-specific” payment structure. It would reimburse varying amounts to drug companies based on how long medicines prescribed for two different cancers — lung and pancreatic cancer, for example — extend the lives of patients with each disease. But some Express Scripts clients say they would have to upgrade their electronic information and payment systems to track such outcomes.

Blue Cross Blue Shield of Massachusetts, for instance, will probably have to weigh “operational issues” as one factor in deciding whether to initially sign on with the Express Scripts plan, said Tony Dodek, the insurer’s medical director.

“It’s an intriguing idea,” Dodek said. Health “providers, payers, and employers have been trying to put a value on these very expensive drugs, and this could be one way to do it.”

Another way is being considered by Harvard Pilgrim, the Wellesley-based insurer that negotiates directly with drug makers. Chief medical officer Michael Sherman said it is developing a performance-based rebate model that could be applied to treatments such as a new class of cholesterol-lowering drugs. For example, it might require rebates if the drugs don’t lead to a reduction in hospitalization for strokes or chest pain.

“It’s a huge change for the pharma companies,” Sherman said. “They realize their prior argument — that they can’t be held responsible for the [patient] outcome — doesn’t work any more and they have to get with the program.”

 

Johnson & Johnson Responsibility For Risperdal Limited To 3 Years Retroactive

The South Carolina Supreme Court cut more than half of a $327 million penalty levied on a Johnson & Johnson subsidiary for whitewashing links between its anti-psychotic drug Risperdal and diabetes, limiting claims to a three-year statute of limitations. The state high court cut the penalty to $136 million, limiting claims to three years from a January 2007 tolling agreement between the subsidiary and the state.

The court agreed with Ortho-McNeil-Janssen Pharmaceuticals Inc.’s argument that the trial court erred in granting the state’s motion for a directed verdict on the statute of limitations on claims over alleged labeling violations. 

The state supreme court rejected Janssen’s argument that the statute of limitations bars all the state’s claims over the Risperdal labels. The court’s opinion stated further:

We reject Janssen’s position, for Janssen misapprehends the statute of limitations and the concept of continuous accrual of this … cause of action. The labeling claim presents a series of discrete, independently actionable wrongs that are at the core of the typical unfair trade practice action.

Janssen also argued that the statute of limitations applied to claims that it violated the South Carolina Unfair Trade Practices Act by sending “dear doctor” letters that glossed over diabetes risks from Risperdal. The November 2003 “dear doctor” letter spurred the U.S. Food and Drug Administration (FDA) to send a warning letter to Janssen in April 2004, according to the ruling. The court ruled that until the FDA sent its letter, Janssen’s deceptive conduct couldn’t have been discovered before then.
Janssen introduced Risperdal in 1994. Starting in the mid-1990s, evidence began to emerge that Risperdal and other atypical anti-psychotic drugs were associated with diabetes and other metabolic side effects, according to the ruling. The state of South Carolina filed suit in 2007, arguing that Janssen sent misleading letters to more than 7,000 to protect billions of dollars in Risperdal sales. The trial court ordered Janssen to pay $327 million in 2011. States such as Louisiana and West Virginia launched cases against J&J after the FDA ordered the company in 2003 to revise prescribing information for Risperdal to include a warning for an increased risk of diabetes among users

Valeant Shortcomings Caught By FDA

 

Pharma Manufacturing  reports that the FDA has

posted a warning letter stating that management at

Valeant Pharmaceuticals failed to properly oversee a

contract manufacturer that supplied it with Sculptra

Aesthetic (injectable poly-L-lactic acid). In particular, the

FDA found no evidence that anyone at Valeant had

reviewed and approved the vendor’s deviation report

after the manufacturer stopped production to fix

problems affecting drug quality. The article says that the

FDA “wants to see evidence Valeant has taken steps to

improve its monitoring of CAPAs and review of supplier

deviation reports.” However, Valeant is confident it can

resolve the issues raised and has already divested

Sculptra Aesthetic as part of a deal with Nestle’s

Galderma unit.

Sculptra Aesthetic, a facial injectable that is marketed to smooth wrinkles. The product competes with Juviderm, which is sold by Allergan. Valeant is trying to buy Allergan, which also sells Botox, for $53 billion in conjunction with Pershing Square Capital Management.

 

Nonetheless, the letter raises the possibility that Allergan and its supporters may use the agency warning to support their argument that Valeant cutbacks focus too heavily on areas other than marketing, which may jeopardize R&D or patient safety. Earlier this week, the Allergan board reiterated that the Valeant offer is “grossly inadequate and substantially undervalues” Allergan.

We asked Valeant for comment and will update you accordingly. [UPDATE: Shortly after we posted, Valeant released a statement that says, in part, the warning letter "pertains to the management of Valeant's contract manufacturers, rather than Valeant's own internal manufacturing."  A Valeant spokeswoman adds that Sculptra Aesthetic was sold shortly after the inspection.]