Archives for January 2012

Permanent Injunction Over Data Integrity Issues

On January 25, 2012, the FDA announced that it had filed a consent decree of permanent injunction against generic drug manufacturer Ranbaxy Laboratories through the United States Department of Justice. The consent decree will address outstanding current good manufacturing practice (CGMP) and data integrity issues at Ranbaxy’s three India facilities as well as CGMP issues at Ranbaxy Inc.’s wholly owned subsidiary Ohm Laboratories, whose facility is located in Gloversville, N.Y. According to the FDA’s press release:

The consent decree requires that Ranbaxy comply with detailed data integrity provisions before [the] FDA will resume reviewing drug applications containing data or other information from the Paonta Sahib, Batamandi, and Dewas facilities.  Specifically, Ranbaxy must:

(1) hire a third party expert to conduct a thorough internal review at the facilities and audit applications containing data from the affected facilities;

(2) implement procedures and controls sufficient to ensure data integrity in the company’s drug applications; and

(3) withdraw any applications found to contain untrue statements of material fact and/or a pattern or practice of data irregularities that could affect approval of the application. 

Issues with Ranbaxy began in 2008 when the FDA issued two warning letters to the company regarding generic drugs coming out of two manufacturing plants, in 2009 the FDA announced it had discovered the company had engaged in data falsification on pending and approved drug applications. The decree also provides for liquidated damages;

In addition to a provision requiring Ranbaxy to pay $15,000 in liquidated damages for each day defendants violate the law or the decree at the facilities covered by the decree and an additional sum of $15,000 for each overall violation of the law and the decree, the decree states that:  (1) if defendants distribute any drug from the facilities covered by the decree, Ranbaxy shall pay liquidated damages equal to two times the retail value of such drug, not to exceed 10 million dollars in any one calendar year; and (2) if defendants submit an untrue statement in connection with any application they file with [the] FDA, Ranbaxy shall pay up to three million dollars in liquidated damages for each such statement, not to exceed 30 million dollars in any one calendar year. 

According to a pharmaceuticals analyst interviewed by the Pakistani Daily Times, the provisions of the consent degree were harsher than anticipated, and some analysts believe it will cost the company upwards of $200 million to implement the terms of the decree. The announcement of the terms of the consent decree caused Ranbaxy shares to fall seven percent shortly following the announcement. The company made US headlines in early December of 2011 when it won approval to sell its generic version of Pfizer’s cholesterol medication Lipitor, the world’s top selling drug. The consent decree does not affect its ability to sell the generic version of Lipitor in the US.


Maryland Home Birth Advocates Seek Legislation to Minimize Midwife Restrictions

Women choose to give birth at home for a variety of reasons including the distrust of medical birthing procedures, the comfort of a familiar atmosphere, and the lack of intimacy in a hospital environment. After a steep decline during the 1950’s and 1960’s, home births have seen quite a resurgence in America over the past couple decades, with 24,970 births occurring at home nationwide in 2006. The state of Maryland has seen one of the greatest upsurges recently, with home births increasing by over 35 percent between 2003 and 2006. However, due to strict regulations in the state, the demand for midwives is exceeding the supply.

While Maryland permits certified nurse midwives (CNMs) who work in partnership with obstetricians to deliver babies in home environments, it does not allow other kinds of midwives, including certified professional midwives (CPMs), to do so. Twenty-six other states currently allow CPMs, who do not have nursing degrees, but are trained in childbirth and are credentialed, to be licensed for home deliveries. Even the state-sanctioned CNMs often are not available to deliver children in a home setting because the doctors they work with refuse to expose themselves to such a high level of legal liability. The small number of CNMs that are available for home births find themselves booked up quickly. Consequently, expecting parents seeking a home birth must either resort to a traditional hospital birth or illegally retain an alternative type of midwife.

Groups such as Maryland Families for Safe Birth are lobbying state legislators to develop legislation that will regulate the practice of midwifery and allow the licensure of CPMs to deliver babies in home settings. Advocates of such legislation maintain that regulation of the profession will allow more parents the option of a home birth and will ensure that these deliveries occur safely.

Opponents cite the safety of mothers and babies as their primary concern about legalizing the practice of CPMs and believe that childbirth is safest in a hospital where physicians, surgeons and modern medical interventions are available in the event of an emergency. In 2011, a joint statement opposing the legislation was issued by the Maryland nursing board, the American College of Nurse-Midwives, the Maryland Department of Health and Mental Hygiene, and a representative group of county health officials. Their position is that licensed doctors or nurses must attend home births and that patients must have immediate access to hospital care in the event of an emergency.

Ariana Kelly, a member of the Maryland House of Delegates, has drafted the legislation that she hopes to introduce during this year’s General Assembly session.

CMS Sets Appeals Process for EHR Incentives

CMS has released a guidance document detailing the steps that health providers must use to appeal a decision relating to applying for incentives to adopt electronic health records (EHR) technology. Under the Health Information Technology for Economic and Clinical Health (HITECH) Act, eligible health professional and hospitals can qualify for payment incentives to adopt EHR. 

Incentive payments started being disbursed in 2011 and will be available to eligible providers under the Medicare program for four consecutive years until 2016. Eligible professionals may receive up to $44,000 if they meet the requirements to receive incentive payments during all five years of the program. If providers have not adopted EHR technology by 2015, they face reductions in their Medicare payments. 

According to the CMS guidance, EHR incentive appeals will be handled by CMS’ Office of Clinical Standards and Quality (OCSQ). The OCSQ will manage a two-level appeal process, which includes an informal review and a request for reconsideration. Within that two-level appeal process, three types of appeal will be available—

  1.  An eligibility appeal allows a provider to show that all the EHR incentive program requirements were met and that he or she should have received a payment but could not because of circumstances outside of the provider’s control.
  2.  A meaningful use appeal allows a provider to show that he or she is using certified electronic health record technology and met the meaningful use objectives and associated measures after a successful attestation. 
  3. An incentive payment calculation appeal allows a provider to show that he or she provided claims data for inclusion that was not used in determining the amount of the incentive payment. (This type of appeal is only available for individual providers, not institutional ones.) 

The guidance provides information on who providers contact to make an appeal, general filing requirements for an appeal filing, and issues precluded from review.

Update on States’ Progress in Implementation of Health Insurance Exchanges

Since we last looked at the states’ implementation of the health insurance exchanges required under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), several states have made significant progress, but there have been setbacks as well. The nonpartisan Center for Budget and Policy Priorities (CBPP) recently released a report on the status of legislation and executive action to establish the exchanges.

CBPP reports that at last count, 29 states have received grants from HHS to go beyond the planning stage and begin setting up the necessary infrastructure. Another seven previously  received “Early Innovator” grants and would be expected to have made substantial progress. However, two of the early innovators, Kansas and Oklahoma,  returned their grants, and Wisconsin announced recently its intention to do so.

Legislation.   The District of Columbia passed legislation to establish an exchange in December, and the Mayor signed it into law on January 13, 2012. According to CBPP’s comprehensive analysis,  in North Dakota, a bill introduced during a special session was voted down November 10, 2011.  Since August 2011, legislation to establish an exchange has been introduced in the following states:

  • Wisconsin: S 273 was introduced  on November 1st and was referred to the Health Committee.  However, on January 18, 2012, Governor Walker announced that the state would return its $38 million Early Innovator grant.
  • Idaho: Legislation has been drafted and was considered by the state health care task force on January 6, 2012.  The legislative session has just begun.
  • Virginia:  Three bills were introduced on January 10, 2012 and were referred to committee.
  • Michigan:  The state Senate passed SJ91 on November 10, 2011.  The House has referred the bill to the Health Policy committee.
  • New Mexico:  SB6 was introduced December 15, 2011; last year the legislation passed but was vetoed by the Governor.
  • Ohio:  SB 277 was introduced on January 3, 2012.
  • Nebraska: LB835 and LB 838 were introduced on January 5, 2012.
  • New Jersey:  A revised bill was introduced  on January 10, 2012; an earlier version passed the Assembly last year.
  • Iowa: Legislation was introduced on January 23, 2012, CBPP reports.

Legislation also failed in Georgia last year. Governor Nathan Deal then appointed an advisory committee to explore the possibilities and issues involved with establishing an exchange. Despite the committee’s report recommending action, the chair of the Senate Health and Human Services Committee announced on January 11th  that the legislature will not consider the issue this year; the governor agreed not to push it.

Executive Action:  Governor Lincoln Chafee of Rhode Island issued an executive order on September 19, 2011, directing the  establishment of an exchange.  Rhode Island is the only state to have received a stage 2 grant to proceed with implementation.

According to CBPP, Arizona officials in stated in a January 5, 2012 planning grant report to CMS that they were investigating whether an exchange could be established through executive action.  Last spring, Mississippi’s Insurance Commissioner announced that the exchange would be established using existing authority under state law.  The Arkansas Insurance Commissioner apparently was considering a similar move, but on December 2, 2011 announced that planning efforts had ceased.

Idaho’s Department of Health and Welfare has worked extensively on preparation for the exchange and received a level 1 establishment grant. The state’s joint legislative committee  recommended passage of the legislation, and it seems to have the support of the business community. However, the Governor Butch Otter told reporters on January 25, 2012 that the state was out of time and probably could not establish an exchange by the 2013 deadline.

Opponents of the exchange legislation argue that there is no point in acting until the Supreme Court rules on its constitutionality. The ruling is anticipated by July, just in time for the 2012 presidential campaign.