Cosmetic drug companies scarred by misbranding

A district court enjoined two individuals and two New Jersey drug companies from distributing unapproved injectable skin whitening drugs. In addition to preventing Flawless Beauty LLC and RDG Imports LLC from distributing the unapproved and misbranded drugs, the injunction requires the companies to recall and destroy all of the unapproved and misbranded injectable skin whitening drugs. The companies and individuals agreed to settle the case and be bound by a permanent injunction.

Complaint

According to the complaint, in addition to making skin whitening claims, the companies’ skin whitening drug products make other unsubstantiated therapeutic claims. For example, some of the products asserted that the drugs “contribute to good liver function” and “clinically treat degenerative brain & liver diseases including Parkinsons.” The complaint also identified public health risks associated with the companies purportedly sterile injectable skin whitening drugs—nerve or blood vessel damage, blood-borne infection, superficial skin infection, cellulitis, abscess formation, and toxic systemic reactions.

The complaint asserted that the products were misbranded because they contained false or misleading information, including the false implication of FDA approval. Other labeling issues identified in the complaint include improper directions for use and the absence of “Rx” on the label.

Injunction. Until the companies meet specific remedial measures, the injunction requires them to stop importing, receiving, manufacturing, preparing, processing, packing, labeling, holding, and/or distributing unapproved drugs. The companies have 20 days to meet the mandate to recall and destroy the unapproved drugs.

Fraudulent medical evaluations earn psychologist 25-year prison term

A former clinical psychologist received a 25-year prison sentence and was ordered to pay $93 million in restitution to HHS and the Social Security Administration (SSA) for his participation in a scheme to obtain over $550 million in fraudulent federal disability payments. In addition to the prison sentence, the clinical psychologist was ordered to pay restitution of over $93 million to the SSA and HHS.

The scheme was initiated by an SSA administrative law judge (ALJ) who reassigned, to himself, pending disability cases associated with a particular attorney. The ALJ contacted the attorney and urged him to provide either physical or mental medical documentation supporting disability determinations, regardless of the actual disability status of the claimants. In cases where medical documentation was required, the clinical psychologist participated in the scheme. The clinical psychologist signed medical evaluation forms prepared by the attorney, without reviewing those forms. The attorney paid the ALJ more than $609,000 for granting benefits in his cases and nearly $200,000 to the clinical psychologist for his participation. The attorney received over $7 million in attorney’s fees.

As a result of the scheme, the SSA paid more than $550 million in lifetime benefits to claimants. The ALJ and the attorney pleaded guilty, receiving sentences of four and 12 years, respectively. Subsequently, the attorney absconded from electronic monitoring and is now considered a fugitive.

House committee gives its approval to Medicare Advantage telehealth bill

A bill—The Increasing Telehealth Access in Medicare (ITAM)—aimed at improving access to Medicare Advantage telehealth services received approval from the House Ways and Means Committee on September 13, 2017. The unanimous approval came alongside the committee’s unanimous passage of a bill (H.R. 3726) to simply physician self-referral prohibitions and a bill (H.R. 3729) to continue Medicare add-on payments for ambulance services.

ITAM

The bipartisan bill, Increasing Telehealth Access in Medicare (ITAM) (H.R. 3727), introduced by Representatives Diane Black (R-Tenn) and Mike Thompson (D-Calif), seeks to encourage the use of telehealth by making it a basic benefit—rather than a supplemental service—for Medicare Advantage beneficiaries. Although critics of telehealth warn that the service presents a risk of overutilization in a fee-for-service reimbursement model, proponents of the new ITAM bill note that by pairing telehealth with Medicare advantage, that concern is “flipped on its head.”

Telehealth

A related bill, in the Senate, known as the Furthering Access to Stroke Telemedicine Act (S. 431), would permit any site exclusively administering acute care stroke treatment to be included in the list of eligible Medicare sites for telemedicine services, without regard for the site’s geographic location. In May of 2017, the Senate Finance Committee unanimously passed the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act (S. 870), a bill designed to expand telehealth access for Medicare beneficiaries with chronic conditions while increasing the incentives for accountable care organizations (ACOs) to provide those services.

Webinar tackles the tribulations of investigator initiated trials

Investigators should be careful to distinguish between interventional and observational studies when developing investigator initiated trials (IITs) because the distinction can effect billing strategies and budget, according a Health Care Compliance Association (HCCA) webinar, presented by Liz Christianson and David Russell of PFS Clinical. The webinar addressed key areas of focus for developing IITs, including protocol development, industry funding, and regulatory requirements.

IITs

Christianson noted there has been a remarkable renewed interest in IITs in the last two years, due largely due to industry sponsors realizing that IIT relationships are symbiotic. However, despite the renewed focus, IITs present challenges. In some cases, challenges arise from the fact that 85 percent of investigators have participated in only one clinical trial in their careers.

Protocols

Protocol development is important, particularly with respect to the articulation of an IIT as interventional or observational. Christianson noted that from reading the protocol it should be obvious whether an IIT is interventional or observational because the distinction can have significant downstream effects on budgets and billing. Christianson defined observational studies as trials where the investigator makes no intervention and allocates treatment based upon clinical decisions. She distinguished this from interventional studies, where participants are assigned to receive one or more interventions (or no intervention) so researchers can evaluate the effects of the interventions on health outcomes.

Billing

Because Medicare uses set criteria for reimbursement of trials, the objective language can be crucial to reimbursement. In observational studies, study actions should not be able to be linked to specific claims codes. Conversely, in an interventional study, actions should be linked to a specific billing code. Thus, the objective language in a study should clearly indicate what the PI’s true intent is—to treat with routine care, then collect patient data (observational) or to assign patients to specific treatment groups (interventional).

Registration

Russell discussed the registration of trials on ClinicalTrials.gov. All applicable clinical trials must be registered on the website in order to receive a unique National Clinical Trial (NCT) number, which is required on all CMS claims. Russell also covered specific data elements and registration information required by the September 21, 2016, Final rule for clinical trials (81 FR 64982). Russell reminded responsible parties that trials must be registered no later than 21 days after enrollment of the first participant and, at minimum, the applicable clinical trial must be updated every 12 months. Summary results (including adverse even information), must be submitted not later than one year after a trial’s primary completion date.