Essential resources for health care providers & attorneys during hurricane season

Hurricane season has arrived and health care providers in affected areas are focusing on providing services to injured individuals and rebuilding damage to facilities, but not necessarily on compliance with Medicare and Medicaid laws and regulations. To assist providers, federal and state agencies are temporarily waiving some regulatory requirements and providing other emergency services. While active hurricane recovery efforts are underway, Health Law Daily will feature links to federal and state resources.

Federal information:

State- and commonwealth-specific information:

Prescription drug spending in U.S. among highest worldwide

Prescription drug spending in the United States exceeds spending in nine other high income countries, with generic drugs comprising 84 percent of the total pharmaceutical market. Besides the U.S., a Commonwealth Fund issue brief looked at prescription drug spending in Australia, Canada, France, Germany, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom.

Prescription drug spending in U.S. increases in 1990s

According to the Commonwealth Fund review, spending on prescriptions drugs increased substantially in the mid-1990s due largely to the growth of the pharmaceutical industry. For instance, FDA approved drugs were at an all-time high and sales of cancer drugs increased. Additionally, drug spending increased due to the expansion of federal programs such as the Children’s Health Insurance Program, Medicaid, and Medicare.

Prescription drug spending increased by 20 percent over a period of two years during the mid-2000s. The growth was primarily due to introducing many expensive specialty drugs to treat hepatitis C, cystic fibrosis and other conditions. Passage of the Affordable Care Act likely led to such increases as well. U.S. spending on pharmaceuticals surpassed $1,000 per person in 2015 and was 30 percent to 190 percent higher than in the nine other countries. The next countries, behind the U.S., in spending in 2015 were Switzerland with $783, Germany with $686, and Canada with $669.

Reasons U.S. spending on prescription drugs is so high

The Commonwealth Fund offered possible reasons to explain why the U.S. spends so much on prescription drugs, including country population and volume of drugs consumed, drug utilization per person, type and mix of drugs consumed (e.g., generics versus brand-name drugs), and prices at which drugs are sold.

Although the U.S. population is ranked among the largest and has the highest prescription drug spending as a country, spending per capita remains much higher in the U.S. than that of other countries. Higher per person spending is not due to the large population of the U.S., however.

The impact of generic prescription drugs

Generic drugs make up 84 percent of the total U.S. pharmaceutical market, which is a larger share than in all other countries, excluding the U.K., which is tied with the U.S. with 84 percent. Followed by the U.S. are Germany with 81 percent, Netherlands with 71 percent and Canada with 70 percent of the share of generic prescription drugs. Lower prescription drug prices in the other countries reflect more centralized processes for obtaining pharmaceuticals and setting coverage.

Conclusion. Price continues to play a primary factor in the high prices associated with prescription drugs in the U.S. The reasons can be attributed to the fragmented nature of health care delivery and payment, as well as separate negotiation arrangements between drug manufacturers and payers and complicated arrangements for federal and state health programs. Also, the U.S., unlike other countries, allows for greater latitude for monopoly pricing of brand name drugs.

FTC settles final charges against supplement sellers

The final three of nine defendants that marketed joint health and a cognitive health supplements have agreed to settle allegations brought by the Federal Trade Commission (FTC) and Maine that they engaged in misrepresentations in promoting the products, the FTC announced. The defendants were charged with violating the FTC Act, the Electronic Fund Transfer Act and its implementing Regulation E, the Telemarketing Sales Rule, and the Maine Unfair Trade Practices Act. Synergixx, LLC, an ad agency, and two individuals including the company’s principal, are barred from engaging in a wide range of marketing practices and ordered to pay a $6.5 million monetary judgment that is suspended based on their inability to pay. The settlement orders are similar to the orders against the other defendants, which the FTC announced in February.

The FTC and Maine charged nine defendants with making false and misleading claims that purported cognitive health supplement CogniPrin: (1) reversed mental decline by 12 years; (2) improved memory by 44 percent; and (3) improved memory in as little as three weeks and is clinically proven to improve memory; and that purported cognitive health supplement FlexiPrin: (1) reduced joint and back pain, inflammation, and stiffness in as little as two hours; (2) rebuilt damaged joints and cartilage and; (3) had been clinically proven to reduce the need for medication in 80 percent of users and to reduce morning joint stiffness in all users.

Synergixx and Fusco advertised CogniPrin and FlexiPrin through 30-minute radio spots that were formatted to sound like educational talk shows, and created inbound call scripts that allegedly deceptively claimed that consumers could try the supplements “risk-free” with an unconditional 90-day money-back guarantee, without disclosing that consumers would have to enroll in an auto-ship continuity plan to qualify for the “risk-free” trial offer, and would have 14 days or less to try the products. The FTC also charged Synergixx and its principal with failing to make important disclosures when they “up-sold” consumers negative option buying clubs and discount medical programs with ongoing fees, charging many consumers for poorly disclosed auto-ship continuity plans they did not want.

One individual, whom defendants presented as an objective medical expert, was charged with providing endorsements without examining the products or exercising his represented expertise. Synergixx and its principal allegedly failed to disclose that he was paid a percentage of FlexiPrin and CogniPrin sales revenues.

The two orders against Synergixx and its principal and the medical expert bar the defendants from making the false or unsubstantiated health claims challenged in the complaint, require them to have competent and reliable scientific evidence when making health-related claims, and require them to clearly disclose their material connections between product sellers and product endorsers. Also, the defendants are barred from misrepresenting the existence or outcome of tests and studies when they promote health products. Additionally, Synergixx and its principal are barred from employing deceptive marketing practices relating to cancellations, negative-option payment plans, upsold merchandise, and deceptive pricing practices.

FDA delays routine regulatory inspections for large animal food facilities

The FDA has announced that routine regulatory inspections for large animal food facilities to ensure compliance with regulations under the FDA’s Preventive Controls for Animal Food rule (80 FR 56170) will not begin until the fall of 2018. Effective September 18, 2017, large animal food facilities must comply with preventive controls requirements mandated by the Food Safety Modernization Act (FSMA) (P.L. 111-353).

Education and flexibility

Large animal food facilities, those with 500 or more full-time equivalent employees, also had to comply with the current Good Manufacturing Practice (cGMP) requirements by September 2016. Based on feedback from animal food producers, the FDA has decided that although the new preventive control regulations will take effect as announced in the final rule as of September 18, 2017, the FDA will first focus on education before regulation. The agency noted that the industry needs additional time and technical assistance to fully understand the requirements of the new regulations for preventive controls. Jenny Murphy, a consumer safety officer with the FDA’s Center for Veterinary Medicine, said in a recent interview that the FDA will allow larger facilities some flexibility to further develop their plans and ensure that their system is operating correctly as guidance from FDA and other resources are put in place.

Increased inspections

While the FDA announced a delay in the routine regulatory inspections for the prevent controls requirements, the FDA will increase oversight of cGMPs with more routine inspections. Effective September 18, 2017, both large and small animal food facilities must meet the cGMP requirements. The cGMPs establish a foundation before establishing preventive controls. “CGMPs establish a base to make sure you don’t contaminate the animal food and the preventive controls take it a step further by making you really concentrate on things that, if they’re found in animal food, could be a public health concern,” said Murphy. “Once you have CGMPs in place, you can see where you need extra layers of protection.”

The FDA adopted the Final rule in an effort to improve public health, and established for the first time cGMPs for food for animals, which are akin to the cGMPs that have long applied to human food. Along with the cGMPs, facilities must establish and implement a food safety system that includes an analysis of hazards and risk-based preventive controls. The rule also mandates that animal food facilities establish a supply chain program.