Deceptive Practices Spotted Among Marketers of Melanoma Detection Apps

Marketers of mobile apps claiming the ability to detect symptoms of melanoma are being challenged for deceptive marketing techniques by the Federal Trade Commission (FTC). The FTC charged that no scientific evidence supported the claims of the ability to detect early stage melanoma. The FTC reached settlements with some marketers of MelApp and Mole Detective, while charges are being pursued against two additional Mole Detective marketers who refused to settle.

Users were instructed to submit a photograph and other information about moles found on their body. The apps used this information to calculate melanoma risk. Although the apps suggested that users see a physician over melanoma concerns, the FTC’s associate director for advertising practices, Mary Engle, said that marketing gave the impression that the apps were diagnosis tools. In 2013, the Journal of the American Medical Association published the results of a study on the classification of melanomas by various apps conducted by dermatologists. Although the apps were not named, three of the apps were found to incorrectly classify at least 30 percent of melanomas as low risk.

Mole Detective was created and first marketed by Kristi Kimball’s company New Consumer Solutions, LLC in January 2012. Avrom Lasarow’s company L Health Ltd. oversaw marketing from August 2012 forward. The Kimball settlement prohibits the company from claiming that an app can detect or diagnose melanoma unless this statement is supported by scientific evidence obtained by clinical testing, and the company must disgorge $3,930. Lasarow and his company did not settle, and the FTC will pursue litigated judgment.

MelApp was marketed by Health Discovery Corporation in 2011. A proposed settlement contains prohibitions similar to the Mole Detective settlement on claims regarding the app’s reliability. The company must disgorge $17,963.

Proposed MA, Part D Policy and Payment Updates Focus on Quality, Access

Newly released proposed changes to the Medicare Advantage (MA) and Part D Prescription Drug programs reflect a commitment to better care and smarter spending. The proposed payment and policy changes, which would take effect in 2016, would provide fair payments to plans, reward high-quality care, and encourage wiser spending of health care dollars to minimize disruption and “create a stable and consistent policy environment,” according to an announcement by CMS.

Health Reform Spurs Improvements

Since the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), MA and Part D have experienced growth and improvement, with MA seeing record high enrollment every year since 2010—a more than 40 percent increase since the ACA was passed—and premiums have fallen by almost 6 percent. Almost all Medicare beneficiaries (90 percent) now have access to a $0 premium MA plan. The announcement notes that the increased enrollment shows that the improvements spurred by the ACA have made the programs more attractive to health plans and beneficiaries. Thus, the proposed changes “will continue this trend.”

Proposed Changes

In its proposed changes, CMS detailed its plan to continue refining the star rating system used by enrollees to select MA plans, with the goal of encouraging improved quality. The proposal also seeks to enhance the value of in-home assessments to support care planning and coordination and improve outcomes. Changes to payment rates vary among plans depending on certain factors. However, the announcement estimates that the expected revenue change would be positive growth of 1.05 percent, with additional growth for plans showing improvement and a focus on customer satisfaction. CMS also proposed working with part D sponsors to ensure access to affordable drug coverage.

Additionally, the proposal seeks to provide enrollees with more information to aid in decision making about care and coverage. Specifically, steps are proposed for ensuring the maintenance of accurate provider directories such that enrollees can better understand what providers are available to them.

Physicians Weigh In on the Worth of Value-Based Payments

A majority of physician leaders plan to meet HHS goals of tying 30 percent of traditional Medicare payments to quality or value by the end of 2016, according to the results of an American Association for Physician Leadership poll. The poll was designed to evaluate how physicians are reacting to HHS’ announcement regarding guidelines for moving Medicare away from fee-for-service (FFS) reimbursement and towards value-based reimbursement.

Value-Based Payments

Value-based payments are being promoted by HHS as an alternative to FFS payments in order to reduce costs and improve health care delivery. The momentum towards value-based payments was enhanced by several sections of the Patient Protection and Affordable Care Act (ACA) (P.L.111-148). Specific value-based innovations initiated by the ACA include Section 3022 of the ACA, which mandated the establishment of a Medicare Shared Savings Program (MSSP); Section 3502, which supported the establishment of patient-centered medical homes (PCMHs); and the CMS Innovation Center, established by section 3021 of the ACA, which created the Bundled Payments for Care Improvement Initiative (BPCI) (see Toward value-based payments: Can CMS deliver on goals?, February 18, 2015).


The specific timeline set out by HHS seeks to have 30 percent of all providers using alternative payment models that emphasize quality of service over quantity by 2016. CMS is hoping to achieve 50 percent participation in alternative payment models by 2018. The agency also wants 85 percent of a Medicare payment payments to be tied to qualify or value by 2016, increasing to 90 percent in 2018 (see Goals and timeline set for achieving value-based Medicare reimbursement, January 26, 2015).


The poll, which asked 656 physicians whether they were taking steps to meet the HHS value-based payment goals, revealed that 73 percent of those physicians were part of organizations which were striving to meet the HHS benchmarks. Another 15 percent of respondents indicated that they were not working towards those goals and 12 percent indicated that the goals did not apply to their particular type of organization. The poll also included comments from respondents regarding feelings on the push towards value-based payments. While some comments were receptive to the HHS move, others felt the initiative is too aggressive. For example, one physician leader wrote, “Yes, we’re taking steps, but we’re ‘light years’ away from being ready.” Another comment condemned the initiative saying, “This is another mandate with no clear path forward.”

FDA Starts Wrapping Up Position on Repackaging of Biologics and Human Drugs

The FDA announced the availability of two draft guidances related to the repackaging of biologic and human drug products. The draft guidances are titled ‘‘Mixing, Diluting, or Repackaging Biological Products Outside the Scope of an Approved Biologics License Application” and ‘‘Repackaging of Certain Human Drug Products by Pharmacies and Outsourcing Facilities.” Within the draft guidances, the FDA indicates the circumstances under which the FDA plans to refrain from taking action against a state-licensed pharmacy, a federal facility, or an outsourcing facility that mixes, dilutes, or repackages biologic and human drug products.


In the first draft guidance, the FDA recognizes that some patient needs may require the mixing, diluting, or repackaging of biological products (80 FR 8882, February 19, 2015). However, if a facility engages in such repackaging outside of an approved biologics license application (BLA), under the Public Health Service (PHS) Act (21 U.S.C. § 262), the action would render the product an unlicensed biological product. The guidance sets out the circumstances under which the FDA will not take action against a facility that engages in such mixing, diluting, or repackaging without first obtaining an approved BLA. The draft guidance sets out specific information that the label of a mixed, diluted, or repackaged biological product must display, including: (1) information as to the facility where the repackaging occurred; (2) dosage form and strength information; (3) the date of repackaging; (4) a beyond-use-date; (5) the National Drug Code (NDC) number of the repackaged biological product; (6) a statement indicating the product is not for resale; (7) storage and handling instructions; and (8) a list of active and inactive ingredients.

Human Drug Products

The second draft guidance sets out when the FDA plans to not take action against certain facilities for violations of new drug application (NDA) requirements and current good manufacturing practice (CGMP) requirements when a facility repackages a prescription human drug product (80 FR 8884, February 19, 2015). The labeling requirements set out in the draft guidance for a repackaged human drug are comparable to those described above for the biological product repackaging guidance.

Related Guidances

In tandem, the two draft guidances are meant to address the FDA’s position “regarding hospital pharmacies repackaging and safely transferring repackaged drugs to other hospitals within the same health system during a drug shortage.” Although the FDA is accepting comments on the guidance at any time, to ensure that a comment is considered, the FDA recommends that comments be submitted in an electronic or written format by May 20, 2015.