Transparency Shapes Pharmaceutical R&D


Applied Clinical Trials

Applied Clinical TrialsApplied Clinical Trials-03-01-2009
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Reformers seek disclosure of investigator payments and conflicts of interest.

A main theme of health reform is to make health care cost and quality information more transparent to better inform treatment decisions by providers and patients. Policy analysts consider a lack of transparency in health care financing a serious problem for the nation's health care system.

Jill Wechsler

Expanded use of health information technology by providers promises to uncover information on provider quality and costs and communicate it to the public. And objective comparisons of treatment effects would supplement the basic safety and efficacy data developed by sponsors to support market approval of products by the FDA.

Pharmaceutical companies are all too familiar with transparency requirements. The FDA Amendments Act expands reporting of clinical research programs, research study results, and drug safety information. Disclosure of company payments to researchers and doctors is on the rise, along with public posting of drug costs and coverage.

Disclosing conflicts

A prominent component of the transparency movement is to broaden disclosure of financial interests of investigators involved in clinical research on new drugs and medical products. The aim is to prevent researchers from fudging the data or skewing results in order to bring new treatments to market—and benefit the investigator financially in the process.

To this end, FDA and the National Institutes of Health (NIH) require investigators to report significant payments from sponsors, proprietary interests in a test product, and equity in a sponsor's company. But reformers are pressing to expand disclosure of manufacturer payments to researchers in order to minimize the role of money in shaping new drug development and utilization.

The Health and Human Services' Office of the Inspectors General (OIG) issued a report in January 20091 recommending that sponsors of clinical trials disclose investigator financial information to FDA before studies begin, instead of when the company files a new drug application (NDA), as now required by FDA. The change would allow FDA inspectors to review financial reports when they inspect clinical sites and would increase reporting rates by clinicians, which the OIG says is way too low.

FDA currently advises sponsors to collect financial information whenever they engage an investigator during the research process to be sure there will be no serious conflicts-of-interest that could compromise study outcomes. But the OIG found that little financial data was listed in some 100 NDAs filed in 2007, and many of the applications contained no investigator reports.

Sponsors object that earlier filing would bring in reports on many investigators involved in studies that turn out to provide little support for product efficacy. And FDA fears being inundated by financial records that turn out to be unimportant.

NIH also has been under fire from Congress for failing to adequately police financial conflicts-of-interest among academic researchers receiving federal grants. NIH requires grantees to report payments from drug companies that exceed $10,000, but investigators with Sen. Charles Grassley (R-IA), ranking Republican on the Senate Finance Committee, have uncovered prominent academics who fail to report millions in payments. This includes a number of psychiatrists involved in testing and presenting on widely used antidepressants.

NIH officials agree more needs to be done to police such activity, but they don't want to start examining the tax returns of thousands of researchers.

Payments and prices

Transparency requirements also are expanding pharma disclosure of payments and gifts to all health professionals. States are passing laws that require manufacturers to disclose payments and gifts to health care professionals, as seen in Minnesota, Vermont, West Virginia, Maine, and most recently in Massachusetts.

A long list of states is considering similar statutes, including California, Texas, Illinois, and New York. These laws generally seek data on fees, gifts, and educational grants to health providers and organizations, but policies vary as to which expenditures have to be disclosed and when.

Manufacturers also have to report a range of pricing information to state governments eager to ensure that their Medicaid programs get best prices. California, Maine, New Mexico, Texas, and Vermont have adopted laws that require companies to submit information on drugs sold in the state to facilitate comparison of average manufacturer prices (AMPs) and to Medicaid rates. And Medicare is posting information on drug prices and rebates on its Web site to help beneficiaries understand differences in plan coverage and out-of-pocket costs.

In addition, federal and state enforcement officials are including disclosure requirements in corporate integrity agreements (CIAs) with drug and medical product companies to resolve allegations of fraudulent promotional and pricing practices.

Prosecutors have put an "emphasis on transparency" in industry relationships with physicians and results from clinical trials, said U.S. attorney Michael Loucks at CBI's Pharmaceutical Compliance Congress in January. Under a comprehensive CIA negotiated as part of Eli Lilly's record $1.4 billion settlement involving schizophrenia drug Zyprexa, Lilly will post on its Web site quarterly reports on payments to physicians, including speaker and consulting fees, grants, gifts, food, and travel.

Last year, Cephalon agreed to report all payments to physicians as part of its $375 million settlement with federal and state prosecutors resolving allegations of improper sales and marketing practices involving three therapies.

By other means

In anticipation of more diverse tracking and disclosure requirements, sponsors are establishing their own transparency programs. Pfizer recently joined Eli Lilly, Merck, and GlaxoSmithKline in announcing plans to post data on financial relationships with health professionals, and some companies are setting total annual caps on payments to individual physicians to reduce any appearance of excessive influence.

Academic research centers similarly are promoting transparency in researcher–industry relationships.

Harvard Medical School is reviewing its limits on staff stock holdings and income from drug and medical product companies. The Cleveland Clinic announced in December that it would publicly report business relationships of its 1800 staff doctors and scientists with pharmaceutical and medical device makers. Stanford University, the University of Pennsylvania, and branches of the University of California in Los Angeles and San Francisco have adopted stricter conflict-of-interest policies.

Some medical societies are moving in the same direction. The North American Spine Society announced in January that the 5000 spine surgeons in the organization will disclose all financial ties with medical product companies.

National standards

Diverse federal and state disclosure requirements also are building industry support for federal transparency legislation that would preempt state laws.

In January, Grassley and Sen. Herb Kohl (D-WI) introduced an updated version of the Physician Payments Sunshine Act, which establishes a federal system for disclosing financial relationships between physicians and manufacturers of drugs and medical products that are covered by Medicare, Medicaid or other government health programs. Companies would have to file reports on payments to physicians over $100 a year (down from a previous $500 threshold) plus any substantial investment interests held by doctors.

All this information would go into a national database of physician–industry relationships that would allow public and private payers to uncover and assess relationships between industry payments and physician practice patterns.

The trade-off for manufacturers is supposed to be federal preemption of state disclosure laws that require differing information on payments to physicians. However, it's not clear how comprehensive that preemption will be in any final legislation.

Meanwhile, companies are establishing data systems able to track a company's "aggregate spend" on research and marketing activities across corporate divisions and product lines. The aim is to collect in one place all company payments to a physician, which may involve clinical research, consulting, and medical education for research programs and products.

Physicians, though, are not enthusiastic about public access to their prescribing records and practice patterns and recently won a court decision that disclosure of physician-level Medicare claims data violated the doctors' right to privacy. Employers and insurers sided with the Consumers' Checkbook in arguing that transparency in health care quality and cost information can help identify high quality and efficient care.

Such legal conflicts reflect the difficulties in establishing disclosure and reporting requirements across the nation's health care system. Physicians may have realistic fears about misinterpretation of practice data. But health reformers regard transparency in health care costs, research practices, and medical product performance as critical to driving down health care expenditures and expanding access to affordable care.

Jill Wechsler is the Washington editor of Applied Clinical Trials, (301) 656-4634


1. Health and Human Services, Office of the Inspectors General, (January 2009).

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