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Drugmakers Prep for U.S. Rules on Disclosing Payments

Drug companies and medical-device makers would be forced to publicly disclose any money paid to doctors under new U.S. regulations designed to make patients aware of conflicts of interest that may affect their health.

The final rule, a provision in President Barack Obama’s health law that is more than a year overdue, is set to be released soon, said Brian Cook, a spokesman for the Centers for Medicare and Medicaid Services. Companies would have to publish payments to doctors for research and consulting services.

The rules would for the first time give patients a peek at a doctor’s financial link to drugmakers, information that regulators have long been privy to yet typically kept to themselves. Expanded public disclosure may bring more scrutiny on physicians serving on advisory panels that help the Food and Drug Administration decide whether to approve a new drug.

“The question is whether there’s some residual fondness for the company because they did pay you,” said Sidney Wolfe, director of the health policy research group at the consumer watchdog group Public Citizen. “More disclosure is better.”

Doctors who now sit on FDA advisory panels must inform the agency about conflicts of interest. The FDA determines when a waiver for a financial conflict may be necessary and otherwise keeps arrangements between doctors and companies secret, even from other panel members. At least 12 drugmakers, including New York-based Pfizer Inc. (PFE) and Johnson & Johnson (JNJ), based in New Brunswick, New Jersey, started making those disclosures public in anticipation of the new regulations.

Ethical Interactions

The Pharmaceutical Research and Manufacturers of America, the primary lobbying group in Washington for drugmakers, said that while it supports more disclosure, the new regulations should take into account “the importance of context in the publication of physician payment information.”

“Ethical interactions between biopharmaceutical companies and health-care professionals are essential to maintaining patient trust,” Matthew Bennett, a spokesman for PhRMA, said in an e-mail. The principle behind the so-called sunshine provision “is complementary to this belief and it has great potential for helping patients understand the ways in which” such collaboration benefits their health and medical innovation, Bennett said.

The Obama administration hasn’t explained why the rules are delayed, said U.S. Senator Charles Grassley, an Iowa Republican. The sunshine provision, which was part of the Affordable Care Act signed into law in 2010, was supposed to be issued by October 2011. CMS is “working to release the regulations as soon as possible,” Cook said in an e-mail.

Basic Accountability

Grassley wrote the White House Jan. 22 urging officials to release the regulation today or name a date it would be issued.

“Letting the sun shine in and making information public is basic to accountability,” Grassley, the top Republican on the Senate Judiciary Committee, said in the letter. “The sooner we can properly implement this law, the sooner we can establish greater accountability for patients and consumers, especially with medical research.”

The regulation is under consideration by the White House Office of Management and Budget, the final step before it’s publicly released. Lobbyists for the American Medical Association, the largest U.S. physician organization, visited the White House this month seeking changes to the rule.

Grace Period

“The AMA has been lobbying for what we would consider a weaker rule,” said Celia Wexler, a lobbyist for the Union of Concerned Scientists, an environmental organization, who has also visited the White House on the regulation. “We’re mostly concerned about what might happen to it.”

The doctors’ group said it wants physicians to have more than 45 days to challenge information in the government’s database and add commentary to explain the payments. It also wants some corporate contributions to physicians excluded from disclosure, including sponsorships for educational activities and “indirect” payments, such as unsolicited contributions a company might make to a nonprofit group affiliated with doctors or to physicians’ employers or practices.

The AMA wants to ensure “the registries will provide a meaningful and accurate picture of physician-industry interactions,” AMA president Jeremy Lazarus said in an e-mail sent by a spokeswoman, Heather Lasher Todd. “It is critical that the final rule provide physicians with a clear way to correct any inaccurate information and not place any substantial administrative burden on physician practices.”

Yaz Pill

Congress designed the law so data would be publicly available by the end of September 2013, Grassley said. Now that the regulation is 15 months overdue, the public may miss an entire year’s worth of data collection because companies need at least a year to comply, he said.

When the FDA reviews applications for new drugs and medical devices, it relies on outside doctors, academics and researchers for insight and recommendations on the safety, effectiveness and need for the products. Watchdogs, including Washington-based Public Citizen and the Project on Government Oversight, have cited instances where doctors advising the FDA on a particular medicine had also been paid to consult for the product’s maker.

The Project on Government Oversight has asked the FDA to post advisory committee members’ financial disclosure forms online since 2010. The group wrote the FDA a year ago urging the agency to do so again after four advisers who backed Bayer AG (BAYN)’s Yaz and its class of birth control pills against concern that they may have higher risk of blood clots were found to have done work for Leverkusen, Germany-based Bayer or a company that make generic versions of the pills.

Dynavax Vote

During the December 2011 meeting, the FDA said there wasn’t a conflict of interest. The vote in favor of the class of oral contraceptives containing the hormone drospirenone was 15-11.

The issue was brought to light again in November when Dynavax Technologies Corp. (DVAX)’s experimental hepatitis B vaccine failed to win the backing of FDA advisers despite a positive regulatory review just days before. A search through the website of GlaxoSmithKline Plc (GSK), which discloses doctor payments, revealed the chairman of the advisory panel previously did work for Glaxo, which has a similar product on the market.

The chairman, Robert Daum, a professor of pediatrics at the University of Chicago received $4,646 from Glaxo for consulting in 2009, according to the London-based company’s website. Daum was the only panel member to vote against the efficacy of the vaccine. On a separate vote, the panel split 8-5 in saying Dynavax didn’t have adequate safety data to support approval.

The FDA was aware of the payments and didn’t consider them a financial interest that warranted a waiver or interfered with Daum’s ability to sit on the panel, Rita Chappelle, an agency spokeswoman said in an e-mail.

Have Faith

Daum said in a telephone interview that his past relationship with Glaxo, which was for work on a different type of vaccine, didn’t influence his vote.

“I don’t think that kind of funding in the distant past would influence my votes,” he said. “I think you have to have some faith in the integrity of the people you’ve asked to serve.”

He said he wasn’t sure whether the FDA should be required to disclose his relationships with drugmakers regardless.

Michael Ostrach, vice president and chief business officer for Berkley, California-based Dynavax, declined to comment on Daum.

Finding Advisers

“In areas of medicine that are popular these days, I think it’s hard to find enough skilled reviewers without possible conflicts of interest and this means that a good committee may have a few such members with possible conflicts,” Ned Feder, a staff scientist with the Project on Government Oversight, said.

In May, the FDA had 634 advisory committee positions and 106 were vacant, according to the latest data on the agency’s website. This compares with 608 positions in May 2010 and 216 vacancies.

“The solution, I think, is not to insist on limiting committees to members without conflicts,” Feder said. “Simply disclose the financial arrangements of all committee members.”

Allan Coukell, director of medical programs for the Pew Health Group in Washington, agreed, saying some financial relationships between doctors and drugmakers are necessary and beneficial like payments for research.

“No drug can be developed or tested without the participation of physicians who enroll patients in clinical trials,” Coukell said in a telephone interview. “That’s an essential part of drug development and we need it to continue.”

To contact the reporters on this story: Anna Edney in Washington at aedney@bloomberg.net; Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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