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DTC TV Pricing Rule Challenged

SECOND UPDATE: On July 8, 2019, the judge issued an order setting aside the CMS rule. The full opinion is available here.

UPDATE: On July 8, 2019, the judge in this suit is due to provide a ruling on whether the rule will take effect on July 9. The judge might issue a stay on the rule's implementation. For more details, see this report from MM&M.

On June 14, 2019, Amgen, Merck, Lilly, and the Association of National Advertisers filed a complaint challenging the CMS rule requiring TV ads to include drug pricing information.

Here's a link to the original complaint: https://drive.google.com/file/d/1w5I5kvuYIedGaFGOYzl_VtzZEDFGA7vQ/view

If there is no action on this complaint, the rule will go into effect on July 9.




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Preparing for Pricing in DTC TV

UPDATE 2: On August 21, 2019, the government filed a notice of appeal in this case.

UPDATE: On July 8, 2019, the judge in the pending litigation described below issued an order setting aside the CMS rule. The full opinion is available here.

If nothing changes, the new rule about including drug pricing in TV ads from CMS will go into effect one week from today on July 9, 2019.

There are a few wrinkles to keep in mind as we approach this deadline. First, there's a lawsuit pending that could delay the rule's implementation. Second, the operational challenges of abiding by the rule are the biggest hurdle including the expanded 2253 filing requirements. Third, the rule's scope is still unclear. Fourth, the rule doesn't preclude or preempt the PhRMA Principles change from April. Finally, the overlapping but non-identical scope of the rules could lead to some confusion and compliance hiccups. This post addresses each of these points in turn.

Pending Litigation

As I noted in a previous post, several pharmaceutical companies along with the Association of National Advertisers filed a complaint seeking to overturn the CMS rule. The full complaint is available here. The plaintiffs have filed a motion to stay the rule's implementation, and the judge has set a date of July 8 for issuing a decision. So, it is possible that companies will not actually be required to include their drug pricing in TV spots on July 9; however, as a practical matter, companies airing spots on July 9 and soon thereafter have most likely already developed them with the required pricing information included. 

All promotional materials for prescription drugs, biologics, and vaccines must be submitted to the FDA at time of initial dissemination or publication, so the FDA has most likely already begun receiving submissions of TV spots that include the information, and it is unlikely that a company would go to the time and expense of producing two versions of their TV spots (one with the pricing and one without) and submit both the FDA, only to determine on July 8 which spot to air the next day. Consequently, even if the judge issues a stay on the rule, there's a good chance that you'll see at least a few TV spots featuring pricing on July 9.

And that points to one of the issues the rule raises: operational challenges.

Operational Challenges 

Adding a line of copy to a TV ad is not a massive creative endeavor, and because the rule only requires the copy to appear on screen for a long enough time to be read, there are no audio implications, but the CMS rule requires that the pricing information presented is kept up to date. Specifically, the new rule requires that the pricing information provided be:
"as determined on the first day of the quarter during which the advertisement is being aired or otherwise broadcast." 42 CFR 403.1202 (not yet live on the code of federal regulations itself).

That means the pricing information must potentially be updated every quarter. Of course, most companies don't change their drug pricing quarterly, but it is common to have pricing updates twice per year. So, every time a company changes its pricing, it will have to determine what ads are currently airing and whether the pricing updates affect those ads. If the pricing changes affect the ads, then the ads will have to be updated. An updated TV ad both means an expense for the advertiser, but it also means a new 2253 filing with the FDA because updated materials must be resubmitted to the Agency.

And that means that the media buyers placing the ads will have one additional wrinkle to keep in mind as they manage the ad placements. They'll need to make sure that as new pricing comes into affect and ads are updated that the old ads are removed from the rotation, lest they be placed on CMS's naughty list.

That operational challenge is compounded by the fact that the scope of the rule is unclear, so it's not currently possible to say exactly what ads must include drug pricing.

Rule Scope Unclear

As I noted in a previous post, CMS made it clear that the requirement to include pricing does not apply to ALL direct to consumer (DTC) ads, but only to a limited subset of DTC ads. Specifically, the new requirement applies to only ads that appear on broadcast, cable, satellite, and streaming television. Unfortunately, CMS never explained what "streaming television" is. I tried to find a definition somewhere but wasn't able to do so. This matters because there are tons of DTC video ads that MIGHT be considered subject to the rule that are definitely not presented on "broadcast, cable, or satellite television."

Because of this scope unclarity, the operational challenges of managing ad inventory is compounded, and of course, companies must decide how to handle ads that are used on television when they appear in places where the pricing information is not required. It would certainly be easier to develop a version of the ad that doesn't require quarterly updates, but it also is easier to traffic fewer total ad units.

CMS Rule Adds to (Doesn't Replace) PhRMA's Pricing Requirements

The Pharmaceutical Research and Manufacturers of America (PhRMA) updated its Guiding Principles on Direct to Consumer Advertisements about Prescription Medicines in October of 2018. The most significant change was the addition of a requirement for television ads to include a destination where people can find pricing information about the prescription drug being advertised. This requirement became operative in April of 2019. All members of PhRMA are obligated to follow the PhRMA guiding principles, and most companies that are not members of PhRMA also abide by the guiding principles. Consequently, almost all television commercials currently airing include a link to a webpage with pricing information.

Adhering to the CMS rule does NOT meet the PhRMA guiding principles. Consequently, most companies will be providing both a link to a page with additional information and the pricing information required by CMS. We'll see how companies execute this, but my expectation is that a single screen at the end of a television commercial will accommodate both pieces of information.

Of course, not all ads are required to include both pieces (or even either piece!) of information.

Non-identical Overlapping Scopes

The new CMS rule applies to all advertised indications of a pharmaceutical product that are reimbursed via Medicare or Medicaid and whose cost is at least $35 per month (or for a typical course of treatment). 42 CFR 403.1200. Note that some drugs have multiple indications, where only some of the indications are reimbursed by CMS. For those products, only the ads that promote an indication reimbursed by CMS are required to include the pricing information; and only if the drug's list price is at least $35 per month (or for a typical course of treatment).

By contrast, the PhRMA guiding principles apply to all ads for prescription medicines regardless of whether the drug is reimbursed by CMS and regardless of the cost. Of course, the guiding principles are only binding on members of PhRMA and any non-member companies that have chosen to abide by the guiding principles.

TL;DR

Some commercials (but we don't know exactly which ones) might start having pricing information in one week. The addition of this information is allegedly going to address the allegedly high price of prescription drugs. The only guaranteed aspect of the recent changes from PhRMA and CMS is that marketing and regulatory operations groups are going to have challenges ensuring ongoing compliance, and the FDA is about to start getting more 2253 filings, including a likely surge of revised television spots in the next few days.




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DHC Privacy Post

The Digital Health Coalition asked for my views on the renewed emphasis on privacy for pharmaceutical marketers. I shared a few thoughts here.




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COVID-19 & Ad-Promo

The COVID-19 pandemic has brought to the fore some issues of ad-promo for FDA-regulated products. I'm posting here to highlight some developments and correct some of the discussion.

Snake Oil & Enforcement

One of the unfortunate things about any new health concern is that the snake oil sales start immediately. There are far too many scumbags who see an opportunity to profit in a crisis. The COVID-19 outbreak is no exception.

These people represent a real danger to the public. People who promote unproven treatments can convince the public that they don't need to take the outbreak seriously, can lead to reckless behavior, and in the extreme can contribute directly to increased deaths as their victims rely on the snake oil instead of trusting healthcare providers.

In this setting, FDA and FTC enforcement is essential. We need vigorous enforcement from the authorities to stop the spread of misinformation. I'm glad to see FTC and FDA have already taken some action in this regard. I hope we'll see more.

Off-Label Promotion & Outbreaks

Researchers, practitioners, and industry are frantically searching for any effective treatments. Currently, the science is unclear about whether any treatment works.

As I write this, there has been a lot of buzz around the possible effectiveness of an anti-malarial treatment, hydroxychloroquine sulfate. This is an already-approved drug being used for an unapproved indication, i.e., this is a classic off-label use of a product.

I have seen some misinformation in the media about off-label uses of products, so I thought it might be helpful to set out the background to all of this.

To bring a new drug to market, a company must submit a New Drug Application (NDA) to the FDA. Among other information, the NDA includes proposed labeling. The proposed labeling provides directions to healthcare providers explaining how to use the drug safely. That labeling sets out the proposed uses of the drug. The uses of the drug are known as the indications. Indications typically include a population, a condition, and the stage/severity of the condition (if applicable).

The FDA evaluates the NDA to determine whether the sponsor has demonstrated that the drug is safe and effective for the proposed indications. Assuming the sponsor meets the evidentiary burden, the FDA approves the proposed indications for the product.

After being approved by the FDA, sponsors may only promote their drugs for the specific indications approved by the Agency. Any other use of the product is "off-label" use.

Off-label use is NOT inherently bad, wrong, or evil; and off-label use of a drug is also not prohibited. The other evening I heard a television news segment where the expert commentator spoke of using drugs in violation of FDA's rules. That's wrong.

FDA does not regulate the practice of medicine, and physicians are, for the most part, able to prescribe drugs as they believe is appropriate to treat the patients they see.

But the sponsors are not permitted to promote their drugs for any uses other than those approved by the FDA. Importantly, there is no explicit prohibition in law against the promotion of unapproved uses. You won't, for example, find off-label promotion listed as one of the items that causes a drug to be misbranded. Instead, there are multiple legal theories about this prohibition and what exactly makes such promotion illegal, including the failure to include adequate directions for use in the labeling.


If a company learns of a new off-label use for a drug and wants to promote the drug for that use, the sponsor must conduct additional clinical trials to demonstrate that the drug is also safe and effective for that new use. After completing the clinical trials, the sponsor submits an sNDA (supplemental New Drug Application) to the Agency.

Assuming the Agency approves the sNDA, the label is updated to include the new indication, clinical trial data, additional instructions for use, etc., and the company is then able to promote the new use of the drug.

So, FDA doesn't have to DO anything to make the possible off-label treatments available, despite several prominent people calling on FDA to take action. The drug being suggested for off-label use is already on the market and can be used for this off-label use.

Why doesn't FDA simply approve the new use?

Because FDA doesn't know if the drug works.

When FDA evaluates an NDA or sNDA it weighs the risks and benefits of the drug for each specific proposed use. As FDA has repeatedly made clear, each specific proposed use requires a separate risk-benefit determination.

It is possible (even likely) that a drug that has been proven to be safe and effective for one use might not be either safe or effective for another use.

Indeed, one frequent criticism of off-label use of drugs is that there simply isn't sufficient evidence of effectiveness for many off-label uses.

And that in turns leads directly to why FDA's prohibition on off-label promotion is so important to protect the public health. Using treatments without evidence and promoting such treatments can make things worse.

FDA has the tools to act rapidly to approve new uses of a drug, but it is unwise to short-circuit the approval process, and it's irresponsible to hype an off-label use without sufficient evidence to demonstrate its efficacy.




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COVID-19 updates: 5 April 2020 – 30 April 2020

All the most important developments in the COVID-19 pandemic for pharmacists and their teams, as they happen.

To read the whole article click on the headline




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Manufacturer to move hydroxychloroquine production to the UK to avoid shortages

A manufacturer has announced plans to move production of hydroxychloroquine — currently being trialled as a COVID-19 treatment — to the UK from abroad to combat potential shortages.

To read the whole article click on the headline




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COVID-19 LATEST: Valproate reviews must not be delayed, says medicines regulator

All the most important developments in the COVID-19 pandemic for pharmacists and their teams, as they happen.

To read the whole article click on the headline




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In Surprise Move, SCOTUS to Rule on Constitutionality of ACA Next Term

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FDA and FTC: Coronavirus Products Are Fraudulent, Could Delay Treatment

March 16, 2020 – Amid rising concerns over “Novel Coronavirus Disease 2019” (COVID-19), the Food and Drug Administration and the Federal Trade Commission took action last week against seven companies for selling fraudulent COVID-19 products. The regulators sent Warning Letters to the companies because these products “are unapproved drugs that pose significant risks to patient […]




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Amid COVID-19 Outbreak, Protecting 2020 Election Should Start Now

March 23, 2020 – As the United States grapples with the COVID-19 outbreak and its ongoing fallout, there is another pressing issue that is crucial to the American public: ensuring safe and fair elections between now and Nov. 3. “The Coalition believes it is important for all Americans to be active in the political process […]




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FDA Streamlines COVID-19 Product Pathways, Continues to Crack Down on Misleading Claims

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COVID-19 Pandemic Likely to Affect FDA Product Approval Timelines

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As COVID-19 Pandemic Continues, Promotion of Unapproved “Cures” Abounds

May 4, 2020 – An important part of protecting the public health during the COVID-19 pandemic is making sure that the marketing of treatments or remedies that are not approved by the Food and Drug Administration (FDA) to treat the virus is stopped before consumers waste their money or potentially are harmed by these products. […]




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EMA starts reviewing Gilead's remdesivir data to accelerate approval of COVID-19 antiviral

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Newron ditches sarizotan program after pivotal trial flop, sees shares crater

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Repairing spinal cord injuries with a protein that regulates axon regeneration

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FDA delays decision on approval of Bristol Myers' CAR-T

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Janssen promotes R&D exec into newfound data science role

Following in the footsteps of an increasing number of biopharmas that want to use data to get more bang for their buck in R&D, J&J has promoted Najat Khan, Ph.D., to the role of chief data science officer.




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BENEO president: ‘We have seen higher and more volatile demand during the pandemic’

From fewer containers and reduced shift work at harbors to delays in planned maintenance in factories, the coronavirus pandemic is impacting global supply chains in myriad ways. FoodNavigator-USA (FNU) caught up with Jon Peters (JP), president at Beneo, a leading supplier of chicory root fiber, rice ingredients, and the specialty low-GI carbs Isomalt and Palatinose, to find out more.




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Despite sales bump, brands that are not preparing for stormy seas ahead could struggle, consultant says

The dietary supplement industry as a whole is enjoying booming sales as consumer stock up on products to support optimum health. But an industry strategist warns that that sales bump is likely to be ephemeral, and brands that are not strategizing vigorously now may be caught out in the near future.




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Surge in screen time has led to jump in sales, says eye supplement president

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Study: Potato protein a winner for women

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Probiotic combination boosts amino acid absorption from plant protein: RCT

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Herbal ingredient supplier benefits from incontinence product supply problems

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Bifido probiotic may enhance effects of exercise and boost training results: Study

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Precision in Oncology: Using the Macro and Micro

Last week, the New York Times had a nice piece “A Faster Way to Try Many Drugs on Many Cancers” on basket clinical trials, which matches patients to a therapy based on the genetics of their tumor as opposed to the site of their primary tumor. This type of trial feeds into the current excitement about precision

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#MHVF Approaches to Drug Development

Today I had the chance for a panel conversation with Geeta Vemuri from Baxter Ventures and Ed Silverman from Pharmalot blog (Wall Street Journal) at the Midwest Healthcare Venture Forum. Our general topic was how we (an entrepreneur and a corporate venture capitalist) look at bringing drugs/devices to market. Here are a couple of takeaways from our

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Blood: Underappreciated Resource in the Health/Disease?

Alternative title: Pitching a VC on Disruption of Blood Testing You may have seen some recent editorials about the necessary frequency of blood tests for healthy individuals, many of them prompted by a series of tweets from Mark Cuban: Although there are certainly potential dangers in expecting any and all test results to be immediately

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Coronavirus FAQs: Do Temperature Screenings Help? Can Mosquitoes Spread It?

And as summer nears, the question must be asked: Is it risky from a COVID-19 standpoint to go in a swimming pool?




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Anti-Vaccination Activists Join Stay-At-Home Order Protesters

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Tracking The Pandemic: How Quickly Is The Coronavirus Spreading State By State?

View our map and graphics to see where COVID-19 is hitting hardest in the U.S., which state outbreaks are growing the fastest and which are leveling off.




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Coronavirus World Map: Tracking The Spread Of The Outbreak

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Extending the Patentable Life of 3D Printers: A Lesson From the Pharmaceutical Industry

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En Banc: Federal Circuit Provides Guidance on Application of On-Sale Bar to Contract Manufacturers

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10 Predictions for healthcare



  • in the news

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A vaccine probably won’t arrive any time soon.




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Commission working on proposal to postpone MDR date of application for one year

After a statement on a press conference today by Stefan De keersmaecker that had many people very excited quickly, the official announcement came later in the afternoon: Here is what I think about this development. Work on a proposal ongoing The Commission announced that ‘work on a proposal to postpone the date of application’. This tells […]




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The MDR amendment proposal: more than meets the eye

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MDR amendment proposal article 120 (3) oversight set to be fixed by Council

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First coronavirus, now 'murder hornets'? 'The Simpsons' predicts the future again

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Coronavirus torpedoes 50th L.A. Pride parade; online celebration planned

The L.A. Pride parade, which would have marked its 50th year, joins the list of events canceled or postponed because of the coronavirus outbreak.




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Editorial: California was ready for a recession, but nothing could have prepared it for coronavirus

The good news: The state is far better prepared to meet this challenge than it was a decade ago. The bad news: It will need help from the feds, and a lot of it.




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Judge grants request to delay start of prison sentence for former Rep. Duncan Hunter

A federal judge found that the uncertainty surrounding the COVID-19 pandemic was good cause for the delay.




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Protesters stage illegal rally at California Capitol to support law enforcement

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First Californian to get coronavirus in community spread was infected at a nail salon, Newsom says

Newsom cited the case when asked why personal services, such as nail salons, must remain closed.




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Unemployment hits 14.7% in April. How long before 20.5 million lost jobs come back?

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Letters to the Editor: Old Americans shouldn't have to prove their value to combat ageism

The idea that old people are worth something because they contribute significantly to society puts us on a slippery slope.




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Letters to the Editor: Mr. President, protect us with testing. Then we'll be your coronavirus 'warriors'

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Remembering a past global struggle in the midst of a present one

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At protests, mostly white crowds show how pandemic has widened racial and political divisions

Coronavirus pandemic widens racial and political divisions