Three headlines that caught our eye over the weekend:

FDA report suggests it’s not quite time for J&J to cut the ribbon on its brand-recovery campaign. The New York Times looks at the most recent inspection report the agency filed on J&J’s troubled Puerto Rico plant, which documents “distribution of drugs that failed quality requirements, a failure to identify product defects during routine testing, failure to detect incorrect expiration dates on drug labels, failure to adequately investigate product problems, failure to follow laboratory controls and inadequate training of lab staff.” The report goes through early November; earlier this month, more manufacturing problems led the company to make another huge wholesale recall of more than 9 million bottles of liquid Tylenol, 4 million packages of Benadryl, as well as Motrin and Rolaids products.

As concerns of nationwide counterfeiting problems grow, India commissions a feasibility study on a federal computerized distribution system to better track drugs through the supply chain. In addition to this survey of stakeholders, India’s drug regulatory agency, DCGI, is also encouraging smaller drug companies to use national subsidies to help with set-up costs of a barcoding system. “Both developments tie in with recent initiatives by the Indian government to try to improve the transparency of India’s pharmaceutical sector – a critical supplier of essential generic medicines for countries around the world – and shake off its image as a hub for counterfeit and substandard drugs,” Securing Pharma writes.

And American Medical News, the online news arm of the American Medical Association, sees a significant drop in doctors’ financial ties to drugmakers. Using follow-up survey data on commercial CME, meals, and samples in a recent Annals of Internal Medicine article, the AMN suggests the last five years have seen a sea-change in the way industry markets to doctors (or conversely, the way doctors accept industry’s advances.)

But though there may be a trend here, recent payment data from Massachusetts’ disclosure law and aggregators like PharmaShine and ProPublica suggest that hundreds of millions of dollars are still going from industry marketing budgets to physicians’ pockets each year.

The future federal sunshine law, as well as state and other AMC public disclosure regs (which barely got a paragraph here) are key: not only as potential driving factors in the trends that AMN is pointing to, but as sources of data that suggest the drop off of physician-industry coziness may not be quite as simple as the AMN suggests.

The article also gives a lot of space to the voluntary PhRMA conduct code and AMA’s own code, both of which are relatively weak and unenforceable compared to many academic medical center policies, and which were, chronologically, responses to pressure for system reform rather than drivers of such change, as the AMN article implies.

–Kate Petersen, PostScript blogger

Drug and device companies paid Massachusetts physicians more than $16 million in the second half of 2009, the Bay State’s newly-unveiled disclosure database shows (for those of you ready to bookmark: http://mass.gov/dph/pharmamed/). Health Care for All’s got first impressions over at A Healthy Blog:

“While other states have come out with data,” they write, “Massachusetts’ is the first database that is fully searchable by provider name, company name, or payment category, and is the nation’s most comprehensive.”

Massachusetts joins Vermont and Minnesota among states that publish pharma payments made to doctors, and as researchers, journalists and consumers begin to comb the data, more pieces of the picture about industry marketing payments to health care providers will fall into place. The data and, importantly, the database itself–its organization, user-friendliness, design and maintenance–offers one working draft for the designers of the federal Physician Payments Sunshine database to copy, improve on, or tweak as they build the federal version, and we’ll be looking at the database with an eye toward its blueprint-ness in the coming weeks and months.

On your mark, get set, download…

–Kate Petersen, PostScript blogger

Having revealed that more than 250 physicians with serious sanctions against their medical licenses are on the speaking circuit of some of the nation’s top drug companies, ProPublica and a series of news outlets around the country have put the question to the companies: When it comes to speakers bureaus, who’s keeping the gate?

One company said that they had a previous plan for gatekeeping.  So what happened to it?

These are not nitpicky violations we’re talking about—a CME credit here or there, unpaid dues. One doctor listed in the ProPublica database, Kenneth Fisher, is paid by GlaxoSmithKline and two other companies despite having been on probation for nine years in the state of Arizona for a series of serious misconduct charges, including sexually violating HIV patients.

This is the sort of thing that makes landlords do background checks. And if landlords can do them, why not drug companies spending millions to have certain doctors talk about their finely-tuned brands?

“Let’s be honest, they do a lot of very complicated things very well,” Hastings Center bioethicist Josephine Johnston told ProPublica. “These are the people who have figured out how to get prescription data for individual doctors so they can send drug reps to target particular doctors in particular ways.”

Good point. Data-mining isn’t exactly a simple (or transparent) marketing strategy, but the industry has it down, spending millions each year to buy individual prescriber records and pairing them with prescribers’ names so that they can tell how much Lipitor Dr. Doe is writing, and how many more scrips she’s likely to write (more on data-mining here). But complicated things in service of marketing that works, and complicated things that might make effective marketing harder are two different matters (although one wonders if there aren’t easily 250+ blemish-free docs willing to step in to fill vacancies on the speaking circuit).

Perhaps the failure to do background checks—the casualness it conveys—underscores just how big these marketing budgets are. That the $7.1 million these seven companies gave the sanctioned docs in the last two years isn’t enough to inspire thorough background checks suggests the sums don’t make industry’s reputation radar. Pharma has been cutting sales rep jobs for awhile now, but let’s not mistake that for cutting marketing spending—doctor-to-doctor talks work, and they are still going strong: The ProPublica aggregator totaled up $282 million in speaking fees from seven companies between 2009 and 2010.  And there are more than 70 drug companies in marketing in the U.S., meaning there’s potentially a lot more money on the table that we will learn of when state disclosure laws and the federal Sunshine laws kick into effect.

None of the seven companies whose payment data was reported offered an official to speak with ProPublica (a sign as a reporter that you’re on to something). But among the general statements they did make, we couldn’t help our jaw from dropping a little as we read the range of reasons companies gave for not doing background checks on their speakers:

Pfizer and Glaxo noted that some of the physicians listed no longer speak for them.

Pfizer also noted that none of its doctors had been banned from participating in federal health programs.

Merck & Co. said it had “previously initiated” plans to conduct more frequent background checks and “is exploring additional capabilities.” The firm would not be more specific.

Johnson & Johnson, Glaxo and Cephalon each said that they are always looking for ways to enhance their selection of speakers.

In an e-mail, Glaxo spokesman Kevin Colgan added that disciplinary actions alone shouldn’t be the basis for excluding a potential speaker or consultant.”

Glaxo and Lilly each made payments to more than 100 of the 292 sanctioned docs ProPublica identified.

After reading about Dr. Fisher’s record, we’d be interested to see the criteria GSK does use to exclude a potential speaker or consultant.

–Kate Petersen, PostScript blogger

Drug supplier Claris Lifesciences is banned from importing products to the US from its flagship Indian plant for a series of unaddressed good manufacturing practice violations that led to contaminated IV bags, and complaints from US distributors and consumers. Some of the unaddressed issues that led to the ban suggest earlier or expanded involvement by regulators could help resolve safety issues more quickly than the company is on track to do on its own.

In June, remember, the company recalled a number of its IV antibiotics and anti-nausea drugs made in the Claris factory in India after some medications tested positive for Cladosporium fungus. At that time, the FDA warned providers not to use IV medications made by Claris, as the fungus could harm immuno-compromised patients.

This month’s letter criticizes the company for delayed and improper investigation that failed to pinpoint the root cause of the fungal contamination in its IV medications–even though the fungal matter was visible.  From the FDA warning letter:

On May 31, 2010, your customer (Pfizer) reported that Metronidazole Injection USP IV bags (lot A090722) were contaminated with fungi (Cladosporium species) and Gram positive bacteria (Brevibacterium casei). Pfizer returned 33 unopened Metronidazole Injection USP bags, but your Complaint Investigation Report failed to identify the contaminants that Pfizer visually observed in at least 31 of these bags.

According to InPharm, the company makes “a broad range of sterile injectable products including the antibiotics ciprofloxacin, metronidazole and levofloxacin, antifungal fluconazole and anti-nausea drug ondansetron.”

Inspection and GMP issues are not solved overnight, but the Claris letter is disturbing because it underscores the company’s failure to

a)     keep equipment clean in order to prevent contamination
b)     start the investigation in a timely manner
c)     find the contamination source, focusing instead on the integrity of the IV bags themselves, not the fungal matter
d)      tell their distributors and customers about the reported contamination, as the FDA indicates here they are required to do:

Claris India acts as a contract manufacturer for IV bag products marketed by other firms, as well as a distributor of some batches under Claris’s own label. Your responsibility as a contract manufacturer is to inform all of your customers of a significant production problem or possible product hazard immediately.

When it comes to contamination and good manufacturing practices, there’s been some high-profile foot-dragging on the part of drug companies and suppliers, especially in telling the public and downstream members of the supply chain.  The Claris case, then, is one more reason to expand the FDA’s authority to remove risky or unsafe products from US shelves when contamination is identified, rather than waiting months and months for a company to handle—or fail to handle—the issues on its own.

You can read more about the June recall and about proposals to expand FDA recall authority and reform supply chain oversight here.

–Kate Petersen, PostScript blogger

In a report on recent drug recalls, one risk analyst suggests they don’t. Aggressive cost-cutting in both in manufacturing operations and in the supply chain may be contributing to the quality problems that have led to a wave of product recalls in the drug supply recently, a Reuters report suggests this week.

Seeking out the cheapest materials, both those that go in the drugs and those involved in their manufacture and transport (like the wood pallets treated with chemicals that seeped into recalled bottles of Johnson & Johnson products and Pfizer’s Lipitor), has not only made he supply chain more complex, but diluted the control—and even awareness—drug makers have over their supply chains.

We thought this insight from the article was especially illuminating:

“Things that were off the table in the past are now on the table,” said Jim Lawton, president of Dun & Bradstreet Supply Management Solutions, which tracks and monitors supply chain risks for clients.

“As a result you’ve got all these supply chains now that are fragmented across all sorts of companies and they’re all geographically dispersed,” Lawton said.

“My guess is they (J&J and Pfizer) don’t even know who the pallet manufacturer is, and yet they’re on the hook at the end of the day for whether or not consumers think they can buy Tylenol and if it’s going to be a safe product to ingest.”

The FDA’s Hamburg agreed that supply chains are getting much more complex.
“There are many, many more players involved as a drug moves through the distribution process and at every point along the way is a point where there needs to be attention or problems may occur,” she said.

And many countries don’t come close to having the same quality control standards as a drugmakers’ home turf.

“I work with a company that had outsourced something to China and the manufacturer in China had turned around and outsourced a key portion of that to sub-Saharan Africa, and yet my customer is saying, ‘I didn’t even know we had suppliers in Africa.’ And they are just exposed,” Lawton said.

Learn more about securing the drug supply chain at the Pew Prescription Project.

–Kate Petersen, PostScript blogger

Protecting the public’s health shouldn’t fall to the whistleblowers, an editorial in yesterday’s Boston Globe says, pointing to a $750 million GlaxoSmithKline settlement late last month in which a whistleblower claimed the company had knowingly sold unsafe drugs into the market.   As we wrote earlier, it’s a significant settlement for being the first to successfully allege a company knowingly sold unsafe drugs. The Globe concludes that the GSK suit—in which FDA inspectors at the Puerto Rico plant found the contamination problems—shows that this time the system worked: “But beefing up the FDA’s drug-manufacturing inspections should keep drug makers from foisting contaminated medications on the public in the first place — and keep the government from having to share fraud-recovery millions with whistle-blowers.”

Meanwhile, the House Oversight and Government Reform committee has its eye on Puerto Rico too, but on the FDA office there, which was thrown into the spotlight during the Johnson and Johnson “phantom recall” hearing earlier this fall.

“It appears that FDA’s Puerto Rico district office may be having difficulty exercising oversight on the numerous pharmaceutical manufacturing facilities on the island,” committee Chairman Edolphus Towns and Ranking Member Darrell Issa wrote. “We question whether the Puerto Rico district office is adequately staffed to fulfill the agency’s mission of securing the nation’s pharmaceutical supply.”

While the latest GAO report suggests that FDA still isn’t inspecting anywhere close to the number of overseas plants involved in the manufacture of U.S. drugs, it does suggest the FDA has stepped up vigilance and focused resources on the problem—and in a major way (quadrupled funding for foreign inspections indicates more than an incremental shift from the status quo.)

That’s a sharp contrast to the tenor of an interview with J&J CEO William Weldon this week, in which he focused more on the image recovery campaigns his company has planned than fixes to the manufacturing problems that lead to the recall of millions of bottles of product in the last two years. The interview took place less than a month after more Tylenol was recalled for complaints of musty odors.

Whistleblowers, investigations, and stepped up regulation all mean information, and to our mind, the more information, the better. It’s encouraging to see that over, under, or through the ballot-box sound and fury, the drumbeat call for drug safety persists, and maybe it’s just our fondness for the bass line, but we hope it gets stronger.

–Kate Petersen, PostScript blogger

Drugmaker Genentech’s new promotion to get eye doctors to use the expensive injectable drug Lucentis for macular degeneration offers rebates to top-prescribing practices based on bulk and rate of increased use, the New York Times reports, despite little evidence that the drug works better than another far less-costly drug, Avastin.

The rebates may be designed to win or keep prescribers from Genentech’s Avastin, a similar drug indicated for cancer that some physicians say works equally well and costs about one percent of what Lucentis does.  A head-to-head trial between the two drugs is underway and some suggest the Lucentis promotion is a way of creating customers for the more expensive drug in the lead-up to the trial results.

The Lucentis rebate to physicians is based on volume but also increase in use—something that sounds all right enough for a coffee customer card, but disturbing for a drug. The program is a top-users club to begin with, only offered to the top 300 using practices in the country. Even with lattes, there’s a finite number of espresso shots one can or should have in a day/week/month, and reward for increase in use is a problematic model because it suggests a curve of infinite consumption.

More disturbing? The company has been explicit in keeping the program a secret. The Times reports that “doctors who have signed up for the rebates are not allowed to acknowledge even the existence of the program, let alone to talk about the specific terms,” in accordance with a company-proffered contract that practices must sign. That’s definitely not how they do the coffee cards.

Lucentis and Avastin are injectables, meaning a doctor must administer the doses rather than a patient going to a pharmacy to get a drug, and as with other injectables, Medicare reimburses doctors for buying the drugs. A rebate or bulk discount program offered by a drug company such as this one boosts the potential money a doctor can make and ties physician payment directly to frequency and volume of a drug used, which is one reason for the federal anti-kickback statute.

According to a calculation by the Times, the volume rebates combined with the increased usage rebates on offer could net a practice meeting the minimum requirements in the biggest rebate category $58,000 per quarter. U.S. sales of Lucentis went up nearly 30 percent in the first three quarters of 2010, to $1.1 billion, and though Medicare reimbursed for less fewer Lucentis injections in 2008, it paid a whole lot more for them: $537 million that year compared to $20 million for Avastin.

Whether these types of rebates violate anti-fraud and anti-kickback laws may depend both on whether they were properly disclosed to government payors, and on how they were promoted to providers. But putting that question aside, news of the program is worrisome from a medical standpoint. Here is a company promoting its (very costly) medicine based on some hybrid of the Starbucks/Costco philosophy—the more and more frequently you buy, the more you save!—and not on the efficacy or merits of the medicine, or on clinical trials and guidelines that demonstrate superiority to comparable drugs or optimum treatment regimens. And where is the patient in all this? Eyes open, and paying the bills.

–Kate Petersen, PostScript blogger

A new survey of pharmaceutical executives found that even as they expect to send a larger share of drug manufacturing, sourcing and sales to emerging economies such as China, India, and Brazil, many are not confident in the willingness or ability of their suppliers to meet regulatory requirements, and rely overwhelmingly on periodic audits to assess supplier’s safety and quality practices.

The findings are part of a PwC/Axendia survey of 112 global pharmaceutical and life sciences executives. Ninety-four percent said global product sales outside of the United States will increase in the next few years, according to the PwC summary, while 78 percent said global sourcing outside of the United States also will increase. Nearly as many—76 percent—said their global manufacturing outside of the United States would grow, as well.

It’s striking to note that despite these near-guarantees of an increasingly spread-out supply chain, companies oversight of suppliers’ manufacturing practices and their confidence in them is flagging. A Pew Prescription Project survey released this summer suggests consumer confidence in the safety of drugs made in these newer markets is low, too.

Counterfeiting is also on pharma’s radar more than it was a decade ago: 44 percent of the executives surveyed cited it as a business risk. One safeguard against counterfeiting and adulteration is track-and-trace technology, which would establish a unique electronic ID tag for each medicine bottle so that drugs can be traced back to their original source and verified at each transaction point along the supply chain, from the factory to the pharmacy shelf. Interestingly, among the obstacles the respondents cited to implementing track-and-trace technology was lack of external regulation and guidance. They also cited cost and lack of industry standards. Requirements that drugs carry such “e-pedigrees” have appeared in the FDA appropriation Chairman’s Mark this summer and in bills before earlier sessions of Congress.

The survey is free to download here (registration required).

More on measures to secure the drug supply over at Pew Prescription Project and SafeRxWatch on Facebook and Twitter.

–Kate Petersen, PostScript blogger