A First Amendment First: Drug Prices in Ads

Most of the controversy surrounding the commercial speech question for FDA-regulated products has to do with government efforts to restrict speech, but the question of pricing transparency for pharmaceuticals is turning that question on its head. The idea has been floating around in Washington for some time now, but the issue has picked up pace recently via a provision in budget legislation that would set aside money for development of regulations.

The Department of Health and Human Services had floated the idea of prescription drug transparency in May under the Trump administration’s American Patients First proposal, and the FDA has convened a working group that will study the idea, even though there are questions as to the legality of such a requirement. Ironically, the FDA’s June 2018 payer communication draft guidance for drugs and devices stipulates that health care economic information should not be provided to prescribing physicians or to patients/consumers, seemingly putting the agency in something of a bind.

One of the more interesting plays in this dramatic series is a letter from five members of the U.S. Senate to several pharma CEOs, such as the  May 18 letter to the Pfizer CEO, Ian Read. The letter calls on the recipient to voluntarily disclose the prices for prescription drugs in DTC ads, but the signers are all members of the Democratic Party. However, Republican Chuck Grassley of Iowa teamed up with Democrat Dick Durbin of Illinois to insert the language that would fund the work needed to draft the related regulations, all as part of the recent spending bill for HHS and two other departments.

The Senate and the House of Representatives have yet to hash out the differences in their respective approaches to H.R. 6157, but some time will pass before any regulations are developed for this purpose, even if the bill is signed into law with this provision intact. The problem with that kind of information is obvious: The list price is not the price paid by those who are enrolled in some sort of health plan or a stand-alone prescription drug program, but that cost comparison might not be worth much if it does not include a comparison of the relative efficacy of the products available for that condition. That’s a fair amount of work for the practicing physician, let alone a patient who is entirely unprepared by virtue of training and/or experience to undertake such an analysis, particularly when the patient faces the crisis of a potentially lethal condition.

Several have questioned whether such a regulation could withstand the inevitable lawsuit, and one legal touchstone for this predicament may be the 1985 Supreme Court case of Zauderer v. Office of Disciplinary Counsel, which raises the question of whether the requirement is both unduly burdensome and “reasonably related” to the prevention of any deception of consumers. There are several other legal mechanisms by which this notion will be tested, but it is certain that any such regulations will be vigorously tested by one or more legal means.

Praise for PTO’s Iancu

The fate of the software patent in the age of Alice v. CLS Bank has been the subject of a number of desultory essays, but to hear it described by a member of the patent bar, the current director of the U.S. Patent and Trademark Office has reversed some of the Alice-in-Wonderland effects of Alice. This is of course an especially critical development in the age of digital medicine, which is one of several great hopes for medicine in this still-young century.

Patent attorney Rich Beem of Chicago writes at Patently-O that the February 2018 decision by the Federal Circuit in Berkheimer v. HP Inc. held that a claim cannot be invalidated for purported routineness or conventionality unless the challenger presents evidence to that effect. Beem assisted Intelligent Medical Objects of Northbrook, Il., regarding a patent that was rejected by a patent examiner and by the Patent Trial and Appeal Board, following which Breem’s firm filed for a hearing at the Federal Circuit in May. The PTO, Breem said, filed an unopposed motion to vacate the outcome at the PTAB hearing for the IMO patent, but this was not the only time in recent months in which the PTO moved to vacate a PTAB determination in the paradigm of Berkheimer.

Beem noted that PTO had issued guidance in April to address the outcome in Berkheimer, which he said makes clear that software patents cannot be rejected without evidence to support the grounds for that rejection. More PTO guidance and more examples of case law are en route, Beem said, but he applauded PTO director Andrei Iancu for the latter’s “recent acknowledgment of legal errors in final rejections” that had been appealed to the Federal Circuit. Still, Beem said, “skillful drafting and prosecution go a long way” toward securing patents for software that will prove critical to cybersecurity and to the flows of medical data that are an essential for development of modern pharmaceuticals and medical devices.

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