What new legal/regulatory
challenges does pharma face—
not just from FDA but from FTC,
CMS, state AGs, et al.?
Larry Mickelberg: There can
be no doubt that pharma is facing an increasingly hostile and
challenging regulatory climate,
and at a time when leaps in science and technology are driving
a fundamental transformation in
the business model. In digital and
connected health, the regulatory
environment is not straightforward and the extent of privacy
and safety concerns is as yet not
fully known, yet the sheer degree
of innovation and the volume of
entrants is growing rapidly. These
new possibilities, new players, and
new expectations are changing the
face of healthcare forever. And so
healthcare marketers must find
opportunities to supplant existing product and service offerings
with disruptive new methods and
approaches that require working in
new ways.
“Working in new ways” is anathema to those in the legal/regulatory
space – and often for good reason, as many non-pharma players
such as tech companies and other
start-ups have come forward with
products and services that lack the
safety- and efficacy-related rigor
expected of pharma and more established players, and are marketing them directly to consumers.
Established healthcare players have
core competencies (ie, medical
expertise, clinical facilities, and the
ability to develop drug therapies)
that have traditionally been highly
prized—and priced. Few new
entrants would be able to say the
same, but, increasingly, this doesn’t
always matter. In fact, it’s becom-
ing apparent that healthcare out-
comes depend on a lot more than
just those expensive core compe-
tencies. There is a shift towards the
more cost-effective approach of
encouraging and empowering con-
sumers to take more responsibility
for their health, both in preventive
healthcare and in chronic disease
management.
Further, the pace of innovation and change in this space is
breathtaking. In drug discovery,
in sensors and wearables, in data
and analytics, and more. Not just
by pharma standards, but by any
standard, and shows no signs of
receding any time soon. Part of
pharma’s success in this space will
be inventing and/or partnering
with these new technologies. That
poses an unprecedented challenge
to pharma’s slow, encumbered, and
very complex med/legal landscape.
Legislating innovation is a tricky
business, and getting trickier. In
particular, for an industry that
struggled with social media for a
decade, apps, software, sensors and
devices may represent an insurmountable challenge.
There are some perhaps encour-
aging signs that regulators are
working to find ways to embrace
innovation, within the traditional
bounds of their traditional remits
to serve the public interest. Within
some pharma companies, and the
industry at large, there are already
re-engineered regulatory frame-
works that are specific to digital
health. Government agencies such
as FDA and FTC are working
within their respective spheres to
find ways to define standards and
embed quality process.
Bruce Grant: Ironically, the FDA,
having now effectively lost the
battle over off-label communication and dialing back enforcement
actions against sales and marketing practices overall, may be the
least of pharma’s worries. Indeed,
legal, legislative, and policymaking
threats—including Anti-Kickback
Statute and Foreign Corrupt Practices Act prosecutions, qui tam
whistleblower suits under the False
Claims Act, state Medicaid fraud
suits, class-action product-liability
actions, new Treasury rules designed to thwart tax inversions,
and the continued threat of limitations or loss of tax-deductibility
for DTC advertising—all loom
larger in the near term. To the
extent that we do see FDA letters
forthcoming, the best bet is that
they will focus on well-understood
“no-fly-zones”—expansion of indication, minimization of risk information, and omission of material
facts—and the rookie (or reckless)
marketers who violate them.
Dan Hoffman: The CMS cost
control testing could pose a formidable challenge to the currently
unrestrained pharma pricing in
oncology and other, physician-administered, therapeutic areas.
Among several issues that CMS
is testing, the agency is exploring
value-based pricing and cutting
add-on fees to physicians and
outpatient infusion centers. This
would effectively end the buy-and-bill approach that is so lucrative to
