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Current News and Issues

FDA Proposes User Fee Changes

The U.S. Food and Drug Administration proposed amending the 2002 Medical Device User Fee and Modernization Act (“MDUFMA”) as it comes before the Congress for reauthorization. The proposal introduces two annual fees while reducing the fees for medical device manufacturers associated with PMA and PreMarket Notification, or 510(k), applications. The proposal includes an annual registration fee and a fee for filing periodic reports. The Agency hopes to develop a more predictable revenue stream to be used to fund product reviews and decrease the time required to get new products to market.
(http://www.fda.gov/cdrh/mdufma/presentations/mdufmaii-043007.html).


FDA Publishes Draft Guidance on Advisory Committee Conflict of Interest and Eligibility Rules

The U.S. Food and Drug Administration announced that it has published a draft guidance for use in determining when an advisory committee member has a potential conflict of interest that would preclude participating in the review of a new drug or device. The new guidance implements more stringent requirements while at the same time increasing the transparency, clarity and consistency of the process and increasing the public’s trust, according to the FDA.
(http://www.fda.gov/bbs/topics/NEWS/2007/NEW01591.html)


CMS Extends Time for Development of Stark Phase III Final Rule

The Centers for Medicare and Medicaid Services (“CMS”) published a notice in the Federal Register extending the interim Stark Phase II rule for an additional one year period through March 26, 2008, while the Agency processes public comments and completes work on the Phase III Physician Self-Referral rule. (72 Fed.Reg. 13710, Mar.23.2007)


Eli Lilly, Boston Scientific Receive Requests for Documents from Representative Waxman’s Committee on Oversight and Government Reform

The House of Representatives is looking into allegations of improper marketing of Eli Lilly’s blockbuster drug Zyprexia and Boston Scientific’s Taxus drug eluting cardiac stents. Document requests were sent to Lilly CEO Sydney Taurel and Boston Scientific CEO James Tobin requesting information about clinical trials including lists of participating physicians, summaries of methodologies, findings, and conclusions, and funding or other support provided by the companies’ respective marketing departments. The House panel is looking at marketing for off-label (unapproved) indications as well as concerns that safety and effectiveness information was misrepresented. (http://oversight.house.gov/story.asp?ID=1199)


State of Utah Sues Eli Lilly Over Zyprexia Marketing to Medicaid Program

The State of Utah brought suit against Eli Lilly on May 17, 2007, under the State’s False Claims Act alleging that the pharmaceutical giant misled the state and physicians about the risks and benefits of its anti-psychotic drug, Zyprexia, increasing the costs to the state’s Medicaid program and putting patients at risk of serious side effects. Like Indiana’s False Claims Act, the Utah statute permits the state to recover three times the amount of the false claims and a statutory penalty of between $5,000 and $10,000 per claim. (The State of Utah v. Eli Lilly & Company Civil No. 070907357, May 17, 2007, Third Judicial District Court, Salt Lake County, State of Utah)


GAO Report Critical of CMS Enforcement Efforts at Problem Nursing Home

The Government Accountability Office (“GAO”) released a report in early May expressing concern that the Centers for Medicare and Medicaid Services had failed to respond adequately to address repeated quality and safety violations at a small but significant number of America’s nursing homes. The report noted that enforcement varied from state to state and criticized CMS for imposing reduced sanctions that did not appear to deter violations in the years following and for failing to use potent enforcement techniques including civil money penalties denying future payments and termination of participation in federal health care programs including Medicare and Medicaid, which account for more than 74% of long term care funding.
(http://www.gao.gov/new.items/d07241.pdf)

Editor - James E. Utterback, co-chair, Health Law Group