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Health Care Professional Ratings Tied to Efficiency

Posted Dec 06 2012 12:00am

The degree of effort put into selecting health care professionals varies among consumers.  For instance, many relatively young users of health care may only go through the motions of selecting a primary care physician, whom they may seldom visit, and never investigate specialists that provide more particularized care.  A recurring question, however, amongst more frequent health care consumers is “who provides the best care?”  As consumers become older, mature, develop ailments more frequently, and raise families, this question becomes asked more and more frequently.  Where is such a consumer to look for reliable information?  Yes, rating systems of health care professionals are available.  But the objectivity of such systems is often questioned because of the agenda of those developing the rating systems.  For instance, Andrew Cuomo, the former New York Attorney General, injected New York State into the practices through which an insurance company rated the health care providers in its network.  The concern identified by the Attorney General’s office was that insurance companies would rate health care providers based upon their ability to provide care cheaply, rather than on their ability to provide quality care.  This concern stemmed from the undeniable profit self-interest of the insurance company. However, was such a stance by the now Governor necessary or appropriate?  I think not.

Determining the quality of care delivered by a health care provider is an inherently subjective task.  The outcomes of individual patients will depend upon a multitude of factors, many of which are out of the control of the provider.  Different patients will react differently to different treatments because of their unique physiology.  The same ailment will have indiscernibly progressed to varying degrees in different patients.  A doctor could follow all the proper protocols, provide the care called for (i.e., satisfy the standard of care), yet a poor outcome could nonetheless result. The outcome in these instances is largely the result of the “luck of the draw” with respect to a patient pool.  Thus, trying to determine which doctors provide the best care is inevitably a limited, if not fruitless, endeavor.

Additionally, a mechanism is already in place to ensure that substandard doctors are not practicing.  The training to become a doctor and the required certifications to practice serves as the screening mechanism to ensure that health care providers have the requisite skill to perform their trade.  So long as doctors are meeting this minimum established by their field, patients should be led to believe in the ability of those doctors to provide adequate care.  Ranking doctors based on outcomes naturally leads consumers to believe that entry level standards are watered down such that doctors “at the bottom” are not competent to perform; which is simply not the case.

Finally, ranking doctors based upon efficiency or cost factors serves a valid societal purpose.  Firstly, putting utility aside, such metrics are readily quantifiable, accurate, and objective.  And with respect to utility, many patients want efficiency.  An efficient doctor is, it would seem, much less likely to engage in “defensive medicine.”  For a time pressed patient, as many of us are, reassurance that our time will not be wasted with unnecessary tests and precautions holds real value.  And on a societal level, it is obvious that health care costs are out of control.  I have recently been put in a position where I must acquire a policy for my family on the open market (I am leaving a secure government position with subsidized health benefits for a position as a law clerk with a small law firm, which does not extend health benefits to its clerks). My monthly contribution is currently $330 for a health plan with no deductible and $20 co-pays.  It appears as though my best option on the open market is a $1200/month plan, with a $1,000 deductible.  My family is young and healthy. Our annual doctor visits consist of well visits, totaling approximately $1,000 in total costs. With this in mind, if insurance companies can encourage the use of efficient providers (who have been vetted by their profession as proficient at what they do), then this practice should be encouraged.  A “high efficiency” network at a reasonable cost would certainly perform well on the open market, particularly among us consumers that don’t actually anticipate using their policies.  Health care is or will be a significant factor in everyone’s life at some point.   However, if we can prevent it from becoming the driving financial concern among the middle class, that would appear to be a worthy cause.

Adam Peterson is a third-year evening student at Seton Hall University School of Law. He received his B.S. in Conservation Biology from the State University of New York College at Cortland in 2007. Since that time he has worked for the New York State Department of Environmental Conservation as an Environmental Analyst, reviewing development projects for compliance with New York State environmental regulations.

Image by Ludraman .

Earlier this week, the Second Circuit Court of Appeals at last issued its decision in United States v. Caronia and it is momentous (and predicted to be heading to the Supreme Court).  A two-judge majority of the Circuit Court held that Alfred Caronia, a pharmaceutical sales representative, “was convicted for his speech – for promoting [the central nervous system depressant Xyrem] for an off-label use – in violation of his right of free speech under the First Amendment.”

The majority’s decision begins with a threshold question.  Was Caronia convicted for conspiracy to misbrand Xyrem because he engaged in off-label promotion qua off-label promotion, that is, for his speech?  Or, was his speech simply “evidence that the ‘off-label uses were intended ones[] for which Xyrem’s labeling failed to provide [the required] directions[,]” as the government argued on appeal?  The former would implicate the First Amendment, but the latter would not.  The Supreme Court has held that “[t]he First Amendment … does not prohibit the evidentiary use of speech to establish the elements of a crime or to prove motive or intent.”  As the Caronia dissent (colorfully) explained, “Abby and Martha [do not have] a First Amendent right to offer arsenic-laced wine to lonely old bachelors with the intent that they drink it. … And any statements Abby or Martha made suggesting their intenteven if all of the statements were truthful and not misleadingwould not be barred from evidence by the First Amendment…”

The majority found that Caronia was convicted for his speech alone, pointing to the lower court’s instructions to the jury and to a number of statements that the government made at trial including “[Caronia] conspired through some act of misbranding, and that act of misbranding … was the promotion on October 26th and November 2nd[,] marketing [a] drug for unapproved uses.”  Caronia’s conviction must therefore be vacated, the majority concluded.  The Food Drug and Cosmetic Act does not “criminaliz[e] the simple promotion of a drug’s off-label use because such a construction would raise First Amendment concerns.”   The majority did not disagree with the general proposition that speech may be used as evidence of intent, and it expressly declined to decide the specific question whether the FDCA violates the First Amendment by “defin[ing] misbranding in terms of whether a drug’s labeling is adequate for its intended use, and permit[ting] the government to prove intended use by reference to promotional statements made by drug manufacturers or their representatives.”  Even if the Second Circuit’s decision stands, then, the government may be able to argue that Caronia is a case about an erroneous jury instruction with limited practical effect

The majority went on to hold that a ban on off-label promotion qua off-label promotionlike the Vermont law barring drug companies from using physician-specific prescribing data to craft physician-specific sales pitches at issue in the Supreme Court’s 2011 decision in Sorrell v. IMS Health (which I discussed on this blog here )is unconstitutional regardless of whether strict or intermediate scrutiny applies.  The majority gave short shrift (no shrift, really) to the argument that the ban on off-label promotion is necessary to preserve the integrity of the FDA’s drug approval process, suggesting that the government could “minimize … manufacturer evasion of the approval process” by imposing “ceilings or caps on off-label prescriptions.”

The majority did not elaborate on how ceilings or caps on off-label prescriptions would work, on the grounds that the First Amendment puts the burden on the government to demonstrate that they would not.  Here, too, there may be an opening for the government, to make a stronger case to the Supreme Court than it did before the Second Circuit (in its briefs or at oral argument ) that ceilings or caps would not be “administrable, feasible, or otherwise effective” and that the ban on off-label promotion therefore provides a direct, narrowly-tailored, and crucial incentive to clinical research into already-approved drugs.  As the dissent suggested, “[a] ceiling on off-label prescriptions would require collecting data from countless numbers of doctors and patients and, given the medical uncertainties involved, could needlessly (and simultaneously) result in the denial of some effective treatments and the overprescription of ineffective and even dangerous ones.”


There was a time in medical science when doctors did not wash their hands prior to operating on their patients (some might say, that to a greater extent than seems possible, this is still the case among medical professionals and point to a number of recent studies as uncomfortable proof). This failure of doctors to wash hands in the medical forum led to the otherwise avoidable death of many of their patients. Up until the mid 1800s, medical science had simply not made the connection between bacteria, transference, infection and death.

Ignaz Semmelweis, a Hungarian physician who was Director of the maternity clinic at the Vienna General Hospital in Austria, made the connection after what is said to have been an extensive statistical analysis in the 1840s, and demonstrated that hand-washing could drastically reduce the number of women dying during childbirth. He introduced a rigorous hand scrubbing protocol and enough women stopped dying to earn him the honorific, “savior of our mothers.”

But as an article from the UK’s Science Museum, Exploring the History of Medicine , points out

Until the late 1800s surgeons did not scrub up before surgery or even wash their hands between patients, causing infections to be transferred from one patient to another. Doctors and medical students routinely moved from dissecting corpses to examining new mothers without first washing their hands, causing death by puerperal or ‘childbed’ fever as a consequence. As  dissection became more important to medical practice in the 1800s, this only increased.

Semmelweis showing again that the common sense of one era is the uncommon brilliance of one bygone.

Which brings us to this latest study/project showing new solutions which decrease the risk of colorectal surgical site infection. According to the Associated Press in an article about the project,

“Almost 2 million health care-related infections occur each year nationwide; more than 90,000 of these are fatal.”


“Infections linked with colorectal surgery are particularly common because intestinal tract bacteria are so abundant.”


According to the press release regarding the Project ,

The participating hospitals were able to reduce superficial incisional SSIs, which affect skin and underlying tissue, by 45 percent and all types of colorectal SSIs by 32 percent. The average length of stay for hospital patients with any type of colorectal SSI decreased from an average of 15 days to 13 days. In comparison, patients with no SSIs had an average length of stay of eight days.

The press release further notes that

Colorectal surgery was identified as the focus of the project because SSIs are disproportionately higher among patients following colorectal surgeries. Colorectal surgery is a common procedure across different types of hospitals, can have significant complications, presents significant opportunities for improvement, and has high variability in performance across hospitals. The project addressed preadmission, preoperative, intraoperative, postoperative and post discharge follow-up processes for all surgical patients undergoing emergency and elective colorectal surgery, with the exception of trauma and transplant patients and patients under the age of 18. Project participants studied the potential factors that contribute to all three types of colorectal SSIs – superficial incisional, deep incisional and organ space SSIs, which affect organs and the space surrounding them.


The AP article:

Solutions included having patients shower with special germ-fighting soap before surgery, and having surgery teams change gowns, gloves and instruments during operations to prevent spreading germs picked up during the procedures.

Some hospitals used special wound-protecting devices on surgery openings to keep intestine germs from reaching the skin.

The average rate of infections linked with colorectal operations at the seven hospitals dropped from about 16% of patients during a 10-month phase when hospitals started adopting changes to almost 11% once all the changes had been made.

The AP article further notes the timely nature of the Project’s benefits:

Besides wanting to keep patients healthy, hospitals have a monetary incentive to prevent these infections. Medicare cuts payments to hospitals that have lots of certain health care-related infections, and those cuts are expected to increase under the new health care law.

Here are some highlights from recent headlines affecting licensing and liability of health care professionals:

  • Professional liability for failing to report child abuse in New Jersey: In L.A. v. Div. of Youth & Family Servcs. , the Appellate Division of the Superior Court of New Jersey held that an emergency room physician must stand trial for medical malpractice because he failed to report to the State that a two year-old child brought to the ER had ingested cologne.   The applicable standard of care is established by N.J.S.A. 9:6-8.10, which requires “[a]ny person having reasonable cause to believe that a child has been subjected to child abuse or acts of child abuse” to report this information to the Division of Child Protection and Permanency (previously DYFS).  Although this statute does not expressly mention neglect, the court held that it “requires the reporting of injuries resulting from conduct that is reckless, or grossly or wantonly negligent, but not conduct that is merely negligent.”  The court further held “that the triggering of the obligation to report, especially in the context of civil litigation involving professional malpractice, does not require the potential reporter to possess the quantum of proof necessary for an administrative or judicial finding of abuse or neglect.  All that is required by N.J.S.A. 9:6-8.10 is ‘reasonable cause to believe.’”   Because the paramount concern is the safety of children, “a physician has ‘reasonable cause to believe’ that there has been abuse if a ‘probable inference’ from the medical and factual information available to the physician is that the child’s condition is the result of child abuse, including ‘reckless’ or ‘wantonly negligent’ conduct or inaction by a parent of caregiver.  The inference need not be the ‘most probable,’ but it must be more than speculation or suspicion.”  The court found that it was a jury question whether the doctor here failed to satisfy this standard of care.  Because there is a jury question as to the doctor’s liability, the court also reversed the dismissal of the plaintiff’s claim against the hospital based on the doctrine of respondeat superior.  As Charles Toutant highlighted  in a recent article in the New Jersey Law Journal, health care professionals need to pay attention to this case.   The court reminded in a footnote that more than professional liability could be at issue because it is a disorderly persons offense under N.J.S.A. 9:6-8.14, 2C:43-8 to fail to make the required report.


  • A supervising doctor in Vermont is not subject to professional discipline based solely on the unprofessional conduct of the physician assistant he supervised: The Vermont Supreme Court in In re Porter , 2012 Vt. 97, held that the state Board of Medical Practice may not find a doctor guilty of unprofessional conduct based only on the unprofessional acts of the physician assistant (PA) whom he supervised where the supervising physician met or exceeded all standards of care.  The PA had admitted that his improper prescribing of opiates constituted professional negligence and unprofessional conduct.  Under Vermont law, “[t]he supervising physician delegating activities to a physician assistant shall be legally liable for such activities of the physician assistant, and the physician assistant shall in this relationship be the physician’s agent” (emphasis added).  26 V.S.A. § 1739.  The Court distinguished “between legal liability, typically at issue in a civil action or for a monetary penalty, and unprofessional conduct at issue in a professional licensing disciplinary proceeding.”  Because the statute references only legal liability, the Court concluded that the statute “encompasses only the concept of civil liability, and does not render a supervising physician vicariously answerable or guilty for the unprofessional acts of his or her PA simply on the basis of their relationship.”  That the statute made the PA the physician’s agent did not change the analysis because “agency theory applies in tort or contract cases, not professional responsibility actions.”
  • Bill to permit advanced practice nurses to prescribe medication without supervision in New Jersey: New Jersey Senator Joseph Vitale introduced S.2354 on November 21 to permit advanced practice nurses (APNs) with more than twenty-four months or 2,400 hours of licensed, active advanced practice experience to prescribe medication without a joint protocol with a physician; reportedly Assemblywoman Nancy Munoz will introduce an Assembly version on December 3. Under current New Jersey law, although APNs may practice independently of physicians, they are only permitted to write prescriptions pursuant to a joint protocol developed with a collaborating physician.  See N.J. Stat. § 45:11-49(b)-(c); N.J.A.C. 13:35-6.6; N.J.A.C. 13:37-8.1.  According to a recent Health Affairs Health Policy Brief , eighteen states and the District of Columbia permit nurse practitioners, which are a type of APN, to prescribe without a doctor’s involvement.  A 2010 report from the Institute of Medicine urged more states to move in this direction.  Although the language of S.2354 is not yet available on the Legislature’s web site , Andrew Kitchenman reports in NJ Spotlight that it would make it easier for APNs to open their own practices.   A study published in the November/December 2012 Annals of Family Medicine predicts that the United States will require nearly 52,000 additional primary care physicians by 2025 while noting that the number of internal medicine residents choosing primary care is decreasing.  Given the existing shortage of primary care providers throughout the country and in New Jersey , which is expected to intensify with Medicaid expansion and increased coverage under the Affordable Care Act, S.2354 could help relieve the primary care supply pressures in New Jersey.   Although this bill circumvents the turf battles between the State Boards of Medical Examiners and Nursing, it is sure to meet substantial pressure from physician groups in the State.   The Health Affairs Health Policy Brief provides helpful context for this important debate.
  • New York begins accepting applications for professional licenses from nonimmigrant aliens: Following the Second Circuit’s decision in Dandamudi v. Tisch , 686 F.3d 66 (Jul. 10, 2012), New York has begun accepting applications for thirteen professional licenses, including medical, podiatric, chiropractic, dental, pharmacy, and veterinary, from applicants who previously were categorically precluded from licensure because they are neither citizens nor legal permanent residents (LPRs).  At issue in Dandamudi was New York’s requirement that pharmacists be citizens or legal permanent residents, which denied licensure to a “subclass of aliens known as nonimmigrants who are lawfully admitted to the United States pursuant to a policy granting those aliens the right to work in this country . . . .”  Because the Circuit in Dandamudi found that these nonimmigrant aliens are a suspect class, “[a]ny discrimination by the state against this group is subject to strict scrutiny review.”  The state had conceded that it lacked any compelling interest in treating this class differently, and thus the court found the New York law violated nonimmigrant aliens’ right to equal protection.  Although limiting its ruling to equal protection grounds, the court also credited Supremacy Clause and preemption concerns with New York’s law because it stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress’ decision to admit these individuals to the country for the express purpose of working in these specialty professions.  In reaching its decision, the Second Circuit expressly refused to follow decisions of the Fifth (see, e.g., Van Staden v. St. Martin , 664 F.3d 56 (5th Cir. 2011)) and Sixth ( LULAC v. Bredesen , 500 F.3d 523 (6th Cir. 2007)) Circuits that required only rational basis review of statutes that treated nonimmigrant aliens differently than citizens or LPRs.  Despite the circuit split created by Dandamudi, the United States Supreme Court on October 1, 2012 denied the petition for certiorari filed in Van Staden.  Although the New York professions web site states that the time to seek a petition for certioriari in Dandamudi has not yet expired, a search of the Supreme Court’s online docket does not reveal that New York has filed a petition within 90 days of the decision or sought an extension of time in which to do so.


Professor John Jacobi published a feature Op-ed in The Record and appeared in NJ Spotlight regarding the implementation of health insurance exchanges in New Jersey. In The Record, Professor Jacobi notes that,

Through exchanges, individuals and small businesses will be able to select insurance coverage armed with easily understood comparators of price, coverage, quality and consumer service. Exchanges will also create a “no wrong door” enrollment system, linking consumers to public programs and subsidies. Recent events have removed the biggest political barriers to the exchanges’ creation.

New Jersey now has a choice: It can create its own exchange, create an exchange in partnership with the federal government or cede responsibility (and authority) for the exchange entirely to the federal government.

New Jersey’s history of health insurance innovation counsels that we create our own exchange, taking advantage of our past innovations and forging our own path for future success.

With the deadline at hand, a temporary reprieve of sorts was granted for states (including New Jersey) which had not yet submitted their letter of intent and application to the federal government to operate their own exchanges. NJ Spotlight notes that,

US Health and Human Services Secretary Kathleen Sebelius wrote that states could submit both a letter of intent and an application to operate their own exchanges by December 14 rather than the original November 16 deadline.

And that:

“[Governor]Christie said on Friday that his decision on whether to have a state-run exchange would hinge on the Obama administration’s answers to Republican governors on exchange costs, according to the Associated Press.

The Republican Governors Association submitted a letter in July with 17 questions about the exchanges and 13 questions about the proposed expansion of Medicaid.

The letter included questions about potential costs of state-federal partnerships; how federally run exchanges will operate; and how the administration plans to pay for exchanges when Republican members of Congress have said they would block funding.

Virginia Gov. Bob McDonnell, the outgoing RGA chairman, reiterated his request for responses to those questions in a letter earlier this month.

Sebelius wrote in her letter that federal officials would be providing more information about the healthcare law “in the coming days and weeks, and our team will do everything possible to answer questions and provide technical assistance to state leaders.”

NJ Spotlight further explained,

Seton Hall University health law professor John V. Jacobi noted that the deadline postponement was in keeping with the federal government’s approach to working with state officials on the healthcare law. McDonnell had asked for a delay in the deadline.

“I think in many states there was a bit of a moratorium as everyone waited to see what was going to happen in the November elections,” Jacobi said, adding that the Obama administration is more focused on “trying to get the reforms moving forward than on having their feelings hurt” by Republican criticism.

Read the feature Op-ed in The Record, “For New Jersey, health insurance exchanges offer opportunity”

Read the NJ Spotlight article, “Federal Responses May Determine Christie Decision on Health Exchanges”

Giovanni Bellini, St. Christopher. Panel of St. Vincent Ferrar Polyptych. c. 1464-68, Church of SS.Giovanni e Paolo, Venice, Italy

In an article out in the American Journal of Obstetrics and Gynecology, the Global Alliance to Prevent Prematurity and Stillbirth (GAPPS)a Gates Foundation-funded initiative of Seattle Children’s Hospital and the University of Washington School of Medicine’s Departments of Global Health and of Obstetrics and Gynecologyreports on its efforts to develop “a research agenda related to pregnancy, childbirth, and early life[.]”  In addition to interviewing scientific thought leaders and convening a “technical team of 13 prominent researchers from multiple disciplines in the developed and developing world,” the GAPPS spoke to “18 representatives of funding organizationsincluding government agencies, global foundations, and other financial partnersto gain a deeper understanding of the current perspectives, attitudes, and commitments of funders toward research on pregnancy, childbirth, and early life.”

The GAPPS’ conversations with funders surfaced a number of challenges to increasing funding, including 1) “a range of understanding of the issues[,]” 2) “varying degrees of interest in the topic[,]” and 3) concern about “the challenges of progress with such a long-term and complex problem.”  The authors, to their credit, do not deny that the question (questions, really) of what causes prematurity, stillbirth, and other pregnancy and early life problems are among the “most difficult … in biomedical research today.”  The authors note that “[d]ifferent biological pathways are involved in the adverse outcomes of pregnancy, and these can be characterized at different biological levels from the genome to the exposome (the combined effects of environmental influences).”

At the level of the exposome, recently-published research by investigators from New Jersey’s own UMDNJ-Robert Wood Johnson Medical School, brings us incrementally closer to understanding the effects of ambient air pollution on stillbirth, while exemplifying the complexity of the science involved.  Ambarina Faiz and colleagues compiled data contained in “New Jersey electronic birth certificate records for live births and fetal death certificates for stillbirths linked to their corresponding hospital delivery discharge records from 1998 to 2004[,]” along with data on air pollutants from 25 New Jersey Department of Environmental Protection monitoring stations.  Their analysis of the data revealed that “[i]ncreased concentrations of ambient air pollutants during pregnancy were associated with increased relative odds of stillbirth after adjustment for known risk factors for stillbirth, mean temperature, and a neighborhood level measure of socioeconomic status.”  Numerous questions remain, though.  The authors call for “molecular studies with specific biomarkers … to define more clearly the roles of specific pollutants and to investigate possible biologic mechanisms that lead to stillbirth.”

Drawing on what it learned from funders, as well as from scientific thought leaders and from the technical team it convened, the GAPPS developed eight recommendations aimed at encouraging such research, with the ultimate goal of “making every pregnancy a healthy pregnancy[.]”  The GAPPS calls for 1) determining and publicizing the true cost of prematurity, stillbirth, and other pregnancy and early life problems, 2) establishing alliances among funders, researchers, and other stakeholders, 3) agreeing on research priorities, and 4) promoting research opportunities, particularly opportunities for “new investigators from multiple disciplines.”  While these are clearly daunting tasks, the authors report that “[s]everal interviewees observed that the Bill and Melinda Gates Foundation has an unparalleled ability to persuade, convene, and organize important players, both nationally and internationally.  In particular, they pointed to the potential for the foundation to move the concept of coordinated funding forward.”  The prospect of a new clarity about research priorities, combined with a coordinated approach to funding, is a hopeful one for all of us since “healthy outcomes in pregnancy benefit everyone, directly and indirectly.”

*I thank Catherine Finizio, the Administrator of Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy, for keeping me focused on this important issue.  (My prior posts are here , here , and here ).  Cathy’s grandson, Colin Joseph Mahoney, was stillborn at 39 weeks gestation on November 10, 2008.

Interesting article in the Washington Post/ Kaiser Health News I stumbled across in our sidebar; it discusses both the cost of addiction, with emphasis given to drugs and alcohol, and the absolute dearth of doctors trained in addiction medicine.

The article states that

“Of the 985,375 practicing physicians in the United States, only about 1,200 are trained in addiction medicine….”

And notes that

A recent comprehensive report by the National Center on Addiction and Substance Abuse (CASA) at Columbia University found that most doctors fail to identify or diagnose substance abuse ‘or know what to do with patients who present with treatable symptoms.’

Which is problematic, given that the report is said to have found that “Only about 10 percent of the 22 million Americans with a drug or alcohol problem receive treatment,” “addiction [including nicotine] is linked to more than 70 diseases or conditions and accounts for a third of inpatient hospital costs. The press release from the report, “Closing the Gap between Science and Practice,” also notes that “Costs to federal, state and local governments amount to 11 percent of total spending; 95 cents of every dollar pay for the consequences and only 2 cents go to prevention and treatment.”

And rather ominously, the WaPo/Kaiser Health News article reports that “The federal Substance Abuse and Mental Health Services Administration estimates that up to a third of the 30 million Americans who may gain health insurance under the Affordable Care Act have a substance abuse or mental health problem.”

There’s some math to be done here regarding costs, and I won’t suggest that I know what percentage the total spending should be for prevention- but I’ll guess that 2% for prevention and treatment is not ideal. And the thought that “most doctors fail to identify or diagnose substance abuse ‘or know what to do with patients who present with treatable symptoms,’” is less than comforting.

But, as someone with a rather large personal stake in all this- in recovery for nearly two decades- what is somewhat comforting is that if, as the report suggests, there is a gap between the science and practice (actually, the more you look, “chasm” seems more fitting a description), a closer look at the science shows some remarkable advances in medical science’s understanding of addiction-especially as it regards the   neurobiological processes , focus on the brain’s “ reward circuitry ,”  neuroadaptations maintained by former drug users long after drug use has stopped, with particular attention on the mesolimbic dopamine system , and, more generally, addiction as a disease of bio-psycho-social etiology .

tara-ragone As this blog has chronicled (see here and here ), New Jersey has begun implementing the 2008 legislation that authorized creation of a Prescription Drug Monitoring Program (“PMP” or “PDMP”).  Although New Jersey’s PMP database has been collecting data for more than a year, the State has not yet issued implementing regulations to flesh out the details of the program beyond what the statute requires, such as the specific information and in what time frames pharmacies must make reports and the scope of interoperability agreements with other States.   The Prescription Drug Monitoring Program Center of Excellence at the Heller School for Social Policy and Management at Brandeis University released “Prescription Drug Monitoring Programs: An Assessment of the Evidence for Best Practices” on September 20, 2012, which provides much for the State to consider as it moves forward.

As its title suggests, this White Paper aims to identify potential PDMP best practices, evaluate the evidence supporting labeling these as best practices, and survey the extent to which PDMPs throughout the country have adopted them.

After tracing PDMP development  from its early roots  in the 1980s and summarizing evidence suggesting that PDMPs are effective in improving the prescribing, and addressing the abuse, of controlled substances, the report identifies thirty-five potential best practices for these programs, including:

1.       Standardizing data fields and formats across PDMPs to improve the comprehensiveness of data, comparability of data across states, and ease of integration with prescription information collected by potential PDMP collaborators, like Medicaid, the Indian Health Service, the Department of Veterans Affairs, and Department of Defense.

2.       Reducing data collection intervals and moving toward real-time data collection to improve the utility of information collected for clinical practice and drug diversion investigations.

3.       Integrating electronic prescribing with PDMP data collection to facilitate communication with electronic prescribers and facilitate monitoring of prescriptions as they are being issued as well as before and after they are dispensed.

4.       Linking records to permit reliable identification of individuals (patients or prescribers), which is necessary for accurate analysis of trends and potential questionable behavior.

5.       Determining validated and standardized criteria for possible questionable activity.

6.       Conducting epidemiological analyses for use in surveillance, early warning, evaluation, and prevention to identify trends in prescribing and questionable behavior, which may inform public health objectives.

7.       Providing continuous online access and automated reports to authorized users to encourage utilization.

8.       Integrating PDMP reports with health information exchanges, electronic health records, and pharmacy dispensing systems to make it more efficient to access data.

9.       Sending unsolicited reports and alerts to appropriate users based on data suggesting potentially questionable activity, such as doctor shopping or inappropriate prescribing.

10.   Enacting and implementing interstate data sharing among PDMPs to address interstate diversion and doctor-shopping.

11.   Securing funding independent of economic downturns, conflicts of interest, public policy changes, and changes in PDMP policies, such as from grants, licensing fees, general revenue, board funds, settlements, insurance fees, private donations, and asset forfeiture funds.

12.   Conducting periodic review of PDMP performance to ensure efficient operations and to identify opportunities for improvement.

The authors noted, however, that good research evidence is not available to support the value of the vast majority of these potential best practices because “research in this area is scarce to nonexistent.”  Thus, they suggested a prioritized research agenda with the goal of strengthening the evidence base for practices they believe have the greatest potential to enhance effectiveness of PMP databases and that can be studied using scientific techniques like randomized controlled trials or observational studies with comparison groups.  Specifically, the report recommends focusing research and development on (a) data collection and data quality; (b) linking records to identify unique individuals; (c) unsolicited reporting and alerts; (d) valid and reliable criteria for questionable activity; (e) medical provider education, enrollment, and use of PDMP data, which includes the question of whether to require providers and dispensers to access the database; and (f) extending PDMP linkages to public health and safety.

With this caveat in mind, the Brandeis report undoubtedly is a valuable resource to policy makers and academics as they consider how to make the most appropriate and efficient use of PMPs.  New Jersey can build on this knowledge base as it decides how to make use of its PMP.  As the White Paper’s laundry list of potential best practices makes clear, the State has a plethora of options to research and consider.  If New Jersey adopts the proposed regulations permitting electronic prescribing of controlled substances, for example, it should consider how it can integrate electronic CDS prescription records with its PMP.  Given the statutory authorization to share data with other States, New Jersey also can learn from the experiences of States that are adopting standardized data formats and implementing interoperability agreements with other States.

The State also should evaluate the evidence that unsolicited reports increase the effectiveness of PMPs and whether legislation and/or regulations would be required to authorize their use in New Jersey.   A related issue is what criteria to adopt to define potentially questionable behavior that would trigger an unsolicited report, which must balance the risks of false negative and false positive reports.

New Jersey also could study the experiences of various states like New York that are requiring certain prescribers and dispensers to register with the State’s PDMP and, in some cases, to check the database before authorizing or dispensing prescriptions for CDS.  A research study underway in Utah may shed some light on whether mandating provider participation in PDMPs improves effectiveness.

In general, the State may wish to research how to strike the appropriate balance between educating prescribers, dispensers, and patients of the risks of prescription abuse and punishing those involved with diversion or abuse.

Because virtually all of these policy choices also involve substantial costs to research and implement, New Jersey might wish to pursue alternative sources of funding, such as grants available through the federal Harold Rogers Prescription Drug Monitoring Program or the National Association of State Controlled Substances Authorities .

kate-greenwood_high-res-2011-comp Recently, the Food and Drug Administration announced that the manufacturer Impax Laboratories has asked the agency to withdraw its approval of a generic version of the antidepressant Wellbutrin XL 300 mg that is manufactured by Impax and marketed by Teva Pharmaceuticals.  A bioequivalence study sponsored by the FDA compared the Impax/Teva 300 mg generic to Wellbutrin XL 300 mg and found that the generic tablets failed to release the medication’s active ingredient into the blood “at the same rate and to the same extent” as the name brand.  While the results of the study only recently became available, the FDA acknowledges that it has been aware of concerns about the Impax/Teva 300 mg generic for over five years.

The Impax/Teva 300 mg generic was approved in 2006 on the basis of a study establishing that Impax’s 150 mg generic was bioequivalent to Wellbutrin XL 150 mg.  The FDA did not require that a bioequivalence study of the 300 mg generic be done, because the 300 mg dose of the drug poses a risk of seizures.  Soon after the Impax/Teva 300 mg generic was approved, the FDA began to receive “reports describing either adverse events or lack of an effect.”  As ABC News reports here , Joe Graedon of the consumer advocacy group the People’s Pharmacy was hearing the same things, and, in 2007, he asked Consumer Lab –according to its website, “the leading provider of independent test results and information to help consumers and healthcare professionals identify the best quality health and nutrition products”–to compare the Impax/Teva generic to its name brand counterpart.

Consumer Lab published an analysis demonstrating that “[i]n the first two hours of a dissolution test, we found [the generic] released 34 percent of the drug, while Wellbutrin released 8 percent” and that “[a]t four hours, the [Impax/]Teva product released nearly half of its ingredients, while original Wellbutrin released 25 percent.”  Consumer Lab’s president explained to ABC that the patent on the extended release technology used in Wellbutrin XL was still in effect when the Impax/Teva generic was approved.  As a result, the generic contained the same medication as the original but used a different (or perhaps no) extended release technology.

The FDA was made aware of Consumer Lab’s results, but declined to act on them.  The agency believed that differences in rate of release were unlikely to be clinically significant because “[t]he antidepressant effect of this drug does not appear for several weeks after initiation of treatment, and the effect is, in large part, related to long-acting metabolites.”  The FDA concluded that “[t]he recurrent nature of [major depressive disorder] offers a scientifically reasonable explanation for the reports of lack of efficacy following a switch to a generic product.”

As the FDA explains in a Questions and Answers document posted to its website, despite its conclusion that the Impax/Teva generic was clinically equivalent to the name brand, in November 2007 the agency “asked Impax/Teva to conduct a study directly on its 300 mg extended-release product to compare its bioequivalence to Wellbutrin XL 300 mg … [in]patients who had reported lack of efficacy after switching from Wellbutrin XL 300 mg to [the Impax/Teva product].”  That study was terminated in late 2011 because “Impax/Teva was unable to recruit a significant number of affected patients to generate the necessary data.”  It was not until 2010 that the FDA decided to sponsor its own bioequivalence study.  That study, of 24 healthy adult volunteers, was not completed until August of this year, because the agency had to “get funding for the study, design[] the study, obtain[] approval from the Institutional Review Board for Protection of Human Subjects, recruit[] and enroll[] healthy volunteers, conduct[] the study, develop[] an analytical method of analyzing the data, and complete[] its analysis of the study data.”

As a result of its experience with the Impax/Teva 300 mg generic, the FDA reports that it “is revising its guidance to industry for how to conduct premarket bioequivalence studies in generic [Wellbutrin] products.”  It will no longer be possible for a company to extrapolate the results of bioequivalence studies done on 150 mg tablets to 300 mg tablets.

One wonders whether there might be other lessons to be learned from the Impax/Teva 300 mg generic experience.  For one, I wonder if the FDA could have–and, if so, if it should have–acted more quickly.  The agency does seem to have taken patients’ complaints about the Impax/Teva tablets seriously.  At the same time, it took six years to withdraw a generic drug that patients complained about immediately upon its approval.   Delays of this sort have the potential to undermine trust in generics generally.

Another potential lesson to be learned from the Impax/Teva 300 mg generic experience is specific to antidepressants.  As Michelle Hottinger and Bryan A. Liang note in their article Deficiencies of the FDA in Evaluating Generic Formulations: Addressing Narrow Therapeutic Index Drugs, which is forthcoming in the American Journal of Law and Medicine, much about antidepressants’ mechanism of action is still not understood, which “may leave some uncertainty as to [their] pharmacokinetics.”  Even where an antidepressant meets the FDA’s bioequivalence standards, Hottinger and Liang write, “therapeutic equivalence is not guaranteed.”  Given this, the FDA might be well-advised to pay heightened attention to adverse event reports about generic antidepressants.

shl-logo1 David W. Barnes

Professor of Law

Free-Riders and Trademark Law’s First Sale Rule ,

27 SANTA CLARA COMPUTER & HIGH TECH. L. J. 457 (2011), selected for inclusion in the 2012 edition of the INTELLECTUAL
PROPERTY LAW REVIEW as one of the best intellectual property articles published in the last year.


L’Ecole Superieure Catholique de Droit de Jérémie,

Haiti, Intellectual Property and Global Public Health

(March 2012)

Prosecutor’s College, New Jersey Attorney General’s

Advocacy Institute with the County Prosecutors’

Association of New Jersey, Computer Crimes Update (September 2011)

Gaia Bernstein
Professor of Law and Margaret Gilhooley Research Fellow


Prohibitions on Gamete Donor Anonymity and their Impact on the

Practice of Surrogacy, IND. HEALTH L. REV. (Symposium)

(forthcoming 2012)

Patent Law, Technological Dissemination and the Forgotten Non-

Creative User , Selected for Plenary Panel Presentation at the 2011

Intellectual Property Law Scholars Conference (August 2011)

Over-Parenting , 44 U.C DAVIS L. REV 1221 (2011) (with Zvi Triger)


American Society of Law, Medicine & Ethics 35th Annual Health

Law Professors Conference, Sandra Day O’Connor School of Law,

Arizona State University, The Impact of Prohibitions on Gamete Donor

Anonymity on the Practice of Surrogacy (June 2012)

PatCon2, Boston College Law School, Incentivizing the Ordinary

User, Plenary Presentation (May 2012)

Fifth Annual Emerging Family Law Scholars and Teachers

Conference, Fordham University School of Law, Intensive

Parenting, Social Networks and Children’s Privacy (May 2012)

Symposium, Imagining The Next Quarter Century of Health Care

Law, IND. HEALTH L. REV., Indiana University, Robert H. McKinney

School of Law, Prohibitions on Gamete Donor Anonymity and their

Impact on the Practice of Surrogacy (April 2012)

Edward D. Manzo Scholars in Patent Law Presentation, DePaul

University College of Law, Incentivizing the Ordinary User

(February 2012)

Faculty Workshop, Pace Law School, Incentivizing the Ordinary User (January 2012)

Second Annual Tri-State Regional Intellectual Property Workshop, Fordham University School of Law, Incentivizing the Ordinary User (January 2012)

Symposium, IP Bullying or Proactive Enforcement?, FORDHAM INTELL. PROP. MEDIA & ENT. L.J., Fordham University School of Law, Incentivizing Ordinary Users (November 2011)

Research Seminar for Future Academics, New York University School of Law, Incentivizing Ordinary Users (November 2011)

International Surrogacy Panel, International Law Association

Meeting, Fordham University School of Law (October 2011)

Faculty Workshop, University of Virginia School of Law, Patent Law,

Technological Dissemination and the Forgotten Non-Creative User

(September 2011)

Symposium, State of the Family, University of Richmond School of

Law, Intensive Parenting, Social Networks and Children’s Privacy

(September 2011)

Intellectual Property Law Scholars Conference, Plenary Panel

Presentation, DePaul University College of Law, Patent Law,

Technological Dissemination and the Forgotten Non-Creative User

(August 2011)

Other News

Elected to the Board of Intellectual Property Section by the
Association of American Law Schools (AALS)

Kathleen M. Boozang

Professor of Law


The New Relator: In-House Counsel and Compliance

Officers , J.H. & LIFE SCIENCES (forthcoming October 2012)

Toward Evidence-Based Conflicts of Interest Training for

Physician-Investigators , J.L. MED. & ETHICS (forthcoming 2012) (with Carl H. Coleman and Kate Greenwood)

An Argument Against Embedding Conflicts of Interest Disclosures in

Informed Consent , 4 J.H. & LIFE SCIENCES 230 (2011) (with Carl H. Coleman and Kate Greenwood)

Responsible Corporate Officer Doctrine: When is Falling Down on the

Job a Crime?, ST. LOUIS U.J. HEALTH L. & POL‘Y (forthcoming 2012)


(Kathleen M. Boozang with Simone Handler-Hutchinson eds., American Health Lawyers Association, 2012)


The Intersecting Worlds of Drug, Device, Biologics, and Health

Law; Food & Drug Law Institute and the American Health Lawyers
Association (AHLA), Washington, D.C, The Newest Compliance

Threats for Life Sciences: Responsible Corporate Officer Doctrine

and Corporate Officers as Relators (May 2012)

Hot Topics in Life Sciences Law, Seton Hall University School of

Law, In-House Counsel, Auditors and Compliance Officers and

Qui Tam Relators (April 2012)

Twenty-Fourth Annual Health Law Symposium: Drugs & Money,

Saint Louis University School of Law, Responsible Corporate Officer

Doctrine: When is Falling Down on the Job a Crime? (March 2012)

Other News

Appointed to the Board of Trustees for the St. Joseph’s Healthcare System

Symposium Co-Organizer (along with Sr. Melanie DiPietro), Is a For-Profit Structure a Viable Alternative for Catholic Health Care Ministry?, Seton Hall University School of Law (March 2012) (Proceedings forthcoming, 2012)

Zack Buck

Visiting Assistant Professor


The Indefinite Quarantine: A Public Health Review of Chronic Inconsistencies in Sexually Violent Predator Statutes , 87 ST. JOHN‘S L. REV. (forthcoming 2013)


The American Society of Law, Medicine & Ethics Health Law Professors Conference, Sandra Day O’Connor College of Law, Arizona State University, Insurance Coverage for Mental Health Services Under the ACA: Essential and Expanding? (June 2012)

Carl H. Coleman

Professor of Law and Director of Global Initiatives



Negri ed., Martinus Nijhoff Publishers, 2012)

The Role of Informed Consent in Tuberculosis Testing and Screening ,

39 EUROPEAN RESPIRATORY JOURNAL, 1057 (2012) (with Michael Selgelid, Andreas Reis, Lee Reichman and Ernesto Jaramillo)

Toward Evidence-Based Conflicts of Interest Training for Physician- Investigators , J. L. MED. & ETHICS (forthcoming 2012) (with Kate Greenwood and Kathleen M. Boozang)


Course Director for World Health Organization Workshop,

Nairobi, Kenya, Developing a Legislative and Regulatory

Framework for Clinical Trials (June 2012)

World Health Organization Workshops on the Ethics of Tuberculosis

Prevention, Care, and Control, Baku, Azerbaijan (December 2011) and Beijing, China (June 2011), Ethical and Legal Aspects of Public Health Measures in TB Care and Control

Università Bocconi, SDA Bocconi School of Management, Milan, Italy, Ethics as a Global Health Challenge (May 2012)

Hot Topics in Life Sciences Law, Seton Hall University School of Law, Proposed Revisions to Common Rule: Implications for Life Science Companies (April 2012)

Executive Course on Intellectual Property, Diplomacy and Global Public Health, co-sponsored by Seton Hall University School of Law and the Graduate School of International and Development Studies, Geneva, Switzerland, Intellectual Property and Global Public Health: Key Concepts and Challenges (February 2012)

European Healthcare Compliance Ethics & Regulation Program, co-sponsored by Seton Hall University School of Law and Sciences Po, Paris, France, Lessons Learned from U.S. Healthcare Fraud and Abuse Enforcement and Compliance Programs (November 2011)

Other News

Rapporteur, joint World Health Organization/University of Paris ethics review of research proposal on fexinidazole as a treatment for late-stage Human African Trypanosomiasis (sleeping sickness) (February 2012)

Drafter, World Health Organization publication, Standards and Operational Guidance for Ethics Review of Health-Related Research with Human Participants
(with Marie-Charlotte Bouesseau, Nancy Kass, Juntra Laothavorn Abha Saxena and Sheryl Vanderpoel) (2011)

Member, Secretary’s Advisory Committee on Human Research Protections (SACHRP), U.S. Department of Health & Human Services (2010-2013)

Margaret Gilhooley

Professor Emerita


Drug User Fee Reform: The Problem of Capture and a Sunset, and the Relevance of Priorities and the Deficit ,41 N.M. L. REV. 327 (2011)

Kate Greenwood

Research Fellow & Lecturer in Law


Toward Evidence-Based Conflicts of Interest Training for Physician-Investigators , J.L. MED. & ETHICS (forthcoming 2012) (with

Kathleen M. Boozang and Carl H. Coleman)

The Affordable Care Act’s Risk Adjustment and Other Risk-Spreading Mechanisms: Needed Support for New Jersey’s Health Insurance Exchange (policy brief issued by the Seton Hall University School of Law, Center for Health & Pharmaceutical Law & Policy for the Rutgers Center for State Health Policy and the New Jersey Department of Banking and Insurance, with funding provided by a grant from the U.S. Department of Health & Human Services) (forthcoming 2012)

Implementing the Patient Protection and Affordable Care Act in New Jersey: The Health Insurance Exchange, the Medicaid Program, and the Apportionment of Responsibility for Determining Eligibility and Effectuating Enrollment (policy brief issued by the Seton Hall University School of Law, Center for Health & Pharmaceutical Law & Policy for the Rutgers Center for State Health Policy and the New Jersey Department of Banking and Insurance, with funding provided by a grant from the U.S. Department of Health & Human Services (forthcoming 2012)

An Argument Against Embedding Conflicts of Interest Disclosures in Informed Consent , 4 J.H. & LIFE SCIENCES 230 (2011) (with Kathleen M. Boozang and Carl H. Coleman)


American Society of Law, Medicine & Ethics 35th Annual Health Law Professors Conference, Sandra Day O’Connor School of Law, Arizona State University, A First Amendment Offensive: An“Emboldened” Drug and Device Industry Attacks the Ban on Off-Label Promotion in Court and Before the FDA (June 2012)

American Society of Law, Medicine & Ethics 35th Annual Health Law Professors Conference, Sandra Day O’Connor School of Law, Arizona State University, Conflicted Physicians: Changing Judicial Conceptions and the Implications for Drug and Device Company Liability (June 2012)

Hot Topics in Life Sciences Law, Seton Hall University School of Law, First Amendment Challenges to the Ban on Off-label Promotion (April 2012)

Media Briefing, Affordable Care Act, Seton Hall University School of Law, Constitutional & Statutory Issues (with John V. Jacobi & Tara Adams Ragone) (March 2012)

The American Society of Law, Medicine & Ethics, Conflicts of Interest in the Practice of Medicine: A National Symposium, University of Pittsburgh, Toward Evidence-Based Conflicts of Interest Compliance Training for Physician-Investigators (October 2011)

John V. Jacobi

Dorothea Dix Professor of Health Law & Policy,

Faculty Director of the Center for Health & Pharmaceutical Law & Policy


High Utilizers of ED Services: Lessons for System Reform , 21 ANNALS OF HEALTH L. (forthcoming 2012)

Health Insurance Exchanges: Governance Issues for New Jersey , policy brief prepared by the Seton Hall University School of Law Center for

Health & Pharmaceutical Law & Policy for the Rutgers Center for State Health Policy and the New Jersey Department of Banking and Insurance, with funding provided by a grant from the U.S. Department of Health & Human Services (2011)


American Society of Law, Medicine & Ethics 35th Annual Health Law Professors Conference, Sandra Day O’Connor School of Law, Arizona State University, All Deliberate Speed: New Jersey and the ACA (June, 2012)

Symposium, Is a For-Profit Structure a Viable Alternative for Catholic Health Care Ministry?, Seton Hall University School of Law, Health Care: Public Good or Private Good? (March 2012) (Proceedings forthcoming, 2012)

Media Briefing, Affordable Care Act, Seton Hall University School of Law,Constitutional & Statutory Issues (with Kate Greenwood & Tara Adams Ragone) (March 2012)

Symposium, Healthcare Reform in the United States: Legal Implications and Policy Considerations, CONN. L. REV., CONN. INS. L.J., University of Connecticut Law School, Health Reform and People with Disabilities (November 2011)

New Jersey Interagency Working Group on the Affordable Care Act, Stakeholder Forum, feature presentation, Health Insurance Exchanges: Governance Issues for New Jersey (November 2011)

Symposium, Implementing the Affordable Care Act: What Role for Accountable Care Organizations?, SETON HALL L. REV. and the Center for Health & Pharmaceutical Law & Policy, Seton Hall University School of Law, Lessons from ACO Implementation in New Jersey (October 2011)

David W. Opderbeck

Academic Director of the Gibbons Institute of Law, Science & Technology and Professor of Law


Cybersecurity and Executive Power , 89 WASHINGTON L. REV. 795 (2012)


Gibbons Institute of Law, Science & Technology, Newark, New Jersey, Moderator, Patent Litigation at the ITC (April 2012)

U.S. Military Academy, West Point, Cybersecurity, Cyberwar, and Civil Liberties (April 2012) Petrie-Flom Health Law Center Colloquium, Harvard University

School of Law, From Transparency to Intelligibility, Health Information Technology’s Role in Health Reform (March 2012)

New Jersey Prosecutors’ Cybersecurity Law Roundtable, New Brunswick, New Jersey (February 2012)

Conference, The Competing Claims of Law and Religion, Pepperdine

University School of Law, Intellectual Property and the Metaphysics

of Social Relations (February 2012)

New Jersey Public Defenders, Continuing Legal Education, Trenton,

New Jersey, Cybersecurity and Computer Crimes Update (January 2012)

Conference, Radical Emancipation, Notre Dame Center for Ethics and

Culture, University of Notre Dame, Law, Neurobiology, and the Soul

(November 2011)

Symposium, Counter-Terrorism, New Jersey Institute of Technology

and New Jersey Marine Corps Reserve Association, Newark, New

Jersey, Cyberterrorism and Computer Crimes (November 2011)

Program, Think Like a Lawyer, Ask Questions Like a Geek, Practicing

Law Institute, New York, New York, Hackers (With Tim Ryan, F.B.I.)

(November 2011)

Prosecutor’s College, New Jersey Attorney General’s Advocacy Institute

with the County Prosecutors’ Association of New Jersey, Computer Crimes Update (September 2011) 

Jordan Paradise

Associate Professor of Law


Synthetic Biology: Does Re-Writing Nature Require Re-Writing Regulation? , 117 PENN. STATE L. REV. (forthcoming 2012) (with Ethan Fitzpatrick)

Reassessing ‘Safety’ for Nanotechnology Combination Products: What Do ‘Biosimilars’ Add to Regulatory Challenges for the FDA? , 56 ST. LOUIS U. L.J. 1 (2012)

Claiming Nanotechnology: Improving USPTO Efforts at Classification of Emerging Nano-Enabled Pharmaceutical Technologies , 10(3) NW. J. TECH. & INTELL. PROP. 169 (2012)

The Devil is in the Details: Health Care Reform, Biosimilars, and Implementation Challenges for the Food and Drug Administration , 51 JURIMETRICS J. 279 (2011)

Follow-On Biologics: Implementation Challenges and Opportunities ,

41 SETON HALL L. REV. 501 (2011)


American Society of Law, Medicine & Ethics 35th Annual Health Law Professors Conference, Sandra Day O’Connor School of Law, Arizona State University, Synthetic Biology: Does Re-Writing Nature Require Re-Writing Regulation? (June 2012)

Food & Drug Law Institute, 55th Annual Conference, Washington, D.C., Moderator, Developments in the Center for Biologics Evaluation and Research (April 2012)

J. Craig Venter Institute, Rockville, Maryland, Assessing FDA Regulation of New Drugs, Animal Drugs, and Cosmetics as Applied to Microbes Modified Using Synthetic Biology (January 2012)

Third Annual Pharmaceutical Reimbursement & Market Access Conference, Philadelphia, Pennsylvania, The Devil is in the Details: Health Care Reform, Biosimilars, and Implementation Challenges for the Food and Drug Administration (October 2011) 

Other News

Elected as Chair of the Food & Drug Law Institute’s Academic Committee for 2012-2013

Frank Pasquale

Schering-Plough Professor in Health Care Regulation and Enforcement


Practical Privacy: Rethinking the Collection, Analysis, and Use of

Health-Inflected Social Network Data, in GOVERNANCE OF SOCIAL

MEDIA (J. Obar, ed., forthcoming, 2013)

Accountable Care Organizations in the Affordable Care Act,

42 SETON HALL L. REV. (forthcoming 2012) (invited piece, Symposium)

The Hippocratic Math: How Much Should Society Spend on Health Care?


Joining or Changing the Conversation? Catholic Social Thought and Intellectual Property , 29 CARDOZO J. A. & L. (2011)

Network Accountability for the Domestic Intelligence Apparatus ,

62 HASTINGS L.J. 1441 (2011) (with Danielle Citron)

Review of John Culhane, ed., Reconsidering Law & Policy Debates: A Public Health Perspective , at Health Reform Watch (2011)

Review of Amy Kapczynski and Gaelle Krikorian, eds., Access to

Knowledge in the Age of Intellectual Property (Zone Books, 2010),

at Concurring Opinions


Harvard-Georgetown Market Democracy Working Group, Georgetown University, Equal Surveillance Under Law (July 2012)

Future of Health Privacy Summit, Plenary Session, Georgetown University School of Law, From Medical Record to Medical Reputation (June 2012)

AALS Midyear Session, U.C. Berkeley Law School, Social Network Privacy Law Update (June 2012)

George Mason Law School, Antitrust in High Tech Network Industries: three different talks on privacy, remedies, and market definition (November 2011, and January and May 2012)

ABA Section on Administrative Law and Regulatory Practice, Spring Conference, The Administrative Agency in an Electronic Age, Princeton University, Regulating “Big Data” (April 2012)

Petrie-Flom Health Law Center Colloquium, Harvard University School of Law, From Transparency to Intelligibility: Rethinking Disclosure in Health and Finance Reform (March 2012)

Interdisciplinary Colloquium on Law, Medicine and Public Health, Columbia University, Rethinking Health Care as an Information Industry (March 2012)

The CFPB After a Year, BROOK. J. CORP. FIN. & COM. L., Brooklyn

Law School (February 2012)

Legal Theory Workshop, University of Miami School of Law, Protecting Consumer Reputations in an Era of Pervasive Surveillance and Secret Analytics (February 2012)

Panel, Co-Chair, Pharmacogenomics, Privacy, and Innovation, as Chair of AALS Section on Defamation and Privacy, AALS Annual Conference, Washington, D.C. (January 2012)

ABA Antitrust Section, Committee on Unilateral Conduct, Unilateral Conduct in High Tech Network Industries (October 2011)

Senior Faculty Reviewer, St. Louis Law School Health Law Scholars Workshop (September 2011)

Tara Adams Ragone

Research Fellow & Lecturer in Law


Structuring Medicaid Accountable Care Organizations to Avoid Antitrust

Challenges , 42 SETON HALL L. REV. (forthcoming 2012) (invited piece, Symposium)

The Affordable Care Act and Medical Loss Ratios: Federal and State

Methodologies , Issue Brief prepared by the Seton Hall University School of Law, Center for Health & Pharmaceutical Law & Policy for the Rutgers Center for State Health Policy and the New Jersey Department of Banking and Insurance, with funding provided by a grant from the U.S. Department of Health & Human Services (forthcoming 2012)

Evaluating Federal and New Jersey Regulation of Rating Factors and Rate

Bands , prepared by the Seton Hall University School of Law, Center for Health & Pharmaceutical Law & Policy for the Rutgers Center for State Health Policy and the New Jersey Department of Banking and Insurance, with funding provided by a grant from the U.S. Department of Health & Human Services (forthcoming 2012)


P.I.C.O. New Jersey, Panelist, Exploring the Legal Hurdles of Coordinating Care, One Year Later: The New Jersey Medicaid Accountable Care Organization Demonstration Project (August 2012)

New Jersey Attorney General’s Advocacy Institute, Legal Ethics for the Health Care Lawyer (February 2012 and June 2012) (with Kim Ringler, Esq.)

Media Briefing, Affordable Care Act, Seton Hall University School of Law, Constitutional & Statutory Issues (with Kate Greenwood & John V. Jacobi) (March 2012)

Symposium, Health & Hospital Law, New Jersey Bar Association, Legal Ethics for the Health Care Lawyer (November 2011) (with Kim Ringler, Esq.)

Symposium, Implementing the Affordable Care Act: What Role for Accountable Care Organizations?, SETON HALL L. REV. and the Center for Health & Pharmaceutical Law & Policy, Seton Hall University School of Law, The Role of Competition in Integrated

Delivery: ACO’s, Federal and State Antitrust Law, the State Action Doctrine, and Clinical Integration (October 2011)

Edward Hartnett

Richard J. Hughes Professor of Law


Facial and As-Applied Challenges to the Individual Mandate of the Patient Protection and the Affordable Care Act ,46 RICHMOND L. REV. 745 (2012)

Marina Lao

Professor of Law


The Perfect is the Enemy of the Good: The Antitrust Objections to the Google Books Settlement , 78 ANTITRUST L. J. 201 (2012)

pasquale_frank_lg11 Last week, the blog Concurring Opinions featured a  symposium on Madhavi Sunder’s new book, From Goods to a Good Life: Intellectual Property and Global Justice. A chapter relevant to health law scholars is available online,  here .  The chapter focuses on access to drugs in less developed countries (LDCs), and makes the following case:

Not too long ago, an HIV-positive diagnosis was tantamount to a death sentence for people in the East and the West, in the South and the North. The drug companies that perfected the antiretroviral therapies invested princely sums to find these miracle cures. To justify their investment, they rely on the promise of a patent . . . . Thus patents have saved countless lives. But this structure has its limits. Indeed, the evidence is mounting that in crucial ways patents fail to promote the health of people in the developing world, and in some cases in the developed world as well.

The chapter begins by telling the moving story of  Thembisa Mkhosana , one of thousands of South Africans who cannot afford the  third-line antiretroviral treatments needed to survive AIDS.   “My blood test results have worsened dramatically,” Mkhosana told a reporter, “And now I suddenly have fever and am in pain. I’m really worried.”  ”I know that I’m going to die,” she said, but “who is going to look after my children?”  Her story appears in .

Mkhosana’s plight raises difficult interpretive issues.  Is she “collateral damage” from a patent system that depends on the strict rules that deny her access to the medicine she needs? Or is this an entirely avoidable tragedy, a consequence of misapplied and misinterpreted laws?  Sunder makes the case for the latter view very convincingly, while providing a compact and accessible account of the development of international patent policy over the past 20 years.

On the other hand, Big Pharma has a number of justifications and excuses for aggressive assertion of their patents. Spokesmen aver that they are only concerned about what would happen to their profit margins if drugs circulated in an uncontrolled manner. They claim that, if poor countries are permitted to manufacture vast quantities of their drugs, those countries may sell them on the black or grey markets. That, in turn, would reduce the return on such drugs in the developed world, leaving less money for research in the future. Sunder responds that, “The grey-markets concern is a valid onebut . . .the World Trade Organization has begun to craft creative solutions to this problem (requiring generic drugs made for developing world markets to be distinctively labeled, for example).”  As surveillance of both people and goods is better perfected by state security apparatuses and RFID technology, the grey market concern should also become more technologically manageable, enabling finer-grained and more effective price discrimination.

Access to drugs is a key area where ordinary markets simply can’t be expected to achieve humane and rational results.  In 2008, the purchasing power of the  average American dog was higher than that of forty percent of the world’s population. Given the  extensive extant involvement of the U.S. government both in the domestic pharmaceutical industry and in the international negotiations determining its powers and duties abroad, there is a special  moral obligation for U.S. citizens and politicians to assure the widespread and equitable distribution of lifesaving drugs. As Sunder states:

Economists call the millions of people who need a drug but cannot afford it “dead weight loss.” But the millions who die needlessly because of the patent systema number that some scholars calculate as nine million in the developing world annuallyare more than an inefficiency in the system. . . . We must both adopt alternative mechanisms for developing and distributing medicines to the poor (including prizes), and fully support the use of  compulsory licenses by developing countries to treat their sick poor. Patent law cannot draw the line at rectifying market failure. Our law must contend with moral failure as well.

Sunder’s eloquent case for access to drugs commends respect and admiration for the  Health Impact Fund , Knowledge Ecology International, Medecins sans Frontieres, and  other groups for trying to close this gap.

X-Posted at  Bill of Health .

kate-greenwood_high-res-2011-comp1 Since September is National Childhood Cancer Awareness Month –a calendar of events can be found here – a review of relevant recent and pending federal legislation seemed appropriate.  The Food and Drug Administration Safety and Innovation Act (FDASIA), which the President signed into law on July 9, 2012, included a number of provisions that it is hoped will speed development of drugs to treat childhood cancers and other rare diseases.  As Peter L. Saltonstall, who heads up the National Organization for Rare Disorders (NORD), explains here , the central purpose of the FDASIA was to reauthorize the Prescription Drug User Fee Act, but several separately-introduced bills “of particular importance to rare disease patients and supported by NORD” were incorporated into it.  These included the Creating Hope Act , which was powerfully advocated for by Kids v Cancer and the bi-partisan Congressional Childhood Cancer Caucus .

The Creating Hope Act expands the FDA’s priority review voucher (PRV) program– which was passed to incentivize the development of treatments for neglected tropical diseases, malaria, and tuberculosis– to cover rare pediatric diseases, including childhood cancers.  Under the program, “[t]he [FDA] shall award a priority review voucher to the sponsor of a rare pediatric disease product application upon approval by the [FDA] of such rare pediatric disease application.”  The fully-transferable voucher can be redeemed for review of–and action on–another new drug application within just six months.  In an influential 2006 article in Health Affairs, David Ridley and colleagues estimated that if a “voucher speeds FDA approval by a year, it could increase the present value of sales of a blockbuster drug by more than $300 million.”

While a voucher worth as much as $300 million would seem to add up to an attractive “pull” mechanism , the PRV program for neglected tropical diseases has, unfortunately, not lived up to expectations.  Only one company, Novartis, has received a PRV, for an anti-malaria drug which was already approved and marketed outside the United States.  Writing at The Incidental Economist earlier this year, Kevin Outterson characterized the PRV program as “unsuccessful” and its extension to rare pediatric diseases as “disappointing.”  More promising, Professor Outterson suggests, are “push” mechanisms like the Innovative Medicines Initiative (IMI) in Europe, described here , which will, among other things, funnel $738 million to antibiotics researchers between now and 2020, with the initial goals of “building and training networks of researchers, facilitating and increasing the exchange of research data, and improving the efficiency of clinical trials on new antibiotics through better laboratory tests and better trial design” and the long-term goal of “speed[ing] up the development of much-needed antimicrobial drugs.”  Notably, the IMI was established with $1.23 billion of European Union funds and an impressive $1.23 billion of “mainly in kind contributions (consisting mostly of research activities)” from the European Federation of Pharmaceutical Industries.

The National Pediatric Research Network Act of 2012 , which is currently pending in the House and Senate, bears some similarities to the IMI’s antimicrobial drug development effort.  The Act would appropriate government funds to support the establishment and operation of a network of pediatric research consortia that would conduct “basic, clinical, behavioral, or translational research to meet unmet needs for pediatric research” and “train[] researchers in pediatric research techniques.”  The Act provides that “an appropriate number of such awards” must be awarded to consortia that, among other things, agree to “conduct or coordinate one or more multisite clinical trials of therapies for, or approaches to, the prevention, diagnosis, or treatment of one or more pediatric rare diseases or conditions[.]”

Childhood cancers are not specifically mentioned in the text of the National Pediatric Research Network Act, however, and, should it pass, the Network it establishes is likely to focus on other rare pediatric diseases.  An existing network , the Children’s Oncology Group (COG), which is principally supported by the National Cancer Institute, “unites more than 8,000 experts in childhood cancer at more than 200 leading children’s hospitals, universities, and cancer centers across North America, Australia, New Zealand, and Europe in the fight against childhood cancer.”  COG “has nearly 100 active clinical trials open at any given time … include[ing] front-line treatment for many types of childhood cancers, studies aimed at determining the underlying biology of these diseases, and trials involving new and emerging treatments, supportive care, and survivorship.”  The existence and success of COG it’s “research has turned children’s cancer from a virtually incurable disease 50 years ago to one with a combined 5-year survival rate of 80% today,” although it has suffered from budget cuts in recent years–likely explains why advocates have turned their attention to pull mechanisms like the Creating Hope Act that build on existing incentives aimed at increasing industry investment in drug research.

Another model for increasing industry involvement is to require it.  This could perhaps be described as a strong pull mechanism.  The Pediatric Research Equity Act (PREA) takes this approach, requiring, with some exceptions, that a sponsor of a new drug application study that drug in children.  FDASIA, as the FDA summarizes here , makes PREA “permanent no longer subject to reauthorization every five years[,] … requires earlier pediatric study plan submission by drug manufacturers subject to PREA and gives FDA new authority to help ensure PREA requirements are addressed in a more timely fashion.”  PREA, though, has not worked to generate research into pediatric cancer treatments, and the FDASIA reforms will not change that.  In remarks delivered at the 2nd Annual Childhood Cancer Summit in September 2011, Dr. Peter Adamson, the Chair of the Children’s Oncology Group, explained that an exception to PREA’s requirements “can be granted for most new cancer drugs, as the common cancers observed in adults essentially do not occur in children.”

Of course, industry involvement could increase though profit-driven activity without additional pushes or pulls from government.  Childhood cancers have not, thus far, been an industry focus.  In the past twenty years, the FDA has approved just two drugs, clofarabine and erwinaze , to treat pediatric-specific cancers.  It was not until this past August that the agency approved the first “pediatric-specific dosage form” of a cancer-fighting drug, everolimus .  A story reported in Fortune’s September 3, 2012 issue entitled Rare Diseases Mean Big Profits (an online version is available here ), suggests that there may be hope that the pace of development will accelerate.  According to Fortune:

Wall Street skews bullish on Alexion[, a specialty pharmaceutical company that developed and sells the drug Soliris which is used to treat two rare disorders,] and its peers in the ultra-rare-disease market.  With Pfizer and other big pharma companies facing devastating revenue drops as blockbuster drugs like Lipitor go off patent, niche players like Alexion look good because of their monopoly pricing power.

Soliris, Fortune reports, costs “around $400,000 per patient per year.”  There may be, then, cause for hope that in the coming years the private sector will increase its investment in the surpassingly important search for treatments for childhood cancers and other rare pediatric diseases.  I welcome your thoughts.

asbestos Two weeks ago, New York City held the 11th annual name-reading ceremony for the victims who died in the collapse of the towers on September 11, 2001. Missing from the ceremony, however, were the names of victims who died years after the attacks.  Since 9/11, a multitude of ground zero workers, first responders, and inhabitants of Lower Manhattan have been diagnosed with a variety of diseases, including cancer and mesothelioma, believed due, and now presumed to be due, to exposure to toxic dust. Some have died from their illness, some survived, and some are yet to be diagnosed.

On 9/11, people from all over the nation rushed to New York City to help with search and rescue.  After the search and rescue mission ended, workers were hired to clean up and dispose of the rubble. Since the twin towers were constructed during the 1970s, there was an obvious concern that asbestos used to insulate the buildings, not banned at the time of construction, would pose major health and air quality concerns .

Former New Jersey Governor Christine Todd Whitman and then administrative head of the EPA assured the public that there was no need for alarm.  After reviewing scientific data, Whitman issued a statement on September 18, 2001 declaring the area safe for workers and nearby inhabitants. In a press release , EPA Administrator Whitman stated,

“‘We are very encouraged that the results from our monitoring of air-quality and drinking-water conditions in both New York and near the Pentagon show that the public in these areas is not being exposed to excessive levels of asbestos or other harmful substances,’ [...] ‘Given the scope of the tragedy from last week, I am glad to reassure the people of New York . . . that their air is safe to breathe and the water is safe to drink.’”

The credibility of this data was later called into question. In 2006, senior EPA scientist Dr. Cate Jenkins addressed a letter to members of the New York Congressional delegation stating,

“[T]est reports in 2002 and 2003 distorted the alkalinity, or pH level, of the dust released when the twin towers collapsed, downplaying its danger. [...] The test results helped the E.P.A. avoid legal liability. [... and] had a costly health effect, contributing ‘to emergency personnel and citizens not taking adequate precautions to prevent exposures.’”

During a June 2007 Congressional hearing , former Governor Whitman received harsh criticism for her statements assuring ground zero workers and Lower Manhattan inhabitants of safe air quality.  When pressed to acknowledge that the toxic dust from the collapsed buildings contributed to illness, she declined. Whitman stated that a lack of conclusive evidence existed “linking the dust to disease.” She denied any presence of pressure placed on her to report the air safe in order to quickly reopen the financial district.  She also expressed no regret for her statements in 2001.

Victims of ground zero exposure brought multiple lawsuits against Christine Todd Whitman, however; the Second Circuit Court of Appeals found that Whitman could not be held liable .

In January 2011, President Barack Obama signed into law the Zadroga Act, which expanded the September 11th Victim’s Compensation Fund to include ground zero workers who died from cancer or respiratory diseases, “ under the presumption that the cause was due to exposure during recovery efforts.” The act “ sets aside money for medical care and $2.775 billion dollars to compensate claimants for lost wages and other damages related to the illnesses.”

Although initially excluded from the Act, the Act was amended to include cancer to the list of ground zero diseases, acknowledging a link between ground zero air and cancer. To date, 50 types of cancers will be covered.  Noah Kushlefsky, an attorney representing 3,800 ground zero victims, foresees that with the addition of cancer, the $2.775 billion will be exhausted before all the victims receive adequate compensation. The addition of numerous cancers to be covered by the Act comes on the heels of Congressional attempts to reduce the deficit. The Zadroga Act faces $300 million in cuts.

The FealGood Foundation , an organization dedicated to supporting the health and welfare of 9/11 first responders, compiled a list of known first responders with cancer and those who died from cancer on their website. Ground zero victims and their families are now seeking legal representation in order to access the victim’s fund.

jost On September 19, the Oklahoma attorney general Scott Pruitt filed an amended complaint in Oklahoma v. Sebelius asking the court to decide that the IRS rule permitting federally facilitated exchanges to issue premium tax credits is illegal.  While this case will almost certainly be dismissed for lack of standing, this issue is unlikely to go away.  Reproduced below is testimony I recently submitted to a House Committee explaining why the IRS rule should in fact be sustained.

The Internal Revenue Service’s Implementation and Administration of the Democrat’s Health Care Law

Testimony of Timothy Stoltzfus Jost

In a little more than a year, millions of uninsured Americans will begin enrolling in health insurance plans through the American Health Benefits Exchanges.  These Americans– your constituents– will be able to purchase health insurance because of the availability of premium tax credits.  At this point, it appears that many states are choosing not to create their own exchanges in 2014, but rather to have their citizens purchase health insurance through federally facilitated exchanges.  It is essential that these uninsured Americans be able to receive premium tax credits through these federal exchanges. My testimony addresses the provisions of the Affordable Care Act that will make it possible for this to happen.

My name is Timothy Stoltzfus Jost and I am a law professor at Washington and Lee University.  I am also a consumer representative to the National Association of Insurance Commissioners and an elected member of the Institute of Medicine. I have written extensively about the Affordable Care Act, and blog regularly about Affordable Care Act implementation at

My remarks today address assertions by Michael Cannon of the CATO institute that the Department of the Treasury’s rule providing for the federal exchange to issue tax credits is not authorized by the Affordable Care Act. This assertion has been widely publicized and seems to be causing confusion among state lawmakers.   Mr. Cannon’s position, however, is based on a misunderstanding of the law, its structure, and history, as I will explain.

The Affordable Care Act  Exchanges and Premium Tax Credits

To understand this issue it is necessary to understand the role of the exchange in the Affordable Care Act.  The American Health Benefits Exchange is fundamentally a market in which health insurance is bought and sold.  The exchange is also responsible for ensuring that insurers who sell their products through the exchange meet certain minimum standards to ensure that individuals and small employers who purchase in the exchange are getting value for their dollar.  Finally, the exchange is the gateway to federal premium tax credits, Medicaid, and other assistance programs for those unable to afford health insurance.  The exchange concept has until very recently enjoyed broad bipartisan support as a tool for making private sector health insurance widely available and affordable to Americans.  Indeed, Congressman and Vice President nominee Paul Ryan’s Roadmap for America includes health insurance exchanges.

Section 1311 of the Affordable Care Act asks the states to establish American Health Benefits Exchanges.  The federal government cannot order a state to operate a federal regulatory program, so section 1321 of the ACA authorizes the Secretary of Health and Human Services to establish a federally facilitated exchange in states that choose not to establish their own exchange.

Mr. Cannon takes the position that federal exchanges cannot offer premium tax credits.  He bases this opinion on two subsections of section 36B of the Internal Revenue Code (created by section 1401 of the ACA), which provides for tax credits to help middle-income Americans afford health insurance.  In defining the premium tax credit amount and the coverage months for which it is available, sections 36B(b)(2) and 36B(c)(2)(A) refer to persons “enrolled in [a qualified health plan] through an Exchange established by the State under section 1311.”  Mr. Cannon argues that this language precludes premium tax credits being issued through the exchanges operated in the states by the federal government.  If this is true, it is likely that many–perhaps most–Americans will be denied access to an important middle-class tax benefit in 2014, as it now appears that many states will, at least initially, have federally facilitated exchanges.

In a recent article, Mr. Cannon, together with Professor Jonathan Adler of Case Western University, claims that this language is not only unambiguous but also intentional, that Congress intended to punish states that refused to establish exchanges by refusing premium tax credits to their residents. [1] Cannon and Adler further claim that final rules promulgated by the IRS making premium tax credits available through federal as well as state exchanges are unauthorized by law, and thus illegal.

If this claim is true, uninsured constituents of members of this committee stand to lose billions of dollars in federal tax relief that would have assisted them in purchasing health insurance.

The Affordable Care Act Explicitly Authorizes Federal Exchanges to Provide Premium Tax Credits

Fortunately for your constituents, Mr. Cannon’s claims are simply not true. If the sections that he cites were the only relevant sections of the Affordable Care Act, and if the legislative history and structure of the ACA could be simply ignored, his statutory construction claim would be plausible.  But the availability of tax credits through federally facilitated exchanges is recognized through the language of the ACA itself.  Moreover, the legislative history of the ACA also establishes that Congress understood that premium tax credits would be available through both federal and state exchanges.   The IRS is explicitly authorized by Congress to interpret the statute and its interpretation of the law will be given deference by the courts.  The existence of exchanges in every state was assumed both by the Congressional Budget Office and by both proponents and opponents of the ACA as it was being debated.  Finally, the structure and purpose of the ACA requires that state or federal exchanges offer premium tax credits in every state.

I begin with the language of the ACA itself.  The term “exchange” is a defined term under the ACA, a point that Mr. Cannon does not mention in his article but that would surely be paid great attention by the courts.  Section 1563(b) of the ACA states: “The term ‘Exchange’ means an American Health Benefit Exchange established under section 1311 of the Patient Protection and Affordable Care Act.”   Section 1311 literally requires that the states “shall” establish an American Health Benefits Exchange by January 1, 2014.  Because the Constitution prohibits the federal government from literally requiring states to establish exchanges,  however, section 1321(c), provides that “the [HHS] Secretary shall (directly or through agreement with a not-for-profit entity) establish and operate such Exchange within the State.”  Under the ACA’s definition of exchange, the term “Exchange” in section 1321 means a section 1311 exchange.  This is reinforced by section 1321 itself, in which the term “such Exchange,” refers to the “required exchange” mentioned in section 1321(c)(1)(B)(i), which is to say the 1311 exchange.  When section 1321 directs HHS to establish an “Exchange,” therefore, it means to establish a section 1311 exchange, which section 36B authorizes to provide premium tax credits.  Moreover, section 1311(d)(1) defines an exchange as an exchange established by the state, therefore by definition a section 1321 federally facilitated exchange is an exchange established by a state under section 1311.

Section 36B is not the only section of the ACA that imposes duties on the state and federal exchanges relevant to premium tax credits.  Section 1311(d)(4)(G) requires exchanges to provide their enrollees with premium calculators that include a deduction for premium tax credits.  Section 1311(d)(4)(I), requires exchanges to forward to the IRS information about enrollees who are eligible for premium subsidies.  Section 1311(d)(4)(J), requires an exchange to notify employers if their employees are receiving premium tax credits.  Finally, section 1413 requires state and federal exchanges to use streamlined applications and eligibility assessments to help people qualify for “health subsidy programs,” which programs specifically include premium tax credits, see section 1413(e)(1).  All of these sections apply to federal as well as state exchanges.

Most importantly, a third subsection of section 36B itself clarifies that premium tax credits are available through both state and federal exchanges.  The ACA is composed of the Senate version of the Patient Protection and Affordable Care Act, Public Law 111-148, and the Health Care and Education Reconciliation Act, Public Law 111-152. The Senate adopted the bill that became Public Law 111-148 in December of 2009, but the House adopted it only in March of 2010.  Shortly thereafter, the House and Senate adopted HCERA, through which the House made certain changes in the Senate bill.  As a later-adopted statute, HCERA takes precedence over that of the PPACA, if there is a contradiction.  Moreover, since the adoption of HCERA was necessary to secure House adoption of the Senate bill, it is doubly important that the provisions of HCERA be taken seriously. The House bill contained only a federal exchange.  Section 1004 of HCERA adds to IRC section 36B, subsection 36B(f)(3) which requires both 1311 and 1321 exchanges to  provide certain information regarding premium tax credits to the IRS and to taxpayers.  Cannon and Adler admit the existence of this provision but simply say it is meaningless, as 1321 exchanges cannot authorize premium tax credits.  This position, however, violates another canon of statutory construction–that every provision of a congressional enactment should be given effect.

It should be noted that several other sections of the ACA use the language on which Mr. Cannon relies–”an Exchange established by the State under section 1311.”  One of them is section 2001, which prohibits states from reducing Medicaid eligibility until an exchange “Established by the State under section 1311 is operational.”  If Mr. Cannon’s interpretation of the ACA is correct, states that decide not to establish a state exchange will be barred indefinitely from changing their Medicaid eligibility requirements.  But this is not what the law means.

The Affordable Care Act’s Legislative History also establishes that Federal Exchanges can offer Premium Tax Credits

Mr. Cannon’s interpretation of the ACA is also refuted by the legislative history of the ACA.  The Senate bill which became the ACA was derived from the S 1679, [2] the Senate Health, Education, Labor and Pensions Committee bill and S 1796 [3] which emerged later from the Senate Finance Committee.  Each of these bills included state and federal exchanges, which were called Gateways in the HELP bill.

The HELP bill (section 142, adding section 3104 of the Public Health Services Act) created an elaborate structure under which states could either establish exchanges themselves (“establishing states”), request the federal government to establish an exchange in the states (“participating states”), or fail to do either, in which case four years after the enactment of the statue the federal government would create a fallback exchange in the state.  Premium tax credits were available in establishing and participating states, but would only be available through the federal fallback exchanges in states that complied with the employer responsibility provisions for state and local employees.  In other words, the states were threatened with loss of premium tax credits, not for failing to establish exchanges but for not complying with the employer responsibility provisions for their employees.

The Finance Committee bill did not use this elaborate structure.  In fact, the rules it creates are very similar to the final ACA.  It creates section 2235 of the Social Security Act, which provides that states “shall” establish an exchange, and sets out the duties of the exchange.  Section 2225(b) provides, in language very similar to current ACA section 1321, that HHS shall contract with a nongovernmental entity to operate an exchange in states that fail to “establish and operate” an exchange in states that fail to create one within 24 months. The Finance Committee Report [4] refers to these federally established exchanges as “state exchanges.”   In a number of places, including the precursor of the current premium tax credit provision, the bill refers to exchanges “established by the state,” but nowhere does it provide, as did the HELP bill, that premium tax credits would not be available in the any of the exchanges created by the federal government.

The provisions of the current ACA addressing this issue are taken largely from the Finance Committee bill, which makes sense because the Finance Committee has jurisdiction over tax matters.  The punitive provisions of the HELP bill were abandoned.

The Senate debated the ACA extensively during November and December 2009.  The version of the Act they were considering included both state and federal Exchanges.  Throughout the debate, Senators assumed that tax credits would be available in all 50 states.  Thus Senator Bingaman stated on December 4, 2009, that the ACA “includes creation of a new health insurance exchange in each State which will provide Americans a centralized source of meaningful private insurance as well as refundable premium tax credits to ensure that coverage is affordable.” [5] Senator Johnson stated on December 17, “the legislation will also form health insurance exchanges in every State,” which will “provide tax credits to significantly reduce the cost of purchasing that [insurance] coverage.” [6]

If Congress had meant to limit premium subsidies to state-established exchanges, as an incentive to States, one would have expected the Finance Committee report on S. 1796  to have mentioned this, and for at least one Senator to have pointed this out during the debate in November and December 2009.

Most importantly, the Congressional Budget Office (together with the Joint Committee on Taxation)  provided Congress on November 30, 2009, with an analysis of the impact of the legislation on premiums that assumed that premium tax credits would be available in all states, making no distinction between federal and state exchanges. [7] Over the next few days this analysis was discussed by Republican Senators Grassley, [8] Enzi, [9] and Coburn. [10] None raised what Cannon and Adler see as an obvious point–that the CBO analysis was flawed because it failed to recognize that premium tax credits would not be available though federally facilitated (sec. 1321) exchanges.  In fact, the CBO repeatedly provided cost estimates of the ACA and HCERA in late 2009 and early 2010, but never suggested that premium tax credits might be reduced if states failed to establish exchanges.  In their most recent report from two weeks ago updating ACA coverage estimates in the wake of the Supreme Court decision, the CBO and JCT reiterates again that premium tax credits will be available though state, federal, and partnership exchanges. [11] As Yale Professor Abbe Gluck notes in a recent blogpost [12] (and forthcoming article), Senators often don’t listen to each other, but they all listen to the CBO,  which assumed that premium tax credits would be available to all Americans in all states.

Mr. Cannon claims, however, to have found a smoking gun, a colloquy between Senators Baucus and Ensign during the Finance Committee debate on the bill, in which, they claim, Senator Baucus admits that premium tax credits could not be made available through federal exchanges.  In fact, the colloquy had nothing to do with federally facilitated exchanges, but rather with whether the Finance Committee or the Judiciary Committee had jurisdiction over malpractice reform legislation that Ensign wanted to attach to the bill.  In fact, there is nothing in the legislative history of the ACA that supports the notion that premium tax credits will not be available through federal exchanges.

Mr. Cannon argues that Congress prohibited the federal exchanges from offering premium tax credits as a way of encouraging the states to adopt exchanges.  It is in fact clear that Congress favored state exchanges, and offered generous grants to the states–which to date have totaled nearly $850 million dollars with more on the way. [13] States that fail to establish exchanges will also lose some control of their insurance markets.  But Congress did not try to “coerce” states to create state exchanges by threatening their citizens with loss of billions of dollars of premium tax credits.  Indeed, under the Supreme Court’s recent Medicaid decision, such coercion might have been suspect.

The Structure of the Affordable Care Act Makes it Clear that Federal Exchanges may Offer Premium Tax Credits

Moreover, not only do a number of provisions of the ACA, already described, refer explicitly to federal and state exchanges performing functions relating to premium tax credits, but the entire structure of the ACA’s insurance reforms are based on the availability of premium tax credits in all states. The ACA’s guaranteed issue and community rating requirements apply to insurers in all states, regardless of whether they have federal or state exchanges. So do the ACA’s risk mitigation programs.  So does the ACA’s individual mandate. The premium tax credits are intended to bring millions of new participants into insurance markets, and if they are not available in many states, the nature of insurance markets will change dramatically, increasing the risk of insurers and decreasing availability to middle-income Americans.  If this was the intent of Congress, it surely would have made it far more evident.

The ACA is admittedly not a model of clear drafting.  It contains three sections with the same number (1563) and amends an existing provision of the Public Health Services Act inconsistently twice within the scope of a few pages.  The Senate bill was not supposed to be the final law.  Only the Senate election in Massachusetts in early 2010 made a conference committee bill that would have reconciled the House and Senate versions and cleaned up the current bill impossible.  The courts are unlikely to find the “established by the state” language a “scrivener’s error.”  But the courts will interpret the ambiguous language in the context of the ACA’s structure and purpose, in light of the ACA’s legislative history, and putting great weight on the HCERA amendment, and find that federally facilitated exchanges can in fact issue premium tax credits.

The Department of the Treasury is Authorized to Interpret Section 36B and the Courts will Defer to its Interpretation

Finally, the courts are likely to grant great deference to the IRS premium tax credit regulation.  Section 36B explicitly grants authority to the IRS to interpret the section.  A recent CRS Legal Analysis of this issue states clearly that under the ruling “Chevron doctrine,” derived from the case of Chevron v. NRDC, [14] courts will defer to the interpretation of the IRS of section 36B unless they conclude that “Congress has spoken to the precise question at issue.”  As should by now be amply clear, Congress has not clearly said that federal exchanges cannot grant premium tax credits.  If a court finds the issue ambiguous, however, “the question for the court is whether the agency’s answer is based on a permissible construction of the statute.”  In this situation, “legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute.”  As noted above, the interpretation of the ACA by the IRS is completely consistent with rather than “manifestly contrary” to the statute, and thus will be granted judicial deference.


In 2014, millions of your constituents will gain access to private health insurance coverage with assistance with premium tax credits. It was the hope of Congress and remains the hope of the federal agencies implementing the ACA that they will receive these premium tax credits through state exchanges.  But the ACA also created fallback federal exchanges, which will be available in states represented by other members of this Committee to ensure that all Americans get access to affordable health insurance.  The Department of the Treasury has correctly determined based on the language and history of the ACA that premium tax credits will be available through all exchanges, state and federally facilitated.  None of your constituents will be denied the tax credits made available through the ACA to ensure them access to affordable health insurance.  I thank you for the opportunity to address this important issue.


[1] Jonathan Adler and Michael Cannon, Taxation without Representation:  The Illegal IRS Rule to Expand Tax Credits Under the PPACA (2012), available at

[2] S 1679,

[3] S 1796,

[4] Senate Report 111-89

[5] 155 Cong. Rec. S12358.

[6] 155 Cong. Rec. S13375.

[7] CBO, An Analysis of Health Insurance Premiums Under the Affordable Care Act,

[8] 155 Cong. Rec. S12107, 12/2/09

[9] 155 Cong. Rec. S12378, 12/4/09

[10] 155 Cong. Rec. S13687

[11] at n. 14 .

[12] ,


[14] 467 U.S. 837 (1984).

tara-ragone I highly recommend two recent articles that consider the intersection of HIPAA preemption doctrine, interoperability of electronic health record (“EHR”) databases, privacy, and confidentiality.

In her article, “Institutional Competence to Balance Privacy and Competing Values: The Forgotten Third Prong of HIPAA Preemption Analysis,” Barbara J. Evans takes on the well-settled belief or “rumor,” as she calls it –  that the HIPAA “Privacy Rule merely sets a floor of privacy protection that leaves states free to set stricter privacy standards.”  (A draft of this article is available on SSRN , and it will be published in the University of California-Davis Law Review in 2013.)  Although this general rule of HIPAA preemption  is largely accurate, the article argues that it is wrong with respect to an enumerated “class of public health activities that Congress deemed to have high social value,” including “reporting of disease or injury, child abuse, birth, or death, public health surveillance, or public health investigation or intervention.”

Professor Evans begins with a textual argument, pointing out that HIPAA’s statutory text specifically includes a third prong, while HIPAA’s Privacy Rule, one of HIPAA’s key implementing regulations, collapses the statutory language into two prongs.  The article maintains that in doing so, the “Privacy Rule ignored a clear statutory instruction to preempt state privacy law in a specific circumstance where Congress determined that individual privacy interests should give way to competing public interests.”  In this specific public health context, she continues, “the HIPAA statute creates what might be called a ‘canopy,’ to shelter specific socially important data uses from more stringent privacy laws.”  The author buttresses her analysis with legislative and regulatory history as well as a comparison with the structure of ERISA preemption provisions.

Noting that the statute speaks directly to this issue, Professor Evans maintains that the public health portion of the Privacy Rule is not entitled to Chevron or Skidmore deference where its interpretation is contrary to the statute and the agency did not offer a persuasive account to justify its interpretations. Rather, “the HIPAA statute preempts state privacy laws even ones that are more stringent than the HIPAA privacy Rule in situations where state laws would interfere with public health surveillance and investigations.”

Professor Evans attributes the inconsistency between the Privacy Rule and HIPAA to politically savvy rather than incompetent agency drafting.  She asserts that HHS was aware that states were afraid that their privacy laws would be preempted, and thus the agency took a modest approach in the Privacy Rule, leaving unspoken the effect of the third prong on more stringent state laws in the limited context of enumerated public health activities.  The statutory text, however, reflects Congress’s choice to  ”trust[] no institution other than itself” to “strike the balance between privacy and competing public interests.”  There was a conscious choice not to permit a patchwork of varying state laws to frustrate the development of multi-state, interoperable databases needed for the enumerated public health activities.

This article breathes new life into statutory language that has been largely overlooked in the sixteen years since HIPAA’s enactment and is critical reading for anyone interested in public health surveillance, investigation, and privacy law.  Professor Evans argues that facilitating access to large-scale, multi-state, interoperable databases of health-related data for tens or even hundreds of millions of people could speed “the detection of drug safety risks, unmask[] ineffective or wasteful treatments, and understand[] disparities in health outcomes among various populations subgroups,” while “unduly restrict[ing] access to data and biospecimens can very literally kill people.”

The article closes with an invitation to scholars for further “dialogue about [HIPAA']s forgotten preemption provision,” an invitation the health law community would be wise to accept.  While she readily acknowledges that her conclusions are unorthodox,  they will undoubtedly generate substantial and serious academic discussion.

Another important article for interoperability policymaking is Leslie P. Francis ‘s article, “Skeletons in the Family Medical Closet: Access of Personal Representatives to Interoperable Medical Records,” which recently was posted to SSRN and was published in volume 4, issue 2 of the 2011 Saint Louis University Journal of Health Law & Policy .

With HIPAA’s Privacy Rule and the HITECH Act, federal law now grants patients the right to access their own medical records, including EHRs, with some limitations for certain records, such as psychotherapy notes.  Importantly,  personal representatives now generally enjoy the same rights of access to medical records that patients themselves hold, consistent with state law.

In addition, although HIPAA preempts state laws that are inconsistent with federal law, HIPAA generally (see Professor Evan’s important caveat above) does not preempt state laws that protect privacy more stringently than federal law.  A state law is deemed more stringent when, for example, it provides individuals with greater access to their health information.  As a result, “states may expand the individual right of access to health information, but may not contract it.”

The article points out an unintended consequence of such an expansion, however, given federal law on access: states that provide equal rights of access to patients and their representatives would be expanding personal representative access in step with any increased rights for patients.

But given the breadth of interoperable EHRs, patients may not want or expect their personal representatives to have access equal in scope to their own.  Interoperable EHRs may very well  contain records of medical care that are not directly relevant to the patients’ current care and that patients may not want their personal representatives to see.  Professor Francis offers the example of an older patient being treated for a stroke who may not want her child to learn about her prior, unrelated pregnancy termination or psychiatric history – what Professor Francis calls “the metaphorical skeletons in her closet.”

The article thus explores the extent to which states may protect patient privacy and confidentiality in this legal framework by regulating personal representatives’ access to patient records.    For example, although states generally either grant or deny personal representatives access to patient records, Professor Francis details how some have been more nuanced.  For example, some permit patients to use advance directives to define the scope of access by personal representatives, such as on a need to know basis, while others restrict personal representative access to mental health or substance abuse treatment records.

Given the importance of respect for private autonomy, Professor Francis then makes four recommendations:

(1)    Advance directive statutes should permit competent patients to designate the scope of their personal representatives’ access to interoperable medical records, ideally with respect to specific types of information, such as mental health, substance abuse, and reproductive history, and options such as all information, information only as needed to make care decisions, or no information.

(2)    When patients do not have advance directives, there should be a presumption that personal representatives only have access to records needed for decision making about their care.

(3)    Interoperable medical records should be designed to permit special management of sensitive medical information, such as mental health or substance abuse treatment records, to which personal representatives would have access only when necessary for emergency care.

(4)    These recommendations generally should apply regardless if patients have mental illness or cognitive disabilities.

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