Bill that would allow drugstores to share customer records killed

David Lazarus
Consumer Confidential

June 18, 2008

Last week's column on California legislation that would allow drugstores to share people's prescription-drug records with mass-mailers clearly struck a chord with readers. And I'm glad to say it resonated with lawmakers as well.

The bill -- SB 1096, written by state Sen. Ron Calderon (D-Montebello) -- was approved by the Senate on May 29. But it hit a brick wall Tuesday when it failed to garner a single vote of support in the Assembly Health Committee.

Calderon reserved the right to resubmit his bill in the future. But his chief of staff, Rocky Rushing, subsequently acknowledged that the legislation wouldn't be coming back, at least not in its present form.

"The bill is dead," he said. "It was voted down."

In presenting the legislation Tuesday, Calderon described it as a boon to consumers, especially those with chronic medical conditions. He said it would allow drugstores to send letters to people reminding them to take their medication or refill a prescription.

Calderon said the bill was inspired by his mother, who he said died several years ago from a stroke after failing to take her prescribed meds.

"I take the issue of medical privacy very seriously," he said. "I just want people to take their medications."

If that was his goal, his bill was a consumer-unfriendly way of accomplishing it.

The bill's "source" was a company called Adheris Inc., which used to be known as Elensys Care Services Inc. The company changed its name after it came to light in 1998 that CVS and other pharmacies were sending people's medical info to Elensys without their permission.

Adheris is owned by InVentiv Health Inc., a New Jersey company that says it provides "a comprehensive range of clinical, communications and commercialization services to take pharma products from development through launch to commercial success."

One problem with Calderon's bill was its lack of transparency about who would pay for the reminder letters, and which patients would get them. Calderon originally told me that Adheris is paid by drugstores to handle communications on their behalf.

He acknowledged Tuesday that drug companies "at times" reimburse pharmacies for their expenses.

That's putting it mildly. Adheris Chairman Mike Evanisko testified before the state Senate's Health Committee in March that funding for the company's activities frequently comes from drug makers.

"The pharmaceutical companies sponsor these programs and [on] some occasions they pay us and we reimburse the chains for their expenses," he said. "And in some cases, the pharmaceutical companies who sponsor these pay the chains, and the chains pay us for providing the service."

Evanisko also said Adheris might reimburse drugstores for "printing, postage, maintaining the databases, transferring information to us" -- in other words, everything the drugstores are ostensibly paying Adheris to do.

"This bill is about opening the door to the pharmaceuticals," Assemblywoman Mary Salas (D-Chula Vista) said Tuesday. "The pharmaceuticals want to be able to directly communicate with patients."

Jeff Krinsk, a San Diego attorney who is suing Adheris on behalf of consumers whose prescription information was provided by Albertsons Inc., told me that not only are drug companies paying Adheris and drugstores to fund the letters, they're also choosing which patients receive reminders.

"They only do it for the drugs that are most profitable," he said. "The decision is made by the pharmaceutical companies."

The reason, Krinsk said, is that pharmaceutical companies want to maintain brand awareness among patients taking expensive drugs and deter them from seeking lower-priced generic alternatives.

"The case can be made that there's an educational component to reminder letters that serves the public interest," he said. "But that isn't what's happening here."

A number of lawmakers expressed reservations Tuesday about a provision of Calderon's bill that would have required consumers to opt out if they didn't want letters. Failure to opt out would mean Adheris and other such companies would have full access to your drug records.

"If there were an opt-in policy, it would be different," said Assemblyman Alan Nakanishi (R-Lodi).

Calderon told me last week that asking people to opt in wouldn't work. If given a choice upfront, he said, most people would say no.

Go figure.

Readers were outraged by the proposed legislation. I received dozens of e-mails opposing the bill, and more than 70 similar comments were posted on The Times' website.

"Do I want my prescription drug records shared with mailing firms? Two words -- hell no!" declared Elaine Ramirez. "It is nobody's business but mine and my doctor's what medication I am taking."

Stanton resident Sandra Stubban echoed this sentiment. "I don't need, or want, a reminder from some pharmaceutical company to know when my prescription needs refilling," she said. "It's very simple: When I get down to the last seven pills, it's time to reorder."

Voting against SB 1096 Tuesday were Committee Chairman Mervyn Dymally (D-Compton), Vice Chairman Nakanishi, Patty Berg (D-Eureka), Ted Gaines (R-Roseville), Sally Lieber (D-Mountain View), Fiona Ma (D-San Francisco), Salas and Jim Silva (R-Huntington Beach).

All other members either didn't vote or were absent.

In a statement, Calderon blamed the demise of his bill on "a deceptive campaign of misinformation."

"I've read so many inaccuracies in the press and heard so many conspiracy theories about SB 1096 that if I believed it all, I too would have voted against it," he said.

According to public records, Calderon has received at least $89,000 in contributions from drug companies and pharmacy chains since 2002.

Consumer Confidential runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.

June 19, 2008

Release of Generic Lipitor Is Delayed

By STEPHANIE SAUL

For people with high cholesterol, the wait for a cheaper version of Lipitor has gotten longer. Pfizer announced an agreement Wednesday to head off generic competition for its flagship drug until November 2011.

The drug maker said it settled patent litigation with Ranbaxy Laboratories, an Indian generic drug maker that had threatened to market its own version of Lipitor, the world's best-selling medicine.

The agreement delay Ranbaxy's generic version of Lipitor and is estimated to be worth billions of dollars in additional sales for Pfizer, which could have faced generic competition from Ranbaxy as early as March 2010.

Whenever it comes, a cheaper generic version of Lipitor would sharply cut Pfizer's sales of the drug, which were $12.7 billion last year.

Lipitor is currently priced at up to $3 a day, while a generic version might eventually sell for well below $1.

Pfizer did not disclose the terms of the agreement. But the company said it contained no provisions that would run afoul of the Federal Trade Commission, which has frowned on arrangements in which makers of name-brand drugs pay off generic manufacturers to keep them from entering the market.

The F.T.C. has argued that such arrangements harm the public by inflating drug prices and has challenged them in court, with mixed results.

"We don't have any of the items that the F.T.C. has identified as being of concern such as reverse payments," said David Reid, Pfizer's acting general counsel.

In a conference call with investors and analysts Wednesday morning, Mr. Reid called the agreement "pro-patient, pro-competition and pro-intellectual property."

But Ronny Gal, a generic pharmaceutical analyst for the investment company Sanford C. Bernstein, said the agreement clearly was not envisioned by the Hatch-Waxman Act, the 1984 law that meant to encourage generic drug competition.

"This is clearly a miscarriage of the law," Mr. Gal said, noting that the agreement will mean that consumers continue to pay branded pharmaceutical prices for Lipitor longer than necessary. Yet, Mr. Gal said, the agreement is probably fashioned in such a way that it will avoid F.T.C. opposition.

Under terms of the deal, Pfizer also granted Ranbaxy the right to generic versions of Lipitor in seven countries, beginning at various times. Those countries are Canada, Belgium, the Netherlands, Germany, Sweden, Italy and Australia.

Mr. Reid said the company's agreements involved no payments to Ranbaxy. But the deal also included another incentive for the generic manufacturer. Pfizer dropped its challenge to Ranbaxy's current sales of generic Lipitor in four other countries — Brunei, Malaysia, Peru and Vietnam — allowing those sales to continue. While potentially bad news for consumers in the United States, the deal was good news for Pfizer, who stock was up more than 2 percent Wednesday in early afternoon trading. It has the effect of extending Lipitor's market exclusivity by up to to 20 months. The exact extension is unclear because the date of Lipitor's patent expiration has been a matter of dispute, with one patent expiring in March 2010 and another in June 2011.

The company had argued that Lipitor might be covered by patents extending into 2016, but analysts have said those are minor patents not likely to be upheld.

Either way, Mr. Gal said the extension would be worth billions of dollars to Pfizer, which has traded near decade lows this year. At midday yesterday, shares in the company were at $18.13, up 41 cents.

The company has mounted an aggressive marketing campaign to defend its Lipitor brand against recent competition from simvastatin, a generic version of Zocor, a similar anti-cholesterol drug that lost patent protection in 2006.

Studies have shown that for many patients hoping to control cholesterol levels, simvastatin is a viable substitute for Lipitor, known generically as atorvastatin. A big difference between the two is that Lipitor costs $2.50 to $3 a day, while simvastatin can retail for 75 cents to $1 a day, or as low as 10 cents a day at some discount pharmacies.

As the first company to file with federal regulators to market a generic version of Lipitor, Ranbaxy has rights under the Hatch-Waxman Act to 180 days of generic market exclusivity. During that six-month period, the maker can price generic drugs fairly close to the brand-name version. Prices generally decline sharply when other generic competitors can enter the market.

The settlement agreement does not prevent other generic companies from challenging the Lipitor patent, but Ranbaxy's "first filer" rights in the United States eliminates much of the incentive to do so. Ranbaxy's shares were up more than 2.5 percent early Wednesday afternoon.

Pfizer currently faces a generic Lipitor challenge in Canada from Apotex, a Toronto drug company known for aggressively litigating patent cases.

Mr. Reid said that the settlement involved Lipitor and Ranbaxy patent disputes virtually worldwide with Ranbaxy and that it also covered Caduet, a Pfizer product that combines Lipitor with a blood-pressure medication, Norvasc.

June 19, 2008

Doctors Divided on Use of Electronic Records

By STEVE LOHR

A government-sponsored survey of the use of computerized patient records by physicians points to two seemingly contradictory conclusions, and a health care system at odds with itself.

The report, published online on Wednesday in The New England Journal of Medicine, found that doctors who use electronic health records say overwhelmingly that they have helped improve the quality and timeliness of care. Yet fewer than one in five of the nation's physicians have started using such records.

Bringing patient records into the computer age, experts say, is crucial to improving care, reducing errors and containing costs in the American health care system. The bottleneck to the adoption of the technology is mainly economic. Most doctors in private practice, especially those in small practices, lack the financial incentive to invest in computerized records.

The national survey found that electronic health records were used in less than 9 percent of small offices with one to three physicians, where nearly half of the country's doctors practice medicine.

Dr. Paul Feldan, one of three physicians in a primary care practice in Mt. Laurel, N.J., has looked at investing in electronic health records, and decided against it. The initial cost of upgrading the office's personal computers, purchasing new software and obtaining technical support to shift to computerized patient records would be $15,000 to $20,000 a doctor, he estimated. Then, during the time-consuming conversion from paper to computer records, the practice would be able to see far fewer patients, perhaps doubling the cost.

"Certainly, the idea of electronic records is terrific," Dr. Feldan said. "But if we don't see patients, we don't get paid. The economics of it just seem so daunting."

Private and government insurers and hospitals can save money as a result of less paper handling, lower administration expenses and fewer unnecessary lab tests when they are connected to electronic health records in physicians' offices. Still, it is mainly doctors who bear the burden making the initial investment.

"We have a broken market for electronic health record adoption because the people who gain financially are not the people who pay," observed Dr. Blackford Middleton, a health technology expert at Partners Healthcare, a nonprofit medical group that includes Massachusetts General Hospital in Boston.

To fix the market, Dr. Middleton, like others, recommends that the government play a role in providing incentives or subsidies to accelerate the use of computerized patient records in the United States, whose adoption rate trails behind most developed nations.

The government took a step in that direction last week, announcing a $150-million Medicare pilot project that will offer physicians incentives to move from paper to electronic patient records. The program is intended to help up to 1,200 small practices in 12 cities and states make the conversion.

Individual doctors will be offered up to $58,000 over the five-year span of the project, which is intended to test the impact of incentives on the spread of electronic health records. Further programs across the country are planned.

The report published in The New England Journal also found that electronic health records were used by 51 percent of larger practices, with 50 or more doctors.

Indeed, electronic health records are pervasive in the largest integrated medical groups like Kaiser Permanente, the Mayo Clinic, the Cleveland Clinic, University of Pittsburgh Medical Center and others. These integrated groups not only have deep pockets. By combining physicians, clinics, hospitals and often some insurance they can also capture the financial savings from electronic health records.

The findings of the study, which was paid for by the Department of Health and Human Services and a grant from the Robert Wood Johnson Foundation, broadly echo previous research on the adoption of electronic health records. Large medical groups have long been the early adopters, and small practices have struggled.

But the new study is based on a large sampling — more than 2,600 doctors across the country — and a detailed survey, making it more definitive than past research, experts say. The results, they say, also show a strong endorsement of electronic health records by physicians who have them, especially for what the report termed "fully functional" records, which include features like warnings of drug interactions and reminders of care guidelines, based on a patient's age, gender or medical history.

For example, 82 percent of those using such electronic records said they improved the quality of clinical decisions, 86 percent said they helped in avoiding medication errors and 85 percent said they improved the delivery of preventative care.

"Those numbers are huge and very encouraging," said Dr. David J. Brailer, the former health information technology coordinator in the Bush administration.

Dr. Brailer also pointed to the 54 percent of physicians without electronic health records who said that not finding an electronic health record that met their needs was a "major barrier" to adoption. In short, they are not satisfied with the existing products, which tend to be designed for hospitals — big customers — instead of small practices.

"What we see is a deficit in innovation, and that is something innovators and the capital markets can address," said Dr. Brailer, who leads a firm that invests in medical ventures, Health Evolution Partners.

One wave of innovation is coming from big technology companies, like Microsoft and Google, which recently have begun services that offer consumer-controlled personal health records over the Web, which are stored in the companies' data centers. These consumer-controlled health records are intended to link up and exchange information with electronic patient records in physicians' offices and hospitals. Google, for example, has a pilot project with Cleveland Clinic, while Microsoft has announced one with Kaiser Permanente.

But the companies say their personal health record initiatives can be driven mainly by consumers. "Our strategy is not dependent on electronic medical record adoption," said Peter Neupert, the vice president in charge of Microsoft's health group.

Consumer demand will probably add pressure on physicians to adopt electronic health records. A market research poll published last week, and sponsored by Kaiser, found that 47 percent of consumers said they preferred doctors who used electronic health records.

Dr. Peter Masucci, a pediatrician with his own office in Everett, Mass., decided to embrace electronic health records to "try to get our practice into the 21st century." He looked at the cost of conventional software, which he could not afford, and instead chose a Web-based service from Athenahealth, a company that supplies online financial and electronic health record services to doctors' offices.

Dr. Masucci and his wife, Donna, a pediatric nurse and the office manager, were already using Athenahealth's outsourced financial service, and less than two years ago adopted the online medical record.

Today, Dr. Masucci is an enthusiast, talking about the wealth of patient information, drug interaction warnings and guidelines for care, all in the Web-based records.

"Do I see more patients because of this technology? Probably no," Dr. Masucci said. "But I am doing a better job with the patients I am seeing. It almost forces you to be a better doctor."

Wednesday, June 18, 2008 Feds plan five-star rating system for nursing homes Associated Press WASHINGTON -- The U.S. has five-star rankings for restaurants and hotels. So why not five-star rankings for nursing homes? The Bush administration announced Wednesday that it will put in place such a rating system by the end of the year. It's designed to give consumers another tool to consider when shopping for a nursing home. The ratings would be placed on a government Web site. "The fact a home has a lower rating will likely put them on the path to improvement," said Kerry Weems, acting administrator for the Centers for Medicare and Medicaid Services. "I don't think we're going to see many people who are very anxious to put a loved one in a one-star home." The agency said it would seek comment from the industry and consumers to determine the criteria for the rankings. In announcing their intentions, federal officials also unveiled a final rule that would require all nursing homes to have in place sprinkler systems by 2013. Homes that fail to have the sprinkler systems could not serve Medicare participants. Newer nursing homes all have sprinkler systems, but many older homes do not. Overall, the government estimates that about one out of every 10 of the nation's 1,600 nursing homes do not have sprinkler systems. In 2004, the Government Accountability Office recommended that federal health officials explore requiring sprinklers in all nursing homes. The recommendation came one year after 31 residents died in nursing home fires in Hartford, Conn., and Nashville, Tenn. Federal regulations did not require either home to have automatic sprinklers and both fires broke out at night when staffing was at its lowest level. There has never been a multiple-death fire in a nursing home with a full sprinkler system, government auditors said. The five-year window for putting in place a sprinkler system was designed to give nursing homes time to plan and finance the undertaking, but they shouldn't expect federal loans or grants to help pay for it. The estimated cost of the improvements over five years amounts to about $850 million. "Nursing homes finance improvements to their physical plant all the time. This is the kind of improvement they need to keep residents safe so we don't contemplate specific grants for nursing homes who are not in compliance with the rule," Weems said.

HHS and National Service Team Up to Increase Volunteering Among Baby Boomers

June 16, 2008



Recognizing the extraordinary potential for social good among baby boomers and older Americans, the Corporation for National and Community Service and the U.S. Department of Health and Human Services’ (HHS) Administration on Aging (AoA) on Sunday, June 1, 2008 unveiled a multi-year partnership to engage baby boomers and older adults in addressing the needs of vulnerable populations through volunteer service

HHS Assistant Secretary for Aging Josefina G. Carbonell joined Corporation for National and Community Service CEO David Eisner in announcing the landmark partnership before an audience of 1,500 Senior Corps project directors and sponsors attending the National Conference on Volunteering and Service http://www.volunteeringandservice.org/index.htm in Atlanta.

“Volunteers, many from AoA’s national aging services network of state, tribal and community organizations, play a critical role in helping older Americans remain at home and in the community, which is what they prefer,” Carbonell said. “This partnership supports the Bush Administration’s efforts to modernize long-term care in our country, and it will set the stage for a major expansion of public and private initiatives that engage older volunteers and baby boomers in strengthening local community programs, particularly those serving older persons.”

The partnership is a result of the 2006 reauthorization of the Older Americans Act, which called for the Administration on Aging and the Corporation to collaborate on strategies to increase volunteering and civic engagement among older adults. The new initiative builds on previous efforts between the two federal agencies, including the 2005 White House Conference on Aging, when delegates adopted a resolution in support of a national strategy for promoting civic engagement and volunteering for current and future seniors.

The core of the partnership is a grant from the Administration on Aging to the National Council on Aging http://www.ncoa.org (NCOA) of $1 million per year for up to three years. NCOA will provide sub-grants and technical assistance to 24 model programs for engaging adults over the age of 55 in increasing the capacity of nonprofits to serve vulnerable populations. Grantees will engage older adults in service and civic engagement projects aimed at increasing the number and types of services to frail elders, families of children with special needs, grandparents raising grandchildren and other vulnerable populations.

Click here to view full release
Click here to view the full Remarks of the Assistant Secretary for Aging



Posted: June 3, 2008

Fed Appears Unlikely to Keep Cutting Rates

By Neil Irwin
Washington Post Staff Writer
Thursday, May 22, 2008; D01

Most leaders of the Federal Reserve viewed their decision to cut interest rates last month as a "close call," according to minutes of the meeting released yesterday, a document that made it clear that the Fed is probably done with rate cuts for the foreseeable future.

The stock market fell sharply due to an increased sense that no more Fed rate cuts are in the offing and because oil prices rose again, creating yet more stress for cash-strapped consumers and businesses. The Dow Jones industrial average was off about 227 points, or 1.8 percent. Crude oil futures touched a trading record yesterday, at $134.15 a barrel.

Fed leaders have pulled back their expectations for growth. The most pessimistic of the group expect the U.S. economy not to grow at all this year. But they also expect higher inflation than they did in January, a reason for the reluctance to keep cutting rates.

The minutes contain strong signals that the policymakers think their interest rate cuts so far -- seven cuts in the federal funds rate since September, totaling 3.25 percentage points -- will probably be enough to combat the economic weakness.

"Most members viewed the decision to reduce interest rates at this meeting as a close call," the document said, adding that the "risks to growth were now thought to be more closely balanced" by the risks of inflation. The document included sharp language about the "upside risk to the inflation outlook" from rising prices for oil and other commodity prices.

The message came through loud and clear to Fed watchers.

"They're now firmly on hold," said Ethan Harris, chief U.S. economist at Lehman Brothers, adding that he expected the Fed to neither lower nor raise its target for short-term interest rates soon.

Moreover, Harris said, since that policymaking meeting on April 30, economic data have been mediocre, not terrible, and financial markets have begun to stabilize. That solidifies the case for a pause on interest rates.

"It's going to require quite a bit of new information to get them to move one direction or another," Harris said.

The Fed is trying to maintain a tricky balance, signaling that markets remain fragile and that the central bank is ready to act if financial conditions go haywire or the economy heads south suddenly. But it wants to maintain credibility in its fight against inflation and doesn't want people to expect more rate cuts if the economy is merely soft.

"Several members noted that it was unlikely to be appropriate" to cute rates further, the minutes said, "unless economic and financial conditions indicated a significant weakening of the economic outlook."

The 17 top Fed policymakers -- 12 regional bank presidents and five governors -- dialed back their growth projections significantly from January to April. Their expectations for gross domestic product growth for this year now range from 0 percent to 1.5 percent; in January, the range had been 1 to 2.2 percent.

They expect the unemployment rate, now 5.1 percent, to end the year between 5.3 and 6 percent.

However, with prices of oil and food continuing their climb, the Fed officials also stepped up their expectations for inflation, saying they thought prices would rise 2.8 to 3.8 percent in 2008. That range was 2 to 2.8 percent in January.

The document also included more details of why two members of the Federal Open Market Committee -- Richard W. Fisher, president of the Dallas Fed, and Charles I. Plosser, his counterpart in Philadelphia -- dissented from the decision to cut rates. Both were more worried about inflation than the rest. Fisher "was concerned that an adverse feedback loop was developing" whereby lower rates were contributing to a falling value of the dollar, higher commodity prices and thus higher inflation for Americans.

Thursday, May 8, 2008

Local spotlight

Mover helps seniors to sell surplus items

Firm that specializes in relocating downsizing senior citizens will open consignment shop.

Christine Snyder / Special to The Detroit News

Sharon Rees says she felt prepared psychologically and logistically for her move to an assisted living facility. She had made choices about her belongings and her daughter--an experienced mover from her life as the wife of a naval officer--came to help. Still, such a move is no easy task for a 75 year old, says Rees. She had lived in her home for 48 years.

What really made the difference was hiring Assisted Moving, LLC, a full-service moving company for seniors based in Plymouth.

Bryan Neal started Assisted Moving four years as an answer to seniors and their families facing the daunting task of downsizing from spacious family homes to much smaller digs.

Assisted Moving organizes the entire downsizing process; making lists; facilitating decisions; shipping; tossing; selling and packing items.

"He had been in my home ahead of time so he knew where I was and what was happening and he also understood where my priorities were," says Rees, who says she appreciated his efficiency and calmness. "He never blinked. If he were (panicky) I might have reacted to that."

Toward the end of the move, Neal offered Rees a hug.

"He's very caring and very understanding about what somebody might be going through," says Rees.

When he opened four years ago, Neal says he did three or four moves a week. Today he averages between eight and 12.

"Growth has been very steady and at my own pace. I've spent hardly any resources on marketing and advertising," says Neal. "Word of mouth and senior community referrals have been amazing."

Assisted Moving's gross annual revenues have doubled from $100,000 in 2004 to $200,000. He says revenues have leveled out some this year. "It's an exciting time to put innovation to the test," says Neal.

In June, Neal is opening Assisted Moving Consignment Store in Plymouth. Part of the service Assisted Moving provides is selling items on consignment, a service that about half of his clients use.

Assisted Moving Consignment Store will take 50 percent of every item that sells; a typical consignment rate. "While we will sell to everyone, we only will take items from seniors who are moving or downsizing," says Neal.

"The biggest challenge is the unknown," says Neal of this new venture. "No one has ever attempted this before, so it's uncharted territory. However, I truly believe that there is a real need for our service."

According to Anita Salustro, associate state director, AARP Michigan, the time is ripe for services geared to seniors. There is, and will be, a huge growth in senior population in southeastern Michigan. By 2035, the population of those older than 65 will have doubled, making up 24 percent of the entire population.

"There is an absolute dearth (in services)," says Salustro. "It's too early in the game for people to have realized what a boon to the economy seniors are because they have deep pockets and fat wallets. These services are just emerging...filling these niches."

For Rees, she is glad that the services Assisted Moving provided are available to her. A unit recently opened in an assisted community that was Rees's initial choice so she's moving again.

Says Rees: "The first thing my daughter asked me when I told her was, "are you going to call Bryan?" She did.

Christine Snyder is a Metro Detroit freelance writer