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ePolicy News September, 2011

Thursday, September 1, 2011



Plaintiffs File Petition for Panel Rehearing in Myriad Gene Patenting Case

On. Aug. 25, counsel for the plaintiffs/appellees in the landmark lawsuit challenging patents on two human genes associated with hereditary breast cancer and ovarian cancer filed a petition for a Panel Rehearing in the Federal Circuit Court of Appeals. In July, a three-judge panel reversed a lower court ruling upholding the right of Myriad Genetics, to patent two “isolated” human genes, BRCA1 and BRCA2, thus granting the company the exclusive right to perform diagnostic tests on the genes and preventing other researchers from even looking at the genes without first getting permission from Myriad. The decision permits the continuation of Myriad's monopoly on the BRCA genes, making it impossible for women to access alternate tests or get a comprehensive second opinion about their results. It also allows Myriad to continue charging a high price for its tests.

The challenge to Myriad’s patent was originally filed by the American Civil Liberties Union (ALCU) and a host of researchers, genetic counselors, women patients, cancer survivors, breast cancer and women's health groups, and scientific associations, including the American Society for Clinical Pathology (ASCP).

The Aug. 25 Petition alleges both factual and legal errors in the Court’s decision on both the standing and patent-eligibility issues, with the primary focus on the Court’s interpretation of “isolated DNA.” The petition alleges that Court was incorrect in defining isolated DNA by its molecular structure rather than by its function, in this case, coding for a BRCA1 polypeptide. The Petition also alleges that the Court relied on “facts not in the evidentiary record” when they reached the conclusion that the claimed DNA “fragments” do not exist in nature.

As petitions for rehearing are rarely granted by the Federal Circuit Court, the next stop for the case may well be the U.S. Supreme Court.



ASCP Urges CMS to Fix Physician Fee Schedule, Anti-Markup and Quality Reporting Rules

On Aug. 30, ASCP wrote the Centers for Medicare & Medicaid Services (CMS) urging the Agency to revise its recently proposed 2012 physician fee schedule to fix loopholes in the Medicare anti-markup rule on diagnostic services. In addition, ASCP raised concern about the flawed sustainable growth rate; CMS’s Physician Quality Reporting System initiative; several proposals related to “potentially misvalued codes” that could affect pathology and laboratory medicine; and the technical component (TC) grandfathering provision on laboratory services provided to hospital patients by independent laboratories.

The anti-markup rule was revised in 2008 specifically to deal with abusive billing practices by physicians profiting on the anatomic pathology services they order. The rule suffers from several major flaws that allow physicians to bill for the pathology services they order. ASCP wrote that it was “greatly disappointed and concerned that CMS has once again failed to address in its annual proposed rule policy options to deter and prevent long-standing abusive billing practices involving the self-referral of anatomic pathology services.”ASCP stated that “CMS’s unwillingness to fix the anti-markup rule has led many physicians to conclude that such practices are either appropriate, or that CMS is unwilling to take any steps to deter abusive billing practices involving anatomic pathology services. The agency’s failure to address the issue has resulted in the self-referral of anatomic pathology services increasing dramatically.”

ASCP also cautioned CMS about its proposals regarding the Physician Quality Reporting System (PQRS) and the Electronic Health Records (EHR) Meaningful Use programs. ASCP raised concern about the agency’s proposal to impose negative payment adjustments on nonparticipating providers as certain specialties may be largely unable to meet the requirement through no fault of their own. ASCP noted that when CMS unveiled its EHR Meaningful Use Final Rule, it set in place a set of requirements that cannot be satisfied by a number of physician specialties, such as pathology.

CMS also floated the idea in the proposed rule that the AMA’s Relative Value Scale Update Committee panel should review several pathology CPT codes it believes are “misvalued.” In response, ASCP argued that a proposal to re-examine 88305 was unwarranted because CMS was relying on information that did not factor in the breadth of work that may be billed under 88305. ASCP noted that concern about a potential payment discrepancy between in situ hybridization CPT codes 88365, 88367, and 88368 for nonurine specimens and in situ hybridization CPT codes CPT 88120 and 88121for urine in situ hybridization is explained in large part by differences in complexity and automation.

In addition, ASCP urged CMS to implement the “technical component grandfather clause” for independent laboratories on a permanent basis. Congress has regularly extended the “grandfather” provision to enable independent laboratories that perform the technical component laboratory work for hospital inpatients and outpatients to bill Medicare directly for their work provided the hospital had a prior relationship with the independent laboratory for these services.

ASCP urged the agency not to expand the multiple procedure payment reduction to pathology services, arguing that the expected efficiencies for the direct practice expense inputs for the TC already are already factored into reimbursement rates.

ASCP also called on CMS to help fix the flawed sustainable growth rate (SGR), which is used to calculate the annual update (positive or negative) to the Medicare physician fee schedule. CMS projects in the proposed rule that without Congressional intervention Medicare payment rates for physicians and other healthcare practitioners who are reimbursed under the physician fee schedule are projected to be reduced by 29.5 percent for services provided in 2012.


ASCP Responds to FDA Draft Guidance on RUO/IUO Diagnostic Products

In June, the U.S. Food and Drug Administration (FDA) issued a new draft guidance on the marketing of research-use-only (RUO) and investigational-use-only (IUO) in vitro diagnostic (IVD) products. The intent of the guidance is to clarify what types of IVD products should be labeled “RUO” and “IUO” and outline how the FDA believes these products should be used and marketed. The guidance is intended for manufacturers and distributors of RUO and IUO products and any other entities that label IVD products. FDA draft guidance documents do not establish legally enforceable responsibilities; rather, they will represent the Agency’s current thinking on this topic and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited.

The guidance outlines the FDA’s position that products manufacturers label as RUO or IUO, which in most cases have not been approved or cleared by the FDA as medical devices, should only be used in research and not for clinical diagnosis of patients. The recommendations clearly indicate that the FDA wants companies selling RUO/IUO IVDs to stop selling their products to customers who may be using them inappropriately for clinical applications. It is important to note, however, that the guidance does not outline any new requirements that are not already being enforced. The guidance was issued as a “reminder” to manufacturers of the requirements already in place that are applicable to RUO and IUO IVDs.

The recommendations in the guidance indicate that the FDA wants to ensure that the investigational device exemption that excuses RUO and IUO products from having to obtain pre-market approval, or a 510(k) clearance, are not being employed by manufacturers to avoid FDA regulation. There is also concern that some laboratories that use the RUO/IUO products as laboratory-developed tests (LDTs) for clinical purposes may not realize that these products are not meant to be used in this way.

The guidance also makes it clear that the FDA considers it a manufacture’s responsibility to go beyond labeling. The guidance indicates that the FDA will not only be monitoring such “adulterated” and “misbranded” products, but also expects manufacturers to refrain from advising or providing support to customers they know will use the technology in a clinical setting. This stipulation could have a serious impact on the nature of collaborations that occur between the RUO/IUO manufacturers and their customers, clinical researchers. This process is propelling the advancement of personalized medicine products through drug/diagnostic co-development. This change in enforcement could dramatically affect the development of new laboratory developed tests (LDTs), as well as the availability of LDTs currently in use. Access to certain tests could be affected, thus limiting a healthcare provider’s ability to manage patient care.

While ASCP supports the FDA’s intent to protect patients, there is great concern the proposed change in the Agency’s enforcement policy could result in the unintended consequence of disrupting critical patient testing needs.

Impact on Solid Organ and Bone Marrow Transplant Programs

Of particular concern is the impact these requirements may have on both solid organ and bone marrow transplant programs. The development of serological assays for the typing of human leukocyte antigens (HLA), detection of anti-HLA antibodies in patient serum, and cross matching of donors and patients to determine compatibility was achieved by using reagents originally intended for research. Researchers have been able to improve both the sensitivity and specificity of these assays by adapting reagents and tests from the literature and validating them against clinical outcome. The tremendous strides that have been made in solid organ and stem cell transplantation technology are a direct result of this translational process. ASCP is concerned that stepped-up oversight could significantly affect this essential and highly successful process, compromising patient safety by disrupting patient testing while creating an entire industry of orphaned tests.

Impact on Oncology Diagnostics

The oncology diagnostics industry could also experience a notable impact from a change in FDA’s enforcement policy. Demonstrating significant efficacy, already an inherently difficult task in clinical trials, depends on the use of diagnostics for biomarkers, many of which are only offered as LDTs requiring the use of RUO materials. A more aggressive approach to enforcement may hinder researchers’ ability to obtain the reagents needed to better define tumors and other pathologic conditions.

On the other hand, FDA feels their current policy of lax enforcement regarding how RUO- and IUO-labeled IVDs presents a patient safety issue. The FDA states in the draft: “The marketing of unapproved and uncleared IVD products for purposes other than research or investigation has led in some cases to diagnostic use of laboratory tests with unproven performance characteristics and manufacturing controls that are inadequate to ensure consistent manufacturing of the finished product. The use of such tests for clinical diagnostic purposes may mislead healthcare providers and cause serious health consequences to patients who are not aware they are being diagnosed with research or investigational products.” ASCP believes that patients certainly should have the right to know whether their laboratory tests are FDA approved or not.

ASCP President John E. Tomaszewski, MD, FASCP, outlined these concerns in a letter to the FDA submitted on behalf of the Society. ASCP will continue to monitor developments on FDA’s new regulation procedures and will report any changes in ePolicy News.



ASCP Attends AdvaMed’s FDA Medical Device User Fee Program Update

As a response to the increasing discussions in Washington on the reauthorization of the Medical Device User Fee Amendments of 2007 (MDUFA), the Advanced Medical Technology Association (AdvaMed) held a meeting on Aug. 4, to provide updates on MDUFA for both patients and providers.

According to AdvaMed, “FDA’s medical device user fee program represents a three-way commitment between FDA, Congress, and the medical technology industry to ensure patient access to needed medical advancements through a timely and consistent review process.” Since the authorization of the user fee program, its budget rose from $219 million in 2003 to $368 million in 2010. Studies have shown that class I recalls, considered to be the most serious, have decreased in recent years due to the increased resources to implement the program. However, effective products continue to experience delays in getting to patients due to substantial increase in average approval time and decline in consistency of average number of review cycles. Furthermore, companies in the United States have been taking their devices to Europe, where approval of the medical devices is faster and access to the devices are obtained two to four years earlier compared to the United States.

The impact of delays in medical device approval in the country continues to grow. As a patient-centered organization, ASCP is extremely aware of the importance of gaining access to better devices and diagnostics. ASCP will continue to monitor developments on this important topic.



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