Tag Archives: health care

Blockchain’s Promise for the Future of Healthcare

In the winter of 2017, the world was captivated by the rise and fall of Bitcoin. Every night during its historic rise, local news ran rags-to-riches stories of basement investors who had cashed out at the right time. Every day, bloggers, tech journalists, and finance journalists tried to diagnose the market and divine what portents this fluctuation may hold for the future. Even before Bitcoin hit its fever pitch in December of 2017, the national conversation focused on the technology powering it – Blockchain. Intrigued by the success of Bitcoin, industry leaders sought to understand Blockchain’s structure, potential, and capabilities. Although the Bitcoin craze eventually came to an end, the conversation over Blockchain continues and it is now positioned to make inroads into the healthcare industry.

Blockchain, in its modern form, was created in the fallout of the 2008 financial crises. It is “[a] digital record or ledger [mini database] that is structured as a series of blocks that are strung together in a chain. Each block—a digital expression of a transaction or an event—is validated by multiple computers on the internet.” Blockchain is also highly secure by distributing “blockchains” to millions of computers, creating a decentralized database.

This combined ability to both secure and share files simultaneously makes Blockchain an attractive new frontier for the healthcare industry. Large healthcare providers such as Cigna, Aetna, and Sentara Health have signed onto Blockchain pilot programs; even Apple signaled interest in Blockchain applications. In 2018, 45% of the healthcare industry experimented with Blockchain applications and 11% of the industry deployed Blockchain applications for use in business. By 2025, it is projected that 55% “of healthcare applications will have adopted Blockchain for commercial deployment.”

This growing trend of Blockchain’s presence in healthcare is due to the enormous benefits the system presents. Cognizant’s 2017 report, “Healthcare: Blockchain’s Curative Potential for Healthcare Efficiency and Quality,” identifies top benefits that healthcare organizations could gain through its implementation, such as strengthened data security and improved interoperability. As Cognizant’s report states, “Blockchain technology enhances privacy through modern public key encryption techniques, reinforces data integrity with its properties of immutability, and improves security with its decentralized data model” allowing for improved patient care through data interoperability between different care providers. Deloitte’s 2018 global Blockchain survey also identifies areas where Blockchain will provide significant value, such as disintermediation, transparency and auditability, and industry collaboration.

These advantages present solutions to long-standing problems that have plagued the industry’s ability to modernize, specifically the ability to digitize patient records into Electronic Health Records. Blockchain’s decentralized data also provides a single authoritative source for patient records resulting in lower cost for patients, better collaboration between professionals, and increased efficiency for providers. Full realization of these benefits has the potential to revolutionize and modernize the healthcare industry and drastically increase the quality of care that patients receive.

Yet Blockchain’s real world implementation highlighted some operational hurdles. The Mayor’s office of Austin, Texas undertook a project called the “MyPass Initiative” to utilize Blockchain technology to improve the city’s homeless services by replacing paper records with “electronic encrypted records that would be more reliable and secure.” The initiative aims to “consolidate the identity and vital records of each homeless person in a safe and confidential way while providing a means for service providers to access that information.” Yet the program faces difficulties such as social buy-in and a reliable way to connect a person with an identity, which can hamper full implementation and in turn preclude the complete realization of the initiative’s benefits. These challenges are not insurmountable and overcoming them will pave the way for larger implementation of Blockchain technology in fields such as healthcare.

Blockchain’s utilization in healthcare is nowhere near complete, but its capabilities and potential operational effectiveness are becoming clear to industry leaders. Its promise to improve patient care through better interoperability, heightened data security, and lower cost is a benefit that the healthcare industry has long been looking to provide to patients. With growing industry engagement with Blockchain technologies and continued innovative pilot programs, such as Austin’s MyPass Initiative, we move ever closer to realizing Blockchain’s promise for the future of healthcare.

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Electronic Health Records: The Dark Side of Digitizing Health Data in the Online Era

The Electronic Health Record (EHR) is permeating the healthcare industry. Easily accessible “minute clinics” and mobile apps providing diagnostic services are all fortuitous results of the increasing digitization of our medical history. While there are many clear benefits to having an EHR—providing accurate and better healthcare, better clinical decision making, and lower healthcare costs—there are numerous privacy risks associated with EHR utilization.

The EHR was a little-known concept when President George W. Bush broached the idea of computerizing health records in his 2004 State of the Union Address. Since then, the healthcare industry has seen a national push to become 100% EHR-dependent; a mission bolstered by President Obama promoting the use of EHRs in both the American Recovery and Reinvestment Act as part of the Health Information Technology for Economic and Clinical Health Act (HITECH) of 2009 and the Affordable Care Act (ACA) of 2010.

Private industries and the general public are increasingly buying into the idea of EHRs as well; according to the Agency for Healthcare Research and Quality, there has been an upward trend in the percentage of patients who find the implementation of EHRs important. There has also been a year-over-year increase in the percentage of healthcare providers who have adopted EHRs, reaching 67% in 2017.

However, this progress toward 100% EHR utilization has also caused increased privacy concerns as EHRs contain a patient’s most sensitive data. These medical records are valuable on the black market as they include a wide range of personal information such as medical history, social security numbers, and insurance details. The permanency of this information provides criminals enough data to completely steal an individual’s identity as well as the ability to commit a wide array of other crimes.

In the summer of 2016, a rogue online actor known as “thedarkoverlord,” stole 655,000 health records from three healthcare providers in the United States. The hacker quickly put the stolen records up for sale on the dark web for an asking price of $700,000. The anonymous hacker told Vice’s Motherboard publication that “[t]he data could be used for anything from getting lines of credit to opening bank accounts to carrying out loan fraud and much more.” This data breach represented a mere 2.4% of all stolen electronic health records in 2016.

More often than not, the burden to resolve the theft of medical records—such as in the case of “thedarkoverlord”—rests with the patient. According to Ponenom Institute’s Fifth Annual Study on Medical Identity Theft, “[s]ixty-five percent of medical identity theft victims […] had to pay an average of $13,500 to resolve the crime.” The heavy financial burden and continued attacks directly affect the public’s concern for its privacy. In 2015, 68% of patients were not confident that their healthcare providers could protect their medical records from loss or theft.

To prevent and combat security concerns, lawmakers have enacted regulations “to protect the privacy of individuals’ health information while allowing covered entities to adopt new technologies to improve the quality and efficiency of patient care.” These competing interests have become more difficult to balance with the increasing reliance on EHRs and thus the increasing opportunity to steal data.

The Health Insurance Portability and Accountability Act (HIPAA) has been the cornerstone legislation on health-data privacy and holds organizations responsible for breaches of data it protects, yet major data breaches still occur through company oversight. In an attempt to incentivize private entities to keep cybersecurity frameworks up to date, Ohio recently passed a law that creates a safe harbor against tort claims for companies who are victims of a data breach. In order to take advantage of this law, companies must comply with the strict state-mandated security framework criteria. Ohio’s innovative approach to cybersecurity enforcement aims to encourage all businesses to implement cybersecurity programs tailored to protect sensitive information while still allowing for technologies to improve.

When President Bush called for implementing EHRs in 2004, he—nor anyone—could have predicted the scale of the current data breaches. A healthcare system reliant upon EHRs is new territory for the health industry and will continue to draw in those who wish to steal its data. However, with continued reliance upon the protections of our regulations such as HIPPA and innovative methods to incentivize a high level of cybersecurity in the private sector, we can feel secure in our progress towards the future that EHRs can provide.

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The ACA Twilight Zone

Death by a thousand cuts has been the Trump Administration’s approach to the Affordable Care Act (ACA).  To be sure, President Trump  tweeted on April 23, 2017 that “ObamaCare is in serious trouble.”  On October 13, 2017, he tweeted, “ObamaCare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves!”  On May 30, 2018, he stated: “For the most part, we will have gotten rid of a majority of Obamacare.”  And on June 4, 2018, he tweeted, “We had Repeal & Replace done (and the saving to our country of one trillion dollars) except for one person, but it is getting done anyway. Individual Mandate is gone and great, less expensive plans will be announced this month.”

In the courts, the ACA has certainly been no stranger to the artful attack.  But two lawsuits, one filed in Texas and the other in Maryland, have gained nationwide traction and hold nationwide consequences.  The first suit, Texas v. US, made its way to U.S. District Court Judge Reed O’Connor’s bench in the Northern District of Texas.  The 20-state GOP led suit was filed on February 26, 2018 by Texas Attorney General Ken Paxton.  It argues that since the ACA was only upheld by the Supreme Court in NFIB v. Sebelius because the individual mandate was a tax, and now that the Tax Cut and Jobs Act of 2017 (TCJA) zeroed-out the individual mandate penalty, the entire ACA is unconstitutional.  The Plaintiff-states also argue that since the ACA does not have a severability clause – a clause that would allow the rest of the statute to live if one part is stricken – the ACA as a whole must fall.

Under Attorney General Jeff Sessions direction, the government will not defend the ACA’s constitutionality.  Defending the ACA, and its patient protections like the prohibition on insurers from discriminating against patients with pre-existing conditions, are 17 Democratic attorneys general representing their respective states as Intervenor-Defendants.  A slew of patient groups and scholars filed amicus briefs in support of the Intervenor-Defendants, but only Citizens United filed as amicus in favor of the Plaintiff-States.  The American Cancer Society Cancer Action Network filed as amicus, urging the court to uphold the ACA and to “recognize Congress’s clear intent to improve access to lifesaving health care for millions of Americans.”  A bipartisan group of law professors filed as amicus, arguing that “[t]he arguments of both the plaintiff States and the United States on the severability of the insurance mandate from the other provisions of the ACA are inconsistent with settled law.”  On July 19, 2018, Senate Democrats introduced a Senate resolution that would authorize Senate Legal Counsel to intervene in Texas v. US to defend the ACA’s patient protections for people with pre-existing conditions.

The second suit, City of Columbus v. Trump, filed on August 2, 2018 by the Cities of Baltimore, Chicago, Columbus, and Cincinnati in the U.S. District Court for the District of Maryland alleges that the Trump Administration’s actions over the last several years amount to an unconstitutional sabotage of the law the President is required to faithfully execute.  The suit makes two claims: the first claim that the Administration is acting arbitrarily and capriciously, and the second that President Trump is violating the “Take Care” Clause of the Constitution.  Under the Take Care Clause of the U.S. Constitution, the President and his or her Administration must “take care that the laws be faithfully executed.” U.S. Const. art. II, § 3.  The suit cites a range of administrative actions taken to sabotage the ACA and have the aim and effect of weakening ACA exchanges, driving up premiums, and driving out issuers, ultimately increasing the rate of the uninsured and underinsured.

Judge O’Connor, after first announcing that oral arguments in Texas v. US would take place on Monday, September 10, moved up oral arguments to Wednesday, September 5, at 9:30 a.m.  At the same time in Washington, D.C., Supreme Court nominee Brett Kavanaugh will be testifying before the Senate Judiciary Committee for potential confirmation.  As some have noted, the fate of the ACA could turn on Kavanaugh’s appointment to the Supreme Court.  Kavanaugh’s preeminent views on separation of powers and his textualist-meets-originalist approach to statutory interpretation is consistent and can be expected to appear in his opinions, but is alarming to health care advocates and patients.  Kavanaugh’s jurisprudence shows that he cares deeply about administrative law and is unlikely to “deconstruct the administrative state,” but he is likely to “put a tighter leash on the regulatory state.”  In all, the fate of the ACA remains to be seen.

 

 

 

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D.C. District Court Limits Discounts to Orphan Drugs

On October 14, 2015, Judge Rudolph Contreras of the District Court for the District Court of Columbia sided with drugmakers in a decision that narrowed the scope of 340B, a popular but controversial drug discount program. The decision effectively bars children’s hospitals, cancer hospitals, and rural hospitals from obtaining 340B discounts for so-called “orphan” drugs like Prozac.

The plaintiffs in the case, Pharmaceutical Research and Manufacturers of America (“PhRMA”), is a lobbying group comprised of 48 of the nation’s pharmaceutical heavyweights, including Novartis and Pfizer. PhRMA challenged an HHS Interpretive Rule, which would have expanded the scope of the drug discount program. PhRMA argued that the agency’s Interpretive Rule contravenes the plain language of 340B. Judge Contreras agreed.

Background to 340B and the Disputed Interpretive Rule

At the heart of this dispute are high-demand “orphan” drugs like Prozac. Orphan drugs are drugs developed to treat a rare disease or condition; the rare disease or condition is the “orphan” use. But, by and large, orphan drugs are more well-known for their non-orphan uses. In the case of Prozac, the drug’s designated orphan use is autism and certain types of body dysmorphic disorders. Yet most patients and providers use Prozac as a treatment for depression.

When the Affordable Care Act was passed, Congress significantly expanded the types of covered entities that would be eligible for 340B program discounts. The ACA added children’s hospitals, freestanding cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals to the 340B drug pricing program. The newly covered entities, however, are excluded from certain types of 340B program discounts.

Under 340B(e), newly covered entities do not have access to discounts for a “drug designated . . . for a rare disease or condition.” Pharmaceutical companies and providers disagreed over the scope of 340B(e). Pharmaceutical companies argued for a broader interpretation and insisted that the provision refers to all types orphan drugs.

To clarify the confusion, HHS issued an interpretive rule on July 23, 2014. Under the Interpretive Rule, drugmakers must offer orphan drugs at a discount to newly-covered entities when the covered entity purchases the drug for a non-orphan use. In the Prozac example, that means a covered entity like a rural hospital could get a discount on Prozac when purchasing the drug for depression (a non-orphan use), but not for autism (the designated orphan use). Drugmakers that fail to comply and refuse to offer the discount price must provide a refund to the covered entity for the overcharge.

D.C. District Court Applies Chevron Test, Vacates HHS Ruling

The court vacated HHS’s Interpretive Ruling, finding that it failed the Chevron test. Under the first prong of the Chevron test, the question is whether Congress has directly spoken on the precise question at issue. If so, the agency must follow the intent of Congress as clearly expressed in the statute. If the congressional intent is unclear, the court proceeds to the second step of the Chevron analysis to determine whether the agency’s ruling is “based on a permissible construction of the statute.”

In this case, Judge Contreras concluded Congress’s intent was clearly expressed in 340B(e) and its related statutory provisions, and that the second part of the Chevron analysis was unnecessary.

The court held in favor of the pharmaceutical company and rejected HHS’s Interpretive Rule.

After concluding that the Interpretive Rule failed the first prong of the Chevron analysis, the Court vacated the Interpretive Rule as “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” In effect, the D.C. District Court’s decision signals a victory for pharmaceutical companies who now do not have to provide orphan drugs at a discount for newly-covered entities like children’s hospitals and rural hospitals.

Experts Foresee Legal Attacks on Other Parts of Drug Discount Program

HHS can still appeal. In the meantime, legal experts weighed in on Law360 and predicted that the decision could encourage drugmakers to lodge additional lawsuits on other parts of the 340B program. In particular, the pharmaceutical industry has railed against the “mega-guidance” that HHS released in August 2015 for the drug pricing program. The omnibus guidance is still in the note and comment process, with the current 60-day comment period ending on October 27, 2015.

Lawyers speculate that this decision leaves the omnibus guidance vulnerable to legal attack. Based on this decision, pharmaceutical companies can challenge the mega-guidance in court as soon as it is finalized, before HHS even attempts any type of enforcement. As Kristi Kung of Pillsbury Winthrop Shaw Pittman stated, “The court here found that the agency didn’t actually have to take an enforcement action against a manufacturer for there to be [a lawsuit].”

Reactions from Providers Underscore Deep Disappointment, Concern Over Access

The District Court decision struck a deep nerve among hospitals and providers. Immediately after the decision was released, the American Hospital Association (AHA) released a statement expressing its deep disappointment.

“This decision comes at a steep cost for the vulnerable patients cared for by rural and cancer hospitals,” AHA stated. “[The decision] will reduce access to critical services and treatments for some of the most vulnerable patients in society. Sadly, the biggest beneficiary of this ruling is the pharmaceutical industry – it does nothing to help either patients or taxpayers.”

The American Society of Health System-Pharmacists (ASPH) similarly stepped out in opposition of the decision. In its own statement, ASPH pointed out the adverse effects of the decision on access to care. According to ASPH, “this ruling will limit access to critical medications for the sickest patients in our healthcare system. . . . Without access to these discounts, participating hospitals may not be able to absorb the cost of providing care to patients who otherwise would not be able to afford it.”

In an interview with Modern Healthcare, the National Rural Health Association agreed, adding that the decision might cause rural hospitals to pass some orphan drug costs onto patients and could lead to some hospitals not stocking certain medications.

The overwhelming reaction against the decision is clear: the D.C. District Court decision creates public policy implications which cut off access to affordable care. By rejecting HHS’s orphan drug discount rule, this decision strongly disadvantages the same patients from underserved areas which the Affordable Care Act meant to assist.

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Pharmaceutical Company Preemptively Files Free Speech Suit Against The FDA

By: Nawa Arsala

Free speech is fundamental to the fabric of the United States. Americans fight for it zealously, regardless of the context, from political contributions to cartoon drawing contests. This battle has extended to the pharmaceutical industry. In an unconventional move, a small, Dublin-based pharmaceutical company, Amarin, filed suit against the Food & Drug Administration arguing that it has a constitutional right to share certain information about its product with doctors for unapproved uses.

The FDA approved Amarin’s drug Vascepa in 2012. It is a prescription form of fish oil that is used along with a low-fat and low-cholesterol diet, to lower high levels of triglycerides (fats) in adults, which is linked to heart disease. After the drug’s approval, Amarin requested permission to give doctors information regarding a study that showed Vascepa can reduce the triglyceride levels in less-severely affected patients, not just high-risk patients. The FDA ultimately rejected their request. Amarin’s issue is that many doctors already prescribe Vascepa to patients who do not have abnormally high triglyceride levels. The discretion of the physician to prescribe for an off-label use is perfectly legal and has been deemed the practice of medicine, which the FDA does not have jurisdiction to regulate. Manufacturers on the other hand, cannot promote for off-label uses.

Amarin wants to send doctors clinical trial data they described as “supportive but not conclusive research” that their drug could reduce the risk of heart disease in patients with less severe conditions than were initially approved for. The FDA denied Amarin’s request to share this information with doctors, and Amarin filed their suit. The FDA found that the “hypothesis that a triglyceride-lowering drug significantly reduces the risk for cardiovascular events among” individuals with less severe symptoms, failed to be proven in clinical trials. Nonetheless, Amarin feels its First Amendment right is being infringed upon by not being able to share this use with doctors. Amarin has not been accused of wrong-doing by the FDA yet, but they are possibly the first pharmaceutical company to sue the FDA preemptively. This could be because dietary supplement forms of fish oil are legally permitted to make the same statement without such rigorous regulation by the FDA. However, there seems to be increased regulation of dietary supplements as well after several injuries have been reported using weight loss supplements.

In a private letter to physicians who are paid to speak on behalf of its company, Amarin writes, “if we receive a judgement in our favor, we will move rapidly to deliver to you additional Company-approved training and updated promotional speaker materials related to the court’s interpretation of free speech related to the ANCHOR results.” In reality, free speech is not as romantic as the founding fathers would have hoped, especially in closely regulated markets such as the pharmaceutical industry. Courts consider several factors in determine if the government is infringing on First Amendment rights including, whether a substantial governmental interest being asserted, whether the regulation directly advances that interest and whether it is not more extensive than necessary.

Amarin may look to a fairly recent case in which a pharmaceutical sales representative’s conviction was overturned because the information he shared was not false or misleading. As a matter of fact, Amarin’s attorney ascertains precisely that, that the clinical trial data is truthful and not misleading. The U.S. Department of Justice and State attorney generals have increasingly used the Federal False Claims Act as an enforcement mechanism against health care fraud. The government believes that by promoting off-label uses, the manufacturers caused pharmacies to falsely claim Medicaid payment for drugs in ways unapproved by the FDA. Amarin is at risk for violating the FCA if they proceed in sharing the data directly to the doctors.

Drugs have and continue to save countless lives. The FDA has the duty, through a rigorous preapproval process, to ensure drugs are safe and effective before they are on the market. However, it is the stance of Amarin, that since off-label usage is already so commonplace by physicians and legal, providing more information, rather than less, is safest for the patient to promote overall health and more informed decision-making by physicians.

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