What appeared to be yet another entry in the march of legal settlements turns out to be more interesting than it first appeared.

The Basic Story: Off-Label Marketing 

The story was initially briefly reported in the media.  A report in the Seattle Post-Intelligencer on 9 January, 2014, was perhaps the most complete,

CareFusion, a manufacturer of medical and surgical supplies and medical devices, has agreed to settle charges of illegal marketing practices and kickback payments for promoting sales of the company’s surgical preparation solution, Chloraprep.

Under the terms of the settlement with Washington, other states, and the federal government, CareFusion will pay a total of $40.1 million.

In particular,
When the FDA approves a surgical solution such as Chloraprep as safe and effective, its manufacturer can’t market or promote it for an 'off-label' use – any use not approved by the FDA.

Chloraprep was approved for specific inpatient hospital procedures, including the preparation of a patient’s skin prior to surgery or an injection. The FDA rejected its use for prepping the skin prior to inserting catheters into veins for administering medications, or cleaning the skin as part of closing wounds.

The lawsuit alleges that from Sept. 1, 2009 to Aug. 31, 2011, CareFusion promoted Chloraprep for improper uses. CareFusion also allegedly publicized unverified information about Chloraprep during the same time period, Ferguson said.

So this follows a template we have seen before, most recently here.  A company promotes a drug or device for "off-label" uses.  While physicians are legally allowed to prescribe a drug or use a device for reasons other than its official indications, companies are not legally allowed to promote such uses.  Sometimes it turns out that the drug has benefits that outweigh its harms when used off-label, in which case the violation could be considered technical.  In other cases, the drug might turn out to be useless or even net harmful when used off-label, so the violation indicates putting revenue ahead of patients' welfare.  

The reporting on the CareFusion Chloraprep settlement did not clearly suggest that the off-label use was harmful to patients.

Allegations of Kickbacks to Promote Off-Label Use, but How?

It gets more interesting.  The Post-Intelligencer also noted,

The states also contend that in 2008 CareFusion’s predecessor corporation entered into agreements that CareFusion assumed legal and financial responsibility for. This included payments to Health Care Concepts Inc., payments that were allegedly made to hide kickbacks to the physician-owner of HCC for promoting and influencing providers to use Chloraprep, he said. This violates federal and state anti-kickback laws.

Now the allegations also include kickbacks to the "physician-owner" of a company to facilitate off-label promotion.  So the issue goes beyond a technical violation of the law.  The Post-Intelligence report, however, did not make clear what Health Care Concepts Inc actually did to contribute to off-label promotion.

A quick attempt to find out more about this company via the web was not fruitful.  There are lots of companies/ organizations called Health Care Concepts or some variant.  The most relevant may be this one, which lists CareFusion as a "partner" on its main web-page.  What this company actually does is a bit unclear.  Its business model is described as "a private incubator of early products, services, and technologies, as well as an accelerator of mature solutions that will be taken to scale." What that has to do with off-label promotion of a product of a big established company like CareFusion is not clear.  How this company could have influenced providers is not clear, given that it is not an advertising firm, public relations firm, or medical education and communication company (MECC).

So what is going on here?  

Allegations of a $11.6 Million Payment to Manipulate the National Quality Forum Standards

Yesterday, 21 January, 2014, Modern Healthcare began to explain the mystery.   

Many healthcare companies have been accused of paying kickbacks to influence physicians' medical decisions, but one major supplier allegedly tried to steer an entire industry by influencing the recommendations of the National Quality Forum

The NQF, which reviews medical evidence and makes recommendations for improving healthcare, acknowledges that a well-known patient safety advocate is alleged to have received millions of dollars to promote a surgical sterilization product while co-chairing an NQF committee that suggested hospitals use that product. 

Federal officials say Dr. Charles Denham, co-chair of NQF's Safe Practices Committee in 2010, received $11.6 million from San Diego-based CareFusion to promote the company's ChloraPrep line of skin-preparation products. Denham's committee at the NQF also recommended surgeons use ChloraPrep products to prevent surgical infections, the NQF said.

The allegations about the role of Dr Denham in the NQF also did appear in the the official US Department of Justice press release.

Allegations of Bogus Contracts, and Non-Denial Denials

The allegations produced some non-denial denials (in the phrase found in All the President's Men).

Dr Denham responded, but through a lawyer:

A statement from Denham's attorney, Larry Gondelman of Powers Pyles Sutter & Verville in Washington, said reports that the underlying lawsuit involved Dr. Denham were 'blatantly false.'

Denham was not accused of wrong-doing in the whistleblower lawsuit, and Gondelman said Denham has and continues to cooperate with investigators in the case.

Note that while the attorney denied that Dr Denham was named in the underlying lawsuit, he did not apparently specifically deny the allegations.

The NQF also reponded,

 An NQF review committee removed the reference to the specific product before final publication of 'Safe Practices for Better Healthcare' in 2010.

'An NQF ad hoc review did not find sufficient evidence to support one skin preparation over another,' a statement from the organization said. 'The ad hoc review effectively served its role of rapidly responding when a potential issue is identified.'

Note that the NQF press release did not deny that the CareFusion money was given to Dr Denham's organization, nor that the NQF report might have promoted the use of a class of products in which CareFusion's Chloraprep resides.

A follow-up story in Modern Healthcare noted that Dr Denham confirmed the payment of the money to his company, but not its purpose,

 Renowned quality expert Dr. Charles Denham confirms that CareFusion paid his company more than $11 million, but Denham says he was surprised to see the U.S. Justice Department describe the money as kickbacks intended to influence national quality-of-care guidelines published by the National Quality Forum.

Dr Denham's lawyer confirmed the payment, but did not further explain it:

Denham's lawyer, Larry Gondelman of Powers Pyles Sutter & Verville in Washington, acknowledged that CareFusion did pay Denham's company under two contracts. 


Gondelman said the $11.6 million paid to Denham's company covered 'an array of services' and that he could not elaborate.

Again, note that Mr Gondelman did not specifically deny that the money served as a kickback.

Meanwhile, the Department of Justice alleged something more elaborate, and nefarious, 

The Justice Department, though, says the contracts were written to look as though CareFusion was buying consulting, software development and strategic marketing services, as well as the completion of three unnamed projects. The value of the deals, the government alleges, far exceeded the fair-market costs of those services, and that one of the actual purposes of the deals was to conceal kickbacks to Denham while he served on the National Quality Forum.

Interval Summary

So what is clear so far is that:
-  CareFusion agreed to a $40.1 million settlement of allegations that it provided kickbacks to promote off-label use of its product.
-  CareFusion paid $11.6 million to Health Care Concepts
-  Health Care Concepts is run (and possibly owned) by Dr Charles Denham, who chaired a National Quality Forum committee that recommended use of CareFusion's product ChloraPrep in a performance standard and the final version of the NQF standard recommended use of a group of products including ChloraPrep

We have frequently discussed how health care corporations may promote goods, particularly drugs and devices and services through deceptive and unethical practices, including inducements ranging form creation of conflicts of interest to outright bribes and kickbacks.   We have also discussed the influence of individual and institutional conflicts of interest on clinical practice guidelines.  This has become an important enough problem for the US Institute of Medicine to weigh in with standards for trustworthy guidelines that markedly limit such conflicts of interest. 

This case seems notable because it may link the problems of deceptive and unethical promotion with the influencing of clinical practice guidelines.  It is particularly notable because the organization generating the guidelines in question, the National Quality Forum, has become large, influential, and authoritative.  Re the latter point, the latest Modern Healthcare article affirmed,

The NQF is a standards-setting organization for the healthcare provider industry. It holds the exclusive contract to provide Medicare and Medicaid with recommendations on a national quality-of-care strategy and the measures used to gauge improvements.

In fact, while the NQF performance standards can function as guidelines, they also may be bases for pay for performance schemes that attach real incentives to guidelines, which could become perverse if the guidelines have been manipulated.

Can the NQF Defend Against Conflicts, and If Not, Should it Remain So Authoritative?

So the big question is whether the NQF, given its unique influence, has any meaningful approach to prevent its standards from being influenced by conflicts of interest?

The NQF does have a recent conflicts of interest policy. However, according to my reading, it neither bans committee members with conflicts of interest, nor even requires public disclosure of conflicts of interest.  All it seems to require is that committee members disclose conflicts internally and voluntarily recuse themselves from deliberations which may be affected by them.  Although the policy states that conflicts of interest may be made public, I could find nothing in the report which Dr Denham co-authored about conflicts of interest or competing interests affecting any of the authors, including Dr Denham

Furthermore, a very quick look at information publicly available on the NQF web-site suggests the organization itself may have major institutional conflicts of interest.  The NQF is one of those "public-private partnerships" that have become all the rage.  Several members of its board of directors have leadership positions in large health corporations, financial firms with large health care interests, or trade associations for large health care corporations: 

- Elizabeth J. Fowler, PhD, JD, is Vice President, Global Health Policy, in the Government Affairs & Policy group at Johnson & Johnson.

- Robert Galvin, MD, is Chief Executive Officer, Equity Healthcare, at The Blackstone Group.

 - Karen Ignagni, President and Chief Executive Officer of America’s Health Insurance Plans (AHIP), is the voice of health insurance plans....

- J Mark Overhage MD, PhD,  Chief Medical Informatics Officer, Health Services, Siemens Healthcare

Thus it is conceivable that they could personally profit, and that their organizations could institutionally profit from standards that favor their organizations' interests.  

Furthermore, NQF receives funding from the US government and private foundations, but also from pharmaceutical companies and their in-house foundations:

the Bristol-Myers Squibb Foundation, the Cardinal Health Foundation, Pfizer Inc., Sanofi-aventis,...

Unless the current case leads to big changes in the prevalence of conflicts of interest among the NQF board, the continuation of its institutional conflicts of interest generated by its sources of funding, and its weak policy on conflicts affecting committee members, the question becomes whether it should continue to have such an authoritative role?

As we have said over and over, pervasive conflicts of interest affect health care decision-makers and policy makers and the organizations within which they function.  Such conflicts threaten to put various private interests way ahead of patients' and the public's health.  If we really want health care that will put patients' and the public's health first, we need to end such arrangements that favor private gain.  

 Roy M. Poses MD on Health Care Renewal

ADDENDUM (23 January, 2014) - A closer re-reading of the NQF conflict of interest policy made it clear that recusal is not voluntary, and that conflicts of interest may be revealed publicly, but that such disclosure is not mandatory.  The paragraph above dealing with these issues was revised accordingly.  

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