Richard Wolfram, Esq.

410 Park Ave. 15th Fl.
New York, NY 10022

SETTLEMENT


Lyme CT AG Press Release - 05.01.08                       Lyme Settlement GCR article
Lyme Comp 360 article                                                   Lyme Settlement agreement - CT- AG- IDSA
Lyme Settlement Cape Cod article                               Lyme WSJ article_5.02.08
Lyme Settlement Summary for Clients & Friends


June 2008

Clients and Friends:

   I am writing to bring to your attention a recent development in the application of antitrust law to health care that may be of interest to you and your clients.  The development may suggest a need for medical associations and related interests to take certain, relatively simple proactive steps to ensure compliance with the law.  I have represented various interests in the matter.

    Background on standard setting.  A theme of my ‘Clients and Friends’ posts over the past several months has been the complex dynamic between standard setting, which can yield significant procompetitive benefits and efficiencies, and antitrust law, which can ensure that standard setting does not devolve into anticompetitive, exclusionary conduct.  (See, for instance, past e-mails regarding the petition in March to the FTC about alleged antitrust patent hold-up by patent licensing company Rembrandt; the public comment in April on the FTC’s settlement with patent licensing company Negotiated Data Solutions; and the recent article on the appellate decision in Rambus v. FTC – all of which I co-authored with David Balto.)

   Antitrust and medical guidelines:  the Connecticut Attorney General’s investigation and settlement regarding Lyme disease guidelines.   Standard setting occurs across the spectrum of commercial and technological activity, including health care.  Just as the supposed antitrust immunity for medicine as a “learned profession” disappeared years ago, because of the appreciation that medicine occurs in commerce, so also, antitrust standard setting principles can apply to the development of medical guidelines.

   This is the lesson of a recent investigation and settlement by Connecticut Attorney General Richard Blumenthal.  On May 1st, the Attorney General announced that his office had entered into a settlement agreement with the Infectious Diseases Society of America (IDSA) regarding its development of clinical practice guidelines for the treatment of Lyme disease.  The agreement, which provides for a reassessment of the guidelines, brought to a close an 18-month investigation into alleged exclusionary and collusive conduct by the IDSA, the major professional medical association in the U.S. specializing in infectious diseases.  A new panel, free of commercial conflicts of interest, will determine whether to retain, modify in part or completely discard and reformulate the guidelines, based on an evaluation of scientific evidence presented by experts in a public forum.

   For the last two and one-half years I have been engaged in antitrust counseling and advocacy on issues underlying the Connecticut investigation, on behalf of various interested entities.  I teamed up with Lorraine Johnson, an attorney and executive director of the California Lyme Disease Association, in bringing the antitrust implications of the IDSA’s conduct to the attention of the Attorney General’s Office.

   Heightened scrutiny of medical guidelines development.  The Connecticut AG’s investigation and settlement suggests the need for heightened scrutiny of the development of medical specialty guidelines to ensure that such conduct does not run afoul of the antitrust laws where guideline panelists (and/or their association) may have economic interests in the outcome of the guideline determination.

   In commercial standard setting, the participants are commercial competitors and one of them typically stands to profit from the choice of a standard.  Abuse of the standard setting process in such circumstances, such as improper interference with the deliberation process, is suspect under well-established antitrust law.

   One of the signal achievements of the investigation, from a legal perspective, was to show that antitrust standard setting principles can legitimately apply also to the development of medical guidelines.  Where participants in the development process are economically interested in the outcome, as alleged in this matter, there is a role for antitrust to ensure that in pre-empting market choices, standard setting does not harm consumer welfare by improperly favoring particular commercial interests.

   On the other hand, it is important to note that where medical guideline participants (or the medical association) have no economic interest in the outcome of the guideline determination, there should be no call for antitrust, regardless of any process abuse; it is a matter of ‘pure’ medical and scientific debate, however flawed.

   Practical ‘take-away’ from the investigation and settlement.  If antitrust has not typically been applied to the development of medical guidelines, it may be because antitrust is only now catching up to an increasingly widespread phenomenon:  the presence of commercial conflicts of interest on the part of medical guidelines panelists, at a time when guidelines more than ever limit clinical discretion and influence insurance coverage decisions.

   This phenomenon, and the Attorney General’s investigation and settlement, combine to create a simple, constructive take-away for individuals and associations involved in the development of medical guidelines:  any economic interests they have in the outcome of their guidelines should be vetted and all possible precautions should be taken to ensure that the guideline selection comports with the association’s own guideline setting rules and also with common law due process.  Failing this, the conduct may be fair game for antitrust enforcement in the future, with a view to ensuring that guideline development yields the optimal outcome for health care in light of the best science – and the Connecticut matter may pave the way.

   If you are interested in reading about this matter in further detail, attached please find a brief summary, along with the Attorney General’s Press Release and Agreement and a few of the more than 100 articles published around the country and abroad covering this story, including from the Wall Street Journal, the U.K.-based Global Competition Review and Competition Law 360.

   If you have any questions or comments about this or related matters, please do not hesitate to contact me.

 

Kind regards,
  

Richard Wolfram, Esq.

 

Copyright 2009 Richard Wolfram, Esq.. All rights reserved.

 

410 Park Ave. 15th Fl.
New York, NY 10022