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Putting Patient Values in Value-Based Medicare

Peter J. Teravskis, MJLST Staffer

The vast majority of payments to medical providers are based on a fee-for-service reimbursement model. The fee-for-service model reimburses providers for every test, exam, intervention, and procedure they perform, potentially contributing to over-billing, increased health care costs, and waste. On the other hand, value-based care models tie provider reimbursement to efficiency of care and measures of patient wellness and satisfaction. For this reason, in recent years, there has been a nationwide effort to transition provider reimbursement away from fee-for-service towards value-based care.

In line with this effort, the Affordable Care Act contains many provisions designed to encourage the transition to value-based care. In 2015, then-Secretary of Health and Human Services Sylvia M. Burwell tasked the Centers for Medicare and Medicaid Services (CMS) with two goals for 2018: increasing (1) value-based purchasing practices, and (2) use of value-based reimbursement models (called alternative payment models or “APMs”) by Medicare providers. The hospital value-based purchasing program rewards acute-care providers for making purchasing decisions based on quality metrics rather than the volume of services provided while still operating in a fee-for-service framework. On the other hand, the APM adoption plan seeks to discard fee-for-service reimbursement entirely by encouraging the adoption of payment models that reimburse providers based on patient outcomes and efficiency of care rather than volume.

While CMS efforts have resulted in increased adoption of value-based care models, early data suggests that these models may not deliver the health and financial benefits initially promised. For example, recent studies indicate that multiple value-based Medicare reimbursement models in several clinical contexts fail to demonstrate meaningful improvements in hospital readmission rates, health outcomes, quality of care, and patient satisfaction. Nevertheless, some marginal cost savings have been reported. However, cost savings may be even more limited than the studies suggest. Government metrics may overestimate the actual adoption of value-based practices given the loose definition of “value-based care.” Further, the New York Times Upshot reports that CMS may overestimate the adoption of value-based purchasing metrics by miscounting many volume-based purchases as value-based purchases.

CMS’s attempt to implement value-based care through this top-down incentive structure is also ethically fraught. Current value-based care models have been criticized for making assumptions about what patients actually value, rather than adopting a pluralistic understanding of patient values. This “monistic” value system decreases patient autonomy in their health care decisions. Indeed, ethicists contend that it is only ethical to impose value-based decisions on patients if there is “strong and sound evidence” that they deliver “equivalent or greater clinical benefit at lower cost.” This ethical principle greatly limits the number of value-based reforms that can be instituted at the national- or hospital-level. Indeed, all other value-based decisions should be made in consultation with individual patients, taking into account their unique value systems. Furthermore, it is “ethically suspect” to withhold otherwise beneficial treatments based on cost savings alone. Unfortunately, value-based care models favor health care market efficiency and could penalize providers who tailor care to patient values rather than the monistic value structure described above.

Given the ethical limitations of value-based decisions that can be made without patient input, the early empirical shortcomings of Medicare’s value-based care initiatives may be partially explained by the slow process of aligning care to patient values. Specifically, the value-based decisions most likely to improve care and costs require physicians to (1) understand individual patients’ values, and (2) tailor efficient and effective care to align with those values. Unlike the APM adoption initiative which takes a holistic approach to incentivize value-based care, the hospital value-based purchasing plan does not allow for significant patient-provider collaboration, especially in the acute care setting where patient interactions are brief.

Recently, the Trump administration has reoriented value-based purchasing agreements to focus on drug price reduction and signaled it will slow the pace of APM adoption (a move that was criticized for creating uncertainty among health care market stakeholders). This deceleration likely stems, in part, from concerns over mandating the adoption of certain APMs in rural communities. Regardless of the motive, decelerating APM adoption will likely prove beneficial. The process of aligning care with patient values is largely intangible in the short-term; therefore providers and patients alike will benefit from the additional flexibility of a slower, voluntary transition away from fee-for-service reimbursement. Nevertheless, CMS must not lose sight of the goal of providing Medicare beneficiaries high-value-care while still affording providers the time and financial latitude to ensure that long-term benefits are genuinely patient-value-centric.


Will the Vaping Industry Go Up in Smoke?

Stephen Wood, MJLST Staffer

It’s no secret that vaping has become increasingly popular. The number of users has increased from 7 million in 2011 to 41 million as of 2018. The total market is now worth an estimated $19.3 billion. Less clear is the future of industry regulation in light of the recent respiratory illnesses linked to vaping. On September 24, 2019, the Centers for Disease Control and Prevention reported that vaping was attributed to 805 illnesses and 12 deaths. Pressure is building on the industry’s major players. In the last week, we have seen the cancellation of a merger between two of the largest tobacco companies, Altria and Philip Morris, and the release of the CEO of Juul, Kevin Burns.

However, the respiratory illnesses associated with vaping haven’t been linked to a specific product, and it is unclear what the long-term effects of vaping are. Because of this uncertainty, some states have implemented blanket restrictions on the sale of vaping products, President Trump has proposed new regulations, and the CDC has issued warnings regarding their safety. This is blindsiding the industry, which has been free from regulation by the FDA until recently.

Vaping devices, also known as electronic nicotine delivery systems (ENDS), became subject to the FDA’s regulatory scheme for all tobacco products on August 8, 2016. The Deeming Rule placed ENDS in the same category of products as cigarettes and other traditional tobacco products, which have been regulated under the Family Smoking Prevention and Tobacco Control Act since 2009. For this reason, the minimum age for purchasing ENDS is 18 years old, and the marketing, manufacturing, and distribution of ENDS is heavily regulated.

Juul, in particular, has come under fire for its marketing strategies. Among other claims, many lawsuits allege that the company specifically targeted minors through its use of social media and distribution of enticing flavors. These practices have also been the focal point of the recent surge of state regulations, which “are filling what many see as a regulatory void caused by federal inaction.” For example, in Michigan, Governor Gretchen Whitmer implemented an emergency ban, limiting the sale of vaping products to those which are tobacco flavored. New York did the same but exempted menthol from the ban. Massachusetts, notably, implemented a four-month emergency ban on all products. President Trump’s proposed ban, on the other hand, would be limited to flavored products.

If President Trump’s proposal is adopted, the industry would see an estimated 80% loss in sales. It will be interesting to see what the regulatory landscape looks like once the smoke clears.

 


A Green New City Plan? How Local Governments Should Plan For Climate Refugees

Shantal Pai 

Politicians, especially democratic presidential candidates, are competing to release the best “Green New Deal.” These proposals are national-scale climate plans that are meant to reduce carbon emissions to mitigate the impact of climate change. But, as these plans are released, a difficult reality remains: we may be less than one year away from irreversible changes to the climate.

Regardless of which Green New Deal eventually becomes United States Law (and one will—because climate change grows more undeniable each day), in addition to a climate mitigation plan, the U.S. and its cities need a climate adaptation plan: a way to survive in the new reality.

At the point of no return (2 C average warming, worldwide) the most inhabited regions of the world will face extremely hot temperatures, dramatic weather events including storms, flooding and drought, and sea-level rise. Though some regions have developed strategies to mitigate these damages—  such as a proposed levee surrounding Manhattan—the best possible solution may be to move threatened communities to higher, cooler ground.

So, in addition to national-scale plans, local governments in communities that will be attractive in our post-industrial climate, places like Minneapolis, Cincinnati, Buffalo, and Denver, should prepare. They need to be ready for a large influx of refugees from the coast looking for a secure future.

If Hurricane Katrina serves as an example, the first people to move permanently inland will not be the predominately white, wealthy residents of the city, but working-class residents and people of color. There are two reasons for this: (1) racially discriminatory housing practices mean people of color are most likely to face flooding and storm damage and (2) these groups are least likely to get government aid after a flood.

There has been a similar trend after Hurricane Dorian. Since the Trump Administration declined to grant temporary protected status to Bahamians fleeing uninhabitable conditions after the storm, many victims are fleeing with visas that will allow them to live in the U.S., but not to work. Many of these people will be staying with family in the United States while the Bahamas rebuilds, increasing demand for U.S. services while they are unable to contribute to local government revenue because they cannot earn an income.

Such a large influx of low and middle-income residents could wreak havoc on an unprepared regional plan. The people fleeing climate change need quick access to affordable housing, schools, and city resources, often at disproportionately high levels. At a city level, places with affordable housing already struggle to generate the revenue necessary to provide these services. In cities where property values are lower, the potential for a city to raise revenue from property taxes is lower. A massive influx of people fleeing climate change would further strain already deeply stressed city budgets.

Furthermore, a large influx of people of color often leads to “white flight”—an en masse departure of white people to nearby, more affluent cities—which deepens regional segregation and inequity.

The two combined lead to downward spirals in which the number of people of color in a community grows, leading to the departure of white people, causing property values to fall because there aren’t enough people of color who can afford to move into the neighborhood, which reduces a city’s ability to generate revenue while simultaneously leading to an influx of low-income people who are more likely to rely on city services. This phenomenon discourages building affordable housing, makes it hard for struggling cities to generate revenue, and maintains racial and economic segregation.

Strategic regional planning can combat these tendencies but needs to happen more aggressively than ever before as climate change amplifies existing inequality. First and foremost, the regions that will be most attractive to climate refugees need to encourage the development of affordable housing throughout the metropolitan area. Spreading the cost of supporting climate refugees across the region prevents any one city from being saddled with the expense of providing services and the inability to raise sufficient revenue.

Second, cities should desegregate school systems. In Louisville, Kentucky, a system to desegregate schools reduced white flight. The desegregation promoted stable housing prices and tax revenue, making it easier for cities to plan for the future.

Third, regions should build more public spaces than otherwise anticipated, in ways that avoid displacing existing poor and minority communities. Spaces like theaters, libraries, schools, and public transit will all face increased demand as new residents become acquainted with the region. These spaces increase property value, encourage wellbeing, and further reduce white flight, all of which help break the downward spiral of city revenue generation caused by white flight.

None of these solutions will prevent inequality, and refugees escaping climate change face extremely difficult challenges in relocating. But, by planning for climate refugees, local governments can help mitigate the effects of climate change on segregation.


The Atlantic Mackerel Plight: Roadblocks to Prevent Overfishing

Yvie Yao, MJLST Staffer

Atlantic mackerel, like sardines and herring, are small forage fish. Not only are they vital prey for seabirds and larger fish like bluefin tuna and cod, but also essential for the survival of ocean wildlife.

Although Atlantic mackerel are resilient to fishing pressure and bycatch risk, scientists announced this year that fishing activities along the coast have added too much pressure to the population of mackerel. That being said, Atlantic mackerel is overfished. On February 28, 2018, the federal government, unsurprisingly, declared that the catching cap for mackerel had been reached and the mackerel fishing season was officially closed for the rest of this year.

To prevent overfishing of a species, the Magnuson-Stevens Fishery Conservation and Management Act requires that local fish councils create a rebuilding plan as soon as possible, not to exceed 10 years. Conservative practices endorse setting a shorter rebuilding timeline with lower catch levels so that the species can recover as quickly as possible. Setting longer timelines with higher catch levels is risky. The species might be commercially inviable sooner than the projection and the council is less likely to reach its goal of rebuilding the under-stocked population. Moreover, low stock of the species is likely to negatively impact healthy and sustainable living of its predators in the ocean system.

The Magnuson-Stevens Act has been effective since it was first passed in 1976. Two amendments in 1996 and 2006 furthered the interest of fishery conservation, requiring local councils to place all overfished stocks on strict rebuilding timelines and mandate hard limits on total catches. These science-based provisions have recovered 44 fish stocks around the country and have generated $208 billion in sales in 2015 for fishermen.

However, this effective ocean fishery conservation law is facing challenges. On July 11, 2018, the House passed H.R. 200: Strengthening Fishing Communities and Increasing Flexibility in Fisheries Management Act. The bill, if it becomes law, would change rules about requirements to rebuild overfished stocks and allow councils to consider changes in an ecosystem and the economic needs of the fishing communities when establishing annual catch limits.

Recreational fishing and boating industry groups vehemently support this bill. They argue that the proposed changes would give alternatives to local councils to manage fish stocks, save taxpayers money, and modernize the management of recreational fishing.

Environmentalists and commercial fishermen oppose this bill. They argue that the proposed bill would let local councils rehabilitate them as fast as practicable, rather than rebuilding stocks as fast as possible, leading to looser regulation. The bill would also remove annual catch limits for short-lived species and ecosystem-component species, where forage fish including Atlantic Mackerel fall into the category. This backtrack from science-based policy would further delay restocking of forage fish and might even drive some species to commercial extinction.

It is unknown whether H.R. 200 will be passed in the Senate. Another companion bill S.1520, Modernizing Recreational Fisheries Management Act of 2017, envisions the same goal as H.R. 200. Will we be able to eat Atlantic Mackerel in the next ten years? The answer is uncertain. Regardless, the vote against such bill is a chance to “affirm that science, sustainability, and conservation guide the management of our ocean fisheries.”


California’s Sport Venue Boom: A Weakening of CEQA?

By: Gabe Branco, Minnesota Journal of Law, Science & Technology Vol. 20 Staffer

The Los Angeles Rams, Sacramento Kings, Golden State Warriors, Los Angeles Clippers, and Oakland A’s are all seeking to build new stadiums in compliance with the California Environmental Quality Act (“CEQA”). CEQA subjects public and private agencies to a process focused on determining any significant environmental impact the proposed project may have and whether any suitable alternatives exist that may mitigate those significant impacts. The process takes some time, as the agency must complete several environmental impact reports (“EIR”), allow for adequate public notice and comment, and provide a period of time for environmental based claims to be litigated.

The Golden State Warriors have been successful in their CEQA process, but have been subjected to high costs in preparing the EIRs and combating lawsuits from environmental groups. The Los Angeles Rams have taken a different approach. CEQA allows for agencies to file for project “statutory exemptions” in order to cut down on the lengthy procedural process. One exemption of CEQA is the voter-sponsored ballot initiatives. In California, it is the right of the people to make changes to the law through these initiatives, which have the same effect as legislation. Land use decisions are subject to these initiatives, and thus projects that are approved through the initiative are not subject to CEQA. The Los Angeles Rams collected signatures from 15% of the population in Inglewood to qualify the development project for special election. The development project was then supposed to be placed on the ballot initiative, but the Inglewood City Council unanimously approved the project. The Los Angeles Rams do not need to complete an EIR, provide time for notice and comment, and are shielded from litigation. The Los Angeles Clippers, Sacramento Kings, and Oakland A’s have received or are in the process of receiving legislative exemptions with varying CEQA procedures somewhere in between the Golden State Warriors’ and the Los Angeles Rams’ processes. While the afore-mentioned franchises must still complete an EIR, they have considerably reduced (or eliminated) litigation and notice and comment periods.

The question becomes whether these exemptions given so willingly to sports teams weaken CEQA’s ability to force agencies to be more considerate of a project’s environmental impacts and alternatives. Sport stadiums do have a significant impact on the environment. Shortening or doing away with judicial review and notice and comment limits the number of alternatives an agency could be made aware of and limits public recourse for legitimate claims, leading to a less than efficient plan for limiting significant environmental impacts.

So far, the courts have held that past projects with CEQA exemptions do not conflict with CEQA’s purpose. Saltonstall v. City of Sacramento, 234 Cal.App.4th 449 (2015). The rationale may well be rooted in the desire for the Courts to limit the amount of environmental litigation on the Court’s docket, and push through stadium projects that may vitalize a California city’s economy. While state legislators have introduced a bill that would prevent future sports teams from gaining the exemption the Los Angeles Rams received, teams may still limit the procedures enforced by CEQA through legislative exemptions. Clearly, that as long as sports have a strong economic foothold in American culture, sports stadiums will continue to be built at the expense of the environment.


Update: Tribal Sovereign Immunity Can’t Protect Allergan from the PTAB

Brenden Hoffman, MJLST Staffer

 

Last September, the pharmaceutical company Allergan entered an agreement with the Saint Regis Mohawk Tribe where the pharmaceutical company sold its patents for the wildly successful drug Restasis to the tribe. The six patents were then licensed back to Allergan.  These moves have been widely criticized as a sham transaction. For more information about this controversy and its role in the ongoing debate over inter partes reviews (IPR’s), see my October 15, 2017 post here.

On February 23, 2018, the PTAB ruled that tribal sovereign immunity does not apply to IPR’s and denied the Saint Regis Mohawk Tribe’s Motion to Terminate the challenges to the Restasis patents made by Mylan Pharmaceuticals Inc., Teva Pharmaceuticals USA Inc. and Akorn Inc.   In this decision, the PTAB dealt a serious blow to the Allergan/Saint Regis Mohawk Tribe deal, finding that tribal sovereign immunity does not apply to IPR proceedings generally and that in this specific instance, that there was no real tra


Could EU General Data Protection Regulation (GDPR) strengthen the United States Consumer Privacy Protection Laws?

Young Choo, MJLST Staffer

 

The EU General Data Protection Regulation (GDPR) will replace the Data Protection Directive 95/46/EC in May of 2018. Unlike the Directive, GDPR does not require each European state to enact a national statute. The GDPR would uniformly apply to countries in the European Union. European Commission proposed the GDPR to “strength and unify data protections for people in the European Union.” The regulation also addresses the export of personal data outside of the European Union. More specifically, Article 3 of GDPR says that “if you collect personal data or behavioral information from someone in an EU country, your company is subject to the requirements of the GDPR.”  Consequently, companies in United States dealing with European Union consumer information are expected to be in compliance with GDPR.

 

In light of the new regulation, the U.S. companies, either have facilities in the EU or having personal data of European, are busy to be in compliance with the GDPR. What would be generally required under the GDPR for the U.S. companies? The first step would be deciding whether GDPR applies to the company. The second step would be having a Data Protection Officer (DPO). A Data Protection Officer (DPO) is “a position within a corporation that acts as an independent advocate for the proper care and use of customer’s information.” The third step would be creating a strategy to be in compliance with the GDPR. To do so, drafting a Privacy Policy agreement in line with the GDPR is necessary. Key requirements should be provided in the privacy policy under the GDPR would be (1) “Privacy Notices”; (2) “Consent”; (3) “Data Subjects’ Rights”; (4) “Security”; (5) “Data Protection Assessment”; (6) “Breach Notification”; (7) “Service Providers”.

 

Could these U.S. companies’ movement to be in compliance with GDPR also influence the United States’ Data Protection law as well? The answer is “possibly”. California recently initiated the move toward more stringent data privacy laws. “The California Consumer Personal Information Disclosure and Sale Initiative (#17-0039) may appear on the ballot in California.” The Initiative includes the following rights for consumers:

 

Gives consumers right to learn categories of personal information that

businesses collect, sell, or disclose about them, and to whom information

is sold or disclosed. Gives consumers right to prevent businesses from

selling or disclosing their personal information. Prohibits businesses from

discriminating against consumers who exercise these rights.

Allows consumers to sue businesses for security breaches of consumers’ data, even if consumers cannot prove injury. Allows for enforcement by consumers, whistleblowers, or public agencies.

 

Another impact the movement toward stringent data protection compliance could bring is the changes of perception of “harms” in the data breach setting. United States courts have not considered “data breach” itself as a harm. They always required an additional showing of consequential harm arising out from the data breach, such as money spent on monitoring the data breach or any credit card misuses arising from the breach. On the other hand, the E.U. data protection law is strongly based on the idea that data breach itself is a harm because privacy is a fundamental human right. It is important to note how circuit courts would decide Article III on a standing issue, one of the requirements for the plaintiffs to prove is a “concrete and particularized harm”, in the data breach setting.

 


Say it to My Face: Why You Don’t Get to Use My Old LinkedIn Headshot to Promote Your Business, Even If You Took My New One

Tim Joyce, Former MJLST Editor-in-Chief

 

[This article unintentionally picks back up on a more theoretical LawSci Forum post from spring 2017 by Travis Waller.]

 

The Situation

A few weeks ago I got all “fired up” about copyright. [To figure out why that’s a terrible #dadjoke, you’ll have to read that post here.] I honestly thought I’d have time to cool down again (fire pun #2!), and let the smoke clear (TRIFECTA?!!) before getting so incensed again (ok, I’ll stop now).

Then, I opened my LinkedIn feed early last week.

Staring back was a side by side comparison of my current profile pic–a quirky, raised-eyebrow homage to the Uncle-Sam-finger-pointing “I Want You” posters of yesteryear–and the new website head-shot we had just chosen for my law firm’s website refresh–a still-relaxed but decidedly more traditional affair. [Click my name above to see my current LinkedIn pic.]

In and of itself, the juxtaposition was not terribly unpleasant. After all, these were both pictures that I had personally selected from dozens in each photo-shoot, and I was the one who chose to make the older photo my profile pic. It was the text accompanying the pictures that really got me lit up. Taking the high road here, I won’t identify the author (the photographer) or reprint the text verbatim. But the went something like,

“This* guy [*me, here] made a terrible mistake ever using the older pic. It might be appropriate for actors and comedians, but not serious lawyers. If you need help figuring out how to look like a competent professional on LinkedIn call me [the photographer] for an appointment.”

Needless to say, insulting. After all, I did enjoy a career as a professional actor pre-law school, and the picture was entirely appropriate for my purposes there.

But even more than insulting, the photographer’s LinkedIn post almost certainly illegal, for 2 reasons.

 

#1 – Copyright law says you don’t get to use other people’s pictures without their permission.

Copyright scholars of any sophistication know that the law gives the creator of an original work of authorship, among others, the right to, well, make copies. Simple, but powerful nonetheless.

An author like, say, a budding amateur photographer capturing a snarky Uncle Sam poster-inspired head-shot has as much right to control the duplication of his own images as an arguably-overpriced full time corporate head-shot “artist.” Without the original author’s permission, a copy like the one in the side-by-side comparison post violates the exclusive right to “reproduce” the work.

Now, because apparently it’s Fair Use week this week, I’ll address that elephant in the room. Our friends at the US Copyright Office note that the analysis of whether a use counts as “fair” is not generally a straightforward process. Whether a secondary user of copyrighted content falls into the fair use exception turns on a combination of four factors. But, they did describe a case where “the use of [copyrighted] celebrity images by a gossip website was not fair.”

While I’m not a celebrity by many definitions, the reasoning should hold even more for less-famous folks. You need permission to use an image that you don’t own, especially for business purposes. Which brings me to my next legal gripe…

 

#2 – Misappropriation is Not a Joke, Jim!

(Admittedly, that header link is mainly to sneak in a YouTube clip from one of my favorite shows. But still relevant!)

The second reason why this corporate photographer’s post is almost certainly illegal is that she was using my likeness for her financial gain, again without my permission.

Here in Minnesota, our common law recognizes a right to publicity. Way back in ‘95, shortly before we called him Governor The Body, pro-wrestler Jesse Ventura went to federal court because, he alleged, WWF president Vince McMahon owed him money. Turns out Ventura was giving color commentary on some wrestling matches that McMahon then sold on videotape (remember those?); Ventura argued that hadn’t been part of the negotiated arrangement, so he wanted backpay of a sort. [This is all super true, and a super surreal case to read. Ventura v. Titan Sports, Inc., 65 F.3d 725, 730 (8th Cir. 1995).]

The estate representative for another Minnesota celebrity, the late Purple One themself (i.e., Prince), played a role in getting this “right to publicity” extended posthumously. So, now you can’t misappropriate someone’s likeness for financial gain after their death, either. [This is really fun research tonight. Paisley Park Enterprises, Inc. v. Boxill, No. 17-CV-1212 (WMW/TNL), 2017 WL 4857945, at *6 (D. Minn. Oct. 26, 2017).]

The upshot is that I have a common law right to tell the new headshot photographer to knock it off, right away. And that’s just what we did, in a strongly-worded email. Not quite as imaginative as some recent cease & desist messages we’ve heard about, but it did the trick.

 

Takeaways

Pro-tip #1: If you’re going to defame a new lawyer by stealing his old headshot and misappropriating his identity to promote your photography business, probably best not to have connected with him recently so he sees the post in his LinkedIn feed.

Pro-tip #2: SO many potential copyright and individual rights issues can be cleared up with a simple phone call or email asking permission. I would gladly have discussed ahead of time the use of the old picture. I would even have suggested appropriate wording for the post that didn’t disparage my previous photographer or conspicuously omit that the old photo was for a different career. Now, though, I’m not inclined to help out at all, and will be diligently checking back to police her use of my new photos.

Pro-tip #3: If you encounter a situation like this, and can’t make lemons out of lemonade by blogging, call a knowledgeable attorney (like me!) to draft a killer C&D.

 

tl;dr

I got really heated when some lady violated copyright and right to publicity laws by taking my picture and writing less-than-flattering things about it on LinkedIn. You can’t reproduce other people’s copyrighted works without permission or fair use exception. And you can’t use other people’s likeness for your own financial gain without permission. Don’t defame a lawyer with lots of time on his hands – it’ll end badly for you.

 

Contact Me

I wrote this to blow off steam and make some terrible puns along the way, but I also really enjoy talking copyright with people. Do you have a question or comment? Contact me here.


Health in the Fast Lane: FDA’s Effort to Streamline Digital Health Technology Approval

Alex Eschenroeder, MJLST Staffer

 

The U.S. Food and Drug Administration (FDA) is testing out a fast-track approval program to see if it can accommodate the pace of innovation in the technology industry and encourage more ventures into the digital health technology space. Dr. Scott Gottlieb M.D., Commissioner of the FDA, announced the fast-track pilot program—officially named the “Pre-Cert for Software Pilot Program” (Program)—on July 27, 2017. Last week, the FDA announced the names of the nine companies it selected out of more than 100 applicants to participate in the Program. Companies that made it onto the participant list include tech giants such as Apple and Samsung, as well as Verily Life Sciences—a subsidiary of Alphabet, Inc. The FDA also listed smaller startups, indicating that it intends to learn from entities at various stages of development.

The FDA idea that attracted applicants from across the technology industry to the Program is roughly analogous to the TSA Pre-Check Program. With TSA Pre-Check certification, travelers at airports get exclusive access to less intensive pre-boarding security procedures because they submitted to an official background check (among other requirements) well before their trip. Here, the FDA Program completes extensive vetting of participating technology companies well before they bring a specific digital health technology product to market. As Dr. Gottlieb explained in the July Program announcement, “Our new, voluntary pilot program will enable us to develop a tailored approach toward this technology by looking first at the . . . developer, rather than primarily at the product (as we currently do for traditional medical products).” If the FDA determines through its review that a company meets necessary quality standards, it can pre-certify the company. A pre-certified company would then need to submit less information to the FDA “than is currently required before marketing a new digital health tool.” The FDA even proposed the possibility of a pre-certified company skipping pre-market review for certain products, as long as the company immediately started collecting post-market data for FDA to confirm safety and effectiveness.

While “digital health technology” does not have a simple definition, a recently announced Apple initiative illustrates what the term can mean and how the FDA Program could encourage its innovation. Specifically, Apple recently announced plans to undertake a Heart Study in collaboration with Stanford Medicine. Through this study, researchers will use “data from Apple Watch to identify irregular heart rhythms, including those from potentially serious heart conditions like atrial fibrillation.” Positive research results could encourage Apple, which “wants the Watch to be able to detect common heart conditions such as atrial fibrillation”, to move further into FDA regulated territory. Indeed, Apple has been working with the FDA, aside from the Program, to organize the Heart Study. This is a critical development, as Apple has intentionally limited Watch sensors to “fitness trackers and heart rate monitors” to avoid FDA regulation to date. If Apple receives pre-certification through the Program, it could issue updates to a sophisticated heart monitoring app or issue an entirely different diagnostic app with little or no FDA pre-market review. This dynamic would encourage Apple, and companies like it, to innovate in digital health technology and create increasingly sophisticated tools to protect consumer health.


Scents: The Unconventional Potential for Trademarks

Amber Peterson, MJLST Staffer

Trademarks are intended to create an immediate brand recognition in the consumer’s mind. Consumers who are satisfied with a product must have a way to easily distinguish it from nearly identical or similar products from competitors. Thus, trademarks play a powerful role in branding and marketing as seen in the Nike “swoosh” and the Target bullseye. These traditional marks or logos are what are typically thought of when thinking about trademarks. However, unconventional trademarks such as the catch phrase “Hasta la Vista Baby” from the film, “The Terminator” and the red color of Christian Louboutin soles can be just as effective to identify a product or service.

The key requirement is distinctiveness. If a product can be thought of as inherently distinctive, it can be trademarked. Thus, the United States Patent and Trademark Office allows the trademarking of a scent since scent is distinctive in that it is deeply tied to memory recognition. Although this option is available, few have accomplished the task since the Patent and Trademark Office has put strict boundaries around what smells qualify.

First, the scent must serve no important practical function other than to help identify and distinguish the brand. This means that those smells whose only purpose is smell-related, such as perfumes and air fresheners, cannot receive scent trademark protection. Second, a detailed written description of the non-visual mark is required to complete the registration process. The problem with scents is the subjective nature of them. The perception of smell can be very different among a number of noses and is thus open to interpretation. This creates difficulty in successfully representing the scent graphically which is required to determine whether something is or is not appropriate for a trademark.

To date, there are only about 12 scent trademarks in the United States (e.g., the flowery musk smell in Verizon Wireless stores and the pina colada scent that a ukulele company scents its ukuleles with). As evidenced, the process of registering a scent can be challenging. However, there are marketing advantages that may make it worthwhile if the product or service resonates more deeply with a consumer compared to a typical visual mark or logo trademark.