April 11,2008

Responses from pharmaceutical drug and device makers to Grassley request for disclosure of support for continuing medical education

M E M O R A N D U M

TO: Reporters and Editors
FR: Jill Kozeny, 202/224-1308 for U.S. Senator Chuck Grassley of Iowa
RE: Industry support for continuing medical education
DA: Friday, April 11, 2008

Copies of letters that Senator Grassley received from drug makers in response to hisrequest for them to follow Eli Lilly’s lead and disclose financial contributions to continuingmedical education are posted with this statement at http://finance.senate.gov. Right now,Senator Grassley does not plan to pursue disclosure legislation separate from the PhysicianPayment Sunshine Act. He will carefully monitor implementation of the disclosure plans described in these letters and consider additional initiatives, including legislation, if transparency is not achieved.

Comment from Senator Grassley:

“When it comes to the drug and device industry, the stakes are high for both public safetyand the public purse. Making information about financial relationships open to scrutiny is theright thing to do. More transparency can do a lot to build confidence in the system and bringgreater accountability,” said U.S. Senator Chuck Grassley of Iowa.

Previous statements regarding drug company support for continuing medical education:

M E M O R A N D U M

TO: Reporters and Editors
FR: Jill Kozeny, 202/224-1308 for U.S. Senator Chuck Grassley of Iowa
DA: Tuesday, February 26, 2008

Senator Chuck Grassley has asked leading drug makers to follow Eli Lilly’s lead anddisclose the money it spends for continuing education for doctors. His written appeal foradditional voluntary efforts is below, along with a list of the recipients of his letter.

Senator Grassley has been working in recent years to increase transparency in thefinancial relationships between the pharmaceutical industry and the medical community. Lastfall, he and Senator Herb Kohl introduced legislation that would require drug and devicemanufacturers to publicly disclose anything of value given to physicians, such as payments,gifts, honoraria or travel above certain amounts.

Senator Grassley is Ranking Member of the Committee on Finance. “Transparencybuilds both trust and accountability,” he said. “I’m asking other pharmaceutical organizations tofollow Lilly’s lead and show the public there’s nothing to hide.”

February 26, 2008

Miles D. White
Chairman of the Board and Chief Executive Officer
Abbott Laboratories
100 Abbott Park Road
Abbot Park, IL 60064

Mr. Kevin Sharer
Chief Executive Officer
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, CA 91320-1799

Mr. Tony Zook
President and Chief Executive Officer
AstraZeneca Pharmaceuticals LP
P.O. Box 15437
Wilmington, DE 19850

James M. Cornelius
Chief Executive Officer
Bristol-Myers Squibb Co.
345 Park Avenue
New York, NY 10154

William C. Weldon
Chairman, Board of Directors and Chief Executive Officer
Johnson & Johnson
1 Johnson & Johnson Plaza
New Brunswick, NJ 08933

Bill Hawkins
President and Chief Executive Officer
Medtronic, Inc.
710 Medtronic Parkway, NE
Minneapolis, MN 55432

Richard T. Clark
Chairman, President, and Chief Executive Officer
Merck & Co., Inc.
1 Merck Drive
Whitehouse Station, New Jersey 08889

Jeffrey Kindler
Chief Executive Officer and Chairman of the Board
Pfizer, Inc.
235 West 42nd Street
New York, NY 10017

Fred Hassan
Chairman and Chief Executive Officer
Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, New Jersey 07033

Robert Essner
Chairman and Chief Executive Officer
Wyeth
5 Giralda Farms
Madison, New Jersey 07940

Robert L. Parkinson, Jr.
Chief Executive Officer and President
Baxter International Inc.
One Baxter Parkway
Deerfield, IL 60015-4625

James R. Tobin
Chief Executive Officer and President
Boston Scientific
One Boston Scientific Place
Natick, MA 01760-1537

Stephen P. MacMillan
Chief Executive Officer and President
Stryker Corporation
2825 Airview Boulevard
Kalamazoo, MI 49002

David C. Dvorak
Chief Executive Officer and President
Zimmer Holdings
345 East Main Street
Warsaw, IN 46580

Daniel J. Starks
Chief Executive Officer and President
St. Jude Medical
One Lillehei Plaza
St. Paul, MN 55117-9913

February 26, 2008

Richard T. Clark
Chairman, President, and Chief Executive Officer
Merck & Co. Inc.
1 Merck Drive
Whitehouse Station, NJ 08889

Dear Mr. Clark:

The United States Senate Committee on Finance (Committee) has jurisdiction over theMedicare and Medicaid programs. As a senior member of the United States Senate and asRanking Member of the Committee, I have a special responsibility to protect the health ofMedicare and Medicaid beneficiaries and safeguard taxpayer dollars authorized by Congress forthese programs. This includes the responsibility to conduct oversight of the medical industry,including makers of pharmaceuticals and medical devices.

One important aspect of my recent oversight concerns the financial relationships thatcompanies such as (The Company) have with medical organizations. On this issue, the Eli Lillyand Company (Eli Lilly) has taken an important step to meet the public's demand fortransparency. In response to my investigation of drug company payments for continuing medicaleducation, Eli Lilly voluntarily created a website to disclose its payments to organizations suchas patient groups and medical societies. I commend Eli Lilly for this leadership and lookforward to working with it, and all of the major pharmaceutical and medical device companies,to further increase the sunshine on key financial relationships.

I am writing to ask what steps your company is taking, or planning to take, to enhancethe transparency of your financial relationships with these medical organizations. If yourcompany does not yet have any efforts or plans in place, please explain why not.

I am sure you are also aware of my latest legislation regarding transparency. ThePhysician Payments Sunshine Act, which Senator Herb Kohl and I introduced last fall, requiresdrug and device manufacturers to disclose to the Secretary of Health and Human Services (HHS)anything of value given to physicians, such as payments, gifts, honoraria, or travel above certainminimum thresholds. Companies would also report the name of the physician, the value anddate of the payment or gift, and its purpose, among other information. The Secretary of HHSwould then make this information available to the public on a searchable website. In addition tovoluntary efforts by industry to disclose their contributions to medical organizations, theenactment of this legislation will finally bring transparency to the financial relationships betweenthe physicians themselves and companies such as yours. While this legislation moves throughthe legislative process, it is my hope that we can also bring transparency to the relationshipsbetween industry and medical organizations through more voluntary efforts like those of EliLilly.

In closing, I would appreciate hearing your response to this letter no later than March 10,2008.

Sincerely,

Charles E. Grassley
United States Senator
Ranking Member of the Committee on Finance

**********************************************

USA Today
Tuesday, February 26, 2008

Drugmakers asked to reveal educational grants to doctors

By Steve Sternberg, USA TODAY

Wondering how much money drug companies spend on continuing education for doctors— and who gets all the support?

Eli Lilly & Co. thinks you deserve to know and lists its grants on its website. Pfizer plansto post similar details soon. Despite Pfizer's move, it is among the 15 companies getting a lettertoday from Sen. Chuck Grassley, R-Iowa, asking what they're doing to "meet the public'sdemand for transparency."

If your company does not have any plans in place, the letter says, "please explain whynot."

"Transparency builds both trust and accountability," says Grassley, ranking member ofthe Senate Finance Committee, which oversees Medicare and Medicaid. "I'm asking otherpharmaceutical organizations to follow Lilly's lead and show the public there's nothing to hide."

Alan Coukell of the Prescription Policy Project, a non-profit that has taken aim atconflicts of interest in medicine, says: "Sen. Grassley is a bear on this issue. He has multipleongoing investigations. He did a big report last year on continuing medical education and thepotential for the medical industry to bias (programs) they're funding."

The drug industry is famous for spending vast sums on promotion, an estimated $30billion in 2004, according to a study last year in The New England Journal of Medicine.Companies are barred by law, however, from using educational grants — for conferencesthat doctors must attend to keep pace with scientific advances — to promote their own drugs ordevices, experts say. Nevertheless, the finance committee report cited two instances of abuse. Tosettle those claims of improper drug promotion, Warner-Lambert paid $430 million in 2004 andSerono labs paid $704 million in 2005.

Companies can follow the rules and still spend lots of money, judging from an analysis ofLilly's website. In one quarter last year, Lilly spent nearly $20 million on educational grants,much of it going to conferences for medical specialties that rely on the company's biggestproduct lines: neuroscience, endocrinology and oncology.

"You give where you earn," says David Rothman of Columbia University, a study authorand the Policy Project's associate director.

Alan Breier, Lilly's chief medical officer, says Lilly was not pressured to act by publicopinion or Congress and plans to expand the program worldwide. "We started (postingeducational grants) last year as part of our transparency agenda, to build trust and confidence(among patients)," he says. "In 2004, we were the first company to voluntarily post our clinicaltrials and our clinical trials data. We found it was something that patients and doctorsappreciated and embraced."

Cathryn Clary, a Pfizer vice president, says her firm is "quite proud of the funding andsupport we provide" and plans to post this year's first-quarter data soon after the quarter's end.

Clary says Pfizer executives are discussing what to disclose next, adding that the ease ofaccessing data on the Internet has greatly increased demand. "We're all struggling with howmuch to reveal," she says. "Stay tuned."

For Immediate Release
Tuesday, May 1, 2007

Baucus, Grassley continue work for independence of continuing medical education

WASHINGTON — Sens. Max Baucus and Chuck Grassley are continuing their effort todiminish the influence of drug companies on medical education programs.

In a letter sent to the Accreditation Council for Continuing Medical Education, thesenators urged greater oversight by the council to better ensure that the content of continuingeducation programs is independent from the business interests of the drug companies who fundthe programs. Their letter follows an extensive report issued by the senators last week.

The Finance Committee report was two years in the making and addresses thepharmaceutical industry’s use of educational grant funding to promote the use of their drugs,including unapproved uses of some medicines. Earlier today, Eli Lilly and Company announcedthat it will begin posting online all educational grant funding that it provides. Lilly is the firstpharmaceutical company to disclose its grants to medical societies, academic centers, patientgroups, commercial continuing medical education providers, and non-profit institutions in theUnited States. Baucus and Grassley said they hoped that other drug companies would takesimilar action.

Baucus is Chairman and Grassley is Ranking Member of the Senate Committee onFinance.

The text of their April 25, 2007 letter to the Accreditation Council for ContinuingMedical Education is below, along with the text of news releases describing the April 23, 2007Finance Committee report on medical education grants and the initial Grassley-Baucus June 10,2005 letter of inquiry to drug makers which ultimately resulted in the Finance Committee report.

April 25, 2007

Murray Kopelow, MD, MSC, FRCPC
Chief Executive
Accreditation Council for Continuing Medical Education
Suite 2150
515 North State Street
Chicago, IL 60610-4377

Dear Dr. Kopelow:

Thank you for your informative response to our letter of December 14, 2006. The insightyou provided on the accreditation process for continuing medical education (CME) helped us inour exploration of the pharmaceutical industry's use of educational grant funding. Given theincreasing Medicare and Medicaid expenditures on prescription drugs, the United States SenateCommittee on Finance (Committee) has an interest in reviewing how pharmaceuticalmanufacturers use grant funding in ways that may increase program costs or endangerbeneficiaries. On April 25, 2007, we released a Committee Staff Report summarizing the resultsof our inquiry, and provided you a copy. The full text of this report is available on theCommittee's website at http://www.senate.gov/.

Our inquiry revealed that the pharmaceutical industry spends more than a billion dollars ayear to fund CME programs that are accredited by the Accreditation Council for ContinuingMedical Education (ACCME). Funding of ACCME-accredited programs represents asubstantial portion of drug company spending on educational grants. Our inquiry also revealedthat drug companies typically fund CME as part of a broader business strategy to support thecompany's brands. Many of the drug companies informed us that they rely on a provider'sACCME-accreditation to demonstrate that their grant money is spent on education and not onmarketing. In keeping with ACCME's policies, ACCME-accredited CME should differ from thedrug company's own marketing and promotional activities in that the drug company should notexercise control over the content of CME. Our letter to ACCME sought information about howACCME ensures that the CME providers it accredits actually operate with the required level ofindependence, and without allowing program content to be controlled or influenced by the drugcompany sponsors.

Your response helped us understand the process by which ACCME oversees theactivities of CME providers. You reported that ACCME reviews accredited CME providers atintervals of two, four, or six years, depending on the CME provider's past history of compliance.In conducting these re-accreditation reviews, ACCME primarily relies on three sources ofinformation: (1) self study reports - written by the CME provider and submitted to ACCME; (2)accreditation interviews - conducted by two individuals from ACCME involving an interview ofrepresentative(s) of the CME provider; and (3) sampling of CME activities - ACCME selects asample of the CME provider's CME activities (usually 15 activities per provider) and asks theCME provider to submit a documentary file on each activity. ACCME then reviews thedocuments submitted to look for policies and procedures indicating that the CME providercomplied with ACCME policies.

Based on your response, it appears that ACCME review of CME providers reliesexclusively on information supplied by those providers. ACCME review also appears to focuson the documentation surrounding the process for funding and creating CME activities, asopposed to the substance of the activities themselves. For example, it does not appear thatACCME review involves analyzing the content of the educational activities created for accuracy,to determine whether the activities include a fair and balanced discussion of competingtherapeutic options, or whether the activities favor products manufactured by the commercialsponsor.

We understand that CME activities typically involve in-person lectures, broadcastedlectures, web-based content, self-assessment questions, and various other types of writtenmaterials. In addition to the scripted material, CME programs may involve answering questionsfrom the audience. ACCME representatives conducting re-accreditation reviews do not sit in onCME lectures, or review recordings of these lectures, to assess the speakers' core presentationsor their responses to audience questions. Similarly, ACCME representatives conductingre-accreditation reviews do not routinely assess the written materials used in CME activities forscientific accuracy or balance.

Based on your response, it appears that ACCME conducts a retrospective review thatrelies on information supplied by the CME providers, and does not involve independentinvestigation by ACCME staff or collection of information from physicians or other audiencemembers who participated in CME activities. Given the nature of ACCME review, it does notappear that ACCME would detect CME providers' voluntarily catering to their drug companysponsors by developing CME content that favorably presents the sponsors' drug products, norwould this practice necessarily violate ACCME policy. Although we suspect that the drugcompanies preferentially fund CME activities that they expect will promote sales of thecompany's products, we do not know how pervasive this is. ACCME does not collect data onwhether ACCME-accredited CME providers produce activities that disproportionately discussfavorable messages, either on-label or off-label, for products marketed by the drug companiesthat fund the activities.

ACCME uses the re-accreditation review process to determine whether the CMEprovider should retain accreditation. Your response indicates that ACCME conducts this reviewto determine whether or not a CME provider generally complies with ACCME standards, asopposed to whether an individual CME activity was conducted in compliance with ACCMEstandards. Your letter described the re-accreditation process as follows: "ACCME compliancefindings are determined at a provider level, not the activity (or presentation) level. Generallyspeaking, when the ACCME finds that 80% of activities are found 'in compliance' fromdocumentation review, then the ACCME will find the provider 'in compliance' with theaccreditation element." The Committee found this troubling, to the extent it means that a CMEprovider would be deemed to be in compliance with ACCME standards even if ACCMEdetermines that some of the provider's educational activities failed to comply with all ACCMEstandards.

Your response included results of re-accreditation reviews recently completed byACCME. You reported that ACCME has reviewed 76 accredited CME providers forcompliance with the ACCME standards for commercial support that were promulgated in 2004.

ACCME found that 18 of these CME providers were not in compliance with at least one elementof the ACCME standards. Examples from ACCME's written findings of non-complianceinclude:

-- “The provider does not ensure that decisions regarding the planning and implementationof CME activities are made independent of commercial interests. A commercial interestinfluenced where and how many presentations were scheduled for three years of a CMEactivity.”

-- “The provider does not ensure that decisions regarding the planning and implementationof CME activities are made independent of commercial interests. Evidence from oneactivity reviewed indicates that a commercial interest was involved in the selection offaculty and other activities that interfered with independence.”

-- “The provider does not ensure that a mechanism(s) has been implemented to identify andresolve all conflicts of interest prior to education activities being delivered to thelearner.”

-- “The provider does not demonstrate appropriate management of commercial promotionassociated with educational activities. One commercially supported activity containsrecurring use of one company's product trade name at the exclusion of other products.”

Your response also described the series of events that may occur if ACCME determinesthat a CME provider is not in compliance with ACCME standards. To summarize, the CMEprovider enters a multi-year corrective action process that might eventually result in losingaccreditation. You informed us that when ACCME finds that an accredited CME provider is notin compliance, the CME provider is afforded an opportunity to provide ACCME with a writtensubmission that describes the provider's compliance. The CME provider is generally allowedone year to submit this progress report to ACCME. If ACCME decides that the progress reportadequately demonstrates compliance, no further action is taken. If ACCME decides that theprogress report does not adequately demonstrate compliance, then the provider may be allowedsix additional months to submit another progress report. If that second progress report also doesnot demonstrate compliance, ACCME may put the provider on probation. If the CME providerdoes not resolve the problem after two years on probation, ACCME may rescind accreditation.

ACCME's finding of non-compliance is merely the first step down a long road to potentiallylosing accreditation, which may occur up to 3.5 years after the initial finding of non-complianceand, depending on the review cycle, as many as nine years after the problematic educationalactivities occurred.

The Committee's inquiry suggested that whether an educational program is independentis a critical feature distinguishing CME from advertising and promotion. Because drugmanufacturers cannot legally promote their products for uses that have not been approved by theFDA, it is particularly important for education programs that discuss off-label uses to beindependent. Whether a drug company is breaking the law by promoting off-label use of itsdrugs hinges on whether a CME provider independently touts an off-label use or whether thepromotion can be attributed back to the drug company.

Given the importance of the concept of independence, the Committee's request forinformation from ACCME also sought delineation of the scope of independence the CMEprovider must have in selecting the topic for a commercially-sponsored CME program.ACCME's response indicated that a commercial sponsor can designate the topic (e.g., diagnosisor treatment of a particular disease) for the CME activity, without being determined to controlcontent or otherwise violating ACCME policies. This would appear to afford drug companiessubstantial opportunity to direct their grant funding to support programs that are likely topromote sales of their products.

We do not have information about the extent to which this is the case in practice.ACCME does not keep track of how many CME programs favorably discuss a drug sold by thecommercial sponsor, either for an FDA-approved indication or for an off-label use. ACCMEdoes not gather information regarding whether the CME providers' educational activitiesfavorably discuss uses of the commercial sponsor's products in a fashion that is disproportionateto what might be expected from an independent activity that does not cater to the sponsor'scommercial interests.

Our review suggests that CME providers could say that they "control content" and have"full independence" in developing CME activities, even though they allow the commercialsponsor to influence content. The drug companies' response to our queries indicate that somecompanies' policies for funding CME allow the drug companies to offer CME providerssuggestions for CME topics and speakers. Some policies also allow the drug companies toprovide data, including data regarding off-label uses, for inclusion in CME programs, so long asthe CME provider requests this assistance. Thus, the CME provider can technically maintain"control" of content - to the extent that the commercial sponsor's suggestions are not imposed inan explicitly mandatory fashion - while continuing to accommodate suggestions from thecompanies that control their funding.

Based on our analysis of the information you provided, we find it interesting that, eventhough ACCME's reaccreditation process relies almost exclusively on information supplied bythe CME providers under review, ACCME still detects a significant number of incidences ofnoncompliance. It also appears that compliance with ACCME standards still allows CMEproviders to accommodate the business interests of their commercial sponsors and affords drugcompanies the ability to target their grant funding at programs likely to support sales of theirproducts. The full extent to which drug companies influence the content of putativelyindependent CME programs cannot be estimated from the information we currently have.

Thank you for your assistance with this matter. We greatly appreciate your cooperationwith the Committee's inquiry.

Sincerely,

Max Baucus of Montana
United States Senator
Chairman of the Committee on Finance

Chuck Grassley of Iowa
United States Senator
Ranking Member of the Committee on Finance

For Immediate Release
April 25, 2007

NEW FINANCE COMMITTEE REPORT FOCUSES ON DRUG COMPANY GRANTS FOR MEDICAL EDUCATION

Inquiry reveals educational grants as common business practice, but potential for abuse remainsWashington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) andRanking Republican Chuck Grassley (R-Iowa) today released results of a Committee inquiryinto drug company grants to fund continuing education for medical providers. Baucus andGrassley launched their probe following allegations that drug companies were using educationalgrants for improper purposes, such as rewarding physicians for prescribing their drugs,influencing clinical practice guidelines and Medicaid formularies, or promoting drugs for usesthat have not been approved by the FDA – an illegal practice called “off-label promotion.”Guidance on keeping education programs independent of drug company influence has beenissued by numerous organizations, including the Accreditation Council for Continuing MedicalEducation (ACCME). The report includes information from ACCME suggesting that somepurportedly independent educational programs may still be influenced too much by theirpharmaceutical sponsors. It appears that ACCME’s oversight of accredited CME providers isinsufficient to guarantee the required independence.

“American taxpayers spend billions of dollars every year on drug treatments forMedicare and Medicaid patients, and those scarce dollars need to be spent wisely. Medicaleducation funded by drug companies has to be real education, not a soft sell designed to swaytreatment decisions,” said Baucus. “This report shows some separation between medicaleducation and marketing efforts, but this process still isn’t clean enough. As long as drugcompanies’ medical education efforts can influence Medicare and Medicaid spending, theFinance Committee has to insist that there be more improvement.”

“We need to make sure educational grants serve appropriate purposes. I take seriouslymy obligation to the taxpayers to make sure dollars for Medicare and Medicaid are spentproperly. I also take seriously my obligation to help make sure the 80 million beneficiaries ofthese programs receive appropriate care. What drugs doctors prescribe for patients, and whatdrugs federal health care dollars buy, should be made based on accurate scientific informationand what is best for that particular patient, not on improper influence from any drug maker,”Grassley said.

The full Finance Committee report is online athttp://www.finance.senate.gov/press/. The Committeecontacted 23 drug manufacturers in the course of their investigation, and all 23 cooperated fully.Drug companies reported that they continue to fund educational grants as part of a broadbusiness strategy to sell their products, but that they have set policies to distance educationalgrant funding from marketing. Committee staff concluded that the pharmaceutical industry hasfocused more on compliance with guidance for educational grants, but risks still exist forkickbacks, veiled advertising of drugs, efforts to bias clinical protocols, and off-label promotion.Baucus and Grassley said today that the Committee will follow up on its findings withparticipating drug companies and with organizations that have issued guidelines for medicaleducation grants, including the FDA, the Inspector General at the Department of Health andHuman Services, the participating drug companies, and ACCME.

# # #

For Immediate Release
Friday, June 10, 2005

Drug companies asked for more information about grant money awarded to promote particular medicines

WASHINGTON — Sens. Chuck Grassley and Max Baucus have asked a number of largedrug makers to explain a marketing practice where the companies give money to stategovernments and other organizations in the form of grants. The drug companies call the awards“educational grants,” but the senators are concerned that the dollars are more focused on productpromotion than education.

The senators said they want to know more about the practice to ensure that it’s not just a“backdoor way to funnel money to doctors and other individuals who can influence prescribingand purchasing of particular prescription medicines, including off-label prescriptions.” Theysaid their inquiry of the drug manufacturers is based on reports that some companies haveawarded these grants to health care providers as inducements to those providers to prescribemedications the companies produce. In other cases, such grants to state agencies may haveprompted those agencies to develop programs leading to over-medication of patients at theexpense of patient health or to unnecessary expense for taxpayers.

“We need to know how this behind-the-scenes funneling of money is influencingdecision makers,” Grassley said. “The decisions result in the government spending billions ofdollars on drugs. The tactics look aggressive, and the response on behalf of the public needs tobe just as vigorous.”

“I support drug companies giving back to the community through grants for educationalprograms used to educate state governments and health organizations about products that couldlead to improved health,” Baucus said. “However, I am concerned that some grants may be forpurposes other than education. These grants need to be driven by good intentions instead ofmotivation for larger profits.”

Grassley is chairman and Baucus is ranking member of the Senate Committee onFinance, which has legislative and oversight responsibility for the Medicare and Medicaidprograms. The first-ever prescription drug program within Medicare will begin in January, andfederal expenditures on prescription drugs through both Medicare and Medicaid are estimated toreach $100 billion in 2006.

The text of their letter follows here. It was sent to the following drug manufacturers:Pfizer, Inc., GlaxoSmithKline, Johnson & Johnson, Merck & Co., Inc., AstraZenecaPharmaceuticals LP, Bristol-Myers Squibb Company, Novartis Pharmaceuticals Corporation,Amgen, Inc., Wyeth Pharmaceuticals, Eli Lilly & Company, Sanofi Aventis, Eisai, Inc.,Boehringer Ingelheim Pharmaceuticals, Inc., Schering-Plough Corporation, Hoffman-LaRoche,Inc., Forest Pharmaceuticals, Inc., Abbott Laboratories, Genentech, Inc., Biogen Idec Inc.,Genzyme Corporation, Chiron Corporation, Serono, Inc., and TAP Pharmaceutical Products, Inc.

June 9, 2005

Dear _______________:

The U.S. Senate Committee on Finance (Committee) has jurisdiction over the Medicareand Medicaid programs, and accordingly, a responsibility to oversee the proper administration ofthose programs which provide health care coverage to more than 80 million Americans. Duringthis legislative session, the Committee will continue its review of issues relating to theseprograms' coverage of prescription drug benefits, including marketing practices that could havean impact on physicians' prescribing patterns. As Chairman and Ranking Member of theCommittee, we ask that ______ cooperate with the Committee and provide it with informationregarding these matters as requested.

In recent years, the cost to Medicaid of reimbursement for prescription drugs has grown fasterthan any other area of the program. The Federal government will spend even more onprescription drugs with the addition of a prescription drug benefit to the Medicare program.Marketing practices that increase the rates at which drugs are prescribed, particularly foroff-label uses, are of concern because they have the potential to increase program costs and mayencourage the use of typically newer, more expensive drugs that have not been proven superiorto existing treatments.

The Committee has identified the use of grants, particularly educational grants, as a practice withpotential for abuse and has gathered the following background information on this topic. Theuse of educational grants was an element in a recent settlement involving off-label promotion ofa prescription drug. Also, educational grants were identified by the Department of Health andHuman Services Office of Inspector General (HHS OIG) as a key risk area in its OIGCompliance Program Guidance for Pharmaceutical Manufacturers (OIG Guidance), issued in2003. In addition, existing Federal and industry guidance is not specific about what activitieseducational grants may be used to support or what kinds of organizations may provide thoseactivities, and it appears that some manufacturers may be using educational grants to fundactivities primarily to promote their products.

Programs and materials performed and disseminated by drug companies are subject to thelabeling and advertising provisions of the Federal Food, Drug, and Cosmetic Act, and as such aresubject to regulation by the Food and Drug Administration (FDA). The FDA does not regulatetruly independent and non-promotional activities supported by industry. However, the linebetween activities performed by or on behalf of companies and activities that are independent oftheir influence has become increasingly blurred as the role of industry in supporting continuingeducation for healthcare professionals has grown. Consequently, in 1997, FDA issued Guidancefor Industry, Industry-Supported Scientific and Educational Activities. The FDA guidance lists12 factors the Agency will consider when evaluating activities and determining independence.These factors relate primarily to the independence of the provider of scientific and educationalactivities but do not explain how the Agency will determine whether an activity is educational orwho qualifies as a provider.

The OIG Guidance, likewise, does not define educational activity or provider but it does statethat support for educational activities sponsored and organized by professional organizationsraise little risk as long as the grant is not restricted with respect to content or faculty. The OIGGuidance also advises manufacturers to separate their grant-making functions from their salesand marketing functions and establish objective criteria for awarding grants that ensure that thefunded activities are bona fide.

The Pharmaceutical Research and Manufacturers of America's Code on Interactions withHealthcare Professionals (PhRMA Code) also addresses third-party educational conferences andprofessional meetings. The PhRMA Code states that support for a conference or meeting,defined as an activity "where a) the gathering is primarily dedicated to promoting objectivescientific and educational activities and discourse (one or more educational presentations shouldbe the highlight of the gathering), and b) the main incentive for bringing attendees together is tofurther their knowledge on the topic(s) being presented," is permissible. However, the PhRMACode states that such support should not be given directly to healthcare professionals but shouldbe given to a conference's sponsor, who should maintain control over the selection of content,faculty, educational methods, materials and venue.

The Committee seeks further information on this topic so that it can assess how educationalgrants are used, in what contexts and for what purposes, and who receives them. This will assistus in determining whether and to what extent educational grants are used to support activitiesthat are not sponsored or organized by professional organizations or do not involve formaleducational presentations, and whether further guidance or legislation is needed. Therefore, asChairman and Ranking Member of the Committee, we request that your company provide thefollowing information and data to the committee:

1. Identify the person(s) and/or agent(s) (including, name, title and contact information)within or affiliated with your company who is/are currently responsible for evaluating requestsfor educational grants.

2. Identify the person(s) and/or agent(s) (including, name, title and contact information)within or affiliated with your company who is/are currently responsible for approving orawarding educational grants.

3. State whether your company has a formal, written policy regarding the use of educationalgrants, or if your company relies on an unwritten policy. To the extent a written policy exists,attach copies, including all versions and revisions of the policy since its inception. To the extentan unwritten policy exists, describe it in detail, including but not limited to describing anycriteria used in evaluating, approving, awarding, authorizing, implementing and/or monitoringeducational grants.

4. Describe the factors and circumstances your company takes into account whendetermining whether or not to award an educational grant.

5. State whether your company has offered or provided educational grants to organizationsthat are not accredited by the Accreditation Council for Continuing Medical Education(ACCME) since January 1, 2000. If so, please describe what other types of organizations receiveeducational grants from your company and indicate whether they are accredited by anorganization other than ACCME.

6. State whether your company has offered or awarded an educational or other grant to anystate Medicaid agencies or other state agencies, or to one or more employee/agent of a stateMedicaid agency or other state agency since January 1, 2000. If so, please describe yourcompany's policy for making such grants and the factors and circumstances your company takesinto account when determining whether to award an educational or other grant to a state agencyor an employee/agent of a state agency. In addition, please describe your company's rationalefor this practice.

7. Identify the total number and dollar amount of educational or other grants your companymade to state agencies or state agency employees/agents during its fiscal years 2003 and 2004.Of those amounts, identify the total number and dollar amount of educational or other grantsawarded and list them by state, by agency, and by agency employee/agent.

8. State whether your company has offered or awarded an educational or other grant(s) as asubstitute or alternative for price concessions since January 1, 2000. If so, please describe yourcompany's policy for making such grants and the factors and circumstances your company takesinto account when determining whether to award an educational or other grant as a substitute fora price concession. In addition, please describe your company's rationale for this practice.

9. Identify the total number and dollar amount of educational grants your company made inits fiscal years 2003 and 2004. Of those amounts, identify the total number and dollar amount ofeducational grants that were made to organizations accredited by ACCME.

10. In accordance with your company's response to #9 above, indicate the source of the fundsfor educational grants in your company's fiscal years 2003 and 2004. For example, if yourcompany budgets for educational grants by product line, please indicate the dollar amount ofeducational grants funded by each product line.

11. State whether your company has an annual budget for educational grants. To the extentthat your company budgets for educational grants, please identify the dollar amount budgeted foreducational grants in fiscal year 2005 by funding source.

12. State whether your company has provided educational grants for programs or activitiesthat may promote or discourage off-label use of drugs since January 1, 2000. If so, pleasedescribe your company's policy for making such grants and the factors and circumstances yourcompany takes into account when determining whether to award an educational grant for anactivity that may promote or discourage off-label use of drugs.

Please provide the information and documents requested in questions 1-12 by June 30, 2005. Incomplying with this request, respond by repeating the enumerated request, followed by theaccompanying response; attach and identify all relevant documents or data by title and thenumber(s) of the enumerated request(s) to which they are responsive. Finally, in complying withthis request, please refer to the attached definitions concerning the questions set forth in thisletter.

Sincerely,

Chuck Grassley of Iowa
United States Senator
Chairman, Senate Committee on Finance

Max Baucus of Montana
United States Senator
Ranking Member, Senate Committee on Finance