Monthly Round-Up of What to Read on Pharma Law and Policy

By Ameet Sarpatwari and Aaron S. Kesselheim

Each month, members of the Program On Regulation, Therapeutics, And Law (PORTAL) review the peer-reviewed medical literature to identify interesting empirical studies, in-depth analyses, and thoughtful editorials on pharmaceutical law and policy.

Below are the papers identified from the month of March. The selections feature topics ranging from the characteristics and follow-up of post-marketing studies or conditionally authorized medicines in the European Union; to changes in prescription drug, over the counter drug, and dietary supplement use among older adults in the United States; to an assessment of the logic of Amarin’s off-label promotion of Vascepa. A full posting of abstracts/summaries of these articles may be found on our website.

  1. Hey SP, Kesselheim AS. An Uninformative Truth: The Logic of Amarin’s Off-Label Promotion. PLoS Med. 2016 Mar 15;13(3):e1001978.
  2. Hoekman J, Klamer TT, Mantel-Teeuwisse AK, Leufkens HG, De Bruin ML. Characteristics and follow-up of post-marketing studies of conditionally authorised medicines in the EU. Br J Clin Pharmacol. 2016 Mar 18. [Epub ahead of print].
  3. Kapczynski A. Free Speech and Pharmaceutical Regulation-Fishy Business. JAMA Intern Med. 2016 Mar 1;176(3):295-6.
  4. Massey PR, Wang R, Prasad V, Bates SE, Fojo T. Assessing the Eventual Publication of Clinical Trial Abstracts Submitted to a Large Annual Oncology Meeting. 2016 Mar;21(3):261-8.
  5. Qato DM, Wilder J, Schumm LP, Gillet V, Alexander GC. Changes in Prescription and Over-the-Counter Medication and Dietary Supplement Use Among Older Adults in the United States, 2005 vs 2011. JAMA Intern Med. 2016 Mar 21. [Epub ahead of print]
  6. Yeh JS, Sarpatwari A, Kesselheim AS. Ethical and Practical Considerations in Removing Black Box Warnings from Drug Labels. Drug Saf. 2016 Mar 21. [Epub ahead of print]

Treasury Targets Corporate Inversion, Pfizer-Allergan Deal Falls Through

By Dalia Deak

The Treasury Department published regulations on Monday that took aim at corporate inversions – and, they hit their mark. Two days later, the merger of pharmaceutical giants Pfizer and Allergan, the largest planned inversion in history of the pharmaceutical industry, fell through.

The temporary and proposed regulations put forth on Monday make it more difficult for U.S.-parented multinational groups to change their tax residence to a low-tax country. This practice, the Treasury noted, is typically not to grow the underlying business or pursue other commercial benefits that may arise, but primarily to reduce their taxes. Companies will often follow up corporate inversions with another tactic—earnings stripping. This is where the company will seek to further minimize U.S. taxes by paying deductible interest to the new foreign parent or its affiliates in the low-tax country.

Specifically, the regulations attempt to curb inversions and earnings stripping by doing the following:

  • Limiting inversions by disregarding foreign parent stock attributable to certain prior inversions or acquisitions of US companies (under section 7874);
  • Targeting transactions that increase related-party debt that does not finance new investment in the US (under section 385); and
  • Allowing the IRS on audit to divide a purported debt instrument into part debt and part stock (under section 385).

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