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Price controls would kill innovation, which would kill people just as rent controls in New York City hurt development. What Trump wrote in The Art of the Deal about rent control applies to government limits on drug prices. (Rent control) forced landlords to subsidize tenants. The costs of fuel, labor, and maintenance rose steadily, but the city refused to let landlords raise their rents to keep pace with inflation, much less the market itself. When landlords simply couldn’t make ends meet anymore, they began abandoning—or torching—their buildings. Between 1960 and 1976, approximately 300,000 housing units in New York were abandoned. Whole neighborhoods in the South Bronx and Brooklyn turned into ghost towns. The city, in turn, lost hundreds of millions of dollars in real-estate taxes.
Price controls would create a similar wasteland in our healthcare system. And contrary to claims that drug companies can charge the government whatever they want, Medicare, Medicaid (including ACA enrollment), VA, the Public Health Service have negotiated an average reduction in list drug prices by up to 60 percent. Unfortunately, for the most part, these discounts are not passed onto consumers.
However, it is possible to reduce what Americans pay for medicines now and in the future by changing the way new drugs are created and financed.
First, cash rebates that drug companies give to discount products are now pocketed by insurance companies or used to subsidize other line items should go directly to patients. Rebates now make up 30 percent ($115 billion) of total drug spending. Indeed, 77 percent of the retail price increase in drugs since 2006 goes to rebates.
When auto companies offer new car rebates, the cash is applied to reduce the price of the car in the dealership. In our health care system, the cash rebates go to the insurance companies and pharmacy benefit management firms. And when we pay for our prescription at the drug store, we are charged the list price.
That’s because PBMs and insurance companies use their control over our drug choices to maximize rebates and discounts. Most of the rebates are generated by medicines for about 5 percent of Americans (including seniors fighting cancer, multiple sclerosis, Parkinson’s and other complex diseases). Most, if not all, Obamacare and Medicare drug plans place most or all drugs that treat such patients on the highest cost formulary tier. So the sickest patients wind up paying up to 50 percent of the retail price of the drugs they depend on even as billions of rebate dollars are being racked in. This targeting is profitable, but it is also discriminatory.
President Trump could sign an executive order banning such discrimination and allow companies to directly pass through rebates and out of pocket assistance to patients for any drug doctors prescribe as part of a broader. The goal should be to eliminate cost sharing completely and encourage health plans to compete on the quality of care. The over $100 billion in rebates and discounts could be used to make this possible.
Second, he can encourage different ways to pay for medicines. Many new medicines generate value and reduce spending over a long period of time. Yet much of the cost is either upfront or recurring. To address this problem drugs could be financed as are cars, college education, homes and construction projects, etc. Drug companies could use cash flow to set up such long-term financing or create financial instruments backed by profits and savings generated by medicines to increase liquidity.
Third, drug discounts the government negotiates on behalf of hospitals in poor communities are pocketed by the institutions instead of going directly to those in need. These discounts (called 340 B discounts for the section of the law creating the program) are as high as 60 percent. Hospitals now receive these 340B discounts on almost half of their drug purchases. In turn these institutions markup drug prices and pocket the profit. The 340B statute doesn’t require that the discounts go directly to their customers. That must change.
Finally, Mr. Trump should remove reduce barriers that limit competition between companies. During his press conference, Trump noted “We have to get our drug industry coming back. Our drug industry has been disastrous. They're leaving left and right. They supply our drugs, but they don't make them here, to a large extent. “Nearly $350 billion in biopharma profits are held overseas because the 35 percent US corporate tax rate can be five times higher than elsewhere.
That’s in part because pharmaceutical research and development efficiency, measured by the number of new drugs brought to market, has declined compared to the amount of money invested. Thanks to regulation, the cost and time needed to developed new medicines have climbed to $1.5 billion over a decade. And a Deloitte study concludes that the pharmaceutical industry's return on its current portfolio of approved products has declined from 10.1 percent in 2010 to 3.7 percent in 2016. The industry's cost of capital is about 8.4 percent. That is not sustainable.
Fracking reduced the time and cost of discovering and safely producing new sources of energy. New biomedical tools and technologies can yield the same benefits in biomedical innovation. He can encourage the return of profits and investment with regulatory reforms of the Food and Drug Administration needed to unleash such potential.
Without new medicines, our lives would be shorter, more painful, less productive. Our economy would be smaller, and health care would be less efficient and more expensive. We need to produce more medical innovations more quickly and at a lower cost. Price controls won’t make it happen. Instead, the way medicines are developed and paid for has to be changed.
The question for companies is not whether they must do so, but when and how. The rebate system is rigged against consumers. The FDA cannot keep up with the geometric pace of change. Failure to address these challenges will, I'm afraid, will lead to the kind of regulation that will undermine innovation. Read More & Comment...
We've called for this from the start and now it's reality. In final guidance released Thursday on naming of biologic drugs, FDA reiterated that each biologic should receive a non-proprietary "core name" plus a unique four-letter suffix that is devoid of meaning. Each biologic and biosimilar would receive a hyphenated "proper name" joining the core name with the suffix.
The convention is designed to differentiate among non-interchangeable reference products and biosimilars. The agency said it is also still considering the suffix format for interchangeable products.
In an agenda released Wednesday, FDA said it plans to publish guidance this year addressing "considerations in demonstrating interchangeability with a reference product." FDA said it intends to apply the naming system prospectively, and will "communicate with companies that have pending applications to discuss implementation."
In the final guidance, FDA said it is "continuing to consider" how to implement the naming convention for existing biologics, and "in the near term, intends to assign distinguishing suffixes to a limited group of these products."
FDA said the unique suffixes should prevent "inadvertent substitution" among biologics and clarify adverse event reporting. The agency encouraged "routine use" of designated suffixes in ordering, prescribing, dispensing and pharmacovigilance of biologics, independent of a product's approval pathway or time of approval.
Well done FDA.
Trump is not the only celebrity who buys into the vaccine-autism link. But he is also going to be President. Asking Kennedy to chair a panel to ‘study’ the issue who claims drug companies are covering up what he called a vaccine holocaust for the sake of profits is troubling.
But Trump is not alone in his unscientific anti-vaccination views. Dozens of celebrities and politicians have continued to promote unfounded assertions about vaccine safety for years. And we can thank the same media outlets that now are condemning the president elect for vaccine denialism for promoting fake science peddled by what infectious disease expert Paul Offit calls autism’s false prophets.
From 2005 to 2011 CBS aired nearly a dozen stories that included extremist views of vaccines and autism. In 2015 Kennedy cited a CBS Atlanta segment that reinforced the claim that the government was covering up the truth about vaccine dangers. The Huffington Post, which pontificated about Trump’s anti-science views yesterday has been the soapbox of anti-vaccine types – Kennedy included -- for several years.
But the irony does not end there. Recently, Kennedy has been claiming that recent research links industrial exposures of lead, mercury and arsenic to the prevalence of autism spectrum disorder (ASD). But he is not alone, dozens of mainstream outlets have published these claims –– as settled fact.
For instance the Fox News website published uncritical article about the connection headlined: “Number of chemicals linked to autism and other disorders doubled in past 7 years, study shows.”
The piece quotes Dr. Philip Landrigan, of the Icahn School of Medicine at Mount Sinai in New York City the co-author of the study: “the increase of later diagnoses of these disorders tracks very nicely with increased production and release into environment of synthetic chemicals over last 40 or 50 years,” Landrigan said.
Except that, the amount of heavy metals, fertilizers and air pollution in our food, water, air, consumer goods have been falling for 20 years. Moreover, as Emily Willingham, the co-author of "The Informed Parent: A Science-Based Resource for Your Child's First 4 Years notes about claims air pollution cause autism: “ You can see an overall decline, sometimes steep, something that doesn’t fit with the increased autism prevalence over the same period, whether you consider the mounting numbers an “epidemic” or a more accurate reflection of primarily stable values over time. Turn to some of the world’s most air-polluted cities, and you will fail to find autism rates that correlate.” The same goes for chemicals alleged to cause autism.
Why is claiming vaccines (or how we administer them) cause autism anti-science but asserting that climate change and pollution have the same impact is unchallenged?
Asking if the president-elect’s views on vaccines and autism are based on fake science is more than fair. But the same questions should be raised when media outlets run uncritical stories claiming (declining) pollution levels damages infant brains.
We all choose the information that confirms our view of the world. Science is shaped by the exact opposite impulse.
The media did not report on the science of vaccines decades ago and it isn’t doing so now. Removing preservatives from vaccines was intended to calm fears, but it only led to more concern and less immunization.
Our children have been endangered by this hijacking of science. In 2013, 87 percent of pediatricians surveyed said they encountered vaccine refusals from parents of their patients, up from 75 percent of pediatricians who said the same in 2006.
After Andrew Wakefield’s claims about vaccines causing autism were finally retracted: The British Medical Journal observed: “The damage to public health continues, fueled by unbalanced media reporting and an ineffective response from government, researchers, journals and the medical profession.”
Mr. Trump’s trust in Robert F. Kennedy Jr. is a product of this fake science.
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Sometimes PBMs and health insurers don't even bother with step therapy or high cost-sharing to limit access to drugs that give them the biggest rebates.
Now they are just switching what drugs they cover without telling consumers.
Swapping drugs to save money is unsafe and unhealthy:
Patients who were switched to another SSRI for non-medical reasons after being stabilized on escitalopram used more resources and had higher health care costs within 3 months of switching than patients who did not switch.
Non-medical switching of drugs for patients treated for heart conditions, diabetes, rheumatoid arthritis, ulcers, menopause, and pain "was more often associated with negative or neutral effects than positive effects on an array of important outcomes. Among patients with stable/well-controlled disease, non-medical switching was associated with mostly negative effects."
Switching may expose heart patients to a higher risk of therapy discontinuation or substitution.
This isn't just a case of switching from a brand to generic or from one brand to another. Switching from one generic to another can cause problems:
After switching their generic phenytoin, 33 out of 80 patients with epilepsy (41%) suffered from increasing seizure events. The number of medical visits for acute seizure significantly increased in the post-interchange period.
These are just a few of the studies that associate when insurers and PBMs switch drugs to save money, they can hurt patients.
Incredibly, the Medicare part B study was going to non-medically switch the cancer drugs seniors gets without telling them. Proponents failed to acknowledge the risks of such a study. In this content, it should be pointed out that ICER's decision to limit access to new drugs based on how it affects the bottom line of health plans is non medical drug switching writ large.
It's not enough to be against step therapy. All that will do is increase the amount of dangerous non-medical drug switching taking place in the dead of night, without notifying patients or worrying about whether such a switch will do more harm than good.
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Importing drugs from Canada is exceedingly dangerous for a number of reasons. For starters, many Internet pharmacies based up north are stocked with drugs from the European Union. And while many people wouldn’t hesitate to take medicines purchased from countries like France, Germany and Great Britain, there’s plenty of risk involved.
The EU currently operates under a system of “parallel trade,” which allows products to be freely imported between member countries. This means that any drugs exported from the United Kingdom to Canada could have originated in an EU country with significantly less rigorous safety regulations, like Greece, Portugal, Latvia or Malta.
Just last year, EU officials seized more than 34 million fake pills in just two months. And in May, Irish drug enforcers confiscated over 1.7 million pounds of counterfeit and illegal drug packages. So if American customers start buying drugs over the internet from Canadian pharmacies, they could easily wind up with tainted medicines of unknown European origin.
It’s also important to note that drugs from anywhere in Europe aren’t even legal for sale in Canada. So when politicians say we can get “the same drugs” that Canadians get, they’re just plain wrong.
Even more worrisome is outright fraud — many “Canadian” pharmacies are actually headquartered somewhere else. Far too often, importing drugs of unknown quality from sketchy pharmacy websites ends in tragedy. Consider the case of one Texas emergency-room doctor, who suffered a stroke after importing what he thought was a popular weight-loss drug. The online pharmacy had actually substituted the doctor’s ordered drug for a counterfeit, stroke-inducing medication shipped in from China. If medical professionals can’t tell the difference between real and counterfeit drugs, regular patients don’t stand a chance.
A 2005 investigation by the Food and Drug Administration (FDA) looked at 4,000 drug shipments coming into the United States. Almost half of them claimed to be from Canada. Of those, fully 85 percent were actually from countries such as India, Vanuatu and Costa Rica.
As part of another investigation, FDA officials bought three popular drugs from two internet pharmacies claiming to be “located in, and operated out of, Canada.” Both websites had Canadian flags on their websites. Yet neither the pharmacies nor the drugs were actually from Canada.
The on-the-ground reality of state and local importation schemes has been dismal and politically embarrassing. Remember Illinois’ high profile “I-Save-RX” program? During 19 months, only 3,689 Illinois residents used the program — that’s .02 percent of the population.
Programs like this wouldn’t do any better on a national basis. A study by the nonpartisan Congressional Budget Office showed that importation would reduce our nation’s spending on prescription medicines a whopping 0.1 percent — and that’s not including the tens of millions of dollars the FDA would need to oversee drug safety for the dozen or so nations generally involved in foreign drug importation schemes. And generic drugs (which represent more than 85 percent of the medicines dispensed in the U.S.) are cheaper here at home than in Canada.
Calling foreign drug importation “re-importation” is a clever way to sell the idea to the American people. But the term simply doesn’t fit with the facts. In reality, in addition to importing foreign price controls, Americans would end up jeopardizing their health by purchasing unsafe drugs while not saving money.
A better policy for our new President and Congress to focus on is the issue of increasing insurance company co-pays. American patients who head up north or online are motivated by the cut-rate prices they see on the web. Health insurers could help patients avoid this temptation by reducing their co-pays for drug purchases, particularly for low-income patients.
Dropping drug co-pays would also help patients stick to their prescribed treatment regimes. All too often, people skip a dose, don’t get a refill, or stop taking their drugs prematurely in order to save money. In the long run, though, not adhering to a drug regimen leaves patients less healthy — and increases national medical expenses by an estimated $300 billion annually.
When consumers say, “My drugs are too expensive,” what they mean is that their co-pays and co-insurance are too expensive. And they’re right. Major insurance companies and pharmacy benefit managers (PBM) receive significant discounts from the manufacturers. So why doesn’t this result in lower co-pays for consumers? That’s a good issue for our new political leadership to debate. Read More & Comment...
Keep the Feds Out of Drug Pricing
Allowing the federal government to negotiate drug prices, as suggested by Minnesota Sen. Amy Klobuchar’s column “Let’s work with Trump to reduce drug prices,” would result in prices going up and patient choice going down.
According to the Congressional Budget Office, allowing Uncle Sam to negotiate Medicare drug prices would have a “negligible effect” on Medicare drug spending. Its report from 2009, reiterated this view, explaining that such a reform would “have little, if any, effect on (drug) prices.”
Allowing the feds to negotiate prices for the Medicare Part D drug benefit would likely have a negative effect on the program. The CBO predicts that when Health and Human Services forces pharmaceutical firms to lower the cost of a particular drug, this tactic brings “the threat of not allowing that drug to be prescribed.” In other words, price controls equal choice controls.
When consumers say, “My drugs are too expensive,” what they mean is that their co-pays and co-insurance are too expensive. And they’re right. Major insurance companies and pharmacy benefit managers (PBM) receive significant discounts from the manufacturers. So why doesn’t this result in lower co-pays for consumers? That’s a good issue for Sen. Klobuchar to take up with President-elect Donald Trump.
Peter J. Pitts, Center for Medicine in the Public Interest; New York Read More & Comment...
Elaine Schattner, a courageous and compassionate cancer survivor, physician and advocate has written a blog for Forbes entitled: “We Need To Tame The Price Of New Cancer Drugs” In the post she reports on a presentation by Peter Bach (who she calls a drug pricing theorist!) about the clear and present danger of cancer drug prices and how nothing short of government set prices will make medicines affordable. (I disagree with him on pricing but Dr. Bach is smart, articulate and creative. And he is a Red Sox fan. No one’s perfect.)
Dr. Schattner writes that: “U.S. healthcare costs will approximate $3.41 trillion. Drug prices are a big part of that, Bach emphasized.”
Not really. Even though cancer drugs are a bigger part of spending on cancer care, cancer spending as a percent of total health care spending has remained about 4.6 percent since 1965.
If drug prices are a big part of the rise in overall health care spending, why has the percent spent on cancer care remained the same over time? Similarly, spending on drugs as a part of all health care spending spiked in 1990 to about 11 percent (15 percent if you add drugs used in hospitals and outpatient settings) and has remained the same since then (with another spike due to Hep C drug spending in 2013). The retail spending amount in 2014 is about $429 billion according to IMS. Rebates and other discounts from drug prices are about $130 billion. Most of that does NOT go to patients.
Back to Dr. Bach:
“Although prescriptions drugs account for only 10% of national health expenditures, their prices are rising disproportionately. Bach showed a graph of cancer drug prices at the time of FDA approval, from 1965 to the present, demonstrating a 100-fold increase. “The y-axis is exponential,” he reminded the audience. The same graph indicates that since 1990, price tags for newly approved cancer drugs have gone up 10-fold.”
First, Prices are NOT rising disproportionately. Especially when you back out rebates. The chart below shows how most of the increase in drug prices driving Bach batty is in the form of rebates and discounts that do NOT go to patients.
In a reply to a tweet I sent to her about this trend, Dr. Schattner asked if it really made a difference if the price was set by insurers or drug companies.
Schattner writes: “Bach referred to data from the Kaiser Family Foundation on rising premiums and high deductibles that affect 150 million non-elderly Americans who get insurance through employment. Many can’t afford out-of-pocket cancer drug costs until they meet their insurance deductibles, so they don’t take their meds, skimp on doses or wait before filling prescriptions. Even then, when companies charge over $100,000 per year per drug, and insured patients with cost-sharing plans are expected to pay some fraction of that, steep prices limit use.”
But as the chart below shows, Insurers are not only pocketing rebates and using them for everything other than reducing patient out of pocket costs. They are increasing what patients have to pay as a percent of the retail drug price!
Second, Dr. Bach’s comparison of cancer drug prices in 1960 and today is out of context and made to make an impact vs. making a substantive point.
For instance, Harvard tuition has increased by 145 percent from 1970 until today.
Or more to the point, the cost per cancer hospital discharge has increased (in unadjusted dollars) from $1778 in 1970 to $73379 in 2014. That’s a 445 percent increase.
Hospitalization is a bigger contributor to health care cost. But the interest and moral outrage about inpatients costs is nil compared to the time and emotion devoted to drug prices.
The reason for that is we pay more of the retail price of a drug on a regular basis than we pay for hospitalization on a less routine basis.
Ironically, the use of new drugs has reduced the hospitalization (along with mortality rates and lost productivity) due to cancer as the
charts below demonstrate:
Schattner observes that “Prices are problematic at the group level, too. They’re a burden for public insurers such as Medicare. “These are serious numbers,” Bach said. In recent years, Medicare has been paying an increasing fraction of prescription drug costs. In private insurance networks, high medication prices drive up premiums and tend to reduce coverage for all participants. “Health insurance, although it’s been extended in the U.S., has beenstripped down in terms of what it delivers.”
Not true. The share of the decline in hospitalization is due to the shift to outpatient procedures and most of it comes from substituting medicines for surgery, a trend that is associated with an increase in cancer survival and life expectancy.
So how much could cancer cost if we had the same hospitalization rates in 2014 that we had in 1970 and at current charges per cancer hospitalization? (I use charges vs costs because Dr. Bach uses retail drug prices.) About $1 trillion dollars vs $100 billion:
Over time Frank Lichtenberg and others have shown that new cancer medicines explain from 60 to 90 percent of the decline in cancer death rates and is the main reason hospitalization costs have decline. If Dr. Schattner or anyone can provide evidence of another reason, I’d be happy to see it.
Finally, the increase in cancer costs matched the overall increase in medical expenditures during the last 20 years. The Bureau of Economic Analysis concluded that new medicines for cancer reduced the cost of treatment between 1990-2010. One can only imagine what insurance premiums would be if we were spending $1 trillion on cancer hospitalizations alone. So add profitability and lower insurance costs to the benefits new medicines generate.
Given what Bach presented, Dr. Schattner favors governments deciding what to pay for drugs based on a robust measure of value. Well, it turns out that when the value parameters she believes Dr. Bach’s estimate of drug value (as well as ICER’s) are counted it would increase the cost per QALY threshold to about $250-300K. That would make most, if not all cancer drugs a bargain, especially when rebates and discounts go to patients.
I haven’t done all the math, but I also estimate that the rebates and discounts on the $18 billion or so spent on the kind of targeted drugs Bach believes will drive us into bankruptcy are about $2.4 billion. Estimates derived from a recent Millman study of the drivers of cancer costs done for the Community Oncology Alliance suggest about 1.25 million people with cancer undergo active treatment each year. I assume that half of these patients are likely to get targeted or immunotherapy and that $2 billion of the rebates are generated from such products. That’s about $3800 per patient, enough to eliminate all but a few hundred dollars of out of pocket costs for those not protected from such a burden.
Yet, my guess is people still would want to solve for price by having the government negotiate prices. They support government price control (the euphemism is negotiation) of drug companies in the same of economic justice and are impelled by the feeling the industry as a whole generates excessive or windfall profits it doesn’t deserve. As I pointed out in my last blog, price competition does not lead to lower prices in the long run since innovation – which requires more investment and higher costs – is the kind of competition that matters.
In any event, it should be noted that at present the government already negotiates drug prices through the VA, Medicare, Medicaid, the Public health service and the Defense Department. (Average discount: 60 percent) And it should also be noted that such negotiations are always paired with limits on access (as they are in Europe) and that such limits on access such as cost sharing, step therapy and outright caps increase death and morbidity.
If Dr. Schattner wants a kinder, gentler version of the cancer Abacus, she should bear in mind that there is no value framework in the world that does NOT limit access to reduce prices and does not reduce the pace of innovation. Indeed, in the past Bach has argued against using higher priced drugs because they do not add more average survival to patients than older, less expensive drugs developed decades ago.
As the last chart shows, the impact of solving for price would be hundreds of thousands of additional cancer patients dying that are alive today. Note that the steep decline in life years lost began as targeted medicines were introduced compared to what would have happened without new drugs.
Source: The Impact of Pharmaceutical Innovation on Premature Cancer Mortality in Canada, 2000-2011
Solving for price exacts a high cost on society.
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Potential FDA chiefs eye faster drug approvals
Donald Trump's potential choices to lead the Food and Drug Administration have called for the agency to ramp up approval of new products, though in drastically different ways.
Two people have been floated as being under consideration to lead the agency: agency veteran and physician Scott Gottlieb and libertarian and investment firm director Jim O'Neill.
Both candidates reflect a desire by President-elect Trump to speed up approval of new products, albeit through different approaches. Trump didn't talk a lot about the FDA during the campaign, but he has said that the agency needs to cut red tape to get new products approved.
O'Neill is the managing director at the investment firm Mithril Capital, which was co-founded by Trump donor and Silicon Valley billionaire Peter Thiel. O'Neill also served as the deputy administrator in the Department of Health and Human Services during President George W. Bush's administration.
He previously has called on the FDA to approve drugs based solely on safety and not on effectiveness, a radical departure from the current approach.
The agency currently approves drugs based on whether they are safe and effective. However, it threads a fine line at times, balancing the risk of a drug versus the expected benefit, especially if it is a new or experimental treatment.
The agency this year approved an experimental therapy called Sarepta for the rare and deadly disorder Duchenne Muscular Dystrophy, but came under fire from consumer advocacy groups who say the agency should have rejected it because of serious safety concerns.
Gottlieb has called for a different regulatory approach at the agency, but hasn't gone to the same extremes as O'Neill.
In July, he advocated for clinical trials for drugs that treat rare diseases. He pointed to the 21st Century Cures Act, which Obama signed into law on Tuesday and would enable the agency to approve drugs using a different clinical endpoint called a surrogate measure.
"These are interim endpoints that can be used to more quickly gauge a medicine's benefit, such as measuring its ability to shrink a patient's liver rather than having to wait for kids to accrue enough disability to see if a drug can help them walk or breathe better," he wrote in the Chicago Tribune.
He also said the law nudges the FDA to make wider use of "adaptive" trials that test a drug on a smaller group of patients.
An agency veteran who worked with Gottlieb said that having support from the agency's career staff is vitally important to getting goals accomplished.
"It is important for the commissioner to be a change agent, not a bomb thrower," said Peter Pitts, a former associate commissioner at the FDA and the president and CEO of the Center for Medicine in the Public Interest. "If you bring in someone who is aggressively contrary to agency culture, those [career staff] will simply wait him out."
However, if a commissioner can get buy-in from career staff who actually review products, it can "help him accomplish it," Pitts said.
Public Citizen, a consumer advocacy group, has problems with both potential picks.
"I don't know if there is any reason to guess that the president has a real vision for the FDA besides the broad brush deregulate," said group President Robert Weissman. "I think that both of these potential candidates are in line with that. Both of them on the pharma side particularly aim to lower the standard of review for new drugs, presumably for existing drugs as well."
It is not clear who Trump will pick for the FDA. However, several other Cabinet picks have shown that Trump is willing to tap people who aim to radically shake up the agencies they are set to lead.
For instance, Trump tapped former Texas Gov. Rick Perry to lead the Energy Department, an agency he pledged to eliminate while running for president in 2012.
He also chose Oklahoma Attorney General Scott Pruitt to lead the Environmental Protection Agency. Pruitt sued the agency on multiple occasions over several regulations and said that people "are tired of seeing billions of dollars drained from our economy due to unnecessary EPA regulations."
Whomever Trump chooses, Pitts said that he is heartened that names are at least being floated early in the transition.
"A lot of times it is left as an afterthought," he said.
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Yesterday the Alzheimer’s Association was one of hundreds of patient/disease advocacy groups celebrating passage of the Cures Act. From the beginning, when Representatives Fred Upton and Diane DeGette introduced the bill in May 2015, the association rallied long and hard for this legislation, driven by the sense of urgency around Alzheimer’s disease (AD)—the leading cause of death from a disease that can’t be prevented or cured; the most expensive disease in the U.S. and a disease associated with a tremendous personal burden borne by patients and their families.
When Lilly canceled the solanezumab development program last month, it was disappointing, but not a complete surprise. Unlike oncology, AD drug development has been a battlefield where there have been very few victories.
Between 2000 and 2012, there were 413 AD trials, including 83 phase III trials. While some of these studies tested disease-modifying or immunologic drugs, most focused on treating symptoms. The overall failure rate was 99.6%. There hasn’t been a new drug approved for AD since 2003 when Namenda was approved for symptomatic treatment of moderate-to-severe AD.
Despite the high level of risk associated with AD drug development, committed companies continue to pursue R&D in this space, but it’s still not enough. As of December 2016, there are 23 drugs in phase 3 development for AD and 134 active trials---a mere pittance compared with oncology in which there are close to 5,000 active drug trials in process, and more recruiting.
As Jeffrey Cummings from the Center for Brain Health at the Cleveland Clinic noted earlier this year, “Overall, the ecosystem of AD drug development must be altered to yield more targets and more candidate therapies if a robust pipeline of therapies is to be established.”
That’s where the Cures Act comes in. The AD research community stands to benefit in many ways from this eleventh-hour bipartisan feat, especially from the $1.6 billion Brain Research through Advancing Innovative Neurotechnologies (BRAIN) initiative and the funding of the EUREKA prize competition to spur innovation in AD research.
Cures is being hailed as groundbreaking legislation, but for AD researchers, many of the law’s built-in initiatives reflect current best practices in Alzheimer’s R&D---large-scale data-sharing, innovative trials design and mega-collaboration. The day after Cures passed in the Senate, the AD research community convened in San Diego at CTAD to listen to a post-mortem recap from Lilly on sola, as well as more encouraging updates from companies like Biogen, which presented phase 1B data showing that adacanumab successfully reduced beta-amyloid plaques in the brains of AD patients; EIP Pharma, which highlighted positive phase 2A data on neflamapidmod in patients with mild cognitive impairment; Eisai with positive phase 1B data on its BACE inhibitor and Sangamo Biosciences, which presented positive, very early-stage data on its gene therapy.
On the last day of the conference, Anavex Life Sciences, a small company with a first-in-class small-molecule, sigma-1 receptor agonist in phase 2A development for mild-to-moderate AD, presented safety and exploratory efficacy data from a 32-patient study on ANAVEX 2-73. Phase 2A, 57-week data demonstrated a favorable safety and tolerability profile, in addition to positive functional and behavioral outcomes. There were significant improvements in insomnia, depression and agitation, and patients reported feeling happier, being able to play golf again, enjoying international travel and even having more compassion for children.
The presentation’s high point was the cognition data. The data showed early signs of a disease-modifying effect when ANAVEX 2-73 was compared with the current standard of care, with drug-related improvements in attention, working memory, verbal learning and other cognitive domains, compared with declines in the standard-of-care population. And when treated patients were tracked based on MMSE/ADL/CogState scores, after 57 weeks, the scores hovered right around baseline, suggesting cognitive stability.
“This is the first drug to demonstrate statistically significant improvement in cognitive domains. We were able to learn from the vast data available from other AD trials,” said Christopher Missling, PhD, CEO of Anavex. “We learned from others’ failures and we were able to factor everything that we know about this disease into our development process.”
As a small company, Anavex has been able to leverage data made available through the Critical Path Institute’s Coalition Against Major Diseases (CAMD) to inform clinical trial design. CAMD facilitates sharing of precompetitive patient-level data from legacy clinical trials, and supported development of a clinical trial simulation tool for AD.
Because of collaborative culture of the AD research community, and the groundwork laid by CPI and other stakeholders, Anavex was able to successfully use adaptive clinical trial design to test their drug in 32 patients and show a statistically significant effect sufficient to justify moving into phase III.
The Cures Act is intended to create more opportunities for companies to find methods to determine early on whether a drug has what it takes to cross the finish line---and when a drug shows real potential, and meets rigorous safety standards, new drug-development tools will be available to make the pathway to approval more straightforward.
“I think the legislation is extremely important because it helps to allocate resources. Time is always lost in the interfaces between companies and the FDA. Every day counts,” said Missling.
In reality, implementation of Cures will be slow-moving. Nonetheless, the additional funding and adoption of more innovate trial design could move the target 2025 date for approval of a disease-modifying AD treatment up a year or two, possibly more.
That’s what twenty-first century victories are made of---pragmatic, collaborative and relentless research that uses new technologies and reserves of knowledge to accelerate drug development and approval.
Read More & Comment...
To the editor:
Clyde Haberman, in Lives and Profits in the Balance: The High Stakes of Medical Patents (NYT, December 11, 2016) raises an important issue – and then gets it wrong. Patents save lives and enhance the value of medicines. As Abraham Lincoln said, “Patents add the fuel of interest to the passion of genius.” Mr. Haberman points to the Bayh/Dole Act, and suggests that the innovator pharmaceutical industry is getting a free ride on R&D but, according to an article in Health Affairs, drugs with public-sector patents accounted for only 2.5 percent of US prescription drug spending. Also, Haberman refers to the Hepatitis C medicine Sovaldi as costing $1000 per pill. This is incorrect. Every major insurance company and pharmacy benefit manager (PBM) receives significant double-digit discounts from the manufacturer and now, with competition from other innovator companies, prices are dropping even further. That's the power of patents in a free market. The more important question is, why doesn't this result in lower co-pays for consumers? “Facts,” as John Adams said, “are pesky things.”
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FDA cautious about real-world evidence
A great deal of work will be required to pave the road for the use of real world evidence in regulatory decisions, wrote FDA Commissioner Robert Califf and 14 other FDA staff members in a commentary published Thursday in the New England Journal of Medicine. The article sets a tone of caution just as the 21st Century Cures Act and PDUFA reauthorization goals commit the agency to create a framework for the use of real-world evidence to make decisions about post-approval studies of drugs and their approval in supplementary indications.
The article describes the definition of real-world evidence as “elusive.” The authors believe it refers to healthcare information "derived from multiple sources outside typical clinical research settings, including electronic health records (EHRs), claims and billing data, product and disease registries, and data gathered through personal devices and health applications.”
It warns that the “allure of analyzing existing data may lead to flawed conclusions," and says this “concern is especially salient in light of the growing proliferation of precision molecular medicine and treatments for rare diseases, many of which are anticipated to undergo review in accelerated approval programs.”
Real-world evidence could play an important role in reviewing such applications, the authors note, which adds to the urgency of developing rigorous methods for collecting and analyzing such information. The authors express optimism about "long-term prospects for the evolution of mature, robust methodologic approaches to the incorporation of real-world evidence into therapeutic development and evaluation," but emphasize that "caution is still needed, and expectations of 'quick wins' resulting from the use of such evidence should be tempered accordingly. Read More & Comment...
This week the House and Senate overwhelmingly passed the 21st Century Cures Act. The legislation increases National Institutes of Health funding, maintains the Cancer Moonshot and Precision Medicine initiatives and provides additional funding for the Food and Drug Administration to support the greater use of information from precision medicine and patient reported outcomes in determining the benefits and risks of new medicines and medical devices.
According to an article by Ed Silverman at STAT: “some consumer advocates and academics warn the legislation contains a provision that may usher in a new era of lower approval standards.
Here’s why: The bill requires the Food and Drug Administration to develop a program for evaluating the use of so-called “real world evidence” for approving additional uses of medicines, as well as for any follow-up studies that may be required.”
Huh? How does capturing evidence about the actual clinical risks and benefits of medicines in specific groups of patients translate into lower approval standards.
Let’s give those who opposed the bill a bit of credit and presume they are uninformed instead of just crazy. They have no evidence to show that randomized controlled trials guarantee safety or are better at demonstrating effectiveness. On the contrary, most safety problems are discovered in a haphazard way through adverse event reporting after thousands of uses. And real world use of medicines provides not information that can be matched against thousands of other data points that randomized trials do not capture.
In opposing the bill, Public Citizen proclaimed “later-stage “Phase III” trials that have long been the gold standard for drug approval. Well-designed randomized controlled Phase III clinical trials are critical for weeding out bad drugs; more than a third of the drugs that enter Phase III testing fail to gain FDA approval.”
But the “failure” of Phase III trials have little to do with whether or not the drug is safe or even effectiveness at time. On the contrary, “failure” is a product of being unable to identify reasons for ineffectiveness that would be more accurately and quickly discovered in observational studies.
Public Citizen has used the gold standard as apolitical tool when convenient. Michael Carome, MD director of Public Citizen's Health Research Group opposed the approval of Exondys 51 for Duchenne Muscular Dystrophy claiming “It would be a mistake for the FDA to approve this…. It would be giving in to political pressure and essentially eviscerating their standard for approval.... To put out a drug that’s not effective isn’t helping anyone.” This from a group that has recommended not use ANY new diabetes drug introduced over the past 20 years.
Ironically, Public Citizen, which now claims randomized trials are the gold standard had fought against their use in testing the effectiveness of HIV drugs in pregnant women living in developing countries. And some of the groups that were part of the anti-Cures act cabal like Annie Appleseed have pushed for using alternative treatments for cancer that of course undergo no FDA testing at all.
Similarly, Cures opponents deliberately mislead and misrepresented the truth when they claimed surrogate endpoints -- physical changes or measures that are reasonably likely to predict clinical benefit – leads to ineffective drugs. Such surrogates are used mostly in a serious or life-threatening disease that lacks good therapies. As FDA’s Janet Woodcock noted in congressional testimony: “During the last five years (2010-2014), out of a total of 197 novel drugs and original biologics approved across FDA, 84 (43 percent) relied upon a surrogate endpoint for approval. Most of these surrogates have gone on to be well-established tools for measuring drug response or the foundation for biomarkers.” The talking about weaker standards is as devoid of evidence as it is full of malice.
The newly found support of randomized trials has nothing to so with watering down FDA standards. It has everything to do with the belief that real world evidence and patient involvement will lead to an increase in the development and use of new medicines and – by extension – benefit drug companies who have a financial interest in getting drugs approved.
Diane Zuckerman, the President of the far left foundation and trial attorney funded National Center for Health Research -- a woman with little insight and even less expertise about drug development -- pretends to stand up for patients. She is part of a smear campaign against the hundreds of patient groups that supported Cures Acts, accusing them of being tools of the drug industry. I will write more on this slander in a future blog. But for now, let me note that Zuckerman and others like her believe patients can’t be trusted to make such decisions because hope (or pharma funding) clouds their judgment.
Increasingly medical advances determine not only whether we live or die, but how we will live and die. Ordinary citizens, those who are potential patients and the friends and relatives of such have as much of a right to determine a drug’s approval as any trial attorney or far left funded lobbying organization. The anti-Cures Act cabal is more interested in hurting drug companies than in saving lives.
Read More & Comment...
President-elect Donald Trump is weighing naming as Food and Drug Administration commissioner a staunch libertarian who has called for eliminating the agency’s mandate to determine whether new medicines are effective before approving them for sale.
“Let people start using them, at their own risk,” the candidate, Jim O’Neill, said in a 2014 speech to a biotech group.
O’Neill, has also called for paying organ donors and setting up libertarian societies at sea — and has said he was surprised to discover that FDA regulators actually enjoy science and like working to fight disease.
A source close to the Trump transition team told STAT that Peter Thiel, the billionaire Trump donor who is helping shape the new administration, is pushing for the FDA appointment for O’Neill, his managing director at Mithril Capital Management.
Trump’s focus on O’Neill was first reported Wednesday morning by Bloomberg.
O’Neill would be an unusual choice. He is not a physician, and lacks the strong science background that nearly all former commissioners have had in recent years.
A graduate of Yale University, with a master’s degree from the University of Chicago, O’Neill went to work at the Department of Health and Human Services in 2002, after a stint as speechwriter at the Department of Education. He worked his way up to principal associate deputy secretary, where he advised the HHS Secretary on all areas of policy, according to his LinkedIn page.
O’Neill first worked with Thiel at Clarium Capital Management, and also ran the Thiel Foundation and Breakout Labs, which funds early-stage companies in areas ranging from food science to biomedicine to clean energy. He is a promoter of anti-aging treatments and technology.
O’Neill also serves on the board of the Seasteading Institute, an organization that aims to create its own sea-based floating communities, on the theory that existing governments are woefully ineffective. “Obsolete political systems conceived in previous centuries are ill-equipped to unleash the enormous opportunities in twenty-first century innovation,” the Seasteading website notes.
O’Neill is not well known in Washington, but has been a frequent speaker on the biotech circuit.
In 2014, in a talk to a group gathered to discuss regenerative medicine, he recalled his days at HHS and expressed disdain for the FDA’s process.
“As a libertarian, I was inclined to believe that the regulatory costs that the FDA impose kill a lot of people and provide a lot of harm to the economy, and I don’t deny that… but one thing that surprised me is that the actual human beings at the Food and Drug Administration like science; they like curing disease and they actually like approving drugs and devices and biologics.”
The problem, O’Neill told the group, is the overall structure and incentives of the regulatory system.
“Every time the FDA commissioner approves something and someone gets sick who used it, the commissioner is summoned to a congressional committee that also controls his budget and forced to testify under oath, why he made this rash decision…It’s a miserable process,” O’Neill said.
O’Neill has proposed that the FDA only require companies to prove drugs are safe before they are sold – not that they actually work.
O’Neill has also said that organ donors should be allowed to be paid. “There are plenty of healthy spare kidneys walking around, unused,” he said in a speech at a 2009 Seasteading conference.
His participation in the Seasteading movement might be a sensitive topic, too. The video of his speech was available on The Seasteading Institute’s website in the afternoon, but by evening, it had disappeared.
In the speech, which is still available elsewhere, O’Neill said that “we can all wish that existing governments will somehow stumble into freedom, but if we want to achieve freedom, seasteads are by far the best prospect.”
Neither O’Neill, Thiel or Trump transition team staffers returned calls seeking comment.
Also under consideration for the FDA job: Dr. Scott Gottlieb, a former FDA deputy commissioner.
Gottlieb, a resident fellow at the American Enterprise Institute, was a senior adviser to the presidential campaign of Wisconsin Governor Scott Walker. A clinical assistant professor at the NYU School of Medicine, he is a venture partner at the venture capital firm New Enterprise Associates, and a senior principal at TR Winston, a healthcare focused merchant and investment bank. He has testified before Congress 18 times on health and regulatory issues.
Gottlieb was recently named to the transition team. Read More & Comment...
But often what is perceived as illiteracy is really confirmation basis or just not understanding. An example of the latter is WSJ reproter Jonathan Rockoff’s article “Drugmakers Find Competition Doesn’t Keep a Lid on Prices”. Rockoff's article does transcend the usual narrative:that drug prices don’t decline in the face of competition because only drug companies can defy market forces and pass added costs onto consumers. Rockoff acknowledges that drug companies are not the only culprits. In making this point, he still implies competition should reduce drug prices without regard to the costs associated with producing goods or services. In doing so, he perpetuates the meme that drug companies are so profitable they can cut prices and generate new medicines.
Rockoff apparently has not looked at the relationship between competition, prices and production costs in other industries.
For example, when has Apple or Microsoft or Google engaged in a price war leading to lower prices over the long run? Have cable rates fallen in response to other ways of watching movies, tv shows, etc? On the contrary, they have not. Similarly, has Netflix or Amazon or Hulu reduced their prices as the battle for broadband viewership heat up?
Have the prices hospitals and insurance companies charge fallen? How about the cost of college? Or closer to home, why has the Wall Street Journal continued to raise its newsstand and digital subscription prices? Heck, WSJ is laying off a bunch of high paid writers. Shouldn't prices go lower, not higher? And why is the renewal price higher than the introductory price. Shouldn't the $99 price be standard?
The fact is prices are more than a response to competition. And competition is rarely only about prices. WSJ increases prices because the costs of staying in business and putting out a good product increase. Netflix could have continued to charge 6.99 if it didn’t want to invest in new movies and original programming. Would people be satisfied watching reruns of Law and Order?
This dynamic is separate and apart from the increase in list prices that fuel higher rebates for insurers and PBMs. But not totally. List prices rise in response to the added cost of rebates and other discounts drug companies must give to get market share.
As Sowell points out (should he really have to?) “Costs are not just prices arbitrarily put on things. Whether the economic system has prices or not, there are real costs for everything. Whether under capitalism, socialism, feudalism or any other system, the real cost of building a bridge are all the homes, factories and other structures that could have been built with the same labor and materials that went into building the bridge.’
To be sure, rebates and discounts don’t mostly flow to the consumers of the drugs generating rebates and discounts. But that is due to the control insurers and PBMs have over retail pricing. This is a huge problem as I have pointed out time and again. Until recently most reporters were unaware of how rebates worked. (Credit due to me and Peter for doing the explaining!)
None of the above changes the fact that lower prices can often lead to less innovation across industries or that prices do reflect value in market economies. Generic drug companies don’t innovate and often stop producing essential medicines that go off patent because prices are often drop below increasing production costs.
Rockoff, like many of us, seek explanations when competition doesn't lead to lower prices. The key is to look deeper into how competition sustains innovation. Companies compete on quality, on novelty and on value. Prices reflect what those qualities or values are as well as the cost of making them. If we want 1990s prices for anything, college, cellphones or drugs, be prepared for 1990s technology.
A footnote: Rockoff’s piece is featured in a WSJ weekly business ethics course reviewed by OC Ferrel, a professor of business ethics at Belmont University. Ferrel writes: “Students should understand that 'fair' competition should result in competitive or lower prices. This phenomena (sic) is causing increased burden on the health care system and should have public policy consequences.”
Maybe Sowell was not tough enough. Read More & Comment...
Other key provisions include:
* Real World Evidence. Require FDA to establish a framework for use of real-world evidence to approve supplemental indications and satisfy post-approval requirements. Timeframe: Within 2 years
* Healthcare Economic Information. Clarify ability of manufacturers to discuss pharmacoeconomic data with payers, formulary committees and others. Timeframe: Immediate
* Limited Population Pathway. Allow limited approval of antimicrobial drugs for life-threatening infections; require labeling and advertising to include “Limited Population” language. Timeframe: Immediate
* Summary Level Review. Allow approval of new indications based on data summaries from sponsors (sponsors must also submit full data). Timeframe: Immediate
* Accelerated Approval for Regenerative Advanced Therapies. Create regenerative advanced therapy designation that allows accelerated approval and use of clinical evidence, clinical studies, registries or other real-world evidence to satisfy post-approval requirements; require FDA to explain decision not to grant regenerative advanced therapy designation. Timeframe: Immediate
* Qualification of Drug Development Tools. Establish review pathway for biomarkers and other drug development tools to shorten development and reduce failure rate. Timeline: Draft guidance within 3 years; final guidance 6 months after end of comment period
* Reauthorization of Program to Encourage Treatments for Rare Pediatric Diseases. Reauthorize the pediatric rare disease Priority Review voucher program until 2020; a drug designated by Sept. 30, 2020 could receive a voucher if approved before Sept. 30, 2022. Timeframe: Immediate
* Silvio O. Conte Senior Biomedical Research Service. Increase senior biomedical research service positions to 2,000 from 500, allow FDA to deploy biomedical research service members for product assessments, increase maximum salary to president’s salary. Timeframe: Immediate
* Hiring Authority for Scientific, Technical, and Professional Personnel. Allow FDA commissioner to set salaries for scientific, technical, or professional positions at up to the president’s salary. Timeframe: Immediate
* Patient Experience Data. Require statement upon drug approval about FDA’s use of patient experience data collected by patients, caregivers and their representatives; disease research foundations; researchers; and drug manufacturers. Timeframe: 180 days
* Patient-Focused Drug Development Guidance. Require FDA guidance on how to collect patient experience data for use in regulatory decisions, how patients can submit proposals and how FDA will respond to them, and how FDA plans to use such data. Timeline: Initial plan in 180 days; draft guidance within 18 months; revised or final guidance 18 months after end of comment period
* Expanded Access Policy. Require companies to have publicly accessible compassionate use policies for investigational drugs treating serious or life-threatening conditions. Timeline: 60 days
On the down side, the $500 million of funding is not mandatory. Stay tuned.
For an excellent recap of the legislation, have a look at BioCentury’s Steve Usdin’s excellent article. Per Usdin, “The political process has created a consensus bill that lacks the kind of paradigm-shifting changes its authors promised. But Cures would produce real, though modest, forward motion in several areas that are important for translating scientific advances into new therapies.”
And, importantly, “Critics of the 21st Century Cures Act have warned that it would erode approval standards by allowing FDA to approve drugs based on anecdotal evidence. This is a huge exaggeration. What Cures would do is start FDA down the long road toward relying on real-world evidence to support selected regulatory decisions.”
Bravo. Read More & Comment...
The best way to measure the value of medical progress is to find out what people fighting serious chronic illnesses do as they get stronger and healthier.
When two people going on different journeys in overcoming potentially life threatening diseases and wind up on a common mission -- to battle against health care policies that deny well-being to others -- you know that value cannot be defined simply as what saves health insurers money.
Don Wright was diagnosed with multiple myeloma in 2003 just ran his 100th marathon. He has been taking one pill a day since then to keep the disease in check and now, with the latest addition of another medicine, he is making his centennial run without missing a stride. When he not running or practicing law, Don provides other people with cancer support and guidance.
Dani Yevsa was diagnosed with psoriatic arthritis. Denied newer medicines by her insurer, she had to try older drugs first. Unable to move, let alone work, her husband quite his job to care for their four children. To get the care and medicine they needed to stay alive, went on welfare. Medicaid where she was forced to fail on three treatments that made her sicker, not better.
She is finally on medications her doctor prescribed.
Both Don and Dani took different approaches to the same path. They are making thousands of patients around America about an insurance funded organization called The Institute for Clinical and Economic Review (ICER). ICER states it is “a trustworthy, independent source to help assess how valuable a new drug really is.” And it claims its goal is to make innovative drugs affordable to patients and insurers.
Except that ICER has decided Don and Dani should only get the older drugs that would have left him disabled or dead.
ICER is deciding for Don, Dani and millions of other patients how much their lives are worth, not the other way around. And ICER has decided that the benefits new drugs provide healthy people are MORE valuable than life-years gained by those who are chronically ill or disabled. Similarly, Dani and Don are worth less according to ICER’s economic assumptions, because they are less likely to get as much benefit from medicines than people with more treatable conditions. And finally, ICER assumes that future benefits are less valuable to Dani and Don than to others.
So it’s no surprise that ICER concludes every new medicine isn’t worth paying for unless they are deeply discounted off retail price and save money by reducing the use of other medical services.
ICER responds that it’s trying to find prices that patients can afford first and foremost. But the deeper discounts they recommend don't make medicines affordable or free up cash. In the real world of how PBMs and insurers price drugs, the savings go to PBMs and insurers, not patients. At the same time, insures overcharge customers for prescription drugs by making them pay up to 50 percent of the retail price of the drug. ICER has issued over a dozen studies and never once wrote or spoke about passing these savings to the patients.
Additionally, ICER suggests that to save even more money, insurers limit the number of people who have access to these new life extending medicines. ICER believes that spending more than $900 million a year on a new medicine should set off alarm bells that strong action – capping how many people can get the novel treatments – must be taken. For psoriasis, ICER concludes that health plans can only cover about 35 percent of the 183000 people diagnosed with psoriasis could be treated with before potential budget impact reaches $904 million. For multiple myeloma, ICER caps access at 25 percent.
That means they before they can get these new drugs, if ever, they have to take older drugs and get sicker. That means, over 5 years, ICER would deny 44000 people with myeloma a second and third chance at life and cost 88000 life years. Over the same time period, given the mortality rate associated with older psoriasis drugs, about 52000 life years would be lost. Dead patients cost nothing.
Don and Dani and others already pay thousands in premiums and taxes only to be denied new medicines based on the kind of rationalizations ICER produces. They have ICER in their sights because the more its recommendations spread, the more money health plans make at the expense of people they often impoverish when they are most vulnerable.
ICER defines value as what’s most profitable for PBMs and health plans. It devalues what makes medical progress so important: When you’re seriously sick, it’s hard to plan or hope. Our dreams our diminished and deferred. We are forced to forsake our full potential.
ICER claims such benefits can’t be counted because they can’t be quantified. I think we can easily measure the value of medical progress: Value is what Don has achieved, what Dani has fought for and the path they are forging for everyone who is or may be forced to fight disease Read More & Comment...
Taking risks with drug safety
Congress must remedy the Creates Act before passing it
Over 60 percent of Americans want the government to take action to lower prescription drug prices, according to a new Kaiser Family Foundation survey. Congress, for once, is listening to voters.
Lawmakers are pushing forward with the Creating and Restoring Equal Access to Equivalent Samples (Creates) Act. The bill’s sponsors hope a series of new legal provisions will make it easier for drug companies to introduce generic alternatives, thus spurring competition and bringing down prices. The bill is well-intentioned. Unfortunately, it’s also worded extremely poorly. Instead of bringing generics to market sooner, the bill could endanger patients’ lives and encourage costly, needless litigation.
The proposed law would address conflicts between innovator drug companies and their generic competitors. To protect consumers, the Food and Drug Administration requires that new drugs undergo a series of clinical trials to prove their safety and effectiveness before entering the market.
Generic drugs must also complete clinical trials, but only to prove they’re clinically similar to the already-approved brand-name drug. The generic drug creation process inherently requires that manufacturers obtain brand-name drug samples from innovators for comparative testing.
Many drugs are so potent, or have such dangerous side effects, that the FDA requires drug companies to develop and abide by specialized safety protocols called “risk evaluation and mitigation strategies,” when selling or dispensing these medicines.
For example, Soliris, a drug used to treat rare blood disorders, can potentially cause dangerous bacterial infections in the bloodstream. Because of these possibly fatal side effects, the FDA-approved risk evaluation and mitigation strategy requires that only specially certified physicians can prescribe Soliris, and that patients must be given an information card to help them recognize early warning signs of an infection.
Here’s where it gets complicated. Generic drug companies are accusing brand-name manufacturers of dragging out negotiations regarding these risk evaluation and mitigation strategies to avoid handing over drug samples. Without the samples for comparative testing, generic manufacturers can’t enter the market. And without competition, the brand-name manufacturers get to keep selling their medicines at inflated prices, even after the patent has expired.
That’s why some in Congress want to pass the Creates Act. The bill would allow generic drug manufacturers to sue brand-name manufacturers if they fail to hand over their drug samples for testing within 31 days, or if the companies do not reach an agreement on shared risk evaluation and mitigation strategies for risky drugs.
That sounds reasonable. Nobody wants brand-name companies to drag their feet and keep prices higher longer than necessary. But the Creates Act’s language is so imprecise that it could lead to potent medicines falling into the wrong hands, without adequate safeguards for patients.
The bill strips the FDA of its watchdog role. Under the proposed law, generic manufacturers aren’t required to outline testing and safety protocols for the FDA to approve. Even if a generic drug maker’s proposed risk evaluation and mitigation strategies are inadequate, the FDA has no authority to reject or halt the transfer of medicines to the generic company for testing.
The experts at the FDA would have no choice but to approve the transfer within 90 days, even if they think doing so would put patients in danger. The Creates Act would also be a trial lawyer’s dream come true.
Poorly worded liability provisions subject innovators to unfair legal risk. Generic drug companies often obtain brand-name drug samples and ship them off to third-party research firms to perform clinical trials. If the third party is negligent with the samples, patients could get hurt. Under the bill’s terms, patients would be able to sue the brand-name drug company, even though it had no control over the testing or safety protocols.
The bill also lets generic drug companies sue innovators for not handing over samples within 31 days of a request, even if both companies are actively negotiating the terms of the sample distribution and safety protocols.
And though the proposed law requires innovators and generic companies to strike transfer deals on “commercially reasonable market based terms,” the law doesn’t clarify what that means. Such subjective wording is music to trial lawyers’ ears.
Congress deserves praise for trying to bring generic medicines to market faster, thereby relieving consumers from high drug prices. Yet good intentions don’t change the fact that the Creates Act, as constructed, is deeply flawed. Congress could help consumers by reworking the law to ensure it stops isolated bad behavior without gutting safeguards for patients or enabling unscrupulous trial lawyers to file costly, pointless suits.
Peter J. Pitts, a former FDA associate commissioner, is the president and co-founder of the Center for Medicine in the Public Interest.
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Patients threatened by new drug coverage limits
Kareem Abdul-Jabbar’s toughest fight wasn’t on a basketball court.
In his early 60s, the six-time NBA champion was diagnosed with leukemia, the deadly blood cancer. Fortunately, Abdul-Jabbar had access to state-of-the-art medications, including the advanced drug Tasigna, which paralyzed his cancer cells and prevented further growth. Today, eight years after his initial diagnosis, Abdul-Jabbar is thriving and cancer-free.
Unfortunately, many of today’s leukemia patients won’t be so lucky. CVS Health, the nation’s second-largest pharmacy benefit manager that oversees 65 million Americans’ drug plans, recently rescinded coverage for Tasigna –— and 130 other specialty drugs.
As a result, millions of people could be denied access to drugs that could save their lives. Instead of prescribing the medicines best-suited to patient needs, physicians will be forced to recommend lower-quality treatments.
Pharmacy benefit managers, or “PBMs” for short, administer the prescription drug plans used by health insurers and employers. In recent years, these organizations have gotten stingy about which drugs they cover.
Back in 2012, the nation’s largest PBM, Express Scripts, excluded no medicines from its list of covered drugs, while CVS Health left off about 30. Today, they exclude more than 200, including an array of popular treatments for arthritis, Hepatitis C, and various skin conditions.
PBMs have also stopped paying for cutting-edge cancer treatments. In addition to Tasigna, CVS won’t cover the revolutionary prostate cancer treatment Xtandi. Meanwhile, Express Scripts just stopped covering Zyclara, a cream that can help prevent skin cancer.
PBMs are restricting drug access in other, more devious ways as well.
CVS is also steering patients away from ultra-complex “biologic” drugs, forcing them to switch to lower-cost treatments the company claims are medically equivalent. But in many cases these less expensive therapies, known as “biosimilars,” aren’t approved by the FDA to be interchangeable with their brand name alternatives.
Consider one study that compared the effectiveness of a Crohn’s disease treatment and its biosimilar. An alarming eight in 10 patients who took the biosimilar required a hospital readmission for additional treatment, compared to only one in 20 who took the original drug.
Despite these disturbing results, PBMs are comfortable forcing patients to use biosimilars and generic medications. That’s because their only concern is bringing down short-term drug spending — even if those savings come at a cost to patients’ well-being.
Ironically, this strategy will end up raising health care costs in the long-run. If doctors can only prescribe less-effective treatments, folks will get sicker, be hospitalized more frequently, and require more expensive care. That demand will drive up overall healthcare costs and overwhelm doctors and hospitals with waves of new patients.
That doesn’t matter to PBMs, though. A dollar saved by avoiding top-notch drugs is a dollar that goes into PBMs’ pockets — even if the patient becomes sicker on less effective treatments and racks up much larger hospital bills for insurers and patients to pay down the road.
PBMs coverage denials are a deadly prescription for America’s patients. By shrinking coverage for cutting-edge treatments, PBMs are forcing sick people to use substandard drugs. It’s about time patients mount a full-court press against this callous behavior.
Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest. Read More & Comment...
According to the latest report from the Altarum Institute, “moderate 2016 health spending growth continues a slow downward trend.” Unfortunately this doesn’t fit the narrative of those who want to talk about runaway trains – especially for pharmaceuticals.
Here are the numbers: Hospital spending represents 32% of American healthcare spending, 20% goes to physician and clinical services, 15% goes to “other health spending,” and 10% is for prescription drugs.
If the media had covered this story -- which they have not -- the headline would have been, "Pharmaceuticals represent 10% of American healthcare spending. A dime on the dollar. A smaller percentage than almost every nation in Europe."
And here’s the subhead – Spending on pharmaceuticals is growing at a slower rate (under 4%) than either hospital (just under 5%) or physician costs (just over 5%). This breakdown is based on the Bureau of Economic Analysis monthly spending data, including its most recent update released on August 29th of this year.
While pharmaceutical spending seems to be the only issue of interest to the media and politicians, the Altarum account isn’t the one they’re telling. Almost every story and every speech on the drug sector focuses on price without the context of value, using a few bad actors to represent the entire industry. Unfair? Sure -- but life is unfair. There is, however, no excuse for slanted stories and untrue, accusatory political oration.
Disease is the enemy. Practicing physicians know this, but their professional association – the American Medical Association – seems in need of some education. The AMA’s new program, “truthinrx.org,” is entirely silent on the actual metrics of healthcare spending and the value of pharmaceutical innovation. Ignorance is not bliss.
Healthcare innovation saves lives, saves money, promotes economic growth, and provides hope for hundreds of millions of people (both patients and care-givers) in the United States and around the world. It deserves respect – or at least honest reportage.
Does this sound naïve? Perhaps, but as Schopenhauer said, “All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.”
The complete Altarum report can be found here.
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According to Medpage: “Congress and the administration can help rein in rising drug costs through a few key regulatory and legal fixes, said insurers and pharmacists at AHIP's National Conference on Medicare, Medicaid and Duals on Tuesday.”
"I think plans need to be given a little bit more leeway to truly assess the value of drugs to make a decision: does this drug at the cost really provide any additional value?" said Sarah Marche, PharmD, vice president of pharmacy services at Highmark, a Blue Cross affiliate in Pennsylvania.
Translation: We already limit access to life saving medicines for the most chronically and seriously ill seniors based on our current value assessment. But we want even more control over what patients get. And by ‘additional value’ we mean increasing the 35-40 percent price discounts we get and what consumers are charged. We want more.
Marche noted that not every drug Medicare covers adds value.
"Glumetza [a branded version of metformin] provides no value above and beyond what's available, and if you look at a lot of the commercial formularies, it's blocked," she said. "Nobody's dying. Nobody has any huge issues with that, but we don't have that same flexibility within the Medicare space. So, you're covering a drug that really provides no additional value, just increasing the cost."
Translation: After Valeant got hammered for hiking Glumetza by more than 800% in 2015, the list price of stood at $10,020 for 90 tablets, up from $896 in January 2013,. For the longest time, insurers didn’t complain . Half of Glumetza’s price is given back in discounts, rebates, chargebacks, and the like to wholesalers, managed care organizations, pharmacy benefit managers, federal and state healthcare programs, and others.
Under pressure to reduce prices, Valeant gave Walgreens’s an exclusive deal to sell Glumetza as generic prices. So Express Scripts, the company running our drug benefit decided it could turned around an blocked Glumetza and cutting a deal with a company making a generic version of the drug to make up for the lost rebate revenue. So we would have covered it if had provided additional profit… I mean value to us regardless of cost. It really depends on the rebates Express Scripts can share with us.
Another panelist, Mark Owen, MBA, president of government programs for the the Blue Cross-affiliated Health Care Service Corp., power “to limit beneficiary access to specialty pharmacies.”
While Owen noted that critics of the idea have said such a change could pose access challenges, he argued that allowing plans to direct beneficiaries towards only certain pharmacies could lower costs and increase adherence.
Translation: Limiting access allows us to pocket more money because it ensures patients have no choice but to take the drugs that we give them. That way we make the biggest profit margin whether they like it or not. And we know that charging patients about 40 percent of the retail price of products is a good way to force them to use drugs what give us the biggest margin. We will work really hard to increase adherence, but only with drugs that fatten our bottom line regardless of whether the drug works for that patient or not.
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