Latest Drugwonks' Blog
From the pensive pen of Dr. Sally Pipes:
“We are not prepared for a pandemic,” Health and Human Services Secretary Michael Leavitt said earlier this month. We do, however, face a significant risk of being hit by one. A new strain of the avian flu, known as H5N1, has killed at least 60 people in Asia since 2003. So far, humans cannot pass it to one another — virtually everyone infected caught the virus from a diseased bird.
The risk to people is nevertheless grave. The 1918 Spanish flu epidemic, blamed for 50 million deaths, also started among birds, but it mutated and spread to humans. Scientists fear the same thing could happen now. As an expert epidemiologist recently told the Wall Street Journal, “Ité¾ not a question of if, but when.” The Centers for Disease Control (CDC) estimates that an avian-flu pandemic could kill between 89,000 and 207,000 Americans. There is no publicly available vaccine for the new strain.
Now that the threat is upon us, the administration says it plans to bolster vaccine production in the United States and purchase huge quantities of antiviral drugs. But the question is: Why weren’t we ready in the first place?
The United States once had a large vaccine industry. In 1957, 26 companies supplied the market for standard children’s vaccines — but now only four companies do. Three decades ago, at least 10 U.S. firms manufactured vaccines to treat seasonal flu. By the late 1990s only five remained. And in 2004, the entire U.S. flu-vaccine market depended on just two companies — a French firm with a factory in Pennsylvania, and a California firm with a factory in Great Britain. Hence, our sense of crisis during last year’s flu season, when contamination at the British plant curtailed supply.
The only avian-flu vaccine likely to be available soon is made by the French company Sanofi-Aventis — the same firm we rely on for seasonal flu vaccines. The Sanofi-Aventis vaccine against H5N1 is undergoing preliminary U.S. government testing and showing early signs of success, but it’s not clear how soon it could be available. California-based Chiron — the one with the contaminated British plant — says it will have an H5N1 vaccine ready for testing by the end of the year.
To develop new and better flu vaccines is well within the reach of science. So why don’t U.S. drug companies, which dominate the global medicine market, make vaccines?
First, vaccines are subject to excessively strict screening by the Food and Drug Administration (FDA). So, for example, FluMist, a flu vaccine delivered via nasal spray, has only been approved for use for people aged between five and 49. It is our youngest and oldest, however, who run the greatest risk of catching the flu. This means that the cost of researching and developing new vaccines is needlessly expensive.
Second, vaccines are very expensive to produce. Using one older method of making flu vaccine, it costs about $300 million to build a factory and takes almost five years to get it completed and inspected. The company that makes FluMist, Maryland-based MedImmune Inc., could produce 20 million doses a year, but only about two million would get by the regulators. Because flu vaccine doesn’t keep, in 2003 MedImmune was forced to discard four million doses of its product.
Third, out-of-control lawsuits have scared companies away from developing and producing vaccines. For example, a researcher claimed in the 1970s that the whooping-cough vaccine caused brain damage. More than 800 lawsuits were subsequently filed in the U.S. against vaccine makers. Scientists later proved conclusively that there was no link between the vaccine and brain damage, but by that time the manufacturers were already out of business.
If companies stood a chance of recouping their investments, all these high costs of doing business might be manageable. Government price controls, though, make getting a return next to impossible. The Vaccines for Children Program was the final nail in the coffin of the American vaccine industry. Established by the Clinton administration in 1994, it established a single-buyer system for children’s vaccines. The government now buys 57 percent of all childhood vaccines, forcing steep discounts on manufacturers.
In short, litigation, regulation, and price controls have strangled our ability to prevent deadly diseases, among them avian flu. It doesn’t have to be this way. America leads the world in making medicine. Pharmaceuticals created by U.S. firms have made our lives longer, more comfortable, and more productive in ways our forefathers couldn’t have imagined. People everywhere clamor for AIDS and cancer medications invented in the United States. If we remove the red tape that has choked off vaccine production, we could have a healthy vaccine industry too.
Here’s another (prepublication) paper. We’re not called DrugWONKS for nothing.
Dan Carpenter, in the October 18, 2005 issue of Health Affairs, proposes financing post-marketing drug safety studies by augmenting FDA user fees. That’s just PDUFy. Why add (by Carpenteré¾ own calculation) 25% increased cost to the process when a more expeditious route is to empower FDA with the enforcement authority required to compel post-market commitments made during the initial approval process. Carpenter’s modest proposal would certainly provide a lot of work for idle academics, but not much in the way of enhanced patient safety. Maybe its time that we kept our powder dry and kept sponsors to their NDA-phrase promises. For more thoughts on the Carpenter article, please click on “comments” below for a thoughtful response from Bob Goldberg of the Manhattan Institute.
Senator Charles Schumer (R, NY) weighs in on the Tamiflu issue with the following perspective; “The problem is not the expense of the drug but rather the shortage of supply, which would immediately be rectified if other companies were able to produce it.” Well, kind of. “If” only it were as simple as gearing up mass production of Tamiflu the problem would indeed be helped, if not “immediately rectified.” But, unfortunately, it’s not so simple. Mark Twain said that for every complicated problem there is usually a simple solution — and it’s usually wrong. And Tamiflu production is extraordinarily complicated. We’re not talking about a toaster that can be mass-produced by anyone, anywhere in the world at any time. The Senator went on to say that the manufacturer of the drug, Roche, should be compensated fairly for giving up its rights over the drug. “I deeply respect the investment Roche has made in order to bring Tamiflu to market, but am confident that there is a way to both serve the public need and ensure that your company receives compensation,” he said in a letter to the company. Glad to hear that a well-respected United States Senator respects intellectual property rights. That’s a good point of departure. I wish the same could be said for rogue Indian patent thieves, the World Health Organization, and the Secretary-General of the United Nations.
Representatives Waxman and Slaughter just announced their co-sponsorship of HR 839, the “Restore Scientific Integrity to Federal Research & Policymaking Act.” Now, while I certainly object to the “restore” bit — I do agree with much of the verbiage, to wit: “Appointments to scientific advisory committees shall be made without regard to political affiliation, unless required by federal statute.” Also, that federal agencies would be required to ensure that “no individual appointed to serve on a federal advisory has a conflict of interest that is relevant to the functions to be performed, unless such conflict is promptly and publicly disclosed and the agency determines that the conflict is unavoidable.” During my tenure at the FDA I was the senior official in charge of advisory committees and I’m here to tell you that what Henry and Louise are advocating is already status quo ante Grassley. But there is one conflict that I need to make known — my wife and Representative Slaughter’s daughter roomed together in college.
It is time to take off the gloves and prosecute stupidity. Looking at it from a different, more proactive angle, it’s time for tort reform. After all, as Forrest Gump so aptly put it, “stupid is as stupid does.”
Our courts are over-crowded and under-funded. Auto insurance and professional liability rates are too high. And, unfortunately, our personal responsibility levels are too low. A New York man sued McDonald’s, Burger King, Wendy’s, and Kentucky Fried Chicken for contributing to both his obesity and his related health problems. I wonder if he took Vioxx?
The man may be fat, but his attorney is a fathead, a very wealthy fathead. If we are going to prosecute stupidity, we will have to make it a misdemeanor (since our courts and jails are already over-burdened), but let us make enabling it a felony.
Keeping in mind the immortal words of former congressman and convicted felon James Trafficant, “Beam me up, Scotty,” consider this editorial from the 10/16/05 edition of the Business Review of Western Michigan:
Contraindicative Rx
If some state lawmakers have their way, drug makers in Michigan will lose their shield against consumer lawsuits. That’s a tough pill to swallow. The bills, which last month passed the House on an 89-17 vote, would repeal a 1996 state law that protects drug makers from liability if their products meet U.S. Food and Drug Administration safety and labeling standards. The bills’ Democratic sponsors are emboldened by last month’s Texas jury verdict against Merck and Co., which marketed the pain killer Vioxx. The jury awarded the widow of a Vioxx user $253.4 million. But here’s one fact to remember: The Michigan protection does not apply if a company intentionally withholds information or makes misrepresentations to federal regulators. While we worry that a lawsuit shield prevents a drug’s users from seeking every angle of recourse against a company that brings to market a drug with unintended ill consequences, the process of researching, developing and receiving approval to market a drug takes several years. What Michigan may do while trying to provide recourse for consumers is erode business protections against meritless lawsuits. What’s more, eliminating the drug-company immunity sends the wrong message as the state seeks to keep what remains of Pfizer’s facilities in western Michigan and elsewhere in the state and attract investments from life-sciences companies — a topic that came up in Business Review’s May 25 quarterly forum in Kalamazoo and Sept. 14 forum in Grand Rapids. After all, life sciences is a logical extension for protection. “We’ve got to protect the rights of consumers and make sure people who are negligent, and wantonly negligent, are punished,” state Rep. Bill Huizenga, (R, Holland),told Business Review. “On the flip side of that, we need to make sure companies are able to be innovative.” Huizenga, chairman of the House Commerce Committee, said removing immunity tells the pharmaceutical industry — and life sciences, too, we say — that Michigan business law is going backward. Here’s our prescription for lawmakers — take a dose of reality, give it a rest and call us in the morning.
Frivolous lawsuits do nothing to educate the American public about better health care. In fact, they trivialize such important efforts. What’s most disturbing, however, are the effects such lawsuits have on our diminishing view of personal responsibility and warped perspective on blame. Blame is what people do when they find themselves on the wrong end of the risk/reward equation. Blame supposes fault and as Plutarch wrote, “to find a fault is easy, to do better may be difficult.”
If we do not stand up for what’s right and what’s needed, then we will live to see a thousand Michigan’s bloom.
Disconcerting news from the subcontinent. “Right or wrong, we’re going to commercialize and make oseltamivir,” (Oseltamivir is the generic name of Tamiflu) said Dr. Yusuf K. Hamied, chairman of Cipla of Bombay. Well, since you asked, it’s wrong. It’s IP theft. It’s trading profit today for health care innovations tomorrow. It’s profiteering. According to Roche, making the drug involves 10 complex steps and would take another company “two to three years, starting from scratch,” to produce it. Dr. Hamied dismissed that claim, saying that he initially thought it would be too hard but that his scientists had finished reverse-engineering the drug in his laboratories two weeks ago. Dr. Hamied said he would sell generic Tamiflu “at a humanitarian price” in developing nations and not aim at the American or European market. I wonder if this includes Illinois?
Here’s a new and insightful piece by Benjamin Zycher, Ph.D.
The greater the power to redistribute wealth wielded by government, the stronger the private-sector incentive to circumvent it, and so ever-expanding is the power that government must grasp. Nowhere is that eternal truth clearer than in the ongoing debate over the importation of pharmaceuticals subject to price controls overseas. Such legalized importation would be one way for those favoring such price controls — a blatant wealth transfer from the future to the present — to have that cake without actually having to vote for it, and thus having to bear responsibility for the ensuing adverse effects on current and future human suffering.
Under a system of reimportation of price-controlled medicines, the pharmaceutical producers, understandably seeking to protect the economic value of their investments and thus their ability to develop new medicines for the future, would have incentives to limit sales into the various foreign markets, so that foreign governments in effect would not determine pharmaceutical prices in the U.S. And the foreign governments, interested in preserving adequate supplies of medicines for their own populations, have made it clear that they cannot serve as pharmacies for Americans.
And so having shunted aside both the serious counterfeiting/safety issues attendant upon the drug importation system now contemplated, as well as the implicit, but huge, erosion of intellectual property rights inherent in the price controls, the Congressional proponents of such importation now must confront the unwillingness of the foreigners to serve as the price control middlemen for the U.S. market.
And confront it they have. The current proposals to allow the importation of pharmaceuticals subject to foreign price controls include provisions forcing the producers to sell to the foreign governments all the drugs demanded at the controlled prices.
Where to begin? This means that foreign governments —- or more specifically, the foreign governments imposing the tightest price constraints — will be given the power to set prices in the U.S. Do we want the future of U.S. medical technology to be determined by political pressures overseas and/or by bureaucrats in Ottawa or Brussels or Brasilia? Apparently, some in the U.S. Congress do indeed. And precisely what is the economic value of any given pharmaceutical patent when that economic value in the U.S. can be confiscated by foreign politicians, whether elected democratically or not? So much for the future of pharmaceutical investment and innovation — the research and development process takes over a decade, and what investor wants to bet on political outcomes not only in the U.S., but anywhere in the world? — and thus for the future development of cures.
And let us have no nonsense about the importation of pharmaceuticals subject to price controls as a manifestation of “free trade.” Forced sales at controlled prices are no more consistent with the principles of free trade than the purchase of stolen merchandise from the back of a truck would be consistent with the principles of free enterprise. Thus is the forced sales approach a blatant violation of the Takings Clause of the 5th Amendment, as the price controls would transfer the property rights inherent in patents from pharmaceutical producers and future patients to current interest groups (a blatantly private use) without any compensation whatever, whether just or not.
The last time I read the 13th Amendment to the Constitution, it said something rather sharply unfavorable about involuntary servitude. The forced sales proposals would mandate that pharmaceutical producers sell all that is demanded at the prices dictated overseas, without recourse to the ordinary processes of negotiation, let alone legal institutions. Thus would American firms be forced to serve foreign masters — literally — on terms dictated by foreigners. And let us not forget the “nondiscrimination” dimension of the forced sales gambit: If, say, the German Sickness Funds buy 30 million doses of a drug at a given price, would the pharmaceutical firm be forced to sell an identical quantity at the same price to anyone else in Germany? That the answer is not clear — it might very well be “Yes” — reveals a good deal more about the forced sales idea than its proponents would like us to know.
And is there any reason to believe that such forced sales would be limited to drugs? If U.S. politicians can transfer wealth to their constituencies in the form of “cheap” pharmaceuticals, why not do the same for a myriad of other goods that require massive up-front investments?
So there we have it. Fewer medicines. U.S. markets held hostage to foreign political pressures. A wholesale destruction of the Bill of Rights. Government of, by, and for the People — Sovereignty — cast to the winds. Such are the inexorable outcomes yielded by politicians and bureaucrats in hot pursuit of wealth redistribution, the larger adverse implications be damned.
Having just returned from Geneva, all I can say is that, as far as health care policy is concerned, it’s HQ for EuroDisney. During my brief sojourn in the city of chocolate, private banks, fine watch movements and Jean-Jacques Rousseau, UN Secretary-General Kofi Annan dropped in for a surprise visit at the World Health Organization. While at WHO he said that the UN would be “encouraging pharmaceutical companies and others to be helpful, making sure that we do not allow intellectual property to get in the way of access of the poor to medication.” Since there is unanimous global agreement that every corner of the globe deserves access to avian flu vaccine, what about a statement from the UN chief reminding the world that it is precisely because of IP protection that we have a treatment at all? It’s truly frightening that the SecGen, his fellow travelers at WHO and the other bureaucratic ticket-takers at acronym-laden EuroDisney/Geneva are willing to not only condone attacks on IP as the great divide of the 21st century, but to promote a siphoning off of the fuel that drives the engine of pharmaceutical innovation for a few column inches. It is short-term thinking of the most dangerous kind — the kind with consequences. Perhaps it’s time for Kofi Annan to take a refresher Econ101 course. Perhaps it’s time that he talks to the invisible hand.
Over a year ago Tom Perez, president of the Montgomery County, MD County Council (and better known as the David Catania of Silver Spring) introduced a resolution that would allow the county to purchase “drugs from Canada.” According to The Washington Post, Perez “anticipated offering the benefit to 85,000 employees and retirees, including 27,000 affiliated with the school system. But the plan suffered a setback last month when the county school board declined to pursue a contract with Canusa, a privately held health benefits company based in Windsor, Ontario, largely because of concerns that the program would violate federal law. So now, Perez is focusing on the county government, with 12,500 workers and retirees, in part because it is the entity over which the council has direct control.” Now Mr. Perez is going to make the local police and fire forces and the other hard working members of the Montgomery County civil service guinea pigs in his lab experiment designed for blatant political ambitions. And, as far as the county retirees are concerned, I wonder how much time (oops — times up) he’s spent educating them on the Medicare Part D benefits to which they are entitled. Meanwhile, the Canadian Health Minister has made it clear that he will not allow his nation to become America’s drug store. That’s why Canadian internet marketers — profiteers masquerading as pharmacists — now need to get their drugs from Europe. And that means Latvia as well as Great Britain and Portugal as well as Germany. Mr. Perez’s plan would not deliver “the same” drugs that Canadians get at their local pharmacies. That’s a fallacy proven 100 times over and conveniently and irresponsibly ignored by the County Council president. And since the Council of Europe just released a new study revealing the bad news about the European Union’s fast growing problem of counterfeit drugs — it’s good news that the Montgomery County school board did their homework and sent Mr. Perez and his foolish notions to detention.
Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.
