The Maine Event

06/19/2017 08:06 AM | Peter Pitts

Straight from the pages of Maine’s Sun-Journal ...

Maine's new generic drug legislation has good intentions, bad execution

By: Peter Pitts

Maine lawmakers are advancing LD 1280, a bill that seeks to reduce patients' health care bills by speeding up the introduction of low-cost generic drugs.

The bill has a noble goal. But it is terribly written. It would enable intellectual property theft: drug companies would be allowed to steal and profit from their competitors' trade secrets. That would discourage research investments — potentially leading to layoffs for Maine's drug-sector workers. Worse, the bill would undermine federal drug safety standards that protect patients.

The FDA requires generic manufacturers to prove their products are therapeutically equivalent to brand-name medicines. To do so, generic firms must obtain samples of brand-name drugs, to test them head-to-head.

Some Maine lawmakers suspect that brand-name firms aren't handing over samples in a timely fashion. This delay, they say, slows down the testing and approval process. That suppresses competition and allows brand-name manufacturers to keep selling their products at high prices, even after their patents have expired.

So a group of state legislators has introduced LD 1280 to prevent foot-dragging and require brand-name firms to provide drug samples "at fair market price and without any restriction that delays access to an eligible product developer."

The bill is well on its way to becoming law. It just passed out of the Labor, Commerce and Economic Development Committee by a wide margin.
Yet the legislation remains deeply flawed. For starters, brand-name firms would have to sell samples to any person or company that "seeks to develop an application for the approval of a drug."

That's an incredibly broad definition. Brand-name manufacturers could demand samples from rivals in order to create competing products that don't technically violate patent protections, but still mooch off the creators' research.

This de facto intellectual property theft would prevent manufacturers from recouping their investments on previous research. That would discourage firms from making new research investments, since no company wants to spend $2.6 billion — the average cost of bringing a new drug to market — only to see a rival freeload off its efforts.

The ensuing cutback in research would mean layoffs for workers and fewer new medicines for patients.
LD 1280 also guts patient safety protections.

Some medicines cause such severe side effects that the FDA requires manufacturers to follow special safety protocols when distributing the drugs. These rules typically govern how the drugs are dispensed.

For instance, if a drug can cause liver damage, providers have to monitor patients' liver function during treatment. If a drug causes birth defects, doctors must confirm that patients aren't pregnant. Doctors who want to prescribe Tysabri, a powerful multiple sclerosis treatment, must first obtain special certification and follow specific procedures to avoid damaging patients' nervous systems.

Before handing over samples of high-risk drugs, brand-name firms negotiate with generic manufacturers to ensure the potent medicines will be tested on patients in accordance with these special safety standards.

LD 1280 would treat such negotiations as "restriction(s) that delay access" and prohibit them. Brand-name firms would be forced to hand over samples to generic manufacturers that may not follow needed safety precautions. Patients would be put at risk.

It's admirable that Maine lawmakers are trying to lower patients' drug bills. But LD 1280 is the wrong way to do it. It would discourage research and endanger patients.
   Read More & Comment...

Gottlieb talks tech

06/16/2017 01:06 PM | Peter Pitts

In a blog post Thursday, FDA Commissioner Scott Gottlieb outlined regulatory steps designed to promote development of digital health technologies. The agency intends to issue new guidance that would clarify FDA's regulatory scope in the sector; explore a third-party certification program for developers that could exempt some products from premarket review; and gather real-world evidence about the use of digital health technologies. The policies fall under the agency's new Digital Health Innovation Plan, intended to promote innovation among health apps, devices such as fitness trackers, and tools such as medical records software.


Over the coming months, FDA plans to publish new guidance clarifying which health products fall in and out of the agency’s regulatory scope, including guidelines on low-risk products that would be exempt from certain premarket regulatory requirements.
The agency is also considering a pilot program under which it may certify developers based on their reliability, which could allow them to bring lower risk products to market without premarket review, while streamlining premarket review of higher risk products.

Unlike FDA’s product-based approach for drugs and therapeutics, the program would grant certification at the company level based on factors such as the consistent quality or maintenance of a developer's software, Gottlieb wrote.
Finally, FDA intends to use the National Evaluation System for health Technology (NEST) as a resource for companies to collect real-world data on their products in both pre- and postmarket settings. The federated system will pool data from various sources, including registries, electronic health records and payer claims. The Medical Device Innovation Consortium (MDIC), a 501(c)(3) public/private partnership, will coordinate its operations.

FDA said MDIC will establish a NEST governing committee in the coming weeks, and plans to launch a first version of the system by YE19.
The plan is part of a broader push by FDA to spur innovation through reforms across its medical product centers. More details are due soon.  Read More & Comment...

Wired Magazine Article Celebrates The New Eugenics

06/14/2017 11:34 AM | Robert Goldberg

 
Wired magazine’s article, “The New War on Overpriced Drugs”  celebrates Steve Pearson and his Institute for Clinical and Economic Research for applying evidence-based science to drug prices.  In doing so, it makes it quite clear that Pearson believes the perfecting the require fewer people benefitting from medical innovation. 
 
The author, David Ferry claims that “ICER and Pearson’s method has successfully checked the prices of a handful of drugs—something very few people can say they’ve done.”
 
It is more accurate to say that ICER successfully legitimized and justified PBMS from restricting access to new medicines, maximizing rebates and imposing cost sharing requirements on the sickest 2 percent of patients.  
 
Ferry gives ICER credit when “Gilead took 46 percent off the list price for Sovaldi and Harvoni. (Two of the first medicines for hepatitis C.) The price drop was stunning. Steve Miller, the chief medical officer of Express Scripts, the largest of the middleman firms that buy drugs wholesale for insurance companies, said ICER’s work had given him the ammo he needed to negotiate with Gilead. Overnight, the tiny nonprofit became an implausible power player in the national conversation about drug pricing.”
 
In fact, ICER’s contribution was proposing a rationing of new medicines and generating a huge rebate windfall for Express Scripts and the other large PBMs.  It was ICER that recommended restricting access to such drugs until they livers start to fail, an approach that has been ruled illegal by a federal district court and has been under challenge in many states. 
 
And rather than making medicines affordable, ICER’s pricing scheme allows PBM’s to pocket rebates and share them with health plans instead of directly reducing patient drug costs. Indeed, many plans require HCV patients to pay up to 30 percent of the list price of the drug.  ICER has ignored this arbitrage as well as the impact it has on access to new medicines.
 
The claims that ICER informed policies protect people from overpriced drugs is factually bankrupt.  “Recent data released by Trio Health show that the prevalence of hepatitis C drug patients diagnosed with Hepatitis C but not started on curative drugs, such as Harvoni and Zepatier, more than tripled between 2014 and 2016—signaling that payers continue to deny coverage despite increased marketplace competition and availability of discounts.”[2]
 
The same can be said for ICER’s claim that new biologics – PCSK9 inhibitors - that help patients who have dangerously high LDL levels and who can’t take or don’t respond to current statins are not cost effective. 
 
Nearly 11 million people have cholesterol levels that if reduced by 50 percent of more, would see a significant reduction in risk of a heart attack or stroke.  Each year, 1.5 million people have a heart attack or stroke and are at greater risk for a subsequent attack or death.
 
A study looking at the impact of primary prevention in the 11 million or so patients estimated the cumulative value of PCSK9 inhibitors “would range from $3.4 trillion to $5.1 trillion (1.9-2.8 million deaths averted), or $12,000 to $17,000 per patient-year of treatment between 2015 and 2035.[3]
 
But so far less than 5 percent of all patients who could reduce their risk of early death with the new medicines get them. 
 
Ferry mentions a meeting that I participated in prior to ICER’s discussion about the value of new medicines for multiple myeloma. He claims ICER determined that four of the newly approved myeloma drugs indeed work, but they’re all dramatically overpriced and don’t represent "high value.” Pharma is overcharging cancer patients for their lifesaving meds, the quants found.
  
Interestingly, while he took the time for a pathetic attempt to smear me (The Center for Medicine in the Public Interest takes money from Big Pharma) he never took the time to pick up the phone and ask me questions.  
 
He obviously didn’t read my white paper on the impact of ICER’s methodology on patients with myeloma.  I barely mention funding and I never challenge ICER’s methodology, only the way it arrives as the estimate of patients who could benefit from new medicines.  (I need a whole other blog to discuss how ICER just chooses thresholds out of thin air, and then refuses to disclose that there is no empiric basis for them, or how they manipulate data to justify pre-ordained conclusions.)
 
Rather, I use ICER’s own analysis to determine how many people would be denied drugs that Ferry claims are (according to ICER) not worth using at current prices.
 
As I noted: “The difference in QALY can be debated by people of differing perspectives. But the impact of the ICER restrictions on access to new medicines, even at very low prices, is straightforward.”
 
I used ICER's budget cut-off of $915 million per new drug per year necessary to protect the health system and then determined how many people with myeloma would not get treatment, even at discounted prices, at the level of spending
 
Under ICER assumptions, people with myeloma that would be denied new medicines would lose 43833 life years. The death of 44,000 people with myeloma will also have a profound economic impact, costing society and myeloma patients nearly $12. 2 billion worth of additional life (at $300K per life year gained).
 
Ferry trots out a cancer survivor who claims “patients opposing ICER have been bamboozled, she says, tricked by Big Pharma into becoming pawns in the industry’s fight to control its pricing power. “
 
In fact, PBMs and insurers generate about These practices are applied to almost every patient with conditions needing specialty drugs and rarely applied to everyone else. Nearly every ACA and Medicare drug plan put specialty medicines on the highest cost-sharing tier.   Half of all drug coverage provided to employer-sponsored health plans impose the same burden only on the two percent.[4]
 
As a result, people who use specialty medicines are 10 times more likely to pay full price for the most expensive medicine. On average, they are 10 times more likely to pay over $2500 out of pocket for medicines than other consumers. [5]
 
In addition, the 2 percent (4.4 million people) generated $13 billion in rebates and $12 billion in out of pocket spending that goes straight to PBMs and insurers.
 
PBMs and health plans could use rebates to reduce cost sharing.  Instead, they systematically maximize their use for the sickest patients.  They do it because they can and because by doing it, they rake in tens of billions of dollars in a predictable manner.  Who is bamboozling who?
 
Pearson justifies all this by claiming that “Health is a very important—perhaps the most important goal for us as individuals, and for our society,” Pearson says. “But it’s not the only goal. We also want good jobs, great schools, a safe environment.”
 
The money you spend on overpriced drugs, he argues, is money that doesn’t go to your kid’s school or the ambulance driver or fire department. “There are choices within the health care system: Should we get this machine or pay another doctor?” he says. “Then, step back and it’s: Another hospital or 10,000 more teachers?”
 
Pearson thereby exposes the moral and intellectual shortcomings of ICER.  He truly believes, like many professional pessimists that resources are scarce and that spending more and more on medicines will ultimately come at the expense of pothole repair or more police or a perfect world. 
 
It never occurs to Pearson that spending on new medicines makes government investment in public services sustainable.   If more people live longer healthier lives, they pay taxes, spend money on insurance premiums and other activities. In Louisiana for instance, the death rate from heart disease is 75 percent higher than the national average.  In some parishes, it’s four times higher.   A lot of those people who will die could reduce that risk with the new medicines ICER claims aren’t worth paying for.
 
As a result, Pearson’s calculus and ICERs recommendation would make America sicker, less prosperous nation.
 
In fact, if ICER’s combination of QALY based prices and budget caps are applied to all new medicines since 1990 for heart disease, psoriasis, HIV, multiple sclerosis, various cancers and drugs for rare diseases, none would be considered cost effective.
 
Pearson is not unaware of the impact his approach would have on patient access. Instead, he is betting on it.  And while many patient groups and drug companies think ICER is open to change, such adjustments are rhetorical.  ICER now uses estimates of rebated prices.  But ICER and Pearson are still silent about rebate and copay rip-offs not because he gets money from PBMs and health plans but because he sees them as necessary to increase his influence over how much we spend on drugs as well as the pace at which new medicines are used. To avoid criticisms like mine, ICER no longer spells out how many people would be denied care.  But budget thresholds are still there.
 
Ferry notes that Pearson believes that what ICER does has “a nobility and a grandeur.”
 
He’s right.  Pearson is a true believer in the Progressive tradition.  As Princeton University history professor Thomas C. Leonard, notes in his 2016 book “Illiberal Reformers: Race, Eugenics & American Economics in the Progressive Era,” progressives believed that scientific experts should be in society’s saddle, determining the “human hierarchy” and appropriate social policies” to achieve a better world[6]    And it obvious that most progressives of any era, Pearson has" an extravagant faith in science and the state with an outsized confidence in their own expertise.”[1]To Pearson, the greater good will be achieved by reducing the use of new medicines. As he notes: “The opportunity cost of supporting the use of ultra-orphan drugs necessitates that patients with a more common disease, for which a cost-effective treatment is available, are denied treatment.”  His solution: restrain “society’s desire to help those weakest among us, especially when their small numbers allow us to see them as unique individuals.”  In that way, we can “ensure that an undue burden is not placed on others for the sake of a few.” [7]
 
As Leonard notes, progressives were all in on eugenics.  The saw eugenics as a scientific tool that could be used to eliminate people of limited or undesirable traits who, because of their disabilities and behavior, are a drain on other spending.   So, they set about establishing which of us should reproduce based on the traits they decided were most desirable.  The eugenics leaders relied upon foundation funding to advance their vision and to support randomized trials and statistical models to demonstrate how the greater good would be served. 
 
All ICER is doing is applying the Progressive's eugenics calculus to restrict the medicines the sickest people – including those with genetic disorders –  that siphon spending away from schools and highway construction, etc., instead of eliminating the people themselves. PBMs and health plans benefit from rich rebates in the short run and – by imposing cost sharing on the sickest – discourage them from sticking around for the long term.   Indeed, as I suggested, Pearson has figured out that PBMs are the perfect mechanism for sorting out the undesirables from those of us who young, lean, healthy and who, like Ferry, want to spend their free time “enjoying sandwiches.” 
 
There is nothing evil about Pearson or ICER.  Rather, as Lionel Trilling observed, “some paradox of our natures leads us when once we have made our fellow men the objects of our enlightened interest, to go on to make them the objects of our pity, then of our wisdom, ultimately of our coercion.”  For Pearson and his acolytes in Wired, that coercion is noble and grand.
 
 
 
 
 
 
 
 
 
 
 

[1] ILLIBERAL REFORMERS Race, Eugenics and American Economics in the Progressive Era
By Thomas C. Leonard 250 pp. Princeton University Press
 
[2] http://www.managedhealthcareconnect.com/content/hepatitis-c-treatment-coverage-denials-increase-sharply
[3] Am J Manag Care. 2016 Jun 1;22(6):e199-207.
Value of improved lipid control in patients at high risk for adverse cardiac events.
Jena AB1, Blumenthal DM, Stevens W, Chou JW, Ton TG, Goldman DP.
 
[4] 2016 Employer Health Benefits Survey Sep 14, 2016
“Among covered workers at large firms whose largest plan has a separate tier for specialty drugs, 43% have a copayment for specialty drugs and 46% have a coinsurance requirement (Exhibit 9.15). The average copayment is $89 and the average coinsurance rate is 26% (Exhibit 9.16). Seventy-eight percent of those with a coinsurance requirement have a maximum dollar limit on the amount of coinsurance they must pay.”
 
 
[5] Source: Medicines Use and Spending in the U.S.: A Review of 2016 and Outlook to 2021, Quintiles IMS Institute May 2017
 
[6] “The Liberals Who Loved Eugenics.” http://wapo.st/2rrKWSj
[7] Largent EA, Pearson SD. Which orphans will find a home? The rule of rescue in resource allocation for rare diseases. The Hastings Center report. 2012;42(1):27-34. 
   Read More & Comment...

Improving Patient Advocacy Across the Globe

06/14/2017 08:19 AM | Peter Pitts

If you’re interested in the FDA’s Patient-Focused Drug Development program and attending next week’s BIO bash, hope you can attend (and participate) at this interactive panel discussion --

Improving Patient Advocacy Across the Globe

Date: Tuesday, June 20
Time: 4:15 PM – 5:15 PM
Location: Room 27 AB  

Session Description:

With the projected increase in prosperity and life expectancy in many countries over the next 20 years, the number of patients with life threatening diseases is expected to grow, presenting a range of challenges for patients, caregivers, healthcare professionals, governments and the pharmaceutical industry. As the number of patients with cancer increases, it will be important that structures are in place to support patients and their families, and to ensure that they have access to information and guidance on diagnosis, treatments and supportive care. At the same time, it will be critical to ensure that the voice of patients is included throughout the process which enables them access to innovative drugs – from input into the R&D process and all the way through public reimbursement and budget allocation decisions. The panel will focus on how strong, stable, capable patient organizations can provide a voice for those who both pay for the health system and rely on it.

Moderator:

Dr. Yoav Shechter, MSD

Panelists:

Kathleen Barnard, Save Your Skin
Peter Pitts, Center for Medicine in the Public Interest
Maria Fatima “Girlie” Garcia-Lorenzo, Philippine Alliance of Patient Organizations (PAPO)

Hope to see you in San Diego.  Read More & Comment...

Regenerative Medicine Can Revitalize America!

06/12/2017 04:08 PM | Robert Goldberg

Here's an oped from the Morning Consult by regenerative medicine/stem cell pioneer and visionary Robert Hariri and me.   If America regains leadership in regenerative medicine it can spur better health and economic growth. 

Regenerative Medicine Can Help Make America Great

ROBERT HARIRI AND ROBERT GOLDBERG   |   JUNE 12, 2017 | 05:00 AM   
When President Donald Trump urged the biopharmaceutical industry to reduce the price of new medicines and to increase its manufacturing in the United States, many took it as a threat.

We believe it’s a call to action. America’s ingenuity in biomedical research is unsurpassed. However, our country is losing out to other nations in the fastest growing biotechnology sector, called regenerative medicine: harnessing the capacity of our cells to repair and restore health and sustain well-being.

Second place is not an option. The regenerative medicine market is growing about 21 percent a year and is expected to be worth over $350 billion by 2050. Today, the U.S. regenerative medicine sector is generating $3.6 billion in revenues and has produced 14,000 jobs. By 2050, the industry could create nearly a million new jobs nationwide.

Regenerative medicine will also reduce the cost of disease. Such therapies will replace drugs, devices, and surgery, saving lives, increasing productivity, and reducing the cost of care. This transformation will add trillions in value to our economy.

Finally, regenerative medicine will also make America more secure. Our nation still lacks the ability to quickly and cheaply mass produce vaccines, antidotes, and cell therapies to counter pandemics and bioterrorism. Our fighting forces need reliable sources of these countermeasures and deserve immediate access to treatments that give them back their lives. We shouldn’t outsource the safety and well-being of our nation and our Armed Forces to other countries.

To regain leadership in regenerative medicine, U.S. firms don’t need government loans, tax credits or massive de-regulation. Instead, it needs the opportunity to invest in reducing the time and cost of manufacturing cellular therapies. To the extent that regenerative medicine is curative it must be made available at vaccine like prices. At present, only a handful of people can afford such treatments.

China and Japan are now in forefront of reducing the cost of producing stem cells, tissue, and other products with restorative biological properties. As a result, they are attracting more capital and forming more new companies than the U.S.

In 2014 Japan became the first country in the world to adopt an expedited approval system specifically for regenerative medical products and to allow outsourced cell culturing. Two products were approved under the new system within a year of its adoption.

By contrast, the Food and Drug Administration regulates any use of manufactured stem cells as equally risky without regard to prior use, health benefit, or therapeutic potential. Indeed, many of the most common stem cell therapies — including bone marrow transplants and blood transfusions — would require 10 years of FDA review if they were brought to market today.

The problem isn’t over-regulation. It’s outdated regulation. Safety checks and benchmarks for cell manufacturing should be based on real world evidence of past applications. Regulation should focus on the specific potential side effects for each specific potential use. In this regard, we agree with incoming FDA Commissioner Scott Gottlieb, who has noted, “Expediting the development of these novel and transformative technologies like gene- and cell-based therapies doesn’t necessarily mean lowering the standard for approval, as I believe other countries have done. But it does mean having a framework that’s crafted to deal with the unique hypothetical risks that these products pose.”

In fact, the United States has the best regenerative medicine manufacturing technology in the world. But it is literally sitting unused in warehouses.

For example, under the Accelerated Manufacture of Pharmaceuticals program, private companies partnered with the Defense Advanced Research Projects Agency to develop mobile cell and tissue manufacturing plants that can be set up almost anywhere. The facilities can produce cells and tissues at a fraction of the current cost. These mobile factories make real-time production of vaccines and biologics for potential bioterrorist threats and pandemics possible. They are also low-cost, high-tech platforms for experimental evaluation of any type of regenerative medicine.

AMPs are operating in Indonesia, Singapore, China, and Japan where cell products — including vaccines — are being mass produced. Not a single AMP is being used in the United States because of outdated regulations.

To remove this regulatory obstacle, the Trump administration should establish a separate regenerative medicine pathway. This pathway, which could be developed by DARPA, FDA, and the Centers for Disease Control and Prevention, would develop regulatory standards for the safe manufacturing and testing of development of regenerative products to treat battlefield related traumas such as traumatic brain injury, life-threatening limb damage, and drug-resistant pathogens.

The focus on the conditions and circumstances unique to war or counter-terrorism is both appropriate and strategic. After World War II, Franklin Roosevelt directed that the scientific and entrepreneurial talents used to achieve ramp up war-time production of penicillin and blood plasma “be used in the days of peace ahead for the improvement of the national health, the creation of new enterprises bringing new jobs, and the betterment of the national standard of living.”

What was created exceeded that vision. The cooperative efforts to achieve mass production of penicillin and blood plasma inspired and supported the creation of industries that employ millions of people today.

Similarly, developing an affordable source of cell therapies to heal our fighting forces and protect the homeland will yield a wide array of affordable technologies and cures that will produce, in FDR’s words, a fuller and more fruitful employment and a fuller and more fruitful life. Simply put, by making the manufacture of regenerative medicine affordable can help make America great.

 

Robert Hariri is CEO of Celularity. Robert Goldberg is vice president of Center for Medicine in the Public Interest.  Read More & Comment...

Regulatory Learnings from the Real World

06/12/2017 07:46 AM | Peter Pitts

In March, the FDA’s Anesthetic and Analgesic Drug Products Advisory Committee (AADPAC) and the Drug Safety and Risk Management Advisory Committee (DSARM). voted 18-8 that Opana ER’s benefits do not outweigh its risks. And on June 8th, the other shoe dropped.

"After careful consideration, the agency is seeking removal based on its concern that the benefits of the drug may no longer outweigh its risks," the agency said in announcing the move. “This is the first time the agency has taken steps to remove a currently marketed opioid pain medication from sale due to the public health consequences of abuse."

The FDA said it was asking Endo to voluntarily cease marketing Opana ER. But it added that if the company refuses, the agency will "take steps to formally require its removal by withdrawing approval."

The FDA said its data indicate that the abuse of the drug has shifted from snorting to injection following reformulation in 2012, which was intended to help the pills resist physical and chemical manipulation. Subsequently, Opana ER was associated with a notorious outbreak of HIV and hepatitis C infection in rural Indiana two years ago, caused by needle-sharing among opioid addicts.

"The abuse and manipulation of reformulated Opana ER by injection has resulted in a serious disease outbreak. When we determined that the product had dangerous unintended consequences, we made a decision to request its withdrawal from the market," said Janet Woodcock, MD, director of the FDA's Center for Drug Evaluation and Research, in a statement. "This action will protect the public from further potential for misuse and abuse of this product."

What can we learn from this action? First, that when a product’s risk/benefit profile is carefully monitored, aggressive action can be taken in a timely manner. But should we need an outbreak of HIV/AIDS and Hep-C to sound the alarm?

Kudos to the FDA for taking appropriate action to protect the public health – but we need more. Specifically we need the agency to work with sponsors o design more and better early warning mechanisms so that a problematic product can we recalled before dire consequences ensue. That means new and more immediate ways to collect, analyze, and share real-world evidence.

It’s time for apps to take center stage in the battle against opioid abuse.
   Read More & Comment...

Managed Care Magazine Unleashes Attack on Orphans

06/08/2017 07:11 PM | Robert Goldberg

If it’s not obvious from the title “Orphan Drugs: Way Too Many, Way Too Expensive” the essence of Joseph Burns article in Managed Care Magazine is: isn’t is terrible that drug companies – who neglected rare and tropical disease for decades to make money – are now making money developing drugs for conditions they were criticized for ignoring and for which the Orphan Drug Act was created. 

Burns article is based on the material and media accounts generated by a syndicate attacking rare disease groups and the Orphan Drug Act funded by Laura and John Arnold Foundation to the tune of $22.4 million. It is a network of left-leaning think tanks with a bias against the profitability of medical innovation, news outlets and patient advocacy organization that spread the anti-orphan message far and wide.   

The Arnold funded think tanks provide the Arnold-funded news outlets with factoids and quotes attacking orphan drug development and patient groups. The Arnold funding patient organization then provides the rest of the syndicate with grass roots outlet for even more quotes and opportunities to spread the message.   The advocacy group, Patients for Affordable Medicines, is run by David Mitchell who recently retired as a founder and principal of PR firm GMMB. 

Mitchell knows a little bit about being a front organization or a pass through for political advocacy: GMMB earned $236.3 million from Hillary for America 2016 and moved over $314 million in Obama ad buys during the 2012 election cycle.  It also runs a group called Waterfront Strategies that handles soft money, consulting and ad buys for a number of PACs. 

Burns fails to tell his readers of Mitchell’s past and present work as a conduit. Instead, he depicts Mitchell as a selfless crusader against “drug companies (that) are manipulating the law that created the orphan drug status.  Mitchell claims orphan drug development is mostly  “salami slicing” strategies—companies dividing diseases into smaller and smaller categories based on genetic and biomarker differences so their products can achieve the coveted orphan drug status.”

“This gaming of the system to cut and recut for different orphan diseases means they get to use the same drug for multiple orphan drug designations,” says Mitchell. “That needs to stop.”

Neither Burns or Mitchell offer any proof that such practices are hurting patients.   Instead, their beef with the fact that companies have the audacity to attempt ot make a profit. 
Burns notes: “some commentators have said the trouble starts with the law’s prevalence-based definition of a rare disease as a condition that affects fewer than 200,000 individuals. Because drug companies can now price orphan drugs at between $100,000 to $200,000 per patient per year, they need only 5,000 to 10,000 patients to hit the blockbuster mark of $1 billion in annual sales.”

Well yeah, that’s what the Orphan Drug Act is supposed to do: Encourage the development of new medicines for groups of patients that do not benefit from existing therapies.

But Burns – like most critics past and present – claims “the law’s intended purpose of encouraging the development of drugs for rare diseases has been undermined in various ways.”

Rather than provide evidence of how the act has been undermined, Burns just asserts: companies “are using the 1983 Orphan Drug Act to secure lucrative incentives and gain monopoly control of rare disease markets where drugs often command astronomical price tags”

Burns assertions of gaming and astronomical prices are without substance:

For instance, he fails to note the retail price of the top selling 10 orphan drugs are a bargain relative to lives lost, health care spending saved and productivity gained.  

Take Revlimid (used at various stages of multiple myeloma) as an example.  The true per patient cost – net of rebates, discounts, and other concessions – is about $78K per patient.  The median charge for a hospital stay is $82000.  

Revlimid sales in 2014 were about $4.4 billion.  But extrapolation of gains in life expectancy based on previous studies of the impact of advances in myeloma care on longevity suggests that each year the use of Revlimid and other novel treatments generate $22 billion in added value. 

Further, many other orphan drugs NOT reviewed by Burns treat extremely small populations and require continuing evaluation and expensive production activities. 

Of the orphan drugs approved since 2012, the average patient population has been under 2000. Nearly 80 percent of the new products or approvals were developed by small biotech companies that are losing money.  If Burns and the critics he channels thinks that punishing companies after they turn a profit will not affect orphan drug development, they should prove it, not force dying patients into a twisted social experiment. 

In addition to being upset about the handful of profitable orphan drugs, Burns claims that slicing and dicing (as he calls it) is an unfair way to make money.  He notes: “Herceptin, originally approved as a breast cancer drug, has gained orphan designation for pancreatic and gastric cancers because those cancers can now also be classified as HER2-positive and HER2-negative.” 

Burns cites an Arnold Foundation funded Kaiser Health News ‘study’ that highlights the number of orphan drug designations generated from existing medicines.  It is not a study, it is simply the same list of orphan drug designations and approvals the FDA generates with KHN’s negative spin added as narrative. 

It is true that there has been an increase in the discovery of markers for previously untreated tumors that are certainly fatal.  And it is true that companies are conducting clinical trials or engaging in data mining to establish benefit in other subpopulations.  KHN implies this is an immoral practice because profit is involved.  

As the FDALawBlog points out, in some cases, a single orphan drug designation can result in multiple periods of orphan drug exclusivity. There appear to be a growing number of cases where FDA has granted multiple periods of orphan drug exclusivity based on the same original orphan drug designation, and where the drug’s indication evolves into something new, shedding and subsuming the previous indication statement.”

The obvious ‘solution’ to this situation is to allow companies faster approval for a broad number of tumors with biomarkers.  FDA’s recent approval of Keytruda for all solid tumors with a specific mutation clears the path for this approach.  Martin Makary (who Burns quotes) suggests this conditional path as an alternative to the multiple exclusivities.  But the anti-orphan Arnold Foundation funded Jerry Avorn and Aaron Kesselheim has attacked the use of biomarkers as a watering down of science pushed by pharma funded patient groups. So my guess is that find a way to characterize THAT as profiteering.  Indeed, Kesselheim is behind the Arnold-funded effort to eliminate biomarker-based disease treatment from Orphan Drug Act designations. 

Burns and the anti-orphan movement suggest instead that orphan drug patent life should be shortened to allow for more generics. But that begs the question: as orphan drugs have gone generic, why haven’t the companies used their first to market exclusivity to engage in similar research?  If it is just slicing and dicing, why wouldn’t a generic company want a line extension?

The answer is supplemental approvals of any type require time and money that innovator companies invest and generics don’t. The FDA does not simply tack on additional patent life.  To obtain a period of orphan drug exclusivity for a drug that is otherwise the “same drug” as a previously approved drug (i.e., a drug containing the same active moiety and that is for the same orphan disease or condition), the sponsor must demonstrate that its product is clinically superior (by showing greater efficacy, greater safety, or by providing a major contribution to patient care) to the previously approved drug.” 

If Burns and the “experts” he quotes wants to repurpose generic Gleevec or Humira for an orphan use and not charge for it, they should set up a company and do so.  

Indeed, Burns and every other critic he cites in his repetition of how the ODA is used to make money ignores a very important point: “Generic competition is generally not thwarted because of the ability of an ANDA applicant to carve-out of its labeling (and thus avoid) a period of unexpired orphan drug exclusivity on the brand-name Reference Listed Drug.” 

The FDA can approve a generic version of the drug product for one or more uses even if, in the future, an innovator company develops another use that garners orphan drug exclusivity. 

Which means the generic version of the drug is on the market and can be used off-label.  

But the anti-orphan critics attack off-label use as a slick, often illegal way, of increasing sales. So that leaves people with rare diseases with a longer wait for medicines that would cost more to make and must rely on generic companies to invest in new indications once innovator drugs go off patent. 

I know people with rare diseases can’t live with that.  I wonder if Joseph Burns and the anti-orphan movement can. 








  Read More & Comment...

The economics of opioids

06/08/2017 11:35 AM | Peter Pitts

The Joint Economic Committee (JEC) will hold a hearing on June 8th to explore the economic aspects of the opioid crisis.

According to the JEC website, “The opioid problem has various elements on the demand and the supply side that JEC witnesses, Professor Sir Angus Deaton, 2015 Nobel Prize laureate in economics, Ohio Attorney General Mike DeWine, Dr. Lisa Sacco, Congressional Research Service Crime Policy Analyst, and Dr. Richard G. Frank, Professor of Health Economics at Harvard will address in detail.” Mike DeWine? Really?

We’ll see.

I suspect that a key aspect of “opioid economics” that will get very little attention is the unwillingness of PBMs to pay for opioids of the abuse-deterrent variety. That’s simple economics. The reason that there are nearly a quarter of a billion generic, non-abuse opioid tablets prescribed annually (vs. about 5 million abuse-deterrent ones) is because they are inexpensive. But that is a failed metric. It’s benefited the bottom line of PBMs and created a national epidemic.

The same math explains why PBMs often implement barriers to the use of branded, on-label non-opioid medicines, relegating these treatments to second line options. 52% of patients diagnosed with osteoarthritis receive an opioid pain medicine as first line treatment as do 43% of patients diagnosed with fibromyalgia and 42% of patients with diabetic peripheral neuropathy even though there are FDA-approved, non-opioid medicines specifically designed and labeled to treat these conditions.

We’ll see.

Zero-sum thinking is an obsession of mine, but mostly in economics. -- P. J. O'Rourke  Read More & Comment...

Single Payer. All the news that's fit to print?

06/04/2017 12:30 PM | Peter Pitts

To the Editor:

Per, "The Single-Payer Party? Democrats Shift Left on Health Care," (NYT, June 3, 2017) it seems somewhat ham-handed to have only one paragraph, deep inside the page 16 jump of a Page One article, mentioning the enormous cost and tax consequences of the California legislation -- and no mention at all of the proposal's impact on patient choice and resource rationing. That's not fake news -- but it certainly isn't all the news that's fit to print.

Peter J. Pitts
   Read More & Comment...

Let's partner with Canada to fight opioid abuse

05/30/2017 09:11 AM | Peter Pitts

Per FDA Commissioner Scott Gottlieb, “As Commissioner, my highest initial priority is to take immediate steps to reduce the scope of the epidemic of opioid addiction. I believe the Food and Drug Administration continues to have an important role to play in addressing this crisis, particularly when it comes to reducing the number of new cases of addiction.”

One place to look for smart policy solutions is just north of the border, where medical experts and public health officials in Canada are also concerned about the abuse of prescription opioids. A study published by the Canadian Health Policy Institute (CHPI) estimates that if all prescription opioids in Canada were abuse deterrent formulations, societal costs could be substantially reduced.

“Mandating abuse deterrent formulations for prescription opioids could reduce societal costs by $140 million to $4 billion annually.” 

The study estimated that the economic value of the health, social and productivity losses associated with the abuse of prescription opioids in Canada could have averaged as much as $4.3 billion per year during the four-year period from 2012 to 2015. The study also reviewed clinical research showing that existing abuse deterrent formulations ranged from 3.3% to 98.8% effective at reducing abuse rates of the tested products. The median effectiveness reducing abuse rates by between 45.1% and 64%.

The study concluded that if the federal government mandated abuse deterrent formulations for all prescription opioids, it would discourage non-medical use of these drugs, reducing associated societal costs by an estimated range of savings between $140 million and $4 billion annually.

Perhaps a cross-border partnership is in order to address this bi-lateral regulatory issue.  Read More & Comment...

Trumping FDA?

05/25/2017 06:20 AM | Peter Pitts

As per a no-nonsense report in BioCentury, President Trump’s FY18 FDA budget request envisions cutting medical product safety funding by $17.8 million. The cuts would reduce the agency’s ability to ensure the safety of imported drugs and ingredients, and to conduct safety research the agency characterizes as “critical.”
FDA stated that the budget proposal would also curtail "proactive" activities to respond to global disease outbreaks.

The proposed cutbacks are a consequence of the administration’s proposal to transfer 100% of the responsibility for funding medical product reviews to user fees. Some FDA medical product safety and regulatory science activities cannot be funded with user fees.
There is almost no chance that Congress will agree to the Trump administration’s plan to rip up the user fee reauthorization agreements that FDA and industry have negotiated. It is not clear whether FDA intends to implement the medical product safety oversight cuts outlined in the budget if Congress rejects the administration’s revamped user fees.

To compensate for proposed budget cuts, the proposal said FDA will "support at lower funding levels regulated product field exams, import entry review, investigations, sample analysis, and inspections for surveillance, compliance, and follow up activities, both domestically and abroad." The proposal added: "Risk assessments will be impacted along with sharing information with regulatory partners."
The proposed $11 million cut to the Center for Drug Evaluation and Research (CDER) medical product safety budget would require the center to “reprioritize and refocus how it promotes and protects public health,” the document said.

The cuts would include "some contracts that promote drug safety and research studies, investments in innovation and research, and training and development opportunities for personnel,” it said. The document said FDA will seek “to minimize the impact of these reductions on FDA‘s core mission activities.”
The medical product safety budget at the Center for Biologics Evaluation and Research (CBER) would be cut by $7.5 million. CBER would "reduce its applied scientific research, which supports the development of innovative products, in order to preserve critical regulatory oversight of its non-user fee programs that address blood components, tissues, and allergenic products." Spending on equipment upgrades and maintenance would be cut, as would "the number of research fellows hired to support the regulatory science program.”

The proposal noted that “research fellows bring innovative ideas, talents, and skills to FDA.”
The budget proposal included reductions in CBER’s “work on the development of laboratory standards, including reference materials, assays, and methodologies that improve product quality and provide standards and guidance to address new technologies and emerging diseases.”
If Trump’s budget is enacted, CBER would "reduce staff through attrition in its non-user fee activities that include the regulation of blood components, tissues, and allergenic products.”

CBER would be forced to “reprioritize how it provides advice to sponsors and reduce resources dedicated to the review of blood components for transfusion and allergenic extracts as well as the ability to provide advice to sponsors of tissues that do not require premarket review.”

As a result, CBER "may no longer be able to exceed its performance target to complete review and action on 90% of complete blood bank and source plasma Biologic License Application supplements within 12 months after submission date.” 
In addition, CBER would “limit proactive work to respond to infectious disease outbreaks globally, including limiting its active participation in international collaboration activities.”

More to come on this.  Read More & Comment...

Off-Label Use: TIme Marches On

05/20/2017 12:04 PM | Peter Pitts

In a recent Washington Post op-ed, Bill Schultz, the former deputy commissioner for policy of the Food and Drug Administration during the Clinton administration, incredulously offers that FDA policies developed 50 years ago are good enough for life in the 21st century (Trump’s new FDA commissioner has a huge decision to make). He’s wrong.

Time marches on and regulatory practices must evolve to better serve the public health. Nowhere is this more urgent than in making sure physicians and patients have unencumbered access to truthful accurate and non-misleading information about FDA-approved medicines –- both on and off-label. In a draft guidance, FDA notes that ‘‘good medical practice and the best interests of the patient require that physicians use legally available drugs, biologics and devices according to their best knowledge and judgment.’’ And, according to the House Energy & Commerce Committee’s 21st Century Cures Initiative, “… conversations between and among doctors, patients, researchers, and scientists in academia and industry should be facilitated. This includes the free flow of data, research, and results related to what a therapy or combination of therapies does or does not do well and in what types of patients.”

Off-label communications is about getting the right medicine to the right patient in the right dose at the right time.  Off-label communications advances both the practice of medicine and the safe and effective use of medicines.  Read More & Comment...

No HELP

05/09/2017 06:02 PM | Peter Pitts

It’s disappointing to say the least when our fine elected representatives place scoring transient political points in front of advancing the public health.

Such is always the case with the perennial non-starter issue of drug importation. What makes it even more dangerous this time is how it could delay swift and clean PDUFA approval.

Front and center is Senator Bernie Sanders. His two PDUFA amendments won’t lower drug prices or increase access for any Americans. But they would negatively impact safety and undercut intellectual property protection.

Let’s cut right to the chase. Generic drugs (85% + of all medicines volume in the US are LESS expensive than in Canada or any European country. Next, for the overwhelming number of Americans with private health insurance, the co-pays for their products are LESS expensive then buying them retail at either a brick-and-mortar of Internet Canadian pharmacy. Biologics? 85% of all biologics are administered in hospitals. Is Senator Sanders suggesting that American hospitals should import drugs that may or may not have been shipped under proper refrigeration conditions? FDA inspections speak otherwise.

So just what is Senator Sanders trying to accomplish? Certainly not a clean PDUFA – which is just what the doctor ordered for the FDA’s Gottlieb Era reforms -- including programs to help lower drig prices by expediting single sourcwe generic reviews.

He certainly doesn’t seem to be interested in safety concerns. Or counterfeits. Or cold-chain control. Or even that every study by the Congressional Budget Office reiterates over and over again that such schemes don’t save the American consumer any money.

But is sure is good for headlines. For shame.  Read More & Comment...

FDA, JAMA, PV, RWE and other relevant acronyms

05/09/2017 02:54 PM | Peter Pitts

Via Medscape:

Safety Events Common in Newly Approved Drugs

Nearly one third of drugs newly approved by the US Food and Drug Administration (FDA) are affected by safety issues that were not known at the time of approval, a study has shown.

Biologic and psychiatric drugs, as well as those that received accelerated approval or were approved within 60 days of the statutory decision deadline, are the most vulnerable to postmarket safety events, Nicholas S. Downing, MD, from the Department of Medicine at Brigham and Women's Hospital in Boston, Massachusetts, and colleagues report. Their study was published online May 9 in JAMA.

The findings "are not surprising to those of us who have been following this for a while, but they do reflect a growing realization by the mainstream medical community that there are important differences between efficacy in randomized controlled trials and effectiveness once a drug hits the real world," Peter J. Pitts told Medscape Medical News. Pitts is a former FDA associate commissioner and current president of the Center for Medicine in the Public Interest, New York, New York. "It reinforces the basic truth that when you give people medicine, interesting things will happen — good and bad. Postmarket research is the continual search for understanding what these interesting things are in the real world," he added.

To determine the prevalence of postmarket safety events and the characteristics associated with the likelihood of their occurrence in newly approved drugs, the researchers used the Drugs@FDA database to identify all novel therapeutics approved by the FDA between January 1, 2001, and December 31, 2010. They then separated the drugs on the basis on seven prespecified features: class (pharmaceutical, biologic), therapeutic area, priority review, accelerated approval, orphan product, near–regulatory deadline approval, and total review time.

Of 222 novel therapeutics identified, including 183 pharmaceuticals and 39 biologics, 71 (32%) were affected by a total of 123 postmarket safety events over a median 11.7 years of follow-up. The safety issues led to three drug withdrawals. The irritable bowel syndrome drugs valdecoxib and tegaserod were withdrawn in 2005 and 2007, respectively, as a result of adverse cardiovascular events. The psoriasis drug efalizumab was withdrawn in 2009 as a result of an observed increased risk for progressive multifocal leukoencephalopathy.

The approved drugs were also associated individually and class-wide with 61 incremental boxed warnings (43 drugs) and 59 safety communications (44 drugs).

Although safety events leading to market withdrawals were rare, "new boxed warnings, indicating that potentially life-threatening or preventable safety events had been observed in the postmarket period, and safety communications, which describe serious but non-life-threatening postmarket safety events, each occurred for approximately one-fifth of the novel therapeutics," the authors write.

The median time between drug approval and the first postmarket safety event was 4.2 years, and nearly one in three of the drugs had one or more safety events at 10 years, the authors write.

The researchers performed multivariate analyses looking at the relationship between each of the prespecified characteristics and postmarket safety events. They found an increased risk for safety issues among biologics compared with pharmaceuticals (incidence rate ratio [IRR], 1.93; 95% confidence interval [CI], 1.06 - 3.52; P = .03) and among drugs used to treat psychiatric conditions compared with cancer and hematologic therapeutics (IRR, 3.78; 95% CI, 1.77 - 8.06; P < .001). In addition, postmarket safety events were more prevalent among drugs that received accelerated approval (IRR, 2.20; 95% CI, 1.15 - 4.21; P = .02) and those approved near their regulatory deadline (IRR, 1.90; 95% CI, 1.19 - 3.05; P = .008).

Of interest, safety events were significantly less common among drugs with the shortest regulatory review times. This finding "conversely raises the possibility that some approval packages provide clearer evidence of safety, allowing for more rapid regulatory approval," the authors write. "An analysis of regulatory review documents from the European Medicines Agency indicated that safety risks that would ultimately prompt a postmarket safety event were not always evident in the premarket period, suggesting that additional premarket review might only delay approval without identifying therapeutics that pose a future safety concern."

"I agree with the authors' main point, which is that there are major gaps in our knowledge about the safety of drugs at the time that they are approved," Sean Hennessy, PharmD, PhD, told Medscape Medical News. Dr Hennessy is from the Center for Pharmacoepidemiology Research and Training, Center for Clinical Epidemiology and Biostatistics, Department of Biostatistics and Epidemiology, and Department of Pharmacology, Perelman School of Medicine at the University of Pennsylvania, Philadelphia.

"This isn't necessarily a bad thing, since requiring drug companies to perform the much larger studies that would need to be done to learn about rare adverse effects prior to approval would further increase the cost of drug development, which is already very expensive. Rather, we need to develop more robust systems to assess the safety of drugs after they are approved," Dr Hennessy explained.

Additional research is warranted to gain insight into the approval timeline and drug safety, the authors state. Further, they call for collaboration between stakeholders and the FDA "to develop and maintain an effective system for detecting postmarket safety events."

Stakeholder engagement is essential, Pitts told Medscape Medical News. "Although it's not taught in medical school, it's up to physicians and pharmacists to report adverse events, which is critical from a risk perspective and to mitigate potential problems with the use of approved medicines in everyday practice."

The good news, according to Pitts, is that "the FDA is taking this challenge to heart," by enhancing the capacity of its postmarket safety surveillance programs, and improving interactions with industry to achieve a better understanding of the performance of new drugs once they get into the market.The FDA's Sentinel Initiative, an integrated, national electronic monitoring system for active postmarket risk identification and analysis, is an important step in this direction, as is the sharing of premarket clinical trial data, the authors write. "[T]he integration of multiple data sources that include observations among large and diverse patient populations can facilitate the detection of postmarket safety events."

Previously, as reported by Medscape Medical News, the Government Accountability Office has questioned the sufficiency of the FDA's reporting of postmarket studies of approved drugs.

"I'm not as optimistic as the authors that the current system is working…. Sentinel, which I'm part of, is a great system, but has limited bandwidth. There aren't enough resources to use Sentinel as the only way to study the safety of every approved product, nor does FDA have the human resources to be primarily responsible for studying the safety of all products," Dr Hennessy explained.

"Industry needs to play a role. Unfortunately, FDA is limited by law in their ability to require companies to perform their own safety studies. Changing this would require an act of Congress," he added.

The authors acknowledge that even the most careful regulatory review and surveillance systems may not prevent all postmarket safety events. "[I]t may be impossible to detect other less common events until several years after approval, once the therapeutics are in broad use."

Dr Downing has disclosed no relevant financial relationships. One coauthor reports receiving personal fees from Cepton, OliverWyman, Roland Berger, McCann Health, Omnicom, Grey Healthcare, Saatchi & Saatchi, Sudler, TBWA, Havas, Agipharm, Mayoly Spindler, Teva, Menarini, Pierre Fabre, Merck, and AbbVie. One coauthor reports receiving a grant from the FDA; research agreements with Medtronic and Johnson & Johnson (Janssen) through Yale University; serving as chair of a cardiac scientific advisory board for UnitedHealth, being a founder of Hugo, being a participant and participant representative of the IBM Watson Health Life Sciences Board; and serving as an advisory board member of Element Science. One coauthor reports receiving grants from the FDA, Medtronic, Johnson & Johnson, the Centers for Medicare & Medicaid Services, Blue Cross Blue Shield Association, and the Laura and John Arnold Foundation. Mr Pitts serves as chief regulatory officer for Adherent Health Strategies. Dr Hennessy has disclosed no relevant financial relationships.

JAMA. 2017;317:1854-1863.  Read More & Comment...

BCBSA BS on Rx

05/09/2017 01:26 PM | Robert Goldberg

The policy shop of BCBS has released a report about drug costs that is deliberately deceptive and misleading.   It focuses only on the contribution of innovative drugs to total drug spending, ignoring other facts that underscore the important role new medicines play in reducing the rate of health care spending and hiding the rebates they, along with PBMs pocket. 

The report claims that “since 2010 prescription drug spending has increased 10 percent annually for Blue Cross and Blue Shield (BCBS)members since 2010, an overall rise of 73 percent.This upward trend is due to a small fraction of emerging, patented drugs with rapid uptake and large year-over-year price increases that are more than offsetting the continued growth in utilization of lower-cost generic drugs. These higher costs are being incurred by consumers and payers alike; while consumer out-of-pocket costs have risen just three percent annually for prescription drugs in total, they have risen 18 percent annually for patented drugs.”


You might wonder how it is possible for consumer out of pocket costs to rise 3 percent annually if the increase in patented drug spending has increased 18 percent? Is it because health plans are sucking up the difference in cost for our sake? A closer look at the findings suggests answers. 

1    BCBS compared apples – the average increase in out of pocket costs – which includes the increase in the use of generic drugs – to oranges, namely the pre-rebate increase in spending on drugs for Hepatitis C, autoimmune diseases and cancer for less than 1 percent of chronically ill patients.  Indeed, the BCBS ‘study’ acknowledges that the drug spending data they use is pre-rebate.  But let’s stick with sticker prices for now and ask: how does the increase in the use of a small number of new medicines affect drug spending and total health expenditures.

2    It turns out that employer-sponsored health plans are spending LESS on brand or innovator drugs as a percent of total health care spending.  And total drug spending is about the same as it was in 2007:


Sources: Health Care Cost and Utilization Reports for 2010-2015





3.       Since 2007, brand drugs as a percent of total drug spending has DECLINED


    Sources: Health Care Cost and Utilization Reports for 2010-2015




4. If brand spending is down and total drug spending as a percent of all health expenditures are flat, why is cost sharing for drugs going up by 3 percent a year? 

BCBS notes: “Utilization is down for all brand drugs, but the unit price has increased by an average of 17 percent each year, leading to a total increase in spending of 10 percent.”
 
In other words, health plans are charging the retail, not the rebated price, in determining copays and coinsurance even as brand drug spending as a percent of total Rx dollars has declined.  Indeed, the spread between the rebated and retail price has been increasing.  


Source: IMS Data

What's more, these rebates are not used to reduce the out of pocket costs of patients And plans use the retail price to fatten their margins with rebates AND the out of pocket spending of consumers.  Reports about rebate revenues are hard to come by.  However, an NAIC report suggests that rebates industry-wide are at least $30 billion which is more than the total underwriting gain of all health insurers.   

The BCBS policy report hides the fact that drug spending as a percent of total health care spending is flat.  It hides the fact that it is using rebates and retail prices to pad the bottom line.  And it is using innovator drug prices as scapegoats.  

A final thought: The Healthcare Cost Institute reports show that the utilization of all inpatient and outpatient services has declined since 2007 even as the use of both new and generic medicines has increased.   And yet health plans have rarely considered or acknowledged that the use of prescription drugs reduces the reliance on more expensive forms of care. 
  Read More & Comment...

From the FDA.ke News Desk

05/06/2017 03:31 PM | Peter Pitts

In the wake of the unraveling scandal surrounding the agency’s television viewing habits, CDRH spokesperson Teng Kay has denied allegations they have been instructed by “unconfirmed alien contact” to reclassify TV remotes as Class II Medical devices. In a related story, Acting FDA Commissioner Rupert Murdoch has issued a list of “breakthrough therapy” entertainment for recommended viewing. The list is said to include: ANDA and the King of Siam, Complete Response Letters from Iwo Jima, and Fahrenheit 453. All programming has been deemed truthful, accurate, and non-misleading by the Shkreli Institute for Ethical Studies.  Read More & Comment...

ICER’s GIGO

05/05/2017 03:58 PM | Peter Pitts

ICER’s new report, to no one’s great surprise, has found abuse-deterrent opioids provide neither financial nor societal benefits.

GIGO. Garbage In. Garbage Out.

For example:

The ICER analysis specifically does not include diversion – even though the majority of the problem arises from this community.

ICER also changed its model at the last minute to be include all abuse-deterrent formulations (ADFs) and not just Oxycontin -- despite preliminary results that showed that, over 5 years, OxyContin ADF prevented 4,300 cases of abuse, >12,000 abuse years, saved $300 million in medical costs against $387 million in incremental pharmacy costs. These results alone are within the realm of cost effectiveness: $20,500 per abuser avoided, $7100 per abuse year avoided for the most successful ADO introduced into the market.

Societal costs are not included despite ICER’s promise they would be.

Heroin switching is included, despite the fact that it is an incident cohort. Per ICER, “We did not include the effects of increasing heroin use that might result from opioid abusers being switched to ADF opioid, as we are considering only incident and not prevalent opioid abuse in the model.” Hm.

ADF benefit is reduced by 25% because of the author of the original paper (Rossiter) conducted a sensitivity analysis to see how such a reduction would effect the model.

ICER is calling for ADFs to be “cost-neutral.” But how is this possible since the overwhelming cause of the problem are inexpensive, non-ADF generics?

What the ICER report ignores entirely is that one of the factors driving abuse and addiction is the inappropriate use of generic opioids for conditions that have non-opioid, on-label options. (52 percent of patients diagnosed with osteoarthritis receive an opioid pain medicine as first line treatment as do 43 percent of patients diagnosed with fibromyalgia and 42 percent of patients with diabetic peripheral neuropathy.)

Payers often implement barriers to the use of branded, on-label non-opioid medicines, relegating these treatments to second line options – along with new abuse-deterrent opioid formulations. The result is a gateway to abuse and addiction. An unintended consequence of the ICER analysis will be more of this inappropriate behavior.

According to Harvard health economist David Cutler, Virtually every study of medical innovation suggests that changes in the nature of medical care over time are clearly worth the cost.  But, as Aldous Huxley reminds us, ““Most human beings have an almost infinite capacity for taking things for granted.”

Abuse-deterrent opioids are precision medicines. They are not for everyone. As Dr. Charles Inturrisi, professor of pharmacology at the Weill Cornell Medical College, said at a 2013 Center for Medicine in the Public Interest Capitol Hill conference on opioids, “Personalized medicine can reduce the non-responder rate because you can focus in on individuals who are highly associated with being responders and you can eliminate the trial and error inefficiencies that inflate healthcare cost.”

One of the consequences of the ICER report is that it will deter investment in more and more creative abuse deterrent programs. The phrase, “strangling the baby in the crib” comes to mind.

Remember – ICER is the organization that found the new class of Hepatitis C therapeutics failing their cost/benefit litmus test -- another example of this organization being on the wrong side of history. Alas, it’s totally understandable considering that, on September 3, 2016, Dan Ollendorf (ICER Chief Scientific Officer) told the Pink Sheet, “It’s difficult to really understand how these [abuse deterrent opioids] are going to be of benefit if the non abuse-deterrent formulations are still out there.”

Talk about Confirmation Bias!

   Read More & Comment...

QunitilesIMS Data to Digest

05/05/2017 08:06 AM | Peter Pitts

The QuintilesIMS Institute has issued a very interesting new report, “Medicines Use and Spending in the US: A Review of 2016 and Outlook to 2021.” It’s a must-read for many reasons – not the least of which is its plethora of data. Many items to peruse and digest.

Here are four of the reports conclusions – as an appetizer …

* The outlook for spending has been revised downward as expectations for new products and price increases have moderated.
* Invoice price growth for protected brands is projected to be between 7-10% down from 8-11% in the prior outlook.
* Net price growth for protected brands is forecast to be 2-5% through 2021.
* The impact of losses of exclusivity are expected to be 50% greater in the next five years, including the impact of biosimilar introductions.

With the caveat that statistics are like swimwear (what they show you is interesting but what they conceal is essential), have a look and draw your own conclusions.  Read More & Comment...

Dear Colleague: Let's Put Off-Label on the Legislative Table

05/04/2017 06:03 PM | Peter Pitts

Representative Morgan Griffith (R/VA) has introduced HR 1703, the Medical Product Communications Act. It’s legislation that would take a lot of the ambiguity out of the FDA’s biggest conundrum – regulatory clarity on the sharing of truthful accurate, and non-misleading off-label information.

As Mr. Griffith writes in a Dear Colleague letter, “Doctors should have the most up-to-date information when caring for their patients and, when done responsibly and in an appropriate context, manufacturers should be able to provide it.”

Amen.

For more detail on the issue, have a look at this new article from the Therapeutic Innovation and Regulatory Science (the official journal of the Drug Information Association), “Using Off-Label Communications to Responsibly Advance the Public Health.”  Read More & Comment...

The Dubai Declaration

05/03/2017 08:58 AM | Peter Pitts

When it comes to 21st century pharmacovigilance, sometimes it’s important to look …  backwards. According to the 10th century Arab physician, Ibn Sina, “The time of action must be observed, so that essence and accident are not confused.”

At the United Arab Emirates’ Sixth National Pharmacovigilance Conference” held last month in Dubai, specific recommendations (known as “the Dubai Declaration”) were released by the Ministry of Health and Prevention (MoHP).

According to Dr. Amin Hussain Al Amiri (MoHP- Assistant Undersecretary for Public Health Policy & Licensing Sector, the Declaration will be submitted to the regional Gulf Health Council for Cooperation Council States and the 22-member Arab League with the hope that this “would benefit the Arab World.”

The complete list of recommendations can be found here.

A few stand out from the rest, specifically:

1- Build trust in the critical role of testing medicines following registration and testing random sample from the field.

2- Enhance of pharmacovigilance education programs among HCPs in the region.

3- Include pharmacovigilance education in the academic curricula of medical and scientific schools and making it among the basics of education.

4- ADRs reporting must become a “culture of HCPs” who must not be embarrassed in doing so.

5- Enhance health education to raise public awareness on expected ADRs.

6- Reported ADRs to be categorized and separated according to originator medicine, generic, and the biological view of the difference in chemical compositions.

7- Focus on the educational role of pharmacovigilance officers among the various healthcare establishments in the region.

When it comes to the quality of medicines, remember the words of Dr. Janet Woodcock, (CDER Director, USFDA), “The spark that ignited the flame was when we asked ourselves, Do we know enough about the quality of drugs that are sold in the United States? And the answer was … no.”

We would all do well to learn not just from the past – but from other parts of the world. The West doesn’t have a monopoly on good ideas.
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