Amazing Grace (Marie)

04/29/2010 07:54 AM |

From today's edition of the Wall Street Journal and the pen of our pal Grace-Marie Turner.

States Face Their First ObamaCare Test

States have until tomorrow to let Washington know if they plan to participate in one of the first government programs to be launched under ObamaCare—new high-risk pools for the uninsured. The question states should be asking is: Why would we participate?

The high-risk program is essentially insurance for individuals who have pre-existing conditions and are expensive to insure. The new health law allocates $5 billion for insuring them until 2014 when enrollees would be transferred to new health-insurance exchanges. But Richard Foster, chief actuary of the Centers for Medicare and Medicaid Services, reported last week that the high-risk program will run out of money next year or in 2012. Therefore, if states sign up for the program, they'll end up shouldering the burden for about two years after it runs out of federal money.

This will be a heavy lift considering the other costs ObamaCare is foisting onto states, one of which is the expansion of Medicaid, a joint federal-state program originally designed to cover low-income Americans. Under ObamaCare, Medicaid will be expanded to cover 84 million people by 2019, up from about 50 million today, putting pressure on states' budgets.

Georgia, Nebraska and other states have already taken a pass. The federal government will likely set up these risk pools without their participation. In a letter to federal Health and Human Services Secretary Kathleen Sebelius, Georgia's insurance commissioner John W. Oxendine said he feared the high-risk pools would "ultimately become the financial responsibility of Georgians in the form of an unfunded mandate." Kansas, Ms. Sebelius's home state, among many others, is considering opting out as well.

In addition to the cost, states are worried about the strings attached to the program. In a conference call with state officials last week, HHS officials weren't able to answer specific questions about federal mandates that will be placed on participating states. That's discomforting because HHS will draft the program's rules only after states decide whether to sign up.

What states already know should give them pause. By law, premiums in the new pools can cost no more than insurance for people in a state's standard nongroup insurance market. Most existing state high-risk pools charge 125% to 200% of standard rates because patients in those pools are by definition more expensive to insure. The new health law says that the federal government will set what states must pay doctors and hospitals for patients in the pools, and that the pools must cover all pre-existing conditions from day one. Right now, most states allow some waiting periods before covering pre-existing conditions to control costs. Washington will also determine which medical benefits must be provided.

Georgia calculated that, under these provisions, the high-risk program would cost more than the $177 million the federal government is expected to allocate for its program.

But what's most disconcerting is that the program will likely disturb the careful balance that some 35 states have struck in setting up their own high-risk pools. The federal high-risk pools would operate alongside existing state pools. States will be required to maintain funding for their pools, even while the federal government signs up new uninsured people for its program. The federal program will have more generous benefits and lower premiums than most state-funded high-risk programs, even though state officials say people in the new federal program are likely to be less needy than those enrolled in existing state risk pools.

The White House says high-risk pools were a Republican idea. But GOP leaders called for allocating $25 billion over 10 years (instead of $5 billion over three-and-a-half years) and would have given states far greater latitude in setting the rules.

If more states opt not to join the federal program, Congress will have to acknowledge that there has been a public repudiation of the federal program. That could create pressure to give states what they want—block grants to increase their existing high-risk pools or, for states that don't have them, money to set up new ones. Deciding whether to sign up for the high-risk program is an important early test for states to tell Washington who is in charge.

Ms. Turner is president of the Galen Institute, a nonprofit research organization focused on patient-centered health reform.

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Obamacare's Financial "Reforms"

04/28/2010 12:20 PM |

Talk about requiring those selling securites to put in more cash  and have increased capital reserves rather than" assets of clients and counterparties as a source of liquidity..."  

The federal government is sucking cash out of it's "clients and counterparties" --  state Medicaid programs, providers, etc. to pay for Obamacare leaving near term shortfalls in their wake.

For instance:

State officials told Kaiser Health News earlier this week that they have already negotiated many drug discounts that exceed 15.1 percent so they will lose that money under the new federal rules. Some said millions of dollars could be on the line for individual states, but federal officials said they have not estimated the cost to states.

State officials had hoped the federal government would interpret the law in a way that left their discounts untouched. But in a letter Thursday to state Medicaid officials, the federal Centers for Medicare and Medicaid Services explained, "The amount of the savings resulting from the increases in the rebate percentages … will be remitted to the Federal government."

Cindy Mann, the agency’s director for the Center for Medicaid and State Operations , confirmed in an interview that meant states that already received drugmaker rebates between 15.1 and 23.1 percent would no longer be able to keep that portion of their savings. States and the federal government would continue to share in savings for the portion of the rebates both below and above that range. Many states already have average rebates well above 23 percent.

Mann suggested that state officials could negotiate deeper discounts with drugmakers to try to "recapture that dollar."

http://www.kaiserhealthnews.org/Stories/2010/April/22/Medicaid-drug-rebates.aspx

In otherwords,  you are on your own. 

In turn, the federal government will use that cash to finance small business tax credits -- that evaporate in 6 years -- for insurance coverage that, because of the legislation -- was estimated by CBO be 13 percent higher.  So Obamacare is draining Medicaid to pay for tax credits to reduce the increased cost of healthcare insurance triggered by the bill:

"The credits are available in full to firms with 10 or fewer employees who offer an average wage of $25,000 or less. The credit is reduced for employers who have as many as 25 employees and average wages of up to $50,000 annually. Employers with more employees or higher average wages don't get the credit at all.

In addition, the credits are only available for six years, further complicating long-term efforts to help small businesses afford providing health insurance for their employees, said Amanda Austin, director of federal public policy for the NFIB, which opposed the Democrats’ health reform efforts and the new law.

The tax credit is emerging as a flashpoint in the ongoing debate about how the reform will affect costs and insurance affordability.

Austin, who spoke Monday at a U.S. Chamber of Commerce forum on what health reform may mean for businesses, said that although some small businesses’ efforts to provide their employees with coverage might be helped by the tax credit, businesses don't want to continue to return to Congress every few years to ask for the program to be extended.

"What we want is the market to drop its costs down long term," she said, adding that individual and small group markets for health insurance could see premiums increase by as much as 13 percent in the coming years. In the meantime, she and others are spending a lot of time waiting to see what the Department of Health and Human Services will do as the rulemaking process for the health law begins to gain momentum."

www.kaiserhealthnews.org/Stories/2010/April/27/small-businesses-health-tax-credit.aspx

Meanwhile, the Obama administration and HHS Secretary Sebilius are disavowing the estimates of Medicare actuary showing a financial meltdown of Obamacare in the decade ahead, with same estimates showing a collapse of healthcare service delivery in Medicaid -- where most people receiving "insurance coverage" will go... At the same time,  the bill provides incentives for people to wait until they are sick instead of obtaining coverage, driving costs up. As the report states: “existing providers resources and could lead to price increases, cost-shifting, and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage.”

tinyurl.com/24pgepa

What did Goldman Sachs call the less than healthy assets it was trying to sell? Something about Obamacare's financing of healthcare has the same smell. 

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The FDA's War on Salt

04/28/2010 09:28 AM |

A recent study measuring the impact of the NYC's mandatory requirement to post calorie counts  found that calories per transaction in a Starbuck fell by 6%. 

Six percent. 

As in eating 232 calories compared to 247.  Fifteen calories if my math is correct.

Morever,  the "impact the effect of calorie posting is actually to increase Starbucks revenue. "

That means either more people showing up or people visting more frequently.  Eating more perhaps.

I bring this up in the context of the FDA's war on salt, which comes on the heels of yet another less than rigorous report issued by the Institute of Medicine...

Earlier this week, the Institute of Medicine released a report  recommending enforceable sodium standards on the nation's food suppliers as a way to curb heart disease fatalities. The FDA claims to be examining practical means of implementation.    

Dr. Michael Alderman, a hypertension specialist at Albert Einstein College of Medicine, has been quoted lately in many papers covering the recently vamped-up war on salt. Alderman said a randomized clinical trail is needed to determine the effect of reducing sodium intake on the length and quality of life. At this point, he says, there’s no proof that it couldn’t be detrimental.  

 

“In careful studies of response to sodium reduction, most people have no change in blood pressure, while perhaps a quarter to a third have a significant fall," he said. "And, importantly, something like 10 percent have an equivalent rise in pressure.”

 

Further, he said, salt reduction can also increase resistance to insulin and other hormones, which can damage cardiovascular health. 

 

 “Thus,” he said, “the health effect of reducing sodium will be the net of these
conflicting effects.”

www.pizzamarketplace.com/article.php

Moreover, we don't exactly know what role salt plays in regulating food or calorie intake.

UC Davis nutrition professor Judith Stern and three colleagues last November published a study in the Clinical Journal of the American Society of Nephrology that questions that "scientific logic and feasibility" of limiting sodium consumption.

Stern, along with UC Davis adjunct professor David McCarron, reviewed data from a range of worldwide studies and examined neuroscience research and found that a body naturally regulates salt intake "within a narrowly defined physiological range."

Stern goes on to note: "If a 'normal' range of sodium intake exists that is consistent with the optimal function of established peripheral and central nervous system mechanisms, that fact should be the sole basis of national nutrition guidelines for dietary sodium intake," Stern's study said. "To attempt to use public policy to abrogate human physiology would be futile and possibly harmful to human health."

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ICU

04/28/2010 08:02 AM |

During her April 22 presentation to the Food and Drug Law Institute's annual meeting, Woodcock was asked when FDA would translate its commitment to the idea of transparency into a greater number of concrete actions. "The answer, honestly, is I don't know," she said. "These things all take time and resources, dedication ... So I can't actually tell you."

FDA's transparency initiative has three components: providing information to the public via a website about what the agency does; deciding what types of information can be disclosed (for example about new safety issues or product applications), and being more transparent to industry about its processes.

Some stakeholders have called on the agency to take transparency into newer areas, such as releasing product application "complete response" letters.

Dealing with documents is not as simple as posting them on the FDA website, it appears. Woodcock said nearly all of them would require some redacting of proprietary or other sensitive information for legal protection. She said when the number of pages reaches into the billions, it is a massive workload.

Transparency – terrific.  But how do we want to FDA to spend its resources?

On a entirely different subject, this just in from the BBC:

Men whose love lives are falling short can try a new prescription pill to combat the problem.

The first drug made available in the UK for premature ejaculation, called Priligy, can reportedly triple the amount of time a man can last in bed. It works by altering levels of serotonin in the brain, which should give men more control over ejaculation.

Keep calm and carry on.

The complete Beeb story can be found here:  http://news.bbc.co.uk/2/hi/health/8646075.stm

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Father of the Bribe

04/27/2010 07:23 AM |

The European Court of Justice ruled on April 22 that financially incentivizing physicians to prescribe generic drugs (and to switch patients from branded medicines) is legal – but it remains illegal for innovator companies to engage in similar practices.

In its ruling, the ECJ said that EU legislation banning pharmaceutical companies from offering financial incentives to doctors does not prevent public health bodies, like UK Primary Care Trusts, from implementing schemes that offer doctors financial inducements for switching patients to a specific, named, medicine.

The switching of large numbers of patients in one area of the UK from a branded statin to generic simvastatin was believed to have been one of the triggers for the original court case, currently being heard in the UK High Court; it was this court that referred the questions decided by the ECJ in its ruling.

But, to understand the unintended consequences of such actions, it’s also imperative to consider what happens when such switching occurs. Case in point, The Health Improvement Network (THIN) study-- an observational study of a large United Kingdom primary care database showed that patients who were switched from established Lipitor therapy to generic simvastatin experienced a 30% increase in relative risk of cardiovascular events or death compared to patients who remained on Lipitor therapy.

The data, which included records from October 1997 to June 2005, were generated from a retrospective analysis of a medical database of anonymous patient records entered by general practitioners in the United Kingdom. The analysis included 11,520 patients (2,511 patients who had taken Lipitor for six months or more and were switched to simvastatin vs. 9,009 patients who were taking Lipitor for six months or more and then remained on Lipitor therapy).

While the reasons these patients were switched is not known -- it is certainly not inconceivable that it might have had something to do with ... short term costs to the system.

Now there will be another reason – direct payments.

And what of Article 94 of EU Directive 2001/83 which bans the practice. Specifically, "Where medicinal products are being promoted to persons qualified to prescribe or supply them, no gifts, pecuniary advantages or benefits in kind may be supplied, offered or promised to such persons unless they are inexpensive and relevant to the practice of medicine or pharmacy."

Do different rules apply to government incentives? In the EU it looks like this is just the case. Another lesson we need to learn as we move forward into the uncertain world of Uncle Sam, MD.

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Drinking the Dartmouth Kool-Aid

04/26/2010 05:34 PM |

Berwick again:

"While Berwick will be constrained by congressional directives and institutional rules, his large vision focuses on nothing less than revamping the delivery system from top to bottom. For example, when I interviewed him for my book Rx For Healthcare Reform, here’s how Berwick explained why he thought we could cut 30 to 40 percent out of healthcare spending without affecting quality:

The work of John Wennberg and Elliott Fisher at Dartmouth shows that the more intensive services are available in a community, the more that they’re used without effect on the quality of care. So supply drives demand. It’s a monster cost driver without value added.

This isn’t what most of the healthcare community (aside from primary care doctors) wants to hear. It isn’t what drug or device makers want to hear. And it’s a major reason why Republicans will oppose Berwick. But it is the message that all stakeholders need to absorb and take to heart if we really want to control costs and make good healthcare available to everyone."

http://industry.bnet.com/healthcare/10002286/berwicks-big-vision-will-make-him-target-in-bid-to-become-medicare-chief/

You can increase quality and reduce the cost of delivering some forms of care, but it has little to do with so-called "supply-driven" medicine.  It has everything to do with identifying what treatments work best for which patients in a given setting and continually improving your ability to selectively use the most effective treatments.  It is not easy and it it sure not a matter of adjusting the "amount" of care to the lowest per capita level or even standardizing treatment steps to the lowest cost per capita.  

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Berwick Relishes Rationing?

04/26/2010 03:58 PM |

The WSJ editorial page notes: "The official who will preside over this fiscal trainwreck is Donald Berwick, the Harvard professor and chief of the Institute for Healthcare Improvement who the White House has nominated to run Medicare. Dr. Berwick explained in an interview last year that the British National Health Service has "developed very good and very disciplined, scientifically grounded, policy-connected models for the evaluation of medical treatments from which we ought to learn." He added that "The decision is not whether or not we will ration care—the decision is whether we will ration with our eyes open. And right now, we are doing it blindly."

Meanwhile in the UK, Britain's Department of Health said investment in the NHS had risen from £35bn in 1997 to more than £110bn by 2011. That's over 200 percent, twice as fast as it did in the US.  At the same time, UK oncologists note: "We now spend similar amounts to Europe on health generally and cancer care in particular, but less than two thirds of the European average on cancer drugs.... It just can't be that everybody else around the world is wrong about access to innovative cancer care and the NHS right in rationing it so severely."

No, it is also that UK cancer survival rates are still the lowest in Western Europe.

http://news.bbc.co.uk/2/hi/health/7579422.stm

Yes, "discipline" indeed.  

Here's my take on Berwick's sweeping and silly assertions.  Do we really want someone so driven by ideology and biased against our own healthcare system to head up CMS?


http://spectator.org/archives/2010/04/26/the-fix-is-in  Read More & Comment...

Foster Care

04/26/2010 10:16 AM |

Remember Richard Foster?

 

He’s the CMS official whose report on Part D costs were “suppressed” during the debate over the MMA.  That was in 2003 – when he was a “whistle-blowing darling of Congressional Democrats.

That was then.  This is now.  Robert Pear reports that:

 

A government analysis of the new health care law says it will not slow the overall growth of health spending because the expansion of insurance and services to 34 million people will offset cost reductions in Medicare and other programs. The study, by the chief Medicare actuary, Richard S. Foster, provides a detailed, rigorous analysis of the law.”

 

In signing the measure last month, President Obama said it would “bring down health care costs for families and businesses and governments.” But Mr. Foster said, “Overall national health expenditures under the health reform act would increase by a total of $311 billion,” or nine-tenths of 1 percent, compared with the amounts that would otherwise be spent from 2010 to 2019.

 

In his report, sent to Congress Thursday night, Mr. Foster said that some provisions of the law, including cutbacks in Medicare payments to health care providers and a tax on high-cost employer-sponsored coverage, would slow the growth of health costs. But he said the savings “would be more than offset through 2019 by the higher health expenditures resulting from the coverage expansions.”

 

Mr. Foster says the law will save Medicare more than $500 billion in the coming decade and will postpone exhaustion of the Medicare trust fund by 12 years, so it would run out of money in 2029, rather than 2017. In addition, he said, the reduction in the growth of Medicare will lead to lower premiums and co-payments for Medicare beneficiaries.

 

But, Mr. Foster said, these savings assume that the law will be carried out as written, and that may be an unrealistic assumption. The cuts, he said, “could become unsustainable” because they may drive some hospitals and nursing homes into the red, “possibly jeopardizing access to care for beneficiaries.”

 

Nancy-Ann DeParle, director of the White House Office of Health Reform, said that fear was unfounded.

 

“Unfounded.” That’s the counter-argument? Seems so. The White House is going to have to do better – a lot better.  And remember – this story is from the pages of the New York Times – not the Washington Times.

The complete New York Times Story can be found here.

This will certainly add fuel to the fire of those calling for repeal.

But rather than repeal we should be talking “appeal” – like in appealing to the better angels of our nature. In other  words -- being for something.  And that something is called "the truth."

Let’s start a movement – and let’s call it “Appealism.”  Here’s how it works:  Rather than calling for “repeal” (which is a negative thing) let’s be for “appeal.” That means appealing to common sense and un-fuzzy math.  It means calling a spade a spade and (most importantly) being honest.

I know – how naïve.  But …

Even if the GOP realizes its most optimistic November projections, the likelihood for legislative repeal is still, well, a highly optimistic projection.  And, even all the stars and planets align in an elephant-friendly fashion, there’s no scenario that provides for a two-thirds majority over-ride of a 100% predictable Presidential veto.

Hence, the need for “appeal.” The Foster analysis is a good place to start because the finish line isn’t repeal; it’s controlling the rule-making process.  And that’s where “appeal” comes in.

Appealing to reality.  Appealing to facts and figures rather than rhetoric and double-sided political coin of bribes and threats.

Appealism.  Yes we can.

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Maverick Supplemental

04/26/2010 09:39 AM |

CQ reports:

"Makers of dietary supplements looked to be on a collision course with Sen. John McCain when the Arizona Republican introduced legislation designed to strengthen policing of products marketed to casual and professional athletes." Yet, "the two sides appear to have reached a compromise they say will be part of a manager's amendment to a major food safety bill (S 510) being readied for Senate floor debate." Notably, "the provisions would require the Food and Drug Administration (FDA) to issue long-delayed guidance on acceptable supplement ingredients and report to the Drug Enforcement Administration when it rejects new supplements that contain synthetic anabolic steroids." This "would be a victory for McCain," who wanted the FDA to have more authority over supplements.
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PhRMA giveth and Uncle Sam taketh away

04/23/2010 09:20 AM |

Talk about federal preemption!

CMS Medicaid confirmed Thursday that some money states receive as rebates from drugmakers will now be redirected to the federal government to help pay for the new health overhaul.  

State officials had hoped the federal government would interpret the law in a way that left their discounts untouched. But in a letter Thursday to state Medicaid officials, CMS Services explained, "The amount of the savings resulting from the increases in the rebate percentages … will be remitted to the Federal government."

Cindy Mann, CMS director for the Center for Medicaid and State Operations , confirmed in an interview that meant states that already received drugmaker rebates between 15.1 and 23.1 percent would no longer be able to keep that portion of their savings. States and the federal government would continue to share in savings for the portion of the rebates both below and above that range. Many states already have average rebates well above 23 percent.

Mann suggested that state officials could negotiate deeper discounts with drugmakers to try to "recapture that dollar."

Thanks Cindy.  Very helpful.

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The Changing "Nature" of GPhA

04/23/2010 09:10 AM |

Teva is resigning from the Generic Pharmaceutical Association effective June 30th. (Apotex and Hospira resigned from GPhA last year.)

Does this make GPhA the healthcare equivalent of the Not Ready for Primetime Players?

Because Teva (Hebrew for "nature") most certainly is.

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The New Republic's Unquestioned New Collaboration

04/22/2010 10:29 AM |

Jon Cohn has written long and well on behalf of single payer health care for The New Republic.  For over a decade he posted his analysis and observations through The Treatment, a column that grew in influence once Obama took office.  I rarely agreed wth Cohn's observations but always admired his persistence and willingness to wade at least a little bit into the clininal literature. 

He has "retired" The Treatment but now reappears in TNR -- and elsewhere -- as a, hired hand or observer at large courtesy of the Kaiser Foundation which is now spending tens of millions to support Kaiser Health News.  Or as the byline in Cohn's most recent TNR piece puts it:  "This column is a collaboration between TNR and Kaiser Health News. KHN is an editorially independent news service and is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization, which is not affiliated with Kaiser Permanente."

Read Cohn's piece here

A collaboration?  Does that mean KHN paid for Cohn to write the piece and TRN ran it?  Did it split the costs?  Did TNR pay for lunch?  Is this something KHN will continue to do with other news outlets and magazines?  Given the Kaiser Family Foundation's advocacy role and support of Obamacare, does this raise questions about media objectivity or should this be considered a novel way of funding reporting?

I have no problem with the Kaiser Foundation setting up KHN or engaging in a collaboration witn TNR  or any other publication to run pieces by Cohn.  I do have a problem when those who support Obamacare then turn around and attack those who have reservations about reform who use similar approaches to disseminate their views. 

Kudos to Cohn and TNR for finding creative ways to carry on the health care discussion.  Let's see if they and their followers are intellectually honest and consistent when folks like me follow suit. 
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Rank Incompetence

04/22/2010 09:13 AM |

From the New England Journal of Medicine:

To the Editor: In their Perspective article (Jan. 14 issue), Murray and Frenk review a number of indicators of the relatively poor state of the population's health in the United States. Most, if not all, of this information is well known to readers of the Journal, and the authors' use of it is not objectionable. However, Murray and Frenk begin their discussion by referring to the World Health Report 2000, Health Systems: Improving Performance, from the World Health Organization (WHO), which ranked the U.S. health care system 37th in the world, and this is objectionable. (I was editor-in-chief of the World Health Report 2000 but had no control over the rankings of health systems.) Fully 61% of the numbers that went into that ranking exercise were not observed but simply imputed from regressions based on as few as 30 actual estimates from among the 191 WHO member countries. Where the United States is concerned, data were available only for life expectancy and child survival, which together account for only 50% of the attainment measure. Moreover, the "responsiveness" component of attainment cannot be compared across countries, and the estimates of responsiveness for some countries were manipulated. This is not simply a problem of incomplete, inaccurate, or noncomparable data; there are also sound reasons to mistrust the conceptual framework behind the estimates, since it presupposes a production function for health system outcomes that depends only on a country's expenditure on health and its level of schooling, ignoring all cultural, geographic, and historical factors.

The number 37 is meaningless, but it continues to be cited, for four reasons. First, people would like to trust the WHO and presume that the organization must know what it is talking about. Second, very few people are aware of the reason why in this case that trust is misplaced, partly because the explanation was published 3 years after the report containing the ranking. Third, numbers confer a spurious precision, appealing even to people who have no idea where the numbers came from. Finally, those persons responsible for the number continue to peddle it anyway. To quote Wolfgang Pauli's dismissal of a theory opposed to quantum mechanics, "Not only is it not right, it's not even wrong!" Analyzing the failings of health systems can be valuable; making up rankings among them is not. It is long past time for this zombie number to disappear from circulation.

Philip Musgrove, Ph.D.
Health Affairs
Bethesda, MD

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Ode to COI

04/22/2010 08:28 AM |

Much conversation about the FDA’s revised guidance on advisory committee conflict of interest waivers.  Commissioner Hamburg wants a “stricter” policy.

Transparency?  Certainly.  But what exactly is the problem that requires stricter guidance?  It’s not COI – its empty seats. 218 positions of the 600-plus on FDA's 49 advisory committees have yet to be filled.

According to the Pink Sheet, The general perception has been that the conflict-of-interest policy has made it more difficult to properly recruit for advisory committees. "There have been places where we felt we didn't have the right experts and we cancelled the meetings," John Jenkins, director of the Office of New Drugs, told attendees at the FDA/CMS Summit in December 2009 "We may have gone too far."

During my tenure at the FDA I was the senior official in charge of advisory committee oversight and the final decision-maker on who got a COI waiver and who did not. Many did not — but those who did received their waivers because FDA professional career staff made a strong case that these people weren’t just important to the advisory committee — but critical.

And we should all pay attention to the nomenclature.  It’s not about “conflict of interest” – it’s about (as Secretary Sebelius correctly says) “interest.”  And having an “interest” is not necessarily a bad thing – as long as you’re transparent about it.

If we allow FDA adcomms to become the realm of the second best and the almost brightest –what have we done to the advancement of America’s health? The answer is a significant disservice.

The revised FDA guidance can be found  here.

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Live Long and Prosper...

04/21/2010 10:06 PM |

Leonard Nimoy is retiring... and so is his incarnation of Mr. Spock

http://www.space.com/entertainment/leonard-nimoy-retires-star-trek-100421.html


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"Step" Lively -- and Mind the Gap

04/21/2010 09:49 AM |

“Fail First” or “Succeed First?”  It’s a pretty good proxy for the larger health care debate that pits short-term cost savings over long-term patient benefit.
 
Sound familiar?

A new bill in the California Assembly (AB 1826) addresses the issue of “fail first” policies (aka: “step therapy) and cuts right to the chase.

The bill “Requires a health plan or health insurer that covers prescription drug benefits to provide coverage for a drug that has been prescribed by a participating licensed health care provider for the treatment of pain without first requiring the enrollee or insured to use an alternative prescription drug or over-the-counter product.”

And it uses chronic pain as a specific example:

“Due to the variety of causal conditions and types of pain (acute and chronic), there is no standard treatment for pain.  Pain treatment varies according to type, severity, and duration of pain, as well as the causal condition (if known), patient co-morbidities, and other factors (e.g., medication intolerance or patient compliance).  Health care providers use clinical judgment to select among various pain medications and treatments in efforts to resolve or control pain for individual patients …For some enrollees, no pain medications are subject to fail-first protocols.  Other enrollees, depending on the provisions of their plan contracts or insurance policies, have outpatient pharmacy benefits that make coverage for between one and 38 pain medications subject to fail-first protocols …Of more than 200 prescription medications used to treat pain, 54 are subject to fail-first protocols for at least some portion of enrollees with health insurance subject to this bill whose health insurance includes an outpatient pharmacy benefit.”  

(The complete bill can be found here.)

One example of a group supporting this legislation is the California Medical Association. Opposed?  The Association of California Life and Health Insurance Companies.

The repercussions of choosing short-term savings over long-term results, of cost-based choices over patient-centric care, of “fail first” policies over the right treatment for the right patient at the right time – are pernicious to both the public purse and the public health. Skimping on a more expensive medicine today but paying for an avoidable hospital stay later is a fool’s errand.

In California -- indeed across the entire United States -- access to care must be matched with quality of care.

 

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Prescription for Change

04/20/2010 01:29 PM |

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Israel's Independence Day

04/20/2010 09:41 AM |

On the 62nd anniversary of the founding of the Jewish state, a reminder of what David ben Gurion said regarding Israel's ability to thrive -- "to be a realist, one must believe in miracles."  ( CMPI has been a proud partner of  program based at the Tel Aviv University School of Management to support life science entrepreneurship in Israel for the past three years.  “Health Care Technological Innovation - From Idea to Commercialization.” )   Israel's robust contribution to biomedical innovation -- despite the threat of terrorism and annihilation -- is truly miraculous:

According to the WEF 2007-2008 Competitiveness Report, Israel has the 5th highest number of patents pending in the world and ranks 3rd in technological readiness. Israel is ranked in 1st in the world for Medical Device Patents per capita, and ranks third in Europe for the number of clinical trials in progress.

Fourth in the world in biotechnology patents per capita, Israel not only has the talent to innovate, but the skills to transform technology into successful enterprise. A generous government incentives program is a major factor for pushing progress forward.

Entrepreneurship in Israel

Israel has the largest number of startups in the world per capita. In absolute numbers, Israel is only second to the US. Israeli startup companies are known for their creativity, innovation, and originality. Israeli ingenuity can be found in some of the world's leading products and technologies: voice mail, billing systems, internet security, instant messaging, ingestible video cameras, and generic pharmaceuticals.

Investments in Israel

Israel has the largest number of companies listed on the NASDAQ outside of the United States and approximately 70 Israeli companies are traded on various European exchanges.
According to the Israel Venture Capital Research Centre, Israel requires approximately $1.5 Billion of new investment annually to support its developing companies. Israel continues to attract capital both locally and from abroad. However, there continues to be a strong need to fuel the capital requirements of early-stage companies

Many major multi-nationals have chosen to run core activities in Israel including: HP, Microsoft, Intel, IBM, Siemens, GE, SAP, Philips, Time Warner, Sony, Cisco, Google, eBay, Analog Devices, Computer Associates, Berkshire-Hathaway, Applied Materials, Sun Microsystems, 3Com, Motorola, Pfizer, J&J and more.

Israel’s high tech industry in particular is extremely profitable and attractive to foreign multinationals.
2007 witnessed over 40 international Mergers & Acquisitions.

Mergers and Acquisitions in Israel

Major foreign firms have stepped up their local M&A activities, and direct foreign investment in Israel has exceeded $2 Billion annually.

2006 saw a record number of Mergers & Acquisitions - a total of 76 Israeli companies were acquired. Warren Buffet's Berkshire-Hathaway made its first international investment when the company made its monumental acquisition of Israeli ISCAR for $4 billion, HP acquired Mercury for $4.5 billion and SanDisk acquired M-Systems for $1.5 billion.  Other examples of multinational companies that have acquired Israeli companies include: Microsoft, Motorola, Intel, HP, Siemens, Samsung, IBM, GE, Phillips, Lucent, AOL, J&J, Applied Materials, Sun Microsystems, EMC, Boston Scientific, eBay, HP, Kodak, Cisco and Xerox.

M&A activity involving Israeli companies that were either acquired or merged totaled $3.2 billion in 2007 in 75 deals – the second highest number of M&A deals in any one year to date.
Mergers and acquisitions of VC-backed Israeli companies in 2007 totaled $1.9 billion and consisted of 32 deals.

Israeli companies were also on the acquiring side in some 60 deals in 2007, including about 20 where one Israeli company acquired another Israeli company, and nearly 40 acquisitions of foreign companies. Israeli companies spent $2.15 billion on mergers and acquisitions in 2007, of which $1.96 billion was for acquisitions of foreign companies (IVC Online)

Venture Capital in Israel

With 100 active funds and over $10 billion under management, Israel’s venture capital industry thrives like in no other country. In 2004, foreign funds committed over 50% of the total dollars invested, demonstrating that Israel is an internationally sought after and sound investment (Israel ’s Ministry of Industry, Trade and Labor).

In the past 10 years, Israeli VC's attracted a total of $10.6 Billion. According to IVC, $2 Billion in capital is currently available for investment by Israeli VC's, of which $1.2 billion is intended for First investments in high-tech companies and the remainder reserved for Follow-on investments. $800 Million is expected to be raised in 2008 by Israeli VC's for investment in Israeli high technology over the next few years. (IVC Online)

In 2007, 462 Israeli high-tech companies raised $1.76 Billion from local and foreign venture investors, 8.5 percent above the $1.62 billion raised in 2006 and 31.5 percent above 2005 levels.
In the fourth quarter, 115 Israeli high-tech companies raised $503 million, a 21 percent increase from the $414 million raised by 108 companies in the third quarter and a 5 percent increase from Q4 2006. (IVC Online)
In 2007, Israeli VC's invested $678 million in Israeli high-tech companies. The Israeli VC share of the total amount invested in Israeli high-tech companies was 39 percent.

Israeli VC's invested $50 million in foreign companies during 2007 (in addition to their investments in Israeli high-tech companies), compared to $60 million in 2006 and $95 million in 2005. Three of the 39 investments were first investments and the remainders were follow-on.

In 2007, 78 Seed companies attracted $151 million, the highest amount raised since 2001.

http://www.novuscom.net/~allon.m/isratech/fund.html
 

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Quote of the Month

04/20/2010 01:59 AM |

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PDUFA Follies

04/19/2010 09:12 AM |

Important reporting from today’s edition of the Wall Street Journal:

“An unusual clinical trial involving four different drugs offered promise that guiding treatment based on the molecular traits of a tumor can improve survival from lung cancer. Researchers said the study amounted to "proof of concept" for a new approach to clinical trials that could improve the efficiency of cancer-drug development and eventually shorten the time it takes to get new treatments to market.”

The “Battle” study involved 255 patients with advanced lung cancer.

According to Edward S. Kim, a cancer researcher at M.D. Anderson and principal investigator of the Battle study, "This is a first step to find biomarkers that may help supplant existing toxic therapies and to find the right population for a particular drug," said.

The WSJ writes, “The adaptive design is gaining interest among researchers and drug companies because it could help identify drugs that don't work sooner, and identify biomarkers that would be used to enroll patients in late-stage studies required for market approval.”

Currently large clinical trials typically take all comers without evaluating their biomarker status. "The problem is that when you take a drug that has a specific target, but you treat everybody, you dilute the effect" of the drug, said Dr. Kim.

Researchers say that is why many targeted cancer drugs fail in late-stage or Phase III studies.

"This is the future," Tyler Jacks, a cancer researcher at Massachusetts Institute of Technology and president of the AACR, said of the Battle trial. "This is how drugs will be developed and clinical trials organized."

Important news.  Good news. Potentially life-saving news.  And interesting news considering that some are using the current PDUFA reauthorization debate to suggest the FDA demand comparative effectiveness studies as part of the agency’s drug approval process – something that no other drug licensing agency in the world does.

If the Battle study proves nothing else – it’s that we don’t know enough about how new medicines work once approved ("in the real world"). And that’s particularly true for cancer drugs. So what does “comparative effectiveness” really mean?  And should it be applied to the global gold standard of safety/efficacy or, if you prefer, risk/benefit.  Lung cancer is a good example, considering that average survival on chemotherapy is about eight months. What’s the value in asking about pre-approval “comparative effectiveness? Compared to what? "Best practice" treatment? And compared how?

Those who call for such a third leg are on a price jihad (cost effectiveness). That’s their privilege – but they had better understand the consequences such a move inside the FDA process would have on pharmaceutical  innovation.

But first, there are some things they should understand, more generally about innovation itself:

Innovation is slow.  As any medical scientist will tell you, there are few "Eureka!" moments in health research. Progress comes step-by-step, one incremental innovation at a time. Companies more often profit by improving existing chemicals and making processes more efficient than by revolutionizing the whole field with new products.

Innovation is hard.  Today it takes about 10,000 new molecules to produce 1 FDA-approved medicine. And if that's not frightening enough, only 3 out of 10 new medicines earn back their research and development costs. And here's the kicker -- unlike other R&D-intensive industries, pharmaceutical investments generally must be sustained for over two decades before the few that make it can generate any profit.

Innovation is expensive.  In 2003, researchers at TuftsCenter for the Study of Drug Development estimated the costs to bring a new medicine to market to be $802 million, and others suggest that the total cost is closer to $1.7 billion

Innovation is under attack.  From accusations of the “me-too” variety, to crackpot schemes to replace pharmaceutical patents with a “prize” system, life for innovator pharmaceutical companies is rough and tough.  Israel Makov (formerly the Big Abba of generics giant Teva) once told me that he wasn’t really in the pharmaceutical business, but rather “in the litigation business.”

But innovation is important – and not just for pharmaceutical industry profits. Increases in life expectancy resulting from better treatment of cardiovascular disease from 1970 to 1990 have been conservatively estimated as bringing benefits worth more than $500 billion a year. In 1974, cardiovascular disease was the cause of 39 percent of all deaths. Today it is about 25 percent. Cerebrovascular diseases were responsible for 11 percent of deaths back then. In 2004 they caused 6.3 percent of deaths. Kidney diseases were linked to 10.4 percent of deaths and now they are associated with 1.8 percent. And that’s just for the United States.

As Harvard University health economist (and Obama healthcare advisor) David Cutler has noted: "The average person aged 45 will live three years longer than he used to solely because medical care for cardiovascular disease has improved. Virtually every study of medical innovation suggests that changes in the nature of medical care over time are clearly worth the cost."

Comparative effectiveness is an interesting health policy issue -- but the PDUFA reauthorization process is the wrong place for the conversation.

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