What can Brown do for you?

01/20/2010 12:55 AM |

Don’t think about Scott Brown as the 41st vote against healthcare reform.  Consider him the 1st vote towards a new, more thoughtful approach.  A more honest approach.  An approach that doesn’t require Uncle Sam to become Uncle Sam, MD.  An approach that doesn’t tax the middle class, gut Medicare and abolish Medicare Advantage.  An approach that doesn’t put the power of government reimbursement decisions into the hands of a politically appointed panel without any oversight by elected officials.  Perhaps even an approach that takes into consideration reform via a partnership between government and the private sector (a la Part D). And maybe even an approach that considers allowing Americans to buy insurance policies across state lines so that we can all benefit from a significant economy of scale and radically lower premiums. A study by University of Minnesota shows that Congress could boost by more than 12 million the number of people who have health insurance without spending taxpayer dollars.  The change required is to allow people to buy health insurance across state lines, so they can shop for less expensive policies. For example, a typical health-insurance policy in heavily regulated New York costs more than three times as much as in less regulated Iowa ($388 a month versus $98 a month for the same coverage).

But – for starters – how about an approach that’s open and transparent.

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Unassisted Suicide...

01/19/2010 10:57 PM |

What exactly about the Scott Brown victory does Ezra (the mind of moment) Klein not get?

"There's nothing about Scott Brown's victory that needs to derail health-care reform in particular, or the rest of Obama's 2010 agenda in general. But if Democrats decide to cower and hide, they can end Obama's presidency on Brown's behalf.

That said, I really wonder what the Democratic Caucus thinks will happen if they let health-care reform slip away and walk into 2010 having wasted a year of the country's time amidst a terrible recession. It won't be pretty, I imagine. If health-care reform passes, the two sides can argue over whether it was a success. If it fails, there's no argument."

voices.washingtonpost.com/ezra-klein/

I have heard that petulant "it's all about me" tone before..  It's the gift that keeps on giving to those of us seeking sensible health care reform consistent with the need to sustain job creating biomedical innovation...  I hope Klein and others keep pushing Dems to ignore the outrage of the voters...  It will produce more Scott Browns.


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Follow On About Face

01/19/2010 10:14 AM |

Michael McCaughan's blog in RPM First Take reveals that the operational definition of a follow on biologic is simply someone else's product that we want to copy...
therpmreport.com/Free/4e767e88-bc84-40e1-871a-4025e307e300.aspx

Saturday, January 16 2010

Teva’s Hedge on Complex Generics
By Michael McCaughan

Generic applications for Lovenox and Copaxone have become bellwethers for the emerging follow-on biologics pathway in the US. Teva is on both sides.
 

Who says you can’t have your cake and eat it too?

When it comes to the follow-on biologics space, there are plenty of companies who are likely to try. As we’ve written before, the looming new pathway for abbreviated approval of biosimilars opens up opportunities for lots of companies—brand, generic and biotech—to consider whether to play as a true “follow-on” supplier, focus on improved “biobetters,” or do both.

But no one is in quite the same position as Teva. Not only is the company doing that analysis for the longer term biosimilar opportunity (you can read more about its latest thinking in “The Pink Sheet” DAILY here), but it is on both sides of the issue for two near-term decisions on complex molecules that are regulated as drugs.

Teva is one of three companies (along with Momenta and Amphastar) with pending applications to market a generic version of Sanofi Aventis’ enoxaparin (Lovenox). In that case, Teva wants FDA to agree that, while enoxaparin is a relatively complex molecule, it is not too complex to allow for a fully substitutable generic approval.

On the other hand, Teva’s largest and most important product is the branded multiple sclerosis therapy glatiramer (Copaxone). There are two would-be generics pending, Momenta’s and Mylan's.

In that case, Teva is arguing that Copaxone is far too complex a molecule to be copied closely enough to allow for substitutability—and is even suggesting that other manufacturers may have trouble even getting a non-interchangeable product approved without full clinical studies.

Teva, of course, is aware that this may sound like trying to have your cake and eat it too. But they don’t see a contradiction. Here is how Teva CEO Bill Marth put it during the Goldman Sachs CEO “unplugged” conference Jan. 6:

“When you think about Copaxone, many people try to equate it to Lovenox. It is
much, much different—vastly more complex—than Lovenox will ever be. We have not characterized it. We don't believe it can be fully characterized.

If one cannot fully characterize Copaxone, I'm not sure how you get it approved without a clinical study since the method of action is not well understood and exactly what the active sequence is. And, by the way, we think there are multiple methods of action, and potentially multiple reasons for that. We think that it is virtually impossible to prove your efficacy without a clinical study. So it really falls into more of that sweet spot of the biologics....

I think it is much different with Lovenox than it is with Copaxone because with Lovenox, the active sequence has been identified by us. It hs been identified by the
innovators. It has been identified of course by Momenta and Amphistar.

So it is defined. It is a sugar. When you look at those sugars and you look at the active sequence, then what you really have to do is understand what is the other stuff or junk that is within your protein or sugar, and there make sure that you don't have improper immunogenicity. They have asked us for immunogenicity testing. We have done that. And it seems to be acceptable so far.”

In other words, Teva thinks it can kept its Copaxone cake and take a huge slice of Sanofi-Aventis’ Lovenox cake too.

But there are other outcomes. From Teva’s perspective, an outright rejection of substitutable Lovenox wouldn’t be so bad, since it would underscore the company’s position that substitutable Copaxone is a pipe dream.

And while Teva would dearly love to tap into the $2 billion Lovenox market, at best it will only get a percentage of a big generic opportunity. With Copaxone, Teva hopes to maintain its own multi-billion dollar brand in something like perpetuity.

How important is that to the company? During its January 7 investor day, Teva’s bullish forecasts for growth for 2015 included what the company called a “conservative” forecast for Copaxone, with sales peaking at $3 billion and then eroding over time to $2 billion in 2015. But the erosion, in Teva’s view, will come only in the face of competition from other MS agents (including Teva’s own oral product)—not from any substitutable generic competition.

So call it a hedge: if generic Lovenox is rejected, Teva’s Copaxone franchise is more secure. If Copaxone can’t be protected, at least Teva will have some generic enoxaparin revenues to fill in the hole.

There’s really only one scenario where Teva loses. If one of the other applicants (Momenta being the most likely candidate) actually has superior technology, it could potentially get approval for generic Lovenox and generic Copaxone, while no one else can.

For Teva, that would be more like a pie in the face.
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What does a Scottish health official wear under his kilt?

01/19/2010 08:09 AM |

This blessed plot, this earth, this realm ... this reimbursement decision.

From the UL newspaper, The Telegraph:

The Government’s drugs rationing body, the National Institute for Health and Clinical Excellence (Nice), has provisionally said that it does not intend to recommend the use of the drug, called Tocilizumab, or Roactemra.Nice claims that the £9,000 a year drug, for rheumatoid arthritis, has not proved that it is cost effective.But patients in Scotland are to receive the treatment after it was recommended by the body which regulates drugs on the Scottish NHS, the Scottish Medicines Consortium (SMC).

The move will reopen accusations of medical ‘apartheid’ within Britain.

It follows an outcry after patients in Scotland were given access to expensive cancer drugs denied on the NHS in England and Wales.

Roactemra has been described as a “life changing” drug because it can be taken after other medications have failed, a common problem in the treatment of rheumatoid arthritis.Patients groups last night said that denying the medication to tens of thousands of patients with the crippling condition in one part of the country was “cruel”.

Ailsa Bosworth, chief executive of the National Rheumatoid Arthritis Society (NRAS), said: “I have heard patients stories that would make you weep.

“People are virtually suicidal because they have nowhere else to go and yet they know that there are other drugs out there that they could have access to but cannot because of Nice.” She added that it was “ludicrous” that the drug would be available in Scotland “and yet two miles on over the border you can’t get it.”

The drug - the first new arthritis treatment for a decade - is already used in most other European countries, including France and Germany.

It offers another option for patients for whom other treatments have failed or no longer work and is used in combination with a standard anti-inflammatory drug, called methotrexate.Currently many rheumatoid arthritis patients receive methotrexate as a first-line treatment to ease their symptoms. In later years they are offered another class of drugs, called anti-TNFs, together with methotrexate, but even combined the effects of the drugs can wear off.

In combination Roactemra has been found to improve the rates of remission of the illness sixfold in comparison with just methotrexate alone.

The SMC - set up in the aftermath of devolution to make decisions about drugs north of the border - has agreed that the drug can be used for patients suffering from moderate to severe forms of the disease for whom other medications no longer work.

Prof John Isaacs, from Newcastle University, said: “This is fantastic news for people in Scotland who suffer from this disabling, lifelong disease.

“However, it also highlights the disparities in accessing treatments between Scotland and the rest of the UK. “Because Roactemra works in a completely different way to the existing drugs it is likely to be effective in some patients where the other drugs don’t work or have stopped working, providing an extremely important option for these individuals.”

Neil Betteridge, chief executive of Arthritis Care and vice president of the European League against Rheumatism (EULAR), said: "There are a number of treatments for RA currently available but they simply don't work for everyone. "There are people who are most severely affected by this debilitating condition – living in intense pain, unable to work, often struggling even to walk – who have been failed by existing treatments, and it's for them that tocilizumab could provide real hope.” He called on Nice to follow the lead of the SMC and approve the drug for use in England and Wales.

Up to 37,000 patients across Britain would be eligible for the drug.

But local health care trusts do not have to pay for drugs which have not been approved by Nice.

In December Nice took the unusual step of challenging Roche, the drug’s manufacturers, to provide more evidence of that the drug was cost effective.

A final Nice appraisal of the drug is expected later this year. Around 646,000 people in Britain are though to suffer form rheumatoid arthritis, in which their own immune systems start to attack their joints. The condition can be extremely painful and debilitating. Around half of sufferers are too disabled to work within a decade of the disease taking hold. The direct and indirect costs of the disease are estimated at £3.8 billion to £4.75 billion a year in the UK alone.

Nice has previously come under fire for refusing drugs which have been approved by the SMC.

Herceptin, a £21,000-a-year drug for breast cancer, was initially turned down by Nice but available in Scotland, which has its own health budget.

A climb-down, ordered by Patricia Hewitt, the then health secretary, allowed the drug in England and Wales. Patients in Scotland also had access to Tarceva, a lung cancer treatment, which costs about £1,700 a month, two years before the rest of the country. Nice also provoked outcry by turning down Lucentis, a £20,000-a-year treatment available in Scotland for wet age-related macular degeneration, one of the most common causes of blindness, although it later also reversed that decision.

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Why Health Care "Reform" Is Imploding

01/18/2010 11:16 PM |

This is prompted by the  latest posting of one of the "leading" liberal health care "experts", Ezra Klein.  Expert not because he has practiced medicine (he has not), or published anything close to an original piece of research on health care delivery or economics (nothing there either) or worked in health care (no)..  Rather he is an expert by virtue of his position as a blogger he has helped shape liberal opinion and policy that went into the current malformation of a proposal that is causing Democrats to go down in flames. 

Thanks Ezra. 

Part of Klein's contribution to Democrat demise is perpetuating the belief that all people cared about was the total cost of the bill, which he once again argues, is really not so big when you consider say, what it would cost to build the entire fleet of Starships for the Federation.  Well, okay, maybe not that much but here is Klein at his misleading and misinformed best:

"by the standards of the health-care system, it's not that big at all. It goes two-thirds of the way on covering the uninsured. It makes a courageous, but insufficient, start on cost control. This is the beginning, not the end, of reform.

Let's begin by breaking down the numbers. The $900 billion price tag is repeated with the regularity of a rooster's crow. That's a shame, as the number is, somewhat impressively, misleading in both directions.

On the one hand, that $900 billion is stretched over 10 years. But people don't think in 10-year increments. They don't pay taxes once a decade. Put more simply, the bill will cost an average of $90 billion a year.

But that number is meaningless without context. Ninety billion is a lot more than you probably paid for, say, your house. But is it a lot of money in the context of national health-care spending? Not really. In 2008, we spent $2.3 trillion on health care. Ninety billion is about 4 percent of that. In other words, a drop in the bucket."

voices.washingtonpost.com/ezra-klein/

I know that The Economist named Klein "minds of the moment" (there is a joke in that but I'll resist) but isn't there a difference between what we choose to spend on health care and what government will force us to spend?  Put another way,  that $90 billion a year drags along the rest of the spending by forcing people into Medicaid, choose only government approved plans with government approved benefits, paying taxes (not if you are a union member) for higher cost plans that you have no say in shaping which in turn will force you to spend money for premiums, deductibles, etc you may not want to pay or might have to if the services you really want are not covered.  

Here is what Michael Cannon, who is a lot smarter and has done a lot more original research than Klein has said about this $90 billion scam:

"The CBO explains it will not count mandatory premiums as federal revenues if the individual mandate leaves consumers with what the CBO considers a "sufficient" or "meaningful" or "substantial" degree of choice among health plans. That rule is both amorphous and arbitrary. (For example, it presumes that the freedom not to purchase health insurance — which an individual mandate would eliminate — is not "meaningful." Millions of Americans would disagree.) More important, evading that rule doesn't make an individual mandate any less compulsory, or any less costly. It just hides those costs by pushing them off-budget.

In Massachusetts, which has enacted what is essentially the Democrats' health plan, mandatory premiums account for about 60 percent of overall costs, according to the Massachusetts Taxpayers Foundation. On-budget government spending is just 40 percent. By my count, mandatory premiums accounted for a similar share of the Clinton health plan's projected cost.

So while the CBO estimates that the coverage expansions in the House Democrats' legislation would trigger about $1 trillion of new federal spending over ten years, the actual cost of those coverage expansions is more like $2.5 trillion."

www.cato.org/pub_display.php

Actually, that $2.5 trillion over 5 years or so.  Which is $5 trillion over ten years, both which equal $500 billion a year or so.  Not to mean the loss of freedom and the dumb central planning involved to make this all happen.

Regular people -- amateurs -- get this.  Experts like Klein who talk to other experts in DC do not.  Their detachment from what we, the little people, can feel and perceive, formed by either arrogance or Economist-induced self-regard is stunning.  And contributory to the growing sense across this nation that Democrats actually believe that health care is a system established to serve Washington interests instead of a series of human relationships that should sustain our lives and well-being. 

 

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Pharma Giveth, Congress Taketh

01/15/2010 06:39 PM |

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The Desperate Hours

01/15/2010 04:07 PM |

Now that the unions are getting a tax break on their health plans the rest of us will not get, the President is dialing for dollars to cover the cost. He is actually picking up the phone and calling members of Congress to shorten the amount of time before generic companies can try to produce their own version of biotech drugs from 12 years to  8 years and allow a short cut around the FDA’s efforts to come up with an approach that insures that medicines meant to heal don’t maim.

For every 10 percent shaved off the life of patent protection, biotech investment declines by 10 percent. Over the next 15 years, the Obama deal would cut biotech investment, heavily concentrated in the Bay State, by 33 percent.  Every biotech dollar invested has a ripple effect in terms of jobs, spending and investment in related businesses. Cut biotech spending by a third and the impact on economic growth will be magnified in reverse.

Then there is the human element. For cancer an increase in the number of biotech drugs iis associated with an increase in both the one-year and the five-year survival rate for all forms of the illness. For orphan disease, it has meant longer lives for people with lupus, cystic fibrosis, MS, Gaucher’s disease, HIV, etc. Less investment, fewer drugs, more deaths sooner. That’s one way to keep costs down and pay for the union tax break.  

Finally, Obama wants to save a few million by cutting corners on drug safety. Current proposals require genetic companies to demonstrate patient safety by requiring appropriate and stringent clinical trials and testing. This is necessary because biologic drugs are created from living organisms such as proteins and carbohydrates, and are not as simple to replicate as traditional drugs like aspirin and antihistamines. Even changing the size of the molecule of the same protein can turn of biosimilar from avatar of health into an avalanche of deadly side effects. But Obama wants safety to meet budgetary, not scientific standards.
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Ted Med

01/15/2010 01:33 PM |

Having been rebuffed in his own committee on follow-on biologics, Mr. Waxman is trying to roll the President. That’s petty politics and bad public health policy.

Consider what Senator Ted Kennedy had to say on the subject of follow-on biologics in March of 2007:

We are in a remarkable period of discovery in the life sciences. Unprecedented advances are taking place, and patients have already begun to see the benefits of this new era through new wonder drugs that can make the difference between life and death for patients afflicted with serious illnesses.

These miracle medicines, called biologics, are complex molecules whose healing power has been brought to patients by dynamic biotechnology companies. Such drugs were once a rarity in the medical arsenal, but each day seems to bring new hope from new breakthrough biologics.

Now Congress must consider whether to authorize FDA to accept applications for follow-on versions of these path breaking medicines.

The stakes riding on the answer to this question are enormous, both for patients and for our economy, and the interest among our committee colleagues in this question is intense. One of our colleagues, Senator Clinton, has a proposal to allow FDA to approve follow-on biologics. I look forward to hearing her views on this question, and to receiving the testimony of the legislation’s co-sponsor, Senator Schumer.

Our committee should be guided by three basic principles.

First, we must be led by science. Acceptable legislation on follow-on biologics must not pre-judge science, but should enable the FDA to make the best decisions based on the most complete science reasonably available.

Second, protecting patient safety is essential. Congress must make certain that any drug given to patients – whether a conventional drug, an innovative biologic, or a follow-on product – is safe and effective.

Third, innovation must be valued and promoted. Just as it is essential to help patients afford the medicines of today, so too it is vital to provide incentives for the innovations that will bring the medical miracles of tomorrow.

Mr. Waxman should show some respect. And so should the President.

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Phase 0.1

01/14/2010 08:57 AM |

FDA's Endocrine and Metabolic Drugs Advisory Committee unanimously agreed that a retrospective analysis of 23 case studies provided substantial evidence to support approval of Orphan Europe's Carbaglu, but recommended collection of long-term safety data as the drug could be used for years as maintenance therapy.

Did somebody say precedent?

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The Tonight Show ... with Peggy Hamburg

01/13/2010 11:36 AM |

The FDA is launching a new Web site explaining its operations to consumers as part of a broader effort to rebrand itself as a more accessible agency. (For more information, go to www.fda.gov.)

The Web site, “FDA Basics,” features short videos about the agency as well as conversations with FDA leaders.
Must see TV.  Maybe it can hosted by Conan O’Brien.

The website is a good idea.  A positive step in the right direction.  If “the people” don’t know what the FDA does, it’s impossible to build a broader base of support. In that respect, it’s more than just a good idea – it’s a crucial one.
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FDA Commish New Year's List

01/13/2010 09:22 AM |

A lot on the plate in the coming year...

From:   A Message from the Commissioner 
Sent:   Thursday, January 07, 2010 7:12 AM
To:     FDA-Wide
Subject:        A New Year

The beginning of a new year is a good time to take stock of what we have done over the past 12 months and where the next year will take us. Upon my arrival at FDA in May, I found myself distinctly impressed by this agency’s enormous impact, both as a regulator of so much of the American economy and as an organization upon which so many depend for the safe use of a wide array of products critical to their daily lives.

I recently observed to Secretary Sebelius that I have found FDA’s employees to be a wonderfully talented and dedicated group that I believed, if adequately resourced and supported, could solve virtually any problem that comes your way.  The Center directors, ORA, and Commissioner’s staff offices recently shared with me their accomplishments for 2009, and it’s a remarkably impressive list of product reviews, inspections, enforcement activities, rulemaking, outreach to the public and those we regulate, reaction to crises and so many other activities that enable the agency to be an effective public health protector.

All of that was done as a cascade of new challenges were thrust upon us – H1N1 influenza, implementation of the new FDAAA and animal drug legislation, new food contamination and drug registration systems, and an entirely new Center to regulate tobacco for the first time in the nation’s history.  I should also note that lurking out there are new requirements in the health care bill moving through Congress (e.g., “follow on” biologics and restaurant menu labeling).

Of course, we launched a number of new things ourselves – new foreign offices, a safe use initiative for drugs, a new food labeling effort, a reexamination of the process for reviewing medical device 510(k)s, new procedures for emergency response, a new policy with regard to antimicrobial resistance for animal drugs, and a rejuvenation and integration of the food safety program, to name just a few.  New facilities also came on line in 2009, most notably the medical device office and laboratory complex at White Oak and the Bio-Imaging facility at NCTR. 

For my part, I am proud of the new emphasis that Josh Sharfstein and I have placed on ensuring FDA’s reputation as a public health agency, as an organization more transparent to the outside world, and as a regulator intent on its scientific integrity and on enforcing the safety standards we have been charged with implementing. 

All of the things that I have mentioned above will, of course, be a priority for 2010 as well.  But I also intend to dedicate myself to giving you more and better tools to do your jobs.  This will include seeking Administration support to improve our regulatory science, ensuring passage of the food safety legislation now before Congress, seeking new authorities to better regulate imports, and identifying changes in our medical device statute that are needed to ensure that program has 21^st century capabilities.  I also intend to urge the Administration and Congress to complete the long-awaited consolidation of our headquarters facilities at White Oak and College Park.  And, of course, getting you the resources and staffing necessary to be successful will be a constant imperative, despite the demands to reduce Federal spending.

I have gone on long enough, even though I have barely touched upon the hundreds of discreet activities that FDA staff carry out every day. I will close simply by saying that I consider myself privileged to serve as your Commissioner in this great enterprise we are about.  I pledge to you the same dedication that you have shown to the American people.  I am proud to be associated with you and with the Food and Drug Administration, and that I hope the new year is as filled with accomplishment and progress as the old.

With all best wishes for a happy, healthy and productive new year.

Margaret A. Hamburg, M.D.
Commissioner of Food and Drugs

 

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Phase 0

01/12/2010 08:59 AM |

The Pink Sheet reports on a very urgent ethical question:

FDA's Endocrinologic and Metabolic Drugs Advisory Committee on Jan. 13 will consider whether Orphan Europe can use positive results from patient experience with carglumic acid to demonstrate efficacy of the firm's Carbaglu for treating hyperammonemia associated with NAGS deficiency, given the difficulty of conducting a clinical study in the orphan setting.

A controlled clinical trial in this target patient population "cannot be conducted because the disease has an extremely low incidence, it is life-threatening, severely symptomatic, and hyperammonemic decompensation leads to quick deleterious neurological/psychomotor consequences," Orphan Europe maintains in briefing material for the committee meeting.

A deficiency of N-acetyl-glutamate synthase is one of the rarest of the urea cycle disorders, which have an overall occurrence rate of approximately one per 30,000 live births. It results in hyperammonemia - high blood ammonia levels - that can lead to death or neurological impairment.

Instead of conducting a trial, the sponsor submitted a retrospective review of the effect of carglumic acid on both short-term and long-term plasma ammonia levels in 23 patients diagnosed with NAGS deficiency. Carbaglu is the pharmaceutical grade of carglumic acid, which has been used as a chemical grade product by clinicians. Also submitted in support of the NDA were interim data for three patients in an open-label, Phase II clinical trial of three days duration.

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Dallek Distortions

01/11/2010 03:34 PM |

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Gruber trouble

01/11/2010 03:20 PM |

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Anti-Pharma Extremists

01/11/2010 09:39 AM |

Pfizer gives Standford Medical School an unrestricted grant to develop continuing medical education...just as critics have wanted.

What is the response?

Let Arnold Relman and David Rothman (he who receives his dollars from George Soros) render judgment:

Relman:  “But it’s just not a good idea for a profession that says it wants to be independent and trusted, a reliable source of information to the profession and the public about drugs, to take money from the drug company under any conditions.”

Rothman: I will also confess I am surprised Pfizer is doing it,” he added, “and I don’t know how many more times they will give money with no strings attached.” (As opposed to the tight strings attached to everything Soros gives to his sock puppets?) 

So doctors who take unrestricted money for any reason under conditions from any company are inherently corrupt? 

Too bad the NY TImes continues to give these extremists a platform -- without ask them to disclose their funding sources... as if that mattered.

www.nytimes.com/2010/01/11/business/11drug.html
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Howdy Pilgrim

01/11/2010 07:57 AM |

Harvard Pilgrim Health Care Inc. has won a major grant from the Food and Drug Administration to build a system to monitor the safety of drugs and medical devices after they have gone on the market.

Pilgrim will use a five-year, $72 million grant to coordinate the efforts of 28 health care organizations around the country as they design ways to make use of information they already gather, in electronic medical records or claims data, to provide early warning of potential harm.

“The goal is to be able to do active surveillance, to look for signals that might indicate there is a safety problem and then to be able to follow up to determine whether there is a problem or not,’’ said Dr. Richard Platt, who will lead the effort. He is chairman of population medicine at Harvard Medical School and the Harvard Pilgrim Health Care Institute. “This is part of a major shift on FDA’s part from being reactive, waiting for physicians and patients to tell them about problems, rather than to be looking actively for problems.’’

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Strike up the Rand

01/11/2010 07:48 AM |

"We do not support approaches, such as those suggested in the Senate's proposed Independent Payment Advisory Board, that rely too heavily on the Medicare program to achieve cost-containment objectives."  So said AARP CEO Barry Rand in a letter sent to Senate Majority Leader Harry Reid and Speaker of the House Nancy Pelosi.

The provisions in the Senate bill task the 15-member board with reducing excess cost growth by recommending cuts in Part D premium subsidies paid by Medicare. Those recommendations mandate fast-track congressional action, required within two-and-a-half months unless the Senate has a three-fifths vote to repeal the board recommendations or any of the savings targets.

Rand continues, "Congress should not abdicate its role of determining benefits and cost-sharing for Medicare.”

Mr. Rand is right.  One of the most frightening unintended consequences of such an advisory board is that they will make decisions based on cost rather than care.  And it’s an inevitable consequence.  Those who owe their jobs to the American voter must always be held ultimately responsible for government reimbursement decisions. And if you don't think this really makes a difference -- just ask the folks at NICE about Sutent.

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Bridges to Health Reform

01/08/2010 08:27 AM |

A new op-ed by CMPI senior fellow John Bridges (appearing today in the Baltimore Sun):

Make patients' needs a higher priority

The Senate's vision for health care reform - the "Patient Protection and Affordable Care Act" - would create a "Patient-Centered Outcomes Research Institute." This institute would aim to compare the effectiveness of different treatments to "assist patients, clinicians, purchasers, and policy-makers in making informed health decisions." ("Purchasers" refers to public, private and employer-sponsored health insurance.)

As the founding editor of "The Patient - Patient-Centered Outcomes Research" - the first medical journal devoted exclusively to informing the health care system about patients' needs and wants - I have several reservations.

It is unclear how the institute will define, let alone meet, the often-competing interests of patients, clinicians, purchasers and policymakers. While clinicians, purchasers and policymakers have adequate means and resources for advancing their interests, it is questionable whether the patient's voice will be adequately represented in this process. Despite the many patient organizations representing specific diseases, only a few are active in research, and these may be tarnished through funding by pharmaceutical companies. Furthermore, unlike clinicians and purchasers who are bound together by their commercial and professional interests, representing the range of patient perspectives is difficult and expensive.

"Patient-Centered Outcomes Research Institute" sounds like a more politically palatable name for an "Institute for Comparative Effectiveness Research." Like other such agencies internationally, the bill gives the institute the power to determine the "appropriateness of medical treatments." International experience demonstrates that "appropriate" is defined as cost-effective or budget minimizing (although our senators have carefully avoided such terms). Also like its international counterparts, the institute would be placed at arm's reach from government, to ensure lawmakers have plausible deniability with regards to health care rationing.

Finally, similar institutes internationally have been criticized for promoting "one-size-fits-all" medicine by ignoring variations in needs and wants across patient populations. While the institute will consider "variations in patient subpopulations," it is unclear what characteristics will define such subpopulations.

A centralist and paternalistic approach is found throughout bill's description of the institute. Already a number of professional organizations have expressed concern that the institute would control the health care system by controlling the flow of information. Internationally, this occurs explicitly through limitations on the advertising of pharmaceuticals and implicitly by restricting funding of research. While the new institute will have a role in "the dissemination of research findings with respect to the relative health outcomes, clinical effectiveness, and appropriateness of the medical treatments," a truly patient-centered approach would also focus on the patient's perspective.

There is little federally funded research focused on the patient's perspective. Knowing more about what patients think might have resulted in less of an uproar over the recent changes to breast cancer screening recommendations, for example.

It is unclear how the findings of the institute will we implemented. Similar institutes overseas cannot have their decisions challenged in court. In trying to be everything to everybody, the institute will need to make trade-offs that will most likely promote clinician-centered or payer-centered outcomes research - ignoring the disparate needs of patients.

House and Senate negotiators should create a separate institute for the scientific study of the patient's perspective, an "Institute of Patients' Needs and Wants," to conduct and fund real patient-centered outcomes research. Such an institute would not only provide necessary oversight, but more importantly, the input of the patient's perspective and participation in health care decisions, from start to finish.

John F. P. Bridges is an assistant professor in the Department of Health Policy and Research at the Johns Hopkins Bloomberg School of Public Health and a senior fellow at the Center for Medicine in the Public Interest.   Read More & Comment...

Part D Line

01/07/2010 01:07 PM |

From today's Wall Street Journal:

The Lessons of Medicare Part D
By DAVID WESSEL

Four years ago, the U.S. government offered subsidized prescription-drug insurance to 43 million elderly and disabled, the biggest expansion of government-backed health care in decades. Today, the program is working better than many expected. Now academics are drawing lessons that are acutely relevant to heath-care legislation pending in Congress.

Medicare Part D did lead the elderly to use more drugs. (That's unsurprising, but pleases economists because it confirms their predictions that when government subsidizes something, people use more of it.) More important is the conclusion from Nobel laureate Daniel McFadden of the University of California at Berkeley: "Medicare Part D … has achieved its primary political goal of providing near-universal coverage in a viable private market." (Link for paper)

Some early lessons:

Markets do work, but...

In Medicare doctor and hospital insurance, the government generally chooses benefits and sets prices. In Part D, there is no government plan; the typical elderly person has a choice of 40 plans, all sponsored by private insurers whose offerings are supervised by the government. Few elderly pick really lousy plans; the government makes sure no really lousy plans are offered, an important lesson for the "exchanges" at which many Americans would shop for private health insurance under the pending bill. Jonathan Gruber and Jason Abaluck of the Massachusetts Institute of Technology, with data on 2.7 million Part D enrollees, find that 70% could have chosen a lower-cost plan, and the typical enrollee could have saved about 25%. (Link for paper.) Consumers focused too much on premiums, not enough on out-of-pocket spending. It's a reminder that elaborate cost-sharing formulas don't guide consumers well if they're too complicated for consumers to understand.

"Markets definitely work," says John Hsu, a physician-MBA at Harvard Medical School. "However, they don't always work according to original assumptions. It's very important to examine each step very carefully to look for unintended consequences."

Prices don't always do the predictable.

The early fear was that arming the elderly with subsidized drug insurance would increase demand and thus drug prices, especially since Congress barred the government from negotiating drug prices directly. That task was left to the private insurers.

Insurers had strong incentive to bargain hard. Mark Duggan of the University of Maryland and Fiona Scott Morton of the Yale School of Management conclude, "Moving consumers into Medicare Part D plans significantly reduced the per-dose price paid to manufacturers." (Link for paper.) Average price cut: 12%. Why? "An individual consumer typically does not have the knowledge of which drugs are acceptable [cheaper] therapeutic substitutes; the consumer's physician typically has poor knowledge of [drug] prices and any one consumer is too small...to negotiate with a pharmaceutical company."

That strengthens the case for harnessing private insurers to restrain health costs, but doesn't mean drug prices couldn't be lower still. The Medicaid program for the poor and the Veterans Administration get even lower drug prices. That matters particularly to the elderly poor who may pay more for drugs because they were switched to Medicare Part D from Medicaid.

One countervailing force: an uptick in drug-company ads aimed at elderly consumers. In unpublished work presented at the American Economic Association this week, Darius Lakdawalla of the University of Southern California compared direct-to-consumer ad spending on drugs with no Medicare use with ad spending on drugs typically used by Medicare patients. After Part D kicked in, spending on the latter rose 60% above spending on drugs with no Medicare users.

Programs never cost what the experts predict.

Economy-wide growth in drug spending slowed surprisingly sharply. "This sharp deceleration in growth rates was unexpected by us, CBO, and most industry experts," CMS chief actuary Richard Foster said in an email to Slate's Tim Noah. "It occurred largely as a result of effective efforts by health-insurance plans to induce people to use generic equivalents and a slowdown in the number of new "blockbuster" drugs coming into the market." Projections are always wrong, he notes, but still essential to wise policy making.

Health care is never simple, though. Higher drug spending pulled down hospitalization of the elderly for diseases treatable by medicine, such as diabetes. "It did make them healthier and keep them out of the hospital," Michael Chernew of Harvard Medical School said at an AEA presentation.

Of course, Congress is often happy to spend those savings and more. Douglas Holtz-Eakin, CBO chief when the drug bill passed, notes that Congress now is contemplating filling "the doughnut hole" -- out-of-pocket spending on drugs that wasn't covered by the original plan. "Every entitlement program gets richer over time," he says.

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And that's Terry Vermillion on Line 2

01/06/2010 03:20 PM |

FDA Warns Public of Continued Extortion Scam by FDA Impersonators

The U.S. Food and Drug Administration is warning the public about criminals posing as FDA special agents and other law enforcement personnel as part of an international extortion scam.

The criminals call the victims -- who in most cases previously purchased drugs over the Internet or via "telepharmacies" -- and identify themselves as FDA special agents or other law enforcement officials. The criminals inform the victims that purchasing drugs over the Internet or the telephone is illegal, and that law enforcement action will be pursued unless a fine or fee ranging from $100 to $250,000 is paid. Victims often also have fraudulent transactions placed against their credit cards.

The criminals always request the money be sent by wire transfer to a designated location, usually in the Dominican Republic. If victims refuse to send money, they are often threatened with a search of their property, arrest, deportation, physical harm, and or incarceration.

"Impersonating an FDA official is a violation of federal law," said Michael Chappell, the FDA's acting associate commissioner for regulatory affairs. "The public should note that no FDA official will ever contact a consumer by phone demanding money or any other form of payment.”

FDA special agents and other law enforcement officials are not authorized to impose or collect criminal fines. Only a court can take such action, with fines payable to the U.S. Treasury.

Anyone receiving a telephone call from a person purporting to be an FDA or other law enforcement official who is seeking money to settle a law enforcement action for the illegal purchase of drugs over the Internet should refuse the demand and call the FDA’s Office of Criminal Investigations Metro Washington Field Office at (800) 521-5783 to report the crime.

In addition to posing as FDA officials, criminals have posed as special agents of the DEA, FBI, U.S. Secret Service, U.S. Customs Service, as well as U.S. and Dominican prosecutors and judges. In response, the FDA, in conjunction with various federal, state, and local agencies, is actively pursing criminal charges.

The FDA also reminds consumers to use caution when purchasing prescription drugs over the telephone or the Internet. In addition to the increased risk of purchasing unsafe and ineffective drugs from Web sites operating outside the law, there is the danger that personal data can be compromised. For more on FDA’s concerns about unlawful drug sales on the Internet, see http://www.fda.gov/ForConsumers/ProtectYourself/default.htm.

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