Off-Label Intramural

05/31/2016 07:22 AM | Peter Pitts

Lawmakers accuse HHS of delaying FDA guidelines for off-label marketing
By Ed Silverman @Pharmalot

Two high-ranking House Republicans have accused the US Department of Health and Human Services of delaying eagerly awaited guidelines for off-label marketing of drugs and devices. And the charge comes amid growing frustration among companies that the US Food and Drug Administration is squelching their free speech-rights.

In a letter sent Thursday to HHS Secretary Sylvia Burwell, the lawmakers wrote they are “perplexed” the FDA has not yet issued new guidelines covering off-label marketing or held a promised meeting. And they worry that court rulings will, instead, become the basis for determining policy. Then they claimed the delay is the result of disagreement between HHS and FDA leadership.

“It is our understanding that HHS has not allowed FDA to issue its completed draft guidance addressing the scope of permissible ‘scientific exchange,’” of useful information about drugs and devices, wrote Fred Upton, a Republican from Michigan and Joe Pitts, a Republican from Pennsylvania. They also attached a draft bill that would allow companies to market products for unapproved uses.

Drug and device makers have increasingly argued that current regulations prevent them from distributing important data to physicians about unapproved, off-label uses of their products. Doctors can prescribe medicines for any purpose, which is called off-label use, but companies can only promote medicines for uses approved by the FDA.

For its part, the FDA maintains public health can be compromised if marketing claims are not backed up by solid evidence. The agency, however, promised to issue new guidelines after a federal appeals court overturned a criminal conviction of a sales rep for off-label promotion. The court ruled his speech was protected, since the information was truthful and not misleading. The FDA also agreed to holding a meeting on the topic, but that has also been delayed.

The issue accelerated last year when Amarin filed a lawsuit to argue its right to distribute information about unapproved uses of a drug is protected by the First Amendment. Amarin sought to give doctors clinical trial data not directly pertaining to approved uses of a pill. In March, the FDA settled the case by allowing Amarin to proceed if information given doctors is truthful and not misleading.

Only a month before that, a federal court jury in Texas decided that the medical device maker Vascular Solutions and its president were not guilty of off-label promotion since the information the company gave to doctors about a laser therapy device was deemed truthful and not misleading. These developments underscored industry anxiety over the delay in issuing a guidance.

We asked the HHS for comment and will update you accordingly. In a speech earlier this month, FDA Commissioner Dr. Robert Califf said the agency is “reviewing our policies,” but did not provide a timeline for releasing the guidance. An FDA spokeswoman said the agency will review the letter, but did not have any further information on the release of the guidance.

One source, who speaks regularly with both agencies, told us this: “HHS leadership doesn’t trust industry to do the right thing … HHS leadership believes off-label speech will lead to more aggressive marketing of new products that will raise costs to [Medicare and Medicaid]. They are allowing both their prejudices [industry as the bad guy] and priorities [keeping spending down] to get in the way … The White House shares these fears, and as a result the FDA’s desire to issue guidance is stymied.”

One Washington insider cautioned that the may lose the initiative if the agency does not release a guidance.

“After the recent court decisions, the FDA realizes that it must either lead the effort to disseminate off-label information that is truthful, accurate, and non-misleading, or lose its ability to direct the speed, direction, and quality of these communications,” said Peter Pitts, a former FDA associate commissioner, who heads the Center for Medicine in the Public Interest, a think tank that is funded, in part, by industry. “Things are moving fast and unless the FDA acts, we’ll have federal judges making these decisions for us. That’s not good for the FDA or the public health.”

As for the draft legislation, a spokeswoman for the House Committee on Energy and Commerce wrote us that the bill may not be introduced. She noted that the language was discussed with the FDA during conversations related to the 21st Century Cures Act, but was ultimately not included in the bill.
One consumer advocate, meanwhile, criticized the draft.

“The threat to patient health posed by the draft bill attached to their letter is tremendous,” said Michael Carome, who heads Public Citizen Health Research Group. “FDA approval of a drug for one use tells us nothing about whether the drug is safe and effective for another use. Yet this bill would allow drug manufacturers to advertise and promote drugs and devices, both to doctors and directly to consumers, for uses never approved by the FDA.”  Read More & Comment...

After the ICER Storm

05/27/2016 03:27 PM |

Here are the takeaways from the ICER meeting on” Treatment Options for Relapsed or Refractory Multiple Myeloma”.
 
First, it is obvious that the Midwest Comparative Effectiveness Advisory Council is nothing but a cheap coat of paint used to poorly cover-up the fact that that, from start to finish, ICER and all the so-called advisory councils (whose participants were added a week before the meeting) are run directly by Steve Pearson, the President of ICER who wants to reduce drug spending to pay for roads and bridges.  Either he dreams of being Rationer in Chief or public works czar, maybe both.
 
The voting members of the panel had as much experience in treating myeloma as they did in translating Beowulf into Klingon.   Yet they voted.  They tried to do so with care.  But it became evident early that the panel knew it was clueless and simply deferred to the one panel member who was an expert on myeloma.  They followed, almost blindly, because informed discussion was impossible.
 
Indeed, after sitting through the meeting (in the comfort of my bedroom via live stream) I came away surprised at how unsophisticated and sloppy the ICER presentations were.  Then again, I don’t think ICER was quite ready for how many patient groups and companies were ready to challenge them.   You could sense the discomfort and the confusion of being held accountable.
 
Second, Steve Pearson, made a strategic retreat by NOT voting on the ‘value’ of new myeloma drugs to the health care system.  Pearson knew ICER would be pummeled for forcing a vote that essentially validated his long held view that most new drugs for seriously ill people with rare diseases will ‘siphon’ away resources that could be used to pay for roads and bridges.
 
Rather Pearson insisted that such meetings were just discusson groups and not intended to guide policy.  That is untrue.  ICER studies and votes have been adopted in making coverage decisions for Hep C, cholesterol and heart failure medicines.   Perhaps Pearson forgot about this statement from Express Scripts:
 
“The Institute for Clinical and Economic Review (ICER) has announced that, through a public and transparent review process, it will establish a value-based price benchmark for the PCSK9 inhibitors later this year. We plan to reference the findings from this independent, trusted organization in our subsequent negotiations with manufacturers to ensure that patients get to access this innovative class of drugs at a price the healthcare system can afford. “
 
 
Third, perhaps it was the setting but no one – from the patient community or the panel --- pointed out that drugs for cancer are very small part of health care spending or that more people living longer means more taxes and premium dollars.  It is crucial at the outset of every pricing discussion to establish a context based on facts. 
 
 It would have been useful if that point was made when Ryan Barker of the Missouri Foundation on Health said that he couldn’t vote for using new myeloma drugs because it would take money away from other patients.  Apparently, letting people die is a better way to generate money than reducing hospitalizations and increasing productivity.  
 
Barker told the group that he teachers medical ethics.  Note to Barker: the litmus test of an ethic is whether you apply it to yourself.  So if it’s your kids dying of myeloma, I expect you to reject any myeloma drug that doesn’t have the evidence you needed to vote yes.  That’s my gut reaction to Barker. 
 
Then again, after sitting through the ICER meeting, it became clear that Pearson aside, there is little malice, just a lack of understanding and opportunities to discuss tangible solutions.  As it stands now, ICER is just the blindly ambitious leading the blind.
 
I believe that it’s time to spend less time picking apart ICER and more time working on ways to create and apply the kind of knowledge needed to reward innovation and patient-defined outcomes. 
 
Is anybody else interested in joining me?
 
 
 
 
 
 
 
 
 
   Read More & Comment...

Truth in Biosimilar Labeling

05/24/2016 04:22 PM | Peter Pitts

From today’s edition of The Hill  …

Truth in biosimilar labeling
By Peter J. Pitts

Recently the FDA issued draft guidance on labeling for biosimilar products. In two words, no surprises – which for some is better news than for others.

The top of Page 8 will get a lot of attention:

FDA recommends that biosimilar product labeling incorporate relevant data and information from the reference product labeling, with appropriate product-specific modifications. The relevant data and information from the reference product labeling that should be incorporated into the biosimilar product labeling will depend on whether the applicant is seeking approval for all conditions of use (e.g., indication(s), dosing regimen(s)) or fewer than all conditions of use of the reference product for the biosimilar product.

And further:

In sections of the biosimilar product labeling that are based on the reference product labeling, it is anticipated that the text will be similar. Text based on the reference product labeling need not be identical and should reflect currently available information necessary for the safe and effective use of the biosimilar product. Certain differences between the biosimilar and reference product labeling may be appropriate. For example, biosimilar product labeling conforming to PLR and/or PLLR may differ from reference product labeling because the reference product labeling may not be required to conform to those requirements at the time of licensure of the biosimilar product. In addition, biosimilar product labeling may include information specific to the biosimilar product necessary to inform safe and effective use of the product, which could include differences such as administration, preparation, storage, or safety information that do not otherwise preclude a demonstration of biosimilarity.

To “inform safe and effective use.” Sounds good on paper – but what does it mean? Always? Sometimes? What are the parameters? If there’s information available, why not share it all the time? Or not at all? Who’s to judge? Can we rely on regulatory predictability – and this early in the biosimilar experience? Isn't more information better?

Of course, in order to maintain maximum regulatory, um, flexibility --

FDA acknowledges that there will be variations on the general concepts outlined in this section because the approach to product identification will depend on the specific statements.

(Note – author highlights, not FDA’s.)
 
An update article in Modern Healthcare makes an interesting point, “Federal regulators are likely trying to simplify physicians' understanding of the products' efficacy and safety. By definition, a biosimilar product has no clinically meaningful difference in terms of safety, purity and potency.”

If what practicing physicians understand about biosimilars is anything akin to the knowledge scale of the FDA’s Arthritis Advisory Committee -- as demonstrated during the meeting that considered the biologics license application for a proposed biosimilar to Remicade (infliximab) – then the agency’s attempt at “simplification” may result in some very serious unintended consequences. From the very beginning of the adcomm, it was clear the expert members of the committee didn’t understand what biosimilars really are, nor the pathway the agency uses to review them. Not good.

Per being upfront that the product is a biosimilar, the agency is unambiguous:

FDA recommends inclusion of a statement, on the line immediately beneath the initial U.S. approval date in Highlights, that the product is biosimilar to the reference product.

Although the FDA notes that the labeling does not need to be identical to information based on the reference product, it’s a pretty safe bet that manufacturers of biologics will likely take issue with competitors using their data for a product that is not exactly the same.
But from a straightforward public health standpoint, why omit truthful and accurate information from the information available to physicians and patients?

Shouldn’t labeling transparency be a key tenet in the Era of Biosimilars?  Read More & Comment...

Building EvGen

05/16/2016 08:30 AM | Peter Pitts

What We Mean When We Talk About EvGen Part II: Building Out a National System for Evidence Generation

By: Rachel E. Sherman, M.D., M.P.H., and Robert M. Califf, M.D.

In an earlier FDA Voice blog post, we discussed a pair of concepts – interoperability and connectivity – that are essential prerequisites for the creation of a successful national system for evidence generation (or “EvGen”). In this post, we take a look at how we would apply these constructs as we go about building such a system.

Building EvGen

Creating knowledge requires the application of proven analytical methods and techniques to biomedical data in order to produce reliable conclusions. Until recently, such analysis was done by experts operating in centers that typically restricted access to data. This “walled garden” approach evolved for several reasons: the imperative to protect the privacy and confidentiality of sensitive medical data; concern about the negative consequences that could arise from inappropriate, biased, or incompetent analysis; and, the tendency to see data as a competitive asset. Regardless of the specific reason, the result has been the same: widespread and systemic barriers to data sharing.

If we are to reverse these tendencies and foster a new approach to creating evidence of the kind envisioned for EvGen, we must bear in mind several critical principles:

There must be a common approach to how data is presented, reported and analyzed and strict methods for ensuring patient privacy and data security.
Rules of engagement must be transparent and developed through a process that builds consensus across the relevant ecosystem and its stakeholders.
To ensure support across a diverse ecosystem that often includes competing priorities and incentives, the system’s output must be intended for the public good and be readily accessible to all stakeholders.What Would EvGen Look Like in Practice?

What would a robust national platform for evidence generation look like? It may be helpful to envision EvGen as an umbrella for all activities that help inform all stakeholders about making treatment decisions.

The task of evaluating drugs, biologics, or devices encompasses different data needs and methods. However, all share a common attribute: the characterization of individuals and populations and their associated clinical outcomes after they have undergone diagnostic or prognostic testing or been exposed to a therapeutic intervention.

Moreover, when medical practice itself is part of the evaluation, characterization of the organization and function of delivery systems is critical. In other words, the kinds of evidence needed to evaluate medical products for safety and effectiveness and the kinds of evidence needed to guide medical practice overlap substantially.

Over the last decade, there has been enormous progress in the area of “secondary use,” in which data collected for one purpose (for instance, as part of routine clinical care) can be reused for another (such as research, safety monitoring, or quality improvement).

The Sentinel Initiative, launched in response to a Congressional mandate to develop an active postmarket risk identification and analysis system, is one example. Modeled after successful programs such as the Centers for Disease Control and Prevention’s Vaccine Safety Datalink, Sentinel allows FDA to conduct safety surveillance by actively querying diverse data sources, primarily administrative and insurance claims databases but also data from electronic health record (EHR) systems, to evaluate possible medical product safety issues quickly and securely.

Another example, the National Patient-Centered Clinical Research Network (PCORnet), is a national system that includes many of the attributes needed for EvGen. PCORnet includes participation from government, industry, academia, and patients and their advocates. Whereas FDA’s Sentinel system is built primarily on claims data repurposed for safety surveillance, PCORnet is designed to leverage EHR data in support of pragmatic clinical research.

The NIH’s Health Care Systems Research Collaboratory has demonstrated through its Distributed Research Network that the concept of secondary data use can be extended into the realm of prospective pragmatic interventional trials. The NIH Collaboratory program, which includes many of the same health care systems involved in Sentinel and PCORnet, has 10 active trials underway.

In addition, the Reagan-Udall Foundation Innovation in Medical Evidence Development and Surveillance (IMEDS) Evaluation Program is exploring governance mechanisms to ensure that private-sector entities, notably regulated industry, can collaborate with Sentinel data partners to sponsor safety queries about marketed medical products. Such measures have the potential to expand the involvement of private-sector partners beyond the arena of methodology, further helping to ensure that Sentinel continues its expansion into a national resource.

Similarly, efforts are underway to establish a National Device Evaluation System (NDES). As currently envisioned, the NDES would be established through strategic alliances and shared governance. The system would build upon and leverage information from electronic real-world data sources, such as data gathered through routine clinical practice in device registries, claims data, and EHRs, with linkages activated among specific data sources as appropriate to address specific questions.

As substantial work already is being done in all of these areas, valuable experience is being gained. The next step is to ensure that these pioneering efforts coalesce into a true national resource. More on that in future postings.

Rachel E. Sherman, M.D., M.P.H., is FDA’s Associate Deputy Commissioner for Medical Products and Tobacco
Robert M. Califf, M.D., is Commissioner of the U.S. Food and Drug Administration
   Read More & Comment...

ICER (The Institute for Constantly Extracting Rebates)

05/13/2016 02:30 PM |

Yesterday Sara Edmond, the chief operating officer of the Institute for Clinical and Economic Review and I danced around whether ICER is really patient-centered as she claimed, or rebate-centered as I did. 

Ms. Edmond was a panelist at an  excellent Financial Times sponsored  US Healthcare Life Sciences Summit yesterday.     https://live.ft.com/Events/2016/FT-US-Healthcare-Life-Sciences-Summit  She was joined by Peter Bach, Director, Center for Health Policy and Outcomes, Memorial Sloan Kettering Cancer Center Jonathan Emms, Senior Vice President, Global Health and Value, Pfizer Jeff Myers, President and CEO, Medicaid Health Plans of America and Leonard Schleifer, President and CEO, Regeneron.

Praluent, the drug targeting people with untreatable high cholesterol was (along with Amgen’s Repatha) was considered low value by ICER and claimed that it should only be given to 15 percent of all patients who could benefit and at 80 percent of the list price.  

As a Reuters article reports, Dr. Schleifer blasted ICER as unscientific:

"They did all the calculations and they said it's X, which is ok. I could have lived with that. But ... they said society can't afford X, so we are going to say it's one-third X," Schleifer said during a panel discussion.
"They had value-based pricing, but they just decided that well we can't afford it. That wasn't scientific. There was no intellectual honesty there."

ICER Chief Operating Officer Sarah Emond, on a panel with Schleifer, countered that budget impact is part of the equation.
"You're attacking the science of an independent non-profit whose entire mission is tied to opening the black box of pricing," she said.

Which lead me to challenge Edmond from my seat in the audience about ICER’s so called independence. 

I said:  “ICER is not independent, it is largely funded and overseen by PBMs and insurers.”

Edmond responded that most the money came from the Arnold Foundation but I pointed out that the Arnold foundation grant is a one time thing.  

I then said that ICER’s value metric reflects the PBM and insurer interest and ignores patient value.  Further, the low QALY by default becomes a price control or price cap that doesn’t make drugs affordable or available.  Instead, the lower price only maximizes rebates that don't go to patients. More important, for all her talk about opening a black box I noted that ICER never mentions that PBMs run the $115 billion rebate racket.  

She said that since ICER doesn't have rebate data they have to use list price.

People laughed and Schleifer asked:  You estimate everything else, why not rebates? 

Finally I reiterated that under the ICER framework, not only would drugs for HIV, cancer, etc. be rejected but that next generation medicines would not be developed.    She responded, if we pay for Hep C drugs then we will have to lay off teachers and close schools." 

That drew another laugh.  

Edmond claims that ICER "uses science, we use math."  But she was unable to rebut the claim that the math supports the kind of creative accounting that reduces drug prices and maintain PBM and insurer profit margins. 

ICER's self anointed claim of being a trusted and independent organization was debunked.  Indeed, the other FT summit panelists talked about plans, providers and drug companies sustaining innovation and generating value while realizing that in doing so some ‘stakeholders’ – hospitals and PBMs – would go the way of Blockbuster video.   

Maximizing PBM and insurer rebate revenue is a self-serving enterprise that is sustained by increasing the spread between list prices and acquisition cost.   ICER was created and is funded by groups that profit from this enterprise to validate a QALY for that financial goal.  

In its current form ICER stands for the Institute for Constantly Extracting Rebates.

Now the black box is opened.   Read More & Comment...

The Urgency of the TPP

05/12/2016 12:51 PM | Peter Pitts

When it comes to global trade, there is no value to living in the past. We no longer trade in barter or beads. The Trans-Pacific Partnership (TPP) acknowledges that we live in a global village – and innovation is an essential commodity. Why are some people finding this so surprising? 

The evolution of the TPP has been long and arduous – but the basic premise has never changed. In order for global trade to flourish in an equitable manner, there have to be rules. Minus the rule of law, chaos ensues and we find ourselves in a survival of the fittest situation without fairness, predictability, or incentives for innovation. In a world without rules, ambiguity trumps investment and risk outweighs rewards.

One of the more important aspects of the TPP is intellectual property (IP) protection for biopharmaceutical innovation. This is of particular importance to the United States, where the U.S. biopharmaceutical research sector leads the world in the development of new medicines with about 4,000 in development or FDA review in the U.S. and more than 7,000 in development worldwide. This sector generates high-quality jobs and powers economic output and exports for the U.S. economy, serving as the foundation upon which one of the U.S.’ most dynamic innovation and business ecosystems is built. 

Read our new report here.
   Read More & Comment...

BILLIONS: Is ICER Enabling Illegal PBM Rip-off Racket?

05/11/2016 05:44 PM |

 If you give someone the tools they use to commit a crime, are you also responsible? 

Consider the following news item from Reuters about pharmacy benefit managers and their rebate contracts with drug companies: 

U.S. probes contracts between drugmakers, pharmacy benefit managers
 
“The U.S. Attorney's Office for the Southern District of New York is investigating contracts between drugmakers and companies that manage prescription benefits, according to regulatory filings… When drugs are knocked off their formularies, patients may have to pay full price for them. PBMs often keep or dump a product depending on whether they can obtain favorable pricing.”
 
As I have noted PBMs get and distribute about $110 BILLION in rebates each year.  That’s a trillion over a decade.  ICER plays, or seeks to play a role in setting prices and determining what products PBMs choose and insurers pay for that is central to enlarging and maximizing rebates.   And the PBMs are working closely with ICER to develop the price and access parameters of the contracts the  U.S. Attorney for the Southern District of New York is investigating:
 
“ICER’s new program will make a huge difference by providing what is sorely needed: an independent, trusted source of information about new drugs,” stated Steve Miller, MD, Chief Medical Officer of Express Scripts, the nation’s largest pharmacy benefits manager. “I believe many payers and policy makers will find this information of critical importance as they evaluate the new drugs, and we look forward to using it to help us improve the ability of patients to get access to new, innovative drugs at a price the system can afford.”
 
PBMs are also looking to ICER’s Steve Pearson to find reasons to pay less for cancer drugs depending on their indication. As a recent article noted: “ Express Scripts is using data from ICER, as well as the DrugAbacus, to inform its indication-based pilot.”
 
As I have noted before, indication pricing, based on average response and on a QALY measure reflecting PBM profit motives, can endanger patients and discourage companies from investing in treatments for the most difficult to treat tumors.  More generally, first in class or first ever drugs to treat the most severe conditions -- particularly rare diseases --  are likely to show modest benefit on average.  Such medicines will never meet ICER's devalued QALY measure. 
 
The most recent example is ICER has already determined that most new multiple myeloma drugs approved to treat patients whose disease has returned are NOT cost effective, even at 90 percent of the list price of the drug.
 
People with myeloma will bear moral, economic and clinical consequences that ICER ignores and the media barely mentions.   So two days before ICER meets to approve the report’s (foregone) conclusions I will be releasing a white paper that measures these essential values.
 
One important point to consider:  ICER recommendations would lead to drug companies forking over billions in rebates in exchange for putting these drugs on their formulary.   It does NOT mean that patients will get access.   It does mean that ICER is enabling the rebate ripoff scheme that the US attorney is investigating.  It may not be cutting the deals but ICER is supplying the PBMs the justification for the rebate enterprise.   


 
 
 
 
 
 
   Read More & Comment...

Peter Bach Values PBM Profits Over Patient's

05/11/2016 05:17 PM |

The American Journal of Managed Care ran a Q&A with Express Scripts and ICER consultant Peter Bach about his " DrugAbacus, the importance of using value frameworks, and using the European market as a model to recalibrate the healthcare system in the United States.

Bach likes to claim that he trying to reduce the mismatch between value and price.   That is a presumption without much basis in fact and is largely shaped by his Malthusian definition of value.   
 
Let's once again prove that Bach has an ideological axe to grind that has nothing to do with reality.  

In his interview, Bach claims that "it’s impossible to convince yourself that we are getting any incremental value, period, let alone any incremental value of the excess spending. If we compare ourselves with other countries, there does not seem to be any rationale, except that we simply spend more for all units of healthcare"  

I will get to his inaccurate assertion about other countries in a bit.  But first, let's look at his claim about incrementalism, one he has been repeating for several years.  Today and yesterday, Bach has ignored how cancer survivorship and life expectancy steadily increased over the past 20 years.   More recently, new drugs for lung cancer have doubled response rates and increased survival by 45 percent.  The total drug cost per patient (which includes the part of the price going to PBM rebates, etc.) is estimated to be between $36000-98000.   

He may believe that the  additional increment of average survival (which ignores genomic variation) is not worth spending money on.  But that ignores the fact that treatments are targeted to smaller populations that have fewer options than previous generations.  And he decidely believes that being able to live long enough to benefit from future medicines is a waste of time and money.

Bach knows better.  After all, one of his co-authors in the paper he cites in his NEJM oral hallucination about new drugs not adding more survival despite higher prices, makes that very point in another study: " In the absence of significant pricing and total oncology outlay flexibility by payers, our analysis suggests that private sector investment in small oncology segments, and in stratified medicine generally, may not prove economically sustainable, thus endangering the translation of scientific advances into bedside medicines. Beyond increasing reimbursement, decreasing development cycle time and costs, or both, would most directly improve the economic incentives facing developers. By contrast, extending exclusivity periods, or initiating advance market commitments and awarding prizes would likely have less impact and involve greater implementation challenges." (Trusheim, Berndt "Economics of Stratified Medicine" Personalized Medicine (2012) 9(4), 413–427)  
 
2.  Bach's main point: "The reality is that the drivers of healthcare spending in the US are unit price, not volume."
 To prove his claim Bach asserts: So, if we want to manage healthcare spending, you can make the argument that the excess price above that, which is being paid ambiently in European countries, is actually wasted dollars. It does not make the pill any better by paying 4 times as much for it."

That is untrue on two levels with respect to drugs. 
 
In developed markets, most growth is from new brands and increased volume, not price.  As the chart (from the IHI Oncology Trend Report: 2015) 
 

 
The IHI report notes: "Oncology drug spending has risen slightly as a percentage of total drug spending over the past five
years in all regions, most notably in the EU5 countries where oncology now represents 14.7% of total
drug spending, up from 13.3% in 2010, while the U.S. has seen oncology increase more modestly from
10.7% to 11.3% of total drug spending over the same period."


Indeed, the US rate of spending was lower compared to Europe even though  US adopts new medicines more quickly than Europe and other developed countries.  
 
 
 
 Yet the share of oncology of total drug spend is lower and increased more slowly in the US.
 
  
The IHI report estimates total spending on cancer drugs in the US is $42 billion.   Forty eight percent of that spend is for targeted therapies ($20 billion)   Total drug spending was $425 billion (without rebates) so new therapies are about 4.7 percent or that amount, which is unchanged since 2010.    Cancer drugs as a percent of total health care spending remains at about 1 percent.    

But Bach claims cancer drugs cost four times as much here than in Europe.  
 
As an aside, Bach’s claim that drugs are 6 times more expensive in the US than in Europe is an absurdity.   I can find a drug on the UK NHS formulary that has been subject to price concessions and price controls for a decade and compare it retail price here.  But that ignores the fact that in most cases the US is using generic drugs that are less expensive than the brand drug Bach has selected.   And with respect to cancer drugs the acquisition price of new products are about the same.   For instance, the retail price of a 50ml vial of Keytruda in the US is about $2200.   In the UK it is $1900.   A year supply of 40 mg crestor is (US dollars) is $4300 and the retail price in the US is  $2280.   A year’s supply of Januvia in the UK is 3326 pounds or $4800 while the retail price in the US is $4552. 
 
 
Finally, he glosses over the inequities of applying a QALY to a class of drugs or indication without regard to genomic variation or the severity  of the tumor being treated.  That's because he has a vested interest in using QALY to devalue new medicines which in turn allows the PBMs and insurance companies he consults for to rake in billions more in rebates.  And this devaluation will also hurt and even cause cancer patients to die. 
 
As I noted in a previous blog reviewing another work of fiction by Bach, "In an article published last year in the Journal of the American Medical Association, he suggested that in an indication-specific arrangement, the monthly price for Eli Lilly & Co.’s cancer drug Erbitux (cetuximab) would plummet from $10,320 a patient to about $470 a patient for its least effective use, treating recurrent or metastatic head and neck cancer. The drug also is used to treat locally advanced head and neck cancer, as well as colorectal cancer."
 
 Bach claims that the use of Erbitux for head and neck cancer is a "least effective use".  Let's set side the curious math used to arrive at the $470 figure.  It is more important to note that Bach ignores not only individual differences in response but the impact of Erbitux relative to existing need and treatment protocols.     Bach uses an average 2.3  months more of survival as his benchmark.   
Here's what we know about pre-Erbitux treatment of recurrent, metastatic squamous cell carcinoma of the head and neck (SCCHN):
 
"None of the trials performed in the past, even those with a reasonable sample size, have shown that aggressive platinum-based combination chemotherapy leads to survival benefit when compared to single agent methotrexate, cisplatin or 5-fluorouracil.
 
What difference does Erbitux makes?  
 
After decades without real progress, a recent European randomized trial showed that adding cetuximab, the first clinically available EGFR-directed monoclonal antibody, to a standard chemotherapy regimen (platinum/5-fluorouracil) leads to an important survival benefit and this, with support of an additional smaller study in the US, has changed practice."  J. B. Vermorken and P. Specenier Optimal treatment for recurrent/metastatic head and neck cancer. Ann Oncol (2010) 21 (suppl 7): vii252-vii261 doi:10.1093/annonc/mdq453
 
Hence, the Bach pricing approach would whittle away payment for the hardest to treat cancers for patients that have had no real advances in care for decades.  Maybe Bach supports paying doctors less for people who are the farthest gone because the relative health gains are well, not worth it??

Bach never comes clean about who benefits from the discounts he proposes.  In the US, it's the PBMs and insurers.  Currently, these special interests rake in about $4-8 billion in rebates on targeted oncology drugs.   Meanwhile patients are forced to use drugs that generate the most rebates and have to pay a large portion of the retail drug cost on top of everything.  

I guess that's linking prices to one set of interests -- PBMs and insurers -- that Bach values more than what is best for patients.    Read More & Comment...

Purple Reign

05/11/2016 06:57 AM | Peter Pitts

Much ado about an article in Morning Consult by Ronald T. Piervincenzi (Chief Executive Officer of the United States Pharmacopeia) and Thomas E. Menighan,  Executive Vice President & Chief Executive Officer of the American Pharmacists Association).

According to their commentary, Legislation Threatens Patient Confidence in Biologics, Slows Biosimilars, legislative language in the Senate’s FDA and NIH Workforce Authorities Modernization Act would impede “the one issue uniting policymakers” -- the need to improve our system for getting low-cost quality-assured therapies to patients quickly.” How? “… by exempting biologic medicines – including biosimilars, insulin, blood thinners, cancer treatments and other drugs – from having to comply with public standards for quality.”

That’s a pretty strong statement and a lot of people should (rightly) take offense. But it raises an important issue – why the vitriol? 

It’s a complicated issue with many moving parts, all of them worth serious debate. For those in on the issue, the under-current renews the continuing tension between USP and FDA on many matters relative to biosimilars.

It’s important that these two institutions work together in many places and understand each other’s individual efforts -- not the least of which is the continuing evolution of the FDA’s new Purple Book.

The “Purple Book” lists biological products, including any biosimilar and interchangeable biological products licensed by FDA under the Public Health Service Act (the PHS Act). The lists include the date a biological product was licensed under 351(a) of the PHS Act and whether FDA evaluated the biological product for reference product exclusivity under section 351(k)(7) of the PHS Act.

The Purple Book will also enable a user to see whether a biological product licensed under section 351(k) of the PHS Act has been determined by FDA to be biosimilar to or interchangeable with a reference biological product (an already-licensed FDA biological product). Biosimilar and interchangeable biological products licensed under section 351(k) of the PHS Act will be listed under the reference product to which biosimilarity or interchangeability was demonstrated.

USP and FDA both have important roles to play. It’s a very small sandbox with very large public health implications.  Read More & Comment...

Medicare's Part B Experiment With Patient Lives

05/06/2016 04:21 PM |

Following the advice of Peter Bach, who holds the Express Scripts Chair for Rebate-Driven Outcomes Policy at Memorial Sloan Kettering, the Center for Medicare and Medicaid Services (CMS) has proposed paying cancer doctors less for administering the most expensive cancer drugs covered  under Medicare part B.  A lot of people -- including the oncologists themselves --have been complaining about the cut.  But nobody has talked about the most unethical part of the experiment:  As Drug Channel's Adam Fein explains:

"CMS wants to reduce reimbursement for buy-and-bill drugs—but for only half of the country's providers. The other half will retain current reimbursement levels. After five years, CMS will see what happened. .."

As only Adam has pointed out this is an unprecedented experiment on patients.   

Did anyone ask Medicare consumers if they wanted to participate?  Did CMS offer to pay moving costs to people who want to be in the control arm of this experiment?   

Did anyone ask if this was even ethical?  Here's what the NIH Office of Human Research Protection guidance on informed consent requires.  You tell me if the Medicare Part B experiment comes within a light year of this moral galaxy:

" Disclosing the reasonably foreseeable risks of research to prospective subjects recognizes the ethical obligation to give prospective subjects sufficient information to make a knowledgeable decision about whether or not to participate. This reflects the ethical principle of respect for persons, which recognizes the importance of giving individuals sufficient information during the informed consent process to make a considered judgment about whether to participate in research that could affect their health or wellbeing—for better or worse."


The CMS notice does not address any of these issues.  Indeed, the phrase informed consent doesn't even show up in the proposal.

Instead: 

"Providers, suppliers, and beneficiaries who are included in the model will have access to the existing claims appeals process, as well as a proposed Pre-Appeals Payment Exceptions Review process, to resolve disputes arising from the policies implemented by this model. "

In otherwords, no informed consent, not even passive consent.  Instead, patients are being hereded into an experiment that in my opinion, violates EVERY canon of the Nuremberg Code 

To be fair, my guess is the position of CMS is that of many people like Peter Bach who believe that price-driven treatment selection does not required informed consent as long as you create a website for your cancer abacus.  But even those who want limits on informed consent in comparative effectiveness trials would do so if patients were not assigned to the treatment arm.  

CMS informs no patient.  The guidance does not require doctors or  hospitals to do so. 

This is a deliberate attempt to side-step informed consent.  And the Part B human experiment is just one part of a larger effort to limit patient choices in what are actually natural experiments by dressing them up as comparative effectiveness research. 

I suggest anyone involved in the Part B human experiment read George and Catherine Annas' article on Therapeutic Ilusion to understand just how unethical the project is.  The authors note: 

"Historically, misleading and confusing terms such as “therapeutic research,” “experimental treatment,” and “invalidated
treatment” have been used to blur the distinction between research and treatment. Similar misleading terms are being deployed in an effort to make evidence-based medicine research (including comparative-effectiveness research) easier to do by dispensing with or watering down disclosure requirements."

By convincing themselves that the law of informed consent does not apply to treatment...The radically paternalistic result would be that physicians could not only set the “standard of care” for medical interventions—whether research or treatment—but also set the “standard of care” for informed consent for both. That quest is, we think, dangerous to the autonomy and dignity of patients and should be repulsed not only by patients, research subjects, and the public, but by physicians and researchers as well."

   Read More & Comment...

Califf's Inclusive "We"

05/06/2016 10:21 AM | Peter Pitts

At yesterday’s annual FDLI conference, FDA Commissioner Califf said that, “to achieve innovation, we must take risks.” And he wasn’t using the royal “we.”

He reiterated that one of his top priorities is to focus on staffing. (He also mentioned that he has about 100 “top priorities.”) There’s an important connection. The FDA’s ability to be an innovation enabler is directly linked to the issue of staff. Not necessarily more staff (although more is certainly better), but staff that is permitted, encouraged, cajoled, urged, directed, educated, and rewarded for taking risks – especially outside oncology and orphan diseases.

It’s slow going. There was solid momentum in the creative thinking of divisional staff in the early days of the new millennium, the McClellan years. But this nascent trickle of “entrepreneurial regulation” hit treacle in the face of the Vioxx imbroglio. It was a battle worth fighting – and winning. The agency is still recovering.

The good news is the agency has come a long way back. New pathways for approval are on the books with some notable clinical successes. New thinking on clinical endpoints and biomarkers, the patient-focused drug development initiative (with the patient voice evolving from tellers-of-sad-stories to allies in clinical development), and more robust programs on quality and pharmacovigilance have infused some inside the FDA to think outside the regulatory box. But entrepreneurial regulation must be more than the “some” of its parts. Proposed legislation could help advance and encourage these and other initiatives but, as the Commissioner commented at the FDLI event, new laws mustn’t allow drugs to enter the market that don’t provide therapeutic benefit. Amen and words to the wise.

Embracing the risks of expedited pathways and other aspects of 21st century entrepreneurial regulation requires better internal agency communication, collaboration, and coordination. If victory in that realm becomes the Califf legacy, it would be a hugely important one for both the FDA and the public health. Success rests, as FDA Chief Counsel Liz Dickinson so eloquently phrased it, “on the infusion of new people and novel ideas.”

The policy of being too cautious is the greatest risk of all. -- Jawaharlal Nehru  Read More & Comment...

Opioids put LA Times in a World of Hurt

05/06/2016 07:13 AM | Peter Pitts

How the mighty have fallen.

Once a newspaper of national importance, the Los Angeles Times has become a shadow of its former self. Consider it’s latest Page One investigation into Purdue Pharma. The drug manufacturer's malfeasance? Promoting on-label claims.

Really.

Here’s a link to the article and here’s a link to Purdue’s response.

According to Purdue, “In an attempt to resurrect a long-discredited theory, the paper ignores the clinical and regulatory data that directly contradicts their story.”

And they have the facts and citations to prove it. All of it.

Further, “Over the course of two years, Purdue Pharma provided the LAT with more than a dozen hours of briefings and discussions regarding the clinical evidence supporting OxyContin’s 12-hour dosing and the regulatory requirement that we promote the product as such. Unfortunately, the paper disregarded this information, instead publishing a story that’s long on anecdote and short on facts.”

Two years and the Times got the story so wrong? That’s bad news for the paper’s readers who expect and deserve better. Maybe it’s good news for the salivating tort bar. But before they start filing lawsuits, they better get the rest of the story.

For example (per Purdue):

CLAIM: OxyContin has a 12-hour dosing “problem” that puts patients at risk.

FACT: Nearly a decade ago, the FDA cited a lack of clinical evidence when it formally rejected the “fundamental premise” that patients receiving OxyContin at intervals more frequent than twice-daily are at increased risk of “side effects and serious adverse reactions.” In doing so, the agency reinforced the twice-daily labeling for OxyContin. The LAT omitted the findings of this report from its story.

Oops.

And my favorite:

CLAIM: Purdue should tell physicians to prescribe OxyContin for eight-hour use.

FACT: The FDA prohibits pharmaceutical companies from promoting their products for uses, including dosing, not approved by the agency. Given FDA has not approved OxyContin for eight-hour use, we do not recommend that dosing to prescribers. In fact, a State Attorney General recently cited a peer company for falsely claiming that OxyContin was an eight-hour drug. The LAT omitted this piece of information from its story, falsely claiming that OxyContin was an eight-hour drug. The LAT omitted this piece of information from its story.

Is there a fact checker in the house?  Ouch.

There are so many serious issues surrounding opioids that the lack of professionalism by the LA Times is astounding.

I guess the Times ace I-Team can forget about that Pulitzer.  Read More & Comment...

Opioids Auth-orization

05/05/2016 07:18 AM | Peter Pitts

Yesterday I had the pleasure of attending and participating at the joint meeting of the FDA’s Drug Safety & Risk Management and Anesthetic and Analgesic Drug Products advisory committees.

The topics under discussion were the successes and failures of REMS programs for extended release (ER) and long-acting (LA) opioids. Many important presentations and discussion. Two statements that stood out as directional:

“REMS modifications shouldn’t unduly restrict patient access.” (Doris Auth, REMS Assessment Team Leader, Division of Risk Management, CDER)

“Education is not an event, it is a process.” (Graham McMahon, President & CEO, Accreditation Council for Continuing Medical Education)

In short – it’s important to move forward, weighing the risks and benefits of REMS programs not just for prescribers – but for patient too. Bravo.

I was chosen to offer public testimony, and here’s what I had to say:

To paraphrase Peter Drucker, the information revolution will shift -- from the generation of data, to figuring out the meaning and purpose of the data with the patient’s perspective in mind.

Nowhere is this more pertinent than in the discussion of the future of opioid pain medicine and the role of the FDA – and advancing both the science and regulatory approaches to appropriate pain care management. But cutting the Gordian Knot of what “appropriate” means demands more than current REMS programs. It requires working with the providers of continuing medical education to develop better curricula. It means ever better-validated risk evaluation and mitigation strategies with more thoughtful purpose.

 It means enhanced and validated reporting tools for post-marketing surveillance. It means using real world data to provide real world advice. And it means using the tools of the 21st century century such as patient and physician apps.

The FDA can play an important role in working to develop and share (with a broad constituency) validated tools for physicians to use in determining which patients may be more prone to slide into abuse so they can choose their therapeutic recommendations more precisely.

One improvement will be to improve the accessibility of the ER/LA Opioid Analgesics REMS website, so that interested healthcare providers can more easily access accredited REMS-compliant material.

We must also work to continue expanding the to include the extended healthcare team. Education of team members beyond analgesic prescribers is critical for implementation of REMS learnings.

We should revise the FDA Blueprint for Prescriber Education to reflect stakeholder input and feedback

We should link Schedule II and Schedule III Narcotics DEA registration and re-registration to either completion of prescription opioid education or other acknowledgements, such as board certification in pain medicine. We should include IR opioids in the REMS modification discussion. It’s where the overwhelming volume is.
 
With the data collected from REMS programs, a logical next step is to utilize that real world data to amend product-specific labeling to indicate lessons learned outside of the rarified world of the randomized clinical trial environment to assist physicians in using the right product for the right patient. Real world evidence doesn’t just mean recognizing new risks, but also communicating new benefits learned through patient outcomes. And such evidence is both available and exciting.
 
Beyond the REMS programs discussed during the course of this meeting, the FDA has required all sponsors of brand name products with approved abuse-deterrent labeling to conduct long-term epidemiological studies to assess their effectiveness in reducing abuse in practice.

And then there’s the thorny question of FDA labeling. Product labeling is the basis for articulating the value proposition of a product. As you are aware, data definition and generation are very much still a work-in-progress – as is their relationship to clinical relevance. No absolute magnitude of effect can be set for establishing product characteristics. And the FDA continues to talk about the ambiguous totality of evidence standard – which really means using their best regulatory judgment.

One crucial question that deserves more conversation is the nature of the evidence used to decide whether or not a given product “works” to reduce abuse in the “real world.” Given the data challenges, it may be almost impossible to ever demonstrate a causal link between a new formulation and an impact on patient abuse – but is that because the product didn’t have an effect or our current measurement methodologies and data systems are inadequate to detect it?

The path forward is unclear. Is real world data reliable and robust enough? Should the FDA define and then assign various statistical weights to comparison and population studies? At the end of the day, the agency can’t only look to REMS for risk mitigation but must also seek out data that supports more aggressive labeling language.

Obviously, more work needs to be done in order to refine optimal data sources, study design, statistical methods, and epidemiologic outcomes of interest to developers, physicians, patients … and regulators. No one group can do it by themselves. We need a more, aggressive, creative, and collegial approach to the pain management ecosystem.

At the end of the meeting, the joint committee recommended mandating continuing education for doctors who prescribe opioids, ignoring American Medical Association calls for such requirements to be voluntary. The committee, which held no formal vote on the issue, also urged FDA to update its education materials by incorporating the new CDC guidelines on opioid prescribing and other material on alternative pain treatments. The committee suggested education be required for doctors seeking DEA registration to prescribe controlled substances.

The committee also urged the agency to update its risk evaluation and mitigation strategy to include shorter-acting opioids, amid criticism from some members that opioid manufacturers have too much influence over the strategy. The committee voted 30-0 to urge FDA to make changes to its entire opioid drug safety program. Some of the advisers said there was little evidence the current safety plan has had any effect, adding that it needed a greater emphasis on the drugs' risks.  Read More & Comment...

Confirmation Bias Distorts Drug Price Research and Reporting

05/03/2016 05:43 PM |

 

 
Francis Bacon was perhaps the first scholar to note that we are all guilty of confirmation bias. He observed that “the human understanding when it has once adopted an opinion (either as being the received opinion or as being agreeable to itself) draws all things else to support and agree with it.”
 
Confirmation bias explains the synergistic relationship between so-called studies that look at drug pricing, the media attention paid to these articles and the virtual absence of reporting on studies looking at the ecosystem for treating cancer.
 
Two articles on the price of oral cancer drugs – one in JAMA and the other in Health Affairs  are examples of this disease.
 
The articles look only at the list price of cancer drugs over 10 years. 
 
They could have looked at the increase in the list price of non-drug cancer care (which has increased as well) but they didn’t. 
 
Nor will you find any discussion of the fact the over the time periods studied, increased use of oral cancer drugs was associated with a decline in hospitalization and outpatient spending associated with increased use in oral oncology.  
 
There are hundreds of articles reporting on these studies that with rare exception (Ed Silverman at STAT) note that the ‘studies’ do consider drug prices in context.  In particular, confirmation bias has lead researchers and reporters alike to ignore other economic and clinical factors impacting the cost – and – value of cancer drugs:
 
A recent IMS Oncology report – largely ignored by the same journalists writing about the two articles -- found that utilization, not price, was the main driver of spending on cancer drugs with longevity of patients a key driver of use. 
 
Targeted therapies (not including rebates, patient assistance support, etc. ) now account for almost 50% of total spending and they have been growing at a compound average growth rate of 14.6% over the past five years
Overall therapy treatment costs per month have increased 39% over the past ten years in in inflation- adjusted terms, similar to the 42% increase in overall response rates and 45% increase in months that patients are on therapy, which also contribute to higher overall spending levels associated with improved survival rates. http://www.imshealth.com/imshealth-web-aux/controller/getReport
 
2.   The increase in use of targeted therapies w diagnostics are associated with  an increase in duration of response and survival.  In fact, the use of oral cancer drugs is associated with a 150 percent increase in treatment duration.
 

 
3.   Neither article accounts for the fact that newest oral cancer drugs are targeting smaller groups of patients based on tumor subtype and mutational status.
 


4.  Neither article noted that over the same period they were obsessing about drug prices, cancer costs increased at the same rate as overall health spending.  Another well-ignored Milliman study found
 
Over the entire 2004 to 2014 study period, the average annual increase in cost was essentially the same in the actively treated cancer population and the non-cancer population.

Cancer prevalence increased from 2004 to 2014 more than the contribution of cancer patients’ cost to the total population spend.

For patients being actively treated, the portion of spending for cancer-directed pharmaceuticals increased from 2004 to 2014 while the portion of spending for inpatient care declined. 
 
 Finally, the articles ignored yet another study showing the increase in rebates as a percent of price increases. The chart below shows the rebates as a percent of gross sales for Bristol Myers as it introduced immunotherapies for cancer.
 

 
 
“As people's opportunities to succumb to confirmation bias increases online - only seeking out information that confirms their prejudices - ignorance, extremism and close-mindedness have continued to rise unabated.” Maajid Nawaz


   Read More & Comment...

Getting Real World About Outcomes Data

04/29/2016 08:40 AM | Peter Pitts

I’ve just returned from a cold, blustery and wet London where I attended the annual Pharma Access Leaders Forum.

But the meeting was hot.

In fact, piping hot when you consider the tectonic changes being felt in the world of healthcare technology assessment (HTA) and their implications on both patient access and innovation. And the linkages couldn’t be more profound.

Wither HTA in the EU? A key red thread through a series of potent discussions was real world evidence (aka, “outcomes data”). Head honcho HTA officials from across Europe (including England and Scotland – both still in Europe as of last report) returned again and again to the value of outcomes not just for the evolving world of Risk Sharing Agreements, but for the acceleration of reimbursement science.

Reimbursement science? In July 2012, when Sir Michael Rawlins was chairman of NICE, he told the House of Commons that value, “is based on the collective judgment of the health economists we have approached across the country. “It is,” Sir Michael said, elusive.”

When it comes to HTA – the times they are a-changin'.

One key insight came from Finn Børlum Kristensen, Chairman of the Executive Committee, European Network for HTA (EUnetHTA), who reminded the conference of JM Eisenberg’s advice, “Globalize the evidence, localize the decision.”

Just as we’ve finally come to realize the urgency of regulatory science (adaptive clinical pathways, imaging, bioinformatics, biomarker validation, 21st century bioequivalence, etc.) to the future of healthcare, so too must we understand and encourage the development of reimbursement science. And high up on the list of items to consider is the validity and utility of outcomes data. We’ve come a long way from the 2007 NICE/Velcade risk-sharing arrangement. Today the stakes are higher and the battle has ratcheted up to a higher level.

When it comes to reimbursement science, we are still in early days. For example, while many HTA bodies in Europe have moved beyond accepting evidence exclusively “the old fashioned way” (via the traditional RCT “gold standard”), there are exceptions – such as Germany. As Detlef Parow (Head of Care Management at DAK-Gesundheit) pointed out, IQWiG will only look at outcomes data “only in exceptional cases.” (This is in keeping with the IQWiG “Principle of Prohibition,” where “Everything is forbidden if it is not expressly permitted.”)

The always-insightful Francois Meyer (Advisor to the President, Director of International Affairs for HAS -- France’s Haute Autorité de Santé) wisely suggested more formal early dialogues on scientific advice – similar to the regulatory science initiatives that drive the conversations between FDA and innovators. This would give HTA bodies the opportunity to identify key issues and receive draft company positions, discuss divergent views and try to reach consensus before any final submissions or decisions are made. Sometimes the most common-sense recommendations are the toughest to implement.
 
But, as with FDA and the advancement of regulatory science, much depends on willingness and ability to implement based on infrastructure, capabilities, and trust. The end goal is the same for all stakeholders -- ensuring optimal use of resources for healthcare systems; improving access to value-adding medicines for patients; and appropriate reward for innovation.
 
In a 2009 white paper, I wrote, “We need to develop proposals that modernize the information used in the evaluation of the value of treatments. Just as the key scientific insights guiding the FDA Critical Path program are genetic variations and biomedical informatics that predict and inform individual responses to treatment, we must establish a science-based process that incorporates the knowledge and tools of personalized medicine in reimbursement decisions: true evidence-based, patient-centric medicine.”

Today, right now, we need a Critical Path for Healthcare Technology Assessment to begin the process of developing a similar list of ways new discoveries and tools (such as electronic patient records) can be used to improve the predictive and prospective nature of clinical outcomes. In an era of personalized medicine, one-size-fits-all treatments and reimbursement strategies are dangerously outdated. Accepting real world evidence does not mean discarding the randomized “gold standard” – it means augmenting it.
 
It’s a complicated proposition—but such a goal is as simple as it is essential -- cost must never be allowed to trump care, and short-term savings must not be allowed to trump long-term outcomes. Just as we need new and better tools for drug development, so too do we need them for HTA.
 
A health technology assessment model for the 21st Century should reflect and measure individual response to treatment based on the combination of genetic, clinical, and demographic factors that indicate what keep people healthy, improve their health, and prevent disease. A rapidly aging society demands a new healthcare paradigm capable of providing for its needs in the 21st Century. Equality of care must be matched with quality of care.
   Read More & Comment...

Buffalo Wings

04/28/2016 10:50 AM | Peter Pitts

From the pages of the Buffalo News:

Insurers have incentive to keep plans affordable

A recent editorial called the provision that prohibits the government from negotiating Medicare Part D drug prices “a ruinously bad decision.” (“Panel offers a blueprint for dealing with ruinous cost of prescription drugs,” April 22 News.)

Yet keeping the feds out of price negotiations between private insurers and drug companies has worked wonders. Surveys indicate nine out of 10 seniors are satisfied with their Part D coverage; 96 percent report that their coverage works well. And because insurers have a financial incentive to attract enrollees by keeping plans affordable, the program cost $349 billion less than initially projected during its first decade.

With satisfaction and savings like that, it’s a shame the government doesn’t make “ruinously bad decisions” more often.

Peter J. Pitts
President, Center for Medicine in the Public Interest; Former Associate Commissioner, FDA  Read More & Comment...

PBM and Insurer Funded Front Group Demands Bigger Rebates and Less Medical Innovation

04/25/2016 10:39 AM |

If you’re interested in pocketing billions more in drug price rebates what do you do?  Fund a front group that claims to make prescription drug prices affordable and propose policies that would give a cartel of PBMs, health plans and unions control over the development, pricing and access of new medicines.   Call for transparency but then refuse to share how those rebates are generated and distributed and how they fatten your profit margins. 

The Coalition for Sustainable Drug Pricing -- an offshoot of the National Healthcare Coalition -- will once again propose 'market-based' solutions to reduce drug prices.   These proposals are actually slightly reworked versions of proposals made by the Center for American Progress, as well as Bernie Sanders.  

The Coalition is once again waving the red herring of speciality drug costs.  It's expert panel is silent about all the rebates being pocketed by their institutions.  

The Coalition is actually a front group for health plans, PBMs and the Washington offices of many liberal interest groups who are all interested in reducing pharmaceutical and biotech profits.  The proposals would do that by transferring even bigger rebates to the aforementioned insurers and PBMs and giving these groups more control over access to new medicines, which in turn would increase their short term profit margins. 

Here's what the Coalition is calling for today:

•    It would force drug companies to a minimum percentage of their revenue in R&D. Companies failing to do so would be subject to fines and possible federal prosecution
•    A price that exceeds a price set by federal advisory committee by more than 20 percent would be presumed to be unreasonable and to harm public health.  Under current law, designating something or someone a public health threat the government has the power to immediately seize products, patents, set prices and throw people in prison for price gouging, just like in Venezuela. 
•    It would allow government health plans, private insurers, hospitals, union health programs and prescription drug benefit companies like CVS to form a cartel set ‘fair’ prices and decide which patients get what medicines based on how much the ‘private’ panel decided how much our lives are worth and how much more should be spent on drugs each year. Drug companies that fail to comply with the prices would be prohibited from sell all of it’s products to any government program. 
•    It allows the same cartel to keep $100 billion in rebates that are supposed to go to patients but instead are pocketed by these special interests

It also wants to weaken and eliminate FDA regulations established to protect patients against serious and life threatening adverse events from the use of new medicines.  

The Coalition also claims that their policies will actually increase innovation by forcing companies to only invest in truly innovative drugs.  Instead is asserts that R and D is an essential expense for a drug company, not an optional investment, if at some point it doesn’t invest in research and development, it won’t be a drug company anymore.

That’s like saying health insurers will have to stay in business even if they can’t raise premiums because otherwise it wouldn't be a health plan anymore.   Ask United Healthcare how that business model would work.  

Nobody's going to offer health insurance if they'll lose money selling it. The same goes for life saving medicines.  

There are better ways to make medicines more valuable by making them more affordable.  The first is to use rebate money to reduce out of pocket cost sharing of actual patients.

The second is to cut the time, cost and risk of bringing new medicines to market.  We can do that by building on proposals included in the 21st Cures Act and on efforts developed by the FDA and groups such as Friends of Cancer Research.   Bringing more medicines to patients more quickly at lower cost will increase competition and encourage innovators to shift investment into more discovery.  

We should all be on the same side in fighting against disease.    Stoking populist anger in order to fatten short term profits doesn't advance that alliance.  
   Read More & Comment...

TheStreet.com's Feurstein Fast and Loose With Remicade Pricing Truth

04/20/2016 03:52 PM |

Is telling just some of the facts to make a point contradicted by all of the facts good journalism?  Is it honest?

Here's the headline from TheStreet.com Adam Feurstein:

Ignoring Criticism, Drug Companies Still Raising Prices, Making More Money 

"Everyone is screaming about drug prices. They're too damn high! Drug spending is going to bankrupt the health care system. Raising the price of drugs multiple times per year is unconscionable and unsustainable.

How are biotech and pharmaceutical companies responding to all the criticism? They're raising drug prices even more.

And increasingly, nearly all of the surplus revenue generated from those price hikes is staying with the drug companies instead of being extracted by insurers and pharmacy benefits managers in the form of higher rebates, said Leerink Partners analyst Geoff Porges.

"The price increases for established brands across our coverage have been substantial indeed. To the surprise of many investors, it now appears these price increases are likely to flow through to actual sales growth, with such growth more than offsetting any volume weakness in 1Q, and resulting in significant positive revenue surprises for these companies when they report 1Q results," Porges wrote in a research note Wednesday.

In other words: Take that, Hillary Clinton!

Porges analyzed J&J's first-quarter sales results, particularly for its specialty pharmaceutical drugs Simponi, Stelara and Remicade, and found 70%-90% of list price increases taken over the past year are flowing through to reported sales. In some cases, J&J captured 100% of the price increase as sales.

In other words, efforts by insurers and PBMs to negotiate higher discounts or rebates on specialty pharmaceutical products isn't keeping pace with the price increases pushed through by drug and biotech companies. Likewise, politicians ranting about outrageously high drug prices aren't having a moderating effect on industry practices -- at least not yet.

The net result should be better-than-expected sales, Porges said...."

Here's the rest of the story.

If Remicade is reporting 70 percent sales, that's a 30 percent rebate.  Pretty, pretty good considering the drug didn't face biosimilar competition until this year.  Neat trick to turn the percentages around but still 30 percent is a lot.  


Oops.





Then there is the Remicade rebate picture 



On top of that, as my last blog demonstrated industry-wide a big chunk of revenues -- $100 billion or so -- goes to PBMs, insurers, hospitals, employers. Everyone but patients.

There's a reason for the phrase, "the truth, the whole truth and nothing but the truth."  You see, telling the truth, but not the whole truth and nothing but is considered lying.  



   Read More & Comment...

Wither "Cures?"

04/17/2016 07:24 PM | Peter Pitts

When a man says he approves of something in principle, it means he hasn't the slightest intention of putting it into practice. -- Otto von Bismarck

Is the cure worse than the disease?

A thoughtful and comprehensive overview in BioCentury (by one of our favorite industry cognoscenti, Steve Usdin), Can “Cures” be Cured, presents a blunt appraisal for either measured optimism or realpolitk pessimism.

Some tantalizing snippets:

After almost two years of effort, it is still not clear whether a path can be cleared to put a 21st Century Cures bill on President Obama’s desk, or what measures would be included if and when legislation is turned into law.

It is certain that anything that could get through Congress would not come close to matching promises made by the legislation’s sponsors to radically transform the way medicines are discovered and to dramatically accelerate the creation of cures.

According to Usdin, Cures legislation, would be a disappointment to anyone hoping Congress will attempt to squeeze more science from the tens of billions taxpayers provide to NIH, or for fundamental changes in the kinds of science NIH supports and conducts.

The Cures bills do not address concerns about the effectiveness of NIH’s translational research, perceptions that NIH’s peer-review process rewards consensus science rather than innovation, or the inefficiency of allowing hundreds of millions of dollars to be siphoned off research grants for “indirect” costs such as administrative support and facilities.

The White House Statement of Administration Policy released in July noted the “new responsibilities for FDA outlined in H.R. 6 exceed the resources provided in the bill and the President’s FY 2016 Budget and as such, FDA will be unable to fully implement the programs established in the bill, while maintaining its current performance levels.”

FDA also thinks H.R. 6 would unleash a flood of applications for qualification of biomarkers and other drug development tools, and it estimates that reviewing these applications would cost $940 million over five years.

In the absence of a substantial increase in FDA funding, the administration, congressional Democrats and regulated industries are likely to push to have many of the FDA provisions stripped from the 21st Century Cures Act.

As the window for passing a bill in the Senate and negotiating a final version narrows, pharmaceutical industry lobbyists who worked hard to shape H.R. 6 and Senate Cures legislation are now sitting on the sidelines.

Pharma companies are unwilling to push for legislation they feel does little to benefit their companies, and they are cautious about supporting a political process that could exacerbate battles over pricing. At the same time, the industry doesn’t want to be seen throwing sand in the gears. Public opposition to Cures legislation would antagonize powerful members of Congress, along with influential patient advocates who have invested immense amounts of time in the Cures process.

Industry and FDA will call for a “clean” reauthorization of PDUFA, but Congress is unlikely to resist the temptation to attach legislation to PDUFA VI. If Cures legislation is enacted this year, any FDA elements that were considered but didn’t make the final cut will be in play as a PDUFA companion bill is drafted.

If Cures doesn’t pass, there will be strong political pressure to include the measures that would have made it into a final bill, along with some of those that were discarded, plus mandatory funding for NIH and FDA.

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Most of the Increase in Drug Spending Pocketed By PBMs and Insurers

04/15/2016 02:32 PM |

Most of the Increase in Drug Spending Pocketed By PBMs and Insurers:
What the Media Missed in Covering The IMS Drug Cost Study

By Robert Goldberg, PhD


Media coverage of the The IMS Institute for Health Informatics study: “Medicines Use and Spending in the U.S. – A Review of 2015 and Outlook to 2020” focused mainly at the change in top-line drug spending from 2014-2015.  That approach, as I have suggested in the past, is uniquely unrevealing. 

Spending on drugs in the outpatient, hospital and nursing homes was $425 billion.  However, the drug and biotech companies made $310 billion of that total.  Where did the other $125 billion go?  The vast majority of articles don’t tell.  

In fact, that spread – which has gotten larger in both total dollars and as a percentage of the increase in drug spending flows directly to insurers, pharmacy benefit managers, hospitals and other large customers, not the patient.


Follow the Money and the Prices 

To find out why such rebates aren’t going directly to the consumer, you have to follow the money and the difference in prices net of rebates and the invoice or retail price.   The amount of prescription drug revenue pouring into such ‘stakeholders’ has increased since Obamacare began taking effect.  Net price increases have actually dropped by half since 2011.  As the IMS study observes: “The average net price for brands already in the market is estimated to have increased by 2.8% in 2015, down from 5.1% in 2014 and significantly lower than seen in prior years.”

Meanwhile, the increase in rebates as a share of price growth surged.  As the charts above and below reveal, rebates as percent of total price growth increased ten fold since 2011.  








Further analysis shows that rebates were $10.8 billion (40 %) of the total increase in specialty drug spending between 2014-15.   As a percent of all brand medicine spending, rebates were 71 percent of the total increase from 2014-2015.  This means much of the price increase imposed on patients reflects the cost of rebates that PBMs and other claim make medicines ‘affordable’.



Patient Cost Sharing Increases as Rebate Revenue Soars

Even as the share of drug spending as a percent of rebates has soared and the contribution of net price increases to spending has declined, PBMs and insurers have increased cost sharing by more than 25% since 2010.  

Patient cost sharing is a percent of the ‘invoice’ or retail price, not the net or rebated price.  This suggests that rebate dollars are not passed through directly to patients. 

As IMS points out…”in response to this rising level of patient cost exposure, brand manufacturers are steadily increasing their use of “buy-downs” through patient savings programs such as coupons or vouchers, to help patients offset these costs. 

Even after coupons are applied, patients with pharmacy deductible plans are still facing high cost exposure.”

Even worse, the percent of patients facing cost sharing of up to 40 percent of a retail price has soared even as rebate revenue increased.  And the number of drugs with the highest cost sharing amount also generate the most rebates.  

A recent Avalere study found that many insurers – with help from the PBMs that design drug formularies and cost sharing “….placed all drugs in a class on the specialty tier. Specifically, in the Protease Inhibitor and Multiple Sclerosis Agents classes, 29 and 51 percent of plans respectively place all drugs, including available generics, on the highest tier. There are no generics in the other three classes of drugs listed below.”

Specifically, in 8 of the 10 classes, 2015 exchange plans were more likely than 2014 plans to assign all single-source branded drugs to the highest cost sharing tier. A single-source branded medication is a brand name drug without a generic equivalent. The practice was most common for some cancer drugs and drugs used to treat multiple sclerosis. Roughly 30 percent of plans also place all single-source drugs for HIV/AIDS on the specialty tier.



Conclusion: The Real Source of High Drug Costs

The real story about drug pricing is how PBMs like Express Scripts and health plans are pocketing about a bigger and bigger share of drug revenues while increasing what patients – especially those with the greatest need for the newest drugs generating the biggest rebates – are seeing their share of the invoice price of a medicine surge.   

The outrage about high drug prices is directed at biopharmaceutical firms. But the IMS study suggests that the $100 billion in rebates and discounts that could reduce the out of pocket cost of consumers is taken by $100 PBMs, insurers and hospitals.  And to add insult to injury, these organizations turn around and charge consumers retail price and require them to pay an increasingly greater share of that cost. 

The fact that such practices not only increase PBM, insurer, etc. revenues but deny people access to new medicines – that in turn increase the risk of staying sicker or getting sicker -- should be a big story.   Why aren’t media outlets and policymakers focusing on the real source of high drug costs?


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