Why do people think it unacceptable for research-based drug makers to charge different prices in different countries? Even in the absence of price controls (which most countries impose on medicines), this is a common practice.

As a San Franciscan with a serious addiction to skiing, I make the trek almost every weekend to Lake Tahoe. I just got back from two days skiing at Northstar-at-Tahoe, where a single day pass costs $63 if you buy it at the base of the mountain. Fortunately, I had a voucher that gave me a lower price of $41: a 35% discount! Imagine my surprise when I learned that people in Reno had been able to buy tickets for just $20, only for January 8. So, people skiing the same mountain, the same day, payed very different prices.

Sure, I was upset that some people from Reno paid less than I had, but I did not ask the government to force the ski resort to charge me the same price. If I had succeeded in doing so, the ski resort would have responded not by reducing the price to me, but increasing the price to the skiers from Reno.

I hear you say: “Hey, your scampering off to ski is not the same as seniors who cannot afford life-saving drugs,” which is true. Nevertheless, the behavior of the suppliers would be exactly the same. Legalizing the international piracy of prescription drugs will cause drug makers to raise prices abroad, not cut them in the U.S.

Policymakers who advocate this piracy need to explain why the law should uniquely forbid drug makers from engaging in this normal business practice.

Here’s a news item that should scare every citizen of the Empire State. (And that includes me.)

New York State is preparing to ask drug companies to pay to get on a “preferred drug list.” To get their drugs on the list, companies would have to subsidize the state with heavy rebates. The state Health Department estimates the legislation could save $200 million in its first year of operation. Most drug companies will likely pay to get on the list, said Craig Burridge, executive director of the Pharmacists Society of the State of New York.

Is this how the folks in Albany want to determine what medicines are best for its citizens? By a pay-for-play formulary?

First the Giants and now this. Yikes.

Drug maker Pfizer has begun attaching high-tech radio identification tags to packages of its anti-impotence drug Viagra in an attempt to thwart counterfeiters. The tags send out a signal that pharmacists in the United States will be able to pick up on specially-designed electronic scanners to verify that packages of Viagra are authentic. The product code detected by the scanner is sent over the Internet to a secure Pfizer Web site to confirm its authenticity. Pfizer joins Purdue Pharma LP, the maker of pain reliever OxyContin, which has been using RFID tags since November 2004 to combat counterfeiting.

I was proud to serve on the FDA’s Counterfeiting Taskforce. One of our main conclusions was that RFID is a viable tool to fight the insidious growth of counterfeiting both here at home and around the world. It’s good to see theory put into practice as we all gear up to battle what is nothing less than international health care terrorism.

Bob Goldberg runs us through a timely tutorial on the fuzzy math of Canadian drug importation …

The Canadian internet pharmacies … otherwise known as the companies that divert products from it’s citizens and pay doctors to sign off on prescriptions from patients they never see for huge profits while also setting up off-shore warehouses where they repackage counterfeit pills from Iran and re-sell them to American seniors, wants Medicare to know that they, not the new prescription drug benefit is the cheaper source of drugs for older Americans. Now, setting aside the counterfeiting and the diversion and the illegality of the scrip writing enterprise in Canada, let’s do the math one more time. Canada is a country of 25 million citizens.
The Medicare program serves 42 million seniors and people with disabilities. Canadian internet drug sales to America now total $700 million. Canada’s total domestic drug expenditure is about $11 billion. Medicare expects to provide about $25 billion worth of drugs to seniors under the new benefit. The fastest growing segment of the Canadian drug business is … the importation of drugs from centers of drug manufacturing excellence such as Pakistan, Iran and Russia … information that neither the Canadian internet pharmacies or its boosters in our Congress such as Anne Northrup, Gil (I will impose tariffs on Canadian cheese) Gutknecht or the media.

In yesterday’s State of the State speech, Governor Schwarzenegger made a remarkably ill-informed statement:

“I believe in the free market. I believe in free trade. I mean we buy food from overseas. We buy cars from overseas. Why not prescription drugs? So I call upon the federal government to permit the safe importation of prescription drugs. I say, let the free market work.”

The Governor is talking about the currently (and rightly) illegal piracy of low-priced drugs from countries like Canada into the United States.

Foreign drug makers are perfectly free to compete in the U.S under the same terms that govern American drug makers. Yesterday, I blogged about a medicine manufactured by a Japanese company and marketed by a Germany company in the U.S. They are investing a lot in selling their medicine in the U.S. In fact, they paid for a 5 sided advertising supplement in the latest issue of Forbes!

Foreign drug makers are just as opposed to the international piracy of prescription drugs as American ones are. Given his success in the movies, I’m surprised the Governor doesn’t understand this. If I picked up a few thousand black market videos of The Terminator on the sidewalk in Bangkok, without paying a royalty, and brought them back to the U.S., I’m sure he would agree that that was not free trade.

International piracy of prescription drugs will not reduce Californian drug prices. Failed programs in states like Minnesota and Illinois have demonstrated that. Instead, thre state needs legislation modeled on the unsuccessful Proposition 78 from last November’s election. A good discount prescription drug program ensures that drug makers have the incentive to supply medicines to low income people free of the threat of government harassment, which means abandoning destructive notions like international pharmaceutical piracy, which strips drug makers of property rights.

Maybe it’s just age, but I’m starting to pay attention to the pharmaceutical ads I read. In the latest Forbes (January 9), there’s a supplement of 5 sides that addresses benign prostatic hyperplasia (BPH). Like most men of a certain age, one of the things that spooks me is prostate cancer, but I’ve never heard of BPH. Basically, it effects urination: in extreme cases, you can’t control it. One of the 5 sides has a patient questionnaire from the American Urological Association to help men determine whether they should seek a diagnosis. (No, I’m not in the risk zone. If I was, do you think I’d be blogging about it for the world to see?)

Yes, there is a pill: it’s called Flomax® (tamsulosin HCI) and it’s made by Astellas Pharma, a Japanese firm, and marketed in the U.S. by Boerhringer Ingelheim. And, yes, the companies paid for the ad. However, the pill is not mentioned until the third side, and only in a box taking up less than a quarter of the page. The fifth side, of course, is taken up with the reams of small print that the government requires: too small, detailed, and technical for most laypeople to follow, and a waste of resources by government diktat that could have been invested elsewhere.

The rest of the supplement consists of the urologists’ patient questionnaire and a sober description of symptoms, diagnosis, and a variety of treatments ranging from “watchful waiting” to surgery.

So, the chances of my taking this pill are zero, but I know a heck of a lot more about this ailment than I did before. Boehringer Ingelheim helped me become better informed even though it does the company no good. Of course, that’s not what it wanted to achieve, but it’s what economists call a “positive externality”. For a classical economist, this implies that direct-to-consumer pharmaceutical advertising should not be banned; it should be subsidized!

I wouldn’t go that far, but I am more determined than ever to resist government control of communication between drug makers and patients.

Comments from Grace-Marie Turner …

The AARP started the New Year with a big surprise, issuing a study that concluded the new Medicare drug benefit provides a better deal for most seniors than importing drugs from Canada, which the organization has long supported.

“How is this possible? Everybody knows that Canadian drug prices are usually far lower than American ones,” the AARP Bulletin asks. “That remains true. But Medicare drug coverage is insurance, so enrollees are charged copayments instead of full price … And the private plans that provide it have been scrambling to win over customers with good deals for 2006.”

It’s important to remember that the AARP did support enactment of the drug benefit — amidst much criticism from its liberal friends — and it does offer Medicare drug plans in partnership with UnitedHealth. So they do have a bias.

But the AARP used a variety of examples, from seniors with plans that have low monthly premiums/a $250 deductible/and no coverage in the doughnut hole, to those with higher premiums/no deductibles/and full coverage in the gap. In all but one instance, seniors did better with the Medicare plan than with drugs imported from Canada. (In that one example, the senior needed a low-cost maintenance drug that didn’t reach the deductible.)

Further, the AARP study didn’t include seniors with low incomes and those who have selected integrated Medicare Advantage plans, both of whom would certainly do better than with Canadian imports. The AARP study concluded: “Nearly all of our interviewees would be better off financially, by varying amounts, under a Medicare plan, with those using the most drugs potentially reaping the greatest savings over the year.”

The Canadian Internet drug industry is fighting back, saying their drugs are still cheaper than Medicare’s. But they are missing a key point that the AARP emphasized: The new Medicare drug benefit provides insurance coverage against the risk of high drug expenses, which the Canadian pharmacies can’t offer. (And BTW, does it need to be said again, that importing drugs from Canada is dangerous and illegal?)

A story on the story that appears in the 1/06 AARP Bulletin.

AARP edges away from drug imports

Kelly McCormack and Bob Cusack, The Hill, January 4, 2006

In a move that is already attracting criticism from some lawmakers, AARP last week softened its support of drug reimportation legislation by saying that the new Medicare drug benefit saves senior citizens more than buying pharmaceuticals from Canada.

The powerful consumer group has previously endorsed reimportating drugs, but its revised position could severely damage momentum for legislation pending in Congress.

It could also alleviate political pressure on the White House and the
pharmaceutical industry, which have opposed reimportation even though it is supported by a majority of members of Congress.

The group has enormous clout on Capitol Hill, playing a crucial role in passing the Medicare drug bill in 2003 and thwarting the GOP effort to reform Social Security last year.

AARP’s press release on the matter, released over the holidays, did not get much attention last week. But the ramifications of it could be
significant in the debate on the affordability of prescription drugs.

The new analysis, titled “The New Math” Cheaper than Canada? The drug
benefit may be the better deal,” used the government’s Medicare plan
finder to compare “stand alone” plans that cover all of a senior’s
prescription needs to the cost of acquiring drugs across the border. It concluded that seniors who enroll in a low-cost Medicare
prescription-drug plan would save more in drug costs this year than if
they were to buy the same drugs in Canada.

While Canadian drug prices are still cheaper than prices in the United
States, AARP found that when a senior includes all out-of-pocket costs — premiums, deductibles and payments for medications — the price is lower.

AARP stressed that it continues to support reimportation legislation.

“The bottom line is drug prices are too high,” said AARP spokesman Mark Kitchens. “The two ideas [reimportation and the Medicare drug benefit] are not mutually exclusive. Many Americans that are not on Medicare would benefit from reimportation. Medicare Part D is a tool that would make prescriptions more affordable.”

But AARP CEO Bill Novelli adopted a different tone in the group’s Dec.
29 release, saying, “Jan. 1 is truly a watershed day for many Americans who face the high cost of presciption drugs. Millions of Americans who have never had drug coverage can now save more money through Medicare Part D rather than turning to Canada to get their prescriptions.”

Some congressional Democrats are still upset with Novelli for his role
in AARP’s backing of the GOP drug bill more than two years ago.

The AARP release added, “In conversations with potential enrollees, AARP is hearing that the focus has shifted from the legislation to choosing the best plan to suit their needs.”

These statements triggered strong reactions from both sides of the
aisle.

“AARP is selling Medicare drug coverage, so it’s not surprising that
they’re pushing their own product,” said Rep. Sherrod Brown (D-Ohio).
“Now they are making an apples-to-oranges comparison between Medicare
drug coverage and Canadian drug prices. Seniors deserve decent drug
coverage, and every American deserves lower-priced drugs. That’s the
bottom line.”

AARP is working with the insurance company UnitedHealth Group to offer
prescription-drug coverage. More than two million seniors have signed up for drug plans offered by the AARP-backed insurer.

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said that the AARP study “drives home the point that the new Medicare
prescription-drug benefit can help beneficiaries save some serious money on their prescription-drug bills.” But he emphasized that the savings will not be realized by all beneficiaries.

“We need to continue to work on other ways to lower prescription drugs
costs for all Americans,” said Grassley. “We can’t let up on making
prescription drugs more affordable.”

“Saying that Medicare drug plans ‘cost less’ than buying prescription
drugs from other countries is misleading,” said Jon Yarian, a spokesman for Rep. Gil Gutknecht’s (R-Minn.). “The cost of the prescription drugs hasn’t changed. The only difference is who bears the burden of the expense. American taxpayers will be paying for these savings.”

Rep. Jo Ann Emerson (R-Mo.) said, “The fact remains that we still lack a comprehensive policy to address high prescription-drug prices in America when identical, safe and affordable medicines are readily available to Americans just over our borders.”

The pharmaceutical industry was more optimistic about the potential
savings in the Medicare prescription-drug benefit.

“Seniors shouldn’t have to gamble with their lives by importing
potentially dangerous, counterfeit prescription medicines,” said the
Pharmaceutical Research and Manufacturers of America Senior Vice
President Ken Johnson. “Instead they should opt for a safer, more
affordable option offered by Medicare.”

The New Math
Cheaper than Canada? The drug benefit may be the better deal.

By Patricia Barry
January 2006
AARP Bulletin

Full story can be found at http://www.aarp.org/bulletin/medicare/new_math.html

If you were looking for a very last minute Christmas gift a couple of weeks ago, a full page ad in the December 25 issue of the New York Times Review of Books might have prompted you to check out The Karasik Conspiracy. According to the blurb, this is “the novel the pharmaceutical industry tried to commission, then control, and finally kill.” Good heavens: what have they done this time?

An employee of the Pharmaceutical Manufacturers of America (PhRMA), the trade association representing the research-based drug makers, at the prompting of an external consultant, offered a couple of authors $300,000 to write a book about a terrorist plot against America that uses unsafe, counterfeit drugs to poison and kill Americans who order lower priced medicines from overseas.

Unfortunately, PhRMA and related folks did not like the first draft. Because they believe that most Americans ordering overseas prescriptions via the Internet are women, they wanted more of a love story to attract female readers, whom the novel would scare off buying those meds.

The whole project crashed on the rocks of literary freedom and PhRMA withdrew its (secret) sponsorship. Piqued, the authors secured the publisher’s commitment and did two things to punish the research-based pharmaceutical industry. First, they re-wrote the novel so that the terrorists were acually financed and managed by a pharmaceutical company. Second, they published their e-mail correspondence with PhRMA and its consultant on their website, www.karasikconspiracy.com.

The easy way to blog about this is to marvel at PhRMA’a misstep in funding this venture - but that’s already been done at Arianna Huffington’s website, amongst others.

Nevertheless, this bizarre episode invites consideration of at least two issues.

1) The pharmaceutical industry’s influence is not as great as we thought. It failed to kill this book, and its public relations now look more absurd than evil.

2) The pharmaceutical industry’s almost exclusive focus on the safety angle of the parallel trade issue has led it far down the wrong track, even into sensationalism. There are exactly zero good arguments in favor of parallel trade: it is a theft of intellectual property; will not reduce prices in the U.S. but increase prices overseas; will reduce scentific R&D in the U.S., etc.

Nevertheless, polls indicate that Americans strongly want the ability to buy cheaper drugs from overseas. However, when pollsters frame the question to suggest that the so-called “Canadian” drugs are actually from Pellucidar, or Azkaban, or somewhere else, support drops significantly.

This has caused the pharmaceutical industry to focus its opposition to parallel trade on the safety element almost to the exclusion of everything else, perhaps to the point of obsession.

2006 began with a burst of sanity from the Washington Post editorial page which concluded its January 2nd editorial with the following statement, “Scientific judgments about the risks and advantages of drugs are not black and white — which is why they are best made by scientists and by the regulatory agency that employs them, not by jurors through the lens of hindsight.”

In medias res!

An important perspective …

Mere Magazines
By THOMAS P. STOSSEL
December 30, 2005;
The Wall Street Journal

Recently I was working in a Zambian orphanage when a young woman with worsening shortness of breath and chest pain asked me for help. Armed only with a stethoscope, I could do nothing other than diagnose a probable lethal tuberculous infection of the heart. Without devices and drugs developed by companies, doctors are not very useful. It was therefore discouraging to return to my Boston-based medical center and witness leading medical journals sanctimoniously demonizing not only the technologies developed by drug companies but also the companies themselves.

The Journal of the American Medical Association has declared industry-sponsored research categorically untrustworthy, and, to publish it, demands that an academic researcher be an author and take responsibility for its integrity, and also that an independent academic statistician analyze its data. This and other journals rail obsessively against “financial conflicts of interest” of academic researchers working with companies and conduct inquisitions to identify every possible financial motive that might corrupt researchers’ objectivity.

The ongoing Merck situation is a case in point. The New England Journal of Medicine wants the company to correct a five-year-old paper that, they allege, inappropriately excluded three late-breaking adverse events associated with the painkiller Vioxx. The company has correctly responded that published research projects always have defined beginnings and endings, and that it reported all adverse events to the FDA. With the drug off the market and Merck mired in litigation, what problem this correction would solve is unclear. Nevertheless, a Dec. 11 New York Times editorial excoriated Merck for “manipulating a journal article” and informed doctors “that they will need to take the findings of industry-backed studies with skeptical caution.” The message in all this is clear: Medical academics are saints — devoted selflessly to patient care — and corporate people are sinners, morally blinded by greed. But having worked in academic medicine for over 35 years and consulted for companies, this Manichean duality is inconsistent with my experience and a woeful distortion of reality.

In a Sept. 8 article in the New England Journal of Medicine, I reported that no systematic evidence exists that corporate sponsorship of academic research contributes to misconduct, bias, public mistrust or poor research quality. On the other hand, many academic colleagues working in my field of basic biological research (I study how your body cells crawl around, which has no obvious commercial value) would run over their grandmothers to claim priority for a discovery, impose their pet theory on the field, obtain a research grant, win an award or garner a promotion. It’s the same in other scientific fields, and no wonder, because for relatively modest remuneration we compete for scarce resources and labor in obscurity to achieve small advances few understand or appreciate. We exercise our ambitions by publishing research papers in high-profile journals. The research journal revolutionized scientific communication in the 17th century. But until the scientific enterprise grew larger than the first journals could accommodate, no peer review restricted publication. Once restrictions arose, human competitiveness established a journal prestige pecking order that grew in importance as research became more prevalent and complex. The more obscure one’s research, the greater the premium on publishing it in a prestigious journal, where those who administer limited rewards might see it, and where the news media are more likely to hype it.

But unbeknownst to the media, the journals at the top got there because of herd behavior by researchers, not because they are better than lower-tier journals at vetting research quality. Here’s why: Researchers submit their best work to the top journals, which can therefore afford to maintain their prestige by rejecting, not publishing, many high quality papers. That’s brand creation — not science. Most of their editorial effort goes into deciding which submitted papers are sufficiently newsworthy. Anonymous peer review by jealous competitors has its merits, but it has a tendency to select for fashionable if relatively unoriginal and inoffensive papers. Top medical journals compete for papers describing large clinical trials reporting small effects of treatments for diseases affecting many people, although these reports often do not substantively advance scientific knowledge, and many subsequently are invalidated. And no description of medical research in a medical journal comes close to the detail level or intense scrutiny imposed by the FDA on companies’ documentation of drug or device development before approval. Space constraints for readability and cost-savings preclude journals from publishing detailed information on the order of what companies file with the FDA, and unpaid journal peer reviewers, not to mention practicing doctors, would never read it anyway. The recent Korean cloning fiasco, in which the leading science journals published blatantly fraudulent papers, wasn’t the first such incident to afflict prestige journals, and it could never happen under conditions of FDA review. Indeed, doctors should take all studies published in “prominent medical journals” with “skeptical caution.” The lower stringency of journals compared to the FDA is a good thing, because academic biomedical research would come to a screeching halt if subjected to anything even approximating FDA examination.

Scientific knowledge advances reasonably efficiently, and new technologies emerge, despite the looseness of journals. And researchers’ craving for prestige goads them to greater efforts.If reporters understood that journals are magazines, not Holy Scripture, we might not be witnessing ever more onerous regulations inhibiting interactions between academic and industry science. Prestigious biomedical journals are good for our health — provided they stick to their core business of facilitating imperfect communication between researchers. Leave drug and device monitoring to the FDA — and theology to theologians.

Mr. Stossel is American Cancer Society Professor at Harvard Medical School and co-director of the division of hematology at Brigham and Women’s Hospital.

According to an article in The Times of London by Health Editor Nigel Hawkes (“Delay Over Top Cancer Tratment for Women”, Dec. 29), there is wide disparity of access in England’s National Health Service’s (NHS) 32 cancer networks to three new medicines for breast cancer: Femara (letrozole), Aromasin (exemestane), and Arimidex (anastrozole). According to the article, research recently published in the New England Journal of Medicine argues that Femara results in 30% greater chance of avoiding a recurrence after surgery.

The medicines are available in Scotland, and some English cancer networks, but others ration or don’t offer them at all.

This is another example in a long list that shows how so-called “public” health care fails in its primary objective: eliminating disparities in access to health services.

Furthermore, English patients do not have a choice of NHS trusts or cancer networks to use: the government has established them geographically, resulting in a “postcode lottery” , as Mr. Hawkes puts it. An Englishman’s home is his castle, but it’s also an Englishwoman’s prison if it’s within the boundaries of a cancer network that doesn’t provide her with the best treatment.

Fortunately, people in the United Kingdom have the freedom to buy private health insurance to make up for shortcomings in the government’s system (a freedom the Canadian government still denies to its subjects). The major competitor in the private insurance market in the U.K. is BUPA, a non-profit outfit whose standard benefits include “access to new, effective drugs and other treatments that may not yet be available on the NHS, including those for early stage breast cancer, bowel, and lung cancer.” (See www.bupa.co.uk/heartbeat.)

Advocates for breast cancer victims are lobbying hard to get greater access to new medicines via the NHS. Maybe they are aiming too low. Perhaps it’s time for the British government to give the people’s health money to the patients who need it, so that they can buy superior coverage in the private market.

A federal judge has ruled that a District of Columbia law designed to reduce the price of prescription drugs is unconstitutional and blocked its implementation. U.S. District Judge Richard J. Leon said the law, passed this fall, violates constitutional protections of interstate commerce and goes against the will of Congress.

Under the measure, the manufacturer of a drug that cost 30 percent more in the District than in four designated countries (Germany, Canada, Australia, Great Britain) would have to prove that the price was not excessive. The drug company could seek to justify the price based on research-and-development costs, its profit margin or other factors. If the manufacturer failed in that effort, a court could impose civil penalties.

Leon’s opinion said the District law is in direct conflict with federal patent law, in which Congress designed a “carefully crafted bargain intended to provide pharmaceutical companies with incentives to develop drugs. Those incentives include exclusive sales rights for a certain period,” he said. Punishing the holders of pharmaceutical patents in this manner flies directly in the face of a system of rewards calculated by Congress to insure the continued strength of an industry vital to our national interests, Leon wrote.

“This is an important issue and one worthy of a fight,” said Council member and author of the legislation David Catania. “No one suggested it would be quick or easy.”

Or safe. Or sound. Or plausible. Or … legal. But never mind the details.

Catania vowed to continue the legal battle and keep an open mind about revising the law.

That’s nice.

Another Council member, Vincent C. Gray, said, “If this [law] is not the instrument that can get it done, then we need to look at others.”

That’s nice too. May I recommend the councilman look at the recent experiences of Nevada, Texas, Vermont, Minnesota, and Illinois for starters.

After all, it’s nice to share.

As seen in today’s Wall Street Journal …

Europe’s Ailing Drug Industry
By GRACE-MARIE TURNER
December 28, 2005

Just a decade ago, more than two-thirds of all drug research was conducted in Europe. Now, 60% is conducted in the United States. Major European drug makers such as Aventis, Novartis and GlaxoSmithKline have shifted significant portions of their research operations from the Continent to the U.S. and beyond. And human talent continues to follow the research money: Some 400,000 European science and technology graduates now live in the U.S., with thousands more leaving every year.

For all this, European investors, scientists and patients have their own political leaders to blame. Deliberate government policy, in the form of price controls imposed by national health-care systems, is slowly choking off a once-thriving sector.

Europe’s government-run and dominated health-care systems are virtually monopsonies. As the primary buyers in their national markets, they have the power to set drug prices 40% to 60% lower than the free-market prices in the United States. These price controls have a serious impact on innovation.

Research and development are expensive. Researchers at Tufts University in Boston determined that drug makers spend at least $800 million just to develop a new medicine, and there is a high risk that a drug could fail after years of testing or flunk the government approval process. In the United States, companies are allowed to recoup their investments and make a profit by charging a price that incorporates their research costs. In Europe, that is seldom the case.

The loss to research caused by price controls was quantified in a recent study by the U.S. Department of Commerce. The study looked at the impact of pharmaceutical price controls in 11 countries, among them Holland, France and Germany, and found that price controls caused a $5 billion to $8 billion annual reduction in funding for drug research and development.

What could that amount buy? According to the study, it could lead to the discovery of three or four new potentially life-saving chemicals each year. So it’s no surprise that from 1998 to 2002 there were only 44 new drug launches in Europe, compared to 85 in the U.S.

But now is no time for Americans to be smug. Ironically, there is a bipartisan move afoot in the United States to implement the same policies that have dried up pharmaceutical research in Europe by having the government “negotiate” drug prices.

The U.S. Congress passed legislation in 2003 that added a new prescription drug benefit for the disabled and elderly participating in the country’s Medicare program. It also created a novel system to deliver the drug benefit, encouraging private, competing companies to negotiate the best prices they can with drug makers.

Congress included in its legislation a “non-interference” clause that preserves the right of these drug plans to negotiate prices freely with the drug companies, without intervention from the federal government. While Americans have mixed opinions about this gigantic government drug program, one thing is clear: Repealing non-interference would put the U.S. pharmaceutical industry on the European path, yet it is a top priority of liberals who plan to bring up this legislation next year.

If non-interference is reversed, it will allow the federal government to step in and set prices for all 40 million Medicare recipients. Since they consume almost half of all prescription medicines sold in the United States, this would effectively amount to nationwide price controls.

We’ve already seen such policies force drug makers out of Europe. Roche chairman Franz Humer has pointed out that the research-based pharmaceutical companies could just as easily move on to Asia, where technology and education are steadily improving. In fact, Roche has just opened a research center in Shanghai, while other drug makers are flocking to Singapore and India.

Of course, if the U.S. gives drug makers a reason to go on the move again, European governments could make their own pitch by eliminating the interventionist policies that have been undercutting drug innovation in their countries. They just might be able to lure talented drug researchers and pharmaceutical investments back home by recognizing the value of pharmaceutical research — not only in creating new medicines but in reviving a valuable industry.

Ms. Turner is president of the Galen Institute, a health-research organization based in Alexandria, Virginia.

Nevada Attorney General George Chanos has released an opinion concluding that Nevada law prohibits the importation of prescription drugs from Canada unless such prescription drugs have been approved by the Federal Food and Drug Administration.

That’s a safe bet.

The Attorney General’s Office drafted the opinion in response to a legal opinion request from Larry L. Pinson, Executive Secretary to the Nevada State Board of Pharmacy.

The opinion analyzes Senate Bill 5, enacted in a special session of the 2005 legislature, which was intended to authorize the licensing of certain Canadian pharmacies to provide only “FDA approved” prescription drugs by mail to Nevada residents.

That’s a sucker bet.

To pursue the metaphor, state legislators should stop encouraging their citizenry to play Russian Roulette with their health by purchasing medicines from non-FDA approved foreign sources.

The following blog contains non-emotional comments from Dr. Bob Goldberg …

After reading that the FDA approved the first drug for treating kidney cancer in over ten years, a drug that was so effective that the National Cancer Institute told the company that was developing it to stop the trial early, I wondered, “what would Merrill Goozner write.” Goozner, who has dumped on every new cancer drug developed and pissed on Tysabri the drug for multiple sclerosis which is about twice as effective as any other drug for MS on the market for many patients was true to form. Goozner once again blatantly distorts clinical data to assert that the drug, Nexavar, does not prolong life. In fact, many patients lived on average twice as long with end stage kidney cancer (6 months compared to 3 months) compared to people who had other drugs. Now anyone but Goozner, who wants to put new drugs in the worst light possible, will tell you that the average includes people who lived a lot longer than 6 months including those who went into remission. And as we develop genetic tests to identify who responds best to which cancer drugs we will be able to provide Nexavar to people with kidney cancer patients well before the cancer is end stage and treat it as a chronic disease as we are doing with breast cancer. The FDA and NCI rapidly reorganized the clinical trials for this drug around such new science as best it could. And it is in large part for this reason that Nexavar was so quickly approved after so much delay. Going forward the FDA is seeking to use tools that more accurately measure how and cancer drug works and what patients it works for.

But all you read from Goozner is the heart problems associated with the drug and how the Europeans are waiting, waiting and waiting for real survival data. Of course Goozner won’t tell you that the Europeans are still waiting for survival data about Herceptin even as we are using to basically cure breast cancer before it starts in a lot of women in an effort to save money. And he ignored the quote from FDA’s cancer division head Dick Padzur who said, “Rarely do we see a 100 percent improvement in a new cancer treatment.”

Goozner, like Sid Wolfe, who heads up Public Citizen, the group from which Goozner’s garbage flows is more interested in killing drug companies than in saving the lives of people. His life work is in contrast to a friend of mine, Alan Feldman who died five years ago this Hanukkah from kidney cancer. He was an oncologist. But more than that he was one of the kindest and most generous people I have ever known Even as he himself was dying from cancer he treated other patients, offering them hope and care. In the last of his journal entries Alan wrote that he hoped he could live to see the day when a more effective medicine for kidney cancer would be approved. He realized how precious each day was as a doctor, father and friend. My celebration of this Hanukkah will be enhanced by knowing that one his wishes has finally come to pass. But my joy in learning about the approval of Nexavar is tempered by the sadness in knowing that he is not alive to use it on behalf of others.

Bob Goldberg reports in from the Big Rock Candy Mountain.

FDA Moves to Decrease Lead in Candy (AP)

The FDA proposed Thursday a stricter recommended limit on the amount of lead, a highly toxic metal, allowable in certain types of children’s candy. The Food and Drug Administration now recommends that candies eaten by small children not contain more than one-tenth of a part per million lead. That amount of lead does not pose a significant risk to small children, the agency said. “This new guidance level will further reduce an already minimal risk from lead exposure in candy,” said Acting FDA Commissioner Dr. Andrew von Eschenbach.

For those of you thinking such a regulatory action is a well-meaning public health initiative, think again. I have in my possession the off-label responses of Sid Wolfe of Pubic Citizen and Charles Grassley to the FDA candy action. Wolfe of Public Citizen lambasted the FDA action stating “this is an obvious move by the agency to do the bidding of the junk food industry who wants to boost profits during the holiday season in a too-little, too-late effort to pass their poison off as healthy.” Senator Charles Grassley commented that the lead limit was yet another example of how industry is too cozy with the FDA. “If there really was a firewall between businesses and the agency, the lead would stay in and kids would eat less candy. I am demanding every candy maker send me every sample of candy ever sent to the FDA, every letter they ever sent to the FDA, every lab test sent to the agency and every document in the United States in every household in the country with the words lead and candy in them. In fact, if the word is spelled led, I want that document too. And the same goes for that cute stationery and pencils and toothbrushes with the name Candy or Candi on it.”

Texas won’t allow Canadian drugs after all

A new state law intended to help Texas consumers buy less
expensive prescription drugs from Canada was struck down Wednesday by
Attorney General Greg Abbott, who ruled that it violated federal law.
The attorney general said the statute violates the federal Food, Drug
and Cosmetic Act, which “makes it an offense not only to import, but to cause the importation of prohibited medications.”

Abbott, whose jurisdiction covers only Texas law, said similar proposals in Maryland, Tennessee and Vermont have encountered legal challenges.

Can FDA do more to speed the advance of cancer treatments? Of course. But FDA hasn’t been idle. Consider the agency’s existing initiatives to help make innovative therapies available more quickly and at a lower total cost while maintaining high standards of consumer protection.

FDA has already made great strides:

* Reducing drug development times by avoiding multiple review cycles
* Improving the review process through a quality systems approach to medical product review
* Supporting innovation in medical products by clarifying regulatory uncertainty and increasing predictability in product development

FDA has been available and engaged in constant communication sponsors early on in the review process including:

* End of Phase II meetings
* Pre-NDA meeting
* Post-NDA Submission meeting being piloted by the Oncology Division

FDA has requested and approved comprehensive development programs in advance of “Fast Track” designations, helping to ensure clinical trials are properly structured:

* Using newly developed Special Protocol Assessment guidance, product developers work more closely than ever before with the FDA to create phase III studies prior to implementation to gather all necessary information

* FDA’s call for the use of a Continuous Marketing Application enhances sponsor access to early guidance and feedback for Fast Track drugs or biologics intended to treat serious or life threatening diseases, and provides for FDA-sponsor agreement to engage in frequent scientific.

In addition to early and frequent communication, FDA’s quality systems approach to medical product review has facilitated the regulatory review process through:

* The implementation of the Common Technical Document (CTD) and the electronic CTD (eCTD), which uses cutting edge technology and combined with international public health policy to provide better quality, consistency and communication with sponsors. Another key component to this program is the development of new medicines by creating clearer guidance for product approvals in priority areas (e.g., obesity, diabetes and oncology).

* The Special Protocol Assessment (SPA), guidance was created to help product developers design phase III trials that will ensure necessary data is being collected. In addition, the FDA works closely with sponsors to review and approve a comprehensive development program in anticipation of Fast Track designation and the potential filing for Accelerated Approval. This includes phase III confirmatory studies —a major theme repeatedly mentioned as a criterion for accelerated approval.

Overall, these and other initiatives are designed to help the FDA achieve its public health mission of promoting and protecting patient health by reducing time to market for new medical products such as Nexavar — resulting in earlier patient access to safe and effective treatments.

Do more? Sure. But credit where credit is due for important reforms already designed and implemented.