Is Everyday Oncology Day at the FDA?

03/12/2019 01:55 PM | Peter Pitts

Two exciting pieces of news from White Oak. The first is that the Director of the National Cancer Institute (NCI), Dr. Ned Sharpless, has been tapped to be the interim Commissioner of the FDA. Whether or not this translates into his getting the official nod for the nomination is anyone’s guess. But he’s clearly the odds on favorite – and that’s a good thing.
 
The second item of interest is the release of new recommendations for broadening cancer clinical trial eligibility criteria. Per the FDA, these new guidelines will facilitate the design of clinical trials that are more representative of the patient population and maximize the generalizability of the trial results and the ability to understand the therapy's benefit-risk profile across the patient population likely to receive the drug in clinical practice.  
 
This is Big News across a spectrum of issues – including expanded access. As Janet Woodcock mentioned earlier this year, “Expanded access programs are only an iterative step towards more regular and robust use of platform trials.” And, per Bob Temple, “Expanded access protocols can produce data that demonstrate effectiveness in populations outside those studied in registration trials, potentially leading to broader indications.”
 
Hopefully, Dr. Sharpless will continue to urge divisions – beyond Oncology – to embrace new clinical trial protocols for both orphan diseases and other areas of urgent public health concerns.  Read More & Comment...

Gottliebensraum

03/10/2019 03:36 PM | Peter Pitts

Gottliebensraum: Will the FDA need more (or less) living space in a post-Gottlieb world?
 
Since Scott Gottlieb’s decision to step down as FDA Commissioner the tributes have been coming in fast and furious. And they're all, save for Sid Wolfe of course, well deserved. But here’s something you haven’t thought about – the exceptional role and excellence of the FDA career staff.
 
One of the reasons that Scott was so successful in so many was because he acknowledged the importance of the FDA's professional staff. Their participation and enthusiasm to share his agenda has helped create a more elastic and angular FDA.
 
So, now what happens? Can the many initiatives begun at say, CDER, gain and maintain velocity? Or do they kind of just fade away? How sharp will FDA elbows be as we slowly march our way towards another glorious round of PDUFA-Palooza? And e-cigarettes? Will planned agency actions back a half-step back to stay quiet and avoid attention? Or will we get a surprise?
 
Swap out NCI for FDA? It’s been done before and wasn’t a disaster, but why disrupt two agencies that are functioning well when you don’t have to. Alex Azar has seen this before as well and his suggestions will carry a lot of weight. As will the Vice President’s.
 
Is the President a wildcard? Are you kidding me? So, there’s that.
 
Momentum comes from without and within. A Scott-Free FDA presents a lot of opportunity space. (But, then again, I’m a cockeyed optimist.)

Stay tuned.  Read More & Comment...

Great Scott!

03/07/2019 08:56 AM | Robert Goldberg

Those of us who have worked with Scott Gottlieb were not surprised at the extraordinary energy and focus he brought to the job as FDA Commissioner.  Similarly, it was unsurprising that Scott announced his resignation effective next month.   As dedicated as he was to the role at the FDA, he is even more devoted to his family.  

His tenure was short but his impact on the agency and the public health will be enduring.  Scott spent most of time and energy implementing the 21st Century Cures act and building the infrastructure to move product development away from randomized controlled trials and encouraging the use of predictive biomarkers and real-world evidence.  His public pronouncements about drug prices, PBMs and vaping were not mere rhetoric.  Though all the initiatives in these areas are not fully implemented, it is to be noted that Scott never said or tweeted anything he was not prepared to back up with action. 

Most important, Scott raised the bar for the next FDA commissioner.   The agency – and the country – has been blessed with a series of solid FDA commissioners over the past decade or more.  Mark McClellan, Andy von Eschenbach, Peggy Hamburg, Rob Califf all made important contributions to the FDA’s modernization and its movement away from what Scott called the hunger for statistical certainty.  It can be truly said that the FDA is now leading the way in personalized medicine, regenerative medicine and applying regulatory policy to promote competition.  

There are some who still wish to turn the clock back on a decade of FDA reform.   Organizations funded by John Arnold, in particular, want to use FDA regulation to slow down drug development, limit investment in orphan drugs and eliminate patient-centered drug development.  But Scott has, by showing how smart regulation is done, demonstrated that much would be lost if we turn back now.   He built, enlarged and secured a broad consensus about FDA’s mission. In doing so, Scott did something nearly impossible in public policy today: he turned a government agency into a source of health, hope, and possibility. 

Well done. 


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Dispatches from the Inquisition

02/26/2019 09:41 AM | Peter Pitts

What the best advice for a bevy of Big Pharma execs as they prepare for a Congressional crucifixion? Don’t bend over.
 
Just the other day, the New York Times ran an editorial titled, “It’s Time for Pharmaceutical Companies to Have Their Tobacco Moment.” Do the CEOs need a roadmap to know where this is going? Medicines save lives. Tobacco kills. While the headline is off-base and objectionable, the prose makes a number of important points that can be summed up in one statement: Pharma has a lot of explaining to do.
 
So, here’s the good news – it’s a terrific opportunity to speak truth to power. But, will that happen? Here’s what Senator Charles Grassley had to say on the matter:
 
“I hope that the drug CEOs testifying tomorrow don’t try to blame everyone but themselves/take no responsibility for their role in fixing the problem. We already understand there are other factors to consider. Tomorrow is about the part drug companies can do to lower costs for patients and taxpayers.”
 
Wise words from a wise man. But will those posing the questions be seeking sage advice or their very own "I am Torquemada" moment?
 
It’s time we all took to heart the Japanese proverb, “Don’t fix the blame. Fix the problem.”
 
And to those CEOs preparing their remarks – be honest, forceful and helpful. Call it as you see it. Have solutions. That’s why you earn the big bucks.

As the great Frank Douglas reminds us, "It's not what you control, it's what you contribute."

Do the right thing.  Read More & Comment...

Purdue Punches Back

02/26/2019 08:51 AM | Peter Pitts

How bad is it getting for Purdue Pharma? Bad enough that they're actually fighting back – and not pulling any punches.
 
They’ve responded forcefully to the recent 60 Minutes episode with a tick-tock response and a very unambiguous lawyers letter.
 
Some snippets:
 
Contrary to assertions that FDA’s changes to the OxyContin indication in 2001 broadened the medicine’s use to chronic pain, the opposite was actually the case. In July 2001, to address extensive abuse of OxyContin, FDA added a black box warning and narrowed the indication to “the management of moderate to severe pain when a continuous, around the clock analgesic is needed for an extended period of time.”
 
Purdue Pharma expressed concerns in the following letter to Mr. Bill Owens, Executive Producer of 60 Minutes …
 
Despite multiple meetings, phone calls, and email exchanges between representatives of Purdue and 60 Minutes Associate Producer Sam Hornblower (during which detailed information was exchanged), we are still concerned that Mr. Hornblower and 60 Minutes intend to air a biased and one-sided segment rife with significant errors and inaccuracies, and that 60 Minutes will refuse to disclose to its viewers critical information about the sources it intends to rely on (and even put on the air), including their personal biases toward Purdue and their financial incentives in making false and misleading statements about the company and OxyContin.
 
Dr. Kolodny has admitted, in the form of a court-filed expert disclosure report made under the penalty of perjury, to the fact that he is a paid consultant and advisor, earning $725/hour for his services.2He also lists on his CV that he submitted to the U.S. House of Representatives Committee on Energy and Commerce on February 27, 2018 as part of his required disclosures prior to his testimony under oath, that he served in a “CONSULTING AND ADVISING” role for “CBS 60 Minutes” in 2017 as part of 60 Minutes’ “The Whistleblower” segment. A copy of this expert disclosure report and Dr. Kolodny’s CV he submitted for his congressional testimony is enclosed for your reference. The facts demonstrate that Dr. Kolodny admits that he worked for 60 Minutes as a consultant and advisor within the last two years (and on a segment that touched on substantially similar subject matter is this segment) and that he is also a paid consultant on behalf of plaintiffs currently involved in active litigation with Purdue.
 
In that same vein and upon information and belief, we understand that Dr. Kessler has also performed extensive work for and has long consulted with and on behalf of plaintiff-side law firms who are or have been engaged in litigation against Purdue regarding the very same issues he purports 6to comment on for 60 Minutes’ planned segment. These types of consulting and advising roles for law firms involved in active or potential litigation are rarely if ever performed for free. It is incumbent upon 60 Minutes, as the ultimate publisher and airer of segments featuring biased and conflicted individuals like Dr. Kolodny and Dr. Kessler, to thoroughly investigate and vet its own sources and intended on-screen interviewees to confirm any such biases and financial incentives for promoting certain viewpoints and commentary. And where such biases and financial or otherwise personal motives to provide one-sided, incomplete, and even false commentary on a subject matter such as opioid use in the United States exists(as it clearly does with Dr. Kolodny and Dr. Kessler who are, at a minimum, paid-for consultants by individuals and parties who are currently suing Purdue), 60 Minutes has a duty to its viewers to clearly and unambiguously disclose such bias and the facts supporting their incentive and motivation for their viewpoints and commentary during any aired segment in which Dr. Kolodny and Dr. Kessler participate in, and to confront such bias head-on.
 
Transparency for thee but not for me?
 
Powerful stuff.
 
As Pharma CEOs prepare to step up to the plate and face a Congressional grilling, it’s time for Pharma to forcefully defend itself with context and … the truth.  Read More & Comment...

"Universal Healthcare" and the Realities of Rationing

02/17/2019 10:00 AM | Peter Pitts

Per the New York Times editorial, “How Much Will Americans Sacrifice for Good Health Care?, one urgent issue relative to a broader government role in providing healthcare is rationing. No nation (and certainly not those in Europe or Canada) provide universal access to everything. Government bureaucrats make decisions about what medical treatments (new cancer drugs, surgeries, new genetic interventions, etc.) are paid for.

Today, of the 74 cancer drugs launched between 2011 and 2018, 95% are available in the United States, 74% in the U.K., 49% in Japan, and 8% in Greece. Access to these cutting-edge drugs means that patients can use the latest treatments to help cure their conditions; it’s why the United States has the highest five-year survival rate for cancers in the world.

Do we want Uncle Sam, MD to replace the considered opinions of our own physicians? Government-paid healthcare presents significant hurdles as well as interesting opportunities and healthcare rationing is an important part of the discussion about any kind of government-run healthcare proposal.  Read More & Comment...

Why the Trump PBM Reform Plan Has Promise and Why Democrats Oppose IT

02/13/2019 12:33 PM | Robert Goldberg

I wrote two op-eds that just happened to be published the same day (today)

The first one explains whyTrump's Prescription Drug Price Reform is Promising.

Soaking the Sick to Make the Rich Even Richer discusses how Democrat opposition to the Trump proposal has led legislators from that party propose giving PBMs more control over access to medicines.  


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Frank Douglas: The Definition of a Free Man

02/12/2019 05:19 PM | Robert Goldberg

Not many people are told, at gunpoint no less, by a dictator to take the next flight out of his country and never come back.   Fewer still have replied by asking the dictator to pay for the trip, let alone live to do so.  

But such quiet acts of defiance connect the "Defining Moments of a Free Man From a Black Stream" by Frank Douglas.  Douglas, one of the most highly honored and respected leaders in the pharmaceutical industry, could have written an entire book about his many careers ranging from a physician, a drug development executive, venture capital advisor, biotech CEO and director of two initiatives to accelerate the commercialization of academic life science research and that alone would have been interesting, informative and inspiring.   But the formative experiences, the events that truly defined the life of Frank Douglas, were forged not in corporate boardrooms or high-level meetings but instead in how he chose to act when faced with beatings, homelessness, outright racism, and political intimidation. 

The autobiography opens with a 12 year Frank Douglas being whipped by his mother after being told that he deliberately dumped a week's worth of groceries from his bicycle basket by her emotionally unstable and sadistic sister, Edith.  It wasn't the first time.  Edith took a sick delight in blaming Frank for things he did not do, knowing that it would lead to a beating.  After this incident, Frank decided he had no choice but to kill himself by plunging into the deep waters off the coast of his native Guyana.  

He asked himself how much "hope is there for a boy of twelve when in his own home he cannot defend himself or defend against injustice?"  Ever the rational being, Frank realized that the possibility of jumping and living in pain wasn't worth the effort to commit suicide.  Instead, he "concluded that there had to be a different solution to my dilemma."

He ran to the home of a woman he called "Moms" who is the mother would take to visit every Sunday after church and declared he wanted to live there.  It was then that Moms told Frank that her son was his real father.  The revelation did not devastate him, it made him stronger.  He went home, no longer a victim, and told his mother and aunt Edith he would not be beaten or manipulated again. 

Such defiance was forged from faith and fearlessness in confronting events and forces that appeared to be beyond his control.  Much like Jacob wrestled God from darkness into dawn before receiving the name Israel, Frank Douglas truly earned his name (which literally means a free man from a black stream) by virtue of his willingness to confront malevolent, even violent forces throughout his life.  

Throughout his academic career which took him from a small private school in Guyana to Lehigh University and then to Cornell for a Ph.D. in Chemistry and a medical degree, Douglas faced outright racism.  Others would have endured it or, especially today sought to triumph by being defined as a victim.  Instead, Frank Douglas took on the threats, often without regard to short term consequences, by confronting those who wanted to squash him because he was black. 

If he had acted otherwise, the world would be a lesser place.  His novel approaches to conducting drug discovery and development spread from the companies he worked for and transformed practice throughout the industry.  The hundreds of students and entrepreneurs that sustain medical innovation would be fewer in number and less effective.  And those fortunate enough to have read the book would not have the privilege of being taught an ageless lesson about the human condition:  that our character is not just our destiny, it is the legacy we leave behind.   And as Defining Moments demonstrates, that heritage is shaped by the work of our own hearts and hands and not the faceless, inexorable traverse from past to future.   Read More & Comment...

Supplementing DSHEA

02/11/2019 10:25 AM | Peter Pitts

Very important initiative from the FDA to update DSHEA – without even once mentioning CBD oil. If you don't think the agency takes the twin issues of quality and claims seriously -- think again. Some excerpts:

Statement from FDA Commissioner Scott Gottlieb, M.D., on the agency’s new efforts to strengthen regulation of dietary supplements by modernizing and reforming FDA’s oversight

The opportunity to strengthen the framework that governs dietary supplements couldn’t come at a more pivotal time. On the one hand, advances in science and the growth and development in the dietary supplement industry carries with it many new opportunities for consumers to improve their health. At the same time, the growth in the number of adulterated and misbranded products – including those spiked with drug ingredients not declared on their labels, misleading claims, and other risks – creates new potential dangers.
 
Legitimate industry benefits from a framework that inspires the confidence of consumers and providers. Patients benefit from products that meet high standards for quality.
 
Dietary supplements can, when substantiated, claim a number of potential benefits to consumer health, but they cannot claim to prevent, treat or cure diseases like Alzheimer’s. Such claims can harm patients by discouraging them from seeking FDA-approved medical products that have been demonstrated to be safe and effective for these medical conditions. In recent years, we’ve also taken action against companies and dietary supplements making similar claims regarding treatment of serious conditions such as cancer and opioid addiction. These enforcement actions are just one part of our overall efforts to update our policy framework governing dietary supplements. 
 
Our first priority for dietary supplements is ensuring safety. Above all else, the FDA’s duty is to protect consumers from harmful products. Our second priority is maintaining product integrity: we want to ensure that dietary supplements contain the ingredients that they’re labeled to contain, and nothing else, and that those products are consistently manufactured according to quality standards. Our third priority is informed decision-making. We want to foster an environment where consumers and health care professionals are able to make informed decisions before recommending, purchasing or using dietary supplements.
 
I’m pleased to announce that we’ve recently created the Botanical Safety Consortium, a public-private partnership that will gather leading scientific minds from industry, academia and government to promote scientific advances in evaluating the safety of botanical ingredients and mixtures in dietary supplements. This group will look at novel ways to use cutting-edge toxicology tools, including alternatives to animal testing, to promote the goals of safety and effectiveness we share with consumers and other stakeholders
   Read More & Comment...

Greedy Tort Bar Tarts Up the CREATES Act

02/07/2019 07:40 AM | Peter Pitts

When members of the tort bar start to salivate over a piece of legislation, it’s worthwhile to find out where the red meat resides.

In a rush to pass legislation to “lower drug prices,” lawmakers are pushing forward H.R. 965 (Cicilline and Sensenbrenner) and S.340 (Leahy). The worthwhile goal of this new version of the CREATES Act is to prohibit pharmaceutical and biologic companies from engaging in anti-competitive conduct that blocks lower-cost generic drugs from entering the market.

Both bills address an important problem – but create an even bigger one.

This proposed legislation establishes a private right of action for “eligible product developers” to sue “license holders” for failure to comply with the process set forth in CREATES for providing access to covered product.  Good! But …

As written, the CREATES Act is ripe for abuse by entities that have no intent to actually develop a generic or biosimilar version of the covered product.  This potential for abuse is exacerbated by the significant monetary damages available under CREATES—up to the amount of revenue generated on the covered product during the period of violation.  Indeed, in certain instances it may be more profitable to litigate and obtain damages under CREATES than it would be to actually market a generic/biosimilar product. 

Can you hear the tort bar drooling? Can you hear the tort bar … drafting?

As currently drafted, the CREATES Act could have significant unintended consequences:

The damage provisions of the current draft create the potential for windfall damages, which will distort incentives. Specifically, the bill allows for damages up to the entire gross profit of the brand medicine during the period of negotiations.  This creates a powerful incentive for generic companies to prolong negotiations (increasing their damage award), which will actually delay generic entry and competition in the marketplace.

Indeed, generic developers would be able to earn more from a lawsuit than from actually selling the proposed generic drug.  An "opportunistic" company (Can you say "Shkreli?") could develop a business model of demanding samples and engaging in litigation for damages without ever submitting an abbreviated application to FDA—undermining the bill’s stated goal to speed availability of lower-cost drugs for patients.

Smart changes will fix these problems, save the government money and achieve the desired policy goals of facilitating generic access to samples and increasing competition; maintaining safeguards for products subject to a REMS; and ensuring generic developers actually develop generic products. 
Here’s a savvy path forward:

Establish an affirmative defense for license holders where the license holder has made a timely offer to provide sufficient quantities of samples at commercially reasonable, market-based terms.

Such an affirmative defense is intended to prevent frivolous litigation—where samples are offered on commercially reasonable terms, the eligible product developer should not be able to decline the offer and continue litigation.  The term “commercially reasonable, market-based terms” is defined to provide further clarity to all parties and avoid unnecessary litigation.  Remedies would not be available if the license holder has established an affirmative defense by a “preponderance of the evidence.”This affirmative defense also protects good acting companies from protracted litigation and stops generic sponsors from unnecessarily prolonging negotiations to increase damages.

Revision to the definition of “eligible product developer” to clarify that the eligible product developer must be a person that seeks to develop “and submit” an application for a generic or biosimilar product. 

These change will help ensure that only legitimate manufacturers are considered eligible product developers for purposes of CREATES; entities that seek only to engage in frivolous litigation and do not seek to submit a generic/biosimilar product application would not be eligible for the remedies under CREATES. The tort bar won’t like it – but this important legislation must be about lowering drug prices – not raising their income.  Read More & Comment...

Separating the Healthcare Wheat from the Political Chaff

02/05/2019 10:09 PM | Peter Pitts

Last night during his State of the Union, the President addressed the issue of drug costs. Some of the ideas are sound while others deserve, shall we say, more careful consideration. Let’s look at the record.
 
BAD IDEA: Adopting an international pricing index (IPI) payment model for Medicare Part B in which a “reference price” for a prescription drug will be generated by taking the average price of that drug from 16 countries.

The president claims that proposal will lower the cost of drugs, makes America first again by stopping foreign freeloaders and limits “out-of-control” prices.
 
In reality these proposals reduce access for patients:
 
* These countries utilize government controlled and single-payer healthcare systems where governments leverage their purchasing power to dictate prices, meaning that these “reference prices” have nothing to do with actual market values. 

* In these systems, governments can only contain healthcare costs by restricting or refusing care, meaning that if a drug costs more they are willing to pay, they can refuse to cover it for patients or limit the number of patients who can receive the treatment. 

* This is why “of 74 cancer drugs launched between 2011 and 2018, 70 (95%) are available in the United States. Compare that with 74% in the U.K., 49% in Japan, and 8% in Greece.”

Access to these cutting-edge drugs means that patients can use the latest treatments to help cure their conditions; it’s why the United States has the highest five-year survival rate for cancers in the world.
 
Price controls reduce innovation:
 
* By leveraging CMS’ purchasing power to impose these price controls, the proposal creates a dramatic market imbalance which would force innovators to adjust business models and reduce investment in R&D – reducing high-risk research into complex conditions such as Alzheimer’s Disease. For example, there were numerous, high-profile failures in late stage clinical trials for Alzheimer’s treatments just in 2018. These failures represent years and billions of dollars in research which will yield no return – all part of the risk of scientific research. 

* The U.S. “funds about 44% of world medical R&D, invests 75%of global medical venture capital, and holds the intellectual property rights for most new medicines,” due to our market forces which incentivize the kind of risk that companies routinely take despite potential failures. 

GOOD IDEA: Increasing transparency around rebates in Medicare will bring down costs for patients.
 
The administration has proposed increasing restrictions around how pharmacy benefit managers (PBMs) and insurers process rebates for pharmaceutical drugs with the intent of ensuring such rebates and savings go to the patient at the point of sale.
 
This proposed rule also reduces incentives for PBMs to opt for higher-cost treatments:
 
* As higher-cost treatments often have some of the largest rebates, PBMs are currently incentivized to choose more expensive treatments and pocket the rebate savings, increasing costs for insurance companies, keeping list prices high without lowering costs for patients. 

* By mandating rebates and savings are provided to patients at point of sale, PBMs are no longer incentivized to keep list prices high or to choose the most expensive treatments. 

BAD IDEA: A rule weakening protections for six-protected classes in Medicare Part D will hurt patients.
 
The administration has proposed loosening regulations in Medicare Part D which ensure access to “all or substantially all” medications that treat diseases in six-protected classes. These medicines are protected because the treat serious, chronic and often life-threatening illnesses like clinical depression, HIV and cancer.
 
The president believes this proposal Is another example of reigning in out-of-control healthcare costs and that the new rule will force providers to make better drug choices and help fix Medicare’s cost issues
 
The reality is that this proposed rule will restrict access for patients.
 
The rule would implement what’s known as “step therapy,” commonly referred to as “fail first.” 

This means that even if a patient’s doctor has recommended a treatment, insurance companies are empowered to force a patient to first try a different treatment, waiting to see if it fails before a patient can “progress” to other options or eventually the doctor’s original prescription. 

For patients, this means that they will need to endure long periods of treatment before finally arriving at one that works, lengthening the period of illness and causing increased discomfort. 

GOOD IDEA: Transparency on the hospital pricing front.
 
The President rightly noted that hospitals are largely unchecked when it comes to procedure or prescription drug prices. On January 1, a new rule forcing hospitals to disclose their prices went into effect, creating greater transparency throughout the system and providing consumers with more information to make informed decisions about their care. In the long term, these disclosures could allow consumers to act rationally and opt for the best value for their care, creating incentives to reduce prices for patients.
 
GOOD IDEA: Enhanced PBM Transparency.
 
Last autumn, the President signed legislation banning “gag clauses” in pharmacy benefit contracts. These clauses stopped pharmacists from disclosing to patients when they could save at the pharmacy counter. By banning these practices, the administration rightly targeted the added costs that middlemen like PBMs add to the system, reducing burdens for patients and shining a light on unfair practices.
 
The best ideas are common property. – Seneca
 
The President wants to protect insurance coverage for pre-existing conditions. Bravo. The President wants to “reduce the price of healthcare and prescription drugs," eradicate HIV-AIDS and defeat pediatric cancers.  Bravo. Now that “the speech” is behind us, the President and Congress should focus and build upon the administration’s successes  in bringing down the real costs of healthcare instead of pursuing fantasy land socialist policies that puts our healthcare system under government control, deters urgent innovation and rations patient care.  Read More & Comment...

AI? Aye. Aye.

02/04/2019 08:50 AM | Peter Pitts

From The Cancer Letter …
 
Gottlieb: FDA to expand real-world data infrastructure to enhance AI capabilities
By Matthew Bin Han Ong
 
FDA is enhancing its ability to handle real-world evidence by training reviewers in data science via a curriculum on machine learning and artificial intelligence, said FDA Commissioner Scott Gottlieb.
 
“We’re working to develop new guidance documents to assist sponsors interested in developing and using real-world evidence,” Gottlieb said at a Jan. 28 panel discussion organized by the Bipartisan Policy Center.
 
“Our ‘Framework for Real-World Evidence Program’ will apply a consistent strategy for harnessing these tools across our drug and biologic review programs,” said Gottlieb, referring to a framework document published last December. The document evaluates the use of RWE to support additional indications for already approved drugs as well as to satisfy drug post-marketing study requirements.
 
“The framework is aimed at leveraging information gathered from patients and the medical community to inform and shape the FDA’s decisions across our drug and biologic development efforts,” Gottlieb said. “The goal is to develop a path for ensuring that RWE solutions can play a more integral role in drug development and regulatory life cycle at the FDA.
 
“Today, I’m announcing four additional activities that’ll help FDA and stakeholders advance these opportunities for the benefit of patients.”
 
FDA plans to:
 
Support the seamless integration of digital technologies in clinical trials by developing a framework on how digital systems can be used to enhance the efficient oversight of clinical trials. These technologies present important opportunities to streamline drug trials and improve data site integrity by remotely monitoring data trends, accrual, and integrity over the course of a trial.

Use digital technologies to bring clinical trials to the patient, rather than always requiring the patient to travel to the investigator. More accessible clinical trials can facilitate participation by more diverse patient populations within div   erse community settings where patient care is delivered, and in the process can generate information that’s more representative of the real world and may help providers and patients make more informed treatment decisions.

Explore how reviewers can have more insight into how labeling changes inform provider prescribing decisions and patient outcomes. The FDA’s Information Exchange and Data Transformation—or INFORMED—is using RWD to examine the impact of a recent FDA labeling change for two approved products from weight-based dosing to flat-dosing of immune checkpoint inhibitors. This project is focused on how community practices are adopting the flat dose after the labeling change, and factors that may affect adoption.

Work with the medical product centers to develop an FDA curriculum on machine learning and artificial intelligence in partnership with external academic partners. The aim of this program is to improve the ability of FDA reviewers and managers to evaluate products that incorporate advanced algorithms and facilitate the FDA’s capacity to develop novel regulatory science tools harnessing these approaches. 

FDA’s Oncology Center of Excellence is working with Friends of Cancer Research, NCI, and others to harmonize reference standards for assessing tumor mutational burden—as determined by multiple proprietary assays—to help identify cancer patients who are more likely to respond to immunotherapy.
 
Harmonizing the measurement of tumor mutational burden across commercial assays used in routine oncology care can help reduce treatment variability, and improve the utility of TMB as a potential biomarker for enriching clinical trials that are designed to test immunotherapies. OCE is also working on a project exploring whether it’s possible to use real world endpoints, such as time to treatment discontinuation (TTD), as a potential real-world endpoint for pragmatic randomized clinical trials, for FDA approved therapies in the postmarket setting.

“Through ‘Project: Switch,’ OCE is investigating whether well-matched contemporaneous synthetic control arms based on prior clinical trials can be used to make inferences regarding the effect of a new drug, or whether a synthetic control could be used to compare data to active control arms in ongoing randomized controlled trials in rare tumor types where the standard of care remained stagnant, and the prognosis is especially poor,” Gottlieb said.
 
FDA’s framework for RWE, created in response to a mandate in the 21st Century Cures, spells out the agency’s thinking on the types of guidances that need to be developed before RWE can be routinely used in regulatory science.
 
“We really need people to weigh in on the guidances, because one thing I did learn at FDA, pretty much if the FDA says something, the industry is going to do it,” former FDA Commissioner Robert Califf said at the meeting Jan. 28. “So, we’d like to get those guidances right.
 
“I’m very excited that Amy Abernethy is coming to the FDA [as principal deputy commissioner]. She is an expert on this, I have every confidence that she’ll help guide us through this.”
 
There is a need to better understand AI algorithms, and whether they generate results that are replicable, said former FDA Commissioner Mark McClellan, who is also a former commissioner for the Centers for Medicare and Medicaid Services.
 
“It’s great to see the progress that’s happening at FDA,” McClellan said at the meeting. “I think Rob [Califf]’s vision for what the future ought to look like, which is a lot of data from a wide variety of sources, including many that a lot of people in the health care industry aren’t really thinking about as important sources of health relevant information—that is the right vision. I think we’re still a long way from getting there. So, great vision, great potential.”

Using real-world data effectively is akin to monitoring jet engines to prevent plane crashes, said Andrew von Eschenbach, former FDA commissioner and former NCI director.
 
“People won’t die, because planes don’t crash. GE has a system in which their jet engines have an incredible number of sensors that are in those engines and they’re sensing and monitoring those engines in real time, and so they know in real time if there’s anything going wrong,” von Eschenbach said at the meeting.
 
“I think what we have is the opportunity with the kinds of tools that are now becoming available, be they sensors in humans, or the opportunity to access the data that’s coming in both real time and retrospectively, we’re going to be able to prevent problems. We’re going to be able to see ahead, just like they can, and not only retrospectively correct what’s going on, but prospectively be able to create what needs to be created to save lives.”  Read More & Comment...

Safe Harbors & Invisible Hands

02/01/2019 10:40 AM | Peter Pitts

From Bloomberg ...

Drug Rebate ‘Safe Harbor’ Axed in Highly-Anticipated Proposal
 
The legal status now protecting controversial drug rebates would be flipped upside down under a highly-anticipated proposal released Jan. 31.
 
Drug rebates paid by drugmakers to middlemen and insurance plans providing coverage through Medicare’s Part D drug program or Medicaid would no longer be protected from federal anti-kickback laws under proposed regulation from the Health and Human Services Department.
 
The anti-kickback statute prevents transactions “intended to induce or reward referrals for items or services reimbursed by federal health care programs.” However, drug rebates are currently exempted from that statute and those exemptions are often referred to as “safe harbors.”
 
The proposed change also would create a new safe harbor to protect direct discounts to patients at the pharmacy counter, the HHS said. It also would create a new safe harbor protection for fixed-fee service arrangements between manufactures and drug middlemen called pharmacy benefit managers.
 
The current drug rebate system has been criticized for incentivizing higher list prices for drugs. Drug companies charge more for the drug initially, but then offer refunds or “rebates” to pharmacy benefit managers and plans. Drug companies say the process forces them to raise the original price.
 
Changing the system is part of the Trump administration’s plan to lower drug prices, and many have said changing the rebate structure could be a massive step toward that goal
 
‘Invisible Hand’
 
The trade-off would be higher premiums in Medicare, but the government counters that this change would “lead to lower Part D spending for Medicare beneficiaries as a whole, because the projected reductions in out-of-pocket costs are larger than potential increases in premiums.” The pharmaceutical lobbying group said in a statement pharma companies support the plan. It will “fix the misaligned incentives in the system that currently result in insurers and pharmacy benefit managers (PBMs) favoring medicines with high list prices.”
 
“What the safe harbor has allowed [pharmacy benefit managers] to do is act as a non-regulated invisible hand in the drug pricing ecosystem,” Peter Pitts, president of the Center for Medicine in the Public Interest, told Bloomberg Law.
 
The center is a nonprofit research and education organization focused on patient-centered health care. “By removing the safe harbor, it’s forcing PBMs to play by the rules like everyone else and be transparent about it,” he said.
 
The HHS is also asking the public to weigh in on potential transparency requirements that would require drug middlemen to disclose details of fee arrangements with drugmakers and plans.
 
But would the change lead to directly lower prices for consumers? Pitts thinks so. “One of the many important things it would do is to reduce the price for patients at point of sale at the pharmacy,” he said. “That’s what this is designed to do.”
   Read More & Comment...

The Real Problem with Biosimilars

01/10/2019 09:38 AM | Peter Pitts

In today’s Washington Post, our long-time pal Chris Rowland writes, “Health-care and government officials are growing concerned that the makers of the most advanced drug therapies are using scare tactics to ward off emerging generic versions of their products, a bid to protect profits that has enormous implications for the nation’s efforts to control health-care costs.”
 
There are two major problems with this statement. The first is that the manufacturers of biosimilars are those same “makers of the most advanced drug therapies.” The second issue is far more important – that’s not even the problem.
 
Why haven’t biosimilars gained a larger share of the market? There are a number of structural ecosystem issues that reflect misaligned incentives in the marketplace. The industry here isn’t just Big Pharma, but also “Big Payer.”
 
The insurance industry and prescription benefit managers (PBMs) engage in a dance called “exclusionary contracting” that often blocks a less-expensive product from replacing a costlier one on a patient’s insurance plan. Biological medicines (both brand and biosimilar) are purchased via a “buy-and-bill” process, where providers purchase medicines and then bill the payers (both private or public) once the medicines have been administered to the patients.
 
The net result is a “cost plus” payment system, where providers lose money when they prescribe a lower-cost product. The current system also incentivizes payers to prefer medicines that carry higher rebates rather than lower list prices, driving preferences for higher-priced products and anti-competitive behavior that blocks access to other medications.
 
Unsurprisingly, manufacturers are willing to raise prices and transfer the greatest list-price-based rebate value to middlemen to secure preferred formulary position at the expense of real free-market competition, while also limiting the therapeutic options of physicians and patients.
 
“Facts,” as John Adams reminds us, “are pesky things.” Blaming Big Pharma may resonate with politicians and the press – but it’s not going to advance the worthy cause of biosimilars. As they say in Japan, don’t fix the blame, fix the problem.  Read More & Comment...

Joy for ODES

01/08/2019 09:26 AM | Peter Pitts

FDA plans to create a new office to leverage cutting-edge science
By Matthew Herper @matthewherper
 
The Food and Drug Administration plans to create a new office to improve the review of new medicines — one that will develop a standardized approach to using personalized medicine, digital data, and patients’ own reports, according to Commissioner Scott Gottlieb.
 
Gottlieb will outline the plan for the new 52-person group, called the Office of Drug Evaluation Science (ODES), as part of a talk at the annual J.P. Morgan Healthcare Conference on Tuesday. Because of the government shutdown, he will deliver the talk via videoconference. “We’re operating with limited staff and I’m needed here,” he said.
 
He said the new office is not just an organizational shift, but part of something grander.
 
To spend or not to spend: Investing for commercial success as an emerging company

A review of emerging biopharma company launches identifies the “sweet spot” for launch spending that could mean the difference between success and failure.
 
“Eventually the drug review process will look a lot different,” Gottlieb wrote in an email. He envisions a world where data will be uploaded from drug company studies into the cloud, and instead of looking at the charts and tables companies create themselves, the FDA will use its own standardized methods on the raw data. “That is what I mean by a structured approach,” he said. “That is where we are heading, starting with the evaluation of safety data.”

Often, industry’s approach can seem anything but structured. For instance, immune-system-unleashing cancer medicines like Merck’s Keytruda, Bristol’s Opdivo, and AstraZeneca’s Imfinzi all depend on tests for the presence of a protein called PD-L1 in tumors; but each company used its own measures.
 
But these kinds of personalized approaches are becoming ever more important. Last year, the FDA even approved two drugs not for traditional cancer categories, but for cancers caused by particular genetic mutations. (The drugs: Keytruda for patients whose tumors have a condition called MSI-High, and Vitrakvi, from Loxo Oncology and Bayer, for tumors caused by mutations in a protein called TRK.)
 
Another important mission for the new office will be understanding how to turn what patients tell doctors into structured data. Take the case of Pfizer’s gene-targeted lung cancer drug Xalkori. It’s because of patient reports that the drug’s label contains a warning that it can cause eye problems, but patient reports also showed that it may reduce worsening of shortness of breath. Patient reports have become increasingly important to the agency since 2011, when the FDA demanded that Incyte Pharmaceuticals, which was developing a drug called Jakafi for myelofibrosis, show not only that the medicine shrank patients’ spleens but also made people feel better.
 
ODES will be part of the Office of New Drugs, which is itself part of the FDA’s Center for Drug Evaluation and Research, which oversees the approval of new medicines. It will have its own director, and three divisions: an 18-person Division of Clinical Outcomes Assessments, charged with evaluating measures of how well drugs are working and how safe they are; an 18-person Division of Biomedical Informatics and Safety Analytics, which will evaluate new ways of using information technology; and an 11-person Division of Research and Biomarker Development, whose job it will be to monitor all those blood draws and genetic scans.
 
The new office is going through the final stages of review and Gottlieb expects to start the office in the first half of this year.
 
“These are now hard sciences,” Gottlieb said. “We think this is going to allow us to understand safety and efficacy much more efficiently.”  Read More & Comment...

Solving the Drug Shortage Problem

12/18/2018 08:23 AM | Robert Goldberg

The primary cause of drug shortages is, to paraphrase the old joke, that the portions are small and the market is terrible.  It’s hard to make a buck churning out old medicines when the cost of production and distribution increase faster than prices. It makes more sense to invest fixed assets in more profitable products. As FDA Commissioner Scott Gottlieb and Janet Woodcock, the Director of FDA’s Center for Drug Evaluation and Research point out: “There may be critical drugs that may sometimes be priced too low relative to the full cost of reliably producing a predictable and high-quality pharmaceutical product. These critical drugs are typically older generic medicines that must be in a sterile, injectable form.”  (It’s amazing how markets and pricing signals determine supply and demand.)
 
Indeed, solving the drug shortage requires creating a robust market for the products that are, or will be, in short supply. The FDA has done a remarkable job in reducing the number of product shortages by preventing them before they occur, instead of having to scramble after they emerge. The agency prevented 132 shortages in 2017. That’s one reason that shortages declined from a peak of 251 in 2011 to 35 in 2017.
 
Specifically, FDA’s drug shortage czar, Keagan Lenihan, (FDA’s Associate Commissioner for Strategic Initiatives of the Agency Drug Shortages Task Force) has increased the amount of collaboration required to identify and avert potential shortages. The agency is not staffed with mind readers, so it needs more advance information from manufacturers, providers, pharmacists, and consumers, which surprisingly is also in short supply.
 
The dearth of predictive information hurts in two ways: First, it forces the FDA to react, rather than head off, shortages. As Dr. Gottlieb and Woodcock note: “If an additional production facility or supplier is needed to help mitigate or prevent a shortage of certain important drugs, we can expedite inspection of a new facility so that it can become operational as soon as possible. We can also expedite review of a new or generic drug application that, if approved, may help mitigate or prevent such a shortage. We prioritize these inspections and reviews.”
 
But these tools are most effective when they are used to prevent a shortage. While an early warning system would help resolve some shortages (and Congress is considering legislation to create such a program), it can be really valuable in creating a risk index to support a commodities market for the raw materials and finished products. In fact, in 2011, IMS (now IQVIA) recommended an early warning system that would include data for “risk identification, demand forecasting, a volatility index, and predictive modeling.”
 
Drug shortages have all the hallmarks of a manufacturing sector that could benefit from trading futures. Like many agricultural products and raw materials for finished goods, generic injectables face volatility due to (1) global sourcing, (2) number of qualified suppliers, (3) market constraint, (4) price increase, and (5) geopolitical climate. Depending on the supply risk of the commodity, food, and agribusiness companies are able to decide whether it is necessary to take actions for securing their supply. More insight into the risks of key input commodities helps companies in their decision-making and risk management. And a robust futures market creates liquidity (cash) that companies can use to invest in manufacturing.
 
But creating a market for drug shortages also requires an upgrade in manufacturing and a reliable source of demand. After Pfizer bought Hospira, it realized that the manufacturing arm of the company (which is virtually a sole supplier of many injectables with persistent shortages)  needed to be overhauled.  An article in Fortune describes the daunting task facing Pfizer in just one facility:
 
The Rocky Mount facility, for example, makes up to a half-billion sterile injectables each year, enough to fill 20 semi-trailers every day. Workers there make 500 different products, fitted into syringes, vials, and ampoules. They span a human life, from the vitamin K used to promote blood clotting in new babies to the morphine used to ease the pain of terminal illness.
 
The plant, though, has only 26 manufacturing lines, meaning that any given line is likely to be running something different every day. Each line, moreover, has to be FDA-qualified for the drugs made on it, a costly and lengthy vetting process. Schedules are typically planned weeks in advance and can be scuttled for any number of unforeseen events, from a snow day to a worker’s illness to components that don’t arrive at the factory on time.
 
Because of the testing and paperwork involved, it takes batches three to six weeks to leave the factory. And each batch generates a 200- to a 400-page stack of paper that documents the process. These, of course, are merely logistical wrinkles. Achieving a sterile environment—essential for medicines that are shot directly into the bloodstream—is the true challenge.
 
 
The long-term solution is to replace the current manufacturing platform for medicines and injectables, which are based on 19th-century production principles and technology with continuous manufacturing. The FDA is encouraging “the adoption of new production technologies, such as 3D printing and continuous manufacturing. Over time, these methods could lower drug production costs, enable more rapid scale up of manufacturing, and help prevent drug shortages caused by product quality and manufacturing problems.” But such a shift needs incentives as well.
 
And that is where public policy could help. Overhaul of the pharmaceutical manufacturing platform may require a public-private partnership (like the Semiconductor Manufacturing Technology or Sematech program) that would focus on continuous manufacturing, 3-D printing, and other advanced production and supply chain technologies. Such a partnership – a pharmaceutical advanced manufacturing technology consortium (PharmaTech?) would require funding but also a commitment on the part of private companies to involve their best and brightest in the enterprise. This is not a fully fleshed out proposal. But it is a model that works.  “Sematech has become a model for how industry and government can work together to restore manufacturing industries—or help jump-start new ones. “ It’s time to approach the drug shortage issue with the same spirit of urgency and inventive opportunity.
 
   Read More & Comment...

Right to Try vs. Right Way to Try

12/15/2018 10:00 AM | Peter Pitts

Great article by BioCentury’s Steve Usdin on the FDA’s new approach to facilitating appropriate and responsible expanded access to experimental drugs. Rather than buying into the political pabulum of “Right to Try,” the FDA is taking the reins with the right way to try.
 
Here are some snippets from the BioCentury article:
 
FDA to facilitate access to unapproved drugs
 
How FDA plans to help patients get expanded access to unapproved drugs
by Steve Usdin, Washington Editor
 
FDA plans to launch a new program in 2019 that will help patients gain access to unapproved therapies. The agency will field telephone requests from physicians and patients, streamline the application process, and act as an intermediary between physicians or patients and drug manufacturers.
 
Legislation is not required, and FDA has sufficient funding to conduct the pilot. Richard Pazdur, director of FDA’s Oncology Center of Excellence, proposed the initiative in early 2018.
 
The goals of the program, FDA Commissioner Scott Gottlieb told BioCentury, are to remove impediments that prevent physicians and patients from seeking access to investigational drugs and to communicate FDA’s support for manufacturers providing access.
 
An FDA internal working group has been meeting for two months to develop implementation plans and to iron out legal issues for the initiative, which FDA staff have dubbed Project Facilitate. The project involves the Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation and Research (CBER).
 
Under the initiative, the agency will provide a telephone number that patients and physicians seeking compassionate use -- which FDA calls expanded access -- can call. FDA staff will answer calls and fill out the form required to apply for a single-patient IND request. It will send the completed paperwork to the physician for signature and then forward the request to the manufacturer.
 
Manufacturers will be expected to respond to requests within a specified time period. FDA has not yet determined the response deadline. Drug companies will continue to have the discretion to approve or deny requests, but for the first time “they’ll have to give the reason for denying access,” Pazdur said.
 
Legislation is not required, and FDA has sufficient funding to conduct the pilot.
 
Drug companies have an “obligation to consider expanded access, especially in areas of unmet medical need,” Gottlieb said.
 
In addition to streamlining requests and incentivizing companies to grant access, placing FDA at the center of the expanded access process will give the agency insight into demand, drug company behavior and outcomes.
 
Under the current system, drug companies have no obligation to report data to FDA or the public about the number of compassionate use requests they receive or grant, or about the outcomes patients experience. Under the new program, FDA will collect data on requests for unapproved drugs to help close the knowledge gap and make it easier to formulate policy. And if FDA learns that a drug company is receiving numerous requests for access to an unapproved drug, it may recommend that the company open an expanded access protocol designed for an intermediate or large population, or a clinical trial, Pazdur told BioCentury.
 
FDA’s expanded access program will, for the first time, create a systematic process in the U.S. for learning about the outcomes of access to unapproved drugs.
 
While biopharma companies often express concern that adverse experiences from expanded access may lead FDA to delay or derail drug reviews, the fear is largely unwarranted, according to FDA officials. The idea that expanded access will harm a development program is “urban lore,” Peter Marks, director of CBER.
 
An FDA review of expanded access data from 2005-2014 found two instances in which adverse events from expanded access contributed to FDA’s decision to impose a clinical hold. “It is very hard to find instances where something identified in the setting of expanded access raised questions that were an impediment to a review,” Gottlieb said.
 
Bob Temple, deputy center director at CDER, suggested that expanded access protocols can produce data that can demonstrate efficacy in populations outside those studied in registration trials, potentially leading to broader indications.
 
If sponsors create large non-randomized expanded access protocols, “they can actually use the information to expand the label,” Gottlieb told BioCentury.
 
The complete Usdin article is worth a read. One interesting take-away is that the FDA is now leading the conversation, controlling the playing field and searching for areas of convergence that reward advancing the health of not just individual patients but also the broader public health by rewarding appropriate industry cooperation.

The FDA's new program is a tremendous step in the right direction but many unanswered questions remain, such as who pays -- and how?

Stay tuned.  Read More & Comment...

Is FDA getting Real with Real World Evidence?

12/09/2018 07:57 AM | Peter Pitts

The FDA has posted a Framework for FDA’s Real-World Evidence Program, creating a framework for evaluating the potential use of real-world evidence (RWE) to  help support the approval of a new indication for an already approved drug and help support or satisfy drug post-approval study requirements. (The framework does not cover medical devices.)
 
The framework will evaluate the potential use of RWE to support changes to labeling about drug product effectiveness. This includes adding or modifying an indication, such as a change in dose, dose regimen, or route of administration; adding a new population; or adding comparative effectiveness or safety information. The RWE Program will establish demonstration projects, engage stakeholders, get input from FDA senior leadership when evaluating RWE, and promote shared learning and consistency in applying the framework. FDA will also develop guidance documents to assist sponsors interested in using RWE to support drug development.
 
Fine sentiments but divisional actions speak louder than policy statements.

In the framework, FDA identifies a three-part approach for assessing whether the use of real world data (RWD) to generate RWE is appropriate to answer a regulatory question:  
 
(1) Are the RWD fit for use? 

(2) Can the trial or study design used to generate RWE provide adequate scientific evidence to answer or help answer the regulatory question? 

(3) Does the study conducted meet FDA regulatory requirements (e.g., for study monitoring and data collection)? 

The agency is accepting comments on the framework and encourages interested parties to submit comments to the established docket (FDA-2018-N-4000). 
 
It’s time to get real.  Read More & Comment...

Being and Nothingness in Drug Pricing

11/16/2018 03:21 PM | Peter Pitts

Pfizer has just issued a statement concerning it’s 2019 price increases. Here’s the headline of the company’s press release:
 
“Pfizer Provides Transparency on Drug Prices in the U.S. 90% of Company’s Prices Will Remain Unchanged”
 
When you separate the spin from the substance, here’s what the headline should be:
 
“Pfizer adjusts 2019 prices in order to achieve 0% net revenue growth”
 
That’s the truth – but it’s not likely to be reported (or tweeted by a certain someone) that way.
 
Here are the facts:
 
Effective January 15, 2019, Pfizer will increase the list price of 41 medicines (10% of its entire drug portfolio).  The increase in list price of this subset of the company’s portfolio will be 5%. The only exceptions are three products that have a 3% increase and 9% for Xeljanz due to the completion of two extensive development programs leading to new medical uses for unmet patient needs.
 
But just as you can’t measure risk without benefit, price increases must be considered relative to cost increases. These increases will be offset by higher rebates and discounts paid by Pfizer to insurance companies and Pharmacy Benefit Managers (PBMs) – resulting in a net effect on 2019 Pfizer revenue growth in the U.S. to zero.  According to the company’s statement, “Given the higher rebates and discounts, we expect that the healthcare system will share those benefits with patients, so they do not experience higher costs for their medicines. In 2018 the net impact of price increases on revenue growth is projected to be a negative one percent in the U.S compared with 2017.”
 
PBMs and insurers should explain what they will do with this enhanced revenue source besides holding it onto it for themselves
 
It’s also important to note that in 2016 Pfizer invested $7.8 billion in R&D, in 2017 that number was $7.7 billion and in 2018 its projected to be between $7.7- $8.1 billion. That’s billion with a capital “B.”  Innovation is hard. Today it takes about 10,000 new molecules to produce one FDA-approved medicine and only 3 out of 10 new medicines earn back their R&D costs. Moreover, unlike other R&D-­intensive industries, biopharmaceutical investments generally must be sustained for over two decades before the few that make it can generate any profit. The costs to bring a new cancer drug to market are about $2.6 billion. Risk/Benefit anyone?
 
The President, Health & Human Services Secretary Azar, just about every member of Congress, governors, members of state legislatures, policy wonks and media cognoscenti have weighed in on why our healthcare system is broken and requires change – some even have ideas on how to fix it. Per Pfizer Chairman and CEO Ian Read, “We believe the best means to address affordability of medicines, is to reduce the growing out-of-pocket costs that consumers are facing due to high deductibles and co-insurance and ensure that patients receive the benefit of rebates at the pharmacy counter.”  
 
The concept of “zero” is one of the most significant breakthroughs in the history of mathematics. It’s an equally important – and complex -- concept when it comes to pharmaceutical pricing.
 
When you make yourself into zero, your power becomes invincible. -- Mahatma Gandhi  Read More & Comment...

Amgen’s Repatha Pricing Approach Disrupts PBM Business Model: Will Patients Benefit?

11/16/2018 02:36 PM | Robert Goldberg

Repatha, Amgen’s breakthrough medicine that attacks treatment-resistant hyperlipidemia, has been shown to save lives and prevent heart attacks and stroke.   PBM policies, enabled by a rigged cost-effectiveness evaluation produced by the Arnold funded ICER, have made it made it impossible to get the medicine.  First, the PBM  prior authorization process has been lengthy and confusing because, it was argued, Repatha was too expensive to make widely available.

So Amgen increased the rebate amount it would provide for Repatha.  Amgen’s rebate deals with payers are 65 percent of Repatha's commercial revenue.  In turn, the PBMs simply pocketed the rebates and charged people who actually got through the step therapy gauntlet up to 50 percent of Repatha’s NON-rebated price.   And of the small percent of patients who actually got permission to use Repatha, nearly 75 percent never filled the prescription because of the huge out of pocket cost. 

A few weeks ago, Amgen cut the list price of Repatha by 60 percent, as a way of reducing the out of pocket cost to patients.   And it also meant that PBMs like Express Scripts were getting less rebate loot.   

It did so in a way that ultimately embarrassed and exposed the PBM rebate game.  

According to the company’s press release: “Amgen is making Repatha available at a reduced list price by introducing new National Drug Codes (NDCs). SureClick®, the most commonly used delivery system, will be available immediately; the Pre-Filled Syringe and Pushtronex® (monthly, on-body infusor) delivery systems will be available in the next 2-3 months. The lower priced Repatha is identical to the Repatha currently available…At the same time, Amgen will continue offering Repatha at its original list price until 2020 or sooner.”

Express Scripts responded to the Amgen gambit by announcing it would create a separate Flex formulary of products with lower list prices.  

It will be interesting to see if such a move gets traction.  Adam Fein notes that someone in Express Scripts said that employers are addicted to rebates.  That may be true, but that begs the question of why are PBMs and health plans are still supplying the employers rebate fix.  

By forcing a real choice between a rebate driven or patient-driven drug benefit Amgen has put the PBM business model on trial.  How many PBM and employers will continue to use the higher price to rake in rebates?  How many will use the lower price?  And how will this affect prior authorization and step therapy?

In the short-term patients may not benefit.  In the long term, I believe Amgen is forging a path other companies will follow.   Amgen cut the price because it aligns with a business strategy based on increasing access and demonstrating value.   And it aligns with Amgen’s recognition that it cannot rely on the newly integrated health plans and PBMs to deliver value.  The company will have to deliver value directly to patients and physicians, something that PBMs are unable to provide.  
  Read More & Comment...