Latest Drugwonks' Blog
As previously discussed (“Wyden Open Spaces”), Senator Ron Wyden (D-OR.) sent a letter to NIH requesting a list of medicines that have reached the market as result of NIH research since 1995 -- when the agency removed the reasonable pricing clause from cooperative research and development agreements (CRADAs). Wyden also asked NIH to convene a panel to reexamine the pricing of medicines and treatments that are developed with public funding.
He’s made this request before. Maybe he should actually read what the NIH has already said on the matter. Here it is straight from the NIH’s Office of Technology Transfer:
Requiring direct financial recoupment of the federal investment in biomedical research can potentially impede the development of promising technologies by causing industry to be unwilling to license federally funded technologies. The “reasonable pricing” provisions that NIH once required in all CRADA and exclusive license negotiations did just that. Of even greater concern should be the potential that the economic disincentives of recoupment will make it expedient for industry to move research outside the federal milieu. Such action would diminish the strides made under the Bayh-Dole Act and have the unintended consequence of removing the research from federal oversight, a particular concern when the research involves lines of investigation that are especially critical or sensitive.
It is impossible to overstate the achievements or the global macroeconomic impact of U.S. taxpayer-supported biomedical research. Federally funded biomedical research, aided by the economic incentives of Bayh-Dole, has created the scientific capital of knowledge that fuels medical and biotechnology development. American taxpayers, whose lives have been improved and extended, have been the beneficiaries of the remarkable medical advances that have come from this enterprise.
Senator Wyden’s misinformed inquiry brings to mind a quote from Robert Louis Stevenson:
“Politics is perhaps the only profession for which no preparation is thought necessary.”
The only thing that dies harder than a bad idea is a bad idea with political resonance.
And one of the down sides of term-limited state legislators is that bad ideas keep getting resurrected. Case in point: state-sponsored schemes for drug importation.
As a public service to these newly elected members, a brief primer on why drug importation is a bad idea There are four basic reasons:
(1) It doesn’t save money.
(2) The drugs being sent to U.S. customers from Canadian Internet pharmacies are not “the same drugs Canadians get.”
(3) The state experience has been dismal and politically embarrassing.
(4) National Security concerns.
Let’s look at each of these four items.
(1) It won’t save any money. Let’s not forget the non-partisan CBO study that showed that such policy would reduce our nation’s spending on prescription medicines a whopping 0.1% -- and that’s not including the millions of dollars the FDA would need to set up a monitoring system.
(2) The drugs being sent to U.S. customers from Canadian internet pharmacies are not “the same drugs Canadians get.” That bit of rhetoric is just plain wrong. In fact, drugs sold to Americans by Canadian Internet pharmacies aren’t even legal for sale in Canada. This isn’t about the quality of Canadian drug regulation. Canadian Internet pharmacies – by their own admission – are sourcing the drugs they're sending to the United States from outside of Canada. And while they may say their drugs come from Great Britain, let’s not conveniently forget that 20% of all the medicines sold in the UK are parallel imported from other nations in the EU – like Spain, Greece, Portugal, and Lithuania.
And the important political point here is that when Americans are asked if they want drugs from nations other than Canada – the answer is a resounding “no thank you.”
(3) The state experience has been dismal and politically embarrassing. Remember Illinois’ high profile “I-Save-RX”program? Over 19 months of operation, a grand total of 3,689 Illinois residents used the program -- which equals approximately .02% of the population.
And what of Minnesota’s RxConnect program? According to its latest statistics, Minnesota RxConnect fills about 138 prescriptions a month. That's for the whole state. Minnesota population: 5,167,101.
That'ss not a surprise considering that Minnesota, state officials observed Canadian Internet pharmacies engaging in dangerous practices.
One pharmacy had its pharmacists check 100 new prescriptions or 300 refill prescriptions per hour, a volume so high that there is no way to assure safety.
One pharmacy failed to label its products and several others failed to send any patient drug information to patients receiving prescription drugs.
Drugs requiring refrigeration were being shipped un-refrigerated with no evidence that the products would remain stable.
One pharmacy had no policy in place for drug recalls. Representatives of the pharmacy allegedly said that the patient could contact the pharmacy about a recall "if they wished."
The FDA launched an investigation, confiscating thousands of drug shipments headed for the United States. Some of them were headed for Minnesotans who ordered them over the state's Web site.
When opened, nearly half claimed to be of Canadian origin, but "85 percent of them were from 27 other countries including Iran, Ecuador and China." And 30 of them were counterfeit.
One Minnesota resident discovered that one of his "Canadian" drugs came from Greece, and another came from Vanuatu, a small island in the South Pacific. "I never heard of the place," he said.
Wisconsin also has an importation program, modeled on the one in Minnesota. It too hawks its promise and hides its dangers. All of the legalese buries the fact that the state doesn't accept any responsibility for the safety or effectiveness of any medicines bought on the state's Web site.
The state won't even guarantee that the drugs ordered are what the customer will receive. Not only that, but the state also says that it will not accept any legal responsibility or liability should any of the drugs cause a problem.
And remember Springfield, MA and “the New Boston Tea Party?” Well the city of Springfield is now out of the drugs from Canada business.
(4) National Security concerns. According to a report from the federal Joint Terrorism Task Force, a global terrorist ring with ties to Hezbollah, is importing counterfeit drugs into America by way of Canada. They are doing so for profit today - but could just as easily do so for more nefarious and deadly purposes. And legalizing importation would only facilitate such actions.
And then there are those politically pesky safety issues.
Adding fuel to the reality is a new by the European Alliance for Access to Safe Medicines. The title says it all, “The Counterfeiting Superhighway.”
The report reveals the scope of the unregulated trade of fake pharmaceuticals. Through extensive research and examination of over 100 online pharmacies and over 30 commonly purchased prescription-only medicines, the report makes one thing very clear – we’re not winning the battle.
Key findings from this report
* 62% of medicines purchased online are fake or substandard (including medicines indicated to treat serious conditions such as cardiovascular and respiratory disease, neurological disorders, and mental health conditions).
* 95.6% of online pharmacies researched are operating illegally.
* 94% of websites do not have a named, verifiable pharmacist.
* Over 90% of websites supply prescription-only medicines without a prescription.
* 78.8 of websites violate intellectual property.
My favorite anecdote is the report’s example of an Internet pharmacy whose products came wrapped in pages from the Mumbai Daily News. The most frightening fact, though, is most of the fake medicines “were delivered in seemingly authentic boxes, accompanied by patient information leaflets in good condition and ostensibly trustworthy blister packs.”
Novice state legislators considering drug importation should refer to Bartlett's Familiar Quotations:
"Those who cannot learn from history are doomed to repeat it."
David Vitter: Wrong on Drug Importation. Wrong on Patent Settlements.
This overly vague language of Senator Vitter’s amendment (#628) to the Senate Budget Resolution would ban all forms of patent settlements, including those that the FTC and the courts have not opposed. This would prevent pro-consumer settlements, reduce the value of patents, and reduce incentives for innovation. Instead, enforcement agencies and courts should continue to evaluate patent settlements on a case-by-case basis, under the same antitrust principles that apply to all other patent settlements.
The Supreme Court is currently addressing the issue, and Congress should await the Court’s ruling (likely this June) on the standard for reviewing such settlements.
For the first time the Supreme Court will review a case regarding the antitrust standard that should apply to patent settlements between innovator and generic pharmaceutical companies. Given the complexities and the conflict between the circuits, even if legislators believe that Congressional action may be warranted, consideration of the issue should await the Supreme Court’s decision in the case.
A ban is bad public policy that harms innovation.
Banning Hatch-Waxman patent settlements would increase the cost of patent enforcement, decrease the value of patent protection generally, and decrease incentives for taking the risks necessary to develop new medicines. As one court has stated, “a rule prohibiting settlements of Hatch-Waxman litigation can have grave consequences for R&D and, in turn, severe consequences for consumers.”
A ban would delay generic entry and delay benefits to consumers.
Despite what proponents of the legislation say, statistics show that brand companies have prevailed in approximately 52 percent of patent cases against generic challengers.
A win by the patent holder means the generic almost certainly would not be able to enter the market before the patent expires. In many cases, therefore, settlements accelerate generic entry and provide access to lower cost medicines. According to one generic company’s estimate, settlements on 10 products alone have resulted in more than $67 billion in savings to consumers.
Congress has already given the Federal Trade Commission the ability to review and evaluate individual patent settlements.
Unlike patent settlements in any other industry, Congress in 2003 required that brand and generic companies settling patent litigation arising out of the generic company’s patent challenge must file a copy of their settlement agreement or a written description of it with the FTC and the Department of Justice before the date when the generic product may enter the market. The FTC thus has the power to challenge any agreement that it deems anticompetitive.
A ban on an entire category of settlements is unwarranted. This kind of blanket ban is overly broad and could negatively impact the availability of medicines that help patients live longer, healthier lives.
Health Insurers Warn on Premiums
By ANNA WILDE MATHEWS and LOUISE RADNOFSKY
Health insurers are privately warning brokers that premiums for many individuals and small businesses could increase sharply next year because of the health-care overhaul law, with the nation's biggest firm projecting that rates could more than double for some consumers buying their own plans.
The projections, made in sessions with brokers and agents, provide some of the most concrete evidence yet of how much insurance companies might increase prices when major provisions of the law kick in next year—a subject of rigorous
UnitedHealth Group, the nation's largest carrier, and other health insurers said premiums for some individuals and small businesses could rise.
The projected increases are at odds with what the Obama Administration says consumers should be expecting overall in terms of cost. The Department of Health and Human Services says that the law will "make health-care coverage more affordable and accessible," pointing to a 2009 analysis by the Congressional Budget Office that says average individual premiums, on an apples-to-apples basis, would be lower.
The gulf between the pricing talk from some insurers and the government projections suggests how complicated the law's effects will be. Carriers will be filing proposed prices with regulators over the next few months.
Part of the murkiness stems from the role of government subsidies. Federal subsidies under the health law will help lower-income consumers defray costs, but they are generally not included in insurers' premium projections. Many consumers will be getting more generous plans because of new requirements in the law. The effects of the law will vary widely, and insurers and other analysts agree that some consumers and small businesses will likely see premiums go down.
Starting next year, the law will block insurers from refusing to sell coverage or setting premiums based on people's health histories, and will reduce their ability to set rates based on age. That can raise coverage prices for younger, healthier consumers, while reining them in for older, sicker ones. The rules can also affect small businesses, which sometimes pay premiums tied to employees' health status and claims history.
The law's 2014 effect on larger companies is likely to be more limited. Many of the big changes coming next year won't touch them as directly as individual consumers and small businesses, though some will have to grapple with the cost of covering more workers or paying a penalty.
The possibility of higher premiums has become the latest focal point of the political tussle over the health law, which marks its third anniversary Saturday. Republican lawmakers have held hearings on the issue, and six GOP members of the House Energy and Commerce committee wrote last week to more than a dozen insurers asking them to turn over internal analyses on the law's impact on premiums and costs.
The insurance industry has also been talking publicly about big potential premium increases in lobbying for tweaks to the law.
The individual market includes about 15 million people, and around 18% of the roughly 149 million with employer coverage were at small companies, according to 2011 figures from the Kaiser Family Foundation. The individual market is expected to grow to around 35 million people by 2016 as a result of the law.
In a private presentation to brokers late last month, UnitedHealth Group Inc., UNH +0.33% the nation's largest carrier, said premiums for some consumers buying their own plans could go up as much as 116%, and small-business rates as much as 25% to 50%. The company said the estimates were driven in part by growing medical costs not directly tied to the law. It also cited the law's requirements that health status not affect rates and that plans include certain minimum benefits and limits to out-of-pocket charges, among other things.
Jeff Alter, who leads UnitedHealth's employer and individual insurance business, said the numbers represented a "high-end scenario," not an average. "There are some scenarios in which a member could see as much as a 116% increase or over," he said, though others, such as some older consumers, could see decreases. He said the company dwelled on the possible increases because it was trying to prepare brokers to speak with clients facing big jumps.
Other carriers have also projected steep rate increases during private meetings and conversations with brokers. Brokers say they are being told to prepare the marketplace for small-business and individual rate increases as carriers get ready to file specific rate proposals and plan designs with regulators.
Insurers are "not being shy that premiums are going to increase in 2014," and are urging brokers to "brace our clients," said John Lacy, vice president of group benefits at Bouchard Insurance, a brokerage in Clearwater, Fla. His firm has been hearing from carrier representatives that individual premiums in Florida could go up 35% to 50%, on average, and small-business rates around 30%, though it hopes to find strategies to blunt the impact.
Aetna Inc., AET +0.42% in a presentation last fall to its national broker advisory council, suggested rates on individual plans not being grandfathered under the law could go up 55%, on average, and gave a figure of 29% for small business rates. Both numbers included 10 percentage points tied to medical-cost inflation, not the law. An Aetna spokesman said the numbers are "still generally in line with what we've been estimating," and represented the average impact in a typical state.
An official with Blue Cross & Blue Shield of North Carolina told a gathering of brokers last week that individual premiums could go up by as much as 40% to 50%, according to brokers who were present. A spokeswoman for the insurer said "we don't have final numbers" yet on premiums.
There has long been debate, even among insurance experts, over how the law will affect premiums. Because the effect is likely to vary, different measurements can arrive at different conclusions. The CBO analysis cited by the administration determined that average premiums for consumers who buy their own coverage would be 14% to 20% lower because of the law—if the law didn't change the types of plans they purchased.
But the CBO also suggested the law would lead to consumers buying more expensive plans, largely because it requires coverage to include certain benefits and limit charges such as deductibles. When this effect was taken into account, the average premiums would go up 10% to 13%, the agency said, though subsidies would ease the bite for most people. The agency also said small-business policies were likely to cost within a few percentage points of the amount they would have without the law.
Health and Human Services officials say competition among insurers, as well as provisions to limit their financial risk from attracting high-cost consumers, will exert downward pressure on premiums, and point to the tax subsidies that will limit many consumers' costs.
Subsidies will be available on a sliding scale for people with incomes of up to four times the federal poverty level—currently $45,960 for a single person and $94,200 a year for a family of four. More than half of the 35 million people expected to be in the individual market by 2016 are likely to qualify for credits. People whose incomes are around the poverty level could see almost all of the cost of their insurance subsidized, while people at the upper end will get only a small discount toward their premiums.
BioCentury reports that Senator Ron Wyden (D-OR.) sent a letter to NIH requesting a list of medicines that have reached the market as result of NIH research since 1995 -- when the agency removed the reasonable pricing clause from cooperative research and development agreements (CRADAs).
Wyden also asked NIH to convene a panel to reexamine the pricing of medicines and treatments that are developed with public funding.
Assuming (and it is not a big assumption) that Senator Wyden wants to show that it’s public money responsible for new drugs – he needs better staff work.
This question has been asked and answered a number of times from a number of different angles. And, at the end of the day, the answer is that NIH-funded research grants are rarely responsible for pharmaceutical breakthroughs – and are never responsible for the complicated and expensive research behind the development phase of drug programs.
Does Senator Wyden even understand the difference?
As the New York Times reported in January 2011, “The National Institutes of Health has traditionally focused on basic research, such as describing the structure of proteins, leaving industry to create drugs using those compounds.”
A quick look at the grants given out by NIH to investigators in academic research demonstrates that taxpayer money is given to pre-clinical activities. The track record of academics moving something into the clinic is quite poor for a variety of reasons. That's where venture capital, biotech, and pharma come in. Indeed without such investment -- which comes earlier than ever before in the discovery process -- taxpayer support for NIH would not be worth the effort. It's the private investment -- which by the way is now increasingly translational in nature and now involves the development of new drug development tools -- that enhances the NIH investment.
Indeed, without contracts and contracting out in key areas such as genomics, proteomics, high throughput screening, biomarker development, the NIH would not be relevant. It relies upon constant collaboration with the private sector at all levels. In fact, efforts to bar NIH scientists from consulting and working with private companies have lead to a massive exodus of key researchers to for profit companies where there is more freedom and resources.
Wyden also requested information about a CRADA covering research on JAK-3 that he said helped lead to the development of rheumatoid arthritis drug Xeljanz tofacitinib from Pfizer. According to Wyden, "taxpayer-funded research was foundational" to the development of the oral pan-Janus kinase (JAK) inhibitor, though he acknowledged Pfizer funded all drug discovery, preclinical and clinical development expenses.
Um, not so fast. In response, Pfizer said it has invested over $1 billion over the past 20 years for the discovery, development and commercialization of Xeljanz. Pfizer also said the CRADA did not yield any compounds or patentable IP.
Wyden made similar requests in the early 90s seeking to regulate prices on drugs developed with the aid of federal resources.
The definition of insanity, said Professor Einstein, “is doing the same thing over and over again and expecting different results.”
Words to the Wyden.
I am delighted to inform you that, effective today, Kathleen (“Cook”) Uhl, M.D., will serve as acting director of the Office of Generic Drugs (OGD) while we initiate a nationwide search for a permanent director. Dr. Uhl most recently served as the senior advisor to the director for OGD.
Dr. Uhl brings a wealth of regulatory and medical policy, scientific, and management experience to the position. In her fifteen years with FDA, Dr. Uhl has become widely-regarded both inside and outside of the Agency as a compassionate, committed, and dedicated leader. Because of her strong management skills and extensive expertise in clinical pharmacology, I am confident in her abilities to lead OGD during a time of transition as we work to evolve quality throughout the Center and implement the Generic Drug User Fee Amendments of 2012.
Dr. Uhl began her FDA career in 1998 as a medical officer in what is now CDER’s Office of Clinical Pharmacology. She has served in numerous positions at FDA, including five years as the assistant commissioner for Women’s Health and as director of FDA’s Office of Women’s Health (OWH). Among her many accomplishments, she is credited with forging new relationships with other federal agencies and the scientific community by establishing a cross-Agency Women’s Health Advisory Council to more effectively identify, communicate, and act on key women’s health issues in the Agency -- and to more closely align OWH’s scientific program with Agency scientific initiatives.
Dr. Uhl returned to CDER in 2010 to serve as deputy director, Office of Medical Policy (OMP) -- a position she held until January of this year. She provided exemplary leadership to OMP during a time of extraordinary change and growth as OMP underwent a major organizational change by becoming a “Super office” -- an office that houses subordinate offices within its organizational structure. Dr. Uhl played a critical role in facilitating OMP’s significant growth in personnel and expanded scope of operations. Further, she was instrumental in FDA’s negotiations with industry for the authorization of the new Biosimilar User Fee Act of 2012 (BsUFA), which was enacted on July 9, 2012, as part of the Food and Drug Administration Safety and Innovation Act. Additionally, Dr. Uhl has extensive knowledge of current quality and risk management processes, as well as standards relevant to FDA’s laws and regulations.
Dr. Uhl received her medical degree from the Medical College of Pennsylvania and completed residency training in family medicine with subsequent fellowship training in medical research and clinical pharmacology. She has held a variety of leadership positions with the American Society of Clinical Pharmacology and Therapeutics (ASCPT), to include serving on their board of directors and as an associate editor for their journal. Further, in 2008 she received ASCPT’s distinguished service award for her outstanding efforts in advancing clinical pharmacology and therapeutics.
Before joining the Agency, she was a clinical investigator and clinician at Walter Reed Institute of Research and Walter Reed Army Medical Center. She retains faculty appointments as associate professor in family medicine and internal medicine at the Uniformed Services University and is a retired officer of the United States Public Health Service Commissioned Corps.
Please join me in welcoming Dr. Uhl to this position. We are fortunate to have someone with her expertise, experience, and abilities leading OGD at this critical juncture.
Janet Woodcock
Indeed, the cost of specialty drugs loom large on the horizon as the new driver of pharmaceutical costs (U.S. Drug Costs Dropped in 2012, but Rises Loom, NYT, March 19, 2013), but there are two issues absent from this article – and often from the larger debate, that are worth mentioning.
The first is that drug costs represent only 11.5% of our national healthcare expense (only 8.5% for on-patent “name brands.”) The second is that, as we make continued strides towards more and more accurate companion diagnostics, we will be able to grab the brass ring of the “four rights” (the right medicine in the right dose to the right patient at the right time). This is the real definition of “personalized medicine” and the ensuing reduction in therapeutic guesswork will save lives and the enormous expense of failing our way to clinical success.
BioCentury reports that in a speech to the Massachusetts Biotechnology Council on Friday, FDA Commissioner Margaret Hamburg provided an update on the status of two of the agency's regulatory initiatives -- the breakthrough drug and biosimilars pathways. Hamburg said the agency has received a total of 31 breakthrough therapy designation requests, nine of which have been granted and 10 denied. One request was withdrawn, and 11 are pending.
Breakthrough drug designation, which was created by the FDA Safety and Innovation Act, commits FDA to collaborate with a sponsor to enable expedited development and review of compounds for serious or life-threatening diseases that show substantial improvements over existing treatments in early trials. Hamburg said FDA is developing guidance to describe and explain the criteria for its expedited development and review programs, including breakthrough designation.
Additionally, Hamburg said the agency has not received any applications for a biosimilar or interchangeable biologic under the 351(k) pathway, which was signed into law in 2010 as part of the Affordable Care Act. As of March 14, Hamburg said the agency had received 51 requests for meetings for 12 different reference products, with 38 initial meetings held with potential sponsors. She said FDA has received 15 INDs for biosimilar development programs.
Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.
