Latest Drugwonks' Blog
HHS has issues a proposed rule that would increase the number of drugs eligible for reimbursement by insurers under the Affordable Care Act's essential health benefits requirements. In a previous bulletin, HHS said it planned to require that essential health benefits cover only one drug in each therapeutic class included in benchmark plans put forward by each state. The new rule essentially changes the language from 'only one' to 'at least one' drug, requiring that insurers cover at least one drug per therapeutic area or the same number of drugs in each category and class as specified in the state benchmark plan, whichever is greater.
BioCentury reports that the proposed rule also states that a plan "must have procedures in place that allow an enrollee to request clinically appropriate drugs not covered by the health plan." Comments on the proposed rule are due Dec. 26. Previous comments on HHS' bulletin said a one-drug requirement would have provided insufficient access to medications for some conditions. Medicare Part D requires that drug plans provide access to "all or substantially all" medications in six therapeutic classes.
HHS also released a proposed rule that prohibits health insurance companies from discriminating because of a preexisting or chronic condition, as well as a proposed rule on implementing and expanding employment-based wellness programs.
When it comes to jurisdiction over compounding pharmacies, Senator Lamar Alexander (R, TN), wants someone “on the flag pole” responsible for ensuring that non-traditional compounders meet set federal standards.
Alexander proposed allowing FDA to designate state boards of pharmacy as the primary regulator, if they are willing and able. If the state regulators proved unable or made mistakes, FDA would have the ability to take over regulation.
FDA Commissioner Hamburg gave that idea a positive nod, saying it was one model that could be explored, but she still wants federal regulations to assure consistency.
“I think it should be made explicit,” she said. “I think for non-traditional compounding there should be federal standards that apply to certain types of practices that go to issues of quality and safety.”
FDA said those facilities should be required to submit to inspections, report adverse events and register with the agency.
On the House side, Tom Harkin (D, IA), suggested that compounding facilities shipping across state lines should come under FDA scrutiny. Other ideas included using a volume threshold and prescription records.
If the FDA gets more responsibility – which is looking increasingly likely -- they will also need more funding. Otherwise this is all just C-SPAN rhetoric.
Did somebody say “sequestration?”
The election may be over, but the malarkey continues.
The most recent Marlarkey Alert comes to us courtesy of the New York Times editorial page.
In defense of the IPAB, the Gray Lady editorializes:
The board, known as the Independent Payment Advisory Board, has been the subject of false attacks over the past few years by Republicans who claim that it will ration care, disrupt doctor-patient relationships, and tell patients what treatments they can receive. That is an outlandish way to describe a board that is prohibited by law from making any recommendations to ration care, raise premiums, increase cost-sharing, restrict benefits or limit eligibility.
That’s malarkey.
Medicare spending is expected to be $575.7 billion this year, jumping to over $1 trillion by 2022, as the country ages. Over the next 75 years, the program is projected to accumulate a $38 trillion budget shortfall.
Much of this enormous price tag goes towards financing Medicare Parts A (hospital insurance) and B (medical services -- including diagnostic tests and doctor visits). And yet, IPAB has no authority over either. And the board can’t make any substantive structural changes. Neither the fee-for-service structure nor enrollee premiums and fees can be altered.
The board’s only viable option is to further ratchet down reimbursement rates for Medicare providers, especially doctors, who are already losing money on Medicare patients. Indeed, the financial burden of too-low payments under Medicare has driven 17 percent of doctors and 31 percent of primary care physicians across the country out of the Medicare program altogether, according to a study from the American Medical Association.
If rates fall any lower, seniors will have an increasingly difficult time securing doctor appointments. Visits will be cut short to squeeze in patients and care compromised.
Lawmakers must cast aside IPAB’s flawed approach (and the media malarkey surrounding it) and focus instead on innovative initiatives that address the program’s real cost-drivers while protecting seniors’ access to care.
There is no greater disaster than greed.
– Lao-tzu
The tragic deaths caused by the current drug compounding scandal could so easily have been avoided. The root cause wasn’t a drug shortage – it was greed.
A new effort by Representatives Ed Markey (D, MA), Henry Waxman (D, CA), John Dingell (D, MI), Frank Pallone, Jr. (D, NJ), Diana DeGette (D, CO), and Anna Eschoo (D, CA) is aimed at getting to the bottom of the problem by investigating the roles of the players in this horrible drama – specifically the actions of Group Purchasing Organizations (GPOs).
Mr. Markey: “As Congress fully investigates all the causes of the tragic meningitis outbreak in an effort to protect patients in the future, we need to look at the role GPOs play in the occurrence of drug shortages that could lead to increased reliance on compounding pharmacies.”
“Through our investigation into drug shortages and the meningitis outbreak, we have discovered that medical professionals have increasingly been turning to compounding pharmacies for their prescription needs,” said Mr. Dingell. “It is important we study every potential cause of this outbreak in order to get to the bottom of this health crisis. I look forward to working with my colleagues in the coming weeks to explore legislative approaches that will address this matter.”
Representative DeGette: “While we've begun to address drug shortages legislatively, it is clear we must aggressively investigate the factors that led to this deadly outbreak and determine possible remedies, so we can take steps to save patients lives.”
“If group purchasing organizations are taking advantage of their unique role in facilitating a safe and reliable drug supply, then we need to know about it,” said Representative Eshoo.
Mr. Waxman, “In light of the tragedy of the meningitis outbreak linked to contaminated compounded drugs, we need to look carefully at all factors that might be contributing to the increasing use of compounded drugs by hospitals and other health care providers.”
“This initiative is a courageous step forward in addressing the foundational reasons behind both the tragedies caused by drug compounding and the broader issue of preventable drug shortages,” said Peter J. Pitts, President, Center for Medicine in the Public Interest and a former FDA Associate Commissioner. “The anticompetitive manipulation of American healthcare by GPOs is an urgent topic for congressional action.”
The full Congressional release can be found here.
BioCentury reports:
FDA issues first breakthrough designation
FDA has "recently" issued the first breakthrough drug designation, Janet Woodcock, director of the Center for Drug Evaluation and Research, said on Wednesday. She said the agency cannot disclose the sponsor or drug candidate. The breakthrough designation, created by the FDA Safety and Innovation Act, commits FDA to collaborate with a sponsor to accelerate product testing and development.
"Drug manufacturing could be the rate limiting step" for implementing the breakthrough drug pathway, Woodcock said at a meeting sponsored by Friends of Cancer Research and the Brookings Institution's Engelberg Center for Health Care Reform. FDA will work with sponsors to improve the chances that manufacturing is scaled-up and approved at the time when breakthrough drugs are approved, she added.
Mirror, mirror on the wall – whose delaying innovation most of all?
Should the new third leg of the FDA review process be … investment considerations?
Jonathan Leff, managing director of Warburg Pincus LLC, believes that the FDA should consider the cost of drug development when making its regulatory decisions.
At a conference on rare diseases conference sponsored by the Drug Information Association and National Organization for Rare Disorders, Leff said FDA should think about the effects of its demands on sponsors, such as the additional cost another efficacy trial would create should the agency demand it.
That’s a bad idea. While there are many things the FDA can and should do that would result in lower drug development costs – the issue has no place in the regulatory review process. It is as inappropriate a third leg as comparative effectiveness. The regulatory process must rest on the twin pillars of safety and efficacy.
Leff does not agree. “We must recognize that if a system is set up to ensure safety and efficacy and no mechanisms are designed into it to take the economic burden into account, we should expect to see as an unintended consequence, exactly what we have seen, which is relentlessly increasing time and cost.”
"Because of that time and cost, venture investors and pharma companies are now unable to make new investments to initiate development of many promising new therapies and as a result the next generation of potential breakthrough treatments … may never have a chance.”
Indeed, we are seeing an increase in time and cost – and these are serious roadblocks to continued investment in innovation. But whether this is entirely the fault of the FDA is not as simple as Leff makes it seem. He’s parroting the party line of those who choose to blame their developmental failures on the FDA. There is a medical device to address this myopia – it’s called a mirror.
Mr. Leff is only repeating the broader opinion of the investor community. The National Venture Capital Association's (NVCA) Medical Innovation & Competitiveness Coalition found that 39% of firms reduced investment in life sciences companies over the last three years. The same percentage expects to further decrease investment over the next three years. The venture capitalists surveyed largely blamed the Food and Drug Administration's restrictions and regulatory challenges for this trend.
Pharmaceutical companies must evaluate their level of responsibility for shrinking investment expenditures. If they want venture capitalists to continue investing in medical research and development, they must produce high-quality drugs worthy of FDA approval – and stop whining when their “miracle drugs” require more clinical evidence.
The solution isn’t for the FDA to weigh the financial investments of biopharmaceutical companies in its regulatory decision process. The solution is to make the regulatory process more predictable.
A quarter-century ago, the success rate for a new drug used was about 14 percent. Today, a new medicinal compound entering Phase 1 testing — often after more than a decade of preclinical screening and evaluation — is estimated to have only an 8 percent chance of reaching the market. For very innovative and unproven technologies, the probability of a product’s ability to make it to the market is even lower. We must work together to turn that around.
When Thomas Edison was asked why he was so successful, he responded, “Because I fail so much faster than everyone else.” Consider the implications if the FDA could help companies fail faster. Using the lower end of the Tufts University estimate of the average pre-tax cost of new drug development, $802 million:
- A 10 percent improvement in predicting failure before clinical trials could save $100 million in development costs.
- Shifting 5 percent of clinical failures to Phase 1, the earliest stage, from Phase 3, the latest stage, reduces out of pocket costs for developers by $15-$20 million.
- Shifting of failures to Phase 1 from Phase 2, the middle stage, would reduce their out of pocket costs by $12-$21 million.
All of these dollars could then be reinvested in other innovative development programs for new life-saving medicines.
For all that modern science has to offer, developing new treatments is still very much an art, in which hunches, intuition, and luck play a critical role. The odds are long. But for more medicine that is affordable and innovative, we need up-to-date regulations that compliment the drug trial process in order to take these chances, which is precisely the mission of the FDA’s Reagan-Udall Foundation.
“I’ll tell you as a venture capitalist, I have been forced to not make investments in rare disease opportunities that we might have or almost certainly would have invested in 10 years ago because of a perception that if we do a clinical trial, and given all the unknowns in this area, miss slightly on the statistical goals, that would be game over for that development program,” he said during the conference.
That may be so. But drug reviews are not and should not be predicated on the calculations of venture capitalists.
But that doesn’t mean maintaining the status quo is acceptable.
Matt Arnold at Medical Marketing & Media asks a few good questions about some tough post-election ACA issues.
How will IPAB cut spending, and who will sit on it?
More than nudging the country towards insurance universality, the guts of the ACA are comprised largely of deeply wonky schemes to try and “bend the curve” of healthcare spending. And then there's the Independent Payment Advisory Board, a scheme with teeth. Nobody's sure exactly how this broadly-drawn entity will operate, but the 15-member board -- for which members must be nominated by the President, in consultation with both parties' Congressional leaders, and approved by the Senate -- will have the power to impose spending cuts on Medicare when the program's spending outpaces projected growth and when Congress fails to pass cuts to offset those increases. Initial cuts will fall on doctors and pharmas, with hospitals and hospices coming in for cuts later on. Critics fear it will evolve into a federal formulary-setting body like the UK's NICE, restricting access to drugs deemed more costly than they're worth (fun fact: Sarah Palin called it “Death Panel-like). The legislation contains language specifically prohibiting the board from rationing care or limiting benefits, but opponents argue it will result in de facto rationing. Republicans are fiercely opposed, along with enough Democrats that repeal is a real possibility, say some Congress-watchers. The board is scheduled to issue its first report in January, 2014, so nominations should be forthcoming soon.
How will CMS reset perverse incentives for provision of medical services?
One of the main goals of the ACA as to shift the US healthcare system away from an incentive structure that rewards quantity – of diagnostic tests and procedures and products, via reimbursement – and towards one that rewards quality, of health outcomes, patient feedback, etc. One way to do that could be through a UK-style comparative effectiveness regime of the sort that industry advocates feared PCORI (the Patient Centered Outcomes Research Institute) would become (early indications are that PCORI will be operating at a much more macro level than ‘Prescribe this, not this'). Another might be a risk-sharing scheme (AKA “Expanded Access”) in which pharmas and federal programs establish a measure of success for a therapy and companies reimburse the government when their products fail to meet that standard. In other words, will we measure for clinical effectiveness or for cost-effectiveness?
What will the particulars of the Physician Payment Sunshine Act legislation that got rolled into the ACA look like?
The Centers for Medicare and Medicaid Services blew past its initial October 2011 deadline to issue guidelines on data collection, having bigger fish to fry – like setting up Obamacare's health exchanges. CMS then pushed back the start date for mandatory data collection to January, 2013. A final rule is expected by the end of the year, but nothing says CMS couldn't hit snooze again. The big question is preemption – will the ACA trump state laws, and if so, will it favor the more lax or the more draconian among them? Also, will the law require health insurers (including government) to report payments to physicians for things like academic detailing and switching patients to generics?
Will Democrats get anywhere in their efforts to limit biologics exclusivity to seven years?
The White House dearly wanted biologics exclusivity limited to seven years. The Administration got rolled by biopharmas, which succeeded in getting it set at 12 years, but the White House never stopped pushing to dial it back. With a fiscal reckoning fast approaching, everything is on the table, and the biopharma lobbies will be playing some serious defense.
How about that non-interference clause?
Vice President Biden, in his debate with Rep. Paul Ryan, suggested he wouldn't mind another bite at a provision in the Medicare Part D prescription drug benefit law explicitly prohibiting the government from butting into negotiations between companies and private plans that administer the benefit. “If they allow Medicare to bargain for the cost of drugs like Medicaid can, that would save $156 billion right off the bat,” said Biden, whose party's left flank has tried and failed repeatedly to dislodge the clause. Given solid Republican control of the House, it seems unlikely that they might succeed now, but again, everything is on the table, and the politics of prescription drug prices are ever tricky.
Matt's complete article can be found here.
December 7, 2011 is a day that will live in regulatory infamy. That’s when Secretary of Health and Human Services Kathleen Sebelius overruled the FDA decision on the over-the-counter status of emergency contraception.
By reversing an FDA decision, the Secretary set a dangerous precedent for all-comers to lobby Congress, the HHS and the White House on any and all FDA decisions—directly inserting politics into what must be a scientifically driven process.
On December 13, 2011, Senators Patty Murray and Maria Cantwell and a dozen other Senate Democrats asked the Obama administration to produce scientific justification for its decision to block girls 16 and younger from buying the emergency contraceptive Plan B over the counter.
In a letter to U. S. Department of Health and Human Services Secretary Kathleen Sebelius Tuesday, the 14 lawmakers said they wanted "medical and scientific evidence" behind Sebelius's unprecedented decision to overrule the Food and Drug Administration and block younger teenagers from buying the so-called "morning after pill" without a prescription.
Senator Murray also called for a Senate hearing on the topic. She asked the Secretary to testify in front of a Senate committee to explain her scientific views on the matter. Senator Murray stated, “I want to know what the scientific evidence is that the secretary made this decision on in overriding the FDA … Pharmaceutical companies here in this country make some very expensive decisions, and they need to know that the FDA is going to base a decision based on science.”
The hearing hasn’t happened yet.
Will it happen now that the election is over?
It should. And the hearing should broaden its scope to address the ability of the Secretary of Health and Human Services to reverse FDA decisions and whether the FDA Commissioner should serve a congressionally mandated six-year term in order to ensure the position is “above” the political fray – similar to that of the Director of the FBI—and then approved by the Senate.
Let the person chosen as FDA Commissioner serve as free of the political current as possible.
And a Senate hearing would be a good place to start.
But what does that mean?
“For our district and for our country, the debate on Obamacare is over,” declared Bill Foster, a Democrat elected Tuesday to the House from a suburban Chicago district.
Not so fast.
As the New York Times reports, “Now comes another big hurdle: making it work.”
Jeff Goldsmith, a health industry analyst based in Virginia, offers a more pragmatic assessment, “If you actually are going to implement this law, people need to know what’s in it — not just the puppies-and-ice-cream parts.”
And, as any owner of a new puppy can attest -- it’s messier than it looks.
It seems that, in Missouri, the natural way to stop an ObamaCare-mandated state health exchange is to insist it be put to a vote. (Under the Patient Protection and Affordable Care Act, states have until 2014 to establish state-based insurance exchanges that may be run by the state, the federal government or through a partnership of both.)
On Election Day the Show Me State passed Proposition E, prohibiting the governor or any state agency from establishing or operating state-based health insurance exchanges unless and until they are authorized either by the legislature or by popular vote. Proposition E allows taxpayers to sue any Missouri state worker or agency involved with any part of the exchange process not required by federal law.
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.
