Latest Drugwonks' Blog
A Double Edged Sword for U.S. Healthcare
By Paul Howard
The U.S. is in the midst of a quiet drug crisis - an unprecedented shortage of critical generic medicines affecting everyone from cancer patients to patients waiting for routine surgeries. The shortage has everyone from regulators to companies scrambling to find solutions, while industry critics are calling for the FDA to mandate that companies keep making some medicines, even when they lose money on them.
Their sense of alarm is understandable, but forcing companies to act against their bottom-line interests will only make things worse. A better solution would focus on improving communications between regulators and stakeholders and strengthening market incentives for companies to keep producing high quality generic drugs.
Ironically, the shortage is the result of America's highly competitive, highly efficient system for rewarding both drug innovation and generic competition. In the long run, the system works well: Americans benefit from having a thriving, innovative biopharmaceutical industry and widespread access to inexpensive, high-quality generics.
As patents expire and generic competitors enter the market, once expensive, brand-name drugs plummet in price, to the great benefit of patients and payers - generic drugs saved the U.S. $121 billion in drug costs in 2008 alone. Today, according to IMS Health, about 75 percent of all U.S. prescriptions are for generics, up from just 57 percent in 2004 - and companies like Wal-Mart offer 30 day supplies of hundreds of generic drugs for just $4 a month. Meanwhile, companies with drugs losing patent protection also have powerful financial incentives to invest in new research to develop newer and better medicines for patients, and to make up for lost revenue.
In the short run, however, problems can crop up as pricing competition drives generic drug prices to rock-bottom levels, forcing less efficient producers to exit the market.
This may lead to just a few (two or three) companies producing important generic drugs. In this situation, with hospitals or pharmacies reluctant to keep large quantities of drugs in stock they don't immediately need, shortages can crop up quickly when there are sudden spikes in demand. Also, as price competition intensifies, some companies may decide that profit margins or demand for a given medicine is too thin to justify continuing production.
The "short run" can be a matter of life and death for patients waiting on critical drugs for diseases like lung cancer or leukemia. Today, some cancer drugs are in short supply in some regions of the U.S. - including carboplatin, cisplatin, doxorubicin, etopiside, and leucovorin. In many cases, physicians or pharmacists can substitute other drugs, but for some cancers "there are no equivalents, no work arounds," says ASCO president-elect Michael Link.
Whatever the cause of the shortages, they appear to be growing worse over time. A particular problem appears to be occurring with complex drugs known as sterile injectables, which the FDA says have experienced "severe and frequent shortages in recent years," accounting for 46% of total drug shortages in 2009.
Sterile injectables require a relatively complex manufacturing process with a substantial "lead time" compared to other drugs. This limits the number of companies that have the capacity to make them.
One example is the fast-acting anesthetic propofol, first approved by the FDA in 1989, and which lost patent protection in 1998. By 2009, just three companies were making generic propofol for the U.S. market: Teva Pharmaceuticals, APP Pharmaceuticals, and Hospira. Last October, both Hospira and Teva had to recall propofol due to FDA-identified contamination in their product lines. By May 2010, Hospira was still off-line and had to recall all of its customers' inventory, according to the FDA.
In the meantime, Teva announced that it would not be returning to the market, a decision perhaps motivated by a massive ($500 million) punitive-damage award against the company as a result of patients contracting Hepatitis from contaminated propofol vials. Explaining the decision, Teva said that it made "little or no profit from the drug," which is complex to manufacture. That left APP Pharmaceuticals as the last firm manufacturing propofol, and they haven't been able to keep up with demand.
Critics have long blasted the pharmaceutical industry for focusing too much on "profits", and called for empowering the FDA to force companies to continue making generic drugs, even when they are unprofitable. This move would of course be a disaster, and it would potentially reduce the incentives for companies to make complex generic drugs on the assumption that exiting the market would be costly. It would also give payers even more power to slash prices, knowing that companies could never refuse to produce the drug, even if they had to sell it at a loss.
A better approach is for regulators, manufacturers, and health systems to work harder to identify potential shortages as early as possible, allowing hospitals and pharmacists to develop plans to better manage or reallocate existing drug supplies before the shortages occur. Hospitals and health systems might also want to consider long-term purchase agreements or paying a few pennies extra per pill to reward suppliers with a track record of making complex, high-quality generic products. Rewarding quality and long-term reliability with a slightly higher price (or longer term contracts) should give producers better incentives to stay with generic product lines and invest in continuously improving their manufacturing processes.
More can certainly be done as well on the FDA side, including better monitoring to ensure that companies are in compliance with current Good Manufacturing Processes, along with upgrading the FDA's ability to provide meaningful oversight inspections. This would include increased funding for more frequent FDA inspections of high-risk manufacturing facilities, and adequate staffing to conduct inspections outside the U.S.
Should the FDA do more? "More is always better," said former FDA Associate Commissioner Peter J. Pitts. "But the agency must spend its money where it can get the biggest bang for the regulatory buck. More focus should be put on those who present the highest risk -- particularly overseas. A handful of FDA inspectors in China and India just doesn't cut it."
The problem of drug shortages comes at a time when the drug market is changing significantly. In the next several years, the market between generic and branded drugs will blur as innovative companies expand into the generics and biosimilars markets.
While no company is immune from manufacturing problems (and many generic firms produce high-quality products), the greater manufacturing experience and scientific expertise available to large, established pharmaceutical companies may help to smooth out at least some of the reliability issues with complex drugs like sterile injectables. And competition works both ways in the pharmaceutical industry. As more traditional drug companies are moving into generic markets, generic drug companies in places like India are trying to move upstream and develop a drug-discovery capacity of their own - believing that they can produce new drugs better and less expensively than U.S. and European companies.
In the long run, supply and quality problems are likely to smooth out as the industry restructures to meet new market and competitive realities. But that's cold comfort for patients facing drug shortages today.
The challenge for health systems, industry, and regulators right now is to find a way to overcome existing supply challenges without dampening incentives to innovate, even for older generic products. Creating better market incentives, improving communications between stakeholders, and bolstering the FDA's ability to conduct risk-based inspections are the best ways to prevent the next shortage before it happens.
Drug Industry Dismayed by FDA Delay on Digital Marketing Guidelines
Three-Month Pushback Frustrates Industry Digging into Social Media and Internet Advertising
The agency released a statement Tuesday night to the EyeonFDA blog that read: "The Division of Drug Marketing, Advertising and Communications (DDMAC) has been researching draft-guidance topics on the following issues related to internet/social-media promotion of FDA-regulated medical products: Responding to unsolicited requests; fulfilling regulatory requirements when using tools associated with space limitations; fulfilling post-marketing submission requirements; online communications for which manufacturers, packers or distributors are accountable; use of links on the internet; correcting misinformation."
It continued: "Our goal is to issue one draft guidance that addresses at least one of these topics during the first quarter of 2011, but we cannot comment any further at this point as to exactly when any draft guidance will issue or any specific order in which the topics will be addressed. The public will be notified officially when any guidance is issued via Federal Register announcements."
The FDA was expected to announce online guidelines by the end of this year after holding two-day public hearings in November of 2009. Delaying that potentially for three more months -- and guaranteeing draft guidance on only one of those topics -- is not sitting well. "It's infuriating," said one health-care-centric ad agency president. "On one hand, you want FDA to get it right. On the other hand, the (public hearings) were last November. They've had more than a year to get it right. It's bullshit."
But Paul Machado, CEO and founder of New Jersey-based Health Innovation Partners, said the delay is not such a bad thing. "If you think about it from the FDA's perspective and the challenges they're dealing with regarding health-care reform, why come out with a position? There's not a need right now. Why bother?"
Mr. Machado added that the industry will "continue to meander through the forest and see what happens, be conservative, see what others do and slowly create a position for themselves. Even if they do come out with guidance, it will take companies a long time to react to it. The reality is, you can only do so much anyway. "
At the November 2009 hearings, more than 60 people spoke, including representatives from Google, drug-makers and ad agencies. A month later the FDA published its Guidance Agenda for 2010, and the "Guidance on the Internet and Social Media" was listed -- meaning, at some point this year, the FDA expected to issue those guidelines.
One of the first inklings that it was going to be delayed came earlier this month when the FDA issued its Guidance Agenda for 2011 and "Guidance on the Internet and Social Media" was again listed.
Asked in an email why the agency would delay its online guidance, former FDA associate commissioner Peter Pitts replied: "Lack of knowledge. Lack of urgency. First Amendment angst."
Ironically, as the pharmaceutical industry itself begs for online/social-media guidance in order to pursue marketing in the new media, the first documented enforcement letter stemming from the FDA's new "Bad Ad" program was online-related.
The Dec. 3 letter from the Division of Drug Marketing, Advertising and Communications (DDMAC) to Hill Dermaceuticals claimed the company's web pages for its Derma-Smoothe product "are false or misleading because they omit and minimize the risks associated with the use of Derma-Smoothe Body Oil, overstate its efficacy, present unsubstantiated superiority claims, broaden and inadequately communicate the indication, and present unsubstantiated claims for the drug product. Thus, the webpages misbrand the drug in violation of the Federal Food, Drug and Cosmetic Act."
The "Bad Ad Program," instituted in May, urges the medical community to report ads and sales pitches that violate FDA rules. Ostensibly, the program was designed primarily to catch what the FDA can't see -- the behind-office-doors pitches from pharmaceutical sales reps to physicians. But the broad definition of the program allows doctors and medical professionals to report false or misleading ads to the FDA, and to do so anonymously.“It really is getting to the point where decision making at FDA is really becoming a major obstacle to VCs committing more money to the life sciences sector,” said Jack Lasersohn, general partner at The Vertical Group.
- Responding to unsolicited requests
- Fulfilling regulatory requirements when using tools associated with space limitations
- Fulfilling post-marketing submission requirements
- On-line communications for which manufacturers, packers, or distributors are accountable
- Use of links on the Internet
- Correcting misinformation
Our goal is to issue one draft guidance that addresses at least one of these topics during the first quarter of 2011, but we cannot comment any further at this point as to exactly when any draft guidance will issue or any specific order in which the topics will be addressed. The public will be notified officially when any guidance is issued via Federal Register announcements.
My colleague Peter Pitts has written smartly on the subject of social media. If you read between the lines of the non-issuance, Peter's prior observation that there is a lot that the FDA will and cannot regulate suggests that any guidance will be a non-event.
Beside, as I point out in my book tabloidmedicine, most of what defines the risk and benefits of a medicine on line is a result of what others are saying or spreading in ways that will always be unregulated by the FDA. So what's a company to do?
1.Fill the void with tools that give consumers information and the ability to determine in partnership with their physicians what's best.
2. Ask people to volunteer participating in certain social networks, only ask and enter when invited.
3. Respond quickly and proactively to scaremongering, counterfeiting scams and hype.
Here’s a significant potential PDUFA addition – adding patient perspectives to the FDA’s analyses of drug application reviews.
In the minutes of the 11/22 PDUFA negotiating session, the FDA said that information about patients’ understanding of existing treatment tools is considered valuable, but is not consistently available during the review process.
This new initiative would place in front of frontline reviewers the views of patients who, for example, are willing to live with more serious side effects or safety concerns because they have failed on previous treatments and have no other options.
The agency said it wants to host meetings with review divisions and relevant patient advocacy groups to talk about available treatment options and unmet needs. That information would be used to help draft guidances for specific indications.
This is a real advance and will significantly enhance the role of the FDA’s Office of Special Health Issues. Bravo.
And speaking of greater input, industry is keen to bring more clarity and transparency to the approval process. Specifically, industry officials want a more structured risk-benefit formula included in PDUFA V and asked that the agency begin using it in its decision-making (similar efforts under way at the EMA).
CDER Director Janet Woodcock, “We’re all for that and we’ve been working on that, the industry’s been working on that, other academic parties have been working on that. So I think we will come up with something there.”
Office of New Drugs Director John Jenkins has said on more than one occasion that the framework should be simple and support sound expert judgment, not replace it.
According to Jenkins, such a model could improve predictability and consistency, support more structured discussions and provide concise descriptions of evidence and the risk-benefit implications.
Amen.
It's time to see all these good words turned into legislative deeds. And the sooner the better.
A few thoughts on PDUFA V before we settle in for the holiday break.
Two Teams. As negotiations proceed, it becomes increasingly obvious there’s an emerging duality – the FDA’s Part B “asks” and industry’s legitimate worries over what was promised, but not delivered, from PDUFA IV.
Perhaps both agency and industry should create two teams so that both sets of issues can be addressed in a timely and comprehensive manner. Special teams, as they say, win ballgames.
Carrots and Sticks. Everyone wants to be rewarded for promises delivered – but perhaps its time for some hurt to be written into the system for promises unfulfilled. PDUFA is a partnership and partnerships are built on mutual respect and understanding. When one side rewrites the rules while the game is in play, that’s not partnership – it’s a thorny thicket of unintended consequences. Not to put too fine a point on it, but predictable timing for first cycle decisions count.
When the agency can “stop the clock,” PDUFA dates lose all meaning. It’s the same argument used in Inherit the Wind to dispute the length of Earth’s “first day.” After all, since the Sun hadn’t been created yet, the first day could have been 24 hours or 24 billion years long. Sometimes a review feels just like that.
And finally …
First Principles. It’s time to remember why PDUFA exists in the first place. And that reason is predictability. PDUFA V will either provide more predictability or more excuses. The latter is not an acceptable choice for industry – nor will it be tolerated by the 112th Congress.
For all concerned – and particularly for patients – PDUFA V needs more resonant cowbell.
I was also pleased to have my book Tabloid Medicine launched and want to thank Peter, Dr. Weber, Mario and Ben for their support! Here's my observation on the new google.com 3-D body browser
www.technewsworld.com/story/Google-Really-Gets-Under-Peoples-Skin-71487.html
tabloidmedicine.com
WikiLeaks: Cuba banned Sicko for depicting 'mythical' healthcare system
Authorities feared footage of gleaming hospital in Michael Moore's Oscar-nominated film would provoke a popular backlash
By Amelia Hill
guardian.co.uk, Friday 17 December 2010
A WikiLeaks cable reveals that when Michael Moore's film was shown to Cuban doctors, they were 'disturbed at the blatant misrepresentation of healthcare in Cuba'.
Cuba banned Michael Moore's 2007 documentary, Sicko, because it painted such a "mythically" favourable picture of Cuba's healthcare system that the authorities feared it could lead to a "popular backlash", according to US diplomats in Havana.
The revelation, contained in a confidential US embassy cable released by WikiLeaks , is surprising, given that the film attempted to discredit the US healthcare system by highlighting what it claimed was the excellence of the Cuban system.
But the memo reveals that when the film was shown to a group of Cuban doctors, some became so "disturbed at the blatant misrepresentation of healthcare in Cuba that they left the room".
Castro's government apparently went on to ban the film because, the leaked cable claims, it "knows the film is a myth and does not want to risk a popular backlash by showing to Cubans facilities that are clearly not available to the vast majority of them."
Sicko investigated healthcare in the US by comparing the for-profit, non-universal US system with the non-profit universal health care systems of other countries, including Cuba, France and the UK.
It was nominated for an Oscar for best documentary feature but was also castigated for being naive and tendentious.
The cable comes from the United States Interests Section in Havana (USINT) – staffed by US foreign service personnel and local staff employed by the department of state, the unit is formally a section of the Embassy of Switzerland, although it operates independently of the Swiss in virtually all but protocol respects.
The secret 2008 cable is based on reports from the USINT's foreign service health practitioner (FSHP) of her conversations with local people, unauthorised visits to Cuban hospitals, and experience of helping USINT American and Cuban personnel access healthcare.
The cable describes a visit made by the FSHP to the Hermanos Ameijeiras hospital in October 2007. Built in 1982, the newly renovated hospital was used in Michael Moore's film as evidence of the high-quality of healthcare available to all Cubans.
But according to the FSHP, the only way a Cuban can get access to the hospital is through a bribe or contacts inside the hospital administration. "Cubans are reportedly very resentful that the best hospital in Havana is 'off-limits' to them," the memo reveals.
According to the FSHP, a more "accurate" view of the healthcare experience of Cubans can be seen at the Calixto Garcia Hospital. "FSHP believes that if Michael Moore really wanted the 'same care as local Cubans', this is where he should have gone," the cable states.
A 2007 visit by the FSHP to this "dilapidated" hospital, built in the 1800s, was "reminiscent of a scene from some of the poorest countries in the world," the cable adds.
The memo points out that even the Cuban ruling elite leave Cuba when they need medical care. Fidel Castro, for example, brought in a Spanish doctor during his health crisis in 2006. The vice-minister of health, Abelardo Ramirez, went to France for gastric cancer surgery. The neurosurgeon whoheads CIMEQ [Centro de Investigaciones Médico-Quirúrgicas] hospital – widely regarded as one of the best in Cuba – came to England for eye surgery, returning periodically for checkups.
"After living in Cuba for two and a half years, treating numerous Cuban employees at USINT, and interacting with many other Cubans, the FSHP believes … preventive medicine in Cuba is a by-gone ideal, rather than the standard practice of care," the memo concludes.
* On his website today Michael Moore has said that Cuba did not ban his documentary, Sicko
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.
