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Light has a personal vendetta against Joe DiMasi of the Tufts University Center for the Study of Drug Development. Light believes there is an international conspiracy to protect the validity of DiMasi's scholarly work on the cost of drug development. Light thinks that because the data on actual costs for each drug studied is not publicly available it can't be verified which is like you can't trust audited financial statements unless you have all the taxi receipts publicly available. The fact is, DiMasi's estimate of the capitalized costs of bring a new molecular entity to market, as opposed to just adding a liquid form of the same drug, has been verified time and again by analysis of private, public and public-private drug development activities where both opportunity costs and clinical trial complexity can be measured.
But Light has his followers who are innovation haters and who believe that the true measure of drug costs are what it costs to bring a generic drug to market. Which begs the question that his Lightness never answers: if it costs so little to bring a new drug to market, why aren't generic companies innovators...
In his lightweight Health Affairs piece, Light only avoids the issue further by claiming that producing more pill forms in response to price controls is a true measure of innovation. But he does a service by showing us the sort of dumbed-down health care we would receive under price controls of any form...and demonstrates again why Joe DiMasi is a class act and a real economist and some people just aren't either...
Oh, and Light has NO degree in psychiatry or medicine ...
Europe Has Expanded Its Lead Over The United States In Pharmaceutical Research Productivity
Separately, Researchers Find That Intellectual Property Rules Are Restricting Access To Generic Drugs In Guatemala; Third Study Encourages Participation Of Outside Experts In Pharmaceutical Patent Reviews In Developing Countries
Bethesda, MD -- It is widely believed that the United States has eclipsed Europe in pharmaceutical research productivity. However, a comprehensive data set of all new chemical entities approved between 1982 and 2003 shows that the U.S. never overtook Europe in research productivity, and in fact Europe is pulling further ahead, according to a study published today on the Health Affairs Web site. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.5.w969
The study is one of three released by Health Affairs dealing with prescription drugs and intellectual property.
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.5.w948/DC2
The U.S. share of approved new drugs did increase in the decade from 1993 to 2003, as compared to the previous decade from 1982 to 1992, but that simply reflected the fact that the pharmaceutical industry poured more of its research dollars into American labs, says study author Donald Light, a professor of psychiatry at the University of Medicine and Dentistry of New Jersey and the Lokey visiting professor at Stanford. Over both decades, the U.S. share of approved new drugs lagged behind its share of research funding.
On a dollar-for-dollar basis, Europe was more productive in discovering new drugs than the U.S. was, and the European productivity advantage was greater in the period from 1993 to 2003 than it had been in the period from 1982 to 1992. Japan outstripped both Europe and the United States in pharmaceutical research productivity over these twenty years.
“Congressional leaders and others concerned about high prices of new patented drugs will be heartened by this analysis, because lower European prices seem to be no deterrent to strong research productivity,” writes Light. He cites previous research showing that pharmaceutical companies are able to recover research costs and make a “good profit” at European prices, and he rejects the notion that Europeans are “free-riding” on American pharmaceutical research investments.
According to the abstract, the average respondent accurately identified the FDA-approval status of just over half of the drug-indication pairs queried (mean 55%; median 57%). Accuracy increased modestly (mean 60%, median 63%) when limited to drugs the respondent reported having prescribed during the previous 12 months. There was a strong association between physicians' belief that an indication was FDA-approved and greater evidence supporting efficacy for that use.
The study’s senior author, Dr. G. Caleb Alexander (assistant professor of medicine at the University of Chicago) said a concern was that off-label uses often did not have the same level of scientific scrutiny as FDA-approved uses.
All the more reason for the FDA and the pharmaceutical industry to jointly develop (as part of the agency's Safe Use initiative) better ways to make the PI more user-friendly – specifically the physician-user. Here’s an idea – how about FDA-approved PI detailing guides?
A good discussion topic for the Risk Communications Advisory Committee.
As most have heard by now, the US has a significantly higher infant mortality rate than its peers, which is presented as a sign that its health care system is lacking. The first problem with international comparison of infant mortality rates is that definitions of live birth and stillbirth are not fixed and may be ambiguous or subjective. The US simply uses the World Health Organization definition, which classifies as a live birth any case in which there is “complete expulsion or extraction from its mother of a product of conception, irrespective of the duration of the pregnancy, which, after such separation, breathes or shows any other evidence of life - e.g. beating of the heart, pulsation of the umbilical cord or definite movement of voluntary muscles - whether or not the umbilical cord has been cut or the placenta is attached.”
But in the UK, while live birth goes essentially undefined, the legal definition of a still birth is “a child which has issued forth from its mother after the twenty-fourth week of pregnancy and which did not at any time after being completely expelled from its mother breathe or show any other signs of life.” The question of what constitutes a sign of life is left open, subject to the interpretation of medical personnel. Second, the fate of babies born earlier is left in a gray area. Again the judgment of doctors is crucial in determining which preemies are counted as still births and which are considered live births.
Similarly, in Germany, the definition of a live birth follows closely, but not exactly, the WHO criteria. Under German law, “[a] live birth…exists when in a child after the separation from the mother’s body either the heart beats or the umbilical cord pulses or the natural breathing of the lungs begins.” This omits, however, voluntary movement. Like in the US, weight is not a criterion for live birth, although a threshold of 500g birth weight is used to differentiate a stillbirth or death during birth from a miscarriage in cases where the child shows none of the three above signs of life.
Switzerland only uses two of the four WHO criteria, the two most obvious signs of life, respiration and heart beat. The oft cited figure of 30 cm as the required length for registering a live birth is not universal in Switzerland but is present in some cantons. Studies have found significant underreporting of premature births in Switzerland, including babies included in either local or national listings but not both, which can alter the overall mortality rate by more than a percentage point.
Need more proof?
Check out the following chart of restrictions on the gestation at which births must be reported as still or live:
Selected statistics from EURO-PERISTAT Project, with SCPE, EUROCAT, EURONEOSTAT, “European Perinatal Health Report,” 2008.
These variations in definition are important because they mean that some babies are not counted in the statistics or are counted differently depending on the country. The broader the criteria for live birth, the higher the infant mortality rate will be because you will be including more babies who ultimately do not survive. Restrictions based on gestation or birth weight, which are present in some countries, exclude precisely the babies that are most likely to die and artificially bringing down the mortality rate. The fact that criteria for registering stillbirths also vary means that some babies are not counted at all and also makes it impossible to correct the statistics or to use alternative statistics, like fetal or perinatal mortality, to produce a numbers that are more representative and comparable across countries.
The Teva (Hebrew for "Nature") press release begins as follows:
“Teva Pharmaceuticals USA, the world's leading generic pharmaceutical company, today announced the start of its "Patient First" project as part of the Year of Affordable Healthcare campaign. The initiative, available at: www.yearofaffordablehealth.com/patients, features a first-hand perspective of everyday Americans as they struggle with the enormous and sometimes insurmountable expense of paying for their prescription medicines.”
And ends:
“Teva's Year of Affordable Healthcare is a nationwide campaign to recognize the important role that generic drugs play in providing competitive and more affordable healthcare. In addition, the campaign calls upon federal legislators to enact further reforms, including passage of a competitive regulatory approval pathway for generic biologics to increase American access to affordable and lifesaving medicines.”
The full press release can be found here.
But – just how much will FOB legislation really change the cost equation? Well, for starters, that’s the wrong question. The right question is (not surprisingly) more complicated. And it’s a two-parter: How much will FOB legislation change the cost/quality equation?
If we can stipulate that quality (aka: safety) cannot be sacrificed for cost (Can we, in fact, stipulate that? Hope so.) – then the answer to cost reduction is maybe 20% or so. Significant, yes? Game changing from a spend perspective? Well – it ain’t chicken feed, but neither is it manna from heaven.
The first point to consider is that FOBs aren’t generics in the Hatch-Waxman sense. (Note: Always take a corrective 2X4 to anyone who utters “generic biologics.”) FOBs will require robust (aka: expensive) clinical trials and complicated (aka: expensive) GMPs. That’s just the nature of the beast.
The next point is that the above will restrict the number of classic “generics” companies who can play in the FOB space (and Teva is at the top of that short list). The ramp-up is too expensive and the risk is too high.
And there are three kinds of risk. The first is failure in either the clinical trial or the GMP aspects of the proposition. The second is that the profit margins are radically different from small molecule generics. And the third is that innovator companies are likely to stay in the game post patent-expiry. It’s that third issue that’s the biggest as well as the least discussed. So, let’s talk about it.
Since the ante for being in the FOB game is high (trials, GMPs), the cost differential between FOB and innovator product will be significantly less (20% or so if you go by the EMEA experience). So, the question becomes, can innovator companies lower their prices by 20% or so on “brand names” and have that be a profitable proposition. Answer: Yes.
Will costs come down? They will. But don’t look for the same precipitous decline in prices that we’re used to seeing from Hatch-Waxman generics. As far as Teva’s “Patient First” program is concerned – kudos. But safety first trumps all.
From the Lou Dobbs program, Thursday, August 20th, 2009:
DOBBS: Tonight the Obama administration working feverishly to set the record straight on what it calls myths about government-led health care. As Ines Ferre reports, however, the president insisting the insured will be able to keep their plans and their doctors just might not be the case.
(BEGIN VIDEOTAPE)
INES FERRE, CNN CORRESPONDENT (voice-over): It's come up in a number of town hall meetings on health care. The concern that if given the choice between a government plan and a private plan, many employers would choose a federal one assuming it's less expensive. President Obama and Democrats have gone through great pains to reassure Americans they can keep seeing their doctor.
OBAMA: If you like your health care plan, you can keep your health care plan. This is not some government takeover. If you like your doctor, you can keep seeing your doctor.
FERRE: Not true for everyone says FactCheck.org. Under the House bill, some employers may have to modify plans after a five-year grace period if they don't meet minimum benefit standards. Also some employers are likely to buy different coverage for their workers or drop coverage and pay a penalty instead, in which case workers would have to buy their own private insurance or go on a federal plan. The FactCheck.org analysis describes the legislation as a moving target with projections of how many would switch to federal plans ranging from near zero to as much as 56 percent of all covered workers. Peter Pitts worked for the FDA during the Bush administration.
PETER PITTS, CENTER FOR MEDICINE IN THE PUBLIC INTEREST: You may not be able to keep the plan that you've got because that plan may cease to exist. You may not be able to go see the doctor that you've always seen because your insurance plan may have changed. So when the president says definitely you can keep your doctor, when members of Congress say definitely you can keep your insurance plan. They're just guessing.
The complete Lou Dobb segment can be found here.
The 8th U.S. Circuit Court of Appeals has rejected
In its ruling, the 8th Circuit noted that the
That’s unfortunate since it will lead to
"
So there is preemptive authority when it comes to pricing – but their isn’t preemptive authority when it comes to safety? An unfortunate allegory akin to health reform really being abot cost containment rather than patient care.
The complete story can be found here.
Who is one of the major players driving this investigation? None other than Henry Waxman, Chairman of the House Energy and Commerce Committee.
How? By adhering to free market principles. The success of Part D is due to its uniquely American hybrid nature. The federal government partnered with the pharmaceutical and insurance industries to offer senior citizens healthcare choice via free market competition. Rather than a one-size-fits-all government plan, Part D offers dozens of private sector plans offering Medicare-eligible Americans various options that best suit their personal healthcare situations. Uncle Sam doesn't design the programs or process the claims or dictate the formularies. Uncle Sam writes the check and sets the ground rules so that everyone has access to the medicines they need. And the same can happen for access to health insurance - but only when we purge ourselves of the notion of the "essential nature" of a "public" plan.
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.
