Latest Drugwonks' Blog
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.
As it is today.
According to a story in today’s Financial Times, Search engines pressed over drug ads policy,
“Pressure is building on the major US search engines to stop showing advertising from overseas drug sellers that deliver potentially counterfeit and dangerous products to consumers in violation of federal laws. The US Drug Enforcement Administration and the Food and Drug Administration are concerned that the practice is continuing despite the deaths of consumers who ordered drugs without examination by a doctor.”
It was the right thing to do in 2004 and it’s the right thing to do now.
- The private sector has been slowly funding less and less of the total national health expenditures; as of 2007 less than 54 percent of total national health care expenditures are paid for by the private sector.
- Reciprocally, the public sector has been slowly funding more and more of the total national health expenditures; as of 2007 public expenditures at the federal and state levels now fund nearly one-half of the total health care expenditures in the U.S.
- Total out-of-pocket expenditures have been plummeting as a share of total health expenditures at an even faster rate; today only a bit more than $1 out of every $10 spent on health care is being funded by individuals through out-of-pocket expenditures.
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.
