Latest Drugwonks' Blog
A recent paper entitled: Economic Evaluation and Comparative-Effectiveness Thresholds: Signals to Firms and Implications for R&D Investment and Innovation John A. Vernon University of North Carolina at Chapel Hill, Joseph H. Golec University of Connecticut - Department of Finance and me address that last issue.
Here's the abstract and a link to the article:
Abstract:
In this article we describe how reimbursement cost-effectiveness thresholds, per unit of health benefit, whether set explicitly or observed implicitly via historical reimbursement decisions, serve as a signal to firms about the commercial viability of their R&D projects (including candidate products for in-licensing). Traditional finance methods for R&D project valuations, such as net present value analyses (NPV), incorporate information from these payer reimbursement signals to help determine which R&D projects should be continued and which projects should be terminated (in the case of the latter because they yield an NPV < 0). Because the influence these signals have for firm R&D investment decisions is so significant, we argue it is important that reimbursement thresholds reflect the economic value of the unit of health benefit being considered for reimbursement. Thresholds set too low (below the economic value of the health benefit) will result in R&D investment levels that too low relative to the economic value of R&D (on the margin). Similarly, thresholds set too high (above the economic value of the health benefit) will result in inefficiently high levels of R&D spending. The U.S. in particular, which represents approximately half of the global pharmaceutical market (based on sales), and which seems poised to begin undertaking cost effectiveness in a systematic way, needs to exert caution in setting polices that explicitly or implicitly establish cost-effectiveness reimbursement thresholds for health care products and technologies, such as pharmaceuticals. In this paper we consider how cost-effectiveness thresholds influence R&D spending because firms react to payer reimbursement signals and guidelines.
Read article here
In a new Harris Interactive/HealthDay online survey (conducted in mid-April, via a nationally representative sample of 2,495 adults aged 18 and over), 47 percent of respondents believe the FDA does a poor job when it comes to monitoring the safety and effectiveness of new prescription drugs.
The good news is that this is an improvement over the 58 percent disapproval rating noted in a similar poll last year.
Some other interesting findings:
* 49 percent of Americans have a negative view of the job the FDA is doing. 48 percent have a positive assessment.
* 6 percent of respondents say that the FDA's oversight of imported foods is "excellent.” 21 percent say it’s "poor."
* 8 percent of poll respondents feel the agency is doing an "excellent" job of making sure new prescription drugs are safe and effective, or monitoring the safety of prescription drugs after they arrive on the market.
* 11 percent believe the FDA does an "excellent" job of handling recalls of prescription drugs. Overall, 43 percent think the agency's handling of recalls is "good," 28 percent "fair," and 12 percent "poor."
* 56 percent of those surveyed feel positively about how the FDA handles food recalls, while 40 percent feel negatively. Confidence about drug recalls was less robust.
* 59 percent said they feel that food safety should be the FDA's most important priority, followed by ensuring the safety and effectiveness of prescription drugs (37 percent). The safety of imported food came in third at 30 percent.
* 47 percent of respondents felt negative and an equal number positive about how the FDA ensures the safety and effectiveness of new prescription drugs. In 2004, 56 percent were positive and 37 percent were negative.
* More individuals (53 percent) felt positive than negative (40 percent) about how the FDA handles drug recalls in 2009, versus an opposite trend in 2008: 39 percent positive and 53 percent negative.
* Roughly the same percentage of people feel positive and negative about how the FDA monitors drugs after they are approved.
* About one-third (35 percent) of respondents say the FDA approves new drugs too slowly, 19 percent too quickly, and 18 percent think the process is about right.
* Only one-quarter feel "very confident" about the safety of over-the-counter medicines such as cough and cold medicines; 24 percent feel the same about prescription drugs, both brand names and generics. But only 14 percent feel this way about herbal remedies and nutritional supplements.
Obviously, some of these findings are somewhat contradictory – and that’s not surprising considering that many of the questions overlap and the responses are based on what people “think” they know about the FDA. But, all that aside, it is a snapshot in time of people’s general attitudes about the agency that regulates more than a quarter of the American economy.
What explains the improvement of the numbers year-over-year? Is the “Obama FDA” in April 2009 any different from the “Bush FDA” from January 2008? The answer, technically, is nothing is different. But with a new administration (and particularly this one) comes higher expectations. And the agency’s expeditious approach to pistachios seems to have given the FDA a kick-start to public redemption.
Well, nuts!
Michael Vick in talks to become PETA spokesman
May 1, 2009 - 2:38pm
Michael Vick has a new job offer waiting for him: PETA spokesman.
The ex-NFL superstar - who is serving prison time for funding an illegal dog-fighting ring - is in talks to do public service ads for People for the Ethical Treatment of Animals, AdAge.com reports.
The new gig is part of a comprehensive PR attempt to transform the disgraced quarterback's image -- and possibly get him re-admitted to the NFL.
Vick's public mea culpas will come in the form of public service announcements, TV interviews, donations to animal-rights organizations, and perhaps even the creation of his own foundation.
Dan Shannon, director of youth outreach and campaigns for PETA says Vick has the potential of truly getting the message across.
"I can do it until I'm blue in the face and it might not convince anybody. Michael Vick sure can. He can say, 'Look, I did it, I was wrong, and it ruined my career,''' Shannon tells AdAge.com.
(Copyright 2009 by WTOP. All Rights Reserved.)
While FDA has made all the right moves in dealing with the swine flu issue (specifically by naming Jesse Goodman to oversee the agency’s role in addressing the problem) there’s one more thing that only the United States Senate can do to help – confirm Peggy Hamburg as Commissioner. Now.
After all, she’s only one of the world’s top experts in flu pandemics – serving as vice chair of the IOM’s Forum on Microbial Threats (where she served along side Dr. Goodman and the FDA’s current “Food Czar,” David Acheson.
It’s time for us to use all the weapons at our disposal to combat the swine flu -- and Peggy Hamburg is a powerful one. Let’s get the confirmation process underway and expedite a Senate vote.
How To Maintain FDA Standards
Don't follow Marcia Angell's recommendations.
Bruce Gingles and Thomas P. Stossel,
For over 100 years, the U.S. Food and Drug Administration has balanced bringing important new medical products to patients with ensuring their safety. No drug or device is 100% safe, but physicians have steadily obtained ever more effective tools that increase patient longevity and quality of life.
Still, critics we dub "pharma-scolds" depict the FDA as a stooge of medical-products manufacturers and demand that the agency develop a more adversarial relationship with the pharmaceutical industry. One inveterate fault-finder, whose opinion is often sought by credulous audiences, is Marcia Angell, former acting editor in chief of the New England Journal of Medicine and author of The Truth About the Drug Companies. In an April 6 piece in The Boston Globe, Angell made sweeping recommendations that, if enacted, will set back patient care.
First, Angell wants to eliminate the "user fees" drug companies currently pay the FDA to evaluate their products. Such fees, she argues, confer "employee" status on the agency. But these companies have no input into the FDA's final decision to approve or deny new drug applications. Substantial research shows that user fees benefit patients by allowing the agency to hire additional staff to process new drug applications in a timely manner.
And many other federal agencies--even the post office--supplement their budgets with user fees. Taxpayers clawing their way out of an economic recession should appreciate that the industry pays in part for its own regulation.
Next, Angell wants the FDA to exclude industry consultants from advisory committees on new products. But evidence shows that the most productive scholars have industry relationships, and that such relationships have no effect on their recommendations for drug approval. It seems Angell would rather have the FDA get less useful advice than turn to experts who work with companies to develop life-saving products.
Angell also wants direct-to-consumer advertising for new products banned for three years after they're launched, limiting market penetration so that side effects not detected by pre-approval trials will affect fewer patients. But since rare complications emerge only after widespread product use, her recommendation is illogical. Banning this advertising, as Angell suggests, would mainly serve to keep useful products from patients who need them.
This brings us to Angell's worst idea: discouraging "me-too" products--drugs developed as variants of new medicines--based on the incorrect presumption that such products increase costs without adding clinical value. Once a new drug is approved, Angell suggests, no more drugs should be approved for the same general purpose unless it is judged superior to the first product in head-to-head clinical trials.
But Angell fails to understand that most useful innovation is evolutionary, not revolutionary. Tweaking antibiotics, for example, counteracts the penchant of disease-causing microbes to develop resistance to them. Radically curtailing second-generation products makes neither medical nor economic sense and borders on murderous absurdity.
The introduction of "me-too" products by multiple companies facilitates testing of the products in different clinical indications, expanding their versatility and benefit to patient. Competition among brand products reduces prices, and sales of incrementally beneficial products provide the revenues to support the research and development of the occasional breakthrough drug.
If the first cholesterol-lowering drug (called a statin) for preventing heart attacks had been not Merck's ( MRK - news - people ) Mevacor, but Bayer's ( BAY - news - people ) Baycol--which was later shown to have potentially fatal side effects--and the FDA had delayed the introduction of new statins because it was waiting for evidence from head-to-head trials, patients who needed to cholesterol reduction and had only Baycol available would have been without any alternative. As another example, lanidomide is not materially more effective than thalidomide (from which it is derived) as a treatment for the disease multiple myeloma, but it lacks thalidomide's side effects.
Angell also wants the FDA to exclude surrogate measurements--like cholesterol, which correlates with heart attack risk--as criteria for approval of second-generation products, because such measurements don't always predict clinical outcomes. Instead, Angell thinks companies should conduct expensive trials to document clinical benefits.
However, surrogate values are frequently predictive. Scientists use surrogate markers to make reasonable predictions about actual outcomes in patients--giving patients faster access to new treatments. FDA approved both thalidomide and lanidomide based on surrogate measurements. Abandoning them would make a perfect enemy of the good.
Last but not least, Angell wants to accelerate FDA approval of generic products, alleging that the "FDA takes roughly twice as long to approve them as to approve brand-name drugs." Generics are the ultimate "me-too" products--they're just cheaper copies of older drugs.
Generics are fine, but Angell draws a false comparison. User fees do shorten the time between the filing of a new drug application and an FDA decision; pre-application development time for innovative products is far longer than for generics. A better metric is to compare actual numbers of new drug and generic drug approvals: In 2008, the FDA approved 21 innovator drugs and 90 first-time generics.
In short, Angell's calls for reform would lead to decreased patient access to lifesaving new products, higher drug prices and less competition between pharmaceutical companies. As public policy, that's a prescription for bad health.
Bruce Gingles is vice president of Cook Group, a medical device company. Thomas P. Stossel is a professor of medicine at Harvard University and a senior fellow at the Manhattan Institute for Policy Research.
Note that the IOM report never specifies or demonstrates through research what damage has occured. And note that it presupposes that the great unwashed are too stupid to figure out that it is being duped to able to judge outcomes. Incredible. So much for evidence based medicine.
Meanwhile, "policies designed to reduce conflicts of interest and mitigate their impact provide an important foundation for public confidence in medical professionals and institutions." That should apply to every financial conflict. To the extent that most of the money and power in the health care system comes from government and involve hospital services that do NOT include devices and rugs. I have only suggested that the focus also be on the abuse of government's role in shaping research and clinical decisions and creating appropriate transparent firewalls between insurers, hospital and physicians so that doctors can be trusted to do what's best for the patient.
Finally there is the presumption that commercialization is inherently corrupting and that therefore information disseminated with support from commercial sources should be banned or disregarded without regard to scientific or intellectual merit. Perhaps I read too much into the IOM report. But to the extent that it calls for all measures to limit and eliminate such relationships while failing to disclose similar cozy connections of financing and self-referencing that created the conflict of interest issue, supported the work of the IOM, paid for it's consultants directly and indirectly all while having a media complicit in ignoring these connections, the end result is not objectivity but bias pure and simple. There may be merit in some recommendation or another in the IOM report. However the ultimate to goal is to enforce limits on science and medical practice that the authors would not impose on itself or many other interests who would profit from a decline in the rate of the introduction of new products.
How Bush Prepared for the Outbreak
Tools developed in the last few years will help the Obama administration fight back.
By TEVI TROY
Swine flu has presented the Obama administration with its first major public-health crisis. Fortunately for the Obama team, the Bush administration developed new tools that will prove critical in meeting this challenge.
Under President Bush, the federal government worked with manufacturers to accelerate vaccine development, stockpiled crucial antivirals like Tamiflu, war-gamed pandemic scenarios with senior officials, and increased the Centers for Disease Control and Prevention's (CDC) sample identification capabilities. These activities are bearing fruit today.
The Department of Health and Human Services (HHS) has already deployed 12.5 million courses of antivirals -- out of a total of 50 million -- to states and local agencies. In addition, CDC's new capacities have allowed Mexican officials to send flu samples to CDC for quick identification, a capability that did not exist a few years ago. Collaboration between the government and the private sector on vaccines -- which Mr. Bush and his HHS team actively encouraged -- could potentially allow manufacturers to shepherd a vaccine to market within four months of identifying the strain and getting the go-ahead from CDC or the World Health Organization.
But new tools aside, top health officials must answer difficult questions about response efforts. One is when and where to deploy antivirals.
The Bush administration considered a "forest fire" approach to pandemic outbreaks abroad. This strategy calls for sharing some of our precious supply of antivirals with a foreign country in order to stop a small flame from becoming a forest fire. The risk is that we have only a limited number of courses, and the use of antivirals increases the odds that the flu strain in question will become resistant to that antiviral. With 37.5 million courses remaining in the federal stockpile, the administration needs to think very carefully about how to use them.
Another issue: Under the Public Readiness and Emergency Preparedness (PREP) Act of 2006, the government has the authority to issue "Prep Act Declarations" granting liability protection to manufacturers whose products were used in public-health emergencies. This helps encourage manufacturers to develop countermeasures. The government issued a series of such declarations in 2007 and 2008. They protected the development and use of influenza vaccines and pandemic antivirals, as well as anthrax, smallpox and botulism products. The Obama administration should consider granting more of them -- if appropriate -- in the weeks ahead.
A third policy question has to do with how to stop the spread of the disease both across borders and within countries. The administration has so far initiated "passive surveillance": Border guards are assessing if people entering the U.S. seem sick, but aren't actively stopping anyone. If things get worse, they may have to intensify border security.
The Bush administration examined the question of closing the borders in certain circumstances but determined that it would probably be ineffective. Worse, it could lead other nations to retaliate by closing their own borders, which could hurt Americans traveling abroad.
Another strategy, already in use to some degree in Mexico, is social distancing -- asking citizens to refrain from large social gatherings. During the 1918 influenza pandemic, St. Louis embraced such measures while Philadelphia eschewed them, and Philadelphia suffered a much higher death rate as a result. We are probably not yet at the point where such drastic measures are necessary, but senior officials had better start thinking about how they would address these questions.
Most importantly, the federal government must figure out how to reassure a nervous public. It doesn't help that none of the 20 top officials at HHS has been confirmed. Some of them, like FDA commissioner-designate Dr. Margaret Hamburg, are experts in biopreparedness and could help reassure Americans. Alas, she and her potential future colleagues, including the new secretary of HHS, are still in limbo. They need to be in place and on the job.
Mr. Troy, deputy secretary of Health and Human Services from 2007 to 2009, is a visiting senior fellow at the Hudson Institute.
Lowering Drug Prices
To the Editor:
Pegging drug prices to health outcomes is a smart way to lower health care costs (“Drug Deals Tie Prices to How Well Patients Do,” Business Day, April 23). It’s also a patient-centric way of determining which drugs are worth the money.
In Britain, New Zealand and elsewhere, government officials determine which drugs are worth the cost. These officials are under constant pressure to arrive at conclusions that lead to lower government spending, so patients are routinely denied access to expensive, cutting-edge medicine.
Tying drug prices to patient performance is a model worth expanding. Tying drug prices to the whims of budget analysts heartlessly endangers lives.
Peter Pitts
New York, April 23, 2009
The writer is president of the Center for Medicine in the Public Interest and a former associate commissioner of the Food and Drug Administration.
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.
