Latest Drugwonks' Blog
Talking about making the auto industry competitive, Senator Carl Levin and John Dingell maintained yesterday that the problem isn't the other car companies but the anti-competitive practices of other countries that allow imports to be brought in at artificially low prices that include labor costs that are lower because of subsizied health care (a factual inaccuracy but whose counting).
Let's remember that the next time Dingell and Levin and Stabenow argue for drug importation which of course a function, not of companies but of countries....
Let's remember that the next time Dingell and Levin and Stabenow argue for drug importation which of course a function, not of companies but of countries....
In am in Israel for the week visiting my son. Interesting article in the Jerusalem Post amidst the items about Hezbollah rearming, Hamas attacking and Iran building up its nuclear weaponry as it hopes the election of Democrats is the beginning of the end of American support for Israel..
Seems as though Israel's pharmaceutical industry is being hammered by counterfeits and patent theft. For those who think this is just an fiction fabricated to screw the Third World -- an idea that can get you a GENIUS AWARD.
It turns out that Israel's pharma and biotech industry has lost about $331 million a year from such practices.
The Jerusalem Post article can be found here:
Intellectual property fraud an 'epidemic'
Seems as though Israel's pharmaceutical industry is being hammered by counterfeits and patent theft. For those who think this is just an fiction fabricated to screw the Third World -- an idea that can get you a GENIUS AWARD.
It turns out that Israel's pharma and biotech industry has lost about $331 million a year from such practices.
The Jerusalem Post article can be found here:
Intellectual property fraud an 'epidemic'
The title says it all.
Click on the link below and have a look at this new op-ed from the Orange County Register:
All prescription drugs not created equal
Those in agreement stand up and shout "Me too!"
Click on the link below and have a look at this new op-ed from the Orange County Register:
All prescription drugs not created equal
Those in agreement stand up and shout "Me too!"
Despite the midterms and continued brickbats from Grassley, Waxman, Hinchey, et al., the persistent and quiet revolution going on inside the FDA continues.
The most recent example of this ray of hope is the agency’s championing of adaptive clinical trials. "Traditional" clinical trials that demonstrate a 40% efficacy rate without even attempting to isolate which 40% is expensive in financial terms and only marginally helpful in helping physicians best treat their patients. It also plays into the hands of the Evangelists of Evidence-based Medicine and the Votaries of Me-Tooism. We must think about clinical trials in new ways. It's a crucial aspect of the Critical Path.
Yesterday, Deputy Commissioner Dr. Scott Gottlieb made such a point at a Manhattan Institute talk – and it sure was refreshing.
Scott’s full remarks can be found by clicking the link below:
http://www.fda.gov/oc/speeches/2006/manhattaninst1113.html
The most recent example of this ray of hope is the agency’s championing of adaptive clinical trials. "Traditional" clinical trials that demonstrate a 40% efficacy rate without even attempting to isolate which 40% is expensive in financial terms and only marginally helpful in helping physicians best treat their patients. It also plays into the hands of the Evangelists of Evidence-based Medicine and the Votaries of Me-Tooism. We must think about clinical trials in new ways. It's a crucial aspect of the Critical Path.
Yesterday, Deputy Commissioner Dr. Scott Gottlieb made such a point at a Manhattan Institute talk – and it sure was refreshing.
Scott’s full remarks can be found by clicking the link below:
http://www.fda.gov/oc/speeches/2006/manhattaninst1113.html
Medicare Drug Focus reports that new HIV drugs Atripla and Prezista have been quickly adopted by Part D plans. Some have flat co-pays while others have special tier payments until out of pocket costs exceed the catastrophic level.
Two points: Neither drug are on the VA formulary. In fact they are not even available on an off-formulary fashion for at least a year..
Second, if the Dems have their way, patients would have almost no commercial information about such new medicines. Zero. Zip. Is it ethical to impose a gag order on companies that want to tell patients about a medicine that is a critical part of a HIV drug cocktail make sense? What about a new drug for Parkinson's or Alzheimer's or cancer? How about an orphan drug that prevents a kid from dying from a rare metabolic disorder? Should it be against the law for a company to tell parents about such medicine? Put another way, who would trust an HMO to let people know about a new and expensive medication without prompting?
Two points: Neither drug are on the VA formulary. In fact they are not even available on an off-formulary fashion for at least a year..
Second, if the Dems have their way, patients would have almost no commercial information about such new medicines. Zero. Zip. Is it ethical to impose a gag order on companies that want to tell patients about a medicine that is a critical part of a HIV drug cocktail make sense? What about a new drug for Parkinson's or Alzheimer's or cancer? How about an orphan drug that prevents a kid from dying from a rare metabolic disorder? Should it be against the law for a company to tell parents about such medicine? Put another way, who would trust an HMO to let people know about a new and expensive medication without prompting?
Revoke non-interference and replace it with "government pricing?"
PAUSE ... NOT!
Says who? See below.
"We are seeing large-scale negotiations with drug manufacturers, but they are conducted by private drug plans, not by the government. … A robust marketplace with a lot of competitors has driven down prices. It's the magic of the market. To assume that the government, in our genius, could improve on this belies the reality of a complex task."
− HHS Secretary Michael Leavitt, The New York Times, 11/13/06
"Both The Non-Partisan Congressional Budget Office And Medicare Actuaries Have Said They Doubt The Government Could Negotiate Lower Costs Than The Private Sector. The theory behind Part D is that market forces and competition among drug plans, overseen by government, can achieve better results than a government-run program. The multitude of plans allows seniors to pick one that best meets their needs."
"Our View On Medicare Part D: Put Brakes On Drug Plan 'Fix,'" USA Today, 11/13/06)
"Government Price Negotiation "Could Leave People Without Drugs That Manufacturers Decide Aren't Sufficiently Profitable Under The Plan. Medicare recipients account for half of all drug prescriptions. With that kind of clout, government might try to dictate prices, not just negotiate them. This could leave people without drugs that manufacturers decide aren't sufficiently profitable under the plan. The VA plan illustrates the point. It offers 1,300 drugs, compared with 4,300 available under Part D, prompting more than one-third of retired veterans to enroll in Medicare drug plans."
"Our View On Medicare Part D: Put Brakes On Drug Plan 'Fix,'" USA Today, 11/13/06
"Part D Seems To Be Working. Average monthly premiums this year were $24, one-third lower than projected, according to Centers for Medicare and Medicaid Services. More than 75% of seniors say they are satisfied with the benefit, five recent independent surveys found."
"Our View On Medicare Part D: Put Brakes On Drug Plan 'Fix,'" USA Today, 11/13/06
"It Is Not Obvious That Allowing The Government To Negotiate With Pharmaceutical Companies Will Lead To Lower Prices Than Those Achieved By Private Drug Plans. Private plans like Kaiser or United are able to negotiate deep discounts with pharmaceutical companies precisely because of the plans' ability to say no – the ability to include some drugs and to exclude others, allowing the market to judge the resulting formulary. On the other hand, when the government negotiates, its hands are tied because there are few drugs it can exclude without facing political backlash from doctors and the Medicare population, a very influential group of voters."
Stanford Business School's Alain Enthoven and Kyna Fong, Op-Ed, "Pelosi On Drugs," The Wall Street Journal, 11/13/06
"By Acting As One Large Buyer, The Government Will Cause Price Discounts To Become More Expensive For Pharmaceutical Companies. In other words, the minimum price that the pharmaceutical company is able to accept increases. All else equal, this will lead to higher, not lower, prices. When private drug plans are negotiating individually with pharmaceutical companies, those companies have the power to 'price discriminate,' meaning they can charge lower prices to some drug plans and higher prices to others. This ability allows for large discounts."
Stanford Business School's Alain Enthoven and Kyna Fong, Op-Ed, "Pelosi On Drugs," The Wall Street Journal, 11/13/06
"Neither Economic Theory Nor Historical Experience Suggests Government Price Negotiation Will Achieve Lower Drug Prices. Congressional Democrats need to be careful in making the logical leap from market share to bargaining power. Empowering the government to negotiate with pharmaceutical companies is not necessarily equivalent to achieving lower drug prices. In fact, neither economic theory nor historical experience suggests that will be the outcome. Members should think carefully before jumping on the bandwagon – this promise may bring just the opposite of what was ordered."
Stanford Business School'svAlain Enthoven and Kyna Fong, Op-Ed, "Pelosi On Drugs," The Wall Street Journal, 11/13/06
PAUSE ... NOT!
Says who? See below.
"We are seeing large-scale negotiations with drug manufacturers, but they are conducted by private drug plans, not by the government. … A robust marketplace with a lot of competitors has driven down prices. It's the magic of the market. To assume that the government, in our genius, could improve on this belies the reality of a complex task."
− HHS Secretary Michael Leavitt, The New York Times, 11/13/06
"Both The Non-Partisan Congressional Budget Office And Medicare Actuaries Have Said They Doubt The Government Could Negotiate Lower Costs Than The Private Sector. The theory behind Part D is that market forces and competition among drug plans, overseen by government, can achieve better results than a government-run program. The multitude of plans allows seniors to pick one that best meets their needs."
"Our View On Medicare Part D: Put Brakes On Drug Plan 'Fix,'" USA Today, 11/13/06)
"Government Price Negotiation "Could Leave People Without Drugs That Manufacturers Decide Aren't Sufficiently Profitable Under The Plan. Medicare recipients account for half of all drug prescriptions. With that kind of clout, government might try to dictate prices, not just negotiate them. This could leave people without drugs that manufacturers decide aren't sufficiently profitable under the plan. The VA plan illustrates the point. It offers 1,300 drugs, compared with 4,300 available under Part D, prompting more than one-third of retired veterans to enroll in Medicare drug plans."
"Our View On Medicare Part D: Put Brakes On Drug Plan 'Fix,'" USA Today, 11/13/06
"Part D Seems To Be Working. Average monthly premiums this year were $24, one-third lower than projected, according to Centers for Medicare and Medicaid Services. More than 75% of seniors say they are satisfied with the benefit, five recent independent surveys found."
"Our View On Medicare Part D: Put Brakes On Drug Plan 'Fix,'" USA Today, 11/13/06
"It Is Not Obvious That Allowing The Government To Negotiate With Pharmaceutical Companies Will Lead To Lower Prices Than Those Achieved By Private Drug Plans. Private plans like Kaiser or United are able to negotiate deep discounts with pharmaceutical companies precisely because of the plans' ability to say no – the ability to include some drugs and to exclude others, allowing the market to judge the resulting formulary. On the other hand, when the government negotiates, its hands are tied because there are few drugs it can exclude without facing political backlash from doctors and the Medicare population, a very influential group of voters."
Stanford Business School's Alain Enthoven and Kyna Fong, Op-Ed, "Pelosi On Drugs," The Wall Street Journal, 11/13/06
"By Acting As One Large Buyer, The Government Will Cause Price Discounts To Become More Expensive For Pharmaceutical Companies. In other words, the minimum price that the pharmaceutical company is able to accept increases. All else equal, this will lead to higher, not lower, prices. When private drug plans are negotiating individually with pharmaceutical companies, those companies have the power to 'price discriminate,' meaning they can charge lower prices to some drug plans and higher prices to others. This ability allows for large discounts."
Stanford Business School's Alain Enthoven and Kyna Fong, Op-Ed, "Pelosi On Drugs," The Wall Street Journal, 11/13/06
"Neither Economic Theory Nor Historical Experience Suggests Government Price Negotiation Will Achieve Lower Drug Prices. Congressional Democrats need to be careful in making the logical leap from market share to bargaining power. Empowering the government to negotiate with pharmaceutical companies is not necessarily equivalent to achieving lower drug prices. In fact, neither economic theory nor historical experience suggests that will be the outcome. Members should think carefully before jumping on the bandwagon – this promise may bring just the opposite of what was ordered."
Stanford Business School'svAlain Enthoven and Kyna Fong, Op-Ed, "Pelosi On Drugs," The Wall Street Journal, 11/13/06
We've created a new drugwonks category: Health Care Haiku -- and we welcome your submissions. So if the muse inspires your passion for health care progress through poetry, please send in your creations to ppitts@cmpi.org.
Herewith the first few health care haiku:
Non-Interference
Should it stay or should it go?
Ask Mark McClellan
Nancy Pelosi
Has her “First Hundred Hoursâ€
Seniors are watching.
Drug Importation
Is bad for the public health
Who will propose it?
The AARP
Is a big Part D player
Why are they whining?
The VA model
Would give seniors much less choice
Don’t even go there.
The Critical Path
Must be funded by Congress
Gene testing a must.
Herewith the first few health care haiku:
Non-Interference
Should it stay or should it go?
Ask Mark McClellan
Nancy Pelosi
Has her “First Hundred Hoursâ€
Seniors are watching.
Drug Importation
Is bad for the public health
Who will propose it?
The AARP
Is a big Part D player
Why are they whining?
The VA model
Would give seniors much less choice
Don’t even go there.
The Critical Path
Must be funded by Congress
Gene testing a must.
Now about those "safe" drugs from Europe ...
According to a new report in the Times of India, over half a million packets of fake medicines, most of them from India, were seized by European customs officials during 2005.
The fake medicines include Viagra, antibiotics, medicines to treat cancer
and high cholesterol and condoms. A sample that was investigated revealed
that what was being passed off as a cardiovascular drug contained a mixture
of brick dust.
"A secret wave of dangerous fakes is threatening the people in Europe," said
Laszlo Kovacs, the EU Taxation Commissioner.
The latest European customs statistics released Saturday said that in 148
operations last year, customs officers intercepted 560,598 packets of fake
medicines. The seizures were double the 2004 rate, but there are fears that
even more counterfeit products may have entered the EU undetected.
Three quarters of the cases involved fake medicines imported from India,
with seven percent from Egypt and six percent from China. Other sources
included Thailand, Argentina, Switzerland, Hong Kong and Indonesia.
The statistics revealed that customs officers across Europe uncovered 26,700
consignments of counterfeit and pirated goods, seizing more than 75 million
items.
"The key is to be faster than the counterfeiters," Kovacs said. "We must
quickly identify, and act to deal with, new routes of fraud and constantly
changing counterfeit patterns to protect our health, safety and the
economy."
Coincidence or Crisis?
(Hint -- There is no such thing as a coincidence.)
According to a new report in the Times of India, over half a million packets of fake medicines, most of them from India, were seized by European customs officials during 2005.
The fake medicines include Viagra, antibiotics, medicines to treat cancer
and high cholesterol and condoms. A sample that was investigated revealed
that what was being passed off as a cardiovascular drug contained a mixture
of brick dust.
"A secret wave of dangerous fakes is threatening the people in Europe," said
Laszlo Kovacs, the EU Taxation Commissioner.
The latest European customs statistics released Saturday said that in 148
operations last year, customs officers intercepted 560,598 packets of fake
medicines. The seizures were double the 2004 rate, but there are fears that
even more counterfeit products may have entered the EU undetected.
Three quarters of the cases involved fake medicines imported from India,
with seven percent from Egypt and six percent from China. Other sources
included Thailand, Argentina, Switzerland, Hong Kong and Indonesia.
The statistics revealed that customs officers across Europe uncovered 26,700
consignments of counterfeit and pirated goods, seizing more than 75 million
items.
"The key is to be faster than the counterfeiters," Kovacs said. "We must
quickly identify, and act to deal with, new routes of fraud and constantly
changing counterfeit patterns to protect our health, safety and the
economy."
Coincidence or Crisis?
(Hint -- There is no such thing as a coincidence.)
The grass is always greener, right?
Some US politicians are advocating the adoption here at home of a Euro-style, deny-and-delay health care system -- but, as P.J. O'Rourke has famously quipped, "If you think health care is expensive now, just wait until it's free."
It's never as simple as some politicians make it sound. And that's as true for price controls as it is for things like drug importation.
It's important to remember, as the debate over revoking the non-interference clause gets under way within the "first 100 hours," that price controls = choice controls. Just ask our British cousins how nice NICE is or the Germans about IQWIG or the French about their government's initiative to get their docs to prescribe fewer medicines for the sake of the budget -- and patients be damned (see the November 11, 2006 drugwonks blog "L'Etat C'est Moins)".
And of course, when it comes to the Italians -- you can see for yourself in today's Washington Post what Alberto Mingardi of The Instituto Bruno Leoni has to teach us about wistfully contemplating the adoption of a Euro-style health care system without understanding the significant unintended consequences.
The title says it all.
A Drug Price Path To Avoid
By Alberto Mingardi
Sunday, November 12, 2006; Page B07
The next speaker of the House, Rep. Nancy Pelosi (D-Calif.), has let it be known that within her first 100 hours on the job, she will move to allow the government to negotiate directly with pharmaceutical companies to obtain lower drug prices for Medicare patients.
Her plan would create a Medicare drug program that looks a lot like the system we have in my country, Italy, where drug prices are among the lowest in Europe. And that's pretty low, considering that drugs in Europe average about 60 percent less than in the United States. Even as U.S. prices rose, Italian drug prices decreased by 5 percent last year.
At first glance, this might seem an enviable model for America to follow. But before Pelosi rushes down the road to Italian-style health care, allow me to offer a word of caution. Italy is hardly a health-care paradise. In fact, it's more like a quagmire of red tape.
For the most part, Italy's lower drug prices are the product of government price controls. The state purchases nearly 60 percent of the nation's prescription drugs. And it supposedly negotiates prices directly with pharmaceutical companies. But since the Italian government controls such a disproportionate share of the market, it in effect dictates drug prices.
In Italy, these price controls have created a number of problems.
First, they distort the laws of supply and demand. Because of the country's artificially low drug prices, demand for pharmaceuticals is artificially high -- higher than it would be under free-market conditions.
The point is that the government's attempt to force down drug prices has not reduced overall health-care spending. Rather, it has resulted in a spike in demand -- which is one reason why Italy's health-care spending has skyrocketed, growing nearly 68 percent between 1995 and 2003.
As for the quality of Italy's care, that, too, is suffering. With demand for drugs rising, the Italian government has attempted to save money by adopting reimbursement policies that favor certain drugs over others. Unfortunately, the most innovative products often aren't considered reimbursable by the government precisely because they are the most expensive.
It's a great system if you just need an antibiotic. But if you're hoping to avoid open-heart surgery through access to a miracle drug, it can be a nightmare.
And Italians are lacking more than just choice in cutting-edge drugs. They also lack information. According to a recent survey, more than 50 percent of Italy's patients believe that the national health service cannot even supply adequate information about treatments and drugs.
The economy is also harmed. Because it's simply not profitable for companies to invent cures in Italy, price controls have decimated Italy's pharmaceutical industry. Today not one of the world's 50 largest drug manufacturers has its headquarters in Italy, even though the country is the world's seventh-largest economy. Because most drug and biotechnology companies are outside Italy's borders, there are only 84,000 pharmaceutical workers in Italy's entire drug industry. The industry has become a perfect target for Italy's politicians, because they can rail against it with little political downside. The more we follow this path, the less likely it is for Italian companies to develop valuable innovations -- at great risk for both our economy and our health.
So by attempting to hold down drug prices, the Italian government has deprived its citizens of the best care without reducing health-care spending. And it has deprived the country of what could be a vibrant sector of the economy. In their rush to revamp Medicare, U.S. policy leaders should be careful not to make the same mistake.
The writer is a director of the Istituto Bruno Leoni, an Italian free-market think tank.
Some US politicians are advocating the adoption here at home of a Euro-style, deny-and-delay health care system -- but, as P.J. O'Rourke has famously quipped, "If you think health care is expensive now, just wait until it's free."
It's never as simple as some politicians make it sound. And that's as true for price controls as it is for things like drug importation.
It's important to remember, as the debate over revoking the non-interference clause gets under way within the "first 100 hours," that price controls = choice controls. Just ask our British cousins how nice NICE is or the Germans about IQWIG or the French about their government's initiative to get their docs to prescribe fewer medicines for the sake of the budget -- and patients be damned (see the November 11, 2006 drugwonks blog "L'Etat C'est Moins)".
And of course, when it comes to the Italians -- you can see for yourself in today's Washington Post what Alberto Mingardi of The Instituto Bruno Leoni has to teach us about wistfully contemplating the adoption of a Euro-style health care system without understanding the significant unintended consequences.
The title says it all.
A Drug Price Path To Avoid
By Alberto Mingardi
Sunday, November 12, 2006; Page B07
The next speaker of the House, Rep. Nancy Pelosi (D-Calif.), has let it be known that within her first 100 hours on the job, she will move to allow the government to negotiate directly with pharmaceutical companies to obtain lower drug prices for Medicare patients.
Her plan would create a Medicare drug program that looks a lot like the system we have in my country, Italy, where drug prices are among the lowest in Europe. And that's pretty low, considering that drugs in Europe average about 60 percent less than in the United States. Even as U.S. prices rose, Italian drug prices decreased by 5 percent last year.
At first glance, this might seem an enviable model for America to follow. But before Pelosi rushes down the road to Italian-style health care, allow me to offer a word of caution. Italy is hardly a health-care paradise. In fact, it's more like a quagmire of red tape.
For the most part, Italy's lower drug prices are the product of government price controls. The state purchases nearly 60 percent of the nation's prescription drugs. And it supposedly negotiates prices directly with pharmaceutical companies. But since the Italian government controls such a disproportionate share of the market, it in effect dictates drug prices.
In Italy, these price controls have created a number of problems.
First, they distort the laws of supply and demand. Because of the country's artificially low drug prices, demand for pharmaceuticals is artificially high -- higher than it would be under free-market conditions.
The point is that the government's attempt to force down drug prices has not reduced overall health-care spending. Rather, it has resulted in a spike in demand -- which is one reason why Italy's health-care spending has skyrocketed, growing nearly 68 percent between 1995 and 2003.
As for the quality of Italy's care, that, too, is suffering. With demand for drugs rising, the Italian government has attempted to save money by adopting reimbursement policies that favor certain drugs over others. Unfortunately, the most innovative products often aren't considered reimbursable by the government precisely because they are the most expensive.
It's a great system if you just need an antibiotic. But if you're hoping to avoid open-heart surgery through access to a miracle drug, it can be a nightmare.
And Italians are lacking more than just choice in cutting-edge drugs. They also lack information. According to a recent survey, more than 50 percent of Italy's patients believe that the national health service cannot even supply adequate information about treatments and drugs.
The economy is also harmed. Because it's simply not profitable for companies to invent cures in Italy, price controls have decimated Italy's pharmaceutical industry. Today not one of the world's 50 largest drug manufacturers has its headquarters in Italy, even though the country is the world's seventh-largest economy. Because most drug and biotechnology companies are outside Italy's borders, there are only 84,000 pharmaceutical workers in Italy's entire drug industry. The industry has become a perfect target for Italy's politicians, because they can rail against it with little political downside. The more we follow this path, the less likely it is for Italian companies to develop valuable innovations -- at great risk for both our economy and our health.
So by attempting to hold down drug prices, the Italian government has deprived its citizens of the best care without reducing health-care spending. And it has deprived the country of what could be a vibrant sector of the economy. In their rush to revamp Medicare, U.S. policy leaders should be careful not to make the same mistake.
The writer is a director of the Istituto Bruno Leoni, an Italian free-market think tank.
Here is a draft of the Jamie Love/Prize vs. Patent legislation I discussed below ("There's a prize in every box," November 10, 2006):
Download file
As I promised to Jamie, I am going to give it a comprehensive redline edit.
Also -- here is Jamie's blog on my visit to his office yesterday. (Do I really look that threatening?)
http://www.cptech.org/blogs/drugdevelopment/2006/11/peter-pitts-on-prizes.html
Download file
As I promised to Jamie, I am going to give it a comprehensive redline edit.
Also -- here is Jamie's blog on my visit to his office yesterday. (Do I really look that threatening?)
http://www.cptech.org/blogs/drugdevelopment/2006/11/peter-pitts-on-prizes.html
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.
