Latest Drugwonks' Blog
Improved Access to Medical Innovation Slows Medicare Spending
By: Peter J. PittsRecently the outlook for spending on federal health programs has been improving. While many have been quick to attribute the slowdown in the growth of spending to the Affordable Care Act, the data suggest improved access to prescription medications is the real hero.
The trustees of Social Security and Medicare recently reported that Medicare should have enough money in its trust through 2030, which is 13 years longer than they projected in 2009. Meanwhile the Congressional Budget Office (CBO) projected last month that federal spending on health programs in 2039 would equal 8.0 percent of gross domestic products (GDP), which is about 15 percent less than was projected in 2010.
Source: Congressional Budget Office
While some policymakers and journalists might conclude that the Affordable Care Act (ACA) of 2010 is responsible, evidence of the decline actually predates the bill’s implementation. From 2000 to 2005, the annual growth in spending per Medicare beneficiary was 7.1 percent. But from 2007 to 2010, that rate dropped to 3.8 percent.
What changed between 2005 and 2007 was the introduction of Medicare Part D, which increased access and reduced the cost of prescription medications for millions of eligible Americans. As a result, prescriptions filled by Medicare beneficiaries jumped 14 percent in 2007.
In 2012, the CBO found that this increased use of medications was lowering Medicare’s spending on hospital and physician services. For every 1 percent increase in prescriptions filled by Medicare beneficiaries, spending on medical services dropped by about 0.2 percent, according to the agency.
The main driver of the decline in health care spending is increased access to prescription medications
A more recent analysis found that Medicare Part D reduced hospitalizations by 8 percent and saved the government about $1.5 billion during the program’s first four years. And Medicare Part D is costing less than expected, which is also contributing to the slowdown in health spending.
The main driver of the decline in health care spending is increased access to prescription medications. The health care system is using medication to control illnesses, and it’s replacing expensive hospitalizations, nursing homes and other medical services.
Medicare Part D provides prescription medication coverage for 35 million seniors through private insurers. Seniors pay low monthly premiums of $30 on average for their coverage and 90 percent said they felt satisfied with their prescription medication coverage in a recent survey. Not only is the program providing a valuable service, it is also costing 45 percent—or $348 billion—less than the original estimates — and with a more than 90 percent customer satisfaction.
The program works well because Part D medication prices are determined through negations between private insurers and manufacturers. The savings are realized because market competition effectively drives down the costs, and these savings are passed on to beneficiaries in the form of lower premiums.
Some government officials have proposed that the government should interfere with the program’s success by imposing new rebates on Part D medications. Such rebates, however, would reduce the savings from the program, increasing prices for Medicare Part D beneficiaries by up to 40 percent. The CBO has stated that government interference with the Part D negotiations between insurers and manufacturers would have a “negligible effect.” Precious few programs in Washington deliver both savings to the taxpayer and results to beneficiaries. On both counts, Medicare Part D succeeds. There isn’t a better model to recommend market-driven approaches to health care.
In contrast, the U.S. Department of Veteran Affairs (VA) negotiates its own medication prices with manufacturers but excludes many newer therapies as a result. About 38 percent of drugs approved in the 1990s and 19 percent of the drugs approved since 2000 are not covered under the VA formulary, impacting the overall life expectancy of veterans. As a result, 40 percent of veterans with VA benefits choose to enroll in Medicare Part D instead.
While Medicare beneficiaries have affordable access to life-saving medicines, those enrolled in health insurance plans through the exchanges established by the ACA might not, thanks to specialty tier drug pricing.
Based on the CBO findings, it is abundantly clear, that medical innovation plays a critical role in the solution to curve health spending in the United States. Affordable access to life-saving therapies and continued support through pro-patient and pro-innovation policies are essential to improving patient lives, health care and the economy.
Washington Insider: Mistruths and half-truths about oncology meds
Demonizing new treatments distracts from the real problem: policies that focus on the near-term
There's been much legitimate consternation over the October 5th 60 Minutes segment on the cost of oncology meds. Hopefully the anger and indignation I've heard will drive some hard thinking toward smart and forceful actions to address the mistruths, half-truths, and straight-out lies presented during the program.
But why is anyone surprised? Did anyone expect a “fair and balanced” story from the same media that was complicit in helping to legitimize vaccine denial?
The 60 Minutes broadcast is only the most recent example of “value denial”—and it's important to understand the program not as a unique and unfortunate incident, but as a set-up for ASCO's pending announcement on it's new methodology for determining the cost-effectiveness of new cancer medicines.
But it's not cost effectiveness and it's not clinical effectiveness. It's a denial of personalized medicine. It is value denial.
Drugs aren't the cause of rising healthcare costs—they're the solution. Demonizing new treatments distracts from the real problem: top-down cost-centric policies that focus on the near-term, short-changing long-term patient outcomes, and so endangering “sustainable innovation” by denying fair reimbursement for high-risk investment in R&D.
New treatments are a bargain. Disease is always much more costly.
Until we counter the Orwellian newspeak that worships at the altar of the “high cost of drugs” with a fact-based and firm explanation of value, the minions of 60 Minutes will own the hearts and minds of the American public. And innovation loses.
And that is not acceptable.
Peter Pitts is a former FDA associate commissioner and president of the Center for Medicine in the Public Interest.
If you have any doubts that vaccines are on the cutting edge of innovation consider this, Pfizer has just received FDA-approval (via the agency’s Breakthrough Therapy Designation and Priority Review program) for Trumenda, a vaccine for the Prevention of Invasive Meningococcal B Disease in adolescents and young adults -- the first and only approved vaccine in the U.S. for the Prevention of Meningococcal Meningitis B.
As part of the accelerated approval process, Pfizer will complete its ongoing studies to confirm the effectiveness of Trumenda against diverse serogroup B strains.
The next time someone challenges the importance of innovation – trumpet Trumenda.
A consortium including European universities and medical groups plans to give experimental drugs to West African Ebola patients without assigning some to a placebo group, touching off an intense trans-Atlantic quarrel over what is ethical and effective in treating the virus.
Academics and medical groups in the U.K. and France, such as Oxford University, the Wellcome Trust, Doctors Without Borders and Institut Pasteur of France, have decided to give the drugs to sick African patients without randomly assigning other patients to a control group not getting the medicines. They say that in a ghastly epidemic, it is unethical to hold back treatment from anyone.
That has put them at odds with senior U.S. officials at the Food and Drug Administration and the National Institutes of Health. Dr. Luciana L. Borio, FDA assistant commissioner for counterterrorism and emerging threats, told public-health officials at the World Health Organization in Geneva this month she was extremely concerned by the plans to give the medicines to patients without better evidence they work and aren’t highly toxic. “This is too urgent an issue for us not to start out with what we know is scientifically best,” said Dr. Borio. “The fastest and most definitive way to get answers about what are the best products is a randomized clinical trial.”
What crap. Randomized trials are not scientifically best, they are just tools no better -- probably worse -- than others to establish what works in who. Dr. Borio, spare us your holier than thou invocation of the randomize trial catechism...
Then there is this: The FDA yet again asked for more data on a drug for Duchenne muscular dystrophy, a fatal disease that kills people before they are 30. The agency doesn't think the measure of response is statistically precise enough...
After receiving criticism the agency assured the public: "The FDA also plans to hold an expert advisory committee “to gain advice from outside experts and interested stakeholders on the adequacy of the data to support approval, including the possibility of ‘accelerated approval’—a mechanism to approve drugs in particular situations prior to the availability of definitive evidence of effectiveness.”
More crap.
The FDA had already received expert advice from Parent Project Muscular Dystrophy, an advocacy group founded by family members frustrated by a lack of research on Duchenne muscular dystrophy, (who) initiated and wrote a draft guidance for pharmaceutical companies trying to develop drugs to treat the fatal condition.
...
Per reporting in BioCentury, in the first lawsuit filed by an originator company over a biosimilars application, Amgen alleged that Sandoz has unlawfully refused to follow the patent resolution protocol laid out by the Biologics Price Competition and Innovation Act of 2009 (BPCIA).
The suit, filed in the U.S. District Court for the Northern District of California, concerns Sandoz's application to market a biosimilar version of Amgen's Neupogen filgrastim G-CSF, a recombinant methionyl human granulocyte colony-stimulating factor. Under BPCIA, Sandoz was required to provide Amgen with its BLA and manufacturing information for the biosimilar within 20 days of FDA’s decision to accept the application for review.
According to Amgen, Sandoz failed to disclose this information, thus depriving Amgen of the opportunity to assess potential patent infringement claims and potentially seek an injunction to prevent Sandoz from commercializing its biosimilar candidate. Amgen is seeking restitution for unfair competition and an injunction to prevent Sandoz from commercializing the biosimilar filgrastim until Amgen is "restored to the position it would have been [in] had Defendents met their obligations under the BPCIA."
Amgen is also seeking an injunction to prevent Sandoz from advancing through FDA's approval process until the company has obtained permission from Amgen to use the filgrastim license. Additionally, Amgen is seeking a judgment of patent infringement for U.S. patent No. 6,162,427. The suit also demands a jury trial.
The bill would add Ebola to FDA’s priority review voucher program, which Congress first authorized in 2007 to promote the development of new treatments and vaccines for neglected tropical diseases. Under the program, a developer of a treatment for a qualifying tropical disease receives a voucher for FDA priority review to be used with a second product of its choice, or this voucher can be sold.
It's an interesting idea worthy of immediate discussion and debate.
I don't think I have ever seen or read a more misleading, deceptive and outright false description of the drug development process. The gist of the article is that surrogate endpoints are not only useless, they are false markers of effectiveness that drug companies use to get worthless but profitable meds approved. Not suprisingly, a lot of so-called health care reporters have lauded MSJ piece as extraordinary journalism. Which just goes to show you that facts need not get in the way of a good story.
But for those who still care about facts, here they are:
Just this weekend at an educational forum about lymphoma, a well- respected hematologist-oncologist from a major medical center – not a drug company – supported the new FDA Breakthrough designation to approve drugs with significant data after phase 2 clinical trials. He says drugs approved on PH 2 data are now helping people with lymphoma. Conversely he notes that despite powerful PH 2 data for Gleevec, the FDA required an additional three years for Ph 3 data. He says, "A significant number of patients died during that period."
Let me put it this way: In short, the article is based on a fundamental misunderstanding of the clinical trial process, confuses overall survival with the impact on life expectancy and concludes that what we need is to expose more people with incurable diseases to interminable waits that are a prolonged death sentence.
1. We are using surrogate endpoints to expedite Ebola treatments. We used them for HIV, Hepatitis C, heart disease, dozens of orphan drugs. The results: faster access, more lives saved. Would the authors oppose using surrogate endpoints — measures of disease progression used to estimate treatment response — for dying Ebola patients. Surrogate is not code word for fake or ineffective. Quite the contrary.
2. They imply that cancer trials take shortcuts. In fact, cancer drugs take longer to approve than many other types of medicines. And only 7 percent of cancer drugs get approved. If companies were controlling the drug development process you would think they would have better success!
3. The authors should have asked why haven’t we made even more progress? They blame surrogate endpoints when in fact they are looking relying upon randomized clinical trials that ignore subgroups of patients, surrogate endpoints that establish linkages between genotype and phenotype and genetic variations. They ignore the rapid growth in targeted therapies and the significant gains in quality of life and life expectancy they yield
4. As a result, The authors claim the solution is more randomized controlled trials (RCTs) and (we assume) the number of people enrolled in each trial. Setting aside the obvious result: an increase in the cost and time required to develop and use new products, this approach is based on wishful thinking and a willful ignorance of the genetic, molecular and clinical diversity that, when ignored, turn RCTs into an tool that harms patients.
Specifically, RCTs are totally inadequate in evaluating treatments in cancer therapy where genomic analysis is uncovering the tremendous heterogeneity of what was previously considered one disease, eg, colon cancer. Genomic analysis of individual patient’s cancers is disclosing the large number of mutations, and thus targets, within one person. Developing RCTs for targeted therapies would likely be impossible and heartless for those waiting for effective treatments.
For example, Bruce Chabner gives the example of PLX4032 for the treatment of metastatic melanoma. That compound had an 81 percent response rate in patients with BRAF mutations in a phase 1 trial. Yet in a phase III study, patients were randomized to PLX4032 or dacarbazine, which has a 15% response rate. Dr. Chabner and others ask whether it is ethical to randomize patients to a drug that everyone knows won’t work if you know in advance which treatment will work for whom.
"If patients with incurable disease who have the right biomarker for response are informed of these impressive early results they will want and perhaps deserve access to the new drug and may not accept random assignment to a modestly effective and toxic standard agent." (N Engl J Med. 2011 Mar 24;364(12):1087-9. doi: 10.1056/NEJMp1100548. Early accelerated approval for highly targeted cancer drugs.
Chabner BA)
Actual clinical RCTs are often statistically underpowered leading to inconclusive or incorrect results precisely because such studies are biased against prior knowledge. This is due in part to the effect of diminishing returns, because larger sample sizes are needed to achieve sufficient power capable of detecting the necessarily smaller positive effect sizes available as fitness improves.
5. Do potent cancer drugs carry risks? Of course. People also die surging surgery. We see the advertisements on TV - certain drugs for arthritis carry a risk of leukemia. But patients still want and need these potent drugs that change their quality of life! Drug approval is not always about survival, and it’s never risk free.
That's a nice narrative but it is history rewritten by those who want to claim that every company in the drug or vaccine business should cut their prices or give away their products.
It is true that when Edward R. Murrow asked Jonas Salk who owned the patent to the polio vaccine Salk said: “Well, the people, I would say. There is no patent. Could you patent the sun?"
Since then, Salk's statement has been use as trump card by individuals who claim that protecting the intellectual property of medicines is immoral or greedy. As an article in Slate notes: One critic of the big pharma called Salk “the foster parent of children around the world with no thought of the money he could make by withholding the vaccine from the children of the poor.”
Let's set aside the fact that solar energy companies have, in effect, patented the sun. There was a reason the Salk and the Sabin vaccines (more on that later) were not patented. The National Foundation for Infantile Paralysis was the beneficiary of a massive campaign to eradicate polio that makes the ALS Foundation Ice Bucket Challenge and Standup2Cancer efforts seem anemic (which they are NOT.)
"In the single year that the polio vaccine was unveiled, 80 million people donated money to the National Foundation for Infantile Paralysis, which spearheaded the vaccine effort.... Schools, communities, and companies joined in a remarkable display of unity against the disease. Even Walt Disney’s cartoon characters contributed their talents, appearing in a film that adapted the Snow White and the Seven Dwarfs’ song “Heigh Ho” to an anti-polio ditty. In the 13 years leading up to the vaccine’s roll out, the budget of the National Foundation for Infantile Paralysis swelled from $3 million to $50 million.
In today's dollars that's about $500 million. The need for IP was removed because the passion capital had already been raised.
Further, it is true that a vaccine (an inactivated virus) does occur in nature as does the sun. But we patent both. How many solar energy companies have repurposed the sun's power with patented technology. A lot. And a lot more than vaccine companies have.
Then there is the myth that the Salk vaccine eliminated polio. In fact as Angela Matysiak noted in a review of a Salk biography:
"In 1959, epidemiologists reported findings on the pattern of the disease. These suggested a shift in incidence according to age, geography, and race. By 1960, less than one-third of the population under 40 years of age had received the full course of three doses of the Salk vaccine plus a booster. Most of those who had were white and from the middle and upper economic classes. The disease raged on in urban areas among African Americans and Puerto Ricans and in certain rural locales among Native Americans and members of isolated religious groups."
There were several reasons for the lag. Most important was the limited effectiveness of the Salk vaccine which was killed version of the polio virus required several shots. Matysiak oberves that Sabin put the point most succinctly: “The need for inoculating large amounts and the need for repetition are bad.” In contrast, an oral vaccine with a small dose of the attenuated versions of each of the three strains, administered once, would give lifelong immunity.
The Sabin vaccine was cheaper and easier to administer. But it became clear that both vaccines were needed because each protected certain subgroups that the other could not protect. The Salk vaccine could be used in people with compromised immune systems while the Sabin vaccine could not.
Both were required to eradicate polio. Ironically, the Sabin vaccine could be considered a me-too vaccine by the same ilk who claim patents don't matter.
And the same anti-patent crowd ignore another inconvenient truth: That Alexander Fleming, who discovered penicillin, regretted that he had not secure a patent because the lack of funding and private investment postponed it's development and commercialization by a decade and cost the lives of millions around the world.
Here’s the headline -- The GPhA now acknowledges the importance of differential nomenclature for biosimilars.
And now here’s the spin
The Generic Pharmaceutical Association (GPhA), out-flanked, out-thought, out of its league, and on the wrong side of history, has proposed a bizarre naming scheme for biosimilars – and shared it with the FDA last January. The agency agreed to the meeting on the condition that it was a ‘listening session’, meaning that the FDA would be unable to answer questions or expand on any issues beyond what is in the public domain and what they have stated in the published draft guidance documents.
Wink and a nod.
Officially, the GPhA requested the meeting to discuss the dialogue held at a recent World Health Organization (WHO) meeting regarding non-proprietary names of biosimilars and the possible addition of identifiers (specifically a three-letter random alphanumeric suffix) to the INNs of originator biologicals in order to name biosimilars.
The GPhA’s brainstorm is, rather than the WHO concept (also supported by the US The Pharmacopeia), attaching the company name as a suffix to the INN without changing the INN as a way to distinguish between products. They also proposed that this then also apply to the originator product, e.g. filgrastim Amgen.
Really? What happens when a biosimilar manufacturer merges with another firm or sells a product line to another company? And since when are drugs named “for a company.” That’s why FDA regulations stress names that are designed to avoid confusion. Using a “company suffix” makes things more confusing, not less. (For example, what happens when one company has more than one drug is any given therapeutic category?)
The GPhA stated that it does not disagree with ‘distinguishability’, but believes that this can be done without changing the INN.
That’s a start.
Without context, Sunshine Act's health care 'transparency' is useless
The biopharmaceutical industry is buying off America's doctors.
That's the bogus conclusion from some who have examined new data from the Centers for Medicare and Medicaid Services. The data set shows that from August to December of last year, drug and device manufacturers paid $3.5 billion to physicians and teaching hospitals.
Those payments were real, but there were no payoffs. The truth behind the numbers is that industry-physician collaboration is one of the main drivers of medical innovation today.
The purpose of the publication of this data is at least partly well-intentioned. As part of the "Physician Payments Sunshine" provision of the Affordable Care Act, it aims to increase transparency in the healthcare industry and help patients make better informed decisions.
The provision requires CMS to provide information on the financial relationship between doctors and the pharmaceutical industry. The data covers all payments and gifts provided to doctors and teaching hospitals from drug and medical device manufacturers. This includes meals, travel expenses, and speaking fees. Disclosure here is all to the good.
But for some, publication of the data was designed to produce exactly a "gotcha" moment: It was intended to embarrass the pharmaceutical industry and healthcare professionals, hopefully leading to a diminution of the supposedly undue influence the industry has on medical practice.
If that's the main impact of the release of the data, it will be doing more harm than good. First, the data reported by CMS is incomplete. Nearly 40 percent of the records aren't actually connected to a specific doctor or teaching hospital. Considering that the information is supposed to help empower patients, this gap is critical.
The data also come with little context. Industry-physician collaborations drive research and development in medicine. Pharmaceutical companies work together with doctors in clinical trials to create novel, lifesaving drugs. In fact, $1.5 billion of the payments reported by CMS were for research. These companies are merely reimbursing doctors for their professional services.
Biopharmaceutical companies and doctors bring separate skill sets and knowledge bases to the research table. Doctors working in the field have a better sense of what types of treatments patients need. And those in the biopharmaceutical industry are better versed in the drug development process. According to a recent survey, 94 percent of physicians say that the role of pharmaceutical and biotech firms in sponsoring clinical trials for new treatments is useful.
Thanks to these partnerships, there are currently 3,400 drugs being developed in the United States. These are drugs that will combat diseases like diabetes, heart disease and Parkinson's.
Currently, 93 medicines are undergoing clinical trials or awaiting FDA approval for Alzheimer's and dementia alone. For the more than 5 million Americans with Alzheimer's, one of these treatments could be the key to higher quality of life.
Physician-industry partnerships are also on the forefront of medical research. Take the collaboration between the University of Alabama at Birmingham and drug manufacturer rEVO Biologics. The two are conducting Phase III clinical trials for a therapy that could prevent dangerous pregnancy complications.
These collaborations are especially critical considering that federal research dollars are quickly drying up. In fiscal year 2013, burdened with the sequestration and budget cuts, the National Institutes of Health (NIH) - the country's main source of biomedical research funding - awarded 722 fewer grants than the previous year.
If the data released under the Sunshine Act continues to present the financial relationship between physicians and industry without this crucial background information, these collaborations could be in jeopardy. Doctors may end up resisting them in order to avoid sensationalist claims that their medical judgment is for sale to the highest bidder. Patients will be the real losers.
The Sunshine Act aims for transparency in healthcare, but fails to be transparent itself. CMS must present a more detailed view of the relationship between doctors and the biopharmaceutical industry. Doing so could even help patients choose doctors who are leading innovators in medicine.
Peter J. Pitts, a former Food and Drug Administration associate commissioner, is president of the Center for Medicine in the Public Interest.
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.
