Latest Drugwonks' Blog
Having just returned from meetings with regulatory authorities in Kenya, Jordan, and Saudi Arabia, I am energized that higher levels of pharmaceutical quality and pharmacovigilance are possible.
But it won’t be easy.
Enhanced levels of excellence will require, if not global harmonization, more aggressive partnerships between agencies around the world.
In other words, it’s time to plan and execute a regulatory Marshall Plan to help build, nation-by-nation, global systems for both quality and safety. Working together to raise the regulatory performance of all nations will help all nations (even the 20% deemed “capable” by the WHO) to create sound foundations to address a multitude of quality and safety dilemmas such the manufacturing of biosimilars, the control of API and excipient quality, pharmacovigilance and, yes, even counterfeiting.
But drug regulation has to go beyond safety and quality and pharmacovigilance. It’s got to embrace innovation. What we need here at home and around the world is a hunger for entrepreneurial regulation.
Entrepreneurial Regulation is a philosophy that allows agencies such as the FDA to be both regulator of and colleague to industry. Expedited pathways are Entrepreneurial Regulation. Special Medical Use is Entrepreneurial Regulation. REMS are Entrepreneurial Regulation. The exercise of enforcement discretion is Entrepreneurial Regulation. More aggressive use of the Reagan/Udall Foundation is Entrepreneurial Regulation. A more central role for the patient voice is Entrepreneurial Regulation.
Entrepreneurial Regulation makes bodies such as the FDA enablers rather than roadblocks to innovation.
One of the key conundrums of Entrepreneurial Regulation is that there is an inherent tension between predictability and innovation.
The foundational principle of PDUFA is predictability – not speed. And that’s been the focus of the conversation: ambiguity vs. predictability. But, when it comes to innovation, ambiguity is inherent. The pathways to innovation are always ambiguous. Innovation is risky – and not only to investors.
And Entrepreneurial Regulation is likewise risky. But as with all matters regulatory, risk must be viewed alongside benefit – to the public health.
Another level of tension is the relationship between research (R) and development (D). Specifically, the lack of respect between the two. Beyond the disproportionate levels of government funding (when’s the last time you heard anyone talk about “doubling” the FDA budget), nascent relationships between academia (“R”) and industry (“D”) are struggling.
The issue of out-sourcing basic research isn’t new – but it’s mighty contentious. And it’s the new reality of drug development. But, if we are to learn any lesson from the CRO experience, it’s that while we say “partnership,” the danger is that it devolves into a vendor-like relationship. It’s the Golden Rule. He who has the gold makes the rules. Will that be acceptable to high-level, big ego Ivy Hall-ers?
And then there’s the issue of academic priorities, specifically tenure. Does industry funding carry the same weight as NIH grants when it comes to advancing a university career? Not at present. That will have to change.
Need drives change. Just as CROs are finally really partnering with pharma to drive the development of personalized medicine, so too must academe and industry collaborate on the continued evolution of pharmaceutical innovation. It will take discipline and focus. It will be risky. And it will take will. There is a confluence of interest.
When it comes to global safety, quality, and pharmacovigilance standards, there’s a general consensus that a high tide floats all boats. When it comes to Entrepreneurial Regulation demands that we honestly address a tough but fundamental question, how can regulatory agencies around the world (FDA-led by both word and deed) focus on what they can do to facilitate collaboration that results in innovation?
Step One is focus.
In the words of entrepreneur extraordinaire Steve Jobs, “I'm convinced that about half of what seperates the successful entrepreneurs from the non-successful ones is pure perserverance."
And, in the case of Entrepreneurial Regulation, failure is not an option.
And for this she bills how much per hour?
From the pages of the Pittsburgh Business Times,
Developing a regulatory strategy is a key first step in bringing a new medical device to market, Regulatory & Quality Solutions LLC President Maria Fagan said Tuesday.
The plan is needed to align stakeholders, making sure executives, investors and others have a shared vision about the purpose and use of the product, Fagan said in addressing a meeting downtown sponsored by the Pittsburgh Technology Council. Included in the plan should be the device’s intent, benefits and target audience of consumers.
“Think through these things early on,” Fagan said. “From a marketing perspective, where do you want to go?”
And, as a word to the wise, spelling also counts.
CONGRESSIONAL TRADE LEADERS FIGHT INDIA’S UNFAIR TRADE PRACTICES
In Letter to ITC, Members Seek Investigation of Policies that Discriminate Against U.S. Exports
WASHINGTON –Senate Finance Committee Chairman Max Baucus (D-Mont.), Ranking Member Orrin Hatch (R-Utah), House Ways and Means Committee Chairman Dave Camp (R-Mich.) and Ranking Member Sander Levin (D-Mich.) today requested the U.S. International Trade Commission (ITC) investigate India’s unfair trade practices that discriminate against U.S. exports and investment.
Noting in a letter that U.S. exports to India are low given the size of its market, the congressional leaders asked the ITC to detail policies India has in place that restrict trade and violate intellectual property rights, as well as the effect they have on U.S. exports, businesses and jobs.
The full text of the letter is available below:
The Honorable Irving A. Williamson Chairman U.S. International Trade Commission 500 E Street, S.W. Washington, DC 20436
Dear Chairman Williamson,
We are writing to request that the U.S. International Trade Commission (Commission) conduct an investigation under section 332(g) of the Tariff Act of 1930 (19 U.S.C. §1332(g)) regarding Indian industrial policies that discriminate against U.S. imports and investment for the sake of supporting Indian domestic industries, and the effect that those barriers have on the U.S. economy and U.S. jobs.
India is an important strategic partner of the United States, yet U.S. exports of goods and services to India remain low. In 2011, U.S. goods exports to India – the world’s second most populous country – were just $22.3 billion. Similarly, recent data indicates that U.S. private commercial services exports, sales of services by majority U.S.-owned affiliates, and U.S. foreign direct investment (FDI) in India were also low.
India has risen rapidly and lifted millions out of poverty in the wake of its significant market opening reforms and its efforts to seek foreign investment in certain sectors of its economy over the past two decades. However, India maintains and continues to put in place measures that appear to contradict its stated domestic growth objectives. For example, India has a complex, non-transparent tariff and fee system and byzantine and overburdensome customs procedures, and it maintains significant tariff and non-tariff barriers to U.S. goods and service participation in sectors including retail and agriculture. More recently, India has introduced new localization-forcing measures such as local content and technology transfer requirements in the green technology and information and communications technology sectors. And India has not yet taken action to fully and effectively protect and enforce copyrights, including in the digital environment, and has applied its patent law in a discriminatory manner, particularly against innovative U.S. pharmaceutical companies, so as to advantage its domestic industries.
Beyond any particular action India has taken, the government has enunciated a broader policy objective to develop and support Indian domestic industries by forcing foreign firms to use local facilities and suppliers and to transfer their intellectual property to Indian entities. Government documents indicate that India is likely to adopt additional measures to this end, and expand these sorts of measures to additional sectors, creating significant concern and uncertainty for U.S. exporters and investors.
Finally, we are very concerned about the broader impact that India’s trade policy may be having on the global trading system, both in terms of the model it is setting for other countries and the drag it is exerting on multilateral trade negotiations.
Despite the widespread evidence of these existing and anticipated barriers to U.S. exports and investment in India, the U.S. Government has not conducted a comprehensive economic analysis of the effect of Indian trade policies on the U.S. economy and U.S. jobs. To assist us in better understanding the effects of these existing and anticipated barriers to U.S. exports and investment in India, we request the Commission to provide a report covering the items described below.
Based on a review and analysis of data and information from available sources, including a survey of U.S. firms, we request the Commission to provide:
· An overview of trends and policies in India affecting trade and foreign direct investment in that country’s agriculture, manufacturing and service sectors, as well as the overall business environment. The overview should take a historic view, but focus on the period since 2003. It should include examples of changes in tariff and nontariff measures, including measures related to the protection of intellectual property (IP) rights, and other actions taken by India’s government to facilitate or restrict the inflow of trade and FDI.
· A description of (1) any significant restrictive trade and FDI policies currently maintained or recently adopted by India as identified by USITC research; (2) the sectors in the U.S. economy most affected by these restrictive policies; and (3) the general competitiveness of sectors in India’s economy that are subject to the identified restrictions.
· Several case studies that examine the effects of particular restrictive measures on U.S. firms that export to or invest in India, or that have not done so because of the measures. To the extent feasible, the case studies should address the impact of the restrictive measures on both large and small and medium-sized enterprises.
· To the extent feasible, a quantitative analysis of the economic effects of India’s identified restrictive measures on the U.S. economy as a whole, on U.S. trade and investment, and on selected sectors of the U.S. economy.
· Based on the survey and analysis of results, and to the extent feasible, a summary of U.S. firms’ perception of (1) recent changes in India’s trade and investment policies in selected sectors and (2) the effects of these changes on U.S. firms’ strategies towards India (e.g., reducing investment or altering product mix), and analysis of whether the effects of these policy changes differ by firms’ characteristics, such as size, IP-intensiveness, or export status.
We request that the Commission deliver the report to us by November 30, 2014.
In preparing its report, we do not expect the Commission to make findings regarding the legal merits of any Indian laws or policies.
As we intend to make the report available to the public, we request that the Commission not include confidential business information in the report.
Sincerely,
Max Baucus
Chairman, Senate Committee on Finance
Orrin Hatch
Ranking Member, Senate Committee on Finance
Dave Camp
Chairman, House Committee on Ways and Means
Sander Levin
Ranking Member, House Committee on Ways and Means
From today’s edition of the South Florida Sun-Sentinel:
Some health providers exploiting drug program
Some major American health care providers are padding their bottom lines by exploiting a federal program meant to help low-income patients. This behavior is netting them billions in ill-gotten gains.
And it could be preventing many vulnerable Americans from accessing the low-cost drugs they need to treat and prevent illness.
This abuse needs to be stopped.
In 1992, Congress created a program — known as "340B" — to help caregivers serving disproportionately large numbers of low-income beneficiaries and uninsured patients. Under 340B, drug manufacturers are required to sell their products at a discount to such institutions. The discounted prescriptions are dispensed either through the caregiver's in-house pharmacy or through a contractual arrangement with an outside pharmacy.
340B has a noble cause. And many of the medications discounted through 340B do in fact go to clinics, hospitals, and medical facilities providing care almost exclusively to uninsured and poor patients.
However, some 340B participants are exploiting the program.
340B only requires caregivers to meet certain minimal thresholds for the number of medically underserved people they treat. For many hospitals, these eligibility standards are easily reached, and some are benefiting from the program's deep drug discounts while still serving a relatively affluent clientele.
Moreover, participating caregivers are not actually required to pass drug savings along to their patients. The huge discounts they're getting from pharmaceutical manufacturers don't necessarily translate to lower pill prices for uninsured and low-income patients.
Given what we have recently learned about some hospital administrators inflating charges for a broad variety of basic services, there's good reason to believe many sell those discounted drugs at full price to insured patients and then pocket the difference. Indeed, a report by the Raleigh News Observer last year found hospitals that "routinely mark up prices on cancer drugs two to 10 times or more over cost. In some cases, the mark up is far higher."
Meanwhile, the vulnerable patient populations 340B was intended to help are often still stuck struggling to gain access to affordable pharmaceuticals.
In large part because some healthcare providers are abusing the 340B system, the size and cost of the program are ballooning out of control. The Berkeley Research Group estimates the total the total value of all the medicines sold through the program will more than double from $8 billion in 2010 to $19 in 2016.
Such a surge in expenses might very well be worth if it 340B was largely helping needy patients. But it is not clear that this is actually happening. Although 340B was created to help low-income patients obtain the medicines they need, it has turned into a revenue generator for many hospitals.
Caregivers are now allowed to qualify for the program's deep drug discounts without passing along those savings to patients in need. Administrators are getting rich off a well-intentioned public program.
Too many uninsured and poor patients still don't have access to discounted drugs.
340B needs to be fixed.
Peter J. Pitts, a former FDA Associate Commissioner, is President of the Center for Medicine in the Public Interest.
Docs Need to Get Up to Speed, Social Media Advocate Says
By Kristina Fiore, Staff Writer, MedPage Today
Bertalan Mesko, MD, PhD, is counting on old media to convince more clinicians about the value of new media.
The clinical genomics specialist has just published a handbook on social media in clinical practice -- and he hopes it will bring late adopters up to speed with their social-media-savvy colleagues, and even with some of their electronically empowered patients.
While "expert" patients voraciously pursue credible medical information and communities online, clinicians "usually lag behind," Mesko, who is based in Budapest, said in an email exchange with MedPage Today. Instead of disdaining this kind of behavior, doctors need to see themselves as a gatekeeper of vetted online information and activities, he said.
One of the earliest clinician voices on social media, Mesko has been attempting to make that gatekeeper role easier as the founder of Webicina.com, a clearinghouse of sorts for digital and social media resources. He's also a self-described "medical futurist" who blogs at Scienceroll.com.
Mesko answered some questions about the book, "Social Media in Clinical Practice," and about online engagement via email. An edited version of that conversation follows.
MPT: Why the need for a book on social media adoption for clinicians?
Mesko: Social media has been playing an increasingly important role in medical communication as the Internet now has a crucial place in our lives. While patients relatively easily become empowered or expert patients -- the so-called e-patients, as they are really motivated to use digital solutions to get a better care -- medical professionals usually lag behind.
I've been teaching medical students and physicians about the proper use of social media and other digital technologies for years, and my experience is that even if I created a free e-learning platform for them, they stick to the traditional way of learning new things. Therefore, the need for a practical handbook full of examples and step-by-step instructions about using social media platforms was imminent.
MPT: Many clinicians are apprehensive about social media because of HIPAA and patient privacy. What are the challenges here, and how should clinicians address them?
Mesko: Physicians should know exactly the potential limitations and privacy issues caused by the use of social media. [In the book], I describe bad examples and stories related to these crucial issues.
In one example, a patient added me on Facebook and shared her previous medical records with me even though she was not my patient. I rejected the offer and sent her a private e-mail explaining why (that this is a personal online channel, why our relationship would be professional and I don't want to mix these). She perfectly understood.
I had a colleague who rejected the offer and pretended like nothing happened when they next met. He described the situation as quite awkward.
This happens when you don't know the rules of online communication. If we know the rules, just like in real-life communication, the use of social media becomes safe and efficient.
MPT: Can you give examples of some of the more insightful uses of social media that you've seen among doctors?
Mesko: I'm a member of amazing medical communities -- from Google+ to closed Facebook groups -- in which I can discuss clinical issues with peers worldwide. My Twitter channel with over 32,000 followers lets me crowdsource difficult diagnostic problems, and my blog gives me a chance to connect with tens of thousands of medical professionals without limitations. I published papers in peer-reviewed journals after collaborating with co-authors simultaneously in a Google document.
Social media provides us with a lot of opportunities, but only if we know the potential limitations and security issues. Acquiring such knowledge takes years, and my goal with the handbook was to shorten this time significantly for those medical professionals who would like to become a bit more digital, but at the same time use these online tools in a secure way.
MPT: How did you crowdsource a difficult diagnostic problem?
Mesko: The story happened in the fall of 2009; the New York Times wrote about it in early 2010. When professors at the clinic could not find the solution to a complicated medical issue, I sent a tweet to my tens of thousands of medical followers for useful advice. I tweeted this:
"Strange case today in internal medicine rotation: 16-year-old boy with acute pancreatitis (for the 6th! time). Any ideas?"
I received hundreds of amazing responses from all over the world, and in one day we came up with a potential solution. The final diagnosis was microlithiasis, small stones from the gallbladder causing pancreatitis from time to time without obvious causes. The diagnosis was not so simple because of the size of the stones and as a medical student I wanted to use the power of the medical community I had been building for years, so that I might come up with useful suggestions for my professors. It turned out to be a good idea.
MPT: If there was one use of digital or social media that all clinicians should adopt, what would it be?
Mesko: I think communication methods in real life and in the online world are the same. If medical professionals understand this and create a proper online presence, as well as give their patients a chance to communicate with them through certain online channels, the doctor-patient relationship can become more efficient by saving time for both parties.
Using digital technologies, especially social media, is now an integral part of medical communication, and as more and more patients use these platforms, their physicians must be able to deal with this in an evidence-based manner.
MPT: Are there any definite "don'ts" for clinicians online?
Mesko: I tell my medical students they should definitely not do things online which they would never do offline. That's how simple it is.
MPT: What is the "Participatory Medicine Movement" and what should practicing clinicians know about it?
Mesko: As e-patients are motivated to use digital technologies in their health management, they have additional questions about the Internet, such as where to find reliable medical resources about their conditions. Doctors must be able to respond properly and professionally to these questions as well. The Participatory Medicine Movement leads to some changes in the structure of medicine in which medical professionals will become mediators or guides for their patients online.
In order to reach this long-term goal, doctors should learn new tricks, not just about communicating with patients online, but also about keeping themselves up to date more easily.
MPT: Which smartphone apps should every clinician already have downloaded?
Mesko: It very much depends on certain factors such as specialty, the smartphone or tablet you have, and the way you want to use it in practicing medicine. The key point here is curation. Only curated, validated, and quality smartphone apps should be used by physicians, and they should be able to help their own patients identify similarly good apps themselves.
Johnny Drake's business is losing 2.3 percent of everything it makes because of the Affordable Care Act.
He's the president of Pathfinder Technologies, a small company in Nashville with fewer than 20 employees, that got hit with an excise tax this year because it makes medical devices
.
Medical device manufacturers are among the federal health law losers, those that will have to pay up to cover the cost of implementing it. Others include high-wage earners, tanning salons and, in some cases, working parents and folks with big medical bills. The law generates revenue through a hodgepodge of new taxes, financial penalties and IRS rule changes.
"Every quarter, we're having to send the federal government a flat 2.3 percent of our revenue," Drake said. "I feel like it's double taxation because at the end of the year, we're sending them our federal income tax as well."
Tanning salon owners started having to pay a bigger tax three years ago. Lyvonn Reese, who owns the Hot Spot Tanning salons in the Nashville area, said the 10 percent tax ate away so much of her profit margin that she had no choice but to pass it along. She itemizes "tanning tax" on customer receipts.
Read the article here.
Congressional Quarterly reports that the Food and Drug Administration has yet to give final guidance on which of the growing number of mobile health apps it will regulate. Draft guidance indicates “enforcement discretion” will be taken toward consumer-oriented mobile apps, especially ones that are more high risk. The draft guidance also notes that clinical apps could “present a potential risk to patients if they do not work as intended.” Many health industry groups would like to see a wider regulatory framework on IT in place before the FDA issues specific mobile app guidance.
That sounds familiar.
For a more detailed look at this issue – with particular emphasis on the issue of enforcement discretion see, “A Regulatory App-ening.”
South Africa seeking mutual recognition with FDA and EMA.
Maybe a better first step is to establish a reference basket of maybe five to six countries. A good model is Singapore. Everyone’s favorite city-state reviews six countries—USA, Canada, Australia, NZ, Japan, Switzerland and the EMA. If any two of the five have approved, then approval is basically a formality.
Singapore doesn’t have mutual recognition with either the FDA or the EMA, but they unilaterally recognize the benefits of referencing to the “big regulatory dogs”, but did not demand that the FDA reference to their tiny agency.
New medicine control body a step closer
Tamar Kahn: Business Day
THE establishment of a new regulatory body for medicines is a step closer, after the Cabinet said yesterday that it had referred enabling legislation containing the Medicines and Related Substances Amendment Bill to Parliament.
The bill will replace the Medicines Control Council (MCC) with the South African Health Products Regulatory Agency (Sahpra), an entity with much wider scope.
The Cabinet said the bill sought to establish a strong, efficient and effective medicine regulatory authority. The Department of Health envisages Sahpra as being the solution to the extensive delays besetting the MCC, which takes much longer compared with US or European regulators to approve new medicines and clinical trials.
It is also expected to bring scrutiny to bear on aspects of the market that have largely gone unregulated, such as medical devices and complementary medicines. The new regulatory agency will also be responsible for foodstuffs, cosmetics, disinfectants and diagnostics.
To the frustration of researchers and the pharmaceutical industry, Sahpra has been stuck in the works for years. In 2008, Parliament passed amendments to the Medicines and Related Substances Act, which were not implemented. The bill was subsequently redrafted and published for comment in March. Since then it has taken more than a year to refine the bill and get it through the Cabinet.
Department of Health director-general Precious Matsoso said in June that one of the key changes made to the draft legislation was the inclusion of provisions for Sahpra to be a public entity with an independent board chaired by a CEO. It would also have a stronger governance structure than the previous draft, which had a CEO appointed by the Health Minister and gave final authority for the approval of new products to the Minister. The draft bill also included measures to shorten the registration time for medicines and medical devices by allowing mutual recognition agreements between Sahpra and other regulatory authorities such as the US Food and Drug Administration.
From the pages of Health Affairs:
Electronic Communication Improves Access, But Barriers To Its Widespread Adoption Remain
Abstract
Because electronic communication is quick, convenient, and inexpensive for most patients, care that is truly patient centered should promote the use of such communication between patients and providers, even using it as a substitute for office visits when clinically appropriate. Despite the potential benefits of electronic communication, fewer than 7 percent of providers used it in 2008. To learn from the experiences of providers that have widely incorporated electronic communication into patient care, we interviewed leaders of twenty-one medical groups that use it extensively with patients. We also interviewed staff in six of those groups. Electronic communication was widely perceived to be a safe, effective, and efficient means of communication that improves patient satisfaction and saves patients time but that increases the volume of physician work unless office visits are reduced. Practice redesign and new payment methods are likely necessary for electronic communication to be more widely used in patient care.
- 1Tara F. Bishop (tlfernan@med.cornell.edu) is an assistant professor in the Departments of Public Health and Medicine at Weill Cornell Medical College, in New York City.
- 2Matthew J. Press is an assistant professor in the Departments of Public Health and Medicine at Weill Cornell Medical College.
- 3Jayme L. Mendelsohn is a research coordinator in the Department of Public Health at Weill Cornell Medical College.
- 4Lawrence P. Casalino is the Livingston Farrand Associate Professor in the Department of Public Health at Weill Cornell Medical College.
- ↵*Corresponding author
From the pages of the South Florida Sun Sentinel …
Competition from insurers is benefit for consumers
How do you know a federal government program is working? When states start using it as a model for their own initiatives. That's what's happening with Medicare Part D, the prescription drug program for seniors. States are incorporating its unique market-based structure into their own healthcare programs to expand access and manage costs.
Under Medicare Part D, seniors select their prescription coverage from a host of private insurers. States are now applying that principle of free market competition to their Medicaid programs, and the results have been excellent.
Kansas, Louisiana, and Florida have received federal waivers that allow them to experiment with providing Medicaid services through private insurers. The states pay a fixed amount to insure each Medicaid enrollee, and then set minimum benefits that plans must provide.
But it's private insurers that actually supply the plans, and it's the enrollees themselves who decide which plan they would like. As a result, insurers can't provide the bare minimum — Medicaid enrollees can easily select a more appealing plan based on their own needs.
The results have been impressive. When Florida recently ran a pilot program, participating counties outperformed others 64 percent of the time on measured health outcomes. In Louisiana, where those on private insurance have the option of returning to the state's traditional Medicaid program, only one-third of 1 percent have chosen to do so. And because these states expect to save money, other states, including North Carolina, Texas, and Utah, are now considering similar policies.
And these programs don't just promise to save money, they feature various innovations to ensure quality. For example, in Florida, insurers are required to conduct customer-satisfaction surveys. While some states have increased the amount they will pay for coverage of high-risk patients, giving insurance companies an incentive to cover these patients and keep them healthy. This type of risk-based pricing helps patients receive more preventive care, according to a report last year by the Urban Institute.
Nationwide, 36 states and the District of Columbia provide at least some of their Medicaid services through private insurers — and these programs are expected to grow as the new health-care law expands access to Medicaid. States already spend up to one-third of their budgets on Medicaid, so an opportunity to save money while providing better service is an obvious win.
All of this is exciting — but it's not surprising, at least not to those who are familiar with the success of Medicare Part D. By letting seniors choose between private drug plans, Part D has cost the government about 45 percent less than initially projected when Congress enacted the program in 2003.
Out-of-pocket expenses for seniors are also lower than expected. And in a recent survey, 90 percent of Part D beneficiaries said they were satisfied with the program.
Given Medicare Part D's success in its own right and as a model for other healthcare programs, it's bizarre that the president and some in Congress would like to undermine the competition that makes Part D work.
The president's most recent budget, as well as bills introduced in Congress by Sen. Jay Rockefeller and Rep. Henry Waxman, would require drug companies to give "rebates" to the government for the drugs purchased for low-income seniors — known in technical parlance as "dual eligibles" because they qualify for both Medicare and Medicaid.
To put it simply, these politicians would substitute government price controls for the competitive marketplace that has been so effective in keeping costs down. As the Congressional Budget Office has reported, the private plans provided through Part D are already negotiating low prices for drugs. Requiring drug makers to, instead, sell their products for below-market prices will force manufacturers to raise prices on other consumers, including most seniors. Such rebates could increase seniors' premiums by 40 percent, according to a study by former CBO director Douglas Holtz-Eakin.
States may be the laboratories for innovation, but the big lesson from Part D is clear: Competition between private insurers reduces costs and encourages better health care. Some states are learning this lesson and applying it to their Medicaid programs. The federal government should be encouraging this market-based reform, not trying to undermine it.
Peter J. Pitts, a former FDA 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.
