Latest Drugwonks' Blog
The Reagan-Udall Foundation has released an online tool to help patients and doctors find drugs that qualify for the FDA program called expanded access, or compassionate use. These are drugs that are not currently approved, but are being tested and may be suitable to help someone who has a fatal illness.
The Be-all, End-all solution to every issue surrounding expanded access? Hardly. But it's a move in the right direction. Mobile apps are an important tool in advancing all sorts of patient empowerment issues.
The Be-all, End-all solution to every issue surrounding expanded access? Hardly. But it's a move in the right direction. Mobile apps are an important tool in advancing all sorts of patient empowerment issues.
Former Sidley Austin partner and product liability specialist Rebecca Wood has been named FDA chief legal counsel. Wood represented multiple life science clients during her nearly 17 years at Sidley, and notably penned briefs in two highly watched U.S. Supreme Court product liability/federal preemption cases, Warner-Lambert v. Kent, Riegel v. Medtronic, Inc . and Wyeth v. Levine.
She replaces Liz Dickinson, who rose to that role through the ranks of the FDA’s Office of Chief Counsel. Dickinson directed the agency’s recent issuance of a controversial FDA memo defending the agency's oversight of off-label communication. Public Health Interests and First Amendment Considerations Related to Manufacturer Communications Regarding Unapproved Uses of Approved or Cleared Medical Products, issued in the final days of the Obama administration, reasserted FDA's stance against off-label communication, which has been opposed by industry and First Amendment advocates for years.
Does the appointment of Wood mean a turn-about on the agency’s views on off-label communication? Watch this space for more details.
She replaces Liz Dickinson, who rose to that role through the ranks of the FDA’s Office of Chief Counsel. Dickinson directed the agency’s recent issuance of a controversial FDA memo defending the agency's oversight of off-label communication. Public Health Interests and First Amendment Considerations Related to Manufacturer Communications Regarding Unapproved Uses of Approved or Cleared Medical Products, issued in the final days of the Obama administration, reasserted FDA's stance against off-label communication, which has been opposed by industry and First Amendment advocates for years.
Does the appointment of Wood mean a turn-about on the agency’s views on off-label communication? Watch this space for more details.
There have been many articles arguing that the way to reduce drug prices – especially out of pocket costs to patients – is to ensure transparency on rebates.
For instance, an excellent article in Forbes by my colleague Grace Marie Turner entitled PRICE TRANSPARENCY IS CRITICAL TO DRUG PRICING SOLUTIONS, suggests that forcing PBMs to disclose drug rebates would help ensure rebates would go directly to consumers and stop PBMs from requiring consumers to pay their share of their prescription drug bills based upon the retail price of the drug.
The fact is, there are already a lot of transparent PBM models. For example, Medicare Part D requires rebate pass through and transparency.
And yet, Medicare doesn't realize that the PBMs are socking away about $14 billion in rebates and so-called performance based fees -- esssentialy rebates in the form of claw backs after a drug is sold. Interestingly, a study published by the pro-PBM trade group, The Coalition for Affordable Drugs revealed just how much of the rebate actually goes to Medicare under the so-called transparent or pass through model. CMS reports a lot less than the PBMs collect.
2014 DIR Amount in billions
Rebates reported by PBM. $31.7
Rebates reported Medicare by PBM $17.4
Amount PBMs didn't report to Medicare $14.3
Where did that $14.3 billion go?
When Adam Fein of DrugChannels asked Glenn Gliese, the lead author of the report, about the 'discrepancy', Gliese replied he "cannot really comment on what CMS is doing."
I bet.
If $14.3 billion in undisclosed rebate dollars doesn’t highlight the hollow promise of transparency, nothing will.
The problem is NOT transparency. The problem is the rebates themselves. The problem is the existence and growth of PBMs that continually exclude retail community pharmacies that know the needs of their customers and the PBMs increasing use of one size fits all benefit designs and restrictive access to control costs and increase rebates (and prices).
Transparent PBMs still force the sickest patients to fail first. And what the don't collect in rebates, the make up for in fees and higher base prices. (Remember, PBMs set the price of the drugs for pharmacies, health plans, patients, pharma.) The so-called pass through of rebates does not change that practice. PBMs need to eliminate cost sharing, fail first, prior authorization and steering patients to drugs that benefit their bottom line. Instead of making PBMs transparent we need to make them disappear. And we need an anti-PBM business model to deliver the drugs that work best for patients at the lowest out of pocket cost.
Although 10 new opioid products with abuse-deterrent formulations (ADF) have received regulatory approval in the United States, lack of willingness by insurers to reimburse patients for their use is seen as a primary challenge limiting ADF uptake, according to the Tufts Center for the Study of Drug Development.
According to Tufts CSDD, 96% of all opioid products prescribed in the U.S. in 2015 lacked abuse-deterrent properties, and only four of the 10 opioid products with abuse-deterrent properties thus far approved for sale by the Food and Drug Administration (FDA) have been launched.
"Developers are confronted with substantial payer reimbursement hurdles with respect to ADF products," said Joshua P. Cohen, associate professor at Tufts CSDD, who completed an analysis of the state of ADF opioid development and uptake by care providers. "In addition, lack of regulatory consistency regarding demonstrations needed to support labelling of abuse claims and lack of clarity regarding eligibility for three-year data exclusivity for ADF products is inhibiting their wider use."
Despite these obstacles, new ADF product development is moving ahead, as more than two dozen applications for new ADF drug products are pending before the FDA, Tufts CSDD said.
The findings were reported in the July/August Tufts CSDD Impact Report, released today, which also noted that:
* 36% of branded opioids prescribed in 2015 contained abuse-deterrent properties, but only 2% of generic opioids did.
* Medicare reimbursement of ADF products is often restricted, while coverage of non-ADF opioids is unrestricted.
* Drug developers face a special challenge in creating abuse deterrents for oral medications, as pills are the most common means by which pain medicine is administered.
"The U.S. opioid crisis is more pronounced than ever and, unfortunately, seems to be growing, increasing the urgency for ADF opioid products," said Cohen. "The FDA has adopted a flexible, adaptive approach to evaluating and labeling abuse-deterrent products, which will help. And the sooner developers can demonstrate ADF clinical effectiveness, the more likely payers will step up reimbursements for ADF products”
According to Tufts CSDD, 96% of all opioid products prescribed in the U.S. in 2015 lacked abuse-deterrent properties, and only four of the 10 opioid products with abuse-deterrent properties thus far approved for sale by the Food and Drug Administration (FDA) have been launched.
"Developers are confronted with substantial payer reimbursement hurdles with respect to ADF products," said Joshua P. Cohen, associate professor at Tufts CSDD, who completed an analysis of the state of ADF opioid development and uptake by care providers. "In addition, lack of regulatory consistency regarding demonstrations needed to support labelling of abuse claims and lack of clarity regarding eligibility for three-year data exclusivity for ADF products is inhibiting their wider use."
Despite these obstacles, new ADF product development is moving ahead, as more than two dozen applications for new ADF drug products are pending before the FDA, Tufts CSDD said.
The findings were reported in the July/August Tufts CSDD Impact Report, released today, which also noted that:
* 36% of branded opioids prescribed in 2015 contained abuse-deterrent properties, but only 2% of generic opioids did.
* Medicare reimbursement of ADF products is often restricted, while coverage of non-ADF opioids is unrestricted.
* Drug developers face a special challenge in creating abuse deterrents for oral medications, as pills are the most common means by which pain medicine is administered.
"The U.S. opioid crisis is more pronounced than ever and, unfortunately, seems to be growing, increasing the urgency for ADF opioid products," said Cohen. "The FDA has adopted a flexible, adaptive approach to evaluating and labeling abuse-deterrent products, which will help. And the sooner developers can demonstrate ADF clinical effectiveness, the more likely payers will step up reimbursements for ADF products”
Medicare spending might increase enough to trigger the use of the Independent Payment Advisory Board to cut spending below the rate set in the Affordable Care Act (rate of inflation plus 1 percent). Almost no one wants to convene the IPAB let alone serve on it. However, there is one group that has sought to emulate IPAB and make decisions about price and access based on the IPAB budget cap: The Institute for Clinical and Economic Review(ICER).
In determining drug coverage ICER explicitly limits spending per drug to the IPAB rate of increase. To keep under the cap, ICER has helpfully advised that health plans “prioritize Rx populations to reduce immediate cost impact.”
While IPAB may never meet, ICER’s mission to ‘prioritize’ may be fulfilled elsewhere. It turns out, the VA’s Pharmacy Benefits Management Services office (PBM) is partnering with the Institute for Clinical and Economic Review(ICER) set drug prices and limit veteran access to new medicines.
According to ICER, the VA will use its “drug assessment reports in drug coverage and price negotiations with the pharmaceutical industry.”
Why emulate IPAB when you can directly influence the VA?
In fact, the VA pharmacy benefit program is a match made in HTA heaven for ICER: It already sets prices and restricts access to new medicines. Under federal law, drug companies must the VA a price at least 24 percent lower than the best private sector price. They also must give the VA rebates if prices go up more than inflation.
Excluding some drugs lets the VA get even lower discounts. But such limits come at a great cost to patients. A study by economist Frank Lichtenberg found that not only were 20 percent of drugs approved since 2000 covered by the VA and that the limited access was associated with lower life expectancy over age 65 compared to Medicare. The innovation gap has grown since then.
A recent Avalere study found that "The VA National Formulary covers 54 percent of drugs on the California public employee retiree plan formulary, including 46 percent of brand drugs (102 of 222) and 61 percent of generic drugs (174 of 287.) " And it covers 50 percent few medicines than most state Medicaid plans.
ICER will only make the denial of timely, effective treatment worse, if that’s possible. In the past, ICER reports have been used to limit access to cures for hepatitis C, drugs that reduce the risk of heart attacks and a wide variety of medicines for people with rare cancers. ICER’s estimate of the value of medicine is so low that many of the drugs used to treat HIV would have been rejected by the group.
ICER’s involvement in VA drug selection will increase the damage being done by the department’s rationing of new medicines.
As an example of ICER’s impact on veterans, let’s assume a more effective treatment for post-traumatic stress disorder (PTSD) is developed. About 103000 veterans are diagnosed with PTSD. Only a third seek care. And those that do often stop treatment.
ICER’s asserts that on average a new drug should not cost a health plan more than $50K per QALY. VA standard of care for someone with PTSD costs $10000 over four years and includes the use of antidepressants, therapy and some hospitalization. Presently, such treatments leads to complete remission in only 18 percent of veterans who seek care. A better drug could reduce hospitalization but increase per patient and total treatment costs. More patients who previously didn’t respond or had never been treated will be likely seek out care if an effective treatment was available. There might be fewer suicides too. So ICER punishes the use of new products that, because they work, also let people live longer and get more care.
Meanwhile, ICER ignores the value (and savings) of reducing non–mental health related medical costs, caregiver burden, strain on family relationships, domestic violence, substance abuse, crime, and homelessness. In fact, a dead or untreated patient is a cost-effective one.
Even if the drug was used, ICER will limit the number of veterans getting treatment. For the US as the whole, ICER’s cap is $915 million per drug per year. For VA health budget, the ICER cap would be $5.52 million per each new drug. At $10000 per patient the VA would have to limit access to the new PTSD drug to 551 veterans a year.
I have not seen any independent confirmation from the VA that ICER has a formal role in designing drug coverage. If so, veterans are in danger.
In determining drug coverage ICER explicitly limits spending per drug to the IPAB rate of increase. To keep under the cap, ICER has helpfully advised that health plans “prioritize Rx populations to reduce immediate cost impact.”
While IPAB may never meet, ICER’s mission to ‘prioritize’ may be fulfilled elsewhere. It turns out, the VA’s Pharmacy Benefits Management Services office (PBM) is partnering with the Institute for Clinical and Economic Review(ICER) set drug prices and limit veteran access to new medicines.
According to ICER, the VA will use its “drug assessment reports in drug coverage and price negotiations with the pharmaceutical industry.”
Why emulate IPAB when you can directly influence the VA?
In fact, the VA pharmacy benefit program is a match made in HTA heaven for ICER: It already sets prices and restricts access to new medicines. Under federal law, drug companies must the VA a price at least 24 percent lower than the best private sector price. They also must give the VA rebates if prices go up more than inflation.
Excluding some drugs lets the VA get even lower discounts. But such limits come at a great cost to patients. A study by economist Frank Lichtenberg found that not only were 20 percent of drugs approved since 2000 covered by the VA and that the limited access was associated with lower life expectancy over age 65 compared to Medicare. The innovation gap has grown since then.
A recent Avalere study found that "The VA National Formulary covers 54 percent of drugs on the California public employee retiree plan formulary, including 46 percent of brand drugs (102 of 222) and 61 percent of generic drugs (174 of 287.) " And it covers 50 percent few medicines than most state Medicaid plans.
ICER will only make the denial of timely, effective treatment worse, if that’s possible. In the past, ICER reports have been used to limit access to cures for hepatitis C, drugs that reduce the risk of heart attacks and a wide variety of medicines for people with rare cancers. ICER’s estimate of the value of medicine is so low that many of the drugs used to treat HIV would have been rejected by the group.
ICER’s involvement in VA drug selection will increase the damage being done by the department’s rationing of new medicines.
As an example of ICER’s impact on veterans, let’s assume a more effective treatment for post-traumatic stress disorder (PTSD) is developed. About 103000 veterans are diagnosed with PTSD. Only a third seek care. And those that do often stop treatment.
ICER’s asserts that on average a new drug should not cost a health plan more than $50K per QALY. VA standard of care for someone with PTSD costs $10000 over four years and includes the use of antidepressants, therapy and some hospitalization. Presently, such treatments leads to complete remission in only 18 percent of veterans who seek care. A better drug could reduce hospitalization but increase per patient and total treatment costs. More patients who previously didn’t respond or had never been treated will be likely seek out care if an effective treatment was available. There might be fewer suicides too. So ICER punishes the use of new products that, because they work, also let people live longer and get more care.
Meanwhile, ICER ignores the value (and savings) of reducing non–mental health related medical costs, caregiver burden, strain on family relationships, domestic violence, substance abuse, crime, and homelessness. In fact, a dead or untreated patient is a cost-effective one.
Even if the drug was used, ICER will limit the number of veterans getting treatment. For the US as the whole, ICER’s cap is $915 million per drug per year. For VA health budget, the ICER cap would be $5.52 million per each new drug. At $10000 per patient the VA would have to limit access to the new PTSD drug to 551 veterans a year.
I have not seen any independent confirmation from the VA that ICER has a formal role in designing drug coverage. If so, veterans are in danger.
What a great combination – Steve Usdin interviews Scott Gottlieb. This lead article in BioCentury, “Health & Wealth” contains many gems. Here are some tidbits …
... Gottlieb believes that drugs “are priced to some measure of the cost of the capital -- including the investment capital -- that’s required to discover and develop them. And the risk and time and cost of the regulatory process are a big part of that equation.” The Commissioner’s plan will include a “broad range of steps we’ll take to make sure that our own regulatory tools and policies are modern and risk based -- and designed to facilitate the development of potentially breakthrough new treatments.”
... “This new policy will address the issue of targeted drugs, and how we simplify the development of drugs targeted to rare disorders that are driven by genetic variations, and where diseases all have a similar genetic fingerprint, even if they have a slightly different clinical expressions.” The guidance will clarify circumstances in which FDA may approve a cancer drug based on its molecular mechanism of action rather than the specific tissue or organ where tumors occur. It will also help sponsors develop drugs for rare subsets grouped by laboratory testing, so they can be studied in a single clinical trial.
... Gottlieb also understands that regulatory transparency cannot be a “for thee but not for me” proposition. Per the Commissioner, “We should be making sure that we try to provide as much information back into the market of ideas as possible. There are places across this agency where we bottle up too much information.” He singles out complete response letters as a “place where we should ask hard questions because there’s some very important information in those communications.”
... FDA is holding a public meeting on July 18 to solicit ideas about ways to administer the Hatch-Waxman Act “to help ensure the intended balance between encouraging innovation in drug development and accelerating the availability to the public of lower cost alternatives to innovator drugs is maintained.” Gottlieb has said he hopes to hear ideas at the meeting about ways to prevent manufacturers of branded drugs from blocking competition.
The full article is well worth the price of admission.
... Gottlieb believes that drugs “are priced to some measure of the cost of the capital -- including the investment capital -- that’s required to discover and develop them. And the risk and time and cost of the regulatory process are a big part of that equation.” The Commissioner’s plan will include a “broad range of steps we’ll take to make sure that our own regulatory tools and policies are modern and risk based -- and designed to facilitate the development of potentially breakthrough new treatments.”
... “This new policy will address the issue of targeted drugs, and how we simplify the development of drugs targeted to rare disorders that are driven by genetic variations, and where diseases all have a similar genetic fingerprint, even if they have a slightly different clinical expressions.” The guidance will clarify circumstances in which FDA may approve a cancer drug based on its molecular mechanism of action rather than the specific tissue or organ where tumors occur. It will also help sponsors develop drugs for rare subsets grouped by laboratory testing, so they can be studied in a single clinical trial.
... Gottlieb also understands that regulatory transparency cannot be a “for thee but not for me” proposition. Per the Commissioner, “We should be making sure that we try to provide as much information back into the market of ideas as possible. There are places across this agency where we bottle up too much information.” He singles out complete response letters as a “place where we should ask hard questions because there’s some very important information in those communications.”
... FDA is holding a public meeting on July 18 to solicit ideas about ways to administer the Hatch-Waxman Act “to help ensure the intended balance between encouraging innovation in drug development and accelerating the availability to the public of lower cost alternatives to innovator drugs is maintained.” Gottlieb has said he hopes to hear ideas at the meeting about ways to prevent manufacturers of branded drugs from blocking competition.
The full article is well worth the price of admission.
From today’s edition of the Daily Caller …
Patients Will Die If Congress Doesn’t Reauthorize This 25-Year Old Law
Thousands of Americans could die waiting for the FDA to approve new, lifesaving treatments if Congress fails to reauthorize a 25-year old law this summer.
The legislation, the Prescription Drug User Fee Act, charges pharmaceutical companies in order to fund the FDA. Without this legislation (renewed every five years), the FDA wouldn’t have the resources to review and approve new medicines in a timely manner. Patients would lose access to new, innovative drugs, thousands of FDA scientists would lose their jobs, and pharmaceutical companies would scale back medical research.
PDUFA, which first became law in 1992, requires pharmaceutical companies to pay the FDA to review new drug applications. The law also requires the FDA to review 90 new drug applications in a predictable, timely manner.
This mandate — and the funding from “user fees” — has greatly sped up the review process for new drugs. Prior to PDUFA, the FDA generally took at least two years to review new medicines. Foreign countries approved 70 percent of new drugs before the United States did. American patients were getting sicker — and often dying — waiting for FDA officials to approve medicines that had already been deemed safe and effective by European regulators.
PDUFA has cut the average review time for new drugs from 30 months in 1991 to under 12 months in 2016. It has helped bring more than 1,500 new drugs to pharmacy shelves.
The law makes medicines cheaper for consumers by increasing competition amongst drug companies. Take the new class of drugs used to cure hepatitis C. In 2013, there was only one cure on the market — and it cost $1,000 per pill. But the FDA approved competing products the following year. The ensuing price war forced drug companies to slash prices by 40 to 50 percent to gain market share.
PDUFA expires this fall. If Congress fails to reauthorize it, we’d revert to a time when drug approvals took years. Some patients battling serious illnesses could die waiting, and all patients would face higher costs due to less competition.
Patients aren’t the only ones who would suffer from congressional inaction. As Senator Lamar Alexander (R-Tenn.) explains, “If we do not move quickly to reauthorize these agreements, in late July, the FDA will be forced to begin sending layoff notices to more than 5,000 employees to notify them that they may lose their job in 60 days.”
Scientists and workers in the private sector could lose their jobs too. Quick drug approvals give pharmaceutical companies more time to sell their inventions before patents expire. That makes drug development a more attractive investment.
Timely approvals give companies confidence to hire new workers and plow money into research, growing the economy. Already, the pharmaceutical industry directly employs 850,000 people and indirectly supports another 3.5 million jobs. The sector contributes a staggering $1.2 trillion in economic output.
Patients, FDA scientists, and drug industry employees would all suffer if Congress lets PDUFA expire. The law has been an unqualified success — and deserves a speedy renewal.
Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.
Patients Will Die If Congress Doesn’t Reauthorize This 25-Year Old Law
Thousands of Americans could die waiting for the FDA to approve new, lifesaving treatments if Congress fails to reauthorize a 25-year old law this summer.
The legislation, the Prescription Drug User Fee Act, charges pharmaceutical companies in order to fund the FDA. Without this legislation (renewed every five years), the FDA wouldn’t have the resources to review and approve new medicines in a timely manner. Patients would lose access to new, innovative drugs, thousands of FDA scientists would lose their jobs, and pharmaceutical companies would scale back medical research.
PDUFA, which first became law in 1992, requires pharmaceutical companies to pay the FDA to review new drug applications. The law also requires the FDA to review 90 new drug applications in a predictable, timely manner.
This mandate — and the funding from “user fees” — has greatly sped up the review process for new drugs. Prior to PDUFA, the FDA generally took at least two years to review new medicines. Foreign countries approved 70 percent of new drugs before the United States did. American patients were getting sicker — and often dying — waiting for FDA officials to approve medicines that had already been deemed safe and effective by European regulators.
PDUFA has cut the average review time for new drugs from 30 months in 1991 to under 12 months in 2016. It has helped bring more than 1,500 new drugs to pharmacy shelves.
The law makes medicines cheaper for consumers by increasing competition amongst drug companies. Take the new class of drugs used to cure hepatitis C. In 2013, there was only one cure on the market — and it cost $1,000 per pill. But the FDA approved competing products the following year. The ensuing price war forced drug companies to slash prices by 40 to 50 percent to gain market share.
PDUFA expires this fall. If Congress fails to reauthorize it, we’d revert to a time when drug approvals took years. Some patients battling serious illnesses could die waiting, and all patients would face higher costs due to less competition.
Patients aren’t the only ones who would suffer from congressional inaction. As Senator Lamar Alexander (R-Tenn.) explains, “If we do not move quickly to reauthorize these agreements, in late July, the FDA will be forced to begin sending layoff notices to more than 5,000 employees to notify them that they may lose their job in 60 days.”
Scientists and workers in the private sector could lose their jobs too. Quick drug approvals give pharmaceutical companies more time to sell their inventions before patents expire. That makes drug development a more attractive investment.
Timely approvals give companies confidence to hire new workers and plow money into research, growing the economy. Already, the pharmaceutical industry directly employs 850,000 people and indirectly supports another 3.5 million jobs. The sector contributes a staggering $1.2 trillion in economic output.
Patients, FDA scientists, and drug industry employees would all suffer if Congress lets PDUFA expire. The law has been an unqualified success — and deserves a speedy renewal.
Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.
Straight from the pages of Maine’s Sun-Journal ...
Maine's new generic drug legislation has good intentions, bad execution
By: Peter Pitts
Maine lawmakers are advancing LD 1280, a bill that seeks to reduce patients' health care bills by speeding up the introduction of low-cost generic drugs.
The bill has a noble goal. But it is terribly written. It would enable intellectual property theft: drug companies would be allowed to steal and profit from their competitors' trade secrets. That would discourage research investments — potentially leading to layoffs for Maine's drug-sector workers. Worse, the bill would undermine federal drug safety standards that protect patients.
The FDA requires generic manufacturers to prove their products are therapeutically equivalent to brand-name medicines. To do so, generic firms must obtain samples of brand-name drugs, to test them head-to-head.
Some Maine lawmakers suspect that brand-name firms aren't handing over samples in a timely fashion. This delay, they say, slows down the testing and approval process. That suppresses competition and allows brand-name manufacturers to keep selling their products at high prices, even after their patents have expired.
So a group of state legislators has introduced LD 1280 to prevent foot-dragging and require brand-name firms to provide drug samples "at fair market price and without any restriction that delays access to an eligible product developer."
The bill is well on its way to becoming law. It just passed out of the Labor, Commerce and Economic Development Committee by a wide margin.
Yet the legislation remains deeply flawed. For starters, brand-name firms would have to sell samples to any person or company that "seeks to develop an application for the approval of a drug."
That's an incredibly broad definition. Brand-name manufacturers could demand samples from rivals in order to create competing products that don't technically violate patent protections, but still mooch off the creators' research.
This de facto intellectual property theft would prevent manufacturers from recouping their investments on previous research. That would discourage firms from making new research investments, since no company wants to spend $2.6 billion — the average cost of bringing a new drug to market — only to see a rival freeload off its efforts.
The ensuing cutback in research would mean layoffs for workers and fewer new medicines for patients.
LD 1280 also guts patient safety protections.
Some medicines cause such severe side effects that the FDA requires manufacturers to follow special safety protocols when distributing the drugs. These rules typically govern how the drugs are dispensed.
For instance, if a drug can cause liver damage, providers have to monitor patients' liver function during treatment. If a drug causes birth defects, doctors must confirm that patients aren't pregnant. Doctors who want to prescribe Tysabri, a powerful multiple sclerosis treatment, must first obtain special certification and follow specific procedures to avoid damaging patients' nervous systems.
Before handing over samples of high-risk drugs, brand-name firms negotiate with generic manufacturers to ensure the potent medicines will be tested on patients in accordance with these special safety standards.
LD 1280 would treat such negotiations as "restriction(s) that delay access" and prohibit them. Brand-name firms would be forced to hand over samples to generic manufacturers that may not follow needed safety precautions. Patients would be put at risk.
It's admirable that Maine lawmakers are trying to lower patients' drug bills. But LD 1280 is the wrong way to do it. It would discourage research and endanger patients.
Maine's new generic drug legislation has good intentions, bad execution
By: Peter Pitts
Maine lawmakers are advancing LD 1280, a bill that seeks to reduce patients' health care bills by speeding up the introduction of low-cost generic drugs.
The bill has a noble goal. But it is terribly written. It would enable intellectual property theft: drug companies would be allowed to steal and profit from their competitors' trade secrets. That would discourage research investments — potentially leading to layoffs for Maine's drug-sector workers. Worse, the bill would undermine federal drug safety standards that protect patients.
The FDA requires generic manufacturers to prove their products are therapeutically equivalent to brand-name medicines. To do so, generic firms must obtain samples of brand-name drugs, to test them head-to-head.
Some Maine lawmakers suspect that brand-name firms aren't handing over samples in a timely fashion. This delay, they say, slows down the testing and approval process. That suppresses competition and allows brand-name manufacturers to keep selling their products at high prices, even after their patents have expired.
So a group of state legislators has introduced LD 1280 to prevent foot-dragging and require brand-name firms to provide drug samples "at fair market price and without any restriction that delays access to an eligible product developer."
The bill is well on its way to becoming law. It just passed out of the Labor, Commerce and Economic Development Committee by a wide margin.
Yet the legislation remains deeply flawed. For starters, brand-name firms would have to sell samples to any person or company that "seeks to develop an application for the approval of a drug."
That's an incredibly broad definition. Brand-name manufacturers could demand samples from rivals in order to create competing products that don't technically violate patent protections, but still mooch off the creators' research.
This de facto intellectual property theft would prevent manufacturers from recouping their investments on previous research. That would discourage firms from making new research investments, since no company wants to spend $2.6 billion — the average cost of bringing a new drug to market — only to see a rival freeload off its efforts.
The ensuing cutback in research would mean layoffs for workers and fewer new medicines for patients.
LD 1280 also guts patient safety protections.
Some medicines cause such severe side effects that the FDA requires manufacturers to follow special safety protocols when distributing the drugs. These rules typically govern how the drugs are dispensed.
For instance, if a drug can cause liver damage, providers have to monitor patients' liver function during treatment. If a drug causes birth defects, doctors must confirm that patients aren't pregnant. Doctors who want to prescribe Tysabri, a powerful multiple sclerosis treatment, must first obtain special certification and follow specific procedures to avoid damaging patients' nervous systems.
Before handing over samples of high-risk drugs, brand-name firms negotiate with generic manufacturers to ensure the potent medicines will be tested on patients in accordance with these special safety standards.
LD 1280 would treat such negotiations as "restriction(s) that delay access" and prohibit them. Brand-name firms would be forced to hand over samples to generic manufacturers that may not follow needed safety precautions. Patients would be put at risk.
It's admirable that Maine lawmakers are trying to lower patients' drug bills. But LD 1280 is the wrong way to do it. It would discourage research and endanger patients.
In a blog post Thursday, FDA Commissioner Scott Gottlieb outlined regulatory steps designed to promote development of digital health technologies. The agency intends to issue new guidance that would clarify FDA's regulatory scope in the sector; explore a third-party certification program for developers that could exempt some products from premarket review; and gather real-world evidence about the use of digital health technologies. The policies fall under the agency's new Digital Health Innovation Plan, intended to promote innovation among health apps, devices such as fitness trackers, and tools such as medical records software.
Over the coming months, FDA plans to publish new guidance clarifying which health products fall in and out of the agency’s regulatory scope, including guidelines on low-risk products that would be exempt from certain premarket regulatory requirements. The agency is also considering a pilot program under which it may certify developers based on their reliability, which could allow them to bring lower risk products to market without premarket review, while streamlining premarket review of higher risk products.
Unlike FDA’s product-based approach for drugs and therapeutics, the program would grant certification at the company level based on factors such as the consistent quality or maintenance of a developer's software, Gottlieb wrote. Finally, FDA intends to use the National Evaluation System for health Technology (NEST) as a resource for companies to collect real-world data on their products in both pre- and postmarket settings. The federated system will pool data from various sources, including registries, electronic health records and payer claims. The Medical Device Innovation Consortium (MDIC), a 501(c)(3) public/private partnership, will coordinate its operations.
FDA said MDIC will establish a NEST governing committee in the coming weeks, and plans to launch a first version of the system by YE19. The plan is part of a broader push by FDA to spur innovation through reforms across its medical product centers. More details are due soon.
Over the coming months, FDA plans to publish new guidance clarifying which health products fall in and out of the agency’s regulatory scope, including guidelines on low-risk products that would be exempt from certain premarket regulatory requirements. The agency is also considering a pilot program under which it may certify developers based on their reliability, which could allow them to bring lower risk products to market without premarket review, while streamlining premarket review of higher risk products.
Unlike FDA’s product-based approach for drugs and therapeutics, the program would grant certification at the company level based on factors such as the consistent quality or maintenance of a developer's software, Gottlieb wrote. Finally, FDA intends to use the National Evaluation System for health Technology (NEST) as a resource for companies to collect real-world data on their products in both pre- and postmarket settings. The federated system will pool data from various sources, including registries, electronic health records and payer claims. The Medical Device Innovation Consortium (MDIC), a 501(c)(3) public/private partnership, will coordinate its operations.
FDA said MDIC will establish a NEST governing committee in the coming weeks, and plans to launch a first version of the system by YE19. The plan is part of a broader push by FDA to spur innovation through reforms across its medical product centers. More details are due soon.
Wired magazine’s article, “The New War on Overpriced Drugs” celebrates Steve Pearson and his Institute for Clinical and Economic Research for applying evidence-based science to drug prices. In doing so, it makes it quite clear that Pearson believes the perfecting the require fewer people benefitting from medical innovation.
The author, David Ferry claims that “ICER and Pearson’s method has successfully checked the prices of a handful of drugs—something very few people can say they’ve done.”
It is more accurate to say that ICER successfully legitimized and justified PBMS from restricting access to new medicines, maximizing rebates and imposing cost sharing requirements on the sickest 2 percent of patients.
Ferry gives ICER credit when “Gilead took 46 percent off the list price for Sovaldi and Harvoni. (Two of the first medicines for hepatitis C.) The price drop was stunning. Steve Miller, the chief medical officer of Express Scripts, the largest of the middleman firms that buy drugs wholesale for insurance companies, said ICER’s work had given him the ammo he needed to negotiate with Gilead. Overnight, the tiny nonprofit became an implausible power player in the national conversation about drug pricing.”
In fact, ICER’s contribution was proposing a rationing of new medicines and generating a huge rebate windfall for Express Scripts and the other large PBMs. It was ICER that recommended restricting access to such drugs until they livers start to fail, an approach that has been ruled illegal by a federal district court and has been under challenge in many states.
And rather than making medicines affordable, ICER’s pricing scheme allows PBM’s to pocket rebates and share them with health plans instead of directly reducing patient drug costs. Indeed, many plans require HCV patients to pay up to 30 percent of the list price of the drug. ICER has ignored this arbitrage as well as the impact it has on access to new medicines.
The claims that ICER informed policies protect people from overpriced drugs is factually bankrupt. “Recent data released by Trio Health show that the prevalence of hepatitis C drug patients diagnosed with Hepatitis C but not started on curative drugs, such as Harvoni and Zepatier, more than tripled between 2014 and 2016—signaling that payers continue to deny coverage despite increased marketplace competition and availability of discounts.”[2]
The same can be said for ICER’s claim that new biologics – PCSK9 inhibitors - that help patients who have dangerously high LDL levels and who can’t take or don’t respond to current statins are not cost effective.
Nearly 11 million people have cholesterol levels that if reduced by 50 percent of more, would see a significant reduction in risk of a heart attack or stroke. Each year, 1.5 million people have a heart attack or stroke and are at greater risk for a subsequent attack or death.
A study looking at the impact of primary prevention in the 11 million or so patients estimated the cumulative value of PCSK9 inhibitors “would range from $3.4 trillion to $5.1 trillion (1.9-2.8 million deaths averted), or $12,000 to $17,000 per patient-year of treatment between 2015 and 2035.[3]
But so far less than 5 percent of all patients who could reduce their risk of early death with the new medicines get them.
Ferry mentions a meeting that I participated in prior to ICER’s discussion about the value of new medicines for multiple myeloma. He claims ICER determined that four of the newly approved myeloma drugs indeed work, but they’re all dramatically overpriced and don’t represent "high value.” Pharma is overcharging cancer patients for their lifesaving meds, the quants found.
Interestingly, while he took the time for a pathetic attempt to smear me (The Center for Medicine in the Public Interest takes money from Big Pharma) he never took the time to pick up the phone and ask me questions.
He obviously didn’t read my white paper on the impact of ICER’s methodology on patients with myeloma. I barely mention funding and I never challenge ICER’s methodology, only the way it arrives as the estimate of patients who could benefit from new medicines. (I need a whole other blog to discuss how ICER just chooses thresholds out of thin air, and then refuses to disclose that there is no empiric basis for them, or how they manipulate data to justify pre-ordained conclusions.)
Rather, I use ICER’s own analysis to determine how many people would be denied drugs that Ferry claims are (according to ICER) not worth using at current prices.
As I noted: “The difference in QALY can be debated by people of differing perspectives. But the impact of the ICER restrictions on access to new medicines, even at very low prices, is straightforward.”
I used ICER's budget cut-off of $915 million per new drug per year necessary to protect the health system and then determined how many people with myeloma would not get treatment, even at discounted prices, at the level of spending
Under ICER assumptions, people with myeloma that would be denied new medicines would lose 43833 life years. The death of 44,000 people with myeloma will also have a profound economic impact, costing society and myeloma patients nearly $12. 2 billion worth of additional life (at $300K per life year gained).
Ferry trots out a cancer survivor who claims “patients opposing ICER have been bamboozled, she says, tricked by Big Pharma into becoming pawns in the industry’s fight to control its pricing power. “
In fact, PBMs and insurers generate about These practices are applied to almost every patient with conditions needing specialty drugs and rarely applied to everyone else. Nearly every ACA and Medicare drug plan put specialty medicines on the highest cost-sharing tier. Half of all drug coverage provided to employer-sponsored health plans impose the same burden only on the two percent.[4]
As a result, people who use specialty medicines are 10 times more likely to pay full price for the most expensive medicine. On average, they are 10 times more likely to pay over $2500 out of pocket for medicines than other consumers. [5]
In addition, the 2 percent (4.4 million people) generated $13 billion in rebates and $12 billion in out of pocket spending that goes straight to PBMs and insurers.
PBMs and health plans could use rebates to reduce cost sharing. Instead, they systematically maximize their use for the sickest patients. They do it because they can and because by doing it, they rake in tens of billions of dollars in a predictable manner. Who is bamboozling who?
Pearson justifies all this by claiming that “Health is a very important—perhaps the most important goal for us as individuals, and for our society,” Pearson says. “But it’s not the only goal. We also want good jobs, great schools, a safe environment.”
The money you spend on overpriced drugs, he argues, is money that doesn’t go to your kid’s school or the ambulance driver or fire department. “There are choices within the health care system: Should we get this machine or pay another doctor?” he says. “Then, step back and it’s: Another hospital or 10,000 more teachers?”
Pearson thereby exposes the moral and intellectual shortcomings of ICER. He truly believes, like many professional pessimists that resources are scarce and that spending more and more on medicines will ultimately come at the expense of pothole repair or more police or a perfect world.
It never occurs to Pearson that spending on new medicines makes government investment in public services sustainable. If more people live longer healthier lives, they pay taxes, spend money on insurance premiums and other activities. In Louisiana for instance, the death rate from heart disease is 75 percent higher than the national average. In some parishes, it’s four times higher. A lot of those people who will die could reduce that risk with the new medicines ICER claims aren’t worth paying for.
As a result, Pearson’s calculus and ICERs recommendation would make America sicker, less prosperous nation.
In fact, if ICER’s combination of QALY based prices and budget caps are applied to all new medicines since 1990 for heart disease, psoriasis, HIV, multiple sclerosis, various cancers and drugs for rare diseases, none would be considered cost effective.
Pearson is not unaware of the impact his approach would have on patient access. Instead, he is betting on it. And while many patient groups and drug companies think ICER is open to change, such adjustments are rhetorical. ICER now uses estimates of rebated prices. But ICER and Pearson are still silent about rebate and copay rip-offs not because he gets money from PBMs and health plans but because he sees them as necessary to increase his influence over how much we spend on drugs as well as the pace at which new medicines are used. To avoid criticisms like mine, ICER no longer spells out how many people would be denied care. But budget thresholds are still there.
Ferry notes that Pearson believes that what ICER does has “a nobility and a grandeur.”
He’s right. Pearson is a true believer in the Progressive tradition. As Princeton University history professor Thomas C. Leonard, notes in his 2016 book “Illiberal Reformers: Race, Eugenics & American Economics in the Progressive Era,” progressives believed that scientific experts should be in society’s saddle, determining the “human hierarchy” and appropriate social policies” to achieve a better world[6] And it obvious that most progressives of any era, Pearson has" an extravagant faith in science and the state with an outsized confidence in their own expertise.”[1]To Pearson, the greater good will be achieved by reducing the use of new medicines. As he notes: “The opportunity cost of supporting the use of ultra-orphan drugs necessitates that patients with a more common disease, for which a cost-effective treatment is available, are denied treatment.” His solution: restrain “society’s desire to help those weakest among us, especially when their small numbers allow us to see them as unique individuals.” In that way, we can “ensure that an undue burden is not placed on others for the sake of a few.” [7]
As Leonard notes, progressives were all in on eugenics. The saw eugenics as a scientific tool that could be used to eliminate people of limited or undesirable traits who, because of their disabilities and behavior, are a drain on other spending. So, they set about establishing which of us should reproduce based on the traits they decided were most desirable. The eugenics leaders relied upon foundation funding to advance their vision and to support randomized trials and statistical models to demonstrate how the greater good would be served.
All ICER is doing is applying the Progressive's eugenics calculus to restrict the medicines the sickest people – including those with genetic disorders – that siphon spending away from schools and highway construction, etc., instead of eliminating the people themselves. PBMs and health plans benefit from rich rebates in the short run and – by imposing cost sharing on the sickest – discourage them from sticking around for the long term. Indeed, as I suggested, Pearson has figured out that PBMs are the perfect mechanism for sorting out the undesirables from those of us who young, lean, healthy and who, like Ferry, want to spend their free time “enjoying sandwiches.”
There is nothing evil about Pearson or ICER. Rather, as Lionel Trilling observed, “some paradox of our natures leads us when once we have made our fellow men the objects of our enlightened interest, to go on to make them the objects of our pity, then of our wisdom, ultimately of our coercion.” For Pearson and his acolytes in Wired, that coercion is noble and grand.
[1] ILLIBERAL REFORMERS Race, Eugenics and American Economics in the Progressive Era
By Thomas C. Leonard 250 pp. Princeton University Press
[2] http://www.managedhealthcareconnect.com/content/hepatitis-c-treatment-coverage-denials-increase-sharply
[3] Am J Manag Care. 2016 Jun 1;22(6):e199-207.
Value of improved lipid control in patients at high risk for adverse cardiac events.
Jena AB1, Blumenthal DM, Stevens W, Chou JW, Ton TG, Goldman DP.
[4] 2016 Employer Health Benefits Survey Sep 14, 2016
“Among covered workers at large firms whose largest plan has a separate tier for specialty drugs, 43% have a copayment for specialty drugs and 46% have a coinsurance requirement (Exhibit 9.15). The average copayment is $89 and the average coinsurance rate is 26% (Exhibit 9.16). Seventy-eight percent of those with a coinsurance requirement have a maximum dollar limit on the amount of coinsurance they must pay.”
[5] Source: Medicines Use and Spending in the U.S.: A Review of 2016 and Outlook to 2021, Quintiles IMS Institute May 2017
[6] “The Liberals Who Loved Eugenics.” http://wapo.st/2rrKWSj
[7] Largent EA, Pearson SD. Which orphans will find a home? The rule of rescue in resource allocation for rare diseases. The Hastings Center report. 2012;42(1):27-34.
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.
