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President-elect Donald Trump is weighing naming as Food and Drug Administration commissioner a staunch libertarian who has called for eliminating the agency’s mandate to determine whether new medicines are effective before approving them for sale.

“Let people start using them, at their own risk,” the candidate, Jim O’Neill, said in a 2014 speech to a biotech group.

O’Neill, has also called for paying organ donors and setting up libertarian societies at sea — and has said he was surprised to discover that FDA regulators actually enjoy science and like working to fight disease.

A source close to the Trump transition team told STAT that Peter Thiel, the billionaire Trump donor who is helping shape the new administration, is pushing for the FDA appointment for O’Neill, his managing director at Mithril Capital Management.

Trump’s focus on O’Neill was first reported Wednesday morning by Bloomberg.

O’Neill would be an unusual choice. He is not a physician, and lacks the strong science background that nearly all former commissioners have had in recent years.

A graduate of Yale University, with a master’s degree from the University of Chicago, O’Neill went to work at the Department of Health and Human Services in 2002, after a stint as speechwriter at the Department of Education. He worked his way up to principal associate deputy secretary, where he advised the HHS Secretary on all areas of policy, according to his LinkedIn page.

O’Neill first worked with Thiel at Clarium Capital Management, and also ran the Thiel Foundation and Breakout Labs, which funds early-stage companies in areas ranging from food science to biomedicine to clean energy. He is a promoter of anti-aging treatments and technology.

O’Neill also serves on the board of the Seasteading Institute, an organization that aims to create its own sea-based floating communities, on the theory that existing governments are woefully ineffective. “Obsolete political systems conceived in previous centuries are ill-equipped to unleash the enormous opportunities in twenty-first century innovation,” the Seasteading website notes.

O’Neill is not well known in Washington, but has been a frequent speaker on the biotech circuit.

In 2014, in a talk to a group gathered to discuss regenerative medicine, he recalled his days at HHS and expressed disdain for the FDA’s process.
“As a libertarian, I was inclined to believe that the regulatory costs that the FDA impose kill a lot of people and provide a lot of harm to the economy, and I don’t deny that… but one thing that surprised me is that the actual human beings at the Food and Drug Administration like science; they like curing disease and they actually like approving drugs and devices and biologics.”

The problem, O’Neill told the group, is the overall structure and incentives of the regulatory system.

“Every time the FDA commissioner approves something and someone gets sick who used it, the commissioner is summoned to a congressional committee that also controls his budget and forced to testify under oath, why he made this rash decision…It’s a miserable process,” O’Neill said.

O’Neill has proposed that the FDA only require companies to prove drugs are safe before they are sold – not that they actually work.

O’Neill has also said that organ donors should be allowed to be paid. “There are plenty of healthy spare kidneys walking around, unused,” he said in a speech at a 2009 Seasteading conference.

His participation in the Seasteading movement might be a sensitive topic, too. The video of his speech was available on The Seasteading Institute’s website in the afternoon, but by evening, it had disappeared.

In the speech, which is still available elsewhere, O’Neill said that “we can all wish that existing governments will somehow stumble into freedom, but if we want to achieve freedom, seasteads are by far the best prospect.”

Neither O’Neill, Thiel or Trump transition team staffers returned calls seeking comment.

Also under consideration for the FDA job: Dr. Scott Gottlieb, a former FDA deputy commissioner.

Gottlieb, a resident fellow at the American Enterprise Institute, was a senior adviser to the presidential campaign of Wisconsin Governor Scott Walker.  A clinical assistant professor at the NYU School of Medicine, he is a venture partner at the venture capital firm New Enterprise Associates, and a senior principal at TR Winston, a healthcare focused merchant and investment bank. He has testified before Congress 18 times on health and regulatory issues.

Gottlieb was recently named to the transition team.

WSJ Gets It Half Right On Drug Prices

  • 12.07.2016
  • Robert Goldberg
Thomas Sowell observed: “A cynic is said to be someone who knows the price of everything and the value of nothing. The same could be said of economic illiterates, many of whom are in politics and the media”.

But often what is perceived as illiteracy is really confirmation basis or just not understanding.  An example of the latter is WSJ reproter Jonathan Rockoff’s article “Drugmakers Find Competition Doesn’t Keep a Lid on Prices”.  Rockoff's article does transcend the usual narrative:that drug prices don’t decline in the face of competition because only drug companies can defy market forces and pass added costs onto consumers.  Rockoff acknowledges that drug companies are not the only culprits.  In making this point, he still implies competition should reduce drug prices without regard to the costs associated with producing goods or services.   In doing so, he perpetuates the meme that drug companies are so profitable they can cut prices and generate new medicines. 

Rockoff apparently has not looked at the relationship between competition, prices and production costs in other industries.

For example, when has Apple or Microsoft or Google engaged in a price war leading to lower prices over the long run? Have cable rates fallen in response to other ways of watching movies, tv shows, etc?   On the contrary, they have not.  Similarly, has Netflix or Amazon or Hulu reduced their prices as the battle for broadband viewership heat up?  

Have the prices hospitals and insurance companies charge fallen?  How about the cost of college? Or closer to home, why has the Wall Street Journal continued to raise its newsstand and digital subscription prices?  Heck, WSJ is laying off a bunch of high paid writers. Shouldn't prices go lower, not higher?   And why is the renewal price higher than the introductory price.  Shouldn't the $99 price be standard? 

The fact is prices are more than a response to competition.  And competition is rarely only about prices.  WSJ increases prices because the costs of staying in business and putting out a good product increase.   Netflix could have continued to charge 6.99 if it didn’t want to invest in new movies and original programming.  Would people be satisfied watching reruns of Law and Order?  

This dynamic is separate and apart from the increase in list prices that fuel higher rebates for insurers and PBMs.    But not totally.  List prices rise in response to the added cost of rebates and other discounts drug companies must give to get market share.  

As Sowell points out (should he really have to?) “Costs are not just prices arbitrarily put on things. Whether the economic system has prices or not, there are real costs for everything. Whether under capitalism, socialism, feudalism or any other system, the real cost of building a bridge are all the homes, factories and other structures that could have been built with the same labor and materials that went into building the bridge.’

To be sure, rebates and discounts don’t mostly flow to the consumers of the drugs generating rebates and discounts.  But that is due to the control insurers and PBMs have over retail pricing.  This is a huge problem as I have pointed out time and again.  Until recently most reporters were unaware of how rebates worked.  (Credit due to me and Peter for doing the explaining!) 

None of the above changes the fact that lower prices can often lead to less innovation across industries or that prices do reflect value in market economies. Generic drug companies don’t innovate and often stop producing essential medicines that go off patent because prices are often drop below increasing production costs. 

Rockoff, like many of us, seek explanations when competition doesn't lead to lower prices.   The key is to look deeper into how competition sustains innovation.  Companies compete on quality, on novelty and on value.  Prices reflect what those qualities or values are as well as the cost of making them.   If we want 1990s prices for anything, college, cellphones or drugs, be prepared for 1990s technology.  
A footnote:  Rockoff’s piece is featured in a WSJ weekly business ethics course reviewed by OC Ferrel, a professor of business ethics at Belmont University.  Ferrel writes: “Students should understand that 'fair' competition should result in competitive or lower prices. This phenomena (sic) is causing increased burden on the health care system and should have public policy consequences.”

Maybe Sowell was not tough enough.
The 21st Century Cures Act provides a legal foundation for regulatory innovations including approving supplemental indications based on real-world evidence and approving antimicrobial drugs for limited populations. The bill also would help FDA recruit and retain staff by creating mechanisms for it to pay salaries that are competitive with those offered in the private sector.

Other key provisions include:

* Real World Evidence. Require FDA to establish a framework for use of real-world evidence to approve supplemental indications and satisfy post-approval requirements. Timeframe: Within 2 years

* Healthcare Economic Information. Clarify ability of manufacturers to discuss pharmacoeconomic data with payers, formulary committees and others. Timeframe: Immediate

* Limited Population Pathway. Allow limited approval of antimicrobial drugs for life-threatening infections; require labeling and advertising to include “Limited Population” language. Timeframe: Immediate

* Summary Level Review. Allow approval of new indications based on data summaries from sponsors (sponsors must also submit full data). Timeframe: Immediate

* Accelerated Approval for Regenerative Advanced Therapies. Create regenerative advanced therapy designation that allows accelerated approval and use of clinical evidence, clinical studies, registries or other real-world evidence to satisfy post-approval requirements; require FDA to explain decision not to grant regenerative advanced therapy designation. Timeframe: Immediate

* Qualification of Drug Development Tools. Establish review pathway for biomarkers and other drug development tools to shorten development and reduce failure rate. Timeline: Draft guidance within 3 years; final guidance 6 months after end of comment period

* Reauthorization of Program to Encourage Treatments for Rare Pediatric Diseases. Reauthorize the pediatric rare disease Priority Review voucher program until 2020; a drug designated by Sept. 30, 2020 could receive a voucher if approved before Sept. 30, 2022. Timeframe: Immediate

* Silvio O. Conte Senior Biomedical Research Service. Increase senior biomedical research service positions to 2,000 from 500, allow FDA to deploy biomedical research service members for product assessments, increase maximum salary to president’s salary. Timeframe: Immediate

* Hiring Authority for Scientific, Technical, and Professional Personnel. Allow FDA commissioner to set salaries for scientific, technical, or professional positions at up to the president’s salary. Timeframe: Immediate

* Patient Experience Data. Require statement upon drug approval about FDA’s use of patient experience data collected by patients, caregivers and their representatives; disease research foundations; researchers; and drug manufacturers. Timeframe: 180 days

* Patient-Focused Drug Development Guidance. Require FDA guidance on how to collect patient experience data for use in regulatory decisions, how patients can submit proposals and how FDA will respond to them, and how FDA plans to use such data. Timeline: Initial plan in 180 days; draft guidance within 18 months; revised or final guidance 18 months after end of comment period

* Expanded Access Policy. Require companies to have publicly accessible compassionate use policies for investigational drugs treating serious or life-threatening conditions. Timeline: 60 days

On the down side, the $500 million of funding is not mandatory. Stay tuned.

For an excellent recap of the legislation, have a look at BioCentury’s Steve Usdin’s excellent article. Per Usdin, “The political process has created a consensus bill that lacks the kind of paradigm-shifting changes its authors promised. But Cures would produce real, though modest, forward motion in several areas that are important for translating scientific advances into new therapies.”

And, importantly, “Critics of the 21st Century Cures Act have warned that it would erode approval standards by allowing FDA to approve drugs based on anecdotal evidence. This is a huge exaggeration. What Cures would do is start FDA down the long road toward relying on real-world evidence to support selected regulatory decisions.”


The best way to measure the value of medical progress is to find out what people fighting serious chronic illnesses do as they get stronger and healthier.   

When two people going on different journeys in overcoming potentially life threatening diseases and wind up on a common mission --  to battle against health care policies that deny well-being to others --  you know that value cannot be defined simply as what saves health insurers money. 

Don Wright was diagnosed with multiple myeloma in 2003 just ran his 100th marathon.   He has been taking one pill a day since then to keep the disease in check and now, with the latest addition of another medicine, he is making his centennial run without missing a stride.   When he not running or practicing law, Don provides other people with cancer support and guidance.  

Dani Yevsa was diagnosed with psoriatic arthritis. Denied newer medicines by her insurer, she had to try older drugs first. Unable to move, let alone work, her husband quite his job to care for their four children.   To get the care and medicine they needed to stay alive, went on welfare.   Medicaid where she was forced to fail on three treatments that made her sicker, not better.   
She is finally on medications her doctor prescribed.  

Both Don and Dani took different approaches to the same path.  They are making thousands of patients around America about an insurance funded organization called The Institute for Clinical and Economic Review (ICER).  ICER states it is “a trustworthy, independent source to help assess how valuable a new drug really is.”  And it claims its goal is to make innovative drugs affordable to patients and insurers.  

Except that ICER has decided Don and Dani should only get the older drugs that would have left him disabled or dead.

ICER is deciding for Don, Dani and millions of other patients how much their lives are worth, not the other way around.  And ICER has decided that the benefits new drugs provide healthy people are MORE valuable than life-years gained by those who are chronically ill or disabled. Similarly, Dani and Don are worth less according to ICER’s economic assumptions, because they are less likely to get as much benefit from medicines than people with more treatable conditions.  And finally, ICER assumes that future benefits are less valuable to Dani and Don than to others.   

So it’s no surprise that ICER concludes every new medicine isn’t worth paying for unless they are deeply discounted off retail price and save money by reducing the use of other medical services.  

ICER responds that it’s trying to find prices that patients can afford first and foremost.  But the deeper discounts they recommend don't make medicines affordable or free up cash. In the real world of how PBMs and insurers price drugs, the savings go to PBMs and insurers, not patients. At the same time, insures overcharge customers for prescription drugs by making them pay up to 50 percent of the retail price of the drug.  ICER has issued over a dozen studies and never once wrote or spoke about passing these savings to the patients.  

Additionally, ICER suggests that to save even more money, insurers limit the number of people who have access to these new life extending medicines.  ICER believes that spending more than $900 million a year on a new medicine should set off alarm bells that strong action – capping how many people can get the novel treatments – must be taken.   For psoriasis, ICER concludes that health plans can only cover about 35 percent of the 183000 people diagnosed with psoriasis could be treated with before potential budget impact reaches $904 million.  For multiple myeloma, ICER caps access at 25 percent.

That means they before they can get these new drugs, if ever, they have to take older drugs and get sicker.   That means, over 5 years, ICER would deny 44000 people with myeloma a second and third chance at life and cost 88000 life years. Over the same time period, given the mortality rate associated with older psoriasis drugs, about 52000 life years would be lost.   Dead patients cost nothing. 

Don and Dani and others already pay thousands in premiums and taxes only to be denied new medicines based on the kind of rationalizations ICER produces. They have ICER in their sights because the more its recommendations spread, the more money health plans make at the expense of people they often impoverish when they are most vulnerable. 

ICER defines value as what’s most profitable for PBMs and health plans. It devalues what makes medical progress so important: When you’re seriously sick, it’s hard to plan or hope. Our dreams our diminished and deferred.  We are forced to forsake our full potential. 

ICER claims such benefits can’t be counted because they can’t be quantified.  I think we can easily measure the value of medical progress: Value is what Don has achieved, what Dani has fought for and the path they are forging for everyone who is or may be forced to fight disease

CREATES Act should be created equal

  • 11.15.2016
  • Peter Pitts
From today's edition of the Washington Times:

Taking risks with drug safety

Congress must remedy the Creates Act before passing it

Over 60 percent of Americans want the government to take action to lower prescription drug prices, according to a new Kaiser Family Foundation survey. Congress, for once, is listening to voters.

Lawmakers are pushing forward with the Creating and Restoring Equal Access to Equivalent Samples (Creates) Act. The bill’s sponsors hope a series of new legal provisions will make it easier for drug companies to introduce generic alternatives, thus spurring competition and bringing down prices. The bill is well-intentioned. Unfortunately, it’s also worded extremely poorly. Instead of bringing generics to market sooner, the bill could endanger patients’ lives and encourage costly, needless litigation.

The proposed law would address conflicts between innovator drug companies and their generic competitors. To protect consumers, the Food and Drug Administration requires that new drugs undergo a series of clinical trials to prove their safety and effectiveness before entering the market.

Generic drugs must also complete clinical trials, but only to prove they’re clinically similar to the already-approved brand-name drug. The generic drug creation process inherently requires that manufacturers obtain brand-name drug samples from innovators for comparative testing.

Many drugs are so potent, or have such dangerous side effects, that the FDA requires drug companies to develop and abide by specialized safety protocols called “risk evaluation and mitigation strategies,” when selling or dispensing these medicines.

For example, Soliris, a drug used to treat rare blood disorders, can potentially cause dangerous bacterial infections in the bloodstream. Because of these possibly fatal side effects, the FDA-approved risk evaluation and mitigation strategy requires that only specially certified physicians can prescribe Soliris, and that patients must be given an information card to help them recognize early warning signs of an infection.

Here’s where it gets complicated. Generic drug companies are accusing brand-name manufacturers of dragging out negotiations regarding these risk evaluation and mitigation strategies to avoid handing over drug samples. Without the samples for comparative testing, generic manufacturers can’t enter the market. And without competition, the brand-name manufacturers get to keep selling their medicines at inflated prices, even after the patent has expired.

That’s why some in Congress want to pass the Creates Act. The bill would allow generic drug manufacturers to sue brand-name manufacturers if they fail to hand over their drug samples for testing within 31 days, or if the companies do not reach an agreement on shared risk evaluation and mitigation strategies for risky drugs.

That sounds reasonable. Nobody wants brand-name companies to drag their feet and keep prices higher longer than necessary. But the Creates Act’s language is so imprecise that it could lead to potent medicines falling into the wrong hands, without adequate safeguards for patients.

The bill strips the FDA of its watchdog role. Under the proposed law, generic manufacturers aren’t required to outline testing and safety protocols for the FDA to approve. Even if a generic drug maker’s proposed risk evaluation and mitigation strategies are inadequate, the FDA has no authority to reject or halt the transfer of medicines to the generic company for testing.

The experts at the FDA would have no choice but to approve the transfer within 90 days, even if they think doing so would put patients in danger. The Creates Act would also be a trial lawyer’s dream come true.

Poorly worded liability provisions subject innovators to unfair legal risk. Generic drug companies often obtain brand-name drug samples and ship them off to third-party research firms to perform clinical trials. If the third party is negligent with the samples, patients could get hurt. Under the bill’s terms, patients would be able to sue the brand-name drug company, even though it had no control over the testing or safety protocols.

The bill also lets generic drug companies sue innovators for not handing over samples within 31 days of a request, even if both companies are actively negotiating the terms of the sample distribution and safety protocols.

And though the proposed law requires innovators and generic companies to strike transfer deals on “commercially reasonable market based terms,” the law doesn’t clarify what that means. Such subjective wording is music to trial lawyers’ ears.

Congress deserves praise for trying to bring generic medicines to market faster, thereby relieving consumers from high drug prices. Yet good intentions don’t change the fact that the Creates Act, as constructed, is deeply flawed. Congress could help consumers by reworking the law to ensure it stops isolated bad behavior without gutting safeguards for patients or enabling unscrupulous trial lawyers to file costly, pointless suits.

Peter J. Pitts, a former FDA associate commissioner, is the president and co-founder of the Center for Medicine in the Public Interest.

The PBM Sky Hook

  • 11.08.2016
  • Peter Pitts
From today’s edition of the East Bay Times

Patients threatened by new drug coverage limits

Kareem Abdul-Jabbar’s toughest fight wasn’t on a basketball court.

In his early 60s, the six-time NBA champion was diagnosed with leukemia, the deadly blood cancer. Fortunately, Abdul-Jabbar had access to state-of-the-art medications, including the advanced drug Tasigna, which paralyzed his cancer cells and prevented further growth. Today, eight years after his initial diagnosis, Abdul-Jabbar is thriving and cancer-free.

Unfortunately, many of today’s leukemia patients won’t be so lucky. CVS Health, the nation’s second-largest pharmacy benefit manager that oversees 65 million Americans’ drug plans, recently rescinded coverage for Tasigna –— and 130 other specialty drugs.

As a result, millions of people could be denied access to drugs that could save their lives. Instead of prescribing the medicines best-suited to patient needs, physicians will be forced to recommend lower-quality treatments.

Pharmacy benefit managers, or “PBMs” for short, administer the prescription drug plans used by health insurers and employers. In recent years, these organizations have gotten stingy about which drugs they cover.

Back in 2012, the nation’s largest PBM, Express Scripts, excluded no medicines from its list of covered drugs, while CVS Health left off about 30. Today, they exclude more than 200, including an array of popular treatments for arthritis, Hepatitis C, and various skin conditions.

PBMs have also stopped paying for cutting-edge cancer treatments. In addition to Tasigna, CVS won’t cover the revolutionary prostate cancer treatment Xtandi. Meanwhile, Express Scripts just stopped covering Zyclara, a cream that can help prevent skin cancer.

PBMs are restricting drug access in other, more devious ways as well.

CVS is also steering patients away from ultra-complex “biologic” drugs, forcing them to switch to lower-cost treatments the company claims are medically equivalent. But in many cases these less expensive therapies, known as “biosimilars,” aren’t approved by the FDA to be interchangeable with their brand name alternatives.

Consider one study that compared the effectiveness of a Crohn’s disease treatment and its biosimilar. An alarming eight in 10 patients who took the biosimilar required a hospital readmission for additional treatment, compared to only one in 20 who took the original drug.

Despite these disturbing results, PBMs are comfortable forcing patients to use biosimilars and generic medications. That’s because their only concern is bringing down short-term drug spending — even if those savings come at a cost to patients’ well-being.

Ironically, this strategy will end up raising health care costs in the long-run. If doctors can only prescribe less-effective treatments, folks will get sicker, be hospitalized more frequently, and require more expensive care. That demand will drive up overall healthcare costs and overwhelm doctors and hospitals with waves of new patients.

That doesn’t matter to PBMs, though. A dollar saved by avoiding top-notch drugs is a dollar that goes into PBMs’ pockets — even if the patient becomes sicker on less effective treatments and racks up much larger hospital bills for insurers and patients to pay down the road.

PBMs coverage denials are a deadly prescription for America’s patients. By shrinking coverage for cutting-edge treatments, PBMs are forcing sick people to use substandard drugs. It’s about time patients mount a full-court press against this callous behavior.

Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.

Alta Vista

  • 11.04.2016
  • Peter Pitts
As they say, everything you read in the newspaper is true -- except for those things you know about personally.

According to the latest report from the Altarum Institute, “moderate 2016 health spending growth continues a slow downward trend.” Unfortunately this doesn’t fit the narrative of those who want to talk about runaway trains – especially for pharmaceuticals.

Here are the numbers: Hospital spending represents 32% of American healthcare spending, 20% goes to physician and clinical services, 15% goes to “other health spending,” and 10% is for prescription drugs.

If the media had covered this story -- which they have not -- the headline would have been, "Pharmaceuticals represent 10% of American healthcare spending. A dime on the dollar. A smaller percentage than almost every nation in Europe."

And here’s the subhead – Spending on pharmaceuticals is growing at a slower rate (under 4%) than either hospital (just under 5%) or physician costs (just over 5%). This breakdown is based on the Bureau of Economic Analysis monthly spending data, including its most recent update released on August 29th of this year.

While pharmaceutical spending seems to be the only issue of interest to the media and politicians, the Altarum account isn’t the one they’re telling. Almost every story and every speech on the drug sector focuses on price without the context of value, using a few bad actors to represent the entire industry. Unfair? Sure -- but life is unfair. There is, however, no excuse for slanted stories and untrue, accusatory political oration.

Disease is the enemy. Practicing physicians know this, but their professional association – the American Medical Association – seems in need of some education. The AMA’s new program, “,” is entirely silent on the actual metrics of healthcare spending and the value of pharmaceutical innovation. Ignorance is not bliss.

Healthcare innovation saves lives, saves money, promotes economic growth, and provides hope for hundreds of millions of people (both patients and care-givers) in the United States and around the world. It deserves respect – or at least honest reportage.

Does this sound naïve? Perhaps, but as Schopenhauer said, “All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.”

The complete Altarum report can be found here.
A recent article in MedPage - Insurers to CMS, Congress: For Lower Rx Costs, Hand Us the Reins – needs a bit of translation to help people under stand what handing insurers the rein over what drugs and how much to spend really means.   For instance, the headline should actually read "Insurers to CMS, Congress: We Want More Rx Rebates So Give Us Total Control Over Medicare Drug Benefit" 

According to Medpage: “Congress and the administration can help rein in rising drug costs through a few key regulatory and legal fixes, said insurers and pharmacists at AHIP's National Conference on Medicare, Medicaid and Duals on Tuesday.”

"I think plans need to be given a little bit more leeway to truly assess the value of drugs to make a decision: does this drug at the cost really provide any additional value?" said Sarah Marche, PharmD, vice president of pharmacy services at Highmark, a Blue Cross affiliate in Pennsylvania.

Translation:  We already limit access to life saving medicines for the most chronically and seriously ill seniors based on our current value assessment.   But we want even more control over what patients get.   And by ‘additional value’ we mean increasing the 35-40 percent price discounts we get and what consumers are charged.  We want more. 

Marche noted that not every drug Medicare covers adds value.
"Glumetza [a branded version of metformin] provides no value above and beyond what's available, and if you look at a lot of the commercial formularies, it's blocked," she said. "Nobody's dying. Nobody has any huge issues with that, but we don't have that same flexibility within the Medicare space. So, you're covering a drug that really provides no additional value, just increasing the cost."

Translation:  After Valeant got hammered for hiking Glumetza by more than 800% in 2015, the list price of  stood at $10,020 for 90 tablets, up from $896 in January 2013,.  For the longest time, insurers didn’t complain  .  Half of Glumetza’s price is  given back in discounts, rebates, chargebacks, and the like to wholesalers, managed care organizations, pharmacy benefit managers, federal and state healthcare programs, and others. 

 Under pressure to reduce prices, Valeant gave Walgreens’s an exclusive deal to sell Glumetza as generic prices.  So Express Scripts, the company running our drug benefit decided it could turned around an blocked Glumetza and cutting a deal with a company making a generic version of the drug to make up for the lost rebate revenue.  So we would have covered it if had provided additional profit… I mean value to us regardless of cost.  It really depends on the rebates Express Scripts can share with us.  

Another panelist, Mark Owen, MBA, president of government programs for the the Blue Cross-affiliated Health Care Service Corp., power “to limit beneficiary access to specialty pharmacies.” 

While Owen noted that critics of the idea have said such a change could pose access challenges, he argued that allowing plans to direct beneficiaries towards only certain pharmacies could lower costs and increase adherence.

Translation:   Limiting access allows us to pocket more money because it  ensures  patients have no choice but to take the drugs that we give them.  That way we make the biggest profit margin whether they like it or not.  And we know that charging patients about 40 percent of the retail price of products is a good way to force them to use drugs what give us the biggest margin.   We will work really hard to increase adherence, but only with drugs that fatten our bottom line regardless of whether the drug works for that patient or not.


Abusing the Privilege?

  • 11.02.2016
  • Peter Pitts
From Medpage Today ...

FDA, Industry Focus on Abuse-Deterrent Opioids

No consensus immediately apparent after 2-day meeting

FDA officials and representatives from both the generic and branded drug industries spent two days hashing out next steps for development of abuse-deterrent opioids.

The two topics on the table: reviewing a draft guidance for the development of generic versions of abuse-deterrent opioids, and developing standard in vitro testing methods to characterize a drug's abuse-deterrent properties.

The meeting was in line with FDA's strategic plan for mitigating the opioid epidemic, which it released in February 2016, said Douglas Throckmorton, MD, deputy director of regulatory programs at the FDA's Center for Drug Evaluation and Research. That includes incentivizing the development of "progressively better" abuse-deterrent opioids and supporting a transition to these products, he said.

Throckmorton acknowledged the tension between generic and branded developers, but advocated working together to come up with a solution that benefits all parties.

"If you all came up with a single approach that suits the best product development, we would be delighted and take it very seriously," Throckmorton said. "It would move the field a great deal. It would require careful collaboration, but it's been successful in other fields, like drug-eluting stents, which had a similar challenge but the industry pulled together and made suggestions we all make use of."

FDA released its draft guidance for evaluating generic abuse-deterrent formulations last March, with the goal of ensuring that a generic is no less abuse-deterrent than the brand-name opioid. No generic abuse-deterrent opioids are currently approved.

In general, an ANDA applicant isn't required to provide independent evidence of the safety and effectiveness of the generic drug; instead it relies on the FDA finding that the previously approved product is safe and effective and must demonstrate that the generic is "bioequivalent" to the reference drug, primarily on the basis of pharmacokinetic studies.

Robert Lionberger, PhD, director of the office of research and standards in the FDA CDER's office of generic drugs, noted that the ANDA for any generic abuse-deterrent opioid would cover all routes of abuse: oral, nasal, injected, and smoked. It would also evaluate the drug in comparative in vitro studies and, in some cases, in relevant pharmacokinetic or other studies to show it is no less abuse-deterrent.

But some industry voices -- particularly from the branded industry -- said these assessments did not go far enough.

"I am concerned that this draft guidance is not sufficient to ensure that generic versions will be no less abusable than the reference drugs," said Alexander Kraus, PhD, of Grunenthal USA in Morristown, N.J. "It does not do enough to ensure that the generic meets therapeutic equivalence. It can't be based solely on in vitro testing. I encourage the FDA to require not only Category I in vitro tests, but Category II pharmacokinetic and Category III human reference studies as well."

Those Category I in vitro tests for abuse-deterrent opioids have their own issues to be worked out, which was why they were also a focus of the meeting.

Xiaoming Xu, PhD, a senior staff fellow at the FDA's division of product quality, said in vitro testing for abuse-deterrent opioids has not been standardized, making both comparisons with other drugs and overall assessments challenging.

Ideally, that testing should assess each potential route of abuse -- oral, injectable, nasal, and smoking -- starting with simple and gentle mechanical and chemical manipulations, progressing to complex and more destructive manipulations. It should also address mechanisms by which abusers can be expected to attempt to overcome abuse-deterrent properties as well as the ways that patients may alter the formulation to change the amount of of drug that gets released, Xu said.

The challenge is that the design of these experiments is complex: any single product can have more than a dozen possible methods to achieve a desired manipulation; scores of different solvents; different reactions to various temperature conditions; different volumes released, and so on. Indeed, the number of experiments can run into the thousands, Xu added.

The problem garnered unique observations about the automobile industry and coffee grinders. Richard Lostritto, PhD, acting associate director in the office of policy for pharmaceutical quality at FDA's CDER, noted that the auto industry standardized the type of hammer it would use in safety tests; Karsten Lindhardt, PhD, of Egalet Corporation, noted that he's had to buy several different types of coffee grinders to do proper in vitro testing.
"You end up with each material behaving differently," he said. "One grinder may be optimal for one drug but not for another."

Throckmorton acknowledged the tension between developing standardized versus individual tests for these types of analyses: "We've seen that even small changes in some formulations can have a large effect on product performance."

Although it was not a point of the meeting, critics at past FDA advisory committee meetings for abuse-deterrent opioids have called for epidemiologic data on whether or not these formulations can actually reduce abuse and the more serious consequences of addiction, overdose, and death.

Also, the meeting did not address patent issues, which generally fall outside FDA's jurisdiction. Although the major opioid drug compounds are now off-patent, it may be many years before patents expire on the specific abuse-deterrence technologies now in use.
The November issue of Lancet Oncology focuses on pharmacovigilance and drug safety. The lead editorial drives home some key points:

At a time when the number of biological agents due to come off patent is increasing, and in the face of a market fuelled by escalating drug prices and pressure from pharmaceutical companies and patient groups alike for expedited drug approval, issues surrounding the safety and efficacy of agents such as biosimilars and generics are paramount.

Substantial variation exists between high-income and low-to-middle-income countries with regards to manufacturing and supply chain regulation of generic drugs, despite countries such as India providing a large market share of generic drugs worldwide. Moreover, bioequivalence—a key consideration when comparing generic formulations with their trademarked counterparts—can vary substantially, making appropriate regulation particularly important. Issues of safety and regulation are further compounded when approving biosimilars: despite nearly 10 years’ of experience in dealing with biosimilar agents, regulators still need to streamline and expedite approval processes, and improve ways of reducing cost. Thus, taken together, the importance of pharmacovigilance has never been greater.

Given that multiple health-care systems encourage or enforce generic and biosimilar prescribing, sometimes without physician knowledge or consent, coupled with further potential complications created by generic or biosimilar switching during a course of treatment, pharmacovigilance needs to evolve beyond merely the uncovering, monitoring, and reporting of adverse events, to continual pre-marketing and post-marketing surveillance.
Although a focus on regulatory and policy issues is key to monitoring safety and     efficacy, especially for newer agents, there are other ways in which drug safety can be improved.

The November issue also includes my new paper, 21st century pharmacovigilance: efforts, roles, and responsibilities.

Here’s the abstract:

In an era when the number of expedited and conditional review pathways for newly available brand-name drugs and biosimilar medicines to treat serious and life-threatening diseases is increasing, defining pharmacovigilance has never been more crucial. 21st century pharmacovigilance is not merely about uncovering, reporting, and addressing adverse events associated with already approved and marketed agents, but can be described as the systematic monitoring of the process of pre-market review and post-market surveillance, which includes the use of medicines in everyday practice. Pharmacovigilance identifies previously unrecognised adverse events or changes in the patterns of these effects, the quality and adequacy of drug supply, and should ensure effective communication with the public, health-care professionals, and patients about the optimum safety and effective use of medicines. In this paper, the first in a Series of three about drug safety in oncology, we discuss evolving challenges in the purview, roles, and responsibilities of the US Food and Drug Administration and the European Medicines Agency with respect to pharmacovigilance efforts, with a special emphasis on oncology treatment.

If you’d like a copy of this article, please contact me at

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.

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