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The AP’s “exclusive“ report on Medicare drug spending excluded many facts that challenge the news outlet’s conclusion that “the rapid rise in spending for pricey drugs threatens to make the popular prescription benefit financially unsustainable.”

By exclusive, AP means selective, since it focused only on 2014-2015 drug spending -- which increased by 15 percent -- and over looked historical and projected changes in drug costs.  

Here's some information AP excluded:

Part D spending grew by 15 percent in 2015 and is expected to grow annually, on average, by 10.9 percent between 2015 and 2020.  And from 2010-2013 gross drug spending (not including rebates and other expenses) grew 10.1 percent.

A 2013 CBO analysis found that Part D drug costs between 2007-2010 “increased by just 1.8 percent per year per beneficiary, growing more slowly than total per capita drug costs.”  From 2010-2013 per capita costs increased by 1.6 percent. 

Specialty drugs accounted for only 6.7 percent of total drug spending per beneficiary in 2007 and 9.1 percent in 2011.   I estimate that

And AP also failed to note just how much “pricey” new drugs were as a percent of total Medicare spending.   In case you’re interested spending on brand drugs for 2015 was $52 billion, around 8 percent of total Medicare spending.  Which is about what it is projected to be for the next 20 years. 

Further, the AP misreports the impact of rebates.  It looks at rebates across the entire program, which includes spending on generic drugs.  AP states: “Rebates for individual drugs…averaged nearly 13 percent across the entire program in 2013, according to government figures, and were estimated at about 17 percent for 2015.”

And AP could have also found that both rebates and administrative costs are increasing faster than part D per capita cost trend.  

Profits plus administrative costs per beneficiary were higher relative to drug costs in 2010 and in 2015 than in 2007.  Which means not all of the slow growth in drug spending was passed back through plan bids

The slow growth in drug spending coincided with a huge increase in the number of Medicare consumers paying thousands out of pocket for drugs deeply discounted under part D.   An Avalere report found:

“The average percentage of covered drugs facing coinsurance has risen sharply from 35 percent in 2014 to 58 percent in 2016 among PDPs. While most PDPs have historically applied coinsurance to high-cost drugs on the specialty tier, plans have extended coinsurance to drugs on lower tiers in recent years, including those covered on preferred and non-preferred brand tiers. “

This is important because increased cost sharing reduces the use of medicines and the use of medicines reduces other spending.  The Congressional Budget Office notes that a 1 percent increase in the number of prescriptions filled by beneficiaries would cause Medicare’s spending on medical services to fall by roughly one-fifth of 1 percent for all patients.  However, the impact on the use of new medicines in reducing other treatment related costs in patients with a diagnosis of a chronic disease without access to a new drug is more significant:

In fact, “improved medication adherence associated with expansion of drug coverage under Part D led to nearly $2.6 billion in reductions in medical expenditures annually among beneficiaries diagnosed with CHF and without prior comprehensive drug coverage, of which over $2.3 billion was savings to Medicare.

Other studies came to the same conclusions: "Implementation of the Medicare prescription drug plan in 2006 was followed by significant decreases in spending on nondrug medical expenditures among beneficiaries who previously had limited drug coverage. After Medicare Part D started, nondrug medical spending in this group was about $1,200 per year less than expected. The savings were driven principally by seniors making less use of hospitals and skilled nursing facilities."

Another study found that part D spending reduced hospitalizations generally by 4.1 percent.  

Among beneficiaries with limited or no prior drug coverage Part D reduced the number of overnight hospital stays by about 12%, and among beneficiaries with generous prior drug coverage Part D reduced the number of hospital nights by about 21%.

By contrast, the increase in cost sharing – even as rebates and PBM profits increase and net drug prices rise below the rate of inflation – makes people sicker and increases health spending. 

Beneficiaries with higher OOP costs for the more expensive oral cancer drugs were more likely to discontinue or delay drug therapy.

More generally, a survey of all articles that” evaluated the relationship between changes in cost sharing and adherence found that 85% showed that an increasing patient share of medication costs was significantly associated with a decrease in adherence. For articles that investigated the relationship between adherence and outcomes, the majority noted that increased adherence was associated with a statistically significant improvement in outcomes.”

Hence, AP’s exclusive access to Medicare part D data was used to confirm a pre-established claim that new drugs will make the benefit unsustainable.  In AP’s world, at least when it comes to drug prices, exclusive means being selective in what information is published to affirm a previously established prejudice.


Per the FDA’s PDUFA VI "commitment letter," the agency will face some real world deadlines to advance the use of real world evidence. But, since we’re dealing with the real world, let’s get real – guidance is unlikely until the end of 2022 at the earliest. (That's the timeline agreed to via the PDUFA VI negotiations.)

Step One towards these new 21st century rules of the regulatory road will be a series of public meetings and regulatory workshops. It will be curious to see who shows up at the table.

PDUFA VI User fees will support agency policy development in the area, and FDA has pledged to meet the following benchmarks:

* End of FY 2018 – Convene one or more public workshops with key stakeholders, including patients, biopharmaceutical companies, and academia, to gather input into issues related to real world evidence (RWE) use in regulatory decision-making.

* End of FY 2019 – Initiate (or fund by contract) appropriate activities (e.g., pilot studies or methodology development projects) aimed at addressing key outstanding concerns and considerations in the use of RWE for regulatory decision-making.

* End of FY 2021 – Publish draft guidance on how RWE can contribute to the assessment of safety and effectiveness in regulatory submissions, for example in the approval of new supplemental indications and for the fulfillment of post-marketing commitments and requirements. FDA will work toward the goal of publishing a revised draft or final guidance within 18 months after the close of the public comment period.

Ground Zero for a real-world evidence regulatory pathway will be Sentinel, the existing public/private program aimed that uses a variety of databases to track, collect and analyze adverse event reports about drugs, vaccines and medical devices.

Modeled after successful programs such as the Centers for Disease Control and Prevention’s Vaccine Safety Datalink, Sentinel allows FDA to conduct safety surveillance by actively querying diverse data sources, primarily administrative and insurance claims databases but also data from electronic health record (EHR) systems, to evaluate possible medical product safety issues quickly and securely.

Sentinel, mandated under the Food and Drug Administration Amendments Act (FDAAA), will get a $50m boost over five years under PDUFA VI. Sentinel currently has information on over 100 million patients.

Similarly, efforts are underway to establish a National Device Evaluation System (NDES). As currently envisioned, the NDES would be established through strategic alliances and shared governance. The system would build upon and leverage information from electronic real-world data sources, such as data gathered through routine clinical practice in device registries, claims data, and EHRs, with linkages activated among specific data sources as appropriate to address specific questions.

As FDA Commissioner Rob Califf and Deputy Commissioner Rachel Sherman recently commented:

Creating knowledge requires the application of proven analytical methods and techniques to biomedical data in order to produce reliable conclusions … There must be a common approach to how data is presented, reported and analyzed and strict methods for ensuring patient privacy and data security…  Rules of engagement must be transparent and developed through a process that builds consensus across the relevant ecosystem and its stakeholders … To ensure support across a diverse ecosystem that often includes competing priorities and incentives, the system’s output must be intended for the public good and be readily accessible to all stakeholders. 

When it comes to the regulatory science of real world evidence, we are still in early days, but the times they are a changin.’ (And you better start swimmin' or you'll sink like a stone.)

ICER Hires More Human Shields For Rationing

  • 07.22.2016
  • Robert Goldberg
As I have previously discussed,  ICER's initiative to revisit the representatitiveness and scientific validity of his QALY based assessments of drug prices and access is really a crude political makeover.  The recent appointment of so-called patient and consumer advocates to his board is example of ICER advertising itself as becoming more open and patient centered when the truth is much different:

"The Institute for Clinical and Economic Review (ICER) has announced the appointment of two new members to its Governance Board. Ellen Andrews, PhD and Frances Visco, JD both join the Governance Board with extensive experience in patient and consumer advocacy....
“These two leaders bring to ICER’s Governance Board tremendous skills honed through years of experience fighting for access to high-quality health care and for the evidence that patients need to participate fully in their health care decisions,” noted ICER’s President Steven D. Pearson, MD, MSc. “This is part of our long-standing plan to augment this perspective among the members of our Governance and Advisory Boards as ICER grows. I know that Ellen and Fran are superbly prepared to join with other Board members in assuring that ICER’s strategic direction and all our efforts are informed by the patient voice.”

They are superbly prepared if by preparation one means that they share Pearson's twisted use of QALYs and budget caps to set drug prices and limit access.

Dr. Andrews was already an advisor to ICER and has written in defense of it's current approach.  She has also spouted the party line that insurance companies don't get to vote on ICER decisions (they just fund the organization).   

She has also written favorably about Canadian drug price controls and was part of a working group tasked with finding ways states and provinces could could control drug prices.  

Fran Visco is also a supporter of using longer, larger clinical trials to slow down access to new medicines.  

She is opposed to expanding compassionate use pathways, claiming: The problem is that the expectations for these drugs are unreasonably high. The public has this unrealistic faith in what these new drugs are going to do."

Here's what she said about accelerated approval: "The F.D.A. should learn a lesson and re-evaluate the accelerated approval process itself. The goal is to save lives, not rush to get drugs to the public."   She also believes that "public policy should discourage access to investigational drugs
outside of clinical trials. "  So much for access.

Visco also support the reimportation of drugs into the US from overseas.  She claims that drug importation can be "adequately regulated and can provide immediate cost savings for consumers."  As long as you don't mind counterfeit cancer drugs such as fake Avastin. 

I have no problem with Pearson packing his boards and committees with true believers or getting financial support from insurers.  But don't claim ICER is an objective and trusted organization that uses independent assessments to " evaluate the value of costly, new interventions – whether they are worth what they charge."   When you rely upon the QALY and budget caps to set prices across all disease areas, it leads to price controls and rationing.    Andrews and Visco believe in both, as does Pearson.   Again, ICER can meet and talk all it wants.  But it is not patient-centered and it is not trusted or independent.   Andrews and Visco are just another couple of human shields to protect Pearson  while he runs his anti-patient enterprise

This latest move is another example of why we should let ICER melt away and develop a method of measuring value that reflects the needs and preferences of of patients, their families and communities. 


Roy Misses the Value Proposition

  • 07.20.2016
  • Peter Pitts
During a Presidential election cycle, facts are often the first casualty.

Avik Roy argues that the GOP needs a “clear plan to tackle the high and rising price of branded prescription drugs.” He calls it a Republican “blind spot.” And he’s right – but for the wrong reasons (“The GOP Needs to Tackle the High Price of Prescription Drugs").

According to Roy, “Even 66% of Republican voters said high drug prices should be a top policy priority, compared to 60% who said the same of repealing Obamacare.” What he doesn’t share (or more likely doesn’t know) is that for most Americans, “the price of drugs” means the co-pay they hand over at the pharmacy when they pick up their prescriptions. That’s not a drug-pricing problem; it’s an insurance industry problem. It’s so easy to blame Big Pharma. That’s the real blind spot.

Mr. Roy quotes from a recent Kaiser Family Foundation poll which says 72% of their sample find “drug prices” generally unreasonable. But he doesn’t share that the same exact percentage (72%) said they find their drugs affordable. If Mr. Roy is reporting one he should report the other. It’s an issue of probability versus reality.

Mr. Roy discusses consumer purchasing of iPhones and compares it to healthcare. His assumption that consumers can make choices through transparent pricing is false since, in healthcare, there are pesky things called therapeutic outcomes. Even if consumers have pricing information its not good enough to make an appropriate “purchasing decision” since they don't necessarily have or understand the information which drives positive outcomes. This is despite pharmaceuticals being the only segment of healthcare (compared to physician and hospital services ) where pricing and outcomes are the most transparent.

Also, Mr. Roy fails to mention that pharmaceuticals are the only segment of healthcare where the costs plummet after a period of time (brand vs. generics). Today’s expensive medicines are tomorrow's very inexpensive generics. Today’s hospitalizations, alas, are tomorrow's even more expensive hospitalizations. Modern medicines continue to provide value in perpetuity - what value does a site of care, like a hospital or an insurer or PBM provide?

Mr. Roy fails to mention that hospitals actually manipulate and increase drug costs by buying up physician practices and shifting site of care. According to Sloane Kettering data, a medicine administered in a hospital setting is 150% more costly that one administered in physician offices.  Hospitals make more money by shifting site of care while vilifying drug companies! They also artificially pad their bottom lines by taking advantage of the 340B program - but he fails to mention that as well.

Of course, drug pricing is a complicated matter -- which is why the pharmaceutical industry should focus on a few basic points when making its case.
Roy argues there’s no relevant connection between the pharmaceutical industry’s investments in R&D and pricing. That’s intuitively and factually wrong.

Since 2000, drugs firms have spent over half a trillion dollars developing new medicines. And research costs for the last year alone totaled more than $51 billion. That’s up from $15.2 billion in 1995.

These are extraordinary spending levels, even compared to other research-intensive industries. In fact, the pharmaceutical sector spends five times more on R&D than aerospace, and 2 ½ times more than the software and computer industry. This is the kind of investment that pharmaceutical innovation demands, and it’s reflected in the economics of advanced drugs.

Big Pharma also needs to do a better job explaining just how many failures firms endure searching for the next breakthrough medicine. Drug companies must develop hundreds of compounds until they find one suitable for testing on humans. Of those rare compounds that make it to phase-1 human trials, fewer than 12 percent win approval from the FDA.

That’s why bringing just one drug to market costs an average of nearly $2.6 billion and takes more than 10 years, according to researchers at Tufts.
If drug companies were open and honest about their frequent and expensive failures, they could quash the myth that pharmaceutical research is obscenely lucrative.

Consider the controversy surrounding the hepatitis C drug Sovaldi. When the medicine came on the market, it quickly became known in the press as “the $1,000 pill.” This may be a great sound bite, but it’s hardly accurate.

In reality, insurers and benefit managers negotiated discounts that reduced the price of Sovaldi by 20 to 50 percent. But they didn’t pass the full discount on to the consumer. Instead, insurers and pharmacy benefit managers pocketed the money to pad their bottom lines and executives’ wallets. Last year, CVS Caremark Corporation, one of the biggest benefit managers, paid its CEO over $32 million.

For many patients, particularly those without insurance coverage, Sovaldi’s manufacturer supplied a coupon ensuring that co-pays for the drug wouldn’t exceed $5.

But Mr. Roy’s key error is focusing on price as the denominator of the conversation. That’s wrong too, in fact it the fundamental error that allows people like Hillary Clinton and Donald Trump to blame for the biopharmaceutical industry for rising health care costs. The true denominator is value.

Consider one pre-Sovaldi “best practice” treatment for Hepatitis C, the drug Pegasys. This requires one injection a week for 48 weeks — and very few patients see the treatment through to completion, so much of that treatment, both physician time and drug cost, is wasted. Nor is it that much cheaper: At about $7,000/month, the full course of treatment is over $70,000 — barely less than cost of the three months needed for Sovaldi to work a cure.
And the price of not using Sovaldi is very high. One in three patients with the Hepatitis C virus eventually develops liver cirrhosis, and managing these patients is costly. A “routine” liver transplant (where the liver is from a cadaver) costs close to $300,000; a “living donor” transplant is even more expensive.

Thanks to Sovaldi, a pill that cures the disease when taken once a day over 12 weeks will eradicate the need, the risks and the costs of liver transplantation. Such radical innovation deserves to be both lauded and rewarded.

But it’s so much easier to place blame than say thank you. When it comes to pharmaceuticals, we have to learn to understand the value proposition. It’s not just the price of the product –it’s the price relative to the value the product provides to individuals and society.

In short, drugs aren’t the cause of rising health-care costs — they’re the solution. Demonizing new treatments distracts from the real problem in the US biopharmaceutical industry: top-down cost-centric policies that focus on the near-term, short-changing long-term patient outcomes, and so endanger “sustainable innovation” by denying fair reimbursement for high-risk investment in R&D.

But it’s so much easier to just place blame. Easy and wrong.  Avik Roy should know better.

Avik Roy wants congressional Republicans to enact free market policies to reduce drug prices.    So do I. Unfortunately, Roy begins with a misleading case against drug companies and ends up endorsing Bernie Sanders proposals to regulate the industry. 

Let’s start with his statement that spending on medications is closer to 20 percent of health spending instead of 10 percent.  So what?  I wish it were 100 percent, as with polio, measles, hepatitis B, etc. Spending more on drugs means less spending on other costlier services. 
If we were treating heart disease and cancer with the services available even 20 years ago, we’d be spending a lot less on drugs but spending twice the amount we are now with less effective treatments.   

Instead of recognizing that most of the increase in drug spending is due to more use and longer life, he claims it’s all due to drug companies charging whatever they want. He dismisses the claim that price increases in part reflect the rising cost of drug development:

“But it doesn’t follow that high R&D costs should lead to infinite pricing power. For example, Gilead didn’t discover its blockbuster hepatitis drug, Sovaldi. Instead, Gilead purchased the company that did—Pharmasset—for $11 billion, after key clinical trials had been completed, and then proceeded to charge unprecedented sums to insurers and patients in order to recoup their acquisition costs.  An even better example is Avonex, a multiple sclerosis drug from Biogen that was launched in 1996 for less than $10,000 per patient per year. In 2015, Biogen was charging $60,000 for exactly the same drug, even though numerous, more effective medicines had been launched in the intervening two decades.”

“If Apple today charged $10,000 for a 20-year-old computer, or Samsung $6,000 for a 20-year-old TV, citing the “high cost of innovation,” they’d be laughed out of Best Buy. And not because their costs of innovation aren’t high—but because it’s understood that consumers, in a free market, have no need to accept unaffordable prices.”


“One thing you hear from defenders of the status quo is that drug companies need to charge high prices in order to continue to produce innovation. Well that’s not true in the rest of the economy. Google and Facebook charge nothing for the core products—search engines and social networks—and yet they are two of the most innovative companies in the world.”

These are truly ignorant assertions.  First, it’s not just the cost of innovation, it is the cost of innovation given the risk of regulatory uncertainty and clinical results.   I daresay that if it took Apple an average of 10 years to bring a new product to market knowing that only 1 out of 10 they invested in would make it to consumers, it wouldn’t have to worry about being laughed out of Best Buy:  Apple would still be selling Newton's and first generation Macs.    Imaging if fracking companies had to conduct randomized clinical trials each and every time the were going to drill.   

Second, as Derek Lowe points out, comparing the development of apps and social media to drug development ignores the fact that engineering and pharmaceutical R&D require  fundamentally different processes. Upgrading the core technology of a computer is a hell of a lot easier than developing an anti-body and modifying it to adapt to rapidly mutating cancer cells..

As Derek Lowe has pointed out “medical research is different than semiconductor research. It’s harder. Ever seen one of those huge blow-ups of a chip’s architecture? It’s awe-inspiring, the amount of detail that’s crammed into such a small space. And guess what – it’s nothing, it’s the instructions on the back of a shampoo bottle compared to the complexity of a living system.”

Even more troubling is Roy’s claim that “prices for drugs that do not reflect what their value would be in a truly free market.”   That is quite an assertion and suggests that Roy can tell us what that value would be or how that would be communicated through pricing information. 

My guess is, based on his article, he has no clue.   Take his claim that drug companies engage in  “infinite’ pricing.  He points out that the retail price of the multiple sclerosis (MS) drug Avonex increased from 1996 to 2015 by 500 percent.  True, but over the same period of time Avonex revenues and global market share actually fell by 100 percent as newer drugs were introduced.   Meanwhile, the aggregate cost of MS hospitalization increased 372 percent even as the number of hospitalizations remained essentially flat.  Which of these two trends reflect a truly free market?   The one where competition eats away at revenues or the one where you increase revenues by providing a service that is increasingly obsolete? 

Roy calls the price of drugs like Sovadli, that cure hepatitis C Sovaldi’s price unprecedented because Gilead bought the company that developed the drug instead of creating it, itself.   Apparently, free market principles have two separate rules about pricing: one if you acquire a company and another if you spend the same money to make a product.  That is sort of like President Obama telling entrepreneurs “you didn’t build that.”

In any event, Roy fails to consider that the price of drugs does reflect their value relative to current treatments.  With regard to Sovaldi:

“Although the cost of antiviral treatment increased with the availability of new therapies, the cost per survival (SVR) has decreased. As shown in Figure 2, the cost of treating HCV genotype 1 with peginterferon-ribavirin, first-generation protease inhibitors, and sofosbuvir-ledipasvir (at wholesale acquisition cost) increased from $43,000 to $103,000 per patient. However, the corresponding costs per SVR decreased from $213,000 to $108,000. After applying the recent discounts (46%), the cost of treatment decreased to $56,000, which is less expensive than boceprevir- and telaprevir-based therapies, and the cost per SVR decreased to $58,000.” Moreover, in addition to reducing what it costs to save a life, drugs like Sovaldi will eliminate the risk of premature death for people with HCV. 

To create a free market Roy suggests “ending federal and state prohibitions on the ability of private insurers to jointly negotiate drug reimbursement rates. And they can eliminate regulations, like those in Obamacare, that force insurers to pay for expensive branded drugs even when more cost-effective alternatives are available.”

In essence, Roy wants to create a government led cartel to control drug prices.  Indeed, his proposals come straight out of the Bernie Sanders campaign.  Three large pharmacy benefit companies (Express Scripts, CVS Caremark and OptumRx ) control about 80 percent of all prescriptions in both private and public health plans.   Consolidating this control through a government cartel would reduce drug prices, but not for patients.  

That’s because, in the price regulated world of pharmaceuticals, rebates reduce what pharmacy benefit management companies, insurers and hospitals pay for medicines.  Patients wind up overpaying and find their choice of medicines restricted.  

All told, about 30 percent of the cost of medicines – about $135 billion – goes directly into the pockets of other health care business. 

Hence, even as drug prices decreased, the rebate-loaded prices – the one’s consumers are stuck with – surged.    Net drug prices (paid to PBMs and insurers) declined 200 percent between 2011 and 2015.   The rebate-loaded price increase by 33 percent over the same time period 

Data source: Medicines Use and Spending in the U.S. – A Review of 2015 and Outlook to 2020

And as the chart above shows over time rebates as a share of price increases has soared from 6.5% in 2011 to 77% in 2015. 

And very little if any of that rebate went to patients.  Rather, as a recent lawsuit against Express Scripts and Anthem reveals, Anthem used an additional $5 billion in rebates generated by raising retail prices to fund stock buybacks in 2009 and 2010 “during the low watermark” of Anthem’s stock price, which ultimately enriched Anthem’s stockholders and management. Anthem could have passed this money on to plan participants in the form of reduced drug pricing, but chose not to do so. “

In fact, the percent of patients facing cost sharing of up to 40 percent of a retail price has soared even as rebate revenue increased.  And the number of drugs with the highest cost sharing amount also generate the most rebates.   Roy calls PBMs collecting rebates market competition.  I think it’s government sanctioned extortion. 

Further, Roy’s assertion that Obamacare forces insurers to pay for expensive brand drugs is wrong.  Just the opposite has taken place: PBMs and insurers are using cost sharing and rationing to discourage using new medicines.

Insurers – with help from the PBMs that design drug formularies are increasing the use of step therapy, prior authorization, cost sharing to limit access.  As the chart below shows, the private companies Roy trusts to create a free market are increasing what consumers pay for a growing number of important drugs:

In 2016, that trend continues: A just published Avalere report finds that nearly 35% of Obamacare health plans use prior authorization and step-therapy for single-source drugs, a 5% increase in utilization management from 2015. From 2015 to 2016, Obamcare plans increased utilization management of hepatitis and mental health medications by more than 15% and oncology and immune medications by more than 10%.

The high cost of drugs is the result of such practices.  Republicans could provide immediate relief to consumers by capping cost sharing and allowing drug companies to provide rebates directly to people to use them to reduce the upfront cost of new medicines.   Instead, Roy would double down on policies that encourage overcharging and rationing by giving government and the three biggest pharmacy benefit companies even more power over the price of and access to new medicines.   

Does he really think that a government created cartel would make medicines affordable instead of enriching the syndicate members?  How does that create a freer affordable market?  His whole approach -- uninformed and pseudo populist – suggests Roy is motivated by political opportunity to join the anti-pharma bandwagon than in truly free markets. 


Much Congressional ado about ADOs

  • 07.14.2016
  • Peter Pitts
Potent report language on Abuse Deterrent Opioids (ADOs) from the House Labor HHS Appropriations Subcommittee Report for Fiscal 2017.

Specifically, "The Committee directs HHS to submit a report to the Committee on Appropriations regarding beneficiary access to ADOs and actions that Congress and the Administration can take to reduce barriers.

ADOs can't help if patients don't have access to them. It's that simple.

Incentivizing Antibiotics

  • 07.13.2016
  • Peter Pitts
From the pages of the Los Angeles Times ...

Can the government encourage the development of new antibiotics?

It’s been nearly 30 years since scientists have found a new class of antibiotics. But U.S. lawmakers tried to give the drug industry a boost in 2012.
That year, they passed the Food and Drug Administration Safety and Innovation Act. It included provisions — collectively known as Generating Antibiotic Incentives Now, or GAIN — aimed at streamlining the government approval process for new antibiotics. It also boosted financial paybacks to drug companies that develop them.

The law has spurred the introduction of several new medicines. But none so far represents a new class of antibiotic or treats a drug-resistant strain for which effective medicine does not already exist. They are called “me-too” drugs, created by engineering small changes in the chemical structure of existing antibiotics.

To foster the discovery of truly innovative medicines, drug companies may need to be offered more extensive inducements, including tax breaks or market guarantees, said Peter Pitts, president of the Center for Medicine in the Public Interest and former associate commissioner of the FDA.

The federal government may even need to do what it has done for antiradiation drugs and some vaccines, he said: Pay for their development and buy and stock these products itself

If Brexit, whither EMA?

  • 07.12.2016
  • Peter Pitts
If Brexit, whither EMA?

Will Great Britain become like Norway and Iceland, attending committees such as the CHMP, where their views and votes are not of the same standing as those of members of the EU, or choose to follow a different route? There’s a lot at stake for the future of the MHRA and the British public health.

But what about the impact of removing MHRA expertise from EMA?

According to “Perplexit,” by BioCentury’s Steve Usdin, there’s a lot for EMA to worry about. “Since the start of EMA, MHRA has been a major supplier of resources and scientific expertise,” former EMA Executive Director Thomas Lönngren told BioCentury.

Of the 3,678 scientific experts listed in an EMA database, 281, or 8%, are from the U.K. “Taking a leading role in providing scientific and regulatory advice at the European level is a position the agency is familiar with and has maintained this year,” MHRA stated in its 2015 annual report. The U.K. drug regulator noted that in 2014-15 it was given 166 appointments to coordinate CHMP Scientific Advice Working Parties, a figure which represented “the highest number of any member state and reflects the high regard in which the agency’s scientific and regulatory expertise is held.”

MHRA also continued to “have the highest number of rapporteur/corapporteur appointments in Europe” in 2014-15. The agency said the workload is an acknowledgement of the “widely respected knowledge of the MHRA and its assessment processes.”

Since EMA’s creation, MHRA officials have served as rapporteurs for 16.5% of CHMP assessments and as co-rapporteurs for 10% of assessments.
MHRA experts have played a major role in pharmacovigilance assessments, serving as rapporteurs or co-rapporteurs for 29% of Pharmacovigilance Risk Assessment Committee (PRAC) safety investigations.

In addition to leading assessments of applications submitted under EMA’s centralized procedure, the U.K. and MHRA are a top choice for companies using the decentralized procedure to obtain marketing authorizations in several EU countries.

Applicants can select a reference member state (RMS) for decentralized authorizations. In 2014-15 the U.K. “remained the preferred RMS responsible for leading on 195 (45%) of all procedures in which the U.K. was involved,” according to the MHRA annual report.

The U.K. agency has taken a leading position in developing EMA regulatory policies, BioIndustry Association CEO Steve Bates told BioCentury. He cited initiatives to revamp the clinical trials directive into a regulation that will facilitate multisite, multinational trials, EMA’s policies on advanced therapies such as gene and cellular therapies, and the PRIority MEdicines (PRIME) initiative, EMA’s version of FDA’s breakthrough therapies program.

Whatever arrangement is negotiated, a Brexit will likely force EMA and its 890 employees to leave its base in London’s Canary Wharf. EMA employs 60 British nationals, and about 10% of its management positions are held by Brits.
With EMA moving to the continent, and MHRA’s loss of status within EMA, will pharmaceutical companies to move their regulatory hubs out of the U.K. To do otherwise, according to Grant Castle, a partner in the London office of the law firm Covington & Burling, “would be like having European marketing authorizations maintained by staff in the U.S., Switzerland or Japan.”
Warsaw here we come?

Advancing Companion Diagnostics

  • 07.07.2016
  • Peter Pitts
Important news. FDA Commissioner Robert Califf outlined two draft guidance documents addressing regulatory approval of next-generation sequencing (NGS)-based diagnostics. The guidances were presented as part of an update on the White House's Precision Medicine Initiative, which is recruiting a cohort of 1 million volunteers for a longitudinal research study. 

The first guidance, titled "Use of Standards in FDA's Regulatory Oversight of Next Generation Sequencing (NGS)-based In Vitro Diagnostics (IVDs) Used for Diagnosing Germline Diseases," describes FDA-recognized standards to demonstrate test accuracy and provides recommendations for designing, developing and validating NGS-based tests for hereditary diseases. 

FDA said a second guidance, titled "Use of Public Human Genetic Variant Databases to Support Clinical Validity for Next Generation Sequencing (NGS)-based In Vitro Diagnostics" outlines "an easier path for marketing clearance or approval" of NGS tests that would allow developers to use genomic databases to support clinical claims.

Per a report in BioCentury, “Califf said the draft guidances are meant to strike a balance between encouraging innovation and supporting patient safety.” FDA will accept comments on the guidance for 90 days.

For a more independent FDA

  • 07.05.2016
  • Peter Pitts
From the pages of the Boston Globe and reporter Ed Silverman ...

Independence would be good for the FDA and the public

 In a moment remarkable for its symbolism, six former Food and Drug Administration commissioners last month sat together on a stage and argued that their former agency needs more autonomy from Washington bureaucracy. The solution: make the FDA independent and maybe give it a cabinet seat at the White House, too.

The idea has been kicked around a few times over the years, but never gained traction. Yet the panel discussion at the Aspen Ideas Festival has refocused attention on the notion that the FDA — and by extension, the American public — would be better off if the agency’s status was elevated. And the suggestion carried still more weight since the former commissioners worked for both Republican and Democratic administrations.

Right now, the FDA is part of the US Department of Health and Human Services, which adds a big layer of officialdom between the agency and the White House. And in a legislative holdover, the FDA budget is overseen by House and Senate agriculture appropriations committees, which may not always be familiar with matters surrounding cutting-edge medical developments.

“An independent agency could work directly with Congress and the White House on a one-to-one basis and create dialogue that could lead to policy changes,” Andrew von Eschenbach, who was FDA commissioner from 2006 through 2009, and is now president Samaritan Health Initiatives, a think tank, told me. “This would put FDA in a much better position to execute its mission.”

To what extent the notion can become reality is uncertain, but it’s worth considering.

Here’s one reason. In December 2011, former HHS Secretary Kathleen Sebelius overruled the FDA and refused to allow an emergency contraceptive pill to be sold over the counter to young teens. This was the first time the HHS took such a step, but it was politically expedient because it allowed the Obama administration to avoid a contentious battle over birth control during a presidential election season.

The decision smacked of malfeasance, but reflected a long-running battle between politicians and scientists over whether the “morning after” pill should be available without a prescription. The Bush administration initially resisted such a move but later allowed over-the-counter access to women 18 and older. In 2009, the Obama administration lowered the age to 17 in response to a federal court order.

Of course, it’s true that even an independent FDA would still remain beholden to the White House, which suggests the potential for political interference will always exist. This is a fact of life in Washington. But cabinet-level status may confer an added benefit, because whoever heads the FDA would, presumably, have more opportunity for direct contact with administration decision makers.

“It may not entirely change the political dynamic, but I think it would be an improvement, because it could make it more difficult to meddle,” said Peter Pitts, a former FDA associate commissioner, who heads the Center for Medicine in the Public Interest, a think tank that is funded, in part, by industry. “You want to make it possible for a commissioner to stand firm and do the right thing,” added Pitts who wasn’t at the Aspen conference.

Toward that end, the top FDA job might also be structured so that there is a fixed term of say, six years, that doesn’t directly overlap with a president’s tenure. Yes, the FDA chief would still be a political appointee, but this approach may encourage a midterm president to find the best candidate, rather than use the appointment as a way to pay a political debt following an election.

Another reason to consider a push for independence is the budget process. Since FDA is part of HHS, its budget is vulnerable to cuts and changes — even before Congress gets to decide what to leave in and what to leave out. By elevating the agency to cabinet-level status, the FDA presumably could have more sway over resources.

“In a way, the FDA has always been a stepchild,” said Ira Loss of Washington Analysis, a consulting firm that tracks the pharmaceutical industry and regulatory policy. “And it often gets trapped in the bureaucracy.”

The challenge is to make a good case for independence.

Right now, the odds seem long. A new administration would have to be convinced to make the idea a priority. And persuading Congress, which seems perennially critical of the FDA and is currently crafting legislation to remake some agency functions, would be a challenge. To speed things along, von Eschenbach noted that a few former commissioners may now consider drafting a joint white paper.

To be sure, there will always be bureaucratic hurdles. That’s the nature of government. But any effort that can recalibrate the balance between bureaucracy and resources should be pursued. The FDA deserves a seat at the table where decisions are made.

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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