Latest Drugwonks' Blog
Special to Roll Call
Thanks to President Barack Obama’s landmark healthcare law, insurance companies are no longer allowed to turn away patients with pre-existing health problems. For millions of sick Americans, this “guaranteed issue” mandate has been transformative, ensuring they can secure the coverage they need to afford vital medications.
Unfortunately, insurers have discovered a sneaky way to undermine this requirement. They’re structuring plans to heap huge costs and bureaucratic burdens onto high-risk patients. Technically, such patients are insured. But they don’t actually have access to medical care.
Federal officials must halt such discriminatory practices. Fortunately, Reps. David McKinley, R-W. Va., and Lois Capps, D-Calif., recently introduced the Patients’ Access to Treatments Act (PATA) (HR-1600) to do just that. Lawmakers should pass it immediately.
Insurers strap sick patients with big bills by putting expensive medications into the highest “tier.” Insurers typically divide their drug benefits into different tiers, with the lowest providing the most financial support and the highest providing the least. The higher the tier, the higher the patient’s out-of-pocket expenses.
For example, in the state-level insurance exchanges established by Obamacare, more than half of the popular “Silver” plans place all multiple sclerosis drugs in the top tier. Patients suffering from this devastating conditions are getting hit with huge costs. Many are forced to forego needed treatments.
Making matters worse, the slice of Silver plans requiring enrollees to pay 30 percent or more of the cost for top-tier drugs has jumped dramatically since last year, from 27 percent to over 40 percent.
PATA ensures that patients can afford these life-saving medications. The bill prohibits insurers from grouping specialty drugs in higher cost sharing tiers than the ones used for regular medicines.
Many health insurers also have a “fail first” policy. Patients must first take drugs that are less effective and often less safe — and only when these fail can they receive needed medicines.
In other words, insurers force people to get sicker before offering them lifesaving treatments.
Consider the plight of Shima Andre, a hepatitis C patient in Los Angeles. Shima’s insurance company refused to cover Harvoni — a costly yet highly effective hepatitis drug — because her liver wasn’t damaged enough. Even after repeated pleas from her doctor, the insurer wouldn’t budge.
Technically, Shima is insured. But that coverage means little, since she can’t access the drugs she needs. Rather, she must take older medicines that the FDA warns have a high risk of serious and even fatal side effects.
A new Harvard study suggests insurers are deliberately offering thin coverage for high-cost therapies to dissuade chronically ill patients from signing up in the first place. When people who need costly drugs see treatments’ price tags, they look elsewhere for coverage — which is what insurers want.
Insurers justify such discrimination by claiming it helps contain healthcare costs, keeping premiums affordable. After all, those with serious illnesses disproportionately rely on expensive, specialty medicines. They’re the 1 percent of patients — often referred to as “super spenders” — that account for more than a fifth of the nation’s annual health expenditures.
But this argument is misleading. Expanding access to prescription drugs actually helps bring down long-term healthcare costs — and denying sick patients needed medications drives costs up.
Cancer drugs, for instance, help keep patients healthy and out of the hospital. As a proportion of total cancer treatment costs, drug spending nearly tripled from 2001 to 2011. Over that same time, the share of total costs spent on hospital stays dropped by 25 percent. Spending more on better medications has improved cancer patient health and saved money.
Restricting drug access to trim healthcare expenses usually backfires. The average patient will skip prescribed medications if her monthly out-of-pocket costs exceed $200. Such “non-adherence” typically causes a patient’s condition to worsen to the point where she requires much more expensive medical interventions.
America already spends over a $100 billion a year on avoidable emergency room visits and hospital stays because patients abandon their medication regimens. This will drive up non-adherence even higher and exacerbate these problems.
One of Obamacare’s central promises was that sick patients would no longer suffer from discrimination. Insurers are breaking that promise by strapping vulnerable patients with huge costs and forcing them to fail on less effective treatments. Lawmakers must stop these abuses — and the Patients’ Access to Treatments Act is a good place to start.
Robert Goldberg is vice president of the Center for Medicine in the Public Interest.
From FDA News:
The FDA is taking steps toward getting more patient input during the drug development process, a move that puts the agency more in line with its EU counterparts, agency officials said at the DIA annual meeting.
The FDA has met with patients from over 20 different disease areas to hear their perspectives on how their treatments are working and how their diseases impact their lives as part of the PDUFA reauthorization process. The agency wants to glean information they don’t get from clinical trials, said Robert Temple, deputy director for clinical science in CDER, during a session at the DIA annual meeting in Washington, D.C.
Temple said patients’ chief complaints aren’t being factored into drug development or clinical trials, and they should be. Trial designs for new drugs should aim to identify the three most irritating symptoms patients with a particular disease have, so that drugmakers can focus on solving those issues. “Any endpoint that affects a patient is an endpoint that needs to be included in a trial,” he said.
Theresa Mullin, director of CDER’s Office of Strategic Programs, echoed that statement, saying the motivator for the FDA to include more patient input is the need to develop better endpoints. The agency can’t properly assess medicines without fully understanding the value, benefit and effect on patients, she said.
In the EU, patient participation is grounded in legislation, with patients having input at all levels of a clinical trial, said Enrica Alteria, head of human medicines evaluation at the European Medicines Agency. The EMA holds meetings with patient advisory and advocacy groups four times a year, and patients view labeling information and leaflets, she added.
As part of that patient discussion, Alteria said the agency consults with health technology assessment bodies early in the drug development process to gather additional patient evidence. In this respect, the EMA takes a broader lifespan approach than the FDA, she said.
The FDA is precluded by law from taking cost into account when it decides to approve or disapprove a drug. Temple said the agency wants people to have choices. “We try hard not to think about the economics.”
This week the American Society of Clinical Oncology released a tool that it claims will help oncologists measure the value of drugs and discuss their costs with patients. The Task Force that developed this so-called value framework proclaims that the perspective of the patient is of central importance in defining value. It notes that “patient perception of value is highly individualized, can be subjective, may change over time and include convenience and quality of life as well as cost. “
Yet value framework – which will be used to develop an app -- does not take into account any measure of the value of individual responses to treatments. It admits that it doesn’t measure the costs saved by taking newer medicines or the productivity gains generated by treatments that require quitting a job and spending months in the hospital.
The app only measures value by more or less estimating how much would be spent on cancer drugs for the additional survival the medicine has shown in clinical trials. (“Bonus” points are added if studies show the drug to generate fewer side effects than a placebo). In addition, the app uses the out of pocket cost to the patient as the benchmark.
There are several defects with this approach that will likely reduce the number of lives saved from cancer.
First, the app uses average response obtained in clinical trials to measure value. For example, most news accounts have made a big deal about how treating people with advanced non small cell lung cancer (NSCLS) with Avastin with two older drugs costs $10000 to add 2 months of survival compared to using the older drugs alone for $800.
But average response is virtually meaningless in treating cancer. Yet the comparison does not take into account lung cancer patients with specific genetic mutations who are likely to live much beyond that average. It can't measure the relative value of "regimens..not directly compared in clinical trials. "That’s just about 90 percent of cancer treatment combinations approved for use. Combining Tarceva with Avastin in lung cancer patients with specific mutations adds 4 months to people who would otherwise die.
Multiply the number of treatments by the number of genetic mutations shaping each and every tumor and then combine these targeted medicines with therapies that teach the immune system to shut down tumor growth. Waiting for randomized clinical trials that compare each and every of these combinations would deny thousands of people potentially life saving and life enhancing care.
Further, the Task Force claims there is no clinical benefit to increasing overall survival by less than 20 percent. That would eliminate the use of a whole host of treatments for pancreatic, brain, lung, stomach and cancers in use or being studied today. By way of comparison, the increase in average life expectancy for people with AIDS was less than 20 percent a year between 1987 and 2000. The ASCO app would have completely rejected these increases, which in turn would have denied life to thousands of people alive today.
Indeed, the Task Force asserts – without evidence – that the use of new drugs is being driven by “sometimes unrealistic patient and family expectations that lead clinicians to offer or recommend some of these services, despite the lack of supporting evidence of utility or benefit.” For all it’s lofty rhetoric about the primacy of patient value, the Task Force sneers that cancer patients “overestimate the benefits of treatments that sometimes extend life by only weeks or months or not at all. “ In fact the evidence suggests just the opposite.
As a result, the app does not calculate the value of hope as measured by the significant progress made in reducing the death and cost associated with cancer. Since 2000, new cancer drugs have been responsible for nearly 90 percent of the decline in cancer death rates. The number of cancer survivors has increased from about 9.8 million to nearly 14 million today. Over that time we have added 26 million additional life-years worth over $2 trillion in better, healthier life.
As the number (and price) of targeted treatments have increased the percent of health care dollars devoted to cancer spending has remained at 4.6 percent. How? New cancer drugs reduce spending on more expensive medical services. In 2001, 64 percent of cancer care went to hospitals and only 3.6 percent to drugs. By 2012 drug spending ‘skyrocketed’ to 11.3 percent of cancer costs but hospitalizations dropped to 38 percent of care. That’s why a government study concluded, “The net value of (cancer) treatment has grown substantially, consistent with medical technology improving over time and leading to better health outcomes at a lower cost per patient.”
All these benefits have been generated by new medicines that are only .7 percent of health spending. The Task Force acknowledges that new medicines are a small fraction of total costs but then asserts that use of new medicines is driving up premiums, reducing wages, etc., when the evidence clearly concludes the opposite is the case.
If the app completely disregards the evidence of patient preferences, cumulative life years saved from small gains in survival, the reduction in treatment costs and increase in the economic value of health, what it’s good for?
It turns out that the app will be very helpful to health insurers who want to
“evaluate the relative value of new treatments” as they develop “benefit structures, adjustment of insurance premiums, and implementation of clinical pathways and administrative controls.”
The task force acknowledges that one important effect of these benefit structures is “patients will find themselves increasingly responsible for a greater proportion of the cost of their health care. Cost shifting or sharing can occur through the increased use of high-deductible policies and larger copayments. “ Which appears to be acceptable to ASCO since it does not take into account evidence of how such practices, by reducing the cost of drugs, drives up the number of deaths and the cost of care.
Health plans are forcing cancer patients to pay thousands of dollars out of pocket for new medicine. And they are requiring them to ‘fail first’ on less costly treatments that insurers want to claim are as, on average, effective as new therapies. Conveniently insurers are already using the ASCO calculation to restrict access.
Meanwhile, the Department of Health & Human Services has warned “placing most or all drugs that treat a specific condition on the highest cost tiers discourages enrollment by individuals based on age or based on health conditions, in effect (is) making those plan designs discriminatory.”
If the app is used by health plans as ASCO hopes – to support the development of pathways and administrative controls – it will be powerful tool for trampling on the civil rights of cancer patients.
ASCO has asserted that oncologists should be aware of the value of an intervention in terms of societal cost when making treatment decisions. It assures patients that this does not conflict with the Hippocratic oath. It doesn’t just conflict; it out right violates that solemn pledge.
The Patent Trial and Appeal Board of the U.S. Patent and Trademark Office has accepted a request from Celgene to consider sanctions against the Coalition for Affordable Drugs, an entity controlled by hedge fund manager Kyle Bass.
Celgene filed a motion seeking sanctions as part of its response to an inter partes review (IPR) petition the Coalition filed that attempts to invalidate some of Celgene’s patents on Thalomid thalidomide. In a document filed with the PTAB, Celgene accused the Coalition of using the IPR process to affect the value of public companies. "This is not the purpose for which the IPR process was designed,” the company wrote. Celgene also alleged that before the IPRs were filed, someone associated with the Coalition “threatened to file IPRs against the challenged patents unless Celgene met their demands.”
Celgene wrote that when it did not pay, the IPRs were filed. Celgene described the alleged attempt to obtain payment to forestall IPR challenges as an “abuse of process and misuse of the IPR proceedings.” In granting Celgene’s request to file a sanctions motion to dismiss the petitions, the PTAB said its decision “is not a decision on the merits of Patent Owner’s allegation of abuse of process.” The board set a July 30 deadline for Celgene to submit a brief supporting its request.
Per a report in BioCentury, the board’s decision is likely to be announced three months after the Celgene brief is submitted, according to Matthew Kreeger, a partner at Morrison & Foerster who is an expert in patent law. The Celgene request puts the PTAB and the IPR process “in uncharted waters,” Kreeger told BioCentury. He noted that if the decision hinges on a demand for payment made prior to filing the IPR, then it might not affect other IPRs filed by Bass or other investors.
Did somebody say “PDUFA VI?”
With the upcoming PDUFA renewal, 21st Century Cures uncertainty, and a leadership transition at FDA, it is a dynamic and uncertain time in the biopharma industry. The outcomes of these key policy debates, along with others, will impact how industry pursues drug development and works with patients and regulators to improve public health.
To advance the conversation and propose practical ways forward, a panel of regulatory experts, including former industry and FDA leaders, got together in Boston on May 20, 2015 to share their best thinking on pressing regulatory policy issues. And there was also a fair degree of appropriate (and useful) venting.
The panel was chaired by Tim Franson, MD (Chief Medical Officer for YourEncore, Board Member for the Critical Path Institute, and current President of the USP Convention. Tim was a key contributor to PDUFA V, particularly as it relates to rare disease incentives, and is generally considered one of the “founding fathers” of the PDUFA concept.
Panelist #2 was Joe Lamendola, Ph.D., the former VP of U.S. Regulatory Sciences for Bristol-Myers Squibb, responsible for over 20 global approvals across 10+ therapeutic areas. Over a 25+ year career, Joe also led the Regulatory Policy and Intelligence Organization for BMS, which was responsible for assessing and influencing regulatory policies, including PDUFA V and multiple therapeutic guidances.
And rounding out the panel was yours truly – the junior associate.
It’s called a regulatory RANT (Relevant Assessment and New Trends) and is a great read to get ready for PDUFA season. The full document can be found here. It's an entertaining and informative read with some relevant assessments and aggressive suggestions
Get ready. Get set. Go!
At the recent BIO confab in Philly I was honored to moderate the panel on “Public Sector Biotech Initiatives in Middle East and North Africa.” I was joined with public officials and regional experts (Marwan Abdulaziz Janahi, Executive Director of Dubai Biotechnology and Research Park, DuBiotech, Samir Khalil, Executive Director of Middle East & Africa, PhRMA, Tarek Salman, Assistant Minister of Health and Population for Pharmaceutical Affairs in Egypt, David Torstensson, Senior Consultant, Pugatch Consilium, and Jeffrey Kemprecos, Executive Director, Emerging Markets Public Policy, Merck).
A key take-away was that one of the key drivers of biotech investment in the region (and, indeed, any region) is sound regulatory policy. This was most directly addressed by Vice Minister Salman who discussed how the Egyptian regulatory authority had upgraded both its processes and procedures to reward innovation with a review pathway that is more predictable and timely.
As the panel’s moderator, I had the opportunity to present opening remarks. Here’s what I had to say:
When it comes to biotech incentives in the MENA region, there are many languages, priorities, pressures, and impediments (social, political, cultural) to consider.
In April 2015 I spent three fascinating days in Sharm El Sheikh, Egypt at the Second Arab Conference on Food & Drugs.
Delegates from the Levant to Morocco had a lot to say and share. The fundamental take-away was that the Arab world is serious about coordinating their efforts in healthcare in general and in regulatory affairs specifically. “Convergence” and “harmonization” were the two key words of the event.
(The Middle East/North Africa Region – MENA – consists of 22 nations – but just 2% of global pharmaceutical sales.)
Biotech initiatives are a global opportunity, but they take many local forms --because public health is a global fraternity with national priority, local impact and global implications.
Biotech Initiatives take many forms:
- Investment programs
- Clinical trial incentives
- Reinvention of medicine and device regulation
- A high regard for Intellectual Property Rights
- An embrace of the concept of both price and value
- Transparency of laws and regulations
- And the rule of law
Most importantly, national biotech initiatives rest on the foundation of the importance and urgency of healthcare innovation.
But Biotech Initiatives mustn’t falter under the false banner of Biotech Imperialism. Initiatives must benefit all parties, transnational, national – and local.
That means “doing the right thing.” It’s about “Nazaha” – Integrity.
This happens everytime a bunch of new medicines hit the market. But how about putting the amount into context or discussing value. As any baseball fan (or FBI agent investigating the St. Louis Cardinals hack of the Houston Astros scouting database) knows context is everything.
So for instance, the Pharmalot blog posted: How Much?! Global Prescription Drug Sales Forecast to Reach $987B by 2020
But the headline obscures and deflects attention from the fact that between 2015-2020 Rx spending will actually decline as a total share of global health spending.
The same designed neglect applies to the breathless discussion of "skyrocketing drug prices or drug costs".
You wouldn't know that drug spending as a percent of total health spending in the US will remain FLAT between now and 2025 even as specialty drug spending becomes half of total Rx expenditures.
Is it too much to ask for some context. It took me, a C minus math student, five minutes to figure out percentages. Why can't journalists and policy types who are a lot better at this stuff than I am run the same numbers?
Per a report in BioCentury, PatientsLikeMe Inc. has granted FDA access to its patient-reported data, which the agency said it will use to identify risks and benefits of drugs. The agency said PatientsLikeMe's adverse event data have the potential to supplement existing sources, including data that sponsors are obligated to report and data from FDA's Adverse Event Reporting System (FAERS), to address safety issues that arise postmarket. PatientsLikeMe said FDA will have access to more than 110,000 adverse event reports on 1,000 different drugs at no cost. The data include information on drug tolerance, adherence and quality of life. PatientsLikeMe President Ben Heywood told BioCentury the collaboration "may lead to FDA-sponsored research projects designed to understand how patient-reported data might be used to enhance post-market surveillance, support regulatory decision making and inform regulatory science." FDA also operates the Sentinel system, with which it can query electronic health records to identify and monitor postmarket safety concerns.
From the pages of the Houston Chronicle:
Pitts: Obama's drug crusade comes at high price
Medicare Part D program, which provides affordable drug insurance, needs to be emulated, not reformed
A new federal report misleadingly estimates the cost of the Medicare Part D program at $103 billion. That figure is bunk. Nonetheless, it will give President Barack Obama more ammunition for his assault on Part D - a program that provides affordable prescription drug insurance to more than 2 million Texas seniors.
Already, the president has pushed for government controls on drug prices in Part D - a "reform" he endorsed in his 2016 budget.
But Part D doesn't need to be reformed - it needs to be emulated. The program is a historic success. Federal interference in Part D drug pricing would destroy that success and drive up the cost of medications, reduce enrollee choice, and harm patients.
Part D drug coverage is affordable for seniors and taxpayers alike. The average monthly premium for a Part D plan is around $32 - and hasn't changed much over the last five years.
Nearly a decade after Part D was created, the program's overall costs are almost $350 billion below initial estimates, according to the Congressional Budget Office.
Unsurprisingly, the program is enormously popular. Among beneficiaries, Part D's satisfaction rate is roughly 90 percent.
Yet the Obama administration wants to tamper with the program by bargaining directly with drug manufacturers for rebates on Medicare prescriptions.
Currently, the law that established Medicare Part D prohibits federal officials from interfering "with the negotiations between drug manufacturers and pharmacies and [prescription drug plan] sponsors."
The Obama administration views this lack of government negotiation as a shortcoming that boosts Part D's cost. But non-interference is actually essential to the program's success.
Indeed, the reason the program is able to deliver satisfactory coverage at such a reasonable cost is its competitive structure. Under Part D, Texas beneficiaries are free to choose from 32 different private coverage plans.
In order to win customers, plan providers compete with each other to offer the best policies at the lowest cost, driving down prices in the process.
This arrangement works because private insurers are able to secure their own drug rebates through private negotiations with pharmaceutical firms. These rebates frequently amount to a 20 or 30 percent discount. And those savings are passed on to beneficiaries.
If the federal government intrudes on private Part D negotiations, the competition driving the program's success will collapse. Drug prices will go up. Quality of plans will go down.
Worse, federal interference in the negotiations wouldn't result in lower drug prices, as the Obama administration claims. Researchers from the Congressional Budget Office have concluded that government officials "would be unable to negotiate prices across the broad range of covered Part D drugs that are more favorable" than the prices achieved by private insurers.
Unfortunately, the administration's rhetoric against Part D ignores these existing discounts. The $103 billion figure, which comes from a Center for Medicare and Medicaid Services report, doesn't account for the discounts either. CMS simply tallied up the market price of all drugs dispensed through Part D.
Factoring in those privately negotiated rebates paints a more accurate picture of Part D annual costs, which are closer to $62 billion.
Federal intervention won't lower Part D's total cost, but it will make it harder for seniors to get the medicines they need. According to Douglas Elmendorf, the former head of the Congressional Budget Office, negotiating for a lower drug price on a given drug carries "the threat of not allowing that drug to be prescribed." Beneficiaries could loss access to treatments they now depend on to stay healthy.
Sadly, none of these facts have stopped the Obama administration from trying to interfere in Part D price negotiations. But it's important to ask: What does the president hope to accomplish with his proposal?
If the president's aim is to expand access to affordable prescription drugs, he should be celebrating Part D - not trying to destroy it.
Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.
To that point, a new op-ed from today's edition of the Wall Street Journal.
The Patent Trial and Appeal Board was supposed to make the system better. It hasn’t.
BY: Peter J. Pitts
When Ultratec, a manufacturer of closed-captioned phones for the deaf, realized that a rival had created a knockoff using its patented technology, the company filed a patent-infringement lawsuit. A Wisconsin federal jury ruled for Ultratec in October, ordering rival Sorenson Communications to pay $44 million in damages.
But Ultratec may never receive a cent. In March a little-known but hugely powerful federal body called the Patent Trial and Appeal Board (PTAB) invalidated Ultratec’s patents, on grounds that the designs were too obvious to be patentable.
The PTAB, created by the 2011 America Invents Act, was intended to strengthen the patent system. Lawmakers hoped to avoid the need for patent lawsuits by giving patent holders and challengers a quick and inexpensive way to resolve disputes as an alternative to the courts.
But the board uses looser standards than a federal court to evaluate a patent’s legitimacy. Courts assume that a patent is valid until a challenger provides “clear and convincing” evidence to the contrary. The PTAB requires only that challengers show that it’s more likely than not (i.e., a “preponderance of the evidence”) that a patent is too broad.
In recent months the board has overturned patents on a computer memory technology, a popular videogame, and a system for monitoring car tires. The PTAB has invalidated at least one “claim”—or part—in almost 80% of the patents it has ruled on, according to a study in the University of Chicago Law Review. Some patent experts such as Randall Rader, former chief judge at the U.S. Court of Appeals for the Federal Circuit, have referred to the 300-odd administrative judges, attorneys and legal aids on the board as “patent death squads.”
Patent challengers have jumped at the chance to exploit the board’s lax standards. Since it began to operate in September 2012, the PTAB has received more than 2,600 patent challenge requests—three times more than it expected.
Many of these challenges—such as one against Combigan, an eye-drop medicine that prevents blindness in patients with glaucoma—seek to overturn patents that district courts have already upheld. In many other cases, the patents have also been challenged in federal courts—but courts have stayed the litigation until the PTAB has ruled. The patent may be invalidated without facing a court’s stricter standard.
The PTAB could devastate innovation-intensive industries. Consider pharmaceutical developers, which spend about $51 billion a year researching new treatments. But less than 12% of drugs that reach clinical trials ever make it to market.
Patents give firms the financial incentive to fund challenging research and development projects. In the event that a huge upfront investment results in a popular new product, the developer can recoup its costs in sales.
The PTAB jeopardizes this process. Since an overturned patent means that rival companies could create knockoff products, firms will lose the confidence that they’ll reap the rewards of innovation.
Some financiers have started using the PTAB to make a quick buck. Kyle Bass is a hedge-fund manager, not a pharmaceutical developer, but he recently challenged six drug patents. His strategy, which has been widely reported, is to bet that the challenges would drive down the patent owners’ stock prices.
The strategy is working. Early this year Mr. Bass challenged Acorda Therapeutics ’ patent on Ampyra, a medicine that uses a re-engineered bird poison to help multiple sclerosis patients walk. The claim: Medical experts would have been able to deduce the effectiveness and proper dosing of the re-engineered molecule. The challenge caused the company’s stock price to drop almost 10%.
If hedge funds and copycats continue to take advantage of the PTAB’s bias against patent holders, it will choke off funding for lifesaving medicines.
The Patent Trial and Appeal Board will make it harder to create the products that improve lives and fuel the economy. To avoid this dangerous outcome, Congress has to reform the PTAB so that it operates under the same standards as a regular court.
Mr. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.