Latest Drugwonks' Blog

Those hot TV lights must be affecting Mike Huckabee’s cognition or, di minimis, his awareness of sloppy staff work.

"Americans should have the freedom to purchase safe drugs from Canada," Huckabee wrote in the Orlando Sentinel. "It just makes sense."

Alas not.

Let’s start here – there is a difference between the high quality, well regulated medicines Canadians get from their local pharmacies and those products sold to Americans via wildcat Canadian internet pharmacies.

Canadian internet pharmacies -- by their own admission -- are sourcing their drugs from the European Union. And while they may say their drugs come from the United Kingdom, let's not conveniently forget that 20 percent of all the medicines sold in the UK are parallel imported from other nations in the EU -- like Spain, Greece, Portugal and Lithuania.

Recently EU officials seized over 34 million fake pills in just two months. Irish drug enforcers confiscated over 1.7 million pounds of counterfeit and illegal drug packages. So if American customers start buying drugs over the Internet from Canadian pharmacies, they could easily wind up with tainted medicines of unknown European origin.

It’s also important to note that drugs from anywhere in Europe aren’t even legal for sale in Canada. So, when politicians say we can get “the same drugs” that Canadians get, they’re just plain wrong.

Even more worrisome is outright fraud — many “Canadian” pharmacies are actually headquartered somewhere else.

A 2005 investigation by the Food and Drug Administration looked at 4,000 drug shipments coming into the United States. Almost half of them claimed to be from Canada. Of those, a full 85 percent were actually from countries such as India, Vanuatu, and Costa Rica.

As part of another investigation, FDA officials bought three popular drugs from two Internet pharmacies claiming to be “located in, and operated out of, Canada.” Both websites had Canadian flags on their websites. Yet neither the pharmacies nor the drugs were actually from Canada.

As an FDA official told Congress, “We determined there is no evidence that the dispensers of the drugs or the drugs themselves are Canadian. The registrants, technical contacts, and billing contacts for both web sites have addresses in China. The reordering website for both purchases and its registrant, technical contact, and billing contact have addresses in Belize. The drugs were shipped from Texas, with a customer service and return address in Florida.”

And in laboratory analysis, every pill failed basic purity and potency tests.

The on-the-ground reality of state and local importation schemes have been dismal and politically embarrassing. Remember Illinois' high profile "I-Save-RX" program? Over 19 months of operation, a grand total of 3,689 Illinois residents used the program—which equals approximately .02 percent of the population.

And what of Minnesota's RxConnect? According to its latest statistics, Minnesota RxConnect fills about 138 prescriptions a month. That's for the whole state. Minnesota population: 5,167,101.

Remember Springfield, Massachusetts and “the New Boston Tea Party?” Well the city of Springfield has been out of the “drugs from Canada business” since August 2006.

And, speaking of tea parties, according to a story in the Boston Globe, “Four years after Mayor Thomas M. Menino bucked federal regulators and made Boston the biggest city in the nation to offer low-cost Canadian prescription drugs to employees and retirees, the program has fizzled, never having attracted more than a few dozen participants.”

The Canadian supplier for the program, Winnipeg-based Total Care Pharmacy, sent a letter to city officials saying the firm was terminating its agreement because there were so few participants. In 2006, Boston saved $4,300 on a total of 73 prescriptions. When Total Care decided to end its relationship with the city, only 16 Boston retirees were still participating.

And such programs won't do any better on a national basis. A study by the non-partisan federal Congressional Budget Office showed that importation would reduce our nation's spending on prescription medicines a whopping 0.1 percent—and that's not including the tens of millions of dollars the FDA would need to oversee drug safety for the dozen or so nations generally mentioned in foreign drug importation schemes.

 Calling foreign drug importation “re-importation” is a clever way to sell the idea to the American people. But the term simply doesn’t fit with the facts. In reality, Americans would end up jeopardizing their health by purchasing unsafe drugs made in foreign countries – while not saving money.

Note to Governor Huckabee – Get better staff.

Yesterday the WSJ ran an article about how Express Scripts wants to tie the cost of cancer drugs to how well they work.  

Let's deal with how hypocritical and self-serving this ploy is.

1.   Health outcomes are a function of adherence to medication.  Why doesn't Express Scripts tie what it makes in rebates to how well they help keep people on medicines.   To do this, it would have to eliminate cost sharing for specialty medicines that are shown to discourage compliance. 

2.   Health outcomes are a function of getting the right medicine at the right time as soon as possible.  Why doesn't Express Scripts invest in precision medicine profiling and eliminate cost sharing for medicines that are best for patients?   Why doesn't Express Scripts refund copays when drugs dont work under a fail first or step therapy approach? 

The answer: all this would get in the way of their profits.  Discrimination against sick people by designing benefits in way that put all meds in the highest cost sharing tier is good for business.  

Next, what about the feasbility and clinical impact of the Express Scripts proposal to tie payment to impact in specific uses or indications.  The company borrowed this idea from Peter Bach who has been noodling about ways to control drug prices for years. 

"Express Scripts’ approach would be similar to that proposed by Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center.In an article published last year in the Journal of the American Medical Association, he suggested that in an indication-specific arrangement, the monthly price for Eli Lilly & Co.’s cancer drug Erbitux (cetuximab) would plummet from $10,320 a patient to about $470 a patient for its least effective use, treating recurrent or metastatic head and neck cancer. The drug also is used to treat locally advanced head and neck cancer, as well as colorectal cancer."

So let's look at how this would work.  Not only does Express Scripts want to do use the Bach approach, the Amercican Society for Clinical Oncology wants to use the it in telling cancer doctors what medicines.  

Bach claims that the use of Erbitux for head and neck cancer is a "least effective use".  Let's set side the curious math used to arrive at the $470 figure.  It is more important to note that Bach ignores not only individual differences in response but the impact of Erbitux relative to existing need and treatment protocols.     Bach uses an average 2.3  months more of survival as his benchmark.   The price controllers love to focus on that number because it sounds so small.  Express Scripts and Bach dishonestly ignore context.

Here's what we know about pre-Erbitux treatment of recurrent, metastatic squamous cell carcinoma of the head and neck (SCCHN):

"None of the trials performed in the past, even those with a reasonable sample size, have shown that aggressive platinum-based combination chemotherapy leads to survival benefit when compared to single agent methotrexate, cisplatin or 5-fluorouracil.

What difference does Erbitux makes?  

After decades without real progress, a recent European randomized trial showed that adding cetuximab, the first clinically available EGFR-directed monoclonal antibody, to a standard chemotherapy regimen (platinum/5-fluorouracil) leads to an important survival benefit and this, with support of an additional smaller study in the US, has changed practice."  J. B. Vermorken and P. Specenier Optimal treatment for recurrent/metastatic head and neck cancer. Ann Oncol (2010) 21 (suppl 7): vii252-vii261 doi:10.1093/annonc/mdq453

Hence, the Bach-Express pricing approach would whittle away payment for the hardest to treat cancers for patients that have had no real advances in care for decades.  Maybe Bach supports paying doctors less for people who are the farthest gone because the relative health gains are well, not worth it??

Second,  the use of Erbitux, which targets the overexpression of EFGR associated with poor outcomes in SCCHN has lead to the development of biomarkers that that identify individuals that will have 4 times greater survival than the one size fits all studies Bach and Express Scripts would use to price treatment 

Thanks to research done with the drug, we now have assays measuring evidence that Hypermethylation of the p16 gene is associated with KRAS mutation and response to Erbitux .

So now we have groups of patients that Patients with p16-unmethylated tumors had significantly longer time to progression (TTP, median 9.0 vs 3.5 month; and overall survival (OS, median 44.9 vs 16.4 months than those with p16-methylated tumors. Patients with both KRAS and p16 aberrancy had markedly shortened TTP (median 2.8 months) compared to those with either KRAS or p16 aberrancy ...  Cancer Res Treat. 2015 Apr 24. doi: 10.4143/crt.2014.314. [Epub ahead of print]    p16 Hypermethylation and KRAS Mutation are Independent Predictors of Cetuximab Plus FOLFIRI Chemotherapy in Patients with mCRC.
Kim SH1, Park KH2, Shin SJ3, Lee KY4, Kim TI3, Kim NK4, Rha SY3, Roh JK3, Ahn JB2.

In the studya above, hypermethylation of the p16 gene was detected in 14 of 49 patients (28.6%) which means an even smaller group of patients then the number of patients in one size fits all studies.  Following the Express Scripts logic, using a drug for a smaller group of patients that have had no progress in treatments and limited 5 year survival prospects should be priced LESS than $470.

Heaven forbid looking at the effect of 'even' 3 months of survival -- or 25 months of survival in a small subgroup -- this way:

Each year 60000 people are diagnosed with head and neck cancer each year.    Fifty three percent have recurrent metastatic types. 

Running the numbers for the 28.6 percent of high responders with metastatic (31800 x.286=17160) we get 20008 years of additional life worth $3.01 billion.

For the benefit, Express Scripts and Bach would pay $17 million.  Meaning that they think an additional year of life for such patients isn't worth more than $583.

I didn't get into how patients receiving Erbitux spend about 30 fewer days hospitalized or in nursing homes and hospice.  Or that total costs per treatment is lower with Erbitux.  I don't have the time or patience right now to walk people who don't care or don't want to know through the economics.  

Too bad no one in the media has run the math instead of running with this as a novel way to deal with health care costs.  This is madness. As Isaiah Berlin put it, ‘disregard for the preferences and interests of individuals alive today in order to pursue some distant social goal that their rulers have claimed is their duty to promote has been a common cause of misery for people throughout the ages.”


Considering the paucity of biosimilar-specific data on the label for Sandoz’s filgrastim-sndz biosimilar, should sponsors be able to discuss their products’ analytical and clinical data with health care providers and payers? And what about with physicians?

When it comes to biosimilars, is off-label now on the table?

Zarxio was approved with labeling that was almost identical to that of Neupogen except for some differences specific to the products’ formulation and presentations The Zarxio label contains all of the same clinical data as that found in Neupogen labeling but none of the clinical or analytical data that supported the finding of biosimilarity to the reference product. But neither the word “biosimilar” nor the name of the reference product are found on Zarxio’s labeling.

Here’s the rub – the FDA has posted on its website hundreds of pages of review documents detailing its findings that Zarxio is highly similar to Neupogen with no clinically meaningful differences. However, the data analyzed in those reviews is nowhere to be found in the Zarxio labeling. The argument is that the absence of such data will hinder a biosimilar sponsors’ ability to use their analytical and clinical data in marketing and promoting the products.

Is this contrary to existing guidance? Technically no. Per a 2012 draft guidance document on scientific considerations in demonstrating biosimilarity, FDA said biosimilar labeling should include all the information necessary for a health professional to make prescribing decisions. This would include a “clear statement” advising that the product is approved as a biosimilar to a reference product, and whether the product has or has not been deemed interchangeable with the reference biologic.  BUT, the labeling-related language was from the final version of the scientific considerations guidance (issued in late April 2015). 

That lack of granularity is particularly irksome to biosimilar manufacturers since being able to discuss the data underlying approved biosimilars will be critical to building support for biosimialrs amongst doctors, patients, and (critically) payers. Can you say FDAMA 114? 

Beyond marketing and formulary concerns, there are also questions over who bears responsibility for updating a biosimilar’s labeling to reflect post-marketing adverse events. And what about the fact that the Sandoz product is not (at least not yet) deemed interchangeable by the FDA?

A side-by-side assessment of biosimilars and their reference product is a logical and appropriate exercise. Will it be considered violative, off-label communications?

Should it be specifically called out in 21st Century Cures? Should it await PDUFA VI? Or will the agency revise it’s current position of it’s own accord. And what will the impact of this issue be on biosimilar nomenclature?

Inquiring minds want to know.

I am putting in a lot of miles on behalf of international regulatory fraternity.

Over the last few months I’ve visited Egypt, Indonesia, Vietnam, Taiwan, Mexico, and Brazil, where I’ve had the distinct privilege to meet with regulatory and healthcare officials. (And boy, are my arms tired.)  Many things were discussed and shared, but the red thread was the urgency of quality.

I’ve learned many things and met many remarkable people. Perhaps the most important thing I’ve come to appreciate is that we need to stop talking about regulatory “harmonization” and focus our time and attention on regulatory “convergence.” Just as every nation has it’s own unique culture and cuisine, so too must it design it’s own regulatory philosophy and structure. It’s not about replicating the USFDA or the EMA – it’s about converging towards best practices.

Beware the danger of regulatory imperialism. Expecting other nations with less experience and resources to “harmonize” with the USFDA or the EMA isn’t the right approach. Rather we should seek regulatory convergence, because that gives us a pathway to improvement – with the first step being the identification of specific process asymmetries that can be addressed and corrected.

And at the top of the list is quality.

Without quality, safety and effectiveness are non-starters. Without quality, healthcare spending is not just wasteful – but harmful. Without quality it’s al about price without any consideration for value. Without quality, regulation is a sham.

In April I spent three fascinating days in Sharm El Sheikh, Egypt at the Second Arab Conference on Food & Drugs. It was all business – and I didn’t even mind not getting any time to enjoy the Red Sea beaches.

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.)

I was honored to present a plenary address on “Advancing Medicines Quality via New Strategies in Bioequivalence Regulations, Pharmacovigilance Practices, and the Identification and Management of Substandard Pharmaceutical Events,” as well as chair the event’s panel on pharmacovigilance, sharing the panel with governmental thought leaders such as Dr. Amina Tebba (Morocco), Dr. Amr Saad (Egypt), Dr. Emad Munsour (Qatar), and leading global policy experts Dr. Hisham Aljadhey (King Saud University), and Michael Deats (WHO). I also participated on a panel discussing the urgency of IP, as well as another on biosimilars – specifically calling out the vexing debate over nomenclature, physician notification, and therapeutic substitution.

With healthcare policy (as with life in general) – wherever you go, there you are.

Not surprisingly, much of the conversation centered on controlling costs – specifically pharmaceutical costs, without (alas) the appropriate balance of time spent on the pennywise/pound foolish consequences of many of these policies. The IP panel tried to add balance to that debate by strongly presenting the facts on the value of innovation.

Dr. Rasha Ziada (Egyptian Ministry of Health) made the important point that if a pricing authority doesn’t take outcomes into consideration, it will lead to overall price distortions. Amen. And Dr. Ola Ghaleb (Ministry of Health, United Arab Emirates), spoke about the UAE’s strategy of performance-based risk-sharing arrangements – but also how politics can derail any decision-making process. Her honesty was refreshing. Net/Net -- Outcomes is now capitalized and bolded in the international lexicon of healthcare policy.

While many of the presenters discussed the value of sharing pharmaceutical economic data across borders, there was not an equal counterbalancing discussion of the value of sharing clinical data for approvals and outcomes-based decision-making processes. But there was certainly an effort (both on many of the panels as well as during the breaks and after hours) to stress the urgency of this agenda. The good news is that many, many speakers (sometimes in passing and other times passionately) made the point that it mustn’t just be about “getting the lowest price,” but also appropriately pricing the most clinically effective treatments. Bravo.

Many of the delegates said (from the floor as well as in conversation) that the conference was useful – but that action is required. In short – talk is cheap. My feeling (speaking privately with senior government officials from many of these nations) is that there is serious momentum for change (and even reinvention). But only time will tell.

As Deming said, “Change is not required. Survival is not mandatory.”

At the closing plenary session came “The Sharm El Sheikh Declaration.” The full document (in English translation) can be found here, but let me focus on the aspects that pertain to quality:

·      Investing in training and qualifying inspectors of pharmaceutical factories and ensuring the application of good manufacturing practice (GMP).

·      Strengthening drug post-marketing regulation through the establishment and activation of pharmacovigilance centers, while working on qualifying and training their workforce.

·      Urging Arab countries to invest in training inspectors of pharmaceutical factories to raise the quality of the inspection process and ensuring the application of current good manufacturing practice (cGMP).

·      Urging Arab countries to authorize performing bioequivalence studies and ensuring that they conform to the technical requirements of Good Clinical Practice (GCP) through regular inspection visits.

·      Urging international drugs regulatory authorities in the Arab world to activate drug post-marketing monitoring programs through establishing pharmacovigilance centers and equip them with trained pharmacists and doctors.

(Pleased and proud to say that many of these recommendations came from the conference panel I chaired on pharmacovigilance.)

In May my regulatory travels took me to Asia. In Jakarta I met with senior hospitalists to discuss the impact of Indonesia’s new legislation (designed to provide universal access to healthcare) – and its impact on both the quality of medicines available and a physicians right to choose both therapy and brand.  Senior healthcare leaders are concerned that insisting that the lowest priced product be used will result in suboptimal outcomes for those patients unable to access private healthcare. They recognize that a system that provides broader access to low quality care is not a victory. Bioequivalent does not equal identical. Biosimilar does not equal identical. The stakes are high.

Next up was the Javanese capital, of Yogyakarta for a symposium on pharmacovigilance held by Ahmad Dahlan University. The senior Ministry of Health official shared the fact that for a nation of 250+ million, there are but 10 people focused on pharmacovigilance. Talk about the Java Jive! She spoke of the need to develop better risk-based assessment protocols and better coordinate efforts with other nations in the region in order to share information on adverse events, bioequivalence, API and excipient sourcing. Quality is a team effort.

Meetings in Hanoi and Ho Chi Minh City focused on quality with a more specific focus on the need for more regular bioequivalence testing on patients under treatment (as opposed to healthy volunteers) in order to better understand not adverse events, but the uptick in Substandard Pharmaceutical Events (SPEs). SPEs occur when a product does not perform as expected—perhaps because of API or excipient issues. SPEs can arise because of an issue related to therapeutic interchangeability. In Vietnam they are beginning to understand and appreciate that Small is the new Big. The need to focus on the individual patient rather than the general population and on long-term care rather than short-term cost.

The last stop on my Asian tour was Taipei, where I had the opportunity to speak to a colloquium of oncology physicians. Their fear and frustration was similarly directed towards a government healthcare program that mandates the use of lowest cost products. Nowhere does this cause greater angst and anger than with healthcare professionals treating patients with cancer. The unintended consequences caused by short-term, price-driven government policies on quality and clinical outcomes cannot be underestimated. Those on the front lines (physicians and pharmacists) understand this. And recognizing there is a problem is the first step towards solving it.

What have I learned? The only thing that’s grown more than my frequent flyer miles is my respect and admiration for those over-worked and under-appreciated civil servants toiling on the front lines of medicines regulation.

It’s a global fraternity of dedicated (and generally under-paid) healthcare and health policy professionals devoted to ensuring timely access to innovative medicines and quality generics drugs. It’s not easy and it’s not a job – it’s a personal public health mission.

There are many languages, priorities, pressures, and impediments (social, political, cultural) to consider, but one thing everyone agrees on is that quality counts. But what does “quality” mean – and does it mean the same thing from nation to nation and from product to product both innovator and generic? The good news is there’s general agreement that lower levels of quality for lower cost items aren’t acceptable. But the bad news is that there are gaps and asymmetries in how “quality” is both defined (through the licensing process) and maintained (via pharmacovigilance practices).

Can there be a floor and a ceiling for global drug safety and quality? Even as we move toward differential pricing, should we allow some countries to have lower standards than others “based on local situations?” Can one man’s ceiling be another man’s floor? Can a substandard medicine ever be considered “safe and effective?”

Aristotle said, “Quality is not an act, it is a habit.” Habits are learned and improve with iterative learning and experience. And nowhere is that more evidently manifested than through the many and variable methodologies for generic medicines licensing and pharmacovigilance practices. From paper-only certification of bioequivalence testing and questionable API and excipient sourcing, the safety, effectiveness, and quality of some products are, to be generous, questionable.

Is this the fault of regulators; of unscrupulous purveyors of knowingly substandard products; of shortsighted, overly aggressive pricing and reimbursement authorities? While there are many different and important avenues of investigation, the most urgent area of investigation should focus on the asymmetries in how quality is defined, measured, and maintained. That which gets measured, gets done.

National 21st century pharmacovigilance practices must also take into consideration the realities of funding, existing staff levels, training programs, and existing regulatory authority. Accessing increased regulatory budgets is problematic. Should licensing agencies consider user fees for post-market bioequivalence testing of critical dose drugs? That’s a contentious proposition– but agency funding is an often-overlooked 800-pound gorilla in the room and deserves to be seriously discussed and openly debated.

Another uneven issue is that of transparency. While regulatory standards are undeniably an issue of domestic sovereignty, shouldn’t there be transparency as to how any given nation defines quality? “Approved,” means one thing in the context of the MHRA, the USFDA, and Health Canada (to choose only a few  “gold standard” examples), but how can we measure the regulatory competencies of other national systems? Is that the responsibility of the historically opaque WHO? What about the regional arbiters? Should there be “reference regulatory systems” as there are reference nations for pricing decisions? And how would this impact the concept of regulatory reciprocity?

In our globalized healthcare environment of SARS, Avian Flu, and Ebola, it’s important to remember that a rising tide floats all boats.

And so home again, home again, jiggity jig to an American healthcare system debating many of the same issues – bioequivalence, biosimilarity, interchangeability, physician notification, substandard pharmaceutical events, patient/physician/pharmacist education, the price/value equation, short-term savings vs. long-term patient outcomes.

It’s a small world after all.

Oils well that ends well.

Reporting from The Hill ...

Bipartisan House committee leaders on Thursday announced a $13 billion deal to pay for the cost of a measure to speed the approval of new medical cures

The 21st Century Cures measure, aimed at streamlining the FDA’s approval process for new drugs, has received bipartisan support in the Energy and Commerce Committee, easily passing a subpanel last week on a voice vote. 

But the major remaining question was how to pay for the bill’s cost, most of which comes from more than $10 billion over five years in new funds for the medical research at the National Institutes of Health. The bill also includes $550 million over five years for the FDA, a key point for Democrats, who pushed to have the funds added. 

Committee leaders in both parties worked intensely over the past few days to come to an agreement. 

The deal puts the bill on track to be a rare bipartisan achievement. After a markup Thursday morning, committee leaders hope to have a full House vote in June. 

“The policies in this package are long overdue and will pave the way for a new generation of health care innovation,” the bipartisan committee leaders said in a statement. “Too many patients and families have been waiting too long for cures — this bill will make a difference

The offsets include selling 8 million barrels of oil each year for eight years from the Strategic Petroleum Reserve, which the Congressional Budget Office says will bring in $5.2 billion. 

A second change modifies the timing of government payments to insurance companies under the Medicare Advantage program so that the government can keep interest earned on the funds rather than the insurer. This measure will bring in between $5 billion and 7 billion. 

A $2.8 billion change reduces Medicaid payments for certain medical equipment. It does this by lowering Medicaid payments to match the lower rates that Medicare pays for the same equipment. Medicare currently pays less because it uses a competitive bidding process.

The bill would also make $200 million by limiting payments for x-rays on film, incentivizing the switch to digital imaging. 

The markup had been scheduled for Wednesday morning, but it was delayed for 24 hours at the last minute after Democrats asked for more time to review the offsets and work through changes.  

Top Democrats on the committee had only seen the full offset proposals this week. 

Rep. Jan Schakowsky (D-Ill.) said Wednesday that the offsets had been “sprung” on Democrats. 

A Democratic committee aide pointed out it would be more customary to work out offsets later in the process after the bill passed committee, but attributed the faster timeline to Republican leadership wanting the bill to be paid for early on. 

The committee’s chairman, Fred Upton (R-Mich.), said Wednesday that leadership wants “us to get our ducks in line,” and that offsets had to be worked out so that the bill could be scored by the CBO. 

In a positive signal from leadership, the bill was given the number H.R. 6. Bill numbers 1-10 are typically reserved for the Speaker. 

Committee leaders sent proposal back and forth this week, winnowing down a list of possible offsets. 

Upton had a final meeting with the other leaders on the bill, Reps. Joe Pitts (R-Pa.), Frank Pallone (D-N.J.), Gene Green (D-Texas) and Diana DeGette (D-Colo.) on Wednesday before the group broke to brief the members in their respective parties. 

Upton said Wednesday evening that committee Democrats had met at 5:30 p.m. that afternoon to go over the deal. 

“We haven't heard any blowback, so I'm sensing that what we discussed earlier is going to hold,” he said. “So we're there.”

Eli Lily's John Lechleiter tells it like it is. And as John Adams said, "Truth is a pesky thing,"

Debunking The Five Big Myths About 'Big Pharma'

If you are a regular reader of politically oriented commentaries on the pharmaceutical industry then you are familiar with, and perhaps even subscribe to, what I call “the Big Five”—myths about this industry that routinely poison debates, obscure genuine problems, and distort policy recommendations on health care. These myths have been all over the public arena again recently, and it’s time to confront them systematically.

Myth #1 Pharmaceutical companies exaggerate the costs of developing new medicines to justify high prices. In fact: The research and development (R&D) expenditures of this industry are staggering—and since they are matters of public record there is no way and no need to exaggerate them.

In the U.S., the member companies of the Pharmaceutical Research and Manufacturers of America (PhRMA) alone spent more than $51 billion on R&D in 2014. That total is based on the same audited financial statements that appear in our annual financial reports to shareholders. In my own company’s case our R&D spending last year was $4.7 billion. In fact, the pharmaceutical industry accounts for 21 percent of all R&D spending by all U.S. businesses—creating and sustaining hundreds of thousands of jobs while serving as a the engine of biomedical progress for the entire world. This level of investment is what is required today to bring forth new medicines.

Myth #2 Industry does not develop most new medicines; they come from government and university laboratories. In fact: Government and academic research contribute in essential ways to biomedical progress—but the complex and expensive process of turning insights on diseases and promising leads into approved treatments for patients occurs almost entirely in private industry.

A recent academic analysis helps to tease out the key distinctions. Looking at the patent applications of all of the drugs approved by the U.S. Food and Drug Administration (FDA) from 1988 to 2005, the study found that nearly half of the new drugs cited either a public-sector patent or a government publication in their patent applications—demonstrating that publically funded research often contributes indirectly to the discovery and development of new medicines. But fully 91 percent of the approved drugs themselves were patented in the private sector—demonstrating that they were substantially discovered and developed by private firms.

Myth #3 Prescription medicines are the main driver of health-care cost increases. In fact: Expenditures on prescription medicines have been a stable component of health-care spending over time and often contribute to overall cost savings rather than to increases.

Only about 10 cents of every U.S. health-care dollar is spent on retail prescription medicines—which is the same share that was spent on prescriptions in 1960. While the overall use of medicines to treat many diseases has increased dramatically in that same period of time—and average life expectancy at birth in the U.S. has increased by more than nine years—the share of spending accounted for by prescription medicines is the same as it was 55 years ago. That comparison makes pretty clear that medicines are delivering value to the system rather than driving unsustainable cost increases.

A study published in the journal Health Affairs provides a good example of how this has worked. The researchers compared total medical expenditures for patients with four major diseases who faithfully used the medicines prescribed by their doctors versus those who did not. The “adherent” patients incurred somewhat higher prescription-drug costs, of course, but savings in their overall health-care expenses exceeded the extra drug costs by wide margins.

The fact that nearly nine out of 10 U.S. prescriptions are filled with generic medicines (which originated in the innovator sector, by the way) also has a lot to do with the overall stability of drug costs. The impact of generics has been especially positive for senior citizens and the programs that insure them. Looking at the top 10 prescription classes by volume used by Medicare Part D beneficiaries, the average daily cost of these therapies declined from $1.50 in 2006 to well under a dollar in 2013, and is headed much lower still.

Much discussion about pharmaceutical quality at the FDA of late (Drug Quality: If you can’t measure it, it doesn’t count, The silent “n” of PDUFA) – and specifically about a more 21st century view of bioequivalence.

And appropriately so. But is the agency doing the right thing the right way? Consider Concerta. Will the courts follow the chevron deference route or tell the FDA to put it on paper?

Here’s the skinny from the Wall Street Journal:

FDA and Mallinckrodt Lock Horns Over the Right to Sell Generic Concerta

By Ed Silverman

To what extent should the FDA be allowed to reclassify a generic drug when the agency believes it is no longer equivalent to the brand-name version?

The issue is being raised in an unusual lawsuit claiming the agency overstepped its bounds by deciding two generic drugs used to treat ADHD should no longer be substituted for the widely used Concerta treatment.

And the outcome of the case may have implications for generic drug makers and the FDA.

Here’s what happened: After reviewing side effect reports indicating some patients were not getting the expected benefit, the FDA analyzed the generics, which are made by Mallinckrodt and UCB, and found the drugs were not bioequivalent. This meant the drugs were not absorbed in the body in the same way as Johnson & Johnson’s Concerta or an authorized version also made by J&J, but sold by Actavis.

So last November, the FDA changed the ratings for the two generic versions, which contain the same active ingredient as Concerta. As a result, the two generics could no longer be automatically substituted for Concerta at pharmacy counters. The agency also gave the drug makers six months to provide data showing bioequivalency to Concerta or their drugs should be withdrawn from the market.

The deadline passed this week, but the generics remain available and it is unclear how the FDA will proceed. An agency spokeswoman would not comment. A spokeswoman for UCB says its Kudco unit, which sells generic Concerta, is working with the FDA to meet its requirement. Mallinckrodt, however, is a different story. The drug maker is not showing any signs of complying with the agency mandate.

Why? In its lawsuit, which was filed last November, Mallinckrodt challenged the authority of the agency to reclassify its generic by arguing the FDA failed to provide sufficient notice of its decision and violated its Constitutional rights. Moreover, Mallinckrodt notes the FDA acknowledged there are no safety issues and patients should continue taking the generics if they are not experiencing problems.

As a result, Mallinckrodt chief executive Mark Trudeau told Wall Street analysts last week that, while his company is talking to the FDA, the drug maker plans to sell its generic for the “foreseeable future.” A Mallinckrodt spokeswoman reiterated his remarks in response to questions, and an FDA spokeswoman would not comment, citing litigation.

Meanwhile, the generics can still be found in plenty of pharmacies. CVS and Rite Aid, for instance, stock the drugs, say spokespeople for the retailers. As Trudeau noted, the Mallinckrodt generic can be prescribed in “virtually every state in the nation,” depending upon state regulations.

As a result, new ADHD patients may also be prescribed a drug that is not therapeutically equivalent to brand-name Concerta. This is especially likely at a time when generics are valued as lower-priced alternatives.

This is not the first time the FDA has reclassified generic drugs over equivalency. In 2012, the agency changed ratings for some generic antidepressants. But the Mallinckrodt challenge is a first. Whether the drug maker succeeds is unclear.

But for now, the episode poses a dilemma, because the showdown has inadvertently produced another category of generic Concerta. A key issue is the extent to which the FDA can serve the public interest and retain the confidence of the American public.

“In a broad sense,” says Kurt Karst, an attorney who specializes in FDA regulatory matters, “this raises questions about the integrity of the generic drug system in the U.S.”

Express Scripts new ‘study’, “Super Spending: U.S. Trends in High-Cost Medication Use” diverts attention from the fact that it profits by discriminating against Americans who need affordable and open access to new medicines.

To maximize profits Express Scripts and health insurers are systematically placing most or all drugs that treat these and other conditions on the highest cost tiers to discourage enrollment by individuals based on age or based on health conditions. HHS notes such practices make those plan designs discriminatory.

To be sure 1 percent of all patients do use a considerable amount ($50000 or more) of medications.  But it is also true that the 1 percent of the most costly patients also consume about 22 percent of all health care spending.

Using Express Scripts data we find that the drug costs of super spenders is a little over 7 percent of the total spending of the 1 percent most costly cohort of patients. 

As the number of people using new medicines increases, their health care costs as a percent of total health care spending has declined.

In 2011, 11.4 percent of total cancer expenditures were for prescription medicines as compared with 3.6 percent in 2001.  The proportion spent on inpatient hospital stays declined from 47 percent in 2001 to 35 percent in

Meanwhile, the claim that drug spending is unsustainable is itself unsustainable

The share spent on medicines will remain flat for the rest of the decade.

Express Scripts claims that patients who used $50000 or more of medicines paid from $1773-2782 out of pocket in 2014.  This estimate also includes Medicare patients who pay only 95 percent of the cost of a drug after an out of pocket maximum is met and Medicaid patients who have a nominal co-pay of $3-5 for all medicines.  Thus, the Express Scripts study masks the burden on consumers in health exchange plans. 

Moreover, HHS estimates that out of pocket spending for drugs, as percent total drug expenditures will actually increase 27 percent over the next decade. 
This shift began a decade ago when PBMs and insurers created formulary tiers of increasingly higher cost and placed newer medicines for chronic conditions on the highest cost-sharing tier.

Despite overwhelming evidence that higher co sharing reduced use of new medicines and leads to higher treatment costs, PBMs and health plans have placed drugs for cancer, rheumatoid arthritis, and multiple sclerosis in the highest cost-sharing tier.  The number of Silver plans in the health exchange that charge patients 30 percent or more has increased to 41% in 2015 from just 27% in 2014.

Such practices have been singled out as violating the civil rights of patients. As the Department of Health & Human Services has stated: “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.”

The fulll CMPI report:  Super Misleading: Express Scripts Super Spenders Study will be available Monday..

FDA puts it's money (actually, our money) where it's mouth is per pharmaceutical quality.

From the pages of Drug Industry Daily --

FDA Grants Seek to Further Quality Metrics Approach

The FDA is offering two grants of up to $600,000 each over three years in exchange for data to establish statistically based pharmaceutical quality standards — a further sign of the agency’s commitment to using quality metrics.
The proposed projects, announced Friday, will evaluate batch-to-batch and unit-to-unit variability of companies’ products, capturing data on such quality chemical and physical attributes as tablet weight, assay, content uniformity and dissolution.
The data will be used to create a risk-based lifecycle approach that measures quality over every step of the manufacturing process, Peter Pitts, president and founder of the Center for Medicine in the Public Interest and a former FDA associate commissioner, tells DID.
CDER plans to use the information to develop data-based guidance on the use of statistical tools and standards to improve drug quality.
Grantees should look at factors such as the range of product dosage forms, manufacturing complexity, types of manufacturing, inter- and intra-batch variability and analytical method variability. The goal is to be able to statistically characterize manufacturing variability, whether across the entire pharmaceutical industry or defined by subsets identified through analysis, the FDA says.
Down the line, collected variability data could be used for bioequivalence testing, Pitts says. It also could be used by OPQ to help support quality-based inspections.
The agency will award $200,000 per recipient in fiscal year 2015, with additional allotments of $200,000 possible over the next two years.
Applications are due July 7, and the FDA encourages applicants to apply early to allow time for any corrections.
Read the announcement at

Statistics are like a bikini. What they show you are interesting, but what they conceal is essential.

Late last month the FDA’s Bioresearch Monitoring (“BIMO”) Program released its annual report on inspections from the previous fiscal year. 

In light of many key issues and initiatives, some of the results are, well … thought provoking.

For example:

·      Following well-publicized recalls of bioequivalent but therapeutically unacceptable generic versions of Budeprion and Metoprolol, the agency reported a 7% decrease in bioequivalence inspections (205 in FY13 and 190 in FY14). Something for the new Office of Pharmaceutical Quality to think about.

·      Can you say “Ranbaxy?” BIMO shows only paltry changes in international inspections from the drug side (CBER down 1 inspection – 24 in FY13 and 23 in FY14 and CDER up a dozen -- 202 in FY13 and 214 in FY14). It’s not the “n” it’s only the beginning.

With PDUFA reauthorization conversations getting under way, these and other metrics are going to be discussion starters and debate drivers. The complete report is worth a read.


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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