Latest Drugwonks' Blog

I recently had the pleasure of meeting with Captain Valerie Jensen, USPHS, who has led the FDA’s efforts to tackle the problem of drug shortages in the US over the past several years. (She is officially the Associate Director of the FDA’s Drug Shortage program.)

Alas, as the tabloid press reminds us, “if it bleeds, it leads.” The media frenzy surrounding drug shortages has vanished. Why? Because, due in no small measure to efforts from the FDA, the problem is being successfully addressed and ameliorated. Unfortunately, that’s not news – but it should be. Here are some interesting points.

The FDA’s strategy in addressing the issue is to enlarge and empower a drug shortage ecosystem. Rather than seeking more Federal dollars (a fool’s errand), the FDA undertook to combine the resources of the constituent players, manufacturers, hospitals, and large-scale purchasers such as GPOs. Combined with appropriate and savvy use of enforcement discretion, the FDA has taken leadership of the drug shortage ecosystem and is driving a sustainable solution.

The drug shortage ecosystem relies on more than just FDASIA-mandated notification requirements –it’s built on trust. Specifically, that the FDA wants to work with manufacturers to solve the problem rather than simply whack them with 483s. The agency is showing more regulatory flexibility when resolving manufacturing and quality issues.

Curiously, a new cause of shortages has arisen – poor corporate planning. Shortages, for example, in Sodium Chloride IV kits have hit the agency’s radar screen. The problem isn’t due to manufacturing quality, but rather lack of inventory.  Hello?

Smart business projections must also be a part of the drug shortage ecosystem.

Speaking of business practices, there remains the 800-pound gorilla of the drug shortage dilemma -- artificially low prices are a major causational problem. And that’s not something the FDA can help fix.

It’s time for our lawmakers to revisit the legislative solution proposed in Senator Orrin Hatch’s Patient Access to Drugs in Shortage Act. There are three key codicils:

1. Price Stability

The Hatch language would change the Medicare reimbursement rate for generic injectable products with 4 or fewer active manufacturers from ASP + 6% to Wholesale Acquisition Cost in order to achieve market price stability.

2. Medicaid/340B Rebate Exemption

Exempt generic injectable products with 4 or fewer active manufacturers from Medicaid rebates and 340B discounts in order to achieve market price stability.

3. Extended Exclusivity

Manufacturers who hold an approved application for a drug that would mitigate a shortage can extend by 5 years any period of exclusivity, even if the drug is eventually moved from drug shortage designation.

So, kudos to Captain Val and her team at the FDA.

Now it’s time to enlarge the eco-system via timely and targeted legislation.

Per BioCentury, USP endorses INN suffix for biologics

The U.S. Pharmacopeial Convention (USP) endorsed a draft World Health Organization (WHO) proposal to create a unique suffix for biologic drugs, including biosimilars.

A WHO working group proposed a voluntary scheme to create unique identification codes, called "biological qualifiers," that would be distinct from international non-proprietary names (INN). The BQs would be random four-letter codes that would be linked in a WHO-maintained database to the product's INN, trade name, name and address of the manufacturer, and regulatory status. According to the WHO, the scheme could facilitate decision making about substitution and interchangeability and help regulators and physicians track patients' responses to products with the same INN.

In comments submitted to WHO, USP suggested that the BQ system be applied to all biologics, not just biosimilars. BQ codes could be assigned retrospectively.

The endorsement comes as FDA is finalizing its biosimilars naming policy in anticipation of regulatory decisions on at least two pending biosimilar applications. Sandoz, a unit of Novartis AG (NYSE:NVS; SIX:NOVN), has submitted an application for a biosimilar version of Amgen's Neupogen filgrastim and biosimilar version of Remicade infliximab, a mAb marketed by Johnson & Johnson (NYSE:JNJ) and Merck & Co. Inc. (NYSE:MRK)

NICE in context

  • 09.23.2014

Superb analysis of the recent NICE draft technology appraisal against the use of Abraxane from the folks at Context Matters. Well worth the read.

NICE: Draft Guidance in Context

In early September, the UK’s National Institute for Health and Care Excellence (NICE) released a draft technology appraisal recommending against the use of Celgene’s Abraxane (nab-paclitaxel) for Pancreatic Cancer. NICE often releases drafts prior to their final reports, giving pharmaceutical companies and other stakeholders the opportunity to offer further information, evidence, and comments. This preliminary decision inspired a number of news articles—PMLiVE, Fierce Pharma, The Telegraph, PharmaTimes, and other news sources all added to the headlines about the agency’s initial report.

Although each of these articles states at least once that the appraisal is draft guidance, not a final decision, it is important to emphasize that NICE’s draft decisions are subject to change. This past May, for example, another Celgene drug, Revlimid (lenalidomide), received a negative draft decision for the treatment of myelodysplastic syndromes. Months later, in August, NICE released a new draft with a positive decision based on additional information provided by Celgene. In March, NICE issued a draft guidance against Alexion’s Soliris (eculizumab), but requested more information justifying the cost. At the beginning of September, NICE, satisfied with Alexion’s addendum, released new positive draft guidance. These three instances alone occurred in 2014; there are more in NICE’s history.

Publishing draft guidance brings up an important point about NICE in particular and HTA agencies in general. NICE’s efforts toward transparency are admirable, but decisions can change until the final guidance is released. Each of the above news articles represents a single data point—a single update in an ongoing process toward a final decision. Only the final decision is binding. Although following the news is certainly valuable, these brief updates do not tell the entire story. Furthermore, though influential, NICE’s decisions do not determine how other countries will make their decisions. NICE is a high-profile agency, but there are others that provide insight into global HTA and reimbursement policies and decisions.

Draft Guidance from NICE: Not the Last and Final Word

Indeed, NICE issued negative draft guidance about Abraxane; but the story does not end there. Abraxane has also been reviewed for Breast Cancer and Ovarian Cancer, and it has been reviewed multiple times by other agencies: HAS in France, PBAC in Australia, CCO in Canada, and SMC in Scotland have all reviewed the drug for at least one indication.

The Snapshot, generated here by the Context Matters Reimbursement Risk Tracker (RRT) database platform, shows that Pancreatic Cancer reviews currently comprise only a small percentage of all HTA reviews for Abraxane. The news about a NICE draft provides manufacturers and stakeholders an opportunity to present additional data and commentary, but it does not include the necessary and complete context to understand the market access status of the drug around the world, or for other disease conditions. Informed action requires more context than that included in the drafts alone.

Furthermore, the draft does not represent all that NICE has decided about Abraxane in the past. NICE recommended Abraxane for the treatment of Ovarian Cancer in 2005; but in 2006, the agency issued a negative decision for its use in Breast Cancer.

The Scottish Medicines Consortium (SMC) has already reviewed Abraxane for Pancreatic Cancer. The agency issued a negative recommendation, finding it more efficacious/effective, but less cost effective than its comparators.

To be sure, draft guidance reviews from NICE provide insight and are valuable issuances to read once published in the news. However, they do not guarantee future and final outcome, nor do they tell the whole story.

From today's edition of the Washington Examiner.

America's other drug war

By Philip Klein

Critics don't dispute the drug's effectiveness, they take issue with the cost: $1,000 per pill.

Winston Churchill famously described an appeaser as "one who feeds a crocodile, hoping it will eat him last." Today, in a very different context, his remark captures the plight of the American pharmaceutical industry.

Roughly five years after lobbyists for drugmakers worked to help pass President Obama’s healthcare law in hopes it would fend off greater government intervention, the industry finds itself under attack.

As the nation focused on Obamacare’s implementation this year, a civil war has erupted within the healthcare industry over a miracle drug named Sovaldi.

The medicine has been shown to cure about 90 percent of common cases of hepatitis C, a condition that affects roughly 3 million people in the United States and can lead to severe liver problems. Sovaldi achieves this with fewer side effects than any previously available treatment, and it works more quickly, too.

Critics don’t dispute the drug’s effectiveness. But they are taking issue with the sticker price: $84,000 for a 12-week course of treatment, or $1,000 per pill.

The seemingly simple question, "Is a pill worth $1,000?" has triggered a fierce debate over drug pricing and the future of American medical innovation at a time when the healthcare system is undergoing radical transformation.

Critics led by insurers and pharmacy benefit managers (which help administer drug plans) have argued that Sovaldi’s price is completely unreasonable, putting a strain on the budgets of individuals, businesses, and state and federal governments.

If half of the estimated population in California with hepatitis C were treated with the drug, it would increase spending on the disease within the state by $22 billion in a single year, according to a report from the insurance industry-affiliated California Technology Assessment Forum.

Critics argue that Sovaldi is just the beginning of a wave of new high-priced specialty drugs that will trigger an explosion in medical spending in the years to come.

"If [Sovaldi] is prologue to future pricing decisions, we are talking about blank-check pricing that is simply not sustainable," lamented Karen Ignagni, president and CEO of lobbying group America’s Health Insurance Plans, which has launched a furious public campaign intended to shame drugmakers.

Express Scripts, the nation’s leading pharmacy benefit manager, has also jumped into the fray. "We’ve taken a strong stand on Sovaldi, because it’s the canary in the coal mine," said Steve Miller, the company’s chief medical officer. "If we let this price stand unchallenged and we don’t fix the system ... the system will not sustain itself. And we will not stay the innovative country we are today."

The pharmaceutical industry counters by arguing that beyond the costs associated with researching and developing new drugs and going through the arduous federal approval process, there is the tremendous long-term value created by breakthrough medicines.

For a long time, criticism of pharmaceutical companies focused on the fact that they merely created "me-too" drugs and were interested only in treating symptoms. But that’s where Sovaldi is different.

"We’re curing people of a disease,” said Gregg Alton, executive vice president for corporate and medical affairs at Gilead Sciences, which manufactures the hepatitis C drug.

Sovaldi launched in December 2013 and the Foster City, Calif., company reported sales from the drug totaling $5.8 billion for the first six months of 2014. The company’s profit nearly quadrupled during those six months compared with the same period a year earlier.

Although Gilead isn’t a member of the Pharmaceutical Researchers and Manufacturers of America, the industry lobbying group has taken to defending the pricing of Sovaldi because of the broader principles involved. The group argues that by curing a disease that is the leading cause of liver cancer and liver transplants, Sovaldi is making a significant contribution to public health and eliminating long-term costs associated with more severe medical interventions.

Lori Reilly, PhRMA’s vice president for policy and research, noted that the stepped-up attacks on drug pricing are coming at a time when society should be focused on how science and technology could usher in a new era of treating, even curing, destructive diseases.

“We’re never going to get there if we have price controls in effect or if we send chilling signals to pharmaceutical companies that we’re not going to value innovation when innovation happens,” Reilly said.

Though there haven’t been any proposals for direct government intervention to hold down the cost of Sovaldi, public pressure has begun to be felt on Capitol Hill. In June, Rep. Henry Waxman, D-Calif., and Diana DeGette, D-Colo., ranking Democrats on the House Energy and Commerce Committee, called for a congressional hearing on Sovaldi's price.

In a bipartisan letter to Gilead Chairman and CEO John Martin in July, Senate Finance Committee Chairman Ron Wyden, D-Ore., and Sen. Chuck Grassley, R-Iowa, wrote that Sovaldi’s “pricing has raised serious questions about the extent to which the market for this drug is operating efficiently and rationally.” The senators directed their staffs to investigate the matter due to its potential impact on federal spending and made extensive document requests of Gilead.

Such moves do not suggest an immediate threat to pharmaceutical companies from the federal government. But they need to be seen as a warning shot because this conversation over price is occurring when government is becoming a much bigger player in the nation’s healthcare system.

With governments under constant pressure to cut costs, it could only be a matter of time before drugmakers find themselves targeted by lawmakers. And on this front, the pharmaceutical industry cannot avoid blame.

On June 3, 2009, fewer than five months into the Obama presidency, Nancy-Ann DeParle, then director of the White House Office of Health Reform, emailed PhRMA’s chief lobbyist. As healthcare legislation was still being drafted in Congress, DeParle reported that the administration had decided, “based on how constructive you guys have been, to oppose importation on this bill.” This was a reference to allowing the importation of cheaper drugs from Canada, something favored by many Democrats but strongly opposed by drugmakers.

The email, one of many unearthed by a 2012 investigation by the House Energy and Commerce Committee, exposed the deal-making between the White House and the pharmaceutical industry during debate over Obamacare. It involved a journey for both sides.

During his 2008 presidential campaign, Obama attacked the cozy relationship between the drug industry and government. In an ad titled “Billy,” Obama highlighted the fact that Billy Tauzin, who helped push the 2003 Medicare prescription drug bill through Congress as chairman of the House Energy and Commerce Committee, became the president and chief executive of PhRMA shortly afterward. “I don’t want to learn how to play the game better, I want to put an end to the game-playing,” Obama vowed.

But once in the White House, Obama changed tack. As administration officials crafted their strategy for pushing national healthcare legislation, they determined that co-opting health industry lobbyists was crucial if they were to get the bill across the congressional finish line and to the president’s desk for his signature. In 1994, fierce industry opposition had helped wreck the Clinton administration’s healthcare initiative, and Obama didn’t want history to repeat itself. So he played the game he had sworn to eschew, and made a deal with Tauzin after all. (PhRMA has undergone a leadership change since the passage of the healthcare law, and is now headed by John Castellani.)

The pharmaceutical industry has had its own complicated relationship with government. Its business model depends on a vigorous defense of capitalism — of the right of innovators to reap profits based on the value they bring to the free market. But government has the industry in a chokehold, given its control over patent law. Drugmakers enjoy a limited period of exclusivity for their inventions, an idea that is rooted in the vision of America’s Founders to promote the arts and sciences.

In the modern era, the Drug Price Competition and Patent Term Restoration Act of 1984, known as Hatch-Waxman, helped establish a balance between allowing drugmakers to profit from their innovations for a period of time and introducing lower-priced generic alternatives into the market.

During the Bush era, PhRMA lobbied for passage of the Medicare prescription drug law, which brought billions of dollars of business to the industry, but also made the federal government a larger purchaser of prescription drugs. Drugmakers lobbied successfully to prevent the government from directly negotiating drug prices.

When Obama came to Washington in 2009 after a landslide election victory that also cemented huge Democratic majorities in both chambers of Congress, he created an air of inevitability about the passage of a national healthcare plan.

Facing the prospect of a bill passing over its objections and without regard to its concerns, the drug industry decided it was better to cut a deal. PhRMA agreed to support the law, take out ads promoting it, and produce $80 billion worth of taxes and other savings to help finance it. In exchange, Obama would protect drugmakers from liberal Democrats who wanted the federal government to drive down drug prices by negotiating with the manufacturers and by allowing imports from Canada. The law produced millions of newly insured Americans who became customers for prescription drugs.

Peter Pitts, who served as an associate commissioner of the U.S. Food and Drug Administration during the Bush administration and is now president of the Center for Medicine in the Public Interest, has been defending the drug industry during the Sovaldi fight. But he said PhRMA’s short-term calculation to save itself from Obamacare complicates the industry’s arguments.

“By saying, ‘We support Obamacare’ and all the things it means, both in terms of what was on paper and what it means spiritually to a lot of people, they really gave away the high ground on a free-market healthcare system and what that means relative to the ability to exist and produce innovation and reap the rewards,” Pitts said.

He explained: “You can’t cut a deal with a group of people who are fundamentally against your business model and expect that it’s going to save your bacon.”

The pharmaceutical industry had also overestimated the inevitability of Obamacare’s becoming law. By the summer of 2009, there was a strong public backlash against it, and it barely passed. Had PhRMA waited to see how well it progressed, it might have been able step in at a later stage and tip the scales against passage. But hindsight is 20/20.

“A lot of people in the pharmaceutical industry right now are unhappy with the fact that a deal was cut and the federal government still has the long knives out pushed against their throats,” Pitts said.

In a slap to drugmakers, after the healthcare law passed, Obama pushed for slashing the exclusivity period on drugs produced using biotechnology to seven years from the 12 years that was assumed in Obamacare.

This, Pitts argues, shows why it was naive for PhRMA to believe it could make a deal with the administration. “But in fairness to Billy Tauzin,” he acknowledged, “as the saying goes, if you’re not at the table, you’re on the menu.”

The drug industry now finds itself under fire once again. Though there have been more expensive drugs than Sovaldi, they have so far been treatments for relatively rare conditions. In contrast, an estimated 3.2 million people in the United States are afflicted with hepatitis C, a blood-borne illness most commonly transmitted through injection drug use. Many people aren’t symptomatic and do not get tested, so the actual number of people infected could be several million higher.

The release of Sovaldi "was an unprecedented event in the following way,” explained Miller of Express Scripts. “We’ve had higher-priced drugs. We’ve never had a drug priced this high for this many people.”

He added, “It’s a threat to healthcare economics that we’ve never seen before.”

Miller argued that the pricing of Sovaldi isn’t reasonable, especially because Gilead “didn’t invent this drug, they bought it. And so they didn’t have R&D costs sunk into it.”

Gilead’s Alton disputes this view and notes that although the company did acquire Sovaldi when purchasing Pharmasset for $11 billion in 2011, at that point the drug was still in the early part of Phase III trials (the largest and most expensive stage of drug testing). Thus, the drug required further development. “We did the vast majority of R&D on Solvaldi,” he insisted.

He also emphasized that Gilead isn’t claiming to have priced the drug based on research and development costs. “What we did was price it based on the standard of care that was used prior to Sovaldi,” he said.

Prior treatments for hepatitis C, he argued, took longer, and the overall treatment regimen cost the same. But those treatments weren’t nearly as effective and in many cases, couldn’t be tolerated by patients.

He also says it’s unfair to look at upfront costs without considering savings over time.

The California Technology Assessment Forum study concluded that if 50 percent of those estimated to have hepatitis C in the state were to take Sovaldi, after 20 years, the offsetting savings would recoup three quarters of the initial drug expenditures. But the study also found that if the drug were given only to those with advanced liver problems, the 20-year savings would exceed the costs by $1 billion. This is why several state Medicaid programs have restricted prescriptions of the drug to populations with more advanced liver disease.

Another factor weighing in congressional thinking is that, according to a survey cited by Sens. Wyden and Grassley, nearly a third of all people with hepatitis C are in prison, and treating prison populations with Sovaldi could pressure federal budgets.

Defenders of Sovaldi’s price note that the oft-cited $84,000 tag isn’t what people actually end up paying once the price has been negotiated down. Nor is everyone with hepatitis C going to get treated. Gilead estimates that Sovaldi will treat roughly 150,000 patients this year in the U.S.

But to Miller, this is all the more reason for a lower price. It would, he says, allow a national campaign to screen people for hepatitis C, and then get them cured. “If the cost were lower, wouldn’t you like to eradicate hepatitis C from the population?” he asked.

Gilead can make a substantial profit even with a lower price, he claims, because manufacturing costs are negligible. The company, he said, “should be able to make a great profit. But the profit shouldn’t be anything the market will bear.”

In other countries, Sovaldi is cheaper. In the United Kingdom, the 12-week course costs $57,000. On Sept. 15, Gilead announced a deal with generic drugmakers in India to produce a lower-priced version of the drug for poorer countries. This is an example of how Americans often subsidize global drug spending.

Sovaldi is expected to get more competition within the United States in the coming months, and its patent expires in March 2029.

Looking ahead, Miller said that other drugs, such as new cholesterol treatments called PCSK9 inhibitors, present an even more daunting payment challenge. He said the new treatments could theoretically be beneficial to 10 million Americans with high cholesterol who cannot tolerate current treatments and are expected to cost $10,000 per year. But unlike Sovaldi, these treatments would have to be repeated, meaning it could boost prescription drug spending by $100 billion annually.

In 2013, cumulative prescription drug spending in the United States was $272 billion, according to a report released in September by actuaries for the Centers for Medicaid and Medicare Services. As defenders of the industry point out, for all the criticism of drug pricing, it represents slightly more than 9 percent of all health spending, the same share that actuaries expect prescription drugs to take in 2023.

Critics of drug pricing from other health sector industries insist that they do not support government intervention, but rather, intend to pressure drugmakers to lower prices. In their comments, there’s an unstated warning to pharmaceutical companies to make their products more affordable or risk government meddling.

AHIP’s Ignagni said the insurance industry’s goal is “to find a private sector solution before anything arises on the public sector side.”

She argued that “hospitals that have pricing that is unsustainable and unaffordable have been challenged to reduce that pricing.”

She went on to explain that, with “everybody in the healthcare arena ... the conversation begins, ‘How can we work to reduce costs?’ ” But, she said, drugmakers represented “the only sector where that conversation is not occurring.”

Miller also pleaded with drugmakers to adjust their pricing voluntarily, before it’s too late.

“We think the market should fix itself,” he said. “But what we’re afraid of, remember, is the government becoming a bigger and bigger player in healthcare every year.”

In 2008, government at all levels accounted for 41 percent of total U.S. healthcare spending. That is projected to reach 48 percent by 2023, according to CMS.

“And so as the government becomes a bigger payer, what will happen is, if these prices keep going up, they’re going to go back to the playbook they understand, which is price control,” Miller warned. “And price controls would be a disaster for pharmaceutical innovation in this country.”

Gilead’s Alton agues that the long-term value created by Sovaldi is so apparent that it would “fare very well in a rational system that evaluates [drugs] on long-term value.”

Reilly of PhRMA said the concept of government interference is “always a concern” for the industry. She used Alzheimer’s as an example of a disease whose victims would benefit from a system that places a high value on innovation.

“If the signal that gets sent is, if you are the company that happens to solve that conundrum, or make significant progress against it, [you are] going to face government price controls, I’m not sure that there is the type of incentive or desire for companies to take that risk,” she said.

Obamacare didn’t pass in a vacuum. It passed after critics of private insurance spent decades pummeling insurers for imposing caps on coverage, denying coverage to individuals with pre-existing conditions, and dropping seriously ill patients. Now, insurance companies find themselves at the mercy of federal regulators who dictate the benefit packages they must offer and limit the amount of profit they may make after paying out medical claims, effectively treating them as public utilities.

Federal lawmakers have levers at their disposal that could pressure drugmakers. Congress could shorten patents, for instance, or allow the government to negotiate drug prices in public programs, or simply pass laws to control drug prices.

Politicians often cite the cost to public health programs when it comes to imposing nanny-state policies such as banning trans fats or smoking in public places. It’s easy to see how, with healthcare costs consuming a growing share of government budgets, there could be a powerful campaign against drugmakers who charge high prices for popular drugs. Drugmakers wouldn’t have much recourse against those in power who see medical innovations as public goods.

“You don’t know what you don’t have yet,” Reilly said. “And the promise of future innovation sometimes gets lost on people.”

For decades, drug companies have lobbied to have it both ways, to reap the benefits of a bigger government while enjoying the profits of the market. But the philosophy underlying big government is incompatible with a free enterprise system that allows innovators to price products based on their market value. And if the pharmaceutical industry hasn’t learned this lesson yet, it probably soon will.

Despite what you might think, the various actions and directives emanating from White Oak tell a very liner story with very steady red thread – and that thread is the difference between communications and marketing.

To many in pharmaceutical company marketing and regulatory review departments it may seem a distinction without a difference. But that’s a fundamental misunderstanding of the FDA’s mindset when it comes to social media.

As Casey Stengel used to say, “Let’s look at the record.”

In April of 2009, the FDA send out 14 warning letters on sponsored Google links – and many pharmaceutical regulatory review professionals said, “See, told ya – you can’t use social media,” and breathed a secret sigh of relief – the first sign of an ever-growing regulatory social media Stockholm Syndrome.

But they were wrong; because when you read the letters it becomes quickly evident that the FDA’s then Division of Drug Marketing, Advertising, and Communication properly equated “sponsored links” not with social media – but with paid advertising. In the context of those letters, “sponsored” equals “paid.” And there are rules for that.

Even before the famous 14 Google letters, in September 2008, the FDA sent out a warning letter regarding a YouTube video in which a paid celebrity spokesperson said that a drug had “cured” his disease (a decidedly off-label claim, shades of Dorothy Hamill and Vioxx). And many internal reviewers industry-wide said, “See, you can’t use YouTube.” Not so. Read the letter. If the content is non-compliant, then it is non-compliant regardless of platform. It’s the content that counts.

In March 2013, there was much angst over the FDA’s Warning Letter to AMARC Enterprises because of their Poly Mva FaceBook page. Aha! said our friends in legal and regulatory review said – you can’t use FaceBook!

The gist of that letter is that the company is marketing its veterinary dietary supplement as a human oncology drug. OPDP spends a lot of space on violative claims made on the company’s website and then – at the very bottom of the letter – addresses the issue of FaceBook. The OPDP writes that, We also note that your Facebook account includes a post which was “liked” by “Poly Mva”:

 “Poly MVA has done wonders for me. I take it intravenously 2x a week and it has helped me tremendously. It enabled me to keep cancer at bay without the use of chemo and radiation…Thank you AMARC”

That’s a violative statement on any media platform. It just happened to take place on FaceBook. And the letter was rather prescient when you consider the FDA’s most recent social media draft guidance of June 2014, Correcting Independent Third-Party Misinformation About Prescription Drugs and Medical Devices:

If a firm chooses to respond to misinformation about its products using non-truthful or misleading information or in a manner other than that recommended in this draft guidance, however, FDA may object if the information provided by the firm does not comply with applicable regulatory requirements related to labeling or advertising, if any.

“Liking” a violative third-party statement on your own FaceBook is violative behavior. Not rocket science and a clear and clarion call to the distinction between communications and marketing.

Now let’s go back in time to the agency’s December 2011 draft guidance, Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices.

This draft guidance doesn’t address many of social media’s (referred to in the document as “emerging electronic media”) regulatory red flags such as adverse events, the question of property owner vs. property user, and a more precise discussion of what “sponsored” means.

But the giant regulatory bugaboo, not only of social media but of regulated speech writ large, is off-label communications. So those who complained this document isn’t “comprehensive enough” don’t understand what it has to offer. Most importantly, it continues the red thread of marketing vs. communications, expanding in a crucial way to off-label marketing vs. off-label communications.

Consider the following verbiage from the draft guidance:

FDA has long taken the position that firms can respond to unsolicited requests for information about FDA-regulated medical products by providing truthful, balanced, non-misleading, and non-promotional scientific or medical information that is responsive to the specific request, even if responding to the request requires a firm to provide information on unapproved or uncleared indications or conditions of use.

The agency recognizes companies are already responding to unsolicited requests for off-label information.  That means the current procedures companies have in place to address these requests are (when properly followed) FDA compliant.

That’s not, however, a get-out-of-jail-free card by any means.  Just as with traditional communications, there’s a great deal of regulatory ambiguity and use of the FDA’s favorite tense -- the conditional tense:

Statements that promote a drug or medical device for uses other than those approved or cleared by FDA may be used as evidence of a new intended use.

In other words, the role of legal and medical in the review of social media communications (relative to off-label issues and beyond) is still crucial.  This draft guidance doesn’t lighten the regulatory burden – it just makes it more feasible.
What it also says (IMHO) is that responding to unsolicited off-label communications is, indeed, in the best interest of the public health:

FDA recognizes that it can be in the best interest of public health for a firm to respond to unsolicited requests for information about off-label uses of the firm’s products that are addressed to a public forum, as other participants in the forum who offer responses may not provide or have access to information about the firm’s products.

The agency has, importantly, made a clear distinction between “solicited” and “unsolicited” off-label questions:

Unsolicited requests are those initiated by persons or entities that are completely independent of the relevant firm.  (This may include many health care professionals, health care organizations, members of the academic community, and formulary committees, as well as consumers such as patients and caregivers).  Requests that are prompted in any way by a manufacturer or its representatives are not unsolicited requests.

The draft guidance makes it clear that misinformation is an important issue:

The Internet has also spawned a variety of social media tools that host online content primarily created and published by users other than the intellectual property owner or product manufacturer.  In some cases, this online content may not be accurate.

Which brings us to the June 2014, Correcting Independent Third-Party Misinformation About Prescription Drugs and Medical Devices.

For those of you not currently on NoFocus therapy, you will remember the 2009 Part 15 hearing on social media – the “SuperBowl of FDA Part 15 hearings.” One of the key questions the agency wanted to discuss was how to correct erroneous product information. All they got were blank stares and request for FDA guidance. Five years later – voila!

The agency writes:

This draft guidance is intended to describe FDA’s current thinking about how manufacturers, packers, and distributors (firms) of prescription human and animal drugs (drugs) and medical devices for human use (devices) should respond, if they choose to respond, to misinformation related to a firm’s own FDA-approved or -cleared products when that information is created or disseminated by independent third parties on the Internet or through social media or other technological venues (Internet/social media), regardless of whether that misinformation appears on a firm’s own forum or an independent third-party forum or website.

Key take-away is that the decision to correct errors is purely voluntary. (But, then again, technically so are all product recalls.) Where that becomes more complicated is how companies may choose to cherry-pick where they interceded for corrective purposes. This is not an issue addressed by the FDA in this draft guidance.  One thing this all means is more work for legal and regulatory review.

This draft guidance is all about user-generated content. The agency writes:

The Internet and Internet-based technologies have made it easier for third parties who are independent of firms to disseminate information about drugs and devices. Information created by third parties (which for purposes of this guidance is user-generated content (UGC)) might appear on an interactive portion of a firm controlled website or other interactive Internet/social media platform, or information might appear on a website or other Internet/social media platform that is independent of, or not under the control or influence of, a firm.

Many Internet/social media platforms allow for real-time and continuous communications and interactions (e.g., blogs, microblogs, social networks, online communities, and live podcasts) while other platforms do not provide a means for interactive content to be posted. Whether a forum is interactive may affect the means by which a firm is able to respond to information.

And, the agency stipulates, “UGC might not always be accurate and may be dangerous or harmful to the public health.” Well, yes. What’s a manufacturer to do?

Five years later, some helpful advice from the good people at White Oak.


If a firm voluntarily corrects misinformation in a truthful and non-misleading manner and as described in this draft guidance, FDA does not intend to object if the corrective information voluntarily provided by the firm does not satisfy otherwise applicable regulatory requirements regarding labeling or advertising, if any.

From a regulatory perspective, that’s a lot of wiggle room and should provide significant food for thought in erring on the side of more rather than fewer voluntary corrective actions.

But (per 12/11) guidance:

If a firm chooses to respond to public unsolicited requests for off-label information, the firm should respond only when the request pertains specifically to its own named product (and is not solely about a competitor's product).

Forewarned is Forearmed. Don’t get to cute. Follow the red thread.

The June 2014 draft guidance isn’t about sponsored communications. The agency writes:

This draft guidance does not apply when a firm is responsible for the product communication that contains misinformation. A firm is responsible for communications that are owned, controlled, created, or influenced, or affirmatively adopted or endorsed, by, or on behalf of, the firm.

A firm is thus responsible for communications on the Internet and Internet-based platforms, such as social media, made by its employees or any agents acting on behalf of the firm to promote the firm’s product, and these communications must comply with any applicable regulatory requirements.


… this draft guidance applies when a firm is not responsible for a product-related communication that appears on the firm’s own forum, an independent third- party website, or through social media, and the firm chooses to correct misinformation about its own product contained in that communication. In such cases, we recommend that the firm do so as described in this draft guidance.

Here are the agency’s eight ground-rules for “appropriate corrective information;”

* Be relevant and responsive to the misinformation;

* Be limited and tailored to the misinformation;

* Be non-promotional in nature, tone, and presentation;

* Be accurate;

* Be consistent with the FDA-required labeling for the product;

* Be supported by sufficient evidence, including substantial evidence, when appropriate, for prescription drugs;

* Either be posted in conjunction with the misinformation in the same area or forum (if posted directly to the forum by the firm), or should reference the misinformation and be intended to be posted in conjunction with the misinformation (if provided to the forum operator or author);

* Disclose that the person providing the corrective information is affiliated with the firm that manufactures, packs, or distributes the product.

Truthful. Accurate. Transparent. Three good rules of thumb. But what about “timeliness?” No advice from the agency on this one – but something crucial for manufacturers to consider since the goal here is to protect the public health.

Again, the agency offers important nuance on how to correct. For example, don’t just correct one mistake when multiples ones appear. The draft guidance also offers absolutely critical commentary relative to the depth and breadth of responsibility when correcting one piece non-sponsored UGC, “The firm is not expected to correct misinformation that appears on other webpages of the website.”

Those sweet sixteen words address a world regulatory angst.


Once a firm undertakes the correction of misinformation, FDA does not expect the firm to continue to monitor the website or communication that previously included UGC containing misinformation.

This does, however, point to the need for individual companies to develop their own policies in this regard. More work for legal/regulatory review teams!

And, for those of you who are thinking a little too hard, consider this important caveat:

… if a firm chooses to correct only misinformation that portrays its product in a negative light in a third-party communication but does not address misinformation that overstates the benefits of its product in that same clearly defined portion of the communication, the firm’s actions do not meet the recommendations in this draft guidance.

Voluntary corrective action isn’t just about “bad” information. Another nod to the distinction between marketing and communications.

And, importantly:

FDA recognizes that a firm cannot control whether an independent third party refuses to correct the misinformation, or corrects only a portion of the misinformation even though the firm provided complete corrective information, or declines to include the respective required labeling, or declines to remove misinformation, or does not correct all the misinformation in one clearly defined part (if the firm sought to correct more than one piece of misinformation). Accordingly, FDA will not hold a firm accountable for an independent third party’s subsequent actions or lack thereof.

The perfect shall not impede the public good.

And, lastly:

FDA does not expect firms to submit corrections to the Agency when correcting misinformation pursuant to this draft guidance; however, FDA recommends that firms keep records to assist in responding to questions that may come from the Agency. The records should include, for example, the content of the misinformation, where it appeared, the date it appeared or was located, the corrective information that was provided, and the date the corrective information was provided.

A few words (no pun intended) on the other June draft guidance for Industry Internet/Social Media Platforms with Character Space Limitations — Presenting Risk and Benefit Information for Prescription Drugs and Medical Devices.

The agency writes:

Risk information should be comparable in content and prominence to benefit claims within the product promotion (i.e., a balanced presentation). Achieving a balanced presentation requires firms to carefully consider the desired benefit claims and risk profiles for their products when choosing a promotional platform.

That’s good advice – choose the platform that best suits any given communications need. But, it’s not really any communications need – it’s any promotional program. That’s important because promotional speech is regulated speech. And that’s not just regulatory rhetoric. And this begs a crucial question not covered in the draft guidance – What it the intent of the communications?

Don’t wait for the FDA to offer guidance on that. They will not and should not. That’s a question only the communicator can answer. And it needs to be done honestly and early in the communications development process. Is it a marketing strategy or a service to the public health?

The agency writes:

FDA acknowledges that Internet/social media platforms associated with character space limitations may pose challenges for firms in providing a balanced presentation of both risks and benefits of medical products, as discussed above … The firm should also provide a mechanism to allow direct access to a more complete discussion of the risks associated with its product.

It’s not Brief Summary, it’s Tweet Summary.

The agency’s most important advice appears on Page 12 of the draft guidance:

In communicating risk information on Internet/social media platforms with character space limitations, firms should consider the following points:

1. Risk information should be presented together with benefit information within each individual character-space-limited communication (e.g., each individual message or tweet).

2. The content of risk information presented within each individual character - space-limited communication should, at a minimum, include the most serious risks associated with the product.

3. A mechanism, such as a hyperlink, should also be provided within each individual character-space-limited communication to allow direct access to a more complete discussion of risk information about the product … the Agency recommends that a direct hyperlink to a landing page that is devoted exclusively to comprehensive risk information about the product be initially included within the original character-space-limited communication.

Not rocket science, but urgently important to remember when considering both the design and appropriateness of a limited-character platform. Also, the use of hyperlinks is crucial. (Note – the agency makes it clear that a link’s name should also be considered. Specifically, it shouldn’t be a claim (i.e.,

Marshal McLuhan wrote that, “At electronic speed, all forms are pushed to the limits of their potential.” Now replace “electronic” with “digital” and you have a good headline for both the obstacles and the opportunities of social media for regulated industry. The challenge, as James Fowler of the University of California, San Diego puts it, is for Pharma to “recognize its network potential.”

And that’s potential not just for marketing, but for public health communications. It is the convergence of social media and social marketing.

Ian Read (Chairman and CEO of Pfizer and the current Chairman of PhRMA) recently published a piece on LinkedIn under the title, Why Society Needs a Vibrant Pharmaceutical Industry: Improving Patients' Lives.

Read writes:

As an industry we are working diligently to improve our standing in society. We understand that we have a great responsibility. We are at the center of society’s desire and expectation for delivering potential cures and new lifesaving treatments. We will continue to fulfill that vital purpose.

Fine sentiments and well-crafted words – but working hard alone isn’t enough to earn trust. Pharma must work hard to do the right thing.

The genesis of Mr. Read’s philosophy began (at least publically) this past April at PhRMA’s 14th annual meeting in Washington DC.

During his inaugural remarks as incoming PhRMA board chair Read shared his concern about the industry’s failure in getting the message out about “the value we generate.” His key message, “We need to fix the misperception gap.”

Specifically he talked about the industry’s need to broaden the conversation from the economic performance of biopharmaceutical companies to the value that accrues to society and called for a “dialogue with society.” Bravo.

Pharma must embrace a new paradigm. Rather than focusing on traditional ROI (Return on Investment), they must now also consider Return on Integrity.

Integrity comes in many forms. Honesty. Virtue. Morality. But it also means (in more common parlance) “doing the right thing.” It means not waiting to be told to do it or waiting to see what others do first. Integrity means being principled and, as my father used to say, “A principle doesn’t count until it hurts.”

For there to be Return on Integrity, integrity must first be demonstrated – publically demonstrated with names attached. This is especially true in the age of social media where the public is watching and commenting. And nature abhors a vacuum.

The FDA’s “Correcting Independent Third-Party Misinformation” presents an opportunity.

If a firm voluntarily corrects misinformation in a truthful and non-misleading manner and as described in this draft guidance, FDA does not intend to object if the corrective information voluntarily provided by the firm does not satisfy otherwise applicable regulatory requirements regarding labeling or advertising, if any.

This provides industry with a tailor-made opportunity to demonstrate integrity at little or no risk – by correcting the mistakes of others about their products in a transparent and appropriate manner.

Who will step up to the plate? Who will be first? Who will earn the return on integrity? Good guidance has been provided. Now it’s time for industry to do the right thing.

And internalizing the difference between digital marketing and social media communications is a good place to start. It’s time for pharma to cross the social media Maginot Line.

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?”

When Paul Orhii, Director-General of Nigeria’s National Agency for Food and Drug Administration and Control, complained to the Chinese government that China was the origin of many of the counterfeit medicines in Nigeria, he was bluntly told Beijing was not responsible for the quality of medicines in Nigeria

When it comes to the safety of pharmaceuticals and medical devices, can one man’s ceiling be another man’s floor?

And how does this fit into the debate over trade policy versus trade practice? Should medical products that are determined not to meet any given national standard be allowed to be exported to other countries? Should there be a “good enough for me, good enough for thee” standard for international trade in pharmaceuticals and medical devices?

According to Poor Quality Drugs and Global Trade: A Pilot Study (a new paper from the National Bureau of Economic Research), Indian pharmaceutical companies are selling lower quality drugs at higher prices in Africa while at home on the Subcontinent, they’re selling the same drugs, manufactured to a higher quality standard at lower prices.

According to the paper’s abstract:

Experts claim that some Indian drug manufacturers cut corners and make substandard drugs for markets with non-existent, under-developed or emerging regulatory oversight, notably Africa. This paper assesses the quality of 1470 antibiotic and tuberculosis drug samples that claim to be made in India and were sold in Africa, India, and five mid-income non-African countries. We find that 10.9% of those products fail a basic assessment of active pharmaceutical ingredients (API), and the majority of the failures are substandard (7%) as they contain some correct API but the amount of API is under-dosed. The distribution of these substandard products is not random: they are more likely to be found as unregistered products in Africa than in India or non-African countries. Since this finding is robust for manufacturer-drug fixed effects, one likely explanation is that Indian pharmaceutical firms and/or their export intermediaries do indeed differentiate drug quality according to the destination of consumption.

That’s the unfortunate distinction between trade policy and trade practice. Is this an issue for TRIPS? Should TRIPS Article 61 be amended to include punishments and penalties for those who export medicines and medical devices that do not meet a certain global standard?

While domestic standards are undeniably an issue of domestic sovereignty, shouldn’t there be transparency as to how any given nation defines safety and quality? “Market authorization” means one thing in the context of the MHRA, the FDA, the EMA, and Health Canada (to choose only a few “gold standard” examples), but how are we to judge the regulatory competencies of other national systems? Is that the responsibility of the WHO via a better-developed (and far more transparent) pre-qualification scheme? Or regional arbiters? Should there be “reference regulatory systems” as there are reference nations for pricing decisions? Should there be regulatory reciprocity?

All the more reason for “gold standard” nations to undertake a regulatory Marshall Plan to help build global systems for drug quality and safety.

The harmonization of global trade policy and practice is essential to the sinews of international medicines quality and safety.

Let’s talk about Non-Biologic Complex Drugs (NBCD). If you look at the FDA’s recent actions relative to raising the issue of quality and performance of generic products and working with outside partners to seriously investigate the problem, you’d think that NBCDs are an obvious top of mind agenda item for the agency to consider and act on via Guidance. But, as with many difficult regulatory questions, predictability comes at the expense of ambiguity – and regulators have a penchant for embracing ambiguity.

When it comes to NBCDs (as with so many other issues), predictability is power in pursuit of the public health.

As my friend and former FDA colleague Dr. Scott Gottlieb has pointed out, a year ago, the Food and Drug Administration quietly posted a public notice that it wanted to hire an independent lab to test a generic drug that it had already approved. FDA wanted to make sure the drug was safe and effective.

The issue concerned a copy formulation of a complex, intravenous medicine used to replenish kidney-dialysis patients’ stores of iron. FDA had approved this “generic” version of the drug in March 2011 because it believed that laboratory data showed that the replica version of the drug was the exact same as the original branded medicine it was copied from. In announcing the request for independent testing of the generic version, FDA was indirectly saying it might have been wrong.

FDA was going back to get more evidence – including data looking at how the drug was behaving in patients – to make sure that its original decision was sound. Additional evidence was needed because this type of drug represents a new chapter in FDA drug approvals. By law, generic drugs are supposed to contain identical copies of the active ingredient of the original branded medicine that they are copied from. With almost all generic drugs, making identical copies has been relatively easy because the original medicine was a small molecule, which has a simple molecular structure. In contrast, complex drugs involve large molecules and are difficult to copy. In fact, their physical and chemical properties may not be fully understood. Even so, FDA has begun to approve generic copies of complex drugs.

Now, on the anticipated eve of one of the most significant generic drug approval decisions in recent years—involving another complex drug—the lesson from the generic IV iron episode bears reminding. FDA is widely known to be considering the approval of a generic version of Teva Pharmaceutical’s blockbuster drug for multiple sclerosis, Copaxone. The patents covering Copaxone for its 20mg/ml strength expired on May 24th. After patent expiration, FDA could approve generic copies of the drug at any time. But some of the same challenges that caused the agency to struggle with and sometimes stumble over its similar previous decisions still linger, and will color FDA’s decision concerning Copaxone.

Gottlieb believes (and I concur), that when it comes to evaluating copies of these complex drugs, the fact is FDA doesn’t have very good tools and policies. These drugs slip between FDA’s other generic drug constructs. They are less complex than biological drugs, which have their own separate law governing how the agency should review and approve copy versions. (Unlike with the generic drug law, the approval of copy versions of biologicals generally must be supported by evidence from human studies.) But non-biological complex drugs are far trickier than generic versions of the normal, small molecule pill drugs that FDA is accustomed to evaluating. It’s that framework for these small molecule drugs that FDA has been trying to apply to these complex drugs.

These challenges illustrate a need to reconsider how FDA approves copy versions of complex drugs. Perhaps different approval standards should be used. Current law already contains an appropriate alternative to the generic drug law in the pathway used for the review and approval of copies of biological drugs, which gives FDA more latitude when it comes to the data it can use as a the basis for these approvals. Some of these principles could be applied to a new category that addresses the complex drugs. Or Congress could re-write certain aspects of the generic drug law, tailoring generic drug principles to the unique challenges of copying complex drugs.

As Gottlieb points out, FDA also needs to change its practices when it comes to these complex drugs, to more clearly establish reliable principles for how generic copies of these medicines can be safely brought to market once brand-name patents have expired. It needs to develop these scientific principles in a more transparent and inclusive process that leverages the expertise that FDA doesn’t readily posses to discern these laws of drug science.

The complex drugs fall in a regulatory gap. FDA has tried to retrofit the “Hatch Waxman” generic drug law and policies that govern approval of small molecule drugs to these complex drugs, with sometimes troubling results. Regardless of the decision FDA makes with Copaxone, it remains clear that Congress and FDA alike need to re-examine the regulatory process when it comes to these intricate drugs.

The problem is that FDA has refused to define these complex drugs as distinct from normal, small molecule medicines. That has forced the agency to rely on less information in approving these complex copies than it probably would like. The agency’s desire to try and squeeze these complex drugs through its existing generic law approval pathway may have as much to do with political expediency as with good science. FDA is probably well aware that getting Congress to define a distinct category for these medicines, and give FDA proper tools, could be a heavy political lift. So FDA is doing what it often does: trying to massage its existing authorities and regulatory practices to fit novel challenges.

The challenge isn’t just the generic drug law, which doesn’t allow FDA to look at much more than bioequivalence data. The setback is what FDA has done in response to these limitations, to try and retrofit its existing policies on complex drugs where the generic drug principles are sometimes poorly suited. And FDA has entered this new chapter in generic drug approvals largely under the radar. Congress and the public generally are not aware of the new direction FDA is taking.

Instead of acknowledging that it needs a broader scope of data to ensure “sameness” (the statutory standard for a generic drug approval) between the original and the copy drug, FDA has typically divined new science in these circumstances – coming up with novel principles of drug science to determine how two drugs can be declared the same by comparing laboratory data that FDA often establishes on its own novel principles. Such is the case with the gene expression data that FDA is examining in the case of Copaxone.

The foundational problem here is that the FDA is in the business of evaluating data against known standards, not establishing those standards de novo. The enterprise of establishing standards upon which two highly complex drugs can be judged the same requires a great deal of expertise in discrete areas of science. This sort of expertise doesn’t exist in one place, and certainly isn’t the province of FDA. That’s not a knock on FDA, or its scientists. This sort of work just isn’t the business that Congress has tasked the agency with doing. FDA is not staffed or resourced to take on the task of developing novel principles of biology and discovering the standards for measuring how drugs affect biological systems.

Per Gottlieb, As a result, FDA has often established principles that are at times embarrassingly incomplete, and sometimes spectacularly wrong. The re-adjudication of the generic IV iron approvals is one example. The problems FDA had in 2008 assuring safety and effectiveness of generic, copy versions of intravenous heparin is another example. FDA had to recently walk back guidance it put out on how to copy a popular eye drop that was another complex formulation. In each case FDA had established some principles upon which the agency thought it could reliably determine that two complex drugs were the same. In each case, FDA was wrong.

Not subtle – but 100% on target.

FDA needs to adopt a more transparent and inclusive process for developing the scientific principles upon which it makes judgments on NBCDs and draft guidance that generalizes these principles, preferably well in advance of patent expirations that create the opportunity for generic entry. By establishing them in an open process, FDA would make this important knowledge generally available, and would lower the barrier to market entry by generic firms of different levels of technical sophistication. It should be emphasized that FDA’s current lack of transparency makes it hard for many generic-drug companies to get on the playing field. Transparency, per Gottlieb, could promote generic competition.


The fact-finding phase is over. At the September 10th 21st Century Cures Initiative roundtable, E&C Chairman Fred Upton (R/MI), said that committee staff will now begin developing draft legislation. “We intend to release a Cures legislative discussion draft in early January 2015 and will look to swiftly move the legislation early in the next Congress.”

But, per Ranking Committee Member Henry Waxman (D/CA), “If we come in with a blunt instrument, suddenly recreating the FDA authorities or mandating things for FDA or … the Department of Health and Human Services to do things they are not equipped to do – and that we of course don’t fund them to do – I think we have to be cautious about some the legislation that may be proposed.”

Waxman’s fear of unintended consequences may seem unusual for someone who often advocates for an active government role in addressing societal problems, but he noted that one of the major reforms at FDA in recent decades, the creation of accelerated approval, was spurred on by AIDS activists, and not by legislation. “The people that brought home the reform at FDA, that got some of these therapies out quickly, were the ACT UP group and the gay community,” he said. “They studied the law of FDA and argued, ‘You don’t need to take so long, you don’t have to weight to the end result to show that the therapy is safe and effective, you can have markers to get these products out more quickly.’”

Stand by for action. 

Here's Lowell Schnipper who is in charge of ASCO's  cancer rationing app project on me-too drugs:  "The oncologist said one way to increase value in cancer medication is to avoid "me-too drugs" that provide marginal clinical gains over existing drugs. "Those are drugs that shouldn't be highly valued like a drug that provides four times the value," he told me. "From a societal perspective, we shouldn't give them a high price designation."

This is being dumb by design or default.  Either way it's dumb.

What is a me-too drug?  Does Schnipper regard all medicines that treat HER-2 positive tumors as alike?  What about the variations in epigenetics that a range of drugs control for?    Should an oral version of an older drug be considered me-too?  

And again Schnipper talks about 'marginal gains.'   He has previously said 3 months of life is marginal.   And he has yet to explain how spending on new medicines to extend life is more of a waste of money than, say, spending money on pre-natal care which has also produced  marginal results.   Or more broadly, why spending money on new medicines where there is no other treatment available somehow wrecks our economy.     Really?   When if we DOUBLED what we spent on cancer medicines it would be all of 1 percent of total health care spending?? 

Schnipper's obsession with ending life by force or fiat is what explains his drive and shapes his desire to ration drugs.   And so far, he and ASCO have avoided debating or discussing the cancer rationing app.  

That's playiing dumb.  By design.

For those of you interested in the other side  of this issue, here's my article on the ASCO cancer rationing app.

From today’s edition of the Washington Examiner …

Cheaper drugs can also mean less choice without savings for patients

Peter J. Pitts

The economics of American healthcare are dictated by the Golden Rule: "He who has the gold makes the rules.” And those rules reward corporate greed at the expense of physician empowerment and patient care.

The gold in this case is the money leveraged by pharmacy benefit managers (PBMs) to reimburse patients for their medicines. And it’s a golden hammer used to negotiate lower prices from pharmaceutical companies. But where do those savings go, and what is the impact on a physician's ability to practice medicine and — most importantly, therapeutic outcomes for patients?

PBMs are large organizations responsible for not only processing and paying prescription drug claims, but developing and maintaining an insurance company’s formulary (the list of prescription drugs covered by a particular drug benefit plan), contracting with pharmacies, and negotiating discounts and rebates with drug manufacturers. Today, whether or not they know it, more than 210 million Americans nationwide receive drug benefits administered by PBMs.

But the savings garnered through bare-knuckle negotiations are not being passed down to patients. Lower drugs costs negotiated by payers are being used to fatten the corporate coffers of those same organizations. Consider the 2010 comment of George Paz, chairman and chief executive of Express Scripts (one of our nation’s largest PBMs), “The cheapest drugs is (sic) where we make our profits.” And just who is “cheaper” better for? "Our whole model is switching people to lower-cost drugs. The more money my shareholders make, the more money I make."

Paz ranked sixth on the 2012 Forbes CEO compensation list, with $51.5 million in total compensation the preceding year, and $100.2 million over a five-year period.

More money for George and Co., but less choice and no savings for patients. This has been the case with brand vs. generic medicines for years. But at least these often resulted in lower out-of-pocket co-pay expenses for patients. Today, the same fatten-George’s Wallet schemes are being used for drugs for evermore serious and life-threatening conditions. Consider Multiple Sclerosis, an autoimmune disease that affects the brain and spinal cord of over 400,000 Americans.

Express Scripts has decided to only reimburse for some MS treatments — and the differentiator isn’t paying for “better” ones. The ones they chose are generally newer medicines with the highest market share. Why? Consider the math. The higher the volume, the bigger the cudgel, the larger the cumulative discount.

But what about those patients whose disease is being well managed on older therapies with smaller market share? Sorry, no dice. Physicians are being told (told!) by Big Payer to monkey with successful therapies because they don't add enough to the bottom line. This is particularly galling in the case of MS, where the ability to successfully manage any given patient’s disease with any given medicine cannot be predicted. There is no way to determine ahead of time which drug works best for any given patient. And one drug (say an older treatment with a single-digit market share) is not necessarily interchangeable with a newer drug (which has double-digit penetration).

Another frightening fact is that upwards of 20 percent of MS patients, when forced to switch from successful treatments to payment-dictated ones simply stop taking their medicines or opt for “drug holidays” because of new and unpleasant side effects.

If patients are in an uproar, physicians are furious — and frightened. If a doctor is forced to change a patient’s therapy because of Big Payer pressure, what happens when something goes wrong and a malpractice suit gets filed? Is there any validity to “the payer made me do it” defense? Nobody wants to be the test case.

PBM’s will say they’re negotiating on behalf of the employer health plans they serve, that their tactics reduce employer costs. Not true. Higher co-pays for off-formulary medicines lead to dramatically higher rates of non-adherence. Data from one large employer with over 60,000 insured workers shows that in the first few months since the implementation of PBM drug exclusions, nearly 50 percent of “rejected” prescriptions remain unfilled. Non-adherence is the major cause of poor health outcomes. That’s a pyrrhic trade-off.

This is healthcare reform? Indeed it is, since the basic tenet of Obamacare is to reduce costs rather than expedite appropriate care. In fact, the drug formularies of most state exchanges are equally if not more draconian than those designed by Express Scripts. Unfortunately, no two patients have the same biochemistry and no two medicines are exactly equivalent. But if your primary goal is to minimize short-term costs so that you can maximize your quarterly profit (in the case of Express Scripts) or keep premiums low but co-pays high (the goal for state healthcare exchanges), that's an inconvenient truth.

The repercussions of choosing short-term thinking over long-term results, of cost-based choices over patient-based care, of “any-medicine-will do,” over the right medicine for the right patient at the right time are pernicious to both the public purse as well as the public health.


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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