Latest Drugwonks' Blog


  • 11.20.2014
Grubernomics:  Economic analyses that are shielded from criticism and cited to the exclusion of other viewpoints in media outlets because they confirm existing biases.  

Here's why Jonathan Gruber was at once so prominent and arrogant:  He knew his audience wouldn't challenge him and critics would have no outlets to offer alternative research in the mainstream media, blogosphere, policy circles and academic publications.  In short, Gruber, like many liberal economists who are self-pronounced health economists,  had a monopoly.    The fact that Gruber received NIH money to study part D right after the election and White House cash to confirm that Obamacare would boost insurance enrollment, save money and improve health AND was flacking for Obamacare was not considered a conflict.  

Compare his treatment to that of Joseph DiMasi, another leading economist who studies the economic and opportunity costs of developing drugs.  DiMasi's critics have what amounts to an open mike in the media.  Academic publications have allowed critics to assail his research without any evidence or economic analyses.  DiMasi's research credibility is attacked as suspect because pharmaceutical companies provided support to the Tufts Center for the Study of Drug Development, where he heads up economic research.   But above all, DiMasi is dissed because his research -- which shows that drug development is costly because it's risky and sometimes done inefficiently --  doesn't fit the liberal narrative that drug companies sell useless drugs at outrageous prices because of monopolies and their ability to bribe doctors and the FDA.    

So Grubernomics can only survive if other viewpoints are systematically silenced or suppressed while media outlets, economic conferences, etc give the Gruber-views exalted status/

According to a report in

“The Pharmaceutical Care Management Association (PCMA), an organization that represents the nation's leading pharmacy benefit managers (PBMs), which administer prescription drug plans for over 210 million Americans, released a new white paper investigating FDA’s influence on drug prices and competition in the pharmaceutical marketplace. The PCMA argues that competition within branded drugs is undervalued in FDA priorities and that FDA’s structures and regulations fundamentally hinder competition.”

The report's bias and ignorance can be summed up via this segment, “Without a statutory and regulatory agenda for the FDA that carefully examines the agency’s effect on pharmaceutical competition, some consumer welfare may be unnecessarily lost.”

Note to PCMA -- the FDA does not factor issues such as "competition" into it's regulatory calculations. Facts cannot be ignored because they are inconvenient.

The report takes specific aim at the FDA’s biosimilar pathway development process, stating that the delay in final guidance has “thwarted the development of a U.S. biosimilars industry—thus preventing the savings that competition would generate.” The report also calls out nomenclature issue for biosimilars as a potential impediment to the utilization of these products, and could also reduce the probability that drug makers would pursue a biosimilar for a product.

Wrong, wrong, and wrong.

Wrong that guidance should be rushed. (Isn’t it more important to get it right?) Wrong that discrete nomenclature will in any way deter use. (Isn’t it more important to ensure safety?) Wrong that manufacturers will decide to walk away because “it’s hard.” (Isn’t that table stakes?)

Speaking of transparency, it’s important to note that PBMs, such as Express Scripts, have a vested interest in keeping drug costs low. The PBM industry has largely supported the biosimilar movement from an early stage, as their utilization could produce an estimated 15% to 20% savings from innovator drug prices. This white paper screams, “cost over care.” According to Express Scripts President George Paz, “The cheapest drugs is (sic) where we make our profits.” (In 2008, Express Scripts agreed to pay $9.3 million to 28 states and $200,000 in reimbursement to consumers to settle lawsuits that accused the company of deceptive business practices in allegedly overstating the economic benefits to consumers of switching to certain drugs.)

“The cheapest drugs is (sic) where we make our profits.” To that end, the article points out that in 2008, “Express Scripts agreed to pay $9.3 million to 28 states and $200,000 in reimbursement to consumers to settle lawsuits that accused the company of deceptive business practices in allegedly overstating the economic benefits to consumers of switching to certain drugs.” - See more at:
“The cheapest drugs is (sic) where we make our profits.” To that end, the article points out that in 2008, “Express Scripts agreed to pay $9.3 million to 28 states and $200,000 in reimbursement to consumers to settle lawsuits that accused the company of deceptive business practices in allegedly overstating the economic benefits to consumers of switching to certain drugs.” - See more at:

Here’s the conclusion of the PharmaTech article:

“I believe the intent of Congress in providing a biosimilar pathway is to allow greater access through increased competition,” Peter Pitts, president of the Center for Medicine in the Public Interest and former FDA associate commissioner, told BioPharm International in a call. “The FDA’s job is to provide a pathway that’s transparent and predictable to allow enough companies to get into the game. If FDA doesn’t do that, it isn’t fully representing the intent of the legislation.”

Pitts believes FDA is doing the best job that it can, given the circumstances. “The creation of biosimilar regulations has to be a thoughtful and evolutionary process. The agency wants to make sure it’s as comprehensive as possible to create a level playing field.” Pitts adds, “The same proposition to transparency is relevant to nonbiologic, complex drugs as well, such as Lovenox.”

The complete PharmaTech article can be found here.

Joe vs. the Volcano

  • 11.19.2014

Much chatter about the Tuft’s Center’s new number for the cost of drug development.

Here’s the thoughtful comment from those lovely folks at Médecins Sans Frontières :

“The pharmaceutical industry-supported Tufts Center for the Study of Drug Development claims it costs US$2.56 billion to develop a new drug today; but if you believe that, you probably also believe the earth is flat.”

NGO’s can poo-poo the important work of Joe DiMasi and crew this as much as they like – but serious analysis can’t just be tsk-tsked away by using the “industry-supported” evasion.

Here’s the news – and it’s important.

Tufts Center for the Study of Drug Development Releases New Data on the Average Cost to Develop a New Medicine

The Tufts Center for the Study of Drug Development released new research on the average cost of drug development.  The research conducted by Joseph DiMasi, Tufts Center for the Study of Drug Development, Henry Grabowski, Department of Economics, Duke University, and Ronald Hansen, William E. Simon School of Business, University of Rochester. 

The estimates are based on research and development (R&D) costs for 106 randomly selected new drugs (87 small molecule drugs and 19 biologic medicines) obtained from a survey of 10 pharmaceutical firms The methodology used is consistent with prior research.  The studies use compound-level data on the cost and timing of development for a random sample of new drugs first investigated in humans and annual company pharmaceutical R&D expenditures obtained through surveys of a number of pharmaceutical firms. The new compounds were first tested in humans anywhere in the world from 2005 and 2007 and development costs were obtained through 2013. [i]

The estimates represent the average cost of developing a new medicine, including the costs of the majority of compounds which do not make it through clinical trials, and the large cost of capital associated with the long-term investments required for drug discovery and development.

  • The average R&D cost required to bring a new, FDA-approved medicine to patients is estimated to be $2.6 billion over the past decade (in 2013 dollars), including the cost of failures. When costs of post-approval R&D[ii] are included the cost estimate increases to $2.8 billion. 
  • Average R&D costs have more than doubled over the past decade.

*Previous research by same author estimated average R&D costs in the early 2000s at $1.2 billion in constant 2000 dollars (see J.A. DiMasi and H.G. Grabowski. "The Cost of Biopharmaceutical R&D: Is Biotech Different?" Managerial and Decision Economics 2007; 28: 469–479).  That estimate was based on the same underlying survey as the author's estimates for the 1990s to early 2000s reported here ($800 million in constant 2000 dollars), but updated for changes in the cost of capital.

  • The overall probability of clinical success (i.e., likelihood drug entering clinical testing will eventually be approved) was estimated to be 11.83%--this is significantly lower than the rate of 21.5% estimated previously.
  • While the length of the process did not contribute to increases in R&D costs, it remained a very large share (45%) of total capitalized costs.
  • Factors contributing to rising R&D costs cited by the researchers include:

o   Increases in out-of-pocket costs for individual drugs are attributed to a range of factors including but not limited to increased clinical trial complexity and larger clinical trial sizes and a greater focus on targeting chronic and degenerative diseases.

o   Higher failure rates for drugs tested in human subjects. The researchers noted an increase in the proportion of projects failing early, before reaching more costly Phase III trials.

These findings reinforce the challenges and complexities related to drug development, including technical challenges as companies are often focusing their R&D where the science is difficult and the failure risks are also higher.

For more information, please see:  

[i] Note: the data are based on R&D projects there were self-originated. The study excludes R&D costs for licensed-in and co-developed compounds.

[ii] Post-approval R&D comprises efforts subsequent to original market approval to develop the active ingredient for new indications and patient populations, new dosage forms and strengths, and to conduct post-approval research required by regulatory authorities as a condition of original approval.

Pain patient advocate extraordinaire, Cindy Steinberg lays it on the line for Massachusetts Governor-Elect Charlie Baker.

Memo To Gov.-Elect: Include Pain Sufferers As You Seek Opiate Solution

By Cindy Steinberg

 Cindy Steinberg is the policy chair for the Massachusetts Pain Initiative and the national director of policy and advocacy for the U.S. Pain Foundation.

Charlie Baker vows to tackle state opiate problem,” was the Boston Globe headline two days after Election Day.

It’s good to hear from our newly elected governor that he plans to take steps to curb the ongoing problem with illegal use of prescription medication in our state. There’s little doubt that too many lives are being harmed by drug abuse and addiction.

But in a quest to fix one problem, policymakers need to consider the potential unintended negative consequences for the patients for whom these medications are a lifeline.

Gov.-elect Baker said in that Globe interview that he plans to convene a coalition of lawmakers, health care providers and labor leaders to confront the opioid crisis in our state. Representatives of the pain community — an estimated 1.2 million Massachusetts residents live with chronic pain — must be included in these discussions as well.

For many with chronic pain, the right medications mean the difference between a life worth living or not.

But despite these legitimate needs, more and more I’m hearing from residents of our state who are unable to access treatment that their doctors say they need and that they depend on. These are not addicts; these are people who are trying to manage their lives with debilitating conditions such as cancer, diabetic neuropathy, sickle cell, daily migraine, fibromyalgia, severe back pain and many others.

These are not addicts; these are people who are trying to manage their lives with debilitating conditions such as cancer, diabetic neuropathy, sickle cell, daily migraine, fibromyalgia.

Not including members of the pain community in discussions about how these medications are prescribed, regulated and controlled marginalizes the lives of thousands of Massachusetts citizens who live with pain caused by a myriad of conditions and serious injuries.

There is not a silver bullet solution to solving the abuse of prescription drugs. We need to take a thoughtful, multifaceted approach to ensure that those who need pain medication have access to it, and that those who choose to abuse these medications are stopped. There is no group more invested in making sure that medications are responsibly controlled than members of the pain community.

Last legislative session, Massachusetts lawmakers did take a step forward: they passed legislation on medications specially formulated to deter abuse.

“Abuse deterrent formulations” are opioids with physical and chemical properties that prevent chewing, crushing, grating, grinding, or extracting, or contain another substance that reduces or defeats the euphoria that those susceptible to substance abuse disorders experience. The new law requires insurance companies to provide the same coverage for the new abuse deterrent formulations as non-abuse deterrents, and they are not permitted to shift any additional cost of these medications to patients. It makes doctors more able to prescribe these medications without pushback from insurance companies.

Abuse deterrent formulations are not the only solution, but they are a good first step in balancing the legitimate needs of pain patients with the need to reduce medication abuse.

Other efforts must also include more robust education of medical professionals and of consumers to keep the medication out of the hands of potential abusers in the first place. Government statistics show that 78.5 percent of those who abuse prescription pain medication did not obtain them from a doctor themselves.

As someone who personally suffers from debilitating chronic pain, I have firsthand experience with the myriad challenges faced each day by the millions of Americans with severe chronic pain. I encourage Governor Baker to work to eliminate improper use of prescription medications, while remembering the medical needs of the chronic pain community.

A new article in the DIA's Therapeutic Innovation and Regulatory Science journal discusses the pitfalls and potential for the FDA's openFDA program.

This past June, the FDA launched openFDA, a new initiative designed to make it easier for web developers, researchers, and the public to access large, important public health datasets collected by the agency.

The crowd-sourcing of adverse event data may or may not yield interesting results, but it’s a good place to start. It represents an opportunity for the agency to begin designing a more evolved approach to 21st-century pharmacovigilance.

To borrow a term from the nuclear disarmament discussion, 21st-century pharmacovigilance must work with its various colleagues to ‘‘trust, but verify.’’ Again, this fits hand-in-glove with the spirit of openFDA.

Access to data is important—but 21st-century pharmacovigilance must also take into consideration the realities of funding, existing staff levels and training programs, and existing regulatory authority. Perhaps creative public use of FDA data via openFDA will help develop not only new solutions but also awareness of the magnitude of the task at hand.

The full open FDA: An Open Question article can be found here.

A new agreement will expand access to Pfizer’s contraceptive, Sayana Press, for Women Most in Need in the World’s Poorest Countries. But there's more to story.

Per the Pfizer press release, “Collaboration will help advance progress and support global efforts to increase access to voluntary family planning information, services and contraceptives by 2020.”

Together with the Bill & Melinda Gates Foundation and the Children’s Investment Fund Foundation, Pfizer has announced an agreement to expand access to it’s injectable contraceptive, Sayana Press (medroxyprogesterone acetate), for women most in need in 69 of the world’s poorest countries. Sayana Press will be sold for $1 per dose to qualified purchasers, who can help enable the poorest women in these countries to have access to the contraceptive at reduced or no cost.

John Young, President, Pfizer Global Established Pharma Business: “This is a great example of applying innovation to a Pfizer heritage product to help broaden access to family planning, Pfizer saw an opportunity to address the needs of women living in hard-to-reach areas, and specifically enhanced the product’s technology with public health in mind.””

The Pfizer/Gates/CIFF effort is a result of the July 2012 London Summit on Family Planning, which set an ambitious and achievable goal of providing an additional 120 million women in the world’s 69 poorest countries with access to voluntary family planning information and services by 2020.

John Young, “I’m so pleased with the leadership from the Bill & Melinda Gates Foundation, the Children’s Investment Fund Foundation and other collaborating organizations that are helping create a sustainable market through an approach that could be a model for other medicines.”

Bravo for Pfizer and partners. But the bigger story here is the creative redesign of legacy products for use in the developing world at low or no cost with NGO and other non-industry collaborators. It’s a model worth deeper investigation and broader implementation. Innovation comes in many forms.

No one could explain Obamacare to stupid American votes... until a superhero from academia appeared. 

Yes,  Jonathan Gruber created a comic book character around his persona...  I guess that's less narcissistic than naming the ACA Grubercare...

Like Johnny Cash said, “I’ve been everywhere” -- or at least it seems that way. Over the past few months I’ve visited with government health officials in China, the Philippines, Malaysia, Egypt, Algeria, Saudi Arabia, Jordan, the United Arab Emirates, Russia, Brazil, Columbia, South Africa, Kenya, and many other points in-between. And 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 (Hong Kong), listening to the voice of the patient (the Philippines), pursuing post-market bioequivalence studies (Malaysia), developing biosimilar regulations (China), understanding the value of real world data (Colombia), guaranteeing the quality generics drugs (Egypt), promoting regulatory strategies for addressing non-communicable diseases.

But, just as in similar Western agencies (USFDA, EMA, Health Canada, etc.), “doing the right thing” is often a battle of evolving regulatory science, tight resources, competing priorities … and politics.

Many languages, priorities, pressures, and impediments (social, political, cultural), 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 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 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?

And then there’s 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.

Two of the most important health advances of the past 200 years are public sanitation and a clean water supply. Those achievements helped to control as many public health scourges as medical interventions helped eradicate. In our globalized healthcare environment of SARS, Avian Flu, and Ebola, it’s important to remember that a rising tide floats all boats. It’s a small world after all.

Working together to raise the regulatory performance of all nations will help all nations to create sound foundations to address a multitude of regulatory dilemmas such the manufacturing of biosimilars, the control of API and excipient quality, pharmacovigilance and, yes, even counterfeiting. 

Whether it’s in Cairo, or Amman, Riyadh, Brasilia, Kuala Lumpur, Dubai, Beijing, Bogota, Pretoria, Nairobi, or White Oak – a regulators work is never done. Global regulatory fraternity is essential to success. It’s about building capacity through collaboration.

Difficult? Surely. But, as Winston Churchill reminds us, “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

Curiouser and curiouser.

From the Economic Times (of India):

Government panel moots clinical trial waiver for two cancer drugs

The (Indian) government's top advisory panel on medicines has recommended waiving off of clinical trials for two new cancer drugs, allowing them to be sold without testing on Indian patients. This, according to the panel, is permitted to cater to unmet medical needs.

The move is significant as it comes despite a recent directive from the Supreme Court asking the government to be careful while approving clinical trials as well as new medicines.

The two medicines - Aflibercept and Trastuzumab emtansine - are used in treatment of metastatic colorectal cancer and metastatic breast cancer respectively.

The Drug Technical Advisory Committee, headed by director general of health services Jagdish Prasad, considered that since both the drugs have been tested in various other countries and found to be effective, these can be allowed for sale in India in "public interest".

The law allows waiver of clinical trial in Indian population, only for drugs approved outside India, if there is national emergency, extreme urgency, epidemic, orphan drug or a disease for which there is no therapy.

However, many health experts feel the proposed clinical trial waiver to the two cancer drugs is in violation of rules and can have serious implications for patients.

According to CM Gulati, editor of the Monthly Index of Medical Specialities and an expert on the rational use of medicines, Aflibercept and Trastuzumab emtansine do not even qualify for exemption as there are alternative therapies available.

"This is a false and fabricated claim because there are other therapies available for metastatic breast cancer, notably Lapatinib plus Capecitabine. As a matter of fact Trastuzumab emtansine was compared with Lapatinib Plus Capecitabine for efficacy and safety," Gulati said.

Colorectal cancer, one of the lifestyle-related cancers, is still not much prevalent in India. Experts say the incidence of colorectral cancer in India is around 40,000 to 50,000 every year. Doctors say it is on rise as people are pursuing a western lifestyle and diet, high in protein and fat, low in fibre and vegetables.

On the other hand, breast cancer is developing into epidemic proportions in India with almost 1.5 lakh new cases being diagnosed every year and close to 70,000 women dying of breast cancer, according to Globocan (WHO) Data 2012.

As per the expert committee's suggestions, Aflibercept can provide for a second line therapy for metastatic colorectal cancer. However, experts contest that by this logic even third-line therapy and fourth-line therapy can be approved without conducting clinical trials on Indian patients.

However, there are also some who feel clinical trials can be waived for drugs that are available outside India for a specific period and which have therapeutic benefits.

"Generally clinical trials conducted in India do not come up with new data. On the contrary, trials cost a lot of money which consumers have to pay later. Moreover, it unnecessarily causes a delay in entry of crucial medicines," says Amit Sengupta, co-convenor of Jan Swasthya Abhiyan, a public health advocacy movement.

Jonathan Gruber was caught on a just released Youtube video of the 24th Annual Health Economics Conference hosted by the University of Penn Leonard Davis Institute claiming Obamacare was passed by hiding it’s worst features and thanks to the stupidity of the American voter.   That is generating headlines in the conservative blogosphere.  But they missed the most breathtakingly honest  statements made by Gruber that underscore that Obamacare is filled with hidden taxes on everyone, especially the middle class Americans with chronic illnesses.   The GOP should use Gruber’s observations as the starting point for whatever actions they take on Obamacare.  Here's what Gruber said: 

Called it a system of draconian taxes

Called employer mandate a political fiction to raise taxes.   But it is NOT central to law.   Shouldn’t care where people get insurance.

Cadillac tax is really a 100 percent tax on cost of insurance (better than nothing)

Transparent spending is a fiction

Healthy people subsidize sick people except that percent of income ramps up over time..Points out that out of pocket costs will increase by 100 percent by 2018.  It has already increased by 100 percent for chronically ill patients

150-200 pct of poverty will have deductibles of $3000. 

Small business have limit on deductibles of $2000.

Limited networks:  Not a good thing for patients.   Gruber notes that people went to specialists less, hospital less.  But not a long run solution. 

Concluded by saying "We don’t have the right answer.   Force politicians to be humble and patient.”

Well now you tell us.  Better late than never.. 

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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