Latest Drugwonks' Blog

The Maine Event

  • 06.19.2017
  • Peter Pitts
Straight from the pages of Maine’s Sun-Journal ...

Maine's new generic drug legislation has good intentions, bad execution

By: Peter Pitts

Maine lawmakers are advancing LD 1280, a bill that seeks to reduce patients' health care bills by speeding up the introduction of low-cost generic drugs.

The bill has a noble goal. But it is terribly written. It would enable intellectual property theft: drug companies would be allowed to steal and profit from their competitors' trade secrets. That would discourage research investments — potentially leading to layoffs for Maine's drug-sector workers. Worse, the bill would undermine federal drug safety standards that protect patients.

The FDA requires generic manufacturers to prove their products are therapeutically equivalent to brand-name medicines. To do so, generic firms must obtain samples of brand-name drugs, to test them head-to-head.

Some Maine lawmakers suspect that brand-name firms aren't handing over samples in a timely fashion. This delay, they say, slows down the testing and approval process. That suppresses competition and allows brand-name manufacturers to keep selling their products at high prices, even after their patents have expired.

So a group of state legislators has introduced LD 1280 to prevent foot-dragging and require brand-name firms to provide drug samples "at fair market price and without any restriction that delays access to an eligible product developer."

The bill is well on its way to becoming law. It just passed out of the Labor, Commerce and Economic Development Committee by a wide margin.
Yet the legislation remains deeply flawed. For starters, brand-name firms would have to sell samples to any person or company that "seeks to develop an application for the approval of a drug."

That's an incredibly broad definition. Brand-name manufacturers could demand samples from rivals in order to create competing products that don't technically violate patent protections, but still mooch off the creators' research.

This de facto intellectual property theft would prevent manufacturers from recouping their investments on previous research. That would discourage firms from making new research investments, since no company wants to spend $2.6 billion — the average cost of bringing a new drug to market — only to see a rival freeload off its efforts.

The ensuing cutback in research would mean layoffs for workers and fewer new medicines for patients.
LD 1280 also guts patient safety protections.

Some medicines cause such severe side effects that the FDA requires manufacturers to follow special safety protocols when distributing the drugs. These rules typically govern how the drugs are dispensed.

For instance, if a drug can cause liver damage, providers have to monitor patients' liver function during treatment. If a drug causes birth defects, doctors must confirm that patients aren't pregnant. Doctors who want to prescribe Tysabri, a powerful multiple sclerosis treatment, must first obtain special certification and follow specific procedures to avoid damaging patients' nervous systems.

Before handing over samples of high-risk drugs, brand-name firms negotiate with generic manufacturers to ensure the potent medicines will be tested on patients in accordance with these special safety standards.

LD 1280 would treat such negotiations as "restriction(s) that delay access" and prohibit them. Brand-name firms would be forced to hand over samples to generic manufacturers that may not follow needed safety precautions. Patients would be put at risk.

It's admirable that Maine lawmakers are trying to lower patients' drug bills. But LD 1280 is the wrong way to do it. It would discourage research and endanger patients.

Gottlieb talks tech

  • 06.16.2017
  • Peter Pitts
In a blog post Thursday, FDA Commissioner Scott Gottlieb outlined regulatory steps designed to promote development of digital health technologies. The agency intends to issue new guidance that would clarify FDA's regulatory scope in the sector; explore a third-party certification program for developers that could exempt some products from premarket review; and gather real-world evidence about the use of digital health technologies. The policies fall under the agency's new Digital Health Innovation Plan, intended to promote innovation among health apps, devices such as fitness trackers, and tools such as medical records software.

Over the coming months, FDA plans to publish new guidance clarifying which health products fall in and out of the agency’s regulatory scope, including guidelines on low-risk products that would be exempt from certain premarket regulatory requirements.
The agency is also considering a pilot program under which it may certify developers based on their reliability, which could allow them to bring lower risk products to market without premarket review, while streamlining premarket review of higher risk products.

Unlike FDA’s product-based approach for drugs and therapeutics, the program would grant certification at the company level based on factors such as the consistent quality or maintenance of a developer's software, Gottlieb wrote.
Finally, FDA intends to use the National Evaluation System for health Technology (NEST) as a resource for companies to collect real-world data on their products in both pre- and postmarket settings. The federated system will pool data from various sources, including registries, electronic health records and payer claims. The Medical Device Innovation Consortium (MDIC), a 501(c)(3) public/private partnership, will coordinate its operations.

FDA said MDIC will establish a NEST governing committee in the coming weeks, and plans to launch a first version of the system by YE19.
The plan is part of a broader push by FDA to spur innovation through reforms across its medical product centers. More details are due soon.

Wired magazine’s article, “The New War on Overpriced Drugs”  celebrates Steve Pearson and his Institute for Clinical and Economic Research for applying evidence-based science to drug prices.  In doing so, it makes it quite clear that Pearson believes the perfecting the require fewer people benefitting from medical innovation. 
The author, David Ferry claims that “ICER and Pearson’s method has successfully checked the prices of a handful of drugs—something very few people can say they’ve done.”
It is more accurate to say that ICER successfully legitimized and justified PBMS from restricting access to new medicines, maximizing rebates and imposing cost sharing requirements on the sickest 2 percent of patients.  
Ferry gives ICER credit when “Gilead took 46 percent off the list price for Sovaldi and Harvoni. (Two of the first medicines for hepatitis C.) The price drop was stunning. Steve Miller, the chief medical officer of Express Scripts, the largest of the middleman firms that buy drugs wholesale for insurance companies, said ICER’s work had given him the ammo he needed to negotiate with Gilead. Overnight, the tiny nonprofit became an implausible power player in the national conversation about drug pricing.”
In fact, ICER’s contribution was proposing a rationing of new medicines and generating a huge rebate windfall for Express Scripts and the other large PBMs.  It was ICER that recommended restricting access to such drugs until they livers start to fail, an approach that has been ruled illegal by a federal district court and has been under challenge in many states. 
And rather than making medicines affordable, ICER’s pricing scheme allows PBM’s to pocket rebates and share them with health plans instead of directly reducing patient drug costs. Indeed, many plans require HCV patients to pay up to 30 percent of the list price of the drug.  ICER has ignored this arbitrage as well as the impact it has on access to new medicines.
The claims that ICER informed policies protect people from overpriced drugs is factually bankrupt.  “Recent data released by Trio Health show that the prevalence of hepatitis C drug patients diagnosed with Hepatitis C but not started on curative drugs, such as Harvoni and Zepatier, more than tripled between 2014 and 2016—signaling that payers continue to deny coverage despite increased marketplace competition and availability of discounts.”[2]
The same can be said for ICER’s claim that new biologics – PCSK9 inhibitors - that help patients who have dangerously high LDL levels and who can’t take or don’t respond to current statins are not cost effective. 
Nearly 11 million people have cholesterol levels that if reduced by 50 percent of more, would see a significant reduction in risk of a heart attack or stroke.  Each year, 1.5 million people have a heart attack or stroke and are at greater risk for a subsequent attack or death.
A study looking at the impact of primary prevention in the 11 million or so patients estimated the cumulative value of PCSK9 inhibitors “would range from $3.4 trillion to $5.1 trillion (1.9-2.8 million deaths averted), or $12,000 to $17,000 per patient-year of treatment between 2015 and 2035.[3]
But so far less than 5 percent of all patients who could reduce their risk of early death with the new medicines get them. 
Ferry mentions a meeting that I participated in prior to ICER’s discussion about the value of new medicines for multiple myeloma. He claims ICER determined that four of the newly approved myeloma drugs indeed work, but they’re all dramatically overpriced and don’t represent "high value.” Pharma is overcharging cancer patients for their lifesaving meds, the quants found.
Interestingly, while he took the time for a pathetic attempt to smear me (The Center for Medicine in the Public Interest takes money from Big Pharma) he never took the time to pick up the phone and ask me questions.  
He obviously didn’t read my white paper on the impact of ICER’s methodology on patients with myeloma.  I barely mention funding and I never challenge ICER’s methodology, only the way it arrives as the estimate of patients who could benefit from new medicines.  (I need a whole other blog to discuss how ICER just chooses thresholds out of thin air, and then refuses to disclose that there is no empiric basis for them, or how they manipulate data to justify pre-ordained conclusions.)
Rather, I use ICER’s own analysis to determine how many people would be denied drugs that Ferry claims are (according to ICER) not worth using at current prices.
As I noted: “The difference in QALY can be debated by people of differing perspectives. But the impact of the ICER restrictions on access to new medicines, even at very low prices, is straightforward.”
I used ICER's budget cut-off of $915 million per new drug per year necessary to protect the health system and then determined how many people with myeloma would not get treatment, even at discounted prices, at the level of spending
Under ICER assumptions, people with myeloma that would be denied new medicines would lose 43833 life years. The death of 44,000 people with myeloma will also have a profound economic impact, costing society and myeloma patients nearly $12. 2 billion worth of additional life (at $300K per life year gained).
Ferry trots out a cancer survivor who claims “patients opposing ICER have been bamboozled, she says, tricked by Big Pharma into becoming pawns in the industry’s fight to control its pricing power. “
In fact, PBMs and insurers generate about These practices are applied to almost every patient with conditions needing specialty drugs and rarely applied to everyone else. Nearly every ACA and Medicare drug plan put specialty medicines on the highest cost-sharing tier.   Half of all drug coverage provided to employer-sponsored health plans impose the same burden only on the two percent.[4]
As a result, people who use specialty medicines are 10 times more likely to pay full price for the most expensive medicine. On average, they are 10 times more likely to pay over $2500 out of pocket for medicines than other consumers. [5]
In addition, the 2 percent (4.4 million people) generated $13 billion in rebates and $12 billion in out of pocket spending that goes straight to PBMs and insurers.
PBMs and health plans could use rebates to reduce cost sharing.  Instead, they systematically maximize their use for the sickest patients.  They do it because they can and because by doing it, they rake in tens of billions of dollars in a predictable manner.  Who is bamboozling who?
Pearson justifies all this by claiming that “Health is a very important—perhaps the most important goal for us as individuals, and for our society,” Pearson says. “But it’s not the only goal. We also want good jobs, great schools, a safe environment.”
The money you spend on overpriced drugs, he argues, is money that doesn’t go to your kid’s school or the ambulance driver or fire department. “There are choices within the health care system: Should we get this machine or pay another doctor?” he says. “Then, step back and it’s: Another hospital or 10,000 more teachers?”
Pearson thereby exposes the moral and intellectual shortcomings of ICER.  He truly believes, like many professional pessimists that resources are scarce and that spending more and more on medicines will ultimately come at the expense of pothole repair or more police or a perfect world. 
It never occurs to Pearson that spending on new medicines makes government investment in public services sustainable.   If more people live longer healthier lives, they pay taxes, spend money on insurance premiums and other activities. In Louisiana for instance, the death rate from heart disease is 75 percent higher than the national average.  In some parishes, it’s four times higher.   A lot of those people who will die could reduce that risk with the new medicines ICER claims aren’t worth paying for.
As a result, Pearson’s calculus and ICERs recommendation would make America sicker, less prosperous nation.
In fact, if ICER’s combination of QALY based prices and budget caps are applied to all new medicines since 1990 for heart disease, psoriasis, HIV, multiple sclerosis, various cancers and drugs for rare diseases, none would be considered cost effective.
Pearson is not unaware of the impact his approach would have on patient access. Instead, he is betting on it.  And while many patient groups and drug companies think ICER is open to change, such adjustments are rhetorical.  ICER now uses estimates of rebated prices.  But ICER and Pearson are still silent about rebate and copay rip-offs not because he gets money from PBMs and health plans but because he sees them as necessary to increase his influence over how much we spend on drugs as well as the pace at which new medicines are used. To avoid criticisms like mine, ICER no longer spells out how many people would be denied care.  But budget thresholds are still there.
Ferry notes that Pearson believes that what ICER does has “a nobility and a grandeur.”
He’s right.  Pearson is a true believer in the Progressive tradition.  As Princeton University history professor Thomas C. Leonard, notes in his 2016 book “Illiberal Reformers: Race, Eugenics & American Economics in the Progressive Era,” progressives believed that scientific experts should be in society’s saddle, determining the “human hierarchy” and appropriate social policies” to achieve a better world[6]    And it obvious that most progressives of any era, Pearson has" an extravagant faith in science and the state with an outsized confidence in their own expertise.”[1]To Pearson, the greater good will be achieved by reducing the use of new medicines. As he notes: “The opportunity cost of supporting the use of ultra-orphan drugs necessitates that patients with a more common disease, for which a cost-effective treatment is available, are denied treatment.”  His solution: restrain “society’s desire to help those weakest among us, especially when their small numbers allow us to see them as unique individuals.”  In that way, we can “ensure that an undue burden is not placed on others for the sake of a few.” [7]
As Leonard notes, progressives were all in on eugenics.  The saw eugenics as a scientific tool that could be used to eliminate people of limited or undesirable traits who, because of their disabilities and behavior, are a drain on other spending.   So, they set about establishing which of us should reproduce based on the traits they decided were most desirable.  The eugenics leaders relied upon foundation funding to advance their vision and to support randomized trials and statistical models to demonstrate how the greater good would be served. 
All ICER is doing is applying the Progressive's eugenics calculus to restrict the medicines the sickest people – including those with genetic disorders –  that siphon spending away from schools and highway construction, etc., instead of eliminating the people themselves. PBMs and health plans benefit from rich rebates in the short run and – by imposing cost sharing on the sickest – discourage them from sticking around for the long term.   Indeed, as I suggested, Pearson has figured out that PBMs are the perfect mechanism for sorting out the undesirables from those of us who young, lean, healthy and who, like Ferry, want to spend their free time “enjoying sandwiches.” 
There is nothing evil about Pearson or ICER.  Rather, as Lionel Trilling observed, “some paradox of our natures leads us when once we have made our fellow men the objects of our enlightened interest, to go on to make them the objects of our pity, then of our wisdom, ultimately of our coercion.”  For Pearson and his acolytes in Wired, that coercion is noble and grand.

[1] ILLIBERAL REFORMERS Race, Eugenics and American Economics in the Progressive Era
By Thomas C. Leonard 250 pp. Princeton University Press
[3] Am J Manag Care. 2016 Jun 1;22(6):e199-207.
Value of improved lipid control in patients at high risk for adverse cardiac events.
Jena AB1, Blumenthal DM, Stevens W, Chou JW, Ton TG, Goldman DP.
[4] 2016 Employer Health Benefits Survey Sep 14, 2016
“Among covered workers at large firms whose largest plan has a separate tier for specialty drugs, 43% have a copayment for specialty drugs and 46% have a coinsurance requirement (Exhibit 9.15). The average copayment is $89 and the average coinsurance rate is 26% (Exhibit 9.16). Seventy-eight percent of those with a coinsurance requirement have a maximum dollar limit on the amount of coinsurance they must pay.”
[5] Source: Medicines Use and Spending in the U.S.: A Review of 2016 and Outlook to 2021, Quintiles IMS Institute May 2017
[6] “The Liberals Who Loved Eugenics.”
[7] Largent EA, Pearson SD. Which orphans will find a home? The rule of rescue in resource allocation for rare diseases. The Hastings Center report. 2012;42(1):27-34. 
If you’re interested in the FDA’s Patient-Focused Drug Development program and attending next week’s BIO bash, hope you can attend (and participate) at this interactive panel discussion --

Improving Patient Advocacy Across the Globe

Date: Tuesday, June 20
Time: 4:15 PM – 5:15 PM
Location: Room 27 AB  

Session Description:

With the projected increase in prosperity and life expectancy in many countries over the next 20 years, the number of patients with life threatening diseases is expected to grow, presenting a range of challenges for patients, caregivers, healthcare professionals, governments and the pharmaceutical industry. As the number of patients with cancer increases, it will be important that structures are in place to support patients and their families, and to ensure that they have access to information and guidance on diagnosis, treatments and supportive care. At the same time, it will be critical to ensure that the voice of patients is included throughout the process which enables them access to innovative drugs – from input into the R&D process and all the way through public reimbursement and budget allocation decisions. The panel will focus on how strong, stable, capable patient organizations can provide a voice for those who both pay for the health system and rely on it.


Dr. Yoav Shechter, MSD


Kathleen Barnard, Save Your Skin
Peter Pitts, Center for Medicine in the Public Interest
Maria Fatima “Girlie” Garcia-Lorenzo, Philippine Alliance of Patient Organizations (PAPO)

Hope to see you in San Diego.
Here's an oped from the Morning Consult by regenerative medicine/stem cell pioneer and visionary Robert Hariri and me.   If America regains leadership in regenerative medicine it can spur better health and economic growth. 

Regenerative Medicine Can Help Make America Great

When President Donald Trump urged the biopharmaceutical industry to reduce the price of new medicines and to increase its manufacturing in the United States, many took it as a threat.

We believe it’s a call to action. America’s ingenuity in biomedical research is unsurpassed. However, our country is losing out to other nations in the fastest growing biotechnology sector, called regenerative medicine: harnessing the capacity of our cells to repair and restore health and sustain well-being.

Second place is not an option. The regenerative medicine market is growing about 21 percent a year and is expected to be worth over $350 billion by 2050. Today, the U.S. regenerative medicine sector is generating $3.6 billion in revenues and has produced 14,000 jobs. By 2050, the industry could create nearly a million new jobs nationwide.

Regenerative medicine will also reduce the cost of disease. Such therapies will replace drugs, devices, and surgery, saving lives, increasing productivity, and reducing the cost of care. This transformation will add trillions in value to our economy.

Finally, regenerative medicine will also make America more secure. Our nation still lacks the ability to quickly and cheaply mass produce vaccines, antidotes, and cell therapies to counter pandemics and bioterrorism. Our fighting forces need reliable sources of these countermeasures and deserve immediate access to treatments that give them back their lives. We shouldn’t outsource the safety and well-being of our nation and our Armed Forces to other countries.

To regain leadership in regenerative medicine, U.S. firms don’t need government loans, tax credits or massive de-regulation. Instead, it needs the opportunity to invest in reducing the time and cost of manufacturing cellular therapies. To the extent that regenerative medicine is curative it must be made available at vaccine like prices. At present, only a handful of people can afford such treatments.

China and Japan are now in forefront of reducing the cost of producing stem cells, tissue, and other products with restorative biological properties. As a result, they are attracting more capital and forming more new companies than the U.S.

In 2014 Japan became the first country in the world to adopt an expedited approval system specifically for regenerative medical products and to allow outsourced cell culturing. Two products were approved under the new system within a year of its adoption.

By contrast, the Food and Drug Administration regulates any use of manufactured stem cells as equally risky without regard to prior use, health benefit, or therapeutic potential. Indeed, many of the most common stem cell therapies — including bone marrow transplants and blood transfusions — would require 10 years of FDA review if they were brought to market today.

The problem isn’t over-regulation. It’s outdated regulation. Safety checks and benchmarks for cell manufacturing should be based on real world evidence of past applications. Regulation should focus on the specific potential side effects for each specific potential use. In this regard, we agree with incoming FDA Commissioner Scott Gottlieb, who has noted, “Expediting the development of these novel and transformative technologies like gene- and cell-based therapies doesn’t necessarily mean lowering the standard for approval, as I believe other countries have done. But it does mean having a framework that’s crafted to deal with the unique hypothetical risks that these products pose.”

In fact, the United States has the best regenerative medicine manufacturing technology in the world. But it is literally sitting unused in warehouses.

For example, under the Accelerated Manufacture of Pharmaceuticals program, private companies partnered with the Defense Advanced Research Projects Agency to develop mobile cell and tissue manufacturing plants that can be set up almost anywhere. The facilities can produce cells and tissues at a fraction of the current cost. These mobile factories make real-time production of vaccines and biologics for potential bioterrorist threats and pandemics possible. They are also low-cost, high-tech platforms for experimental evaluation of any type of regenerative medicine.

AMPs are operating in Indonesia, Singapore, China, and Japan where cell products — including vaccines — are being mass produced. Not a single AMP is being used in the United States because of outdated regulations.

To remove this regulatory obstacle, the Trump administration should establish a separate regenerative medicine pathway. This pathway, which could be developed by DARPA, FDA, and the Centers for Disease Control and Prevention, would develop regulatory standards for the safe manufacturing and testing of development of regenerative products to treat battlefield related traumas such as traumatic brain injury, life-threatening limb damage, and drug-resistant pathogens.

The focus on the conditions and circumstances unique to war or counter-terrorism is both appropriate and strategic. After World War II, Franklin Roosevelt directed that the scientific and entrepreneurial talents used to achieve ramp up war-time production of penicillin and blood plasma “be used in the days of peace ahead for the improvement of the national health, the creation of new enterprises bringing new jobs, and the betterment of the national standard of living.”

What was created exceeded that vision. The cooperative efforts to achieve mass production of penicillin and blood plasma inspired and supported the creation of industries that employ millions of people today.

Similarly, developing an affordable source of cell therapies to heal our fighting forces and protect the homeland will yield a wide array of affordable technologies and cures that will produce, in FDR’s words, a fuller and more fruitful employment and a fuller and more fruitful life. Simply put, by making the manufacture of regenerative medicine affordable can help make America great.


Robert Hariri is CEO of Celularity. Robert Goldberg is vice president of Center for Medicine in the Public Interest.
In March, the FDA’s Anesthetic and Analgesic Drug Products Advisory Committee (AADPAC) and the Drug Safety and Risk Management Advisory Committee (DSARM). voted 18-8 that Opana ER’s benefits do not outweigh its risks. And on June 8th, the other shoe dropped.

"After careful consideration, the agency is seeking removal based on its concern that the benefits of the drug may no longer outweigh its risks," the agency said in announcing the move. “This is the first time the agency has taken steps to remove a currently marketed opioid pain medication from sale due to the public health consequences of abuse."

The FDA said it was asking Endo to voluntarily cease marketing Opana ER. But it added that if the company refuses, the agency will "take steps to formally require its removal by withdrawing approval."

The FDA said its data indicate that the abuse of the drug has shifted from snorting to injection following reformulation in 2012, which was intended to help the pills resist physical and chemical manipulation. Subsequently, Opana ER was associated with a notorious outbreak of HIV and hepatitis C infection in rural Indiana two years ago, caused by needle-sharing among opioid addicts.

"The abuse and manipulation of reformulated Opana ER by injection has resulted in a serious disease outbreak. When we determined that the product had dangerous unintended consequences, we made a decision to request its withdrawal from the market," said Janet Woodcock, MD, director of the FDA's Center for Drug Evaluation and Research, in a statement. "This action will protect the public from further potential for misuse and abuse of this product."

What can we learn from this action? First, that when a product’s risk/benefit profile is carefully monitored, aggressive action can be taken in a timely manner. But should we need an outbreak of HIV/AIDS and Hep-C to sound the alarm?

Kudos to the FDA for taking appropriate action to protect the public health – but we need more. Specifically we need the agency to work with sponsors o design more and better early warning mechanisms so that a problematic product can we recalled before dire consequences ensue. That means new and more immediate ways to collect, analyze, and share real-world evidence.

It’s time for apps to take center stage in the battle against opioid abuse.

If it’s not obvious from the title “Orphan Drugs: Way Too Many, Way Too Expensive” the essence of Joseph Burns article in Managed Care Magazine is: isn’t is terrible that drug companies – who neglected rare and tropical disease for decades to make money – are now making money developing drugs for conditions they were criticized for ignoring and for which the Orphan Drug Act was created. 

Burns article is based on the material and media accounts generated by a syndicate attacking rare disease groups and the Orphan Drug Act funded by Laura and John Arnold Foundation to the tune of $22.4 million. It is a network of left-leaning think tanks with a bias against the profitability of medical innovation, news outlets and patient advocacy organization that spread the anti-orphan message far and wide.   

The Arnold funded think tanks provide the Arnold-funded news outlets with factoids and quotes attacking orphan drug development and patient groups. The Arnold funding patient organization then provides the rest of the syndicate with grass roots outlet for even more quotes and opportunities to spread the message.   The advocacy group, Patients for Affordable Medicines, is run by David Mitchell who recently retired as a founder and principal of PR firm GMMB. 

Mitchell knows a little bit about being a front organization or a pass through for political advocacy: GMMB earned $236.3 million from Hillary for America 2016 and moved over $314 million in Obama ad buys during the 2012 election cycle.  It also runs a group called Waterfront Strategies that handles soft money, consulting and ad buys for a number of PACs. 

Burns fails to tell his readers of Mitchell’s past and present work as a conduit. Instead, he depicts Mitchell as a selfless crusader against “drug companies (that) are manipulating the law that created the orphan drug status.  Mitchell claims orphan drug development is mostly  “salami slicing” strategies—companies dividing diseases into smaller and smaller categories based on genetic and biomarker differences so their products can achieve the coveted orphan drug status.”

“This gaming of the system to cut and recut for different orphan diseases means they get to use the same drug for multiple orphan drug designations,” says Mitchell. “That needs to stop.”

Neither Burns or Mitchell offer any proof that such practices are hurting patients.   Instead, their beef with the fact that companies have the audacity to attempt ot make a profit. 
Burns notes: “some commentators have said the trouble starts with the law’s prevalence-based definition of a rare disease as a condition that affects fewer than 200,000 individuals. Because drug companies can now price orphan drugs at between $100,000 to $200,000 per patient per year, they need only 5,000 to 10,000 patients to hit the blockbuster mark of $1 billion in annual sales.”

Well yeah, that’s what the Orphan Drug Act is supposed to do: Encourage the development of new medicines for groups of patients that do not benefit from existing therapies.

But Burns – like most critics past and present – claims “the law’s intended purpose of encouraging the development of drugs for rare diseases has been undermined in various ways.”

Rather than provide evidence of how the act has been undermined, Burns just asserts: companies “are using the 1983 Orphan Drug Act to secure lucrative incentives and gain monopoly control of rare disease markets where drugs often command astronomical price tags”

Burns assertions of gaming and astronomical prices are without substance:

For instance, he fails to note the retail price of the top selling 10 orphan drugs are a bargain relative to lives lost, health care spending saved and productivity gained.  

Take Revlimid (used at various stages of multiple myeloma) as an example.  The true per patient cost – net of rebates, discounts, and other concessions – is about $78K per patient.  The median charge for a hospital stay is $82000.  

Revlimid sales in 2014 were about $4.4 billion.  But extrapolation of gains in life expectancy based on previous studies of the impact of advances in myeloma care on longevity suggests that each year the use of Revlimid and other novel treatments generate $22 billion in added value. 

Further, many other orphan drugs NOT reviewed by Burns treat extremely small populations and require continuing evaluation and expensive production activities. 

Of the orphan drugs approved since 2012, the average patient population has been under 2000. Nearly 80 percent of the new products or approvals were developed by small biotech companies that are losing money.  If Burns and the critics he channels thinks that punishing companies after they turn a profit will not affect orphan drug development, they should prove it, not force dying patients into a twisted social experiment. 

In addition to being upset about the handful of profitable orphan drugs, Burns claims that slicing and dicing (as he calls it) is an unfair way to make money.  He notes: “Herceptin, originally approved as a breast cancer drug, has gained orphan designation for pancreatic and gastric cancers because those cancers can now also be classified as HER2-positive and HER2-negative.” 

Burns cites an Arnold Foundation funded Kaiser Health News ‘study’ that highlights the number of orphan drug designations generated from existing medicines.  It is not a study, it is simply the same list of orphan drug designations and approvals the FDA generates with KHN’s negative spin added as narrative. 

It is true that there has been an increase in the discovery of markers for previously untreated tumors that are certainly fatal.  And it is true that companies are conducting clinical trials or engaging in data mining to establish benefit in other subpopulations.  KHN implies this is an immoral practice because profit is involved.  

As the FDALawBlog points out, in some cases, a single orphan drug designation can result in multiple periods of orphan drug exclusivity. There appear to be a growing number of cases where FDA has granted multiple periods of orphan drug exclusivity based on the same original orphan drug designation, and where the drug’s indication evolves into something new, shedding and subsuming the previous indication statement.”

The obvious ‘solution’ to this situation is to allow companies faster approval for a broad number of tumors with biomarkers.  FDA’s recent approval of Keytruda for all solid tumors with a specific mutation clears the path for this approach.  Martin Makary (who Burns quotes) suggests this conditional path as an alternative to the multiple exclusivities.  But the anti-orphan Arnold Foundation funded Jerry Avorn and Aaron Kesselheim has attacked the use of biomarkers as a watering down of science pushed by pharma funded patient groups. So my guess is that find a way to characterize THAT as profiteering.  Indeed, Kesselheim is behind the Arnold-funded effort to eliminate biomarker-based disease treatment from Orphan Drug Act designations. 

Burns and the anti-orphan movement suggest instead that orphan drug patent life should be shortened to allow for more generics. But that begs the question: as orphan drugs have gone generic, why haven’t the companies used their first to market exclusivity to engage in similar research?  If it is just slicing and dicing, why wouldn’t a generic company want a line extension?

The answer is supplemental approvals of any type require time and money that innovator companies invest and generics don’t. The FDA does not simply tack on additional patent life.  To obtain a period of orphan drug exclusivity for a drug that is otherwise the “same drug” as a previously approved drug (i.e., a drug containing the same active moiety and that is for the same orphan disease or condition), the sponsor must demonstrate that its product is clinically superior (by showing greater efficacy, greater safety, or by providing a major contribution to patient care) to the previously approved drug.” 

If Burns and the “experts” he quotes wants to repurpose generic Gleevec or Humira for an orphan use and not charge for it, they should set up a company and do so.  

Indeed, Burns and every other critic he cites in his repetition of how the ODA is used to make money ignores a very important point: “Generic competition is generally not thwarted because of the ability of an ANDA applicant to carve-out of its labeling (and thus avoid) a period of unexpired orphan drug exclusivity on the brand-name Reference Listed Drug.” 

The FDA can approve a generic version of the drug product for one or more uses even if, in the future, an innovator company develops another use that garners orphan drug exclusivity. 

Which means the generic version of the drug is on the market and can be used off-label.  

But the anti-orphan critics attack off-label use as a slick, often illegal way, of increasing sales. So that leaves people with rare diseases with a longer wait for medicines that would cost more to make and must rely on generic companies to invest in new indications once innovator drugs go off patent. 

I know people with rare diseases can’t live with that.  I wonder if Joseph Burns and the anti-orphan movement can. 

The economics of opioids

  • 06.08.2017
  • Peter Pitts
The Joint Economic Committee (JEC) will hold a hearing on June 8th to explore the economic aspects of the opioid crisis.

According to the JEC website, “The opioid problem has various elements on the demand and the supply side that JEC witnesses, Professor Sir Angus Deaton, 2015 Nobel Prize laureate in economics, Ohio Attorney General Mike DeWine, Dr. Lisa Sacco, Congressional Research Service Crime Policy Analyst, and Dr. Richard G. Frank, Professor of Health Economics at Harvard will address in detail.” Mike DeWine? Really?

We’ll see.

I suspect that a key aspect of “opioid economics” that will get very little attention is the unwillingness of PBMs to pay for opioids of the abuse-deterrent variety. That’s simple economics. The reason that there are nearly a quarter of a billion generic, non-abuse opioid tablets prescribed annually (vs. about 5 million abuse-deterrent ones) is because they are inexpensive. But that is a failed metric. It’s benefited the bottom line of PBMs and created a national epidemic.

The same math explains why PBMs often implement barriers to the use of branded, on-label non-opioid medicines, relegating these treatments to second line options. 52% of patients diagnosed with osteoarthritis receive an opioid pain medicine as first line treatment as do 43% of patients diagnosed with fibromyalgia and 42% of patients with diabetic peripheral neuropathy even though there are FDA-approved, non-opioid medicines specifically designed and labeled to treat these conditions.

We’ll see.

Zero-sum thinking is an obsession of mine, but mostly in economics. -- P. J. O'Rourke
To the Editor:

Per, "The Single-Payer Party? Democrats Shift Left on Health Care," (NYT, June 3, 2017) it seems somewhat ham-handed to have only one paragraph, deep inside the page 16 jump of a Page One article, mentioning the enormous cost and tax consequences of the California legislation -- and no mention at all of the proposal's impact on patient choice and resource rationing. That's not fake news -- but it certainly isn't all the news that's fit to print.

Peter J. Pitts
Per FDA Commissioner Scott Gottlieb, “As Commissioner, my highest initial priority is to take immediate steps to reduce the scope of the epidemic of opioid addiction. I believe the Food and Drug Administration continues to have an important role to play in addressing this crisis, particularly when it comes to reducing the number of new cases of addiction.”

One place to look for smart policy solutions is just north of the border, where medical experts and public health officials in Canada are also concerned about the abuse of prescription opioids. A study published by the Canadian Health Policy Institute (CHPI) estimates that if all prescription opioids in Canada were abuse deterrent formulations, societal costs could be substantially reduced.

“Mandating abuse deterrent formulations for prescription opioids could reduce societal costs by $140 million to $4 billion annually.” 

The study estimated that the economic value of the health, social and productivity losses associated with the abuse of prescription opioids in Canada could have averaged as much as $4.3 billion per year during the four-year period from 2012 to 2015. The study also reviewed clinical research showing that existing abuse deterrent formulations ranged from 3.3% to 98.8% effective at reducing abuse rates of the tested products. The median effectiveness reducing abuse rates by between 45.1% and 64%.

The study concluded that if the federal government mandated abuse deterrent formulations for all prescription opioids, it would discourage non-medical use of these drugs, reducing associated societal costs by an estimated range of savings between $140 million and $4 billion annually.

Perhaps a cross-border partnership is in order to address this bi-lateral regulatory issue.

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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