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Selected news articles which highlight important policy issues.

News: Weekly Archives

News for the week of 08-16-2004

RESPONSE TO SOARING COSTS: Prescription battle Lawmakers in West Virginia prepare to push for price controls placed on drugs as powerful pharmaceutical industry tries to defeat effort
Newsday, 8-16-04

West Virginia is considering legislative action to impose price controls on drug manufacturers, along with a range of other aggressive policies to lower the state's high drug costs. West Virginia is particularly hard hit by health care costs, since a significant portion of its population is elderly and in poor health – on average, residents take five more prescription drugs per day than other Americans.

Price controls would undoubtedly come with a cap on state spending in order to rein in costs. Patients would be shifted to older medications with more side effects before they were allowed to use newer, more effective (and expensive) ones. Thus price controls could, in the long run, quite possibly further damage the health of a population already laboring under other disadvantages. That is the option that West Virginia's policymakers should consider most costly.

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Catching The Bad Bug
Forbes, 8-16-04

Critics of the pharmaceutical industry like to tout the ability of government researchers to drive biomedical innovation to the extent that private invest comes across as superfluous. If this is true, why is there such a dearth of vaccines and medicines to treat bioterror weapons like anthrax? Isn't this one area of research, riddled by true market failures, where government researchers ought to be radically outperforming industry?

Alas, they are not – and policymakers recognize that government has to create market incentives for private industry to commit wholeheartedly to biodefense innovation. Project Bioshield, signed into law by President Bush in January, has created a ten-year $5.6 billion fund to stockpile treatments for smallpox, botulism, and anthrax. Still, large pharmaceutical companies are holding back on biodefense research projects because the government, during the 2001 anthrax attacks, forced Bayer to slash the price of one of the few truly effective anthrax treatments, Cipro. This sent a signal to the market that the government wouldn’t let industry recoup its biodefense research costs if there was an actual attack.

Senators Orrin Hatch and Joseph Lieberman are trying to draw larger companies into the biodefense market by offering better incentives, for instance tax credits, blanket liability protections for bioterror treatments, and even patent extensions for blockbuster drugs (like statins) already on market. Until the government makes it clear that industry profits in this critical sector will be honored, biodefense research will remain agonizingly slow.

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Health Journal: Latest Approach for Migraine Sufferers: Stopping Headaches Before They Start
Wall Street Journal, 8-17-04

The coming wave in medicine is prevention, with drug therapy used to forestall chronic diseases or reduce their severity when they do strike. Migraines, which affect about 30 million Americans, certainly fall into this category. The drive to prevent migraines is aimed at patients who regularly have multiple migraines every 30 days. Migraine prevention gained another tool this week when the FDA approved the epilepsy drug Topamax for migraine prevention, "bringing to five the total number of drugs approved by the FDA for migraine prevention."

FDA approval of Topamax for migraine prevention was based on two studies of 900 patients who suffered 4-8 migraines a month. In this placebo controlled study, "about half of the patients taking Topamax reported at least a 50% reduction in the number of monthly headaches." Other drugs can also be used to prevent migraines: propanolol and timolol (beta-blockers), divalproex sodium (an anti-convulsant), and the drug methysergide. All of the drugs work about as well as Topamax.

Does addition of Topamax to a crowded arsenal of migraine treatments make it a "me-too" drug, i.e. a useless addition to the public pharmacy? Probably not. The most widely used class of drugs used to treat migraine episodes, triptans, is ineffective for about 20-30% of patients, and overuse of the drugs can cause "medication overuse" headaches. For those patients who fail on traditional treatments, or who have frequent and severe migraine episodes, every alternative drug brings new hope for relief.

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An experiment in globalisation - how India hopes to reshape the world drugs industry - PHARMACEUTICALS: Companies hope the country can build on its success in fields such as software and become a centre for innovation and research
Financial Times, 8-18-04

India's domestic pharmaceutical companies – long established leaders in generic drug markets – are girding themselves to challenge companies based in developed nations in the area of research-based drug development.

India already reaps enormous benefits from its abundant supply of low-cost, high-skilled labor in the IT sector – enough so as to cause tremors in the U.S. presidential election. But India also possesses similar advantages when it comes to the life-sciences industry – and those advantages are being leveraged by firms rushing to take advantage of India's implementation of the WTO's IP rules in 2005.

Under its current patent regime, Indian companies are allowed to sell generic versions of prescription drugs patented in other countries, provided they come up with a different manufacturing process. That will end in 2005, when India harmonizes its IP laws with WTO standards. As a result, Indian generic companies are racing to find other revenue streams and are shifting resources to directly compete with research based global giants like Pfizer and GlaxoSmithKline. Will they succeed?

Maybe, maybe not. But with significantly lower costs at home and companies in Europe and the U.S. facing ever greater regulatory pressures, Indian companies have to be taken very seriously as potential competitors.

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EUROPE'S gag reflex - Drug companies in Europe fight to take their message to the masses
The Star-Ledger, 8-18-04

Direct-to-consumer prescription drug advertising is illegal in the European Union, except for information inserted directly into prescription drug packaging. The ostensible reason advanced by European regulators is that drug advertising in the U.S. creates irrational prescribing patterns by physicians. The truth is that member states in the E.U. ration their prescription drug budgets, often introducing newer, more effective drugs years after they have been approved by regulators. The result: cancer drugs like Taxol and Gleevec may take years longer to reach consumers than in the U.S., where drugs reach market quickly after being approved by the FDA. If the Europeans were to allow drug companies to pass information on effectiveness directly to patients, they would be forced to admit that cost, not patient care, was the driving force behind drug coverage decisions in the E.U. And that is the last thing they want to happen.

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Medicare Proposal May Aid Insurers - Preliminary List of Drugs For New Benefits Could Be A Blow to Manufacturers
Wall Street Journal, 8-19-04

Health care in America is largely what the ancient Greeks would refer to as gigantomachia – a battle of the titans between government, insurers, and pharmaceutical companies where the mere mortals (that is, consumers) are, for the most part, relegated to the sidelines.

Under the new Medicare law, the U.S. Pharmacopeial Convention Inc. has the task of devising a blueprint for which therapeutic classes of prescription drugs will be covered by Medicare starting in 2006. The law mandates that insurers must cover at least two drugs in each class; hence, the larger the number of therapeutic classes, the larger number of drugs that insurers have to cover for Medicare beneficiaries.

A larger number of narrowly defined classes benefits the pharmaceutical industry. Fewer classes and broader classes, that lump together older generic drugs with newer medications, would tend to benefit insurers by keeping down prescription drug costs. Drug companies want about 200 classes; insurers and pharmacy benefit managers want about 50 to 90.

The USP's first draft appears to split the difference (with about 146 classes), and the Centers for Medicare and Medicaid Services may tinker with the final list even more. Still, the final draft will no doubt provide plenty of fodder for critics from every corner.

Is this the best way of funneling prescription drugs to patients? Probably not. Drug quality and value, after all, should be determined by patients, not the pharma companies or the insurers. However, because patients don't pay for their own care, decisions about coverage inevitably become political firefights. Health Savings Accounts would solve this problem by having consumers pay for routine prescriptions, with catastrophic costs covered by insurance. Patients would then have powerful incentives to choose the most cost-effective medications available, not necessarily the cheapest or the newest.

Until consumer driven health care becomes a reality, the gigantomachia will go on, with patients caught in the middle.

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A Test Predicts Breast-Cancer Survival - Inexpensive Blood Screen May Emerge as Key Tool In Choosing Treatments
Wall Street Journal, 8-19-04

Immunicon Corp., a Pennsylvania company, has developed a blood test that can measure the number of tumor cells circulating in the blood stream of patients with metastatic breast cancer. The test should be available for patients as early as this fall.

The number of circulating tumor cells is a remarkably accurate biomarker for the aggressiveness of metastatic cancers; "women with five or more tumor cells in a small test tube of blood died in an average of 10 months. That compares with more than 18 months for those with fewer than five tumor cells in their blood."

Doctors hope that this test will help physicians determine more quickly – in a matter of weeks as opposed to months – if a given treatment is working. The test is also significantly cheaper than imaging tests like PET scans. Biomarkers like this one are at the forefront "personalized medicine": fine-tuning treatments to respond to a patients individual disease or genetic profile. The pharmaceutical industry is rushing to find dozens of other biomarkers that will help determine at an early stage whether potential drug compounds are worth further research. Private sector investment in biomarker research is helping to save lives, drive down costs, and expand the frontiers of human biology.

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Irish officials: prescription drug import plan "unusual"
Associated Press Newswires, 8-19-04

Illinois Gov. Rod Blagojevich's program to import prescription drugs from Canada, Ireland and the U.K. is running into more problems every day. The latest misstep by the program was revealed when it was discovered that, in point of fact, mail order sales of prescription drugs is illegal in Ireland. The governor's office apparently had not contacted the Irish Medicines Board to notify them of its plan in advance of putting it into operation. Blagojevich's office said that the Illinois program would circumvent Irish laws by buying from wholesalers instead of pharmacies. "The drugs would then be funneled through pharmacies in the U.K., where such sales are legal."

Legal niceties aside, the governor's plan is having the ironic effect of showing exactly how impractical drug importation really is. A representative from Ireland's biggest pharmaceutical trade association called the governor's plan "unworkable and impractical" because it would force Irish consumers to compete with American buyers, potentially causing drug shortages and driving up Irish drug prices. Anne Nolan, chief executive of the Irish Pharmaceutical Healthcare association said that the governor’s program, if successful, "would cause enormous problems for us to meet our local obligations here."

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FDA Will Seek To Revise Labels For Antidepressants
Wall Street Journal, 8-20-04

Actual suicide rates among adolescents have been declining since the mid-1990s, which roughly correlates with a surge in anti-depressant prescriptions for pediatric use. However, recent data analysis by some anti-depressant makers and FDA researchers has called into question the risk-benefit profile for these drugs. Some studies indicate that there may an increased risk of suicidal thoughts and tendencies among teens on anti-depressants, and that some anti-depressants don't perform as well as placebos in pediatric patients. When this story first emerged, the FDA asked Columbia University researchers to review the results of nine clinical trials and sort out the conflicting evidence. The Columbia researchers have concluded that, overall, trial participants on anti-depressants "were 1.78 times more likely to have suicidal thoughts or actions if they were taking the drugs, compared to those taking placebo pills." It should be noted, however, that rates varied by the anti-depressant prescribed and that no teenagers actually committed suicide during the course of any of the trials.

The only consensus that seems to emerging is that Prozac is probably the best first line treatment for pediatric depression. To date, Prozac is also "the only major antidepressant that won an FDA-approved label for treating depression in young people." An FDA advisory meeting on the study’s findings and possible labeling changes for antidepressants is scheduled for September 13-14, 2004.

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Statins Cut Diabetics' Risk of Heart Attacks, Study Finds
Washington Post, 8-20-04

A new study released in the British medical journal Lancet, sponsored primarily by the British government and the British counterpart of the American Diabetes Association, found that patients with type-2 diabetes and normal cholesterol levels could still substantially reduce their risk for heart disease and stroke through statin therapy. After 4 years, patients on the statin drug were 36 percent less likely to have a heart attack; 48 percent less likely to have a stroke; and 37 percent less likely to have any serious adverse cardiovascular event. The study supports earlier research showing that many diabetics could benefit from the drugs even if their cholesterol levels were not considered elevated before treatment. Given the enormous costs of treating heart disease and diabetes, statin drugs are turning out to be medications worth their weight in gold.

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Discounted drugs urged for uninsured Californians; Official rejects Canadian medications as illegal
The San Diego Union-Tribune, 8-20-04

Never having been known as much of a lemming, California Gov. Arnold Schwarzenegger is bucking the national trend of governors rushing to endorse Canadian drug importation through state sponsored programs. Instead, his administration is proposing a sweeping new program that would offer uninsured, low-income Californians access to already established "free drug programs sponsored by pharmaceutical companies and [would] renew efforts by the state to use its leverage to negotiate discounts." Bravo to the governor, who is once again thinking outside the box.

An official spokesman for the governor hit the nail on the head: passing drug importation legislation in California "would at best be a symbolic gesture that would never be implemented and never bring relief to Californians who desperately need assistance." California is home to many of the nation's leading biotech firms and Gov. Schwarzenegger knows that importing Canadian price controls into his state isn't going to do the industry any favors. The bottom line is that policymakers have to change the fact that Americans single-handedly finance the bulk of the world’s drug R&D. Until that happens, the governor's plan should offer the state's low-income uninsured residents real access at an affordable price.

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