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Selected news articles which highlight important policy issues.

News: Weekly Archives

News for the week of 11-01-2004

Novartis Drug Gains Wider Use
Wall Street Journal, 11-1-04

The FDA has approved the drug Femara to reduce the risk of breast cancer recurrence in postmenopausal women who have already been treated with Tamoxifen. Femara is already available in the U.S. market to treat women with metastatic breast cancer, but it has now been shown to reduce “the risk of breast cancer recurrence by more than 40% in women taking Femara after an average of 2.5 years compared with women on a placebo, or sugar pill.” The trial testing Femara’s effectiveness had such good results that its placebo wing was offered the chance to switch to Femara therapy. This is particularly good news for women, for while Tamoxifen has proven itself to be a highly effective breast cancer treatment, “it appears to lose its effectiveness after five years and might increase the risk for other types of cancer” thereafter.

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How Bad Will the Lawsuits Get? Really, really bad.
Forbes, 11-1-04

“Will Vioxx be the next Baycol, or Rezulin, or fen-phen?” To early to tell, but if history is any guide Merck may find itself in tort hell. Trial lawyers are remarkably adept at mounting national litigation efforts, capitalizing on media attention, pooling information and critical documents, and combining thousands of plaintiffs with minor or dubious injuries with a handful of severely injured victims to create national class action lawsuits. Once trial lawyers have battle tested a winning formula, they will shop relentlessly for judicial forums where they can play on anti-corporate prejudices to generate multi-billion dollar jury verdicts.

Fortune opines that “given the millions who were taking Vioxx, it is a statistical certainty that thousands suffered heart attacks and strokes. Obviously Vioxx won’t have caused all those, but plaintiffs lawyers will likely have little trouble finding medical experts who’ll testify to a causal connection.” The real issue in mass tort cases is not compensating people who were injured. Everyone agrees that corporations should compensate those plaintiffs. The problem is that the tort system has no mechanism for separating out real injuries from spurious ones, and commonly compensates lawyers handsomely for clogging the system with non-meritorious injuries.

Reasons for restraint: Any drug taken by over 20 million people (as Vioxx was) will undoubtedly have side effects, some severe. Other widely used drugs Americans rely on (anti-inflammatories, “the pill”, diuretics for high blood pressure) have serious risk profiles ranging from ulcers, to stroke, to diabetes. Given the current litigation climate, those drugs might not be approved today if they had to navigate the same hurdles – despite their enormous benefits. What we need (and what everyone is working towards) are biomarkers and other profiling tools that would allow physicians and pharmaceutical companies to predict how different drugs affect different people – personalized medicine that would help doctors keep drugs away from patients who are at high risk for serious adverse events.

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Vaccine Works to Prevent Cervical Cancer
The New York Times, 11-2-04

An experimental vaccine has proven that it can not only prevent cervical cancer, but that its protection against a virus (called human papilloma virus, or HPV) that causes cervical cancer is durable over time. Merck, the vaccine’s developer, had originally tested the vaccine in over 1,500 women between the ages of 16-23 who received three vaccine inoculations over the course of six months. Not only did it provide 100% protection against the virus, but its protection was still “100 percent effective” four years later.

This vaccine is a real breakthrough since HPV viruses – which are sexually transmitted and very common in human beings – cause nearly every case of cervical cancer. However, the current vaccine is not the one Merck plans to market; a second vaccine is currently being tested that “will immunize against four [HPV] strains: the [two] main causes of cervical cancer…and two other viruses that cause genital warts.” Once approved the vaccine may prove particularly helpful in poor nations, where regular gynecological exams are rare and death due to cervical cancer is much more common than in the U.S. Nearly 500,000 cases of cervical cancer are diagnosed every year worldwide, along with 225,000 deaths – only 4,000 of which are in the U.S.

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Medicare Takes Steps Broadening Coverage of Cancer Care
The New York Times, 11-2-04

In September, the Centers for Medicare and Medicaid services drew heavy fire from physicians who treat cancer after it announced that it would be reducing the fees paid to oncologists who administer cancer drugs to Medicare patients in their offices. Everyone agreed that the prices that Medicare paid for those drugs was vastly inflated, but oncologists claimed that Medicare should retain its original fee schedule since they provided patients with extra care well above and beyond the cost of the drugs themselves.

Mark McClellan, CMMS Administrator, has quelled much of the fervor by establishing demonstration programs that would reimburse oncologists for administering cancer drugs provided that they also collect data on patient outcomes. In exchange for $130 per patient per day, oncologists will record patient information on pain, nausea, and fatigue resulting from chemotherapy. In cooperation with the National Cancer Institute, the agency has also agreed to cover some colon cancer drugs off-label when they are used to treat other cancers, provided that doctors agree to participate in clinical trials that will monitoring their effectiveness.

Dr. McClellan’s Medicare reforms may be controversial, but only because he is trying to shift the agency from a fee-based model to a quality-based model that reimburses providers for offering more effective care to their patients and collecting empirical data on what really works. Once this data is made public, it will hopefully help spur a national shift towards quality and outcome based health care, which would benefit all Americans.

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$18B tab possible in recall of Vioxx: Study says Merck could face more than 50,000 lawsuits
NJ.com, 11-4-04

One FDA researcher estimates that, out of the approximately 20 million people who took Vioxx at one time or another, about 27,000 patients may have suffered serious or fatal cardiovascular events as a result of their exposure to the drug. One investment analyst predicted that "given the large number of Vioxx users, the publicity surrounding the recall, the types of litigation such attention typically generates, and Merck's 'deep pockets', we believe the number of claims filed that do not involve serious cardiovascular events could [be surprising]." Translation: plaintiff's lawyers are likely to file large class action suits with thousands of members, some of them with dubious or nonexistent injuries related to Vioxx. That will increase their leverage in court, although it may also hurt the chances of individuals with serious injuries from receiving the compensation they deserve.

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Flu Vaccine Goes Further With a Shallower Shot: Technique Could Improve Protection, Stretch Supply; Further Testing Is Needed
Wall Street Journal, 11-4-04

Two new studies published in the New England Journal of Medicine suggest that small doses of flu vaccine injected into the skin of “healthy young and middle-aged adults offered similar protection to a full dose injected into muscle, the traditional way of administering vaccines.” The dilution of the vaccine is made possible because there are immune cells in the skin layers that are “poised” to fight off invading infections, rather than in the muscle tissue, where the vaccine must travel to lymph nodes before eliciting an immune response.

Although these findings won’t be validated in time to affect the current flu vaccine shortage, larger clinical trials testing the method could help it to become the standard procedure for delivering vaccines.

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Medicare Tweaks Preventive Plans
Wall Street Journal, 11-4-04

In the U.S., about 80 percent of all health care dollars are spent on 20 percent of the patients. Thus for that small part of the population - suffering from chronic diseases like heart disease, asthma, diabetes, or cancer - advances in the treatment and prevention of those conditions could lead to significant savings in total health expenditures. With this goal in mind, the Centers for Medicare and Medicaid Services is increasing payments to physicians and hospitals by an average of about 4% next year to encourage the use of more preventative forms of health care. “Too many beneficiaries haven’t used services that make it possible to detect and treat illnesses before they lead to serious health problems and avoidable health care costs,” said CMS Administrator Mark B. McClellan. “Under the new law, we’ve modernized Medicare to include preventive benefits and appropriate payments for these services, and we intend to close the prevention gap for seniors.”

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Vulnerable System -- Behind Flu-Vaccine Shortage: Struggle to Police Drugs Globally -- Chiron Case Shows Failure Of Agencies to Swap Data; A Bad News Wake-Up Call -- Rising Overseas Duty for FDA
Wall Street Journal, 11-5-04

Lurking behind the partisan sniping over the flu vaccine shortage is a troubling issue that has widespread implications for other pharmaceutical issues, from bioterrorism to drug importation.

With the globalization of the pharmaceutical industry, and ongoing consolidation of companies, the FDA is increasingly burdened by the need to inspect manufacturing plants in far-flung corners of the world that supply medicines for the American market. To date, the agency is proving less than equal to the enormity of the challenge. In short, there is no international regulatory system for pharmaceuticals, and the FDA lacks the human resources to inspect foreign plants on a regular, thorough basis. “In 2000, the FDA said in separate reports that it was falling ‘considerably short’ on biennial inspections outside the vaccine area and that the ‘globalization of the pharmaceutical industry is outpacing our resources to inspect pharmaceutical plants world-wide.” This is a huge gap in FDA oversight, and a troubling footnote to the rush to legalize drug importation from countries well-beyond the familiar Canadian market.

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Lawyers Organizing for Mass Suits Over Vioxx
The New York Times, 11-5-04

Lawyers are gathering in this week in Pasadena, California to decide how they will carve up their Christmas turkey - sorry, the Vioxx litigation against Merck, one of the world's largest pharmaceutical companies. The California conference will be open to defense lawyers; an additional conference will be held on November 11 in Las Vegas only for members of the plaintiffs' bar.

Even before Merck withdrew Vioxx from the market, hundreds of cases alleging harm from the drug had been filed against the manufacturer - now, with the stakes increased exponentially, the number of cases is sure to explode. "The plaintiffs' lawyers plan to compare notes next week on the types of clients who may make the strongest cases, with a premium on people who were in demonstrably good health before taking Vioxx. The group also intends to discuss ways to cooperate in gathering evidence and expert testimony, and in devising tactics to influence where the bulk of the cases may end up, as state and federal judges consolidate them. . . . Many lawyers will also be jockeying for roles that will maximize their influence, and ultimately their reimbursement, as the litigation unfolds."

Perhaps, when everything is said and done, the lawyers will all be happy. If they are, however, it is very likely that there will be no more Merck - hardly a good outcome for industry, patients, or global health.

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F.D.A.'s Drug Safety System Will Get Outside Review
The New York Times, 11-6-04

In response to the firestorm raging over Vioxx, the FDA has asked the Institute of Medicine, one of "the government's top scientific review" institutions, to examine the FDA's drug safety system to determine if it is adequate or in need of revision. The FDA has also begun setting up an internal appeals process for regulators within the agency who "feel that superiors have made a mistake by approving a drug or, after approval, refusing to order its recall." In the event of a serious disagreement, "that person will be able to make a case before a committee of experts, from inside and outside the agency, who were not involved in the decision."

This may be all to the good, but it seems to perpetuate an either/or mentality at the agency. The reality is that even drugs like Vioxx, which are safe for the vast majority of users, can be left on market provided doctors have the ability to screen out patients at high risk for adverse events. The crux of a radically new system of patient safety would rely on pharmacogenomics studies and better statistical modeling before and after a drug was approved for marketing to monitor how the drug is metabolized by different groups of patients. Right now, we are a far cry from that goal and won't get any closer to it if the FDA's response is to circle the wagons and become even more risk averse than it already is.

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Medicare faces cost crisis; Multitrillion-dollar deficits loom over federal programs
The San Francisco Chronicle, 11-7-04

Compared the unfunded liabilities of the federal government’s Medicare and Medicaid programs, the Social Security deficit pales in comparison. “Looking more than 75 years into the future [one economist] estimates that the nation faces a $62 trillion unfunded liability for Medicare - versus a $12 trillion gap for Social Security.” The choices appear stark and there are no shortage of doomsayers amongst policymakers and pundits.

Still, angst on this issue is generated by many in an attempt to engineer yet more government intervention in health care markets. There is, however, ample reason to reject the notion that the sky will inevitably fall - in 20 years, let alone 75.

The most significant reason for optimism is technology itself. Anyone who thinks they can tell you what health care costs will be like 75 years from now is kidding themselves. No one in the 1970s could predict the enormous productivity gains from the personal computer in the 1990s, and no one now can predict health care advances in the next 10, 15, or 20 years, when new sciences like genomics will really begin to blossom. Rather than hamstring tomorrow’s health care markets today, we should focus on building more patient control and responsibility into the system, and let industry do what it does best: develop new technologies. A system with the right incentives, including consumer control and high quality information about providers and treatments, will help us solve the insolvable.

Pessimism in measured doses is an important impetus for policy reform; too much pessimism is a recipe for blind panic.

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Merck Faces U.S. Criminal Probe Over Vioxx Drug
Wall Street Journal, 11-9-04

There are two words that describe the rise and fall of Vioxx: moral hazard. For instance, Vioxx was an expensive drug in a crowded field of prescription pain relievers, including many cheap generic ones. This has earned the company no small amount of criticism. However, Merck is just playing the game according to rules others have written. Physicians and consumer groups have worked hard to tie the hands of insurers and HMOs when it comes to reimbursement - meaning that insurers don't bother much trying to push back against consumers or physician preferences. Physicians, for all of their carping about Vioxx, didn't pay for it, and were only to happy to write a prescription for it if someone asked - even after suspicions were raised about its heart attack risk.

Merck ran a great advertising campaign, it's true, but no one ever runs out and buys an SUV because of a great commercial - because they wind up paying the bill. It might be a different story if an insurer had to write a check every time a consumer opted for the Hummer instead of the Volkswagen beetle.

Vioxx would've been a great drug for a select group of patients, at high risk for gastrointestinal problems, or who couldn't tolerate other NSAIDS. But Merck - and patients, and doctors - all saw a big green light the end of the reimbursement tunnel and they all happily drove through it. Third party insurance for routine health care creates an enormous moral hazard for all of the players in the health care sector. As Milton Friedman once pointed out, no one uses insurance to buy groceries or mow the lawn, but we do use health insurance to pay for Vioxx when aspirin or ibuprofen might do as well.

The tort lawyers and industry critics, will, of course, write a different story. They will talk about Merck's greed, FDA incompetence, and innocent consumers taken in by seductive advertising. Still, the real culprit driving this particular problem is that Americans have come to treat all health care expenses - major, minor and everything in between - as a Right that someone else has to pay for.

If the rise and fall of Vioxx should teach us anything it should be that the jokes on us - and we're all paying for it.

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New Vision-Loss Drugs Offer Hope
Wall Street Journal, 11-9-04

Macular degeneration is the leading cause of blindness among American elderly and could reach epidemic proportions as baby boomers age. For instance, "by 2025, more than 11 million Americans will suffer from the condition." Although there is currently only one drug approved to treat macular degeneration (Visudyne), several other drugs are on the way. One drug, Lucentis, from Genentech, has shown an ability in early clinical trials to reverse eye damage. Another new drug, Macugen, shows promise as well. "In a trial of over 1,100 patients, those who didn't receive the drug lost twice as much vision as those who got Macugen." As more treatments become available, scientists think that "the brightest hope for macular degeneration treatment may be drug combinations similar to the cocktails that fight cancer and HIV."

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