|Selected news articles which highlight important policy issues.||
News: Weekly Archives
News for the week of 07-06-2005
Africa Tackles Graft, With Billions in Aid in Play
Decades of sizable grants and loans have had little influence on poverty and disease in Africa, as they are often subverted by the absence of accountability measures and corrupt local officials. For instance, Nigeria's World Bank loans of as much as $1 billion a year, and $3.5 billion in direct aid over the last 20 years have not significantly improved Nigeria’s infrastructure—to say nothing of the country’s own $300 billion in oil and gas profits over roughly the same period. Foreign aid largely ends up in useless pet projects or in private bank accounts.
Reform will have to come from the bottom up in Africa—and there are already a few encouraging signs. Nigeria's National Agency for Food and Drug Administration, headed by Dora Nkem Akunyili, is one such beacon:
Four years ago, perhaps four-fifths of [Akunyili's] agency's regulators were corrupt, she said in a recent interview. Even worse, two in three drugs sold publicly were either unregistered or unsafe for consumers…. Every few weeks, Mrs. Akunyili's agency made a show of burning heaps of fake drugs collected at airports, seaports, illegal factories and distributing houses. A spot check last year showed the impact: only one in eight drugs was unregistered. Major pharmaceutical companies have now returned to Nigeria, and other African nations have agreed to lift their bans on Nigeria's drugs.
Ultimately, only reliable, corruption-free state institutions and the rule of law will attract the capital investments that can lift moribund Africa out of poverty.
Health Canada, Canada’s national health care agency, recently commissioned a panel to review the risks and benefits of Vioxx and other Cox-2 drugs. The panel recommended allowing Vioxx and Celebrex back on the market without any further safety studies, should their manufacturers request re-approval. It concluded that, “all anti-inflammatory drugs carry explicit warnings of their heart risks,” including the nonprescription drug ibuprofen.
The panel's report says that because Cox-2 drugs carry heart risks similar to traditional painkillers, yet seem to have a lesser chance of causing stomach problems, patients could “benefit from having a variety of drugs to choose from for pain relief.”
The panel, in short, found that when all is said and done, Vioxx and Celebrex are safe and effective alternatives for patients, and that all non-steroidal anti-inflammatories carry similar risks. This will, hopefully, help to derail the juggernaut of product liability suits filed against the makers of Cox-2 drugs.
Rival Drug Discount Plans on Fall Ballot in California
In November, California will vote on two rival initiatives—one backed by unions and some consumer groups, and the other by the pharmaceutical industry—to decrease the costs of prescription medicine purchased by California’s Medicaid program.
The biggest difference [between the two proposals] is in the leverage the state might bring to procure discounts. Under the union-backed proposal, if a company did not offer what state negotiators considered sufficient discounts the state could discourage use of that company's drugs in the state's Medicaid program, which spends about $4 billion a year on drugs.
Doctors wanting to prescribe a restricted drug to a Medicaid patient would have to get permission, although there would be exceptions made if there were no adequate substitute for the drug.
It is ironic that California—a hotbed of biotech R&D—wants to reduce the revenues of companies that do business in and with the state, thereby reducing incentives to create innovative new medicines. A better tactic would be to evaluate the cost effectiveness of drugs in the Medicaid program. If companies can show that their drugs save the state money by keeping patients out of hospitals or in better health, the state should agree not to slash prices and encourage the use of those drugs as first line treatments. Encouraging companies to slash prices across the board without regard to efficacy only encourages a race to the bottom—without offering Medicaid patients better health care.
Brazil reaches drug patent deal
The U.S. government’s pressure on Bayer to sell its antibiotic Cipro at cut-rate prices during the anthrax attacks in 2001 has made pharmaceutical companies leery of participating in the government’s BioShield program. The lesson for policymakers should be clear: attacking property rights gets you less of what you want.
Unfortunately, this lesson has been consistently ignored by the Brazilian government, which has repeatedly threatened to break patents on AIDS drugs unless companies selling them slash their prices—despite the fact that Brazil already pays the lowest AIDS drug prices outside of Africa. Over the last several weeks, Brazil had threatened to break the patent on Abbott’s anti-retroviral drug Kaletra; since then, Abbott and Brazil have reached an “agreement” for Abbott to cut its prices even further:
As part of the deal, Brazil will have access to Kaletra's next new formula…. Abbott has agreed that Brazil can treat more patients with no overall increase in costs, in effect reducing the price of the drug and saving the government more than $250m over the next six years.
Brazil has reached similar agreements with pharmaceutical companies in the past after threatening to break patents. Kaletra is one of the most widely used anti-retroviral drugs, which are essential to the treatment of HIV.
Selling AIDS drugs at a discount based on a country’s ability to pay makes sense: rich countries should pay a premium, poor countries (like those in sub-Saharan Africa) a discount. Brazil, however, is no pauper. Her self-serving tactics only undermine the financial incentives for companies to research new AIDS drugs.
DTC ADVERTISING VALUE STILL A DEBATE AMONG EXPERTS
In early July, Senator Bill Frist (R, TN) called for a voluntary 2 year industry moratorium on direct-to-consumer advertising for new prescription drugs, saying that spending on DTC advertising can "lead to inappropriate prescribing and fuel prescription drug spending…[and] can also oversell benefits and undersell risks." This week, FDAnews offers a balanced look at this much debated industry practice:
Some professionals praise DTC ads for encouraging patients to visit doctors, while others contend unbranded disease awareness ads could achieve the same goal. Market research data shows DTC ads bring patients—who would otherwise go undiagnosed or untreated—into doctor’s offices… Others warn that if DTC ads were to vanish, consumers would still be bombarded by advertisements for nonpharmaceutical treatments, such as vitamins…
Changes in DTC practices are sure to come soon—whether through a voluntary industry code or additional FDA guidances. But any changes should be considered very cautiously. Ruling out branded advertising might make it substantially harder for companies to launch innovative new drugs that compete with established market leaders; ironically, this might lead to higher drug prices and worse health care in the long run.
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