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Selected news articles which highlight important policy issues.

News: Weekly Archives

News for the week of 09-21-2005

Council Approves Bill on Suing Drug Companies Over Costs
Washington Post, 9-21-05

Editor’s Notes:

Though price controls inevitably give governments and citizens less of what they really want, they remain popular as a way for politicians to signal their sympathy with consumers facing high prices—in this case, Americans without prescription drug insurance.

The District of Columbia has taken bad judgment to new heights by imposing price controls on drugs sold to city residents and publicly funded programs:

The D.C. Council approved legislation yesterday that would make it illegal for pharmaceutical companies to sell prescription drugs at an "excessive price" in the District, but its sponsor expects the industry to try to block it. The bill, passed unanimously, could give consumers and the D.C. government a legal advantage when suing pharmaceutical companies over prescription drug prices, sponsors said. It puts the burden of proof on pharmaceutical companies to prove that their prices are not excessive. The legislation defines excessive as being 30 percent over the comparative price in Germany, Canada, Australia or the United Kingdom. The bill would allow civil penalties against the drugmaker. …
One independent expert said the bill could prompt drug companies not to sell their products in the city. The president of a D.C.-based nonpartisan organization that studies health policy said pharmaceutical companies could refuse to sell drugs to D.C. businesses, especially because many customers could cross into Virginia and Maryland for their prescriptions. "The probable effect of this would be that there would be no pharmacies left in D.C.," said Paul Ginsburg, president of the Center for Studying Health System Change.

As it happens, the referenced countries already impose price controls on drugs. Using them as a benchmark is like saying that “fair” rent for an apartment in Chicago should only be defined by the price of a rent-controlled apartment in San Francisco. We should also note that the D.C. city council isn’t pegging the price of U.S. generic drugs to European prices: Thanks to its emphasis on market pricing, the U.S. has the cheapest generic drugs in the developed world.

Drug pricing and prescription-drug coverage for low-income Americans are separate issues. If the D.C. city council were serious about addressing the latter issse, it would spend more time trying to making health insurance more affordable and accessible, and less time scoring cheap political points by attacking companies that make vital medicines.

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Experts: Counterfeit drugs becoming major health threat in Europe
Associated Press Newswires, 9-22-05

Editor’s Notes:

While legislators in Congress muster for yet another effort to legalize prescription drug importation, government officials and law enforcement authorities in Europe, where importation is not only legal but actually required in certain quarters, find themselves besieged by a growing number of potentially dangerous counterfeit drugs.

Meeting at a three-day conference organized by the Council of Europe, government officials, law enforcement officers, doctors and pharmaceutical experts from Europe and the United States called Thursday for tighter criminal legislation, better public awareness campaigns and a central point for collecting information on fake drugs.
They warned that the rise in counterfeit medicines could undermine patients' confidence in public health care. "It is worrying that there is no recognized central reference point in Europe entrusted with surveillance, trend analysis and policy recommendations in the field of counterfeit medicines," said Maud de Boer-Buquicchio, deputy secretary general of the Council of Europe, the continent's leading human rights body…
Counterfeit medicines make up for approximately 10 percent of the European pharmaceutical market -- up from close to zero 10 years ago -- and often are supplied by international criminal rings, the World Health Organization says. In Russia, some 20 percent of all drugs distributed are fake, while in Mexico it is 40 percent and in Nigeria as much as 80 percent, Council of Europe and WHO statistics show. Counterfeit medicines often are packaged like the genuine product and are hard to detect. Lifestyle drugs, such as Viagra, and essential medicines such as antibiotics and insulin are particularly popular with counterfeiters, but there's also an increasing number of fake contact lenses and even materials such as surgical mesh.

More EU-wide coordination might help slow the onslaught of counterfeit medicines, but stopping it is probably impossible. Counterfeiters are basically taking advantage of government-sanctioned arbitrage schemes to move low-cost drugs across national borders. As long as governments encourage importation, criminals will find a way to move their products past any hurdles bureaucrats put in their way.

The lesson for the U.S. should be that prescription drug importation can’t be made safe—and that we should find other ways to make prescription drugs more affordable, for instance through increased use of generics and reforms to increase the availability of health care insurance.

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Many Insurers Set to Offer New Medicare Drug Plans
The New York Times, 9-24-05

Editor’s Notes:

Pundits of virtually every ideological stripe have been casting stones at the Medicare drug benefit since it was signed into law in 2003. One dire scenario that has failed to materialize, however, was the prediction that insurers would shun the plan and leave the government as the sole provider.

In a major step to cut drug costs for older Americans, the Bush administration announced on Friday that 10 companies would offer prescription drug coverage to Medicare beneficiaries in all parts of the country, while many other insurers would sell coverage in specific states, for premiums averaging $32 a month.
Each company can offer several options, with different benefits and co-payments. Advocates for the elderly said the large number of choices could confuse beneficiaries. …
"Drug plans are offering better benefits and lower prices than independent experts had predicted because they are competing to serve everyone in Medicare," said Dr. Mark B. McClellan, administrator of the federal Centers for Medicare and Medicaid Services. "A lot of people said this couldn't be done on time, couldn't be done nationwide. We proved them wrong." In a major departure from traditional Medicare, federal officials will rely on private companies, subsidized by the government, to manage and deliver the drug benefit. The number of companies offering drug benefits ranges from 11 in Alaska to 20 in New York, Oregon, Texas and Washington, with 17 in Connecticut and New Jersey. Beneficiaries will have many more choices than expected when Congress created the new benefit in 2003.

The critics’ refrain now is that seniors might be confused by so many choices. This may very well turn out to be true, but it remains to be seen. But the market is full of confusing choices, which consumers routinely navigate. As we have argued elsewhere, the market is full of confusing choices—which consumers navigate routinely. For the time being, we should regard the number of plans as a welcome cacophony that will fall into tune over the next few months as seniors begin to explore their options.

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Remicade May Prevent Surgery for Ulcerative Colitis Patients
Wall Street Journal, 9-26-05

Editor’s Notes:

Among patients with ulcerative colitis “only about 50%…respond to ‘first line’ treatments” to control the dangerous inflammation that accompanies the disease and that can “[require] surgical removal of the colon.” The FDA recently approved Remicade, a drug that is already widely used for rheumatoid arthritis, to help patients with ulcerative colitis who aren’t responding to other treatments.

A newly approved treatment for ulcerative colitis, an inflammatory bowel disorder, could save many patients from surgery and allow others to discontinue drugs with powerful side effects. Last week, the Food and Drug Administration approved Johnson & Johnson's Remicade for treatment of ulcerative colitis, which affects more than 500,000 Americans. Doctors expect the drug to be adopted quickly for patients who don't respond to other treatments. …

Ulcerative colitis is far from the only serious medical condition which isn’t responsive to the best available therapies. Depression and several auto-immune diseases, for instance, also come to mind. The availability of good therapies, in other words, doesn’t mean that companies and researchers can rest on their laurels. For non-responding patients with these conditions, there is no such thing as a “me-too drug.”

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New FDA chief wants to prepare agency to foster transformation in medicine
Associated Press Newswires, 9-26-05

Editor’s Notes:

FDA Commissioner Lester Crawford’s resignation last week caught everyone by surprise. His interim successor, Dr. Andrew Von Eschenbach, is nonetheless in an excellent position to leverage FDA initiatives that can help advance the nascent development of personalized medicine and improve patient safety as part of the FDA’s “Critical Path” reforms.

Dr. Andrew C. von Eschenbach, tapped by President Bush to at least temporarily head the regulatory agency, said Sunday that recent research will lead to a new kind of health care. "We are discovering so much about diseases like cancer at the molecular level," von Eschenbach, a urologic surgeon by training, said in an interview with The Associated Press.
Based on these understandings, physicians will be able to devise treatments more effectively matched to a specific patient and his or her condition, he said. That's a fundamental shift: Doctors now treat illnesses based primarily on how well other people have responded to a given treatment. Von Eschenbach has a reputation for optimism. As head of the National Cancer Institute, he outlined an ambitious goal of eliminating suffering and death due to cancer and turning it into a manageable disease by 2015 -- an aim regarded by some as unlikely.
But von Eschenbach has seen cancer from both sides, having survived three diagnoses: melanoma, prostate cancer and basal cell carcinoma. Von Eschenbach said he will stay in his post at the institute, which is the government's lead agency in researching cancer treatments, while running the FDA. He gave no indication whether he expected to be nominated as permanent chief of the FDA. He replaces Commissioner Lester Crawford, out only two months after the Senate confirmed him for the post. Crawford had functioned as acting head for more than year.

Von Eschenbach may be optimistic by nature—but it sometimes requires a bold visionary to rally fragmented constituencies around a single goal. And medical researchers in diverse fields will have to work in close collaboration if personalized medicine is to become a reality. With luck, Von Eschenbach’s leadership of the FDA will serve as a focus point for these efforts.

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Test Predicts Response to Cancer Drugs
Wall Street Journal, 9-27-05

Editor’s Notes:

Iressa was originally touted as a wonder drug designed to attack tumors with epidermal growth factor receptors (EGFR). After analysis of clinical data, however, it turned out that Iressa works for only about 10% of lung-cancer patients who take it. This doesn’t mean that the drug is a failure, however, because cancers in that 10% are particularly responsive to the drug. The problem, then, is discovering which patients happen to fall into that fraction, so doctors can maximize their chances of responding and avoid unnecessary treatments. Fortunately, a new genetic test that focuses on mutations in the EGFR genes in high-responding patients should help doctors prescribe Iressa and other targeted cancer drugs more effectively:

…targeted therapies, including Iressa, Tarceva and Gleevec, are designed to attack specific features of cancer cells and have few side effects, unlike chemotherapy and radiation. They have been hailed as among the most promising medicines in the fight against cancer. But they typically work only for a subset of patients…
[A] new test from Genzyme Corp., as well as similar tests in the works from other researchers, could herald an era where doctors can avoid unnecessary treatments and administer drugs only to patients likely to respond. …
The new test is based on research done by scientists at the Dana-Farber Cancer Institute and Massachusetts General Hospital in Boston…The studies showed that patients whose lung cancer carry a set of mutations in the EGFR gene are more likely to see their tumors shrink after taking Iressa or Tarceva. The research was limited to patients with non small cell lung cancer.

Personalized medicine is still in its infancy—but cancer research should continue to offer more targeted options for patients as scientists gain a better understanding of the molecular mechanisms that spur the disease.

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