|Selected news articles which highlight important policy issues.||
News: Weekly Archives
News for the week of 11-09-2005
Crucial Antibiotic Rescues Biotech Maker’s Finances
While oil companies are being lambasted by U.S. Senators for so-called “windfall profits,” and politicians are threatening to revoke Roche’s Tamiflu patent, it may be a good time to recall that profits drive markets—and markets drive innovation. “Windfall profits” has become a term of abuse, when really the profits indicate that companies have been successful in creating products that we want and need.
It is particularly unhelpful to attack profits on critical medicines, since these drugs are subject to intense competition from generics and other branded drugs, and their patents exist only for a limited time. After the patent expires, the drug may only sell for pennies on the dollar.
Take, for instance, the company ViroPharma and its drug Vancocin, which is “the only drug approved to treat Clostridium difficile, a bacterium that already kills thousands of people a year in this country and is apparently becoming more common and more deadly.”
The life-saving drug has turned out to be a financial lifesaver for ViroPharma which, almost by serendipity, acquired the American rights to Vancocin last November. Since then, in response to rising demand, the company has increased the price of the drug - its only product - three times by a total of 80 percent, to about $800 for a course of treatment. …
With Vancocin sales expected to more than double this year to $120 million, ViroPharma, based in Exton, Pa., is profitable for the first time in its 11-year history. Its stock price is up 14-fold since reaching a 52-week low in April. On Monday, it rose nearly 15 percent, after the company announced higher-than-expected third-quarter profit and raised its estimate for sales of Vancocin this year, then it declined 91 cents yesterday, to $23.19.
But some doctors say the price increases are exploiting growing fears of the bacterium, while placing a burden on patients and those who take care of them. "It's absolutely outrageous," Dr. Daniel M. Musher, an infectious-disease specialist at the Veterans Affairs Medical Center in Houston, said of the price increases.
We would respectfully disagree with Dr. Musher that the price is, in fact, “absolutely outrageous.” ViroPharma—with this single profitable drug—must support the rest of its operations and its entire R&D portfolio. Competitors are also in the process of rushing other drugs and vaccines to market to treat the same disease, meaning that the drug may lose its market power in short order.
Attacking companies when their products turn out to be especially useful—or in short supply—would only send signals to other companies not to bother developing competing products that would suffer the same fate. In short, higher prices now signal more products, more supply, and cheaper prices later. That is a bargain for everyone concerned.
Cholesterol drug also helps memory
Statins, as we have noted several times in the past, appear to be wonder drugs somewhat akin to aspirin. They are relatively safe and researchers seem to uncover new potential uses for the drugs every year. Researchers at UCLA, for instance, have discovered that one cholesterol-lowering generic statin drug may hold out hope of reversing or slowing mental disabilities in 100,000 Americans with a rare genetic disorder.
[Lovastatin] reversed learning and memory problems in a mouse model of a genetic disorder that affects 100,000 Americans. The findings, reported this month in the journal Current Biology, were so impressive, scientists said, that the Food and Drug Administration has agreed to allow clinical trials in patients with neurofibromatosis-1 to go forward immediately. The genetic disease strikes one in 3,500 people, causing growths and tumors. Half of patients also have learning, attention and memory deficits. The medicine, lovastatin, has a long record in lowering cholesterol.
In the latest study, Alcino Silva and colleagues at the David Geffen School of Medicine at the University of California, Los Angeles, raised mice with a gene mutation that causes neurofibromatosis-1 and exposed them to learning and memory tasks with and without lovastatin. With the medicine, the animals had no problem learning a task that they had trouble doing without it.
Silva said he suspects the implications could go beyond neurofibromatosis to include all forms of learning disabilities. "We are incredibly excited," Silva said. "This is the first good news in treating NF-1. There is very little we can do. It is a happy day." Those who work with human patients are hopeful. "It's great to see the studies go forward in patients," said Kim Hunter-Schaedle, chief scientific officer of the Children's Tumor Foundation, a nonprofit fundraising organization. Three separate clinical trials, including one at UCLA, are set to begin.
Missing Medicine -- Emergency Response: Fearing Avian Flu, Bioterror, U.S. Scrambles to Fill Drug Gap --- Congress Debates Incentives And Liability Protection For Vaccines, Antibiotics --- Trial Lawyers: 'That's Unfair'
Experts seem to be in unanimous agreement that vaccines and other medicines used to defend against bioterror attacks need greater liability protection to encourage manufacturers to invest in new products. Trial lawyers—who make multimillion dollar paydays from suing biotech and pharmaceutical companies—reply that such protections would be “unfair.”
Drug companies have long been reluctant to produce vaccines out of fear of lawsuits. While any drug may be the target of a product-liability suit, vaccines and bioterror drugs are particularly vulnerable because they may be rolled out in an emergency and given to millions of people quickly. Also drugs to treat diseases such as anthrax can't be fully tested in humans because it would be unethical to poison people with anthrax to test a drug's efficacy. …
"We're saying, you aren't going to have companies risk their entire corporate existence without sufficient liability protection," says James Greenwood, president of the Biotechnology Industry Organization, the industry's major trade group. …
Some Democrats and trial lawyers argue that if the liability protection is too sweeping, victims of a botched vaccine would have no redress. At a committee meeting last month, Sen. Edward Kennedy called for the legislation to include a "strong" compensation fund for victims. The Association of Trial Lawyers of America has also objected to Sen. Burr's bill, which would only provide injury compensation for emergency personnel and other limited groups. "Congress cannot just eliminate your jury-trial right, just to protect drug companies," says Linda Lipsen, senior vice president of the trial lawyers' association. "That's unconstitutional and unfair."
We agree that a compensation program for civilian injuries is the right way to go. But there should be no serious argument about removing these cases from the tort system. Companies must have substantial liability protection for products that are critical to the public health and for national defense—otherwise, those products won’t get made.
The Vaccine Injury Compensation Program (VICP) has been a success in its narrow application and should be extended to these products. The only people to whom such a program is unfair are the attorneys who are robbed of the chance to cash in their legal fees from jackpot jury verdicts.
As for the program being unconstitutional, the devil is in the details. But there are many existing administrative compensation programs (worker’s compensation, Social Security, VICP, September 11th) at both the state and federal levels that have operated for decades as fair and legal vehicles for compensating individuals without recourse to the courts.
A Booster Shot for Medical Data-Sharing
The FDA’s move to enable electronic prescribing is only a small part of the government’s ongoing health IT program. Last week, HHS awarded four contracts to build prototype networks that would allow seamless information-sharing between health care providers.
The movement to build a medical Internet linking millions of Americans' electronic health records advanced on Nov. 11. Officials of the U.S. Health & Human Services Dept. awarded four contracts to build regional networks that will let doctors and hospitals share medical data. The network is aimed at improving medical quality and slashing health-care costs.
Contracts went to groups led by IBM (IBM), Accenture (ACN), Northrop Grumman (NOC), and Computer Sciences (CSC). Although the contracts total only $20 million, bidding by some of technology's titans reflects the industry's recognition that the $1.7 trillion U.S. health-care business could generate the next big wave of tech investment and productivity growth.
By next year, the awardees will need to develop technology standards that make all the data-sharing work. They'll have to lay the groundwork for handling sensitive issues, such as protecting the privacy of patients' information, says David Brailer, national coordinator of health information technology for HHS. "This is the artillery coming in here," Brailer says.
Some experts think that a national health information network may “save tens or even hundreds of billions of dollars a year” by reducing waste and duplication of medical services. Such a network might also empower consumers, by giving them up-to-date data on health care providers. Of all the ways to advance consumer-driven healthcare, information management may be the most critical to its success.
Know your patient for fine-tuned therapeutics
The Holy Grail of personalized medicine is a system of cheap but effective diagnostics, which can match patients to the best medicines. While getting the science right will be challenging, getting the economics right may be just as hard.
Treatments and diagnostics are coming together to form a new buzzword in the biosciences industry: theranostics. The much-heralded era of personalised medicine will depend on every drug having a companion "theranostic" - a test specifically designed to predict whether a patient will benefit from the treatment or to monitor how well it is working. When pharmaceutical and biotechnology companies got together in Dresden this week for the Bio-Europe conference, theranostics were high on the agenda. "In 10 years it will be a rare drug that does not have a diagnostic test associated with it," says Christopher Seaton, senior vice-president at Bayer, the German pharmaceutical company. …
"If the blockbuster drug model is dying and we are entering an era of personalised medicines, we need diagnostics to decide which patients to put into our clinical trials," says Mr Seaton. "We (Bayer) are working with our diagnostics division to develop specific tests for our own products." Chris Chamberlain, head of medical genetics for Roche of Switzerland, agrees. "You need the use of diagnostics to be fully integrated into your drug development process. This can cost upfront but you will get your payback later," he says. But only four large companies - Bayer, Roche, Johnson & Johnson and Abbott - have integrated diagnostics and therapeutics businesses, says Bill Kridel, managing director of the biosciences investment bank Ferghana Partners. The others will have to work with separate diagnostics companies.
Experts have observed that diagnostic companies make only a fraction of the earnings that pharmaceutical companies do, and thus have less of an economic incentive to develop stand-alone diagnostics for drugs. In short, as “a key question is whether and how pharmaceutical companies will share drug revenues with diagnostic developers, particularly if the theranostic is for a class of related drugs rather than a single product.”
A combination of factors will probably help advance the field. First, of course, are liability concerns. “Dumb” drugs must be prescribed on a trial and error basis. After Vioxx, companies should know that any mass-market drug is a potential ticking time bomb. Personalized medicines should, at least in theory, make it easier for companies to defend their science and marketing claims.
The second factor is the economic. With populations aging and healthcare budgets rising across the developed world, insurers and government agencies will demand more effective drugs, with better science backing them up. Pharmaceutical companies that develop theranostic platforms (drug+diagnostic) will be in a better position to shield out rivals and demand premium prices.
In the end, however, it is patients who will benefit the most from the advance of personalized medicine.
FDA takes the pain out of Rx info: New rule requires online data for health care providers and consumers
Many adverse drug events are the result of human error - of not using drugs correctly, or not having the most up-to-date information on potential drug side-effects.
Thankfully, to improve drug safety, Americans won’t have to wait until every drug has a personalized diagnostic. Standardizing and digitizing drug labeling will save lives, spur the adoption of health IT, and help physicians and patients avoid common side-effects.
The [Food and Drug Administration] now requires manufacturers to submit prescription drug label information to the FDA in a new electronic format that some say could smooth the path toward a nationwide electronic health records exchange.
Under regulations effective earlier this month, companies must transmit all packaging materials to the FDA via an Extensible Markup Language format, known as Structured Product Labeling (SPL). The format will permit easier access to the latest drug data, FDA officials said.
"Currently, health care providers may be accessing information that is as much as a year out-of-date, thereby impacting the safety of patients," said FDA spokeswoman Kristen Neese.
The FDA also requires companies to describe their products using identical subheads and medical terms. FDA officials say universal vocabulary standards will reduce medical errors, which annually cause about 98,000 deaths in the United States.
The move to electronic labeling is a terrific example of how industry and the FDA can work together to move healthcare into the 21st century.
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