Welcome to Medical Progress Today, a web magazine devoted to chronicling the connection between private sector investment and biomedical innovation, market friendly public policies, and medical progress. Every Thursday we will distribute our email newsletter chronicling the latest news and commentary that illustrates the intersection between medical progress and market driven public policies, along with timely research and original Spotlight articles on health care policy from some of America's leading health care experts.
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In the Spotlight
Questioning the Evidence in Evidence-Based Guidelines
Michael Weber, M.D., 7-22-04
In a recent article published in the Journal of the American Medical Association (JAMA), two medical economists, Michael Fischer and Jerry Avorn, claimed that if practicing physicians could be persuaded to prescribe drugs for treating hypertension strictly according to recently published guidelines there could be savings of up to $ 1.2 billion in the nation's annual drug bill for treating this condition.
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Study of Antidepressants Finds Little Disparity in Suicide Risk
The New York Times, 7-21-04
A study of nearly 160,000 British patients treated for severe depression in the Journal of the American Medical Association found that there is no real difference in rates of suicidal behavior among patients given one of three commonly prescribed antidepressants: Paxil, Prozac, or the generic amitriptyline.
The study is welcome news for physicians and patients who were concerned by recent reports that certain antidepressants might present an increased risk of suicidal tendencies among adolescents. The study confirmed what physicians had long suspected: suicide risk is highest when patients first begin drug treatment for depression, and then declines rapidly.
Investors Target The Side Effects Of Cancer Drugs
Wall Street Journal, 7-21-04
New targeted cancer drugs are helping to save lives without many of the debillitating side effects associated with earlier forms of radiation and chemotherapy. Still, hundreds of thousands of cancer patients every year are afflicted by side-effects of cancer treatments, including oral mucositis, a condition which affects about 40 percent of patients undergoing chemotherapy or radiation therapy. Oral mucositis is a painful condition where sores in the mouth make speaking, eating, and drinking difficult or even impossible. Side-effects from cancer treatment can become so severe that treatment has to be halted altogether.
Large pharmaceutical companies have been hesitant to develop therapies for conditions like this, which may only afflict a minority of cancer patients. Thankfully, small start-up venture capital biotech firms see an opportunity here both to make a difference in cancer patients' lives, and carve out a profitable niche for their products. One company, Aesgen, has developed a drug to prevent oral mucositis and accelerate healing; a marketing application for the drug, Saforis, should be filed with the FDA this year.
Still, for smaller firms to expand their effectiveness in niche markets, the FDA should make its drug approval process as cost-effective as possible, so that drug development costs don't hinder venture capital firms from developing effective treatments for relatively small groups of patients.
Coalition Floats Ideas to Tame Rocketing Costs of Health Care
Wall Street Journal, 7-21-04
The National Coalition on Health Care, a nonpartisan group representing companies, unions, consumer groups, and politicians, is calling for the establishment of a national board overseen by Congress that would "set limits for reimbursement rates paid to physicians and hospitals for a set package of core medical benefits and restrict increases to insurance premiums." The group also called for setting quality standards and technology improvements to further reduce costs.
It is not clear that a national price control board for health care would do much to control rising costs - the U.S. may lead the world in overall health care spending, but other developed nations are not far behind. For instance, since 1970, according the Center for Studying Health System Change, the average annual growth in U.S. health care spending was 4.4 percent; the average for other wealthy countries was 4 percent.
And if rich countries where governments largely set prices for health care can't significantly lower the rate of spending increases, what is the point of the U.S. switching to a single-payer model? Proponents of the U.S. adopting European-style health care should also take note of the fact that just as the U.S. is increasing government control of health care, Europeans are trying to find ways to reduce it. Installing a price control board for health care would just be a bad first step in the wrong direction.
Move over, cholesterol drugs
Washington Times, 7-19-04
The market for statin drugs may see a price war emerging in the near future. A new combination drug is about to be released called Vytorin (a combination of Zocor with a new drug Zetia) which is expected to compete strongly with class-leading Lipitor. Studies have shown that Vytorin can lower cholesterol better than Lipitor, and industry watchers expect it to be less expensive. Another statin drug, Crestor, has shown itself superior to Lipitor in some studies as well. Prices for statin drugs are expected to fall even faster in 2006, when Zocor loses patent protection.
As more research emerges based on head-to-head comparisons among drugs in the same therapeutic class, consumers and doctors should benefit from increased knowledge and lower prices.
Bush Administration Seeks to Clear Confusion About Medicare Cards
Wall Street Journal, 7-19-04
There are real concerns that more low-income Medicare beneficiaries need to sign up to receive a drug discount card that entitles them to a $600 subsidy towards the purchase of prescription medications. Mark McClellan, Administrator of the Centers for Medicare and Medicaid Services, has nonetheless lauded the achievements of the program to date: about 4 million seniors have the discount cards and 125,000 are signing up for cards every week. Mr. McClellan has said that his agency is working with civic groups and stepping up its own efforts to recruit low-income seniors into the program. To date, eight pharmaceutical companies have promised to continue to offer low-income seniors prescription drugs for little or no cost even after the $600 subsidy has been exhausted. Election year criticism not-withstanding, policymakers should focus on helping the program become even more successful, rather than carping about what it hasn't done yet - two months into its existence.
US FDA to revise drug review letters
Reuters News, 7-19-04
In another sign that the FDA is focused on real reform efforts, the agency is aiming to provide companies whose drug applications are turned down better explanations as to why their applications failed. Under a recently released proposal, the agency would replace its two drug review letters, "approvable" and "not approvable", with a single "complete response letter" that will give companies a specific catalogue of steps that applicants must follow to win drug approval.
As companies get a better sense of what the agency expects, they can retrofit their programs to better comply with expectations. Patients are, in the final analysis, the winners in this scenario. A large component of drug prices are the innumerable failures that precede even a single successful drug launch. Cutting down the failure rate by even 10% would lower prices significantly.
Next to the Express Checkout, Express Medical Care
The New York Times, 7-18-04
Streamlined medical clinics, staffed by experienced nurse practitioners, are starting to pop up in malls and department stores, offering patients convenience, speed and affordable basic medical treatment. The clinics "aim to diagnose and treat about a dozen common ailments - like strep throat, sinus and ear infections and seasonal allergies - in about 15 minutes. They also provide vaccinations and offer screenings for cholesterol and blood pressure problems." At one chain, the computer system is programmed to watch out for patients who present repeatedly with the same symptoms, indicating that a referral to a doctor is necessary.
The clinics can offer significant cost savings versus a traditional doctor's office: at one clinic, "a test for strep throat costs $44 versus an average of $109 at a doctor's office or $328 in an emergency room." Patients with insurance pay even less.
This is a great example of what the market can do when government regulation lets a really innovative idea slip through the cracks. Policymakers should take a good look and think hard about how we can outsource more healthcare services from expensive settings (hospital rooms, doctor's offices), into more nimble and effective operations like this one.
Alzheimer's Association, National Institute on Aging Seek to Expedite Prevention Trials for Alzheimer's
News Release, 7-18-04
The 9th International Conference on Alzheimer's Disease and Related Disorders (ICAD) is being held in Philadephia this week (July 17-22), and one of the most important topics under discussion will be how to reduce the cost and complexity of trials that test new Alzheimer's therapies. Alzheimer's trials can be particularly expensive and hard to conduct because elderly populations must be followed for long time periods, and cognitive testing requires either cumbersome visits to clinics or trips by researchers to homebound patients. Also, "frail older participants are often more prone than younger patients to drop out of a study or stop taking the medicine. They may also pass away during the study." Researchers are working to develop better home-based and web-based cognitive testing models, as well as biomarkers for identifying patients who are at high risk for developing Alzheimer's. ICAD's call for faster, less expensive clinical testing models is emblematic of the problems facing the pharmaceutical and biotech industries - and another reason why the FDA and federal policymakers should spend less time worrying about drug importation and more time on improving the drug discovery process.
New Cholesterol Guidelines Face Criticism Over Conflict of Interest
Wall Street Journal, 7-16-04
Are studies or recommendations published by researchers who have at one point worked for, or received funding from industry inherently tainted? The question begins and ends with the quality of the research and a strong system of peer review. The article in question notes the outcry by some consumer groups that guidelines issued by the government and the American Heart Association that patients at high risk of heart attack consider lowering their "bad" or LDL cholesterol from 100 to 70 were issued by a panel whose members had ties to industry.
But, it should be noted, the consumer groups who decry industry ties have not actually called the underlying science into question - they just trumpet the fact that the members of the panel had not (recently) disclosed their industry ties. On the same grounds, one might also question the motives of some consumer advocacy groups, like Public Citizen, who have long-standing financial ties to trial lawyers - who make a very handsome living suing corporations vilified by advocacy groups.
There is a legitimate concern that there should be more transparency in the medical research community - particularly in the publication of clinical trial results - but transparency is no substitute for good research. The recommendations on lowered cholesterol discussed here had been reviewed by 80 other researchers before they were finally released. The damage done here is that patients who might benefit from the findings will cynically ignore them. Accusation by affiliation doesn't help the public sort out the underlying facts, nor does it advance the public health.
FDA to Set Up New Cancer Drug, Products Review Office
Wall Street Journal, 7-16-04
The FDA has consolidated its cancer offices in order to "more quickly [review] drugs and other cancer treatments." The unit, the Office of Oncology Drug Products, will be integrated into the FDA's Center for Drug Evaluation and Research (CDER), "which is charged with reviewing, evaluating, and monitoring drugs." Dr. John Jenkins, CDER director, thinks that the consolidation will make the FDA's already speedy cancer treatment approval process even faster - one very successful drug, Gleevec, was approved in a mere 42 days.
The FDA ought to be commended for its commitment to advancing cancer research, and continually looking for better ways to approve meaningful treatments. One question that arises, however, is why can't the entire organization be as nimble as its cancer research divisions?
The Informed Patient: Help Is on the Way For Your Skeleton - Coming Drugs and Treatments For Osteoporosis Rebuild Bones Instead of Just Slowing Loss
Wall Street Journal, 7-15-04
Slowing or stopping the progression of disease and disability is one thing - but reversing it is the holy grail of medical research. Patients with osteoporosis can see some hope on the horizon that one day bone loss can be reversed, freeing them from the constant fear of debilitating or even fatal bone fractures.
Everyone, but especially women, loses bone density as they age. Researchers are racing to improve on the current arsenal of drugs that ameliorate bone loss, and produce medications that can actually stimulate new bone formation. Six new drugs are slated to go on market in the next several years, with over 600 more osteoporosis trials waiting in the wings. This research couldn't be more timely: by 2010, it is estimated that more than 52 million women and men will be afflicted with some degree of osteoporosis.
The first bone-building agent, Forteo (a synthetic hormone), was approved in 2002 after trials showed that it reduced the risk of moderate or severe spinal fracture by as much as 90% over placebo. Additionally, 70% of patients showed an increase in spinal bone density (5% or more, and nearly half (44%) showed an increase of 10% or more. However, Forteo can only be prescribed for two years due to concern over potential side-effects. Other promising drugs should reach market soon, and researchers are also looking into whether or not exercise programs or other physical interventions can stimulate bone growth as well.
Fixed-Dose Mixtures of Generic AIDS Drugs Prove Effective
The New York Times, 7-15-04
The humanitarian group Doctors Without Borders presented evidence at the 15th International AIDS conference in Bangkok that fixed-dose combination (FDC) generic AIDS drug can be as effective as patented, brand name drugs. While encouraging, these findings shouldn't take all of the onus away from proving the safety of generic AIDS drugs: after all, these drugs came from only two Indian generic manufacturers, while there are at least 27 companies in Asia making generic anti-retrovirals, only a few of which have been fully vetted by the WHO.
Critics of international IP agreements should be aware that opening the floodgate to generic manufacturers will help to drive down prices, to be sure, but it also means that it will be harder to control the quality of AIDS drugs reaching market - raising the specter that poorly made drugs will accelerate the growth of drug-resistant strains of the AIDS virus, an issue that activists have yet to fully address. Doctors Without Borders should also note that one of their favorite generics, Triomune, made by Cipla, is not a generic any more: it has been patented in South Africa and 17 other African nations.
House Passes Bill to Finance Development of Bioterrorism Antidotes
The New York Times, 7-15-04
U.S. legislators have passed the Project Bioshield Act, which allots $5.6 billion over the next decade for pharmaceutical and biotech companies to develop defenses against bioterrorism. By guaranteeing that the federal government will supply a steady revenue stream to develop medicines and vaccines in the event of a bioterror attack, the government has reassured industry that any investments it makes in developing new treatments will not founder for lack of a buyer. The bill also speeds up FDA approval for vaccines and lets the government distribute some treatments before FDA approval in the event of an emergency. All in all, this a good first step in the right direction. (More information on the Bioshield bill, and suggestions for improving it with follow-on legislation can be found on Senator Joe Lieberman's Senate website
U.S. Official Defends Focus Of AIDS Prevention Policy
Washington Post, 7-15-04
When it comes to the fight against global AIDS, the U.S. is the leader in two categories. The first is funding. The second is as a convenient target for activist outrage.
The outrage is, on its face, mostly puzzling: this year, the U.S. is spending $2.4 billion on fighting the epidemic, which is about twice a much as all other donor governments combined. The President has also made an epic commitment to fight global AIDS by promising to spend $15 billion over the next five years. Nonetheless, when Randall Tobias, the U.S. global AIDS coordinator, spoke at the recent international AIDS conference in Bangkok, he was soundly heckled by protesters.
Activists have taken aim at the administration's promotion of abstinence in addition to condom use, which critics deride as "denying people access to life-saving information and technologies." Reputable studies suggest otherwise: Uganda's success in cutting HIV infection rates from 21 percent to 6 percent succeeded largely by teaching abstinence. Other evidence from Africa shows that the availability of condoms doesn't necessarily lead to decreased HIV transmission rates. In South Africa, "reported rates of teenage sexual activity have fallen for three years straight, disproving the notion that there's no point in telling youths to change their behavior." Rather than recognizing that there are many paths to AIDS prevention (including tested abstinence programs), activists have allowed their dislike of the U.S. conservative agenda (to say nothing of American pharmaceutical companies) to blind them to evidence that might save lives.
Or, as Randall Tobias put it, "There are some people here who have the objective of the U.S. being a global whipping boy."
Offshore firms selling diluted, fake drugs as Canadian; FDA warns in battle over cheap imports
The Globe and Mail, 7-15-04
FDA associate commissioner William Hubbard testified to the U.S. Senate Committee on the Judiciary that "rogue Internet pharmacies in distant places such as China and Belize" are impersonating Canadian online pharmacies and selling Americans "potentially dangerous fake and unregulated drugs."
FDA officials continue to express worrying concerns about their ability to monitor drug importation plans on the scale that Congress is currently considering. A glance at the numbers reveals why: Americans bought about $1 billion in Canadian drugs this year, while the total U.S. prescription drug market is about 200 times as large. While everyone agrees that Canadian drugs are safe, no one ought to labor under the illusion that Canadian resellers could meet even a significant fraction of U.S. demand. The only alternative, then, is to extend importation to a broad range of countries, vastly increasing the scope and difficulty of monitoring imports. The amount of money at stake in opening the U.S. to global drug re-importation would undoubtedly make the U.S. market an even more attractive target for counterfeiters, organized crime, and, possibly, terrorists.
There is one glaring omission in current debates over drug importation. Drugs are expensive because the pharmaceutical industry is one of the most heavily regulated industries in the world. Regulation contributes to drug safety, but it also radically increases the cost of drug development (over $800 million at last count). In other words, being good at navigating your way through a labyrinth of expensive government regulations does not necessarily lead to better treatments for patients. Everyone from the FDA to industry agrees that the regulatory status quo is particularly bad at moving drug targets from the lab bench to market, but no one whose feet aren't in the fire seems to draw the right conclusion: if there are fewer and more sensible regulations, drug development will become cheaper, and competition, prices, and quality will all improve as a result.
Massachusetts Lawmakers Approve Constitutionally Protected-Health Care
Associated Press Newswires, 7-14-04
A joint session of the Massachusetts legislature voted 153-41 to approve an amendment to the state constitution mandating that "it shall be the obligation and duty of the Legislature and executive officials to enact and implement such laws as will ensure that no Massachusetts resident shall lack comprehensive, affordable, and equitably financed health insurance coverage for all medically necessary preventive, acute, and chronic health care and mental health services, prescription drugs and devices." If it is approved again during the next session of the Massachusetts legislature (2005-06) the amendment will be presented to voters in a referendum in 2006.
Whether or not the amendment ever gets to the voters is anyone's guess, but the scope of the amendment (and its price tag if passed) beggars the imagination. What would be considered, for instance, on the list of "medically necessary" preventive, acute, chronic, and mental health care services, to say nothing of prescription drugs and devices? Who would draw this list up? Once the list was in hand, does anyone think that it wouldn't be instantly challenged in state court by consumer and provider groups anxious for their rightful share of "medically necessary" funding?
Government mandated access to health care is bureacrat-ese for saying that the government will impose price controls on health care services to subsidize access - and since demand at artificially low prices always outstrips supply the result is, inevitably, long lines and substandard care.
Middle class and employer angst over rising health care costs is certainly real enough, but state attempts to mandate what services insurers must cover and how they must cover them have substantially increased health care costs and priced millions of Americans out of insurance markets.
An important basic reform that would make health insurance more affordable would be for states to de-regulate insurance markets, making basic health insurance significantly less expensive - and accessible. (For an eloquent discussion of this problem see David Gratzer, Less Is More
Pfizer AIDS drug has good early trial results
Reuters News, 7-14-04
A new compound in the struggle against HIV/AIDS has shown promise in early clinical testing. The new compound, UK-427,857, is the first in a class of drugs that prevents the HIV virus from entering human cells, as opposed to protease inhibitors, which disrupt the virus' activity within cells. It is hoped that compound will have fewer side effects than current treatments and offer an alternative to patients who are infected with drug resistant virus strains.
UK-427,857 was unveiled at last week's international AIDS conference in Bangkok by Hank McKinnell, Pfizer CEO, who reminded the conference that advances in HIV therapy were dependent on pharmaceutical companies underwriting new research through profits and strong intellectual property rights.
Naturally, Mr. McKinnell's defense of property rights was greeted with catcalls from AIDS activists, who have attacked pharmaceutical companies relentlessly for putting profits before patient health. However, while they make the legitimate point that AIDS drugs ought to be affordable in poor countries, they should take note of the fact that an industry that cannot make a profit on a product will not make that product. Keeping the AIDS pipeline full of new drugs for generic manufacturers to copycat and sell in Africa or Asia at cut-rate prices means letting Pfizer enforce its IP rights and engage in differential pricing - selling dearly in rich countries and cheaply in poor countries. Demonizing the pharmaceutical industry may make for good press in some circles, but it doesn't pay in the long run to bite a helping hand.
Debunking the Myths of Drug Importation
Nina Owcharenko, Heritage Foundation, 7-20-04
The Medicare Discount Drug Cards: One Month In
Derek Hunter, Heritage Foundation, 7-15-04
How to Help India's Aids Victims
Julian Morris, Wall Street Journal Asia, 7-9-04
Robert E. Windom, Washington Times, 7-8-04
The Real Obstacles to Sound Treatment of AIDS in Poor Countries
Roger Bate, Richard Tren, AEI-Brookings Joint Center for Regulatory Studies, 7-1-04
Health Savings Accounts: Early experience shows broad appeal
Grace-Marie Turner, Galen Institute, 6-23-04
Beware the pitfalls of "evidence-based medicine"
Grace-Marie Turner, Galen Institute, 3-24-04
MarketWatch: Doughnut Holes And Price Controls
Gerard F. Anderson, Dennis G. Shea, Peter S. Hussey, Salomeh Keyhani, Laurie Zephyrin
There is a gap in the recently passed Medicare Modernization act - the so called "doughnut hole." When Medicare drug coverage takes effect in 2006, Medicare beneficiaries will pay $35 a month for prescription drug coverage, with Medicare covering 75 percent of all prescription drug prices up to $2,250. The patient will pay out-of-pocket all expenses after that up to $5,100 (this is the "doughnut hole"). Medicare will pick up 95 percent of all expenses above $5100. This article argues that Canada, the United Kingdom, and France (all of which enforce price controls on prescription drugs) pay an average of 34-59 percent less for prescription drugs, and that Congress could expect similar savings if it followed the international model. The authors argue that if the U.S. government was to enforce similar controls through Medicare drug coverage it could elminate the "doughnut hole" without exceeding current spending estimates. The authors acknowledge, however, that "any attempt to control U.S. prices, given the large percentage of international consumption, may affect investment in the industry and consequently pharmaceutical innovation."
The authors' stark choice, however, assumes that there is no way to improve the current drug development process that would lower prices and spur innovation, an odd oversight given that the authors observe that "of every 5,000 medicines tested, only five on average are tested in clinical trials, and only one is approved for patient use." Worse yet, only 3 of ten drugs reaching market manage to exceed R&D costs, meaning that a few truly successful drugs must recoup an enormous portfolio of wasted investments. Even a small improvement in that ratio could lead to significant market price reductions.
From The Field: Closing The Doughnut Hole: No Easy Answers
Patricia Danzon, a professor at the Wharton Business School, takes issue with the savings estimate Anderson et al. attribute to Medicare (see above paper) if price controls were imposed on the U.S. pharmaceuticals market. She argues that the price savings they expect are the result of "price differentials that are not fully representative, and [that] adopting foreign prices may be both problematic and inappropriate."
In an earlier study, Danzon found that a larger, volume weighted sample of international drug prices (taking into account substantial generic drug sales in the U.S.) showed that there was a "net average discount of 8 percent" versus U.S. prices. She also noted that drug price differentials between the U.S., UK, France, and Canada were roughly in line with differences in per capita GDP between the countries-e.g., "drug price differentials roughly reflected income differentials across industrialized nations", and that "differential pricing is an essential step toward making drugs affordable for less developed nations", including price differences between developed nations like the U.S. and Canada. Danzon believes that instead of price controls or drug importation, policymakers should try to do more "cost-effectiveness" analysis of pharmaceutical and biotech products, as well as targeting more subsidies towards low-income seniors.