Medical Progress Today
  Volume 2, Number 1
  January 6, 2005


In the Spotlight

Importing failure

Robert Goldberg, Ph.D., Washington Times, 1-3-05

George Santayana observed that "Fanaticism consists in redoubling your effort when you have forgotten your aim." What else can explain the feverish insistence of the supporters of drug importation to press on in the face of a comprehensive and well-documented report that concludes that importation of medicines from price controlled countries is not only a form of price controls, but a form of price controls that doesn't even save money, which was the point of importation in the first place?

Continue reading . . .

Featured News:
Health Journal: What You Should Know About Painkillers Before Clearing Out the Medicine Chest
Wall Street Journal, 1-4-05
Featured Commentary:
Drug import plan sags
USA Today, 1-3-05
Featured Research:
The Distortionary Effects of Government Procurement: Evidence from Medicaid Prescription Drug Purchasing
Mark Duggan, Fiona Scott Morton, NBER , 11-1-04

News

Second Opinion: As Drug-Safety Worries Grow, Looking Overseas for Solutions - French Vigilance Centers Spot Problems, and U.K. Traces Issues With 'Green Cards' - A High-Tech Prescription Pad
Wall Street Journal, 12-31-04

“The U.S. spends more on pharmaceuticals, devotes more resources to medical research and discovers more new drugs than any other country.” This is certainly all to the good. Still, our system for “monitoring and responding to safety issues after drugs are approved” is more ad-hoc than state of the art. This article illustrates some ways that regulators abroad and innovative companies at home are using information technology and active communication with clinical practitioners to improve drug safety.

The current FDA system relies on a two-stage voluntary reporting program: first, doctors are expected to forward serious adverse drug events to the manufacturer, who then has a binding duty to alert the FDA. However, given the time constraints on doctors, there is a real concern that many drug side effects go unreported.

By comparison, in France “a network of ‘pharmaco vigilance centers’ serves as a sentinel and a resource for doctors,” ensuring that information flows freely from regulators to doctors and back again. In Britain, researchers concerned about drug side effects will send “green cards” to doctors who routinely prescribe the drug in question, allowing them to quickly collect data on potential concerns. In Australia “independent drug-safety experts meet regularly to ponder new information about drugs on market.”

In the U.S., hospitals and health care providers are finding ways to integrate more information and drug safety protocols directly into their daily routines. At the Intermountain Health Care hospital in Salt Lake City “an advanced [computer] system automatically informs pharmacists of events that may signal problems with a drug…Each alert brings a pharmacist to the patient’s bedside to look for signs of a possible bad drug reaction.” Intermountain also regularly screens its patient database to look for “links between drugs and side effects, or to impose tight surveillance on a new drug to scan for unforeseen problems.”

With many options to choose from, the FDA is sure to improve on its current passive reporting program. The real challenge is how to “make [post marketing analysis] be constructive and improve decision making without it just being Monday-morning quarterbacking.”

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FDA Approves First in a New Class of Pain Drugs
Wall Street Journal, 12-29-04

The FDA has recently approved a new class of painkilling drugs based on a “synthetic version of a sea snail venom.” The drug is intended for use by AIDS and cancer patients who are unable to achieve pain relief from other powerful painkillers like morphine.

The drug, called Prialt, “offers an important new option for patients,” who have terminal illnesses and are suffering from “intractable pain.” Some benefits of the new drug compared to older ones: the drug doesn’t generate resistance after repeated use and is not addictive. However, like all drugs, this one has side effects, including the potential to cause dizziness, confusion, difficulty walking, and hallucinations.

The approval of Prialt offers a timely reminder that painkillers are vital tools in the battle against suffering and disease, and that increasing the number of therapeutic alternatives available to physicians and patients means that fewer patients have to suffer needlessly.

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Doctors, Too, Ask: Is This Drug Right?
The New York Times, 12-30-04

A better question to ask is “Is this drug right for this patient?” The rush to embrace “evidence based medicine” looks good or bad depending exactly what is being used to constitute “evidence”, and what you do with it. Take for instance, the following: “for at least the last two years, doctors at the Mayo Clinic, the Veterans Affairs Department and the Kaiser Permanente health plan have been sharply limiting their use of Vioxx and Celebrex. That is because those three institutions, after undertaking separate reviews of test data available on various painkillers, reached the same conclusion: For most patients, Vioxx, Celebrex, and a related drug, Bextra, did not work any better than older pain relievers or provide any safety benefits beyond them.”

If this is to say that this constitutes “evidence” that drugs should be given to patients who get the greatest benefit from them, or at the lowest risk of side-effects, few people would quibble with it. But if insurers instead mandate that doctors prescribe a one-size-fits all regimen where every patient de facto gets one drug or treatment until it proves ineffective or harmful, stretches the definition of evidence into something that looks suspiciously like cost-control. After all, the right treatment for this patient, may not be the treatment that works for the average patient.

The answer then, is not to design a health care system that can only generate average observations and then declare it evidence that one treatment is the best for everyone. Instead, we need to improve our datamining systems to look for rare adverse events, improve genetic screening that correlates for disease states and specific treatment regimens and, last but not least, make sure that doctors get state of the art diagnostic training that allows them to offer each patient the most effective care possible.

This will give clinicians the discretion and tools to make sure that each patient is treated like an individual – not a datapoint.

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The Nation; Medicare to Screen for Alcoholism; The coverage is part of a move toward prevention of several costly conditions that some say is overdue. Participation could be the big hurdle.
Los Angeles Times, 1-2-05

“Problem drinking among the elderly may cost Medicare more than $230 million a year to treat liver disease and other ailments, but only now will [Medicare] start covering routine screening for alcoholism.”

A greater emphasis on preventative medicine is part and parcel of the Bush administration’s efforts to revolutionize Medicare, beginning with “newly enrolled Medicare beneficiaries who are [now] eligible for an introductory physical that emphasizes prevention of conditions including alcoholism, depression, high blood pressure and diabetes.”

Increasingly, policymakers and researchers are recognizing that a handful of very expensive chronic conditions (heart disease and diabetes among them) account for enormous Medicare outlays. This program is intended to help doctors identify potential problems among new Medicare patients before the first warning signs of disease mushroom into enormous financial liabilities for the already strained federal program.

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India's new patent law to shake up drug industry.
Reuters News, 12-30-04

India is preparing to enter a bold new world in 2005, “when laws recognizing foreign patents take effect, ending a copycat trade [in pharmaceuticals] that has fostered local pharma firms for three decades and helped bring cheaper medicines to the poor.”

Indian policymakers hope that joining the global rules protecting pharmaceutical patents will lead to an influx of foreign investment in Indian companies that are shifting to R&D based pharmaceutical and biotech projects. In the long run, India hopes that these former copycat companies will be able to compete successfully with European and American companies in global health care markets.

However, the new regime will not impede access to older generic drugs, nor drugs aimed at helping the world’s poorest nations. “The new rules to not apply to drugs patented before 1995, so [companies like Cipla, a generic manufacturer] can continue selling its widely distributed version of the HIV treatment AZT. Even copies of drugs patented between 1995 and the introduction of the new law are unlikely to be withdrawn.”

India’s new commitment to patent protection is more evidence that the path out of poverty leads through free markets, property rights, democratic elections, and a judicial system devoted to protecting the rule of law.

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Health Journal: What You Should Know About Painkillers Before Clearing Out the Medicine Chest
Wall Street Journal, 1-4-05

This article presents a short but very helpful overview of what we know, and don’t know, about the drug safety issues surrounding Cox-2 inhibitors and other anti-inflammatory painkillers.

Although the FDA and the NIH are now leading a review of “dozens of studies” of 18 anti-inflammatory drugs, “many scientists and public health experts think the risks for the general population have been exaggerated and that far more study is needed before we have definitive answers.” For instance, even the evidence linking Vioxx to an increased risk of heart attacks and strokes isn’t totally ironclad: “None of [the studies implicating Vioxx] were specifically designed to assess cardiovascular risk, and each involved several variables,” meaning that “it’s impossible to draw any broad conclusions for the rest of the population.”

The article goes on to note that “Every day, consumers assume serious risks when they take common drugs. For instance, taking aspirin daily to prevent heart attack puts the user at a 40% higher risk for a hemorrhagic stroke. In the real world, that translates to one additional stroke over five years for every 1,000 patients taking aspirin.”

Researchers are rushing to develop genetic and technological screens to better help patients and physicians sort through the risks and benefits of all available treatments. In the meantime, patients should consult carefully with their doctors when seeking medical treatment – and resist panic over risks that, even if present, are very, very small.

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Americans Save Less Buying Canadian Drugs
Wall Street Journal, 1-5-05

In 2004, Americans purchasing Canadian drugs online saw prices go up as supply contracted thanks to drug manufacturers restricting supply to Canadian buyers. As a result, the average internet savings over American prices dropped from 38% to 29%. “To circumvent the restrictions and keep supplying their American customers, Internet pharmacies have been buying drugs from Canadian bricks-and-mortar drug stores, which charge them a markup of between 7% and 15% above wholesale prices.”

This means that Americans and Canadians are increasingly competing over the same supply of drugs, a development that hasn’t escaped the notice of Canadian policymakers. The Canadian health ministry for instance, has recently floated the idea of “[preventing] Canadian doctors from co-signing prescriptions written by American physicians, which would essentially kill the industry” or of creating “a list of drugs that can’t be exported.”

Now that drug importation is turning out to be a politically inspired mirage, maybe we can concentrate on finding real solutions that work.

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AIDS Fight Shifts Fronts - Researchers Aim to Fortify Cells to Prevent Virus From Getting In
Wall Street Journal, 1-5-05

Many of the most touted AIDS drugs, including protease inhibitors, attempt to short-circuit the virus’ ability to replicate it after it has gained access to a hosts’ cells – a strategy this article dubs “battling the enemy inside the fort” rather than outside the gates.

However, several pharmaceutical companies are rushing to develop a new generation of AIDS drugs that will block the cellular pathways that HIV uses to gain access to the cell’s inner sanctum. Two of these pathways are “docking stations on the cell surface that eventually allow the virus to get inside.” The most common docking station for the HIV virus is called the CCR-5 receptor; less common viral strains bind with the CXCR-4 receptor or can bind to both sites. While the current crop of antiretroviral drugs are very effective, and have dramatically improved the life expectancy of AIDS patients, the virus is continually mutating and developing drug resistance, “so new treatments are always needed.”

Pfizer is developing a CCR-5 blocker, UK-427, which is currently in late-stage human studies. GlaxoSmithKline PLC and Schering-Plough also have CCR-5 compounds in testing, although neither is as far along as Pfizer’s. Another company has a drug in development that blocks the CXCR-4 site.

“Researchers and the companies expect the CCR-5 blocking pills, if approved, to be part of a multidrug regimen, not treatments that would be used alone. The best case scenario would be for these drugs to be used alongside one that blocks the other pathway, CXCR-4.”

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Malpractice Bill Shields Drugmakers
Washington Post, 1-5-05

Imagine you are a business owner. You follow all relevant government regulations and obey the law scrupulously. Then one day, one of your products is accused of harming a consumer. Assuming that you are found liable for compensatory damages in court, should the plaintiff also be able to ask for punitive damages, i.e. accusing you of acting negligently and recklessly? Or, to put it another way, “if you have done everything the law requires, why should you be punished?”

Without some safe haven for regulatory compliance, the risk is that legitimate companies, especially small companies and entrepreneurs, will increasingly shy away from medical markets where liability risks are massive and unpredictable.

However, a small provision in a medical malpractice bill pending in Congress that would protect pharmaceutical companies from punitive damages if they comply with all FDA regulations is becoming increasingly controversial. The provision doesn’t cap compensatory damages, or deny claimants access to the courts: it just protects companies from punitive damages if they obey all the relevant FDA regulations.

Protection from punitive damages for responsible companies who operate in an industry that provides critical medicines that improve the health and well being of millions of people around the globe should be a no-brainer. However, tort lawyers will try and use recent safety concerns about Cox-2 drugs to demagogue the bill, playing on public fears and obscuring the real issues at stake.

Hopefully, this is one time when their power-play will come up short.

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Drug industry assists in tsunami effort - Companies donate medicine and millions of dollars to relief agencies
The Star-Ledger, 1-4-05

Dammed if you do, damned if you don’t. Pharmaceutical companies are donating millions of dollars in medicines and medical supplies to aid hundreds of thousands of South Asian tsunami victims, and yet one marketing executive still says that “the relief effort won’t do much to burnish the industry’s image.”

We don’t want to take issue with this article, which is just reporting the facts, but the general tone of debates over aid – and over corporate behavior generally - portrays corporate philanthropy as an entitlement, not an act of grace.

This is the wrong attitude to take. Companies are not charities. If they don’t make a profit, they go out of business. And it would have a massive knock-on effect on global health and well being if, say, R&D pharmaceutical companies suddenly decided to give away all their drugs or medical supplies for free. In other words, the philanthropic efforts of nonprofits are utterly dependent on companies who donate enormous amounts of funding, employee time and expertise, and free products to disaster relief and humanitarian efforts like this one. That money ultimately comes out of the salaries and 401k’s of their employees, or is passed along to consumers in the form of higher prices for other products. Companies may ultimately benefit from their humanitarian contributions, but the assistance itself is not without its costs and depends first and foremost on corporate profitability.

In short, the for-profit sector is not a less valuable, barely tolerated second cousin to government groups and NGOs who dedicate themselves to the public weal – capitalism is the precondition for effective, successful philanthropy. The first and best social responsibility of a corporation is to generate profits and wealth. That pursuit may not play well with anticapitalist ideologues, but it sure comes in handy when it comes time to pass the plate for international emergencies like this one.

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Commentary

Prescription for Confusion
The New York Times, 12-28-04

It is, the Times notes “no surprise that many people who rely on painkillers to ease their way through the day feel lost at the moment. Not only have Vioxx, Celebrex, and Bextra, the only three drugs in a class thought to be exceptionally safe, been found to cause heart attacks and strokes in some patients, but an over-the-counter painkiller, Aleve, has too. It makes one wonder whether anything out there is really safe.”

The main lesson the Times takes from the confusion is that: “all medicines carry risks as well as benefits”, and that “risks may not show up in clinical trials that are used to decide whether a drug is effective enough and safe enough to be marketed in this country. But if the drug is used by vast numbers of people for extended periods of time, adverse effects may emerge.”

However, after making these very valid points the editorial jumps to the conclusion that doctors and the FDA are “in thrall to drug companies” and have compromised their public obligations as a result. Says the Times: “Now that exquisitely calibrated judgments must be made as to which patients can truly benefit from what drugs, doctors will have to reassert their independence.”

We should point out that as science advances more “exquisitely calibrated judgments” will be available that allow us all to second guess companies and regulators who are only doing the best they can with the facts – and regulations - at hand. After all, we know very little about the risks of generic drugs that have been on the market for decades, and not even aspirin might pass FDA muster if it was presented to the agency now, despite its many benefits.

Getting to the outcome everyone wants (the right balance between safety and benefit, or risk and innovation) depends primarily making sure that outdated technologies – for instance, the clinical trials that the Times deprecates – are supplemented by state of the art screening technologies and datamining that improve patient safety.

Making sure that FDA regulations are driven by the latest science and technologies will help the agency make the right decisions on the first go round – and leave us all with less opportunity to second guess the agency and its stakeholders.

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Commentary: Stopping the flu pandemic
David Longtin, Henry Miller, M.S., M.D., Washington Times, 1-3-05

After World War I, the “Spanish Flu…killed an estimated 40 million to 50 million people” around the globe. Could the world be headed for another devastating pandemic flu outbreak? “Experts are virtually certain another flu pandemic will eventually occur, either naturally or as a result of laboratory strains developed as bioterror weapons.”

What can we do to stop it? In theory, “vaccination and antiviral drugs” could be used to quarantine and halt an epidemic, “but current vaccine production methods and stockpiles of antiviral medications are woefully inadequate for a genuine emergency.” Miller and Longtin instead call for a “quantum leap in technology”, including “gene-splicing techniques to make [new vaccines],” but note that what is really slowing the development of new flu treatments is that “the major purchaser of most vaccines, the Centers for Disease Control and Prevention, extracts huge discounts from manufacturers. Arbitrary and excessive regulation also block progress. As a result, innovation has suffered and vaccine producers have abandoned the field in droves, leaving only four major manufacturers and a few dozen products.”

To overcome these handicaps, Miller and Longtin want the government to increase funding for research on new vaccine technologies, stop demanding huge price discounts that discourage market entrants, and “pursue ‘reciprocity agreements on approvals [among international regulators] so vaccines and antiviral drugs licensed in certain foreign countries can be marketed in the U.S.”

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Painkiller panic
Alan Reynolds, Washington Times, 1-2-05

Reynolds points out that the riskiest policy we can take when it comes to drug safety is trying to avoid risk altogether.

Take the first and perhaps most notorious drug safety scandal, thalidomide. “After the thalidomide ban was finally eased for research, the once-infamous new drug has shown considerable promise in the treatment of multiple myeloma, leprosy, and AIDS.” Most of the time, the best approach with known safety risks is to restrict drug use or improve drug labeling, rather than ban it altogether. As long as a drug is still on market, researchers can study it and the patients who need it most will still have access to it.

Consequently, the rush to pull drugs with known safety risks off the market altogether often does more harm than good. “The hullaboo about questionable risks from chronic overuse of such beneficent drugs as Celebrex and Alleve may yet cause truly serious health risks if it contributes to the terrifying FDA urge to deny doctors and patients timely access to vital drugs.”

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Drug import plan sags
USA Today, 1-3-05

USA Today says that “2004’s magic elixir for soaring drug costs”, drug importation, has too many “unpleasant side effects” to be a workable federal policy. For cynics who think the report is a whitewash, they also refer readers to statements by the Canadian Health Minister Ujjal Dosanjh, who has threatened to “prevent Canadian doctors from co-signing prescriptions for American patients they haven’t examined, effectively ending the cross-border drug trade.”

The “underlying problem,” the editors say, is that Canada has price controls on prescription drugs, while the U.S. doesn’t. The U.S. could adopt the Canadian approach, but “the money to research new cures will dry up.”

Instead, the editors support “guidelines that identify preferred lost-cost treatments, such as generic drugs,” which are cheaper here than anywhere else in the world. “Widespread use [of generics] could reduce drug spending by billions of dollars a year.”

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The Life and Times of Ivermectin - A Success Story
Andy Crump, Satoshi Õmura, Nature, 1-4-05

This article chronicles a successful model of how public-private partnerships can work hand-in-glove to greatly lessen the impact of infectious diseases in developing nations. Ivermectin, an anti-parasitic drug developed jointly by the Kitasato Institute in Japan and the Merck, Sharpe and Dhome laboratory in the U.S. has “improved the lives of hundreds of millions of the world’s poorest” citizens afflicted with the debilitating parasite that causes “river blindness” (onchocerciasis). Thanks to this groundbreaking partnership, the disease may be eradicated as a global public health problem by 2010.

Ivermectin began its career as a successful veterinary antiparasitic drug in 1981, and has remained a market leader ever since with sales of about $1 billion annually. From animal studies researchers suspected the drug might be effective against the parasite that causes river blindness and moved quickly to test their thesis.

After 4 years of large scale human clinical trials it was found that “a single annual dose of 200 micrograms per kg of body weight eradicated microfilarial worms from the eye and skin after one month, and patients remained worm-free for up to 12 months after treatment.” By 2007, 59 million people in African countries where the disease is prevalent will have been treated with ivermectin.

As the humanitarian value of the drug crystallized during late stage clinical trials, “discussions took place between the public and private sectors to determine a suitable price for the drug, bearing in mind that the end-users of the product would be poor and marginalized communities. In 1987 . . . the Kitasato Institute . . . agreed to forgo royalties” and Merck agreed that ivermectin “would be provided free of charge for the treatment of river blindness ‘for as long as it is needed’, a pledge that has been honored ever since.”

Besides giving away the drug gratis to eradicate river blindness, Merck also pays “the production costs [of ivermectin], the costs of transport from the manufacturing facility in France to the recipient countries and the related customs and other handling costs.” To date, Merck has donated over 250 million doses; in one year, 2001, “the value of the ivermectin contributed by Merck & Co. [was] estimated to be US$143.6 million.” To put that sum in perspective, the total fifteen year program costs to eliminate river blindness are estimated to be only $182.5 million.

In other words, even for a “free” drug Merck bears very substantial costs year in and year out.

All in all, “The discovery, development, and deployment of ivermectin through the efforts of Merck & Co. and the Kitasato Institute, aided by a group of international partners…has been hailed by some commentators as one of the greatest medical achievements of the twentieth century.”

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Research

The Distortionary Effects of Government Procurement: Evidence from Medicaid Prescription Drug Purchasing
Mark Duggan, Fiona Scott Morton, NBER , 11-1-04

Government subsidies can distort markets in very unpredictable ways. For instance, when government isolates one group of citizens from cost pressures (setting prices through administrative fiat), prices can rise for everyone outside that group. One twist on this familiar theme has been identified by Duggan and Morton in the federal-state Medicaid Program, which “insures 43 million people for virtually all of the prescription drugs approved by the FDA.”

“To determine the price that [Medicaid] will pay for a drug treatment, the government uses the average price in the private sector for that same drug. Assuming that Medicaid recipients are unresponsive to price because of the program's zero co-pay, this rule will increase prices for non-Medicaid consumers.” [Ed. – emphasis added.]

This authors present yet more evidence that even government attempts to shield low-income consumers directly from prices – rather than through targeted tax credits or vouchers that still encourage price sensitivity – backfire by raising costs for all other consumers and the government programs that provide the subsidies.

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Medical Progress Today is published by the Center for Medical Progress at the Manhattan Institute for Policy Research.

For more information about Medical Progress Today, please contact the managing editor, Paul Howard, at phoward@manhattan-institute.org, or via telephone at 212.599.7000, x319.

Press inquiries regarding Medical Progress Today can be directed to Lindsay Young, executive director, communications at communications@manhattan-institute.org, or via telephone at 212.599.7000, x315.

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SPOTLIGHT

Importing failure

NEWS

Second Opinion: As Drug-Safety Worries Grow, Looking Overseas for Solutions - French Vigilance Centers Spot Problems, and U.K. Traces Issues With 'Green Cards' - A High-Tech Prescription Pad
FDA Approves First in a New Class of Pain Drugs
Doctors, Too, Ask: Is This Drug Right?
The Nation; Medicare to Screen for Alcoholism; The coverage is part of a move toward prevention of several costly conditions that some say is overdue. Participation could be the big hurdle.
India's new patent law to shake up drug industry.
Health Journal: What You Should Know About Painkillers Before Clearing Out the Medicine Chest
Americans Save Less Buying Canadian Drugs
AIDS Fight Shifts Fronts - Researchers Aim to Fortify Cells to Prevent Virus From Getting In
Malpractice Bill Shields Drugmakers
Drug industry assists in tsunami effort - Companies donate medicine and millions of dollars to relief agencies

COMMENTARY

Prescription for Confusion
Commentary: Stopping the flu pandemic
Painkiller panic
Drug import plan sags
The Life and Times of Ivermectin - A Success Story

RESEARCH

The Distortionary Effects of Government Procurement: Evidence from Medicaid Prescription Drug Purchasing
Center for Medical Progress 
Copyright Manhattan Institute for Policy Research
52 Vanderbilt Avenue
New York, NY 10017
(212) 599-7000
mpt@manhattan-institute.org