Medical Progress Today
  Volume 2, Number 18
  May 5, 2005


In the Spotlight

Death and Taxes.
Why taxes and tariffs on medicines in developing nations is a fatal policy.


Roger Bate, Medical Progress Today, 5-5-05

In the time it will take you to read this column at least ten people in poor countries will die from diseases that are preventable and curable. Well over half the world's population lacks access to even the most basic medicines. Improving access to critical medicines should be a top priority for policymakers in poor countries.

Continue reading . . .

Featured News:
Europe 'lagging further behind US on drugs'
Financial Times, 4-28-05
Featured Commentary:
How to Fix Health Care
Dan Crippen, Washington Post, 5-1-05

News

Team effort is best medicine for athlete's sight
The Star-Ledger, 5-2-05

Editor’s Notes:

Off-label prescribing is a common practice in the U.S. whereby physicians give patients a drug that has not been officially approved by the FDA for that particular disease or disability.

Some researchers worry that off-label treatments are just plain useless or turn patients into guinea pigs for drugs that may have serious side-effects. This is because off-label prescribing is often driven by anecdotal evidence or a handful of small studies, rather than by the large scale random clinical trials required for FDA approval. On the other hand, clinical trials can be enormously expensive and time consuming. Requiring clinical trials for every new off-label indication would rob patients and physicians of a many beneficial treatments.

This article, for instance, chronicles one physician’s struggle to prescribe an off-label treatment to her 19-year-old patient, Lamar Register, who has a rare inflammatory disorder known as sarcoid uveitis. The first-line drug used to treat his disorder, steroids, “was building up pressure inside Lamar’s eyes, threatening him with glaucoma and blindness.”

Lamar’s doctor wanted to prescribe him the drug Remicade off-label. Remicade, made by Centocor, is FDA-approved for treating Crohn’s disease and rheumatoid arthritis, not sarcoid uveitis. Lamar’s insurer, consequently, labeled it an investigational treatment and denied coverage. Thankfully, the FDA, Centocor, and Lamar’s doctor came up with a novel solution:

After weeks of negotiations… [Lamar’s doctor] would be allowed to conduct a one-patient experimental investigation of the use of Remicade for sarcoid uveitis. …Centocor would provide, at no cost, all the medication the young man needed. St. Barnabas [Medical Center] would provide the "infusion" - an intravenous drip that takes several hours - also at no cost.

Many thousands of patients like Lamar could be helped if the FDA and insurers joined forces and used physicians real-world clinical experience to validate off-label treatments. The evidence validating new drug indications is out there, if we want to take the time to find it.

TOP^

German Curbs On Drug Costs Rile Big Brands
Wall Street Journal, 5-2-05

Editor’s Notes:

We have two articles this week on the issue of how price controls affect pharmaceutical innovation. The lesson to be learned from both articles: There is no antidote for success like complacency.

About ten years ago, Europe led the U.S. in the discovery of new medicines, and many of those medicines were launched in Europe first. Patients routinely complained to the FDA that they were denied access to treatments that were available in Europe. Today, the U.S. leads Europe in every significant category of biopharmaceutical innovation--from biotech venture capital, to developing new medicines.

The European Commission has called for studies on the cause of the decline (see the Financial Times article below). But it’s really no mystery. European health care systems inflicted price controls, rationing, and parallel importation on pharmaceutical companies. For instance,

Under the tax-funded German health-care system, a special commission set up by the health ministry decides how much the state will pay for drugs. The ministry decided last year it would no longer cover the higher prices of branded drugs that it deemed to have the same medical efficacy as available generics. So the commission drew up a list of drugs that it won't pay full price to cover, including many popular treatments for stomach acid and high blood pressure, as well as Lipitor, the world's best-selling drug. Legislation reflecting the ministry’s new stance went into effect in January; since then, demand for many of these once popular medicines has plummeted.

One executive for AstraZeneca likened Germany’s pricing policy to “losing your patents because you are forced to reduce your price…Basically, this methodology puts you in the same bucket with generics...”

The net result is that Germany—and Europe as a whole—penalizes pharmaceutical companies for investing in medicines that are more effective or have fewer side effects than older treatments. Adopting an age-old tradition, those companies are now refugees flocking to America’s shores.

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The Quest for Custom Cures Boosted by new technology, the burgeoning science of genomics is ushering in an age of personalized medicine.
Fortune, 5-2-05

Editor’s Notes:

People often labor under the mistaken impression that the science of drug development is like building a Lego castle. It’s not. It is a very unpredictable, expensive art that fails many thousands of more times than it succeeds.

Even when, it does succeed, human genetic diversity humbles multi-billion dollar companies by throwing up side-effects and other unintended outcomes that no one can predict or control. As this article correctly notes, “most mass-marketed prescription drugs typically produce the desired effect for only 40% to 60% of the patient population.” Raising those rates, and increasing the predictability of medicine, is the challenge facing companies today.

Thankfully, the unraveling of the human genome and powerful new computing and diagnostic technologies are tipping the balance towards personalized medicine:

Discoveries in the human genome are helping scientists identify the genetic origins of disease and gain a deeper understanding of how patients of a particular genotype respond to treatments. The payoff? Safer and more effective remedies. "We help patients by soothing symptoms, but rarely can we cure a disease," says Andre Terzic, professor of medicine and pharmacology at the Mayo Clinic. "The real future will go to the foundation of the disease and remove the problem."

Medical miracles that can “remove the problem” are undoubtedly still decades away. In the meantime, targeted cancer drugs like Iressa, Gleevec and Hercpetin are giving us a glimpse of the day when drug development will become more like the science of engineering than the haphazard endeavor it is today.

TOP^

Europe 'lagging further behind US on drugs'
Financial Times, 4-28-05

Editor’s Notes:

European pricing schemes, as we noted above, may be destructive in Europe but they remain popular in the U.S. On May 3, for instance, the D.C. City Council passed legislation

…that would make it illegal in the city to charge ‘excessive prices’ for prescription drugs and, in some cases, allow the District government to make its own arrangements to have drugs produced more cheaply.

As a benchmark for “reasonable” prices, the legislation cites prices charged in Europe, Canada, and Australia (among other places) where the governments impose drug price controls and ration access to new medicines.

The council member who sponsored the bill, David Catania, is probably unaware that the European Commission is awaiting the results of a study it commissioned on Europe’s declining pharmaceutical industry. Early data from the study were reported in the Financial Times last week. The study’s author, Fabio Pammolli, from the University of Florence, found that from 1996-2002:

  • 70 per cent of world drug research and development collaboration originated in the US against 25 per cent in Europe;
  • 70 per cent of "new chemical entities", the basis of innovative medicines, were launched first in the US - normally one to two years ahead of in Europe; and
  • More than half of total global pharmaceutical patents were registered in the US, and their influence was disproportionate, representing 70 per cent of academic citations.

Professor Pammolli recommended that Europe "introduce systems of co-payment and other private mechanisms to help supplement over-burdened state health systems in paying for medical expenses, in order to raise prices paid to drug developers towards levels almost twice as high in the U.S." [Ed.: emphasis added]

In other words, low European prices curtail investment and development of new medicines. The D.C. city council should order a copy of Professor Pammolli’s report and ready it carefully.

TOP^

New FDA office for drug safety is proposed; Two senators want it to have power to restrict marketing and pull approved drugs if new studies reveal risks.
The Philadelphia Inquirer, 4-28-05

Editor’s Notes:

As we noted, “custom cures” are in their infancy, and we are still far away from Star Trek style health care.

Getting significantly better data on drug safety, however, is within our reach - if we don’t burden the FDA and companies with expensive and redundant new regulatory requirements that will siphon scarce resources away from R&D.

New legislation, sponsored by Senators Grassley and Dodd, is designed to create a new Center for Postmarket Drug Evaluation and Research (CPMDER) at the FDA, which would report directly to the FDA Commissioner.

A new drug-safety office, with broad powers to fine pharmaceutical companies, restrict marketing of their medications, and in some instances pull drugs off the market would be established under legislation introduced yesterday by [Senators Dodd and Grassley].

Their legislation grew out of the conventional wisdom that the FDA was slow to remove Vioxx from market after suspicions were first raised about its risks. But the delay in action was not due to the lack of independence of the FDA’s drug safety office, but to its passive safety monitoring procedures and antiquated IT infrastructure.

Perhaps some new regulatory powers—and certainly more funding—might be considered for the FDA, but any changes should be carefully crafted and based on the best science available. The last thing the FDA needs is for the U.S. Congress to paste new bureaucratic boxes to its organizational chart that will inevitably create more red tape.

TOP^

Early-Warning Tool for Unsafe Drugs
Wall Street Journal, 4-28-05

Editor’s Notes:

As we mentioned above, the FDA sorely needs to update its IT infrastructure and use of datamining. Partly this can be accomplished by working with public and private insurers to access patient databases. For instance,

…UnitedHealth Group, Inc. plans to launch a drug registry that will use its vast database of health-plan members to find potential problems. The registry, which UnitedHealth…plans to market this summer to federal drug regulators, pharmaceutical companies and others, is part of a growing effort by health plans and health-care systems to create databases as resources for drug-safety research. …Once the UnitedHealth database has at least 1,000 people on a given drug, it will monitor that drug by comparing the group's claims experience to that of an equally sized and nearly identical group taking a similar drug, the company said. Over time, as more people take the drugs, the size of the groups will swell. Powerful computers will mine the data as they accumulate for unusual patterns, such as clusters of hospitalizations or higher-than-average reports of particular side effects.

This is no substitute for targeted medicines and diagnostic tests that can actively match patients to the right treatment—or avoid the wrong one. But, in the meantime, data-mining projects like this one are invaluable, and Congress should encourage the FDA’s own work in this area.

TOP^

Target Corp. redesigns the pill bottle, hoping to grab customers
Associated Press Newswires, 4-28-05

Editor’s Notes:

While talking about drug safety it’s easy to forget that many adverse events are caused by human error—for instance, doctors or nurses who inadvertently deliver the wrong drug to patients, or patients who fail to read a drug’s label and take it exactly as prescribed. In other words, we can’t forget that safety always requires consideration of the human element.

For instance, Target Corp. is redesigning prescription drug bottles to minimize the risk of human error.

Target pharmacies this month rolled out a flattened bottle with easier-to-read labels and plastic rings that can be color-coded for each family member…The name of the drug appears prominently on the spine, and a card with information about side-effects slips into a slot aimed at keeping it with the pills…Besides reducing the chance of errors with medications, Target is hoping the redesigned bottles will help it grab customers from other pharmacies.

Target’s new bottle, apparently, is the first redesign by a national pharmacy in about 40 years. Hopefully, consumers will be impressed by Target’s dedication to safety and other pharmacies will quickly follow suit.

TOP^

Commentary

A Pharmaceutical Free Lunch?
Doug Bandow, Townhall.com, 5-2-05

Bandow writes on the D.C. city council legislation that we discussed above:

A council committee has approved legislation to create a new “illegal trade practice” – selling drugs for more than city politicians decide is fair. The bill would allow Washington, D.C. to transfer the companies patent rights to other firms through compulsory licensing. … Since the Constitution requires payment of “just compensation” for government takings, [the bill’s sponsor David Catania] redrafted his legislation to target drug “overpricing”… City politicians would decide which prices were fair and which were not.

D.C. politicians want a “free lunch”, i.e. medical innovation on the cheap. Their policy is neither effective nor prudent, although it remains an attractive strategy for “politicians who are most concerned about winning votes in the next election a year or two hence rather than ensuring the availability of medicines a decade or two hence.”

TOP^

How to Fix Health Care
Dan Crippen, Washington Post, 5-1-05

America’s population, as the saying goes, isn’t getting any younger. And as we age, our health care costs will inevitably rise. How can we deal effectively with those added costs without rationing health care or compromising on quality? Dan Crippen thinks that we need better data on the patients who require the most intensive, and expensive, health care.

We need to know more about these patients. Only recently have government agencies begun to assemble the mountains of data the government collects into patient records. ...As we collect data, we can begin to assess the state of knowledge on treatment of multiple conditions to determine the best forms of treatment, including pharmaceuticals, and the best settings for treatments. …With proper incentives, we can have physicians coordinating the entire care regimes of the chronically ill, regulating the prescriptions and doing everything in their power to provide the best treatment without using the hospital as a default. The patient will get better care, and Medicare will recoup big savings.

TOP^

A Private Obsession
Paul Krugman, The New York Times, 4-29-05

For Krugman, America’s woes health care woes are driven by a blind obsession with private enterprise:

American health care is unique among advanced countries in its heavy reliance on the private sector. It’s also uniquely inefficient. We spend far more per person on health care than any other country, yet many Americans lack health insurance and don’t receive essential care….Our system is desperately in need of reform. Yet it will be very hard to get useful reform, for two reasons, vested interests and ideology….a lot of big companies are essentially in the business of wasting health care resources. The most striking inefficiency of our health system is our huge medical bureaucracy, which is mainly occupied in trying to get someone else to pay the bills. A good guess is that two million to three million Americans are employed by insurers and health care providers not to deliver health care, but to pass the buck to other people.

Krugman overlooks some essential points.

For instance, health care is among the most heavily regulated industries in America, at both the state and federal levels. This means that insurers and doctors must spend an awful lot of time—and money—navigating bureaucratic rules. Government should, therefore, bear some of the blame for wasting scarce resources.

Secondly, America’s health care costs began ballooning out of control in the early 1990s, when fee-for-service insurance—not bureaucratic HMO’s—were the rule, not the exception, as they are today. HMO’s may be loathed in the popular imagination, but studies have generally found that they provide care about as well as their predecessors did at less cost (at least until recently). They are not in the business of taking money without delivering value.

The model Krugman holds up for emulation is the European or Canadian model. What he doesn’t mention is that overall health care costs are rising in those nations at about the same rate as in the U.S. (No reverse gear, The Economist, 7-15-04) The fundamental force driving health care expenditures is consumer demand for advancing medical technologies, from MRIs to Gleevec.

The U.S. pays more for health care as a percentage of GNP than Europeans or Canadians do because we create, and embrace, those technologies sooner--and don’t ration their use by doctors and patients. Ultimately, however, Europeans are in a worse crunch than we are because their economies can’t sustain their rapidly aging populations and extremely generous entitlements.

Still the U.S. isn’t a health care utopia. Health care costs and access are real problems. How can we address them?

First, we need to face the reality that consumers will eventually get their way, no matter where the funding comes from. Congress can embrace the European model of “free health care,” but if it does, the economy will be strangled by increasingly high tax burdens.

The best solution is to continue to encourage the adoption of Health Savings Accounts, which give individuals more responsibility for their own routine health care expenses - and powerful incentives to minimize costs. Then we can target the rest of our public resources on our poorest citizens, subsidizing the purchase of basic insurance plans. Finally, government can drive quality improvements across the health care sector, by developing and disseminating basic standards for measuring health care outcomes, and by ensuring that purchasers drive dollars towards the most efficient health care providers.

The more that American health care becomes a real market, as opposed to an ersatz one, the better it will work.

TOP^

FDA policy reforms sorely needed to improve safety
Henry Miller, M.S., M.D., Detroit Free Press, 4-28-05

Another good article on drug safety. In this op-ed, Henry Miller makes the point that safety is a function of better data, not more bureaucrats.

The efficient detection of side effects is essential, and the United States needs to improve pharmaco-vigilance -- the monitoring of the safety of approved drugs. But the newly created FDA Drug Safety Oversight Board is not the answer. Rather than more bureaucrats, we must have better data. We need to encourage physicians' reporting of adverse events (perhaps by rewarding them with the Continuing Medical Education credits they need to retain licensure), to contract with organizations that treat large patient populations to monitor and report adverse events, and to share data with foreign regulators. …

TOP^


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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HOME

SPOTLIGHT

Death and Taxes.

NEWS

Team effort is best medicine for athlete's sight
German Curbs On Drug Costs Rile Big Brands
The Quest for Custom Cures Boosted by new technology, the burgeoning science of genomics is ushering in an age of personalized medicine.
Europe 'lagging further behind US on drugs'
New FDA office for drug safety is proposed; Two senators want it to have power to restrict marketing and pull approved drugs if new studies reveal risks.
Early-Warning Tool for Unsafe Drugs
Target Corp. redesigns the pill bottle, hoping to grab customers

COMMENTARY

A Pharmaceutical Free Lunch?
How to Fix Health Care
A Private Obsession
FDA policy reforms sorely needed to improve safety
Center for Medical Progress 
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