Medical Progress Today
  Volume 2, Number 25
  July 18, 2005


Featured News:
U.S. Struggles for Drugs to Counter Biological Threats - As Bigger Firms Shun Effort, Small Ones Are Challenged; 'This Is Really Hard Stuff'
Wall Street Journal, 7-11-05
Featured Commentary:
A Drug-Ad Ban Is Tough To Swallow
Charles Stein, The Boston Globe, 7-10-05
Featured Research:
U.S. Pediatric Studies Have Led to New Labeling for Nearly 100 Drugs, According to Tufts Center for the Study of Drug Development
Tufts Center for the Study of Drug Development, 7-5-05

News

U.S. Struggles for Drugs to Counter Biological Threats - As Bigger Firms Shun Effort, Small Ones Are Challenged; 'This Is Really Hard Stuff'
Wall Street Journal, 7-11-05

Editor’s Notes:

U.S. efforts to secure new drugs to defend against bioterrorism and radiological attacks have lagged due to large manufacturers’ concerns regarding profits and liability protections:

Big drug and biotechnology companies largely have shunned the [government’s bioterrorism defense] program, known as Project BioShield …amid concerns over legal liability, high costs and limited potential for profit. That has left the government highly dependent on fragile, little-known biotech companies …
Michael Friedman, chief medical officer for biomedical preparedness at PhRMA, the drug-industry trade group, warned that this could happen during House testimony on the BioShield legislation in 2003.
"It is necessary to recognize scientific, legal and economic impediments to the research and development of biodefense products," he said at the time. He noted that manufacturers could be "exposed to devastating product-liability suits." In addition, he cautioned, "The decision to divert resources from the research and development of medicines for serious illnesses like heart disease can be financially risky, especially when a countermeasure may never be purchased or used."
Companies also expressed concerns in the wake of the anthrax attacks, when then-HHS Secretary Tommy Thompson ordered the maker of Cipro, Bayer AG, to supply tablets to the U.S. government at a fraction of the regular price. That event alienated drug companies already wary of getting into the biodefense business.

Essentially, the government is asking companies to engage in expensive, blue-sky research with little assurance that their R&D investments will eventually be profitable. This is a recipe for self-sabotage. Until government offers better—and more consistent—incentives to large manufacturers, developing bioterrorism medicines will be remain a slow and haphazard endeavor.

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In cancer fight, a spice brings hope to the table / M.D. Anderson researchers see a potent weapon in curcumin, used in Indian cooking
Houston Chronicle, 7-11-05

Editor’s Notes:

As we saw in the case of Project BioShield, the absence of clear property rights and profits signals from the market can doom research in critical medical sectors. This also applies to promising natural medicines—which can’t be patented under current law.

In a host of studies, M.D. Anderson researchers are showing that curcumin, the pungent yellow spice in both turmeric and curry powders, has potent anti-cancer properties. They say it may prove effective for both prevention and treatment….
"Curcumin's promise is enormous," said Bharat B. Aggarwal, a professor of cancer medicine in M.D. Anderson's department of experimental therapeutics. "It appears to inhibit multiple pathways by which cancer grows, and we know it's nontoxic."
The greatest obstacle to further study of curcumin is financial. No pharmaceutical company is likely to develop a natural product that can't be patented so the only sources of funding are government agencies.

And government agencies often don’t have the expertise or financial resources to navigate potential new drugs through the hazardous and unpredictable process of drug research, development, and FDA approval.

One solution for this problem would be for governments to create patent pools for natural compounds where companies, based on sliding fees, could begin proprietary research into their development and use. Fees would be low initially, to encourage basic research, with royalties payable if and when the drug was actually approved for marketing by the FDA or its European counterpart. Creating assignable property rights is the best way to encourage research in areas that would otherwise languish without private sector investment.

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Brazil reaches drug patent deal
, 7-9-05

Editor’s Notes:

The U.S. government’s pressure on Bayer to sell its antibiotic Cipro at cut-rate prices during the anthrax attacks in 2001 has made pharmaceutical companies leery of participating in the government’s BioShield program. The lesson for policymakers should be clear: attacking property rights gets you less of what you want.

Unfortunately, this lesson has been consistently ignored by the Brazilian government, which has repeatedly threatened to break patents on AIDS drugs unless companies selling them slash their prices—despite the fact that Brazil already pays the lowest AIDS drug prices outside of Africa. Over the last several weeks, Brazil had threatened to break the patent on Abbott’s anti-retroviral drug Kaletra; since then, Abbott and Brazil have reached an “agreement” for Abbott to cut its prices even further:

As part of the deal, Brazil will have access to Kaletra's next new formula…. Abbott has agreed that Brazil can treat more patients with no overall increase in costs, in effect reducing the price of the drug and saving the government more than $250m over the next six years.
Brazil has reached similar agreements with pharmaceutical companies in the past after threatening to break patents. Kaletra is one of the most widely used anti-retroviral drugs, which are essential to the treatment of HIV.

Selling AIDS drugs at a discount based on a country’s ability to pay makes sense: rich countries should pay a premium, poor countries (like those in sub-Saharan Africa) a discount. Brazil, however, is no pauper. Her self-serving tactics only undermine the financial incentives for companies to research new AIDS drugs.

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Vioxx should return to market, panel says; Painkiller poses heart-health risk similar to ibuprofen, study concludes
The Globe and Mail, 7-8-05

Editor’s Notes:

Health Canada, Canada’s national health care agency, recently commissioned a panel to review the risks and benefits of Vioxx and other Cox-2 drugs. The panel recommended allowing Vioxx and Celebrex back on the market without any further safety studies, should their manufacturers request re-approval. It concluded that, “all anti-inflammatory drugs carry explicit warnings of their heart risks,” including the nonprescription drug ibuprofen.

The panel's report says that because Cox-2 drugs carry heart risks similar to traditional painkillers, yet seem to have a lesser chance of causing stomach problems, patients could “benefit from having a variety of drugs to choose from for pain relief.”

The panel, in short, found that when all is said and done, Vioxx and Celebrex are safe and effective alternatives for patients, and that all non-steroidal anti-inflammatories carry similar risks. This will, hopefully, help to derail the juggernaut of product liability suits filed against the makers of Cox-2 drugs.

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Rival Drug Discount Plans on Fall Ballot in California
The New York Times, 7-8-05

Editor’s Notes:

In November, California will vote on two rival initiatives—one backed by unions and some consumer groups, and the other by the pharmaceutical industry—to decrease the costs of prescription medicine purchased by California’s Medicaid program.

The biggest difference [between the two proposals] is in the leverage the state might bring to procure discounts. Under the union-backed proposal, if a company did not offer what state negotiators considered sufficient discounts the state could discourage use of that company's drugs in the state's Medicaid program, which spends about $4 billion a year on drugs.
Doctors wanting to prescribe a restricted drug to a Medicaid patient would have to get permission, although there would be exceptions made if there were no adequate substitute for the drug.

It is ironic that California—a hotbed of biotech R&D—wants to reduce the revenues of companies that do business in and with the state, thereby reducing incentives to create innovative new medicines. A better tactic would be to evaluate the cost effectiveness of drugs in the Medicaid program. If companies can show that their drugs save the state money by keeping patients out of hospitals or in better health, the state should agree not to slash prices and encourage the use of those drugs as first line treatments. Encouraging companies to slash prices across the board without regard to efficacy only encourages a race to the bottom—without offering Medicaid patients better health care.

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Commentary

A Drug-Ad Ban Is Tough To Swallow
Charles Stein, The Boston Globe, 7-10-05

In an astute discussion of an advertising ban on pharmaceuticals, as recently proposed by Senate Majority Leader Bill Frist, Charles Stein wonders about the logic behind such a ban.

The call for a ban assumes that Americans are weak-minded and gullible—practically impotent in the face of slick and seductive advertising…. The facts suggest Americans are actually capable of making judgments.
“Our drug costs are growing much more slowly than they were a few years ago,” said Neil Minkoff, medical director for pharmacy at health maintenance organization Harvard Pilgrim Health Care. Minkoff estimates Harvard's drug bill is rising at a 6 percent to 7 percent annual pace. That squares with national data that showed drug costs climbed more slowly than overall health costs last year. Hospitals, which don't advertise much, accounted for the lion’s share of the increase in medical spending….
“It is always a poor idea to suppress information,” said Regina Herzlinger, a Harvard business school professor and the author of a book called “Consumer-Driven Health Care.” Herzlinger says consumers will be best served in a world of maximum information and maximum disclosure. “People can draw their own conclusions,” she said.

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A rebuttal on ‘half-truths’
Robert Goldberg, Ph.D., Washington Times, 7-8-05

This article is actually a letter to the editor by Manhattan Institute senior fellow Bob Goldberg in response to Representative (R, KY) Anne Northup’s letter attacking Goldberg’s op-ed “Stealing U.S. Drug Patents.”

While the exchange should be read in its entirety, Goldberg’s basic assertion is that prescription drug importation (which Rep. Northup supports) from countries with price controls on U.S. made drugs undercuts the property rights of U.S. pharmaceutical companies, reducing their incentives to create new medicines and hurting the U.S. economy.

Under the [legislation Northup supports, the] Pharmaceutical Market Access Act of 2005, companies would be prohibited from setting their own prices here or at home and from deciding whom they want to sell to and at what terms and in what amounts.In essence, Mrs. Northup supports handing the power to set prices and volumes to foreign governments and foreign wholesalers.
And that's before she decided to sponsor a bill that would prohibit the U.S. trade representative from negotiating trade agreements that would stop the importation of all products that have artificially lower prices due to government price controls or subsidies.

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Reimportation Threatens Innovation
Orrin Hatch, Roll Call, 7-7-05

Orrin Hatch, a Republican Senator from Utah who sits on the Senate Health, Education, Labor, and Pensions Committee, explains why U.S. drug prices are amongst the highest in the world—and argues against the reimportation of prescription drugs from abroad.

The price of drugs is very high, too high. What many fail to appreciate, though, is that the issue is not so much what we pay, but that many other countries aren’t paying their fair share.
American taxpayers are putting up billions of their hard-earned dollars each year for biomedical research at the National Institutes of Health while, year in and year out, many other countries essentially free-ride on U.S. research and development activities and then set price controls on the approved drugs products that are the fruits of this U.S.-financed research.

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Opening Pandora's Pillbox
Dr. Scott Gottlieb, Health Affairs, 7-1-05

As the FDA faces mounting criticism for perceived lapses in postmarket drug safety, Scott Gottlieb—formerly the FDA’s Director of Medical Policy Development—offers some practical and effective ways to reform the system.

The FDA has already taken some steps to create more active and proactive [postmarket] surveillance tools. With improved resources for conducting this kind of surveillance, as well as resources for undertaking large simple safety studies in collaboration with health care networks on newly approved products, the FDA can improve its safety-monitoring program without burdening its drug approval process. Most importantly, by partnering with health care providers, institutions, product developers, as well as other government agencies, the FDA will more quickly and thoroughly identify and understand the risks associated the products it regulates.

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Research

Erlotinib in Previously Treated Non–Small-Cell Lung Cancer
Frances A. Shepherd, M.D., New England Journal of Medicine, 7-14-05

Erlotinib (brand name: Tarceva) is a targeted cancer drug that attacks cancers that express a protein called epidermal growth factor receptor (EGFR) or HER1. In this randomized, double-blind placebo controlled study, patients with late-stage cancer who had already been treated with two rounds of chemotherapy were given either erlotinib or a placebo. The researchers concluded that “erlotinib can prolong survival in patients with non–small-cell lung cancer after first-line or second-line chemotherapy.”

The response rate was 8.9 percent in the erlotinib group and less than 1 percent in the placebo group…the median duration of the response was 7.9 months and 3.7 months, respectively. Progression-free survival was 2.2 months and 1.8 months, respectively…Overall survival was 6.7 months and 4.7 months, respectively… in favor of erlotinib. Five percent of patients discontinued erlotinib because of toxic effects.

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U.S. Pediatric Studies Have Led to New Labeling for Nearly 100 Drugs, According to Tufts Center for the Study of Drug Development
Tufts Center for the Study of Drug Development, 7-5-05

The FDA Modernization Act of 1997 granted pharmaceutical companies that conducted FDA requested studies of their medicines in children an additional 6 months of exclusivity after patent expiration—i.e., it granted companies protection from generic competitors for an additional 6 months. It was hoped that the patent extension would encourage companies to study the effects of their drugs in children, since drugs can have very different effects in the adult and pediatric populations.

The Tufts University Center for the Study of Drug Development conducted an analysis of the effect that this incentive has had on pediatric studies for drugs and found that:

Nearly 100 medicines for sale in the United states have received pediatric labeling since the late 1990s based on new clinical studies to determine appropriate dosages, safety, efficacy, and formulations for children…
“The increase in pediatric labeling signals a major advance in pediatric medicine,” said Christopher Milne, assistant director of Tufts CSDD and author of the study. “This will improve the overall health of children, who comprise 25% of the U.S. population.”

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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.

Press inquiries regarding Medical Progress Today can be directed to the Communications Department, at communications@manhattan-institute.org, or via telephone at 212.599.7000.

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NEWS

U.S. Struggles for Drugs to Counter Biological Threats - As Bigger Firms Shun Effort, Small Ones Are Challenged; 'This Is Really Hard Stuff'
In cancer fight, a spice brings hope to the table / M.D. Anderson researchers see a potent weapon in curcumin, used in Indian cooking
Brazil reaches drug patent deal
Vioxx should return to market, panel says; Painkiller poses heart-health risk similar to ibuprofen, study concludes
Rival Drug Discount Plans on Fall Ballot in California

COMMENTARY

A Drug-Ad Ban Is Tough To Swallow
A rebuttal on ‘half-truths’
Reimportation Threatens Innovation
Opening Pandora's Pillbox

RESEARCH

Erlotinib in Previously Treated Non–Small-Cell Lung Cancer
U.S. Pediatric Studies Have Led to New Labeling for Nearly 100 Drugs, According to Tufts Center for the Study of Drug Development
Center for Medical Progress 
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