Medical Progress Today
  Volume 2, Number 29
  August 12, 2005


In the Spotlight

PhRMA Fights the Battle of the Bulge
Why DTC needs to take the long view.


Peter J. Pitts, Medical Progress Today, 8-11-05

Almost 60 years after the end of World War II, the pharmaceutical industry is fighting its own version of the Battle of the Bulge in a last ditch effort to regain consumer confidence and stave off more regulation or (gasp!) legislation.

Continue reading . . .

Featured News:
Guidelines May Fail to Meet Needs of Elderly Patients With Comorbidities
Medscape, 8-9-05
Featured Commentary:
Let People Choose
David Gratzer, New York Sun, 8-11-05

News

Guidelines May Fail to Meet Needs of Elderly Patients With Comorbidities
Medscape, 8-9-05

Editor’s Notes:

Evidence-based medicine is one of the hottest health care policy topics these days. Researchers and insurers (both private and public) hope that treatments that are validated through clinical research can provide reliable guidelines for physicians that, if followed consistently, would both improve quality and lower health care costs by avoiding drug side effects and ineffective treatments. The problem, however, is that patients’ health conditions can vary so widely that generalizing an “always do this” treatment regimen can be very difficult. For instance,

“Following clinical practice guidelines for single diseases in patients with multiple chronic conditions is very complex and costly and may lead to adverse consequences, including polypharmacy with its associated risks of adverse effects and drug interactions and even hospitalizations," lead investigator Dr. Cynthia M. Boyd told Reuters Health.
This is especially pertinent, she added, because pay-for-performance incentives may be based on quality of care standards created for the management of single diseases, whereas half of patients over age 65 have three or more chronic conditions. The care of these patients accounts for almost 90% of Medicare's annual budget. [Emphasis added]

Obviously, the stakes involved in creating effective evidence-based guidelines—in both financial and human terms—are enormous. Much more research is needed on patients with multiple chronic ailments, but in the meantime policymakers should remember that effective medicine is not about statistical constructs, but about getting the best possible care to individual patients.

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The Nation; For Generic Drugs, the Price Is Right in U.S. Plain-label medications can be 78% costlier in Canada, a survey finds. Many Americans are unaware of the savings potential at home.
Los Angeles Times, 8-9-05

Editor’s Notes:

Many vital drugs are cheaper in the U.S. than in Canada. The media, however, has focused so much attention on U.S. prices for brand name drugs that consumers can be forgiven for forgetting that we have the cheapest generic drug prices in the world. Generics, in fact, account for about 50% of all U.S. prescriptions. But the hype surrounding Canadian imports may mean that U.S. consumers are wasting “more than $100 million a year on Canadian generics.”

Americans know that brand-name drugs are cheaper in Canada because the government controls prices there. But many don't realize that Canadian policies have the opposite effect on prices for generic drugs. "We have a system of government favoritism toward generic companies," said Brett J. Skinner, director of pharmaceutical and health policy research for the Fraser Institute in Toronto. The public policy organization advocates free-market policies, including the repeal of price controls on brand-name drugs.

Earlier this year, the institute released a study by Skinner of the 100 top-selling generic drugs. It found that Canadian prices were, on average, 78% higher than in the U.S. The study estimated that Canadians could save $2 billion to $5 billion annually if their generic market was as competitive as it is here. (The study accounted for exchange rate differences, and the potential savings are in Canadian dollars.) A smaller study last year for the U.S. Department of Health and Human Services looked at five popular generics and found that U.S. prices were 32% lower.

More information on generic drug prices can be found on the FDA’s Web site. Policymakers should also remember that Canada’s policies reward copycat pharmaceutical companies at the expense of firms that conduct innovative research into new medicines.

Ironically, while some U.S. policymakers exhort Americans to shop for drugs in Canada, Canadians can’t take advantage of low-U.S. generic prices—importing generics is illegal under Canadian law.

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No New Cases in Tysabri Patient Screening
Associated Press Newswires, 8-9-05

Tysabri—a once promising new multiple sclerosis (MS) drug—has been shelved for months after a handful of patients taking it developed a rare, fatal viral infection called progressive multifocal leukoencephalopathy (PML). In an effort to clear the drug for its eventual return to the market, Biogen Idec and Elan (the drug’s sponsors) have screened thousands of patients (previously supplied with the drug) for any signs of PML. To date, those patients have tested negative.

The companies said they asked more than 2,000 MS sufferers who took Tysabri in clinical trials to be screened for signs of PML. They said 91 percent have complied so far, of whom 99 percent had a neurological exam and 98 percent had an MRI scan.
The screening produced "no new confirmed cases" of PML, the companies said. "Given the high unmet medical need in MS and the therapeutic benefit we have seen with Tysabri, we are encouraged by these safety findings," said Whaijen Soo, senior vice president of medical research at Biogen Idec in Cambridge, Massachusetts.

This represents good news for patients suffering from severe MS, who may be willing to accept the risks associated with the drug—provided that the FDA eventually allows it to return to the market.

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Radical Surgery For Medicaid? South Carolina Governor Sanford has a plan to slash costs -- but a political battle looms
Business Week, 8-8-05

Editor’s Notes:

Former U.S. Supreme Court Justice Louis Brandeis once endorsed American federalism by observing that “It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” Welfare reform experiments in Wisconsin in the mid 1990s set the stage for the enormously successful national reforms that followed. Republican governors like Mark Sanford in South Carolina and Jeb Bush in Florida are blazing similar trails in Medicaid reform that will, hopefully, lead to a similar revolution.

Why do these governors have unprecedented room to maneuver? As in the case of welfare, there is widespread agreement that Medicaid is a program in crisis.

The state and federal program that provides essential health benefits for the poor is in big trouble across the country -- under fire for providing often substandard care even as it breaks the budgets of many states. Now, in what could be the first step toward a fundamental remaking of the huge public program, South Carolina's Republican governor, Mark Sanford, has quietly asked the federal government for permission to redesign Medicaid for the 800,000 low-income residents of his poor, largely rural state.
Under Sanford's proposal, Medicaid would be dramatically transformed. It would no longer provide unlimited care, instead offering beneficiaries -- mostly mothers with children -- a fixed amount of money each year to buy insurance and pay out-of-pocket costs. If they run through their accounts, they would have to pay for additional care on their own. But if they hold spending down, they could bank the leftover money to pay future medical costs -- or even use it to buy private insurance if they leave the program. "This is the biggest change ever for Medicaid," says Cleveland State University finance professor Michael Bond, who helped design the plan.

Ironically, the long-term fiscal health of this much-lauded liberal program may depend on bold reforms from just a few Republican governors.

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F.D.A. Responds to Criticism With New Caution
The New York Times, 8-6-05

Editor’s Notes:

According to the New York Times, the FDA has responded to a rash of media and Congressional criticism by—unsurprisingly—becoming significantly more cautious in its approach to drug safety and drug approval. Perhaps too cautious, in fact.

Stung by a series of drug safety scandals, the Food and Drug Administration has in recent months issued a blizzard of drug-safety warnings and approval times for new drugs are slower. The agency is issuing twice the number of public advisories about drug risks as it did a year ago and adding five times as many black box warnings -- its most serious alert -- to drug labels. And drugs approved in the first half of this year took almost twice as long to get that approval as drugs approved in the same period last year.

This new conservatism, a response to fierce recent criticism from Congress that the F.D.A. has failed to protect the public against drug dangers, has upset some doctors and drug makers. Doctors say that the agency's vague warnings and confusing advice mean that doctors are not getting the information they need to avoid problems but will get blamed for them anyway. Drug makers say the warnings are scaring patients and reducing sales. …

Delayed access to new drugs is not just a matter for academic debate or bureaucratic bean-counting. Patients suffer and die during the months or years the FDA takes to review new drug applications. What about rare drug risks? They are, by definition, rare. The vast majority of FDA approved drugs are safe for the vast majority of people who take them. Monday-morning quarterbacking by Congress of the FDA’s enormously complex decisions can only lead to one outcome: the FDA slows down. Unfortunately, no federal agency in is empowered to do a cost-benefit analysis of Congress’ overheated rhetoric.

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Commentary

Let People Choose
David Gratzer, New York Sun, 8-11-05

Gratzer, a Senior Fellow at the Manhattan Institute, criticizes Congressional proposals that would protect traditional hospitals from competition by making specialty hospitals illegal:

People should be allowed to choose the hospital that best fits their needs and not be stuck with the hospital that Congress prefers. Yet a bipartisan coalition on Capitol Hill is seeking to deprive Americans of an important option: the specialty hospital. …
Specialty hospitals offer a rare bit of competition in the otherwise static world of hospital care. As Nobel laureate George Stigler once noted,” competition, like exercise, is universally noted to be good for other people.” Specialty hospitals may not solve all the woes of American health care, but they do present an important option. For the gentleman requiring heart surgery or the woman with a herniated disc, they offer an alternative to the large and (all too often) impersonal general hospital.
And despite their limited scope, specialty hospitals offer competition that’s a win for consumers. When the federal Medicare Payment Advisory Commission studied this issue in 2004, it noted that general hospitals tend to shape up when faced with competition, investing in better equipment and making operating schedules more flexible.

Competition—between hospitals or hot dog vendors—improves quality and price for consumers. If Congress is serious about improving America’s health care system, they need to encourage more competition between providers instead of trying to legislate it out of existence.

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OUR VIEWS: 'Paradise' pills
The Press-Enterprise, 8-7-05

The Press-Enterprise editors believe that the best response to pharmaceutical direct-to-consumer advertising is not more government regulation. Instead, we need “greater diligence from consumers and doctors.”

Prompted by concerns that direct-to-consumer drug advertising skews medical decisions and drives up prescription drug costs, Congress and the Food and Drug Administration are weighing tougher rules on the $4 billion-a-year drug advertising industry. … But such suggestions raise the question of what is wrong with the truth-in-advertising rules now in place. Fact is, the FDA has stepped up enforcement of existing advertising regulations. For instance, the FDA in April ordered Bayer Pharmaceuticals and GlaxoSmithKline to pull an ad for their impotence drug, Levitra, because the spot made outlandish claims about the drug's benefits and did not adequately explain the side effects.

The drug industry literally has billions of incentives to police itself, and it should. In response to the rising chorus for more regulation, the Pharmaceutical Research and Manufacturers Association on Tuesday announced a new voluntary set of guidelines for future ad campaigns. …Those steps are a fine start. But no matter how hard an ad tries to sell better living through medication, or understate a drug's side effects, doctors - not pharmaceutical companies or government regulators - have the responsibility to prescribe medicines that are in the best interest of the patient. Likewise, patients have the duty to ask questions and engage in a give and take with their doctors about the best course of treatment - and not swallow the ads' claims like so much easy medicine.

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California Dreamin'
Grace-Marie Turner, Galen Institute, 8-5-05

Turner takes issue with a recent report by John Garamendi, the California State Insurance Commissioner, which attacks health savings accounts and consumer-driven health care in general. In this short piece, Turner takes on several of Garamendi’s charges and refutes them.

[The report charges that] consumer directed plans "put the entire health system at risk" because they attract the young and healthy into leaner plans, leaving the older and sicker in traditional plans.
In fact, Assurant Health found that 29% of its HSA policyholders had incomes of less than $50,000, 57% were over age 40, and 73% were families with children. Importantly, America's Health Insurance Plans found that 37% of those purchasing HSAs were previously uninsured. Further, eHealthInsurance found that most people with HSAs opt for more comprehensive plans that cover 100% of hospitalization, doctors' visits, lab tests, emergency room visits, and prescription drugs after the deductible. Not so "lean."

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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.

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SPOTLIGHT

PhRMA Fights the Battle of the Bulge

NEWS

Guidelines May Fail to Meet Needs of Elderly Patients With Comorbidities
The Nation; For Generic Drugs, the Price Is Right in U.S. Plain-label medications can be 78% costlier in Canada, a survey finds. Many Americans are unaware of the savings potential at home.
No New Cases in Tysabri Patient Screening
Radical Surgery For Medicaid? South Carolina Governor Sanford has a plan to slash costs -- but a political battle looms
F.D.A. Responds to Criticism With New Caution

COMMENTARY

Let People Choose
OUR VIEWS: 'Paradise' pills
California Dreamin'
Center for Medical Progress 
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