Medical Progress Today
  Volume 2, Number 3
  January 21, 2005



Featured News:
Drug makers offer discount prescription card - TogetherRxAccess would give breaks of up to 40 percent to America's medically uninsured
The Star-Ledger, 1-12-05
Featured Commentary:
FDA Moves Cancer Cures into the Slow Lane
Dr. Scott Gottlieb, Forbes, 1-18-05

News

Gene-Based Drug Research Takes Shape at Novartis
Wall Street Journal, 1-19-05

Massive financial investments in genetic research are helping Novartis to better “determine how diseases work and how best to treat them.”

“Novartis is getting closer to breaking down the cause of diabetes. It is also dissecting several illnesses long neglected by other drug makers, including cystic fibrosis and tuberous sclerosis, a rare genetic disorder that causes tumor growth and seizures.”

However, the gains aren’t cheap or quick. Novartis is currently spending $4 billion to equip a new genetics research center in Cambridge, Massachusetts. In the long run, the company is betting that the center will revolutionize the way Novartis develops new drugs. “Traditionally, drug researchers have discovered medicines by bombarding an illness with a variety of chemicals until they hit a combination that treats it. A research strategy based on genetics, by contrast, tries to zero in on the exact gene or chain of genes that cause a disease.”

If successful, genetic research will also revolutionize how drugs are marketed, since rather than using advertising to maximize market share, companies will target drugs at patients with certain genetic disorders and the doctors who treat them. Besides providing a better medical match for patients, genetic medicine will also enable Novartis and other companies to develop drugs by testing them first in small groups of patients rather than in large, expensive clinical trials. Hopefully this strategy will not only lower overall drug development costs but market prices as well.

The shift towards genetic medicine is increasingly being driven by market forces. Although profits for industry have been good, “major drug companies in the U.S. and Europe have become increasingly reliant in recent years on a few blockbuster drugs that treat widespread ailments,” with “blockbuster” drugs accounting for more than 45% of revenue. However, as the Vioxx experience has shown, marketing drugs to large populations without the science to back it up exposes companies to far more risk than potential gain. Overall, cutting edge science and market pressures are forcing companies to usher in personalized medicines, which should pay off in safer, more effective treatments for all patients.

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Wyeth Nears Diet-Drug Settlement: Company Sets Framework With Plaintiffs' Lawyers For Most Remaining Cases
Wall Street Journal, 1-18-05

Wyeth and plaintiff’s lawyers representing nearly all of the remaining lawsuits alleging that Wyeth’s diet drugs [fen-phen] caused heart damage have reached a tentative settlement framework. “The agreement would establish two tracks for plaintiffs to follow to settle remaining cases. An expedited option would pay $20,000 on average to plaintiffs who were unable or unwilling to demonstrate that they took the company’s diet drugs for 90 days or more…People who can document they took the drugs for 90 days or longer would be paid according to a grid that weighs the severity of health damage. The proof of injury claim could be demanding and time consuming, though less uncertain than a trial. No schedule of payments contemplated by this track was available.”

Anyone who opposes creating an administrative remedy for pharmaceutical injuries (a process modeled on the federal Vaccine Injury Compensation Plan) should take a close look at this case.

If we have scientific methods available that can accurately identify people who were injured by a drug, why do we need an enormously expensive, lengthy court case to dole out compensation? (In the average tort case, less than 50 cents on the dollar actually goes to plaintiffs who win awards. The rest is consumed by the system and attorney's fees.) At the same time, large mass tort actions (asbestos, breast implants) are often laden with many dubious injuries with little if any supporting documentation. Paying these claims only inflates the fees paid to plaintiff’s lawyers and takes money away from people who are seriously injured. So why are we doing it?

As in most class actions, perverse incentives operate: defendants want to lower the average payment to very seriously injured claimants, while plaintiff’s lawyers want to inflate the number of dubious injuries because, when it comes to attorney’s fees in class action settlements, size matters.

The right solution for pharmaceutical injuries is an administrative claims system like the Vaccine Injury Compensation Plan, which uses a science-based list of injuries to award compensation to truly injured claimants in a fair and timely manner.

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Nursing Employees Back to Health: Employers Battle Ailments That Sap Productivity, With Drug Makers' Help
Wall Street Journal, 1-18-05

Have you ever gone to work in the midst of allergy season but been so miserable that you got nothing done? Many workers find their productivity – and enjoyment – of work sapped by chronic ailments that burden their everyday lives. Companies also lose millions of dollars in lost productivity every year. Now, however, “companies are analyzing the bottom line effect of conditions such as seasonal allergies, migraines and stomach troubles, particularly when employees show up for work but operate at far less than 100%.”

The productivity cost of nagging health ailments is hard to quantify, but one company, Comercia, “surveyed its employees and found that about 40% of respondents said they suffered from irritable bowel syndrome, which can involve abdominal discomfort, bloating, or diarrhea.”

The company estimated that associated productivity costs could amount to $8 million a year. As a result, the company now distributes information about irritable bowel syndrome and sponsors workshops with doctors on how employees can better cope with the condition through “living habits, diet and possible medications. The company has [also] asked insurers to explore ways too encourage employees to get medical care that could improve productivity.”

This is just one more example that targeted health care spending has bottom-line benefits that outweigh its costs, especially when market forces can be harnessed to better health outcomes.

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Eli Lilly Goes On the Offensive to Defend Prozac
Wall Street Journal, 1-13-05

An article in a recent issue of the British Medical Journal accused Eli Lilly of withholding secret data from the FDA on its antidepressant drug Prozac that linked the drug to an increased risk of suicide. However, “Lilly [has] produced and submitted to the Food and Drug Administration 16 pages of annotations and explanations for documents that the British Medical Journal [BMJ] used to make its allegations. In the annotations, the company charted out a chronology of its multiple submissions and communications with health regulators that it had been forthcoming about Prozac side effects…The BMJ said that it couldn’t comment because it hadn’t seen Lilly’s response to the documents.”

Nonetheless, early indications are that the BMJ rushed the story to print without extensively researching the authenticity of the claim that they were “secret.” Five pages of these supposedly secret charts “showing that Prozac caused suicidal thoughts and behaviors far more often than the older antidepressants in use” were actually “made by someone at the FDA,” meaning that the FDA was in possession of the data years before the BMJ uncovered it.

If corporations have a responsibility to correct data or articles that create a misleading public impression, so should the BMJ. We look forward to seeing how this issue is resolved.

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CAPITAL: Conflict-of-Interest Disclosures May Not Protect the Unsophisticated
Wall Street Journal, 1-13-05

Is the disclosure that doctors may receive gifts from pharmaceutical companies enough to warn the public about the potential conflicts of interest when doctors are prescribing medicines? One economics professor at Carnegie Mellon University isn’t so sure. “Disclosure can ‘let people off the hook morally,’ Mr. Lowenstein said in a review of his research…A well intentioned doctor or stock analyst may not realize how much his advice is tainted, and the act of disclosure may offer him unjustified relief.” Mr. Lowenstein went on to “call for a ban on all gifts by drug companies to doctors and medical students, even small ones.”

This is a complicated question. However, it should be observed that in the marketplace (or in a doctor’s office) physicians have access to many different types of information from competing companies, peers, medical journals and through personal experience. Furthermore, we could also observe that physician bias is also evident in how doctors are trained. If a patient with prostate cancer sees a radiologist, he will most likely receive radiation therapy for his disease; if he solicits the opinion of a surgeon, he will most likely be counseled to undergo surgery.

How can a patient know which course of treatment is best? Answering that question requires a patient to become an active participant in the diagnostic process, i.e., consulting a variety of sources to arrive at the best decision.

Banning advertising from drug companies, or interaction between physicians and pharmaceutical sales representatives may have some benefits at the margins – but it would also reduce the volume of information flowing to physicians and rob companies of the incentives they have to perform extensive research on their products and tout that research in an open forum, where it can be examined and critiqued. The government’s job shouldn’t be to ban certain types of information or speech, but to ensure that data presented to physicians and the public is as accurate as possible.

Otherwise, the only way to protect patients from all conflicts of interest would be to exclude them from treatment entirely.

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Prostate-Cancer Therapy Leaves Men Prone to Bone-Fracture Risk
Wall Street Journal, 1-13-05

“A common treatment for prostate cancer appears to increase the risk of broken bones. In a study published in today’s New England Journal of Medicine, researchers found that the risk of bone fractures is as much as 54% higher in older men undergoing certain types of androgen-deprivation therapy.”

The therapy – either surgical castration or testosterone lowering drugs – “reduces bone mineral density and increases the risk of osteoporosis,” especially when those drugs are delivered in high doses. While this might seem to be a small trade-off if it saves a life, for some patients “with less aggressive tumors confined to the prostate” the risk-benefit profile may turn out to be quite different. As side effects for older therapies become more clearly defined (like this one) doctors can tailor therapy to minimize risk and researchers can focus on developing new treatments with less serious side effects.

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Savings Uncertain In Import Drug Plan: Questions Raised In Montgomery
Washington Post, 1-13-05

“Montgomery County’s plans to make Canadian prescription drugs available to employees has hit a snag after an analysis by the school system concluded that the practice wouldn’t save as much money as hoped and could be more expensive than domestic sources for drugs.”

The study blamed the lack of savings on fluctuating U.S.-Canadian exchange rates, noting that the declining value of the American dollar has now made it “more expensive for Americans to purchase Canadian drugs with U.S. currency.” The analysis also faulted an earlier study advocating importation as failing to include the cost of shipping medications to the U.S. in its analysis.

Large scale importation programs depend on so many fickle variables that they are certain to run into trouble once they are closely examined. But the reasons for lower Canadian drug prices in general – government price controls and the greater purchasing power of American consumers – aren’t very attractive in and of themselves. Either U.S. policymakers will have to mandate price controls, which will reduce medical innovation, or reduce the buying power of U.S. consumers. Neither sounds like a good option.

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Drug makers offer discount prescription card - TogetherRxAccess would give breaks of up to 40 percent to America's medically uninsured
The Star-Ledger, 1-12-05

“A group of 10 leading drug makers yesterday unveiled a discount card for 36 million Americans who don’t have health insurance. The card will offer breaks of between 25 percent and 40 percent on the cost of prescription medicines.”

The discount card will offer reduced prices on nearly 300 medications, and is free for any non-Medicare patients with “incomes of up to $30,000 for a single person or $60,000 for a family of four.” This is the first time that pharmaceutical companies have offered discounts broadly to the uninsured, including people with incomes three times the federal poverty level.

It is also a welcome signal that the industry is thinking outside the box of federal programs like Medicare and Medicaid. Expanding access to prescription drugs for the uninsured not only improves the public reputation of the companies, it also helps to undermine the illusion that only government price controls can make prescription drugs affordable.

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Commentary

Some Gene Research Just Isn't Worth the Money
Keith Humphreys, Sally Satel, MD, The New York Times, 1-18-05

Two genetic researchers have published a controversial article arguing that federal funding for genetic research should focus on “disorders whose emergence and course cannot be derailed by changes in personal habits or manipulation of the environment. Examples are autism, Type 1 diabetes and Alzheimer’s disease.”

Satel and Humphreys support their recommendation because using environmental approaches to treat some disorders – like addiction – has proven to be very effective. “In the past 20 years, California has reduced smoking to 16 percent of adults from 26 percent through higher cigarette taxes, closer monitoring of sales outlets, restrictions of smoking in public places, endorsement of antismoking attitudes in the general public and better decisions about health by current and prospective smokers.”

The National Institute of Alcohol Abuse and Alcoholism has also found that “three-quarters of adults who once had been alcohol dependent but no longer have alcohol problems never received treatment.”

Setting effective priorities for government research is critical because the government lacks market incentives to target research funding where it can be most cost effective – for instance, literally helping people who cannot help themselves. Consequently, true genetic diseases should be our first priority, especially when other conditions like addiction are much more amenable to changes in public policy.

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FDA Moves Cancer Cures into the Slow Lane
Dr. Scott Gottlieb, Forbes, 1-18-05

Gottlieb says that there is a “dangerous backlash” inside the FDA, “with rank-and-file medical reviewers taking an increasingly cautious approach to the approval of important new medicines.” Worse yet, the Oncology Drug Advisory Committee is becoming more cautious and may be “[clamping] down on the number of cancer drugs qualifying for accelerated approval.”

More stringent standards for accelerated approval “could add years to the development of new cancer drugs, and require more of them to undergo all three phases of clinical trials, rather than letting the most promising new drugs that target unmet medical needs onto the market after only two rounds of clinical study, as is now customary.”

This could be very bad news for medical innovation, if investors in biotech companies conclude that the enormous resources required to shepherd new drugs through development and FDA approval could be better spent elsewhere.

Gottlieb concludes that the FDA’s new go-slow approach might keep it out of the news cycle or safe from Congressional criticism – but it will inevitably hurt cancer patients desperate for new treatments.

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A Gift for Drug Makers
Bob Herbert, The New York Times, 1-14-05

Herbert calls a ban on punitive damages against pharmaceutical companies “an unconscionable degree of protection” and a “bonanza” for industry.

“The whole idea behind punitive damages is to severely punish the most egregious offenders,” Herbert says. But, in that case, what standard establishes egregiousness if a firm has complied with all relevant laws and regulations?

Some safe harbor should be granted to corporations that make a good faith effort to behave responsibly. Until that happens, punitive damages will be meted out arbitrarily and pharmaceutical companies will avoid research on risky treatments. Our colleague Jim Copland, on our sister site Point of Law sums up the issue neatly as follows: “eliminating [punitive damages] when a drugmaker has complied with the FDA would lower costs on innovation, thus spurring drug development and/or lowering costs.”

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Editorial: Drug Trade
Washington Post, 1-13-05

The Washington Post agrees that “legalizing importation would be bad policy,” and that the “current system is…politically and morally unsustainable.” The Post says that it isn’t fair that American consumers pay top-dollar for their medicines while other nations – like Canada and Germany – impose price controls on pharmaceuticals and free ride on American innovation.

The Post thinks that the “U.S. government ought to intervene, at the international level, to push harder for more equitable drug prices around the world.” This has begun to happen “in a very minor way,” for instance in the recent U.S.-Australia free trade agreement, but much more needs to be done. “If the Bush administration does care about inequities in international drug pricing, it should start using its diplomatic and trade leverage more aggressively to address them.”

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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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NEWS

Gene-Based Drug Research Takes Shape at Novartis
Wyeth Nears Diet-Drug Settlement: Company Sets Framework With Plaintiffs' Lawyers For Most Remaining Cases
Nursing Employees Back to Health: Employers Battle Ailments That Sap Productivity, With Drug Makers' Help
Eli Lilly Goes On the Offensive to Defend Prozac
CAPITAL: Conflict-of-Interest Disclosures May Not Protect the Unsophisticated
Prostate-Cancer Therapy Leaves Men Prone to Bone-Fracture Risk
Savings Uncertain In Import Drug Plan: Questions Raised In Montgomery
Drug makers offer discount prescription card - TogetherRxAccess would give breaks of up to 40 percent to America's medically uninsured

COMMENTARY

Some Gene Research Just Isn't Worth the Money
FDA Moves Cancer Cures into the Slow Lane
A Gift for Drug Makers
Editorial: Drug Trade
Center for Medical Progress 
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