FDA Regulation & Medical Innovation Category

The discovery of rare side effects from some drugs and medical devices and has left politicians and the media clamoring for more extensive and onerous pre-market and postmarket scrutiny of products regulated by the Food and Drug Administration. But there is no evidence that reliance on additional "one-size-fits-all" standards, or an unbalanced focus on product risks as opposed to benefits, will make products safer – and it will certainly make patients wait longer for potentially life-saving drugs and medical devices. MPT’s prescription for reform is to utilize the latest scientific advances to streamline regulation and spur the adoption of more personalized medical therapies that help patients and their physicians make more informed choices.

I grew up, as did many people, believing that government agencies protected us in many ways. It seemed obvious that an agency named the Environmental Protection Agency protected the environment from would-be polluters and the Department of Education advanced the educations of Americans. As an aside, the government has long been acutely aware that names matter, which is why bills are named the Affordable Care Act and the Clean Water Act. Who could be against affordable care or clean water?

As I got older and went to college and then graduate school, I took economics and public policy classes and learned the problems with government agencies and the benefits of freedom, decentralization, spontaneous order, and self-regulating free markets. I changed my views and saw government agencies, such the U.S. Food and Drug Administration, in a new, more critical light. My perspective changed again, slowly and largely imperceptibly, when I went to work in the pharmaceutical industry. I was so busy dealing with my new responsibilities that I virtually stopped thinking about public policy issues. Then, one day, I noticed that I again believed in the FDA. If we didn't have the FDA, I thought, what menagerie of dangerous and inefficacious drugs would be on the market? Without the FDA, Americans could be dying. My thinking had come full circle, largely in the background and on automatic pilot.

This didn't mean that I liked or even respected the FDA, as I heard all the damning stories of the FDA's internal workings. I think at this point, however, my views were pretty consistent with many employees in the pharmaceutical business: The FDA was a messed up government bureaucracy that still performed a critically important function.

These days I think and write more about drug regulation and the FDA and my views have continued to evolve. I'm excited because I'm thinking about these issues more clearly than before, but I keep coming back to the same question: Do we really need the FDA?

I'd like to hear the stories of others. Have you always had the same view of the FDA and drug regulation? Has it changed over time? If so, why? What triggered the change? If it hasn't changed, when did you first become aware of your view?

As Milton Friedman once said, "I don't think the state has any more right to tell me what to put into my mouth than it has to tell me what can come out of my mouth." Of course, the state doesn't agree and the FDA's whole raison d'être is to tell us what we can put into our mouths.

Now consider Andrea Sloan, a vibrant woman fighting advanced ovarian cancer. She has been through countless therapies that have kept her cancer in remission, but it has returned once more. Now her doctor informs her that she has run out of options. "We had the conversation where he told me to get my affairs in order." In other words, prepare to die.

In the midst of this despair, she learned of an experimental drug, named BMN 673, which is being developed by the California biotech company, BioMarin. According to Dan Spiegelman, chief financial officer: "As a phase two small patient study goes, it's as good as it gets. We think our numbers stack up well at this level. The drug is clearly the most potent of the compounds we're talking about." BMN 673 may yet help Sloan with her ovarian cancer.

Of course, any drug, even an approved and marketed drug, has risks. Sloan understands these risks and still wants to try BMN 673. "I just want a chance to live a long and healthy life and I'll continue fighting until I get it." In other words, she's going to die anyway, so why not try a drug that might possibly work? A chance of living is always better than no chance.

There's one big problem. The FDA has not approved BMN 673 and BioMarin is not offering BMN 673 under a so-called compassionate use program. Now, you might blame BioMarin for not offering this new drug to Sloan and perhaps BioMarin deserves to be rebuked. But BioMarin is only a player in the drug development game and it is the FDA that wrote the rules. The FDA does allow companies to give experimental drugs to people in certain life-or-death situations. However, if Sloan suffered some sort of problem or, worse, died while taking BMN 673, it could preclude the subsequent development and FDA approval of BMN 673.

Companies know how difficult and dangerous the FDA's drug approval process is and they respond rationally by behaving conservatively. This is an example of that behavior. If Milton Friedman got his way and the state didn't tell us what we could put into our mouths, I have no doubt that Andrea Sloan would already be on BMN 673 therapy. This is just another example of how the FDA's policies kill Americans, all the while presenting BioMarin as the bad guy who says "no."

The pharmaceutical industry - collectively and often individually - has tarnished its own reputation through unethical commercial practices such as off label promotions, bribery in China, covering up (or at best, not being as forthright as they might have been) safety concerns, and manufacturing problems leading to massive recalls. Besides creating their own problems, other players in the healthcare industry have pointed the finger of blame at pharma companies as a major cause of runaway costs.

Pharma companies are constrained in what they can say and how they communicate with key stakeholders such as the public or physicians. Whether they are marketing a particular product, or the company as a whole, they are limited by regulations and their message is likely to fall upon a skeptical (if not hostile) audience. Any attempt to get their own message out is undermined by the perception that they are greedy and self-serving.

While there has been increasing pressure for companies to publish all of their clinical trial data for some time, they can at least control the timing and method of its release. The publishing of data could be timed with the news cycle to enhance positive news and downplay anything that might harm the company's reputation.

Today, however, much of the data about marketed products is generated and stored beyond the control of the manufacturers, whose ability to manage their reputation is further weakened. As real-world evidence becomes more pervasive - and a more critical component of reimbursement decisions - control of that data will reside with payers, providers, and analysts more than with Pharma manufacturers.

Additionally, considering the abundance of unstructured and often non-validated data communicated about a product through "new media" such as health-care chat rooms, blogs, Facebook, and Twitter, it is easy to see how reputation management has become increasingly difficult for manufacturers to influence - let alone control.

Healthcare is one of the most popular topics discussed on the Internet. Chat rooms are full of patients, caregivers, and physicians discussing diseases, treatments, and side effects - all unregulated and often non-validated. While Pharma companies can monitor what people are saying, there's very little regulatory guidance on how they can and should participate. How should they be able to address misinformation? Do they have a duty to report side effects discussed in a chat room?

How Pharma companies manage their reputation in a world where the data is out of their control will be an increasing focus in the years ahead.

The U.S. market for prescription drugs is dominated by me-too products.

Just not the kind that is much maligned in the press. Pharmaceutical companies are often attacked for spinning out "me-too" drugs that are only slightly different than earlier versions, but cost as much (or more). The real story there is a bit more complicated, but let's save that argument for another day.

The real "me-too" drugs sold in the U.S. are generics, i.e. drugs that are (for the most part) exact copies of branded (patent-protected) drugs, but sold at a fraction of the price. According to a recent report by IMS health, generics account for the vast majority of all U.S. prescription drugs - a whopping 84%. IMS estimates that by 2016 this figure will rise to 87%. This is a sea change from the late 1990s, when generics only accounted for about 40 percent of the market.

Is this good for patients, and for the health care system? Yes. Is this bad for the patients, and the health care system? Yes. It depends on whether you look at the short run or long run, and what aspect of the system you want to focus on.

First a little history and some explanation: Why are generics, from a volume perspective at least, dominating the U.S. market?

The pharmaceutical industry is, as we've said many times, largely a victim of its own success. The late 1980s and 1990s saw a slew of "blockbuster" drugs launched (Prozac, Prilosec, Zocor), largely for primary care indications like depression, high cholesterol, and acid reflux. This strategy generated billions in profits for the industry, because these indications represent very large patient populations, and patients have to take some of these drugs indefinitely - perhaps for the rest of their lives.

Blockbuster has something of a pejorative connotation, but drug treatment can represent a very cost-effective way of preventing more dangerous and much more expensive complications. Harvard health economist David Cutler, for instance, has estimated that effective use of recommended antihypertensive medicines avoids 833,000 hospitalizations and 86,000 deaths annually. And if untreated hypertensive patients were effectively treated, it could prevent another 420,000 hospitalizations and 89,000 premature deaths.

Even the Congressional Budget Office (CBO), which is very conservative when it comes to estimating offsets for health care innovations, estimates that a 1 percent increase in Medicare Part D prescription drug spending saves about 0.2 percent in other Medicare costs.

But all good things must come to an end, and all patents come with an expiration date. Blockbuster drugs patented in the 1990s or early 2000s have already lost patent protection or will do so in the next few years.

This leaves industry with a pipeline problem, since they haven't produced anywhere near enough new drugs to compensate for the products going generic. And this explains the sea change: companies just aren't moving enough patients onto new drugs as patents expire. When a generic is available, patients will chose the generic 95% of the time. In fact, this year, for the first time ever, total U.S. drug spending actually declined, at least in part because of this tremendous shift towards generics (IMS suggests other factors as well).

Why have branded companies had so much trouble filling their pipelines? They've run into something of a perfect storm.

The FDA has raised the bar for approving drugs for primary care indications, and insurers are also scrutinizing new drugs more closely when it comes to reimbursement. After being stung by rare side effects linked to FDA approved drugs like Vioxx, Avandia, and Phen-Fen, the FDA wants more data from larger clinical trials for primary care indications to rule out rare side-effect problems for drugs that are likely to be used in hundreds of thousands, or maybe even millions, of American patients after the FDA grants marketing approval. This means more tests, larger trials, and closer scrutiny of the potential for rare side effects.

Arguably, this makes sense. With many good, effective drugs already approved, regulators and payers are inevitably going to look askance at new drug candidates that don't have a clear safety or efficacy advantage over existing, and very cheap, generic medicines.

But with development costs rising (due to the aforementioned FDA regulations), industry is rationally going to walk away from developing products that might have incremental benefits, but can't generate sufficient profits to justify the investment required to bring them to market. So products that might have been commercially viable - and would make a real difference to patients - a decade ago just aren't sustainable today.

Scientifically, the low hanging fruit has been picked. If you're looking, for instance, for a drug to lower the risk of heart attacks, we've got LDL cholesterol pretty clearly licked, and you're going to have to look elsewhere (scientifically) to gain a competitive position in a patient population that is taking generic atorvastatin (formerly Lipitor).

So companies find themselves chasing novel mechanisms of action where the science is less well understood. Pfizer, and other companies, got into trouble in this area when they went after drugs to raise HDL cholesterol, and found that, in cases like torcetrapib, raising HDL cholesterol actually resulted in more deaths, not fewer - which was the opposite of what the research had previously suggested.

As companies chase more novel targets they face more scientific, financial, and regulatory risks. Add to this the fact that big time investments in genomics and other new strategies haven't (yet) paid off as handsomely or as quickly as many expected, and you've got a (at least in the short term) a severe pipeline problem.

Bigger isn't necessarily better. As pipelines thinned or slowed, companies looked to restock their shelves and improve their earnings through consolidation, i.e., insourcing other people's pipelines. From a balance sheet perspective, this can make a lot of sense, but it's also a one shot strategy - financial gains from consolidation, in terms of combining sales forces and drawing in outside revenues, can only happen once. Consolidation also makes sense given the regulatory environment (which requires more sophistication) and reimbursement environment (i.e., having more products on market gives you additional bargaining leverage with large insurers and PBMs).

But from an innovation perspective, this approach may not be effective. It's not clear that when you take two different R&D teams, with different cultures and approaches to doing research, each of which might be successful independently, and cram them together - along with the associated layoffs - you're really better off. You just might be more schizophrenic.

Where does that leave industry and patients? Increasingly, companies are focusing on "unmet medical needs" - in therapeutic areas like cancer, multiple sclerosis, cystic fibrosis, and other orphan diseases where there are few good treatment options and less generic competition. This is good for patients, who literally face life and death challenges, and it also gives industry some (frankly) much needed revenues to fund ongoing R&D.

The FDA approved 39 new drugs last year, a record, but 19 of those were for either cancer or orphan diseases. IMS also notes that out of the 28 drugs launched from last year's approvals (a number were approved late in the year, and weren't launched until 2013), representing $10.8 billion in new drug spending, specialty drugs accounted for $7 billion. That gives you a pretty good picture of where the industry's growth strategy is pointed, at least for the time being.

So are we headed to a two tiered market, where generics dominate (at least by volume) for primary care indications, and pharma/biotech focuses on specialty indications? And if that is the industry division of labor, is it sustainable?

Some of the new specialty treatments, like Kalydeco, are also truly game changers for patients. Although Kalydeco helps just 4% of cystic fibrosis patients, the drug seems to be an effective cure for those patients. That's tremendous science, and should be applauded. Cancer is another area where the industry is poised to make tremendous gains.

But all of these medicines are tremendously expensive, because of the "numbers" problem: With a smaller patient population, companies have far fewer (i.e., thousands or even hundreds) patients over which to spread their development costs and generate profits, especially since effective patent times have been flat or declining. Kalydeco, for instance, costs $294,000 annually.

As more expensive products push into the rare disease space, insurers and government payers are eventually going to balk at paying those prices, and they already are to some extent - requiring much higher co-pays from patients for some drugs.

On the other hand, the shift away from primary care indications is deeply troubling because of the enormous impact of chronic disease on patient health and the economy (through both direct and indirect costs, like lost productivity). Diabetes, heart disease, stroke and drug resistant pathogens all require much better treatments.

Burden of chronic disease.png
Source: http://www.chronicdiseaseimpact.com/

Without a different approach from the FDA, and a reimbursement environment that rewards incremental and breakthrough innovations in these disease areas, to say nothing of Alzheimer's, we're looking at a tsunami of health care costs and expensive complications from these diseases as the population ages.

The Solution: Broaden Innovative Pathways to Market for All Indications

Policymakers are apt to cheer cheaper generics today without thinking deeply about the implications for innovation tomorrow. Fundamentally, there is a very clear tradeoff between lower drug prices today, and less innovation for patients tomorrow.

The Obama Administration, for instance, seems blissfully untroubled by the implications of imposing Medicaid price controls on Part D, or reducing exclusivity for biologic medicines down from 12 years to 7. The former would save an estimated $123 billion over 10 years, and the latter would save $3 billion over the same time period--but the lost revenues would clearly reduce the industry's capacity to invest in innovation. And research suggests that future innovation has far higher returns to society than lower drug prices today - something on the order of 3-1 - but current policy debates are much more short-sighted than economics suggests that they should be.

What can we do to change the equation? Policymakers should encourage innovation across many different disease areas, both primary care and specialty.

For starters, we should revisit Hatch-Waxman, and slow the erosion in effective patent times so as to encourage more innovation. Companies should get back all of the patent time they lose in FDA mandated clinical trials and drug reviews. This won't prevent a single drug from going generic, but it will allow drug makers to spread their costs over more years, and help reduce short term pricing pressures.

Second, we should expedite pathways for new or repurposed drugs targeted at subgroups of patients. Drugs that come to market with companion diagnostics could be granted short patent extensions, say six months. Taking old generics and developing new uses for them, including conducting the clinical trials required for FDA approval, should be rewarded with new patent or marketing exclusivity. Repurposing old drugs is less expensive than developing new drugs, given that significant data already exists on their safety profile and mechanism of action. Encouraging more co-development of drugs and companion diagnostics will increase their cost-effectiveness, and help energizing the diagnostics industry. (Here, the MODDERN Cures Act is a great step in the right direction.)

Finally, FDA approval pathways - like accelerated approval or the new Breakthrough Therapies designation - need to be opened other classes of drugs beyond cancer, orphan drugs, and HIV. Here, the Obama Administration can heed the excellent report from the President's council of scientific advisors on doubling drug innovation in the U.S. over the next decade.

The agency and its stakeholders should develop standards for using novel biomarkers and adaptive clinical trial designs to approve drugs for targeted populations for primary care indications and antibiotics as well as specialty and orphan drugs. This would help industry, as well as society, replenish our supply of new medicines in these vital areas.

In the short run, the triumph of generics may seem like financial a windfall to payers and consumers. And largely, it is. But with an aging population, these gains will be short lived and will be far outweighed by the human and economic cost of lost or foregone innovations tomorrow.

As a follow up to our post last week on Katherine Eban's disturbing article on Ranbaxy's massive fraud on the FDA, we thought we'd follow up with a closer look at the U.S.-India trade environment, particularly with regard to pharmaceuticals and intellectual property rights (IPR).

The U.S. runs an $18 billion trade deficit with India, of which approximately $4.5 billion (or 25 percent) is attributable to pharmaceuticals, primarily generic drugs. Although India is an attractive and growing market for U.S. companies, U.S.-based pharma companies have been hesitant to invest in India or to make more of their products available to Indian patients for fear that their IPR will be stolen by Indian companies - with the blessing of the Indian government and courts.

These concerns are not unfounded. In a May 2013 report from the U.S. Trade Representative, India was highlighted on the USTR's "Priority Watch List" for countries with weak IPR and enforcement.

While investors have been hoping for several years that India would strengthen its IP regime and begin to move up the pharmaceutical value chain by producing more innovative pharmaceuticals, it seems to be a case of one step forward, two steps back. The USTR notes that:

In many areas, however, IPR protection and enforcement challenges are growing, and there are serious questions regarding the future condition of the innovation climate in India across multiple sectors and disciplines. ...

In the pharmaceutical sector, some innovators are facing serious challenges in securing and enforcing patents in India. ...

The United States is concerned that the recent decision by India's Supreme Court with respect to India's prohibition on patents for certain chemical forms absent a showing of "enhanced efficacy" may have the effect of limiting the patentability of potentially beneficial innovations. Such innovations would include drugs with fewer side effects, decreased toxicity, or improved delivery systems. Moreover, the decision appears to confirm that India's law creates a special, additional criterion for select technologies, like pharmaceuticals, which could preclude issuance of a patent even if the applicant demonstrates that the invention is new, involves an inventive step, and is capable of industrial application.

The United States will also continue to monitor closely developments concerning compulsory licensing of patents in India, particularly following the broad interpretation of Indian law in a recent decision by the Indian Intellectual Property Appellate Board (IPAB).... In particular, India's decision in this case to restrict patent rights of an innovator based, in part, on the innovator's decision to import its products, rather than manufacture them in India, establishes a troubling precedent. Unless overturned, the decision could potentially compel innovators outside India - including those in sectors well beyond pharmaceuticals, such as green technology and information and communications technology - to manufacture in India in order to avoid being forced to license an invention to third parties.

In other words, India is clearly maintaining policies designed to bolster its domestic generic pharmaceutical industry profits at the expense of foreign competitors and IPR.

When the patent for Novartis' leukemia drug Glivec was overturned, for instance, Novartis was already giving away, for free, supplies that met 95% of the Indian oncology market, selling just 5 percent of its product to the small sliver of insured or affluent Indians that could afford pay a higher price or co-pay for the drug. That's hardly a record of profiteering on human misery.

Indian courts have also overturned patents on drugs like Glivec, Bexxar, and Viread.

At the end of the day, Indian generic companies don't subsist on charity. Indian companies make billions in profits from sales to customers in other affluent and mid-market nations, including the U.S. (about 40% of all pharmaceutical Indian exports), Latin America, and the European Union. Wealthy country taxpayers also underwrite the Indian industry, since 70% of the drugs purchased through international aid programs come from India.

Because generic drug companies don't have to conduct clinical trials to prove that their products are safe and effective, producing generic drugs for export is an enormously profitable business, allowing generic drug companies like Ranbaxy to become large multinational companies in their own right (Ranbaxy currently is the 9th largest drug company in the U.S.; overall, Indian exports around $11 billion in drugs annually.)

As the Ranbaxy case shows, however, the sheltered treatment of Indian generics firms like Ranbaxy from domestic regulators and international aid groups appears to have led to a culture of complacency, entitlement, and greed. As Eban writes,

[Ranbaxy's own] confidential report laid bare systemic fraud in Ranbaxy's worldwide regulatory filings. It found that "the majority of products filed in Brazil, Mexico, Middle East, Russia, Romania, Myanmar, Thailand, Vietnam, Malaysia, African Nations, have data submitted which did not exist or data from different products and from different countries ..." The company not only invented data but also fraudulently mixed and matched data, taking the best results from manufacturing in one market and presenting it to regulators elsewhere as data unique to the drugs in their markets.

Sometimes all the data were made up. In India and Latin America, the report noted the "non-availability" of validation methods, stability data, and bio-equivalence reports. In short, Ranbaxy had almost no method whatsoever for validating the content of the drugs in those markets. The drugs for Brazil were particularly troubling. The report showed that of the 163 drug products approved and sold there since 2000, only eight had been fully and accurately tested. The rest had been filed with phony data because they had been only partially tested, or not at all.

No corner of the globe was untouched by Ranbaxy's fraud - including drug's purchased by the World Health Organization's antiretroviral programs in Africa.

In other words, Ranbaxy fell into the trap that all domestic industries that are shielded from international competition eventually fall into: shoddy quality, bloated profit margins, and negligent management.

Competition is the best solution to this problem. Large Western pharmaceutical companies are increasingly recognizing that there is a business and a moral case to be made in pricing both new products and branded generics at prices that are affordable in many developing nations.

Partly, this is because the market for their products in wealthy countries is saturated, with sales flat or declining (thanks in part to patent expirations, the total value of the U.S. prescription drug market actually declined in 2012, according to IMS). Not only does the developing world represent a new sales and profit opportunity, Western companies can compete on quality - backing up, with their brands, the quality of their product in markets where fake or substandard products routinely sold to patients.

Broadly, Western companies are also making much better efforts to expand access to their newer products. GlaxoSmithKline, for instance, caps prices of its products in 49 of the world's poorest countries at 25 percent of their developed world prices.

GSK and Merck have also pledged to make their rotavirus vaccines available to developing countries at sharply reduced prices through the Global Alliance for Vaccines and Immunisations (GAVI). Gilead, a leading innovator in HIV/AIDS either sells its life-saving AIDS medicines at little or no profit in poor countries, or licenses them (as in the case of South Africa) to local producers who sell them at affordable prices.

How does this relate to intellectual property rights and Ranbaxy's fraud?

Strong IPR regimes in developing countries - including India - will encourage large Western firms to expand access and sales even more broadly in developing markets.

Protecting IPR would also open India's domestic market to more foreign direct investment, injecting the much-needed expertise, technology, and adherence to international regulatory norms into India's pharmaceutical industry. This would be a win-win, for India, which would be able to raise the quality of its generic products while also expanding into the production of branded drugs.

Generic companies that make excess profits selling substandard drugs are the only companies who have anything to fear from greater competition. Indian patients would benefit from improved access to higher quality, but still affordable generic and branded medicines.

Ironically, regulators in the U.S. and EU - when they pay attention, as they likely will now - already have enough muscle to police Indian companies. It is the world's poorest countries, where regulation is weakest, who have the most to gain from bringing international regulatory and IPR standards to bear on Indian manufacturers.

India won't likely get serious about fixing its lax regulations and weak IPR restrictions until Congress and the Obama Administration signal that the status quo is unacceptable, given the risk to American patients. And if they don't, America should look elsewhere for high quality generic drugs.

If you haven't read Katherine Eban's gripping (and somewhat terrifying) exposé of gross fraud and deception at the Indian generics multinational Ranbaxy, you don't know what you're missing. Or more accurately, what might have been hiding in your medicine cabinet for the better part of a decade. Eban writes that,

On May 13, Ranbaxy pleaded guilty to seven federal criminal counts of selling adulterated drugs with intent to defraud, failing to report that its drugs didn't meet specifications, and making intentionally false statements to the government. Ranbaxy agreed to pay $500 million in fines, forfeitures, and penalties -- the most ever levied against a generic-drug company. (No current or former Ranbaxy executives were charged with crimes.) ...

Fortune's account of what occurred inside Ranbaxy and how the FDA responded to it raises serious questions about whether our government can effectively safeguard a drug supply that last year was 84% generic, according to the IMS Institute for Healthcare Informatics, much of that manufactured in distant places. More than 80% of active pharmaceutical ingredients for all U.S. drugs now come from overseas, as do 40% of finished pills and capsules.

In a nutshell, Ranbaxy duped the FDA and other international regulators for years, fabricating documents and tests that the drugs it was selling met regulatory requirements for safety and efficacy, especially in comparison to the innovator medicines they were meant to mimic.

The story isn't likely to end with last week's settlement, since Ranbaxy has already said it is laying off 1/3 of its global sales force, and the company's officers may still face additional criminal charges or lawsuits from individual consumers.

For years (exactly how long is unclear) Ranbaxy submitted fake data to the FDA, falsifying or backdating records requested by regulators, and substituting tests on branded drugs for their own putative manufacturing runs. The scale of the fraud is breathtaking, and calls into question how the FDA could've been fooled so thoroughly for so long.

Most disturbingly, we don't know if Ranbaxy is a rogue actor or the tip of a corrupt iceberg in the loosely regulated Indian pharmaceutical industry. This is especially disconcerting given that Indian drugmakers have been growing their stakes in the U.S. generics market.

Generic Drug Share.png
Source: http://thomsonreuters.com/content/science/pdf/ls/newport-deals.pdf

FDA regulators and inspectors have a tremendous workload, especially as the industry has shifted to a global manufacturing model. They simply cannot inspect every manufacturing facility outside the U.S. on the same schedule they do for the U.S. (According to the GAO, 40% of domestic facilities are inspected every year; which means U.S facilities are inspected about once every two-and-a-half years; internationally, that falls to around 11% or once ever nine years). (To the agency's credit, they have been making progress in inspecting more facilities, as the GAO report notes.)

Broadly speaking then, the FDA regulatory system operates on trust. Trust that the data submitted to the agency by the regulated companies and their contractors is genuine. This is different from a rogue contractor substituting substandard ingredients in Heparin, or oncologists buying drugs on the internet in an effort to boost their margins. Here we have a large multinational company, the ninth largest generic drug company in the U.S., and the second largest drugmaker in India (just behind Abbot's Indian subsidiary) simply thumbing its nose at U.S. and E.U. regulations with a sense of total impunity.

Last year's PDUFA agreement, FDASIA, for the first time included a new generic prescription drug user fee program, to allow the FDA to hire more reviewers to review - and likely expedite - generic drug applications. Hopefully, this will also lead to more scrutiny of companies, like Ranbaxy, that operate outside the U.S. (as per GAO's recommendations) and whose manufacturing facilities face less scrutiny from U.S. regulators - and weak enforcement from domestic regulators.

FDASIA also contains provisions for increasing the inspection of foreign facilities, and for working with foreign regulators to task agency inspectors at the highest risk facilities (less inspections, for instance would be required in the E.U.) and more in higher risk countries with lax regulation, like India.

But the FDA is never going to be able, for cultural and logistic reasons, to simply show up at Indian plants and deliver the same degree of scrutiny that they can at U.S. based operators.

Here's another idea: Congress should consider requiring the FDA should to utilize its own or private laboratories to conduct spot inspections of foreign generic drug shipments on a regular but random basis to ensure that companies (especially those without a proven record of consistent quality) haven't run up a "test batch" for FDA scrutiny and then later substituted substandard or adulterated drugs for the U.S. market.

This should be done on a "trust but verify" basis, with more frequent spot inspections from high risk countries or suppliers with a spotty safety record, with inspections tailing off after the company demonstrates it can consistently deliver high quality products.

The results of all FDA testing should be shared with the public, on a website, to name and shame companies that don't meet FDA standards (and help consumers identify those that do). If a company batch fails a testing requirement, they should be fined and a larger inspection of that entire drug line should begin.

If widespread problems are detected sanctions should escalate rapidly, and repeat offenders should be debarred from selling to any federal programs and/or loss of Hatch-Waxman exclusivity until the problems are resolved. The key will be to prevent companies like Ranbaxy from playing shell games with the agency while violations drag on for years.

These may seem like harsh penalties - and the FDA is rightly concerned about drug shortages for critical medicines - but until the FDA and Congress signal that the integrity of the U.S drug market is a priority, unscrupulous firms will bet that their frauds will go undetected and unpunished.

The 1984 Hatch-Waxman Act has led to a sea change in the U.S. drug market, accelerating generic drug access and rewarding companies that are "first to file" successful patent challenges with six-months of exclusivity. But the enormous financial stakes, combined with fiercely competitive generic industry, may push companies to cut corners in an effort to lower costs and maintain high profit margins. This is what seems to have happened at Ranbaxy.

Worse yet, Eban's article implies that Ranbaxy's substandard drugs may have killed people, including AIDS patients in Africa. A list of drugs currently supplied by Ranbaxy includes medicines for anxiety, high blood pressure, Alzheimer's, depression, and malaria. Poorly controlled disease due to substandard medicines could've easily led to serious hospitalizations or deaths for these indications.

The FDA says that it doesn't think that anyone was harmed by these drugs, and the vast majority of generic medicines are (probably) safe. But Eban's article should shake everyone's confidence. Given the size of the U.S. market, and the relatively high background rate of morbidity and mortality for many chronic diseases, it might be very difficult to detect complications or side effects resulting from Ranbaxy's drugs. But that doesn't mean that they aren't there. And this isn't the first time that the FDA has had to walk back assurances of generic drug effectiveness or safety.

Whatever you think of the FDA's approach to regulation of innovator drugs, this is one area that conservatives and liberals should rally together and demand higher standards. The Ranbaxy story strikes at the heart of the FDA's core mission of ensuring that a drug is safe, contains the ingredients listed in the label, and performs as advertised compared to its branded cousin.

It's especially disquieting that it took the FDA years to crack down on Ranbaxy, and that the agency continued to approve Ranbaxy drugs - including generic Lipitor (which itself erupted in a scandal due to glass particles being found in the drug) - long after whistleblowers were feeding the agency inside information.

Here's one final question this time for Indian patients, policymakers, and international aid groups that have championed India's generic drug industry: If Ranbaxy is willing to treat its largest and most important market with complete contempt, what standards operate inside India or other developing countries, especially when, as Eban notes, Ranbaxy's own executives refused to expose themselves or their families to the firm's drugs?

In the U.S., the expansion of the FDA's powers to regulate drug safety grew out of a number of scandals and deaths that called into question the industry's ability to self-regulate. If India wants to continue to have access to the U.S. market, Indian policymakers should seize this opportunity to raise the quality level across the entire industry, and prevent even worse scandals down the road.

If Indian regulators don't act, Congress should restrict access to the U.S. market until they do.

(Roger Bate, at AEI, provides an excellent overview of quality problems afflicting the Indian generic drug market. He also suggests that one of the forces inhibiting the development of a "quality first" drug culture at Indian pharma firms is the country's weak intellectual property regime, which discourages foreign companies operating in more stringent regulatory environments from investing in Indian subsidiaries. From this perspective, it will be interesting to see if Daiichi Sankyo's takeover of Ranbaxy will help change the company's dysfunctional corporate culture. Or maybe the Japanese company will find some way to walk away, given the current scandal.)

I'm going to have a little fun with Josh Bloom's recent posting, not because I don't respect him or his writing--I do--but because we can use it to illustrate an important point.

His posting was about Merck and Liptruzet and he asked how Merck could look itself in the mirror when "Merck is trying something that is as good an example of marketing without innovation as you'll ever see." He went on to say, "Liptruzet behaved, as expected, just like Vytorin. It reduced LDL cholesterol more [than] for patients who took Lipitor alone, but it did not reduce patients' chances of developing heart disease. Not surprisingly, this left some doctors to wonder why it was approved at all."

In other words, if Merck can't prove that Liptruzet does more than just reduce LDL, then it's just a big marketing scam. For fun, let's gain some perspective by substituting Merck with Ford and Liptruzet with the F-150 pickup.

"The Ford F-150 pickup carries workers and tools to jobsites around the country. It has been used for carpentry, masonry, steel working, HVAC, concrete, logging, plumbing, and roofing, but, at least so far, Ford has been unable to prove that the F-150 can do other, even more amazing things. With the F-150 pickup, Ford is trying something that is as good an example of marketing without innovation as you'll ever see."

Perhaps Ford has not proven the F-150's ability to do other amazing things because those things are difficult or expensive to prove. Or perhaps the study is underway, as is Merck's IMPROVE-IT study of Vytorin. Maybe down the road someone will show that F-150's can be used for other, important things. Or, maybe not. In the meantime, the stuff the F-150 does is still impressive and, by being on the market, it gives consumers a choice and provides competition for Dodge, Chevy, and Toyota.

If customers did not see the value in F-150's, they wouldn't buy them. The fact that they do buy them shows that they see value. And these are the people who are most directly affected by owning a new pickup, as opposed to outside "experts" who might have different values and preferences, and certainly have less skin in the game.

Pharmaceuticals are somehow seen as different. The opinion that Liptruzet shouldn't be given a chance on the market shows little respect for the ability of patients, physicians, and payers--the real people who take, prescribe, and purchase drugs--to form their own opinions based on their own experiences. I, for one, would prefer the pharmaceutical market to be more like the automotive market.


At the end of last night's Intelligence Squared debate, 53 percent of attendees thought so - up from 24 percent at the beginning.

So what is it that swayed a room of oncologists, physicians, and even celebrities like the father of DNA, Jim Watson? Arguing for the motion were former FDA Deputy Commissioner and American Enterprise Institute Resident Fellow, Dr. Scott Gottlieb, and Manhattan Institute Senior Fellow, Peter Huber. The duo made a compelling, if somewhat wonky (try explaining the difference between Bayesian and frequentist statistics in under a minute), case that the FDA's aging clinical trial requirements are ensuring that the most needed medicines - those that treat diseases like Alzheimer's, antibiotics that are effective against resistant bacteria, and many others - will either never make it to market, or will take years longer than what is reasonable.

Indeed, listening to Dr. Gottlieb and Huber, it becomes evident (as we've discussed on MPT numerous times) that the large population requirements and the onerous statistical certainty that the FDA requires are keeping drug development from progressing - moving from treating the average patient to treating the individual. A glimmer of hope, however, remains. The FDA has demonstrated its ability to be more innovative in the past - its fast track and accelerated approval designations helped get cancer drugs and HIV/AIDS drugs to market in record time. As Huber put it, the very existence of a fast track designation, indicates that there is something patently wrong with the standard trials.

But what about the other side? Surely there is an argument to be made in favor of the FDA's caution. Arguing against the motion was Dr. Jerry Avorn of Harvard Medical School, and Dr. David Challoner, VP for Health Affairs Emeritus at the University of Florida. The crux of the rebuttal, however, was not quite as compelling - in essence, Avorn and Challoner believe that the FDA is approving drugs fast enough, and requiring them to do so any faster would be very risky. The statistical certainty demanded by the FDA is a necessity for an agency charged with ensuring the safety of our food and our medicines. In years that few drugs were approved, they argued, the fault lies with the pharmaceutical industry for not coming up with enough new drug candidates.

The problem with this line of reasoning is twofold: first, Huber's point on the fast track designation is on the money. The fact that fast track and accelerated approval designations were necessary to get urgently needed drugs on the market is in and of itself an indictment of the clinical trial process. Certainly, cancer drugs often do much harm to the patient, and AIDS cocktails were notoriously rife with side effects. But it's hard to imagine that anyone would have preferred having these two drug classes go through the decade-long development process of FDA clinical trials.

The second problem with Avorn and Challoner's reasoning is that it ignores an important class of drugs - antibiotics. Over the past two decades, antibiotic resistance has become a growing public health problem, and many of our last-line antibiotics are beginning to fail (cephalosporins are often not effective against gonorrhea, for instance). New antibiotics are hard to come by, however, because of a variety of reasons (an important one is that the "low-hanging fruit" has already been picked), but chief among them are the stringent requirements for antibiotic trials set by the FDA - these requirements are designed to meet a level of statistical certainty, but this often make antibiotic development impractical or prohibitively expensive.

Nevertheless, this is a debate that is likely to continue. While the FDA has acknowledged that some of its guidelines may need to be updated, the agency has been slow to issue definitive and easy-to-follow guidance to guide the development of personalized medicine. Hopefully, officials at the agency were paying attention to last night's debate.

The discovery of a new drug-resistant strain of gonorrhea - now being called a "superbug", should worry policymakers. This is only the latest (and certainly not the last) instance where antibiotic-resistant bacteria threaten public health. The last line of antibiotics that treat gonorrhea - cephalosporins - are beginning to fail worldwide (a recently developed antibiotic in this class ceftobiprole medocaril, however, has shown some efficacy against a methicillin-resistant staphylococcus aureus (MRSA) - though the FDA rejected approval in 2008). 

Among all drug classes, antibiotics are known to have among the lowest risk-adjusted net present value (NPV: the discounted future revenue minus discounted costs) - around $100 million; compare this to an estimated $300 million NPV for cancer drugs or $1.15 billion for drugs treating musculoskeletal conditions. In effect, this means that antibiotics fall fairly low on drug companies' lists of new projects. Though there are many reasons for antibiotics' poor value for companies, it is widely agreed upon that FDA clinical trial regulations (particularly as they affect antibiotic development) contribute significantly. 

Just like any other drug candidate, when a new drug application (NDA) is filed for an antibiotic, there needs to be supporting evidence demonstrating its safety, correct dosage, and efficacy using the FDA's 3-phase clinical trial approach. But antibiotics have to face yet another hurdle - traditionally, drugs are tested against a placebo to establish efficacy. However, when it comes to putting antibiotics through clinical trials (usually patients are signed up in a hospital setting) using a placebo in the control arm of the study presents an ethical dilemma of offering someone with a serious infection a simple placebo (more importantly, the point of a placebo is to verify that particular conditions won't clear up on their own - while simple upper respiratory infections very well might, it's hard to argue that a MRSA infection will). Because of this, antibiotics are put into what are known as "non-inferiority" trials; drug sponsors have to show that new antibiotics are - within a certain margin - no worse than existing treatments.

The problem here is twofold - first, the FDA's clinical trial designs require very large patient samples, and place restrictions on previous antibiotic use (the patient can't have taken another antibiotic within a certain time period before being entered into the trial). For antibiotics, which have very specialized markets (these markets tend to have higher than average mortality rates because they are usually in a hospital setting), large sample sizes are often unrealistic, and neither is the expectation of no prior antibiotic use (because patients are often given an antibiotic immediately when being admitted for an infection). Second, while the FDA has (thankfully) moved away from imposing pre-defined non-inferiority margins and has given investigators more discretion in doing so, the guidance is still relatively stringent and has not helped spur antibiotic development. In particular, the guidance still favors a "fixed margin" approach, where the non-inferiority margin is identified based on historical placebo trials (the alternative, the "synthesis" method is less conservative but more nuanced - it combines estimates for effect versus a comparator drug as well as versus a placebo). The preference for placebo-focused trials undoubtedly causes confusion when placebo trials are unavailable or impractical.

Besides the FDA regulations, other issues with antibiotics development are inherent to the market - antibiotics are short-term therapies, with a course of therapy typically lasting around a week. By contrast, cancer therapies can last for months, or statins for a lifetime, giving drugmakers a much longer time frame to recoup their costs and generate profits.

But is there really a pressing need for new antibiotics? Or is the drug-resistant strain of gonorrhea a one-off finding? A few statistics should answer this:

  • More Americans die from MRSA every year than from AIDS. 
  • Growing antibiotic resistance has led to doctors using old, highly toxic antibiotics like collistin, which may often kill the patient just as well as the infection.
  • The number of new antibacterial agents approved in the U.S. is at an all-time low.

The need for antibacterial drugs is undeniable. A growing number of pathogens are becoming resistant to all but the most toxic antibiotics in our armamentarium - many of these (like gonorrhea) used to be highly susceptible to available antibiotics but developed resistance over time. All is not doom and gloom however - the reauthorization, last year, of the Prescription Drug User Fee Act (PDUFA V) included a provision known as the GAIN Act. This established an additional five years of Hatch-Waxman exclusivity for antibiotic NDA-filers, resulting in a total of 10 years of market exclusivity with or without a patent. The law also gives antibiotics priority review and fast track status to reduce the review period and speed up the path from Phase I testing to NDA filing. While there may be marginal benefits for drugmakers, because the market exclusivity runs concurrently with patent life, the impact of an additional five years of Hatch-Waxman exclusivity is unlikely to be a game-changer.

Even more importantly, however, the law mandated that the FDA create a new pathway for approval of antibiotics. A specialized designation (with complete and thorough guidance) for antibiotics that simplified the development process and peeled back unnecessary regulations would be the best step that the FDA could take in helping spur antibiotic development. Since PDUFA V, the Infectious Diseases Society of America (IDSA) and the President's Council of Advisors on Science and Technology (PCAST) have proposed a "special population, limited medical use" pathway, which has received some FDA support. However, antibiotics approved under such a pathway would be very restricted to only the subpopulation for which trials establish an adequate benefit-risk ratio (though at the same time, this would hopefully make approval more predictable). Nevertheless, this seems to be a moot point for the time being, since no official draft guidance has been issued from the FDA, and the idea is still in the discussion stages with industry groups.

An adequate supply of antibiotics, and the ability to fend off ever-evolving bacteria is crucial to a future rife with chronic diseases and a generally "older" population. FDA regulations are hampering the ability of pharmaceutical companies to provide this supply. Policymakers should pressure the FDA to make good on its PDUFA obligations and to re-examine its antibiotic trial guidance. The limited use designation, when FDA takes action on it, may be valuable for the industry - a streamlined, focused pathway would help justify higher prices for antibacterial drugs, increasing the class's NPV for drugmakers. And while some may clamor about pharmaceutical companies profiteering from people's sickness, think of it this way - if we're willing to pay tens of thousands (even hundreds of thousands) of dollars for a cancer treatment that offers a few extra months of life, we should be willing to pay at least as much for an antibiotic that unquestionably saves a life.

The pharmaceutical industry does many wonderful things, yet most people regard it as one step below head lice on the food chain.

This week, Merck, with some questionable help from the FDA, gave more ammunition to industry critics, who typically maintain that the industry contributes little innovation, and is simply concerned with profits.

For the most part, this criticism is biased and uninformed, but this time I'm siding with the critics. Because Merck is trying something that is as good an example of marketing without innovation as you'll ever see.

The company just received approval for the cholesterol-lowering combination drug Liptruzet-- a functionally similar (identical?) version of their own Vytorin, which is a combination of their statin Zocor and Schering's (now part of Merck) cholesterol absorption blocker Zetia (ezetimibe).

Liptruzet, ironically happens to be a combination of Zetia and atorvastatin (generic Lipitor). Yes--Merck is substituting a former Pfizer drug for their own Zocor with combining it with Zetia to make a "new" medication with additional patent protection. This is innovation?

Worse still, both Vytorin and Liptruzet are of questionable use. In 2009, studies showed that Vytorin, despite lowering LDL and total cholesterol did nothing to prevent cardiac events. In fact, a 2009 New England Journal of Medicine article concluded that not only did Vytorin fail to reduce heart disease, but "the use of ezetimibe led to a paradoxical increase in the degree of atherosclerosis in association with greater reduction in LDL cholesterol, an effect we hypothesize may stem from unintended biologic effects of this agent."

Liptruzet behaved, as expected, just like Vytorin. It reduced LDL cholesterol more for patients who took Lipitor alone, but it did not reduce patients' chances of developing heart disease. Not surprisingly, this left some doctors to wonder why it was approved at all.

Dr. Steven E. Nissen, chairman of the department of cardiovascular medicine at the Cleveland Clinic commented "This is extremely surprising and disturbing."

This sentiment is echoed (and then some) by Philip Gelber, M.D., Chief Cardiologist at Cardiovascular Consultants of Long Island. "It is surprising to me that the FDA approved this combination drug. The modern movement requires that drugs not just be safe and effective in their immediate goal, but to also show efficacy in improving outcomes. Cardiac medications should not just reduce the cholesterol count, but reduce the risk of heart attack and stroke as well." He continues, "There was, I'm sure, pressure by big pharma to get this approved, which by pairing it with another drug, would in effect restore blockbuster Lipitor back to branded status. A tricky move, but one which doesn't make folks any healthier."

So, why on earth would we need a virtually exact copy of a drug that doesn't even work? This is for Merck to answer.

I also don't understand what the FDA was thinking here.

Are they under so much political pressure to approve new drugs that they will accept just about anything? Because it sure seems that way right now.

This past January, FDA Commissioner Margaret Hamburg bragged about the improved performance at the agency, which approved 39 new drugs last year compared to 30 in 2011, and 21 in 2010. She said, "Not only have we been able to approve more new drugs that have real benefits for patients but also classes of drugs that signal where we are going in areas like personalised medicine, where we've been able to use diagnostics to target sub-populations of responders."

But last week's approval of Liptruzet makes me wonder whether they are simply playing a numbers game for the sake of public perception. Because if there is any drug that does not have any obvious benefits for patients, it is Liptruzet.

This is a sentiment shared by Dr. Nissen. He said, "It seems like the agency is just tone deaf to the concerns raised by many members of the community about approving drugs with surrogate endpoints like cholesterol without evidence of a benefit for the disease we are truly trying to treat--cardiovascular disease."

This episode just plain smells bad on many levels. I get the feeling that just about everything except science is driving this, and this will be a black eye that Merck will be inflicting on itself and the rest of the industry.

In testimony before the Senate Appropriations Subcommittee, FDA commissioner Margaret Hamburg defended the agency's FY 14 budget - calling it a "true bargain among Federal agencies." Indeed, as Dr. Hamburg frames it: "at two cents a day [per-person]" Americans get quite a bit of value out of the agency. With tens of drugs approved each year (last year was a 10-year record, with a number of innovative drugs like Kalydeco) and a food supply that is among the safest in the world, the FDA appears to do a great job (and the 20% budget increase in the FY 14 budget is mostly made up of industry fees).

And to be fair, the agency falls between a rock and a hard place - ensuring that medicines and foods meet minimum safety requirements while at the same time encouraging innovation can put the agency in a situation where it just can't win. With that said, given the current climate of budget austerity, we should ensure that we are getting maximum value out of the agency.  Unfortunately, there's reason to think that we aren't.

For starters, although the agency has ensured that dozens of cancer drugs and AIDs drugs have been brought to market through its accelerated approval, fast track, and priority review pathways, they are less effective for primary care indications where there may be fewer "surrogate endpoints" that the agency trusts, or where reviewers are hesitant to approve drugs that may have benefits for sub-populations, like morbid obesity, but where the benefit-to-risk ratio is less in large populations (people who are merely overweight.)  Personalized medicine is another potential bright point at the agency, with voluntary genomics submissions soaring, but there are still complaints that the pathways for companion diagnostics are murky.   

A recently developed "breakthrough" designation, contained in the last PDUFA reauthorization, shows some promise - last year's cystic fibrosis drug, Kalydeco was the first to receive it; Pfizer's new breast cancer therapy combining palbociclib with letrozole recently received the designation as well.

The problem? These niche pathways, welcome as they are, don't eliminate the need for lengthy and expensive Phase III trials for the majority of indication, which can deter drug development (for instance, for neurological diseases, and antibiotics).

Better clinical trial designs (like more flexible, Bayesian trials), faster uptake of new surrogate and clinical endpoints beyond irreversible mortality and morbidity, and a focus on collaboration with scientific experts beyond the agency's walls would all markedly improve the status quo. And the agency knows this.  

Nonetheless, reform is slow. In her testimony, Dr. Hamburg notes that with the agency's limited resources, some of these responsibilities may be difficult to accomplish - she may be right; a $4.7 billion annual budget isn't very much given the overall size of the federal budget. But does this mean that we should increase the FDA's budget even further?

Maybe not. The FDA is designed to deal with food and drug safety - ensuring that drugs have the compounds that the label says, that nutritional counts on food labels are accurate, and that clinical trials are conducted accurately and meet the minimum threshold for approval. When it comes to dealing with innovation more broadly, or personalized medicine specifically, the FDA shouldn't be on the front line. Rather, other agencies, like the National Institutes of Health - with a roughly $31.1 billion budget, and much more experience with research across various disease categories - may be in a better position to drive translational science forward.  Other, disease focused organizations, like ASCO, may be in a better position to validate new clinical endpoints and trial designs for cancer. . Rather than trying to do everything under one roof, maybe the FDA needs to recognize where - like every other modern organization - it should outsource non-key functions and responsibilities. The FDA's core expertise - reviewing data and ensuring that companies follow best practices - doesn't mean that the agency has to or should develop all of those standards itself.  Far from it.

Notably, in the White House's latest budget, however, the NIH budget stays roughly flat.  And the NIH's National Center for Advancing Translational Sciences , NCATS, has very little funding to accomplish its stated goals - just $666 million for FY 14 (just 2 percent of NIH's total budget).  Considering it can take billions of dollars to develop a new drug, this is a pittance (the American pharmaceutical industry spent $280 billion on R&D in 2011).

Likely, for NIH and other organizations to make the critical leap we need to modernize drug development, industry, academic medical centers, and NIH will need to pool resources, rethink existing research silos, and develop new ways of sharing - and valuing - data.

Those topics are well beyond this post. But to answer the basic question of whether the FDA is a bargain, the answer is probably yes.     The social value of having a safe food supply and non-contaminated medicines is likely in the trillions of dollars. But paying for drug innovation on the cheap, and asking the agency to do things that strain its organizational capacity and expertise, is pennywise but pound foolish. 

Researchers have reported what appears to be only the second case of a functional cure for HIV/AIDS. (The first case was a Berlin man - the "Berlin patient" - who was cured of HIV after a bone marrow transplant.)

While mother-to-infant transmission of HIV is rare in the U.S., thanks to near universal testing of pregnant women and aggressive treatment of those who are HIV-positive to prevent transmission of the virus to the infant, it still happens in rare cases - in this instance because the woman in question didn't have an HIV test until she was in the delivery room.

Thankfully, a quick thinking physician started aggressive HIV antiretroviral therapy shortly after delivery:

In this case, researchers believe that a doctor's decision to start an aggressive antiretroviral treatment within 31 hours of the infant's birth led to the cure. They theorize that the drugs prevented the formation of so-called viral reservoirs that harbor the virus. These reservoirs have been the key stumbling block to a cure because even though AIDS drugs stop HIV from replicating, the virus lurks in the reservoirs, ready to come surging back when treatment is stopped.

In this case, "the child got therapy and then went off therapy, and now there's no detectable virus," said Deborah Persaud, a pediatrician and AIDS researcher at Johns Hopkins Children's Center in Baltimore and lead author of a study reporting the cure. "That's really unheard of. If people go off therapy, most of them rebound...within a few weeks."

While antiretroviral drugs have been the standard of care for HIV treatment since the mid-1990s, researchers are still discovering new uses for the drugs. In 2011, for instance, researchers found that patients started on HIV therapy early in the course of the disease could prevent sexual transmission of virus - offering a tool to help halt infections in poor nations where the disease is closer to an epidemic.

If this case turns out to be an effective treatment option for infected children, the real benefits may accrue to patients in the developing world, where an estimated 500,000 children are infected with the disease every year. And a functional cure early on could spare the children from having to continue on drug cocktails for the rest of their lives.

For critics of the industry, this is what might be called a teaching-learning moment. This is a technology that is nearly twenty years old, and many HIV combinations are either generic or are made available at cost in poor countries. But enormous health gains from the medicines wouldn't be available without the large up-front investments - and yes, higher prices - that wealthier nations pay to companies developing new HIV treatments.

After HIV antivirals lose patent protection, of course they are cheap permanently, meaning that a relatively few years of high prices leads to enormous social gains down the road that aren't captured by the manufacturers. Indeed, in a 2005 NBER paper researchers at the University of Chicago estimated that manufacturers only capture about 5 percent of the social value of HIV medicines. The rest goes to patients, current and future, who benefit from the medicines.

The authors of the study, Philipson and Jena, also advance an interesting argument:

Despite the high prices of these drugs to patients and health plans, the low share of social surplus going to innovators raises concerns about advocating cost-effectiveness criteria that would further reduce this share, and hence further reduce incentives for innovation. In particular, popular technology assessment criteria in healthcare going under the rubric of "cost-effectiveness" often implicitly maximize consumer surplus, which is consistent with maximizing static efficiency after an innovation has been developed. Dynamic efficiency, however, aligns the social costs and benefits of R&D and is therefore determined by how much of the social surplus from a new technology is appropriated by producers.

In short, policymakers who advocate plans to lower drug prices now - through price controls or other strategies - ignore the dynamic effects of drug pricing on future innovations, and the enormous gains to future patients that accrue from innovation. Price controls assume a static stock of innovations, and push costs much closer to the actual marginal cost - the cost to manufacture each pill - of producing those medicines today.

Such policies are pennywise, but pound foolish. As today's announcement shows, gains from HIV antiretrovirals continue to accrue to patients decades after the original discovery. Medical innovation is dynamic, and as economists know well, very responsive to pricing signals. Price controls would diminish the number of future innovations, leaving us with fewer new medicines - and more lost lives.

To put it bluntly - duh.

The FDA just approved the first-ever "bionic eye" for patients with retinitis pigmentosa, a rare genetic eye condition in which the retina deteriorates over time. The Argus II Retinal Prosthesis System (Second Sight, the developer, should have hired a better marketing department) comes with a pair of eyeglasses that has a video camera attached. This camera wirelessly connects to an artificial retina implanted into the eye, which bypasses the original, deteriorated retina. Though the Argus II doesn't actually restore sight - hence, not a cure, per se - it allows patients to distinguish between light and dark in the environment, helping them get around.

This is surely a cause for celebration for patients with what is otherwise untreatable blindness, and the researchers who developed the artificial retina hope that in the future, they will be able to use the device to treat all causes of blindness including macular degeneration (affecting some 2 million people in the U.S.).

The device was approved under the FDA's "humanitarian use" pathway, which is used to rush approval for devices that that treat a condition in fewer than 4,000 people per year; the condition must also have no alternative treatment available. And the Argus II certainly qualified - RP is a condition present in less than 1 in every 4,000 Americans.

The clinical study for the device included only 30 patients - most of them were able to perform basic activities much better, and only 11 experienced serious adverse effects. This should be great news for those concerned with the FDA's regulatory burdens, but there's more that can be done. (One bit of news that's not so great, though, is that Europe has had the Argus II for a year already).

There's no reason why a "humanitarian use" pathway should apply only to such the small number of conditions that affect 1 in 4,000 Americans - surely, many patients who suffer from MS, ALS, Alzheimer's and a slew of other chronic conditions would be willing to accept certain risks to potentially treat their conditions (even though treatments exist, they are often ineffective). The humanitarian use pathway should be expanded - if a patient, with consultation from his doctor, of course, decides that the potential benefits of an untested treatment outweigh the risks (communication with pharmaceutical and biotech companies is critical here) - there is no reason why the treatment shouldn't be made available. And the results of the treatment, whether good or bad, should be recorded for use in future clinical trials.

We are at a potential watershed moment for the FDA - the organization has acknowledged that it has a problem with clinical trial designs and limited approval pathways. And to the agency's credit, a few other pathways - the accelerated approval, priority review, and fast track designations have worked very well. More recently, the FDA accepted comments on development of a new pathway geared towards life-saving drugs, with a focus on antibiotic-resistant bacteria. In short, there is progress at the agency. The FDA should take note of the successes of its existing pathways and allow more drugs and devices to receive the appropriate designations, thus expanding the designations to broader populations.

For the uninitiated, 3D printing is a fast-growing manufacturing technology that effectively allows "printing" of small objects like machinery components. Where the "revolution" part comes into play is that the "printers" are small enough and inexpensive enough to let almost anyone set up a mini-factory in their garage - or laboratories. These mini-factories are connected to a computer where 3D models are designed and fed into the printer (along with the necessary raw materials). Using high-powered lasers, the printer shapes the object according to the specifications.

Last December I wrote about Organovo - a 3D bioprinting company that was partnering with Autodesk to print living, architecturally correct human tissue. A new, potentially more exciting development is that researchers from the University of Edinburgh have developed a printer that is able to produce living, viable, embryonic stem cells. For those suffering from chronic diseases like Alzheimer's or Multiple Sclerosis - this has the potential to be life-changing.

While most adult tissue has its own stem cells, embryonic stem cells are unique - they are able to differentiate into almost any type of tissue to repair it after it has been damaged. In recent years, however, there's been quite a bit of controversy surrounding the ethics of using embryonic stem cells (which have to be harvested from human embryos), to say nothing of the possibility of rejection when injecting stem cells from one person into another.

While these issues remain, the ability to spit out these stem cells through a simple manufacturing process (the printer doesn't technically manufacture the cells - it clumps them into uniform droplets to keep them viable using two types of "bio-ink") provides a new, automated way of producing embryoid bodies (essentially a clump of stem cells) that can be used in treatments. And indeed, an ever growing body of research is indicating that stem cell treatments - even those derived from a person's own body (non-embryonic) may help to cure (not only treat) chronic diseases like MS.

Of course, any optimism should be tempered with reality. Printing stem cells that have biomarkers indicating pluripotency (the ability of a stem cell to differentiate into any type of cell) is very different from using those same cells to treat diseases in humans. It's unclear whether the human body will be able to accept these manufactured stem cells or how viable they will be in the long-run compared to natural stem cells.

There are also potential regulatory pitfalls. The FDA has been less than accommodating to companies that have tried using autologous stem cell treatments (where stem cells are taken out of a person, treated, and injected back into the same person), shutting down the laboratory of a promising venture in 2012. Though the FDA has a specific statute under which they regulate human cells and tissues, these newly manufactured cells would likely not fall under that statute. Instead, a company would probably need to pursue approval as a drug - but the long, winding, and expensive process of clinical trials is poorly suited to proving the ability of stem cells in treating chronic diseases.

A more stem-cell-friendly approach would allow companies offering these treatments to conduct "N=1" trials - for patients who have decided that an unproven treatment may very well be worth it if it has the possibility of curing a disease like MS - and submit this data over time to the FDA to help prove the efficacy of the treatment as well as to potentially help validate new surrogate endpoints.  

In a post on the FDA's web blog FDA Voice the agency notes that early communications with agency staff - called pre-investigational new drug meetings or pre-INDs - resulted in significantly faster drug development, shaving years off of total development time:

Recently, FDA has taken a look at the development times of new drugs that were approved with the benefit of pre-IND meetings and compared them to the development times for drugs that were approved without such meetings. The findings underscore the value of early communication. For those new drugs for which a pre-IND meeting between the drug developer and FDA was held, average clinical development times were substantially shorter than when a meeting was not held. For instance, for all new drugs approved between 2010 and 2012, the average clinical development time was more than 3 years faster when a pre-IND meeting was held than it was for drugs approved without a pre-IND meeting.

For orphan drugs used to treat rare diseases, the development time for products with a pre-IND meeting was 6 years shorter on average or about half of what it was for those orphan drugs that did not have such a meeting. Early communication is especially important for orphan drugs because these products require special attention and thus early talks can be especially beneficial

The FDA believes that these meetings are particularly helpful for products that are novel, and where clear development pathways don't exist.

The FDA's data is supported by earlier work from the Tufts Center for the Study of Drug Development, which looked at FDA approvals from 1987-95 and found that average development times were 27 months - more than two years - shorter for products with pre-IND meetings. They also found that meetings at another pivot pint for drug development - the end of Phase II trials - shaved 16 months off development times.

End of Phase II meetings were also associated with higher rates of first cycle approvals, according to a Booz-Allen report. One of the FDA programs for identifying and accelerating agency communications with companies developing the most promising medicines (Fast Track) also had a higher rate of first cycle approvals (58%) compared to non-Fast Track products (42%).

This is good news, and a datapoint that industry, regulators, and patients' groups can build upon. Policymakers should ensure that FDA has the resources and staffing it needs to encourage frequent industry-FDA communications early in the drug development process, while also ensuring that clear development and approval guidelines and pathways are available for all product classes. (Incremental innovations are just as important for improving patient care as breakthrough innovations, which are much rarer.)

The most recent FDA PDUFA reauthorization contains a number of provisions that will help accelerate these trends, which we noted in post late last year:

Among other things [the legislation] it encourages the FDA to expand the use of Fast Track and Accelerated approval beyond HIV and cancer; eliminates caps on conflict of interest waivers for FDA advisory committees; creates a new breakthrough therapies designation that is supposed to allow for expedited development and review of drugs for "serious and life threatening illnesses" that show significant improvement over existing treatments in early stage testing; expands PDUFA review deadlines by 60 days to allow for additional meetings between sponsors and FDA; and requires the FDA to establish a new risk/benefit framework for describing how reviewers are actually evaluating the benefits and risks of new medicines.

Flexibility and standardization would appear to be goals that mitigate against each other. But there can also be a learning process that occurs as sponsors and regulators look back at "what works" and integrate best practices into the normal review process - in this case, adding two months to the FDA's PDUFA clock to encourage more communications between the agency and stakeholders.

Another approach would be for the agency and stakeholders to continue to look beyond the curve - on stem cells, nanotechnology, gene therapy, and other cutting edge tech - and think about how to rapidly integrate new scientific discoveries into the development and review process, so that the learning curve isn't so steep when sponsors approach the agency with "first in class" technology.

Here's one crazy idea: create a fellowship program that would allow FDA reviewers to take sabbaticals of 6 months or a year and become "fellows-in-residence" at academic centers, small biotech start-ups, and big pharma companies that are working on cutting edge products and novel technologies. Companies could create a similar high-level exchange program for the agency, so they could get a better picture of how the FDA thinks, and what kinds of information it looks for when it reviews new products. (To address conflict of interest concerns, FDA fellowship alumnae could be barred from reviewing applications from host companies.)

While the FDA already offers a Commissioner's Fellowship Program for graduate students, a fellowship/exchange program for FDA employees and industry experts would help ferment intellectual exchange between industry and the FDA, give companies better insight into regulators' concerns, and allow the agency to get up to speed faster on novel technologies months or years before companies even submit an IND.

If occasional meetings are good, wouldn't longer term educational and exchange programs be even better?

A recent article in NPR resurrects an important, controversial issue for the FDA - stem cell treatments.

Often considered the body's "master cells", stem cells help form and repair damaged tissue in the body. The most potent, embryonic stem cells, can essentially differentiate into any other kind of cell - potentially allowing them to regenerate tissue in the brain, the spine, or anywhere else. As the name implies, however, embryonic stem cells only exist in embryos, raising ethical concerns. Also, stem cells derived from embryos face the prospect of tissue rejection when placed in a new host, potentially requiring recipients to take dangerous immunosuppressive drugs for life. 

Adult stem cells, however, exist in tissue across the body. These cells, however, are more specialized and can only repair specific types of tissue. In 2011, Celltex Therapeutics was formed - the company offered a process that would genetically alter adult cells to have certain properties of embryonic cells. These cells would then be re-injected into the patient from whom they came. The thought was that this could help patients with a variety of chronic diseases - Multiple Sclerosis, Alzheimer's, Amyotrophic lateral sclerosis (Lou Gehrig's Disease) - if not curing the diseases, at least offering a potentially effective treatment where often none exist.

In 2012 the FDA identified over 30 violations at the Celltex facility, most of which pointed in one direction - that Celltex was marketing an unapproved drug. Under traditional FDA regulations, medical procedures (referred to as the "practice of medicine") are largely unregulated beyond basic sanitary standards, along with any regulations the FDA imposes specifically on the associated laboratory tools or devices involved in the transplant. This stance covered the gamut from bone marrow transplants to in-vitro fertilization.

However, the FDA has taken an increasingly aggressive regulatory stance towards physician offered stem cell therapies, based on the more than "minimal manipulation" standards (and indeed, FDA's very broad statutory authority) that would allow regulation of the process under CFR 1271.3(f)(1) (the section of FDA's regulations that deal with the use of human tissue). Under this statue, the FDA determined that Celltex fell short, and thus their process could be regulated as a drug.

While the FDA has shown promise lately by working to develop more adaptive standards for clinical trials, their position on stem cell treatments is rather worrisome. The fact is that stem cell treatments similar to the process that Celltex was offering have already shown promise; proving the efficacy in double-blind randomized clinical trials, however, is extremely difficult.

Many of the diseases that stem cells would help treat are orphan diseases (those with fewer than 200,000 patients in the U.S.), making recruitment for large-scale trials very difficult. And for people suffering from diseases like Alzheimer's, the risk-benefit often falls on the side of taking a chance with what may be unproven treatment.

Instead of forcing companies like Celltex (which is now moving their operations to Mexico!) to comply with narrowly defined trial guidelines, the FDA should make it easier for such treatments to receive approval through an alternative pathway that recognizes the difference between Celltex's process and a cancer drug.

This would require a pathway that is more conducive to Bayesian analysis - for instance, multiple "N=1" trials (where one person decides to try an unproven treatment - like Ms. Wilkinson from NPR's piece) could be used to gather data on fairly simple clinical or surrogate endpoints (in the case of Ms. Wilkinson, 11 out of 25 of her MS symptoms improved!). This data could be used to both validate new surrogate endpoints for future use, and to offer additional data to the FDA as approval is pending. Certainly, shutting down a lab without recognizing that physicians have been traditional innovators in the medical field - and still invent new surgeries without FDA regulation - seems like an extreme step. Surely there was a middle of the road approach that would have recognized the value of the procedure while warning patients that they were highly experimental and collecting additional data that could be validated through other means.

But more importantly, when it comes to dealing with a part of your own body (remember, Celltex was taking stem cells out of person A and putting them back into person A) it seems rather draconian to classify the product in question as a drug.

While the long-term efficacy of stem cell treatments may not be certain, there is much evidence showing at least some short improvements in patients that receive them. For those with otherwise untreatable diseases, this is undoubtedly a gamble worth taking.


The famous sci-fi writer, and author of the book I, Robot, (namesake of the company as well) would be proud of the FDA's recent approval of the "RP-Vita", a remote-presence robot for use in healthcare settings.

RP-Vita is designed to allow supervising physicians to remotely monitor healthcare delivery in settings like ICUs or emergency rooms, where the physician would have to otherwise be running back-and-forth between patients. The device makes patient data available via wi-fi that the physician can access through an iPad or similar device. Although  some may be understandably pensive about reducing the personal patient-physician relationship to a face on a computer screen, RP-Vita this marks an important step forward in healthcare delivery.

Many tasks routinely performed by specialists can be handled just as well by nurses and nurse practitioners with a physician supervising. Devices like the Vita can free physicians to do what they do best - diagnose based on all available patient information (remember, it's relayed to them electronically via wi-fi), while other healthcare professionals handle the delivery of care under the physician's watchful eye.  And this can be accomplished from a few feet away to hundreds of miles away (battlefield medics or remote military outposts, for instance, might be able to deploy a military version with a satellite links to communicate with physicians at large military hospitals like Walter Read).

From a policy perspective, the approval of RP-Vita shows that technology is beginning to affect how health care is delivered, extending the reach of high quality care and (hopefully) lowering the cost along the way. Eventually, you might even have a virtual supercomputer generated physician diagnosing you at home, with human follow up later. Paging Dr. Watson...

A few months back I discussed the explosion of "big data" - how it helped Obama win the 2012 election, and how it is being used to treat multiple myeloma, a rare bone cancer. To recap, the term "big data" refers to large, complex datasets that require an enormous amount of computing power to plow through. Because over the years, the cost of computing has fallen exponentially (the cost of storage is almost irrelevant now), and the advent of cloud computing essentially gives anyone access to a supercomputer at their fingertips, the big data revolution has become a reality.

A new collaborative project between the Mayo Clinic and United Health (one of the largest insurers in the country) is poised to take big data even further. Optum Labs, the research institute that the two will be building in Cambridge, MA, will combine Mayo's and UH's data on over 100 million people. The goal will be to use the massive dataset to understand which treatments work best, focusing on patient outcomes and cost-effectiveness. For instance, it could allow researchers to find that one diabetes treatment works just as well as another, but costs half as much.

More broadly, however, the results of the research conducted at Optum Labs may help the FDA take steps to reform their clinical trial requirements.

While much has been written about the poor clinical trial designs forced upon drug developers, the FDA has only recently shown real interest in changing them. The 2012 Food and Drug Administration Safety and Innovation Act (FDASIA) establishes the "Breakthrough Therapy" designation; while the law itself was vague on how this designation differed from Accelerated Approval, one clause of the act calls on the FDA to "[take] steps to ensure that the design of the clinical trials is as efficient as possible...", and the first drugs receiving this designation were announced just last week. And a 2012 FDA report went even further, recommending a new optional pathway for drugs shown to be effective in small subgroups of patients, rather than large, broad groups.

So how does this tie into big data? New clinical trial designs, particularly for patients with orphan diseases, should allow the use of existing patient data to demonstrate drug efficacy - for instance, data from emergency room uses of an antibiotic can be used to complement (or substitute) data from what can often be, a very difficult to run clinical trial. Or data on a drug's (successful) off-label use can be used in place of a clinical trial to receive provisional FDA approval for a new indication.

More generally, the use of large datasets like these will allow drugmakers to use observational data to receive provisional FDA approval with confirming studies to follow, and expanding patient populations as new uses are validated.

For Mayo and United Health, these databases can also be used to identify and validate potential biomarkers, allowing further improvements in clinical trial design.

If the FDA continues its slow, but steady move toward reform, Optum Labs may be just the tip of the iceberg.

In a recent issue brief my colleague, Jim Copland, and I discussed the impacts of the recent U.S. Court of Appeals for the Second Circuit's landmark ruling in U.S. v. Caronia - that criminalizing the communication of truthful information about an FDA-approved drug was an unconstitutional impingement on free speech.

The decision highlighted two emerging, but competing, trends in medicine and law: the growing use of FDA-approved medicine for off-label prescriptions and the increased criminalization of pharmaceutical promotion. As it turns out, off-label use is already quite common - some 21 percent of commonly used drugs are prescribed off-label. Nonetheless, the FDA has adopted very restrictive and complex regulations for when pharmaceutical companies can discuss off-label uses for their products, even when those uses are routine in the medical community. And these restrictions only apply to pharmaceutical companies - independent physicians, academic researchers, and consumer groups are entirely free to say what they want about the risks and benefits of FDA-approved medicines.

No one is arguing that companies should be able to say anything and everything about their products. We argue that that the FDA should create a safe-harbor for truthful, scientific information about the emerging uses of their products - allowing for the dissemination of information on drug benefits, as well as risks. (Currently, the FDA requires companies to communicate known information about off-label risks - it's the benefit information that companies can't communicate, with some very narrow exceptions.)

More information means more informed physicians and better care for the patients they treat.

Unfortunately, the FDA isn't the only agency restricting the communication of truthful information about new medicines to consumers. Medical schools and health systems are increasingly restricting pharmaceutical company representatives from communicating with doctors about new products. The result is that physicians have less access to emerging information about both the risks and benefits of medicines.

In fact, a 2012 study published in the Journal of Clinical Hypertension by Chressanthis et al found that physicians with high access to pharmaceutical representatives - who would inform them about better-performing, innovative drugs as well as new warnings about the risks of older drugs (i.e., those of their competitors) - adopted the new treatment between 1.4 and 4.6 times faster and reduced the use of the older treatment 4 times faster.

To put it in simple terms, truthful communications between pharmaceutical companies and doctors (already heavily monitored by the FDA) is generally good for patients. While marketing abuses should be curtailed (and the industry has ended its practice of wooing doctors with expensive trips and meals), we shouldn't throw the baby out with the bathwater and restrict information from companies that can save lives and improve health.

We're just at the dawn of molecular medicine. And it's going to change everything.

Take cancer treatment, for instance. Next generation therapies for cancer - including new molecular-targeted therapies, nanotechnology enhanced chemotherapy, gene therapy, and cancer immunotherapy - have the potential to "disrupt" tradiational cancer treatment paradigms, radically improving outcomes and (in the long run) sharply lowering the costs of treatment.

Researchers and the media have been talking about the revolution in "personalized medicine" for more than a decade now, but that just means that the most promising therapies are just beginning to reach the clinic now, with even more powerful therapies in the pipeline behind them.

As these treatments reach the mainstream, they will make many of our current health care debates obsolete. Every few years, we wring our hands about the cost of new drugs, and ask how pharmaceutical companies can charge so much for treatments that only extend life by a few weeks or months.

Of course, incremental innovations are better than no innovation at all, and new some cancer therapies, like Gleevec, are truly "game changers", and for a handful of other types of cancer (like breast cancer and testicular cancer) survival rates have skyrocketed as companies and researchers have substantially improved both diagnostics and treatments. But for most solid tumors, and some blood cancers, the prognosis is still unremittingly grim and the treatment costs are very high.

That prognosis, however, is likely to change, as both the effectiveness of new treatments rises and their cost plummets as new technologies mature. For instance, the New York Times this week chronicled how researchers at the Children's Hospital of Philadelphia genetically re-engineered leukemia patient Emma Whitehead's own T-cells - using a deactivated version of the virus that causes AIDS, no less - to attack her cancer, acute lymphoblastic leukemia. This was a last ditch experimental treatment, because Emma's cancer had resisted every other treatment her doctors had tried. The Times explains:

To perform the treatment, doctors remove millions of the patient's T-cells - a type of white blood cell - and insert new genes that enable the T-cells to kill cancer cells. The technique employs a disabled form of H.I.V. because it is very good at carrying genetic material into T-cells. The new genes program the T-cells to attack B-cells, a normal part of the immune system that turn malignant in leukemia.

The altered T-cells - called chimeric antigen receptor cells - are then dripped back into the patient's veins, and if all goes well they multiply and start destroying the cancer.

The T-cells home in on a protein called CD-19 that is found on the surface of most B-cells, whether they are healthy or malignant.

What is even more remarkable is that when Emma developed a life-threatening complication from the immunotherapy, her doctors were quickly able to run a battery of diagnostic tests to isolate the specific immune response that was causing the problem (an overproduction of interleukin-6). They then used another drug (off-label, normally used for rheumatoid arthritis) to save her life. The treatment has since been used successfully in several other patients who developed the same complication.

Researchers might have to administer another dose or two of the therapy later, or might not - they can easily track her cancerous B-cells to make sure the disease remains in check. Her genetically altered T-cells, however, will remain in the body, roaming hunter-killers seeking out signs of cancer. (Although, as the Times nnotes, the engineered T-cells attack all of Emma's B-cells, cancerous or not, since they both express the same cell surface protein. However, if researchers can identify a more specific cancer protein signature they can spare the healthy cells by making the engineered T-cells even more precise.)


The work at CHOPs is a stunning advance for cancer immunotherapy and personalized medicine, since the T-cells must be tailored for each patient, rather than brewed in enormous vats, like traditional drugs. The drug company Novartis is backing the commercial development of the technology, so it can eventually be scaled up for far more cancer patients - and eventually applied to other cancers, including solid tumors. (The first successful application of cancer immunotherapy, although it appears to be less successful as a therapeutic, is Provenge for advanced prostate cancer.)

As we suggested earlier, another bright spot in this story is the cost of the modified cell therapy, about $20,000 per patient, according to the Times. Compare that to the cost of chemotherapy. One drug, Clolar, can cost $68,000 for two weeks of treatment for relapsed pediatric ALL. Bone marrow transplants, another ALL treatment option, can cost hundreds of thousands of dollars and long hospital stays.

Another advantage of tailored immunotherapies (like other targeted therapies) is that they can show efficacy rapidly in smaller clinical trials, lowering the cost of development and allowing companies to press FDA regulators for rapid marketing approval in light of the high benefit-risk ratio for patients who've run out of other options. Doctors will then - as Emma's did in her case - fine tune them on the fly as diagnostic and treatment options improve around them.

CHOPs and Novartis are helping to pioneer a completely different model of drug development, and drug approval that can help de-risk the entire industry and enable rapid follow on innovations. While industry is going through the doldrums now, Emma's saga is a welcome sign that the future of the industry - and the science underlying it - is bright.

Of course, for Emma Whitehead and her parents, just having a future to look forward to is enough. The next time you hear someone worry about the cost of new cancer treatments, you might want to mention her story to them.

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