July 1st, 2009 by SteveSimmonsMD in Better Health Network, Primary Care Wednesdays
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When my six-year-old daughter heard that I was going to write about President Obama’s speech to the American Medical Association in Chicago, she offered me this insight: “He’s not a doctor! He isn’t supposed to tell people what to do when they’re sick; he’s supposed to rule the world.” Yet, regrettably, doctors do need his help and it was with great interest that on June 15, the medical community listened.
I suspect that my colleagues in Chicago are the only crowd to boo the President during a speech since his election, and I think that much can be learned by examining why this occurred. Just moments before being booed, Obama received raucous applause when he acknowledged, “that some doctors may feel the need to order more tests and treatments to avoid being legally vulnerable. That’s a real issue.” Physicians in the audience then booed the next line, “I’m not advocating caps on malpractice awards which I believe can be unfair to people who’ve been wrongfully harmed.” The President went on to offer a plan to help physicians avoid practicing expensive defensive medicine. “We need to explore a range of ideas about how to put patient safety first, let doctor’s focus on practicing medicine, and encourage broader use of evidence based guidelines.”
I do not object to President Obama’s sincere and well delivered remarks to the AMA, but found some of them to contain trite platitudes. Encouraging physicians to “put patient safety first, focus on practicing medicine and follow evidence-based guidelines” is like asking airline pilots to pay attention to safety gauges, fly their planes, and respect passengers. I found the admonition to follow evidence-based guidelines as a means to avoid medical malpractice claims a particularly naïve statement. I’m not arguing against using guidelines, I just don’t see how guidelines will protect me from a lawsuit any more than the currently used standard-of-care.
I share the President’s opinion that any individual should have the option of remediation through the court system when wronged but large, punitive settlements change the way hospitals and physicians practice medicine and have resulted in an untold number of unnecessary surgeries as well as causing the actual death of many who never had their day in court. Unreasonably large medical malpractice settlements often have consequences that reach far beyond the parties involved in the original suit. Follow the relationship between cerebral palsy and C-sections and you will understand my assertion. In 1985, then trial lawyer John Edwards won a settlement of 6.5 million dollars against a hospital and 1.5 million dollars from an OB/GYN doctor arguing that if a C-section had only been done for an unfortunate child she would have been born without cerebral palsy. This case set off a chain reaction of suits throughout the country, leading obstetricians to practice defensive c-sections. The United States currently has the highest rate of C-sections in the world, the most expensive obstetrical costs per birth, and when measuring infant mortality ranks 42nd out of 43 industrialized nations.
In 1970, six percent of births in the U.S. were done by C-section; today that number has risen to over 30% while the WHO recommended, in 2006, that the actual rate should be no higher than 15%. Yet, the last four decades have seen the cerebral palsy birth rates remain close to 2 per 1000 live births in the U.S. without change. Considering that women are 4 times more likely to die during a C section than during a vaginal birth it becomes a simple and tragic mathematical exercise. Consider that in Scandinavia the maternal death rate is 3 per 100,000 births while 13 mothers die per 100,000 births in the United States; unless you’re African American–then you count an appalling 34 dead for every 100,000 births. Furthermore, once you have had a C-section there is a very good chance that all future births will be done the same way with an increased rate of hysterectomies, post-operative infections, blood clots, drug reactions, etc.
On the other hand, tort reform has resulted in major shifts in the physician workforce. In 2003 Texas put a cap of a quarter million dollars on malpractice settlements for pain and suffering but did not place a limit on the actual economic loss suffered by a plaintiff. The limit for a wrongful death case was set at 1.6 million dollars. Since 2003 Texas has seen 18% more doctors filing for new medical licenses per year (30% in 2007) and by the end of 2007 there was a 6 month backlog for the medical board to begin processing new license requests. The increased number of physicians has helped to improve access to care. Medical malpractice reform is necessary to avoid the kind of collective defensive behaviors that, ironically, may not be in the best interests of patients.
In my next few posts, I plan to discuss various aspects of our broken healthcare system. It is imperative that we understand all of these problems to avoid making things worse. This will require a probing and honest evaluation of what is wrong today. I also intend to discuss the President’s plans for reform and while I don’t agree with all of his plans, he has put forth many ideas that I do agree with. The time for reform is here, action appears inevitable, and the moment to speak out is now.
Until next week, I remain yours in primary care,
Steve Simmons, MD
June 29th, 2009 by admin in Better Health Network, Health Policy
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Much has been made of the recent pressure on the FDA to create a pathway for follow-on biologics. On June 9, 2009, Rep. Henry Waxman, chair of the Energy and Commerce committee, sent a letter to President Obama imploring him to approve a pathway for generic biologics: “I urge the administration to consider what steps can be taken under existing authority to prepare and even begin to use a pathway for generic biologics.”
Six days later, President Obama, in his June 15, 2009 speech to the AMA, followed Waxman’s lead, asking the FDA and industry “to introduce generic biologic drugs into the marketplace.” He continued: “These are drugs used to treat illnesses like anemia. But right now, there is no pathway at the FDA for approving generic versions of these drugs. Creating such a pathway will save us billions of dollars.”
Is this true? Are follow-on biologics, biosimilars, or generic biologics (all names for the same concept) truly the path to healthcare savings? And what are they, anyway? To clear up the confusion, this post aims to explain what biologics are, what generics are, and what the challenges are in the creation of an approval pathway for generic biologics.
What are biologics? How do they differ from traditional small-molecule therapies?
When you think of a drug, you probably think of a pill like Tylenol or Lipitor. You may not be as familiar with biologics, which are attracting a great deal of attention from policymakers and media. Biologics represent a different set of drugs, distinguished by their size, their informational and manufacturing complexity, and their therapeutic advantages.
If you were to look at most drugs under a microsope, you would find that they are actually rather small relative to a typical biologic. Acetaminophen, which is the active ingredient in Tylenol, weighs 150 daltons (a dalton is a unit of atomic mass). Enbrel, on the other hand, which is a top-selling biologic indicated for several autoimmune diseases, weighs 150,000 daltons. To put that thousand-fold difference in visual terms, if Tylenol weighed as much as your mountain bike, then Enbrel would weigh as much as an unfueled 12-passenger private jet. Hence you will often hear people in the pharmaceutical industry refer to “small molecule” drugs and “large molecule” drugs — because these are two truly distinct classes.
Biologics are often designed to closely mimic the body’s own specific natural processes. Because of this higher specificity, biologics tend to bind to drug targets in the body more precisely than do traditional drugs, which may bind to other unintended targets in the body, placing the patient at greater risk of side effects.
On top of it all, there is currently no defined pathway at the FDA for companies to develop generic versions of biologics, so biologic manufacturers retain data exclusivity over their products. Not surprisingly, the therapeutic and market advantages of biologics have caused pharmaceutical companies to focus their efforts on developing or acquiring biologics over small-molecule drugs. In fact, according to a recent forecast, by 2014, seven of the top ten drugs in America will be biologics, including every single one of the top six.
Unfortunately, while biologic therapies provide a great deal of therapeutic benefits, they are also extremely challenging for biopharmaceutical companies to develop and manufacture, because they are composed of entire proteins, carefully grown through recombinant DNA methods which are newer and less practiced than traditional drug chemistry methodologies. A traditional drug is usually derived through a set of chemical reactions. It’s a lot like following a recipe. Synthesizing a biologic, however, is a bit more like cloning a cat. In order to synthesize a biologic, host mammalian cells, usually Chinese hamster ovary cells, must be implanted with a gene that codes for the desired drug. The host cells are maintained in a special bioreactor that is designed to keep the cells alive as they translate, synthesize and excrete the drug. The broth of cells must then be harvested from the cells, modified, purified, and tested. The solution is finally packaged into vials or pre-filled syringes for distribution.
This manufacturing process is unusually challenging to reproduce consistently, even within a company. For example, Johnson & Johnson manufactures epoetin alfa, an anemia therapy, under the name EPREX in Europe. In the late 1990s, J&J changed its manufacturing process for EPREX at the request of the EMEA (the European version of the FDA). The process change caused some patients to develop pure red blood cell aplasia, a serious adverse reaction. Rather than receiving the benefit of the anemia therapy, these patients actually lost their ability to make red blood cells because they produced an antibody (triggered by the faulty EPREX) that inactivated both the EPREX and the body’s natural protein that is essential for red blood cell production. J&J eventually determined the cause of the adverse reaction and corrected it, but only after a lengthy and expensive investigation.
Because of the intense development and manufacturing process, biologics are also significantly more expensive than traditional therapies. Herceptin, an effective treatment for some forms of breast cancer, can cost as much as $48,000 for one year’s worth of treatment. It’s important to keep in mind, however, that virtually every drug company provides programs to help underinsured or uninsured patients get financial assistance in the form of co-pay cards, co-pay grants, or free drug programs. Simply contact the drug manufacturer.
Why have biologics gotten so much attention from healthcare reformers such as Rep. Waxman and President Obama?
The high cost of biologic therapies has attracted attention from both private payers, such as Aetna and UnitedHealthcare, and public payers, such as Medicare, Medicaid, and state health insurance programs. While payers agree that the therapeutic benefits of these treatments are important, they are still anxious to limit their exposure to the high price tags. Most insurers require several other therapeutic steps before allowing a physician to prescribe a biologic therapy.
Wait, what exactly is a generic? And what’s all this talk of bioequivalence?
The Hatch-Waxman Act of 1984 established a pathway for generic versions of small-molecule drugs to be offered to the public. Once the patent ends on a drug, generic drug makers may manufacture and sell the same drug without repeating the research, expensive clinical trials, or marketing efforts conducted by the original patent holder. These savings allow generic manufacturers to sell their versions for a lot less.
In order to gain approval, the maker of the generic must still show bioequivalence to the original drug, called the “reference listed drug” in the generic drug maker’s application. In a bioequivalence study, the reference listed drug is administered to one group of healthy volunteers, and the generic is administered to a second group. The blood concentrations of the active ingredients are measured over time and graphed. If the generic drug’s graph lies between 80% and 125% of the graph of the reference listed drug, then the two are deemed bioequivalent, and the generic drug is approved. Once approved for the market, it may be sold and independently substituted by a pharmacist for the branded medication without telling the physician, assuming the doctor has not expressly forbidden generic substitution. This last permission is referred to as the “interchangeability” of the drug.
Why can’t Congress just duplicate the same approval process used for generic small-molecule drugs?
In theory, Congress could. In practice, however, there are several technical hurdles that remain to be cleared. As discussed above, the processes used to create biologic therapies are extremely sensitive to manufacturing changes, as in the EPREX case. If a generic biologic manufacturer develops its own process, there is a good chance that the quality of the product would differ from that of the reference listed drug. Furthermore, no one has yet confidently measured bioequivalence for a biologic.
Frank Torti, Chief Scientist of the FDA, summarized these issues very well in a September 2008 response to a Congressional inquiry about follow-on biologics:
Because of the variability and complexity of protein molecules, current limitations of analytical methods, and the difficulties in manufacturing a consistent product, it is unlikely that, for most proteins, a manufacturer of a follow-on protein product could demonstrate that its product is identical to an already approved product. Technology is not yet sufficiently advanced to allow this type of comparison for more complex protein products.
All is not lost, though. The FDA could still create a pathway for generic biologic manufacturers to develop “biosimilars,” which are products that are intended to be close to a reference listed drug but cannot be shown to be the same. Because they are not the same, biosimilar manufacturers would likely have to conduct clinical trials to show that their version is safe and effective for human use, and can be manufactured consistently.
What are the realistic cost savings?
Because of the added cost of clinical development, testing, and marketing of a biosimilar product on top of the difficult manufacturing process, and competition, generic biologic pricing is more likely to resemble brand-to-brand biologic competition than the generic-to-brand competition seen in the small-molecule drug marketplace. Therefore, it’s not yet clear how much more affordable a FOB would be for health insurers. Without being able to show that the products are truly identical and therefore interchangeable, physicians are also likely to be reluctant to try what is essentially a “new” drug that does not truly share the established track record of the original drug. Payers and patients may be excited about the lower cost but skeptical of potential safety issues. As a result of these factors, generic biologic manufacturers may ultimately fail to capture enough business to make up for the upfront expenses of clinical testing, as well as the ongoing manufacturing and marketing expenses.
The Federal Trade Commission recently published a report that studied and called out these limitations. The consequences of the market dynamics imply that only two or three companies with large biologics manufacturing capabilities will even bother to get involved in this field, because only those companies will already have the plants and people to compete effectively. Ironically, the FOB manufacturer for a given reference drug will probably be other biologics innovators who already have the manufacturing capabilities but don’t normally compete in that particular market.
What would be some of the other implementation challenges for the government?
For one, CMS would need to decide how to bill and code for the new products, a subtle referendum on how identical the biosimilars will really be. If they give the generic versions the same codes as the originals, interchangeability is easier and the cost savings are more likely to materialize. On the other hand, it’s important for both the FDA and CMS to track adverse events with these new products (an activity known as “pharmacovigilance”), which is easier to do if the codes are different.
Where does the policy debate stand? What are the Eshoo and Waxman proposals?
The current Waxman bill is remarkably similar to the Hatch-Waxman Act of 1984, which was originally designed for small-molecule drugs. It would not require any new clinical trials for generic biologics provided that the generic had a “highly similar molecular structures,” and allows a case-by-case determination on whether or not safety and efficacy data would be required before pharmacies could substitute generics for reference biologics without telling the physician, but the default would be to allow substitution on approval. The Waxman bill allows for five to nine years of data exclusivity for the original patent holder.
The current Eshoo bill would require clinical trials comparing the generic biologic to the reference biologic, unless the FDA waived them. Rather than automatically granting interchangeability upon approval, the FDA would have to publish guidance with data that describe the criteria required for interchangeability. The bill also recognizes the greater challenge in developing biologics by allowing for twelve to fourteen years of data exclusivity.
Can the healthcare system really save billions of dollars with biosimilars?
President Obama’s speech to the AMA suggested that billions of dollars would be saved by the creation of a biosimilars approval pathway. Several others to study the issue have cited fairly conservative numbers. Avalere Health put the federal savings at $3.6 billion over a ten-year period, while the Congressional Budget Office says $6.6 billion. Avalere’s model assumes moderate discounting, several entrants, slow uptake of biosimilars, and a ten-year data exclusivity period. The CBO report scores a bill that resembles the Eshoo option described above, but doesn’t account for some of the market dynamics discussed above and in the FTC report.
Finally, to keep pharmaceutical costs in perspective, policymakers should remember that prescription drugs currently make up only 10% of healthcare costs, while physician services make up 21% and hospital care makes up 31%. The CBO estimate also predicts that follow-on biologics would save $25 billion on national biologics expenditures over ten years. Even if correct, those savings still make up one-half of one percent of all national spending on prescription drugs, which is itself one-tenth of all healthcare spending in the United States.
Which option makes more sense?
Overall, the Eshoo bill appears to do the best job of reflecting the current technical challenges particular to biologic therapies. The need for clinical trials to insure the safety, efficacy and quality of FOBs ought to be non-negotiable. However, given the high cost of becoming a FOB manufacturer, and the small number of likely entrants, the optimal length of data exclusivity is a good open question. Henry Grabowski of Duke University studied the issue and concluded that an ideal breakeven point is 12.9 and 16.2 years, also suggesting that the Eshoo option is the most likely to drive economic growth. The European Union currently allows for biosimilars and permits ten to eleven years of data exclusivity. Let’s hope that policymakers work hard to thoughtfully strike the right balance that maintains both a stream of innovative therapies from scientific pioneers and a structure that wisely manages costs for payors.
Author’s bio:
Jonathan Sheffi is a summer intern in the FDA Office of Biotechnology Products. Before the FDA, Jonathan worked for Amgen, first as a marketing analyst and then as a biopharmaceutical sales rep. He will start at Harvard Business School in the fall of 2009, and is seeking an internship opportunity for the summer of 2010. Follow Jonathan’s blog at http://jonathansheffi.com/ and on Twitter at @sheffi.
Acknowledgments:
Thank you to Val Jones (Better Health), Niko Karvounis (The Century Foundation), and Kimberly Barr (UnitedHealthcare) for their comments and suggestions.
Disclosures:
All included information has been derived only from publicly available sources. This blog post reflects the author’s personal opinions and do not represent the opinion of any other organization or individual.
June 29th, 2009 by EvanFalchukJD in Better Health Network, Health Policy
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Everything is McAllen, Texas.
It’s all part of our “uniquely American” approach to many issues: oversimplify the problem, so we can solve it. Ideally, on an artificially short time line.
In the case of health care reform, let’s say we get ‘er done by August 1.
When we talk about health care reform, we are really talking about dozens of different issues. Is health care reform about covering the uninsured, or about cutting costs for employers? Is it about having a publicly-funded health plan, or changing reimbursements to doctors? Is it about longer life expectancies or creating insurance cooperatives? Is it about caps on medical malpractice awards, or comparative effectiveness? Is it about healthier lifestyles, or cutting the cost of prescription drugs? Is it about cutting administrative waste, or incentives for more people to go to medical school? Is it about implementing new health care IT, or preventing insurers from making excessive profits?
It’s about all of these things, and more. And that’s the problem, if you’re an ambitious reformer. There is no simple way to get all of these things under one roof.
Well, until Atul Gawande introduced us to McAllen.
The President quickly made Dr. Gawande’s article on McAllen required reading at the White House, telling Senators this is the problem we are trying to solve. His point man on health care, Peter Orszag, has been blogging about it repeatedly. Members of Congress and the press have taken to talking about McAllen as the center of the health care debate. Even doctors from McAllen are calling on the President to come and see for himself.
Others are using it, too. Paul Krugman, in his blog, took on Harvard economist Greg Mankiw for saying that some comparisons of the US and foreign health care systems may be flawed as a premise for U.S. reform. In response Krugman said “read Atul Gawande!” I saw this, too, when I questioned Steven Pearlstein about why he had such a problem with doctors. His only response was “Maybe you should talk to Atul.”
The problems of McAllen make easy talking points. But they are also a convenient way of avoiding dealing with the enormous complexity of the health care system. There are nearly 650,000 doctors in America, millions of patients, thousands of hospitals, tens of thousands of insurance and pharmaceutical companies, hundreds of thousands of employers who provide health benefits, and thousands of other charities, academics, consultants, government agencies and others who have strongly held views about our system. Too often, their voices are not being heard in all the loud talking about McAllen.
And so, if reforming our health care system is, as the President says, a “moral imperative,” why can’t we have a process that treats reform that way? Why the rush to pass reforms that have to be sold under the premise of solving the problems of McAllen?
The President and the Congress are perfectly capable of putting together a respected commission of experts to study health care, in depth, and then return with serious, comprehensive recommendations that Congress and the President can work to enact. Polls show great public support for the idea of reform, but mixed understanding on what reform means. As we see from the evaporating support for reform in Congress, this gap is a serious problem.
We need effective health care reform in America. McAllen isn’t enough to close the deal.
*This blog post was originally published at See First Blog*
June 28th, 2009 by Emergiblog in Better Health Network, Health Policy
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Well, apparently they call a nurse!
Either that or Nurse Nellie caused the headache.
But we know that nurses never cause doctors to have headaches, so that can’t be what’s happening.
Ha!
Trust me, there have been a few doctors over the years that have given me major headaches and I have no doubt that I have been the impetus behind a few MD migraines myself!
**********
The guy in the Anacin ad must be doing what I’ve been doing for the last two days.
Trying to get a grip on healthcare reform.
That alone is enough to give you a migraine.
There is so much information and conjecture and opinion and debate, it is difficult to know where to start.
Who gets covered? What gets covered? Who pays? Who decides the charges? Who decides the fees? Who has an agenda: political, financial or otherwise? Private or public plan?
And the most important question of all: Who is fighting for what is best for the patient?
Because, when all is said and done, WE are “the patient”.
*****
Okay, so I’ve come up with some foundations; these are things that I feel must be at the heart of any health care reform debate:
1. Every citizen must have health care coverage.
2. Every citizen needs to own their health care coverage.
3. There should be a choice between private and public plans.
4. Every citizen must be able to choose between a private or a public plan and switch between as necessary.
5. Each plan must cover basic health care: physicals, screening, immunizations, well care.
6. Each plan must cover chronic or catastrophic illnesses. (Diabetes, asthma, MS, cancer – just a few examples)
7. After basic health care and chronic/catastrophic illness, each citizen should be able to choose how they want to be covered. I have heard this called the “cafeteria plan”.
*****
Gee, I don’t ask for much, do I?
We don’t have to invent the wheel here. Other countries have gone before us; there are models of universal coverage we can study.
The operative word here is “study”. Take what is good, understand what does not work and use that knowledge to form a unique form of universal health care that meets the needs of the citizens of the United States.
*****
Probably the easiest way to tackle health care is from a personal angle.
I just found out what my COBRA payment would be if I left my job tomorrow.
I’m hoping my jaw heals before I go to work on Thursday.
But that’s a topic for the next post.
*This blog post was originally published at Emergiblog*
