Like many other people, Ms. Krinsk thought that her prescription information was private. But in fact, prescriptions, and all the information on them — including not only the name and dosage of the drug and the name and address of the doctor, but also the patient’s address and Social Security number — are a commodity bought and sold in a murky marketplace, often without the patients’ knowledge or permission.
But given the money involved, I’m afraid it isn’t.
But with the pharmaceutical industry soon to release $150M dollars of ads promoting health reform as they cozy up to Congressional leaders, the conflicts of interest for patient’s privacy are staggering. Further, the promotion of the electronic medical record, personal health records, and ultimately, cloud computing (where no one will know where health data resides), are firmly part of the health reform landscape.
Now before people think I’m totally against the EMR, let me be candid: I’m not. It does facilitate care and is an incredible means of communication between physicians and laboratories and pharmacies and the like. When used properly, they are miraculous.
But the risks of losing information remain huge. Certainly, the above referenced New York Times article notes that safeguards are supposed to be enacted to prevent this wholesale marketing of your health data.
But suddenly, we learn of a White House snitch line where they will collect e-mails of people who might be spreading “misinformation” about the health reform efforts underway. (Thanks to my previous blog post, I am happy to report I’ve been reported! ;)) But this occurs at a time when privacy issues in health care must be seen as paramount and electronic medical records protected as secure.
Ooops.
So now we have a White House eager to build a snitch line as they cozy up to pharaceutical interests that are already selling personal information from prescription data, all while trying to promote the security of electronic medical records to the masses.
Who are they kidding?
But then, shucks, just think of the marketing possibilities for the government:
And lest people think I’m too partisan (who me?), the Republicans with their travel junkets aren’t any better.
Sheesh!
-Wes
Reference: White House blog with snitch e-mail link at flag@whitehouse.gov .
*This blog post was originally published at Dr. Wes*
The drug makers have agreed to cover part of the costs of brand name drugs in the donut hole, that no man’s land of Medicare Part D where patients must pay for their own drugs.
Obama said that drug companies have pledged to spend $80 billion over the next decade to help reduce the cost of drugs for seniors and pay for a portion of Obama’s health care legislation. The agreement with the pharmaceutical industry would help close a gap in prescription drug coverage under Medicare.
I see one problem with the assertion that drug companies will be “spending” $80 billion dollars to reduce the cost of drugs for seniors. Drug companies and by default, their board of directors have allegiance to their shareholders, not the the US government or the seniors of this country. I can assure you, this deal may look good on paper (for seniors) and it may benefit seniors a great deal (FREE=MORE) but it is also one step further to the promised land of the senior vote. And it will worsen access to drugs for everyone else. There is no free lunch in this world.
It may save seniors money, but it will not be revenue neutral. It will not save $80 billion dollars over 10 years or reduce overall costs of care. Somehow, someway, the costs will be shifted. It may mean higher drug costs for those privately insured or the uninsured. It may mean decreased access to compassion programs. It may mean higher costs to hospitals. Whatever the agreement means, it will not mean $80 billion dollars saved in the next decade.
Drug companies are not in the business of sacrificing their shareholders or bond holders for patriotic means. They are in the business of making money. And that means they have selfish interests to maximize their ROI for any agreement they make with the government.
The question isn’t really how wonderful this is for seniors. The question is how will buying off seniors affect the rest of America. And I’m telling you here, right now, you will see higher costs for everyone not lucky enough to bathe in a sea of FREE=MORE known as the Medicare National Bank.
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.
This week’s episode of CBS DOC DOT COM took me to a college campus where I got schooled by two students about the widespread use of ADHD (Attention Deficit Hyperactivity Disorder) meds – by kids without a diagnosis of the condition – to study, stay attentive, and sometimes just to feel good. A 2005 Web survey found that 5% of US undergraduates reported having used stimulants over the previous year for non-medical reasons. But the real number may be much higher, especially if you listen to the students I interviewed with Dr. William Fisher, a psychiatrist at Columbia University Medical Center.
Features of ADHD include inattention, hyperactivity, and impulsiveness. A national survey in 2003 reported that about 4.4 million children in the US have been diagnosed with ADHD and 56 percent take medication to treat it. It’s estimated that about one to two thirds of the children with ADHD continue to have symptoms in adult life.
ADHD medication was in the news last week with a report that medication use in elementary school children improved math and reading scores. The gains – equal to about a fifth of a school year in math and a third of a school year in reading – still left the treated children lagging behind kids without the disorder. The study fans an ongoing debate on who should receive medications such as Adderall and Ritalin. These medications – along with behavioral/psychological therapy and educational interventions – help patients with ADHD; but they’re also being used by students and adults who have not been diagnosed with the disorder.
These drugs have potentially serious side-effects such as high blood pressure, irregular heart beat, and dependency. Doctors prescribing them for patients with ADHD should be carefully weighing the risks and benefits. People taking them on their own are rolling the dice with their health. No matter what you may feel philosophically about using these stimulants, the risk-benefit of their use in patients without ADHD has simply not been established.
I feel strongly that ADHD medications should only be used under the guidance of a physician. But that’s apparently often not the case. In today’s segment, we explore this issue further. Why do people without ADHD take stimulants? How do they start? How does it make them feel? Is society’s metronome pulsing so much faster today that people feel pressured to take drugs just to keep up? Click here for a fascinating related article which appeared recently in The New Yorker.
Thanks to Andrew Sullivan who cited my post on the uninsured, I’ve gotten a lot of new comments on that subject. While my post was just a gripe about the problem, the comments were mainly focused on solutions. How do you fix the problem? I even got an e-mail specifically asking me what I would do to deal with the problem of the uninsured.
You have to realize that I’m basically chicken (as are most doctors). I like to point the finger and avoid the fingers of others. It’s much easier to gripe than to fix things. It’s much easier to criticize than it is to say things that can be criticized. But I will break from the safe position of critic and give some thoughts on what I think needs doing on the problem of the uninsured/underinsured. Those who doubt the reality of this problem have only to spend a few days in primary care physician’s office to realize that it a huge problem that is getting worse.
So here are my suggestions:
1. The government has to take on tasks that are in the best interest of the public.
Preventive healthcare should be paid for. This could be done via public health clinics, but having having some sort of preventive health insurance for the uninsured would not have much overall cost (compared to the whole of healthcare) and would potentially save money.
There certainly is debate as to what prevention is really worth it (the PSA test debate is a good example), but some prevention is clearly beneficial (immunizations, Pap Smears). Simply building a relationship between people and primary care physicians also has benefits by itself.
The overall goal is to improve the overall health of the American public. Promote behavior that deals with problems when they are still small or before they happen at all. Just visiting a PCP isn’t the solution by itself, but it is probably a necessary component to achieve a healthier public.
2. Promote proper utilization
One of the main costs to any system, public or private, is overutilization of services. Any solution that does not somehow look at utilization will automatically fail. More care costs more.
Here are areas of increased utilization:
Emergency room visits for non-emergencies.
Visits to specialty physicians for primary care problems.
Unnecessary tests ordered – more likely in a setting where the patient is not known.
Patient perception that “more care is better.”
Nonexistent communication – ER doesn’t know what PCP is doing, PCP doesn’t know what happened at specialist or in the hospital. This causes duplication of tests.
Solutions to these problems include:
Better access to primary care or other less costly care centers
Increase the ratio of primary care to specialists
Care management for high utilizing patients
Public education (not through the press but through better public health).
Promoting connections between information systems – better IT adoption would help, but that IT must communicate.
Make the malpractice environment less frightening to doctors. A large amount of questionable care is given to protect physicians from lawsuits. (A good example is PSA Testing. Even though recent studies question the benefit, many doctors fear that not ordering them will expose them to risk should the patient develop prostate cancer).
How does this help the problem of the uninsured? It reduces the overall cost of non-catastrophic care, which makes either public or private insurance focused on this more feesable.
3. Fix problems with Pharma
Medication costs are a huge problem to my uninsured and insured populations. There are many reasons for this, but some of them are simply due to a bad system. For example:
Medication discount programs cannot include Medicare patients. Why should I be able to give a discount card to my patients with private insurance, even my uninsured, but not Medicare patients?
High cost of generic drugs. When a drug goes generic, there is usually only a slight drip in the price. The system allows only limited competition for price, so the cash price remains high. Encourage cost competition.
Drug Rebates. This raises the overall cost of drugs to everyone. Rebates are sent to insurance companies by drug companies for inclusion on the formulary. It pretty much looks like extortion. The cost of these rebates is not absorbed by Pharma, it is passed on to those who aren’t covered by insurance companies getting the rebate. These need to be eliminated.
Get rid of direct to consumer marketing of drugs. This is pure capitalism that encourages over-utilization.
All of these programs would allow reduced overall cost of medications, which would make either drug coverage more possible or make the cash price of drugs more affordable.
4. Address Conflicts of Interest
Insurance companies are largely publicly-traded companies. This means that their main business goal is to maximize profits by either cutting their costs or increasing revenue. Having them the ones managing care is like putting the kid in charge of the cookie jar. Insurance companies should get back to the business of insuring. Care management is certainly important to control overutilization, but that should not be done by those who could profit from it (insurance companies, hospitals, physicians).
Insurance companies promote themselves as healthcare companies. They don’t provide care, and they shouldn’t. Perhaps there needs to be a third-party that does care management – I am not certain – but it is clear that good care management would greatly reduce overall utilization and profiteering.
How does this help the uninsured? It reduces the footprint of the insurance industry on healthcare as a whole, which should bring down the cost if insurance. It should let insurance companies compete solely on cost, not on provider pannels or other services they shouldn’t be giving in the first place. If insurance costs less, there are less uninsured.
5. Focus on the “uninsurable”
5% of Americans account for over 50% of the overall cost of care (reference). These are the uninsurable people – those who are truley expensive to treat. There needs to be very close management of these people. Leaving them uninsured doesn’t reduce cost, it just shifts it to hospitals and local government. It also leaves them unmanaged. Of the waste in healthcare, the likelihood is that a very large percent of it is in the high-utilizers (by definition). These people need management, either in a “medical home” or by some sort of care management.
There you have it. Follow these rules and everything will be fine.
Yeah, right. Alright everyone, have at it! Tell me what you think, but don’t be a chicken: criticism should be accompanied by an alternative solution.
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