Reform Rodeo

1. Principle or Posturing (or both)? –Kaiser Health News discusses the sudden plea from certain Senators for a reintroduction of the public plan into the Senate’s bill.

2. Starting From Scratch? — The Hill highlights polling indicating that many Americans favor scrapping the health bill and starting over, an option that President Obama has repeatedly said is not an option.

2a. Presidential Preemption? — Interestingly, the New York Times details the possibility of Obama posting his own health reform bill on the Internet ahead of the much-hyped health care summit. Could Obama use his “new” bill as evidence of a “fresh start” to appease Republicans?

3. Back to Basics — Maggie Mahar details the longstanding debate about whether health insurance actually saves lives.

4. Scoop on Standards — Dr. John Halamka, a physician who serves as CIO of Beth Israel Hospital and Chairman of the Health Information Technology Standards Panel (HITSP) at the ANSI, shares his thoughts on the vocabulary standards that will come to be the Esperanto of HIT.

5. HIT Funding — On Febuary 12th, the first $1 billion of federal funding for HIT promised under the HITECH Act was made available, with $10.6 million going to Massachusetts for the creation of a health information exchange.

6. Health Reform “Casualty”: The New York Times reported that former Congressman-turned head of PhRMA Billy Tauzin is resigning.  Betting on the passage of health reform, Tauzin offered billions in concessions to the White House in exchange for, among other things, favorable patent exclusivity periods for pricey biologics.

7. Health 2.0 — The Health Care Blog reports on the purchase of online pain management company ReliefInSite.com by PatientsLikeMe.com–the popular patient web site which claims to be the  “leading online community for patients with life-changing diseases.” Don’t be to surprised to see further growth of similar “Health 2.0″ websites that seek to take advantage of the increasing digitization of health care delivery and research.

8. The Science Behind Reform — Stephen Novella at Science-Based Medicine revisits the question of the effectiveness of colonoscopies.

The FDA Steps In: Regulating Prescription Drug Promotion on the Internet

The FDA has been widely criticized for not providing guidance for drug companies eager to promote their products on the internet.  Earlier this year, the FDA expressed the view that the message was what was important, not the medium, meaning that companies should simply apply the rules governing prescription drug advertising in print media to the internet.  On April 2, 2009 the agency issued Notice of Violation letters to 14 companies who sponsored links on internet search engines advertising their products; the links gave the name of the drug and, in some cases, its indicated use, without including the required “fair balance,” i.e., safety information such as contraindications and potential side effects.  In reliance on the so-called “one-click rule” — which had never actually been adopted by the FDA — the companies had put the required safety information one click away on a separate page.

In recent months, the FDA has indicated that it is open to providing internet-specific marketing guidance.  Yesterday and today (November 13^th) the agency is holding a hearing on “Promotion of FDA–Regulated Medical Products Using the Internet and Social Media Tools.”  Representatives from advertising agencies, consumer groups, health-related websites, pharmaceutical companies, and search engines are scheduled to testify.

In written testimony released before the hearing, PhRMA, the pharmaceutical industry’s trade group, proposed that the FDA approve a standard universal warning: PhRMA suggests “All drugs have risks.  Click here for more information from the manufacturer.” — for use “in places throughout the Web where there is not enough room for complete disclosure of all warnings, indications, and contraindications (e.g., search results and microblog posts.)”  Such a warning would, PhRMA argues, allow companies to take advantage of sponsored links, make full use of Twitter, etcetera, while also providing easy access to safety information.  PhRMA even suggests that the warning incorporate the FDA’s logo, arguing that this could mitigate against “the dangers posed by illegal Internet drug sellers.”

It will be interesting to see whether and how the proposals of the other groups represented at the hearing differ from PhRMA’s, and, of course, whether the FDA in the end decides that its “fair balance” requirements should be modified for the web.  Among the other interesting issues FDA may address is companies’ responsibility for web content they do not control.  Google’s introduction of Sidewiki, which allows anyone visiting a pharmaceutical company’s website to leave a comment, has brought this issue to the fore, raising, for example, the prospect of doctors discussing a product’s off-label uses on the manufacturer’s site.

Anyone who wishes to comment on these or other internet-specific promotion issues may do so through February 28, 2010.

The Biosimilars Debate: Is it Over?

Two months ago, I discussed possible federal legislation intended to balance the competing need for scientific and medical innovation with the costs to patients for biosimilars.  So where does the debate stand now?

Current proposals couple a regulatory approval pathway for biosimilars with exclusivity periods for pioneer biologics.  As part of its July 15, 2009 health reform bill, the Senate Health, Education, Labor, and Pensions (HELP) Committee adopted an amendment proposed by Senators Kay Hagan (D-NC), Michael Enzi (R-WY), and Orrin Hatch (R-UT) that provides for a 12-year exclusivity period for pioneer biologics.   On July 31, despite protestations from Rep. chairman Henry A. Waxman (D-Calif.) that the amendment is “exactly the wrong way” to create a pathway for approval of biologics, the House Energy and Commerce Committee approved H.R. 3200, which also includes a 12-year exclusivity period.

On September 29, ten governors wrote a letter in support of the exclusivity period to House Speaker Nancy Pelosi (D-Calif.), House Minority Leader John Boehner (R-Ohio), Senate Majority Leader Harry Reid (D-Nev.), and Senate Minority Leader Mitch McConnell (R-Ky.), stating, “[i]nnovator companies must be provided with at least 12 years of non-patent data exclusivity to allow for recovery of their original investment and to ensure licensing payments to our research institutions.” Read more

Of Doughnut Holes and Simple Math, or, “Even if I Pay Half Price For Brand Name Drugs, Won’t That Still Be $4,350 Out of Pocket Until Medicaid Kicks In?”

Forgive me if I sound naïve, or perhaps a wee bit skeptical, but I’m somewhat perplexed as regards the bottom line of PhRMA’s well cheered announcement to offer a 50% discount on name brand prescription drugs to seniors stuck in the money pit known as the Medicare “Doughnut Hole.”  The New York Times has said that the “Federal Saving From Lowering of Drug Prices Is Unclear” and the Washington Post has said that  ”It was not clear how much of the savings would accrue to the government side of the ledger and how much would represent lower out-of-pocket payments for consumers.” Unclear as it may be, it may be worth a look. This is not to say that this move announced by PhRMA is not a step in the right direction, just that a closer gauge of the step, as it appears at present, would seem to be in order.

First things first, in its 2008 fact sheet, “Prescription Drug Trends, September 2008,” Kaiser Family Foundation found (pdf. page 2) that

“The average brand name prescription price in 2007 was over 3 times the average generic price ($119.51 vs. $34.34).

Kaiser also found that “For products with a large number of generics, the average generic price falls to 20% of the branded price and lower.” And that “Approximately three-quarters of FDA-approved drugs have generic counterparts.”

When considering the approximately 25% of FDA-approved drugs which do not have generic counterparts, and which would figure largely in any savings under the new PhRMA discount plan, it is probably important to remember that pharmaceutical companies often  engage in what is known as “pay-for-delay:” the practice of paying generic drug manufacturers not to market generic drugs which would compete with their own branded drugs.

Might I suggest that without a concomitant decrease in the breadth of the lapse in coverage known as the “Doughnut Hole,” or some after purchase rebate scheme which allows the full price of the discounted drug to count towards satisfaction of the Doughnut Hole requirement, the net result for many of the hardest hit  seniors will be fairly limited? That they will still have to pull approximately $4,350 per year out of their pockets?

What’s a Doughnut Hole?

The PhRMA discount goes to the price of brand name prescription drugs after the initial cap is met on the Medicare prescription drug benefit. This initial cap on prescription benefit coverage can result in what CMS refers to as “the coverage gap” or what is often referred to as the Medicare Part D “doughnut hole.”

As we reported in a post back in February,

The Dallas Morning News has offered this explanation of “the doughnut hole”

Seniors with Medicare’s standard drug benefit for 2008 pay the full price once their total drug expenses — both Medicare’s costs and their own out-of-pocket deductibles and co-payments — reach $2,510.

They are then on their own for the next $3,216, until their total drug spending exceeds $5,726. At that point, catastrophic coverage kicks in, and Medicare pays 95 percent of their drug costs.

Some seniors are able to avoid the doughnut hole because they qualify for extra government help or buy extra insurance. But everyone else has to mind the gap, which lawmakers included in Medicare’s drug benefit to hold the line on federal costs.
The WSJ Health Blog reports that in 2009, “The coverage gap will open up after beneficiaries and their drug plans have spent a total of $2,700 on medications…. Seniors are then on the hook for the next $4,350.”

We also noted that “In response to that expense, the Kaiser Foundation has shown that many seniors cease or diminish the use of their medications.”

Some simple, if not rudimentary, math
In order to make a complex matter slightly easier, allow me the liberty of making the numbers even: we’ll use $2,500 for an initial cap, and we’ll use $4,500 for the out of pocket or “on the hook number” — that which one must pay until Medicaid kicks in and pays 95% of the cost. [Because of the wide variation in coverage plans, the actual numbers can vary as well, and there is some fluctuation in the amounts reported.]

Again for even number ease sake, consider someone with a large, constituting catastrophic, $12,000 per year brand name prescription bill. That person, regardless of the discount, will still have to take $4,500 out of his or her own pocket during the Doughnut Hole period of non-coverage-unless the Donut Hole itself is changed or eliminated. Looking at the calendar year, if the Doughnut Hole is not changed or eliminated, with or without the discount, the initial cap ($2500 @ 1000 per month) will be met at around the middle of March. The primary difference with the discount is that instead of making it only to August before Medicaid picks up the tab for the consumer, Medicaid will not kick in until December. Under this scenario, the brand name consumer stands to ultimately save roughly $200 as a result of the 5% Medicaid co-pay,  and Medicaid will have to make a payment for the brand name pharmaceuticals for roughly 3 weeks worth of supply. But the consumer’s out of pocket $4,500 still went to the brand name  pharmaceutical. Read more

PhRMA Shows Its Committment to Transparency With Revised Principles on Conduct of Clinical Trials

The Pharmaceutical Research and Manufacturers of America (PhRMA) Board of Directors announced yesterday their unanimous endorsement of revised principles to increase transparency in medical research through their newly revised PhRMA Principles of Conduct of Clinical Trials and Communication of Clinical Trial Results.  The revised principles are part of an effort to encourage behavior that benefits the healthcare community and the public through objectivity in research and strengthened transparency in medical studies.

PhRMA states that the Principles of Conduct, which are to take effect on October 1, 2009, will:

Fortify our commitment to patients and healthcare professionals by increasing transparency in clinical trials, enhancing standards for medical research authorship and improving disclosure to manage potential conflicts of interest in medical research.

The pharmaceutical and biotech industries have been under recent pressure to become more transparent, specifically concerning the disclosure and publication of clinical trial results, the disclosure of physician payments/reimbursement for conducting clinical trials, and authorship standards.

Read more