Over the years PhRMA must be getting pretty sick of Univ of Medicine and Denistry of New Jersey Professor Donald Light. He’s made a cottage industry of pissing on the commonly-trumpeted propaganda that only American drug research is effective, and that high prices for drugs in the US cross-subsidize lower prices elsewhere in the world. And in Health Affairs this week he does it again. Essentially Light shows that the added R&D spent in the US compared to Europe doesn’t give much bang for the buck, and that not many breakthrough drugs have been created anyway—something that PhRMA knows all to well as it looks at its shrinking pipelines.
In global NCEs, European research productivity was about the same as U.S. productivity in the first period but increased by 30 percent in the second period (1993-2003), while U.S. research productivity declined 26 percent (Exhibit 3). In first-in-class drugs, European relative innovativeness moved from well behind the United States in the first period to well ahead in the second. These are the most commercially and therapeutically important types of new chemical entities.
Now personally I think that, in an era in which all drug research is pretty much international, the basic premise of the argument about which system does more effective drug research is pretty silly. But of course it’s a one-two punch. And the upper-cut that would leave pharma staggering if it didn’t have control of the microphone is this quote from Light:
Congressional leaders and others concerned about high prices of new patented drugs will be heartened by this analysis, because lower European prices seem to be no deterrent to strong research productivity.20 A previous analysis using industry-based data showed that pharmaceutical companies recover all costs and make a good profit at European prices.21 Europeans are not “free riders” on American patients–another myth promoted by industry that assumes that countries are separate R&D/market silos that should each pay for themselves.
Given that Billy Tauzin at PhRMA has already cut a deal with the Obama Administration (albeit one that seems to be unofficially official), none of this matters very much. But it’s good to see that it might just be possible to reduce the very high margins earned by big Pharma without necessarily ending scientific advancement as we know it.
Brian Klepper and David Kibbe have written a terrific piece on how and why health care is in a handbasket and wondering where it’s going. But as we ex-futurists know, there’s lots of luck required to make a good forecast.
When I met Brian five years ago he told me that the sky would fall within five years, and at the time he was trying to persuade players in the health care system to self-reform. He suggested to them that the alternative would be soon be much worse.
I said, “no no, it'll take longer (10-15 years) and the system players will never self reform”. Instead I thought “reform” would be be done to them by the government when the system hit crisis. My guess was a combination of Medicare with 5 years of baby boomers on board and a middle class with 80 million uninsured would arrive around 2012–15. And then the brown stuff would be hitting the whirly object soon after that when the Chinese wanted their money back.
As it turns out we were both wrong and both right.
Over at DiabetesMine #1 health blogger Amy Tenderich has very important post. She and several fellow travelers are appealing to the FDA to strike a balance between safety and progress in allowing new diabetes treatments.
The FDA of course has been beaten to a pulp these last few years because it’s played footsie with the drug industry and ignored several potentially damning studies, with the result that the number of drugs withdrawn from the market has been much higher than in previous years.(Vioxx, Phen-Fen, Baycol, et al).
I’ve always felt that the FDA’s role should not to be a black/white (dangerous/safe) stamp of approval, but instead it should be the honest broker of getting all the data out there. As Amy and her crew point out, some diabetics may be prepared to take a risk of higher long-term cardiac complications in return for a medium term gain from a new medication. Something similar is certainly true in terms of hormone replacement therapy.
AstraZeneca appears set to follow Merck into the market for “bio-similars.” (See AstraZeneca may join generic rush.)
Congress and the media tend to portray biosimilars are analogous to
generic chemistry-based pharmaceuticals, and therefore believe that
they will lead to much lower prices as a result of the commoditization
of these products. If all goes according to plan, that should cut the
price of biologics by 50 to 95 percent as has been the case for generic
versions of traditional pharmaceuticals.
Pharma and biotech companies aren’t seeing it this way and neither
am I. Although they won’t say so, pharma companies are starting to
realize that biosimilars –which unlike traditional generics cannot be
subsituted by a pharmacist for a branded product– are really like
me-too products within a class of drugs. That’s exactly the model
that’s enabled multiple blockbusters within a given class in the
mainstream pharma business, and led to higher spending overall.
Biosimilars are unlikely to be a lot cheaper than the products they
copy, and they will have all the sales and marketing costs associated
with a branded product, plus some of the development costs. Don’t be
surprised if some biosimilars are actually priced higher than
the original products, based on some real or perceived improvement in
efficacy or safety. That’s what happened when me-too drugs like Lipitor
entered the statin market. (See Generic biologics — or Me Too Drugs 2.0? for more details.)
advocacy groups, most of them drug industry-funded, have asked
President-elect Barack Obama to appoint a Food and Drug Administration
commissioner who won’t cave in to pressure from lawmakers or the news
media, according to the Wall Street Journal.
It is news to me that the news media has much say about decisions at
FDA. There are reporters who highlight problems, especially safety
problems, in the nation’s food and drug supply. And there are reporters
who highlight every study suggesting the next miracle cure is just
around the corner. Large news organizations like the New York Times
have both. For every Gardiner Harris, there is a Gina Kolata. The news
media are megaphones. They are not, to use someone else’s phrase, the
Vioxx and Avandia didn’t come to light because of the press or angry
legislators on Capitol Hill. What consumers and patients, legislators
and the press learned about the lethal side effects of those drugs was
due to diligent researchers like Steve Nissen and Eric Topol and
courageous whistleblowers inside the FDA like David Graham. Ditto for
most of the other safety scandals that have plagued the agency in this
That said, patient advocates who are worried that the agency under a
more safety-conscious commissioner will somehow abandon the search for
faster cures should know that their views are well represented inside
the transition team. Josh Sharfstein, the Baltimore health
commissioner, formerly on Rep. Henry Waxman’s staff, who took up cause
of making pediatric cold medicines safer, may be leading the effort.
But his co-conveners include Greg Simon, who heads a group called . . .
da da . . . Faster Cures (not industry-funded, according to Simon). The
other team leader is attorney Alta Charo from the University of
Wisconsin, whose expertise is primarily in bioethics, not drug safety.
It seems like everyone in the Pharma Blogosphere and the press is recommending who president-elect Barack Obama should nominate as the new FDA Commissioner to replace Dr. Andrew von Eschenbach.
A few weeks ago, I created the “Who Should Obama Nominate for FDA Commissioner?” online survey to determine who readers of Pharma Marketing News think should be the next FDA Commissioner. I received many interesting comments and decided to open the survey up to as many stakeholders as possible, including consumers, healthcare professionals, former FDA and other government officials, pharmaceutical employees, and others.
I hope readers of The Health Care Blog will also participate (see how below) and I thank Matthew for allowing me to make this post to THCB.
Big pharma has big problems. The root cause is a lack of research and development productivity, which means a dearth of new products to make up for
looming patent expirations. Something near half of big pharma’s
revenues will be threatened by generic competition within the next
three to four years, and that will radically change the face of the
The R&D productivity problem isn’t exactly new. When I was at
the Boston Consulting Group (BCG) in the mid-90s we were already
talking about the “NCE gap,” which referred to the number of new
chemical entities that needed to be developed to justify pharma
companies’ valuations at the time. Back then, there was still a
possibility that new discovery tools would boost productivity and
prevent a collapse of the industry.
Update: The Harvard Health Policy Review site is back up with an apology and disclaimer for not seeking a response from the JHE editors.
A Harvard Health Policy Review article that details two researchers’ account of unethical editing at the Journal of Health Economics (JHE) mysteriously has gone missing from the Internet (but not entirely–here’s the PDF). Actually, the journal’s entire site has been taken down.
The article is full of drama that rivals a John Grisham thriller. It involves the Ivy League, corporate greed, a suggestion of tainted science, and legal threats — which I’m guessing may not be over.
In the "missing" article, University of Pennsylvania sociologist Donald Light and health economist Rebecca N. Warburton, of Canada’s University of Victoria, recount their two-year ordeal to publish a critique of a 2003 study published in JHE, in which Tufts researchers — using confidential data supplied by drug companies — estimated research and development costs for a new drug at $802 million.
Light and Warburton had several criticisms of this article, namely the undisclosed conflicts of interest of the Tufts authors. But they say the JHE editors thwarted their efforts to publish a fair critique.
The "missing" article details the back and forth between the JHE editors (three of whom are Harvard professors) and the original authors. Light and Warburton called it "ultimatum editing," and said the editors "violated almost every ethical standard set for editors."
At one point in the process, Light and Warburton even threatened to sue. Alan Millstein agreed to make a legal case on behalf of the authors and drafted a complaint. “He did not expect much in monetary damages, but expected to win before a jury, revealing to the world how leading economists handled an independent critique of a key article concerning the high costs of drug development form an industry-sponsored research center.”
Merrill Goozner wrote about the conflict in his post, "Where’s Harvard’s Missing Health Policy Journal?" PharmaGossip also writes about the missing journal here.
Stanford University’s medical school announced this week new restrictions on educational contributions by drug and medical device companies, which turn out to be among the strictest in the nation.
The rules are an effort to limit industry influence on physician practice. Currently, the continuing education programs tend to follow the market’s needs and not necessarily the best advancements for optimal patient care.
"The school will no longer accept funds from pharmaceutical or device companies that are targeted to specific programs, as industry-directed
funding may compromise the integrity of these education programs for
practicing physicians," a press release states.
SiliconValley.com reported that "Drug and medical-device company
contributions for continuing medical education have surged nationwide
from $302 million in 1998 to $1.2 billion in 2006, according to the
Accreditation Council for Continuing Medical Education. Stanford
officials said about $1.87 million — or 38 percent — of the medical
school’s budget for continuing education came from industry sources in
Such a pity that the NY Times has been so beaten up by the commies amongst us that it actually now feels that it has to point out where Peter Pitts and Janet Trautwein get their money. Although, as per the last time it let Pitts write an op-ed, it didn’t mention his day job as a PR man for pharmaceutical companies. After all, who could be opposed to “Medicine in the Public Interest” — after all it is in the interest of the public to pay for all and any medicine at any price that PhRMA chooses, right?
And let’s not get started on underwriters (for whom Trautwein is the main flack). After all Grace-Marie Turner thinks that they’re the health care heroes! Perhaps they’re heroes because they drive sick people into the uninsured population so that the under-paid clinical staff working in America’s public and community health system get to show their worth by caring for them —even if they’re less heroic than underwriters.
But that’s OK, Pitts & Trautwein can be printed in the NY Times cherry-picking problems with other countries health care systems. Because as we all know there’s absolutely nothing wrong with ours, eh?
And why should Pitts quote the peer-reviewed 2007 Commonwealth Fund study that showed that waiting times for surgery were longer in the US than in the communist hell-hole of Germany, when instead he was able to cite an 11 year old study about longer waiting lists for one specific type of surgery in the Netherlands, which has completely revamped its health care system since then. Something he and Trautwein have helped stop us doing — preserving a dismal status quo they obviously want to maintain.
Those two wouldn’t last 92 seconds in a debate with Uwe Reinhardt or Hillary Clinton.
On the other hand, there’s no letter from Karen Ignagni to make up the trifecta. Did she negotiate some summer vacation time along with her $1.3m salary?