Over at his Respectful Insolence (a.k.a. "Orac Knows") blog that usually focuses on public health, Orac is hosting The Tangled Bank XXV, which is kind of a Grand Round for scientists. While frankly I don’t care too much for basic science (spot the guy who got kicked out of physics class and retreated to history at age 15), the writing — in the style of a very pissed off author submitting his work to an academic journal — is hysterical. And if you check the links closely you’ll see one with a most unlikely concurrence of scientists and babe-models.
POLICY: Uninsured number will rise, but maybe not enough
In an article in Health Affairs today called It’s The Premiums, Stupid Gilmer and Kronick project the numbers of the uninsured through 2013. Kronick, BTW was a co-author with Alain Enthoven of some of his market-based consumer choice articles, though he seems to have moved leftwards since the early 1990s. Essentially they forecast that there will be a continued price effect with low and middle-income workers continuing to be squeezed out of insurance as the costs go up. For the human side of this, take a look at the LA Times article which assessed this phenomenon yesterday. For the numbers, Kronick and Gilmer say:
Based on the
projected growth rates for health spending and personal income, we
estimate that the rate of uninsured non elderly workers will increase by
4.0 percentage points to 27.8 percent in 2013. We estimate that the
uninsurance rate among all nonelderly Americans will increase by 3.3
percentage points to 20.5 percent in 2013. With an expected population
of 271 million people under age sixty-five in 2013, we estimate that
there will be fifty-six million uninsured Americans in this age group,
an increase of thirteen million over the CPS estimate for 2002. Of this
estimated increase, 8.6 million occurs because of the expected increase
in the proportion of the population that is uninsured, and 4.4 million
because of an increase in population size.
The problem is that while there are countless stories of misery behind these numbers, and some real costs to being uninsured in terms of both access to care and worse health status — not to mention the corresponding increase in people being severely underinsured — this may not be enough to change things. Vic Fuchs at Stanford always used to say that we needed a national crisis to change the health system. Adding a couple more million people — and they are poorer, more marginalized people than the typical voter — to the uninsured numbers each year isn’t going to change too much. If however, things are getting worse, and we see these numbers increase at a faster rate — particularly amongst white middle income males in their 50s (i.e. Republican voters) — then there might be some real change coming up in 4-8 years. I think that’s an equally plausible scenario, but if Gilmer and Kronick are right, then it’s probably more of the dreary same.
PHARMA: Where are the orphan cancer drugs? by The Industry Veteran
Greg Pawelski’s recent posting here about whether cancer care could improve has drawn several responses, many of which I’m trying to redirect back into the comments section. One, however, that deserves its own posting is from our old friend The Industry Veteran who wonders whether the current model of big pharma itself can sustain itself in the kind kind of designer-drug world Greg is proposing:
Greg Pawelski makes a good point in his post, specifically, that the economic
model under which Pharma companies develop oncology products may be inimical to
the individualized treatment approaches required for the disease(s). I suspect
that the figurative lumber rooms of the Big Pharma companies are stacked with
discontinued oncology compounds that proved wonderfully effective and tolerable
for 5%-10% of the target candidates but, sadly, they were terribly toxic or no
better than placebo for the others. In fact, I know that’s the case. Not long
ago I completed a study for a client to find why the companies are so reluctant
to out-license these moribund compounds. The overwhelming answer, the one that
dwarfs all the others, is ego of the fiduciary executives. The executives feel
they would invite serious job trouble by out-licensing an abandoned compound to
a small startup that proceeds to make it a successful brand.
While
Pawelski deplores the one-size-fits-all requirement, that constitutes the
standard among Big Pharma for launching a product.Today the Big Pharmas will
curtail development of a product with projected, peak year, global sales of less
than $850 million. Anything less will not sustain their high fixed costs or
permit the economies of scale on variable expenses that represents their
comparative advantage. When BusinessWeek asked Pfizer’s CEO Hank
McKinnell if the era of the blockbuster (and the giant Pharmas created to
support such megaliths) has passed, he replied, “Anybody who says that doesn’t
understand our business.” A small company, however, can derive a large return
on equity/sales/assets from a product that successfully treats 5%-10% of a
comparatively small, target population. The CEO of such a company probably
won’t receive $50 million annual compensation the way Mr. McKinnell does, but
its stockholders and a reasonable number of patients can benefit when a Celgene
takes an abandoned and despised compound (thalidomide, developed as a
tranquilizer for pregnant women) and brings it to market as a major therapy for
multiple myeloma.
I suspect this dilemma will resolve itself as the
pharmaceutical industry evolves into what Oracle’s CEO, Larry Ellison, once
called the Hollywood approach to drug development. I’ve written about this
before and don’t wish to repeat myself, but basically this involves the Big
Pharmas limiting themselves to acting as sources for development funding and
distribution, while independent producers (biotechs? specialty companies?) buy
the properties and develop them. Movies today can successfully reach smaller,
more segmented audiences than the big Hollywood studios ever could during the
Mickey Rooney, Judy Garland days. Unfortunately a lot of people will needlessly
die of cancer before Andy Hardy grows up and tells Louis B. Mayer to go screw
himself. But hey, in a country that twice elects a wannabe redneck as
president, the market is sacrosanct and its pace of Darwinian change is all we
can expect.
POLICY: The high cost of health care
I’m giving a talk this morning about consumer health care so not much time for a long post. Kind of ironic that we’re entering the brave new world of consumer health care at a time when the price of insurance has got so high many people just cannot afford it. The LA Times today has an article called At what cost? which has some horrendous stories of low paid workers having to pay up to a quarter of their income in health insurance premiums. As IFTF/Harris has said for years, the empowered consumer is in general reluctantly empowered, and the basic ethos is pay more, get less.
POLICY/POLITICS: Congress acts in health care emergency
Last week a young Florida child sank into a coma. Due to recent cutbacks, he
wasn’t eligible for the state CHIP program and with no health insurance and
precious little money available from her job at Wal-mart, his mother had skipped
on taking him to the ER until it was too late. With a sudden realization that
American health care was in crisis, late last Saturday night Congress passed a
bill completely changing the nation’s health care system. President Bush flew in
from yet another vacation to sign the new law, saying that the health care
system ought to preserve the culture of life. Evangelical religious groups
picketed Congress holding banners denouncing the impact of the lack of health
insurance and the high cost of health care for poor and middle class Americans.
Self-appointed moral values spokesmen denounced the nation’s courts for doing
nothing to improve the infant mortality rate, claiming that it was below that of
Cuba. Finally, all the cable news channels turned their networks over 24 hours a
day to covering the crisis. Even though there were bitterly opposing sides in the dispute and polls seemed
to show that most Americans didn’t agree with Congress or the President, the
politicians insisted that the moral imperatives made their action necessary. Sage editorials in the major newspapers explained that the Florida
tragedy had at least had the virtue of having families in the nation discuss
whether or not they wanted access to health insurance. Sadly the young boy died unaware that his fate had transformed a nation.
PHARMA/QUALITY: Can Cancer Care Get Better? by Greg Pawelski
AP Biotechnology Writer, Paul Elias, wrote an article this week that described how while the cost of cancer drugs have skyrocketed, the benefits are less apparent. It’s been more than 30 years since we declared a war on cancer and although there have been some real triumphs, and some great advances, the overall picture is not good. Tomorrow one of my closest friends is going into the local oncology center for the removal of what we all hope are some benign breast lumps. This post is dedicated to her, and to all those with cancer or at risk for cancer. Part of the issue is surely environmental, and we have much more to learn about what causes cancer and whether the toxins that we put into the planet are coming back to attack us. Part of the issue, though, is how we approach cancer care. THCB contributor Greg Pawelski has written before about the need for more chemosensitivity testing, and now writes on how we can use what we know to more effectively care for patients.
We have produced an entire generation of investigators in clinical oncology who believe that the only valid form of clinical research is to perform well-designed, prospective, randomized trials in which patients are randomized to receive one empiric drug combination versus another empiric drug combination. The problem is not with using the prospective, randomized trial as a research instrument. The problem comes from applying this time and resource-consuming instrument to address hypotheses of trivial importance (i.e. do most cancers prefer Pepsi or Coke?).
There are 60-80 different therapeutic drug regimens out there, any one or in combination can help cancer patients. The system is overloaded with drugs and underloaded with wisdom and expertise for using them. Government and academic clinical investigators have failed to support the individualization of chemotherapy through laboratory testing, in favor of attempts to identify "one size fits all treatments" through trial and error testing which has consumed tens of thousands of human lives. This entire effort has been a colossal failure and a colossal waste of human and financial resources.
One of the main problems in providing effective chemotherapy is the situation that every patient is unique. Tumors grow and spread in different ways and their response to treatment depends on these characteristics. The amount of chemotherapy that each patient can tolerate varies considerably from patient to patient. Therapeutic protocols currently in use are limited in their effectiveness because they are based on the results of clinical trials conducted on a general patient population, yet no two patients are alike. Chemosensitivity testing can help to improve the efficacy of cancer therapies on an individual patient basis.
Without the information provided by chemosensitivity testing, oncologists have the freedom to choose between multiple different drug regimens, all of which have approximately the same probability of working. Some of these regimens are highly profitable to oncologists. Other regimens are much less profitable. Pre-screen testing takes away a lot of this freedom to choose and narrows the selection to those drugs that have the highest probability to be successful but may have lower profitability for the oncologist. This cuts into the oncologist’s bottom line, though it benefits the patient.
The hallmark of the disease is heterogeneity, yet the powers that be insist on trying to homogenize it, rather than tailoring treatment to the individual nature of the disease. If we devoted 10% of the "one-size-fits-all" resources to developing and testing methods to individualize therapy, we’d have actually made some progress at lowering the costs of cancer drugs.
POLICY: Florida HIV mystery raises questions, by John Pluenneke
A little
more than thirty days ago, a statistician at the Palm Beach Department of
Health accidentally sent out an internal email containing a list with the names
of more than 6,000 local residents with HIV and AIDS. Officials immediately shut down and scrubbed
the county network. Relieved supervisors
praised the rapid response of the county IT department, which
was able to eliminate all of the offending emails within 10 minutes. A lot of
people – including me – wondered how they could be so sure the problem had been
solved that easily.
A month
later it looks as though somebody has gotten their hands on the list. One by one, mysterious letters have begun turning up at
the homes of people with HIV/AIDS across Florida. Not surprisingly, many of those people are
upset and quite understandably concerned that the information could travel further.
The director of the Palm Beach County health department calls the
incident “medical terrorism” and says the letters remind her of the 2001 anthrax
attacks. That may well be a little
strong.
Like the
Kaiser Permanente story, the Palm Beach debacle has been
largely ignored by the media in the early going. The issues the incident raises, however, are very
similar. How safe are patient medical records, really? What use are expensive network security
systems when human error can easily bypass their defenses? If recent trends are any indication, these
cases are only the tip of the iceberg. That
should be very worrying.
HIPAA was designed, at least in part, to prevent this kind of problem. The real
question at this point seems to be how effective is it really going to be at doing its job? A little over a month from now, we’ll have a
very good idea.
County health officials in Palm Beach are arguing – in
the way officials often do – that last month’s email incident and this latest
problem are a complete coincidence. That
boggles the imagination. Such coincidences just don’t happen. The
story itself
is made a little more interesting by the fact that the letters do not
appear to
be at all threatening. The problem is that they reveal information they
shouldn’t. Whoever is sending them appears to be motivated by a desire
to reach to the HIV/AIDS community and to simply have not thought
through his or her plan
very well. This is one to follow.
PHARMA: Two quickies
The guy who was mentioned in a THCB post a while back about writing a tell-all book about being a slacker Viagra salesman has found that his new employer, Eli Lilly, didn’t approve, and fired him. I assume he’ll do well in his new role as a consultant on the next Michael Moore movie.
Meanwhile, John Mack apparently has his sights set on a bigger challenge than turning around Merck, (chortle, chortle).
PHARMA/POLICY: The NY Times misses the point on medicinal marijuana
The New York Times has a very dumb article about medical marijuana called Medicinal Marijuana on Trial, which suggests that medical marijuana hasn’t been properly proved by clinical trials.
Well leaving aside that plenty of drugs have been approved by the FDA which have had less than full trials, there are three points not made in the article.
1st: Medical marijuana has been broadly favored by an Institute of Medicine report, and the Federal government has been sending it out for years to a very few patients.
2nd: There have been no major trials in the US, and precious few elsewhere, precisely because the DEA has stopped it for purely political reasons. So this article, which shows modest benefits from the few studies that have been done, but irrelevantly claims that this is outweighed by the impact on teenagers who smoke vast quantities of marijuana for no medical purpose. So we deny sick people medicine because of the actions of other people. Well in that case, we shouldn’t allow Percocet for people coming out of surgery, because some people are heroin addicts. Illogical rubbish and the NY Times should know better.
3rd: Most importantly, like Ginko, vitamins, fish oil and God knows how many other "cures", sick people take medical marijuana because they think it makes them feel better and healthier. Making people feel better is the point of medical care. Rightly or wrongly people should be allowed to have what they believe to be medicine. And despite some 75% of the country being in favor of allowing medical marijuana, it’s purely political grandstanding by extremist (and predominantly family values Christian) groups–being used as a front for the vast amount of money that the taxpayer has to pour into law enforcement–that has opposed sick people getting what they believe to be medicine. Shameful.
PHARMA: Pain Therapeutics update
Wacky trading indeed in Pain Therapeutics stock Thursday. As faithful THCB readers know I’ve been in this stock for some time. They have two parallel phase 3s on the first of their potentially huge drugs– Oxytrex, a replacement for Oxycontin. In the phase 2 Oxytrex did better on pain control than generic oxycontin (oxycodone). In the phase 3 it did only as well (or slightly better depending on how you interpret it) BUT it showed lower side effects. The stock would obviously have been much better today if it had done better on pain (the primary end point) and on the news the stock sold off from $6 down to about $5.20. But over the course of the day people started looking at the side-effects — particularly proxies for addiction — and the stock came back to where it started.
Of course oxycodone is already pretty good at dealing with pain, as any hillbilly heroin addict knows, so the FDA’s decision is probably as dependent on the side-effects as it is on the pain reduction effects of Oxytrex. In that way it’s an improved me-too. But many successful US drugs are improved me-toos (anyone for Lipitor?) and reducing the addictive properties of opiates would be a substantial improvement in the real world of DEA crack-downs on doctors.
It’s the addiction story that has been the key all along, as the drug binds a molecule to the opiate that has shown it to be less addictive in rats. That’s hard to test in humans, but they got a finding which suggests that it’s working in this trial. If it does OK (i.e. no negative surprises) in the next phase III then I think they’ll get FDA approval at the end of the year. I’m surprised that the stock hasn’t gone up alot more on this news — but even if it’s a moderately successful drug which gets 25% of the market for OxyContin (now $1.5bn), that’s revenues of 3-400m a year for a company with a market cap of less than 300m with 100m in cash. That should translate to a market cap of $1-1.5bn or a stock price of 30-50. So the market is confused, but I think the downside is low from here — and Pain Therapeutics has TWO more drugs in phase 3!
I still think this stock eventually will be a barn burner, but it definitely would have been better for us poor shareholders had it shown better performance on the pain metric v oxycodone. Of course Oxycontin will come off patent soon and the revenue size of the market will fall, but Oxytrex looks like the logical replacement to me. I still think anyone who got some at 5.20 this morning will be very happy. I have a bunch lower than that but I’ve been here since 1999 and I ain’t leaving yet!
