Posts Tagged ‘pharma’

kidney transplants and dialysis

Tuesday, December 15th, 2009

Outrageous news from the USA.

Although Medicare is primarily an insurance program for older Americans and the disabled, it has since 1973 covered those with end-stage renal disease, regardless of their age or condition.

The federal program now pays for most costs associated with dialysis and transplantation. But for patients younger than 65, coverage of the anti-rejection dugs — which can run from $1,000 to $3,000 a month — ends after three years. If patients cannot afford the medications, they may lose their donated kidneys and have to return to dialysis while awaiting another transplant.

The policy is widely regarded as pound-foolish. Medicare spends an average of $17,000 a year on kidney transplant recipients, most of it for the anti-rejection drugs, compared with $71,000 a year on dialysis patients and $106,000 for a transplant.

Kevin Sack, “Plan for Kidney Drugs Spurs Division”, New York Times, 15 December 2009.

House Democrats have tabled a proposal to extend Medicare coverage of transplant patients beyond the current limit of 36 months. To pay for the extra coverage, the proposal requires Medicare to “set a flat fee for dialysis treatments and related medications that some providers say would not cover costs”. Those in the business of providing dialysis are lobbying against the proposal. This “supporters of the measure fear … may make it easy for Congress to kill the provision altogether”.

The news story raises a number of questions. Isn’t it possible for a country as wealthy as the USA to provide proper medical care for those who suffer from kidney disease? Why does provision of anti-rejection drugs to transplant recipients have to come at the expense of caring for those who lack a functioning kidney? Can’t US taxpayers afford to support both groups?

how big pharma prevents competition

Wednesday, December 9th, 2009

The Wall Street Journal‘s Health Blog has an article explaining how Abbott is able to prevent generic competition in its sales of TriCor, a cholesterol-reducing drug first marketed in Europe in 1975. The reason:

Abbott licensed the compound to sell in the U.S. in 1998, and has been jockeying to keep it patented ever since ….

In 1999, a generic drug company that was later acquired by Teva applied to market a generic version of TriCor. Abbott sued for patent infringement, changed the dosage of TriCor and changed it to a tablet from a capsule. Then the company filed for a patent on the slightly modified form of the drug and bought back the capsules that pharmacies still had on their shelves.

Because the company had changed the type of pill and the dosage, pharmacists couldn’t swap in the generic capsules Teva planned to introduce, because they were no longer identical to the tablets Abbott was selling. In 2002, Teva asked the FDA for permission to sell a generic version of the tablets, and Abbott again altered the dosage and formulation.

Jacob Goldstein, “How a Decades-Old Drug Is Still a Patented Blockbuster”, WSJ Health Blog, 1 December 2009.

In March 2011, Abbott’s new patent runs out, which might be good news for Teva and for patients. But don’t get your hopes up, since “last year, the FDA [Food and Drug Administration] approved a new Abbott drug called Trilipix, which is similar to TriCor but which is approved for use in combination with statins, a popular class of cholesterol drug. Now Abbott is busy trying to get patients to switch from TriCor to TriLipix before TriCor goes generic.” The generic name for TriCor, by the way, is fenofibrate.

Thanks to “Mike the Actuary” for the pointer.

marketing prescription drugs

Thursday, December 3rd, 2009

The US Congressional Budget Office (CBO) yeseterday released an 8-page report on how pharmaceutical companies promote prescription drugs.

The way that pharmaceutical manufacturers promote prescription drugs has changed significantly in the past decade. Until the late 1990s, pharmaceutical manufacturers confined their marketing efforts largely to physicians and other health care providers. In the late 1990s, however, drugmakers began marketing directly to consumers—a practice known as direct-to-consumer (DTC) advertising. …. In 2008, spending on DTC advertising totaled $4.7 billion, nearly one-fourth of pharmaceutical manufacturers’ expenditures for all promotional activities. Those developments may be having an impact on the functioning, cost, and effectiveness of the nation’s health care system.

Sheila Campbell, “Promotional Spending for Prescription Drugs”, Economic and Budget Issue Brief, Congressional Budget Office (CBO), 2 December 2009.

Here is some detail, shown in a chart taken from the report:


The CBO’s data set includes more than 2,000 prescription drugs, only 700 to 800 of which are promoted in any given year. Promotional expenditure almost always includes detailing, but DTC advertising is limited to fewer than 100 drugs in a typical year, and is inevitably accompanied by unusually heavy expenditures on detailing. “Although DTC advertising might spur a consumer to visit his or her doctor, the physician must prescribe the drug; therefore, manufacturers would seek to ensure that physicians were also informed about the drugs they advertised to consumers.”

The report contains much of interest. Especially interesting, to me, was the fact that DTC advertising is heaviest for drugs that have no direct competitors. At first glance, this seems strange. Why should a monopolist want to advertise its product? Two reasons are given. First, a monopolist can set its price above cost, earning monopoly profits on each additional unit sold. Second, if there are few (or no) competing drugs, there is little (or no) risk that advertising will spur demand for a competing product, rather than the advertised drug itself.

A tip of the hat to Catherine Rampell for today’s TdJ.

placebos are becoming more effective

Wednesday, August 26th, 2009

From 2001 to 2006, the percentage of new [pharmaceutical] products cut from development after Phase II clinical trials, when drugs are first tested against placebo, rose by 20 percent. The failure rate in more extensive Phase III trials increased by 11 percent, mainly due to surprisingly poor showings against placebo. ….

It’s not only trials of new drugs that are crossing the futility boundary. Some products that have been on the market for decades, like Prozac, are faltering in more recent follow-up tests. ….

It’s not that the old meds are getting weaker, drug developers say. It’s as if the placebo effect is somehow getting stronger. ….

The roots of the placebo problem can be traced to a lie told by an Army nurse during World War II as Allied forces stormed the beaches of southern Italy. The nurse was assisting an anesthetist named Henry Beecher, who was tending to US troops under heavy German bombardment. When the morphine supply ran low, the nurse assured a wounded soldier that he was getting a shot of potent painkiller, though her syringe contained only salt water. Amazingly, the bogus injection relieved the soldier’s agony and prevented the onset of shock.

Returning to his post at Harvard after the war, Beecher became one of the nation’s leading medical reformers. Inspired by the nurse’s healing act of deception, he launched a crusade to promote a method of testing new medicines to find out whether they were truly effective. ….

By 1962, … Beecher’s double-blind, placebo-controlled, randomized clinical trial—or RCT—was enshrined as the gold standard of the emerging pharmaceutical industry. ….

Beecher’s prescription helped cure the medical establishment of outright quackery, but it had an insidious side effect. By casting placebo as the villain in RCTs, he ended up stigmatizing one of his most important discoveries. The fact that even dummy capsules can kick-start the body’s recovery engine became a problem for drug developers to overcome, rather than a phenomenon that could guide doctors toward a better understanding of the healing process and how to drive it most effectively.

Steve Silberman, “Placebos Are Getting More Effective. Drugmakers Are Desperate to Know Why”, Wired Magazine, September 2009.

This article is fascinating, and well worth reading. It is a superb addendum to Merrill Goozner’s 2004 book on Big Pharma. After years of ignoring the effect of placebos, Merck, Lilly, Pfizer, AstraZeneca, GlaxoSmithKline, Sanofi-Aventis, Johnson & Johnson, and other major firms are now funding a massive data-gathering effort called the Placebo Response Drug Trials Survey. It is now clear that response to placebo is a physiological phenomenon, not—as previously thought—a psychological trait related to neurosis and gullibility of patients.

It is possible that—because of mass advertising and because of the increased effectiveness of real drugs—people have more faith in all types of pills. Pharmaceutical companies then are victims of their own success.

I don’t understand, though, how Big Pharma will be able to profit from a study of placebos. Perhaps they don’t expect to, which would explain why they are co-operating, rather than working secretively and independently.

Steve Silberman ia a contributing editor at Wired Magazine. HT to Tyler Cowen at Marginal Revolution.