I kick off this segment with a surprising twist: I describe a hospital error that I experienced as a patient in the ER of a famous academic medical center. And yes, I give a shout out to Paul Levy at minute 5 for his courageous efforts to reduce infection rates at Beth Israel Deaconess Medical Center in Boston.
For more information about this lecture, check out:
Meredith Gould’s blog post, A Tale of One Presentation
Science-Based Medicine’s, Mainstreaming Science-Based Medicine: A Novel Approach
A thoughtful and (dare I say it) balanced look at medical malpractice in today’s NYT:
Malpractice System Breeds More Waste in Medicine - NYTimes.com
The debate over medical malpractice can often seem theological. On one side are those conservatives and doctors who have no doubt that frivolous lawsuits and Democratic politicians beholden to trial lawyers are the reasons American health care is so expensive. On the other side are those liberals who see malpractice reform as another Republican conspiracy to shift attention from the real problem. [...]
The direct costs of malpractice lawsuits — jury awards, settlements and the like — are such a minuscule part of health spending that they barely merit discussion, economists say. But that doesn’t mean the malpractice system is working.The fear of lawsuits among doctors does seem to lead to a noticeable amount of wasteful treatment. Amitabh Chandra — a Harvard economist whose research is cited by both the American Medical Association and the trial lawyers’ association — says $60 billion a year, or about 3 percent of overall medical spending, is a reasonable upper-end estimate. If a new policy could eliminate close to that much waste without causing other problems, it would be a no-brainer.
*This blog post was originally published at Movin' Meat*
Dr. Jim Hill is a friend of mine and co-developer of the National Weight Control Registry - the nation’s largest database of individuals who have lost at least 30 pounds and kept off the weight for at least 1 year. Jim has been studying their commonalities - and has determined that there is in fact a recipe for long-term weight loss success. I shared the recipe with ABC news today. My interviewer (Natasha Barrett) was really funny, and had tendencies to blurt questions in the middle of our conversation (such as: “what do you think of granola bars?”)
Defense Secretary Gates With Dr. Val
I recently wrote about the heroic efforts of volunteer pilots involved in Mercy Medical Airlift and Air Compassion for Veterans. I met Steve Craven on a shuttle to a Red Cross event with US Defense Secretary Robert Gates. Steve kindly explained a little bit about what some airlines are doing to contribute to our active duty and veterans’ medical transportation needs. I was soon contacted by American Airlines to help them with awareness efforts of their own veterans initiatives.
I interviewed Captain Steve Blankenship, the Managing Director of Veterans Initiatives at American Airlines. Feel free to listen to the podcast or read a summary of our discussion below.
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Dr. Val: Tell me a little bit about yourself, Captain.
Blankenship: Being a veteran myself (20 years with the US Cost Guard) a count it a real privilege to serve our veterans. During my first 8 years with the Coast Guard I was a helicopter rescue crewman doing search and rescue based out of Miami, Florida. I eventually went to navy flight training and retired from the military in 1991 and was hired to fly for American Airlines for the next 14 years. In 2004 I helped to launch their Veterans Initiative.
Dr. Val: Tell me about Operation Iraqi Children and Snowball Express.
Blankenship: There are so many children who have never been in uniform, but who have paid the ultimate price of losing a mom or a dad in war as they defend our freedoms. American Airlines is particularly proud to be supporting childrens’ initiatives. The Snowball Express program involves private flights around the country to pick up kids and their surviving parent to take them on a fun-filled trip during the difficult winter holiday season.
Actor Gary Sinise helped to co-found Operation Iraqi Children where we shipped over 25 tons of toys and educational materials to Iraq. Our troops were able to give out 10,000 individually wrapped gifts to young children in Iraq.
Dr. Val: What about American Airlines’ support of the iBot Mobility System for wounded veterans?
Blankenship: The iBot is a special kind of wheelchair (designed by the guy who created the Segway) that allows its user to sit at an eye level with someone standing next to them. They can also climb stairs. To date we’ve raised over $700,000 to buy these iBot Mobility devices for our wounded warriors.
Dr. Val: What else is American Airlines doing for veterans?
Blankenship: We fly wounded warriors and their families on charter flights from Brooks Army base to Disney World. We have three dedicated “yellow ribbon” airplanes that we use to fly recovering service men and women to events so they can get out of their rehab centers for a period of time and have fun with their families. This kind of charity comes naturally to us because American Airlines was founded by a military veteran and over 10% of our current staff are either active duty military personnel or veterans.
Every day we go to work, we recognize that the right and privilege we have to fly our airplanes and transport our passengers was paid for by the men and women who wear the cloth of our nation. American Airlines is continually looking for ways to thank them and support the efforts of our military.
Dr. Val: How do military and their families find out more about your programs and services?
Blankenship: They can send me an email directly and I’ll make sure they’re referred to the right place.
steve.blankenship@aa.com
Asking a bunch of doctors and nurses what they want out of health care reform is like asking a group of teens what toppings they want on a pizza: You’re going to get a lot of different answers, with the loudest proclamations reserved for what they don’t want.
Such a group came together July 17 at the National Press Club in Washington, D.C. at an event called Putting Patients First, hosted by Better Health. The unanimous conclusion: Get government out of the health care delivery continuum.
Val Jones, M.D., CEO of Better Health, said, “I don’t think people outside the doctor-patient relationship should be making life and death decisions” on behalf of the patient or doctor. Rep. Paul Ryan (R-Wis.), the event’s keynote speaker, said government has an obligation to establish conditions for free markets to thrive. Ryan blamed insurance companies for the problems with health care today - essentiually stating that insurers dictate the care that providers can deliver - and he called for a solution that does not involve heavier government.
“Government bureaucracy is not the answer to insurance bureaucracy,” Ryan said. The government’s failure to control costs in Medicare and Medicaid “shows us we should get government out of the way and put more faith in the market. Providers should compete against each other for our business.”
Ryan claims that the so-called ‘public option’ in President Obama’s proposed health care reform initiative would allow the government to be “referee and player in the same game,” and that companies hoping to compete for consumer health care dollars would be at an unfair disadvantage. Obama’s plan would result in “cookie-cutter standards” for determining individual patient care, set unfairly low reimbursement rates and create an economic barrier to young talent hoping to enter the medical profession.
Ryan added that Obama’s plan offers no incentives for people to get and stay healthy, which would lower health care costs. But offering reduced insurance rates to a consumer who, say, quit smoking or lost excess weight “would be illegal” under Obama’s plan, Ryan noted. “So there’s no incentive” for people to take better care of themselves. Ryan has a plan that he says would include a “carrot and stick” provision to reward people for maintaining a healthy lifestyle.
Between two expert panels, Robert Goldberg, Ph.D., co-founder of the Center for Medicine in the Public Interest, showed a video, complete with scary background music, of patients in Canada and the U.K. complaining about abhorrent wait times to see doctors and government-mandated denial of life-saving treatments. Goldberg concluded that government-run health care in the U.S. would yield a similar system, with patients wasting away in the long shadows of a bureaucratic monster while doctors and nurses stood by, helplessly bound by the new rules. (One panelist later noted that polls show 70 percent to 80 percent approval among Canadians for that country’s health care system.)
The event did yield some progressive ideas for improving the U.S. system.
Alan Dappen, M.D., associate clinical professor at Virginia Commonwealth University School of Medicine, Department of Family Practice, and founder of DocTalker, a practice in Fairfax, Va., has moved a huge chunk of his patient consultation onto the phone. Patients still pay for his time - just as they would for an office visit - but the system is much more efficient than having every patient come in for every ailment. “If you have a tick bite or an ear infection I don’t necessarily have to see you,” he says. Further, he says, the documentation for treating such minor ailments “should not go through 30 people” at an insurance company to ensure the doctor is paid or the patient is reimbursed. “That’s just ridiculous.”
Dappen has been practicing this way for eight years and says it takes on average 10 minutes to solve a patient’s issue over the phone. “Most of our patients are helped to satisfaction,” he said. And as a result of the time saved on patient visits, he added, he has time to do house calls - and is the only doctor in Fairfax County who does so.
Rich Fogoros, M.D., a former professor of cardiology and cardiac electrophysiology and longtime practitioner and researcher who is now a consultant and writer, suggested that primary care physicians go “off the grid” - i.e. refuse to participate in any insurance plan. That, Fogoros said, will force regulators and insurers to acknowledge that current practices by insurance companies have destroyed the doctor-patient relationship.
Kevin Pho, M.D., an internal medicine physician in Nashua, N.H., and author of the blog Kevin, M.D., said the most common complaint he hears from his patients is how little time they get to spend with him during a typical visit. “We are incentivized to see as many people as possible,” Pho said, not to provide the best care possible for each patient. One solution: hourly pay for doctors, siilar to the ‘billable hours’ system used by lawyers.
James Herndon, M.D., an orthopaedic surgeon and chairman emeritus of the Department of Orthopaedic Surgery at Partners health care (an integrated health system founded by Massachusetts General Hospital and Brigham and Women’s Hospital) in Boston, Mass., voiced concern about doctors in hospitals who won’t take care of the uninsured and underinsured. The doctors “keep pointing them elsewhere until they end up in the trauma unit, which is the last resort,” he said. “I would mandate that [all doctors on staff] see their share” of those patients.” Herndon added that he favors “public support,” such as some form of a tax, to ensure doctors are compensated for providing that care. He also conceded that the health care industry has become too profit focused. “The CEO of United Health made $1.2 billion” in one recent year. “We need to get rid of excess profit in insurance.”
Kim McAllister, R.N., the author of Emergiblog, said that, no matter which plan emerges from the ongoing debate in Washington, “People will circumvent it by showing up in the emergency room.” She recounted a story of a patient in California who went to the emergency room for a headache - twice - because he couldn’t get a timely appointment with his physician. She favors a health care savings account model under which each consumer could then “decide what provider they see and when they see that person.” McAllister suggested allowing the money to roll over from year to year - another nod to rewarding healthy lifestyles - although she strongly implied that allotments would be scaled based on a person’s income.
And this hit a point on which most of the participants seemed to agree: For consumers who really cannot afford health care in a free-market system, the government should have funds available to help them pay.
Those on the left will pretty much sacrifice everything to attain their goal of universal coverage.
But, in this well-reasoned piece by conservative economist Tyler Cowen, expanding coverage won’t necessarily control costs, which is a more imperative issue. The bandied about means of cost control, such as electronic medical records, cutting provider payments, and preventive care, all will have little nor no impact in controlling costs.
Take physician reimbursements, for instance, a favorite target of health reforms. According Princeton economist Uwe Reinhardt, a favorite son among policy wonks, cutting physician pay by 20% would only reduce spending by 2%.
Furthermore, under the current payment system, simply cutting provider reimbursements will only give more of an incentive to do more procedures to make up for lost revenue.
The hard truth is that care will be rationed, and that’s something the Obama administration is unwilling to admit. Indeed, as Mr. Cohen writes, “if we aren’t willing to take even limited steps to conserve resources, we shouldn’t be spending any more money elsewhere.”
Cost control first before universal coverage, and therein lies the central contention of the debate.
And the worst case scenario, as progressive blogger Ezra Klein correctly surmises is, “that the final bill will include a pricey expansion of coverage paired with a speculative and uncertain set of cost controls.”
*This blog post was originally published at KevinMD.com*
[Dr. Jim Herndon is a past president of the American Academy of Orthopaedic Surgeons, and chair emeritus of the department of orthopaedic surgery at Partners Healthcare]
***
The challenges of health care reform are enormous. To expect that the vast array of problems that exist today will be corrected or solved in a couple of months is totally unrealistic. Witness the moving target of announced changes and options occurring daily in the press and media in general. And add to the confusion…these changes are being developed at the top (Congress and the White House)…not from the bottom up (from doctors, nurses and other health care providers, and importantly, patients). In their place are the powerful lobbyists…the health insurance industry, the hospital industry, the drug industry and even organized medicine (AMA)…who wield their influence over our policy makers by all sorts of tangible (financial donations) and intangible (spouses of leaders on corporate boards) pressures.
I must admit, although occasionally said without real meaning…I don’t hear an outburst of support for the essential mission/purpose of health care…the health of our citizens…”the patient comes first”. Where is the patient…who is supposed to come first…in this national debate?
Everyone knows that health care is expensive. In 1970 health care spending consumed 7% of the Gross Domestic Product. In 2009 health care spending is consuming 16% or more of our Gross Domestic Product. It is increasing more rapidly than inflation. Yet, as a nation, we have not…in all these years…had a serious conversation about Americans’ health. Where is it in our list of priorities? I don’t think we know. From recent events we do know it is lower than the need to remove Saddam Hussein from power…it is lower than bailing out investment companies and banks…it is lower than stabilizing the mortgage market…and it is lower than bailing out two automobile manufacturers. I am not knowledgeable enough to question the priority of the bailouts of banks and financial institutions or the mortgage companies…but I do question the priority of removing another country’s dictator or bailing out two automobile manufacturers instead of allowing them to proceed through bankruptcy in our court system…over health care reform.
Too often in my lifetime I have seen the importance of health care reform pushed down the list of priorities over other needed programs…to wait for another day. How important is the patient, the health of Americans today? How far are we going to push the profession of medicine from “a calling”…a profession, as President Obama states to “a business”. It is known that patients trust their doctors, but not our health care system. When will patients begin to trust their own doctors less? It will happen if and when they believe doctors are more “concerned with the pulse of commerce” rather than the “pulse of their patients”. I submit we are getting very close to this tipping point…in losing the trust of our patients and society in general.
There is no unanimity of opinion regarding the health care reform debate…amongst Democrats, amongst Republication…amongst the public…amongst physicians in general…and orthopaedic surgeons specifically. I asked a few young physicians in an orthopaedic residency program their opinions about the health care reform debate. All believed that every American should have basic health care insurance coverage. Obvious to them, it would include coverage for care of patients with acute fractures or patients with severe pain or loss of function. They admit not knowing much about the “public option” and the swirling politics going on. They also were not comfortable with defining what situations or problems would not be covered by insurance…although they agreed that some restrictions above “basic care” would have to be implemented.
Their responses reminded me that in 1990, when I was in graduate school for an MBA…we had a class debate about whether health care was a right or not of all citizens? Although the discussion was lively and some felt health care was a privilege, the class conceded that health care was a right of all citizens…admitting historically it was considered a privilege for the few who could afford it, but then (1990 or earlier?) health care had become a right for all in the US. I then asked a few of my colleagues who enjoy leadership positions in the field of orthopaedic surgery their opinions regarding health care reform. They also could not agree on the issues of this debate.
One area where they did agree was that academic medical centers are not well positioned for the future…especially those that depend on state funding. We have already witnessed this in Massachusetts where apparently the state has decreased funding to some teaching hospitals that traditionally have cared for a large number of uninsured. Now that most citizens have insurance, they are seeking their care in other hospital emergency departments. My colleagues also agree that physicians will receive lower payments for specific treatments or participate in “bundled” payments to the entire healthcare team/facility for comprehensive care of the patient.
Otherwise my colleagues disagreed. On the one side some support the public option and universal coverage…although “the devil is in the details”. For this group they have become tired…like so many American physicians…with the convoluted way we finance health care and the associated paper trail/documentation overload. The system has made some patient conditions profitable and others not profitable…described by one as “perverted incentives”. These physicians (me included) are angry at the loss of our professionalism as hospitals and physicians chase dollars and not the health needs of each patient and the public. On the other side (against public option), my colleagues have some agreements…most orthopaedic surgeons are supportive of care of the uninsured and underinsured, especially for patients presenting with acute problems to hospitals’ emergency departments. Most also agree that there needs to be a serious realignment of incentives and improved collaboration of hospitals and doctors.
But they have many disagreements…including the provision of elective care. They argue…with good reasons…that with continued rising costs to practice medicine (rent, electronic records, employee wages and benefits, malpractice insurance, increased personnel requirements for the administration/paperwork overload) and continued reductions in reimbursement (Medicare, for example, pays an orthopaedic surgeon today approximately 50% of the reimbursement it paid for a total hip replacement in 1990)…it is becoming increasingly problematic to provide elective care for the underinsured and uninsured. They commonly ask…”How can you provide care that costs more than any receipts”?
Other disagreements include: the single payor system…they don’t believe it will work; although well-intended, they believe these reforms will result in overall lower quality of care for patients; that emergency departments will still be used by those with insurance because patients can see a physician at the patients’ convenience and avoid long delays to see a doctor in his/her office…for example there is a 40-day wait to see an orthopaedist in his/her office in Boston; the continued tremendous demands by American patients to have the latest technology, the latest treatment…even if evidence for its use is unknown; skepticism about the prevention of disorders that have a genetic basis, i.e. osteoarthritis…in the foreseeable future; the simple fact that to reduce errors and overuse/misuse of tests by an electronic medical record and computer physician-order system will cost enormous amounts of increased spending in the short term…before cost savings are eventually realized… and to draw attention to one specific unsolved problem area…Workers’ Compensation…where orthopaedists, daily, see ineffective treatments being used and large numbers of patients on disability.
Briefly, the follow are factors that have led to increased and inefficient health care in the US: high administrative costs; overuse of services and new technology; an increased prevalence of chronic disease; tremendous geographic variations in care; increased payments not resulting in improved quality; a continually high number of medical errors and complications; a broken professional liability system; a shift in costs from the uninsured to the insured; a predominant third-party payer system; overuse and misuse of care; focus changing from the patient to the pocketbook; insurance company abuses (cherry-picking healthy patients, denying care of patients with chronic disease, deliberately lowering the normal of “usual and customary” fees…to name a few); and continued issues of fraud and abuse, especially in the Medicare and Medicaid programs.
Finally I would like to close with the official position of the American Academy of Orthopaedic Surgeons (AAOS) on health care reform: “Any changes to the health care financing and delivery system…the well-being of the patient must be the highest priority. The AAOS strongly supports reform measures…that provide individuals with patient-centered, timely, unencumbered, affordable and appropriate health care and universal coverage while maintaining physicians as an integral component to providing the highest quality treatment”.
The AAOS is opposed to a single-payer health system or even a federal health care authority. The AAOS suggests “a number of tax initiatives…that will level the playing field and make health care coverage more affordable”. There should be “adoption of policies that restore equity and enhance market competition”. The AAOS also “strongly believes that patient empowerment and individual responsibility are necessary components of health care reform. Health choices should be recognized and preventive care should be promoted”.
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.
Obama Open to Reining in Medical Suits
In closed-door talks, Mr. Obama has been making the case that reducing malpractice lawsuits — a goal of many doctors and Republicans — can help drive down health care costs, and should be considered as part of any health care overhaul, according to lawmakers of both parties, as well as A.M.A. officials.
Wow. Yay. Crisis over, let’s move on to something else now.
Or maybe not.
Senator Max Baucus of Montana, the chairman of the Senate Finance Committee, is expected to outline his proposal for a health care overhaul this week, and aides said liability protection for doctors is not part of the plan.
So, I’m guessing that Obama’s talk about supporting med mal reform runs about as deep as his comitment to gay rights. Which is to say that he’ll put out some happy talk about it to appease a necessary constituency but won’t twist any arms or spend any capital in Congress to actually make it happen.
Worse, the semi-concrete proposals I have seen don’t look like they’ll offer much protection. Jon Cohn at TNR links to a summary of a few options:
Win-Win-Win on Malpractice Reform? - The Treatment
Disclosure-and-offer programs, in which health care providers disclose unanticipated outcomes of care to patients and make prompt offers of compensation. Patients do not waive their right to sue by accepting the offer, but reportedly, few go on to file lawsuits.
It’s hard to see this as reform at all. Disclosures are nothing new any more, and it’s always been good tactics to make an offer of compensation if there actually was substandard care. I doubt this will be embraced by the medical community, since when you do a disclosure you’re basically giving a potential plaintiff a roadmap for their future lawsuit. You’re basically relying on their sense of decency to avert a suit, and how that fact can be altered I cannot imagine. Another commonly cited option would be to:
create a federal “safe harbor,” retaining the current process of adjudication but insulating physicians from liability if they adhered to evidence-based medical practices. For example, legislation introduced by Senator Ron Wyden (D-OR) in February would create a rebuttable presumption that care was not negligent if the physician followed accepted clinical practice guidelines.
Sound great, but good luck applying that standard. Consider Whitecoat’s trial, in which the case seems to be hinging on the fact that the got the right diagnosis and performed the right treatment, but he may or may not have done so in a timely fashion. Presuming there even exist “guidelines” for a particular condition or presentation, there are so many technical variables in the execution of the care under these guidelines that I don’t see how juries could be expected to put this into practice.
Consider a child with meningococcemia. It’s a no-brainer that a child with this deadly infection needs to be given antibiotics as soon as possible to have a chance to survive, and there’s probably a guideline out there that makes reference to “urgent” or “timely” administration of antibiotics. So, if a kid comes into my ER with a fever and petechiae and I don’t get the Rocephin in for, say ninety minutes, was that timely enough? Or maybe the kid didn’t have the rash on presentation, but at hour three of an extended ER work-up the rash is noted and then antibiotics are given? Or maybe I was too rushed, stupid or negligent to notice the rash and didn’t give antibiotics till hour three. My point is that it’s meaningless to say that “guidelines were followed” when it’s impossible to write guidelines that cover every clinical circumstance. Worse, if implemented narrowly, the “safe harbor” would offer very very little protection, and if construed broadly, it would make it very difficult to actually distinguish negligent care from good care.
The reason I’m spending so much time on this point is that this proposal has had explicit endorsement from Obama himself, his Chief of Staff Rahm Emanuel and his physician brother, Ezekiel Emanuel, and key legislators like Senator Ron Wyden. It sounds great, but it too is just “Happy Talk.”
The last option cited is the classic option of moving med mal cases to specialized health care courts of some variety. I’ve always thought this had great potential, but there doesn’t seem to be any political support for it and it would certainly be fought tooth and nail by the trial lawyer’s association.
So it’s looking more and more like health care reform, if enacted at all, will probably not include any meaningful or effective national solution to the ongoing malpractice crisis. Plenty of “Happy Talk,” but no action and no solutions. Not that I really expected any, coming from a Democratic President and a Democratic Congress, but hope does spring eternal.
*This blog post was originally published at Movin' Meat*
