Oncology Drugs — shortcuts and high cost

ShortcutSome shortcuts just don’t work out.  The US oncology drug industry has found ways to reduce the time from drug discovery to market by taking shortcuts called “surrogate endpoints”.

The two most important questions cancer patients have when thinking about cancer drugs are 1) how much life do I gain? (survival) and 2) will I feel OK while I survive? (quality of life).  The problem for drug makers is it is expensive and time consuming to answer those questions (to use endpoints of survival and quality of life).

Drug surrogates are measurements that show some effect of a cancer drug but are not absolutely related to those 2 primary questions.  An example of a surrogate endpoint is “event-free survival”.  This is a measure of time, like the time from when chemotherapy is given before something bad happens.  Clearly important, but not the same as survival or quality of life.

The Federal Drug Administration (FDA) has a list of surrogate endpoints it will accept in order to approve cancer drugs.  Drug companies have progressively moved research to those surrogate endpoints.  The graph below is based on the data of Martel.Cancer Treatment Endpoints

 

 

 

 

Many times this shortcut is helpful for patients but it is always helpful for drug makers.  It has decreased the costs associated with marketing a drug.  But, the cost of drugs has gone up at a faster rate than the prolongation of life the drugs impart.  And, that survival may not be a benefit in quality of life.  Now, virtually all new anticancer drugs exceed the $50,000 per quality life year many social researchers say is the amount our economy can afford.  It means insurance can’t include those drugs otherwise premiums would be so high the average citizen could not afford the insurance.  Here is a very disturbing graph from an article by Howard.chemo costs and life year

The vertical axis is that cost being paid for one year of life provided by a cancer drug.  The horizontal axis is the year in which that drug was approved.  Meaning it’s not a very good deal — the cost of one year of life gained by chemotherapy is rising and you likely can’t afford such drugs.  The economics are really depressing and the situation is absolutely not sustainable.  Rather than hoping a treatment will be invented we will be hoping the cost of that treatment is within reach.

There are signs the cancer drugs are overpriced, inflated by speculation and simple price gouging.  To the extent such unethical practices exist they need to be rooted out and stopped.  Given the past history of big pharma there is likely a lot that needs to be fixed.

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Medicare Penalizes Hospitals — safety problems

MC Hospital Penalties

Hospitals in the lowest quartile of safety scores from Oct 1, 2014 to Nov 30, 2015 were recently penalized 1% of Medicare billings as detailed on the Medicare.gov web site.  The above graphic highlights the results in terms of the number of hospitals penalized per million medicare enrollees in each state.  Red indicates the most hospitals penalized and green indicates the least with the lighter shades in between.

New York had many hospitals penalized but Alaska only had a few.   However, Alaska does not look very good considering they don’t have very many Medicare enrolees (or other people for that matter).  So a patient’s chance of experiencing safety problems is higher in Alaska.  This reflects poorly on the State-wide hospital quality programs and the importance hospitals in that state place on quality.   If you live in a state with poor performing hospitals then be especially careful to pick hospitals with the best scores.  KHN.org  lists the poor performing hospitals.

The four Medicare safety measures were somewhat limited and heavily focused on surgery:

  1. The AHRQ Patient Safety Indicator (PSI 90 Composite)
  2. Central Line-Associated Bloodstream Infection (CLABSI)
  3. Catheter-Associated Urinary Tract Infection (CAUTI)
  4. Surgical Site Infection (SSI) – colon and hysterectomy

What should be done?

  1. Patients should avoid hospitals with lower scores
  2. Poor performing hospitals should make better use of state quality resources.  Spend more money on boosting quality than on remodeling or building new facilities.
  3. High performing hospitals should redouble safety efforts.  Improved performance by competitors could push complacent hospitals toward lower ratings.
  4. Hospitals should not just focus efforts on the few areas that are rated — overall safe care and quality care are the goals.  The basis for financial penalties could, and very likely will, change.

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Why the US Pays More for Drugs

MoneyThe people in the United States pay more for drugs than any other country.  And, they pay more to universities to do drug research than other countries.  In a nutshell, it is due to a lack of regulation in the U.S.

Two very insightful articles appeared in the past week addressing the inequity of global drug prices — The New York Times and the Wall Street Journal.

Drug companies constantly complain regulations are hurting profits.  Now it appears without enough regulation drug companies are hurting sick patients.  As big pharma points out, it’s all legal.  Basically, big pharma points a finger at the US Congress for not imposing restrictions common in the rest of the world.  Sounds like a circular argument!

Between the two articles linked above and this author’s experience here are the reasons:

  1. Abuse of patent laws
  2. Driving small drug  companies and generic companies out of business with frivolous but highly expensive suits.
  3. Release of a similar drug before a patent expires and manipulating doctors and patients to change to the new drug suggesting the similar drug is “MUCH” better (evergreening).
  4. Paying new drug makers to delay marketing their competitive drug (pay-to-delay).  While at the same time asking for a fast track through the FDA approval process.
  5. Claiming a new drug is novel when by any reasonable standard it is not (asthma inhalers are a good example).
  6. Coupling devices to drugs to double the difficulty for competition (like insulin pumps).
  7. Failing to pay their fair share of basic drug research, funded by the US government instead.
  8. Happily doing “inversion” deals to move headquarters to other countries to evade US taxes — into the very countries that strongly regulate drug company profits.
  9. Voluntarily limiting profits in many countries due to the threat of regulation, but failing to offer the same deal to the US.
  10. Lobbying successfully to prevent Medicare (a larger health program than the NHS in the UK) from negotiating prices as the UK has done for many years.
  11. Blackmailing patients to pay for old drugs at exorbitant prices because generic companies are afraid to compete (pricing because-they-can, oral beclomethasone is one example).
  12. Preventing drugs from other countries to be sold across borders because of unfounded safety concerns (crocodile tears).
  13. Actively avoiding drug comparison research — forcing others to do that type of research after the drug is already marketed.
  14. Doing cancer drug research with endpoints (such as tumor size) rather than life expectancy.  85% of cancer drugs now have no connection to the most basic expectation of patients, to live longer.
  15. The WSJ review of 40 drugs administered in physicians offices:  39 cost less in the UK, 37 cost less in Norway and 28 cost less in Ontario Canada.  The price gouging in the US certainly suggests racketeering.
  16. Drug company profits are 17% in the US and 7% elsewhere.
  17.  Actively avoid cost-effectiveness research — prescribers don’t know whether a new drug is better or worse than old drugs except by what is told to them by marketing.  (Unlike the UK drug system which is strongly linked to cost-effectiveness)
  18. Drug companies hide special deals with large customers so other customers have no idea of the low end of the price spectrum.  The companies are so large that a lone US State can not leverage deals needed to lower prices like countries can.

Perhaps I have missed some other corrupt practice or unethical behavior, there are just so many.  This mess needs to be cleaned up!  At very least the US Congress needs to institute controls similar to other countries.  Feel free to send this blog to your congressional representative — with a copy of your drug bills!

 

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Control Drug Costs — help from the ACA

costThe Affordable Care Act (ACA) does have some teeth to reduce drug prices.  The ACA formed a 15 member group intended to restrain the growth in cost of Medicare without reducing benefits.  The Independent Payment Advisory Board (IPAB) has powers to improve efficiency and prevent Medicare from being victimized by business interests.

Mergers of large pharmaceutical companies have created near monopolies for setting prices — the new specialty drugs are a case in point.  Also, by repeatedly suing smaller companies and generic manufacturers the competition is under siege if not defeated.   The huge rise in drug prices have become a national disaster because individuals and Medicare just can’t afford the price gouging.

The IPAB has some power to help the problem — hopefully they will act to implement reference pricing of new drugs.  It forces drugs with a similar effect to charge the same amount — old drugs and new.  So if a new wonderful drug “Neximabob” is no better for arthritis than ibuprofen then the prices must be the same.

The Federal Drug Administration can not require drug-comparison research.  This has been a wonderful marketing loophole for big pharma.  It’s time consuming to do comparison research.  By the time “Neximabob” is found to be a sham, billions of prescriptions have been filled,billions of dollars have been paid and Medicare has lost billions.  But, you will be happy to know, the FDA says “Neximabob” is safe and effective.

The IBAP can act on expert opinion rather than wait for full comparison research.  One option for drug companies is to do the comparison research (which they fight) or do more lobbying (more that the hundreds of millions they already spend).

Guess where the money for drug lobbying comes from?  the very tax payers and Medicare recipients who pay for the medications in the first place — it’s just not fair.  Next time you hear the IBAP is so so bad you will know who is speaking — it’s not consumers!


Note:   According to the Congressional Research Service the IBAP is not currently active because the rise in Medicare cost in 2015 is not enough to trigger actions by the committee.  There is some thought it may become active in 2017 unless repealed by Congress.

 

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Over prescribing — high risk for the elderly

hugsnotdrugs

Elderly patients are taking too many drugs.  And, in most cases the drugs can be stopped.  This surprising idea was highlighted by Dr. Ezekiel J. Emanuel in his New York Times article 11/22/15.  He backed up his statements with a study from 2010 (JAMA).  The figures that follow are from that study.

The first figure is the logic diagram for stopping medications in elderly patients who have several chronic diseases.  The second figure is the list of medications that were stopped in the study.  Only 2% of the stopped medications eventually had to be restarted.  The cost savings alone is huge and the reduction in the risk of side effects is likewise tremendous.  “Less is more”.

Health care providers often prescribe drugs intended for younger healthier patients to older sicker patients.  Often the drug testing originally done to approve drugs excludes older sicker patients due to the risks of side effects.  A drug might add many years of life to a 50 year old but that’s not likely for an 80 year old with multiple problems.   In fact, over medicating elderly patients may hasten death — this has been proven in many studies.

Dr Ezekiel suggests asking the following questions to the health care providers who prescribe medications, tests or treatments to elderly patients (or perhaps any patients):

  1. What difference will it make?
  2. How much improvement is expected?
  3. How likely and severe are the side effects?

Evaluate the answers carefully, if the answers are: small difference, not much improvement, and fairly likely side effects then perhaps that drug, test or treatment is not needed.

Dr. Emanuel favors the advice of teaching hospital doctors like him, but it’s just not practical or necessary for patients to get a university consultation.  Stopping medications is not rocket science.  As the graphic says, it may be better for many elderly patients to get “hugs not drugs“.

 

Figure 1

drugstop

 

 

Figure 2

medsstopped

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Specialty Drugs — at a price you can’t afford

specialtydrugcostBig Pharma blows the lid off the price for “specialty drugs”.  Those drugs now cost more than an average American’s income.  By 2020 the average specialty drug will cost $80,000 per year, just pray you don’t need two of them!

The data plotted above come from AARP.  The raw data is concerning and three questions beg to be answered:  WHY is this happening, IS THIS A PROBLEM and if it is a problem WHAT IS THE SOLUTION.

WHY?  — because big pharma wants to make a lot of money.  Somewhere, long ago and far away, some researcher wanted to help people with difficult medical problems.  But, that altruistic thought was crushed as the drug was marketed.

PROBLEM? — absolutely, the US healthcare system can not afford the drugs and neither can average individuals.   If a drug costs a trillion dollars it’s not a drug, it’s a joke.  So where is big pharma going wrong?  Here are some possible choices:

  • Too much is spent on research
  • Too much is spent on advertising
  • Too much profit is paid to shareholders

Where is US healthcare going wrong?

  • Too little regulation exists to require cost effectiveness research before marketing drugs
  • Too little drug price control is being exerted by the government.
  • Too little mirroring of price controls in other countries that shift profit taking to the US.

SOLUTIONS?  — if the trend is allowed to continue “Bronze” health insurance will not cover specialty drugs but “Platinum” insurance will.  Sadly, only the top 1% will be able to afford the “Platinum” plan.  The US will have more of a two tier healthcare system with a huge gap between the 99% and the 1%.

  • Impose cost controls on drugs — extremely high priced drugs should trigger rules to lower profits so such drugs will either cost less or not be produced.
  • Demand cost benefit analysis on all drugs before marketing — if the benefit is not worth the cost then don’t add them to the formulary for Medicare or Medicaid.
  • Wrap drug costs inside health plans.  That way other factors get consideration, like preventive care,  hip surgery, simple childhood vaccinations,  and pregnancy.  The big pharma bill should not be coming “off-the-top”.

 

 

 

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Insurance CEO Paid $66,000,000 — for what?

hatinringThe author of this blog is willing to be the CEO of United Healthcare for a mere $60,000,000 / year.  That would save the insurance company 6 million dollars a year — a real bargain.   So why does United Healthcare need a new CEO?

The Wall Street Journal reported today that United Healthcare (the nations largest healthcare insurer) can’t seem to make enough money with clients who get insurance on the government exchanges.  They feel other insurance companies should have those pesky patients, who cost more for a couple of years, because they did not have insurance before.

United Healthcare (NYSE:UNH) has been having a lackluster financial situation for the past few months, like almost all other stocks — perhaps a little worse.  Reports show the health insurer will lower its earnings-per-share outlook to $6 per share, down from its earlier forecast of $6.25 to $6.35 per share.

Could it be that the 25 cent drop in earnings is due to business on the exchanges? — surely it’s not the fault of the CEO?   But, why take a chance, get a new CEO.  The company could get a new CEO for half the price and even might be able to snag someone with a PhD in economics to help figure out what to do.   Duh — lower the operating costs!

Presidential candidate, Dr. Ben Carson*, says insurance companies should be low-cost non-profit operations simply to process claims.  It makes a lot of sense.  Why is so much profit being extracted from the US healthcare system by insurance companies?  It does not need to be that way.  The companies keep about 20% to 25% of premiums for CEO salary, expenses and profits.  In France, insurance companies are limited to 6%.  Yes, it can be done.

 


 

* This is not a political endorsement, just an observation.

 

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