Thursday, March 24, 2016
Tuesday, June 16, 2015
Terri is the Founder of SME Health Systems and Cambria Health Advisory Professionals. Formerly, she was a Senior Partner at Valiant Health, LLC. The thoughts put forth on these postings are not necessarily reflective of the views of her employers, clients nor other colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007. She has both a BS and a PharmD in Pharmacy and an MBA.
Wednesday, April 1, 2015
- Premise: It is good to treat or prevent diseases that cause pain, suffering, or early death.
- Premise: The cost of treating (or preventing) diseases that cause pain, suffering, or early death needs to be affordable to both the individual and the health care system which pools resources on behalf of a population to pay for these needs
- Premise: The development of medical and pharmaceutical innovations requires investment in Research and Development (R&D) by companies and shareholders that expect to be reasonably compensated for the investment.
- Premise: There is probably a price limit beyond which patients or the system will not be willing or able to support.
- Premise: If the cost of R&D exceeds the ability to generate a payback because either the price per unit that the market will bear is too low or the total number of potential patients is too small, the manufacturer will abandon the development of that product.
- Premise: A period of patent protection that expires within a short time after the drug makes it to market may mean that the manufacturer cannot generate enough sales to cover the cost of R&D and a return attractive enough to interest investors.
- Premise: Some innovative products that make it to market may be associated with a very high cost, but which provide only an incremental or marginal benefit for their cost that makes them unsuitable for first-line use.
- The time for a company to gain sales before loss of patent exclusivity and the introduction of lower cost generics (at which time, the brand manufacturer sees their sales plummet to near-zero levels).
- The number of potential patients
- The list price per treatment
So What Can Be Done?
- One option: allow the manufacturer to appeal to approval authorities (FDA, FTC, SEC) a means to drop the go-to-market price to a negotiated level, in exchange for additional time under patent protection to secure their return on investment. Other competing brands in the therapeutic class could still come to market, but a generic drug would be delayed until the agreed upon patent expiry date comes to pass.
- Another option: allow manufacturers and payers to work on contracting initiatives without generating new concerns around “best price” to create “outcomes” assurances and allow new product adoption for even products with marginal innovation or clinical benefit. These outcomes may include non-product cost mitigations (e.g., prevented surgeries or hospitalizations).
- Last, allow payers and manufacturers (perhaps using formal partnerships between the payer, the patient, and banking or finance companies) to facilitate product use in year one and allowing the payer to amortize the cost over 3 to 5 years. The financing may have to "follow the patient" if they change to another payer. If the manufacturer is enabled under #2 above, to provide some measurable outcomes assurances in the out-years that would not hurt their own financial statements or create a new “best price”, this could reduce the payer’s one-year underwriting anxieties.
Monday, August 18, 2014
Sunday, March 16, 2014
Wednesday, January 8, 2014
As someone who got a BS in Pharmacy in 1979, an MBA in 1990 and a PharmD in 2008, I have seen a few things change over 35+ years in regards to the manufacture, regulation and marketing of drugs in the United States. Some things are now rather “topsy-turvy” compared with the reality of my early professional years.
I’ve worked as a hospital and retail pharmacist, for a major pharmaceutical manufacturer, a large health plan and a hospital system. Last, I owned a business forcing me to apply theory to practice: I had to make payroll. These experiences left me with a certain “steeped in reality” perspective that goes beyond things I read in textbooks or heard from my professors. Life, as it unfolded, has also progressed my political leanings from naïve liberal to conservative to almost libertarian as I witnessed and felt the result of regulatory misadventures and their unforeseen consequences on the “little people”. Bureaucracies may mean well but they are never "efficient".
For example, when I went to Pharmacy School in 1979, I learned the following in my Jurisprudence courses about the bureaucracy we know as the Federal Food & Drug Administration:
- The FDA is there to protect the citizenry from fake, dangerous or adulterated food and drugs. The creation of the FDA was precipitated as part of the 1906 Food & Drug Act after snake oil salesman sold their secret tonics to treat everything from fatigue to menopause to heart diseases or cancer. These tonics often contained dangerous drugs like morphine, cocaine, or potentially toxic substances like arsenic or digitalis in variable doses. Food contamination and handling was as important as the drug purity and was brought to light in Upton Sinclair's novel, The Jungle.
- Drugs marketed in the late 1970s were typically either “over the counter” or legend (available by prescription only). All of them, with the exception of a "grandfathered" few, were under the direct scrutiny of the FDA. Some products, like heroin or LSD, were so highly regulated that they could not be legally manufactured or sold in the United States at all; these were deemed to offer little medical value relative to the detrimental effects. Others, like food supplements and “natural” products were pretty much unregulated---much like they are today. You can find these products sold with wild and unsubstantiated claims on the internet, in the back of tabloid magazines, or in the “nutritional supplement” aisles of health and drug stores.
- We learned the history of thalidomide and the need to test drugs for effects on the developing fetus. Indeed, Dr. Frances Kelsey was something close to a saint for her work in preventing the US FDA’s approval of the sedative thalidomide. England experienced thousands of limb malformations from the drug’s use in pregnant women; the US largely avoided this disaster thanks to Dr. Kelsey.
- The FDA was presented to us students, singularly, as a heroic regulator, necessary to a safe and effective drug supply, advocating for the patient at every turn. The rules of the FDA, we were told, are applied to all 50 states; as it is a Federal agency, its rules trumps those of the states. Certainly, the Controlled Substances Act (enforced by the Drug Enforcement Agency) applies as well to each of the states.
- I thought, briefly, that it might be great to work for the FDA or the CDC. They are clearly doing interesting and important work. I tend to believe that there is a role for some governmental oversight of things that are sold for ingestion of the people.
- While its mission is
presented in noble and lofty terms about protecting the public and speeding
innovations (see http://www.fda.gov/aboutfda/whatwedo/),
the FDA has often been criticized (sometimes to the point of vilification) for
delays in the approval of drugs that are openly available in other
countries. Over the course of the past century, the agency itself has
grown and the mission has been expanded.
For my part, I wonder about the effectiveness of FDA security measures protecting the US public from the importation of inferior or even counterfeit drugs. The FDA cannot be everywhere and there is a lot of money chasing prescription drugs which breeds bad guys seeking to rip somebody off.
So, after all these years, I am left somewhat bemused as I look at what is happening now regarding marijuana!!
Where is the FDA and DEA on these issues? There are a couple of points that are particularly peculiar:
Apparent Reversal of Focus Away from Pot and Towards Sugar. For the past couple of years, state, local, and federal regulatory initiatives around smoking cigarettes, drinking soda pop or eating foods we might otherwise choose are becoming more burdensome at the very time that the FDA and DEA seem to be “giving up” on their efforts to control the sale and distribution of marijuana, ignoring relaxation of rules at the state level. So, we are tightening the rules on cigarettes and soda pop and loosening the rules on what has always been called, the “gateway” drug.
For example, in 2014, it is now more time-consuming to buy pseudoephedrine at the pharmacy than it is for someone to score some pot, completely free of criminal consequences. We seem to be promoting the use of marijuana and restricting the use of decongestants; we won’t mess too much with tobacco (because of the tax revenues), so we are now taxing / restricting sugar consumption. Duh.
Certainly, the costs (police, prisons, court dockets, and medical costs) of enforcing pot laws to any state versus the revenues associated with taxing its use make the financial benefit of legalizing pot apparent to everyone. These new measures save costs and increase revenue. Duh, again.
However, the recent federal response, it seems, is to pick and choose which laws to ignore and which ones to enforce. This seems like “lawlessness” to me. But this attitude would be surprising coming from the DEA or FDA, as I have known them. I could be wrong; perhaps I missed their press releases to the contrary.
Safety Concerns Seem to Be Arbitrary. When one inquires about the justification for the War on Drugs, the basis for rules around manufacture and distribution, and the inspections of pharmaceutical factories, “public safety” is always the key reason for the regulations. We all know the safety concerns around cigarettes, alcohol consumption, and maternal drug use. But are we ready to ignore the dangers of marijuana on children, pregnant women and drivers? What about potential drug or disease interactions?
Both marijuana and tobacco, when smoked, deposit the same junk into the lungs. The combustion of organic materials contains more than just the active ingredients; the smoke contains tars, detrimental carbon monoxide, and carcinogens, and potential molds or insecticides. It also contains inconsistent amounts of the active ingredients. The FDA I am familiar with would want to assure a consistent product for the safety of the public, right? Wrong?
If pregnant women should avoid alcohol and tobacco products, shouldn’t they also avoid pot? Where is the labeling requirement to assure that they are informed of this? Do labeling warnings even work as a deterrent?
Product Integrity. The FDA expends tremendous effort and countless millions to assure that “Good Manufacturing Practices” (GMP) are used by certified manufacturers to keep the drug supply safe. Not the least of the reasons for applying GMPs to these factories is to assure that dosages of active ingredients and formulations are consistent from one lot to the next and from one manufacturer to the next. Where is the assurance about the variability of an organic product that is not lot-tested or subject to GMP? How do we know that a given batch of pot does not contain molds or other toxins? Who oversees the production processes to protect the public?
What will happen when someone using medical marijuana has a bad outcome? Will it be reported? Will the person be able to sue the producer, the supplier, or the state that permitted it? These are the same kind of lawsuits brought by plaintiffs to pharmaceutical companies every day.
Is it ONLY about money? I am concluding that some of this is just hypocritical and is being permitted in order to permit the states to fill their coffers with marijuana-related tax money. Don’t get me wrong: I am not saying that we should infringe on the right of someone to do whatever he or she wants to do with his or her own life. That includes, I think, using marijuana, even growing their own, even buying an unregulated product. I'm not even against the state collecting taxes to cover the new challenges this drug use will bring them.
However, I think that if you are going to enforce rules for drug or device products, you should have a policy that is rational for all products. Manufacturers should be held accountable for the integrity and purity of a drug or device product; even pot manufacturers. Buyers should be aware that there are down-sides that are often not evident and they are using at their own risk. But does the mission of the FDA stop at State Pot Distributors? Will legalized Cocaine or Heroin be next? If not, why not?
State versus Federal Scoff Laws. Both marijuana and tobacco fall under various local, state or federal laws governing their production and sale (including taxes and age limitations), but the 2014 rules for Colorado are particularly interesting because it is still against FEDERAL law but permissible (at a private residence with the permission of the home owner as long as no one else can smell it.) The patchwork of laws and regulations are likely to grow in number, creating confusion for the user and the authorities alike, especially near state borders. See the latest on Colorado rules for a recent example: http://www.denverpost.com/marijuana/ci_24823785/colorado-marijuana-guide-64-answers-commonly-asked-questions
Is there a rational compromise? As an embryonic libertarian, I would say the answer to this depends on whether or not you believe there should even be an FDA. As I stated earlier, I think I can make the case for an efficient "small government" agency to oversee the safety and purity of marketed products.
Should there be a role for the government (funded by taxpayers) to regulate the sale and production of various drugs, including marijuana, in order to protect the people? Or should people be free to ingest/inject/apply anything that is sold on the street?
The next question is whether or not the regulation and enforcement should be at a local, state, or federal level. That opens up a HUGE discussion, well beyond the scope of this post.
In the meantime, you can smoke Pot if you want to, and I think I am even up to defending your right to smoke it and be unmolested by the government. However, I don't know how it will impact your "employability". For example, if I have to make payroll, I would rather employ the attentive worker whose brain is free of cannabinoids than the worker who engages, even occasionally, in the use of pot if it objectively reduces work performance. THC is a chemical that alters the conscious brain and has been shown to be detrimental over time. As an employer, I need the maximal output of that brain. So in a purely libertarian world, it would be my choice to discriminate against pot users.
Will Colorado apply laws that could infringe upon the right of the employer to say “no” to potheads? We are living in INTERESTING times. Can’t wait to see what happens next!
Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals. The thoughts put forth on these postings are not necessarily reflective of the views of her employers, clients nor other Valiant Health colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007. She has both a BS and a PharmD in Pharmacy and an MBA