DESI Drugs

From 1938 to 1962, federal law permitted manufacturers to market drugs that had been tested for safety. In 1992, Congress amended the law to require that the Food and Drug Administration approve drugs for marketing based on evidence of safety and efficacy. (Click here for an historical timeline of FDA regulation.

In 1968, the FDA commissioned the Drug Efficacy Study Implementation (DESI) that identified 3,400 active drug ingredients marketed between 1938 and 1962 that were safety tested but not proven effective. The FDA explains that

"One of the early effects of the DESI study was the development of the Abbreviated New Drug Application (ANDA). ANDAs were accepted for reviewed products that required changes in existing labeling to be in compliance. In September 1981 final regulatory action had been taken on 90% of all DESI products. By 1984, final action had been completed on 3,443 products; of these, 2,225 were found to be effective, 1,051 were found not effective, and 167 were pending."

Federal law permits the manufacturer to continue to market DESI drugs until the FDA deems the drug unapproved based on lack of efficacy following notice and a hearing.

Forty years later, the FDA has not completely closed the loop on these DESI drugs. The FDA's web site explains that

For a variety of historical reasons, some drugs, mostly older products, continue to be marketed illegally in the United States without required FDA approval. Many healthcare providers are unaware of the unapproved status of some drugs and have continued to unknowingly prescribe unapproved drugs because the drugs’ labels do not disclose that they lack FDA approval. Often these drugs are advertised in reputable medical journals or are included in widely used pharmaceutical references such as the Physicians’ Desk Reference (PDR).

The FDA recently released compliance guidance on unapproved drugs and plans a workshop in January 2007.

BNA reports that Sen. Charles Grassley (R - Iowa), Chairman of the Senate Finance Committee, is concerned that the compliance guidance "estimates that there are several hundred unapproved active ingredients in drugs currently on the market", and he is pressuring the agency to remove these drugs from the market.

Assess Your Disease Risk Online

The Wall Street Journal reports today on several web sites that adults can use to calculate their health risk for various diseases. The Journal highly recommends a comprehensive risk assessment site created by the Harvard Center for Cancer Prevention. The site called "Your Disease Risk" also offers an customized action plan. I just tried to log onto the site, which has been receiving 2000 visits per day and the Journal article has crashed the site. So try it out in a few days.

The Journal gives honorable mention to a heart attack risk assessment offered by the American Heart Association and a breast cancer risk assessment offered by the National Cancer Institute.

Walmart Accelerates Expansion of its $4 Generic Drug Program Again

Walmart expanded its $4 generic drug program to 14 additional states yesterday, including the states bordering DC -- Maryland and Virginia. (There is no Walmart in DC.) The Washington Post compared Walmart's price to the prices charged by Costco and retail pharmacies and there is clearly a savings. The knock on the Walmart's program, as explained in the Post article, among others, is that the list of drugs eligible for the $4 program is limited and includes older generic drugs. From a health care policy perspective, I was struck by the following section of the Post article:

The American Pharmacists Association said it supports more affordable medications but cautioned that patients should consult medical experts about which drugs are right for them -- and that they may not be the ones on the $4 list.

"It starts to send a message that drugs are just another commodity," said Kristina Lunner, acting vice president of policy and communications. "They're very different."

But is that really the case? The pharmaceutical industry's direct to consumer advertising, which benefits the pharmacies, certainly presents drugs like commodities, notwithstanding the legal disclaimers and what's more the direct to consumer advertising puts the doctor in the middle between the advertising and the patient. Of course, that's the doctor's responsibility and it strikes me that the doctor can fill that role in either situation. What's good for the goose should be good for the gander. I am not a Walmart fan, but competition does benefit the economy.

Bye Bye AWP Part 3

The federal district court held a hearing on October 24 in the RICO lawsuit against First Databank and McKesson that has yielded a proposed settlement with First Databank that would require the publisher to reduced its Average Wholesale Price (AWP) listings for over 8,00 drugs by 4 -5% and to stop publishing that AWP listing in 2008. Prescription benefit managers (PBM) often use the First Databank listings as a benchmark for their pricing deals with health plan customers.

The Court did not rule on the motion to approve the proposed settlement at the October 24 hearing. Rather, it granted in part a McKesson motion to unseal a declaration submitted by the plaintiffs' lead attorney, according to my review of the court docket on PACER.

AP reports that publicly traded PBM stock prices fell on Wednesday October 25 based on investor concern over the impact that the proposed settlement would have on those companies. According to an AP report, "Wachovia Capital Markets analyst Matt Perry [in a note to clients] said shares of Express Scripts and other pharmacy benefit managers are down due to the potential impact on drug prices. But he said the issue should not "obscure what was truly a very strong quarter" for the company.

Another False Claims Act Settlement

According to a U.S. Justice Department press release, Intermune, a California-based biopharmaceutical manufacturer, agreed to pay the U.S. Government $39.2 million in settlement of Government charges that Intermune caused false claims to be submitted to Medicare, Medicaid, TRICARE, and the FEHB Program based on its illegal promotion of its Actimmune drug for a use -- the treatment of lung scarring -- that the Food and Drug Administration had not approved.

EBRI's 2006 Health Confidence Survey

The Employee Benefits Research Institute's annual Health Confidence Survey , released today, discloses that Americans generally are satisfied with the quality of our health care system but aren't happy with paying the freight.

Gov't Panel Recommends Shingles Vaccines for Adults 60+

Merck announced today that the Centers for Disease Control's Advisory Committee on Immunization Practices is now strongly recommending that adults aged sixty and older receive Merck's Zostavax vaccine against shingles (herpes zoster). This recommendation follows the FDA's approval of the vaccine which was given last May. FEHB plans generally adopt the Advisory Committee's recommendations. Merck charges $150 per dose for the one shot vaccine.

Citizens Health Care Working Group Issues Final Report

The Citizens Health Care Working Group, which Congress established to make health care reform proposals, has transmitted its final report to the President. The Group made six recommendations:

Recommendation 1: Establish Public Policy that All Americans Have Affordable Health Care
Recommendation 2: Guarantee Financial Protection Against Very High Health Care Costs
Recommendation 3: Foster Innovative Integrated Community Health Networks
Recommendation 4: Define Core Benefits and Services for All Americans
Recommendation 5: Promote Efforts to Improve Quality of Care and Efficiency
Recommendation 6: Fundamentally Restructure the Way End-of-Life Services are Financed and Provided

The Galen Institute was not too pleased with the report.

FEHB Open Season Publicity

Today's Washington Post health section published a Steve Barr article about the upcoming FEHBP, FEDVIP, and FSAFEDS Open Season which runs from November 13 through December 11, 2006. The current issue of the Federal Times similarly includes extensive Open Season coverage.

Medco Settlement Finalized

The U.S. Department of Justice announced yesterday that it has finalized an agreement with Medco Health Solutions, among others, to settle the False Claims Act lawsuits pending against Medco in the federal district court in Philadelphia, PA. Under the settlement agreement, which was first announced in May 2006, Medco will pay the Government and the qui tam relators who initially brought the lawsuits over $155 million. Medco also is entering in a corporate compliance agreement, and it has agreed to treat the settlement and related payments as "unallowable costs" for purposes of its government contract business with Medicare, Medicaid, TRICARE, and the FEHB Program. The settlement documents are available here. This settlement brings to a close litigation that raged for several years.

HITSP and CCHIT Developments

On Friday, October 20, the Healthcare Information Technology Standards Panel met again to consider amendments to its first three sets of interoperability standards. Modern Healthcare.com published a full report on the meeting today. HHS's American Health Information Community (AHIC) will consider the standards at its October 31 meeting.

Modern Healthcare explains that

In its personal health-records [PHR] use case, AHIC proposes that PHR systems would be more useful and attractive to patients if they could be linked electronically to data sources so that a patient’s medication history and basic health and demographic information could be loaded into the PHR with little patient effort.

The PHR related interoperability standards therefore concern an electronic patient registration (or medical summary) and an electronic medication history. Modern Healthcare reports that

Considerable controversy arose last month over a report of the technical committee working on the PHR specification to create a patient’s medical summary. The committee recommended adopting the Exchange of Personal Health Record Content (XPHR) as an interim specification even though the specification is still under development by Health Level 7, the Ann Arbor, Mich.-based standards development organization. The recommendation drew cries of foul from supporters of the competing Continuity of Care Record, which has been developed, balloted and is in use by providers and IT vendors. The CCR was developed by ANSI-accredited standards development organization, ASTM International.

HITSP settled the controversy by postponing for six months a decision on which standard to endorse for the PHR use case while expressing a preference for using the Continuity of Care Document, itself a compromise between HL7 and ASTM. The CCD, which incorporates the CCR, is expected to be balloted sometime early next year. Thus, the specification for the PHR that was sent to the AHIC Friday was not deemed to be a standard ready for testing, as were the other specifications, but rather a “work in progress.”

Another area drawing critical comment was a decision by HITSP to use the HL7 version 2.5 communication standard for transmitting lab data and results to an EHR rather than the EHR-Lab Interoperability and Connectivity Standards, or ELINCS, a project of the California Healthcare Foundation.

FEHB Plan carriers will be obligated to adopt these interoperability standards in their new and upgraded health information technology under a 2008 contract amendment that OPM will adopt pursuant to the President's August 22, 2006, Executive Order.

On a related note, the Certification Commission for Healthcare Information Technology (CCHIT), which like HITSP operates under an HHS contract, certified several additional ambulatory HIT products today, including several electronic health record products.

Surgical Safety Tip Sheet Released

The Surgical Care Improvement Project released a Surgical Safety Tip Sheet for patients and family members today that received kudos from HHS Secretary Mike Leavitt, among others.

Health Care Consumer Tools

Michelle Singletary wrote an interesting piece in today's Washington Post about tools that are available on the internet to health care consumers, such as Health Grades and my Family Health Budget. Many of these tools are made available by health plans to their participants.

Praise for the FEHBP

Robert E. Moffitt, the director of the Center for Health Policy Studies at the Heritage Foundation, praised the FEHB Program's competitive model in an op-ed published today in the Washington Times.

Study Supports the Use of Virtual Colonoscopy

All doctors (and Katie Couric) agree on the value of colonoscopy as a medical screening tool for people over 50 . In fact the Columbia University Department of Surgery notes that

"By screening people every five to 10 years, we think we can prevent most cancer formation," says gastroenterologist Christine L. Frissora, M.D. In fact, having just one colonoscopy decreases your lifetime risk of dying from colorectal cancer by 68 percent.

The Washington Times reports today about a study published in the medical journal Radiology finding that virtual colonoscopy which uses three-dimensional computed tomography produces accurate diagnoses as compared to invasive, optical colonoscopy. The "research found that only 6 percent of the patients who underwent a virtual colonoscopy required a subsequent conventional colonoscopy." The article reports two especially interesting facts:

In addition, the [virtual] procedure has yielded surprise benefits. It has picked up "clinically important extracolonic findings," according to a study last year at the San Francisco VA Medical Center. Virtual colonoscopy revealed kidney cancers, abdominal aneurysms and other serious conditions in 45 out of 500 patients who underwent the procedure.

Meanwhile, the American College of Gastroenterology has not yet given its blanket approval of virtual colonoscopy for routine screening. But the Maryland-based group yesterday pronounced capsule colonoscopy -- in which the patient swallows a jelly bean-sized video camera that records thousands of images -- a "promising new tool for colon cancer screening." The group will release complete research findings on Monday.

Walmart Accelerates Expansion of its $4 Generic Drug Program

Earlier this month in Tampa, Florida, Walmart and Sam's Club pharmacies began selling a thirty day supply of about 300 types of generic drugs for $4.00 whether or not the patient is insured. Walmart indicated at the time that it planned to expand the program to all of Florida at the end of the year and beyond Florida in 2007. Walmart almost immediately changed gears and opened the program to all of Florida. Today it announced the immediate expansion of the program to 14 additional states: Alaska, Arizona, Arkansas, Delaware, Illinois, Indiana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Texas and Vermont.

HHS Transparency Website

My colleague, Theresa Defino, has called to my attention this very informative HHS website on healthcare transparency. I’m not sure how long the site’s been up on the web, but it is chock full of healthcare pricing and quality transparency information.

More Evidence of Drug Safety Problems

The Journal of the American Medical Association and the U.S. Centers for Disease Control published a report this week estimating that as many as 700,000 Americans wind up in the emergency room every year due to adverse reactions produced by combining prescription drugs with over the counter drugs or herbal supplements. Most of the affect population is over 65. The projection is based on a surveillance project on outpatient drug safety that started in 2004.

The Chicago Tribune reports that

The study's authors said that in 2004, 82 percent of the U.S. population reported using at least one prescription drug, over-the-counter medication or dietary supplement, and 30 percent reported using five or more drugs. More effort must be made to prevent adverse events, the researchers said.

The study's database included 63 nationally representative hospitals that reported 21,298 adverse drug reactions among American adults and children treated in emergency rooms during the two-year period.

FDA Approves New Type 2 Diabetes Drug

On September 15, I blogged about two drugs that Merck and Novartis were developing to treat type 2 diabetes. On October 17, the Food and Drug Administration approved the Merck drug Januvia (sitagliptin phosphate), a once a day pill also known as a DPP-4 inhibitor that helps the body lower elevated blood sugar levels. Mayoclinic.com explains that

Controlling your blood sugar is essential to avoiding long-term complications of type 2 diabetes. If you're struggling to control your blood sugar with diet, exercise and traditional diabetes medications, Januvia may provide a welcome alternative. Ask your doctor if Januvia would be an appropriate addition to your current treatment plan, or if the drug could be used in place of the medications you're currently taking.

A survey of doctors revealed that physicians intend to prescribe the new drug in lieu of an Eli Lilly drug Byetta that was launched in June 2005. Forbes.com notes that "Merck is expected to charge $4.86 for the pills, which are taken once-a-day [or $146 per month]. Older diabetes drugs can cost as little as 50 cents a day, according to published reports." Drug manufacturer CFOs love this type of drug because the large population suffering from this disease would take the pills for a long time.

Bye Bye AWP part 2

On October 24, the federal district court in Boston will hold a hearing on the motion to approve the tentative settlement of the Prescription Access Litigation Project's case against the Average Wholesale Price (AWP) publisher, First Databank, discussed in my October 8 post. The settlement agreement, if approved, will require First Databank to stop publishing its AWP listing two years from now, subject to certain exceptions. The AWP is the benchmark for many prescription drug manager pricing arrangements with health plan customers for brand name drugs.

What will replace the AWP? Of course the AWP is no longer the only show in town as other pricing arrangements have been developed. What's more the the Medicare Modernization Act requires that federal government use an Average Sales Price ("ASP") methodology (plus 6%) to reimburse the cost of Medicare Part B covered drugs. The HHS Office of Inspector General has recommended that the ASP methodology be extended to Medicaid. Just as the Medicare Part B resource based relative value schedule (RBRVS) has replaced the old California relative value schedule as the primary basis for preferred provider arrangements, I think that we can expect the ASP to be the new wave in PBM pricing.

Leapfrog Group's Top 50 Hospitals

The Leapfrog Group, an association of large employers and health care purchasing organizations (OPM participates as a liaison) having its objective to improve health care quality and safety, has issued first list of fifty top U.S. hospitals. The Group explained its methodology as follows:

Top Hospitals fully meet Leapfrog’s standard for ICU physician staffing
(IPS) and the Leapfrog Safe Practices Score (SPS). The adult hospitals also
meet Leapfrog’s standards for two or more of the high-risk procedures or
conditions included in the Evidence-Based Hospital Referral (EHR) leap (some
do not apply to children’s hospitals), which were each given equal weight.
Full implementation of Computerized Physician Order Entry (CPOE) was used to
break any ties.Then, if necessary, hospitals' ranking on overall points for
the Leapfrog Safe Practices Score was used to break any remaining
ties.

I was surprised to find no hospitals in the D.C. metropolitan area on the list (although there are three from Baltimore, Sinai, University of Maryland, and Johns Hopkins). Although Mass General and Brigham and Womens Hospitals which are associated with Harvard Medical School made the list, Yale New Haven did not.

2007 FEHB Premiums and Withholdings

In Benefit Administation Letter 06-035, the U.S. Office of Personnel Management announced that The official Federal Employees Health Benefits (FEHB) withholdings and contribution rates for 2007 are available in a [handy dandy] PDF and Excel file formats on the OPM web site.

CMS Finalizes the 2007 Inpatient Prospective Pricing System

Traditional Medicare Part A reimburses hospitals for inpatient care based on a prospective pricing system (PPS) . The Centers for Medicare and Medicaid Services (CMS) updates the PPS annually. CMS issued a notice of the proposed Fiscal Year 2007 PPS updates and rates in August and on October 11 CMS published the final update in the Federal Register. "CMS is continuing to estimate that payments to hospitals will increase by $3.4 billion or an average of 3.5 percent." CMS is requiring hospitals to report quality data in order to receive the full FY 2007 PPS update. CMS reported last month that

Out of the nation’s 3,490 acute care hospitals eligible to participate, 99 percent of those chose to report quality data. Out of those hospitals eligible to receive a 2 percent annual payment update from Medicare for participating, 171 failed to meet the FY 2007 reporting requirements (143 failed the submission requirements and 28 chose not to participate).

The Electronic Health Record Utilization Baseline

The Robert Wood Johnson Foundation, working with researchers from the GWU University Medical Center and the Massachusetts General Hospital, released a report today that the U.S. Department of Health and Human Services commissioned to establish a baseline for judging the Nation's progress toward achieving the President's goal of widespread electronic health record (EHR) use by 2014. The report is sobering.

While 25% of doctors use EHRs to improve patient care, but only "5 percent of hospitals used computerized physician order entry." Moreover, "less than one in 10 are using what experts define as a "fully operational" system that collects patient information, displays test results, allows providers to enter medical orders and prescriptions, and helps doctors make treatment decisions."

The Foudation spotlights the following findings from the report:

• Hospital adoption trends are unknown. Assertions to the contrary, there are not enough high-quality, reliable surveys of hospital use of EHRs. The research team reliably estimates, however, that about 5 percent of America's 6,000 hospitals have adopted computerized physician order entry (CPOE) systems, a component of EHRs, to help reduce medical errors and ease care delivery.
• There is no evidence yet of a digital divide. There remains "considerable uncertainty" about the existence and size of gaps in use of EHRs among physicians who care for vulnerable populations. Tracking the adoption and use of EHRs among these providers, understanding unique barriers to adoption, and identifying policies to close this gap are important steps. The study did find that patient characteristics matter, however. Physicians who treat fewer Medicaid patients are more likely to report using EHRs than those with a larger share of practice revenue from the insurance program.
• A better definition of EHRs is essential. There really is no standard definition of what an EHR is and what adoption means. Consequently, a lot is left to interpretation when surveys are conducted. The report says that the U.S. could more adequately measure EHR adoption trends over time if there was a consistency in terminology and survey methods related to adoption practices.
• Adoption depends on many factors. The report points to four key things that drive adoption: financial incentives and barriers, laws and regulations, the state of the technology and organizational influences such as the size of a practice or hospital or payer mix; and how integrated a health care system is.

There's a lot of work still to be done.

New Drug Safety Report

The Washington Post reports today that following up on a recent Institute of Medicine study, five drug safety experts have published an article in the Annals of Internal Medicine with the following recommendations:

Both the Institute of Medicine and the five experts would ban consumer
advertising of newly approved classes of drugs until they have been on the
market long enough for any problems to emerge; give the agency new powers to
fine drugmakers that fail to complete required safety studies; and take steps to
limit conflicts of interest and broaden the range of expertise on panels
appointed by the agency to review scientific data on proposed drugs.

But the experts went further by calling for a Center for Drug Safety outside of the CDER and increased FDA funding for safety monitoring, perhaps through a fee of a few cents on every prescription. They also recommend giving "conditional approval"
to some drugs to require drugmakers to demonstrate a drug's safety or else risk
seeing it pulled from the market.

Focus on drug safety stems from such recent problems as Merck's withdrawal of Vioxx from the market. Drug safety legislation is expected to be a hot topic in the next Congress, which convenes in January 2007.

Bye Bye AWP

The Wall Street Journal's lead story on Friday was a fascinating report on the tentative settlement of a lawsuit against First Databank, the Hearst subsidiary that publishes the most popular pharmaceutical Average Wholesale Price (AWP) list. Prescription benefit managers (PBM) often use this list to price brand name drugs for their health plan customers. The Wall Street Journal quips that AWP also means ain't what's paid or as Kramer put it on Seinfeld "only suckers pay retail."

The lawsuit being settled was brought by the New England Carpenters Health Benefits Fund and AFSCME District Council 27 Health and Security Plan in the federal district court in Boston. The lawsuit alleges that First Databank and the drug wholesale McKesson conspired to crank up the AWP prices in 2002 using on a "survey" of only one wholesaler -- McKesson. (McKesson has denied any liability, but the plaintiff's lawyers are continuing to pursue McKesson.)

Under the settlement, without conceding liability, First Databank agrees to reduce many of its AWP prices by 4% and to phase out publishing its AWP listing in 2008. An economist hired by the plaintiffs' lawyers reportedly projected that this settlement will produce $4 billion in prescription drug cost savings for health plans and Medicaid in 2007. The tentative settlement report negatively impacted the stock prices of pharmacies, drug manufacturers, drug wholesalers, and prescription benefit managers on Friday. A federal judge in Boston must approve the tentative settlement before it can become final and binding.

CVS, the major pharmacy chain, already is fighting back with an announcement that it will negotiate higher fees.

More Prizes for Genome Research

The 2006 Nobel Prize for Chemistry was awarded to an American scientist from Stanford University Roger Kornberg for his pioneering work in RNA transcription -- the process through which "information stored in genes is copied and transferred to other parts of the cell. While dioxyribonucleic acid (DNA) is the blueprint for life, ribonucleic acid (RNA) is the actual builder that decodes the blueprint. Although all cells carry a full set of DNA code, each cell must activate, or express, different genes to do their specialised work. Kornberg apparently figured out how this happens, using X-ray crystallography to ‘photograph’ RNA-polymerase, the molecule used by RNA to read and transcribe the DNA code. This groundbreaking work will help researchers better understand the process of transcription, where even minute flaws could lead to illnesses like cancer." Dr. Kornberg's father won a Nobel Prize in 1959, and as the Chicago Tribune points out this is not the first time that parent and child have won Nobel Prizes. Can there be truth in the saying that the apple does not fall far from the tree?

Meanwhile, the X Prize Foundation, which offered a $10 million prize for private spaceflight, announced that it will award $10 million to the first group that is able to decode the genomes of 100 people in 10 days. Such a machine, which is estimated to be only five years away, would pave the way to individualized medicine, according to various reports. The editorial board of Scientfic American questions the "cash for breakthoughs" approach.

British study of schizophrenia drugs

The Washington Post reports today about a British study of schizophrenia drugs concluding that the newer drugs, such as Zyprexa, produce the same results over the long term as the lower cost drugs they were designed to replace, such as Haldol. The British psychiatrist who lead the study, Dr. Peter Jones, and an American psychiatrist from the Veterans Administration, Dr. Robert Rosenheck, observed that

[T]he problem with many drug company studies that seemed to show that new drugs are better is that they focused on short-term results -- a symptom or side effect -- rather than the big picture: how patients fare long-term.

"The story of these newer antipsychotic drugs is a story that reveals an institutional gap," Rosenheck said. "It should not have needed 10 years to get three government studies."

This study strikes me as further evidence of the wisdom of the recent Institute of Medicine recommendations that all new drugs undergo a new round of testing five years after their introduction.

2006 Nobel Prize in Medicine

The Nobel Foundation awarded the 2006 prize in Physiology and Medicine to two American researchers, Dr. Andrew Z. Fire, of MIT, and Dr. Craig C. Mello, of Harvard, who discovered "a fundamental mechanism for controlling the flow of genetic information." The Nobel Foundation explains that their discovery is expected to lead to novel therapies for viral infections, among other uses.

Abraxane

Abraxane , manufactured by Abraxis BioScience, and Taxol, manufactured by Bristol Myers Squibb, have equivalent survival rates in treating late stage breast cancer. The generic version of Taxol known as Paclitaxel is $150 per dose. Abraxane, which is easier to administer than Taxol, is $4,200 per dose. According to the New York Times, "About 20,000 people have now been treated with the drug, and Dr. [Patrick] Soon-Shiong [, the Abraxsis CEO,] expects its sales to approach $200 million this year. By 2010, Abraxane’s annual sales could reach $1 billion, analysts say."

I highly recommend that you read this fascinating New York Times article by Alex Berenson to learn why. (If you want to read more, check out this history of the "tortured" development of Taxol.)