Twenty-eleven and 2012 are going to be remembered in the near term as very profitable periods of the generic manufacture of many formerly branded mega-sellers. Of course, the agent getting the most media ink this week is atorvastatin (Lipitor), the ubiquitous cholesterol lowering pill whose miraculous ways even prompted a short-lived lobby to go OTC.

The pharma company Pfizer, it could be reasoned, would still have some skin in the game in spite of generic availability. Specifically, partnerships with pharma benefit managers and insurers would still give the company a stake in orgs that would inhibit generic availability by offering rebates and discounts of branded Lipitor. It is the potential for actions like this which gets the attention of legislators (specifically Democrats) who want fair competition — as opposed to stymied innovations in generic marketing from pocketed profits by PBMs and insurance companies.

Detailed in an NYT piece last month, the prospect for limited availability of generics — specifically for Medicare Part D beneficiaries is a sobering one. Pfizer claims cost equivalencies (with respect to lower co-pays on branded Lipitor) for beneficiaries if the pharma company is able to offer those discounts to third parties. It is an interesting development in what is usually an uneventful and mundane process.

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This item comes as no surprise to those of us who primarily treat the elderly.

According to researchers, nearly 100,000 hospitalizations every year are linked to adverse drug events such as allergic reactions and unintentional overdoses. Nearly half, or 48.1 percent, of those hospitalized were adults 80 years old or older.

Those agents? Insulin, older generation anti-diabetic drugs (oral), aspirin, and warfarin. It is quite true — and as equally disturbing — that these medications are not only responsible for discrete adverse drug reactions in their own right, but their pharmacological behaviors are responsible for a substantial number of interactions whose iterative clinical manifestations are truly logarithmic in scope. | LINK | Abstract LINK

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On the campaign trail recently, top GOP candidates have been rolling out the talking points with respect to the debate on healthcare policy and politics. That latter point is made quite clearly in the party’s stance on the “solvency”^[1] of the prescription drug benefit under Medicare Part D. Asked whether this rather costly program — arguably one of the most significantly costly from the George W. Bush administration’s passage of MMA in 2003 — should be yanked (as they feel so-called Obamacare should be), you’ll get a resounding “no” on that policy point.

Although the House GOP have led the deficit hawk brigade in response to President Obama’s recent comments on balancing the budget, the party as a whole has been relatively quiet on the Medicare overhaul issue, especially as it pertains to Part D — a program the party structured and passed under Bush eight years ago. It’s no secret politics is in play, especially when monies to support the benefit have to come from the government’s general coffers — competing for earmarks for other priorities, like education funding.

Republicans like to point out that throwing drug coverage under Medicare, in part, to the pharma marketplace has offset initial costs for supporting the program via competition. But, currently, the wide variety (amid the spate of new branded preps) of traditionally cheaper generics probably has to do more with keeping costs low — with respect to beneficiary affordability and the marginal profits on such non-branded offerings by Pharma.

Fast forward to 2011 and the popular Medicare provision is being utilized by over 60 percent of retirees (with the balance coming from former employers’ plans), and it looks safe for now. The big unknown is when the inevitable resurgence in pharma spending increases will occur over the next ten to fifteen years — and how Part D will fare within the reform mix. | LINK

1. There really is no dedicated tax toward funding the Medicare prescription drug benefit.

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Prescription drug premiums under Medicare Part D will not be increasing next year — not exactly surprising, considering the profound availability of generics in the pharma marketplace currently. Still, welcome news to beneficiaries. As a matter of fact, within the next couple of years, many longstanding branded bestsellers are due to flip generic…a bonanza for competition within this space.^[1] Elderly patients are also due rebates and discounts on branded preparations this year as a result of reform. Obama’s provision to shut off of the MMA 2003 stipulation regarding donut hole gaps in coverage under Medicare will continue include more beneficiaries, as a result. | LINK

1. Pfizer plans to pursue OTC status once bestselling Lipitor goes generic.

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Clarence Thomas wrote for the 5-4 decision in which companies were shielded from lawsuits by consumers suffering from adverse effects of certain drugs. Anthony Kennedy, the SCOTUS justice often seen as the court’s swing vote, wrote for the majority opinion in another pharma case which strikes down a Vermont law that banned companies from using data mining techniques to obtain information about the prescription drugs individual doctors have a preference in prescribing.

Federal law requires the makers of brand-name drugs to label their products with FDA-approved warning information and to update the warnings when reports of new problems arise. But in a 5-4 decision, the high court said this same legal duty to warn patients of newly revealed dangers did not extend to the makers of copy-cat generic drugs.

I actually agree with Thomas on this decision. Fed law should trump state law in this case. Generic formulations are essentially chemical equivalents of their branded predecessors and, as such, really cannot be held accountable to novel warnings not appearing on the branded parent drug. A ruling in the reverse could open the door to flurries of suits for a range of untoward events for a multitude of generics — only adding to the cost of already fiscally overburdened healthcare delivery at the outset of reform (emphasis below, mine).

In the second decision, the court by a 6-3 vote struck down a Vermont law that barred pharmacies, drug makers and others from buying or selling prescription records from patients for marketing purposes. [...] Writing for the court, Justice Anthony M. Kennedy said that “information is speech,” and that under the 1st Amendment, the government usually cannot restrict speech because it does not approve of the message. “If pharmaceutical marketing affects treatment decisions,” he said, it does so because doctors find it persuasive”.

Exactly. This case highlights the effect Pharma representatives have always had on the prescribing patterns of physicians and protects the ultimate decision maker at the point of healthcare delivery — the provider. Is it any wonder why reps have been essentially banned from many healthcare systems in many markets nationwide? | LINK

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Drug shortages in hospitals were somewhat of a rarity at one time. For many reasons (not all of them economic) a trend in the late 2000s continuing up to today notes a disturbing pattern of many pharmaceuticals whose usage permeates multiple departments in an acute care setting. From the emergency department to the ICU, this problem is just beginning to percolate.^[1] In fact, in the month of May 2011 alone, major shortages in a range of agents contributed to the over 90 such cases in the first quarter of ’11. Antibiotics such as ciprofloxacin (already on an endangered species list in many hospitals due to increasing resistance patterns) lead the pack.

The major reasons cited? Product recalls (less of an issue with fewer NDAs), contaminated vials, demand fluctuations, and improvements on the manufacturing end (production plants). From an economic standpoint, lower profit margins for generics allows for less of an incentive for manufacturers to produce the low cost agents — creating a problem for their availability. Higher cost branded drugs may also create more of a problem during an availability crisis because substitutions may not render the same quality of care — representing a case for comparative research as a marker for quality. Although the overall numbers of deaths due to pharmaceutical shortages pales in comparison to the incidence of other more numerous causes of avoidable and preventable hospital deaths,^[2] the issue of med availability is a compelling one that deserves increased scrutiny. | LINK

1. As many as 211 drugs were listed as in short supply in 2010, three times more than in 2006.
2. According to the Institute for Safe Medication Practices, two patients died last year because their substitute painkiller dosage was wrong – at the time there was a shortage of morphine.

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A healthcare informatics company issues a report today that I really do not find surprising. The trends of Pharma of late are much fewer fast-tracked medications in the pipeline, decreased NDAs for many novel and like-classed (so-called “me-too” drugs) medications, and — are you ready for this? — much greater healthcare consumer spending on generics, which, according to the report, now make up almost 80 percent of the pharma marketplace.

It would be too easy to blame this on the economy. At the root of this and other findings detailed in the report are forces more complex in the healthcare economy than just the principles of supply and demand. After all, while there are fewer patient visits and greater demand by providers and health systems for payments by third parties, you can bet that Pharma still manages to turn a profit. Just take a look at the volume of sales by therapeutic areas: anti-cancer drugs continue to lead the way.

The top five therapy classes were: oncologics, with $22.3 billion in 2010 spending; respiratory agents, at $19.3 billion; lipid regulators, at $18.7 billion; antidiabetes drugs, at $16.9 billion; and antipsychotics, at $16.1 billion. Growth in spending among these classes ranged from 0.9 percent for lipid regulators to 12.5 percent for antidiabetes medications.

Although consumers, third party payers, hospitals, and providers all appear to be embracing quality provisions as a way to control costs, it is somewhat less clear what this pharmacologic austerity will ultimately mean for the management of chronic disease and how that will impact the cost of healthcare over the next 10 years. | LINK [PDF] to IMS report

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Amid all the fanfare of, say, Super Bowl-like proportions, the Obama administration’s 2012 Budget [PDF] made its debut and, almost as immediately, was roundly criticized by both Democrats and Republicans before the first shipping box was even pried opened at the offices of the Senate Budget Committee. Predictably, the acknowledgement to Medicare funding was expected: in order to fund the so-called recurrent Doc Fixes^[1] the budget plan will begin to attack the effects of fraud, waste, and abuse on taxpayer financed healthcare delivery. It would also decrease fed spending on Medicaid. In order to make this happen, Obama has proposed provisions in the budget totalling approximately $54B.

The immediate effect of this is a siphoning off of matching funds states could use to deliver services covered by Medicaid. Obama’s plan would cut $18.4 billion in federal Medicaid funding by reducing the amount that states could levy on providers to help finance Medicaid. The budget also proposes an increased use of generic pharmaceuticals as a way of decreasing utilization in Part D programs, for example. PhRMA, of course, quickly criticized this action — expressing concerns on its effect on innovation in pharma R&D.

Also, perhaps out of necessity in saving face amid all of this criticism over the budget, Obama has backtracked somewhat on his commitment to full compliance of the electronic health record among Medicare and Medicaid providers by funneling some of those fees (meant to penalize providers which do not convert to full EHR) to cover Part B services under Medicare. All in all, a pretty messy and convoluted scenario to the problem of guaranteeing care for all under reform while cutting Medicare/Medicaid spending and ensuring proper reimbursement for physicians who continue to live out the threat of ongoing SGR inertia-induced cuts in payouts.

1. A provision that would extend current Medicare provider payment rates through December 31, 2011.  Doctors were scheduled to receive a 25 percent reduction in their reimbursement rates on January 1, 2011, owing to rates as determined by the SGR. It requires congressional approval.

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Kinda reminds me of the ol’ snake oil days. Bayer has settled a lawsuit out of court that three states filed against the Pharma manufacturer over misleading claims that its product — the One-A-Day Men’s multivitamin — could reduce the risk of prostate cancer incidence. The $3.3M payout means that the claim cannot be made that the agent can prevent or cure prostate cancer or any other disease without scientific evidence.

At issue is the selenium compound in the over the counter drug. Bayer said it had made the claims based on the FDA’s statements allowing use of such language in promotional use. The FDA counters that it has never said that selenium is able to reduce or negate prostate cancer risk in men. | LINK

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Johnson & Johnson executives and the Food and Drug Administration shared the blame yesterday (Thursday) for a hidden recall in which hired contractors bought up defective painkillers to clear them from retail, avoiding certain negative PR in the process.

In the past couple of months Pharma giant Johnson & Johnson has yanked such devices as contact lenses and hip implants from the healthcare marketplace. Those recalls were only part of a greater problem. J&J, once known as a standard bearer for quality in relation to consumer and patient safety, testified [PDF] to a congressional committee earlier this week on its quality lapses as it tried to explain its massive recall of popular medications (Tylenol and Motrin, for starters).

The company’s serious mishandling of drugs and devices not only led to major losses in revenue, but also shed greater scrutiny on its manufacturing practices earlier this year. Equally as puzzling is where the attention of the FDA was during this matter. Although the federal agency apparently does not have the power to order strict recalls on its own authority, surveillance by the agency was apparently lacking — as J&J waited up to twelve months in one recall series involving Tylenol before pulling batches from the market. | LINK

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