Els motius i les conseqüències de l'elevat preu dels medicaments

Prescription for the People

El contingut del llibre (orientat als USA):

Introduction

Part I

1. People Everywhere Are Struggling to Get the Medicines They Need

2. The United States Has a Drug Problem

3. Millions of People Are Dying Needlessly

4. Cancer Patients Face Particularly Deadly Barriers to Medicines

5. The Current Medicine System Neglects Many Major Diseases

Part II

6. Corporate Research and Development Investments Are Exaggerated

7. The Current System Wastes Billions on Drug Marketing

8. The Current System Compromises Physician Integrity and Leads to Unethical Corporate Behavior

9. Medicines Are Priced at Whatever the Market Will Bear

10. Pharmaceutical Corporations Reap History-Making Pro ts

Part III

11. The For-Profit Medicine Arguments Are Patently False

12. Medicine Patents Are Extended Too Far and Too Wide

13. Patent Protectionism Stunts the Development of New Medicines

14. Governments, Not Private Corporations, Drive Medicine Innovation

15. Taxpayers and Patients Pay Twice for Patented Medicines

Part IV

16. Medicines Are a Public Good

17. Medicine Patents Are Arti cial, Recent, and Government-Created

18. The United States and Big Pharma Play the Bully in Extending Patents

19. Pharma-Pushed Trade Agreements Steal the Power of Democratically Elected Governments

Part V

20. Current Law Provides Opportunities for Affordable Generic Medicines

21. There Is a Better Way to Develop Medicines

22. Human Rights Law Demands Access to Essential Medicines

Conclusion

Notes

Index

El cost d'oportunitat dels preus desmesurats dels medicaments pel càncer (2)

 Cancer medicines: a private vice for public benefit?

El que costa un medicament pel càncer:

Over 23 years of cancer medicine R&D the mean cost in USD of developing a cancer medicine to pharmaceutical companies has been around $4.4 billion. But this hides a huge range of costs from ‘just’ 276 million USD for Dinutuximab for post consolidation therapy for childhood high risk neuroblastoma to 13.4 and 15.8 billion USD, respectively, for Durvalumab (used to treat certain types of bladder, lung, and biliary tract cancer) and Isatuximab (used in treatment of blood cancer multiple myeloma).

I el retorn de la inversió (ROI):

 Overall, ROI for cancer medicines with sufficient maturity i.e., launched between 1997-2015 is between 435 to 551%. Again, this hides huge variation. A substantial number of cancer medicines to date have negative or flat ROI’s as low as minus 78-87% in some cases. However, some cancer medicines launched in late 1990’s to mid 2000 have generated astronomical ROIs; for example, Erlotinib (2794%) (pancreatic and lung cancer), Trastuzumab (3421%) (breast cancer), Rituximab (2523%) (Non Hodgkin’s Lymphoma) and Bevacizumab (3200%) (colon, lung, glioblastoma and renal cell cancers). This reflects the fact the the oncology business model is still driven by blockbusters.

I el missatge:

 The problem thus is that the entire structure and incentive framework governing the biotechnology and pharmaceutical industry are geared towards a specific type of behaviour. Short of completely reforming the entire capital-industrial market, starting in the USA, expecting industry to behave any differently from what it is doing right now is a dead end. It is an ideological and technical cul-de-sac. Arguing about the rights and wrongs of industry profits in oncology misses the point. The system is geared towards profit maximisation that is completely independent of R&D costs, it is insensitive to whether the drugs deliver meaningful therapeutic benefit, or whether the cancer medicines are priced ‘fairly’ for any given country.

Les opcions:

One is faced with two choices. Accept that progress is a private vice with public benefit. Essentially align with Bernard Mandeville’s position in Fable of the Bees (1705) that vicious greed, properly channelled by skilful politics, will lead to invisible co-operation and public benefit. Espousing any higher virtue is mere hypocrisy. In this world the only challenge is external. If, for example, China was to exercise its considerable biopharmaceutical muscle in oncology to massively undercut global prices. The other choice falls more in line with the Rawlsian idea of social justice. In this world a new social contract is constructed that truly reflects equitable value. Respective institutions all align along this common public good backbone. Prices truly reflect clinical benefit and are set to a fair level that maximises patient access. R&D is incentivised on societal worth and not profit.

Article per guardar i per reflexionar. El cost d'oportunitat dels medicaments pel càncer és precisament tot aquest valor social que som incapaços de capturar i que deixem de dedicar a altres usos més valuosos.

World Press Photo 2024

 

 

Lliçons sobre política farmacèutica (3)

Regulation, Innovation and Competition in Pharmaceutical Markets

Si voleu un llibre introductori que descriu amb precisió el mercat farmacèutic aquesta és l'opció del moment. Els conceptes habituals necessaris per moure's bé en aquest entorn són explicats amb tots els detalls.

M'ha interessat especialment el tema de pagar per retardar l'entrada dels genèrics, els acords de pagament invers, perquè s'explica amb tota claredat una pràctica vergonyosa de la indústria que ja coneixia però que em faltaven peces.

Es tracta d'això:

‘reverse payment’ patent settlement agreements (also called pay-for-delay settlements), because they provide for the patentee to pay the alleged infringer, rather than the opposite (considering the standard expectation that a defendant would pay a plaintiff to settle), with the aim of delaying its market entry. In other words, in its typical scheme, the brand-name drug pharmaceutical company enters into an agreement with the generic competitor to settle the dispute and to limit its market entry in return for a transfer of value.1 Such transfer can take different forms, including either a direct monetary payment or another form of valuable agreement (eg an authorised licensed entry at a specific date, distribution agreements, favourable terms in a side deal in which the originator company grants a commercial benefit to the generic company), or both. 

Aquest és l'índex del llibre: 

Introduction 1

I. The Different Faces of Pharmaceutical Markets 1

PART I

1. Regulating Entry 15

I. The Main Features of Pharmaceutical Markets: The Supply Side and the Demand Side 15

II. The Product Life Cycle and the Costs of Innovation 20

III. The Access to the Market: Regulatory Approaches 23

A. The European Regulatory Framework 23

B. The US Regulatory Framework 27

IV. Concluding Remarks 33

2. Regulating Exclusivity 34

I. The Interplay between Regulatory Exclusivities and Intellectual Property Rights 34

II. Intellectual Property Rights in the Pharmaceutical Industry: An Overview on the Role of Patents 35

III. EU Supplementary Protection Certificate and US Patent Term Restoration 41

IV. Regulatory Exclusivity 48

V. Research and Bolar Exemptions 52

VI. Exhaustion Doctrine and Parallel Trade 59

VII. Concluding Remarks 63

3. Regulating Prices 64

I. Pharmaceutical Pricing and Reimbursement Systems in Europe 64

II. The US System 70

III. Concluding Remarks 76

viii Contents

PART II

4. Competition Law Enforcement in Pharmaceutical Markets: An Introduction 79

I. EU and US Antitrust Rules: An Essential Overview 79

II. Antitrust Enforcement in the Pharmaceutical Sector 87

III. Market Definition 95

IV. Concluding Remarks 100

5. Reverse Payment Patent Settlements 102

I. The Recurrence of Reverse Payment Patent Settlements in Pharmaceutical Markets 102

II. Reverse Payment Patent Settlements in the United States 105

A. Earlier Case Law and the Actavis Ruling 105

B. Critical Issues after Actavis 109

C. Further Developments 113

III. EU Case Law on Reverse Payment Patent Settlements 119

A. Lundbeck 120

B. Generics 123

IV. Comparative Analysis 127

A. Legal Frameworks 127

B. The Antitrust Assessment 129

V. Concluding Remarks 134

6. Product Hopping 136

I. Pharmaceutical Product Reformulations 136

II. Product Hopping before US Courts 140

III. The EU Experience 146

IV. The Antitrust Assessment of Product Reformulation 151

V. Concluding Remarks 155

7. Excessive Drug Pricing 157

I. The Resurgence of Excessive Pricing Cases in the Pharmaceutical Sector 157

II. Excessive Pricing under EU Competition Law 161

A. Aspen 165

III. The US Approach 169

IV. The Role of Antitrust Enforcement on Excessive Drug Prices 176

V. Concluding Remarks 178

PART III

8. Further Interactions: Pharmaceutical Markets, Intellectual Property and Human Rights 183

I. The Right to Health and Access to Medicines and the Relationship with Intellectual Property Rights: An Overview 183

II. Compulsory Licensing 191

III. Concluding Remarks 196

9. Public Health and Public Interest in Competition Law 198

I. Public Health and Competition Law 198

II. Competition Law and Non-competition Interests 203

III. Concluding Remarks 208

Conclusion 209

Bibliography 213

Index 233

El pensament il·lusori sobre els preus de les teràpies genètiques

Sources of Innovation in Gene Therapies — Approaches to Achieving Affordable Prices

Miro el NEJM  i em trobo un article sobre com pagar la innovació farmacèutica que ve, tema molt important del que no s'en parla prou. I allà es recorda el seu origen: 

All gene therapies approved in the United States thus far have their origins in academic institutions or spinoffs from such institutions that developed indispensable know-how and underlying forms of  technology

 I també recorda l'alt preu pagat per l'adquisició d'aquestes noves empreses amb l'expectativa de preus desorbitats.

Pharmaceutical manufacturers have actively participated in latest age clinical development and testing of the approved gene therapies, and a few have played major roles in expanding the market for these therapies, often by buying smaller companies. The costs associated with these acquisitions and licensing agreements can be very high. For example, Gilead was reported to have acquired Kite Pharma (which had rights to axicabtagene ciloleucel and brexucabtagene autoleucel) for $11.9 billion, and Novartis acquired AveXis (which had rights to onasemnogene abeparvovec) for $8.7 billion. The costs of such intellectual property are largely driven by the absence of limits on drug prices in the U.S. market. The resulting high prices can impose an enormous acute financial burden on patients and payers.

I després explica què fer. Una primera opció seria produir acadèmicament teràpies genètiques. L'exemple CAR-T ens sonarà familiar, i cita Suïssa però s'oblida l'Hospital Clínic i de l'Hospital de Sant Pau:

 The cost to produce tisagenlecleucel, for example, was estimated at approximately $70,000 — a fraction of the therapy’s current prices in the United States and Europe. One approach would be for academic and other research institutions to conduct or contract out late-stage development activities — such as managing clinical trials, corresponding with and submitting applications to the FDA, and manufacturing — for publicly funded treatments that they discover. University hospitals in Switzerland have formed an alliance to manufacture gene therapies in-house to reduce costs and improve accessibility.

L'altra opció seria, llicenciar:

 Regulators and policymakers could encourage institutions that receive federal funding to engage in nonexclusive licensing for certain key platform innovations that are part of the gene-therapy processes they have developed, in keeping with their mission and in recognition of the public funding that supports such discoveries. Licensing to multiple manufacturers would spur competition, which could help improve the technology over time and contain treatment prices.

I la tercera, compra conjunta

A third approach would be to facilitate systemwide price negotiation for gene therapies. In industrialized countries that have mechanisms for drug-price negotiation, prices for such therapies are high but still generally lower than prices in the United States 

Més que opcions possiblement són desitjos. La darrera seria la mesura més definitiva de totes.  Les multinacionals són globals, els mercats locals. Però tot i així ens enfrontaríem a gestionar amb transparència la discriminació de preus per part dels pagadors i reguladors. Implica un govern planetari inexistent, i si existís potser l'altra part no voldria negociar...

En definitiva, d'això s'en diu "wishful thinking", pensament il·lusori. D'il·lusió també en viu el NEJM.

Imatge per guardar i ensenyar quan calgui explicar d'on venen les innovacions...

PD. Fa uns cinc anys vaig fer una conferència on vaig explicar com la farmàcia hospitalària s'enfrontava a un canvi en la funció de producció. I aquest canvi seria provocat inicialment pel receptor antígen quimèric per a les cèl·lules T, CAR-T. Es van sorprendre força. Els temps passa i confirma el que vaig dir. El que sorprèn és que no s'hagi formalitzat com a tal aquest canvi i no es plantegi un canvi organitzatiu profund on s'analitzin les economies d'escala i aprenentatge possibles.

Exposició a Barcelona

Making competition work

 Antitrust Policy in Health Care Markets

After reviewing all these issues included in the book, do you still think that true competition could work in health care?

In US, the evidence is that remedies doesn't cure the disease (collusion, monopoly, dominant position abuse).

Contents:

1. Health Care Markets and Competition Policy 1

1.1 The Marketplace of Health Care Spending 1

1.2 Competitive Concerns 3

1.3 Antitrust Policy 4

1.4 Plan of the Book 5

1.5 Concluding Remarks 12

2 Antitrust Policy in the United States 14

2.1 Introduction 14

2.2 The Economic Rationale for Antitrust Policy 14

2.3 Political Foundation of Antitrust Policy 19

2.4 Antitrust Treatment of Monopoly and Cartels 23

2.5 The Clayton Act 26

2.6 Private Antitrust Suits 27

2.7 Class Action Suits 31

2.8 Concluding Remarks 33

PART I MONOPOLY 35

3 Patents and Monopoly Pricing of Pharmaceuticals 37

3.1 Introduction 37

3.2 The Patent System 39

3.3 Patents and Monopoly Pricing 42

3.4 Patent Licensing 47

3.5 Antitrust Remedies 51

3.6 Government Policy Proposals toward Prescription

Drug Pricing 52

3.7 Extensions: Medical Devices and Orphan Drugs 64

3.8 Concluding Remarks 68

4 Patents and Exclusionary Product Hopping 74

4.1 Introduction 74

4.2 Exclusionary Product Hopping 75

4.3 Legal Challenges to Product Hopping 78

4.4 Solutions, If Any 88

4.5 Concluding Remarks 92

5 Bundled Discounts and PeaceHealth 95

5.1 Introduction 95

5.2 Bundled Discounts 96

5.3 Bundled Discounts in Health Care Settings 99

5.4 Anomalies of the Discount Attribution Test 105

5.5 Antitrust Treatment of Bundled Discounts 109

5.6 Concluding Remarks 112

PART II SELLER CARTELS 113

6 Collusion in Health Care Markets 117

6.1 Introduction 117

6.2 A Basic Cartel Model 117

6.3 Collusion among Physicians and Surgeons 121

6.4 Collusion among Hospitals 126

6.5 Collusion among Pharmaceutical Manufacturers 128

6.6 Collusion among Medical Device Manufacturers 131

6.7 Collusion among Health Insurers 132

6.8 Concluding Remarks 134

7 Collusion in Generic Drug Markets 136

7.1 Introduction 136

7.2 The Competitive Promise of Generic Pharmaceuticals 137

7.3 The Incentive to Collude 140

7.4 The Alleged Conspiracies 142

7.5 Economic Consequences of Collusion 150

7.6 Deterring Price Fixing 152

7.7 Concluding Remarks 154

Appendix: Alleged Participants in Generic Pharmaceutical

Drug Conspiracy 154

8 The Hatch-Waxman Act, Patent Infringement Suits,

and Reverse Payments 168

8.1 Introduction 168

8.2 The Hatch-Waxman Act 169

8.3 Reverse Payment Settlements 172

8.4 The Actavis Decision 177

8.5 The Post-Actavis Experience 186

8.6 Legislative Remedies 192

8.7 Private Damage Actions 197

8.8 Concluding Remarks 200

Appendix: The Economics of Settlements 200

9 The Alleged Insulin Conspiracy 204

9.1 Introduction 204

9.2 Insulin: A Brief History 205

9.3 The US Insulin Market 207

9.4 Pharmacy Benefit Managers 215

9.5 Collusion in the Insulin Market 220

9.6 Concluding Remarks 225

10 Licensing of Health Care Professionals 230

10.1 Introduction 230

10.2 Economic Concerns with Professional Licensing 232

10.3 North Carolina Dental and the State Action Doctrine 236

10.4 Licensing to Exclude Competition 242

10.5 Economic Effects of Mandated Supervision 245

10.6 The Empirical Evidence 249

10.7 Concluding Remarks 250

PART III MONOPSONY 255

11 Monopsony, Dominant Buyers, and Oligopsony 257

11.1 Introduction 257

11.2 Basic Model 258

11.3 Dominant Buyer Model 267

11.4 Oligopsony 270

11.5 Monopsony in Health Insurance Markets 273

11.6 Antitrust Treatment of Monopsony 275

11.7 Concluding Remarks 277

12 Countervailing Power: Physician

Collective Bargaining 279

12.1 Introduction 279

12.2 Bilateral Monopoly 280

12.3 Physician Cooperative Bargaining 286

12.4 Competitive Concerns 296

12.5 Concluding Remarks 298

13 Group Purchasing Organizations, Monopsony, and

Antitrust Policy 300

13.1 Introduction 300

13.2 What Do We Know about GPOs? 301

13.3 GPOs and the Exercise of Monopsony Power 302

13.4 Foreclosure of Suppliers 307

13.5 GPO Funding Mechanisms 312

13.6 Antitrust Enforcement Policy 315

13.7 Concluding Remarks 319

PART IV BUYER CARTELS 323

14 Collusion in the Nurse Labor Market 325

14.1 Introduction 325

14.2 The Shortage of Nurses 326

14.3 A Simple Analysis of an Employer Cartel 329

14.4 Recent Antitrust Litigation 333

14.5 Antitrust Damages 336

14.6 Antitrust Policy 341

14.7 Concluding Remarks 343

15 Collusion in the Oocyte Market 345

15.1 Introduction 345

15.2 Collusion in the Oocyte Market 346

15.3 Antitrust Standards 348

15.4 Economic Effects of Price Ceilings 351

15.5 Rule of Reason Analysis 352

15.6 Antitrust Injury and Damages 357

15.7 Disposition of Kamakahi 362

15.8 Concluding Remarks 365

16 No-Poaching Agreements and Antitrust Policy 368

16.1 Introduction 368

16.2 Background 370

16.3 No-Poaching Agreements in Health Care:

Seaman v. Duke University 373

16.4 Damage Theory 375

16.5 Government Regulation 381

16.6 Concluding Remarks 383

PART V MERGERS AND ACQUISITIONS 385

17 The Economics of Horizontal Mergers 389

17.1 Introduction 389

17.2 Mergers to Monopoly 390

17.3 Mergers of Producers to Realize Efficiencies 393

17.4 Mergers of Buyers to Realize Efficiencies 397

17.5 Merger Efficiencies Resulting in Increased Quality 401

17.6 Concluding Remarks 404

18 Horizontal Merger Policy 405

18.1 Introduction 405

18.2 Horizontal Merger Policy 406

18.3 Defining the Relevant Antitrust Market 410

18.4 Economic Evidence of Competitive Effects 412

18.5 Mergers and Their Anticompetitive Effects: Sutter

Health 415

18.6 Agency Analysis of Mergers in Health Care Markets 419

18.7 Concluding Remarks 431

19 The Economic Theory of Vertical Integration 434

19.1 Introduction 434

19.2 Vertical Integration 435

19.3 Vertical Integration and Competitive Distribution 439

19.4 Successive Monopolies in Production and Distribution 444

19.5 Competitive Concerns with Vertical Mergers 448

19.6 Empirical Evidence on Vertical Mergers 450

19.7 Mergers of Complementary Input Suppliers 451

19.8 Concluding Remarks 455

20 Vertical Merger Policy 457

20.1 Introduction 457

20.2 Legal Foundation 458

20.3 The 2020 Vertical Merger Guidelines 461

20.4 A Merger in Biotechnology: Illumina/GRAIL 465

20.5 The Merger of a Health Insurer and a Physician Group:

UnitedHealthcare/DaVita 469

20.6 The Merger of a Hospital System and a Physician Group:

St. Luke’s/Saltzer 472

20.7 Concluding Remarks 476

21 Concluding Remarks

The farce of confidential drug prices (3)

 Exploring the consequences of greater price transparency on the dynamics of pharmaceutical markets

The 2018 OECD report Pharmaceutical Innovation and Access to Medicines suggested that increased price transparency could promote public accountability, while potentially delivering efficiencies to health systems by including economic considerations in coverage, treatment decisions and budget allocation. Despite this, precisely what should be made more transparent, and how greater transparency would affect the functioning of markets, have been poorly characterised. To help frame the policy debate, the OECD undertook an exploration of the potential consequences of greater price transparency on market dynamics. The work included a roundtable and a series of semi-structured interviews, with participation by 19 experts in pharmaceutical pricing, economics of pharmaceutical markets, competition, and law. With an extensive review of the current practice and relevant literature as a preface, this report presents the key findings from those consultations.

 

Drug pricing overhaul

 Pricing for Medicine Innovation: A Regulatory Approach to Support Drug Development and Patient Access

The message:

We introduce a regulatory approach we term “Pricing for Medicine Innovation” (PMI), which departs dramatically from the market-equilibrium assumptions of conventional (neoclassical) economics. The PMI approach recognizes the centrality of collective investments by government agencies and business firms in the productive capabilities that underpin the drug development process. PMI specifies the conditions under which, at the firm level, drug pricing can support both sustained investment in these capabilities and improved patient access. PMI can advance both of these objectives simultaneously by regulating not just the level of corporate profit but also its allocation to reinvestment in the drug development process. PMI suggests that although price caps are likely to improve drug affordability, there remain two potential issues with this pricing approach. Firstly, in an innovation system where a company’s sales revenue is the source of its finance for further drug development, price caps may deprive a firm of the means to invest in innovation. Secondly, even with adequate profits available for investment in innovation, a firm that is run to maximize shareholder value will tend to use those profits to fund distributions to shareholders rather than for investment in drug innovation. We argue that, if implemented properly, PMI could both improve the affordability of medicines and enhance the innovative performance of pharmaceutical companies.

 David Hockney

Pharmaceutical contracts and prices

  Introduction to Market Access for Pharmaceuticals

Contents:

Chapter 1: Health as a Good

Chapter 2: Decision-Making in Public Health

Chapter 3: Definition and Concepts

Chapter 4: HTA Decision Analysis framework

Chapter 5: Early HTA Advice

Chapter 6: Overview of Market Access Agreements

Chapter 7: External Reference Pricing

Chapter 8: Gap between Payers and Regulators

Chapter 9: Early Access Programs

Chapter 10: Market Access of Orphan Drugs

Against patents (2)

 Medical Monopoly. Intellectual Property Rights and the Origins of the Modern Pharmaceutical Industry

Medical Monopoly combines legal, medical, and business history to offer a sweeping new interpretation of the origins of the complex and often troubling relationship between the pharmaceutical industry and medical practice today. Joseph M. Gabriel provides the first detailed history of patent and trademark law as it relates to the nineteenth-century pharmaceutical industry as well as a unique interpretation of medical ethics, therapeutic reform, and the efforts to regulate the market in pharmaceuticals before World War I. His book will be of interest not only to historians of medicine and science and intellectual property scholars but also to anyone following contemporary debates about the pharmaceutical industry, the patenting of scientific discoveries, and the role of advertising in the marketplace.

 

Pharma, big pharma (8)

 Drug Truths: Dispelling the Myths About Pharma R & D

This book answers the questions about the process and costs of pharmaceutical R & D in a compelling narrative focused on the discovery and development of important new medicines. It gives an insider's account of the pharmaceutical industry drug discovery process, the very real costs of misperceptions about the industry, the high stakes--both economic and scientific--of developing drugs, the triumphs that come when new compounds reach the market and save lives, and the despair that follows when new compounds fail. In the book, John LaMattina, former president of Pfizer Global Research and Development, weaves themes critical to a vital drug discovery environment in the context. This is a story that Dr. LaMattina is uniquely qualified to tell.

TABLE OF CONTENTS

PART I A MATTER OF THE HEART 1

CHAPTER 1 CHOLESTEROL DRUGS ARE UNNECESSARY 3

CHAPTER 2 INDUSTRY IS MORE INTERESTED IN "ME-TOO" DRUGS THAN IN INNOVATION 13

CHAPTER 3 IT TAKES INDUSTRY TOO LONG TO DISCOVER NEW DRUGS 23

PART II THE ROLE OF PHARMACEUTICAL R&D IN HEALTH CARE 39

CHAPTER 4 DRUGS ARE DISCOVERED BY ACADEMIA 41

CHAPTER 5 NEW MEDICINES ADD COSTS BUT LITTLE BENEFIT 50

CHAPTER 6 BIG PHARMA HAS FAILED AND SHOULD LEARN FROM BIOTECH SUCCESS 59

PART III THE PROFIT MOTIVE 69

CHAPTER 7 THE INDUSTRY INVENTS DISEASES 71

CHAPTER 8 NEW DRUGS ARE LESS SAFE THAN TRADITIONAL MEDICINES 79

CHAPTER 9 INDUSTRY SPENDS MORE ON ADVERTISING THAN ON R&D 91

CHAPTER 10 INDUSTRY DOES NOT CARE ABOUT DISEASES OF THE DEVELOPING WORLD 100

PART IV THE FUTURE 109

CHAPTER 11 BIG PHARMA'S DAY HAS PASSED 111

CHAPTER 12 FINAL REFLECTIONS 122

Business as usual is unacceptable in a pandemic

 What are the obligations of pharmaceutical companies in a global health emergency?

Timely article by Ezequiel Emanuel et al. in The Lancet:

Pharmaceutical companies have special obligations in this emergency, which follow from their indispensable capacity to help to end the pandemic by developing, manufacturing, and distributing COVID-19 vaccines. However, the capacity to help alone does not fully specify companies’  obligations. Additionally, market-based arrangements, with patents, marketing exclusivity, and confidentiality clauses, give pharmaceutical companies the freedom to choose what treatments to research and develop, how to price and distribute their products, and whom to furnish with products through bilateral agreements.9 Indeed, companies need not produce vaccines or infectious disease therapies at all. Patents and exclusivity, alongside the absence of price controls or requirements for technology transfer, also permit companies to charge higher prices than they otherwise could.  Governments adopt intellectual property rights, limited pricing regulations (ie, each country has its own pricing, with no one countrycontrolling the pricing, at most being able to set limits on the prices that can be charged), trade agreements, and other limited  interventions (eg, manufacturing, inspections of facilities, etc) in the hope of incentivising the development, manufacturing, and distribution of socially valuable products. Everyone—including pharmaceutical companies— agrees that business as usual is unacceptable in a pandemic.

 Ethical obligations:

CRISPR: from lab to the clinic

 This is the year that CRISPR moves from lab to clinic

Jennifer Doudna says:

In 2021, researchers will use CRISPR to enhance our medical response to the Covid-19 pandemic. Teams will continue to collaborate and bring to market vital CRISPR-based diagnostic tools that are accurate, rapid and painless. One currently being developed and scaled by Mammoth Biosciences, a company I co-founded, along with partners at the University of California, San Francisco and the pharmaceutical company GSK, can detect and indicate the presence of SARS-CoV-2 RNA in a similar fashion to a pregnancy test.

 CRISPR will also have an important effect on the way we treat other diseases. In 2021, we will see increased use of CRISPR-Cas enzymes to underpin a new generation of cost-effective, individualised therapies. With CRISPR enzymes, we can cut DNA at precise locations, using specifically designed proteins, and insert or delete pieces of DNA to correct mutations.

This is precisely what is going on. 

 

Pharma, Big Pharma (2)

 Government, Big Pharma, and The People. A Century of Dis-Ease

A book to read, with this Table of Contents:

Dedication
Acknowledgements
Preface
Chapter One – Introductions
Health
Woman as a Biological and Social Entity
A Different Paradigm
Health Care and Rights
Drugs and Their Role in Society
Drug Policy
Big Pharma
Drug-Related Problems
The People
What’s Ahead
Conclusion
Chapter Two – The Four "P’s"
Introduction
Marketing as an Actualizing Process
The Marketing Mix/The Four "P’s"
Government and the Four "P’s"
Conclusion
Chapter Three – Investigators and Investigations
Introduction
The Hearings
The Grand Inquisitor
Gaylord Nelson – Son of Torquemada
The Fountain Hearings
Senator Kennedy Joins the Fray
Small Business Problems – Dingell
Drug Efficacy Problems – Fountain
Moss on Drug Abuse
Fountain Redux
Congressman Rogers on Transition
Senator Humphrey and the Literature
A Newcomer – Congressman Van Deerlin
Senator Fountain – "One More Time"
Senator Kennedy Returns
FDA Under the Microscope Again
Kennedy – Not Too Tranquil
Gore on Pharmaceutical R & D
Senator Fountain Again
Claude Pepper for the Old Folks
Zomax in the Spotlight
A Pryor Engatement
The Task Force on Prescription Drugs
Research Findings and Recommendations
Conclusion
Chapter Four – Legislators and Legislation
Introduction
Laws and Policy
Bills and Sponsors
The Process
Conclusion
Chapter Five – Regulators and Regulations
Introduction
The Food and Drug Administration
Other Regulators and Regulations
Federal Trade Commission
Federal Communications Commission
Drug Enforcement Administration
Centers for Medicare and Medicaid Services
Patents and Trademarks
State Regulations
Drug Names
Conclusion
Chapter Six – Non-Government Influence
Introduction
Self-Regulation
Third Parties – Managed Care Controls
Formularies and Prescription Limitations
Lawyers
Advocates and Adversaries
Mail Order Pharmacy
Pharmacy Benefit Managers and Outcomes Management
Conclusion
Chapter Seven – The People and Their Drugs
Introduction
The People as Patients
Health Belief Model
Case – Health Belief Model
Attitudes and Evaluation of Drugs
The Sickness Career
The Sick Role
The Sick Role in Acute and Chronic Illness
Compliance with Medication Regimens
Other Influences on Medication Use
What to Do
Death or Maybe Not
Conclusion
Chapter Eight – Response of Big Pharma
Introduction
Response to Government
Big Pharma Speaks
Response of Big Pharma to the People
Some Ideas for Big Pharma
PMA Monographs
Statesmanship
Conclusion
Chapter Nine – Little Pharma and Friends
Introduction
Generic Pharma – Not So Little
Big Bio
What is Special about Specialty Drugs?
Little Boutiques
Back to the Future – Compounding Pharmacists
Friends
Conclusion
Chapter Ten – Greedy Big Pharma
Introduction
Two Parts of Greedy
AARP and Greedy Big Pharma
Congress and Greedy Big Pharma
Risk vs. Reward
Greedy Big Tech
Conclusion
Chapter Eleven – Whence the Drugs?
Introduction
Origins of Drugs
Drug Product Development
Marketing in the Last Century
Invention, Discovery, Development
Curiosities and Surprises
Recommended Reading
Conclusion
Chapter Twelve – Drugs of the Future
Introduction
But Seriously
Drugs in an Aging Society
Future Drugs for the Aged
Lifestyle Drugs
Conclusion
Chapter Thirteen – The Non-Prescription Products Market-Dr. W. Steven Pray
Introduction
Patent Medicines
Laws That Regulated Non-Prescription Products
FDA’s Review of O-T-C Products
The Prescription to O-T-C Switch
A Third Class of Drugs
Quackery – Lacking Proof of Efficacy
Quackery – New Names Confer False Respectability
Conclusion
Chapter Fourteen – Issues and Studies in Pharmacoeconomics
Introduction
The Emergence of Pharmacoeconomic Research
The Cost of Illness
Quality of Life Assessment
The Economics of Non-Compliance
Economic Epidemiology
Conclusion
Chapter Fifteen – On Drug Prices – Dr. E. M. "Mick" Kolassa
Pricing: The Forgotten "P"
The Growing Importance of Pharmaceutical Prices
Prices, Politics and Problems
Pricing Terminology
What is a Pharmaceutical Price?
Price Decision Making
The Value of Pharmaceuticals
The Future of Pharmaceutical Pricing
Chapter Sixteen – Summary, Ruminations and Apologia
Introduction
Ruminations
Trends
What If’s
Apologia

A plea for public patents on COVID prevention and treatment

 Funding of Pharmaceutical Innovation During and After the COVID-19 Pandemic

Extensive public investments also are being made in therapeutics. The 2 most prominent monoclonal antibodies (by Regeneron and Lilly) have come to market with substantial governmental support for product commercialization. Both products derive from therapeutic research platforms established with governmental support before the COVID-19 pandemic, but product commercialization and manufacturing received major additional investments in 2020. Separately, the National Institutes of Health (NIH) Rapid Acceleration of Diagnostics program has committed $1.5 billion to supporting development of diagnostic tests related to COVID-19. The specifics of the federal contracts largely remain confidential.

Why do they remain confidential? 

The lesson of the COVID-19 experience is that, when innovation in the life sciences is imperative, the traditional reliance on pharmaceutical industry prices and profits is jettisoned in favor of governmental grants and procurement. Sustained public funding for product development and commercialization will permit the sustained financing of innovation, a renewed attention to major public health needs, and the global position of the US pharmaceutical industry.

If there is public funding, why there aren't public patents? 

Mazzucato as a supplier of a flattering narrative for politicians (2)

Mission Economy. A Moonshot Guide to Changing Capitalism

My former post on a recent book by Mazzucato was based on a comment by McCloskey. Now, she has published a new one, and the best comment has been made by John Kay, clear message, I don't have anything to add.

Ever since 1969, people have asked themselves why if humans can land on the moon, can’t they solve pressing problems here on Earth, such as poverty, dementia and climate change. Mariana Mazzucato offers an answer: if only governments would apply the mission-driven methods of the Apollo project, they could.

Mission Economy, the new book from the high-profile economist noted for her advocacy of a more active state, contains many screenshots of the whiteboards beloved of brainstorming meetings, each with an ambitious goal at the top: secure the future of mobility, clean oceans, defeat cancer; below is a jumble of boxes and circles linked by multidirectional arrows.

We need a “solutions based economy”, driven and co-ordinated by more powerful governments engaged in every stage of the process of innovation.

But Apollo was a success because the objective was specific and limited; the basic science was well understood, even if many subsidiary technological developments were needed to make the mission feasible; and the political commitment to the project was sufficiently strong to make budget overruns almost irrelevant. Centrally directed missions have sometimes succeeded when these conditions are in place; Apollo was a response to the Soviet Union’s pioneering launch of a human into space, and the greatest achievement of the USSR was the mobilisation of resources to defeat Nazi Germany.

Nixon’s war on cancer, explicitly modelled on the Apollo programme, was a failure because cancer is not a single illness and too little was then — or now — understood about the science of cell mutation. Mao’s Great Leap Forward, a vain bid to create an industrial society within five years, proved to be one of the greatest economic and humanitarian disasters in human history. At least 30m people died.

Democratic societies have more checks and balances to protect them from visionary leaders driven by missions and enthused by moonshots, but the characteristics which made the Great Leap Forward a catastrophe are nevertheless still evident in attenuated version.

With political direction of innovation we regularly encounter grandiosity of ambition and scale; the belief that strength of commitment overcomes practical problems; an absence of honest feedback; the suppression of sceptical comment and marginalisation of sceptical commentators. All these were seen in Britain’s experience with Concorde, the Channel Tunnel and the AGR nuclear reactor programme, some of the worst commercial projects in history. More recently, there is the £12bn wasted on the NHS computerisation programme — a project that Mazzucato mentions, though only to blame private contractors for their failure to deliver on the political imperative.

On a smaller scale, Britain has suffered in the last year from the delays resulting from Public Health England’s insistence on central control of the coronavirus testing programme and the predictable fiasco of the attempt to sideline the expertise of Apple and Google in order to develop a uniquely advanced NHS test and trace app. And in September there was prime minister Boris Johnson’s “operation moonshot”, designed to control the coronavirus by testing 10m people daily in early 2021.

In contrast to these failures, the rapid development of vaccines is, at least provisionally, a success story. That development is not the product of visionary central direction but is the result of a competitive process with many different teams around the world attempting to be among the first across the finishing line.

Their work has drawn on a combination of existing academic science with the expertise in development and testing and the manufacturing and logistics capabilities of the global pharmaceutical industry. The role of government, appropriately, has primarily been in funding basic research and assuring that there will be a rewarding market for successful products.

Mazzucato lists “twenty things we wouldn’t have without space travel”. Athletic shoes, CAT scanners, home insulation, baby formula, artificial limbs. Yes, really. But beyond the ridiculous headline, we see the reality of productive innovation: a decentralised process in which developers draw on and help create the collective intelligence that leads to constant incremental improvement in so many fields — including better running shoes.

When historians of technology review the past 50 years, they may conclude that Neil Armstrong exaggerated when he announced “one giant leap for mankind”. The “new frontier” of the late 1960s turned out to be, not space, but information technology. And the development of IT was characterised by a striking absence of centralised vision and direction.

No moonshots; but piecemeal innovation through disciplined pluralism in which temporary winners were almost always displaced as they failed to anticipate the next step of the journey. Do you remember Digital Equipment, Word Perfect, Wang Laboratories, CompuServe, Netscape, AOL, BlackBerry? Each once a leader, now forgotten. Even Apple suffered more than one near-death experience, Microsoft failed to anticipate mobile computing or the cloud, IBM was swept out of the industry it had created.

Mazzucato has correctly emphasised the contribution of state funded basic research to Silicon Valley, but thank goodness the development was in the hands of Steve Jobs, Travis Kalanick and Elon Musk rather than a committee in the department of commerce.

No one has, or could have, the knowledge of present or future required to create or implement successfully the strategies that Mazzucato recommends. Take her modern signature example — Germany’s Energiewende, or energy transition to renewables. You will not learn from Mission Economy that this highly political, much publicised and wildly expensive project has brought about significantly smaller reductions in carbon emissions than Britain’s quiet, economically and socially beneficial substitution of gas for coal.

The failure of the Energiewende illustrates the dangers of moonshots and the mission economy. As talk of a “Green New Deal” becomes more frequent on both sides of the Atlantic, the prospect of more large, costly and ineffectual visionary projects grows.

Politicians readily fall in love with such proposals, and Mazzucato is not shy in reminding us how anxious they are to engage with her in discussing them. But the vision that propelled China’s economic development was not Mao’s Great Leap Forward or Cultural Revolution, but Deng’s “it doesn’t matter whether a cat is black or white if it catches mice”. It is more rewarding and effective to build better mousetraps than to shoot for a mice-free world.

John Kay is an economist, author and fellow of St John’s College, Oxford

 

Health supplies as strategic asset

China Rx
EXPOSING THE RISKS OF AMERICA'S DEPENDENCE ON CHINA FOR MEDICINE

Key messages from Chapter 14:

China has been one of America's bankers, buying US Treasury bonds, and is now America's drugmaker. The centralization of the global supply of key ingredients for America's medicines in a single country poses enormous risks that must be mitigated.
Free market advocates may contend that the United States is better off outsourcing medicine making to China and allowing Americans to keep more of their money to spend on other goods. But medicines are essential for life. A country needs them to function. Prescription drugs are made by private corporations, but many serve a public purpose. 

Not unlike the manufacture of other consumer products, business decisions about manufacturing essential drugs and their therapeutic ingredients have been left to the invisible hand of the market. Financial and human capital have migrated to countries with the lowest cost of doing business. Corporate executives and their boards have determined that for them, the benefits of dependence on China outweigh the risks.
These decisions are too important to leave to the invisible hand. As China rapidly pursues a determined strategy to become a pharmaceutical power, US dependence on a single country will rise dramatically.

Key prescriptions to consider:

1. CONSIDER MEDICINES A STRATEGIC ASSET, NOT A COMMODITY TO BE BOUGHT AT THE LOWEST PRICE
2. TRACK AND FORECAST VULNERABILITIES IN THE SUPPLY OF AMERICA'S MEDICINES
3. PRIORITIZE A LIST OF MEDICINES FOR WHICH A SUPPLY INTERRUPTION POSES AN IMMEDIATE DANGER TO PUBLIC HEALTH
4. INVESTIGATE CHINESE DRUG CARTELS TO FIND OUT IF THEY CAUSE DRUG SHORTAGES IN THE UNITED STATES
5. PROVIDE INCENTIVES TO BRING DRUG MANUFACTURING HOME
6. ENSURE THE US MILITARY DOES NOT DEPEND ON CHINA FOR ESSENTIAL MEDICINES
7. STRENGTHEN, DON'T WEAKEN GOVERNMENT OVERSIGHT OF DRUG MANUFACTURERS
8. DON'T CEDE US REGULATORY OVERSIGHT OF DRUG MANUFACTURING TO CHINA
9. INCREASE FDA TESTING OF MEDICINES                                                            10. LUCK IS NOT A STRATEGY: IDENTIFY PROBLEM PRODUCTS RAPIDLY

Given the current health crisis, you can change medicines by tests and it fits perfectly. You can apply it to your country.

Are Pharmaceutical Companies Earning Too Much?

Are Pharmaceutical Companies Earning Too Much?

Estimated Research and Development Investment Needed to Bring a New Medicine to Market, 2009-2018

The debate about pharmaceutical companies earnings is a never ending story. Now you can find in JAMA an article that reflects the cost of a new drug: $1336 million. This is the summary:

The FDA approved 355 new drugs and biologics over the study period. Research and development expenditures were available for 63 (18%) products, developed by 47 different companies. After accounting for the costs of failed trials, the median capitalized research and development investment to bring a new drug to market was estimated at $985.3 million (95% CI, $683.6 million-$1228.9 million), and the mean investment was estimated at $1335.9 million (95% CI, $1042.5 million-$1637.5 million) in the base case analysis. Median estimates by therapeutic area (for areas with ≥5 drugs) ranged from $765.9 million (95% CI, $323.0 million-$1473.5 million) for nervous system agents to $2771.6 million (95% CI, $2051.8 million-$5366.2 million) for antineoplastic and immunomodulating agents.

Why this new figure is relevant? Because previous estimates said that it was the more than the double!

The mean estimate of $1.3 billion in the present study was lower than the $2.8 billion (in 2018 US dollars) reported by DiMasi et al,

And   my impression is that we have entered in a difficult world to estimate the real cost. Right now many firms are buying research (buying firms that have already a product close to be commercialised) and they are paying a premium for outsourcing research. Therefore, how to estimate the cost in this situations? Uncertain.

David Cutler asks about the earnings of pharma firms and says:

Ledley showed that from 2000 to 2018, the median net income margin in the pharmaceutical industry was 13.8% annually, compared with 7.7% in the S&P 500  sample. This difference was statistically significant, even with controls, although earnings seemed to be declining over time.

Is this positive return differential evidence of too high a return? Not necessarily. The economics of pharmaceuticals are important to consider. Like several other industries (eg, software and motion picture production), the pharmaceutical industry has very high fixed cost and very low marginal cost. It takes substantial investment to discover a drug or develop a complex computer code, but the cost of producing an extra pill or allowing an extra download is minimal. The way that firms recoup these fixed costs is by charging above cost for the product once it is made. If these upfront costs are not accounted for, the return on the marketed good will look very high.

 Paying more than a drug is worth clinically is not a good strategy. Even if a drug is worth a high price socially, pricing patients who need the drug out of the market is a real loss, even if it leads to more innovation in the future. In still another case, price increases for older, generic drugs serve no innovation purpose. But, as a general rule, it is important to be wary of blunt “lower all drug prices” policies.

Cutler doesn't say too much on price according value and about public funding of research. It leaves the initial question open and waiting for adhoc answers. That's it , it's a complicated issue, no general prescriptions, they need to be adjusted to specific conditions without a captured regulator. This last point is the most difficult one to overcome.

Prix Pictet

Global pharmaceutical market vs. local regulators

Regulating Medicines in a Globalized World: The Need for Increased Reliance Among Regulators

As defined by the World Health Organization (WHO), recognition occurs when a regulatory authority accepts the regulatory decision of another authority “as its own decision;”— reliance takes place when a regulatory authority takes into account the work products of another authority (e.g., inspection reports, scientific assessment reports, joint assessment reports produced together with another authority) to help inform the receiving authority's own regulatory decision, which, in the end may differ from the made by the initial authority using the same products. 

Recognition and reliance are the first steps towards an improvement of real coordination between regulatory bodies. If the pharmaceutical market is global, the regulators should cooperate for a coherent global regulation.

Improving the pharmaceutical regulation production function

Using Routinely Collected Data to Inform Pharmaceutical Policies

With the broadening of data available for officials to regulate markets, things could change. The issue is specially relevant for pharmaceuticals. Up to now if you want information about the market you have to use IMS data. Now governments that pay the drugs bill can use their own data to improve regulation. Better knowledge could represent better regulation if it is performed appropriately and on a timely basis. The OECD report tries to put all these elements together and highlight the opportunities ahead.

This report provides an overview of patient-level data on medicines routinely collected in health systems from administrative sources, e.g. pharmacy records, electronic health records and insurance claims. In total 26 OECD and EU member countries responded to a survey addressing the availability and accessibility of routinely collected data on medicines and their applicability to developing evidence. The report further explores the utility of evidence from clinical practice, looking at experiences and initiatives across the OECD and EU.

Governments will have to improve big data capabilities and add new talent.

Sorolla right now in London

Pharma returns

Measuring the return from pharmaceutical innovation 2018

Key findings for top 12 biopharma companies in the Deloitte study.

• R&D returns have declined to 1.9 per cent, down from 10.1 per cent in 2010 - the lowest level in nine years
• Returns have been impacted by the growing cost of bringing a drug to market which now stands at $2,168 million – almost double the $1,188 million recorded in 2010
• Forecast peak sales have declined from last year to $407 million – less than half the 2010 value of $816 million

The growing cost of new drugs includes buying companies for their research (outsourcing research) instead of "producing" R&D within the company. The report will not tell you this minor observation.
Last February I said :

In drug industry the probability of R&D failure is 90.4%. We all know that in the drug costs we are paying also for failures, but we easily forget the figure.

You'll not find any reference to this minor issue. Is there any profitable industry with such a failure rate?

Caro Emerald