A Little-Discussed Issue That Puts "Care" Back in Health Care Reform

"In all this discussion about health care reform, we never hear about health care. It's
always about insurance," say many people who talk to me about what's going on in Congress.

Good point. The focus of most discussions has been on health insurance, because with the American system, care improves if you can pay for it. Those who arrive in emergency rooms because they are very sick will be cared for, but it would have been better for them, and for the tax-paying public, if they had access to care when preventive health measures could have been implemented, thereby reducing emergencies.

The health care reform bill under discussion is multi-faceted, and many of the provisions will directly affect our care. One of these has to do with future medications, a topic that is receiving very little coverage in the general press. Yet legislation concerning the changes for the drug approval process on a special type of medicine (biologic medicines) could provide huge savings -- a major need with health care reform.

(If you want to be sure "care" remains part of the health care reform bill, I hope you'll read through this post to the end. Then write or call your Congressional representatives. It is vital that citizens weigh in on this issue.)

New Medicines that Offer Better Care -- and Some Cures

Beginning in the 1980s, a new type of medication began being approved for use, and these medications now appear to be the way of the future. Known as biotechnology products, these medicines are made using living organisms. Biotechnology medicines have revolutionized health care with effective, targeted therapies that battle some of the most costly and complex diseases such as cancer, Parkinson's, Alzheimer's and rheumatoid arthritis.

As of 2008, more than 300 biologics have been approved by the FDA and 633 are in development (including more than 250 new treatments for cancer). By 2012 about half the drugs approved by the FDA are expected to be biologics.

Right now biologic medicines are very expensive, ranging from $14,000 to $300,000 per year.

How Drugs are Currently Approved

To understand what is being discussed regarding biologics, it is important to remember that traditional medicines follow a specific route to the marketplace.

Traditional drugs (such as anything from prescription antibiotics to over-the-counter aspirin) apply for FDA approval under the Food Drug & Cosmetic Act. The Hatch-Waxman Act was enacted in 1984 and permits generic manufacturers to get copies of medicines to market after the original manufacturer has enjoyed five years of market exclusivity to earn back the company's investment in research and development. Instead of proving safety and effectiveness, a generic manufacturer need show only that its copy is bioequivalent to a certain medication and the FDA then relies on its own previous determination that the original company's product is safe and effective when approving the copy. The generic manufacturer must also respect the brand manufacturers' patents.

Because of the smaller amount of data required on a generic drug, and the absence of clinical studies, consumers today can buy generic medicines at about 70-80 percent off the price of the original drug.

When the first biologic drug was approved in 1982 (it was recombinant insulin developed by Genentech, then licensed to Eli Lilly), it was through a chance of history regulated as a drug under the Food, Drug and Cosmetic Act. (This applies to most of the hormones and so they are called biologics drugs.) However, most biologics are licensed under the Public Health Service Act (PHSA) rather than the Food, Drug and Cosmetic Act.

The FD&C Act requires clinical studies, but under the PHSA, sponsors of biologics are not required to conduct clinical studies but they must demonstrate that their biologics are safe, pure, and effective. This makes sense when one considers products like flu vaccines, when there is no time to conduct full clinical studies and affirmatively demonstrate efficacy. Even without these studies manufacturing time can be a limitation on availability as we are witnessing with the current effort to create enough vaccine for the H1N1 (swine) flu.

Because Hatch Waxman, the generic drug law, only amended the FD&C Act, and not the PHS Act, there is currently no abbreviated regulatory pathway to market for competitors to those biologics under the PHSA. As a result, the FDA currently requires that all biologics subject to the PHSA go through the same complete development and approval process as any other new biologic medicines, and this keeps costs high. (Because biologic medicines are made from living organisms and lack definitive specifications and so cannot be shown to have been replicated exactly, they are not referred to as generics; they are being called follow-on biologics or biosimilars.)

Elan Rubinstein, a California-based pharmaceutical consultant, points out that non-biologic drugs -- traditional drugs -- can be manufactured by different sponsors as identical structures even if in different factories, but that is not yet clear that this will be true with biologics. The manufacturing process requires microorganisms, purification, and sometimes modification of the molecule, which complicates the copying process.

To clarify, a small molecule traditional medicine like Zyrtec can be reliably duplicated but it has not yet been fully agreed that biologic medicines like Avastin (cancer) or Remicade (arthritis) can be copied in such a way by a different sponsor such that the "biosimilar" drug or the follow-on biologic can be used interchangeably with the original biologic drug.

However, as noted above, innovators do make manufacturing changes to their own products, with the FDA's permission, so clearly it is possible to make such products safely in different ways, in different facilities if one has the right knowledge or does the right tests. These need not include clinical studies (which the innovators do not do, the majority of times that they make such changes using so-called comparability approaches).

Rubinstein notes that if biologics are not identical, then the FDA may restrict marketing claims of interchangeability meaning that only doctors, and not pharmacists, can substitute a biosimilar for its reference innovator biologic, and vice versa.

Yet the opportunity to create follow-on biologics or biosimilars would help consumers and the government, since so many Medicare patients receive these drugs. Estimates are that in the first decade in the marketplace, biosimilars could save patients and our health care system as much as $71 billion.

Why We Have the System We Have for Medications and What is Being Discussed in the Reform Bill

The current approval system was created for several reasons:

1. The U.S. wanted a way to assure citizens of safety of the medicines that are available. (We are only a little more than 100 years beyond the time when traveling medicine men marketing patent medicines that promised to cure everything.)

2. In American business, we believe in rewarding innovation. If a company has invested many years in developing a medication, their right to market it exclusively for a period of years is intended to let them earn back their research money and profit from creating a successful medication. The patent process permits for competition when a patent expires. (The market exclusivity that extends over and above patents, currently only applies to small molecule drugs and no other industry.)

3. Once the medication has been on the market for a time, the generic medicine can be produced, and drug costs for consumers are greatly reduced.

4. This system provides added incentive for new research and development. Pharmaceutical companies know that they need to be creating the "next new thing" because they will at some point lose whatever their current "cash cow" drug is.

So what's the issue under discussion re: health reform?

Congress is trying to iron out legislation that enables biologic medications that are intended to "copy" a previously approved biologic to get to market, in the same manner as generic drugs now compete with brand drugs when patents expire. If complete development is required on all biologics, this may mean that follow-on biologic may be almost as expensive to develop as a new biologic. Without head to head competition in the market place (akin to the generic substitution that we see today for traditional drugs) the cost to the consumer may not come down, and some biologics may have indefinite monopolies.

Conflicting Interests

Matthew Gardner, CEO of BayBio, an independent trade association for the life science industry, favors the 12-year market exclusivity (the period during which a competing biosimilar would be blocked from reaching the market) currently in several of the various reform bills under consideration by Congress. He points out that even in the production process, these medications are more difficult to replicate than are traditional drugs, and that makes the entire process more costly.

Yet the 12-year exclusivity period means that consumers will not have more affordable options on these new medications any time soon.

Several organizations, the Universities Allied for Essential Medicines (UAEM), the American Medical Student Association (AMSA), and the consumer groups Essential Action and Knowledge Ecology International, put out a news release (9-28-09) stating that the current legislation that specifies 12 years of market exclusivity for biologics vs. the five-year exclusivity for traditional drugs will all but block the creation of biosimilars by creating such a long delay from original to copy.

The groups' news release cites a 2009 PhRMA report that indicates that development costs for biologics ($1.2 billion) vs. conventional drugs ($1.318 billion). Their viewpoint is expressed in this tongue-in-cheek video: http://affordablemedsnow.org/

The well-respected New England Journal of Medicine also published a commentary October 14 that expressed that 12 years was too long. http://healthcarereform.nejm.org/?p=2070&query=home

Representative Henry Waxman and Senator Charles Schumer have both introduced alternatives (H.R. 1427/S. 726) that would address the problems by providing for five years of exclusivity.

There Needs to Be Incentive for Innovation

Michael Jacobs, principal and national clinical practice leader, of Buck Consulting, a global employee benefits and human resource consulting firm, sums up the conflict: "Of course I want the lowest possible price on the medications our clients are covering for their employees, but I also want innovation. Right now there are about one million people out on disability with diagnoses of Chronic Fatigue Syndrome. This type of thing is very costly for companies, so I want legislation that will encourage innovation for pharmaceutical companies because I want medications that will help these people feel better and get back to work. It's a difficult balance."

Drug development can take decades and be very costly. Lupus is a disease suffered by about 1.5 million Americans. A new biologic medicine is expected to be approved in November, but this is the first new drug for this illness in 50 years. The amount of money invested by various companies on research and development over this long time is almost incalculable.

An additional voice on this issue comes from those who represent "orphan diseases." These are illnesses that are rare enough that they are considered a "small" market for drug companies. Any person with one of these rare diseases is very concerned that drug companies remain motivated to introduce new drugs, as that lets them live with the hope of a cure. The other issue has to do with interchangeability.

Bob Campbell, who is communications manager for the Alpha-1 Association, is also a sufferer of Alpha-1 (Alpha-1 Antitrypsin Deficiency). This is a disease that exhibits itself as severe lung and/or liver problems, and results from the alpha protein not being able to be processed by the liver.

Bob went for many years with what seemed to be severe asthma that seemed to progress to emphysema and chronic obstructive pulmonary disease. Then nine years ago, he was prescribed a biologic medicine called Prolastin, highly purified blood plasma. The medication has greatly slowed the progress of Campbell's condition. He maintains a 40-50 percent function of his lungs -- not great but good enough to make life worth living.

"Fewer than 200,000 people have Alpha-1, and my drug is very expensive," says Campbell. "After living for most of my life with a lung disease that was getting progressively worse, I worry about switching. What if the copy doesn't work as well?"

"The Alpha-1 community favors competition so that drugs are more affordable, but if we're taking something that works, it is frightening to think of having to switch to something else because of cost," adds Campbell. His organization is advocating for special review of biosimilars by an expert advisory panel, as they feel medical generalists should not be making the decisions about what else is effective for Alpha-1 (and other rare diseases).

While Campbell's concern is worthy of note, one has to think that the FDA review panel on follow-on biologics will be as careful as the original reviewing panel, and they will understand that they need to consider interchangeability.

We May Have Heard This Before

Pharmacist Douglas Miller, professor of pharmacy practice at Wayne State University in Detroit, Michigan puts this conflict in perspective: "This discussion is not dissimilar to the one that occurred in the late 1970s and early '80s about creating generic medicines. In 1962 the Kefauver Harris Amendment provided that all drugs had to go through the same lengthy approval process -- new drugs as well as generic. The 1984 Hatch-Waxman amendment that provided a shortcut for generics was enacted only after great controversy."

Miller predicts that the solution may lie in the FDA developing a multi-tiered approval system for follow-on biologics. The first review would involve establishing the similarity of an original and a copy of a drug, and then the FDA could rule on each application separately as so whether or not more testing is needed.

As with any type of new invention, one has to think that the process will become easier and the costs will drop over time. (Think of what has happened with computer technologies and the extraordinary decreases in price.) While the pharmaceutical companies are currently facing steep costs in developing these new medications, history shows us that with new processes and more people working in the field, companies will likely find ways to bring costs down, making these long exclusivity periods all the more unnecessary.

Right now the reform bills that include provisions on biologics allow for a 12-year exclusivity, with the possibility of amending a medication and getting a new patent, which could extend the exclusivity indefinitely.

When the full Congress undertakes this discussion, they could look at a compromise measure that would provide for five years of market exclusivity after the approval of the original drug. This would match what is provided for traditional drugs and might serve to balance between financial incentives for innovation with consumer needs for prices to drop to make new medications more easily affordable.

Even if new legislation covers the follow-on biologics, it will take time to get any new follow-on biologics to the marketplace. Depending on the details in the new legislation, the FDA may need to draft guidelines for an approval process, and applicants will still have to wait until a product's patent expires or the market exclusivity period expires before marketing a "biosimilar."

So if Congress enacts legislation that provides authority to the FDA to review and approve biosimilars, and that allows sponsors to bring these medicines to the marketplace, what savings might consumers expect?

"In Europe, they are experiencing a 20-25 percent drop in prices with the biosimilars, and I would think that is rough estimate of what we would get here," notes Peter Pitts, president of the Center for Medicine in the Public Interest. "Ultimately we want the FDA to create a process that provides patients with the highest possible quality medicine at the lowest possible cost."

So what do you think? Take a stand (five-year exclusivity? 12-year exclusivity? 12 years but with absolutely no extensions? A compromise of 7 or 8 years to balance the two current time periods being considered?), and write to your representatives in Congress. Public opinion matters, and this issue may be decided soon.

For more on biologic drugs and how they are made, see the New York Times slide show on the subject: "Growing Biologic Drugs, from Vial to Vat."

Follow Kate Kelly on Twitter: www.twitter.com/katekelly6

Comments

[Billl]

Medicare, Medicaide, and all government funded health care programs were all distributed through private delivery systems, this is the killer for every attempt to save money in an industry where Americans spent $2.6trillion last year.

Only public sales tax funding, replacing insurance as we know it, in combination with public owned hospitals which will dispense all government funded care free, (sales tax funded), to consumers which elect to receive public care, coexisting in a dual public/private system in which private care and insurance can be purchased by those who prefer to use private systems, can produce benificial health care reform.

Nobody can collect the money to pay for health care as cheaply as the government can through a national sales tax, and nobody can deliver high quality care and medications as cost effectively as the VA.

President Obama commented that “governments unfair advantages” would not be allowed to disrupt private health care’s businesses, however a CBO study to compare all proposed reforms, to a dual public/private plan, would scream that “governmments unfair advantages” offer the only solutions to save lives and prevent bankrupting families, employers, and our country.

Everyone choosing public care could have it no restrictions, no insurance, no co pays, free period.
Employers who select federal public care for their employees would not be required to pay for or have any further involvement with health care.

Going back and forth between private and free public care would offer unlimited choices.

[Kate Kelly - Huffpost Blogger]

Thanks for extending the conversation.

[DrJulienArbor]

Eli Lilly?

http://www.youtube.com/watch?v=6QMYFgC_YSo

Chronic Fatigue Syndrome?

http://www.youtube.com/watch?v=0PLXLJwl9uM

The FDA?

http://www.youtube.com/watch?v=oXHcZjz0Cq8

http://www.youtube.com/watch?v=sLblkjMqtbs

http://www.youtube.com/watch?v=PSIrxIRDF8Q

http://www.youtube.com/watch?v=PST6NoDHoOQ

http://www.youtube.com/watch?v=66nz2-TI_AE

http://www.youtube.com/watch?v=-SVrjgVlJrc

http://www.youtube.com/watch?v=cuGLFnwKg5g

http://www.youtube.com/watch?v=wyofKBgpxko

http://www.youtube.com/watch?v=_BCtBbzm4pU

http://www.youtube.com/watch?v=ISVlEb8P20Y

'Nough said.

[Kate Kelly - Huffpost Blogger]

Wow! Thanks for posting...I'll have to catch up on these over the weekend.

Kate

[Kate Kelly - Huffpost Blogger]

Thank you for posting. These are good questions for your doctor as the answers would be specific to your condition.

Good luck.

[PlaceboStudman]

I read the article and I read the NYtimes article, and while this has some great potential, there are still a lot of questions.

For example, once the protein is harvested from the cell, how is it prepared to be administered to the patient? Injection? traditional pill form?

If it is in pill form, then presumably the same chemicals, additives, and fillers and stabilizers would be used to administer the biological drug, and if that is the case, considering that it is the extra additives that are the harmful aspects of the drug, I wonder just how much more effective they would be?

If a disabled patient such as myself takes a biological, how much better, or for that matter any different would it be for my kidneys and liver, if my kidneys and liver still have to process the same dangerous junk that has caused the organ damage I have already suffered?