Surpeme Court Decision on Gene Patenting Can Affect Drug Prices

In a surprising decision the Supreme Court unanimously (with the opinion written by Justice Clarence Thomas) ruled that human genes cannot be patented by companies that discover them to solely profit off of the research.  This is one of the things that keep name brand drug prices high.  

Jonas Salk, inventor of the polio vaccine, was once asked by CBS anchor Edward R. Murrow who owned the patent.  He said "The people I would say. Could you patent the sun?"  There was plenty of scientific progress when greedy corporations did not drive the process. The great polio scare of the 1950's was contained successfully as a result.

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An Explanation of Washington Post Graphs on the Cost of Procedures

New Time Magazine Article on Healthcare Costs with Stewart Discussion

Evergreening

Legalized Bribery

Ever wonder why health care costs so much in this country, and why we get such poor outcomes in return? Here's a small piece of the puzzle.

The New York Times reports that an obscure paragraph in the recent “fiscal cliff” bill extends a delay in implementation of Medicare price controls on Sensipar, a drug used by kidney dialysis patients, for two years. The drug is manufactured by Amgen. The delay will cost Medicare—and ultimately taxpayers—$500 million. The section of the bill (Section 762) is not tranparent and does not mention Amgen by name. It's one of many examples of pork that are buried in a bill that was supposed to reduce the deficit.

Here are the details. Currently, Medicare pays for dialysis drugs individually. They determined that this created an incentive to overprescribe medication that was useless and possibly harmful. The change, now postponed, was that Medicare would pay a single, bundled rate for dialysis treatment.  That was a threat to Amgen's profits.

According to the Times, this decision was made by Senator Max Baucus (D-MT), chair of the Senate Finance Committee, and Senator Orrin Hatch (R-UT), the ranking Republican on the committee. It was subsequently approved by Senate Minority Leader Mitch McConnell (R-KY) and Vice President Joe Biden, who negotiated the “fiscal cliff” agreement. Amgen has made over $5 million in political contributions since 2007, including $67,750 to Senator Baucus, $59,000 to Senator Hatch, $73,000 to Senator McConnell, and $141,000 to President Obama's two presidential campaigns.

Sen. Mitch McConnell
(or possibly a turtle)

The Times quotes aides to Senators Baucus and Hatch and an Amgen spokesperson as saying that the delay was justified because it would “give Medicare and health care providers the time they need to accommodate complicated changes in federal reimbursement for kidney care.” The price restraints were originally scheduled to begin in 2012. Congress granted Amgen a two year delay until 2014. The “fiscal cliff” bill extends that delay until 2016. How much time do they need?

An aide to Senator Baucus added that, “What is the best policy for Montanans and people across the country is at the heart of every decision Chairman Baucus makes.” But none of the people contacted attempted to justify the decision on medical grounds.

Amgen is the world's largest biotech corporation, with $15.6 billion in revenue in 2011. It has 74 lobbyists in Washington, including former chiefs of staff of both Senators Baucus and McConnell. Senator Hatch's leading staff member on health care policy is a former Amgen employee.

On December 19, Amgen pleaded guilty to illegally marketing Aranesp, an anti-anemia drug, for purposes the FDA had explicitly not approved. The $762 million settlement was a new record for a biotech company.

I think incidents like this pose a serious threat for single-payer advocates. One of the major arguments against single payer, which resonates strongly with the general public, is that the federal government can't be trusted to run a health care system that will provide quality medical care at a reasonable price. We usually try to counter that argument by pointing out that all other countries with single-payer systems achieve better health outcomes than we do at lower cost.

However, the United States is not like other industrialized countries. It's possible that our level of political corruption is so much higher than other countries as to make us not comparable to them. If so, it's impossible to predict how single payer would fare in this country. Of course, despite our corruption, Medicare is still cheaper than private insurance. However, if Congress ever passes a single payer bill, it is important that it contain safeguards that insulate the system from corporate and political interference.

Update (1/31/13)

The liberal organization Progressives United has latched onto this story and is asking people to sign a petition to the CEO of Amgen asking him to give back the $500 million. (Good luck on that!) The petition can be found here.

ReCOVERING: Chuck-En-Stein on Addiction & Health Care

Chuck-En-Stein

Ron Stouffer and Rosie Skomitz are writers and bloggers on the Healthcare 4 All PA board.  Here is a post they wrote on drug addicts struggle with health insurance companies for the online journal CommonSense 2.  You can read other posts by them there on health care.

ReCOVERING: Chuck-En-Stein on Addiction & Health Care

By Ron Stouffer and Rosie Skomitz

CS2 editor Chuck Brown’s dear friend, Tina (not her real name), suffers from degenerative disc disease, a fairly common problem. Many Americans share this affliction and can relate to the pain that accompanies back/disc issues. Tina’s doctor prescribed OxyContin, a highly addictive narcotic, and for over two years Tina took narcotic drugs in increasingly higher doses to deal with the agony of her back pain. Chuck shared with us the story of her downward spiral into the world of addiction and his anguish in seeing a close friend caught in the throes of this disease.

Addiction and the Medical Establishment

Chuck calls the medical establishment in the U.S. an assembly line. Even though safeguards are put in place to protect the patient, those safeguards are often lost in the assembly line. Here’s how Chuck describes it: You go to the doctor’s office; go to the receptionist, sign in, and show your insurance information; sit in the waiting area; you’re shown to one of  several exam rooms, all of which contain patients waiting for or being seen by the doctor; a nurse or practitioner preps you; then the doctor comes in. “Doctors are like airlines,” Chuck says. “They overbook and there’s overflow in the waiting room. This is your typical doctor’s office.”

When seeing someone complaining of pain, doctors will often whip out their prescription pad – that’s what they think of first. Tina was eventually prescribed the maximum allowable amount of highly addictive drugs so she needed careful supervision, according to the safeguards in place to protect patients. Chuck describes the procedure: Each time you go to the pharmacy to renew your prescription for narcotics, the pharmacy is required to call the doctor’s office. Even if you are allowed five refills, they still must make the call. Chuck does not believe that call ever reaches the doctor. The likely scenario, as he sees it, “A woman at the desk (in the doctor’s office) handles this kind of thing, looks in her file and sees, oh, yes, this woman is allowed to have this refill and tells the drug store to go right ahead.” There’s no discussion about any problems or red flags, no questions about possible problems such as running out of her supply before the end of the month.

Watching his friend deal with the horrors of addiction prompted Chuck to learn more about it. One thing he discovered is that running out of the drug supply before the end of the month is one of the main tell-tale signs that you’re on the road to becoming an addict, and once you’re addicted to OxyContin, it’s harder to break the addiction than for a coke-head. “It’s much harder,” Chuck says. “It’s one of the most difficult withdrawals of drug addictions. So you would think doctors and the medical establishment would be interested in making sure that this doesn’t happen, with follow-up calls with their patients.” But the addiction experts Chuck consulted told him there’s an epidemic of people in this country hooked on drugs. Some believe doctors over-prescribe.

Chuck believes the system doesn’t encourage doctors to avoid prescribing potentially addictive drugs. “Why would a doctor want to treat you with holistic ways to address your pain when you’re not going to be coming back to him with your pain? They get these people on drugs, and they’re on drugs for the rest of their lives.”

Withdrawal

Withdrawal occurs on the discontinuance of the use of a drug to which one is addicted. The portrayal of withdrawal in the Ray Charles movie is not at all exaggerated, Chuck tells us. He says, “I’ve watched my friend in withdrawal, and it’s horrifying. Addicts will do anything to avoid that. They’ll stick up their mother. That’s why there’s so much crime in Reading and places like that. They can’t help themselves. They will take your purse, knock you over the head, whatever they need to do because they know what that withdrawal is like, and they’ll do anything to avoid it.” Often, these are people who end up in jail. Addictions counselor Cheryl Dawson (not her real name) contends, “They shouldn’t be in prison. They should be in treatment.”

Withdrawal without medical supervision is extraordinarily difficult. In fact, even when taking withdrawal medicine (known as a taper) in a treatment center, it’s nasty. The physical pain of the withdrawal process is very real.

Addiction and the Health Insurance Industry

Tina wanted to get help to kick her addiction, one of the hardest battles she will ever face. But the harsh reality of health insurance in the U.S. kicked her in the teeth. She discovered that her insurance company, at its whim, can decide if they’re going to pay for her rehabilitation or not. “Why is this choice left to a private, for-profit company?” Chuck wonders. “Who are they to say whether treatment for addiction should be paid for or not? Why is it their decision?” Chuck explained that in the Netherlands, the government writes the insurance policy and private insurers bid on selling it.

Furious, and rightly so, Chuck lashed out at the U.S. health insurance system. “In America, not only do we let insurance companies make decisions on whether or not we get covered, they make decisions on what drug you can take. They also make decisions on your care – how many days for treatment. If the doctor says you need a month in rehab and the insurance company says they’ll pay for three days, how’s that their decision? Why do we allow this to be in the hands of private industry?” For this reason, some of the most prestigious (and expensive) treatment facilities do not accept insurance. They refuse to take treatment orders from insurance companies. Consequently, these facilities are financially out of reach of poor and many middle class addicts.

Like Chuck, we are old enough to remember that it wasn’t always like this. Chuck reminds us, “There was a time in this country when there was a social contract. When our parents came home from World War II, they got a job.If they kept their nose clean and worked at that job for 30 years, they got a nice pension/retirement. And during that 30 years they got their health care paid. They didn’t get it taken out of their paycheck every two weeks. It was paid for. In return, you gave your loyalty and your hard work to the company. That social contract doesn’t exist any more…No one will stand up for the average person in this country.”

So Tina’s insurer refused to pay for the treatment she so obviously needed, deeming that her addiction was not life-threatening. Her request denied, Tina had to pay out of her own pocket to check herself into a facility. This young, professional woman in her early 30s took out as much of a loan as she could to pay for as much of a program as she could afford. Her doctor thinks she needs a longer treatment program, but she can’t stay longer because she can’t afford to. What’s more, there are programs that will teach her how to deal with her back pain without narcotic drugs, but, no surprise here, the insurance company won’t pay for those either.

We can only hope that the brief stint Tina spends in rehab is sufficient to help her conquer her disease. If it is not, then her health insurance company surely has sentenced her to more misery down the road. A worst case scenario: Her employer knows about her addiction since she tried to use employer-provided health insurance for treatment. Chances are the employer will keep a closer eye on her job performance when she returns to work. Her previous stellar evaluations may matter little. Miss a few days of work or have an occasional bad day and she’s looking at a pink slip. This could open a Pandora’s box of nasty possibilities. Unemployed, uninsured, she cannot afford her expensive pain medication if she isn’t in recovery. Chuck informs us that heroin on the street is 1/3 the price of OxyContin. Heroin users have only a 5% success rate of beating their addiction. Chuck sums up the dilemma, “So we make them into heroin addicts, and their life is in jeopardy. Then when they’re on the street with nothing left, then I guess it’s life-threatening and insurance might pay.”

What About the Affordable Care Act?

“There’s nothing in Obamacare that changes anything that I just described,” Chuck stresses. The ACA, according to some estimates including President Obama’s own assessment, will leave at least 26 million uninsured. And there’s no guarantee that those who do get coverage will have a quality plan with deductibles they can afford. Insurance companies can still decide what’s covered and what’s not covered. A system, now codified in law, that puts profits over people makes Chuck see red. “It’s outrageous, and to have this situation in a country as rich as we are says something about who we are…I see the reality of what’s happening to the people. You know, my friend didn’t have $20,000 or credit for treatment – tough luck! Most people don’t have that much credit…so they’re out of luck. This country doesn’t give a damn that they’re out of luck…They tell us (ACA) is the American version of health care. What is it? It’s Wall Street’s version of health care, and there’s nothing American about it. You want an American program?…Medicare’s an American program.”

Single-Payer to the Rescue

The PA Family and Business Health Care Security Act is a state-wide single-payer (improved Medicare for all) bill that would cover all Pennsylvanians. Among its many other benefits, it covers 100% of addiction treatment. That’s it – plain, simple, straightforward. Responding to the current lack of such coverage, Chuck says, “Every civilized society has single-payer. We are uncivilized. We don’t take care of our people…There’s no lack of money for drones. We have all the money in the world when it comes to doing something destructive. But we have no money to take care of our own people.”

The PA single-payer legislation recognizes that addiction is a disease even though some in our society consider it a moral weakness. We urge you to learn more about single-payer legislation and become part of a grassroots movement to achieve it. Also, save the date of October 27 for a single-payer forum at St. Barnabas Episcopal Church in Kutztown. More details will follow later.

Addiction, the Land of Equal Opportunity

Addiction does not discriminate. It hits people in all socio-economic levels, from those living in the streets to the middle class and the well-to-do. Middle class people like Tina, with legitimate health issues, get tossed into this spiral. So, too, do the poverty-stricken who turn to drugs to deal with hopelessness. Author Chris Hedges, in a report published by TomDispatch, tells of the poor who inhabit abandoned West Virginia coal towns whose drug of choice is OxyContin – “hillbilly heroin.” According to Hedges, “…The speech and movements of those we met were so bogged down by opiates that they were often hard to understand.” Many of these unfortunate souls get by on relief checks such as Social Security, Disability, Assistance for Needy Families, retirement or unemployment benefits.

Al-Anon is a support group for those whose loved ones suffer from addiction. Chuck has attended Al-Anon meetings in an attempt to better understand his friend’s situation. There, he has seen people ranging from the very poor to corporate executives. Yes, indeed, addiction does not discriminate. Standing room only at Al-Anon meetings indicates the breadth of the problem.

More on Al-Anon

Chuck found that Al-Anon is concerned not only with the addict, but the survival of the family. The difficult lesson to be learned by friends and family members of addicts is that you can’t help. The inclination to intervene by confiscating pills or other attempts at helping actually enable the addict. The inability to help is “a hard thing for friends and family to accept,” Chuck discovered. The addict is the one responsible for his/her sobriety.

The Nature of the Beast

The hard reality of addiction is that no matter how you arrived there, you cannot be cured. You can only be recovering – a constant struggle. Drug counselors have told Chuck that these drugs get into the brain. As he describes it, “They take over the reasoning center, and they trick you. In the brain is a survival center. When the drug stops, the brain goes into survival mode – we are going to get that drug. If the person doesn’t listen, the pain is so severe, it feels like appendicitis…The brain must go through several months without drugs to readjust.”

According to an article in the Reading Eagle, reporter Dan Kelly spoke with Dr. William Santoro, director of detoxification and rehabilitation services at Reading Hospital. Kelly writes, “Santoro explained that heroin, morphine, OxyContin, Vicodin, Percocet and generic versions of oxycodone are all opiates. They are made from the opium poppy plant and then are manufactured into different forms, but the effect on the brain and the body are the same.”

Final Thoughts

One thing Tina will have to understand in recovery is that she can never have narcotics again. As counselor Dawson put it, “Once you’re a pickle you can never be a cucumber again.”

For all the Tinas in our country, it behooves each and every one of us to do our utmost to promote single-payer legislation in Pennsylvania (and in the 20 other states working toward state-based legislation). We simply cannot continue to allow insurance companies to dictate if, when, and for how long an addict may receive treatment. The current asinine system is unacceptable!

Lessons from HBO's 'Weight of the Nation'

This past week HBO debuted a four part documentary called The Weight of the Nation on the obesity epidemic in the US.  The clip above from part four talks about how geography can have a big effect on one's health due to the socioeconomic factors which surround these areas.  The fourth episode which deals with public health challenges can be seen below and is relevant to much of the research I have been doing for PUSH-Healthcare for All PA on Pennsylvania's uninsured.  The episode can be seen below.  All four parts can be seen at the above link in italics.  I'll review this episode in particular.

The program does a good job of presenting the data and issues related to the obesity epidemic in the US.  The impacts of their actions, intentional or not, are discussed at length including those on health care costs.  Various solutions to the problem are discussed such as ending farm subsidies, creating more park space in inner city areas such as Philadelphia County, and adding more bike trails.  While all of these are good things which I fully support, how much does the obesity epidemic really contribute to the high cost of health?  According to The Incidental Economist only around $25 billion in extra health care spending in 2004 can be attributed to health problems related to obesity because other non obesity related diseases such as prostate cancer are just as prevalent in the US relative to other countries with universal care such as Japan, Germany and the UK as can be seen in the graph below.  Diseases below the horizontal line in the graph such as Hepatitis B and Bladder Cancer are more prevalent in those countries.  You can see more cost analysis at this page.

In the opening credits of the episode above we can see that one of the sponsors of this documentary is Kaiser Permanente which was skewered for its profiteering practices in the film Sicko by Michael Moore.  The practices of the health insurance, pharmaceutical, and agribusiness industries to maximize profits often overlap.  I credit the filmmakers for skewering the food industry.  Is the Kaiser Permanente using this documentary to distract individuals from their own practices?  Congress only turned on the tobacco industry when the costs to the health care system became clear.

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Evergreening

 

Moving Backward 

 

Unbelievable Promises Monopolized Care—UPMC

WaPo Interactive International Cost Graphic

Evergreening

The Incidental Economist (a blog) alerted me to an article by medical student Nicholas Downing and three colleagues exposing the outrageous shenanigans of Abbott Laboratories, maker of fenofibrate, a lipid-modifying drug that claims to reduce the risk of heart disease.

In the U. S., patent protection on a new drug expires after 20 years. Since the clock starts ticking before clinical trials can begin, by the time a drug gets Food and Drug Administration (FDA) approval, it typically has seven to twelve years of patent protection. After that, other companies are free to sell generic equivalents, which usually cost less than half the price of the original. The goal of pharmaceutical houses is to extend that patent protection as long as possible by whatever means necessary.

Abbott did not do the research and development that led to fenofibrate. They bought it from another company. They marketed it as Tricor-1 in 1998. However, their patent was about to expire, and in 2000, another company, Novapharm, announced its intention to produce a generic version. Abbott then filed suit for patent infringement. This was a frivolous lawsuit, but such suits are routine because when they are filed, they automatically result in an injunction against the generic company which prevents them from marketing the generic for 30 months. Drug companies almost always lose these infringement cases, but they file them anyway because the amount of money they make during the 30 month waiting period is far greater than the cost of the lawsuit.

The 30 months also gave Abbott time to get a patent for Tricor-2 and introduce it to the market. Tricor-2 was identical to Tricor-1 except for the dosage. Because it was the same, no new clinical trials were required. By the time the 30 month period had expired, Tricor-1 was no longer available and Tricor-2 had cornered 97% of the fenofibrate market. It was useless to produce the generic version of Tricor-1 because Tricor-2 had different dosage levels, and pharmacists can only substitute generics when the dosage levels are the same.

So the generic company announced its intention to produce a generic Tricor-2. At this point, the story begins to resemble the plot of the film Groundhog Day. New lawsuit by Abbott. Another 30 month wait. Abbott announces Tricor-3. It captures 96% of the market. Generic company intends to produce generic Tricor-3. New lawsuit. Another 30 month wait. Abbott announces Filibrix. Filibrix is fenofibric acid rather than fenofibrate, which requires new clinical trials, but gets them an additional three years of patent protection extending it to 2012.

By this time, the generic companies had noticed the futility of their strategy, so they filed suit against Abbott for violation of the Sherman Antitrust Act. Abbott eventually settled that suit for $300 million, which was about 4% of what they made selling various versions of fenofibrate. The authors estimate that the cost to the public of using Abbott's versions of fenofibrate rather than their generic equivalents is $700 million a year.

This is not an isolated incident. Several other drug companies have done the same thing. When the patent is about to expire on one of their lucrative drugs, they make a trivial change and market it under a new name in order to extend their period of exclusivity. This common practice is called “evergreening.” (Get it?) It succeeds in part because doctors don't pay attention to what's going on. However, even if they had known about Abbott's psychopathic behavior, there was nothing doctors or pharmacists could do because no generic equivalent of fenofibrate has yet made it to the market.

To add insult to injury, a large outcome study published in 2005 showed that fenofibrate was ineffective in reducing the risk of cardiovascular disease. But apparently the doctors weren't paying attention to that either, because as of 2010, fenofibrate sales were still increasing.

There is a serious problem with the FDA's system of granting patents. They only require clinical trials that compare the new drug with a placebo—an inactive pill that supposedly controls for patient expectations. This allows different drug companies to market nearly identical drugs, none of which are more effective than the others. It also allows companies like Abbott to “evergreen” by relabeling old drugs under new names. A more sensible standard would be to compare the proposed new drug to the best existing treatment and only grant a patent if the new drug produces a significant improvement in patient outcomes.

In our capitalist wonderland, it's useless to urge “corporate persons” such as Abbott to behave more responsibly. They will pursue profit however they can. It's probably also unrealistic to expect doctors to read medical journals or prescribe available generics. They get their pharmaceutical information from drug salespersons bearing gifts—everything from ballpoint pens to free trips to Las Vegas (to attend a medical “seminar,” of course). It would be nice if Congress would make this legalized bribery illegal, but since they're doing the same thing, that's not likely to happen.

Downing and his colleagues only suggest one governmental remedy—elimination of the 30 month hold on the generic during a lawsuit. Otherwise, they just recommend consciousness raising among patients, doctors, and pharmacists. Good luck with that.

Taming the Gift Culture

As Paul Ricci noted here last week, one point about which we agree with conservative critics of the Affordable Care Act (ACA) is that it doesn't do enough to contain costs. That's where the agreement stops. We disagree about the major reasons that health care costs so much more in the U.S. than other industrialized countries; hence, we disagree about how to reduce costs. Advocates of single payer note that costs are certain to be higher when both medical care and health insurance are provided by corporations that are motivated to maximize profits.

To be fair, however, the ACA does contain some provisions to reign in costs, but without altering the basic economic structure of the system. One of these reforms was announced the other day. Manufacturers of drugs, medical devices and medical supplies used by Medicare and Medicaid patients will soon be required to report all payments and gifts they make to doctors or teaching hospitals. The data will be posted on a government-run website that will be searchable by the name of the doctor.

The New York Times reports that 25% of doctors report receiving cash payments and two-thirds report receiving gifts from drug and medical device manufacturers. This includes research and consulting fees; food, travel and entertainment; free samples (“the first bag of heroin is free”); plus all those incidentals such as pens and tote bags with the manufacturer's name on the side. (One doctor's son said that it wasn't until he was eight years old that he realized not all frisbees had the word “Merck” printed on them.) These gifts can result in doctors prescribing expensive new drugs that are no more effective than generics, or requiring tests and procedures that have no real benefit to the patient.

Doctors are embedded in what anthropologists call a gift culture, a network of reciprocal favors in which there is no explicit agreement as to when and how the favor will be repaid. These favors create feelings of obligation to the benefactor, obligations that may be repaid many times over, but the lack of an explicit quid pro quo reduces awareness of the corruption that is actually taking place.

Many years ago, social psychologist Bob Cialdini reported how a little gift can go a long way. Hare Krishna disciples who handed out paper flowers at airports, for example, were paid back many times over by voluntary contributions from recipients. There are several studies showing that this works in a medical context. For example, Orlowsky and Wateska (1992) examined the effects on doctors of free trips to seminars in sunbelt locations sponsored by the manufacturers of two relatively new prescription drugs. Their data showed significant increases in prescriptions of the two drugs in comparison to other hospitals, and in comparison to other drugs having the same effects. Interestingly, 17 out 20 doctors in the study stated unequivocally that the free trip would not influence their behavior.

This disclosure requirement is certainly a step in the right direction. My question is whether it goes far enough. Lawrence Lessig, in his new book about political corruption, Republic Lost, calls transparency a “reform that doesn't reform.” Have you ever looked at one of those lists of contributors to a political campaign? Did it help you? Most of them are people and organizations you've never heard of. The list provides little information about what these contributors wanted or how they were repaid after the election.

Similar lists of medical company gifts and payments may not be very useful to consumers. How many of them will consult the website in advance of a visit to the doctor? Even if they do, the fact that General Electric is on a doctor's list of contributors only helps if you know that GE manufactures the device that will be used to scan your internal organs. The fact that a drug company is on the list is useless unless you have memorized which drugs that company markets. In some cases, the absence of a corporation from the list may be more meaningful than its presence.

This website may be useful to researchers and investigative reporters, and this could benefit consumers indirectly if their studies are reported by the media. The existence of the list could also embarrass some doctors into refusing gifts, although I wouldn't count on that, since almost all doctors erroneously believe that gifts have no effect on their decisions.

But the real problem is that this is only a half-baked reform. Since we know the unfortunate effects payments and gifts have, they should be banned, not reported on some obscure government website.