Tag Archives: pharmaceutical companies

Why GlaxoSmithKline v Teva is Important for Medication Affordability and “Please Look at My Baby”

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SS Tu, A Sarpatwari. NEJM 388: 483-485. A “Method of Use” to Prevent Generic and Biosimilar Market Entry

This article explains how generic and biosimilar companies have tried to navigate the ‘patent gamesmanship’ that brand-name manufacturers have used to delay competition for their products beyond the typical 20 years after an application is filed.

Key points from this article:

  • “The Hatch–Waxman Act, provided a partial solution by explicitly authorizing manufacturers to market generic drugs if they don’t claim any indications protected by active method-of-use patents.3 Such skinny labeling enables generics manufacturers to market their products for older, non–patent-protected indications without infringing later-issued method-of-use patents…43% of products that were the first available generic formulation of a brand-name drug included skinny labels”
  • The article delves into the  GlaxoSmithKline v. Teva case which centers on the overlapping potential indications for the beta-blocker carvedilol. Teva had used skinny labeling to get approval for hypertension (HTN) but was sued by GlaxoSmithKline as carvedilol can be used for congestive heart failure (CHF).
  • Much of the case centers on the paradox that “by law, generics [& biosimilars] manufacturers are required to use very similar labels” as the labeling of original products even though the generic has requested approval for a much narrower approval. In this case, when the Teva generic was used for CHF, GlaxoSmithKline sued since the product was approved for HTN.
  • Another example: Humira has “more than 70 patents on inventions ranging from the active pharmaceutical ingredient and primary indications to the drug’s purity, various formulations, and secondary indications.” For a generic/biosimilar to address all of these (potentially-endless) patents is a huge barrier.
  • Based on this ruling, “brand-name manufacturers can thus now create labels that reference material related to new method-of-use patents and then sue generics manufacturers for patent infringement.”
  • “Lack of action by both the Supreme Court and Congress would allow brand-name drug manufacturers to wield a powerful new weapon to delay or deter the entry of generic and biosimilar drugs, which could have important implications for health care costs and patient welfare.”

My take: My prediction is that these tactics by drug manufacturers, despite their extensive financial connections with lawmakers, will eventually backfire and result in extensive changes to the regulations regarding exclusivity and pricing.

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In an unrelated article in the same issue, Golda Grinberg provides a first-hand account of how families could benefit by the consideration of hospice in children with extensive medical problems. NEJM 2023; 388: 486-487. Please Look at My Baby — When Clinicians Should Say the Word “Hospice”

“To the surprise, perhaps even shock, of the SICU team, we tossed an option B onto the table: if we truly could not extubate, we suggested, maybe we should skip the trach and transition to comfort care….When presented with a child in whom previous extubation attempts had failed and who was becoming more deconditioned by the day, the SICU team had made the standard, safe, and familiar recommendation for an acute problem: place a trach… It would have been tremendously helpful if, from the beginning, we’d had an open conversation with our son’s medical team and discussed all the options.”

My take: Most parents are happy with their medical decisions for their children. However, it is not uncommon to hear parents say many years later that they wished that they had been informed of the long-term dire outlook of their children and the possibility of deescalation of care in children with severe medical conditions before embarking down the ‘standard’ path.

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How Industry Manipulates Physicians For Product Promotion

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As an homage to May 4th, I wanted to highlight an AAP report that reminded me of Yoda telling Luke Skywalker: “If once you start down the dark path, forever will it dominate your destiny, consume you it will, as it did Obi-Wan’s apprentice.”

DS Diekema. AAP Committee on Bioethics. Pediatrics 2022; 149: e2022056549. Open Access. Health Care Clinicians and Product Promotion by Industry.

Background:

  • “In 2016, pharmaceutical companies spent $29.9 billion on marketing, of which $20.3 billion (68%) was directed toward health care clinicians in the form of prescriber detailing ($5.6 billion), free samples ($13.5 billion), direct physician payments related to specific drugs ($979 million), and disease education ($59 million)”
  • “In 2019, 615 000 physicians received payments or investment interests worth $3.6 billion (an average of $5854 per physician recipient), and 1194 teaching hospitals accepted payments totaling $2.63 billion”
  • “Despite their own sense of invulnerability to persuasive techniques, physicians do consider other physicians to be vulnerable.125  This phenomenon is what social scientists refer to as the “bias blind spot.”147  As a general rule, individuals underestimate the degree to which they are influenced by cognitive and motivational bias and overestimate the degree to which others are influenced by the same things.147 “

Key points:

“In his book, Influence: The Psychology of Persuasion, Cialdini summarizes this literature and describes 6 basic categories of effective persuasive techniques.57“

  • “Commitment and Consistency…Industry representatives are trained to get health care clinicians to make a verbal commitment to use their products…once the health care clinician has tried the drug on 5 patients, he or she is more likely to continue to use the drug.7 “
  • “Social Proof…When told that almost all of the physicians in the region are now using drug A to treat disease B, a health care clinician will be hard-pressed not to join the group”
  • “Liking… Humans tend to be more responsive and receptive to individuals who are friendly, likeable, and attractive”
  • “Appeals to Authority…The use of opinion leaders and experts to give lectures supporting the use of a product”
  • “Scarcity…Opportunities to engage in consulting and speaking opportunities fall into this category”
  • “Reciprocation…A sense of obligation to reciprocate accompanies the receipt of any favor, gift, or kindness. Gifts can take many forms and need not be valuable.”

Reciprocation Elaborated:

  • “Much cognitive activity occurs without conscious awareness, and the most effective marketing and persuasion strategies are designed to engage the subconscious aspects of decision making…Decision making appears to rely on dual systems within the brain, a socioemotional system” and the cognitive control system.
  • “The socioemotional system tends to involve rapid, automatic processing that is often reactive, intuitive, unconscious, and sensitive to social norms…Effective marketing strategies, including the use of incentives and gifts and the nurturing of relationships, are designed to engage the socioemotional decision-making areas of the brain”
  • “The cognitive control system, on the other hand, tends to be consciously controlled, reasoned, and analytic and requires more time and conscious effort”
  • “Most health care clinicians believe they cannot be bribed and that they would never trade a small gift for changing their prescribing behavior…Gifts may subtly and subconsciously affect the way the receiver of the gift evaluates the information provided by the gift giver, and these feelings of indebtedness may ultimately lead to changes in prescribing behavior”

“With regard to the receipt of gifts from the industry, the American Academy of Pediatrics (AAP) has endorsed the AMA guidelines, which do not prohibit gifts outright but offer the following basic principles for managing them:198 

  • Physicians should decline cash gifts in any amount from an entity that has a direct interest in physicians’ treatment recommendations.
  • Physicians should decline any gifts for which reciprocity is expected or implied.
  • Physicians should accept an in-kind gift for the physician’s practice only when the gift is of minimal value and will directly benefit patients, including patient education.
  • Academic institutions and residency and fellowship programs may accept special funding on behalf of trainees to support their participation in professional meetings, including educational meetings, provided the program identifies recipients based on independent institutional criteria and funds are distributed to recipients without specific attribution to sponsors”

As a final incentive,  “in late 2020, the Department of Health and Human Services Office of the Inspector General issued a special fraud alert highlighting concerns … in connection with speaker programs.” The Office of the Inspector General warned both companies and health care professionals that such arrangements may, under certain circumstances, violate antikickback statutes.”

My take (from the report): “At a minimum, health care clinicians should be cognizant of the techniques used to attempt to alter their behavior and guard against them.”

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Legislative Agenda for Drug Pricing

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There have been some recent terrific advances in pharmacology –a few that come to mind:

The one common feature is that these are all very expensive; there are many other expensive medications with less benefit.  Given the rise in costs of these medications, there is a need to do a better job in getting good value in our drug costs.  A potential path forward is outlined in a recent commentaries (SB Dusetzina, J Oberlander. NEJM 2019; 381: 2081-4; PB Bach. NEJM 2019; 381: 2084-6).

In the first commentary, the authors review the Elijah E Cummings Lower Drug Costs Now Act of 2019 (HR 3).

  • In essence, this act establishes a drug-price negotiation process and limits price increases on existing products.  “Companies whose products are selected for ‘negotiation’ will in reality face price regulation and a severe penalty for noncompliance.”
  • The act would examine U.S. prices compared to prices paid in other countries.  “There would also be a legislatively set maximum price that could not exceed 120% of the average net price paid for the same drug in designated countries.”
  • The bill also would cap Medicare Part D out-of-pocket spending at $2000 per year.

In the second commentary, Dr. Bach notes that drugs that have too little evidence to support full approval and those that are ‘too late in their life cycle’ both should have their pricing negotiated by the government.  This would side step some of the arguments about undermining the incentive for new drug development.

“Too little”

  • The FDA grants approval of some drugs on the market conditionally on the basis of data indicating that they improve a surrogate marker of patient benefit. “Despite the conditional nature of the approval, …the pharmaceutical firms currently charge the same high prices that fully approved drugs capture.”
  • Required studies frequently show that these conditionally-approved medications are ineffective.  Of the 198 indications granted accelerated approval since 1992, only 115 have garnered full approval.  Also, conditional approval may result in less incentive to complete the needed trials in a timely fashion.

“Too late”

  • In this category, the author notes that some medications have found many ways to extend their monopolies, which are intended as a time-limited reward for the effort of developing a new medication.  These include overlapping patents, refusing to provide samples to competitors, and paying other companies to delay bringing generic or biosimilar products to market
  • Most of the potential for savings are in this category rather than the ‘too little’ category
  • Negotiating prices of the top 10 too little and 10 too late medications with reference to 120% of UK pricing would have provided about nearly 27 billion in savings in 2019

My take: While current partisanship makes reaching agreement difficult, targeting soaring pharmaceutical costs is one area in which I predict common ground can be found.  While many are going to benefit from the therapeutic advances listed above, there are other medications which are overpriced and should be negotiated like in other high-income countries.

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Bathroom mural for bicycle enthusiasts (at a stop on the Petit Train du Nord Linear Park)

WSJ: How Pfizer Settled on $9,850 per Month for New Drug

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WSJ:  How Pfizer Set the Cost of Its New Drug at $9,850 a Month

An excerpt:

The average cost of a branded cancer drug in the U.S. is around $10,000 a month, double the level a decade ago

Pfizer’s multistep pricing process shows drugmakers don’t just pick a lofty figure out of the air. At the same time, its process yielded a price that bore little relation to the drug industry’s oft-cited justification for its prices, the cost of research and development.

Instead, the price that emerged was largely based on a complex analysis of the need for a new drug with this one’s particular set of benefits and risks, potential competing drugs, the sentiments of cancer doctors and a shrewd assessment of how health plans were likely to treat the product…

In 2013, Pfizer hired outside firms to conduct hourlong interviews with more than 125 cancer doctors in six cities…

Pfizer hired firms that surveyed more than 80 health-plan officials such as medical directors and pharmacists…

Pfizer employees say the mock reviews supported a monthly price below $10,000. If it was higher, insurers could start requiring doctors to fill out paperwork justifying its use.

My take: This article makes clear that the driver of higher pharmaceutical prices is based on a shrewd assessment of what the market will bear.

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Another Shady Pharmaceutical Business Practice: Citizen’s Pathway to Delay Competition

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First, a comment regarding yesterday’s post: The Truth About Probiotics: Constipation Version

Some readers took issue with my pessimism with probiotics in terms of their effectiveness for several conditions, their safety and the number needed to treat (NNT). It is noted that the number needed to treat (NNT) with probiotics is better than with many other conditions.  For example, the NNT for benefit with the influenza vaccine, Tamiflu for influenza, and mammography for preventing breast cancer are much worse than the NNT for benefit with probiotics for conditions like NEC, antibiotic-associated diarrhea, Clostridium difficile infection, and ulcerative colitis (with VSL#3). If one looks at multiple posts from this blog, there are plenty of posts supporting the use of probiotics (see some of the links yesterday or search “probiotics” on this blog.  Thus, it is important to not overlook the benefits of probiotics for many conditions and to not take a single study and extrapolate too much.

Now for today’s post -perhaps it will stir as much interest:

I must admit I’m fascinated with the way pharmaceutical companies operate and the creative ways they find to magnify their profits.  In previous posts, I’ve detailed how pharmaceutical companies will try to corner the generic market, increase the cost of liquid medicines, and package drugs in a way to force the purchase of additional vials of medicine among other tactics.  Now, a commentary (R Feldman, C Wang. NEJM 2017; 376: 1499-1501) details how pharmaceutical companies have increasingly used “the citizen-petition process that the Food and Drug Administration (FDA) implemented in the 1970s.”  This process was designed as “a way to voice concerns” by individual citizens.

Yet, this pathway is now being used to delay competition/entrance of generic drugs, mainly with frivolous claims.  In most cases, companies file these claims at the end of the approval process, almost always as a delaying tactic.  Approximately 80% of these actions by competitor drug companies are denied by the FDA.

Ultimately, these actions could be countered with antitrust actions; this, in fact, has occurred with Shire ViroPharma.  On February 7, 2017, the Federal Trade Commission filed an antitrust action “alleging that the company abused regulatory processes by filing 43 submissions with the FDA (including 24 meritless citizen-petition filings within one docket) in an effort to hold off generic competition for its gastrointestinal drug Vancocin (vancomycin).”  However, antitrust actions are typically difficult to pursue and expensive.

My take: I think these tactics (and others) will undermine the relationship of pharmaceutical companies with consumers. While their stock holders may see benefits in the short term, I expect that other stake holders will fight back.  There are several targets in that endeavor, including ending limits on Medicare negotiating for better prices.

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Turning Liquid into Gold: A Pharmaceutical Rumpelstiltskin Story

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A recent letter to the editor (LA Probst, TR Welch. NEJM 2017; 376: 795-6) provides a sad tale of how well-intended legislation to promote safety and efficacy of pediatric liquid medications has led to both an increased number of liquid formulations approved by the FDA but with a much higher cost than previous extemporaneously compounded formulations.

The liquid version of lisinopril is priced 775 times the cost of the equivalent tablet.  Other medications with high liquid to tablet cost ratios include enalapril (21 times), indomethacin (49 times), glycopyrrolate (14 times), and pyridostigmine (11 times).

The authors note that there are additional costs for developing/manufacturing these liquid formulations.

My take (borrowed from the authors): “there must be a better way to support the costs of developing the drug formulations that many children and some severely impaired adults desperately need.”

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Chattahoochee near Azalea drive

Chattahoochee near Azalea drive

Orphan Drugs –Very Profitable

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Did you know that Remicade and Humira are orphan drugs?  For those concerned about pharmaceutical costs, a recent NPR article is a must.

From NPR: Drugs For Rare Diseases Have Become Uncommonly Rich Monopolies

Here’s an excerpt:

Lucrative financial incentives created by the Orphan Drug Act signed into law by President Reagan in 1983 succeeded far beyond anyone’s expectations. More than 200 companies have brought almost 450 so-called orphan drugs to market since the law took effect.

Yet a Kaiser Health News investigation shows that the system intended to help desperate patients is being manipulated by drugmakers to maximize profits and to protect niche markets for medicines already being taken by millions. The companies aren’t breaking the law but they are using the Orphan Drug Act to their advantage in ways that its architects say they didn’t foresee or intend. Today, many orphan medicines, originally developed to treat diseases affecting fewer than 200,000 people, come with astronomical price tags…

More than 70 were drugs first approved by the Food and Drug Administration for mass market use. These medicines, some with familiar brand names, were later approved as orphans. In each case, their manufacturers received millions of dollars in government incentives plus seven years of exclusive rights to treat that rare disease, or a monopoly…

When a drugmaker wins approval of a medicine for an orphan disease, the company gets seven years of exclusive rights to the marketplace, which means the FDA won’t approve another version to treat that rare disease for seven years, even if the brand name company’s patent has run out. The exclusivity is compensation for developing a drug designed for a small number of patients whose total sales weren’t expected to be that profitable…

Industry-wide, orphan drug tax credits cost the federal government $1.76 billion in fiscal 2016

My take: Any objective observer would recognize that the goals of the Orphan Drug Act are being subverted by current practice and changes are needed to achieve the goals of targeting rare diseases and reasonable medication costs.

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Drug Waste Costing Billions. Who benefits? Pharmaceutical Companies

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From NY Times: Waste in Cancer Drugs Costs $3 Billion a Year

Here’s an excerpt:

The federal Medicare program and private health insurers waste nearly $3 billion every year buying cancer medicines that are thrown out because many drug makers distribute the drugs only in vials that hold too much for most patients, a group of cancer researchers has found…

If drug makers distributed vials containing smaller quantities, nurses could pick the right volume for a patient and minimize waste…according to researchers at Memorial Sloan Kettering Cancer Center, whopublished a study on Tuesday in BMJ…

“Drug companies are quietly making billions forcing little old ladies to buy enough medicine to treat football players, and regulators have completely missed it,” said Dr. Peter B. Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering and a co-author of the study…

Some non-cancer drugs also generate considerable waste, includingRemicade, an arthritis drug sold by Johnson & Johnson for which an estimated $500 million of the drug’s $4.3 billion in annual sales comes from quantities that are thrown away, researchers found.

My take: this is another indictment of our pharmaceutical companies willful neglect of medication costs or cynical manipulation of our healthcare system.

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