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In case you did not know, the 12 years of market exclusivity proposed for follow-on biologics by supporters and lobbyists for the pharmaceutical and biotechnology industries is part of the impending US healthcare reform legislation currently pending in Congress. While President Obama has publicly announced that he supports a five year period of data exclusivity for biologics (the same as the exclusivity period for generic small molecule drugs, it is unlikely that the President will be able to convince or coerce legislators to reconsider the 12 year data exclusivity provision. However, there was a brilliant Op-Ed piece in today’s New York Times written by Anthony So and Samuel Katz at Duke University which offers a plethora of financial and business reasons why the five year period makes a lot of sense!

1. Generic small molecule drugs have been estimated to save the American healthcare system as much as $734 billion over the past 25 year or so since the inception of the Hatch Waxman Act.
2. Biologics cost on average 22 times more than equivalent brand name prescription small molecule drugs
3. In 2008, 28% of sales of the life science industry’s top 100 products came from biologics and biotechnology products: by 2014 that share is expect to rise to about 50%
4. The Medicare Payment Advisory Commission found that the top six selling biologics which include Epogen (Amgen) Avastin (Genentech) and Remicade (Centocor) accounted for $7.0 billion (43%) of Part B drug spending in 2007 (Part B covers the cost of doctor spending and outpatient visits)
5. Between 2006 and 2007, Medicare Part D (prescription drug coverage) spending on biologics increased by 36% as compared with a 22% increase in spending for small molecule drugs
6. Prices for biologics and biotechnology products have increased more rapidly than those for small molecule drugs
7. While industry leaders and their lobbyist contend that it costs more and takes longer to develop biologics and biotechnology products than small molecule drugs, based on reports by various industry trade groups it costs about $1.2 billion to develop biologics and roughly $1.318 billion for small molecule drugs
8. The US Federal Trade Commission, the independent federal agency whose main goals are to protect consumers and to ensure a strong competitive market by enforcing a variety of consumer protection and antitrust laws, recommended that the data exclusivity period for follow-on biologics should not exceed six years.

Despite the likelihood that follow-on biologics will substantially reduce prescription drug costs and healthcare spending, Congress has chosen to support questionable legislation that will delay access of Americans to less costly, efficacious follow-on biologics until at least 2020.

Until next time...

Good Luck and Good Job Hunting

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Officials for the Centers for Medicare and Medicaid Services announced on Wednesday that the agency plans on distributing billions in stimulus monies to upgrade the nation’s paper medical records to electronic ones. Under the proposal, doctors and hospitals that keep UPDATED electronic medical records (EMR) of their patients could receive bonus payments for using EMR-based software systems. While the proposal that was floated is not definite, it was posted to the agency’s website and is open for public comment for 60 days before the final guidelines are issued. 

According to agency spokespersons, healthcare professionals (HCPs) who use EMR for 80 per cent of their medical instructions could receive bonus payments. This means that HCPs would have to provide patients with printouts of their medical history and use computers for potential drug-drug interactions. Further, hospitals would be required to complete 10 per cent of medical orders electronically. Separately, the agency laid out technology standards that EMR software should meet to qualify for the program.

Although technology standards for government-based EMR systems have now been delineated, similar standards for private sector EMR keeping systems have yet to be clearly enunciated by the government. Many hospitals and HCP organizations hastily threw together EMR plans to qualify for stimulus monies that were disbursed early last year. Unfortunately, at present, there is still no general consensus on the software platforms and middleware programs that will need to be developed so that different EMR systems can communicate with one another! Consequently, the national drive to digitize paper medical records is occurring in a haphazard and piecemeal fashion. To realize improved efficiencies and cost savings, I contend that general guidelines ought to be issued before too much private sector work goes on. Allowing the private sector to dictate technology standards may not be in the best interest of a national EMR effort. Nevertheless, as I mentioned an earlier post this week, healthcare informatics is one of the fasted growing industries in the US!

Until next time...

Good Luck and Good Job Hunting!!!!!!!

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Like my kids frequently say when I mutter something obvious…”Like..DUH.! According to an article in today’s New York Times, “American medical care may be the most expensive in the world, but that does not mean it is worth every penny. A study to be released Thursday highlights the stark contrast between what the United States spends on its health system and the quality of care it delivers, especially when compared with many other industrialized nations.” No surprises here—the US spends more per capital on healthcare than all other industrialized nations but a greater percentage of the US population is without adequate healthcare.

One of the things that irritate me the most is that many Americans still believe that US healthcare is second to none. True, Americans have greater access to experimental and new cutting-edge treatments than others in the world, but when it comes to preventing or prophylatically delaying the onset of chronic diseases like diabetes, high blood pressure, obesity etc, the American healthcare system is grossly deficient.  

Healthcare insiders and third party payors have known that the system has been failing for past 20 years. Unfortunately, the healthcare and drug maker company lobbies have effectively blocked and prevented any changes to correct the glaring deficiencies of the American healthcare system. Anytime, anybody utters the phrase “nationalized healthcare” a collective shudder is exhibited by most Americans. The truth is that Medicare, a government-run healthcare insurer, is responsible for covering almost 60% of all medicals claims that are filed annually in the US. This means that healthcare benefits supplied to a majority of Americans are under the auspices of a nationalized healthcare program. Why not go all the way and cover the medical costs of all Americans?????

Politicians can no longer deny that it’s time for a change—the health of America depends on it!

Until next time…

Good Luck and Good Job Hunting

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Health care spending in the United States grew 6.7 percent in 2006 to $2.1 trillion, or $7,026 per person. This represents a slight increase over the 6.5 percent rate in 2005 (which was the slowest growth since 1999). Health spending accounted for 16 percent of US gross domestic product in 2006, outpacing overall nominal GDP growth by 0.6 percent. However, total health care spending in the US is not the real story here.

The federal government reported that the new Medicare drug benefit called Part D, which was implemented in early 2006, contributed to an 18.7 percent increase in Medicare spending that year, the fastest rate of growth since 1981 and double the rise in 2005.  In 2006, Medicare spending rose to $401.3 billion, up from $338.0 billion a year earlier, according to the government’s annual health spending report.

The impact on funding sources that paid for prescription drug benefits varied. The public share of spending (federal and state)  increased from 28 percent in 2005 to 34 percent in 2006, while funding from private sources (insurers) fell from 72 percent to 66 percent.  The shift in funding was most dramatic for Medicare and Medicaid. Medicare’s share of total retail prescription drug spending surged from just 2 percent in 2005 to 18 percent in 2006, following Part D implementation. Meanwhile, Medicaid’s share fell from 19 percent to 9 percent.

At present, the US government cannot negotiate prescription drug pricing with drug companies that produce the medications–only drug distributors and third party insurers can do that! As the baby boomer retirement continues, the amount of government spending on prescriptions drugs will increase exponentially and ultimately cause healthcare costs in this country to explode. In my opinion there are two options: impose price controls on prescription drugs or provide all US citizens with a national healthcare system that allows the government to negotiate drug pricing directly with drug manufacturers. And for those of you who think national healthcare is a fantasy–over 60% of all healthcare claims in the US are currently handled and paid by Medicare–a federally finaced and run government healthcare system!  We are closer to a national health insurance program than you think!

Until next time...

Good Luck and Good Job Hunting!!!!!!

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