[Ip-health] Washington Post Wonkblog: "Want to cut health care costs? Start here."

Outterson, Kevin mko at bu.edu
Mon Apr 23 08:57:40 PDT 2012


The underlying paper is from the Archives of Internal Medicine
http://archinte.ama-assn.org/cgi/content/full/archinternmed.2012.187v1

The blog post that Kliff reported from was Aaron Carroll at
http://theincidentaleconomist.com/wordpress/heres-some-waste-we-can-cut/

In other news, I'm disappointed to see language in the House PDUFA V
draft.  The FDA's mission is drug safety, but the draft requires the FDA
to add ³promoting economic growth, innovation, competitiveness and job
creation among the industries.² I haven't seen the bill language, only an
article in BioWorldToday.  If true, this cannot be allowed to stand.  H/t
to BioWorldToday.  

Kevin
-----------------------------
Associate Professor
BU Law <http://www.bu.edu/law/faculty/profiles/#o> & BU SPH
Editor in Chief, Journal of Law, Medicine & Ethics
<http://www.aslme.org/Publications>
Faculty Associate, Harvard Center for Communicable Disease Dynamics
<http://ccdd.hsph.harvard.edu/about/Faculty-Outside-Harvard/Michael-Outters
on>
Blogging health law at The Incidental Economist
<http://www.theincidentaleconomist.com/>
Research papers at SSRN <http://ssrn.com/author=340746>
mko at bu.edu
617 353 3103 w
Twitter @koutterson






On 4/21/12 4:13 PM, "Steven Knievel" <sknievel at citizen.org> wrote:

>http://www.washingtonpost.com/blogs/ezra-klein/post/want-to-cut-health-car
>e-costs-start-here/2012/04/20/gIQA2P0NWT_blog.html
>
>.................
>
>Want to cut health care costs? Start here.
>Posted by Sarah Kliff at 09:00 AM ET, 04/21/2012
>
>Every year, Americans pay $700 million more for cholesterol-lowering
>drugs than they need to. The reason? Abbott Laboratories.
>
>Abbott Labs is a pharmaceutical company based in Illinois. About a decade
>ago, in 2000, it faced a problem. The company had recently acquired
>exclusive rights to sell Tricor-1, a cholesterol-fighting drug. It was
>profitable, which was nice, but the best part was this: It was a
>name-brand drug and Abbott was the only company with rights to sell it.
>
>Drug exclusivity does not, however, last forever: After a name-brand drug
>has five years on the U.S. market, generics are allowed to come in and
>compete. That's what a generic pharmaceutical company wanted to do with
>Tricor-1. Novopharm submitted an application to the Food and Drug
>Administration to produce a generic version of the drug.
>
>That was bad news for Abbott Labs: With generics tending to sell at about
>80 percent less than brand-name drugs, the new medication had the
>potential to seriously undercut its Tricor-1 business.
>
>Abbott Labs was able to delay Novopharm by a bit, a story that
>health-care researchers recount in a recent Annals of Internal Medicine
>article. The company filed a patent infringement lawsuit that ate up some
>months, and in the meantime, they came up with Tricor-2. It looked a lot
>like Tricor-1 - same active ingredients, same uses, nearly the same name.
>But there was one hugely important difference: Dosage. Where Tricor-1
>came in 67 and 134-milligram formulations, Tricor-2 would come in 54 and
>160-milligram dosages.
>
>By time Novopharm's generic came onto the market, Abbott Labs had already
>rolled out Tricor-2 and made it doctors' prescription of choice. Six
>months after its introduction onto the market, Tricor-2 accounted for 97
>percent of all prescriptions for this type of medication, known as
>fenofibrates.
>
>Over the past decade, this has happened two more times. Tricor-3 replaced
>Tricor-2. Abbott did get a little creative with the name this last time,
>replacing Tricor-3 with a different dosage branded Tripilix. "As soon as
>direct, generic competition seemed likely at the new dose level, where
>substitution would be allowed, Abbot would launch another reformulation,
>and the cycle would repeat," Yale University's Nicholas Downing and his
>co-authors write.
>
>The cost implications of Abbott's strategy are pretty big: The Annals of
>Internal Medicine estimates that, if the health-care system had come to
>rely on Novopharm's generic medication, our health-care system would be
>saving $700 million every year. Overall, the use of generic drugs is
>estimated to save the country $158 billion annually, which breaks down to
>$3 billion a week.
>
>Part of the blame, the researchers say, goes to doctors, who have
>predominantly stuck with Abbott's brand-name drugs as their prescription
>of choice.
>
>They call their findings "a cautionary tale for physicians, who must
>accept some responsibility for the continued use of branded [drugs]."
>
>"Despite the availability of many generics during the past nine years,
>physicians have continued to prescribe Abbott's more expensive
>formulations," they write. "Which in December 2009 accounted for more
>than 75 percent of all prescriptions."
>
>Some of the issue has to do with the regulatory system, too. Each time
>Abbott Labs faced a new generic, it would launch a patent infringement
>lawsuit. Each time it did that, it would create a huge delay for the
>generic pharmaceutical company, as the FDA requires all applicants to
>have resolved any outstanding patent disputes before seeking approval.
>
>The more fundamental question, though, is about whether the new dosages
>of brand-name drugs ought to get new exclusivity periods in the first
>place. The new Tricor dosages, after all, never showed improved outcomes
>for patients over previous formulations. Most of them didn't require
>financing for new patient trials or testing. Without the new Tricors,
>we'd have the same outcomes - and $700 million each year in additional
>health-care spending.
>
>................
>
>Steven Knievel
>Global Access to Medicines Program
>Public Citizen | Protecting Health, Safety and Democracy
>TEL: +1 202-588-7771
>1600 20th St NW, Washington, DC 20009
>URL: http://www.citizen.org/access
>Twitter: @PCMedsAccess
>
>
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