What do doctors know about FDA drug approval standards and the breakthrough therapy designation? Less than we’d hope.

By Dalia Deak

A study published this week in JAMA examined how much physicians know about FDA approval standards for new drugs and the breakthrough therapy designation. The investigators found major gaps in understanding with regard to both issues, despite intuitive beliefs to the contrary.

For the study, Kesselheim et al. conducted a national survey of board-certified internists and specialists. They selected a random sample of 300 clinically active internists and 900 specialists in endocrinology, hematology, and infectious diseases from the American Board of Internal Medicine’s diplomate list. Of the 1,148 physicians contacted, 692 physicians, or 60%, responded.

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Treasury Targets Corporate Inversion, Pfizer-Allergan Deal Falls Through

By Dalia Deak

The Treasury Department published regulations on Monday that took aim at corporate inversions – and, they hit their mark. Two days later, the merger of pharmaceutical giants Pfizer and Allergan, the largest planned inversion in history of the pharmaceutical industry, fell through.

The temporary and proposed regulations put forth on Monday make it more difficult for U.S.-parented multinational groups to change their tax residence to a low-tax country. This practice, the Treasury noted, is typically not to grow the underlying business or pursue other commercial benefits that may arise, but primarily to reduce their taxes. Companies will often follow up corporate inversions with another tactic—earnings stripping. This is where the company will seek to further minimize U.S. taxes by paying deductible interest to the new foreign parent or its affiliates in the low-tax country.

Specifically, the regulations attempt to curb inversions and earnings stripping by doing the following:

  • Limiting inversions by disregarding foreign parent stock attributable to certain prior inversions or acquisitions of US companies (under section 7874);
  • Targeting transactions that increase related-party debt that does not finance new investment in the US (under section 385); and
  • Allowing the IRS on audit to divide a purported debt instrument into part debt and part stock (under section 385).

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Regulating genetically modified mosquitoes

By Dalia Deak

Fears of spreading zika virus have renewed interest in the use of genetically modified mosquitoes to suppress disease, with recent attention focused on the UK firm Oxitec. Last week, the developing public health crisis around zika prompted the federal government to tentatively clear a small-scale field test for the first time in the United States, pending a public comment process on a draft environmental assessment submitted by Oxitec. It should be noted that a final approval for the trial will not be made until the FDA completes the public comment process.

The genetically modified insects, which are male Aedes aegypti mosquitoes, are designed to breed with the female Aedes aegypti mosquito (primarily responsible for transmitting zika, dengue fever, and other diseases) and contain a gene lethal to their offspring. The female mosquitoes lay eggs but the larvae die well before adulthood. Oxitec claims that recent tests have shown up to a 90% decrease in the population of the Aedes aegypti mosquito, with a recent test in Piracicaba (~100 miles from Sao Paulo in Brazil) showing an 82% decline. Tests have also been conducted in the Cayman Islands and Malaysia.

In the United States, Oxitec is in the process of waiting for FDA approval to conduct trials in the Florida Keys. However, this is relatively unclear and uncharted territory for the federal government in terms of what group should be responsible for the review, and the decision for the CVM jurisdiction in this case remains hotly debated. Jurisdictional debate exists between the U.S. Department of Agriculture and the FDA’s Center for Drug Evaluation and Research (CDER) and Center for Veterinary Medicine (CVM).

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Jacobus and Catalyst Continue to Race for Approval of LEMS Drug

By Dalia Deak

The latest development in the race for approval between Jacobus Pharmaceutical Company and Catalyst Pharmaceuticals is a ‘refuse to file’ letter that the FDA issued to Catalyst indicating that Catalyst’s New Drug Application for Firdapse was incomplete. Both companies are competing for approval of slightly modified forms of a drug—3,4-diaminopyridine, or 3,4-DAP— to treat Lambert-Eaton myasthenic syndrome (LEMS). The winner will receive 7 years of exclusive marketing rights to the drug.

LEMS is an autoimmune disorder that affects an estimated 3,000 people in the United States. It is a rare, debilitating disorder that is marked by progressive weakening of the muscles that often begins in young adulthood. The drug in question was initially discovered in the 1970s in Scotland, with researchers in Sweden demonstrating its use in LEMS patients in the 1980s. Jacobus Pharmaceutical Company has been providing a free base form of the drug to patients with a LEMS diagnosis since the early 1990s at no cost (with the exception of postage), though the drug had never received FDA approval.

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In Flint, Echoes of DC Lead Crisis

By Dalia Deak

The public health crisis in Flint, MI is a long way from resolved. The short-term public health effects have been staggering, a state of emergency has been declared in the city, uncertainty looms in the long-term, and the city, state, and federal government have a serious trust issue on their hands.

Last April, the city of Flint changed its water source from Lake Huron to the Flint River in an effort to reduce mounting financial pressure on the city. However, the new water source corroded the city’s old pipes, leaching lead into the water. Adding insult to injury,
when residents complained about the taste, smell, and appearance, or attributed rashes and other medical conditions to the water source, city officials told residents that they were continually monitoring the levels to ensure that they were safe (a claim which has been called into question). Despite concern over the quality of the water dating back almost immediately after the switch, a state of emergency was declared when parents started bringing children in to the pediatrician for concerns about delayed development. When researchers at Hurley Medical Center looked into the issue, they found that the proportion of infants and children with above-average lead levels close to doubled after the switch. Residents filed a class-action lawsuit against the Governor, the state, the city, and 13 public officials in November for damages from the high levels of lead in the water, claiming that their 14th amendment right was violated when the city took away their safe drinking water and replaced it with a cheaper, more dangerous alternative.

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A Conversation about… Tax Rates?: The Pfizer and Allergan Deal

By Dalia Deak

Last week, Pfizer and Allergan announced a $155B merger that has the health care and policy world talking. The contours of the deal—in particular, where the new company will be based and the implications it has for the company’s tax rate— have raised important questions.

Pfizer is a company with a long history in the United States that dates back to the mid-1800s when it sold antiparisitics and then painkillers during the Civil War. In the modern era, Pfizer is perhaps best known for blockbusters drugs like Viagra and Lipitor. Yet, expiring exclusivities and patent protections have threatened to knock the drugmaker from its No.1 spot. In January of this year, revenues were higher than expected but still down 3% year-over-year, with a forecasted decline in sales from $49.6B in 2014 to between $44.5B and $46.5B expected in 2015. Without blockbusters to replace Lipitor and Celebrex in particular (which fell 6% and 31% respectively), the company has been looking for a deal, even trying to push through a $118B acquisition of UK-based Astrazeneca in 2013, though that deal ultimately failed.

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CMS Issues Notice Regarding Barriers to HCV Treatment

By Dalia Deak

Yesterday, the Centers for Medicare & Medicaid Services (CMS) issued a notice that affirmed CMS’s commitment to provide prescription drugs to beneficiaries, specifically highlighting beneficiaries suffering from hepatitis C virus (HCV). The notice comes at a moment of heightened interest in the cost of prescription drugs (particularly on the federal level as an inquiry in the Senate has been initiated regarding rising drug prices).

In the statement, CMS:

  • Reminded the states of their obligation, under the terms of the Social Security Act, that Medicaid programs must cover prescription drugs for medically accepted indications if the manufacturer of the drug is a manufacturer with whom they have rebate agreements with;
  • Discussed the concern regarding costs of direct-acting antiviral (DAA) HCV drugs, emphasizing the role of competition and negotiation in bringing down the drugs’ prices;
  • Expressed concern regarding some states’ policies to restrict access to the DAA HCV drugs that may be contrary to their obligations under the Social Security Act;
  • Encouraged states to ensure that their policies do not unreasonably restrict coverage of effective treatment;
  • Reminded states that drugs available under the states’ fee-for-service programs must also be available to beneficiaries of Medicaid managed care organizations; and
  • Indicated that CMS will monitor state Medicaid policies for DAA HCV drug coverage to ensure that they are compliant with approved state plans, statutes, and regulations.

CMS also followed up its notice with a letter to the CEO of AbbVie asking for additional information regarding the types of value-based purchasing arrangements offered to payers and to state Medicaid agencies by December 31, 2015.

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UDI Adoption: A Necessary Step Towards Better Care for Patients with Implanted Devices

By Dalia Deak

In the United States, though many millions of individuals live with implanted devices, it may shock you to know that it is easier to recall tainted dog food than it is to recall a faulty pacemaker. This is due in large part to the lag of the medical device world behind most other industries in the implementation of a standardized system that can uniquely identify and track medical devices as they move through the supply chain to a patient. Such an identification system has existed for most products since stores implemented the UPC and Congress mandated that drugs be labeled with the National Drug Code, both of which were introduced in the early 1970s.

To remedy this lag, Congress, in FDAAA of 2007, tasked the FDA with the creation of a unique device identification (UDI) system. In 2013, FDA published a Final Rule regarding manufacturer labeling of UDIs, to be rolled out by class in the coming years. While the establishment of such a system would certainly constitute an important step forward, another number on a label will do little to enhance patient safety on its own. Rather, the value of UDIs is in the uptake of the identifier at each point in a medical device’s life—from manufacturer to distributor to provider to patient to payer (see this report I co-authored on this very issue). Continue reading

A Cost Conundrum for Treating Small Patient Populations

By Dalia Deak

The issue of drug pricing has been thrust center stage (again) after Turing Pharmaceuticals raised the price of daraprim from $13.50 to $750 per dose. The public issued a loud outcry, the pharmaceutical industry condemned the move, and presidential candidates are now discussing drug prices (as discussed previously on this blog). The reactions were so swift and loud that Turing eventually backed down, indicating that they will lower the drug’s price, though it is unclear by how much.

The drug in question in this debate, daraprim, is a 62-year old drug used to treat toxoplasmosis, a parasite that is particularly dangerous in infants, AIDS patients, and cancer patients. The curiosity of this case in particular is that the usual host of development incentives implicated in driving up the cost of a drug (e.g., patents, market exclusivity) was not in play. The reason Turing was able to raise the cost of daraprim is because no other generic competitor for the drug is on the market to drive down the cost. This is largely a result of the small market for daraprim, which had 13,000 prescriptions filled for it last year. This begs the questions: specifically for disease areas where populations are small, will drug prices, even for generics, remain stubbornly high?

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DCIS Study Amplifies Questions and Demand for Answers

By Dalia Deak

This week, a JAMA Oncology article made a splash when it intensified discussion around what ductal carcinoma in situ (DCIS) should be considered – cancer, precursor, or risk factor – and whether current treatment approaches have been effective. The New York Times, The Guardian, and others have picked up the story, and readers have reacted extensively, only amplifying a demand for answers to questions raised.

Often called Stage 0 breast cancer, DCIS is considered to be abnormal cells that are confined inside the milk ducts and, as such, are not considered invasive. Because of the increased risk associated with DCIS, many women who are found to have DCIS (a growing number considering the frequency of and improvements in mammography) undergo lumpectomies or mastectomies often accompanied by radiation therapy. Continue reading

Introducing the 2015-2016 Petrie-Flom Student Fellows

The Petrie-Flom Center is pleased to welcome our new 2015-2016 Student Fellows. In the coming year, each fellow will pursue independent scholarly projects related to health law policy, biotechnology, and bioethics under the mentorship of Center faculty and fellows. They will also be regular contributors here at Bill of Health on issues related to their research. Continue reading