Wednesday, July 15, 2009

New Drug Development and Access

While the government debates extending the patent term for biologics, let's get the discussion rolling here on what sort of changes might make drug discovery, development, approval and access more economical for patients, while preserving economic returns and incentives for innovative therapies.

The ability to bring innovative cost effective drugs to market is paramount. Consider these facts from the website NCHC - Facts about Health care Costs in the US:

National Health Care Spending

  • In 2008, health care spending in the United States reached $2.4 trillion, and was projected to reach $3.1 trillion in 2012.1 Health care spending is projected to reach $4.3 trillion by 2016.1
  • Health care spending is 4.3 times the amount spent on national defense.3
  • In 2008, the United States will spend 17 percent of its gross domestic product (GDP) on health care. It is projected that the percentage will reach 20 percent by 2017.1
  • Although nearly 46 million Americans are uninsured, the United States spends more on health care than other industrialized nations, and those countries provide health insurance to all their citizens.3
  • Health care spending accounted for 10.9 percent of the GDP in Switzerland, 10.7 percent in Germany, 9.7 percent in Canada and 9.5 percent in France, according to the Organization for Economic Cooperation and Development.4

Employer and Employee Health Insurance Costs

  • Premiums for employer-based health insurance rose by 5.0 percent in 2008. In 2007, small employers saw their premiums, on average, increase 5.5 percent. Firms with less than 24 workers, experienced an increase of 6.8 percent.2
  • The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $12,700 in 2008. Workers contributed nearly $3,400, or 12 percent more than they did in 2007.2 The annual premiums for family coverage significantly eclipsed the gross earnings for a full-time, minimum-wage worker ($10,712).
  • Workers are now paying $1,600 more in premiums annually for family coverage than they did in 1999.2
  • Since 1999, employment-based health insurance premiums have increased 120 percent, compared to cumulative inflation of 44 percent and cumulative wage growth of 29 percent during the same period.2
  • Health insurance expenses are the fastest growing cost component for employers. Unless something changes dramatically, health insurance costs will overtake profits by the end of 2008.5
  • According to the Kaiser Family Foundation and the Health Research and Educational Trust, premiums for employer-sponsored health insurance in the United States have been rising four times faster on average than workers’ earnings since 1999.2
  • The average employee contribution to company-provided health insurance has increased more than 120 percent since 2000. Average out-of-pocket costs for deductibles, co-payments for medications, and co-insurance for physician and hospital visits rose 115 percent during the same period.6
  • The percentage of Americans under age 65 whose family-level, out-of-pocket spending for health care, including health insurance, that exceeds $2,000 a year, rose from 37.3 percent in 1996 to 43.1 percent in 2003 – a 16 percent increase.7
Consider that many Americans have lost their jobs in the past year and are struggling with "Cobra" and other temporary measures while they try to find employment.

In 2006 12.6% of health care spending was shelled out for pharmaceuticals. This rose from 9.3% in 1996, but there are many more countries that were ahead of the US in spending on Pharmaceuticals.

There is no "money tree" in the Pharmaceutical industry. Drugs and treatments are paid for by employer/employee contributions and taxes. We have got to spend it wisely.

A couple of things I am thinking about:

We have discussed this before - but the drug approval process at the government level has to be examined.

With this in mind:
1.) companies drug development, clinical trial practices, medical/regulatory departments are completely audited by a fully accredited governmental agency. This would also include complete employee screening. Once you have been reviewed, this and other factors might help in speeding up the NDA process for your company.
2.) All new NDA being filed are scrutinized by an independent team of reviewers, much like a jury being assembled for a court trial. Meaning you go out in the field and independently and randomly pick health care professionals to co-review the NDA. This would also include review of the data and issues by a biomedical ethicist and a pharmacoeconomics expert. There is some nominal fee paid, and there are time limitations.
3.) Cap the amount of investor capital that can be raised to fund new drug development projects
4.) Government sponsored Phase II clinical trials
5.) Global Pharmaceutical industry regulation, this would be meant to facilitate access to important innovative drugs to all citizens of the world

Just some thoughts....


  1. Hi Former,

    I suspect you have provided so much to chew on that it is hard to begin the meal!

    So just a couple of notes.

    Re: healtcare spending, of course, just a fraction of it goes to drugs. PhRMA usually says 9%. Experts who have reviewed the figure to include Medicare spending and related bring it up to about 18%.

    In your second proposal, and part of the first, it sounds like you want to create a "back-up FDA," but perhaps I'm missing the point. If not, my own inclination would be more targeted and, in some arenas, radical reform of the FDA we have than to create another NDA reviewing layer.

  2. Hi Justice,

    It is not so much what goes to Pharma, it is the overall cost of health care that is important to consider. I think 18% is the more likely figure that goes to Pharma....

    I am suggesting the creation of another NDA reviewing layer....

  3. Re: "another NDA reviewing layer," is that because you feel the FDA in inherently "unfixable" to a reasonable degree or because two separate reviews is inherently better?

    (Or is the idea to bypass FDA altogether?)

  4. Hi Again Justice,

    Two separate reviews that are selected on an ad hoc basis - and, I might add, are blinded to one another, should help to instill some integrity back in the process...The reviewers are less likely to be coereced by management or industry. The anonymitity should help the reviewers do their job with out fear of prejudices.

    I was at a recent "scientific" meeting where clinicians and scientist were intimidated if they asked questions that were not "in line" with the "marketing" message of the product under discussion. This is unacceptable.

    Science first, patients second and money Third....


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