Medicare Payment Data Raises Questions About Drug Costs

Even though the just-released Medicare data on payments to individual doctors doesn’t provide specifics on prescription drug outlays, it opens the door to sharp scrutiny of Medicare reimbursement for medicines delivered in physician offices. The Centers for Medicare and Medicaid Services (CMS) has released data on payments to some 880,000 healthcare providers who collectively received $77 billion in Medical Part B fee-for-service payments in 2012. It’s part of the government’s “transparency” campaign to better inform the public and healthcare entities about spending and

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costs in the delivery system. The American Medical Association blasted this “data dump” as likely to confuse the public and “destroy careers,” which may be valid complaints as journalists, analysts, and plaintiffs’ attorneys begin to troll the data set.

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FDA Wants You!

A number of top management positions at the Center for Drug Evaluation and Research (CDER) need to be filled, and CDER leaders are looking for experienced industry managers to help rebuild its staff.

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Many experienced FDA staffers are ending their careers or taking on new challenges, creating a need for “renewal and replenishment of the agency,” explains Richard Moscicki, deputy director for science operations at CDER, who is leading its executive recruitment campaign. Moscicki formerly headed clinical development at Genzyme before coming to FDA in February 2013 and hopes to attract more people with similar backgrounds to public service. While some positions may be filled by internal candidates, Moscicki is looking to bring in people with leadership and management experience that may not exist at the agency.

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Drug-Diagnostic Development Stymied by Payer Concerns

The shift to personalized medicine, which supports medical treatment tailored to individual patient characteristics, has been hindered by uncertainty over the value, accuracy, and clinical utility of companion diagnostic tests. Even for the handful of drugs approved by FDA with labeling that links prescribing to specific biomarker measures, health plan operators, providers, and payers frequently question the need to cover the added testing, according to analysis by Joshua Cohen of the Tufts Center for the Study of Drug Development (CSDD). Cohn noted at a recent CBI conference on “Precision Medicine and Companion Diagnostics” that only a few therapies have been approved by FDA

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co-developed tests to inform prescribing; several more drugs gain links to specific diagnostics post- approval.

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Track-and-Trace Not Enough to Halt Drug Counterfeiters

Despite recent legislation to establish a more secure pharmaceutical supply chain to deliver high quality, approved medicines to American patients, efforts to block the import of substandard, fraudulent, and counterfeit drugs remains an uphill fight. Criminals are expanding from “lifestyle” drugs to widely used anti-cholesterol and cancer medicines, attracted by huge profits and low risks from drug counterfeiting activities, noted Marcia Crosse, director

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for healthcare at the Government Accountability Office, testifying at a Feb. 27, 2014 hearing before the House Energy and Commerce, Oversight and Investigations subcommittee.

A main problem is that penalties for distributing counterfeit drugs are too low to spur prosecution and to deter illegal operators, explained Howard Sklamberg, FDA deputy commissioner for global regulatory operations and policy. FDA is working with other federal agencies to identify and take action against illegal operators, with a focus on fraudulent Internet pharmacy sites that sell low-cost “Canadian” medicines. But most counterfeiters end up facing charges of “misbranding” or importing “unapproved foreign-made drugs,” which carry minor fines and minimal jail terms.

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Drug Shortages Continue to Plague Healthcare System

Despite notable successes in preventing and mitigating short supplies of important medicines, the drug shortage crisis still disrupts medical treatment and gives drug manufacturers a bad name. FDA is doing

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continue to limit treatment options for doctors and patients. A severe shortage in intravenous saline solutions has generated outcries from hospitals, dialysis centers, and physicians. The situation is aggravated by increased hospitalizations due to flu outbreaks. Some states are taking extreme measures for executing felons facing the death penalty due to difficulties obtaining supplies of drugs for lethal injections. Recent vaccine shortages have forced physicians to delay immunizations.
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PDA Panel Proposes Limited Set of Metrics to Measure Quality Trends

If FDA is going to establish standards for assessing the quality of manufacturing sites and products, it should seek data on a few well-defined measures that reflect longer-term results and trends, rather than “snapshots of current numbers.” And such metrics should include more leading—vs. lagging—indicators to reflect a firm’s commitment to continuous improvement in production processes. Those recommendations come from a PDA “points to consider” paper, written to help FDA set standards to measure product quality and manufacturing capabilities.

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FDA Approves Fewer New Drugs, But Acts Fast on Innovative Products

As expected, FDA approved only 27 new molecular entities (NMEs) in 2013. There was no late-December surge in approvals to bring the tally closer to the near record of 39 innovative new drugs approved in 2012. In addition, the Center for Biologics Evaluation and Research (CBER) approved eight novel products, including innovative influenza vaccines and a number of blood products.

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Provider Demand to Drive Compounder Registration with FDA

FDA is moving fast to implement the drug compounding provisions of the new Drug Quality and Security Act (DQSA), issuing new guidance to spur registration by outsourcing facilities just days after President Obama signed the new bill into law. Because FDA cannot compel compounders to opt for agency regulation, implementation will rely largely on market pressures to encourage healthcare providers to purchase compounded products only from registered facilities, explained FDA commissioner Margaret Hamburg at a press briefing Dec. 2, 2013.

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Industry Needs to Drive the Dialogue Regarding FDA’s Quality Metrics Initiative

Guest blog written by Walter Morris, Director of Publishing, Parenteral Drug Association, on behalf of the PDA Quality Metrics Task Force

The US FDA Center for Drug Evaluation and Research (CDER) reached out earlier this year to industry and the public for input into plans to implement parts of the 2012 Food Drug Administration Safety and Innovation Act (FDASIA).1 Quality manufacturing leaders in the industry must now seize this opportunity to help bring about real changes to a system of regulatory inspection and enforcement that, in spite of reasonable attempts at reform over the last decade, is struggling with new challenges. Continued high-cost enforcement actions, plant closures, drug shortages and, regrettably, real harm to patients have pushed everyone involved with this industry to recognize, finally, that a new regulatory and quality paradigm is needed.

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True Pharma Innovation Lies in Quality, not Quantity, of Approvals, say FDA Analysts

We’re already embroiled in the annual speculation game about whether FDA approvals this year will keep pace with last year’s near-record of 39 new molecular entities (NMEs) brought to market. The tally is closely watched as a sign of the state of biopharmaceutical innovation and the health of the pharmaceutical industry and biomedical research enterprise.

But this focus on the quantity of new drug approvals is misleading, according to FDA analysts, because it fails to distinguish between truly innovative new therapies and those that are similar to medicines already on the market, explains Mike Lanthier, operations research analyst on the economics staff of FDA’s Office of Planning. While all NMEs offer some therapeutic advantage, those that are “first-in-class” and “advance-in-class” medicines represent important advances, he explains. Alternatively, “addition-to-class” therapies may provide useful options for patients, but not substantial advances over existing products. And it is this last category that has experienced the much-hyped decline in approvals in recent years, while more vital therapies are holding steady or increasing in number, Lanthier points out in an FDA Voice blog posted Aug. 6, 2013. This “more nuanced and informative” assessment of NME categories thus refutes fears of an “innovation gap” that threatens drug discovery.

One factor may be a rise in small biopharma companies developing more innovative drugs, while large drug companies have focused on refining blockbuster drugs for large patient populations. NMEs from small companies have increased notably since 1996 and now account for 50% of approvals, compared to roughly one-third in the past, Lanthier and colleagues explain more fully in an article in the August 2013 issue of Health Affairs.

FDA initiatives also may support these developments. Most innovative NMEs have benefited from priority review treatment, and the new breakthrough drug program and added incentives for new antibiotics and pediatric treatments promise to expedite the development of innovative therapies. It’s also possible, the authors say, that the increased influence of large pharmacy benefit management firms reduces reimbursement for pricey drugs that lack proven benefits.

Another measure of biopharma innovation may be the number of new drug applications filed with FDA, although the quantity-over-quality measure also may apply here.

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