Sunday, 23 March 2014

10:43 – We had a warm sunny day yesterday, but now we’re back to chilly, windy, rainy weather, with lows near or below freezing and snow forecast for Tuesday.

There’s an interesting article in the paper this morning, about people with ObamaCare finding out that it doesn’t cover the drugs they need. The insurance companies are using tiering to avoid covering expensive drugs, and who can blame them? Some of those drugs cost $30,000 to $100,000 a year or more. My attitude is that this is the way it should be. If someone can afford to pay for these drugs and chooses to do so, fine. But forcing others to pay for them is simply wrong. I understand that some people need those drugs, and may die sooner without them. Tough luck. Their need doesn’t give them the right to force everyone else to pay for them.

The real problem is that pharma companies’ economic model makes no sense, and the FDA approval process encourages wasteful development. It can cost literally billions of dollars to develop a new drug and get it through the approval process. And that approval process sets a very low bar. Essentially, the FDA requires only that a new drug be safe and effective. Not safer than existing alternatives, if any. Not more effective than existing alternatives, if any. Merely safe and effective. So we find ourselves in a situation where a new drug that sells for, say, $3,000/month may actually be less safe and less effective than a current drug that sells for $30/month. And you can bet that the pharma company pulls out all the stops to promote their expensive new drug, with splashy ads in magazines and on TV, reps visiting every physician to encourage them to prescribe their new drug, and so on. The pharma companies have little choice. They have to recoup the billions they spent developing that new drug, not to mention the billions and billions more they spent developing new drugs that never made it though trials and the approval process. It’s insane.

I hasten to add that I don’t blame the pharma companies or their researchers. It’s the process itself, mandated by the federal government, that’s broken.


20 thoughts on “Sunday, 23 March 2014”

  1. It is a chilling 61 F here in the Land of Sugar and looking like rain. Forecast to drop down to 53 F tonight. Been sick all weekend with some sort of stomach virus that makes my body ache and has given me an awesome headache. Can’t be the flu, I had the shot! No fever though.

  2. BTW, my wife took Herceptin treatments for a year in 2005 as a part of her breast cancer. She was in a clinical trial since she was stage 2B (tumor was 3 cm in diameter and she had a secondary tumor in her lymph nodes) for Genentech so her Herceptin was “free”, a $29,000 value at the time. I am told that Herceptin was now a $50,000 drug a couple of years ago. Plus you need to have heart tests and bone scans for five years afterwards due to possible side effects that Genentech also paid for. Which she did but her heart is still way better than mine.

    The study that she was a part of said that the chance of breast cancer reoccurance for her reduced from 60% to 25% for five years with 50 Herceptin treatments, weekly over a year. My wife has both BRCA genes and the other two minor genes. So, in this case, I believe that Hercetin is a good drug. But you only take it for one year. I cannot imagine taking an expensive drug like that for many years. Plus, it is an IV administered drug and she had her chest port removed in 2006.

    I just started taking Rythmol for my atrial fibrillation. I will probably take it the rest of my life since I not only have afib but also have tachycardia. Walgreens says the drug costs $475/month but I only paid $20 with my insurance. I hate the drug but it stops the tachycardia that drives me nuts. Hopefully you have no idea how it feels to have your heart racing away for no reason at all.

    I can hardly wait to get our group health insurance re-upped in December. I suspect that we are going to get another 20+% hike and I will be dropping benefits again.

  3. BTW, Obamacare has several changes for group health insurance. The first is the new 3.5% tax that I pay for the privilege of buying health insurance for me and my employees as of Jan 1, 2014. I cannot believe that the scum politicians make me pay for this privilege. Next, they will deny the insurance cost as a legitimate business expense.

    The second is that the cost is changing from an average for each employee to a stated cost for each employee. Right now, I pay $470/month for each of the 16 people on our plan. Our next plan, starting in December, will have an individual cost for each named employee or dependent. I am not sure why they are doing this but I am sure that there is something about it.

    I am convinced that our politicians in the USA are total scum. They pass incomprehensible laws and budgets that make any lawyer scream with pleasure. But, the Democrats are the worst.

  4. It can cost literally billions of dollars to develop a new drug and get it through the approval process. And that approval process sets a very low bar. Essentially, the FDA requires only that a new drug be safe and effective. Not safer than existing alternatives, if any. Not more effective than existing alternatives, if any. Merely safe and effective. So we find ourselves in a situation where a new drug that sells for, say, $3,000/month may actually be less safe and less effective than a current drug that sells for $30/month. And you can bet that the pharma company pulls out all the stops to promote their expensive new drug, with splashy ads in magazines and on TV, reps visiting every physician to encourage them to prescribe their new drug, and so on.

    I’m surprised that you’ve fallen for the “me too drug” fallacy the lefties like to promote. I know you read Derek Lowe’s blog, and he’s written about it a number of times (http://pipeline.corante.com/archives/me_too_drugs/). “Me too” drugs often arise because someone has identified a pathway or target for a disease and published a paper on it. The pharma companies do the math on viability and start the R&D process on it. So you can end up with several drugs nearing the market at the same time. Here’s a good post from Lowe’s blog on how venture capital firms assess drug funding: http://pipeline.corante.com/archives/me_too_drugs/ High differentiation from existing treatments is one of their important factors.

    The billions per drug development cost is somewhat misleading. It also includes the costs of drugs that never make it to market. Second, the “safe and effective” threshold is a good one, because sometimes the “best” drug doesn’t work for some people. For example, I get better allergy relief from generic Zyrtec than Allegra or Claritin. Yet all three were FDA approved. Heck, Benadryl is even better, but I can’t drive if I take it. (And come to think of it, as a libertarian anarchist, why is FDA approval even a factor for you?)

    The marketing machine has some effect, to be sure, but it’s not as powerful for non-lifestyle drugs. Doctors do take cost into account for prescriptions – for example, there is a really good drug app for doctors that has cost data with the prescription data and has pointers to cheaper alternatives. Also, the drug marketing reps are pretty limited in what they can offer doctors – no more fancy dinners and the like. Maybe a box of donuts for the office and a few totchkes is about it. They used to give out free pens with the drug names on them, but that got stopped here in Texas. Also, one of the decision factors for VC is to favor drugs that specialist and hospital use – lower marketing costs.

    Is the drug discovery business broken? Maybe. I think that there could be a new wave of important drugs come out of the nanotech, stem cell and genetics research areas, but right now we’re in a dry period as the low-hanging fruit have been picked. Does FDA approval process need tweaking? Sure. Lowe and others have written about ideas to streamline it. One of the benefits of Obamacare is the forced switch to electronic medical records – it could provide a huge data set that can be mined to look at side effects and efficacy data for drugs and treatments. It also provides a rich dataset for hackers to exploit, alas.

  5. One of the benefits of Obamacare is the forced switch to electronic medical records

    Is that a single nationwide electronic medical record system or does each Doctor have their own?

    MD Anderson Cancer Center has an awesome online medical records system that my wife uses extensively. It has every surgery notes, test results, everything every doctor has transcribed about her. Even xrays and MRI scans:
    https://my.mdanderson.org/

    My impression was that each doctor is rolling their own system. If so, what a freaking disaster.

  6. You can always tell the pharma reps in the Dr. office building: Brief cases, suits and ties, skirts and high heels.

  7. “…now we’re back to chilly, windy, rainy weather, with lows near or below freezing…”

    That presumably means 32 F or below, which here means balmy breezes off the lake and a welcome respite from what we’ve got right now—10 and dropping to minus 5 later.

    The big snow storm heading this way will likely miss us entirely and smash the northeast coastal areas and the Maritimes. We skate again but keep the chill until at least Friday, looks like. Peeps around here put up with it but we’re all kind of tired of mid-winter temps at the end of March.

  8. Jetstream is dipping low across the nation’s midsection, while California skates again. Colder weather for us and south of us until Thursday. Only 18F tonight. Snow tomorrow night.

    Having had some friends who work in pharma sales, I can relate that they were once just order-takers, but now are straight-ahead pushers. No dinners? Last time I was in my doctor’s office of about 30 docs and support people, they were ALL getting lunch catered from local sources, and the high-heeled pusher madam was right there eating with them. Cost me 30 minutes of my time beyond my scheduled 30 minutes, while the nurses all had lunch together.

    From my video work in med mal, I can say that during the last 4 or 5 years, EVERYTHING is now done on computers. That is seen as a legal protection to the docs, clinics, and hospitals, because the computer asks questions and demands that certain statements be read to patients, if certain conditions occur. When I first started doing this work, lots of stuff was still done on paper, and it was not unusual for mistakes to occur in the OR in terms of wrong sizes of items, non-matching parts (like a hip replacement with a ball too small for the socket). Now all that stuff is scanned in, just like in the grocery store, and when mismatches occur, the computer stops things dead in their tracks.

    My understanding is that it is not the case that each doctor’s office generates their own programs with hired programmers, but rather, there are a few competing systems out there that doctors’ IT people implement. My doctor has implemented 2 major changes to their computer systems in the 4 years I have been back.

    But it is clear that communication between hospitals is now pervasive, with doctors able to look at high resolution photos and scans — no longer crappy faxes. Communications between EMT vehicles and hospitals is phenomenal, with most situations able to get people into an OR directly from the vehicle, with minimal additional tests. How all this relates to privacy issues, I have no idea, but the amount of information instantly at hand is just nothing short of astounding. When somebody is transferred to a different hospital for specialty work, the subsuming doctor has already seen the patient’s entire history. He no longer has to wait until morning for somebody to pull the family doc’s files and charts on the patient — that is now instantly available to anyone who will be working with that patient.

    In fact, the only paper I see at my doctor’s office, is the slip they give me with my next appointment, and I can even forgo that with a telephone call a few days in advance substituting for the paper slip.

  9. Is that a single nationwide electronic medical record system or does each Doctor have their own?

    The doctors, hospitals, clinics, etc. are free to choose their own. As I understand it, there are standards for data interchange so that the systems can exchange data. My mom’s cardiologist and internist seem to use the same software based on the sheet they give her at the end of each visit. My internist is affiliated with a hospital system (St. Luke’s) and is tied into their system.

    While waiting to clear security at a Texans game, I heard a couple of MDs from a local clinic complaining about the electronic medical records system. One was P.O.ed that the software guys doing the configuration and troubleshooting were paid more than they were. (I think they said they were being paid $5k/week.) If it’s like some of the big enterprise systems like Peoplesoft, they are worth every penny.

    One note: One of Obama’s major backers and bundlers, dating back to his days in the state house in IL, is the CEO of an electronic medical records software house. Funny how that worked out.

    No dinners? Last time I was in my doctor’s office of about 30 docs and support people, they were ALL getting lunch catered from local sources, and the high-heeled pusher madam was right there eating with them.

    They used to be able to wine and dine doctors and clinic directors, have trips for hospital pharma directors, etc. My wife went to a dinner for a new drug once. They took over one of the major steak houses in Houston and served steak dinners with all the trimmings, wine, etc. At the end a doctor involved in the final trials of a new drug got up to do a talk about the drug, why it was better, etc. My wife was already using it – when she was a resident the speaker was one of her instructors and she administered it as part of the trials. She went to see the speaker.

    Now there are strong restrictions on what they can do. Carrying in lunch is at the top end of the scale of what’s allowed. They used to bring pre-printed prescription pads with the name of a new drug watermarked on it, free logo pens, etc. Can’t do that any more.

  10. Just to be clear, I wasn’t talking about me-too drugs. As I’ve said before, I don’t think any drug with the exception of antibiotics should be controlled at all. Nor do I think the FDA should exist. A drug company should be free to distribute a new drug (or an existing drug) without any testing or trials, with the understanding that it is experimental and that the drug company has zero responsibility for any problems. The drug company should be able to specify that anyone who takes the drug does so at his own risk and that the company bears zero liability. Equally, insurance companies should be free to specify which drugs they cover, and to choose to cover only generic drugs.

  11. Communications between EMT vehicles and hospitals is phenomenal, with most situations able to get people into an OR directly from the vehicle, with minimal additional tests.

    Yes, a friend of the family (younger than me) had a heart attack. He went to an Immediate Care place two minutes from his house. They confirmed he had a heart attack and called an ambulance. He sat in the ambulance for 30 minutes while they figured out which Indianapolis hospital could treat him first. They didn’t rush him to an ER because the ambulance had everything he needed.

  12. I just bought some antibiotics (Augmentin = 875mg of Amoxicillin + 125 mg of Clavulanic Acid) and it was a 10 day course of two pills per day. So, those 20 antibiotic pills cost me $69 without insurance (wife changed jobs and so we’re uninsured for the next month or so). I have to say, that’s really not too bad at all. I was also given an NSAID (500mg Naproxen) and it was only $20 for 60 pills. I think that may actually be cheaper (per mg) than buying it OTC.

    I have a female relative that was prescribed Abilify (Aripiprazole) and was rejected by her insurance. The cost without insurance is about $900/month. That will drop significantly once a generic is available (drug patents are 20 years?), but in the meantime she had to go back to her psychiatrist for an alternative mood stabilizer. It’s really too bad as the handful of different psychologists and psychiatrists she’s discussed it with are all in love with Abilify.

    My BIL tells me Levitra (Vardenafil)/Viagra (Sildenafil)/Cialis (Tadalafil) can run about $20/pill and insurance companies hate covering the cost. So, going by the last average I remember reading, the “average” married couple in their thirties has sex roughly three times a week on average. So, 150 times a year at $20 a pill, and a man with ED will be paying about $3,000/year (out of pocket) just to maintain an “average” sex life. Those generics should be on the market soon though, so that will help.

  13. Those generics should be on the market soon though, so that will help.

    At my age I need to wait for the COSTCO packaging.

  14. I don’t really keep up with prescription drug prices, but I’d be surprised if the pharmacy paid more than maybe $3 wholesale for the tablets in that $69 amoxiclav prescription, assuming it was generic. Same deal on the naproxen at $0.33 per tablet. IIRC, the last time I looked at Costco, they were selling 220 mg naproxen sodium tablets at something like $14 for 400. Call it about $0.08 per 500 mg.

    What’ll help even more than generics on ED drugs is making them available OTC, which there’s no reason not to. They’re certainly safer than some existing OTC drugs, notably ones that contain acetaminophen. Once Costco has generic ED drugs on their OTC shelves, my guess is you’ll see the price drop from $20/pill to $0.20/pill.

  15. I know I could save a lot by buying bulk, but I really hate jumbo containers of anything. Especially as they near empty. For example, the 32oz bottle of ketchup that only has 4oz left in it. Things like that just drive me crazy to the point I am willing to pay a premium to have things in small size.

  16. Chad wrote:

    “… I really hate jumbo containers of anything.”

    I got a new fridge last month and nothing fits in it. Well, that’s an exaggeration, but many things I’d like to fit in won’t so I’ll probably have to take out some shelves just so some modestly tall containers will fit standing up.

  17. Our other friends, including Canada and the UK, do the same thing, threatening US pharma companies that if the companies won’t sell it at the price they’re willing to pay, they’ll ignore patents and make the drugs themselves. People in the US essentially pay the tab for the whole world when it comes to drugs that are still under patent.

  18. And yet people wonder why any of us object to patents and copyrights. As I have frequently said, it is obvious fact that, — regardless of the righteous intent, — in this era, private enterprise will not lift a finger unless they can rape people on cost. It is no longer acceptable to them just to make a living, which is what the pharma’s (once family-owned businesses) and the P&G’s once did, they have to make a killing and pay top execs far, FAR more than the rest of the world, or screw it — they won’t do it. Period.

    Dean Baker, recently affirming what our host just stated, that the US pays for drugs for the whole world AND pays for excesses, deaths, and dangerous practices as pharma tries to push drugs that have already been found to have fatal aspects and should be abandoned, proposed that patents on all drugs should be revoked and health research should occur in places like university settings, much as seed and plant development once was, before Monsanto, Cargill, Archer Daniels Midland, and their ilk started raping farmers by licensing seed in an even worse way than Micro$oft and started pushing gene-modified crops through to our stomachs with no testing whatever, just the same crappy refrain that the climate change people use: our way IS good for you, so stuff it!

    If we are going to pay for every penny of drugs costs, then we should be getting bang for the buck and research on stuff that is useful to even people with niche diseases, instead of just the ‘big hits’ that big pharma only considers worthwhile these days.

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