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The Innovation-Competition-Affordability Connection and its Importance to Patients

June 15, 2021
12:49 pm

One of the biggest headlines in healthcare this month occurred when the Food and Drug Administration gave approval to a new treatment for Alzheimer’s disease developed by Biogen. This is a development that brought hope to the millions of individuals and their loved ones who have or will have a terrible and complex disease that is taking an increasing toll on our society.  The Biogen approval speaks to the importance of biomedical research and development in this country as well as the FDA’s Accelerated Approval Pathway program, which makes novel treatments available in areas of unmet need.

But the good news is not without controversy.  There is already criticism of the recommended market price of this product.  In that light, I found the blog post below from Genentech CEO Alexander Hardy to be relevant and insightful.  As he points out, the most effective pathway to achieve greater affordability for breakthrough medicines is to encourage more innovation and the development of competing therapeutics.  Remember the firestorm that occurred over price levels when Gilead Sciences developed a cure for Hepatitis C?  Those prices dropped precipitously when other biopharmaceutical companies developed competing products.  It’s an important lesson for policymakers that innovation is a more effective and patient-centered tool for achieving affordability than heavy-handed regulation.

I am pleased to share the perspectives of Genentech’s chief executive.

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Innovative Medicines Demand Responsible Pricing

The FDA approval of Biogen’s new Alzheimer’s disease medicine will be, I hope, the first of many new treatment options for patients to help combat this devastating condition. With this news, there has also been much commentary on the price of the medicine.

At Genentech, we’re well aware of the challenges of developing treatments for Alzheimer’s disease. We’ve spent the last decade researching potential targets and have experienced a number of scientific setbacks. But we’re proud to remain in the fight and are currently developing three investigational medicines – two in Phase II and one nearing Phase III completion. Despite the challenges, we remain optimistic about our potential to launch one or more medicines in the future.

Alzheimer’s is one of the biggest public health challenges of our time. The impact of the disease on patients and caregivers is truly tragic and we applaud Biogen for their efforts to develop a treatment.

We believe, like many others in the industry, that the price of a medicine must be based on the benefits it provides to patients and society. Ultimately, the price must enable patients to have rapid and broad access and provide a reasonable return that will fund future R&D investments.

Given the growing worldwide incidence of Alzheimer’s disease, it’s imperative that people with the  disease have multiple treatment options to choose from. Hopefully, a number of additional medicines will be approved that deliver more benefits to patients and society. With those advances, the resulting competitive market dynamics will prevail and bring a decline in prices. The availability of more therapies should drive healthy competition, delivering savings to the healthcare system overall and ensuring patients and doctors have important choices in the medicines they receive.

There is an opportunity now for lawmakers and industry to work together on policies that will fuel efficient market-based competition. We must also provide a safety net in the form of a cap on Medicare out-of-pocket costs to ensure that patients have access to life-changing medicines.

At Genentech, we’re committed to working every day to bring even more hope for patients and caregivers living with Alzheimer’s disease. If we are successful, we will price our medicines responsibly so that they reflect the benefit they provide to people with Alzheimer’s disease and society as a whole. We’re committed to working with the U.S. Administration, Congress, and others to find sustainable, system-wide solutions that lower costs while also protecting scientific innovation and ensuring patients have access to the life-changing medicines they need.

Waiving Patent Protections for Vaccines is a Damaging and Short-Sighted Move

May 06, 2021
3:42 pm

Biopharmaceutical companies are receiving justified praise for the rapid speed with which they produced effective vaccines against COVID-19, offering hope for a return to normalcy from a pandemic that has cost lives and damaged economies.  The success of vaccine production underscores the critical importance of investments in research and development and the value those investments can bring in the future.  Pfizer scientists, for example, are already exploring how the mRNA technology used to create a COVID-19 vaccine can be utilized to develop advanced treatments for cancer, HIV, and other diseases.

Thus, it’s mystifying that there is a push to discourage this kind of investment by shredding the intellectual property protections held by the vaccine makers.

The Biden Administration has done a superb job in COVID-19 vaccine distribution and administration, but it has taken a misstep on the intellectual property issue.  Yesterday, the U.S. Trade Representative said that the United States would now support a move in the World Trade Organization to waive patent protections for vaccine products.  India and South Africa had initiated this action, ostensibly to open the door for poorer countries to create their own generic version of vaccines.

Seeking this waiver is a move based on a false premise that vaccines are not making their way around the world.  In fact, vaccine manufacturers have pledged to supply over 12 billion doses by the end of this year and working with the World Health Organization to supply doses to 90 developing countries at a discounted price. Eliminating patent protections will do less for global vaccine production and dissemination than what is already occurring.  Any country seeking to make its own version would have to acquire vaccine components and the knowledge on how to manufacture the products and then generate large-scale manufacturing capabilities.  This would take significant time.

The long-term harm here is to future research and development.  Intellectual property protections are vital to the development of new treatments, cures and vaccines.  Without those protections, there is no incentive to invest in the research cycle that can require years and billions of dollars just to get one new product through the development pipeline.  The WTO move achieves limited short-term gain while risking damage that could leave the world more vulnerable to the next public health crisis.

Enhance and Expand Access to Vaccines

September 16, 2020
3:09 pm

With progress continuing on development of a vaccine for COVID-19, conversations are taking place over the best strategies for distributing a vaccine, once approved, to millions of Americans.  In the post below, two executives from Pfizer – one of the companies involved in coronavirus vaccine development – point out that local pharmacies are a logical vaccination site, but that will also require harmonization of state laws that affect the roles of pharmacists in providing care.

Enhance and Expand Access to Vaccines

By:

Robert Popovian, Pharm.D., MS, Vice-President US Government Relations, Pfizer Inc.

Dave Hering, Regional President, North America, for Pfizer Vaccines.

It was not so long ago, and certainly within the memory of many older Americans, when the fear and uncertainty we are experiencing today with coronavirus were much more common. Before the advent of vaccines for a vast number of diseases, it was not uncommon for people to know friends and family members who had contracted measles, mumps, rubella or polio. Families routinely had to deal with the impact of these diseases on everyday life and, more significantly, manage life-long disabilities like loss of vision, hearing or mobility.

There are scores of studies on the positive impact that vaccination has had on public health. In addition, vaccines are one of the most cost-beneficial interventions in health care. It is estimated that caring for unvaccinated adults costs the U.S. health care system approximately $7 billion per year.

Vaccination rates in the United States for most serious ailments are in the 90th percentile for children, while for adults, the immunization rates are abysmal. For example, less than 50 percent of adults age 19 and older get a flu shot every year. What’s even more alarming is that for adult patients between the ages of 18 and 65 with risk factors (e.g., patients with asthma or chronic bronchitis or smoking history), the rate of pneumococcal vaccination is only 23 percent. Both measures are well below the Healthy 2020 targets set by the U.S. Office of Disease Prevention and Health Promotion.

One approach to encourage adult vaccination is to further expand the ability of community-based pharmacists to administer vaccines. Patients and health systems have benefited most when pharmacists are allowed to immunize patients.

Roughly 9 out of 10 Americans live within 5 miles of a pharmacy that provides vaccination services to patients without an appointment. Community pharmacies offer extended hours of service compared to other sites-of-care, which is especially important for younger, healthier adults for whom immunization rates are exceptionally low.

Also, the evidence is clear that allowing pharmacists to administer vaccines is the lowest-cost alternative for providing this essential public health service. For the most vulnerable adults, our seniors, there may be additional access issues because a majority of family physicians either aren’t stocking or are unable to bill for all available vaccines, especially those reimbursed under Medicare Part D.

Unfortunately, there are significant variations in state laws governing pharmacists’ ability to immunize patients. States that have more restrictions on pharmacists’ ability to provide vaccinations may negatively affect public health and increase health care costs. Therefore, it is of utmost importance for states to expand and harmonize state laws governing pharmacist authority to immunize and allow pharmacists to administer all Food and Drug Administration-approved and Advisory Committee on Immunization Practices (ACIP) recommended adult vaccines.

The recent guidance from Health and Human Services (HHS) allows pharmacists to administer any COVID-19 vaccine, which is FDA-authorized or FDA-licensed, is a step in the right direction. However, the HHS direction under the Public Readiness and Emergency Preparedness Act (PREP Act) is time-limited and mandates that it be based on ACIP recommendation.

Reducing vaccine-preventable disease prevalence and overall health care costs is critical for all Americans. The best way to achieve both goals is through increased vaccination of adults in the United States, particularly at the pharmacy. Policymakers must take the important step of implementing state laws to expand pharmacists’ immunization authority for adults, so we are better prepared if and when the next public health crisis occurs.

On the Precipice of a Major Stride in Healthcare Progress

August 13, 2020
4:49 pm

It actually seems elementary when you think about it.  To deliver the best possible and most cost-efficient care to patients, particularly those with complex chronic conditions, it is essential for all aspects of the healthcare system – primary care physicians, specialists, hospitals, pharmaceutical and medical device manufacturers, pharmacies, and others – to work together to coordinate patient care and deliver comprehensive treatment.

Currently, however, our federal laws and regulations prevent that type of patient-centered collaboration.  Measures known as the Stark Law and the Anti-Kickback Statute were created in the era of fee-for-service medicine to prevent bad actors from acting in ways adverse to a patient’s interests in order to gain some sort of financial benefit.  In our current transition to holistic value-based care, though, these fraud and abuse safeguards are serving as daunting legal barriers to the kind of working relationships that deliver optimal health outcomes.

We are hopeful this is on the verge of changing.  The Department of Health and Human Services has developed, with extensive public input, new rules to modernize these outdated laws and regulations and create opportunities for healthcare professionals and organizations to collaborate without fear of legal reprisal.  There will still be more than adequate protections against fraud and abuse, but the obstacles to patient-centered, value-based care will be significantly alleviated.

These new rules were submitted by HHS to the Office of Management and Budget for final review and approval last month. The Healthcare Leadership Council is one of more than 120 healthcare companies, associations, and patient advocacy groups that has asked President Trump to intervene and bring this critical work across the regulatory finish line.

As the letter to the president puts it, with the finalization of these rules “victory can be claimed in the name of helping get better coordinated care and reducing overall healthcare costs.”  We don’t see any reason to wait to begin reaping these benefits.

Addressing the Bacterial Infection Threat That Can Complicate Covid-19 Cases

March 31, 2020
9:52 am

Dr. Julie Gerberding, former head of the Centers for Disease Control and Prevention and today an executive vice president for Merck for strategic communications, global public policy, and population health wrote an op-ed for STAT News on the high mortality rate associated with COVID-19 patients who develop a secondary bacterial infection.  She said this underscores the need for research and development into new antibiotics.  The op-ed is found below and here.

Antibiotic resistance: the hidden threat lurking behind Covid-19

By Julie L. Gerberding

March 23, 2020

The ongoing Covid-19 pandemic highlights the critical need for rapid development of vaccines and antiviral treatments to reduce the number of hospitalizations and deaths caused by this dangerous new coronavirus, SARS-CoV-2. The biopharmaceutical industry has quickly responded and at least 80 candidates are already in development. With good luck, we will eventually have some of the tools we need to fight this new global threat.

But there is an even larger threat lurking behind the current outbreak, one that is already killing hundreds of thousands of people around the world and that will complicate the care of many Covid-19 patients. It is the hidden threat from antibiotic resistance — bacteria that are not killed by standard antibiotics. Unfortunately, the pipeline of drugs to manage these deadly infections is nearly dry.

Although antibiotic resistance hasn’t gotten our attention in the same way that SARS-CoV-2 has, antibiotic-resistant bacteria present a growing global menace. In the U.S. alone, we see 2.8 million antibiotic-resistant infections each year and more than 35,000 deaths, though experts fear that the real number is much higher. The so-called superbugs that cause these infections thrive in hospitals and medical facilities, putting all patients — whether they’re getting care for a minor illness or major surgery — at risk.

The patients at greatest risk from superbugs are the ones who are already more vulnerable to illness from viral lung infections like influenza, severe acute respiratory syndrome (SARS), and Covid-19. The 2009 H1N1 influenza pandemic, for example, claimed nearly 300,000 lives around the world. Many of those deaths — between 29% and 55% — were actually caused by secondary bacterial pneumonia, according to the Centers for Disease Control and Prevention. It’s a one-two punch: A virus can weaken the body, making it easier for complex, hard-to-treat bacteria to take hold.

The new coronavirus is no exception. Already, some studies have found that 1 in 7 patients hospitalized with Covid-19 has acquired a dangerous secondary bacterial infection, and 50% of patients who have died had such infections. The challenge of antibiotic resistance could become an enormous force of additional sickness and death across our health system as the toll of coronavirus pneumonia stretches critical care units beyond their capacity.

Seventeen years ago, when I was leading the CDC, we worried about antibiotic resistance complicating the care of SARS patients. We knew then that America’s arsenal of antibiotics was not sufficient to guarantee we could manage a large outbreak of drug-resistant bacteria. Since then, these bacteria have only become more widespread, more deadly, and far more difficult to treat, yet our stable of antibiotics to manage them has barely increased. In fact, the gap between the superbug threats we face and the antibiotics we have to combat them is rapidly growing wider.

We can’t predict when or where the next pandemic-triggering virus will emerge, but we can predict that secondary bacterial infections will follow. To fight these superbugs, we desperately need new antibiotics. An important question policymakers should be asking themselves is this: Why don’t we have powerful antibiotics on hand when we need them the most?

In a perfect world, we would always have new antibiotics to fight emerging antibiotic-resistant infections, ready to use when a crisis like the Covid-19 pandemic strikes. But developing new antibiotics takes time and can cost more than $1 billion and that investment cannot be recovered by wide use of new antibiotics because they must be used as sparingly as possible to preserve their effectiveness for as long as possible.

Current hospital reimbursement systems generally discourage use of new antibiotics, even when patients clearly need them, because they are more expensive than older antibiotics. Understandably, hospitals that are already challenged to cover the rising costs of care find it hard to justify the inclusion of more expensive drugs on their formularies.

As a result of this unique market dynamic — low reimbursement and low-volume use — many of our country’s most promising antibiotic developers have gone out of business or suffered severe financial losses, including three biotechnology companies within the last year.

This market failure must be corrected as if lives depend on it because they do — as we may soon see as cases of Covid-19 increase. Reimbursement reform will both improve appropriate access to novel antibiotics and encourage private investment in the pipeline. While other proposals have been discussed, including stockpiling and further grant funding for research, these measures do not address the underlying issues.

Recognizing this need is critical, Sens. Bob Casey (D-Pa.) and Bill Cassidy (R-La.) and Reps. Danny Davis (D-Ill.) and Kenny Marchant (R-Texas) have introduced the Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms (DISARM) Act, a bipartisan bill that would reform Medicare reimbursement to make it easier for hospitals to use the antibiotic that is most appropriate for a patient. Right now, there’s a strict cap on how much hospitals are reimbursed by Medicare for inpatient services, which deters use of new targeted antibiotics that might be the best course of therapy for patients with superbug infections.

Passing the DISARM Act is a first step we can take to help ensure that hospitals are not financially penalized when providing patients the lifesaving antibiotics they need. This is good for patients and will, in turn, sustain the confidence investors need to support companies developing new antibiotics. Policymakers must also create incentives, like market entry rewards and other “pull” mechanisms, that clearly signal to biopharmaceutical companies that the antibiotic pipeline merits ongoing research and development investment.

As we come together to fight today’s Covid-19 crisis, we must also look ahead to the next one. We cannot be short-sighted, and we cannot be complacent, especially about antibiotic resistance. We must put measures in place to ensure that we have the antibiotics we need — today and in the future. The time to act is now.

Julie L. Gerberding, M.D., is chief patient officer and executive vice president for strategic communications, global public policy, and population health at Merck. She was director of the CDC from 2002 to 2009.