The High Cost of Health Care: Why Some Pay $240 for a $9 Bottle of Pills

By Jonathan J. Darrow

An earlier post discussed the equivocal efficacy of Propecia (finasteride) as a baldness remedy, ending with the provocative assertion that, efficacy aside, “there is little reason for anyone ever to buy or consume Propecia (finasteride), or any doctor ever to prescribe it, since a much cheaper and identical chemical sold under the trade name Proscar (finasteride), is available.” This post continues the discussion, addressing one small component of the rising cost of healthcare—the cost of finasteride.  It explores why consumers pay as much as $240 for a bottle of Propecia (finasteride) when a $9 bottle of an equivalent, FDA-approved supply of the identical chemical is readily and legally available at nearby stores.

In the exorbitantly priced landscape of prescription drugs, there is at least one low-cost oasis: Wal*Mart.  Though some find reason to criticize the discount store, few would disapprove of the dozens of prescription medications Wal*Mart offers for an unbeatable $4 for a 30-day supply.  Cost-sensitive consumers can purchase everything from blood thinners to antidepressants to antibiotics at this price, while a 90-day supply is only $10 (and this price includes shipping to your doorstep).  A handful of drugs that cannot be sold at $4 per month sell for a still-modest $9.  For the 300 or so drugs on Wal*Mart’s list, this means there is no longer a need for $10 co-pays or snowy treks to the pharmacy in 15 degree weather.  That’s right: the Wal*Mart total price is less than most insurance company co-pays.  Finally, a major industry player seems to have put effective downward pressure on prescription drug prices.  Read More

Finasteride as an FDA-Approved Baldness Remedy: Is It Effective?

By Jonathan J. Darrow

Questionable baldness remedies have been peddled since the beginning of medicine. According to Pliny (23-79 A.D.), ashes of seahorse could cure baldness.  Almost 2000 years later, the British Medical Association warned the public of the increasing “number of preparations put forward for the cure of baldness,” particularly those which “are not applied locally but taken internally.”  The purported active ingredient? “[H]aemoglobin.”  (see Secret Remedies (1909), page 114).

While the medicinal use of a seahorse or dried blood matter may sound fanciful to modern ears, one has to wonder whether today’s public is any less credulous: Worldwide, consumers have spent over $400 million per year on a modern baldness remedy known by the trade name Propecia (finasteride).  Has science finally triumphed over a medical condition that has persisted through millennia? Today’s consumers might rationally believe that its has, given that Propecia is FDA-approved for the treatment of alopecia (baldness).  FDA-approved remedies must, according to federal law (21 U.S.C. § 355(d)), prove their efficacy in well-controlled, clinical investigations.

Yet one need only walk through a crowded street to see that, if a baldness cure has truly arrived, a surprising number of people have not availed themselves of it. Is Propecia, then, not effective? Let us take a look at the official data. Read More

At $28,000 a Dose, How Effective Is Acthar?

By Jonathan J. Darrow

In a well-researched, recent post, Patrick O’Leary addresses the FDA’s efficacy requirements as applied to an old drug, Acthar (corticotropin), that was first approved in 1952 and granted an orphan designation in 2010 for the treatment of infantile spasms. The initial approval therefore occurred before the Drug Amendments of 1962, which instituted a “new” statutory requirement of efficacy (more on this below). O’Leary points out that Acthar’s “grandfather” status does not entirely exempt it from the FDA’s efficacy requirements, and that the drug did survive an efficacy evaluation under the DESI program. But how effective is Acthar?

Neither O’Leary nor the New York Times article on which his post is based dig very far into the clinical trial data accepted by the FDA as supporting the efficacy of the drug as a treatment for infantile spasms, and I was curious to know what the evidence says about Acthar in this regard. Clinical trial data is presented—or perhaps more accurately, “buried”—in Section 14 of a drug’s FDA-approved label; in the case of “H.P. Acthar Gel” (NDA 022432), that label can be found here. What does the clinical trial data reveal?  The section is brief, just half a page, and notes that of “[t]hirteen of 15 patients (86.7%) responded to Acthar Gel as compared to 4 of 14 patients (28.6%) given prednisone (p<0.002).”  Nonresponders were then given the other treatment, with the following results. “Seven of 8 patients (87.5%) responded to H.P Acthar Gel after not responding to prednisone,” while “[o]ne of the 2 patients (50%) responded to the prednisone treatment after not responding to Acthar.”  As the p-value (0.002) indicates, the first figures, at least, are statistically significant.  These figures were also better than I expected: 86.7% efficacy with Acthar does seem much better than 28.6% efficacy with prednisone.  Read More

Pharmacy Compounding: Federal Law in Brief

by Jonathan J. Darrow

Until recently, most ordinary people had never heard of “pharmacy compounding.”  Then, a number of deaths and illnesses caused by a drug that was compounded in a Framingham, Massachusetts pharmacy propelled drug compounding to the national spotlight (see, e.g., Denise Grady et al., Scant Oversight of Drug Maker in Fatal Meningitis Outbreak, N.Y. Times, Oct. 6, 2012).

Compounding is the practice of preparing a drug for an individual patient’s needs, and is used when those needs cannot be met by a mass-produced drug.  See Thompson v. Western States Medical Center, 535 U.S. 357, 360 (2002).  For example, if a patient is allergic to a particular excipient (inactive ingredient) in an FDA-approved medicine, a doctor may order a special compounding pharmacy to prepare the medicine without that excipient. Because of the very small scale of compounding, Congress in 1997 attempted to exempt (via 21 U.S.C. § 353a) the industry from a number of provisions of the Food Drug and Cosmetic Act, including the requirement to submit a new drug application prior to interstate sale (21 U.S.C. § 355), the requirement that the drug labeling bear “adequate directions for use” (21 U.S.C. § 352(f)(1)), and the need to strictly follow good manufacturing practices, or GMP (see 21 U.S.C. § 351(a)(2)(B)).  A number of controls on compounding were included, however, such as the requirement that there be a valid prescription from a licensed practitioner (21 U.S.C. § 353a(a)(1)), that the drug be compounded by a licensed pharmacist (or physician) (21 U.S.C. § 353a(a)(1)), and that the drug be compounded from ingredients that meet certain quality standards (21 U.S.C. § 353a(b)(1)(A)–(B)).

However, § 353a—and with it, all of the provisions and exemptions just mentioned—was held unconstitutional in its entirety in Western States Medical Center v. Shalala, 238 F.3d 1090 (9th Cir. 2001), aff’d 535 U.S. 357 (2002), on the basis of certain restrictions on free speech that were also contained within the statute and which, according to the Ninth Circuit, could not be severed from the remaining provisions because “Congress intended to exempt compounding from the FDCA’s requirements only in return for a prohibition on promotion of specific compounded drugs.” See 535 U.S. at 366. Thereafter, the FDA promulgated a policy by which it would primarily “defer to state authorities regarding less significant violations” but would enforce a number of provisions relating to ingredient standards, unapproved substances, commercial scale production, adulteration, and promotion.  The FDA made clear that its enforcement activities “need not be limited to” these or any particular areas, however, thus negating any expectations that Congress’ now-invalidated exemptions might nevertheless provide a safe harbor through the weight of influence, if not law. Since then, the FDA has in fact exercised oversight of compounding pharmacies, as is evident from the handfuls of warning letters that it sends to non-compliant facilities each year.  These letters have addressed, for example, promotion that made unsubstantiated efficacy claims, contamination, and the large-scale manufacture of what were essentially copies of FDA-approved drugs.

Read More

FDA Reprimands Genentech for “Drastically Overstat[ing] the Efficacy of Tarceva”

by Jonathan J. Darrow

On October 3, 2012, the FDA’s Division of Professional Drug Promotion issued an untitled letter to Genentech in connection with its cancer drug Tarceva.  Tarceva (erlotinib) was approved in 2004 for the treatment of non-small cell lung cancer, and has since been approved, in combination with Gemzar (gemcitabine), for the treatment of pancreatic cancer. Its approval letter reported a tumor response that was 9 times greater with Tarceva than with placebo (0.9% in placebo versus 8.9% in Tarceva), but relatively modest improvements in 1-year survival rates: approximately 8 of 10 patients on placebo did not survive 1 year, while about 7 of 10 patients on Tarceva did not survive (see page 6, line 102 of the approval letter).  A 2005 New York Times article was less than enthusiastic about Tarceva’s efficacy, noting that it (along with several other cancer drugs that were new at the time) “help[s] most patients only marginally . . . .”  Despite its modest efficacy, Tarceva was reported in the same New York Times article to cost almost $31,000 per year.  A number of patents are listed in the FDA’s Orange Book as covering Tarceva until 2020.

The recent untitled letter accused Genentech’s promotional materials of misleadingly indicating that Tarceva in combination with gemcitabine extended overall survival by 3.7 months in comparison with gemcitabine alone, when the actual increase in survival was only about 12 days.  The FDA characterized the discrepancy as “drastically overstat[ing] the efficacy of Tarceva.”  (The figure of 3.7 months was derived, according to the FDA, “from a retrospective, exploratory subgroup analysis that does not provide substantial evidence to support the efficacy claims cited . . . .”). In addition, the front cover of one of the promotional materials in question contained an image of an hourglass positioned on its side, presented with the claim: “Extending survival for moments that matter.”  Although the claim with its associated image may be literally true (“moments” is left undefined), the FDA characterized the image and claim as “drastically overstat[ing] the overall survival benefit for patients” because it “strongly suggests that time is standing still for the cancer patient because of Tarceva therapy.”  The FDA noted a number of other instances of misleading overstatement of efficacy or minimization of risk.

The October 3 Tarceva letter brings to 23 the total number of Drug Marketing and Advertising Warning Letters (and untitled letters) listed by the FDA’s Office of Drug Promotion as having been sent this year.

Why Consent Is a Requirement for Ethical Research

by Jonathan J. Darrow

In a Petrie-Flom Center event last month, Dr. Alan Wertheimer raised the question of why consent is needed in ethical research.  Without commenting on his answer to the question (attendees were asked not to do so), I would like to offer two principal lenses through which an answer can be understood: one by analogy to contract, and one by analogy to tort.

First, informed consent is needed to ensure that there is a “meeting of the minds” between the researcher and the research subject.  The concept of a meeting of the minds will be familiar to all first-year law students who have taken a course on contracts, and relates to the need for each party to assent to the essential elements or terms of the contract.  See 17A Am. Jur. 2d Contracts § 30.  In lay terms, a meeting of the minds is needed in order to protect the reasonable expectations of each party.  Just as each party to a contract desires to know, in advance, what must be given and what can be expected to be received, so too must each party to a research subject agreement know what is expected of him or her and what benefits are likely to accrue.  (Because of information asymmetries, with the researcher normally knowing far more than the subject about the nature of the proposed relationship, consent need only be required of the subject).

Second, consent is needed to avoid what essentially amounts to misappropriation or conversion.  Without an understanding of what the researcher will gain from the research, the subject may feel that what was taken from him or her was wrongfully converted to the benefit of the researcher.  The feeling that one’s property has been converted to the benefit of someone else, without appropriate disclosure or compensation, seems to have been a primary motivation to bring suit in the famous case of Moore v. Regents, 793 P.2d 479 (Cal. 1990), where cells extracted from a patient became potentially valuable to the researcher. While the analogy of this second lens is to tort law, rather than contract, the underlying motivation is the same: to protect the reasonable expectations of the subject, and thereby allow the subject to make a choice that he or she is less likely to later regret.

When Do Doctors Discount Clinical Trial Results?

by Jonathan J. Darrow

A research study reported today in the New England Journal of Medicine found that physicians are able to discriminate between clinical trials with high levels of rigor versus those with low levels of rigor, as well as between clinical trials that are funded by industry and those that are funded by the government.

The randomized study analyzed the responses of 269 physicians who were presented with hypothetical abstracts of clinical trial findings for three hypothetical drugs.  Abstracts were deliberately crafted to reflect three levels of clinical trial rigor (low, medium, and high), and three types of funding disclosure (no disclosure, National Institutes of Health funding, and pharmaceutical industry funding), yielding 27 abstract types.

The major finding of the study was that physicians are less willing “to believe and act on trial findings, independent of the trial’s quality,” if the trial is funded by industry.  That industry funding led to a decrease in perceived credibility, even for large and well-designed trials, concerned the study authors, who felt that “[t]he methodologic rigor of a trial, not its funding disclosure, should be a primary determinant of its credibility.”

The full article citation is: Aaron S. Kesselheim et al., A Randomized Study of How Physicians Interpret Research Funding Disclosures, 367(12) New Eng. J. Med. 1119 (Sept. 20, 2012). Available here.

[Editorial Note: And within the et al. is Chris Robertson, a former Petrie-Flom Academic Fellow, current prof at University of Arizona, and future guest blogger here at Bill of Health!]

Generic Drugs: Grabbing a Bigger Slice

by Jonathan J. Darrow

The expiration of the patent on $11-billion-per-year Lipitor® (atorvastatin calcium) last November received wide media attention and was eagerly greeted by consumers, reflecting public excitement that seems to have not yet dissipated.  In the following months, prices “plunged from about $175 a month for Lipitor to about $15 for generics,” according to a recent article in the New York Times. At times it felt as if legions of consumer Davids had triumphed over a corporate Goliath.

Although the public’s euphoria over the availability of cheaper generic versions of drugs is an understandable cause for celebration, price decreases in themselves should not be mistaken for net gains to society.  The societal gains represented by new drugs, to the extent there are any gains at all, come from the new therapeutic benefits that those drugs offer to patients. The entrance of generic competition, on the other hand, merely represents a shift of wealth from one unit of society (originator manufacturers) to another (patients, and also generic drug companies and insurers).

While individual consumers may care little about “net gains to society,” policy-makers should care: If there are no net gains to society from the high prices preceding patent expiration, then perhaps the patent system should be abolished entirely.  That option, however, has not been a serious topic of discussion in the United States since the 1870s. Instead of debating the underlying issues, however, the public’s attention is focused on what is easiest to see: When can I pay less?  One has to wonder, however, what the innovative landscape would look like if more attention were paid to baking a bigger pie, rather than celebrating the newfound ability to grab a bigger slice.