PNHP

Backgrounder on the Trans-Pacific Partnership and health care

Backgrounder on the Trans-Pacific Partnership and health care

By Margaret Flowers, M.D.

1. The Trans-Pacific Partnership (TPP) is part of a global effort to circumvent the failed World Trade Organization talks and dramatically shift power to multinational corporations.

  • While the TPP is being called a trade agreement, the U.S. already has trade agreements covering 80 percent of the goods traded with countries involved in the talks. (Williams,“Trans-Pacific Partnership (TPP) Countries: Comparative Trade and Economic Analysis,” Congressional Research Service, June 10, 2013.)
  • The text of the TPP includes 29 chapters, only five of which are about trade. The remaining chapters are focused on changes that multinational corporations have not been able to pass in Congress such as restrictions on internet privacy, increased patent protections, greater access to litigation and further financial deregulation.
  • Unlike previous trade agreements, the text of the TPP is classified so that only the U.S. trade representatives and their 600 corporate advisers have access. Members of Congress must go through a complicated process to see portions of the text. All that is known about the contents of the TPP is from documents that have been leaked and reports from NGOs and industry meetings. From the information available, one thing is clear about the impacts of the TPP on health care: the intention of the TPP is to enhance and protect the profits of medical and pharmaceutical corporations without considering the harmful effects their policies will have on human health. It is more appropriate to call these trade agreements “rigged” trade rather than “free” trade because they rig the rules in favor of business interests.

2. The TPP will raise the cost of health care, particularly of medications, by extending the length of patents, placing barriers to generics and giving the pharmaceutical and medical device industries greater legal standing to challenge reimbursements.

3. The TPP will lower access to health care.

  • In addition to raising the costs of medications and medical devices, the TPP requires opening the floodgates to patenting surgical procedures, treatments, diagnostic tests and even plants and animals. In short, anything that can be monetized so that profits will be maximized at the expense of affordability of healthcare. People in many of the countries included in the TPP already have limited access to care because of the cost, and the TPP will worsen that situation. (“Secret Trans-Pacific Partnership Agreement (TPP) – IP Chapter,” Wikileaks, Nov. 13, 2013; “The Australian: Put health ahead of profits in Asia-Pacific trade pact,” Medecins Sans Frontieres Access Campaign, March 8, 2013)
  • The TPP contains strict intellectual property right provisions which would limit the ability to share information and technology; therefore, keeping knowledge out of the hands of those who may need it to save lives. And with the emphasis on promoting corporate profits over public health needs, innovation will be driven by that which generates the most profit rather than that which addresses significant health conditions in low income populations or important public health threats.

4. The TPP threatens public health.

  • Most of the text of the TPP is written to eliminate non-trade barriers to profits such as the control of intellectual property rights, advantages given to locally-produced goods and public entities and regulations. A corporation can challenge perceived barriers to trade through an international trade tribunal, an extrajudicial legal system equivalent to arbitration that is composed of three lawyers, many of whom will be on temporary leave from their positions within corporations. The decisions of trade tribunals are not appealable to traditional courts and the laws of the nation where the trade issue occurred are not applied. This is known as the Investor State Dispute System, and it is highly controversial especially in the European equivalent to the TPP, the Trans-Atlantic Trade and Investment Partnership (TTIP). The TPP permits corporations to sue for loss of expected profits. This means that corporations can sue governments, even at the local level, for large sums of money if their laws that protect public health interfere with profits. Among the actions that could be considered interference are public health campaigns that educate about the dangers of smoking, labelling foods that contain genetically-modified organisms and laws to protect workers or that prevent polluting the environment. (Khor, “The Trans-Pacific Partnership Agreement (TPPA): When Foreign Investors Sue the State,”GlobalResearch.ca, Nov. 10, 2013.)
  • The TPP will undermine food safety by lowering the standards on imported foods below those currently in effect in the U.S. It will also eliminate Buy America provisions meaning that institutions will not be able to give preference to local producers. (Paul and Cummins, “Consumer Alert: Secret Trade Agreements Threaten Food Safety, Subvert Democracy,” Organic Consumers Association, June 13, 2013.)
  • Trade agreements have been notoriously bad for workers and the TPP is no exception. Previous agreements have caused lost jobs, lower wages, barriers to union organizing and unsafe work environments. Even when they contain language to protect workers, the rules are not enforced. The ISDS system will hurt worker rights even more because higher wages and regulations to protect worker health will be challenged as threats to expected profits. (“The Trans-Pacific Partnership: Lost Jobs, Wages and Workers Rights,”Communication Workers of America, Dec. 6, 2013.)
  • For similar reasons, the TPP will be bad for the environment. The chapter on the environment was leaked in late 2013. It showed no enforcement mechanism for the weak regulations that are included. This means that corporations can challenge local laws that ban toxic practices such as hydro-fracking for methane gas. Large potential settlement costs can force governments to repeal those bans. (Kelsey, “TPPA Environment Chapter & Chair’s Commentary Posted by WikiLeaks, Issues for NZ,” Wikileaks, Jan. 16, 2014.)

5. The TPP is a significant barrier to single-payer health systems.

  • The TPP prohibits state-owned enterprises (SOEs, any enterprise that has any form of preferential treatment from the state such as tax breaks, access to resources and capital and favorable regulation) from having advantages over private enterprises. Further, the TPP attempts to eliminate the value of public service from SOEs, pushing for greater privatization of public services. This could have a harmful impact on current public health systems in the U.S. and abroad by opening the door to privatization. (“The risk of disciplines on state-owned enterprises in the proposed Trans-Pacific Partnership Agreement,” ItsOurFuture.org.nz, Sept. 17, 2013.)
  • The TPP requires SOEs to disclose any special advantages they receive and the government to give the same advantages to corporations. It also provides methods for corporations to sue governments if they believe that they are not being treated fairly. The text outlines punishments such as increased tariffs on exports from the country found in violation and suspension of any “tariff concessions” made to the country in violation on imports.
  • The TPP may require that a new monopoly (such as a single-payer health system) cannot exist until the companies that are put out of business by the monopoly are fully compensated. It is not known if such language exists in the TPP because only a small portion of the text that has been leaked is available to the public. However, such language did exist in WTO texts. (Skala, “The potential impact of the World Trade Organization’s General Agreement on Trade in Services on health system reform and regulations in the United States,” International Journal of Health Services, Vol. 39, No. 2.)
  • By eliminating the public good aspect of health systems and opening the door to privatization, the TPP will force the failed market-based U.S. model of health care onto TPP countries and could damage some of the top health systems in the world (Australia, Japan). Already, Aflac has gained more access to the market in Japan as part of the TPP negotiation process. (Ito, “Aflac Wins Wider Access to Japan Post’s Insurance Sales Network,” Bloomberg News, July 26, 2013.)

6. The TPP undermines democracy.

  • The TPP will undermine democracy in the United States. Though the agreement is being negotiated in secret with little input from Congress, our domestic laws will have to be brought into compliance with provisions in the TPP. The process of negotiating in secret, with the participation of more than 600 large corporations, without Congress or the public participating is anti-democratic.
  • The TPP gives greater legal standing to corporations to challenge domestic laws in an extrajudicial legal system without recourse. Corporations take complaints about barriers to their profits to a trade tribunal that operates as an arbitration court and does not allow decisions to be appealed. When faced with large potential settlements, local and state governments may choose to repeal laws, even those that have overwhelming public support and that protect public interests, rather than pay. As a result local governments lose control over the passage of laws, protecting their environment and controlling their budget to a secretly negotiated trade agreement.
  • The president is pushing Congress to grant him trade promotion authority (also known as fast track) which means the president would negotiate and sign the agreement and then it would be presented to Congress for a brief period of review, limited debate and no amendments before an up-or-down vote. This prohibits any meaningful review of the impacts of the agreement. It excludes a transparent and democratic process.

Insurers continue to discriminate against the sick

To:  Sylvia Burwell, Secretary of Health and Human Services
From:  Over 300 patient advocacy groups

Letter, July 28, 2014

Based on reports of enrollee experiences during the first year of Marketplace implementation, we have identified a number of concerns. These include discriminatory benefit designs that limit access, such as restrictive formularies and inadequate provider networks; high cost-sharing; and a lack of plan transparency that may deprive consumers of information that is essential to making informed enrollment choices.

Limited Benefits: 

Due to the manner in which Essential Health Benefits (EHBs) are defined for plan years 2014 and 2015, select plans do not include all the medications that enrollees may be prescribed to address their health care needs. Plans are further restricting access to care by imposing utilization management policies, such as prior authorization, step therapy and quantity limits. Tying plan formulary requirements to the number of drugs in each class in the state benchmark has resulted in some plans not covering critical medications, including combination therapies. Additionally, there is no requirement for plans to cover new medications and plans can remove medications during the plan year as long as the plan continues to meet the state’s benchmark requirements. Narrow provider networks and a lack of access to specialists are also negatively impacting access to quality care for enrollees.

These design elements appear to affect certain patient populations disproportionately – many of the same populations that were subject to pre-existing condition restrictions prior to ACA implementation.

High Cost-Sharing: 

Despite enrollee out-of-pocket limits that are included in the ACA and reduced cost-sharing for people with very low income levels, some plans are placing extremely high co- insurance on lifesaving medications, and putting all or most medications in a given class, including generics, on the highest cost tier. This creates an undue burden on enrollees who rely on these medications. Unlike employer-sponsored plans, where enrollees usually experience reasonable co- pays, enrollees in the Marketplace are being subject to plans that impose 30%, 40% and even 50% co-insurance per prescription. Such high co-insurance is shocking enrollees and will lead to reduced medication adherence and medical complications as people are unable to afford to begin or stay on medications. Some plans are also imposing high deductibles for prescription medications and high cost-sharing for accessing specialists.

We believe these practices are highly discriminatory against patients with chronic health conditions and may, in fact, violate the ACA non-discrimination provisions.

Transparency and Uniformity: 

Individuals must have access to easy-to-understand, detailed information about plan benefits, formularies, provider networks, and the costs of medications and services. Unfortunately, individuals cannot access this information easily through an interactive web tool such as a plan finder or benefit calculator that matches an individual’s prescriptions and provider needs with appropriate plans (such as the one utilized by the Medicare Part D program). Most troubling is the practice of requiring co-insurance without information for an individual to understand what their actual cost-sharing will be. Transparent, easy-to-navigate grievances and appeals processes are needed, along with special enrollment procedures when patients lose access to a medication due to formulary changes during a plan year.

http://www.theaidsinstitute.org/sites/default/files/attachments/IAmStillEssentialBurwellltr_0.pdf

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Comment:

By Don McCanne, MD

In spite of regulations defining the essential health benefits to be covered, actuarial values of the health plans, and adequacy of plan descriptions, the private insurers continue to use deceit in implementing these regulations to avoid enrolling individuals with greater health care needs. Even if some of the current deceptions are patched, they will always use the marketplace tool of innovation in order to advantage themselves over patients.

Though the government may try to revise regulations as problems arise, no regulation can ever alter the innate amorality of the industry – no, make that immorality. The private insurers need to be replaced with a single payer national health program.

An American doctor experiences an NHS emergency room

By Jen Gunter, M.D.
Dr. Jen Gunter’s ‘Wielding the lasso of truth’ blog, Aug. 12, 2014

You know it’s going to be one of those days when one of the first tweets on vacation inquires about the closest hospital.

Victor, one of my 11-year-olds, had something in his eye courtesy of a big gust of wind outside of Westminster Abby. He was complaining enough to let me flip his eyelid and irrigate his eye on the square in front of Big Ben. (I’m sure several people thought I was torturing him).  Despite an extensive search and rinse mission no object or relief was to be found. I fretted about going to the hospital. It wasn’t the prospect of navigating a slightly foreign ER, but simply the prospect of the wait. While I am a staunch supporter of the British NHS in the back of my mind I envisioned a paralyzingly full emergency room and an agonizing 18 hour wait only to find he had nothing in his eye (the basic antechamber of Hell scenario). To ensure we really needed to go I gave Victor a choice between the emergency room and a toy store (Gunter’s 3rd rule), but he declined the toys so off we went to St. Thomas hospital, conveniently right over the bridge.

The hospital was on the aging side and a little drab, but clean and well-marked. I didn’t have to ask anyone for directions. We had to take a number to be registered, but waited less than 5 minutes. I gritted my teeth a bit in preparation for the we-are-not-from-the-UK conversation, but it wasn’t an issue at all. I offered my U.S. insurance number for billing, but was told they didn’t need it. The clerk was, however, impressed with the fact that I flipped his eyelid and irrigated his eye before coming. “Well, you did all the right things,” and looking at his red and watering eye she smiled and said. “Looks like you are in the right place.”

Registration completed, we waited to be seen by the children’s part of the ER. A registrar (resident) did a quick triage within 5 minutes of our registering (also impressed with the eye irrigation) and then a nurse did his vitals and took a history. After that we waited less than 15 minutes for the registrar to do a formal assessment. He wanted ophthalmology to do the evaluation. I was a bit surprised the ER doc wouldn’t do it, but every facility is different and when they found out that Victor was born at 26 weeks and had retinopathy of prematurity they got a bit jumpy. Everyone does. I was OK with ophthalmology checking him out. What I have learned from years of medicine is don’t mess with the local order.

We were walked over to the urgent care clinic and were warned that the ophthalmology registrar was covering the whole hospital so it might be a while. This was our longest wait, about 20-30 minutes. She was very nice (also working on her PhD). Dr. Katie Williams (she gave me permission to use her name and her photo) diagnosed Victor with a corneal abrasion and easily snagged the offending speck of dirt wedged under his eyelid.  Once removed Victor exclaimed, “It’s gone!,” and within a minute or two the redness cleared up. She put in antibiotic ointment and gave us a tube to use at home.

“So where do I pay?” I asked Dr. Williams.

The answer: you don’t. Perhaps they might bill us, she just wasn’t sure.

I was about as dumbfounded at her answer as she was at my asking.

I protested that it wasn’t fair. We had used services and I was very prepared to pay. I also have insurance that covers emergencies when out of network, so I was pretty sure I would be reimbursed at least some of the visit. However, we were just sent away. They do have my address so it is possible I will get a bill in the mail.

I am very curious what similar care would have cost in the U.S. The saddest commentary of all is that it is really impossible to tell as billing practices are so bizarre and opaque. My guess is it would be a minimum of $1,000 in America for cash (which is egregious). If I ever get a bill from the UK, I’ll post a follow-up. If anyone has had similar care in the U.S. and received a bill please do post in the comments. You can remain anonymous if you like.

But what of this idea that national health care means DMV-purgatory worthy waits, Dementor-staffed death panels, Saxon-age medical equipment, and incompetent care? Well, I can tell you we had great care at St. Thomas and Dr. Williams was fantastic. The slit lamp wasn’t brand new, but it worked just fine. Sure it’s an N of one, but I’ve been to the ER more times than I can count with my other son and this was as smooth as the best care we’ve had in the United States.

We could have hit the ER at an opportune time, but to expand my N I’ve also asked many people about their medical care while I’ve been in the UK. Not one person wanted to abandon the NHS. I’ve heard of excellent care and some care that was lacking, but the bad care has nothing to do with the “national” part. Rather it was diagnostic errors or a full hospice unit, things that I hear about with the same incidence back in the world of commercial insurance. Take away the accents and I could easily have been listening to a group of Americans discussing their care. With one exception, no one in the UK is left wondering what the price will be or gets an egregious bill.

It makes you wonder exactly what frightens Americans about the NHS?

Dr. Jennifer Gunter is an OB/GYN and a pain medicine physician whose writings have appeared in USA Today, KevinMD.com, EmpowHer.com, Exceptional Parent, Parents Press, Sacramento Parent, and the Marin Independent Journal.

http://drjengunter.wordpress.com/2014/08/12/an-american-doctor-experiences-an-nhs-emergency-room/

FDA proposes allowing off-label claims of risk reduction

Proposed US Food and Drug Administration Guidance for Industry on Distributing Medical Publications About the Risks of Prescription Drugs and Biological Products: A Misguided Approach

By Sidney M. Wolfe, MD
JAMA Internal Medicine, August 15, 2014

In June 2014, the US Food and Drug Administration (FDA) for the first time issued draft guidance for the pharmaceutical industry on distributing scientific and medical publications about the risks of approved prescription drugs and biological products. In my view, the draft guidance, which is open for public comment until August 25, 2014, has the potential to undermine the FDA’s drug safety laws and regulations and should be substantially changed.

As written, the draft guidance would allow pharmaceutical companies who believe that the FDA-approved drug-labeling information overstates the risks of their drug to tell physicians that the risks are, in fact, lower. Companies could inform physicians of the purportedly lower risks by distributing peer-reviewed articles and instructing their sales representatives to discuss the information they contain about the lower risks. Laws and regulations requiring FDA approval of the drug label would have little meaning if a company, without the agency either reviewing the data or approving it, can detail this information. In analogy to the off-label promotion of unapproved uses of drugs, this activity might be referred to as “off-label risk reduction.”

The draft guidance states that
“FDA does not intend to object to the distribution of new risk information that rebuts, mitigates, or refines risk information in the approved labeling, and is distributed by a firm in the form of a reprint or digital copy of a published study, if the study or the analysis and the manner of distribution meet the [specified] principles….”

The agency guidance was issued in response to petitions from 11 pharmaceutical companies seeking clarification and expansion of the limits on industry for communications with physicians and others without risking FDA enforcement action for off-label promotion of unapproved indications. Since 1991, pharmaceutical companies have paid tens of billions of dollars to the United States for criminal and civil legal violations. Two of the common forms of illegal activity have been off-label promotion of unapproved uses of drugs and understating the risks of approved uses.

The draft guidance suggests that the agency has now tilted toward protecting industry’s commercial speech and away from protecting patients from the risks of prescription drugs and biological products.

Unfortunately, the draft guidance strikes the balance more toward the industry’s view of its First Amendment right to commercial speech than toward the agency’s mandate for patient protection.

The longer a drug is marketed, the historical pattern is for information to develop about an increase in the risk to patients, not a decrease in risk. FDA-approved labeling changes about risk are rarely about reductions in risk. More commonly, labeling changes incorporate information about increased risk, including many new boxed warnings. For example, a 2005 FDA guidance that is frequently referred to in the 2014 draft guidance discusses, almost in its entirety, the various kinds of post-marketing surveillance that result in information about increased risks. Between 1975 and 2009, the FDA approved 748 new drugs; 114 (15.2%) received 1 or more boxed warnings after approval, and 32 (4.3%) were withdrawn from the market for safety reasons.

To protect patients and the public health, the FDA should substantially revise its draft guidance for industry on distributing medical publications about the risks of prescription drugs and biological products. When new information supports a reduction in risk, the company should inform the FDA and provide the evidence, as is required under current regulations; if the agency is convinced, the label can be changed. Off-label risk reduction is a misguided approach.

http://archinte.jamanetwork.com/article.aspx?articleid=1897291

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Era Of Faster FDA Drug Approval Has Also Seen Increased Black-Box Warnings And Market Withdrawals

By Cassie Frank, David U. Himmelstein, Steffie Woolhandler, David H. Bor, Sidney M. Wolfe, Orlaith Heymann, Leah Zallman and Karen E. Lasser
Health Affairs, August 2014

After approval, many prescription medications that patients rely on subsequently receive new black-box warnings or are withdrawn from the market because of safety concerns. We examined whether the frequency of these safety problems has increased since 1992, when the Prescription Drug User Fee Act, legislation designed to accelerate the drug approval process at the Food and Drug Administration, was passed. We found that drugs approved after the act’s passage were more likely to receive a new black-box warning or be withdrawn than drugs approved before its passage (26.7 per 100.0 drugs versus 21.2 per 100.0 drugs at up to sixteen years of follow-up).

The Prescription Drug User Fee Act (PDUFA)—first enacted in 1992 and renewed in 1997, 2002, 2007, and 2012—authorizes the FDA to collect fees from drug companies to expedite the drug approval process. Congress enacted the PDUFA in response to widespread concerns that the process was taking too long.

New drugs have a one-in-three chance of acquiring a new black-box warning or being withdrawn for safety reasons within twenty-five years of approval. We believe that the ultimate solution is stronger US drug approval standards.

http://content.healthaffairs.org/content/33/8/1453.full

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Trends in Boxed Warnings and Withdrawals for Novel Therapeutic Drugs, 1996 Through 2012

By Christine M. Cheng, PharmD1; Jaekyu Shin, PharmD, MS; B. Joseph Guglielmo, PharmD
JAMA Internal Medicine, August 15, 2014

Our study demonstrates that boxed warnings are common, affecting more than one-third of recent drug approvals. While nearly three-quarters of boxed warnings had been applied to novel therapeutics at the time of approval, more than 40% acquired the warning after a median market period of 4 years. Clinicians should be aware of the prevalence and growing numbers of boxed warnings and the importance of continued adverse event reporting for identifying new safety concerns.

http://archinte.jamanetwork.com/article.aspx?articleid=1897290

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Comment

By Don McCanne, M.D.

The Food and Drug Administration (FDA) protects the public from pharmaceutical firms that increase their drug sales by not being totally forthcoming about both the effectiveness and safety of their drug products. The required drug labeling is based on the best information available. History has repeatedly confirmed that such oversight is essential even now with the pharmaceuticals firms having paid tens of billions of dollars in penalties for these continuing violations.

Yet the FDA seems to be allowing the pharmaceutical firms more leeway. An example is that the FDA allows the firms to pay fees for the purpose of expediting the consideration of new drug applications. Allowing them to buy their way to the front of the queue is not only a compromise of justice, much more importantly it has allowed new products to be introduced to markets prematurely. This has resulted in an increased need to add post-marketing black box warnings about more serious adverse effects of the drugs. Of even greater concern has been the increased need to withdraw drugs from the market, raising concern that the accelerated approval process may have allowed the release of drugs that never should have been on the market in the first place.

The current request pending before the FDA to allow pharmaceutical firms to distribute studies that have not been cleared by the FDA that show that their products are safer than the required labeling would indicate should raise concerns since the first draft of this FDA guidance would allow such activity. Although it proposes some guidance on how this information would be distributed, based on previous behavior of the pharmaceutical firms, there is absolutely no doubt that they would abuse this process by supporting studies done by researchers who are friendly to the industry, and by selecting only the favorable studies and burying those that are less favorable.

Those who are concerned about this ill-advised FDA guidance, and we all should be, can read the full draft of the guidance and then submit a comment to the FDA. Public comments are open only until Aug. 25.

Draft Guidance;
http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM400104.pdf

Submit a comment on the guidance:
http://www.regulations.gov/#!submitComment;D=FDA-2014-D-0758-0002

Expert says FDA draft guidance would let drug industry tell doctors medications are safer than they really are

By Public Citizen
Press release, Aug. 15, 2014

WASHINGTON – The U.S. Food and Drug Administration (FDA) recently issued draft guidance that would let the pharmaceutical industry essentially circumvent drug labeling rules and tell doctors that its products have fewer risks than those described in the FDA-approved labeling.

This issue is discussed by Dr. Sidney Wolfe, founder and senior adviser of Public Citizen’s Health Research Group, in an article published in JAMA Internal Medicine today.

In June 2014, the FDA issued draft guidance for the industry on distributing scientific and medical publications about the risks of approved medication and biological products.

According to Wolfe, the guidance, as written, would allow pharmaceutical companies that believe that the FDA-approved labeling information overstates a medication’s risks to tell doctors that the risks are in fact, lower. Company salespeople could inform physicians of the purportedly lower risks by distributing peer-reviewed articles – without the agency either reviewing the data or approving it – and discuss with doctors the information about the lower risks.

Wolfe says that to protect patients and the public health, when new information supports a reduction in risk, the company should inform the FDA and provide the evidence, as is required under current regulations. If the agency is convinced, the label can be changed.

Off-label risk reduction is the wrong approach, Wolfe writes. The article also discusses how people can voice their opinions to the FDA on this by Aug. 25, when the docket on the guidance closes.

The URL link for commenting on the FDA draft guidance is here:
http://www.regulations.gov/#!documentDetail;D=FDA-2014-D-0758-0001

Dr. Wolfe’s article is available here:
http://archinte.jamanetwork.com/article.aspx?articleid=1897291

“Proposed US Food and Drug Administration Guidance for Industry on Distributing Medical Publications About the Risks of Prescription Drugs and Biological Products: A Misguided Approach,” by Sidney M. Wolfe, M.D., JAMA Internal Medicine, Aug. 15, 2014

Public Citizen has initiated a petition that asks the FDA to not permit Big Pharma to undermine information about pharmaceutical risks:
http://action.citizen.org/p/dia/action3/common/public/index?action_KEY=12559&start=150

The costs of complexity in health reform just keep rising

By Philip Caper, M.D.
Bangor (Maine) Daily News, Aug. 14, 2014

As I’ve written before, the costs of unnecessary complexity in healthcare reform are very high, and they are rising. There are at least three recent examples.

One is the flap over whether people who have received health insurance through the exchanges run by the federal government are eligible to receive government subsidies, as they have been led to believe. Courts have disagreed on this point, opening the door for yet one more food fight about the legality of portions of the Affordable Care Act.

Complex federal legislation, inevitably the product of many authors, is usually full of many minor (and some major) errors. These errors are usually corrected during the process of reconciling the differing House and Senate versions during the “conference committee” process.

Because of the divisive politics leading up to the passage of the ACA, no such committee was ever convened.The House of Representatives simply passed the Senate bill without changes — errors and all — eliminating the need for a House-Senate conference.

One of those errors was the granting of explicit authority for the exchanges run by the states, but not the federal government, to provide subsidies to people they enrolled, even though any common-sense interpretation would conclude that congressional intent was to give all exchanges, whether state or federal, such authority.

Nevertheless, that omission provided an exploitation opportunity to those looking for an excuse to sabotage the entire law. And exploit it they have, bringing a lawsuit that could end up in the Supreme Court. The costs of the ACA in dollars and confusion have risen as a result.

Another example is the (on its face) ridiculous attempt to sue President Obama for failing to enforce with enough enthusiasm a provision of the law requiring some employers to offer health insurance to their employees or pay a fine. This puts Republicans in the interesting position of threatening to sue Obama for failing to vigorously enforce a law they have repeatedly tried to repeal.

Additionally, billions of dollars have now been spent unsuccessfully trying to construct exchanges that comply with the complicated federal requirements imposed by the ACA in an attempt to perfect a marketplace for private insurance. Even some states (such as Massachusetts) where exchanges created pre-Obamacare were already working have experienced chaos, and because of it have thrown tons of their own and federal dollars down a rathole.

These are just a few examples of your tax (and healthcare) dollars at work. Even though these complexities provide full employment for thousands of lawyers, consultants, navigators and other helpers, they don’t buy even one Band-Aid’s worth of healthcare.

The real tragedy here is that if the “policymakers” in Washington were really interested in serving the needs of most of their constituents instead of those of their corporate contributors, all of this expense and confusion could have been avoided. Perhaps instead spent on providing care to the millions who will be left out, even after Obamacare is fully implemented.

The sole purpose of the exchanges is to provide a choice of insurance companies. But the fact is that most people don’t give a hoot about who their insurance carrier is. What they do care about is who their health care provider is. In yet another unintended consequence of this complex law, many insurance companies are now doing their best to limit that choice in order to save themselves money.

Ironically, it is actually cheaper to cover everybody than it is to spend all of the unnecessary time, money and effort collecting the information needed to slice and dice people into smaller and smaller risk pools so we can then decide which of them of “deserve” healthcare. Moreover, risk pools of different types of people (old/young, wealthy/poor, employed/not employed, well/sick) create yet another opportunity for politicians to play us off, one against the other.

I fully expect this unnecessary complexity of the ACA to continue to be exploited by those looking to make a quick buck or another destructive or disingenuous political point. That is unless and until we put a stop to it by sending an unmistakable message to politicians who refuse to do the right thing that we’re mad as hell and not going to take it anymore. A simple expansion of Medicare to everybody would do the trick, and eliminate almost all of the unnecessary complexity of our current insurance industry.

If we were all in the the same system, we’d all have a stake in making it work. That’s how it is in other wealthy countries. Compared to the chaos we have here, that sounds pretty good to me.

What do you think?

Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at pcpcaper21@gmail.com or through his website at philcaper.net.

http://bangordailynews.com/2014/08/14/health/the-costs-of-complexity-in-health-reform-just-keep-rising/print/

Medicare for all would be great solution

By Sandra F. Penn, M.D.
Albuquerque Journal, Aug. 14, 2014

Remember when Sen. Domenici became an advocate for mental health parity? It came as no surprise to some of us that he had a “close relative” with mental health challenges.

Now, we were given a thorough piece about insurance issues in an UpFront column by Journal staff writer Win Quigley, who has a “close relative” who has been caught in the quagmire of prior authorization and insurance silos.

He ends his column with a suggestion that a plan that is “easy to use, easy to understand, consistent and fair would stand out in this or any other market.”

Well, yes! There is a plan just like that, and many of us have been advocating for it for years.

It is called Medicare, and we would like all of us enrolled in it.

Medicare for all would eliminate many of the conditions that now plague our convoluted system.

The Affordable Care Act has increased health insurance coverage and Medicaid expansion has been so important in our poor state.

Nevertheless, our multiplicity of insurance companies and their ways of controlling costs or trying to, can make all of us miserable when we are caught in the tangle.

The majority of us who need limited medical intervention at the moment are quite fortunate. When need appears, as with a personal illness or one in the family, we can no longer be philosophical about what is happening. It can be overwhelming.

Win suggests that the newly insured may not have the experience to know how to maneuver with insurance.

As a physician, I can tell you that even the long insured and the professional can be confused because it is almost a given that the system is meant to be anything but simple and easy to use.

Why do we not have a simple, easy to use national health insurance? Over the many years and multiple attempts, there is always some interest group that fears loss of income or loss of control.

The American Medical Association, the various insurance companies, physicians and ideologues with an interest in “small government,” have each in turn found ways to paint national health insurance as a fearsome thing.

There were “Harry and Louise,” “death panels” and “the government controlling what your doctor can do.”

Our electorate can be persuaded to vote against its actual interests by clever sound bites paid for by those who willingly make enormous sums of money from the process and from maintaining the current foul system.

Will that ever change?

That old saw often comes to mind: “Americans will do the right thing after they have exhausted all other possibilities.”

Dr. Sandra F. Penn is an Albuquerque resident.

http://www.abqjournal.com/445522

Growth of private exchanges leading to two-tier system

The Evolution Of A Two-Tier Health Insurance Exchange System

By Rosemarie Day, Pamela Nadash and Angelique Hrycko
Health Affairs Blog, August 13, 2014

Health reform has been a catalyst for change. It has fostered the creation of public health insurance exchanges and accelerated existing trends in health insurance coverage for employees. Many employers are reevaluating their coverage offerings, some employers are no longer providing insurance coverage, and, among those who continue to offer it, high deductible plans with restricted networks are becoming the norm.

In addition, employers are increasingly outsourcing health insurance benefits management by moving employees to private health insurance exchanges – often in combination with a shift toward a defined contribution approach. Estimates vary, but surveys show that anywhere from 9 to 45 percent of employers plan to implement private exchanges in the future.

Accenture has predicted that by 2018, private exchange enrollment will outpace public exchange enrollment.

Consulting firms and benefits consultancies are positioning themselves to grab this market, and are generating interest by publicizing upbeat projections of conversions to private exchanges. This publicity means that attention is focused on these firms and the large employers they target.

However, another, less visible movement is taking place among small to mid-size employers, whose employees may not be so well served by private exchanges. Not only do small employers lack the negotiating power of large employers, but exchange operators for this market may be unable to offer the same level of service; nor does it seem likely that the public small business exchanges will offer sufficient competition.

Benefits consultancies, such as Aon Hewitt, Towers Watson, and Mercer, have been actively recruiting employers to switch to this model, and — with notable success — have acquired large well-known companies like Walgreens. Other major employers are currently negotiating arrangements, planning to phase in private exchanges over time, focusing on different groups of employees.

Two Tiers: Small vs. Large Employers

However, these established consulting firms and benefits consultancies are, by and large, initially focusing on large employers, which represent only one segment of the American workforce. Small employers (with 2-50 employees working at least 30 hours a week) make up nearly 96 percent of all U.S. businesses and employ nearly 34 million workers – and the health insurance picture here isn’t pretty.

People working at firms with fewer than 50 employees are disproportionately uninsured, constituting 25 percent of American workers, but 40 percent of the uninsured. The smaller the firm, the less likely they are to cover their workers.

Moreover, the health insurance that they do provide has tended to be less robust than that offered by large employers – the phenomenon that the term “underinsurance” was created to describe. This is largely because small businesses pay, on average, 18 percent more for health insurance than large employers do, due to higher administrative costs.

The Affordable Care Act (ACA) attempts to address this problem by establishing the Small Business Health Options Program, or SHOP exchanges.

SHOP vs. Private Exchanges

However, like the public exchanges for the individual market, SHOP exchanges have had their problems. For the 32 states participating in the federal SHOP exchange, the picture is gloomy: the administration delayed implementation and dropped the requirement that insurers participating in the public exchange also participate in the federal SHOP exchange, reducing choice for employees, and making life more complicated for the federal SHOP exchange – they will now need to negotiate with each carrier individually to encourage participation.

In addition, the “employee choice” option was delayed for the federal SHOP exchanges until 2015, and most recently, 18 of these exchanges sent a request to CMS to opt-out of employee choice for another year, pushing this delay to 2016.

The picture for the 17 states and DC running their own SHOP exchanges is somewhat better, but not great. Currently, only 3,000 out of roughly 120,000 small businesses in Colorado participate in its SHOP exchange, while enrollment in other states has been low: in Connecticut, only 330 lives are insured, along with only 4,900 lives in California.

Are There Any Downsides to These Private Sector Efforts?

Given the slow start-up of the SHOP exchanges, the private exchanges may provide a valuable service, and, because they have the chance to corner the market before the SHOP exchanges are fully up and running, they may provide public exchanges with stiff competition.

Yet, with private exchanges, employers are likely to get what they pay for. Consequently, large employers will likely have the interest and capacity to demand quality from the sophisticated organizations competing for their private exchange business. These entities are likely to do a good job, using well-designed websites and decision support tools that promote product transparency.

Less sophisticated organizations, dealing with employers who have less negotiating power and insurance expertise, may not.

Private exchanges may well end up segmenting based on the markets they are catering to: more bare-bones, with fewer options and decision support tools for the small employer sector, and more generous, better options with more sophisticated decision support tools for large employers.

Moreover, if private exchanges corner the market, SHOP exchanges may never get off the ground.

http://healthaffairs.org/blog/2014/08/13/the-evolution-of-a-two-tier-health-insurance-exchange-system/?view=full

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Comment:

By Don McCanne, MD

It’s complicated. As insurance coverage expands, inside and outside of the ACA marketplace (insurance exchanges), it looks like some of the current inequities and injustices will be expanded as well.

Briefly, here is what we are looking at:

  • The public ACA exchanges are now covering individuals, but primarily with plans that have lower actuarial value (pay a smaller percentage of health care costs) and with narrow networks (greatly limiting choice of physicians and hospitals). These undesirable features slow the growth of insurance premiums though, even with government subsidies, they are still too high for many who are then allowed to opt out on a hardship basis.
  • Federal and state SHOP exchanges (Small Business Health Options Program) are being established to provide a health insurance market for small businesses now, and eventually for large employers as well. For reasons explained in the article, these government SHOP exchanges are off to a very slow start and may become inconsequential as employers turn to private insurance exchanges instead.
  • Employers have been seeking relief from the burdens of their employee health benefit programs. They are turning to private insurance exchanges which employees accept as a means of providing them with greater choices of health insurance plans. However, employers are using this opportunity to increase deductibles and other cost sharing, reduce provider choice through narrower networks, and switch from defined benefit to defined contribution – placing more of the burden on employees. It may take a while before employees realize what happened.
  • Large employers will still have leverage to negotiate more favorable features with the competing private exchanges.
  • Small employers will not have leverage and will be stuck with higher administrative costs and bare minimum, lower actuarial value plans. They likely will end up using private exchanges by default because of the implementation difficulties that the government SHOP exchanges are experiencing.
  • As this article explains, it appears that we will perpetuate and expand the two-tiered nature of lousy plans for small employers and slightly better but mediocre plans for large employers.

Where is health care justice in all of this? Not to be found. We need an equitable single payer national health program. The sooner the better.

Health navigators for everyone

More Employers Limit Health Plan Networks But Seek To Preserve Quality, Says Adviser

By Mary Agnes Carey
Kaiser Health News, August 13, 2014

Dr. Robert Galvin is chief executive officer of Equity Healthcare (a wholly owned subsidiary of Blackstone, a global investment and advisory firm), where he works with executives of nearly 50 companies that purchase health coverage for 300,000 people. Galvin says the 2010 Affordable Care Act has made employers more engaged in health benefits while encouraging their workers to be savvier health care consumers.

“I think what the ACA has done more than anything is it has made every employer examine their strategy and in every case it’s bringing the CFO and the CEO” into decisions about the company’s health care, which often didn’t use to happen, he said.

Q: We’re hearing a lot these days about narrow networks. While they existed before the ACA, how are employers using tools like narrow networks or high-deductible plans to control costs?

A:  Those employers who are going to stay in the game – which is the majority of them – in many cases have to [improve] what they’re covering. They now have to use the managed care tools that they all abandoned 15 years ago.

So the answer is narrow networks – we now call them “performance networks” – they are definitely increasing in popularity.  And I think what we’re trying to do differently this time is to make them performance [based] and not just narrow.

The second change from the ‘90s is always offering options outside of the narrow network.  So rather than “Here’s your narrow network, that’s it,” it’s, “Here’s your performance network that is going to be less expensive for you.  If you want to, [you have the option] of paying considerably more money,  and getting to another network, or another physician.”

I think what we learned in the ‘90s was that Americans want choice, even if it’s the wrong choice.

On the high deductible side, there’s absolutely a move in that direction.  The way we think about it, we’re trying to make more informed consumers.

This is a more intelligent way of getting people more involved in their health decisions. I think the thing to watch, honestly, is the full replacement high deductible.  [There’s] no [preferred provider option], no point-of-service.  All you have is a high deductible.  There’s still in and out of network but what it means as an employee is you can’t choose between a PPO where you pay $20 to see your doctor or a high deductible where you’ll have to pay $120.  The only option you have is the high deductible.  About 20 percent of the commercial companies have that.  The key thing to watch is how many companies basically only offer high deductibles. It’s about 20 percent now but I think that’s going to grow double-digits every year.

Q: Does the ACA need the employer mandate to work?

A: My bottom line feeling about that is no.

I think people in government have absolutely no idea what kind of work and complexity [employers face] for what seems like a simple regulation. In terms of who’s eligible, who’s tracking hours, doing the look back, what you have for HR systems to manage the reporting requirements, actually administering that is a nightmare.

Q: How do employers help their employees understand more about the health care they’re purchasing?

A: The first thing  is they need to make employees price sensitive.  Time has shown that all the education you can give someone really only impacts a small percent of employees who are interested anyway. 

With more price sensitivity is an obligation, if you want the market to work, for information. And information that works for individuals.  More companies are giving [employees] access to health navigators, or health coaches.  So that if you look at information on the computer or you don’t have broadband or you don’t know what it means, you have someone to call who can walk you through it.

It’s a real need in the market to be able to call a navigator or a coach, not through an insurance company, but a free-standing company and have that person help employees figure things out.

Along with price sensitivity has to come the support.

http://www.kaiserhealthnews.org/Stories/2014/August/13/More-Employers-Limit-Health-Plan-Networks-But-Seek-To-Preserve-Quality.aspx

****

Equity Healthcare (a subsidiary of Blackstone)

Equity Healthcare works with private equity firms and their portfolio companies to bring innovative solutions to manage health care costs.

http://www.equityhealthcare.com/default.aspx

****

Blackstone

At Blackstone, we apply our strengths as a leading global investment and advisory firm to deliver solutions, unlock value and propel growth.

Above all, we have made it our No. 1 priority to serve the needs of our investors and clients.

http://www.blackstone.com/the-firm/overview/why-blackstone

****

Comment:

By Don McCanne, MD

Follow the logic. To receive greater value in health care, we need to put the patients in charge of purchasing decisions by exposing them to price sensitivity – requiring out-of-pocket payment of high deductibles. We also have to use the managed care tools of 15 years ago – provider networks – but which are now narrower, so we are renaming them “performance networks.” But this does increase the complexity of a system already infamous for its administrative excesses. So what can we do to improve the patient’s ability to negotiate this complex maze of market-oriented health care?

Simple. Let’s provide each patient with a “health navigator” or “health coach.” They can help patients figure out how this thing works. Of course, they can’t give medical advice, but they can provide additional administrative services to assist the patient. Equity Healthcare promotes free-standing companies that provide health navigator services – more administrative services, but no health care services, but at least these entities can help fulfill the mission of serving the needs of Blackstone’s investors.

We gain more administrative services and greater investor opportunity at a cost of reducing patient choices in health care while exposing them to potential financial hardship. Is that how markets are supposed to work? Making things worse for patients while imposing on them the costs of yet more superfluous administrative services? Adam Smith would be perplexed. Producers gain by serving consumers, yet today producers are abusing consumers to achieve their gains. Isn’t it time to replace the invisible hand of the market with the opaque hand of government by establishing our own single payer national health program?

To save lives and money, choose single-payer health care

By Morolake Amole
AMSA ‘On Call’ blog, Aug. 13, 2014

The problem with health care in the United States is not that we suffer from inadequate medical resources. Quite the contrary.

We have thousands of highly skilled and dedicated doctors and nurses. We have many top-notch hospitals possessing state-of-the-art equipment and medications. We have significant patient protection laws.

So then how do we explain our country’s poor health outcomes, e.g. that we ranked 19th out of 19 wealthy nations in 2010 on preventing deaths that could have been avoided with medical care?

Here’s a clue: If you compare the U.S. system with those of other industrialized nations, you’ll see that no other country relies so heavily on multiple private insurance plans and has such high financial barriers to care.

Does the Affordable Care Act change this picture? The ACA will, within a few years, increase coverage for about 20 million people through a combination of subsidies for private insurance and an expansion of the Medicaid program (in those states that have agreed to accept it). This increased coverage will likely save many thousands of lives each year.

Yet even when the ACA is fully implemented, 30 million Americans will remain uninsured. Some won’t be able afford a private plan. A recent survey by Kaiser Family Foundation found that 36 percent of Americans between the ages of 18-64 who remain uninsured stated that they opted out of buying insurance because the plans available were too expensive.

Many million more will remain “under-insured,” i.e. vulnerable to severe financial stress if they get sick because they’re enrolled in skimpy health plans with high deductibles and co-pays.

The U.S. health care system is the most expensive in the world. In 2012, our nation spent roughly $2.8 trillion on health care, about $8,508 per person. Yet the ACA has no proven ways to control costs.

So, if the Affordable Care Act is not the final answer, what is?

Many physicians and economists believe that the answer lies in the adoption of a single-payer system. Such a system has already proven successful in Canada, where most care is taxpayer financed but delivered by private doctors and hospitals. One could cite a dozen other examples, from Norway to Taiwan.

Citizens of these nations enjoy high-quality health care, with outcomes that are generally as good as or better than ours – at much lower cost. They’re successful for a variety of reasons.

By establishing a payment system in which citizens pay taxes that are then designated toward health care, there’s an implied idea of transparency in health care spending. Citizens can see how their money is being spent.

Their systems have very low administrative costs, allowing them to spend more resources on providing actual health care. Single-payer systems are also better at controlling costs. They can buy drugs and medical supplies in bulk, and efficiently plan big capital outlays.

Nonprofit single-payer systems take away the power of private insurance companies to come between patients and their doctors. Patients no longer have to look to insurance agents for decisions on health matters, and patients can choose to go to whatever doctor or hospital they want.

And because patients are able to obtain primary care and receive treatment for problems at an earlier stage, they require fewer costly interventions later.

With a single-payer system in the U.S., physicians would be able to concentrate much more on what they were trained to do, and be less burdened with time-consuming and costly insurance paperwork. They’d remain well-compensated (e.g. Canada’s physicians have incomes comparable to their U.S. counterparts, especially when you factor in how little they have to lay out in overhead and malpractice), but primary care physicians would see their incomes rise, reflecting the crucial role they play.

The most important reason for enacting a single-payer national health insurance program, or an “improved Medicare for all,” is that it would achieve the goal of giving everyone equitable access to all medically necessary care. Health care would be re-routed toward its original goal of giving people an improved quality of life.

We should implement a nonprofit single-payer system without delay.

Morolake Amole is a clinical medical student at Meharry Medical College in Nashville.

http://www.amsa.org/AMSA/Homepage/TakeAction/AMSAOnCall.aspx

Brits, don’t be fooled: the NHS is brilliant. And Aussies? Don’t let your guard down

After my breast cancer scare and exemplary care in the UK, I’ve felt a powerful urge to shout at the Brits: do you know what an extraordinary health system you have?

By Paola Totaro
The Guardian (U.K.), Aug. 12, 2014

I found the lump a fortnight ago while on a work assignment in Vilnius, Lithuania. It was a hot, sunny day in the landlocked capital but as my fingers discovered what felt like a ping pong ball sized growth, ice went through my veins. I am not a catastrophist by nature but within seconds, I had envisaged the worst and by the time I was in the air homeward bound for Heathrow a few days later, I was writing my will in my head.

We have lived in London since 2008 and not a day goes by when the National Health Service isn’t in the news, more often than not for mistakes, delays, apparent inefficiency or targeted for funding cuts. From the red top tabloids to the circulation busting, Daily Mail, sticking the knife into the NHS seems to have become a favoured British sport (paradoxically, Britons still gush with national pride about Danny Boyle’s London Olympics opening ceremony and his eccentrically, flamboyant homage to the NHS.)

Paradoxically too, despite this background hum of complaint, just 11% of Brits have private medical cover, compared to the 54% of Australians who pay for some form of general treatment cover.

Like most other Aussies, I’d paid for private health insurance since my mid 20s. Australia also has a world class public health system but “gap” payments – the costs over and above what is reimbursed by Medicare – can be significant, especially for specialist treatment. Having a family with four kids meant it made even more sense later although I was shocked by a rough, back of the envelope calculation that shows $70,000 went in medical insurance since the mid 1980s.

In Britain, dentistry is pretty much the only medical procedure you pay for, and even that is incredibly cheap: £18.50 for screening and x-rays to a capped, one-off £219 payment for complex, multiple treatments like crowns, bridges and dentures.

All GP visits and diagnostic tests are free while under 16s receive free prescription medicines as well as dentistry, including orthodontics such as braces.

Last year alone, the NHS performed 10,595m operations, up nearly 60% on 10 years ago. Every 36 hours, the NHS deals with one million patients while its hospitals admitted 15,146m people between 2012 and 2013, up by a third on a decade ago. Do UK taxpayers have any idea just how lucky they are?

Suddenly vulnerable that fateful Monday morning, I wasn’t thinking quite so optimistically about the system. Without an appointment, I headed to the local GP surgery at 7.50 am for the first open surgery. Despite widespread national complaint about waiting times, I was in with my usual GP within 35 minutes. Brisk, efficient and thorough, she examined me with empathy and promised King’s Hospital would contact me for tests within seven working days. She insisted I call her if I’d not heard anything by Friday.

Exactly 24 hours later, Royal Mail delivered a letter giving me an appointment with the breast care unit at King’s College Hospital at 11am that Friday (four days later). I couldn’t believe my eyes.

The next day however, a hospital receptionist rang to apologise that they’d over-booked Friday and would I mind moving to the following Monday. The idea of another anxiety-riddled weekend led me to beg that they call me if a cancellation opened up: I live a walk away and could be there in minutes. Unbelievably, an hour and a quarter later, thanks to patient being delayed by a train malfunction, I found myself in the breast unit.

Over the following four hours I saw a specialist consultant, underwent four mammograms, two ultrasounds, a needle-guided aspiration of one lump and an intense and frightening moment when a second lump was found behind the first. Another two mammograms followed, apparently 3D this time, but when I saw the specialist again late that afternoon, I knew from his unabashed smile it would be alright: “I’m convinced there is nothing sinister. These were cysts…we don’t know why and it may happen again, but all you need for now is this antibiotic, just to be sure.” Pathology would be back on Monday but his confidence was clear. I could have hugged the man and he, an oncologist delivering good news, was genuinely happy too.

In the weeks since, I’ve felt a powerful urge to shout at the Brits: “Do you know what an extraordinary health system you have? How civilized your society is to afford everyone, rich, poor, young and old a world class health safety net?”

Back with my GP the following week, I said something similar and this chronically over worked, brisk wonderful woman stopped and rummaged in her drawer: “Look at this,” she said showing me the latest British Medical Journal, “The NHS tops the world’s health systems in a comparison of 11 developed nations … it tops it! And nobody reports it, nobody says a word. Of course we have problems, all systems do but when things go right – which they do more often than not – silence!”

Well, here I am not only saying something but shouting it publicly and loudly: wake up British taxpayers, wake up and appreciate – and protect – what you have built with such vision since the NHS’s birth in 1948.

And Aussies? Please, please don’t ignore the possibility that the proposed GP co-payment, sold as a measure to slash the mounting cost of health care driven, won’t just get hiked over and over again – and the Medicare that you know and do love won’t just disappear before your eyes.

Paola Totaro is an Australian journalist and writer specializing in European affairs, politics, social policy and the arts. She was most recently the London-based Europe correspondent for the Age and the Sydney Morning Herald and has reported widely across politics, education and urban affairs.

http://www.theguardian.com/commentisfree/2014/aug/13/brits-dont-be-fooled-the-nhs-is-brilliant-and-aussies-dont-let-your-guard-down

Does $760m a year of industry funding affect the FDA’s drug approval process?

A study out this week indicates that new “black box” warnings and safety withdrawals have increased since the drug approval process was changed

By Sydney M. Wolfe, M.D.
The BMJ, Aug. 5, 2014

In 1992, because of widespread concern that the US Food and Drug Administration was taking too long to approve drugs, the Prescription Drug User Fee Act (PDUFA) was enacted, authorizing the FDA to collect user fees from drug companies to expedite the approval process. Besides providing funding for an increased FDA staff, the act established performance goals during the approval process to ensure more rapid review.

As of the current fiscal year (October 2013 to September 2014), $760m (£450m; €570m) in drug industry money is allocated to the FDA’s Center for Drug Evaluation and Research, comprising a large proportion, more than 60%, of the center’s drug review expenditure.[1]

The hypothesis posed in a study published this week was that “new black-box warnings and safety withdrawals have increased following PDUFA’s enactment, perhaps as a result of an expedited review process that may not adequately detect serious drug safety problems in the preapproval period.” This was the first study to look at all FDA drug approvals for a long enough time before and after the enactment to examine this question.[2]

The study involved the 748 new molecular entity drugs approved by the FDA between 1975 and 2009. The principal finding was that “drugs approved after the act’s passage [from 1993 to 2009] were more likely to receive a new black-box warning or be withdrawn than drugs approved before its passage (26.7 per 100.0 drugs versus 21.2 per 100.0 drugs at up to sixteen years of follow-up,” a statistically significant 25% increase in the rate of such safety actions.

In the case of drugs withdrawn from the market, the average review time for those approved before PDUFA was around three years, but this had fallen sharply to one year for the post-PDUFA drugs. After PDUFA was passed, the number of approvals of new molecular entity drugs rose dramatically, with 92 approved in 1996 and 1997 combined, considerably more than in any other two year period from 1975 to 2009.[3] Of the 39 new drugs approved in 1997, a fifth (eight) were eventually withdrawn for safety reasons, considerably more than in any year in the 1975 to 2009 interval encompassed by this study.[2] These eight withdrawn drugs were three fluoroquinolone antibiotics, one appetite suppressant, one antidiabetes drug, one statin, one non-steroidal anti-inflammatory drug, and one antihypertensive drug—none arguably breakthrough drugs.

Although the study found that the faster post-PDUFA drug approvals were associated with a higher rate of subsequent safety withdrawals and black box warnings, it could not establish a causal connection between the funding aspects of PDUFA and the increased dangers of these outcomes.

However, coinciding with the original law and its renewal every five years have been legislative changes that often outline specific steps or pathways toward faster drug approval. One such change has given the FDA the authority to mandate post-approval studies to resolve safety issues that have arisen during the pre-approval review of a drug. There is therefore concern that one reason for the outcomes documented in this new study is that the shorter review times—combined with increased FDA authority to require further studies after approval, rather than settling safety issues before approval—have contributed to the increased rate of withdrawals and black box warnings.

In a survey of FDA physicians who review drugs (medical officers) conducted in 1998, by which time the PDUFA effect had clearly sunk in, many of the 53 respondents expressed concern that drugs they thought should not have been approved had been, despite negative safety conclusions. Respondents thought that standards of safety and efficacy had been weakened since the passage of the law. Nineteen medical officers identified a total of 27 approved new drugs in the past three years that they reviewed that they thought should not have been approved. Most of these medical officers said that current FDA standards were “lower” or “much lower” than previous ones. Twelve medical officers identified 25 new drugs that they reviewed in the past three years that in their opinion had been approved too fast.[4]

The most important preventive remedy for this post-PDUFA increase in safety withdrawals and black box warnings would be to restore more thorough reviews of the majority of approved drugs that clearly do not represent a therapeutic breakthrough. For the smaller proportion of drugs that appear to represent important advances, a shorter approval time, without compromising standards of safety or efficacy—as occurred in the case of approval of the antiviral zidovudine, a long time before the PDUFA—is appropriate.

But because these much needed changes have not yet occurred at the FDA, the principle of caveat emptor (and caveat prescriber) must be applied. An important conclusion of the new study was that patients should delay using any new non-breakthrough drug until it has been on the market for several years and is thereby less likely to be subject to a safety withdrawal or a new black box warning. An article published several years ago discusses the “seven year rule,” referring to the suggestion that in the case of drugs that aren’t breakthroughs—the majority of drugs approved—it is safer to wait at least seven years after approval before using them. Even though subsequent withdrawals and new safety warnings beyond seven years will still occur, older alternative drugs are, on average, safer.[5]

The answer to the question in the title of this article seems to be yes, but the source of the impact on the approval process goes beyond the massive drug industry funding itself and is likely to be related to many of the legislative, regulatory, and attitudinal changes that have inevitably accompanied PDUFA and its renewal every five years.

Sidney M Wolfe (Swolfe@citizen.org) is founder and senior adviser, Health Research Group at Public Citizen, Washington, DC, USA.

Notes

Cite this as: BMJ 2014;349:g5012

Footnotes

    Competing interests: I am a coauthor of the Health Affairs article on which this article was based.

    Provenance and peer review: Commissioned; not externally peer reviewed.

References

  1. Food and Drug Administration. FY 2015: justification of estimates for appropriations committees. www.fda.gov/downloads/aboutfda/reportsmanualsforms/reports/budgetreports/ucm388309.pdf.
  2. Frank C, Himmelstein DU, Woolhandler S, Bor DH, Wolfe SM, Heymann O, et al. Era of faster FDA drug approval has also seen increased black-box warnings and market withdrawals. Health Affairs2014;33:1453-9.
  3. Food and Drug Administration. CDER new drug review: 2012 update. www.fda.gov/downloads/aboutfda/centersoffices/officeofmedicalproductsandtobacco/cder/ucm331454.pdf.
  4. Lurie P, Wolfe SM. FDA medical officers report lower standards permit dangerous drug approvals. Dec 1998. www.citizen.org/Page.aspx?pid=2339.
  5. Wolfe SM. The seven-year rule for safer prescribing. Aus Prescrib 2012;35:138-9.

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http://www.bmj.com/content/349/bmj.g5012