Fixing the Pharms

Whether you love or loathe pharmaceutical companies, it's clear that we have a problem with pharmaceutical delivery in the U.S.

First of all, some drugs are inexplicably expensive. There's the $93,000 prostrate cancer drug Provenge, for example,  which I've blogged about in the past ("The Skewed Values of Drug Prices"). A more recent example is Anascorp, an orphan drug (used to treat rare diseases) approved by the FDA in August to treat scorpion stings. Anascorp has been used in Mexico for many years, at a cost of $100 per dose, but in the U.S. it now costs  $12,000 per dose, according to a recent Kaiser Health News blog post on the topic ("Treating a Scorpion Sting: $100 in Mexico or $12,000 in U.S."). Blog author Jenny Gold points out that patients need up to five doses of the anti-venom to recover.

It's not fair, however, to blame the cost entirely on the manufacturer, Rare Disease Therapeutics. Gold writes that hospitals in Arizona purchase Anascorp for about $3,700 per dose, then mark up the price to cover their own costs, including the cost of providing care for uninsured patients. It's a long and tangled journey from a $100 dose to a $12,000 dose, and one that does not serve patients well.

More common drugs aren't faring much better, however. There is currently a shortage of generic injectable drugs used to treat cancer and other serious medical problems, an issue covered earlier this month by another Kaiser Health News blog post ("Drug Shortages Affect More Than half a Million Cancer Patients").

The problem has become so acute that it triggered a presidential smackdown, a.k.a. an executive order, in October that demands FDA action and includes Justice Department investigations of possible price gouging.  There are many reasons for these drug shortages, such as a shortage of raw materials needed to make the drugs, and a limited number of manufacturers, who drop production of the drugs if they are not profitable enough or if they have problems with the manufacturing process (as sometimes happens with vaccines).

What's the cure for all this? Don't get sick, silly. But failing that, as we all do from time to time, it seems clear to me that the government needs to flex its muscle with the pharmaceutical companies that bring both great good and great expense to health care.

Taxpayer-funded research should not lead to drugs that taxpayers cannot afford when they need them. The pursuit of blockbuster drugs - those that earn $1 billion or more per year in revenues -  should not undermine the development of less profitable, equally necessary treatments for other diseases. Government incentives and regulations should ensure that a wide range of manufacturers are providing the medications that Americans need.

Drug Shortages: Blame Policies, Not Agencies

A recent article in the Washington Post by Rob Stein pointed out shortages of 211 medications in 2010, including lifesaving drugs used in emergency rooms and oncology wards ("Shortages of key drugs endanger patients"). What is causing this shortage? "Experts cite a confluence of factors," writes Stein:

Consolidation in the pharmaceutical industry has left only a few manufacturers for many older, less profitable products, meaning that when raw material runs short, equipment breaks down or government regulators crack down, the snags can quickly spiral into shortages.

Stein points out that there are especially acute shortages of generic medications (which aren't very profitable for manufacturers), especially sterile injectable medications (whose manufacturing processes are complicated and error-prone). There are also shortages of raw materials (often imported from abroad).

Stein cites the shortage of the leukemia and lymphoma drug cytarabine due to problems obtaining raw materials and manufacturing the drug. Cytarabine is a vital cancer drug that many hospitals have been forced to ration to patients. Inadequate medication substitutions have also lead to patient deaths, he said.

It's easy to blame the FDA for some of the problems with the drug supply. As Stein explains, "some industry representatives blame part of the problem on increased oversight by the FDA, which has made drug safety a higher priority after coming under intense criticism for being too lax." If the FDA would just skip a few manufacturing facility inspections, the supply pipeline would be smoother?

Drug supply problems don't originate with the FDA, however. Pharmaceutical manufacturers, eager to turn a healthy profit for their investors, would rather chase the next blockbuster drug (earning $1 billion or more in profits yearly) than thanklessly churn out low-profit items such as generic drugs and vaccines. Increasingly, venture capital firms that might fund new drug development would rather fund profitable new technologies than invest in better treatments for diseases.

The financial market, while it plays a role in drug development, should not drive public health decisions. The antidote to this problem is thoughtful legislation. Laws such as the Orphan Drug Act, which I've written about before, have successfully helped pharmaceutical companies refocus some of their energies on patient needs rather than profits.

Maybe the FDA could require that a company whose FDA-approved drug reached blockbuster status must ramp up its generic manufacturing to a certain level - building more manufacturing plants for a needed drug, or adding a popular vaccine to its roster -  before any more drugs are approved. Why not? Stronger regulations and incentives can encourage pharmaceutical manufacturers to diversify their assets and create a safer and more stable supply of drugs for everyone who might need them some day.