Caution: Centralization Is Dangerous To Your Health

Caution: Centralization Is Dangerous To Your Health
By Grace-Marie Turner
4/8/2011

The agency that runs the Medicare program decided in late March that it will pay for patients to receive an advanced new treatment for prostate cancer called Provenge.

The decision was cheered by patient groups. The pressure was intense as they demanded that the Centers for Medicare and Medicaid Services (CMS) pay for the pioneering vaccine that already had been approved by the Food and Drug Administration. Early signals indicated the agency might deny payment because the drug is expensive.

But Provenge is expensive because it is expensive to make. The drug is created individually using each patient’s own cells and costs $93,000 for the required three treatments.

Patients with advance-stage breast cancer, however, are not cheering.

In December, the Food and Drug Administration revoked its earlier approval for Avastin, a cutting-edge biologic drug used to treat breast cancer that also is expensive. The agency decided the medicine's potential side effects were too great compared to its benefits. Many are still wondering if cost was part of the consideration.

Genentech, Avastin's manufacturer, has appealed the ruling. But if the FDA decision stands, thousands of women who wanted and needed the medication won’t be able to get it.

Both decisions symbolize one of the most pressing problems with our health sector -- government controls too many medical decisions.

People over 65 have virtually no choice but to use Medicare for their primary health coverage. So if Medicare declines to pay for a drug, seniors are, for all intents and purposes, denied access to it. Many private plans follow Medicare’s lead.

The treatments Medicare covers are determined by government officials. There are private plans within Medicare, but they’re highly regulated and limited in the coverage they can provide.

Provenge and Avastin are just two examples of many in which government officials will be deciding what treatments will or will not be available to us. Many of these decisions will be under the radar for patients and doctors, never knowing that government officials may well determine whether or not a doctor can prescribe an important, but possibly costly, drug for them.

Decisions from Washington could limit access to a wide range of novel drugs and biologics. And it’s going to get worse under agencies created by the new health law. The new Independent Payment Advisory Board, for example, will have sweeping authority over payments in Medicare, and these unelected board members are specifically charged with focusing on payments for prescription drugs. In other countries with government-run heath systems, bodies like IPAB lead to explicit rationing.

Washington control ultimately will dictate which drugs are developed – or not. This will certainly deter innovation and development of tomorrow’s new medicines. Firms generally avoid investing in treatments if there is a risk the big government programs won’t pay for them.

In the case of the Avastin ruling, Genentech is likely to take a huge financial hit. Medicare and Medicaid will probably stop paying for the drug for breast cancer, and the firm will lose a huge share of the market.

And this is happening even after the drug received FDA approval. Avastin was approved in 2008 when the FDA first considered it. So this new ruling adds yet another degree of uncertainty to the federal drug approval process, deterring future pharmaceutical development not just for Genentech, but for every pharmaceutical research company watching this play out.

We need to reform the FDA drug approval process to gather information more quickly and efficiently. And we definitely don’t want government to have the final say on whether these medicines will be available to us.

Physicians, hospitals, and health insurance companies all conduct their own effectiveness research into drugs, devices, and treatments. These entities are closer to the patient and better-positioned to make the call about which treatments are worth paying for.

The government now controls half of all health spending in this country. Putting so much of our health sector under government control distorts prices and restricts choice. Instead, we should empower patients to have more control over health insurance choices. Prices need to be more transparent. And it should be up to individual patients, doctors, and their insurer to determine if a new drug should be covered. These vital decisions shouldn't be left to a distant government bureaucrat sitting in an office in Washington DC.

Our centralized healthcare system is dangerous to health and must be watched carefully. When bureaucrats, distant from the actual delivery of care, decide what treatments are "worth it," patients suffer.
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What Does the FDA Avastin Decision Mean for Patients?
By Grace-Marie Turner
3/23/2011

The United States is the world’s leader in pharmaceutical innovation, especially in the newest form of drugs created through biomedical research. Made from living cells, biotech drugs can treat certain medical conditions for which no other medicines are available. These drugs are the cutting edge of 21st-century medicine, and the U.S. performs 80 percent of biotech research worldwide.

That could all change, though, because of a recent ruling from the Food and Drug Administration.

In December, the FDA announced it will revoke approval of the biotech drug Avastin to treat late-stage breast cancer. This decision could cause public insurance programs like Medicare, along with private insurers, to stop paying for Avastin treatment.

The ruling has been appealed by Avastin's manufacturer, Genentech, and the FDA will issue a final ruling this month. Unless the FDA reverses course, drug development and patient care in this country will be compromised.

Avastin slows the growth of cancer by cutting off the blood supply to tumors. The FDA approved the drug six years ago for the treatment of colon cancer, and the agency has since approved it to treat other cancers, including for lung, brain, and breast.

About 17,500 late-stage breast cancer patients are prescribed Avastin annually. The drug has improved the quality and length of life for thousands of women. One clinical trial found that patients given Avastin lived nearly twice as long as those not given the drug.

Last summer, the Oncologic Drugs Advisory Committee at the FDA recommended that approval for Avastin be rescinded, despite its proven benefits. Many observers speculated that the likely reason for the reversal was cost. Biologics -- the complex class of drugs Avastin falls under -- are expensive to develop and manufacture. Those expenses are reflected in the final product’s price: an individual Avastin regimen costs about $88,000 annually.

FDA agency officials have noted that doctors could still prescribe the drug “off-label.” But public and private insurers rarely covers off-label treatments. Patients would likely have to pay the whole cost of Avastin themselves. Very few can afford to do that. And so, for the vast majority of breast cancer patients, this drug effectively won’t be an option -- even though it might benefit them.

Denying Avastin will also stunt U.S. drug innovation.

It costs about $1.3 billion, on average, to develop and tests a new biologic drug and bring it to market. Genentech spent $2.25 billion to develop Avastin.

Companies are less likely to make such a huge investment if the FDA can revoke coverage after a drug is approved and take away the opportunity to recoup its investment.

Unfortunately, the FDA's Avastin decision could be just the tip of the iceberg. The Obama administration is pursuing a government-centered model of medical care on multiple fronts. The new health law creates at least 159 new government boards and agencies that will sink roots into every aspect of the health sector. Some of these non-elected boards will have the power to cut costs and restrict choices for doctors and patients.

The new Independent Payment Advisory Board (IPAB), for example, has the authority to cut Medicare reimbursement rates for doctors. Such cuts will drive physicians out of the Medicare program, and with fewer doctors available, there will be longer waits for care.

And the economic stimulus bill created a federal office to study the “comparative effectiveness” of new drugs and medical treatments. In other countries, such research has been used by government officials to deny patients access to advanced medicines.

The comparative effectiveness body in the Britain, for instance, has routinely denied public coverage for new medicines that are widely available throughout the rest of the Western world. The result has been lower quality of medical care for the British people.

Indeed, a study published in the Lancet medical journal found that only 69 percent of British women survive at least five years after being diagnosed with breast cancer, but 84 percent of American women survive at least that long.

Medical decisions need to be left up to patients and their doctors – not distant bureaucrats. The FDA needs to reverse its Avastin decision. Otherwise, patients are going to lose a vital treatment option and we'll all lose out on investment in tomorrow’s new, life-saving drugs.