At pharma's earnings calls and R&D reviews the last two weeks, analysts asked several senior executives whether they might consider acquiring molecular diagnostics businesses as companions to their core operations. Without exception, the officers at several companies acknowledged the growing importance of diagnostics, but they also claimed an ability to access this key element of pharma's future through partnership arrangements without an equity commitment.
Their statements appear intended to support down-cycle stock prices that rest on some shaky fundamentals. At the same time, their don't-worry, we-can-partner-it approach appears likely to retard the advance of new therapies in the dawning era of personalized medicine.
Pharma's core task of developing genuinely improved new drugs remains in a trough, but the basic science behind various approaches to personalized medicine suggests at least the possibility of major breakthroughs within the next 10 to 20 years. So molecular diagnostics cannot only offer a modestly remunerative business unit but, more important, it also represents a necessary, preliminary step for developing personalized therapies.
Yet fiduciary offers at GlaxoSmithKline, Takeda, Pfizer and Sanofi all disdained any interest in acquiring diagnostics business units. Glaxo's chief financial officer, Simon Dingemans said the company is "not about to ... [add a] diagnostic business or new legs" to its operations in pharma, vaccines and consumer products.
» More Pharma's passing on diagnostics is penny wise, pound foolish
A commonly used drug for stomach disorders can cause irreversible neurological damage in the brain, but many doctors seem to be disregarding these problems—challenging the concept that a drug’s benefits must outweigh its risks.
Metoclopramide (Reglan) is a widely prescribed generic drug available in tablets and by injection for nausea, gastroesophageal reflux disorder (GERD), and stomach disorders related to nerve damage in some patients with diabetes. It has other uses related to nausea, as well.
Reglan’s most troubling side effects are abnormal, often disfiguring movement disorders called dyskinesias. The movements may involve protruding tongue, lip smacking, eye rolling, and even repetitive movements of entire limbs. In time, the movements may become untreatable and irreversible, a condition called tardive dyskinesia.
Looking at FDA data from the first quarter of 2011 for our QuarterWatch program, we observed 63 cases of dyskinesia (or abnormal movements) and identified an additional 1,180 dyskinesia cases arising from lawsuits against the drug manufacturers for events that likely occurred over a longer period of time. QuarterWatch is an Institute for Safe Medication Practices program we use to identify drug risks and errors reported to the U.S. Food and Drug Administration (FDA) by healthcare practitioners and consumers.
» More Common nausea drug can cause serious movement disorder
Americans, it seems, love Medicare. Elderly beneficiaries give the program the highest approval ratings of any insurance plan in America. According to the Commonwealth Fund, 91 percent rate it as good, very good or excellent. That’s 10 points higher than the grade for private employer-based coverage and 33 percent higher than that for private individual insurance.
Among all U.S. adults, Medicare enjoyed the support of 88 percent in a recent Harris poll. That’s up from 77 percent in 2005. In a recent Marist poll, 80 percent opposed making major cuts. Even more remarkable, that opinion was shared by 70 percent of tea party supporters.
There’s good reason for Medicare’s popularity. It provides better coverage than other plans. In the Commonwealth Fund poll, only 20 percent of elderly Medicare beneficiaries reported a problem getting access to care. Experiences were decidedly less favorable among those with private coverage. Thirty-seven percent of those with employer-based coverage and 48 percent of those with individual policies reported problems.
All Americans automatically receive Medicare hospital coverage (Part A of the program) when they reach age 65. There are no premiums and no enrollment forms. It’s difficult to imagine that anyone would want to opt out of a plan like this. But that’s what a small group of people want to do.
» More Effort to opt out of Medicare would have jeopardized system
One of the movies that will receive attention and possibly some awards on Oscar night is Moneyball, based on the true story of baseball's Oakland Athletics. Now it appears that some people in pharma are trying to copy what Oakland and other baseball teams did a decade ago. The likely result is that in pharma, as in baseball, not much will change.
The essence of the Moneyball story is that Oakland, as a small-market team, could not compete with teams in New York, Boston, Los Angeles and other major markets by paying exorbitant prices for free agent ballplayers. To help overcome that handicap, their general manager hired three econometricians (reduced to one character for the movie) to develop stochastic models (complex statistical and mathematical formulas) that could identify unappreciated performance indicators. By seeing which ballplayers excelled on these arcane measures, the A's were able to buy their contracts for relatively inexpensive amounts because wealthier teams didn't bid up the cost.
The A's enjoyed remarkable success in 2002, the first season in which they used quantitative modeling. Their results have been far less successful in subsequent years. Over the nine seasons beginning with 2003, the A's made the playoffs twice. In the last five years their mediocre records failed to even qualify them for the playoffs and they are now what used to be called a "second division" team.
In baseball, the A's haven't produced winners in recent years because the big-market teams also started to use the arcane percentages and formulas, but mainly for selecting the role players to round out their rosters. The stars are still chosen by competitive bidding, and in that contest big money is everything. So even as the mathematical models no longer gave Oakland a competitive advantage, perhaps more important, the wealthier teams were also able to acquire two or more players for various team roles. That allowed them to keep winning when the inevitable injuries or slumps occurred.
According to the Philadelphia Federation of Teachers, the layoff of 47 school nurses in December has led to medications being handed out to school children by “principals, gym teachers, counselors, community liaisons, secretaries, and even aides who normally monitor the playground.” By doing this, the Federation contends, the school district is endangering the lives of the school children it is required to protect.
Hard to know what the precise situation is, but if I were the parent of a student in the school system, I’d be worried about the potential for medication mistakes.
Examples of medication errors in schools around the country are plentiful. A kindergartner was taken to the hospital on the first day of school after a teacher’s aide accidentally gave him another child’s medication. The 5-year-old boy became drowsy after he was given Catapres (clonidine), a blood pressure medication sometimes used to treat children who have attention deficit hyperactivity disorder (ADHD).
In another case, an eighth-grade student with ADHD was not responding to methylphenidate (Ritalin). He began to develop new symptoms and ended up in the emergency department, unconscious. The school nurse had been absent for a week, and medications were being administered by the school secretary, who, for three days had given the student anther student’s methadone (a powerful narcotic pain medication with significant side effects). The medication had been kept in an envelope listing only the handwritten generic name, not the student’s name. The methadone was mistaken as methylphenidate.
» More “Denursifying” of schools puts children at added risk of medication errors
The Supreme Court will decide in a few months whether health reform is constitutional. If the decision is no, where does that leave “Obamacare”? The answer is that most of it could end up remaining intact.
Opponents claim that Congress lacked authority to impose the law’s mandate that everyone have health insurance. However, if the Supreme Court agrees, it must then confront an even thornier issue. Does it throw out all 2,700 pages of the law or only that part? Or, in legal terms, is the challenged provision “severable”?
Opponents want the court to throw out everything. They claim that the mandate is so central that the rest of the law would be useless without it.
Last week, the Obama administration filed a brief with the court that argues otherwise. It contends that if the court strikes down the mandate, everything else should remain in place except for two related provisions. (Click here to see the entire brief.) These provisions require insurance companies to cover everyone and to charge the same rates regardless of health status.
» More For health reform, constitutionality is not a matter of all or nothing
Last week The Inquirer's Stacey Burling wrote about the large number of cardiologists who are selling their practices to hospital networks. Here is what that trend means.
1. Burling correctly mentioned that cardiologists are selling their practices because flat to declining reimbursements are stagnating their incomes while rising seas of red tape and capital demands (e.g., for converting to electronic medical records) expand their costs. What she didn't discuss was why hospital networks across the country are voraciously buying up practices in cardiology, orthopedics and a few other specialties. Quite plainly, hospitals are trying to consolidate the provider side of health care in order to gain leverage over payers (e.g., insurers and large employers) and, thereby, negotiate more lucrative service agreements.
One way that hospitals can exercise leverage and gain higher reimbursements is by controlling costs. Cost control will become more likely when physicians work as hospital employees. In that role they will feel pressure to follow the uniform treatment protocols and formularies that have demonstrated optimal cost-effectiveness.
2. When physicians work as hospital employees, it means decisions about treatment will become a top-down process that follows the rational, data-driven procedures established by large institutions. For most aspects of medical care, the methods that individual physicians use to make decisions -- anecdote, seat-of-the-pants feelings, and the so-called "art of medicine" -- will be relegated to the medical dustbin alongside leeches and night vapors. Intuition and experience will continue to have their role in medicine, but it will be a smaller one.
Pharmacists, especially those who practice at neighborhood pharmacies, are on the brink of an extraordinary opportunity.
It is an opportunity that promises to bring about a shift in how health care is delivered while also addressing challenges related to patient safety, quality of health outcomes and health care costs.
And it is an opportunity to tackle one of the biggest health problems in the U.S.
A December 2011 report to the U.S. Surgeon General provides a compelling discussion that recognizes and advances the role pharmacists play in delivering patient care services. The report calls for recognition of pharmacists as health-care providers, which would remove barriers to compensating pharmacists for clinical services they provide. Beyond payment for products they dispense, pharmacists would be compensated for activities that promote your health and prevent adverse drug events, such as working with your doctor to reduce the number of medications you take to reduce the chance of drug interactions or overdoses.
» More Pharmacists hope opportunity to advance profession won’t go up in smoke
Has health reform become a taboo topic?
In his State of the Union speech on Tuesday evening, President Obama referred to it only once. By one count, he devoted only 44 words to the subject. That’s out of a total of over 7,000 for a meager 0.6 percent. (Click here for a transcript of the entire speech.)
The president didn’t even mention health reform by name. He referred to it obliquely by promising not to go back to the days of policy cancellations, coverage denials, and differential premiums for men and women. He never stated that those days were ended by his reform law.
And he neglected to acknowledge Adam Rapp, a guest sitting next to First Lady Michelle Obama, whom White House officials had touted to the press as a health reform success story. He was able to maintain health coverage after a cancer diagnosis thanks to the law.
» More Obama leaves health reform out of the State of the Union address
The role of Big Pharma companies is changing.
Each year, it becomes more likely that the new drugs needed to advance curative medicine will come from small start-ups and biotechs.
Those companies will be the ones to discover innovative compounds and demonstrate their proof-of-concept.
Where does that leave the pharmaceutical giants? On a path to becoming smaller.
- Health News blogs:
- NYTimes.com: Well
- WSJ.com Health
- NPR.org Shots
- Inquirer Health & Science
- Medical Organizations
- Pennsylvania Medical Society
- Medical Society of New Jersey
- The ACP Advocate Blog by Bob Doherty
- Kaiser Health News
- American Medical Association
- Area hospitals
- Abington Memorial Hospital
- Aria Health
- The Chester County Hospital
- Cooper University Hospital
- Crozer-Keystone Health System
- Jefferson Health System
- Kennedy Health System
- Lourdes Health System
- Mercy Health System
- Penn Medicine
- St. Mary Medical Center
- Temple University Health System
- Tenet Healthcare
- Virtua
- New Jersey Hospital Association
- The Hospital & Healthsystem Association of Pennsylvania
- Government agencies
- Pennsylvania Department of Health
- New Jersey Department of Health and Senior Services
- U.S. Department of Health and Human Services
- Centers for Medicare & Medicaid Services
- Centers for Disease Control and Prevention
- U.S. Food and Drug Administration
- Pennsylvania Health Care Cost Containment Council
- Pennsylvania Patient Safety Authority
- Agency for Healthcare Research and Quality
- Medication and Device Safety sites:
- ECRI Institute
- Institute for Safe Medication Practices
- Consumer Medication Safety site from ISMP
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