Friday, March 13, 2009

News Clipping Archives

 

Maryland / Regional

Howard County health workers laid off (Baltimore Sun)

Award against ExxonMobil estimated at $150M (Daily Record)

‘This isn’t the year’ for Maryland health insurance bills (Baltimore Business Journal)

National / International

Study: Some heart patients undoing drug benefits (Washington Post)

Probable Carcinogens Found in Baby Toiletries (Washington Post)

Safety net health centers struggle to meet demand (Washington Post)

FDA Issues Guidance on Peanut-Based Products (Wall Street Journal)

GAO cites fraud in Medicare in-home services billings (USA Today)

Opinion

Blocking drug development (Washington Times)

 
 

Maryland / Regional

 

Howard County health workers laid off

 

By Larry Carson

Baltimore Sun

Thursday, March 12, 2009

 

Howard County's health department has begun layoffs that may total 15 workers by June 30, as officials say slumping income tax and real estate revenues push a projected county budget shortfall toward

 

$10 million in the current fiscal year.

 

County health officer Peter L. Beilenson said today that he has laid off five workers, including two who are part-time employees.

 

The health department is a state entity that operates in the county.

 

Another eight to 10 may lose their jobs by the end of the fiscal year, primarily because of lower state revenues, he said.

 

County Executive Ken Ulman said the latest state figures mean county revenues may fall up to $10 million short of projections -- twice the figure forecasted one month ago.

 

Ulman said the county has funds set aside to cover the loss.

 

In cost reductions earlier this fiscal year, Ulman cut back on take-home vehicles and closed the county's print shop and TV studio, eliminating about 10 jobs. Some of the workers transferred into other county jobs.

 

Copyright 2009 Baltimore Sun.

 

Award against ExxonMobil estimated at $150M

 

By Danny Jacobs

Daily Record

Friday, March 13, 2009

 

TOWSON — ExxonMobil Corp. dodged a billion-dollar bullet Thursday when a Baltimore County jury found it had not committed fraud in connection with a massive 2006 gasoline leak in Jacksonville.

 

Even so, the company indicated it might challenge the jury’s awards of about $150 million in compensation to 88 families, suggesting the verdicts were, in part, punitive damages in disguise.

 

“We find the amount awarded inconsistent with the verdict in which the jury rejected the punitive damages claims,” the company said in a statement. “The compensatory damages should not be so high as to essentially be punitive instead of truly compensating for actual harm caused by the spill.”

 

Those were among the few fighting words issued Thursday, however, as both sides expressed relief that a trial that began in October in Baltimore County Circuit Court has finally concluded.

 

“I’m glad it’s over,” said Stephen L. Snyder, of Snyder, Weltchek & Snyder in Pikesville, the plaintiffs’ lead counsel.

 

Snyder said his firm had no plans to appeal the jury’s finding that Exxon was not guilty of fraud by concealment, which would have led to punitive damages.

 

“All in all, we’re satisfied,” he said.

 

The jury of four women and two men needed seven days of deliberation to reach a verdict and nearly two hours to report their decision to visiting Judge Maurice W. Baldwin Jr., who presided over a standing-room-only courtroom.

 

The jurors filled out 88 separate verdict sheets, one for each plaintiff family. (Two families owned two properties, making the total number of homes in the case 90.) For each verdict sheet, the jury first ruled the plaintiffs had not proven fraud by concealment on the part of Exxon.

 

Residents alleged the company ignored a history of reliability problems with leak detectors such as the one at the Jacksonville station, where a 25,000-plus-gallon leak began Jan. 13, 2006.

 

The detector alarmed the first day, but the leak was not discovered until 37 days later after an inventory discrepancy was noticed.

 

Exxon maintained technicians responding to the station that first day improperly reset the detector, essentially rendering it incapable of alarming for the leak.

 

“We are grateful and pleased the jury saw the facts that way,” said James F. Sanders, Exxon’s lead counsel.

 

The jury also ruled on each verdict sheet that Exxon’s actions caused the plaintiffs’ injuries. Jurors then moved to damages, awarding plaintiffs money in some or all of three categories: diminution of property value, medical monitoring and non-economic damages.

 

Jurors awarded more than $61 million for diminution of property value, an average of $693,000 per household. Several residents said they received amounts equivalent to the price of their home prior to the spill, with values ranging from $300,000 to more than $1 million.

 

Jurors awarded more than $14 million for medical monitoring, an average of $164,000 per household. Residents had requested medical monitoring because of exposure to methyl tertiary butyl ether, a gasoline additive known as MTBE. The additive has not been conclusively determined to cause cancer in humans, and both sides offered expert testimony discussing residents’ exposure risk.

 

Snyder was particularly pleased his clients received medical monitoring compensation.

 

“The jury recognized the constituents of MTBE can cause problems,” he said.

 

Jurors also awarded more than $71 million in non-economic damages — in most cases, $500,000 per adult and $50,000 per child. Snyder, in his closing argument, suggested jurors award $2.5 million for each adult plaintiff.

 

About a dozen plaintiff households did not receive any non-economic damages because residents in those homes did not testify during the trial. Other plaintiffs received nearly $1 million for non-economic damages, an amount that will likely be capped by the judge at $665,000 under Maryland law.

 

Emotional moment

The compensatory damage award comes six months after Exxon agreed to pay $4 million to settle the Maryland Department of the Environment’s claims arising from the leak. The company has already spent $38 million on cleanup and remediation efforts in Jacksonville and will continue working until “the job is complete,” Sanders said.

 

An Exxon spokesman would not comment on how the awards and costs might affect the company’s bottom line. The company reported net profit of $42.5 billion in 2008, the highest ever recorded by a company.

 

Residents took copious notes when their respective verdict sheets were read aloud. The air seemingly went out of the courtroom after the jury did not award punitive damages with its first verdict sheet, meaning it would not be awarding punitive damages to any plaintiff.

 

# View the related story, Exxon verdict includes full pre-leak value of homes

# View the related blog post, Is Snyder's $150M win really a loss?

After that initial letdown, however, residents quietly and attentively listened to each verdict sheet. Husbands and wives held hands or each other before and after their award was announced.

 

Once the jury was dismissed, hugs were shared with neighbors, lawyers and even several of the alternate jurors who came back to hear the verdict.

 

“It’s very emotional,” said Ron Diedeman, one of the plaintiffs. “Basically, I feel like we got a fair treatment.”

 

“It’s hard to go up against Exxon,” added Jodi Howe, another plaintiff. “For a small firm to go up against a giant like that, they hit home run after home run.”

 

One juror told the Associated Press the jury sympathized with residents but wrestled with how much to award.

 

“We’re happy for the plaintiffs,” Steve Scazis said. “We hope they’re happy and moving on with their lives.”

 

Scazis and his fellow jurors received a round of applause from the entire courtroom after the final verdict was read. Baldwin said he would ask Judge John G. Turnbull II, the county’s administrative judge, to draft a letter “forever excusing” them from jury duty.

 

“There are just no words to express how much we appreciate you,” he said.

 

Still to come

While the jurors are finished with the Jacksonville leak, the court itself is not.

 

A separate “mass-action” claim against Exxon stemming from the Jacksonville spill is still pending. That case, with more than 250 plaintiffs, is scheduled to go to trial before Judge Susan Souder in January 2010.

 

The plaintiffs’ lead counsel in that case, Theodore M. Flerlage Jr., congratulated Snyder.

 

“The verdicts are well justified,” said Flerlage, a lawyer with The Law Offices of Peter G. Angelos P.C.

 

Flerlage and colleagues sat in on much of Snyder’s trial. He was impressed by the technology used in the courtroom and praised the plaintiffs’ testimonies as “impressive.”

 

“It’s interesting to watch the effect of the testimony on the jury,” he said.

 

Flerlage declined to discuss his litigation approach, but said it is developing differently than the one Snyder presented.

 

“There are a lot of other facts out there,” he said.

 

Flerlage added he did not anticipate his firm’s case taking as long as Snyder’s did.

 

“I am blunt and to the point,” he said.

 

Copyright 2009 Daily Record.

 

‘This isn’t the year’ for Maryland health insurance bills

 

By Julekha Dash

Baltimore Business Journal

Friday, March 6, 2009

 

Two measures that would have altered health insurance practices in Maryland will not make it out of the General Assembly this year.

 

Senate Bill 79 would have required health insurers to spend more of their premium money on patient treatment, rather than administrative costs, thereby increasing what is known as an insurer’s medical-loss ratio.

 

House Bill 972 would have required insurers to lower premiums when their reserves exceed a certain level. That bill is aimed at Maryland’s largest health insurer, CareFirst BlueCross BlueShield, which has come under fire for holding large amounts of money in reserve while insurance premiums rise.

 

“This isn’t the year for the bill,” said Del. A. Wade Kach, a Baltimore County Republican who sponsored the CareFirst bill. Members of the Health and Government Operations Committee who heard the bill want to wait until Maryland Insurance Commissioner Ralph S. Tyler has completed a study on the issue this spring before putting forth any legislation, Kach said.

 

The bill would have required CareFirst to lower what is known as its risk-based capital ratio, or the amount of cash reserves compared with its measure of risk associated with unexpected claims and expenses. CareFirst had $1.27 billion, about $738 per member, in reserves at the end of 2007, compared with $1.13 billion at the end of 2006.

 

CareFirst officials did not have their reserve level for 2008 but expect the amount to be substantially lower due to the sour economy, spokesman Michael Sullivan said.

 

Lawmakers will not make any changes to insurers’ medical-loss ratio this year either. The state plans to study how other states address medical-loss ratio.

 

© American City Business Journals Inc. All rights reserved.

 

 

National / International

 

Study: Some heart patients undoing drug benefits

 

Associated Press

By Maria Cheng

Washington Post

Thursday, March 12, 2009

 

LONDON -- European heart patients are taking more medication than ever before to lower their blood pressure and cholesterol, but bad habits such as overeating and smoking are undermining the drugs, a new study says. Despite big increases in heart patients on medication, most still have high blood pressure and nearly half have high cholesterol.

 

Researchers interviewed more than 8,500 patients in eight countries. Patients were on average about 60 years old, and had a history of heart problems.

 

The experts found that more young patients are smoking, and more patients are fatter and diabetic compared with similar groups from 12 years ago.

 

The study was published Friday in the medical journal, Lancet.

 

"In terms of the lifestyles of patients with coronary disease, everything is moving in the wrong direction," said Dr. David Wood, one of the paper's authors and a professor of cardiovascular medicine at Imperial College in London.

 

The study was supported by the European Society of Cardiology and paid for by pharmaceutical companies that make heart drugs.

 

Researchers also found that the numbers of patients taking drugs to lower their cholesterol was seven times higher in 2006-2007 than in 1995-1996. About 43 percent of patients still had high cholesterol.

 

And while more people now take medications to lower their blood pressure, Wood said that hadn't made any difference. "The response of physicians is just to give more and more drugs, but what we need is a comprehensive lifestyle program."

 

Experts said trends were similar in the United States.

 

"Even if we advise patients to lose weight, they have to walk out the door and do that themselves," said Dr. Alfred Bove, incoming president of the American College of Cardiology.

 

Bove, who was not linked to the study, said more patients were now being treated for high blood pressure, but millions were unaware they even had a problem.

 

In the last decade, deaths due to heart disease have dropped by about 30 percent in the United States and 45 percent in Britain. But the rates are leveling off, and experts worry the surge in obesity and diabetes will reverse previous successes.

 

Even with advances such as medications, heart stents and angioplasties, Dr. Daniel Jones, a past president of the American Heart Association, said that fighting heart disease "is like swimming upstream."

 

Jones, who was not connected to the Lancet study, warned that the widespread use of heart drugs has masked the effects of the obesity epidemic and that it would be even worse without them.

 

"We know that giving medications will reduce patients' risk, but we shouldn't put all our eggs in that one basket," he said. "We need to work harder on preventing problems at their root."

 

On the Net:

 

http://www.lancet.com

 

http://www.americanheart.org

 

http://www.acc.org

 

http://www.escardio.org

 

© 2009 The Associated Press.

 

Probable Carcinogens Found in Baby Toiletries

 

By Lyndsey Layton

Washington Post

Friday, March 13, 2009; A04

 

More than half the baby shampoo, lotion and other infant care products analyzed by a health advocacy group were found to contain trace amounts of two chemicals that are believed to cause cancer, the organization said yesterday.

 

Some of the biggest names on the market, including Johnson & Johnson Baby Shampoo and Baby Magic lotion, tested positive for 1,4-dioxane or formaldehyde, or both, the nonprofit Campaign for Safe Cosmetics reported.

 

The chemicals, which the Environmental Protection Agency has characterized as probable carcinogens, are not intentionally added to the products and are not listed among ingredients on labels. Instead, they appear to be byproducts of the manufacturing process. Formaldehyde is created when other chemicals in the product break down over time, while 1,4-dioxane is formed when foaming agents are combined with ethylene oxide or similar petrochemicals.

 

The organization tested 48 baby bath products such as bubble bath and shampoo. Of those, 32 contained trace amounts of 1,4-dioxane and 23 contained small amounts of formaldehyde. Seventeen tested positive for both chemicals.

 

"Our intention is not to alarm parents, but to inform parents that products that claim to be gentle and pure are contaminated with carcinogens, which is completely unnecessary," said Stacy Malkan, a spokeswoman for the Campaign for Safe Cosmetics, which is calling for the government to more strictly regulate personal care products such as shampoo, lotion and makeup.

 

Companies that manufacture and sell the products tested by the group stressed that they comply with government standards.

 

"The FDA and other government agencies around the world consider these trace levels safe, and all our products meet or exceed the regulatory requirements in every country where they are sold," Johnson & Johnson said in a statement. "We are disappointed that the Campaign for Safe Cosmetics has inaccurately characterized the safety of our products, misrepresented the overwhelming consensus of scientists and government agencies that review the safety of ingredients, and unnecessarily alarmed parents."

 

The European Union has banned 1,4-dioxane as an ingredient in personal care products, but the Food and Drug Administration has not established a safe limit for the chemical in shampoo, lotion and other toiletries. It maintains that the trace amounts found in those products are not harmful.

 

A 1982 study by the FDA showed that 1,4-dioxane can penetrate human skin when used in lotion.

 

Health advocates argue, however, that federal regulators have not considered the cumulative effect of chemicals in personal care products.

 

"The levels we've found are relatively low, and the industry often says there's just a little bit of carcinogen in my product," Malkan said. "The problem is, we're finding a little bit of carcinogen in many products. Many of these products are used every day, so we've got repeated and frequent exposure to these low levels of chemicals. They're not the safest and purest products, and parents ought to know that."

 

In addition, government studies have not examined the effect of chemical exposure on the particular vulnerabilities of infants and children, whose bodies are still developing, the advocates said.

 

Several Democratic lawmakers said the report is evidence that the nation's chemical regulation system needs to be changed.

 

"The fact that we are bathing our kids in products contaminated with carcinogens shows how woefully out of date our cosmetics laws are and how urgently they need to be updated," said Rep. Jan Schakowsky (Ill.). "The science has moved forward; now the FDA needs to catch up and be given the authority to protect the health of Americans."

 

Sen. Dianne Feinstein (Calif.) called the findings "horrifying" and said she intends to introduce legislation that would require stronger oversight of the cosmetics industry.

 

The report can be found at http://www.safecosmetics.org/toxictub.

 

Copyright 2009 Washington Post.

 

Safety net health centers struggle to meet demand

 

Associated Press

By Mike Stobbe

Washington Post

Thursday, March 12, 2009

 

STONE MOUNTAIN, Ga. -- The health care safety net is straining. Just look at Jeffrey Taylor's parking lot. Taylor oversees a community health center for the poor in this suburb a dozen miles east of downtown Atlanta. The center, a modest one-story brick building on a hillside, has never been busier. People who recently lost their jobs and health insurance fill the waiting rooms, and their cars jam into the clinic's 50-space parking lot _ with much of the overflow ending up at the nightclub next door.

 

"We need to expand this lot," said Taylor, who runs Oakhurst Medical Centers Inc., which operates two clinics.

 

Oakhurst is among 1,200 community health centers, 1,100 public hospitals and nearly 3,000 local health departments that are primary strands in the nation's health care safety net. Most say they have become significantly busier in the last seven months, as the economy has worsened.

 

These last-resort centers coping with waves of new customers are looking forward to a jolt of new money from the $787 billion federal stimulus package signed into law last month.

 

Safety net providers struggle as a rule, but times are unusually tough. Most community health centers and public hospitals are temporarily maintaining their razor-thin operating margins, but say they can't keep it up for long. Many health departments _ which play a leading role in preventive care and are heavily dependent on waning state revenues _ are doing worse, eliminating thousands of jobs and shedding services.

 

"We've never seen it this bad," said Dr. Georges Benjamin, executive director of the American Public Health Association.

 

The stimulus package includes $87 billion for government health insurance for children and the poor, and another $3.5 billion to bolster public health services and safety net care. Federal officials are still deciding specifically how and where to spend that money, causing hand-wringing at these facilities.

 

A survey released last month indicates most ER doctors are seeing more unemployed patients who have lost health benefits. About 88 percent of the 1,200 doctors who answered a survey from the American College of Emergency Physicians said they had patients who had been turned away elsewhere because they couldn't pay. (Federal law bars ERs from turning away patients with emergency needs for lack of money.)

 

Perhaps the most common theme involves the recently unemployed who have chronic health problems, like heart disease, that require prescription drugs. When their work coverage runs out, they turn to safety net providers to keep the medications going, said Dr. Michael Brooks of West End Medical Centers Inc., an Atlanta-based community health center organization.

 

But in some cases, patients have simply put off care _ like Sharon Moore. Uninsured and recently unemployed, the soft-spoken 59-year-old was suffering worsening headaches but saw a doctor visit as too costly.

 

A friend, also uninsured, told Moore about Southside Medical Center, which runs a bustling clinic in a poor area a few blocks from the Atlanta Braves baseball stadium. Moore made her first visit late last year and learned the cause of her headaches was severe high blood pressure.

 

She was given water pills that lowered her blood pressure, eased her pain and potentially averted a heart attack or stroke. She pays $30 per doctor visit, a sliding-fee scale based on income. The pills cost just $9 for a three-month supply. "It's a blessing," Moore said.

 

Comprehensive statistics about the U.S. health safety net are hard to come by, and details vary by community. But it's clear that many of the medically needy go to hospital emergency rooms.

 

Hospital officials say the recession has hit them hard. Hospital funds lost money in the stock market like everyone else. Charitable donations are drying up. It's harder to borrow from banks or through tax-exempt bonds. Medicaid funding, which depends on state tax revenues, is precarious. And more affluent patients _ whose business offsets the unreimbursed care of the uninsured _ are cutting back on elective procedures and other care.

 

Most safety-net hospitals seem to be managing at the moment, but some are showing signs of strain. This week Atlanta's Grady Health System, which runs one of the largest public hospitals in the country, announced it cut 150 jobs because of the economy.

 

Many more public hospitals probably will end the year in the red, said Larry Gage, president of the National Association of Public Hospitals and Health Systems. "For some, the situation is even more dire, with projected losses potentially reaching tens of millions of dollars next year," he added.

 

Federally funded community health centers, first created in the 1960s, have long been a mainstay of the safety net. Annual funding almost doubled in the last decade, to about $2 billion. In many towns, hospitals and health departments have abdicated patients to these clinics.

 

"We've held our own for the past several years," said Craig Kennedy, an official with the National Association of Community Health Centers. "But we're facing the worst difficulties we've seen in quite some time."

 

Health departments are another piece of the safety net. Most aim at disease prevention, like vaccine clinics, restaurant inspections and tuberculosis-monitoring to make sure patients take their medicine. About 10 percent offer full-service clinics, partly because that brings in some income, whether it's cash or Medicaid reimbursement.

 

But many are looking at cutting services, or restricting what they pay for.

 

Northern California's Santa Cruz Health Department likely will cut as many as 30 of its 150 jobs this year. The department _ which manages state and local funds for indigent care _ also stopped paying for such things as joint replacements and cataract surgery.

 

"They're all wrenching decisions," said Dr. Poki Namkung, the department's director. "It's not the level of services people would expect to have in a civilized country."

 

Last year, health departments cut 11,000 jobs and this year expect to shed another 10,000, according to a report this week by Trust for America's Health, a research group.

 

Some health departments have been getting out of the patient care business. In Georgia, the suburban DeKalb County Board of Health treated patients for a dozen years at two clinics. That ended in September, in part because the state's Medicaid HMO system quit paying for care at health departments.

 

The department is now referring its previous patients to nearby community health centers. That's how Kordie Green ended up at Jeffrey Taylor's Stone Mountain clinic one morning this week.

 

It's hard to find a doctor, especially an attentive one, when you don't have good health coverage, said Green, 52, an uninsured child care worker who needs a continuing prescription for a thyroid condition.

 

"You want someone to take the time to see you and take the time to explain what's going on with you," she said.

 

On the Net:

 

National Association of Coummunity Health Centers:http://www.nachc.com/

 

American Public Health Association:http://www.apha.org/

 

© 2009 The Associated Press.

 

FDA Issues Guidance on Peanut-Based Products

 

By Brian Kalish

Wall Street Journal

Friday, March 13, 2009

 

WASHINGTON -- The U.S. Food and Drug Administration announced Thursday it was providing guidance for manufacturers about peanut-derived products.

 

The FDA said in a statement that it recommends manufacturers obtain any peanut-derived ingredient only from suppliers who use production processes that have been demonstrated to adequately reduce the presence of Salmonella species; or they ensure that their own manufacturing process would adequately reduce the presence of salmonella species.

 

Peanut-derived products include peanuts, peanut butter, peanut paste, peanut meal and peanut granules.

 

The FDA said recent salmonellosis outbreaks -- such as the outbreak involving the Peanut Corp. of America -- demonstrate the potential for food-borne illness from the consumption of foods containing peanut-derived products if those products are contaminated with salmonella.

 

The FDA reminded consumers that it and the Centers for Disease Control and Prevention urge consumers to check the FDA's Web resource on the peanut-derived product recall or call CDC's 24-hour information hotline at 1-800-CDC-INFO before eating any peanut-derived products.

 

Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved.

 

GAO cites fraud in Medicare in-home services billings

 

By Julie Appleby

USA Today

Friday, March 13, 2009

 

Fraud and abuse helped boost Medicare spending on home health services 44% over five years as some providers exaggerated patients' medical conditions and others billed for unnecessary services or care they did not provide, a Government Accountability Office report out Friday says.

 

The GAO reviewed home care payments from 2002 to 2006, when spending reached $13 billion. The number of Medicare enrollees using in-home services rose 17% during that period to 2.8 million.

 

Medicare pays for visits by nurses, aides, physical therapists and other medical professionals for homebound enrollees. They check and clean surgical wounds, give medications, provide physical therapy and assist with other skilled care.

 

Iowa Sen. Chuck Grassley, who is the top Republican on the Senate Finance Committee and asked for the report, says Medicare must strengthen its oversight. "Every home health care dollar that's lost to fraud or improper payments is a dollar that doesn't go to necessary care and a better quality of life for older Americans," he says. "There's no excuse for Medicare officials neglecting payment problems."

 

Last year, Medicare spent about $16.5 billion on home care for the services reviewed by the GAO out of a total budget of $455 billion.

 

The study recommends that the Centers for Medicare & Medicaid Services (CMS) consider criminal background checks on home health operators and draft new rules to remove problem providers more easily.

 

The growing tab for home care in some states — coupled with big jumps in the number of providers — is a concern, says William Dombi, vice president for law at the National Association for Home Care & Hospice, the industry's trade group.

 

"We know from our own experience that kind of growth usually indicates something is wrong," says Dombi, who has not seen the GAO report. He says the industry likely will support many of its recommendations.

 

Still, Dombi says not all growth is bad. "Home health care spending is less today than it was 10 years ago," he says. In 1997, Medicare spent $17.1 billion on home health care for about 3.6 million people, he says.

 

Then, in the late 1990s, a series of GAO reports questioned the high costs and improper payments. Dombi says spending fell to about $9 billion in 2000 and home care served about 2 million people.

 

"The system overreacted" to the GAO reports, he says. "There were bona fide people … entitled to home health services who couldn't find it."

 

The government "is committed to continually reviewing and refining our processes to improve the Medicare program," Acting CMS Administrator Charlene Frizzera wrote in response to the GAO report. She says Medicare is working to combat improper payments for home care services.

 

In October, the agency set new rules for home health care operators in seven states. Those include stricter background checks of equipment suppliers, unannounced visits to businesses and more scrutiny of billing records submitted by doctors.

 

USA TODAY reported in October that Medicare was on track to pay a projected $1.3 billion in Miami-Dade County alone in fiscal 2008 for services to homebound patients — up 1,300% since 2003.

 

Copyright 2009 USA Today.

 

Opinion

 

Blocking drug development

 

ByGilbert Ross

Washington Times Commentary

Friday, March 13, 2009

 

COMMENTARY:

 

The U.S. pharmaceutical industry has replaced the tobacco cartel as the favorite punching bag of Congress and litigators over the last few years. The pipeline of new drugs has slowed to a crawl as the risk-averse Food and Drug Administration becomes more cautious by the day.

 

Nevertheless, the Obama administration wants to add another obstacle to new drug development.

 

The health section of the new stimulus budget contains a section funding - at a $1.1 billion level - a program to evaluate drugs (and procedures) for "comparative effectiveness" (CE).

 

If followed to its logical conclusion, the FDA will no longer approve a drug if CE studies show that it's merely safe and effective. Henceforth, it would have to be proven better than similar drugs already on the market. If adopted, this will lead to major declines in the already-stunted drug pipeline and fewer choices for consumers.

 

The handwriting on the wall was exemplified recently when Pfizer, the world's largest pharmaceutical company, halted development of two new drugs during late-stage trials, after many millions of research dollars had been spent. This unusual timing - failed drugs get scrapped in their early stage trials, as a rule - occurred because, according to Pfizer, "We don't believe that they provide significant benefit over other therapies." Imagine if we held other consumer products and manufacturers to this standard: No new TVs, computers or autos would be marketed without clear evidence the newer models were "better" according to some arbitrary government standard.

 

The process of developing, testing and gaining FDA approval for a new drug consumes 10 to 15 years and costs more than a billion dollars. And even after passing these tests, few drugs become successful enough to recoup their development costs.

 

But that was before CE. Henceforth, clinical trials designed to show that a drug is superior to another active drug will have to be even larger and longer than current trials, which merely have to demonstrate superiority to an inactive (placebo) drug. Drug companies will be loath to embark on such a perilous journey. Many research pathways will be cut off before they begin. Companies will fear following the same course Pfizer did, getting deeply into clinical trials and finding that their new drug can't out-perform the leader.

 

Who will decide the criteria by which new drugs would be deemed superior to existing drugs? A vast new bureaucracy - the Federal Coordinating Council for Comparative Effectiveness Research - will adjudicate these complexities. Since even Dr. Sidney Wolfe of Public Citizen (who never saw a new drug he liked) has been deemed acceptable to serve on an "impartial" FDA panel, it is unlikely the Coordinating Council will be pharma-friendly.

 

Never mind the reassuring statements by the new health-care team asserting that judgments about less-effective drugs won't affect insurance coverage - the Coordinating Council's decisions about the quality of drugs will include cost-effectiveness among their criteria. And that means rationing, no matter their current intentions - although you won't find the word "rationing" in any part of the new health policy. The government insurance programs will not cover drugs that fail to pass the "CE" test.

 

The new CE policy is supposedly aimed at discouraging drug makers from wasting money and resources on "me-too" drugs that are similar to older ones that are going off-patent. But limiting choices is unfair to patients. If this policy were in place in the 1980s, we would have only one statin drug.

 

Some patients respond to one drug and not to others in the same class. Furthermore, having a wide range of options helps keep prices down by fostering competition. And new drugs tend to be more effective than older ones, helping save money in the long run by keeping people out of the hospital (if Congress really wanted to save health-care dollars, it would consider tort reform, reducing the costly practice of defensive medicine).

 

The editorial board of the New York Times recently took on the mantle of health gatekeeper, asserting that some types of colonoscopy should lose insurance coverage for not being cost-effective enough. That's the sort of guidance we'll have to look forward to under the new administration.

 

Pharmaceutical companies, already pinched by the economic downturn, have taken to mass layoffs and mergers. If the Obama administration continues on this anti-pharma path, expect our once-vibrant pharmaceutical industry to go the way of Europe after price controls: major contractions in drug research and the flight of companies to less-restrictive markets, perhaps in Asia.

 

This is not a recipe for creating a better health-care system. It's a recipe for turning health care into a state-controlled utility.

 

Gilbert Ross, M.D., is medical director of the American Council on Science and Health (ACSH.org, HealthFactsAndFears.com).

 

Copyright 2009 Washington Times.

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