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241Suzanne Fiscella, “Are Patients Really the Problem,” Kevin MD (blog), July 20,, 2017, https://www.kevinmd.com/blog/2017/07/patients-really-problem.html.
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243Abby Alpert et al., “Prescription Drug Advertising and Drug Utilization: The Role of Medicare part D” (NBER Working Paper Series 21714, National Bureau of Economic Research, 2015), http://www.nber.org/papers/w21714.pdf.
244Laura Entis, “DTC Pharma Ad Spending Slipped 4.6% in 2017: Kantar,” MM&M, March 12, 2018, https://www.mmm-online.com/commercial/dtc-pharma-ad-spending-slipped-46-in-2017-kantar/article/750421/.
245If this weren’t true, pharmaceutical companies wouldn’t spend money on these kinds of ads year after year.
246Sridhar Narayanan et al., “ROI Implications for Pharmaceutical Promotional Expenditures: The Role of Marketing Mix Interactions” (Forthcoming in Journal of Marketing, 2003), https://pdfs.semanticscholar.org/5bb3/6f34c96fb2748b69b948d12fea505ac45215.pdf.
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248Justin Tinsley, “Twenty-Five Years Ago Today, Magic Johnson Announced he Had HIV,” The Undefeated, Nov. 7, 2016, https://theundefeated.com/features/twenty-five-years-ago-today-magic-johnson-announced-he-had-hiv-los-angeles-lakers/.
249Beth Snyder Bulik, “Gilead Pushes Hep C Testing in Baby Boomers as Its Blockbusters Plummet,” Fierce Pharma, Feb. 22, 2017, https://www.fiercepharma.com/marketing/baby-boomers-targeted-gilead-hepatitis-c-awareness-campaign-even-as-drug-s-fortunes-drop.
250Sherry Amatenstein, “Pseudobulbar Affect: I Wish People Knew How I felt,” PSY Com, Oct. 1, 2018, https://www.psycom.net/mood-disorders/pseudobulbar-affect.
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257Merck KgA’s subsidiary Dey had itself acquired the rights to the EpiPen from Meridian Medical Technologies, which acquired it in a merger with Survival Technology, where it had been invented.
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258Cynthia Koons and Robert Langreth, “How Marketing Turned the EpiPen Into a Billion-Dollar Business,” Bloomberg Businessweek, Set. 23, 2015, https://www.bloomberg.com/news/articles/2015-09-23/how-marketing-turned-the-epipen-into-a-billion-dollar-business.
259Cythina Koons et al., “How EpiPen’s Price Rose and Rose,” Bloomberg, Sept. 1, 2016, https://www.bloomberg.com/graphics/2016-epipen-pricing/.
260James Surowiecki, “How the Maker of the EpiPen Made Government Its Ally,” The New Yorker, Sept. 22, 2016, https://www.newyorker.com/business/currency/how-the-maker-of-the-epipen-made-government-its-ally.
261Carly Helfand, “FDA Swats Down Teva’s EpiPen Copy, Putting Mylan in Cruise Control,” Fierce Pharma, March 1, 2016, https://www.fiercepharma.com/sales-and-marketing/fda-swats-down-teva-s-epipen-copy-putting-mylan-cruise-control.
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264FDA, FDA Alerts Consumers.
265Pauline Bartolone, “EpiPen’s Dominance Driven By Competitors’ Stumbles and Tragic Deaths,” Shot, Health News from NPR, Sept. 7, 2016, https://www.npr.org/sections/health-shots/2016/09/07/49296
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266Steven Johnson, “Big Pharma Incentives Are Out of Whack: Why We Need an X-Prize for Drugs,” Wired, Oct. 11, 2012, https://www.wired.com/2012/10/prescription-drug-crisis/.
267Another key pitfall of the X-Prize model is that whoever has to pay the upfront cost on behalf of society (presumably the government) might struggle to come up with the money all at once. It’s hard to plan for sudden expenses. That’s why mortgages exist. In Chapter 8, I’ve included a sidebar on novel proposals to incentivize the development of antibiotics that illustrate that governments prefer a very different model from the X-Prize.
268It’s hard to imagine the entire industry operating this way or that it would lead to much cost savings. At the end of the day, drug development and proper marketing requires a certain number of people and spending and some profit to investors to keep them investing in new projects, so whether the industry collects its revenues all upfront for each success or over time (as it does now), the budget must be balanced. As discussed in Chapter 11, there’s not much one can cut from the top-line before critical functions, whether R&D or marketing, are reduced.
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13
Incentivizing Incremental Innovation: Proposing Short Exclusivity Extensions Instead of Long Patents
At age three, my daughter found that she enjoyed playing with the tester (needle and drug removed) of a new device-drug combination called Auvi-Q. This epinephrine delivery apparatus actually talked her through the few steps of using it correctly, and she got a kick out of showing everyone how to use it. For her this was a big improvement over an EpiPen that didn’t talk to her and only came with written instructions, which she couldn’t read. The device that she found amusing—a talking pen that gave step-by-step instructions—might end up saving lives. Yes, the EpiPen is easy to use. But in a moment of panic when seconds count, not everyone has the wherewithal to read and follow written instructions, no matter their age.
In addition, Auvi-Q is smaller than the EpiPen and shaped to fit more easily in a pocket. These might seem like minor improvements, but to a parent of a child with food allergies, these differences are meaningful (e.g., less risk of forgetting to take the bag with the EpiPen).
In accordance with the Biotech Social Contract, society is nearly finished paying off its mortgage on the EpiPen and, as generics come to market, they will eventually drive down prices. But if insurance companies refuse to cover Auvi-Q, patients will likely opt for a well-covered generic EpiPen, and Auvi-Q may fail commercially. And that leads to an important question: Is the upgrade represented by Auvi-Q worthy of another mortgage? Embracing and paying a premium for Auvi-Q’s advantages would likely cost billions more over the next decade.
At the time development of the Auvi-Q first began, in the mid 2000s, researchers and investors couldn’t have known that Mylan, the current producer of the EpiPen, would create such a large market for epinephrine autoinjectors. They probably expected that Auvi-Q’s advantages would be worth a premium when it someday launched, though it’s doubtful that they expected it to launch at the same time that the EpiPen would be going generic (and in fact, it didn’t the first time around).273 Auvi-Q is finally on the market, and its advantages will hopefully help it eventually garner a large share of the epi-autoinjector market, even if its manufacturer may have to lower the price to be closer to that of the EpiPen generics so that payers don’t put up blocks. Importantly, it represents a permanent upgrade of our future generic armamentarium.
If Auvi-Q is a commercial success despite competition from generic EpiPens, then innovators will look to upgrade more such drugs in the future. For example, diabetics experiencing hypoglycemia can be rescued with a rapid dose of glucagon; there, seconds count too. And there are medications that can rescue someone experiencing a seizure. These all represent opportunities for optimizing the ease and speed of drug delivery outside of the hospital setting. It comes down to the value of increments of innovation.
What’s the smallest increment of medical innovation that is worth its cost to society? And what’s an adequate incentive to get to that innovation? Those questions underpin some controversy surrounding drug pricing. Is it innovative to turn a twice-daily pill into a once-daily pill or convert an intravenously infused (IV) drug into one that can be given subcutaneously, or combine two generic drugs into a single branded pill? If we want the new-and-improved version, we have to pay for it.274
But should we? Arguments against ignore several facts that are intrinsic to the Biotech Social Contract and belittle real and compelling advances.
Convenience: Much More Than a Luxury
The more frequently patients have to take a pill, the less likely they are to remember to take all their pills. This is known as a problem of adherence (formerly and more paternalistically called “compliance”), and it has real-world consequences.275 Moving from a twice-daily pill to a once-daily pill improves outcomes.276
Adherence is also compromised with pills that must be taken with food or must be taken on an empty stomach. A patient prescribed more than one medicine might face drug-drug interaction problems that would force them to stagger their various pills throughout the day and have to coordinate taking them with or without meals. It’s easy to see how this can overwhelm at least some patients, especially those without a caretaker at home. These aren’t merely inconveniences; these are barriers to adherence, and the more we can remove these barriers, the more patients will experience improved outcomes and avoid side effects and even death.
Turning pills that must be taken more than once a day into a once-daily pill, making large, hard-to-swallow pills smaller or coating them so that they are easier to swallow, making drugs that have to be taken with food (or on an empty stomach) able to be taken either way without compromising their rate of absorption into the bloodstream, combining multiple pills used to treat a disease into a single pill,277 converting a pill that has to be swallowed to a film that dissolves in the mouth—all of these are valuable improvements. Imagine how welcome the pill-to-film improvement would be for a patient who can’t swallow anything because they are suffering from chemotherapy- or migraine-associated nausea, or for a patient who has difficulty swallowing due to a neurological disorder such as Parkinson’s, ALS, or multiple sclerosis.278
The incremental improvements are seemingly endless: IV drugs converted to subcutaneously administered medications allow for easier dosing—at a doctor’s office or at home. Drugs that have to be drawn up from vials into syringes can be converted to pre-filled auto-injectors—then rendered stable at room temperature so that patients don’t have to keep them in refrigerators or carry them in coolers when they travel. Injected drugs with a lingering sting can be reformulated to make their injection less painful.279
Finally, consider insulin, which has been steadily improved over decades. For nearly a century, insulin extracted from animal pancreases was used to help diabetics regulate blood sugar, until the early 1980s, when recombinant human insulin was introduced. In the mid-1990s, insulin analogs came along and substantially replaced recombinant human insulin.280 In the mid-
2000s, these analogs were formulated in convenient, dose-adjustable, pre-filled syringes with needles so thin they could barely be felt. Recently, a more concentrated version hit the market, one that further improves convenience and tolerability by reducing the injected volume.
Today, controlling blood sugar requires less frequent injections, and those injections have faster onset and/or more reliable delivery profiles. Diabetics today experience better control of their blood sugar with less weight gain and lower risk of dangerous—potentially lethal—hypoglycemic episodes.281
These improvements clearly have value, and they’ve often been accompanied by higher prices. The question of whether they are “worth it” compared to older human insulins has been debated extensively over the last decade.282 Critics have suggested that insulin, a 100-year-old drug that once cost pennies, has been price-jacked by greedy companies, but this claim lacks merit. The insulin of 100 years ago and even 25 years ago is nothing like the products we have today283—and those newer products are beginning to go biosimilar,284 in accordance with the Biotech Social Contract.285 Moreover, studies using conventional cost-effectiveness analyses found insulin analogs to be worth their higher costs,286—and these studies didn’t even take eventual biosimilarization into account!287 They assumed that high prices for branded insulin will stay high forever, which, as we know, is not the case. Imagine how much more favorable the analyses would look if they factored in the lower cost of biosimilars, the first of which have recently entered the US and EU markets.288
The Great American Drug Deal Page 22