The Daily Rise: Wednesday, February 24

March-In, Innovation Out

Paul Howard, a senior fellow and director of health policy at the Manhattan Institute, sounds the alarm on an unprecedented move being considered by the federal government to issue “march-in rights” against some pharmaceutical companies.

HHS Secretary Sylvia Burwell’s action “would allow federal agencies to essentially break patents on high-cost medicines to lower prices.” Wait, what are “march-in” rights? Howard explains:

“March-in rights are a little-known feature of the Bayh-Dole Act of 1980, (which) sought to stimulate innovation by allowing universities (as well as small businesses and non-profits) to patent, and then license, discoveries with commercial applications that emerged from government-funded research…But the law also allows federal agencies that fund research to compel patent-holders to grant licenses to third-party manufacturers for specific public purposes, such as alleviating public health or safety needs not achieved by the contractor.”

While that may sound like the best of intentions, Howard says that “march-in” rights have never been used in the law’s three decades of existence. He also cautions that, “Politicizing drug development—allowing bureaucrats to pick drug classes or diseases where government will break patents to lower prices—will only hurt patients.”

A great point. Patients aren’t well-served when politicians make decisions about health care. Let’s be honest: politicians base their decisions on sound bytes for the cable news cycle — not sound public health care research. If some patients benefit from political connections in Washington or a disease that’s in the news, it undermines the momentum for major structural reforms that will lower costs and expand access for all patients.

“A better strategy,” Howard argues, “is to address the high cost of co-pays and co-insurance and streamline drug development to encourage more market competition based on price and value.”

Clinical Pathways: Are You On One?

As part of our ongoing effort to better educate patients about the decisions behind their treatment, today we’re looking at clinical pathways.

Clinical pathways are guidelines set by payers for doctors to follow when treating a patient. Sometimes patients don’t even know they are on a clinical pathway nor do they know whether their insurance company is rewarding doctors for following them. Clinical pathways are often the most cost effective option for the providers — not the best treatment option for the patient.

HealthPayerIntelligence.com’s Vera Gruessner questions whether clinical pathways need an oncologist’s perspective.

“When doctors diverge from a clinical pathway, even for well-justified reasons,” Dr. Robin Zon, chair of the American Society of Clinical Oncology notes, “payers are likely to either deny coverage or require prior authorization, which can delay treatment and threaten patients’ health. The sheer number of pathways has created intense administrative burdens because oncology practices are forced to sift through the various requirements and preferences of the pathway program of each payer on a patient-by-patient basis.”

VP’s Roundtable: Big Data, More Trials

Earlier this month, Vice President Joe Biden participated in a roundtable discussion with doctors, public health researchers, patient families and health care professionals from Duke and UNC-Chapel Hill. Jane Stancill, who covered the vice-president’s visit for the News and Observer, highlighted two important issues that surfaced in the roundtable discussion: 1) the role of big data in spurring innovation and 2) educating patients about enrolling in clinical trials.

1. Standardize data: Dr. Shelley Hwang, chief of breast surgery at Duke, urged the vice-president to lead a national effort to standardize and share data in order to more effectively help patients. There’s no question streamlining the data collection and sharing process would help spur innovation and lead to new discoveries of treatments.

2. Expanding patients’ access to clinical trials: “We live in a country where I don’t think there should be 30 cancer patients waiting in line to get into a clinical trial,” said Dr. Kimberly Blackwell, professor of medicine at Duke. More people need to be educated on enrolling in clinical trials.

Patients Living Longer, Adds Value

American Enterprise Institute’s Tomas J. Philipson asks an interesting question, “Who gains more from medical innovation: Patients or drug manufacturers?”

Philipson’s contrarian view makes the case for why payers and their patients are “getting the lion’s share of the social value.”

“The reason why innovators receive a low share of social value can be understood by a simple back-of-the-envelope calculation using the illustrative case of the breakthrough HIV medicines that came out in the mid-1990s. The number of people who were infected with HIV in the United States at the time was roughly 1 million. Assume for the sake of simplicity that these new medicines added 10 years of life for HIV patients (although we now understand this is an understated estimate). Now we will assume that each year of life is valued at $100,000, a low-ball amount used by economists and federal agencies, such as the FDA and EPA. Therefore, each patient gains 10 (years of life) times $100,000, or $1 million. If the estimated 1 million US HIV patients received these treatments, $1 trillion dollars would be generated due to longer lifespans.”

What’s It All Mean?

We’re all patients. Every day we comb the headlines looking for stories to educate and inform you. You and your loved ones live on Main Street facing real concerns about your healthcare while K Street and Wall Street throw punches.  There is so much to understand not only within our new healthcare law (ACA), but the entire innovation landscape. — Immunotherapy. Biosimilars. REMS. Clinical Pathways. Step Therapy. Value Frameworks. Oral Drug Parity. Cap the CoPay. PBMs (Pharmacy Benefit Managers). Insurance Formulary. Specialty Pharmacy. Biomarkers. Gene Mutations. Targeted Therapy. Negotiating with Medicare. Price Controls. Price Gouging. R&D. Oh, My!

We believe the more you know, the less likely you are to fall through the proverbial healthcare cracks.

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