Forecast 2007: At Sea - Pharmaceutical Executive


Forecast 2007: At Sea

Pharmaceutical Executive

"Now that the government has said it will subsidize the first $2,500 prescription spend, employers will follow suit," Tenaglia says, pointing to Ford's recent announcement that it would deep-six its health coverage for Medicare-eligible white-collar retirees in favor of a flat $1,800 toward their Part D premiums. More and more of pharma's most attractive customers will find themselves paying out-of-pocket for brand drugs or going generic. "No one saw this coming," Tenaglia says. "It was touted as a great new entitlement. But it may have ended a fundamental obligation that the government organizations and employers have traditionally had to people"—and put the big squeeze on pharma.

Medicare will also be great for grandstanders. The elevated level of argument will likely include, from the left, Rep. Pete Stark (D-CA), chair of the House subcommittee on Medicare: "In the current program, there are no protections for beneficiaries that aren't exceeded 10 times over by benefits to the pharmaceutical industry." And from the right, Sen. Charles Grassley (R-IA), in other contexts, Pharma Enemy No. 1: "I don't think seniors want the government in their medicine cabinets." TiVo the bloviators.


Ernst & Young's Buck Luce predicts that congressional debates on drug safety will monopolize the September PDUFA reauthorization. "It's possible that PDUFA will become the 'Drug Safety Act,'" she says. "Since it's a must-pass, there's the potential for overregulation, with the outcome going way beyond the initial intent of the renewal."

"All sorts of regulations aimed at the industry will be attached," says Jack Angel, executive director of the Coalition for Healthcare Communication Foundation, "from manipulating DTC ads to permitting drug imports to ending tax deductions."

Longtime Democratic critics of FDA–industry coziness, including Sen. Edward Kennedy (D-MA), Rep. Jon Dingell (D-MI), and Rep. Henry Waxman (D-CA), will head key oversight committees, stepping up efforts to create "a 21st-century FDA." Two bipartisan bills—dubbed Kennedy-Enzi and Dodd-Grassley—are vying to lead this sweeping reform.

"The only bill that counts is Kennedy-Enzi," says Peter Pitts, director of the Center for Medicines in the Public Interest, "because it at least begins to understand that you can't separate safety and risk." Dodd-Grassley, which proposes a separate office of drug safety inside FDA is, Pitts says, "dead in the water."

Although it's more sensitive toward the safety–risk calculus at the heart of the pharmaceutical enterprise, Kennedy-Enzi will give FDA the clout to make pharma finally fulfill its commitment to post-approval surveillance. Congressional debates over whether to mandate the most controversial of the Institute of Medicine's recent high-profile recommendation—the use of a black-triangle icon on prescription labels for two years after drug approval—promise at least to offer comic relief.

The true innovations and regulations necessary to create a 21st-century FDA have little to do, of course, with scary symbols on product packaging. IOM proposes a "lifecycle approach" to "evaluate risks in the context of benefits" for all marketed meds, correcting what it views as the system's favoring of speed over safety and tight pre-approval studies over lax Phase IV surveillance. FDA's Critical Path Initiative goes even further, blue-printing personalized medicine via technological and structural reforms for cheaper clinical trials and faster drug approval in targeted populations followed by expanded approval based on post-market monitoring.


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