Cost and Compliance Dominate Agenda for 2011 - Pharmaceutical Technology

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Cost and Compliance Dominate Agenda for 2011
Top priorities for manufacturers include user fees, new health initiatives, and regulatory compliance.


Pharmaceutical Technology
Volume 35, Issue 1, pp. 26-32

Comparing effectiveness

Obama's healthcare reform legislation also expanded federal support for comparative effectiveness research (CER), and that initiative has already begun to take shape. The governing board for the Patient-Centered Outcomes Research Institute (PCORI) held its first meeting in November. It adopted bylaws and explored operating procedures and is now conducting a search for an executive director. Additional priorities are to work with the Institute's new Methodology Committee and to develop a communications plan, including guidelines for interacting with interest groups and for disseminating PCORI findings.

Before PCORI awards any grants for new CER projects, the Board wants to assess what research and analysis already is going on in this field and where there are information gaps to fill. The US Department for Health and Human Services (HHS), the National Institutes of Health, and the Agency for Healthcare Research and Quality have dispersed $1.1 billion to CER projects during the past two years—the funds were provided by the economic stimulus legislation of 2009, and most of these initiatives are up and running.

PCORI may gain assistance for conducting an environmental scan of current CER work from a planned HHS initiative to establish an online CER catalog. Similarly, the Partnership to Improve Patient Care is creating a database of federally funded CER projects to provide patients and healthcare professionals with information on treatment options. PCORI also would like to review state and private CER initiatives sponsored by insurance companies and research organizations to help identify opportunities for early projects that can increase general understanding of CER and further illuminate PCORI's role.

Although comparative effectiveness is not a formal component of drug development in the US, increased government involvement in this field is slated to pressure pharmaceutical companies to demonstrate the value of new therapeutics, especially for crowded drug classes. The development of CER standards and methodologies promises to impact the scope of evidence required by regulators to reduce uncertainty, which will be an important development for manufacturers.

Costs drive compliance

By steering patients and providers to the most effective treatments, CER advocates hope to improve healthcare quality, while also reducing spending on medical services and products. With healthcare consuming an ever-growing portion of federal and state budgets, authorities are looking hard at all opportunities to save money, and healthcare fraud and abuse seems to be a prime target. The Justice Department announced in November that it had recouped $3 billion in civil settlements and judgments last year, much of it from pharmaceutical companies.

At the top of the list is Pfizer's (New York) $2.3-billion settlement for promoting unapproved drug uses and illegal marketing, the largest healthcare fraud payment in history. That surpassed an earlier $1.4-billion deal with Eli Lilly (Indianapolis) for illegal marketing of its pain reliever Bextra. AstraZeneca (London) agreed to a $302-million civil settlement, Novartis (Basel) paid $193 million, Teva (Jerusalem) was hit with a $100 million fine, and Forest Laboratories (New York) doled out $93 million.

There's no sign of any let-up: in October, GlaxoSmithKline (GSK, London) agreed to a $750-million settlement, in this case for failing to correct manufacturing problems at a Puerto Rican plant that resulted in adulterated products. And Merck & Co. (Whitehouse Station, NJ) negotiated a $950-million deal with the US Department of Justice (DOJ) to settle marketing violations related to Vioxx (on top of the $5.6 billion the company has paid out to settle various Vioxx lawsuits and claims). Extensive layoffs throughout the pharmaceutical industry will only encourage more dismissed workers to blow the whistle on malfeasance by former employers. And industry cost-cutting appears to be eroding plant maintenance and increasing reliance on foreign suppliers, giving rise to serious product quality problems and product recalls and shortages.

The crackdown on illegal drug company behavior is slated to intensify as regulators and prosecutors look for more stringent enforcement actions to convince corporate leaders of the importance of complying with FDA marketing and manufacturing rules and of addressing violations cited in warning letters. One strategy is for the federal government to bring criminal charges against individuals considered responsible for serious violations. The first shoe fell in November when the DOJ charged a former GSK executive with making false statements and blocking an FDA investigation into off label uses. The trial begins in February, and conviction could bring a jail term as well as fines.


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