Meningitis Outbreaks Call for FDA Leadership. Don’t Hold Your Breath

Henry Miller:


Vaccination is one of the most important advances in public health in recent centuries, and hundreds of vaccines have all but eradicated many of the infectious disease scourges of the past. But two recent college campus outbreaks of Meningitis B (MenB), which is caused by serotype B of a bacterium called Neisseria meningitidis, or meningococcus, show that more needs to be done. What we need right now is not scientific or technological ingenuity, but more enlightened and responsive government oversight.

Since the first MenB cases were reported at Princeton University nine months ago, the federal government has taken insufficient and piecemeal steps to stem the further spread of the highly contagious and potentially deadly disease. The second outbreak has occurred at the University of California, Santa Barbara over the past month. Twelve students in all have been infected. Worldwide, there are 20,000-80,000 cases of MenB annually, with a mortality rate of about 10 percent. Of those who survive, about one-fifth suffer from devastating permanent disabilities such as brain damage, deafness, or limb loss. One UCSB case is a freshman lacrosse player whose feet had to be amputated.

As students and administrators at UCSB have learned to their dismay, there is no approved MenB vaccine in the United States although one called Bexsero, manufactured by Novartis, has been approved by regulators in the European Union, Australia, and Canada, and is available in those countries. The same vaccine is in clinical trials in the United States, but characteristically, the FDA has slowed the testing and approval process, so officials at the affected campuses have been forced to appeal to the federal government for special permission to import and administer it.


Why not reciprocity?? Burned by the FDA

Alex Tabarrock asks why the US FDA has to duplicate drug approvals already completed by reliable nations – e.g.. Germany, Great Britain. Is there any explanation other than aggregation of power to the bureaucracy?

If you lived in Great Britain or Germany and your physician prescribed a pharmaceutical, would you ask them, ‘has this pharmaceutical been approved by the U.S. FDA?’ Probably not. At Dan Klein and I argue that international reciprocity is a no-brainer:

If the United States and, say, Great Britain had drug-approval reciprocity, then drugs approved in Britain would gain immediate approval in the United States, and drugs approved in the United States would gain immediate approval in Great Britain. Some countries such as Australia and New Zealand already take into account U.S. approvals when making their own approval decisions. The U.S. government should establish reciprocity with countries that have a proven record of approving safe drugs—including most west European countries, Canada, Japan, and Australia. Such an arrangement would reduce delay and eliminate duplication and wasted resources. By relieving itself of having to review drugs already approved in partner countries, the FDA could review and investigate NDAs more quickly and thoroughly.

Unfortunately, even when they can, the US FDA does not take advantage of international knowledge as the WSJ notes in European Sunscreen Roadblock on U.S. Beaches:

Eight sunscreen ingredient applications have been pending before the U.S. Food and Drug Administration for years—some for up to a decade—for products available in many overseas countries. The applications were filed through the federal TEA process (time and extent application), which allows the FDA to approve the ingredients if they have been used for at least five years abroad and have proved effective and safe.

…Henry Lim, chairman of dermatology at Henry Ford Hospital in Detroit and a member of the American Academy of Dermatology, says multiple UVA filters still awaiting clearance in the U.S. have been used effectively outside the country for years.

‘The U.S. is an island by itself on this one,’ he said. ‘They’re available in Canada, available in Europe, available in Asia, available in Mexico, and available in South America.’




Antibiotic-resistance: we need better incentives

(…) And going to the hospital has itself become alarmingly risky. Already, 1.7 million people in the U.S. acquire infections in the hospital each year, resulting in 99,000 deaths, according to the Centers for Disease Control and Prevention.

(…) “A lot can happen in the several days that it takes for the doctor and the patient to determine that the first antibiotic that was given didn’t work,” Mellon said.

We were traveling and thus missed Megan McArdle’s Ocober 2011 analysis. I highly recommend a careful read to reflect on the scale of the problem and some possible policy solutions. There are a number of problems contributing to poor investment incentives plus poor incentives to maximize the utility of new molecules.

(…) The problem is, efforts at promoting conservation may discourage innovation—and vice versa. Some hospitals now require infectious-disease doctors to sign off on the use of newer and more powerful antibiotics. But this has a cost. “When a new antibiotic comes out,” Pfizer’s Utt says, “physicians don’t necessarily use it—they tend to hold it in reserve. So by the time it’s being used, it’s already used up part of its marketable patent life.” As a result, fewer large firms may want to spend the time and money to get these drugs approved—according to the IDSA, only two major drug companies (GlaxoSmithKline and AstraZeneca) still have strong active research programs, down from nearly 20 in 1990. Antibiotics are not big moneymakers: Every time a doctor writes a prescription for Lipitor, Pfizer may gain a customer for decades. But short-course drugs like antibiotics sell perhaps a dozen doses.

(…) Those same critics suggest that perhaps we should take this out of the invisible hands of the market. Historically, we’ve solved tragedy-of-the-commons problems either through privatization, as Britain did with its land, or through nationalization, as many nations have done with their military and police. If the market doesn’t work, why not try the government?

Even many libertarian types agree that the commons problem seems to call for stronger state controls over antibiotics. But how far should that go? Government and academia perform vital basic research, but they haven’t delivered a lot of working drugs. “What would be nice,” says Daemmrich, “would be to have free-market mechanisms reward new-drug discovery even as the use of antibiotics was limited to infections that don’t go away on their own.”

One possibility is to have the government buy all the antibiotics on a sliding scale: so many billion dollars for a first-in-class antibiotic, half that amount for a second-in-class, and so forth. The government could then restrict the antibiotic’s use. I’ve posed this possibility to people at pharmaceutical companies and gotten a surprisingly warm reception. Another idea, proposed by Outterson and a colleague, Harvard’s Aaron Kesselheim, is to change the reimbursement system so that companies get paid more when fewer of their drugs are prescribed, as part of a conservation plan. “Let’s say Bayer had a diagnostic test that could quickly tell whether you had a bacterial or viral infection. Right now, the only thing that this would do is knock down their unit sales [of antibiotics]. We should reward companies like Bayer if they bring out a diagnostic like this—their unit sales might decrease by half, but if so, we should quadruple their unit price.” Or we could have special rules for antibiotics patents: instead of a 20-year term, make them renewable annually for drug companies that promote conservation.

These ideas sound elegant and simple in a magazine article. In the real world, they’d be messy and controversial. The government would be getting into the business of fixing prices. Likely, it would overshoot, handing windfall profits to firms, or undershoot, leaving us without enough drugs to treat emerging resistant infections. But the potential for such mistakes shouldn’t stop us from trying to pursue creative public-private solutions. We just need to be prepared to face a lot of yelling.

Especially since the way to reward conservation is not entirely clear. Laxminarayan notes, “Whether resistance develops is not entirely a function of what the manufacturer does—it’s a function of what other manufacturers do as well.” Not to mention doctors, and patients, not all of whom are, ahem, entirely compliant.

If you are not totally depressed, read the June 14, 2011 McArdle analysis “How Superbugs Will Affect Our Health Care Costs. That article is based on “The ‘return of our old enemies in an untreatable form’” by the Remapping Debate. Please read both articles for discussion of the following two figures — these two trends can only end very badly:

Note that the first chart does not include the resurgence of multidrug resistant (MDR) and extensively drug resistant (XDR) tuberculosis.

New Drugs Cost Even More Than You Think

R&D constant dollar graph.png

The depressing figure above was referenced in McArdle’s “Pharma Spending Less on Finding New Drugs“; Copyright The Boston Consulting Group. NME’s per $B R&D spent (constant dollars), where NME’s are New Medical Entities.

There is a very helpful article where Megan McArdle examines recent studies of the cost of new approvable drug discovery. That US$ 1 billion I’ve been using is low by 4 to 12 times:

(…) The standard figure for drug discovery thrown around by the industry’s most avid critics is the Light and Warburton estimate of roughly $43 million. Most serious analysts think that’s way too low (I agree–their assumptions were bizarre, and their attempt to defend them in the comments to this Tim Noah piece is painful to read).

The industry, and its supporters, prefer Joseph DiMasi’s figure of around $800 million. But critics point out that it was derived using confidential data, which can’t be verified, and they are very critical of the method, which includes opportunity costs–the returns that pharmaceutical firms didn’t earn by spending the money elsewhere.

Now along comes a new method, from Matthew Herper at Forbes. It uses only public, audited data, and it’s breathtakingly simple: over a 15-year period, they divided each company’s R&D spend by the number of drugs they got approved. The result: DiMasi is also way too low. For every approved drug, pharma spent between $4 billion and $11 billion on R&D. Yes, there’s probably some wiggle room on the accounting, but not that much–your auditor is not going to let you reclassify your new delivery trucks, or a Human Resources SVP, as a research expense.

As Herper points out, this isn’t necessarily a vindication of pharma–one could demand to know why they have to spend so much money to develop new drugs. Yes, I know, it’s getting harder to find approvable new drugs, but the industry has been flailing for ten years, and so far, the only answer they have hit on seems to be “more layoffs!” Maybe they’re just trapped in a bad place, but since the layoffs clearly aren’t working, I sure hope they come up with something else.

Still, it’s a useful corrective to the notion that pharma just wanders down to the university labs once a year to harvest the new drugs, then spends the rest of the year sitting back and idly watching the royalty checks pour in through the mail slot. Finding an approvable new drug is a long, expensive process that too often goes awry–and often, the rules we impose make things worse, and even tax policy. We should think about these numbers every time someone like Marcia Angell suggests that really, Big Pharma barely does anything. Unfortunately, Big Pharma is doing a lot, although not necessarily effectively as they could. Even more unfortunately, a dry pipeline hurts us at least as much as it hurts them.

The Budgetary Impact of Ending Drug Prohibition

The Cato white paper by Jeffrey A. Miron and Katherine Waldock is a good reference. When a nation has severe fiscal problems, the first thing they should do is pluck the low hanging fruit. Especially expensive government programs that generate horrendous negative externalities. This report concludes that $88 billion could be saved each year. From the executive summary:

State and federal governments in the United States face massive looming fiscal deficits. One policy change that can reduce deficits is ending the drug war. Legalization means reduced expenditure on enforcement and an increase in tax revenue from legalized sales.

This report estimates that legalizing drugs would save roughly $41.3 billion per year in government expenditure on enforcement of prohibition. Of these savings, $25.7 billion would accrue to state and local governments, while $15.6 billion would accrue to the federal government.

Approximately $8.7 billion of the savings would result from legalization of marijuana and $32.6 billion from legalization of other drugs.

The report also estimates that drug legalization would yield tax revenue of $46.7 billion annually, assuming legal drugs were taxed at rates comparable to those on alcohol and tobacco. Approximately $8.7 billion of this revenue would result from legalization of marijuana and $38.0 billion from legalization of other drugs.

The $88 billion is narrowly defined in US terms. But the global “war on drugs” is driven entirely by US policy. If the US legalized the positive worldwide impact would be huge.