Health and life insurance companies have access to a powerful new tool for evaluating whether to cover individual consumers: a health "credit report" drawn from databases containing prescription drug records on more than 200 million Americans.
Collecting and analyzing personal health information in commercial databases is a fledgling industry, but one poised to take off as the nation enters the age of electronic medical records. While lawmakers debate how best to oversee the shift to computerized records, some insurers have already begun testing systems that tap into not only prescription drug information, but also data about patients held by clinical and pathological laboratories.
Traditionally, insurance companies have judged an applicant's risk by gathering medical records from physicians' offices. But the new tools offer the advantage of being "electronic, fast and cheap," said Mark Franzen, managing director of Milliman IntelliScript, which provides consumers' personal drug profiles to insurers.
The trend holds promise for improved health care and cost savings, but privacy and consumer advocates fear it is taking place largely outside the scrutiny of federal health regulators and lawmakers.
Ingenix, a Minnesota-based health information services company that had $1.3 billion in sales last year -- and Wisconsin-based rival Milliman -- say the drug profiles are an accurate, less expensive alternative to seeking physician records, which can take months and hundreds of dollars to obtain. They note that consumers authorize the data release and that the services can save insurance companies millions of dollars and benefit consumers anxious for a decision.
"Some insurers can make a decision in the same day, or right on the spot," Franzen said. "That's the real 'value-add.' "
But the practice also illustrates how electronic data gathered for one purpose can be used and marketed for another -- often without consumers' knowledge, privacy advocates say. And they argue that although consumers sign consent forms, they effectively have to authorize the data release if they want insurance.
"As health care moves into the digital age, there are more and more companies holding vast amounts of patients' health information," said Joy Pritts, research professor at Georgetown University's Health Policy Institute. "Most people don't even know these organizations exist. Unfortunately the federal health privacy rule does not cover many of them. . . . The lack of transparency with how all of this works is disturbing."
The water felt cool and the pressure against her limbs was soothing. A few trips to the pool and the mermaid was hooked. She began to look forward to Mondays, Wednesdays, and Fridays each week and began to count how many laps she completed, each day, each week, each month.LOS ANGELES/NEW YORK: Biogen Idec and Elan have notified regulators of two new cases of a potentially deadly brain disease in multiple sclerosis (MS) patients being treated with Tysabri.
Biogen shares dropped about 23 percent in after-hours trading, while Elan's shares fell 45 percent in New York.
"This is going to have very broad, very wide ramifications for the commercial prospects of the drug because there's just a lot of uncertainty here," said Cowen & Co analyst Eric Schmidt.
Tysabri, co-marketed by Ireland's Elan and Cambridge, Massachusetts-based Biogen, was withdrawn from the market in 2005 after three patients developed the brain infection known as progressive multifocal leukoencephalopathy (PML).
The drug returned to the market in 2006 with warnings after the U.S. Food and Drug Administration decided MS patients willing to accept the risks should be able to have access to the drug's potential benefits.
The two new PML patients, one of whom is hospitalized, are in the European Union, the companies said.
More cases are likely and physicians are likely to reduce the number of patients they start on the drug as they are reminded of long-term potential safety issues, Morgan Stanley analyst Steven Harr said in a research note.
Elan and Biogen said more than 31,800 patients were being treated with Tysabri as of the end of June and second-quarter sales totalled $200 million (100 million pounds).
"We've said all along, and the FDA has also stated and it's clearly outlined in our label that we expect to see additional cases of PML," Biogen spokeswoman Naomi Aoki said. "These are the first cases we've seen since the reintroduction in the U.S. and approval in Europe two years ago."
She said the company believes that heightened clinical vigilance has been the best way to monitor for PML and that heightened vigilance was critical in identifying these cases.
Schmidt said, the "key fear factor in the market place is going to be what happens when you treat beyond two, two and a half years ... Nobody knows the answer and that's kind of scary."
"I think you'll see a general pause in the market place, especially in the U.S., where safety has become more of a lightning rod issue, in part driven by the litigious nature of our society," the analyst said.
Tysabri also won U.S. approval this year to treat adults with moderate to severe Crohn's disease who have had a poor response to, or cannot take, other therapies.
Shares of Biogen, which closed at $69.76 on Nasdaq, fell to $53.68 after hours, while shares of Elan, which closed at $20.05 on the New York Stock Exchange, were trading at $11.00.
Elan's shares had already lost one-third of their value on Wednesday when investors sold the stock after disappointing data on an experimental Alzheimer's drug Elan is developing with Wyeth.
Biogen and Elan have a scheduled a conference call with analysts and investors for Friday morning.
(Reporting by Deena Beasley and Bill Berkrot; editing by Jeffrey Benkoe and Carol Bishopric)
Item 8.01 Other Events.On July 31, 2008, Biogen Idec Inc. and Elan Corporation, plc notified relevant regulatory agencies of two confirmed cases of progressive multifocal leukoencephalopathy (PML) in multiple sclerosis (MS) patients treated with TYSABRI in the commercial setting. Additional information about these cases is set forth below.Case 1
• On July 30, 2008, following a period of clinical evaluation, Biogen Idec received confirmation of a diagnosis of PML in a MS patient in the European Union (EU). • The diagnosis was made based upon the detection of JC Virus (JCV) DNA in the cerebrospinal fluid (CSF) in the setting of clinical signs, symptoms and magnetic resonance imaging (MRI) findings consistent with the diagnosis of PML. • As reported to the company on July 31, 2008, the patient remains clinically stable and ambulatory at home. • Background:
- Patient in EU with aggressive MS who was naïve to prior disease modifying therapy; - TYSABRI monotherapy for approximately 17 months; - Clinical vigilance led to early identification of signs and symptoms of possible PML and medical work-up which included MRI scanning and CSF testing, but PML was not confirmed at that time; - However, given continued clinical suspicion by treating physician plasma exchange was initiated as outpatient; - Subsequent testing of CSF detected JCV DNA which was reported to the company on July 30, 2008; - It was then determined by PML experts that the latest CSF results together with the clinical history, physical findings, and MRI results are consistent with the diagnosis of PML. Case 2
• On July 31, 2008, Biogen Idec was notified of a diagnosis of PML in a second MS patient in the EU. • The diagnosis was made based upon the detection of JCV DNA in the CSF in the setting of clinical signs, symptoms, and MRI findings consistent with the diagnosis of PML. • As reported to the company on July 31, 2008 the patient is currently hospitalized. • Background:
- Patient in EU with MS with a history of prior disease modifying therapies including azathioprine and beta-interferons; - TYSABRI monotherapy for approximately 14 months; - Evaluation for possible PML included MRI scanning and CSF testing; - CSF testing detected JCV DNA, which was reported to the company on July 31, 2008; - The CSF results together with the clinical history, physical findings, and MRI results are consistent with the diagnosis of PML.
I think Diane's response to Brian is important for each of us to remember -During one of my yoga classes my instructor read a story to the class while we were in a meditation pose. The story she read was "Who Moved My Cheese," by Spencer Johnson. The story deals with change; changes in everyday life and how most people fear change.
This story really struck a core with me due to all of the changes that have happened in my life during this year. The most obvious of course, was begin diagnosed with Multiple Sclerosis. The fear of the unknown can really limit people to how they accept changes in their lives. At the time of my diagnosis I had no idea what MS was let alone how it would forever change my life. That fear of the unknown started kicking in and I was freaking out. I was noticing changes in my body and was not able to do certain things as easily as once before. Some days I could hike to the top of a mountain with my hubby Chaz and other days I was so fatigued I couldn't keep my eyes open. MS was changing my body in ways I thought would never happen at age 30. I knew that if I didn't keep a positive outlook I would crack under the pressure.
I started learning more about MS and understanding my symptoms. I started taking better care of myself and took my diagnosis as a wake-up call for my health. As crazy as this may sound, my MS became the change I needed. MS was a slap in the face at the unhealthy life I was leading. In a way I was letting go of the old me and ushering in the new me. Smoking a pack of ciggs everyday since I was 16 years old went out the window. Doing cardio, yoga and weight training has become my new routine. Even with the MS I'm currently the healthiest I have ever been in my life. The way I have dealt with this "change" has helped me appreciate life a little more.
Change is scary, but the way one deals with change can make the world of difference. The most important message someone can get from the story, "Who Moved My Cheese," would have to be:
"What would you do if you weren't afraid?"
I hope you find this story as enjoyable as I did~
When I was diagnosed with MS in 1976, that was enough for me to handle because at the time I had just got married and we wanted a family. All the treatments for MS at that time harmed the fetus, so I was advised to "table" getting pregnant. After a round of chemotherapy that was especially bad, I threw my hands up and told my doctor "ENOUGH!" I had gone through ACTH, plasmaphoresis, various chemo infusions, blood washing, nuclear therapy, high steroid therapy, physical therapy, electro-stim, and had been in several "studies." (They justify everything by calling them "therapy" or "studies.")
Then in 1979 I found out I had endometriosis, which inhibits fertility. So over three years, I had 11 (eleven!) surgeries for endometriosis in efforts to get pregnant. I was on Pergonal, Clomid and going through invitro (5 times) trying to get pregnant. Then OB/GYN I was going to said he would no longer participate in my campaign to have babies. Because of all the "therapies" I had been on, there was high concern for deformities and spontaneous abortions. (7 of those)
Every OB/GYN I went to after, as soon as they saw (from records forwarded) that I had MS and had various treatments for it, they would refuse fertility treatments.
I was tested for Rheumatoid Arthritis and Fibromyalgia at that time and the tests were negative - everything within normal range. Then testing for the RH Factor was done and that was within normal range. MRI's were not around yet, CT scans of brain showed benign MS. I had a small window of opportunity to get pregnant and I jumped on it.
Finally, I made a decision to NOT tell the next OB/GYN anything bad, in order to get someone to treat me. Long story short, after 9 pregnancies, I have two live children.
Pregnancy is supposed to make MS dormant but that isn't always so. When I was 6 months pregnant (on Christmas morning) I had a stroke and the stroke set off the MS. Two years of rehab later, most of my physical MS symptoms can be attributed to stroke. When I was well enough to go back to school and work, instead of telling people I had MS, I only told them of the stroke.
I was in medical school when I was dx'd with MS, almost completed when I finally got a pregnancy to hold and dropped out so I could hold on to the baby. It worked. But I had to give up a career that I had worked for since before I was a teenager. No regrets now, I have two sons. After rehab, I went through a PA (Physician Assistant) program and was able to be employed without discrimination because I was quiet about the MS.
If you read my blog, you may remember my writing about someone who "outed" me in the ER where I had been employed. She was a med tech in my doc's office and totally screwed me in my job. I was fired.
After that, I've had to invent some very devious stuff just to remain employed. I had a bad turn and I returned to work after being wheelchair bound for 8 years. I worked part time, but not in the medical field the whole time. I believed everything the docs were feeding me - that I wasn't going to be able to work full time, that I'd be in a w/c before I was 50, that with each flare I would get worse and finally that I would advance to progressive MS.
In 2000, I decided to take control of my life again. I went back on my old regimen of exercise, water therapy, vitamins, diet, H-Wave and deep water walking. Within 3 months, I was able to work 25 hours a week and in 6 months added 15 hours to bring me to full time.
Getting past an employment physical was old hat for me, so in 2001 I decided to get back in the medical field. They did some routine blood work and urine and wouldn't ya know - they sent it to the lab my doc uses. That's how they found out I had MS - from the lab. Because of the ADA laws in USA, I was covered. The lab tech was fired but damage was already done.
I went back to my neuro in efforts to see if there was anything they would be privy to that I didn't really want them to know.
He decided to do some bloodwork because he was not cc'd on employment blood studies and he wanted to see how much it had changed since the year before. At that time, I was only getting bloodwork done once a year (around my birthday).
Lo and behold, he had added several tests onto the routine tests, and guess who now has RA. So when it flares, I go on a prednisone timetable...if it is really bad, I do IVSM. When the RA kicks up, the MS flares; when the MS flares, the RA acts up. Vicious circle.
I have to go for MRI within the next month and I am worried because I have lost some of my cognitive abilities. Coordination isn't bad, but brain power is noticably changed. I get MRI's every two years because I am stubborn and don't want to be reminded yearly of how bad it is getting. LOL. On MRI, from 1994 through 2000, I had active 16 brain lesions - very little changes on MRI.
In 2002, after my regimen had been in place almost two years, I had 3 active lesions. In 2004, one active lesion. In 2006, no active lesions. Because my brain isn't behaving iitself lately, I am concerned there will be active lesions again. My neuro is cool with the fact that I don't want any MS drugs and agrees to just follow me. I think something absolutely DRASTIC would have to happen to me for me to consider any MS therapies....like total shutdown where nothing works anymore. Even then I guess I'd have to think about it...if I could think still.
Oh well, you've got the general idea of how I manage with MS. Mental stimulation is foremost with me and I believe it keeps me sharp. No one has said so, but I myself do notice that my brain is slipping in the past six months or so. I often have to retrace steps, which is a key indicator! LOL
Sorry for this long email. I sometimes think I have to justify why I choose to treat my MS the way that I do, when so many are treating with various injections.
Price Gouging in Extremely Vulnerable and Captive Market
By 9:00 AM, the line of those waiting to enter Room 106 of the Dirksen Senate Office Building in Washington, D.C., had grown longer than the velvet rope gate established to organize such a line.
"What's being lobbied for today?" asked a congressional staffer who passed by the table covered with handouts of the witnesses' testimonies.
The topic of the morning was pharmaceutical "price gouging" from drug companies with effective monopolies within an "extremely vulnerable and captive market." Thus on July 24, 2008, Senator Amy Klobuchar (D-MN) opened the Joint Economic Committee hearing to discuss, "Small Market Drugs, Big Price Tags: Are Drug Companies Exploiting People With Rare Diseases?"
Even Before It Began
While a friend held my place in the waiting line, I was allowed to sit in one of the chairs at that press sign-in and handout-laden table. I asked the staffer sitting next to me, "Is this a larger turn-out than normal?" She laughed and told me that she had "never seen people line-up for a JEC hearing before."
From that chair, I was able to witness a public relations representative who arrived to leave fact sheets provided by one of the drug companies who was mentioned specifically. That company is Questcor Pharmaceuticals, Inc., who manufacturers the drug H.P. Acthar (r) Gel which is FDA-approved for the treatment of periodic flairs in multiple sclerosis. However, the drug is more commonly used in the treatment of Infantile Spasms (IS) which is a rare seizure disorder found in only an estimated 2000 infants each year in the United States.
The PR rep was told that someone else in charge would need to be asked, but I certainly asked to have a copy. After reading the fact sheet and when he returned to the table, I asked him some questions as well as introducing myself by name. But of course, he had no idea exactly how much I have researched Questcor's historical financial information.
Just a little later, a messenger from PhRMA, Pharmaceutical Research and Manufacturers of America, the industry's lobby firm, also came by the table with copies of a Press Release prepared to accompany today's hearing. Funny thing. She looked a lot like a drug sales rep. You know, that former cheerleader look.
But she couldn't stick around for the hearing as she was on her way to a different one, perhaps the one during which Medicare Part D Reform was discussed. Another funny thing about PhRMA - why is it that so many of their press releases tout "more than 300" drugs in development for name-the-disease-category, such as Mental Illness or Orphan Drugs.
Inside Room 106
A long conference table was facing Senator Klobuchar's seat upon which were three name tags, several bottles of water, and timing boxes which counted down the amount of time allotted for each witness to speak. I chose a seat on the second row so as to be able to hear the speakers better.
Joining me in attendance were 75-80 others in the room. Huge turnout I'm told for a Joint Economic Committee hearing. Staying to listen to the testimonies was Questcor's pr guy who sat a few rows behind me.
Senator Klobuchar opened the meeting by introducing the topic and thanking the three witnesses about to testify. On the docket were an academic economist from the PRIME Institute at the University of Minnesota, a physician who is the CEO/president of Children's Hospitals and Cinics of Minnesota, and a mother of an Infantile Spasm patient who was also in attendance.
Although I do believe that little Trevor slept for most of the event and only needed to be escorted out of the room once, upon returning he was happy enough with his bottle. Sitting next to his daddy and little baby brother was also Tobey, the big brother, who enjoyed some time on his Nintendo. Sorry, I didn't get a good look at what game he was playing.
Before excusing himself to attend another meeting, Senator Charles Schumer, Chairman of the Joint Economic Committee, presented a statement addressing the topic of the day. It is known that Senator Schumer has been "a staunch advocate of lower priced drugs and a competitive pricing market."
The Economist
Madeline Carpinelli, research fellow at the PRIME Institute which focuses its research on policy issues related to pharmaceutical economics and drug expenditures at all levels in the marketplace. Madeline explains that ordinary annualized price increases for branded drugs has been two to three times the rate of general inflation which has become routine.
"This rate of inflation is not necessarily acceptable, or even reflective of an economically efficient pharmaceutical market, but it has come to be expected in recent years."
The study at hand centers around drugs experiencing extraordinary price increases which was defined as "any price increase that is equal to, or greater than, 100% at a single point in time." This refers to a drug which doubles in price from one day to the next overnight. Primarily these drug products are not among the top 100-500 drugs on the market and the huge price increases may have been "flown under the radar" in small patient populations.
The Doctor
Dr. Alan Goldbloom is the president and CEO of Children's Hospitals and Clinics of Minnesota which is "the 7th largest pediatric heath care system in the nation." Dr. Goldbloom made clear that his testimony is not a rant against the entire pharmaceutical industry, but is focused on the practices of some specialty pharma companies and their questionable pricing of some older drugs now used in rare disease populations. His personal experience comes from two companies in particular, Ovation and Questcor, but notes that they are not the only ones and that this practice is not confined to pediatric pharmaceuticals.
Dr. Goldbloom discussed the drug indomethacin (Indocin) which was discovered over 30 years ago to be a safe and effective, non-surgical treatment of patent ductus arteriosus (PDA) found in some premature babies. Dr. Goldbloom testified that before Ovation purchased exclusive rights to Indocin (and several other drugs) from Merck in 2005, the cost of Indocin was just over $108 per unit, truly a low-cost alternative to surgery. But then in January 2006 the price jumped up 1278% to $1500 per unit.
"Indocin is an old drug. It has been on the market for more than three decades, so this dramatic price increase cannot be attributed to the high cost of research and development."
Presented was data on three other drugs which Ovation had purchased from pharmaceutical giant Merck and the amounts of price increases for these drugs which include Cosmegan (up 3437%), Diuril Sodium (up 864%), and Mustargen (up 979%). Please keep in mind that an extraordinary increase was previously referred to as being only 100%.
Dr. Goldbloom turned his attention to H.P. Acthar(r) Gel which experienced a 1410% increase in August 2007 from $1650 per vial to $23,269 per vial. I have previously discussed historical data related to Acthar and Questcor's justification for the rise in price.
After the close of stock trading today, Questcor released their 2nd Quarter Results in 2008 and held a conference call. I was unable to listen to the call at that time and will have to listen to the replay on their website later. Questcor reports Net Sales of $24.9 million and a profit margin of 91%. "We continue to successfully execute our Acthar-centric business strategy," said Don M. Bailey, President and Chief Executive Officer of Questcor in the Press Release.
It looks like Questcor had initially published a Statement Regarding the July 24 Senate Hearing on their website, but the item has been withdrawn and the link goes nowhere.
The Mommy
Danielle Foltz is mother to Trevor Foltz who at 7 1/2 months began exhibiting seizures which resembled "a newborn startle reflex." This was in November 2007 just before Thanksgiving. The Foltzes were preparing to return to their ministry work and home in Tanzania, East Africa when Trevor's jerky, odd movements were noticed. Danielle has shared their story on her blog Dear Trevor.
Originally the Foltzes insurance company denied coverage of Acthar stating that it is not FDA approved in the treatment of Infantile Spasms. Questcor filed an sNDA for that very indication in August 2006 but announced that they received a "not approvable" letter from the FDA in May 2007.
Mr. Foltz spent days on the phone with the insurance company fighting for coverage for Trevor. Mrs. Foltz called the Acthar patient assistant program but was told that it would take "a minimum of 3 business days" for the approval process and that approval was not guaranteed even in financial situations such as their's.
Ultimately treatment for Trevor was delayed six days before they were given the go-ahead to start treatment. Being quoted a price of $30,000 per vial the medication, and with a round of treatment for Trevor requiring 5 vials, the cost for medication alone approached $150,000 for their drug plan.
"Because ACTH must be injected into the thigh, a nurse had to teach us how to administer it once we went home. When she asked my husband if he was nervous about giving Trevor the shot for the first time, he answered that he was more nervous about holding $5000 in a single syringe. Or worse, dropping the vial!!"
Just imagine. With an insurance plan having 10-20% copays on medication, Trevor's treatment would cost $15,000-30,000 to the insured patient. Insurance policies can be structured in so many ways that it is very difficult to ascertain what the typical cost to the insured customer is. What I pay out-of-pocket is different from what you pay out-of-pocket which is different from what your neighbor pays out-of-pocket, all for the very same drug.
In Conclusion
It was fascinating to attend the meeting and learn a few things I didn't already know. It was a tiny bit frustrating to be sitting in the audience and know that I could supply much greater detail than was presented in such a short period of time. In fact, two of the drugs I take in relation to having multiple sclerosis were mentioned during the question/answer session.
These were the topics discussed today. Senator Klobuchar stated that this is only the beginning of the research to come. The Federal Trade Commission and the General Accounting Office have been asked to investigate further the business strategies and executive decisions which have led to such extraordinary price increases in recent years.
- Effective Monopolies
- Vulnerable and Captive Markets
- Old Drugs - New Prices
- Orphan Designation
- Anti-competitive Behavior
- Price Gouging
From 100% to 10,000%, drug prices in niche markets have soared
and ultimately we all pay for that. The question is - Who Benefits? and Who Suffers?
I look forward to following the developments of such research and the conclusions of the researchers.
After the hearing concluded, I spoke with Mr. Foltz before introducing myself to Ms. Carpinelli. Unlike the Questcor guy, she immediately knew who I was. "I've read your blog. It's great! And the research you've done... Going through and actually reading SEC filings... Impressive. I wouldn't do that. (lol)"
Well, then again. I'm an odd duck and heard for about the fourth time this week that I should start a secondary career. What do you think?
Which hat do you think might look good on me?
- Passionate Patient Advocate
- Financial Researcher and Analyst
- Strategy Consultant
- Freelance Writer/Author/Blogger
Transcripts and Video can be seen here.
