Novel Drug Approvals Strong in 2012

Novel Drug Approvals Strong in 2012
Dec 21, 2012
http://www.innovation.org/index.cfm/NewsCenter/Newsletters?NID=208

Over the past year, biopharmaceutical researchers' work has continued to yield innovative treatments to improve the lives of patients. In fiscal year (FY) 2012 (October 1, 2011 – September 30, 2012), the U.S. Food and Drug Administration (FDA) approved 35 new medicines, keeping pace with the previous fiscal year’s approvals and representing one of the highest levels of FDA approvals in recent years.^[i] For the calendar year FDA is on track to approve more new medicines than any year since 2004.^[ii]

A recent report from the FDA highlights the groundbreaking medicines to treat diseases ranging from the very common to the most rare. Some are the first treatment option available for a condition, others improve care for treatable diseases.

Notable approvals in FY 2012 include:

• A breakthrough personalized medicine for a rare form of cystic fibrosis;
• The first approved human cord blood product;
• A total of ten drugs to treat cancer, including the first treatments for advanced basal cell carcinoma and myelofibrosis and a targeted therapy for HER2-positive metastatic breast cancer;
• Nine treatments for rare diseases; and
• Important new therapies for HIV, macular degeneration, and meningitis.

The number of new drugs approved this year reflects the continuing commitment of the biomedical research community – from biopharmaceutical companies to academia to government researchers to patient groups – to advance basic science and translate that knowledge into novel treatments that will advance our understanding of disease and improve patient outcomes.

Building on these noteworthy approvals, we look to the new year where continued innovation is needed to leverage our growing understanding of the underpinnings of human disease and to harness the power of scientific research tools to discover and develop new medicines.

To learn more about the more than 3,200 new medicines in development visit http://www.innovation.org/index.cfm/FutureOfInnovation/NewMedicinesinDevelopment.

The Rough Road to Progress Against Alzheimer's Disease

The Rough Road to Progress Against Alzheimer's Disease
 PhRMA
Sep 13, 2012
http://www.innovation.org/index.cfm/NewsCenter/Newsletters?NID=205


Two high-profile Alzheimer’s drug development failures were announced in recent weeks shining a spotlight on the challenges and frustrations inherent in Alzheimer’s research. Alzheimer’s disease is among the most devastating and costly illnesses we face and the need for new treatments will only become more acute as our population ages.

Understanding a disease and developing medicines to treat it is always a herculean task but Alzheimer’s brings particular challenges and long odds. A new report from the Pharmaceutical Research and Manufacturers of America (PhRMA), "Researching Alzheimer’s Medicines: Setbacks and Stepping Stones", examines the complexities of researching and treating Alzheimer’s and drug development success rates in recent years.

Since 1998, there have been 101 unsuccessful attempts to develop drugs to treat Alzheimer’s—or as some call them “failures,” according to the new analysis. In that time three new medicines have been approved to treat the symptoms of Alzheimer’s disease; however, for every research project that succeeded, 34 failed to yield a new medicine.

These “failures” may appear to be dead ends – a waste of time and resources – but to researchers they are both an inevitable and necessary part of making progress. These setbacks often contribute to eventual success by helping guide and redirect research on potential new drugs. In fact, the recent unsuccessful trials have provided a wealth of new information which researchers are now sifting through to inform their ongoing research.

Alzheimer’s disease is the sixth leading cause of death in the United States today, with 5.4 million people currently affected.^[i]  By 2050, the number of Americans with the disease is projected to reach 13.5 million at a cost of over $1.1 trillion unless new treatments to prevent, arrest or cure the disease are found.^[ii]  According to the Alzheimer’s Association a new medicine that delays the onset of the disease could change that trajectory and save $447 billion a year by 2050.

According to another new report, researchers are currently working on nearly 100 medicines in development for Alzheimer’s and other dementias. Although research is not a straight, predictable path, with continued dedication, we will make a difference for every person at risk of suffering from this terrible, debilitating disease.

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^[i]Alzheimer's Association, “Factsheet,” (March 2012), http://www.alz.org/documents_custom/2012_facts_figures_fact_sheet.pdf 
^[ii]Alzheimer's Association, 2012 Alzheimer's Disease Facts and Figures, Alzheimer's and Dementia, Volume 8, Issue 2

Quality of Government and Living Standards: Adjusting for the Efficiency of Public Spending

Quality of Government and Living Standards: Adjusting for the Efficiency of Public Spending. By Grigoli, Francesco; Ley, Eduardo
IMF Working Paper No. 12/182
Jul 2012
http://www.imf.org/external/pubs/cat/longres.aspx?sk=26052.0

Summary: It is generally acknowledged that the government’s output is difficult to define and its value is hard to measure. The practical solution, adopted by national accounts systems, is to equate output to input costs. However, several studies estimate significant inefficiencies in government activities (i.e., same output could be achieved with less inputs), implying that inputs are not a good approximation for outputs. If taken seriously, the next logical step is to purge from GDP the fraction of government inputs that is wasted. As differences in the quality of the public sector have a direct impact on citizens’ effective consumption of public and private goods and services, we must take them into account when computing a measure of living standards. We illustrate such a correction computing corrected per capita GDPs on the basis of two studies that estimate efficiency scores for several dimensions of government activities. We show that the correction could be significant, and rankings of living standards could be re-ordered as a result.

Excerpts:

Despite its acknowledged shortcomings, GDP per capita is still the most commonly used summary indicator of living standards. Much of the policy advice provided by international organizations is based on macroeconomic magnitudes as shares of GDP, and framed on cross-country comparisons of per capita GDP. However, what GDP does actually measure may differ significantly across countries for several reasons. We focus here on a particular source for this heterogeneity: the quality of public spending. Broadly speaking, the ‘quality of public spending’ refers to the government’s effectiveness in transforming resources into socially valuable outputs. The opening quote highlights the disconnect between spending and value when the discipline of market transactions is missing.

Everywhere around the world, non-market government accounts for a big share of GDP and yet it is poorly measured—namely the value to users is assumed to equal the producer’s cost.  Such a framework is deficient because it does not allow for changes in the amount of output produced per unit of input, that is, changes in productivity (for a recent review of this issue, see Atkinson and others, 2005). It also assumes that these inputs are fully used. To put it another way, standard national accounting assumes that government activities are on the best practice frontier. When this is not the case, there is an overstatement of national production.  This, in turn, could result in misleading conclusions, particularly in cross-country comparisons, given that the size, scope, and performance of public sectors vary so widely.

Moreover, in the national accounts, this attributed non-market (government and non-profit sectors) “value added” is further allocated to the household sector as “actual consumption.” As Deaton and Heston (2008) put it: “[...] there are many countries around the world where government-provided health and education is inefficient, sometimes involving mass absenteeism by teachers and health workers [...] so that such ‘actual’ consumption is anything but actual. To count the salaries of AWOL government employees as ‘actual’ benefits to consumers adds statistical insult to original injury.” This “statistical insult” logically follows from the United Nations System of National Accounts (SNA) framework once ‘waste’ is classified as income—since national income must be either consumed or saved. Absent teachers and health care workers are all too common in many low-income countries (Chaudhury and Hammer, 2004; Kremer and others, 2005; Chaudhury and others, 2006; and World Bank, 2004). Beyond straight absenteeism, which is an extreme case, generally there are significant cross-country differences in the quality of public sector services. World Bank (2011) reports that in India, even though most children of primaryschool age are enrolled in school, 35 percent of them cannot read a simple paragraph and 41 percent cannot do a simple subtraction.

It must be acknowledged, nonetheless, that for many of government’s non-market services, the output is difficult to define, and without market prices the value of output is hard to measure. It is because of this that the practical solution adopted in the SNA is to equate output to input costs. This choice may be more adequate when using GDP to measure economic activity or factor employment than when using GDP to measure living standards.

Moving beyond this state of affairs, there are two alternative approaches. One is to try to find indicators for both output quantities and prices for direct measurement of some public outputs, as recommended in SNA 93 (but yet to be broadly implemented). The other is to correct the input costs to account for productive inefficiency, namely to purge from GDP the fraction of these inputs that is wasted. We focus here on the nature of this correction. As the differences in the quality of the public sector have a direct impact on citizens’ effective consumption of public and private goods and services, it seems natural to take them into account when computing a measure of living standards.

To illustrate, in a recent study, Afonso and others (2010) compute public sector efficiency scores for a group of countries and conclude that “[...] the highest-ranking country uses onethird of the inputs as the bottom ranking one to attain a certain public sector performance score. The average input scores suggest that countries could use around 45 per cent less resources to attain the same outcomes if they were fully efficient.” In this paper, we take such a statement to its logical conclusion. Once we acknowledge that the same output could be achieved with less inputs, output value cannot be equated to input costs. In other words, waste should not belong in the living-standards indicator—it still remains a cost of government but it must be purged from the value of government services. As noted, this adjustment is especially relevant for cross-country comparisons.

...

In this context, as noted, the standard practice is to equate the value of government outputs to its cost, notwithstanding the SNA 93 proposal to estimate government outputs directly. The value added that, say, public education contributes to GDP is based on the wage bill and other costs of providing education, such as outlays for utilities and school supplies. Similarly for public health, the wage bill of doctors, nurses and other medical staff and medical supplies measures largely comprises its value added. Thus, in the (pre-93) SNA used almost everywhere, non-market output, by definition, equals total costs. Yet the same costs support widely different levels of public output, depending on the quality of the public sector.

Note that value added is defined as payments to factors (labor and capital) and profits. Profits are assumed to be zero in the non-commercial public sector. As for the return to capital, in the current SNA used by most countries, public capital is attributed a net return of zero—i.e., the return from public capital is equated to its depreciation rate. This lack of a net return measure in the SNA is not due to a belief that the net return is actually zero, but to the difficulties of estimating the return.

Atkinson and others (2005, page 12) state some of the reasons behind current SNA practice: “Wide use of the convention that (output = input) reflects the difficulties in making alternative estimates. Simply stated, there are two major problems: (a) in the case of collective services such as defense or public administration, it is hard to identify the exact nature of the output, and (b) in the case of services supplied to individuals, such as health or education, it is hard to place a value on these services, as there is no market transaction.”

Murray (2010) also observes that studies of the government’s production activities, and their implications for the measurement of living standards, have long been ignored. He writes: “Looking back it is depressing that progress in understanding the production of public services has been so slow. In the market sector there is a long tradition of studying production functions, demand for inputs, average and marginal cost functions, elasticities of supply, productivity, and technical progress. The non-market sector has gone largely
unnoticed. In part this can be explained by general difficulties in measuring the output of services, whether public or private. But in part it must be explained by a completely different perspective on public and private services. Resource use for the production of public services has not been regarded as inputs into a production process, but as an end in itself, in the form of public consumption. Consequently, the production activity in the government sector has not been recognized.” (Our italics.)

The simple point that we make in this paper is that once it is recognized that the effectiveness of the government’s ‘production function’ varies significantly across countries, the simple convention of equating output value to input cost must be revisited. Thus, if we learn that the same output could be achieved with less inputs, it is more appropriate to credit GDP or GNI with the required inputs rather than with the actual inputs that include waste. While perceptions of government effectiveness vary widely among countries as, e.g., the World Bank’s Governance indicators attests (Kaufmann and others 2009), getting reliable measures of government actual effectiveness is a challenging task as we shall discuss below.

In physics, efficiency is defined as the ratio of useful work done to total energy expended, and the same general idea is associated with the term when discussing production. Economists simply replace ‘useful work’ by ‘outputs’ and ‘energy’ by ‘inputs.’ Technical efficiency means the adequate use of the available resources in order to obtain the maximum product. Why focus on technical efficiency and not other concepts of efficiency, such as price or allocative efficiency? Do we have enough evidence on public sector inefficiency to make the appropriate corrections?

The reason why we focus on technical efficiency in this preliminary inquiry is twofold. First, it corresponds to the concept of waste. Productive inefficiency implies that some inputs are wasted as more could have been produced with available inputs. In the case of allocative inefficiency, there could be a different allocation of resources that would make everyone better off but we cannot say that necessarily some resources are unused—although they are certainly not aligned with social preferences. Second, measuring technical inefficiency is easier and less controversial than measuring allocative inefficiency. To measure technical inefficiency, there are parametric and non-parametric methods allowing for construction of a best practice frontier. Inefficiency is then measured by the distance between this frontier and the actual input-output combination being assessed.

Indicators (or rather ranges of indicators) of inefficiency exist for the overall public sector and for specific activities such as education, healthcare, transportation, and other sectors. However, they are far from being uncontroversial. Sources of controversy include: omission of inputs and/or outputs, temporal lags needed to observe variations in the output indicators, choice of measures of outputs, and mixing outputs with outcomes. For example, many social and macroeconomic indicators impact health status beyond government spending (Spinks and Hollingsworth, 2009, and Joumard and others, 2010) and they should be taken into account. Most of the output indicators available show autocorrelation and changes in inputs typically take time to materialize into outputs’ variations. Also, there is a trend towards using outcome rather than output indicators for measuring the performance of the public sector. In health and education, efficiency studies have moved away from outputs (e.g., number of prenatal interventions) to outcomes (e.g., infant mortality rates). When cross-country analyses are involved, however, it must be acknowledged that differences in outcomes are explained not only by differences in public sector outputs but also differences in other environmental factors outside the public sector (e.g., culture, nutrition habits).

Empirical efficiency measurement methods first construct a reference technology based on observed input-output combinations, using econometric or linear programming methods. Next, they assess the distance of actual input-output combinations from the best-practice frontier. These distances, properly scaled, are called efficiency measures or scores. An inputbased efficiency measure informs us on the extent it is possible to reduce the amount of the inputs without reducing the level of output. Thus, an efficiency score, say, of 0.8 means that using best practices observed elsewhere, 80 percent of the inputs would suffice to produce the same output.

We base our corrections to GDP on the efficiency scores estimated in two papers: Afonso and others (2010) for several indicators referred to a set of 24 countries, and Evans and others (2000) focusing on health, for 191 countries based on WHO data. These studies employ techniques similar to those used in other studies, such as Gupta and Verhoeven (2001), Clements (2002), Carcillo and others (2007), and Joumard and others (2010).

? Afonso and others (2010) compute public sector performance and efficiency indicators (as performance weighted by the relevant expenditure needed to achieve it) for 24 EU and emerging economies. Using DEA, they conclude that on average countries could use 45 percent less resources to attain the same outcomes, and deliver an additional third of the fully efficient output if they were on the efficiency frontier. The study included an analysis of the efficiency of education and health spending that we use here.

? Evans and others (2000) estimate health efficiency scores for the 1993–1997 period for 191 countries, based on WHO data, using stochastic frontier methods. Two health outcomes measures are identified: the disability adjusted life expectancy (DALE) and a composite index of DALE, dispersion of child survival rate, responsiveness of the health care system, inequities in responsiveness, and fairness of financial contribution. The input measures are health expenditure and years of schooling with the addition of country fixed effects. Because of its large country coverage, this study is useful for illustrating the impact of the type of correction that we are discussing
here.

We must note that ideally, we would like to base our corrections on input-based technical efficiency studies that deal exclusively with inputs and outputs, and do not bring outcomes into the analysis. The reason is that public sector outputs interact with other factors to produce outcomes, and here cross-country hetereogenity can play an important role driving cross-country differences in outcomes. Unfortunately, we have found no technical-efficiency studies covering a broad sample of countries that restrict themselves to input-output analysis.  In particular, these two studies deal with a mix of outputs and outcomes. The results reported here should thus be seen as illustrative. Furthermore, it should be underscored that the level of “waste” that is identified for each particular country varies significantly across studies, which implies that any associated measures of GDP adjusting for this waste will also differ.

...

We have argued here that the current practice of estimating the value of the government’s non-market output by its input costs is not only unsatisfactory but also misleading in crosscountry comparisons of living standards. Since differences in the quality of the public sector have an impact on the population’s effective consumption and welfare, they must be taken into account in comparisons of living standards. We have performed illustrative corrections of the input costs to account for productive inefficiency, thus purging from GDP the fraction of these inputs that is wasted.

Our results suggest that the magnitude of the correction could be significant. When correcting for inefficiencies in the health and education sectors, the average loss for a set of 24 EU member states and emerging economies amounts to 4.1 percentage points of GDP.  Sector-specific averages for education and health are 1.5 and 2.6 percentage points of GDP, implying that 32.6 and 65.0 percent of the inputs are wasted in the respective sectors. These corrections are reflected in the GDP-per-capita ranking, which gets reshuffled in 9 cases out of 24. In a hypothetical scenario where the inefficiency of the health sector is assumed to be representative of the public sector as a whole, the rank reordering would affect about 50 percent of the 93 countries in the sample, with 70 percent of it happening in the lower half of the original ranking. These results, however, should be interpreted with caution, as the purpose of this paper is to call attention to the issue, rather than to provide fine-tuned waste estimates.

A natural way forward involves finding indicators for both output quantities and prices for direct measurement of some public outputs. This is recommended in SNA 93 but has yet to be implemented in most countries. Moreover, in recent times there has been an increased interest in outcomes-based performance monitoring and evaluation of government activities (see Stiglitz and others, 2010). As argued also in Atkinson (2005), it will be important to measure not only public sector outputs but also outcomes, as the latter are what ultimately affect welfare. A step in this direction is suggested by Abraham and Mackie (2006) for the US, with the creation of “satellite” accounts in specific areas as education and health. These extend the accounting of the nation’s productive inputs and outputs, thereby taking into account specific aspects of non-market activities.

Over 900 Biotechnology Medicines in Development, Targeting More than 100 Diseases

Over 900 Biotechnology Medicines in Development, Targeting More than 100 Diseases
September 14, 2011
http://www.innovation.org/index.cfm/FutureOfInnovation/NewMedicinesinDevelopment/Biotechnology_Medicines

Biotechnology has opened the door to the discovery and development of new types of human therapeutics. Advancements in both cellular and molecular biology have allowed scientists to identify and develop a host of new products. These cutting-edge medicines provide significant clinical benefits, and in many cases, address therapeutic categories where no effective treatment previously existed.

Innovative, targeted therapies offer enormous potential to address unmet medical needs of patients with cancer, HIV/AIDS, and many other serious diseases. These medicines also hold the potential to help us meet the challenge of rising healthcare costs by avoiding treatment complications and making sure each patient gets the most effective care possible.

Approved biotechnology medicines already treat or help prevent heart attacks, stroke, multiple sclerosis, leukemia, hepatitis, congestive heart failure, lymphoma, kidney cancer, cystic fibrosis, and other diseases. These medicines use many different approaches to treat disease as do medicines currently in the pipeline.

America's biopharmaceutical research companies have 901 biotechnology medicines and vaccines in development to target more than 100 debilitating and life- threatening diseases, such as cancer, arthritis and diabetes, according to a new report [http://www.phrma.org/sites/default/files/1776/biotech2011.pdf] by the Pharmaceutical Research and Manufacturers of America (PhRMA). The medicines in development—all in either clinical trials or under Food and Drug Administration review—include 353 for cancer and related conditions, 187 for infectious diseases, 69 for autoimmune diseases and 59 for cardiovascular diseases.

The biotechnology medicines now in development make use of these and other state-of- the-art approaches. For example:

•A genetically-modified virus-based vaccine to treat melanoma.
•A monoclonal antibody for the treatment of cancer and asthma.
•An antisense medicine for the treatment of cancer.
•A recombinant fusion protein to treat age-related macular degeneration.


SELECTED BIOTECHNOLOGY MEDICINES IN DEVELOPMENT

Autoimmune Diseases: Autoimmunity is the underlying cause of more than 100 serious, chronic illnesses, targeting women 75 percent of the time. Autoimmune diseases have been cited in the top 10 leading causes of all deaths among U.S. women age 65 and younger, representing the fourth largest cause of disability among women in the United States.


Blood Disorders: Hemophilia affects 1 in 5,000 male births. About 400 babies are born with hemophilia each year. Currently, the number of people with hemophilia in the United States is estimated to be about 20,000, based on expected births and deaths since 1994.


Sickle cell disease is an inherited disease that affects more than 80,000 people in the United States, 98 percent of whom are of African descent.


Von Willebrand disease, the most common inherited bleeding condition, affects males and females about equally and is present in up to 1 percent of the U.S. population.


Cancer: Cancer is the second leading cause of death by disease in the United States—1 of every 4 deaths—exceeded only by heart disease. This year nearly 1.6 million new cancer cases will be diagnosed, 78 percent of which will be for individuals ages 55 and older.


Cardiovascular Diseases (CVD): CVD claims more lives each year than cancer, chronic lower respiratory diseases, and accidents combined. More than 82 million American adults—greater than one in three—had one or more types of CVD. Of that total, 40.4 million were estimated to be age 60 and older.


Diabetes: In the United States, 25.8 million people, or 8.3 percent of the population, have diabetes. An estimated 18.8 million have been diagnosed, but 7 million people are not aware that they have the disease. Another 79 million have pre-diabetes. Diabetes is the seventh leading cause of death in the United States.


Genetic Disorders: There are more than 6,000 known genetic disorders. Approximately 4 million babies are born each year, and about 3 percent-4 percent will be born with a genetic disease or major birth defect. More than 20 percent of infant deaths are caused by birth defects or genetic conditions (e.g., congenital heart defects, abnormalities of the nervous system, or chromosomal abnormalities).


Alzheimer’s Disease: In 2010 there were an estimated 454,000 new cases of Alzheimer’s disease. In 2008, Alzheimer’s was reported as the underlying cause of death for 82,476 people. Almost two-thirds of all Americans living with Alzheimer’s are women.


Parkinson's Disease: This disease has been reported to affect approximately 1 percent of Americans over age 50, but unrecognized early symptoms of the disease may be present in as many as 10 percent of those over age 60. Parkinson's disease is more prevalent in men than in women by a ratio of three to two.

Asthma: An estimated 39.9 million Americans have been diagnosed with asthma by a health professional within their lifetime. Females traditionally have consistently higher rates of asthma than males. African Americans are also more likely to be diagnosed with asthma over their lifetime.


Skin Diseases: More than 100 million Americans—one-third of the U.S. population—are afflicted with skin diseases.

Personalized Therapies Mark Significant Leap Forward in Fight Against Cancer

Personalized Therapies Mark Significant Leap Forward in Fight Against Cancer

http://www.innovation.org/index.cfm/NewsCenter/Newsletters/Newsletters?NID=191   October 12, 2011  This year marks the 40th anniversary of the signing of the National Cancer Act of 1971. Indeed, the 12 million cancer survivors living in the U.S. today attest to the significant progress in cancer prevention and treatment we have made over the past decades. Despite the remarkable advances we have made there are still more than 550,000 men and woman who lose their battle to cancer each year.   Recently released scientific data demonstrate that the collective commitment to cancer research is unwavering and our knowledge of the biology of cancer and ability to treat it continues to expand. One promising trend in cancer research: drug developers are harnessing an improved understanding of the molecular basis of many types of cancer to develop therapies uniquely targeted to these pathways.   For example, a newly approved drug for lung cancer called crizotinib is targeted to a mutation in a gene called anaplastic lymphoma kinase, or ALK. Mutations in the ALK gene are found in approximately 5% of patients with non-small-cell lung cancer. In data presented at this year’s meeting of the American Society of Clinical Oncology (ASCO), 54% of patients who received crizotinib were still alive after two years compared to just 12% in a control group. Crizotinib received fast-track review by the U.S. Food and Drug Administration (FDA) and was approved in August ahead of the six-month priority review schedule.   Dramatic advances are being made in the treatment of the skin cancer melanoma as well. More than 60 drugs are currently in development for the disease and this year two new medicines have been approved – the first approvals for the disease in 13 years. The first, ipilimumab, was approved in March and was the first treatment ever approved by FDA to show a survival benefit for patients with metastatic melanoma. In August the second, a new personalized medicine called vemurafenib, was approved to treat this deadliest form of skin cancer. This drug, which is taken orally, selectively inhibits a mutated form of the BRAF kinase gene. The mutated gene is associated with increased tumor aggressiveness, decreased survival, and is found in approximately half of all malignant melanomas. Recently reported clinical trials results demonstrate that the medicine reduces the risk of death by 63% percent.   Personalized medicine holds great potential beyond these two select examples in lung cancer and melanoma. MD Anderson Cancer Center recently reported on the results of a large-scale clinical trial examining the effect of matching targeted therapies with specific gene mutations across many cancer types. According to the results of the study, patients who received a targeted therapy demonstrated a 27% response rate compared to 5% for those whose therapy was not matched. This clinical trial marks the largest examination of a personalized approach to cancer care to date, and as principal investigator Apostolia-Maria Tsimberidou, M.D., Ph.D. concludes, "This study suggests that a personalized approach is needed to improve clinical outcomes for patients with cancer."   As these and many other studies illustrate, a dramatic transformation in cancer diagnosis and treatment is underway. Therapies targeted to the genetic and molecular underpinnings of disease are being developed, and patient outcomes are improving as a result. The studies highlighted above only begin to scratch the surface of the remarkable potential of personalized, targeted therapies, but are an indication of the great reward of years of research and investment, as well as great promise for continued innovation in the years to come.

USAID Expands Life-Saving Malaria Prevention Program in Africa

USAID Expands Life-Saving Malaria Prevention Program in Africa

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FOR IMMEDIATE RELEASE
August 17, 2011
Public Information: 202-712-4810

http://usaid.gov/press/releases/2011/pr110817.html


WASHINGTON, D.C. - The U.S. Government, through the U.S. Agency for International Development (USAID), announced the expansion of its Indoor Residual Spraying (IRS) program. IRS is the application of safe insecticides to the indoor walls and ceilings of a home or structure in order to interrupt the spread of malaria by killing mosquitoes that carry the malaria parasite. Malaria is the number one killer in Africa.

Through the new IRS contract, the President's Malaria Initiative, led by USAID and implemented together with the Centers for Disease Control and Prevention (CDC), will provide technical and financial support to the Ministries of Health and National Malaria Control Programs in African countries to build country-level capacity for malaria prevention activities. The $189 million, there-year contract awarded by USAID to Abt. Associates will cover the implementation of IRS activities in Angola, Benin, Burkina Faso, Ethiopia, Ghana, Liberia, Madagascar, Mali, Mozambique, Nigeria, Rwanda, Senegal, Zambia, and Zimbabwe, with the possibility of expansion based on malaria control needs and availability of resources.


Activities include assessing the environment to ensure safe and effective use of insecticides, evaluating mosquito abundance and susceptibility to the insecticides, educating residents about IRS and how they should prepare their house for spraying, training spray teams, procuring insecticide and equipment, and monitoring and evaluating spraying activities.

"Here in Washington, a mosquito bite is a fleeting nuisance. But in all too many places, that sudden sting and scratch can be a death sentence. In a world being bound ever closer together, those places do not seem so far away," said Rear Adm. (RET) Tim Ziemer, U.S. Malaria Coordinator. "Preventing and treating malaria saves lives, contributes to a reduction in all-cause under-five mortality, improves the health of children in malaria-burdened regions, and contributes to socioeconomic development in areas most affected by malaria."

The United States is focusing on building capacity within host countries by training people to manage, deliver, and support the delivery of health services, which will be critical for sustained successes against infectious diseases like malaria. PMI continues to introduce and expand four proven and highly effective interventions in each of the target countries. Scale-up of the four interventions is complemented by a strong focus on extending expanding access in rural and underserved communities and further expanding community engagement for malaria prevention and control.

According to the World Health Organization, the estimated number of global malaria deaths has fallen from about 985,000 in 2000 to about 781,000 in 2009. In spite of this progress, malaria remains one of the major public health problems in sub-Saharan Africa, where malaria is the leading cause of death for children under five. Because malaria is a global emergency that affects mostly poor women and children, malaria perpetuates a vicious cycle of poverty in the developing world. Malaria-related illnesses and mortality cost Africa's economy alone $12 billion per year.

Europeans are approving important new drugs more rapidly than we are

The FDA Is Evading the Law. By SCOTT GOTTLIEB
Europeans are approving important new drugs more rapidly than we are.
WSJ, Dec 24, 2010
http://online.wsj.com/article/SB10001424052748704034804576025981869663212.html

This year, the Food and Drug Administration rejected the only medicine capable of treating the rare and fatal lung disease known as idiopathic pulmonary fibrosis. Pirfenidone, which has been available in Japan since 2008 and was just approved in Europe, was spurned by the FDA because the drug only showed efficacy in a single big trial—not the two large studies the FDA now requires. The decision to ban the drug is one of a rash of recent decisions that shows the FDA is making it more and more difficult for promising drugs to reach severely ill patients.

Last week, the FDA revoked an approval for the cancer drug Avastin because it said that evidence supporting its use in breast cancer wasn't strong enough. (The drug was judged ineffective because it merely stalls the spread of tumors.) European regulators, looking at the same data, made the opposite decision.

It wasn't supposed to be this way. In 1997, Congress passed the FDA Modernization Act, which gave the FDA broad discretion to reduce the quantity and rigor of clinical data needed to approve drugs targeting grave illnesses. The purpose of the law was to save lives by reducing the cost and time needed to launch such medicines.

But the FDA has steadily disregarded many of the law's provisions. Longer, larger trials that require drug makers to evaluate "hard" endpoints (like how long a cancer patient lives) rather than "surrogate" endpoints (like a drug's ability to shrink tumors) give FDA reviewers more statistical confidence. Reviewers prefer these drawn-out trials because they insulate the FDA from critics who say that it isn't focused enough on safety. But bigger trials increase the time needed to develop a drug, keeping it out of the hands of patients.

The Modernization Act also allowed the FDA to conduct drug trials in which patients are treated with an experimental medicine in a single group or "arm," and the trial can be completed in less than a year. But the FDA doesn't often opt for such trials. The agency commonly requests more complex, "multi-arm" and "placebo controlled" studies, which can take three years to finish and are much more expensive. Each patient enrolled in a trial adds over $30,000 to drug-development costs.

Of 76 cancer drugs approved since 2005, the FDA gave only 13 "accelerated approval"—another process created under the Modernization Act to expedite drug development. From 2001 to 2003, 78% of the novel cancer drugs approved were granted accelerated approval. Since then only 32% got the designation.

What's more, the clinical trial requirements that the FDA is imposing on cancer drugs with accelerated approval are now as burdensome as the requirements imposed on regular drugs. So, practically speaking, having "accelerated approval" doesn't mean anything.

Europeans are now approving novel drugs an average of three months more rapidly than we do. Of 82 novel drugs that were submitted for approval in both the U.S. and Europe between 2006 to 2009, 11 were approved only in Europe. One is for relapsed ovarian cancer, another for bone cancer.

To reverse these discouraging trends, Congress should reaffirm the provisions of the Modernization Act. It should spell out in legislation that the FDA "shall"—rather than "may"—approve drugs for severe conditions on the basis of a single study, or a more lenient statistical orthodoxy than "two, randomized, placebo controlled trials."

While Congress may not want to get into the business of establishing the FDA's analytical methods, it can call on the agency to convene an advisory panel to cultivate principles that are more permissive when it comes to very bad diseases. And it could go a step further, empowering patient groups with a mechanism to seek review of FDA decisions.

Congress also needs to modernize the way the FDA's review process is organized in order to increase efficiency and enable more cooperation. The science embedded in the most novel drugs is increasingly complex, requiring collaboration across many disciplines, including clinical medicine, pharmacology and statistical modeling.

But in recent years, the FDA has carved out each scientific discipline into its own distinct office. In addition, new work rules allow drug reviewers to spend two days each week working from home. The result is that FDA scientists don't collaborate well. Reviewers rarely meet as full teams, so they struggle to resolve internal debates and provide timely feedback to drug makers. The FDA's scientists should be organized around areas of therapeutic expertise—not broken into discrete offices based on what degree they have.

Finally, the FDA should be required to disclose its reasons for rejecting a drug.

The next Congress will reauthorize a user fee program that funds the FDA's review process. It should use this legislation to revive the FDA's fundamental mission: giving very sick Americans the best medical options available.

Dr. Gottlieb, a former deputy commissioner of the Food and Drug Administration, is a fellow at the American Enterprise Institute and a practicing internist. He invests in and consults with drug companies.

This week Medicare sent a flyer to seniors: The act passed by Congress "will provide you and your family greater savings and increased quality health care"

Medicare and Double Standards. WSJ Editorial
An ObamaCare mailer tells some howlers.WSJ, May 28, 2010

In the full-circle department, recall the moment last September when Senator Max Baucus and Medicare went after the insurer Humana for having the nerve to criticize one part of ObamaCare. It turns out those same regulators have different standards for their own political advocacy.

This week Medicare sent a flyer to seniors, ostensibly to inform them of what ObamaCare "means for you." Many elderly Americans are worried—and rightly so—about where they'll rank in national health care, given that the new entitlement is funded by nearly a half-trillion dollars in Medicare cuts. They must have been relieved to hear that "The Affordable Care Act passed by Congress and signed by President Obama this year will provide you and your family greater savings and increased quality health care."

That's the first sentence of the four-page mailer, and it gives a flavor of the Administration's respect for the public's intelligence. It goes on to mention "improvements to Medicare Advantage," the program that Democrats hate because it gives nearly one out of four seniors private health insurance options. "If you are in a Medicare Advantage plan, you will still receive guaranteed Medicare benefits."

But that's not what Medicare's own actuary thinks. In an April memo, Richard Foster estimated that the $206 billion hole in Advantage will reduce benefits, cause insurers to withdraw from the program and reduce overall enrollment by half. Doug Elmendorf and his team at the Congressional Budget Office came to the same conclusion, as did every other honest expert.

That's also what Humana told its customers, warning that seniors "could lose many of the important benefits and services that make Medicare Advantage so valuable." Medicare threatened the Kentucky-based company with fines and regulatory punishments for "misleading and confusing" beneficiaries, then issued a blanket gag order on Advantage insurers. The agency later backed down, once its Cosa Nostra message had been signed, sealed and delivered.

Medicare's flyer includes answers to other pressing questions in Boca Raton and Scottsdale, such as allowing children up to age 26 to remain on their parents' health plans, and further misleading commentary about keeping the program "strong and solvent." Dave Camp, the ranking Republican on the Ways and Means Committee, believes the mailer may violate the prohibition on using taxpayer dollars for political propaganda.

The larger issue is the White House's view of political opposition. It seems to think its assertions will be true if they are repeated often enough, as long as no one is allowed to disagree.

Obamacare's Cooked Books and the “Doc Fix”

Obamacare's Cooked Books and the “Doc Fix”, by James Capretta
May 26, 2010

The Obama administration continues to insist (see this post from White House budget director Peter Orszag) that the recently enacted health-care law will reduce the federal budget deficit by $100 billion over ten years and by ten times that amount in the second decade of implementation. They cite the Congressional Budget Office’s cost estimate for the final legislation to back their claims.

And it is undeniably true that CBO says the legislation, as written, would reduce the federal budget deficit by $124 billion over ten years from the health-related provisions of the new law.
But that’s not whole story about Obamacare’s budgetary implications — not by a long shot.

For starters, CBO is not the only game in town. In the executive branch, the chief actuary of the Medicare program is supposed to provide the official health-care cost projections for the administration — at least he always has in the past. His cost estimate for the new health law differs in important ways from the one provided by CBO and calls into question every major contention the administration has advanced about the bill. The president says the legislation will slow the pace of rising costs; the actuary says it won’t. The president says people will get to keep their job-based plans if they want to; the actuary says 14 million people will lose their employer coverage, many of whom would certainly rather keep it than switch into an untested program. The president says the new law will improve the budget outlook; in so many words, the chief actuary says, don’t bet on it.

All of this helps explain why the president of the United States would be so sensitive about the release of the actuary’s official report that he would dispatch political subordinates to undermine it with the media.

It’s not the chief actuary’s assignment to provide estimates of non-Medicare-related tax provisions, so his cost projections for Obamacare do not capture all of the needed budget data to estimate the full impact on the budget deficit. But it’s possible to back into such a figure by using the Joint Tax Committee’s estimates for the tax provisions missing from the chief actuary’s report. When that is done, $50 billion of deficit reduction found in the CBO report is wiped out.

And that’s before the other gimmicks, double counting, and hidden costs are exposed and removed from the accounting, too.

For instance, this week House and Senate Democratic leaders are rushing to approve a massive, budget-busting, tax-and-spending bill. Among its many provisions is a three-year Medicare “doc fix,” which will effectively undo the scheduled 21 percent cut in Medicare physician fees set to go into effect in June. CBO says this version of the “doc fix” would add $65 billion to the budget deficit over 10 years. The entire bill would pile another $134 billion onto the national debt over the next decade.

If the Obama administration gets its way, this three-year physician-fee fix will eventually get extended again, and also without offsets. Over a full 10-year period, an unfinanced “doc fix” would add $250 to $400 billion to the budget deficit, depending on design and who is doing the cost projection (CBO or the actuary).

Administration officials and their outside enthusiasts (see here) say the Democratic Congress shouldn’t have to find offsets for the “doc fix” because everybody knows a fix needs to be enacted and therefore should go into the baseline. (By the way, the history of the sustainable growth rate [SGR] that Ezra Klein provides at the link above is a misleading one. The SGR was a replacement for a predecessor program that too had run off the rails — the so-called “Volume Performance Standard” enacted by a Democratic Congress in 1989.)

But supporting a “doc fix” is not the same as supporting an unfinanced one on a long-term or permanent basis. Not everybody in Congress is for running up more debt to pay for a permanent repeal of the scheduled fee cuts, which is why such a repeal has never been passed before. In the main, the previous administration and Congresses worked to find ways to prevent Medicare fee cuts while finding offsets to pay for it.

But that’s not the policy of the Obama administration. The truth is the president and his allies in Congress worked overtime to pull together every Medicare cut they could find — nearly $500 billion in all over ten years — and put them into the health law to pay for the massive entitlement expansion they so coveted. They could have used those cuts to pay for the “doc fix” if they had wanted to, as well as for a slightly less expansive health program. But that’s not what they did. That wasn’t their priority. They chose instead to break their agenda into multiple bills, and “pay for” the massive health entitlement (on paper) while claiming they shouldn’t have to find offsets for the “doc fix.” But it doesn’t matter to taxpayers if they enact their agenda in one, two, or ten pieces of legislation. The total cost is still the same. All of the supposed deficit reduction now claimed from the health-care law is more than wiped out by the Democrats’ insistent march to borrow and spend for Medicare physician fees.

And the games don’t end there. CBO’s cost estimate assumes $70 billion in deficit reduction from the so-called “CLASS Act.” This is the new voluntary long-term-care insurance program that hitched a ride on Obamacare because it too created the illusion of deficit reduction. People who sign up for the insurance must pay premiums for at least five years before they are eligible to draw benefits. By definition, then, at start-up and for several years thereafter, there will be a surplus in the program as new entrants pay premiums and very few people draw benefits. That’s the source of the $70 billion “savings.” But the premiums collected in the program’s early years will be needed very soon to pay actual claims. Not only that, but the new insurance program is so poorly designed it too will need a federal bailout. So this is far worse than a benign sleight of hand. The Democrats have created a budgetary monster even as they used misleading estimates to tout their budgetary virtue.

There is much more, of course. CBO’s cost projections don’t reflect the administrative costs required to micromanage the health system from the Department of Health and Human Services. The number of employers looking to dump their workers into subsidized insurance is almost certainly going to be much higher than either CBO or the chief actuary now projects. And the price inflation from the added demand of the newly entitled isn’t factored into any of the official cost projections.

We’ve seen this movie before. When the government creates a new entitlement, politicians lowball the costs to get the law passed, and then blame someone else when program costs soar. Witness Massachusetts. Most Americans are sensible enough to know already that’s what can be expected next with Obamacare.

The Truth about Health Insurance Premiums and Profits

The Truth about Health Insurance Premiums and Profits, by Alan Reynolds

Cato, Mar 15, 2010

On a recent Fox News debate about health insurance, Democratic political strategist Bob Beckel explained that, "The president needed an enemy, and the insurance companies are it."

Proving that point in a Pennsylvania stump speech, President Obama asked, "How much higher do premiums have to go before we do something about it? We can't have a system that works better for the insurance companies than it does for the American people."

On February 20, President Obama used his weekly radio show to express outrage that a fraction of Californians buying individual Anthem Blue Cross Blue Shield (BCBS) plans "are likely (sic) to see their rates go up anywhere from 35 to 39 percent." He used those figures to justify preempting state regulation "by ensuring that, if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable."

There was always something peculiar about this desperate effort to demonize certain health insurers. Individual plans account for only 4 percent of the insurance market. So why do they account for 100 percent of the president's fulminations about insurance premiums? Could it be because insurance premiums for the other 96percent have not been rising much?

Nonprofit BCBS plans account for a third of the private health insurance market. Michigan's nonprofit asked for 56 percent premium hike without the national media taking that Hail Mary pass too seriously. But even Obama finds it difficult to accuse nonprofits of being too profitable, so he needed to pin his enemy badge on a for-profit firm – one of Wellpoint's "Anthem" BCBS plans.

Anthem of California's requested rate increase on individual policies was actually 20-35 percent. The only way it could get to 39percent would be if a policyholder insisted on a gold-plated Cadillac plan and also happened to move up into a higher age group. Besides, requesting a rate hike means nothing. Even Obama's radio address mentioned two requests that had been cut in half. Many are denied.

So, how many Californians have actually been faced with a 39 percent increase in their premiums? Exactly zero.

How many are really "likely" to be faced with even a 35 percent increase after state insurance regulators have their say? My forecast: Zero.

The president highlighted the "likely" increases of "35 to 39 percent" to suggest insurance companies in general were asking for huge premium increases just to boost their lavish profits. He complained that in the $1.2 trillion health insurance industry, "the five largest insurers made record profits of over $12 billion." But that puny sum includes WellPoint's sale of its pharmacy benefits management company NextRX to Express Scripts for $4.7 billion last April. Adding that $4.7 billion to WellPoint profits is like saying a family's income rose by $1 million because they sold a million-dollar home.

University of Michigan economist Mark Perry calculated that without the sale of NextRX, "WellPoint's profit margin would have been only 3.9 percent, the industry average profit margin would have been closer to 3percent"— $100 per policy. Yet Obama concluded that, "The bottom line is that the status quo is good for the insurance industry and bad for America."

The media echoed the president words endlessly, and wrote as though one company's hypothetical request for increases of 35 percent-39 percent were a nationwide threat—even to those with group insurance—rather than an unique and highly unlikely request that might (if magically approved) touch a miniscule number in a hostile state for health insurers.

"It doesn't take too many 39 percent increases, like the recent one proposed in California that has garnished so much attention, to put insurance out of reach," exclaimed a New York Times report. That same paper's editorial added, "The recently announced plan by Anthem Blue Cross in California to raise annual premiums by 35 to 39 percent for nearly a quarter of its individual subscribers is a chilling harbinger of what is to come if reform fails." Really?

Grasping for confirmation of the 39 percent figure, some reporters cited a Feb. 24 memo about Wellpoint written by journalist Scott Paltrow for The Center for American Progress Action Fund. Paltrow gathered news clippings suggesting premiums are "expected to" increase by "up to" some scary number in various states. For California, however, Paltrow's source was the president's speech. This Action Fund is a is no "liberal think tank," as the Wall Street Journal put it, but a 501(c)4 lobby which can participate in campaigns and elections. Founded by Bill Clinton's former chief of staff John Podesta, it's a propaganda arm of the Democratic Party.

A Wall Street Journal story about Wellpoint's wish list for higher premiums cites the Department of Health and Human Services as its source. That means a shoddy four-page polemic at HealthReform.gov, "Insurance Companies Prosper, Families Suffer." That pamphlet, like another from the Commonwealth Fund, cites Duke Helfand, an L.A. Times reporter who wrote on Feb. 4 that, "brokers who sell these policies say they are fielding numerous calls from customers incensed over premium increases of 30percent to 39 percent."

So, the president's 39 percent figure came from Duke Helfand, who heard it from insurance brokers who, in turn, said they heard it from customers. The 39 percent figure referred to one person named Mary. After rounding Helfand's 30 percent up to 35 percent, however, that was good enough for the president's purposes.

Like Obama, the "Insurance Companies Prosper" pamphlet repeatedly confuses asking with getting. "Anthem Blue Cross isn't alone in insisting on premium hikes," it says; "Anthem of Connecticut requested an increase of 24 percent last year, which was rejected by the state." So what? If you went to your boss and insisted on a 24 percent raise, would that constitute proof that wages are rising too fast?

If Obama has been reduced to basing the redistribution of health care on the cost of health insurance premiums, he will need much better facts. Fortunately, credible statistics on health insurance premiums are readily available from the Centers for Medicare and Medicaid Services (CMS) and Bureau of Labor Statistics.

CMS statistics (Table 12) reveal that the net cost of private health insurance – premiums minus benefits – fell by 2.8percent in 2008. Furthermore, CMS Health Spending Projections predict that spending on private health insurance will rise 2.5percent in 2010, while prices of medical goods and services rise by 2.8percent.

Consumers' cost of health premiums is also part of the detailed consumer price index. After all the overheated rhetoric about "requested" or "expected" increases of "up to" 39 percent, who would have imagined that the average consumer cost of health insurance premiums fell by 3.5 percent in 2008 and fell by another 3.2 percent in 2009?

The president's health insurance proposals hoped to use stern command-and-control techniques to run the health insurance system. It was all about minimizing free choice and maximizing brute force—forcing people to buy certain kinds of politically-designed insurance, forcing insurers to cover services many consumers do not want to pay for, and forcing insurers to curb or roll back premiums even as medical costs go up. The whole shaky apparatus was built upon even shakier statistics—including the purely hypothetical 39 percent increase in premiums that Mary's insurance agent reported to Duke Helfand.

"The President's Proposal" on health-care

ObamaCare at Ramming Speed. WSJ Editorial
The White House shows it has no interest in compromise.WSJ, Tuesday, February 23, 2010 As of 3:09 AM

A mere three days before President Obama's supposedly bipartisan health-care summit, the White House yesterday released a new blueprint that Democrats say they will ram through Congress with or without Republican support. So after election defeats in Virginia, New Jersey and even Massachusetts, and amid overwhelming public opposition, Democrats have decided to give the voters what they don't want anyway.

Ah, the glory of "progressive" governance and democratic consent.

"The President's Proposal," as the 11-page White House document is headlined, is in one sense a notable achievement: It manages to take the worst of both the House and Senate bills and combine them into something more destructive. It includes more taxes, more subsidies and even less cost control than the Senate bill. And it purports to fix the special-interest favors in the Senate bill not by eliminating them—but by expanding them to everyone.

The bill's one new inspiration is a powerful federal board that would regulate premiums in the individual insurance market. In all 50 states, insurers are already required to justify premium increases to insurance commissioners, who generally have the power to give a regulatory go-ahead, or not. But their primary concern is actuarial soundness and capital standards, making sure that companies have enough cash to pay claims.

The White House wants to create another layer of review that will be able to reject any rate increase that is "unreasonable or unjustified." Any insurer deemed guilty of such an infraction by this new bureaucracy "must lower premiums, provide rebates, or take other actions to make premiums affordable." In other words, de facto price controls.

Insurance premiums are rising too fast; therefore, premium increases should be illegal. Q.E.D. The result of this rate-setting board will be less competition in the individual market, as insurers flee expensive states or regions, or even a cascade of bankruptcies if premiums are frozen and the cost of the care they are expected to cover continues to rise. For all the Dickensian outrage about profiteering by WellPoint and other companies, insurance is a low-margin business even for health care, and at least 85 cents of the average premium dollar, usually more, is devoted to actual health services.

Price controls are always the first resort of national health care—i.e., Medicare's administered prices for doctors and hospitals. This new White House gambit is merely a preview of ObamaCare's inevitable planned medical economy, which will reduce choice and quality.

The coercive flavor that animates this exercise is best captured in the section that purports to accept the Senate's "grandfather clause" allowing people who like their current health plan to keep it. Except that "The President's Proposal adds certain consumer protections to these 'grandfathered' plans. Within months of legislation being enacted, it requires plans . . . prohibits . . . mandates . . . requires . . . the President's Proposal adds new protections that prohibit . . . ban . . . and prohibit . . . The President's Proposal requires . . ." After all of these dictates, no "grandfathered" plan will exist.

Meanwhile, the new White House plan further vitiates the remnants of cost-control that remained in the House and Senate bills. Now the highly vaunted excise tax on high-cost insurance plans won't kick in until 2018, whereas it would have started in 2013 in the Senate bill, and this tax will only apply to coverage that costs more than $27,500.

Very few plans ever reach that threshold, and sure enough, this is the same $60 billion deal the White House cut in December with union leaders who have negotiated very costly benefits. Now it is extended to all to avoid the taint of political favoritism.

While the White House claims to eliminate the "Cornhusker Kickback," the Medicaid bribe that bought Nebraska Senator Ben Nelson's vote, political appearances are deceiving. As with the union payoff, what the White House really does is broaden the same to all states, with all new Medicaid spending through 2017 and 90% after 2020 transferred to the federal balance sheet. Governors will love this ruse, but national taxpayers will pay more.

And more again, because the White House has adopted the House's firehose insurance subsidies. People earning up to 400% of the poverty line—or about $96,000 for a family of four in 2016—will qualify for government help, and, naturally, this new entitlement is designed to expand over time.

The Administration also claims to have discarded the House's 5.4-percentage-point surtax on joint-filers earning more than $1 million a year, but it sneaks it back in by expanding the Senate's expansion of the 2.9% Medicare payroll tax to joint income about $250,000. The White House would now apply that tax for the first time to income from "interest, dividends, annuities, royalties and rents," details to come.
***

The larger political message of this new proposal is that Mr. Obama and Democrats have no intention of compromising on an incremental reform, or of listening to Republican, or any other, ideas on health care. They want what they want, and they're going to play by Chicago Rules and try to dragoon it into law on a narrow partisan vote via Congressional rules that have never been used for such a major change in national policy. If you want to know why Democratic Washington is "ungovernable," this is it.

Federal President Admits CBO Cost Estimates of ObamaCare Are Incomplete

Obama Admits CBO Cost Estimates of ObamaCare Are Incomplete

Posted by Michael F. Cannon

Yesterday — day #224 of the ObamaCare Cost-Estimate Watch — President Obama told House Republicans:

You can’t structure a bill where suddenly 30 million people have coverage and it costs nothing.

And just like that, the president admitted that the official Congressional Budget Office estimates of his health care plan do not reflect its full costs.

Both the House and Senate versions of ObamaCare would cover millions of uninsured Americans by requiring them to purchase private health insurance. As President Obama notes, even if you force people to spend their own money on health insurance, it still costs something to cover them. And if the government partly subsidizes those premiums, the remaining mandatory premium is still part of the cost of covering them.

Yet Democrats have systematically blocked the CBO from including those costs in its official cost projections. The Senate bill’s estimated price tag of $940 billion, for example, includes only the costs that bill would impose on the federal government. By my count, that’s only 40 percent of total costs. By Mr. Obama’s admission, that’s not the full cost of the bill.

Now that the President of the United States has acknowledged that the CBO’s cost estimates are incomplete, could we maybe get a complete cost estimate? Maybe just for the Senate bill?

Michael F. Cannon • January 30, 2010 @ 8:07 am

The Harvard School of (Unscientific) Public Health (Activism)

The Harvard School of (Unscientific) Public Health (Activism). By Elizabeth M. Whelan, Sc.D., M.P.H.
ACSH, Jan 27, 2010

FDA Decision on Chemical BPA Gets Mixed Review: "ACSH scientists are glad a ban was avoided but remain disappointed"

FDA Decision on Chemical BPA Gets Mixed Review: "ACSH scientists are glad a ban was avoided but remain disappointed."
ACSH, January 15, 2010

New York NY -- January 15th, 2010. The American Council on Science and Health applauds today's decision by the Food and Drug Administration (FDA) not to ban the plastic hardener bisphenol-A (BPA). Despite heavy pressure from various activist "environmental" groups, the FDA has not placed any restrictions on the chemical's use in consumer products but rather decided to "support" industry's decisions to reduce exposure to BPA in food-related products aimed at infants and children. FDA is also "facilitating" the development of alternatives to BPA in infant formula cans.

FDA stopped well short of a ban on this common and useful chemical, which has been in safe use in a wide spectrum of consumer products for over 50 years. ACSH scientists are pleased but remain disappointed that the FDA review and recommendations deviated at all from sound science -- by showing concern for hypothetical and non-existent health risks. ACSH's medical director, Dr. Gilbert Ross, said: "BPA has been among the most well-studied substances known to man, and repeated evaluation by respected scientific bodies worldwide has without fail deemed BPA safe as typically used. Our publication on BPA remains quite relevant today: we found that BPA is safe for all ages, including infants and children."

Another key fact is that since BPA became commonplace in the lining of canned goods, foodborne illness from canned foods -- including botulism -- has virtually disappeared. Any possible new replacement could not have the same record of testing and safety as has been shown for BPA.

ACSH's president, Dr. Elizabeth M. Whelan, added, "The fear campaign against BPA promoted by a few activist groups has been based solely on flimsy animal research. Recently, lacking real science to support their alarmist claims, some labs have tried 'novel approaches to test for subtle effects,' as the FDA report states. This is not how human risk assessment should be carried out. If there were any real adverse health effects from exposure to BPA, such effects would have become manifest long ago and would not have required bizarre tests in a few advocate's labs."

ACSH's associate director, Jeff Stier, pointed out: "This finding should put the matter to rest. The current FDA is very cautionary. After taking all this extra time to re-study the issue, the fact that they are keeping BPA on the market speaks volumes about the safety of the product. If BPA were endangering children, they'd have never left it on the market."

See also: ACSH's earlier official statement on The Facts About Bisphenol A.


For media contact, including interviews, please call:

Dr. Elizabeth Whelan (WhelanE[at]ACSH.org): 917-439-8043
Dr. Gilbert Ross (RossG[at]ACSH.org): 516-581-8400
Jeff Stier (StierJ[at]ACSH.org): 646-245-1443

Health Experts and Double Standards - Jonathan Gruber, Peter Orszag and the press corps

Health Experts and Double Standards. WSJ Editorial
Jonathan Gruber, Peter Orszag and the press corps.
The Wall Street Journal, page A18, Jan 14, 2010

The press corps is agonizing, or claims to be agonizing, over the news of Jonathan Gruber's conflict of interest: The MIT economist has been among the foremost promoters of ObamaCare—even as he had nearly $400,000 in consulting contracts with the Administration that weren't disclosed in the many stories in which he was cited as an independent authority.

Mr. Gruber is a health economist and former Clinton Treasury hand, as well an architect of Mitt Romney's 2006 health plan in Massachusetts that so closely resembles ObamaCare. His econometric health-care modelling is well-regarded. So his $297,600 plum from the Department of Health and Human Services in March for "technical assistance" estimating changes in insurance costs and coverage under ObamaCare, plus another $95,000 job, is at least defensible.

However, this financial relationship only came to wide notice when Mr. Gruber wrote a commentary for the New England Journal of Medicine, which has a more stringent disclosure policy than most media outlets. Last week the New York Times said it would have disclosed Mr. Gruber's financial ties had it known when it published one of his op-eds last year. Mr. Gruber told Politico's Ben Smith that "at no time have I publicly advocated a position that I did not firmly believe—indeed, I have been completely consistent with my academic track record."

We don't doubt Mr. Gruber's sincerity about his research, though the same benefit of the political doubt wasn't extended to, say, Armstrong Williams when it was revealed that the conservative pundit had a contract with the Department of Education during the No Child Left Behind debate. Any number of former Generals-turned-TV-analysts were skewered in the New York Times in 2008 merely because of continuing contact—and no financial ties—with the Pentagon.

The political exploitation of Mr. Gruber's commentary is another matter. His work figured heavily into a recent piece by Ron Brownstein in the Atlantic Monthly that the Administration promoted as an antidote to skepticism about ObamaCare's cost control (or lack thereof). White House budget director Peter Orszag has also relied on a letter from Mr. Gruber and other economists endorsing the Senate bill.

In a December conference call with reporters, Mr. Orszag said that "I agree with Jon Gruber that basically everything that has been put forward in health policy discussions for a decade is in this bill." He also praised "the folks who have actually done the reporting and read the bill and gone through and done the hard work to actually examine, rather than just going on buzz and sort of loose talk, but actually gone through and looked at the specific details in the bill," citing Mr. Brownstein in particular. Which is to say, the journalists who had "done the reporting" were those who agreed with the Gruber-White House spin.

Mr. Orszag never mentioned Mr. Gruber's contract. Nor did HHS disclose the contract when Mike Enzi, the ranking Republican on the Senate health committee, asked specifically for a list of all consultants as part of routine oversight in July. His request noted that "Transparency regarding these positions will help ensure that the public has confidence in the qualifications, character and abilities of individuals serving in these positions."

We're not Marxists who think everyone's opinion depends entirely on financial circumstances. But if Mr. Gruber qualifies as a health expert despite his self-interest, then the studies of self-interested businesses deserve at least as much media attention. The insurer WellPoint has built a very detailed and rigorous model on the likely impact of ObamaCare, using its own actuarial data in regional markets, and found that insurance costs will spike across the board. The White House trashed it, and the press corps ignored it.

This is a double standard that has corroded much of the coverage of ObamaCare, with journalists treating government claims as oracular but business arguments as self-serving. We'll bet Messrs. Orszag and Brownstein that WellPoint's analysis will more closely reflect the coming insurance reality than the fruits of Mr. Gruber's government paycheck.

Where U.S. Health Care Ranks Number One - Isn't 'responsiveness' what medicine is all about?

Where U.S. Health Care Ranks Number One. By MARK B. CONSTANTIAN
Isn't 'responsiveness' what medicine is all about?
WSJ, Jan 08, 2010

Last August the cover of Time pictured President Obama in white coat and stethoscope. The story opened: "The U.S. spends more to get less [health care] than just about every other industrialized country." This trope has dominated media coverage of health-care reform. Yet a majority of Americans opposes Congress's health-care bills. Why?

The comparative ranking system that most critics cite comes from the U.N.'s World Health Organization (WHO). The ranking most often quoted is Overall Performance, where the U.S. is rated No. 37. The Overall Performance Index, however, is adjusted to reflect how well WHO officials believe that a country could have done in relation to its resources.

The scale is heavily subjective: The WHO believes that we could have done better because we do not have universal coverage. What apparently does not matter is that our population has universal access because most physicians treat indigent patients without charge and accept Medicare and Medicaid payments, which do not even cover overhead expenses. The WHO does rank the U.S. No. 1 of 191 countries for "responsiveness to the needs and choices of the individual patient." Isn't responsiveness what health care is all about?

Data assembled by Dr. Ronald Wenger and published recently in the Bulletin of the American College of Surgeons indicates that cardiac deaths in the U.S. have fallen by two-thirds over the past 50 years. Polio has been virtually eradicated. Childhood leukemia has a high cure rate. Eight of the top 10 medical advances in the past 20 years were developed or had roots in the U.S.

The Nobel Prizes in medicine and physiology have been awarded to more Americans than to researchers in all other countries combined. Eight of the 10 top-selling drugs in the world were developed by U.S. companies. The U.S. has some of the highest breast, colon and prostate cancer survival rates in the world. And our country ranks first or second in the world in kidney transplants, liver transplants, heart transplants, total knee replacements, coronary artery bypass, and percutaneous coronary interventions.

We have the shortest waiting time for nonemergency surgery in the world; England has one of the longest. In Canada, a country of 35 million citizens, 1 million patients now wait for surgery and another million wait to see specialists.

When my friend, cardiac surgeon Peter Alivizatos, returned to Greece after 10 years heading the heart transplantation program at Baylor University in Dallas, the one-year heart transplant survival rate there was 50%—five-year survival was only 35%. He soon increased those numbers to 94% one-year and 90% five-year survival, which is what we achieve in the U.S. So the next time you hear that the U.S. is No. 37, remember that Greece is No. 14. Cuba, by the way, is No. 39.

But the issue is only partly about quality. As we have all heard, the U.S. spends a higher percentage of its gross domestic product for health care than any other country.

Actually, health-care spending now increases more moderately than it has in previous decades. Food, energy, housing and health care consume the same share of American spending today (55%) that they did in 1960 (53%).

So what does this money buy? Certainly some goes to inefficiencies, corporate profits, and costs that should be lowered by professional liability reform and national, free-market insurance access by allowing for competition across state lines. But the majority goes to a long list of advantages that American citizens now expect: the easiest access, the shortest waiting times the widest choice of physicians and hospitals, and constant availability of health care to elderly Americans. What we need now is insurance and liability reform—not health-care reform.

Who determines how much a nation should pay for its health? Is 17% too much, or too little? What better way could there be to dedicate our national resources than toward the health and productivity of our citizens?

Perhaps it's not that America spends too much on health care, but that other nations don't spend enough.

Dr. Constantian is a plastic and reconstructive surgeon in New Hampshire.

A tax increase that will cause many seniors to lose private benefits

ObamaCare on Drugs. WSJ Editorial
A tax increase that will cause many seniors to lose private benefits.
The Wall Street Journal, page A10, Jan 02, 2009

Democrats are starting to mash together the Senate and House health-care bills, all of the negotiations taking place in secret. One reason to keep quiet is so voters don't discover items like the Senate's destructive change in the way retiree health benefits are taxed. This is a revenue grab that will cost many retirees their private drug benefit coverage, with knock-on harm for the federal budget and financial markets.

When the Medicare prescription drug benefit was created in 2003, one concern was that businesses that provided private drug coverage for seniors would dump them into the new taxpayer-funded plan. So Congress created a modest tax subsidy—equal to 28% of the total cost of a drug plan—to encourage employers to maintain coverage for retirees who would otherwise enroll in Medicare. On average, this subsidy will cost the government about $665 per person in 2011, according to the Employee Benefit Research Institute, while the same Medicare coverage would run about $1,209.

Currently, the $665 a business gains by providing benefits—and keeping one senior off Medicare—is not taxed. By instead treating the subsidy as income taxed at the 35% corporate rate, Democrats expect to raise about $5.4 billion for ObamaCare—and while that's a pittance in the scheme of a new multitrillion-dollar price tag, it's also based on a static tax analysis that is surely wrong.

The cost of offering drug benefits will rise by about $233 per retiree, making Medicare a far more attractive option for businesses. Private drug coverage is already on the decline, but Verizon, Xerox, Boeing, Metlife, Caterpillar and other companies are already warning that they may be forced to cut benefits. (Consider this another reward for the Business Roundtable's decision to promote ObamaCare.)

As more employers drop drug coverage, Congress won't be dispensing as many subsidies with the one hand that it can tax with the other, so revenue will fall. The retirees who lose private benefits will simply move onto Medicare, so public drug spending will also rise. The American Benefits Council, which represents the largest employers, estimates the tax will be a net loser for the government if just one out of four retirees is crowded out of private coverage.

That $233 may not sound like a lot, but under an accounting rule established in 1990, companies are required to report and expense their long-term retiree health liabilities on their financial statements, including actual paid claims and certain future payments. The deferred losses from the tax change thus must be immediately reflected on their balance sheets, which would take a huge bite out of reported earnings in 2010. Given the shaky economy, not to mention the political uncertainty that Washington continues to generate, is this really the best idea?

This is merely one example of how careless Democrats have been about the details as they dash to pass ObamaCare, even as they behave as if the results of their major changes to the health market will match perfectly with their perfectly unrealistic rhetoric.

"One of the things I've learned is that the Econ 101 approach to life where all that matters is the direct financial incentives or penalties is just wrong," Obama budget director Peter Orszag said in December. "Not to say that it doesn't matter, but exclusive focus on rational, perfectly optimizing behavior is just not, not where it's at."

When even the budget scorekeeper spurns economic incentives, you know pure politics is in charge. We suspect the White House will discover soon enough that everyone is a lot more rational, and a lot smarter, that it presumes.

Why the Health-Care Bills Are Unconstitutional. - If the government can mandate the purchase of insurance, it can do anything

Why the Health-Care Bills Are Unconstitutional. By Orrin Hatch, J Kenneth Blackwell and Kenneth Klukowski
If the government can mandate the purchase of insurance, it can do anything.
The Wall Street Journal, page A11, Jan 02, 2009

President Obama's health-care bill is now moving toward final passage. The policy issues may be coming to an end, but the legal issues are certain to continue because key provisions of this dangerous legislation are unconstitutional. Legally speaking, this legislation creates a target-rich environment. We will focus on three of its more glaring constitutional defects.

First, the Constitution does not give Congress the power to require that Americans purchase health insurance. Congress must be able to point to at least one of its powers listed in the Constitution as the basis of any legislation it passes. None of those powers justifies the individual insurance mandate. Congress's powers to tax and spend do not apply because the mandate neither taxes nor spends. The only other option is Congress's power to regulate interstate commerce.

Congress has many times stretched this power to the breaking point, exceeding even the expanded version of the commerce power established by the Supreme Court since the Great Depression. It is one thing, however, for Congress to regulate economic activity in which individuals choose to engage; it is another to require that individuals engage in such activity. That is not a difference in degree, but instead a difference in kind. It is a line that Congress has never crossed and the courts have never sanctioned.

In fact, the Supreme Court in United States v. Lopez (1995) rejected a version of the commerce power so expansive that it would leave virtually no activities by individuals that Congress could not regulate. By requiring Americans to use their own money to purchase a particular good or service, Congress would be doing exactly what the court said it could not do.

Some have argued that Congress may pass any legislation that it believes will serve the "general welfare." Those words appear in Article I of the Constitution, but they do not create a free-floating power for Congress simply to go forth and legislate well. Rather, the general welfare clause identifies the purpose for which Congress may spend money. The individual mandate tells Americans how they must spend the money Congress has not taken from them and has nothing to do with congressional spending.

A second constitutional defect of the Reid bill passed in the Senate involves the deals he cut to secure the votes of individual senators. Some of those deals do involve spending programs because they waive certain states' obligation to contribute to the Medicaid program. This selective spending targeted at certain states runs afoul of the general welfare clause. The welfare it serves is instead very specific and has been dubbed "cash for cloture" because it secured the 60 votes the majority needed to end debate and pass this legislation.

A third constitutional defect in this ObamaCare legislation is its command that states establish such things as benefit exchanges, which will require state legislation and regulations. This is not a condition for receiving federal funds, which would still leave some kind of choice to the states. No, this legislation requires states to establish these exchanges or says that the Secretary of Health and Human Services will step in and do it for them. It renders states little more than subdivisions of the federal government.

This violates the letter, the spirit, and the interpretation of our federal-state form of government. Some may have come to consider federalism an archaic annoyance, perhaps an amusing topic for law-school seminars but certainly not a substantive rule for structuring government. But in New York v. United States (1992) and Printz v. United States (1997), the Supreme Court struck down two laws on the grounds that the Constitution forbids the federal government from commandeering any branch of state government to administer a federal program. That is, by drafting and by deliberate design, exactly what this legislation would do.

The federal government may exercise only the powers granted to it or denied to the states. The states may do everything else. This is why, for example, states may have authority to require individuals to purchase health insurance but the federal government does not. It is also the reason states may require that individuals purchase car insurance before choosing to drive a car, but the federal government may not require all individuals to purchase health insurance.

This hardly exhausts the list of constitutional problems with this legislation, which would take the federal government into uncharted political and legal territory. Analysts, scholars and litigators are just beginning to examine the issues we have raised and other issues that may well lead to future litigation.

America's founders intended the federal government to have limited powers and that the states have an independent sovereign place in our system of government. The Obama/Reid/Pelosi legislation to take control of the American health-care system is the most sweeping and intrusive federal program ever devised. If the federal government can do this, then it can do anything, and the limits on government power that our liberty requires will be more myth than reality.

Mr. Hatch, a Republican senator from Utah, is a former chairman of the Senate Judiciary Committee. Mr. Blackwell is a senior fellow with the Family Research Council and a professor at Liberty University School of Law. Mr. Klukowski is a fellow and senior legal analyst with the American Civil Rights Union.

2009: Health Year in Review

2009: Health Year in Review
Innovation.org, December 16, 2009

In the midst of the high-profile health care reform debate, 2009 quietly marked another year of important advances against serious diseases and conditions.

There have been advances across diseases and life expectancy reached an all time high of 77.9 years.^[i] Findings like this demonstrate the progress we are making as a result of prevention, early detection and better treatments. Likewise, we’ve seen positive trends in many disease areas this year. Here are just a few examples:

HIV/AIDS: The Centers for Disease Control and Prevention reported this year that between 2006 and 2007 the HIV/AIDS death rate fell 10%, which was the largest single-year decline since 1998.^[ii] Antiretroviral drugs have been instrumental in bringing death rates down and the disease has become a chronic condition for many, rather than an acute fatal illness. Since the mid-1990s, when researchers developed this new wave of medicines to treat HIV/AIDS, the U.S. death rate from AIDS dropped by more than 70 percent.^[iii]

Cancer: The American Association for Cancer Research published a study in August 2009 showing that for people in their 40s, cancer mortality rates have been falling by 26% per decade.^[iv] Although most age-adjusted mortality figures show that cancer deaths were rising until the mid-1990s, this study emphasized the fact that among younger age groups death rates have been falling since perhaps the mid-1950s and continues today. The authors attribute the trend to improvements in cancer detection, treatment and prevention.

Cardiovascular disease: The number of hospitalized patients with coronary artery disease (CAD) declined by 31% in the last decade, knocking CAD from the top cause of hospitalization to third place, according to new data from the Agency for Healthcare Research and Quality. In an interview with HealthLeaders Media, AHRQ analyst Anne Elixhauser said, "A lot of people think it's because we have better control of risk factors…. We've decreased smoking, we have better control of cholesterol, and blood pressure," which she said is credited to better lifestyle awareness and the use of drugs like statins.^[v]

Other cardiovascular diseases showed great progress in the AHRQ report as well. For example, hospitalizations for stroke and heart attacks are down 14% and 15%, respectively, compared with ten years ago.

These examples demonstrate some of the improvements that are happening in the health of Americans as a result of improvements in lifestyle, prevention, detection and treatments. There are, however, many challenges on the horizon as the nation ages, obesity becomes more prevalent and chronic diseases affect more people. New treatments will be an important part of combating these worrisome trends. Today, in the US, there are over 2,900 medicines in clinical trials or awaiting FDA approval.^[vi] Researchers are using new strategies to attack disease. They are working on dozens of different approaches to treating Alzheimer’s disease, they are searching for an HIV vaccine, they are studying promising drugs to treat Lou Gehrig’s disease and lupus, and they are using genetics to better target treatments for many diseases. Although the challenges are many, progress promises to continue in the coming years.

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^[i] HHS, Center for Disease Control and Prevention, National Center for Health Statistics, National Vital Statistics System, J. Xu, et al. “Deaths: Preliminary Data for 2007,” National Vital Statistics Reports, 58, no. 1, p. 1, (19 August 2009) http://www.cdc.gov/nchs/data/nvsr/nvsr58/nvsr58_01.pdf (Accessed 4 December 2009).

^[ii] HHS, Center for Disease Control and Prevention, National Center for Health Statistics, National Vital Statistics System, J. Xu, et al. “Deaths: Preliminary Data for 2007,” National Vital Statistics Reports, 58, no. 1, p. 5, (19 August 2009) http://www.cdc.gov/nchs/data/nvsr/nvsr58/nvsr58_01.pdf (Accessed 4 December 2009).

^[iii] Centers for Disease Control and Prevention, National Center for Health Statistics, Health United States, 2008, (Hyattsville, MD: HHS, 2008).

^[iv] Kort et al, “The Decline in U.S. Cancer Mortality in People Born after 1925,” Cancer Research, 69: 16 (2009): 6500-6505.

^[v] C. Clark, “Heart Disease is No Longer Leading Reason for Patient Admission,” HealthLeaders Media, 24 September 2009, http://www.healthleadersmedia.com/content/239484/topic/WS_HLM2_QUA/Heart-Disease-is-no-Longer-Leading-Reason-for-Patient-Admission.html (Accessed 4 December 2009).

^[vi] Adis R&D Insight Database, 4 December 2009.