ASP Decreases Volume for Some
The switch in 2005 to an average sales price (ASP)-based payment method for drugs administered in physician offices under Medicare Part B resulted in substantial price savings for the federal program, according to a report from the Medicare Payment Advisory Commission (MedPAC). The ASP-based system led to an increase in claims volume and total charges; even so, some specialists provided fewer drugs in their offices in 2005, according to MedPAC. Overall, drug spending for Part B fell from $10.9 billion in 2004 to $10.1 billion in 2005. The commission scrutinized how the switch to ASP affected certain specialists. Urologists cut back the most, giving 16% fewer drugs, leading to a 52% decrease in Medicare spending, mostly for hormones that were prescribed for prostate cancer. Rheumatologists increased the drug volumemostly for infliximabby 9%; Medicare's spending on that drug was constant, however, according to the report. Infectious disease specialists gave 21% fewer drugs in 2005, possibly because physicians shifted their patients to hospital outpatient and post-acute care settings, the report said. The change may present some patient access and safety issues, according to MedPAC. But there was no reduction in quality of care in other specialties as a result of the switch to ASP.
Monitoring Drug Acquisition
A new law requires the Centers for Medicare and Medicaid Services to keep a closer eye on the Medicare Part B Competitive Acquisition Program. As part of last year's omnibus tax and health care bill (H.R. 6111), Congress established a postpayment review process for CAP, a program under which physicians are paid for administering certain Part B drugs and biologics but do not take on the financial risk of purchasing the drugs. For 2007, only one vendor, BioScrip, has been chosen to participate in CAP. The review program mandated by Congress will be aimed at ensuring that when Medicare pays for a drug or biologic, it has actually been administered to the beneficiary.
Unique New Drugs on Decline
The Food and Drug Administration approved only 18 new molecular entities last year, which is on par with the previous year but close to a historic low. Throughout the 1980s and 1990s, the agency approved at least 2030 NMEs annually. Among the 18 were four biologic therapies and four new vaccines. The paltry number of approvals and a Government Accountability Office report issued in December may point to a decline in new drug development, according to Representative Henry Waxman (D-Calif.), and Senators Richard Durbin (D-Ill.) and Edward Kennedy (D-Mass.). The legislators requested the GAO report, which found that huge increases in drug industry research and development from 1993 to 2004 were not accompanied by a similar rise in new drug applicationsespecially for NMEsto the FDA. From 1993 to 2004, research and development spending increased 147% while NME applications increased by only 7%. NME applications have declined especially since 1995. "These submission trends indicate that the productivity of research and development investments has declined," the GAO report said. In support of that conclusion: Over the same period, the FDA has continued to approve most submissions, but the number approved overall has declined, the GAO said.
FDA Panels Held Less Often
An advocacy group is charging that the FDA is holding outside advisory panel meetings less often than it did a decade ago. Public Citizen's Health Research Group analyzed the 275 advisory committee meetings held from 1997 to 2006. In 1998 and 1999, almost half of approved new molecular entities were preceded by panel meetings; from 2000 to 2006, only 24% (35) of the 147 NMEs approved had a committee meeting first, according to Public Citizen, which put its conclusions in a letter published in the Dec. 23 issue of the Lancet. The group also found that the FDA did not present its scientific opinion as a counterbalance to the drug maker's presentation at 18%, or 49, of the 275 meetings. The FDA overruled the panel conclusions 28% of the time, "a figure higher than is generally assumed," according to Public Citizen.
Easing Use of Experimental Drugs
The FDA is proposing to widen access to experimental drugs. The agency has been accused by patient advocates and some drug makers of obfuscating the criteria that physicians need to seek to use investigational drugs in their patients. In 2003, an Arlington, Va.-based advocacy group, the Abigail Alliance, sued the FDA to get unfettered access to unapproved therapies. The plaintiffs were backed by a federal appeals court in May 2006, and a rehearing of the case is expected to begin in March. In the meantime, the FDA's proposed rule, which was published on Dec. 14, said that the agency was going to make it easier for physicians to access experimental therapies and for manufacturers to make them available. "FDA hopes this proposal will increase awareness in the health care community of the range of options available for obtaining experimental drugs for seriously ill patients," Dr. Janet Woodcock, FDA deputy commissioner for operations, said in a statement. A separate proposed rule would make it easier for manufacturers to recover costs. In a statement, the Abigail Alliance said that the FDA proposals "merely clarify their existing policies."