Saturday, October 08, 2005

Most Drug Expenditures for "Me-Too" Drugs

The British Medical Journal just published a significant article about drug prices. (Morgan SG et al. "Breakthough" drugs and growth in expenditure on prescription drugs in Canada. Br Med J 2005; 331: 815-816.)
Some have suggested that rising health care costs are in part attributable to new, innovative, effective treatments. Morgan et al used existing categorizations by the Canadian Patented Medicine Price Review Board to classify all new prescription drugs available in Canada since 1990 as "breakthrough" - "the first drug to treat effectively a particular illness or which provides substantial improvement over existing drug products," to which Morgan and colleagues added later drugs added in the same chemical class; "me-too," other new drugs patented since 1990 that did not provide substantial improvements over existing drugs. Drugs available before 1990 were categorized as vintage brand or vintage generic.
The investigators then broke down drug expenditures in British Columbia from 1996 to 2003 by drug type.
Breakthrough drugs accounted for 6% of expenditure and 1% of use in 1996, and 10% and 2% in 2003.
"In contrast, me-too drugs accounted for 44% of use and 63% of expenditure by 2003."
They concluded, "In British Columbia most 980%) of the increase in drug expenditure between 1996 adn 2003 was explained by the use of new, patented drug products that did not offer substantial improvements on less expensive alternatives available before 1990. The rising costs of using these me-too drugs at prices far exceeding those of time tested competitors deserves careful scrutiny." Furthermore, "given that the list of top 20 drugs in global sales includes newly patented version of drugs in long established categories (that is, marketed before 1990) - such as angiotensin converting enzyme inhibitors, statins, selective serotonin reuptake inhibitors, and proton pump inhibitors - me-too drugs probably dominate spending trends in most developed countries."
This says something very important about the bizarre financial incentives prevalent not only in the US health care system, but throughout at least the developed world. We spend huge amounts on expensive drugs that provide little advantage over cheaper alternatives, and then seem to not have enough money for primary and generalist care, for acute care, to handle unexpected crises, to provide care to the less fortunate, etc., etc., etc. In the US, we seem to have plenty of capacity to treat erectile dysfunction and restless leg syndrome, but not enough capacity to make a vaccine for avian influenza (see this article) . What is wrong with this picture?

5 comments:

Abby said...

Well there's two kinds of me-too drugs, and you've neglected the most egregious kind, where the drug company seeks to patent a left-handed version of the same molecule. I think that Eli-Lilly tried this with Prozac.

In the case of SSRIs it's hard to say whether the existence of me-too drugs is such a waste. A lot of people respond to one but not another, and nobody quite knows why.

Jim B said...

Another way to analyze this would be to look at the most prescribed generic drugs (an indication of "staying power" and presumably therapeutic advantage) and ask the question "was this a me-too product?" Atenolol, metoprolol, naproxen, alprazolam, lisinopril, diclofenac, paroxetine, amitriptyline, furosemide, and ranitidine to name a few were me-too products.

The simple fact is that it takes years for the marketplace and prescribing physicians to sort out if the n th product in a chemical product is superior or not. To obviate this market process by overgeneralizing that me-too products should in some way be forbidden is at best shortsighted and at worst nonsensical.

Roy M. Poses MD said...

What a great example of a slippery slope! Who said anything about banning me-too products? My clear implication was that we are paying too much for them, not that they should be taken off the market.
I would also point out that the factors that determine what generic drugs are most prescribed may not be exactly the same as those that the determined the pricing of the brand-name versions of the same compounds before they went off patent.
Finally, remember that the market-place for drugs is hardly an ideal free market. Hence whether the market that exists will sort things out optimally is clearly open to question.

Tom Huddle said...

Docs may not use me-too drugs very rationally; but their effect on the market is benign, as JD Kleinke has recently pointed out in Health Affairs. There is a market in drug classes with several members; and more drug options in a class reduce prices for the class and do so faster the faster the me-too drugs enter the market.

see Health Affairs, Vol 24, Issue 3, 884-885

Anonymous said...

The Fallacies Associated With The Me-Too Medications

“But corruption is neither need based nor greed based. It’s simply opportunity based.” -----

Billy Tauzin, president and C.E.O. of PhRMA, the pharmaceutical industry’s most powerful lobbying group, as Mr. Tauzin stated in Boston recently.

It has been said by others that the pharmaceutical industry should not have government regulation or interference from our government at all because that would drastically limit if not eliminate innovation as well as our health care choices and options, both from the perspective of the doctor and the patient, so the public has been told often by others. Also what has been stated by this industry that their internal controls prevent wrongdoing. So, according to some, the public’s health would be limited and possibly harmed without the copious innovation of this industry. As with other issues we face as citizens, this is another attempt by these others to apparently install fabricated fear in our minds- void of any proof or reason, and is a fallacy.

As it has turned out, the pharmaceutical industry’s lack of innovation in particular has happened and they have appeared to do this on their own, overall, those innovators and lifesavers.
Over the past several years, those few meds created and FDA approved with true therapeutic advantages happened by discovery with government involvement in over half of these meds with clear clinical advantages for certain patients. Conversely, of the new chemical entities approved lately and developed by drug companies, over 50 percent of these have microscopic therapeutic advantage for patients, so I understand upon information and belief. This inefficient drug development by the pharmaceutical industry has created what is now the dominant development strategy of drug companies, and this strategy is known as the intentional development of what are phrased, ‘me too’ drugs.

These drugs essentially are small molecular variations of the original molecule in a particular class of medications. In other words, they tweak the original molecule in order to obtain patent rights for their now new drug project. This me too objective of drug companies now accounts, I believe, for about 80 percent of the research budgets of drug companies. And because the FDA only requires a potential med to be superior to a placebo in their mandatory clinical trials, usually these me too meds are approved- regardless of their necessity for others, or the need for such drugs.
And me too drugs are selected by the drug company for their potential blockbuster status as well as the speculated growth of a particular market, which means making over 1 billion dollars a year on such a drug, at least. For example, statin drugs, for high cholesterol patients, is a multi- billion dollar market. As a result, there are several statin meds now available for use by doctors to prescribe to their patients. Yet, arguably, me too drugs are all essentially very similar in regards to safety, efficacy, and cost, regardless of the class referred to so often saturated with me too meds, with few exceptions. The differences overall are minor once again with most me too drugs, overall. As aggressive marketers, the makers of these meds are suspected of doing a bit of publication planning, it is suspected, to falsely claim superiority of their newly approved me too drug over all the other drugs in a particular class both during and after the creation of these me too meds. Also, other classes of meds with several me too drugs may include SSRI anti-depressant drugs, as well as those meds for hypertension. There may be a dozen drugs in a particular class of medications that are all essentially the same in regards to their treatment abilities for patients with such disease states that they treat.

Now, there may be cases where a patient tolerates one drug in a class over another for unknown reasons, so in these few cases, some me too drugs occasionally are beneficial for patients for some reason or another, but should absolutely not be a primary objective of the drug companies to create them as often as they do. Instead, true innovation and discovery should be the focus of pharmaceutical companies, and it does not appear to be the focus of the pharmaceutical industry, presently. It appears that, thanks to the Bayh-Dole Act of 1980, they license molecules from those in the academic world, and then proceed with development of another’s creation they claim as their own.

Further vexing is that competition in the pharmaceutical industry amazingly does not and has not been of any financial benefit for the consumer, as competition normally does create. This fact is greatly demonstrated with other industries and is the apex of business operations. This pharmaceutical industry model is an exception, and the reason for this remains an unknown, as far as the etiology of being deprived of this costly environment of drug spending, yet it can be speculated that the me too drug makers claim uniqueness of their me too drug, which is rather deceptive.
This progressive marketing paradigm of the pharmaceutical industry, such as the creation of me too meds solely for their own profit, clearly illustrates their focus on these issues over true research and science, so it seems. Innovation, along with ethics, use to define this pharmaceutical industry. Sadly, it seems this is not the case today, which ultimately and potentially deprives potential treatment methods potentially for the public health if the objectives were focused on their true purpose. Yet hopefully, such historical qualities of drug companies will return some time. With effort, in time.

Dan Abshear