New Hampshire Libertarians Score a Victory for Patient Privacy Rights

I have done book reviews on different tomes related to diabetes, but I also read content unrelated to diabetes -- it's just that I don't usually write about it. One of my favorite books is Joel Garreau's "Nine Nations of North America", a book written in 1981. The author, a senior writer for The Washington Post, president of his company, The Garreau Group, writes (convincingly, I might add) how the continent of North America really works right now, not as if it were 3 nations -- the United States, Canada, and Mexico; not as if it were 50+ states and provinces; not as it should work, as an academic might have it; but how it is really working. In the book, Garreau argues that North America can really be divided into 9 regions, or "nations", which each have distinctive economic and cultural features -- and each has it's own capital city. You can visit the Garreau Group's website for more detail on the book, but interestingly, few people who have ever read this book seem ever seem to argue or disagree with it.

Joel Garreau's Nine Nations of North AmericaFor example, he argues that the states of Florida and California don't really exist functionally, but are conglomerations of different nations, each with different loyalties, economic and social priorities and alliances. Consequently, there are sometimes disagreements between two big California "nations" Ecotopia and MexAmerica (represented by their respective capitol cities, San Francisco and Los Angeles), for example. Political gridlock in Sacramento is often an example of this.

Don't Mistake Libertarianism for Liberalism

He also argues that with the possible exception of the southwestern portion of Connecticut and parts of Maine which border Quebec, only New England's political boundaries have any genuine meaning. Maine and Nova Scotia (Canada, for my geographically-challenged readers) share a host of similarities -- an Atlantic coastline, similar climate, etc. Aside from being the best source for lobster in North America (and possibly Maple Syrup, although not the ideal food for people with diabetes, unless you're treating hypoglycemia). Politically, in spite of being in 2 different nations, same-sex marriage will be permitted across the entire region both in Canada's Atlantic Provinces as well as in the U.S. New England states (except Rhode Island, whose legislature remains very heavily influenced by Catholic leaders, and has therefore not voted on the issue, but lest anyone consider this social conservatism, think again: Rhode Island is a renegade in New England in that there are no laws prohibiting prostitution in the state, only a law that prohibits public solicitation). Outsiders sometimes naïvely mistake this for liberalism, but the reality is far more libertarian than liberal. This political philosophy is noted on each New Hampshire license plate with the state motto "Live Free or Die". The prevailing view across the region is that the government has no right to meddle in personal lives and that laws cannot and should not favor any particular type of relationship between two consenting parties. Fortunately, this libertarian view also extends to doctors' drug prescribing habits.

In recent years, at least on the U.S.-side of the "nation" known as New England, has been a move in Northern New England (Maine, New Hampshire, and Vermont) to limit access to doctor's prescription-writing by data-mining companies that analyze and then sell prescription dispensing information (I'm not 100% certain how Canada regulates this), which is then used by salespeople to focus on certain "underperforming" doctors who suddenly get lots of attention from salespeople than do doctors who prescribe a given drug at "normal" rates (as determined by the drug companies).

New Hampshire's Strike Against Prescription Data-Miners

Several years ago, the New Hampshire legislature was concerned about this practice, and in an effort to reduce health-care costs, passed a law aimed at making it more difficult for drug companies to engage in targeted marketing pitches to particular doctors, which the state believes results in expensive brand-name drug use (BTW, there ARE medical journal references which seem to validate this belief). New Hampshire passed a first-in-the-nation prescription privacy law that made doctors' prescription-writing habits confidential, barring the data-mining companies from providing drugmakers with doctor prescription histories for use in detailing. The measure applies only to information the data-mining companies acquire within the state, typically from pharmacies (especially major pharmacy chains such as CVS/Caremark, Walgreen's and Rite Aid Pharmacies, who sell Rx data to data-mining companies for a profit).

New Hampshire's Nashua Telegraph newspaper reported that "State Rep. Cindy Rosenwald, D-Nashua, wrote the bill at the behest of doctors who complained about these companies wanting to know their drug-dispensing habits."

She also said that blocking access to this information prevents major pharmaceutical companies from trying to influence doctors on their drug choices by sending them gifts or awarding them lucrative trips.

Since New Hampshire passed that groundbreaking law, both neighboring Vermont and Maine have also adopted very similar restrictions to prescription-writing data, and reportedly, similar legislation is now also pending in as many as two dozen other states.

Not surprisingly, the New Hampshire law was greeted by lawsuits filed by the 2 biggest aggregators of this data, IMS Health Inc., of Norwalk, CT, and Verispan LLC, of Yardley, PA which was begun by drug wholesaler McKesson (incidentally, both of these companies are physically located in the "nation" known as the Foundry, at least according to Mr. Garreau, not New England, even though Norwalk, CT is in the New England state of Connecticut).

Two years ago, after a trial in Concord, New Hampshire the drug marketing companies managed to convince Judge Paul Barbadoro to strike down the constitutionality of New Hampshire's Prescription Privacy law. But 6 months later, an appeals court in Boston overturned that decision, setting up the request for the U.S. Supreme Court to hear it. The data-mining companies challenged the law on the basis that the statute violated their constitutional free-speech rights. They also claimed that money made by selling the information to drug-makers allows them to provide the same material to researchers and humanitarian organizations at little or no cost.

The companies also warned in court papers that the law could be broadly applied to newspaper publication of stock market information and many other services that gather large amounts of information.

Meanwhile, the 2nd U.S. Circuit Court of Appeals is allowing Vermont to enforce a law similar to the New Hampshire ban on data-mining prescription information. The case is: IMS Health Inc. and Verispan LLC v. Ayotte, 08-1202.


Not surprisingly, drug and biotechnology industry trade groups supported their appeal.

But on Monday, the U.S. Supreme Court responded (sort of) to the appeal. The Supreme Court ruled that it would not stop the state of New Hampshire from making doctors' prescription-writing habits confidential over the objection of companies who analyze and sell that information. This also means that Vermont and Maine's prescription privacy laws cannot be challenged, either.

The issue of state's rights has been favored even by so-called conservative justices, who tend to favor the rights of states to govern themselves as they see fit without too much of Washington's influence (especially their recent efforts, which have been dubbed as "unfunded mandates" placed on the states without any money to support the Federal government initiatives).

Although similar legislation is now pending in two dozen other states, so far, the impact of 3 relatively small (population-wise) states is unlikely to influence the practice significantly. But the Supreme Court's refusal to hear the case represents a major victory for patients, doctors and the right to privacy!

What Else You Can Do

For those of you who are concerned about patient privacy, you may also wish to ask your Congressional representatives to support H.R. 2630 "Protect Patients and Physicians Privacy Act" today. This bill would:

• Grant individuals the right to opt out of any federal electronic system that tracks/stores their personal medical information
• Require informed consent for the sharing of electronic medical records (for federal programs)
• Prohibit health information from being placed in a federally mandated, created, or funded electronic system without a patient's written, informed consent

These are common-sense protections which are not protected by current Federal laws, but with this new legislation, some of these glaring privacy omissions would be addressed properly for the first time!

JDRF Reports New Progress in Translational Research

Last week, the Juvenile Diabetes Research Foundation (JDRF) reported that for the fourth time in 18 months, one of the non-profit organization's biotechnology partners had signed a collaboration agreement with a large pharmaceutical company to move research on type 1 diabetes into the final phases of clinical trials.

According to the JDRF, the newest development is the latest example of success in its Industry Discovery and Development Partnership (IDDP) program, through which JDRF provides early-stage research funding to drug and/or biotech companies working on technologies and therapeutic candidates.

The latest example was JDRF's industry partner Bayhill Therapeutics Inc., which just entered into a collaboration agreement with Genentech, Inc., a wholly-owned subsidiary of the Swiss pharmaceutical giant the Roche Group, to further develop and potentially commercialize a novel antigen-specific immunotherapeutic which aims to reverse the immune response that causes type 1 diabetes.

Other IDDP partners that have created similar commercialization agreements with big drug and biotechnology companies during the past 18 months include: Tolerx, which joined with GlaxoSmithKline to develop an anti-CD3 antibody to preserve beta cell function in newly-diagnosed patients; MacroGenics, which is developing a similar antibody with Eli Lilly and Company; and Toronto-based Transition Therapeutics, which has also signed a commercialization agreement for a beta cell regenerative therapy with Eli Lilly & Co. To date, JDRF has awarded more than $29 million in research funding to 25 companies through its IDDP program.

Collectively, these are just the latest examples of JDRF's program which first made public headlines in a front-page Wall Street Journal story on January 26, 2007 describing the organization's new push to help fund for-profit companies doing drug research.

These follow a number other deals that JDRF unveiled in preceding years, including a deal announced in October 2006, in which JDRF announced it would pay up to $3 million to Sangamo BioSciences Inc. for a phase-2 clinical trial of a protein drug that showed promise against diabetic neuropathy. Just a few weeks ago at the ADA Scientific Sessions in New Orleans, Sangamo BioSciences Inc. presented (abstract entitled "Reappearance of Nerve Potentials in Severe Diabetic Peripheral Neuropathy Patients with Unmeasurable Nerve Conduction Using Vascular Endothelial Growth Factor Zinc Finger Protein Activator") positive Phase 2 therapeutic data which resulted from this early JDRF-IDDP partnership.

In that presentation, they reported that the trials resulted in statistically significant and clinically relevant improvements in subjects with moderate and severe diabetic neuropathy as compared to placebo. The biotechnology medicine was referred to as "SB-509" and was reportedly well-tolerated in both multi-dose studies.

The logic behind these deals is simple: they're examples of what's known as "translational research", which is sometimes also referred to "bench-to-bedside" research which aims to assist in bringing promising therapies that might not otherwise ever see commercialization without JDRF's assistance to market.

In effect, JDRF is helping to, as the banking industry sometimes refer to it, "de-risk" the development of these products, and in doing so, make these therapies more attractive to companies which might bristle at the cost of bringing them to market.

Although JDRF aims to assist a variety of potential treatments with this IDDP program, fundamentally, the organization is pushing hard to to treat the root-cause of type 1 diabetes, rather than simply more palliative treatments, which is what virtually every type 1 diabetes treatment to date has been for nearly a century (88 years, to be precise). Palliative treatments simply treat the symptoms and manifestations of the disease, without ultimately eradicating the disease(s) which made the patients sick in the first place.

Increasingly, there is a growing consensus with Alexander "Zan" Fleming, MD's assessment (who formerly headed diabetes drug review at U.S. Food and Drug Administration) and now serves as Chief Medical Officer of Kinexum, which is the firm behind the newly-branded start-up known as Exsulin Corp. of the current situation:

The development of therapies for T1D has been neglected in favor of efforts in advancing therapies for the larger T2D population. Pharmaceutical companies have also been deterred by lack of clarity around the regulatory expectations for such therapies.

The U.S. Food and Drug Administration (FDA) and other regulatory authorities have long been in a quandary about how to approve therapies directed at the underlying autoimmune cause of type 1 diabetes (T1D). Therapeutic targeting of islet autoimmunity has been focused to date on persons with some remaining beta-cell function, essentially those just diagnosed with T1D. This target population requires reenrolling in a registered clinical trial, which are relatively long and difficult to conduct. These and other challenges have slowed the pharmaceutical industry's pursuit of T1D therapies, even though it afflicts more than 1 million North Americans.(Footnote #1) The larger type 2 diabetes (T2D) population has dominated the attention of regulators and pharmaceutical companies alike. For T2D drugs, the regulatory efficacy end point, hemoglobin A1c (HbA1c), was validated by landmark trials as predictive of microvascular benefit, (Footnotes #2 and #3) and the design of T2D registration trials has become standard. For some time, the FDA assumed that HbA1c should also be the primary end point for T1D therapies.

Footnotes:

#1. National Institute of Diabetes and Digestive and Kidney Diseases.
2003. National Diabetes Statistics Fact Sheet: General Information and National Estimates on Diabetes in the United States, 2003. U.S. Department of Health and Human Services, National Institutes of Health. Bethesda, MD.

#2. The DCCT Research Group. 1993. The effect of intensive diabetes treatment on the development and progression of long-term complications in insulin dependent diabetes mellitus. N. Engl. J. Med. 329: 978-986.

#3. The UKPDS Study Group. 1998. Intensive blood glucose control with sulphonylureas or insulin compared with conventional treatment and risk of complications complications in patients with type 2 diabetes (UKPDS 33). Lancet 352: 837-853.



To be sure, there is some debate on whether all of the new type 2 therapies represent genuine progress. Some drugs, such as Merck's Januvia (sitagliptin), are extremely costly to the nation's healthcare "system" and this drug's benefits are somewhat questionable. Regardless, no one can deny that when it comes to new and improved diabetes treatments, the rule in the pharmaceutical and biotechnology industries is follow the easy money, with particular emphasis on the word EASY.

It took 43 years for the first fundamentally new insulin variety (Eli Lilly & Co's. Humalog, or insulin lispro rDNA injection) to hit the market. Prior to that, the last fundamentally new insulin product was the Lente series (insulin zinc suspension), which was considered by most doctors to be far superior to NPH (insulin isophane suspension) in terms of predictability of time-activity profiles yet is no longer marketed today. NPH only remains on the market today because it's easy to sell in pre-mixed varieties such as 70/30, 50/50, etc. (it can be pre-mixed without changing the activity profile of the 2 insulins, while Lente products cannot). The pharmaceutical industry sees a potential goldmine in the massive type 2 market if they can convert even a small percentage to using those products, and not having to mix insulin is a key feature used to sell to millions of primary care physicians worldwide. Of course, these products do not deliver superior glycemic control, but they help to convert these "insulin naïve" type 2 patients into insulin users, which is the business objective.

Market leader Novo Nordisk A/S reportedly has several insulin products in various stages of development right now, and these are designed to be "weight neutral" products, another pitch aimed more at converting the type 2 market into insulin users rather than a fundamental advance in treatment. But beyond almost non-existent insulin development, Novo only recently set up a biotech unit outside of Seattle (see here and here for details) to pursue "inflammation" drugs aimed at the root cause of insulin insufficiency (there are different forms of inflammation in type 1 and type 2 diabetes, but ultimately, no current drugs on the market can stop either of these destructive inflammation processes). Novo's move was more sizzle than steak, as the company really has nothing in it's inflammation drug pipeline, while rival Eli Lilly & Co. has 2 partnerships for potential autoimmunity treatments and beta cell regeneration therapy in various stages of development. At present, these target newly diagnosed patients, but there are a number of different efforts which ultimately hope to be effective in long-standing type 1 diabetes as well. However, in order to measure the effectiveness of these treatments, it's necessary to see if they work on newly-diagnosed patients first, then perhaps they can be expanded to include the majority of patients who are long-past the honeymoon phase.

Regardless, it is heartening to see solid progress being made by these efforts; the JDRF should be commended on helping to bring new therapeutics to market beyond palliative treatments like a closed-loop insulin delivery system, which has plenty of critics (not the least of whom are the healthcare providers who will be expected to foot the ongoing costs, which will be much higher than current treatments). Whether the JDRF/Bayhill Therapeutics Inc. drug effectively arrests autoimmunity remains to be seen, but so far, the initial results appear promising. That, combined with several other therapies in various stages of development (see here and here for more background on some of these), perhaps combined with Exsulin's INGAP product (see here for some additional background) could spell the first fundamentally new forms of treatment for type 1 diabetes since the discovery of insulin in 1921. So far, this looks like the folks at Boston Consulting Group who created the following diagram (with a few additions of my own, noted in red) looks to be pretty much on target!

Another Movie Looks Into America's Food

If you thought the critical exposés into America's industrial agri-business were over, think again. First, we had "Supersize Me" (2004) which was a serious if somewhat humorous look into the fast-food industry, then we had a very similar (more serious, but less humorous) documentary "Fast Food Nation" (2006), followed by "King Corn" (2007) which examined a specific crop's impact on the nation's diet.

Today, another new movie called "Food Inc." premiers in selected theaters, and according to the movie's website this new documentary "exposes America's industrialized food system and its effect on our environment, health, economy and workers' rights." According to NPR, this film "takes aim at corporate giants behind the U.S. food supply. It makes a fierce argument for Americans to pay attention to where their food really comes from."

A preview can be seen here:



The filmmaker (and food advocate), Robert Kenner, features and builds on the testimony of authors Michael Pollan, who wrote "The Omnivore's Dilemma," and Eric Schlosser, who wrote the book "Fast Food Nation."

Although I haven't seen the movie (yet) ... but since it's raining this weekend, it might be a good time to catch this flick! I suspect it will be similarly as eye-opening as the others (already noted above) in this genre were. We can expect to see exactly what a factory farm looks like, as well as just how much growth hormones are used, and the impact that genetically-modified seeds has. NYC's NY1 reviewer says "Kenner does not rant, but rather connects the dots."

I suspect it will be a good look beneath our current food-supply system, and as my local NY1 reviewer put it:

"A big-picture vision of corporate duplicity and control, 'Food, Inc.' is a hard movie to shake. Days after you've seen it, you'll find yourself eating something - a cookie, a piece of chicken, cereal out of the box, a perfectly round waxy tomato - and you'll realize you have virtually no idea what it actually is."

As is often the case, this will be an art-house movie, premiering in selected theaters in major cities around the country this week, followed by a broader distribution in the coming weeks, followed by a release on DVD later this year or perhaps early next year.

For All You Twits Out There

Ordinarily, I consider myself a pretty mellow guy, usually looking for a way to make everyone happy and being more likely to bite my tongue rather than making a fuss when someone makes a scene. But sometimes, when people rub me the wrong way (or they approach me the wrong way), look out! The outcome is not going to be pretty -- for you!!

Not long ago, I received what I consider to be one of the most irritating "Tweets" (I should go on the record as saying it's technically not even a "Tweet" but a notification that someone was now following me on Twitter, and I even considered blocking this user from following me (although I haven't rushed into anything) from someone who follows more than 500 people, which will probably be 750 users before the week is over. This person's Twitter user name was "Diabetes Helper (diabetesnomore)".

The user name almost made my stomach turn. Naturally, I chose not to follow this person. But some of their stupid "Tweets" included the following comments:



# Diabetes doesn't need to stop you from traveling this summer, but its a good idea to stop by the doctor before you go : )

# 17 million americans suffer from diabetes, but knowledge is power, Knowing how to battle it can put you in control of your diabetes

# Sometimes we overeat because of the number of people we eat with, we don't have to eat alone, but lets be careful! :)


First of all, let me go on the record as saying that I don't need any "Diabetes Helpers" unless they've suddenly found a cure for autoimmunity which hasn't yet been shared with the scientific and medical communities. Nothing this person does is going to make my diabetes vanish (so much for their poorly-descriptive name "diabetesnomore"). Furthermore, I don't want any diet or exercise tips from them.

What I DO want is someone who actually bothers to understand that diabetes is not a single disease, and sending such ill-conceived advice is probably not going to help me at all and is far more likely to p!$$ me off. I'm willing to bet that I have more diabetes and nutrition information than they do, and I certainly won't be buying anything from them. (OK, I may very be a fossilized old troll, but I admit it!)

Why such a harsh assessment?

Perhaps I should give you some background on what I actually think about Twitter. Feel free to skip ahead if you don't want to read it -- I won't be offended.

Although I signed up for my user name on Twitter close to a year ago, my only motivation was to secure the login name so that no one else grabbed it! I think Twitter is way too overhyped and frankly, it has potential become tomorrow's MySpace (a social media community now owned by Rupert Murdoch's News Corp., and one that is generally viewed as dying. -- Don't believe me? Traffic at that site is down. So are revenues. Senior executives are leaving in droves ... need I say more?). To be sure, Twitter is somewhat different from MySpace. At it's core, Twitter is really a facilitator of what I call "micro-blogging", so that is one positive for it.

For those who don't already know it, Twitter enables users to send (and read other users' updates) which are known as "Tweets". Tweets are text-based posts which are limited to a mere 140 characters in length and are displayed on the user's profile page and also delivered to other users who have subscribed to them (those people are known as "followers"). What makes Twitter different is that it's designed to handle very short posts sent via text messages (from one's mobile phone). That much is unique.

But let's be honest, from what I've seen, a lot of "Tweets" are really pretty inane. So much so, there's now a blog called "Twitter Backlash" which is dedicated to this very subject. Many Tweets could probably be called idiocracy (and that's being generous!). For example, kids who Tweet where they're going at every second of the day, which I find to be a complete waste of otherwise productive time. Franky, who gives a sh!t if you just got home from school, or walked the dog. IMHO (in my humble/honest opinion), this is useless information taken to a new level.

I only reluctantly joined Facebook (or "FB") but have since rediscovered & reconnected with many people I knew when I was growing up, so that has proven to have some utility I hadn't really expected. Of course, my experience appears to be similar to others, which I suspect is what prompted one Wall Street Journal writer to claim that Facebook was pretty much a social application for middle-aged people anyway!

Let me go on record as saying that I haven't sent a single "Tweet" on Twitter since signing up (well, 1 which I had to do when I signed up, 276 days ago), yet in spite of that, I still have nearly 100 followers anyway! That isn't to say I will NEVER send a Tweet, but my view is that I plan on reserving my Tweets for appropriate opportunities, but just don't expect me to send Tweets just for the sake of doing it. I have things I'd rather be doing.

Not long ago, I did login to Twitter in order update those I actually follow. There are occasionally interesting comments and thoughts that emerge, but mostly they're it's like listening into a conference call on a subject you have limited interest in. Anyway, when I logged in, I also added a bunch of familiar people to my Twitter list. Like anything in social media, there is a tendency to do what your friends do on the site, but my rule has generally been only to follow people I actually know, which means that I am quite unlike Ashton Kucher in that I don't have a million followers nor do I follow a million people -- I don't want that many. I have no interest in following people I don't know, and I don't care if they follow me, either.

A while back, I posted an NPR commentary regarding Twitter on my Facebook page entitled "Keep Your Tweets to Yourself" (or, in plain text, it's a lot faster, see here)

I received a few comments from my followers on Facebook about their reasoning for using Twitter and why it can be valuable.

Fair enough. (I never said it was a totally useless application.)

As for Tweets, you may notice that I've added a widget to my blog in the right margin to display a few Twitter Tweets (I've limited it to just 2). I DO plan on using Twitter (sometime), but I expect to do so only on occasions that probably deserve it! For example, next month, I'll be attending the Roche Diabetes Social Media Conference in Indianapolis, and may find that to be a useful venue for 140-character micro-posts -- provided I figure out how to do so from my cell phone (I need to find the appropriate number to text to)! I will have limited access to the Internet while I'm there, but will have my mobile phone so I can send theoretically send short Tweets about things that are going on at that event.

For those who want my Tweets, yes, you can catch me at "sstrumello" on Twitter, but expect my Tweets to be very limited to specific occasions where they're likely to be a useful format for sharing information. Otherwise, I'm inclined to agree with NPR's John Ridley:

"We claim to be a nation of people who take our privacy very seriously. Just mention the idea of warrantless wiretaps and expect to get hit up with a congressional investigation.

But give somebody an avatar and a URL, and he can't tweet, post or hyperlink enough personal information about himself to as many people as possible.

Seriously, does valuable broadband space need to be taken up with announcements in that creepy Facebook third-person-ese that "John is enjoying two-for-one margaritas with the rest of the IT Team at T.G.I. Fridays"?

Where is the expectation of privacy anymore? Or, more correctly, where is the expectation that people will keep their private nonsense to themselves so that those of us who still like to communicate personal information with one person at a time don't have to get caught up in somebody else's e-mail circles or listen to their one-sided cell phone conversations?

No, I don't know what's hipper; to Facebook or to Twitter. I just know for me, personally, discretion never went out of style."


I won't be using Twitter to update much about my personal life, as I really don't feel Twitter is the appropriate venue for these kinds of posts. Also, I think some topics deserve more than 140 characters, and for those, don't expect to see any Tweets from me! But you can expect Tweets from me where I don't have access to the Internet or where timing of the message will be more important than the content.

So those are my thoughts on Twitter. Aren't you glad I shared that?

Diabetes & Bankruptcy: Average Diabetes Expenses Among Bankruptcy Filers is Second Highest Out-of-Pocket Expense Category at $26,971

My career in involves a lot of time doing research online looking for statistics, etc., so I spend a lot of time on the Internet. My own day-to-day diabetes care is a factor more often than I would like it to be, but that's just the way things are. But beyond my own daily care, it is not all the time that my research for work overlaps directly with diabetes. This is one such time.

As someone who works as a consultant for the consumer finance industry (primarily banks, but I've done work for a range of other companies such as Sony, Disney, etc.) and it's long been a been common knowledge that medical bills have long been a major factor behind consumer bankruptcies. That part is not really news, even if it doesn't get mentioned nearly as often as it needs to in the debate over healthcare reform in the United States.

One observation I've seen in spite of a major reform to bankruptcy law back in late 2005 (which banks lobbied legislators for years to put into law -- the idea behind that was supposed to be that by implementing means test to bankruptcy law, the bankruptcy courts could theoretically push more consumers into chapter 13 which obligates some repayment of debts rather than into chapter 7, in which consumers' debts are totally absolved). However, since that reform occurred, we've seen a steady increase in bankruptcies (albeit at a slower pace), and surprisingly, more have been chapter 7 filings, which was not expected by the banking industry. However, I had long suspected that healthcare expenses played a role in that, too. Hospital bills add up very quickly.

I'd pretty much assumed that catastrophic illnesses like cancer, heart attacks, and stroke were a major factor behind these filings because these things tend to happen suddenly and people are often in recovery for quite a while.

But a recent study published online in The American Journal of Medicine with data compiled by researchers at Harvard Law School, Harvard Medical School and Ohio University revealed that even among people with insurance, many are still left with medical bills that drive them into bankruptcy. The latest statistics show that in 2007, medical bills contributed to 62.1% of all bankruptcies. Between 2001 and 2007, the proportion of all bankruptcies attributable to medical problems rose by about 50%.

Contrary to my assumptions, chronic illnesses dominate the top 2 catagories, and to my surprise (and dismay), diabetes ranks second, following only nonstroke neurologic problems (i.e., multiple sclerosis). But the study also indicates that the health problems that left patients with the highest out-of-pocket medical expenses weren't dominated by catastrophic illnesses. The article reports that among common diagnoses, the health problems that left patients with the highest out-of-pocket expenses were ranked as follows:

#1) Neurologic (e.g., multiple sclerosis): $34,167
#2) Diabetes: $26,971
#3) Injuries: 25,096
#4) Stroke: $23,380
#5) Mental illnesses: $23,178
#6) Heart disease: $21,955

Also, it is important to keep in mind that among the other categories, diabetes is a leading contributor to the stroke and heart disease categories. These are some pretty astonishing figures!

Another interesting observation: hospital bills are, not surprisingly, the largest single out-of-pocket expense for 48.0% of patients who file for bankruptcy, but the second-largest category isn't doctor's bills, its for prescription drugs for 18.6%. Doctors' bills isn't far behind, accounting for 15.1%, and premiums accounting for 4.1%. The remainder cited expenses such as medical equipment and nursing homes.

As a person with type 1 diabetes myself, I must admit that while this disease is anything but cheap, even I was a bit surprised by some of these findings, especially considering that in February 2009, the American Diabetes Association and others were citing studies which showed many Americans with diabetes were skipping certain medical treatments, drugs etc. due to the cost.

Anyway, these statistics suggest that diabetes is contributing to many U.S. bankruptcy filings, and we can now quantify the out-of-pocket expenses among filers, too. The diabetes community should be citing these figures when we speak to our legislators on our support for healthcare reform. We now have hard data to back us up!

Medco CFO Sees Generic Insulin By 2013, Generic Analogues By 2015

This isn't meant to be a primer on the role of the Pharmacy Benefits Managers (or PBMs), but few people realize just how massive the role of the PBM really is in today's healthcare reform debate. These companies know the score when it comes to the drug costs, prescription and usage patterns and the outlook on where things are likely to be going.

The Role of the PBM in the U.S. Healthcare "System"

PBMs are probably one of the biggest players in the U.S. healthcare field that most people have at best, only a hazy idea of their role in managing the cost of healthcare. For people with chronic medical conditions, they may know these companies as the mail-order companies they're forced to order 90-day supplies from. Increasingly, however, many healthcare plans are placing caps on prescriptions filled at retail pharmacies, which effectively forces virtually all drugs purchased to be filled via mail order. But PBMs are more than just mail-order pharmacies.

Aside from drug wholesalers like McKesson (another part of the complex medical industry that few people have much understanding of -- I won't even get into that today), PBMs play a direct role in deciding which drugs people will use, how much they pay for them, and they play a bigger role in negotiating prices with pharmaceutical, biotech and medical device companies. Today, roughly 95% of all patients with prescription drug coverage receive their benefits through a PBM. In addition, PBMs manage about 70% of the more than 3 billion prescriptions dispensed in the U.S. each year, and these firms pay for about 60% of the claims at chain drug stores as measured by number of Rx claims processed each year (the other 40% is either co-pays or the few that still pay for their prescriptions out-of-pocket). However, when PBM market share is measured by drug expenditures, only about 40-45% of prescription drug expenditures are paid for by PBMs. This means that PBMs are paying significantly less per prescription than are other payers! Pity the poor, uninsured individual ... they're really getting a raw deal from so many angles.

Although insurance companies (errr, healthcare providers, not all are for-profit entities, although most are, including many of the Blue Cross/Blue Shield [BC/BS] firms people once thought were cooperatives. Wellpoint, a for-profit company, owns many of the larger BC/BS units today). Because of their massive role as drug payment facilitators, a less-appreciated role of the PBMs is that they are able to negotiate prices on drugs that insurance companies will pay for, but the PBM skims a margin off the top. The PBM's margins are very low to non-existent on brand-name drugs, but they make a fortune off generics, which they effectively push patients towards with tiered pricing arrangements and varied co-payments. Today, there are about 50 or so PBMs: 3 massive, publicly-traded companies (these are Medco Health Solutions, Express Scripts and CVS/Caremark) who control much of the industry; as well as dozens of smaller firms and/or in-house operations. In 2007, CVS purchased Caremark for about $26.5 billion. More recently (in March 2009 the deal was announced), a large, in-house PBM operation was sold, Wellpoint NextRx was sold to Express Scripts, but there are others that remain, such as Kaiser Permanente's, which is a big healthcare provider based on the West Coast, and a Canadian PBM known as Catamaran Corp. which has been gaining market share in recent years.

As noted beforehand, PBMs know the score when it comes to the costs and where things are likely to be going, and they occasionally publish studies, reports, interviews and/or give public statements to investors and/or the press that give a better picture about what is going on about this component of our healthcare costs. One annual report is Medco's annual Drug Trend Drug Trend Report, which kind of chronicles the previous year and identifies issues in the coming year. Express Scripts also publishes periodic reports. Taken in isolation, these reports don't say nearly as much as when they're viewed as a chronicle of where things are going.

PBM Diabetes Drug Trends: More Expensive Drugs, Not New Users Is Driving the Growth

Last year, the headline from Medco's 2008 Drug Trend Report was that diabetes medicines had become a leading driver of prescription drug spending growth. This is hardly news given the number of new diabetes diagnoses.

The Medco Drug Trend Reports are archived here. Rival Express Scripts archives it's own Drug Trend reports here. Rival CVS/Caremark's 2009 Drug Trend report has been moved to the files section of the combined company, while historical reports are found on the old Caremark website. The link to the 2009 report is here, while the 2008 report is here. Not surprisingly, the CVS/Caremark findings are very similar to the findings in Medco and ExpressScripts' Annual Drug Trend reports, although this company also pubishes a quarterly version of the report as well.

In it's 2009 report, Express Scripts also noted that 2008 was the first year that diabetic supplies (meters, test strips and syringes), which typically do not require a prescription although they are covered under many prescription-drug plans, were included in the diabetes category. However, it notes that prescription drugs represented 85% of spend.

For both Express Scripts and Medco (CVS/Caremark uses a slightly different methodology), Specialty Drugs were the main driver of drug spending, and diabetes drugs is a big (although hardly the only) component. However, anticoagulant and antiplatelet, respiratory disease, and rheumatological drugs are also big components of specialty drug spending. It wasn't so much the number of new patients with diabetes that was driving the big increase in drug spending, it was newer, more expensive medicines. In fact, Medco's report indicates that spending for specialty drugs continued grew at a double-digit rate, but on a per patient basis, there was only a marginal increase (1-2% increases in utilization). Spending on Merck's type 2 medicine Januvia at both Express Scripts and Medco was also a major driver of diabetes drug spending. More costly insulin analogues also played a big role. It was really the lack of follow-ons and the fact that doctors have no "generics" for these drugs was perhaps the biggest factor in Specialty Drug Spending.

Medco CFO Sees Generic Insulin By 2013, Generic Analogues By 2015

For several years, I have chronicled the lack of guidance from the FDA and from Congressional leadership on generic biotech medicines, including my ground-breaking article on this subject from early 2007. The lack of guidance, or Congressional legislation mandating the FDA to move, even for those biopharmaceuticals like insulin, which are grandfathered as "drugs" according to the law, has caused costly, unnecessary delays. As a result, we are tied up in this mess whether we deserve to be or not.

In terms of outlook, last month, Investor's Business Daily interviewed Richard Rubino, who is Medco's Chief Financial Officer (CFO). Rubino spoke about his views on how the U.S. could get the most for the health buck from the products, procedures, protocols and practices that yield the best results. Although I am generally skeptical when we ask a company that profiteers from the existing system, when he spoke on follow-on biopharmaceuticals, I took notice.

He said "... now there's the promise of biosimilars, which some call biogenerics. There's huge potential for less expensive versions of costly biotech drugs used to treat severe diseases.

These drugs are usually injected and can cost patients tens of thousands of dollars a year."

When the magazine asked about his view (as the CFO of a company directly impacted) about how soon we might see follow-on biologics, he responded:

"We assume that legislation could be completed by the end of this year or early 2010.

Recognizing that these drugs would be more complicated to manufacture and that there could be clinical trials required, we assume they may reach the market by 2013."

Rubino believes we'll see generic insulin soon.

He said he expects to see follow-on versions of Humulin (and Novolin) insulin on the market no later than 2013.

"Patents have expired on a significant number of these drugs, so in 2013, we assume we'll have the release of generics of Neupogen, another Amgen product; Humulin from Eli Lilly (LLY); and Betaseron from Bayer" he said.

Humalog and Novolog won't be too long afterwards, as Congress has taken so long to move on this issue that those formerly-new products have patents that are due to expire very soon.

Rubino added "Then in 2015, some of the big (patent expirations) include Aranesp and Avonex from Biogen Idec (BIIB), Humalog from Lilly and Novolog from Novo Nordisk (NVO)."

But he admitted that these wouldn't necessarily be the gravy train PBMs saw with prescriptions for Prozac, Zocor and other small-molecule drugs. He said that follow-on biopharmaceuticals are not likely to be exact duplicates, as is the case with small-molecule drugs, which are considered interchangable without patient or doctor permission unless specifically designated "Dispense As Written" by the doctor on the prescription itself.

Rubino said "You won't see the mass switching of a [as we observed with generic] Zocor. That's because the disease states are hypersensitive. They're matters of life and death.

The molecules will not necessarily be identical. They'll be similar but not necessarily identical. So if you are diagnosed with a disease, you will start on the biosimilar. If that works then you'll stay on it.

Generic pills or capsules are easier to produce than biologics."

Of course, Congress still needs to act.

Although California Rep. Henry Waxman is pushing the issue again, he introduced legislation on this issue in 2006, 2007 and 2008, but the legislation never made it out of committee thanks to House and Senate leadership's failure to act on the issue. Congressional leadership has been slow in bringing this issue to a vote. But with pressure growing to reign in healthcare costs, perhaps we'll finally see generic versions of older insulin varieties by 2013, followed by Humalog and Novolog in 2015.

And we have that prediction from someone who ought to know!