Thursday, July 09, 2009

Evergreening Does Not Refer to Trees

When most of us think of evergreen, usually images of Christmas trees come to mind (or perhaps Barbra Streisand's sappy 1977 tune "A Star Is Born", a.k.a. "Evergreen"). The term evergreen is derived from perennially green trees that retain their rich, green colors even through the coldest winters in places like Alaska, the Canadian Northwest Territories, Siberia, the Scandinavian Lapland or anywhere else these hearty trees happen to call home.

But the term "evergreen" has come to mean something else, especially when it comes to the debate over how to manage healthcare costs. In effect, the term has become a euphemism used by the pharmaceutical, biotechnology, home diagnostics, and medical device industries as a means to perpetually extend the lives of their patent protection by making marginal modifications to the product design (or, a derogatory term if you're a critic). Critics argue companies are abusing the patent and regulatory systems to delay the legitimate entry of generic competition. In effect, these are a low-risk way to extend the exclusivity protection of established products, without bringing much genuine health benefit, although it does delay generics from entering the market.

In pills, for example, the phrase "incrementally modified" drugs is sometimes used by the pharma industry staffers to describe variations on existing pharmaceutical products, such as new formulations (extended release versions, for example, or different dosages which require fewer pills), liquid capsule forms, transdermal patches, etc., of the established, brand-name product) to effectively entitle the brand-name manufacturer to enjoy more time under effective monopoly of patent protection even though the changes made to the core medicine do little to fundamentally change the product. Sometimes, there are pretty standard modifications that can be made which are known at the time the drug is first developed and patented but are subsequently promoted as "innovations" even when the core product remains essentially unchanged.

In 2002, the U.S. Federal Trade Commission (FTC) conducted a study which was scathing of the pharmaceutical industry practice known as evergreening that finally gave some much-needed regulator and lawmaker attention to these industry practices (and abuses). The study also prompted the FTC to issue recommendations for legislative changes to Hatch-Waxman Act to maintain incentives to innovate and facilitate the entry of generic drugs. So far, however, Congress has been agonizing slow to reform this in a very meaningful way (some argue that Washington lobbyists are responsible for that).

Examples of Evergreening in Diabetes Care

One of the most obvious examples of "evergreening" occurs in home diagnostics business, notably with blood glucose testing supplies. As guest-writer David Lazurus fairly recently wrote on Amy Tenderich's blog Diabetes Mine, "the pricing of test strips — a roughly 900% markup over the manufacturing cost, as best as I can tell" adding that "the global market for glucose meters and test strips was estimated at $6.3 billion as of 2005. It undoubtedly tops $7 billion now." This topic alone subsequently prompted a lively discussion on the social networking site TuDiabetes.

Ironically, however, there is not a single generic test strip sold in the U.S. market. It seems pretty clear that we can thank evergreening for that. For example, the companies might reduce the blood sample size required for a test, or modify the type of plastic used to manufacture them, or maybe change the electronic contacts inside the meter, but none of these are what could really be billed as "innovations" to the core product, but nevertheless, entitles them to more time under the protection of U.S. patent law.

The companies who dominate this industry, Johnson & Johnson, Abbott, Roche, Bayer and a handful of others, are for the most part, well-seasoned in the various intricacies of pharmaceutical evergreening, and have arguably used it to effectively preclude any sort of meaningful generic competition in the home diagnostics market. Thus, we have 900% markup on test strips and I haven't seen generic test strips in a good 15 years or more.

My own opinion is that as long as healthcare providers (e.g. insurance companies) continue to tolerate this practice, we are unlikely to see any meaningful reform short of lawmakers addressing the practice via legislation. But when we discuss the costs of managing chronic diseases in the context of healthcare reforms, these practices undoubtedly should be part of the debate, but so far, have not been. However, to reduce the influence of industry and special-interest lobbyists, we as patients need to make our voices heard by contacting our legislators!

Some also say the effective extension of patents on biosynthetic human insulin is also an example of evergreening. Although I disagree on that point (there is no need to evergreen when there is no way for generics makers to seek approvals from the FDA). Nevertheless, last month, the Pharmaceutical Care Management Association (PCMA) released an advertisement lambasting our lawmakers for their failure to move (download the ad directly here).

Whether this is evergreening or not is irrelevant. The main issue is that Congress has consistently debated the topic, but has failed to act. How can they have meaningful healthcare reform when they can't even get their $#!t together to actually vote on a bill that even former President George W. Bush said he would sign?

Evergreening Follow-On Biopharmaceuticals?

In January 2007, with my ground-breaking article (see here for that article) I shared that that the patents on Eli Lilly & Company's Humulin insulin products had expired in 2001, and Novo Nordisk's Novolin insulin product patents had expired in 2002, and yet, in spite of no law preventing generic insulin, we still don't have it several years later (2009).

The FDA has continually delayed outlining procedures for generic manufacturers to apply for and obtain approvals of therapeutically equivalent versions of insulin, making excuses that Congress needs to tell them what to do or saying they want to publish broad guidelines applicable to ALL biopharmaceuticals.

In effect, the Congressional and FDA's failure to act on this extends the life of the original patent, costing taxpayers and our healthcare providers millions of dollars each year. In 2006, Sen. Orrin Hatch (who co-authored the Hatch-Waxman Act permitting generic drugs back in the mid-1980s) admitted that the absence of having a comparable approval path for biotechnology drugs, "essentially acts as a second patent to keep off-patent biological products off the market."

And as then-Kansas Governor (now U.S. Secretary of Health and Human Services, who now has a much more vested interest in controlling healthcare costs in her new role) wrote in the petition she signed back in 2006: "The FDA's delay in informing manufacturers of the requirements for obtaining approval of therapeutically equivalent versions of insulin and HGH has cost the states and other health-care providers hundreds of millions of dollars."

Concerns About Follow-On Biopharmaceuticals Legislation Needs to Address

I have long been a supporter of legislation that would enable follow-on biopharmaceuticals to emerge, but my support for legislation does not mean I support a free-for-all for generics makers or branded drug companies.

As the political debate on U.S. healthcare turns to cost-savings, there will be growing pressure on lawmakers to do something about so-called generic biopharmaceuticals (they aren't exactly the same, therefore the FDA refers to them as "follow-on" biopharmaceuticals, while regulators in Europe sometimes refer to them as "biosimilars"). Contrary to what the biotechnology industry would have us (and their Congressmen/women) believe, the real concern in this debate is not about balancing the needs of the industry by allowing a longer period with patent protection. The real issue is about enabling competition at an appropriate time while also protecting patients as well.

1. Say NO to Interchangeability

First, we need legislation that will clearly specify that follow-ons are NOT considered interchangeable with the brand-name product, because they aren't. This would mean that no pharmacy could simply give us a "generic" insulin without asking our permission as they can with pills. Anyone who has ever switched insulin brands knows that just because they are both "regular" insulin doesn't mean they work exactly the same way.

The FDA has already suggested that what they call "follow-ons" would not be considered interchangeable. A follow-on is not interchangeable, and we cannot have pharmacies automatically switching us to follow-on versions without our knowledge or consent. The FDA has already suggested this might be the case anyway, although it's up to Congress to specify this in the law.

2. Demand Full Disclosure of the Manufacturer and Ensure Continued Availability from Pharmacies/PBMs

We also need to take this a step further and demand that our legislators let us know more about the manufacturers, and that we will be able to attain the exact same product be from the same manufacturer (not a manufacturer chosen by Medco Health, CVS Caremark, or Express Scripts) based on the simple economics of their business.

We are entitled to know not only who makes the follow-on, but also that we can continue using that particular follow-on if we switch pharmacies (especially mail-order pharmacies who typically provide 90-day supplies). Keep in mind that pharmacy benefits managers (PBMs) make millions of dollars on generics, but they can switch suppliers without telling patients because the FDA says that small-molecule drugs are interchangeable.

Consider the following potential real-life scenario:

Let's say you buy your medicines from Medco Health Solutions (they're the #1 PBM, so many of you already do). Medco may have a deal with Barr (now owned by Teva), but Medco can switch suppliers if they get a better deal from someone else. But if Medco decides to switch from Barr/Teva to say Watson, Mylan, Sandoz or Hospira (... or Dr. Reddy's or anyone else, for that matter), while its usually a non-issue in terms of bioequivalency in small-molecule (chemical) drugs, it is a very big deal in terms of biopharmaceuticals because the unique cell culture used in making these medicines can make for a very different product.

Your insulin dosage with Novo's Novolin R may be 1 unit per 15 grams of carbohydrate consumption, while your dosage of Lilly's Humulin R may be 1 unit for 13 grams of carbohydrate. The difference is real, but if you can't be sure to get the biopharmaceutical from the exact same manufacturer, you could have a dosage management nightmare on your hands every time you order it, thanks to lack of thought by our legislators.

Hyper and/or hypoglycemia might be the rule every time you refill your script if you can't ensure continuity in suppliers. The pharmacy benefits managers (PBMs) aren't expecting biosimilars to result in the same kind of mass-switching that normally occurs when a generic comes on the market. In the article I recently featured on this topic, the CFO of Medco Health Solutions spoke more on the subject of follow-on biopharmaceuticals.

In Q2 interview with Investor's Business Daily, Richard Rubino, Medco's Chief Financial Officer (CFO), admitted that follow-on biopharmaceuticals wouldn't necessarily be the gravy train PBMs saw with prescriptions for Prozac, Zocor and other small-molecule drugs. He said that Medco understands follow-on biopharmaceuticals are not likely to be exact duplicates, as is the case with small-molecule drugs, which are considered interchangeable 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."

Rubino's last sentence is especially important to my point about knowing who makes the product, and ensuring access to continued availability of that biosimilar from Pharmacies/PBMs such as Medco, CVS/Caremark or Express Scripts. But unless Congress mandates in the law that biosimilar manufacturers must be clearly disclosed, and that the supplier will guarantee continued availability from the same manufacturer, people with diabetes are lacking simple protections that any "Access to Lifesaving Medicines" legislation need to address -- so share this with your lawmakers and make the issues known to him or her!


Anonymous said...

Very enlightening, the things that corpamerica does and we aren't even aware. I always wondered why there weren't more insulins on the market. Although years ago Squibb did make insulin..don't know if they still do.
Betty Jackson

Cherise said...


Thank you so much for posting this information. OMG! You rock for shedding light on this. As of right now, I am against generic insulin. This is why--My Endo refuses to prescribe generic thyroid medication because of the dosage being off. So imagine insulin dosage being off on insulin, not good. There has to be a balance but I don't think this is the answer.