Author: Jacob Goldstein

  • Grassley Asks Hospitals About Problems With Health IT Systems

    GrassleyChuck Grassley, a Republican senator and a prolific author of letters, has written to more than 30 hospitals to ask about their experiences — including “complications,” “errors” and “problems” — with health IT systems.

    The letters follow a barrage Grassley sent out last fall to some of the companies that sell electronic systems to hospitals and doctors, asking some similar questions.

    Health IT is a big deal at the moment, of course, because of the tens of billions of dollars included in last year’s stimulus bill to encourage doctors and hospitals to buy and use electronic systems.

    Many of the questions in the hospital letters echo those in the letters to companies. In both sets of letters, Grassley asks whether “‘gag orders’” in contracts with health IT vendors prevent hospitals from sharing information about problems with their systems with other facilities.

    And he asks about whether contracts deal with liability. In the letters to the hospitals, he says that one company told him “it is not liable when harm or loss results from the client’s use of the product in diagnosing and/or treating patients.”

    Both liability issues and non-disclosure clauses were discussed in this JAMA essay last year.

    Last fall, a spokeswoman for Cerner (one of the companies that got a Grassley letter) had this to say about the inquiry: “Our industry focuses every day on saving lives and taxpayer money … We are confident that all of the companies that received a letter will work with Senator Grassley to validate the safety and efficiency … [of] their products.”

    We couldn’t find this week’s hospital letters online anywhere, so we asked Grassley’s office to send us the text. Here it is. (Warning: It’s long.)

    Update: For a list of hospitals that received the letter, scroll down to the bottom of the post.

    January 19, 2010

    Dear __________:

    As Ranking Member of the Senate Committee on Finance, which has jurisdiction over the Medicare and Medicaid programs, I have a special responsibility to protect the health of the programs’ more than 100 million beneficiaries as well as the congressionally authorized tax dollars used to fund these programs. This includes ensuring the effective and efficient use of taxpayer money by the health care industry in implementing Health Information Technology (HIT), such as Computerized Physician Order Entry systems and Electronic Health Records.

    In recent legislation, approximately $19 billion in taxpayer funds was appropriated to encourage development and implementation of HIT systems, which further emphasizes the importance of responsible use and thorough oversight. Over the past several months, however, I have been made increasingly aware of difficulties and challenges associated with HIT implementation. The reported problems appear to be associated with administrative complications in implementation, formatting and usability issues, and actual computer errors stemming from the programs themselves, as well as, interoperability between programs. For example, I have heard from health care providers regarding faulty software that produced incorrect medication dosages because it miscalculated body weights by interchanging kilograms and pounds.

    In addition, I have heard from health care providers around the country that when they report such problems to their facilities and/or the product vendors, their concerns are sometimes ignored or dismissed. Some sources recount difficulties in approaching the HIT vendor with problems and the lack of venue to discuss these issues either with the vendor or peer organizations. Often this is attributed to alleged “gag orders” or non-disclosure clauses in the HIT contract that prohibit health care providers and their facilities from sharing information outside of their facilities regarding product defects and other HIT product-related concerns.

    Some HIT products, I understand, are medical devices regulated by the Food and Drug Administration (FDA). Therefore, the manufacturers of these devices are required to meet specific reporting requirements, such as the reporting of adverse events to FDA’s Manufacturer and User Facility Experience database. However, for HIT products that may not fall under FDA regulation, there appears to be a lack of a national system for reporting product errors or failures and adverse events associated with the use of such products. Thus, problems with these products may go without remedy thereby inhibiting the ability of the health care professional to provide quality care and potentially impacting patient safety. Furthermore, contractual restrictions on the sharing of experiences and information related to specific vendor products limit a health care facility’s ability to make informed decisions about HIT adoption and implementation.

    American taxpayers and health care facilities across the country will be investing substantially in the HIT industry, and it is important that their monies are appropriately spent on effective and interoperable HIT systems. In October 2009, I wrote to ten major HIT companies regarding similar issues and concerns. The purpose of today’s letter is to gather information from hospitals regarding their perspective and experiences with HIT. Accordingly, I would appreciate your response to the following questions and requests for information regarding the HIT products being implemented at your facility and any issues or concerns that have been raised by your health care providers. Unless otherwise noted, the requests cover the period of January 1, 2007 through December 31, 2009. In responding to this letter, please repeat the enumerated question and follow with the appropriate response and documentation.

    1. Please describe in detail your facility’s process for identifying HIT products for purchase and choosing an HIT vendor(s).

    a. What is the personnel structure of those involved in the purchase?

    b. To what extent do physicians and other health care providers within your facility provide input regarding the specific HIT items to be implemented within your facility?

    c. Who or what department within your facility is responsible for making HIT purchase decisions?

    2. Three of the companies that I wrote to in October 2009 informed me that they do not manufacture HIT software or hardware, but instead assist their health care clients, such as hospitals, with the implementation and management of HIT systems. To what extent do you contract with such entities to assist with the purchase, implementation and/or management of HIT products in your facility?

    3. Please describe the training process implemented in your facility to familiarize employees with new technology systems.

    a. How does your facility budget for HIT training?

    b. What are the vendors’ roles in helping your facility train in the use of their products?

    4. Does your facility have any policies or processes governing the reporting of problems or concerns by your health care employees related to the HIT products or systems implemented in your facility? If so, please provide a description of the policies or processes. If not, please explain why not.

    5. When patient care and/or safety problems related to HIT systems arise, how are these problems reported within the facility and what is the process or mechanism for addressing them?

    a. Are these problems also reported to the HIT vendor, and if so, what is the process for reporting them?

    b. If patient care and/or safety problems related to HIT systems are not routinely reported to the HIT vendors, please explain how your facility decides which problems or issues are reported to a vendor and/or addressed by a vendor and which problems are addressed internally by the facility.

    6. Please describe in detail any system your facility has in place to document, track, catalogue, and maintain complaints, concerns or issues related to HIT products that may directly or indirectly involve or impact the delivery of care or patient safety.

    7. Please provide a list of HIT problems or complaints that have been identified by or reported to your facility since January 2008 that directly or indirectly impacted patient safety or the delivery of care, including any complications or adverse events that have occurred as a result of HIT product design and/or usability. Please describe whether and how each of those problems or complaints was resolved and whether these issues have resulted in a change in policy to prevent the problem in the future.

    8. Does your facility have policies regarding the discussion of problems in your HIT systems with other health care facilities or with government officials or any individuals or entities outside your facility? If so, please describe those policies. To what extent are these policies driven by contractual agreements with the HIT vendors, and to what extent do they stem from internal processes? Please provide examples of contracts with HIT vendors that include non-disclosure clauses.

    9. Some of the HIT vendors stated specifically in their responses to me that they do not include language that would hold them harmless for failures of their products or for the company’s own negligence or recklessness. However, they may include provisions that spell out the vendor’s and the health care client’s respective legal responsibilities and obligations in the use of the product. For example, one vendor stated that it is accountable for the performance of its product as long as the client uses the product appropriately. Another vendor stated that it is not liable when harm or loss results from the client’s use of the product in diagnosing and/or treating patients.

    a. Do any of the HIT vendors include language in their contracts with your facility that could be considered “hold harmless” provisions, i.e., the transferring of liability associated with the services or products provided to your facility, or otherwise limit their liability? If so, please provide a copy of sample contracts containing such provisions.

    10. What is the relationship between your facility and any HIT vendors?

    a. HIT vendors that manufacture software, hardware and/or other products purchased by health care facilities have stated in their responses to me that they do not offer any financial incentives for purchasing their products, such as shares in the company or financial interests in a particular product. At least one vendor stated, however, that it does offer financial incentives in the form of discounts based on purchase size. Another vendor said that health care clients may receive royalty payments when the clients collaborate with the vendor to develop a product. What financial interest, if any, does your facility have in HIT vendors and/or their products?

    b. Do the vendors offer your facility and/or any of your health care providers any financial incentives for purchasing the vendors’ products? If so, please describe the types and value of the incentives.

    11. Did your staff, health care providers and/or facility receive any payments, product discounts, or other items of value from any vendor for discussing and/or promoting that vendor’s HIT products? If so, please list the different types of payments and discounts and their value.

    I look forward to your cooperation and assistance on this important matter. Please provide your response to the questions and requests set forth in this letter by no later than February 16, 2010.

    Sincerely,

    Charles E. Grassley

    United States Senator

    Ranking Member

    Update: Here’s the list of hospitals that received the letter: Banner Health, Brigham & Women’s Hospital Case Western Reserve University Hospital Health System, Catholic Healthcare West, Cedars Sinai Children’s National Medical Center, Geisinger Medical Center, Hackensack Hospital, HCA TriStar, Intermountain Healthcare, Indiana University Hospital, Jefferson Regional Medical Center, Kaiser Permanente System, Marshfield Clinic, Massachusetts General Hospital, Mayo Clinics, Memorial Hermann Healthcare System, Methodist Hospital of Indiana, North Shore-Long Island Jewish Health System, Palo Alto Medical Foundation, Rainbow Babies and Children’s Hospital, Saint Mary Mercy Hospital, Seattle Children’s Hospital, Stony Brook University Medical Center, Trinity Hospital System Tufts Medical Center, University of California San Francisco Medical Center, University of Pennsylvania Health System, University of Pittsburgh Medical Center, University of Virginia Medical Center, and Vanderbilt University Hospital.


  • Should There Be a Limit on Wait Times to See the Doctor?

    DoctorStarting next year, people in California may find it a bit easier to get in to see the doctor. The state is putting in place new limits on doctor wait times for the more than 20 million Californians who get insurance through HMOs.

    The limits include 10 business days for non-urgent primary care, 15 business days for non-urgent appointments with specialists, 48 hours for urgent care appointments that don’t require authorization, and 10 minutes to speak with an HMO’s customer service rep. (A longer list is at the bottom of this San Francisco Chronicle story.)

    The rules are the result of a law passed after people complained about waiting times in HMOs. An HMO trade group in the state called the limits a “reasonable compromise,” but said the rules would drive up prices, the Los Angeles Times said.

    But some docs worry that HMOs may simply push them to work faster, rather than expand the network of doctors patients can see. “The pressure should be on health plans to have adequate networks of doctors,” a former president of the California Medical Association told the LAT.

    Health Blog Question of the Day: Should there be a limit on HMO patients’ wait times to see the doctor?

    Image: iStockphoto


  • The Other Health-Care Overhaul: The Debt Commission

    StethoscopeThe future of the Dems’ big health-care bill looks murky, but there’s another big Washington plan that could have profound effects on health care: The idea of creating a bipartisan commission to cut the budget deficit is gaining ground.

    In the latest proposed iteration, the commission would include Republicans and Democrats appointed by the White House and by congressional leaders from both parties. The group would be charged with coming up a plan by the end of the year to cut the deficit to 3% of GDP by 2015, and Congress would give the plan an up-or-down vote after this year’s midterm elections. The details are in this story from this morning’s WSJ.

    This isn’t a health-care commission per se, but when you look at the nation’s long-term budget issues, health-care spending is a key issue. As the head of the CBO wrote last year, relative to GDP, “almost all of the projected growth in federal spending other than interest payments on the debt stems from the three largest entitlement programs—Medicare, Medicaid, and Social Security.”

    So if this commission does get off the ground, it’s almost certain to call for significant changes to Medicare and Medicaid. Given the central role those programs play in the nation’s health care — and the way Medicare sets the tone for many private insurers — those changes could wind up resonating throughout the health-care system.

    Photo: iStockphoto


  • What Does Scott Brown Mean for the Health-Care Debate?

    CapitolSo maybe that big health-care bill won’t pass. Either that, or the Dems will have to thread the legislative needle even as opposition to the bill is running high. That’s the gist of this morning’s Washington coverage (e.g. WSJ, Washington Post, New York Times, Politico).

    The key points:

    • Scott Brown’s win in Massachusetts means the Dems no longer have a filibuster-proof majority in the Senate. That means Republicans could (and almost certainly would) block any wholesale changes to the Senate health-care bill.
    • The House could pass the same version of the health-care bill that already passed the Senate, and send it to the President’s desk. Some further tweaks to the health-care overhaul could be made under a process known as reconciliation, which requires only a simple majority in the Senate.
    • Or House Dems could balk, both because they don’t like some of the provisions in the Senate bill, and because of popular opposition to the health-care overhaul. Rep. Anthony Weiner, a New York Dem who had earlier pushed for a single-payer system, seems to be in this camp. “I don’t think I can vote for the Senate bill, and I don’t think there are the votes in the House for the Senate bill,” he said, according to the WSJ.


  • Pfizer’s Looking for More Sales Reps. In China.

    ChinaSame song, different verse: A big drug maker is cutting jobs in the developed world and growing in China.

    This time, it’s Pfizer, which said today that it’s looking to increase its sales force in China to 3,200 by the end of next year, up from about 2,300, Dow Jones Newswires reported today. The company has said it will cut nearly 20,000 jobs as part of the Wyeth merger.

    Eli Lilly said last fall that it would continue to hire in China, even as it cuts jobs in the U.S. and other developed markets. Novartis is also making a big push into China, hiring hundreds of workers and spending $1 billion to expand a research center in Shanghai.

    With business tough in developed markets, drug makers are counting on the developing world for growth. But that’s not always a sure thing, either; just today, the WSJ reported that the Philippine government is asking drug makers to submit a list of proposed price cuts on their “top-selling and most expensive drugs.”

    Last summer, the government in Manila put price controls on several drugs, including Pfizer’s Norvasc and Lipitor. Pfizer had previously offered to cut the prices on some of its drugs there, and said last year it was “disappointed” that the government didn’t accept its offer.

    Image: iStockphoto


  • Will New York Tax Soda?

    SodaThe lean-times budget that David Paterson put out today has a bunch of health-related elements — a higher cigarette tax, cuts in projected Medicaid payments to hospitals and nursing homes, that sort of thing.

    But it was the proposed soda tax that caught our eye. It’s an idea that’s been floating around in New York (and in public-health circles) for a while now. The state’s health chief made a low-budget YouTube video (complete with visual aids) back in late 2008, when Paterson previously proposed a soda tax.

    The basic argument is that taxing soda and other sugared drinks would be a way to fight obesity while raising money to fund health care (the money raised by the proposed tax in New York would go into an existing pool that funds some of the state’s health expenses).

    Beverage industry players have been speaking out against soda taxes for a while now. The CEO of Coca-Cola called such a tax “outrageous” at a speech last fall, the WSJ reported. And the American Beverage Association, an industry trade group, has said that “balancing calories consumed from all sources with calories burned through exercise is the key equation to weight maintenance,” and that singling out sugared drinks for taxation isn’t an effective way to fight obesity.

    The proposed tax (explained on p. 130 of this PDF) would come out to about a penny an ounce. According to the budget outline Paterson put out, the tax would apply to sugared drinks

    …that contain more than ten calories per eight ounces, such as soda, sports drinks, ‘energy’ drinks, colas, fruit or vegetable drinks containing less than 70% natural fruit or vegetable juice, and bottled coffee or tea. Milk, milk products, milk substitutes, dietary aids, and infant formula would be exempt.

    Photo: iStockphoto


  • Now Pfizer & Teva Are (Reportedly) Bidding Against Each Other

    Pill BottleWe’ve been writing for a while now about the narrowing gap between generics companies and big pharma.

    The latest sign comes from the German business paper Handelsblatt, which reports that Pfizer and Teva are the key final bidders for Ratiopharm, the German generics shop. (Here’s Reuters’s English report on the Handelsblatt story.)

    Both would-be buyers are emblematic of the shifting landscape. Pfizer, the world’s biggest pharma company, is facing the expiration of the patent on Lipitor, the biggest selling drug of all time. The company has been moving away from the blockbuster-drug model and towards a more diversified business that includes a growing generics unit. Teva, the world’s biggest generics company, gets about 30% of its revenues from branded drugs, and has a market cap of more than $50 billion (higher than Eli Lilly’s) and ambitious growth plans.

    Several groups made first-round bids for Ratiopharm late last year, with offers around 2.5 billion euros, Dow Jones Newswires reported.

    Last week, DJ Newswires said Pfizer, Teva, the Swedish private equity firm EQT and Iceland’s Actavis Group were all in the running as possible second-round bidders. Handelsblatt also mentions EQT, but suggests that it’s likely to be outbid by Pfizer or Teva. Final offers could be in the range of 2.8 billion to 3 billion euros, the paper reports.

    Photo: iStockphoto


  • Medical Marijuana: Research, State Law and the Feds

    MarijuanaTo no one’s surprise, Jon Corzine signed New Jersey’s medical marijuana bill into law yesterday, on his last day on the job as the state’s governor.

    That makes 14 states that have legalized medical marijuana. But as both the WSJ and the New York Times note this morning, research into the medical uses of the drug remains rather limited.

    That’s partly due to the fact that it’s not easy for researchers to study the drug, the NYT suggests. The article cites the case of a University of Massachusetts researcher who has been trying for nine years to get federal approval to grow and study marijuana plants but has yet to be allowed to proceed, despite a favorable ruling from the D.E.A.’s administrative judge. (The D.E.A. says it follows the lead of the National Institute on Drug Abuse, which is part of NIH.)

    So what has research shown about medical uses of marijuana? It appears to help with neuropathic pain, which is caused by certain types of nerve damage, the WSJ says. There’s also evidence to suggest it eases nausea and improves appetite in some types of patients, including people who are getting chemotherapy for cancer. Of the many other possible uses suggested for the drug, evidence is hard to come by, according to the article.


  • Today, It’s the Coakley-Brown Health-Care Bill

    MassachusettsThe morning papers are full of speculation about what the Democrats will do with their health-care bill if Scott Brown, a Republican, wins the senate seat formerly held by Ted Kennedy. Massachusetts is holding a special election for the seat today; if Brown defeats Martha Coakley, a Democrat, the Dems will lose their filibuster-proof majority in the Senate.

    One option would be for the House to pass the bill already approved by the Senate. That possibility gets top billing in stories from the WSJ the New York Times and the Los Angeles Times.

    But many House Dems object to some provisions in the Senate bill, including language on abortion and the tax on high-end health plans. Those elements of the bill that pertain to the budget could be tweaked through a process known as reconciliation, which requires only 51 votes in the Senate.

    Another option — passing a final version of the health-care bill before Brown is seated (if he wins) — has been ruled out, the WSJ says.

    Coakley backs the health-care overhaul, and Brown opposes it. In Massachusetts, more than 90% of those who back the overhaul support Coakley, and more than 90% of those who oppose the overhaul back Brown.

    So the broader issue implied by the election in Massachusetts — a solidly blue state — is that the health-care bill has become unpopular with many Americans. A new Washington Post-ABC News poll found that 51% of people oppose the health-care changes being debated in Congress, while 44% support them. And whatever happens with the bill in the next few weeks, you’ll be hearing about it for months to come — as a central theme in this year’s midterm elections.

    Image: Wikimedia Commons


  • Martin Luther King Jr. Day

    Martin Luther King Jr.In observance of Martin Luther King Jr. Day, the Health Blog will not be published today.(Photo: Associated Press)


  • Antipsychotics, Nursing Homes and the Feds’ Case Against J&J

    RisperdalThe feds say J&J paid kickbacks to a big nursing-home pharmacy company to get the company to prescribe more of its drugs, including the antipsychotic Risperdal.

    The allegation isn’t a huge surprise: The pharmacy company, Omnicare, paid $98 million last year to settle allegations that it had solicited and received kickbacks from J&J in exchange recommending the company’s antipsychotic drug Risperdal.

    J&J told the WSJ today that “airing the facts will confirm that our conduct, including rebating programs like those the government now challenges, was lawful and appropriate.”

    As we noted when the Omnicare settlement was announced, the story of nursing-home patients getting antipsychotics is long and thorny.

    Risperdal, like many other psychotics, raises the risk of death in patients with psychosis that stems from dementia, and isn’t approved to treat this form of psychosis. Nevertheless, the drugs have been widely prescribed to nursing-home patients with dementia, as the WSJ reported back in 2007.

    J&J isn’t the only company that’s been accused of wrongdoing in this market. Eli Lilly used a “5 at 5″ slogan to promote the antipsychotic Zyprexa’s side effect of sedation to nursing-home doctors, according to the Department of Justice: 5 milligrams of the drug at 5 p.m. would help patients sleep.

    Eli Lilly paid a $1.42 billion settlement and pleaded guilty to a misdemeanor as part of a broad DOJ inquiry into the way the company marketed Zyprexa.

    Photo: Bloomberg News


  • Live Blog: Haiti Update from Doctors Without Borders

    Stefano Zannini, head of mission for Doctors Without Borders in Haiti, is talking with reporters this morning about the situation on the ground. Zannini was in Haiti when the earthquake struck. The call should begin any minute now.

    10:09: Starting yesterday, people were trying to rescue their personal effects from their houses. During the day, the streets are crowded with people looking for help and trying to find their families. “I can see thouands of them walking in the streets, asking for help, asking for everything. Trying to stop every car they see in order to get something to go on.”

    10:11: At night, people are sleeping in the streets. They are protecting themselves with plastic bags or blankets. They are afraid to go into their houses.

    10:13: Patients are being transported on doors used like stretchers, as well as by car, truck and motorbike. There are a few hospitals that were not destroyed in the earthquake.

    10:15: “In our hospitals, there are thousands of people waiting for surgery.” They have been able to begin surgery in one hospital in the Cite Soleil area.

    10:16: There are many patients with open fractures who need surgical intervention. First surgical activity last night was a complicated delivery. “I am very proud to share with you that we were able to save the life both of the baby and the mother.”

    10:19: Trucks are moving around the city collecting dead bodies.

    10:20: Three main needs: Medical care (including surgery), food, and drinking water.

    10:21: Asked about spread of disease, he says they are focused on surgery. “We have thousands of people who need immediate surgical intervention.”

    10:24: Asked about coordinating with the UN or other groups, he says: We are focused around our teams.

    10:26: There were hundreds of dead bodies at their facilities, which they turned over to trucks sent by the Haitian government.

    10:30: At the moment we are working in public [hospitals] that survived the earthquake. The group is also bringing in an inflatable hospital, which will include an operating theater. It is supposed to arrive today, and the setup will begin immediately.

    10:34: Yesterday, they received a delivery of drugs and other medical supplies via plane. “At the moment we have enough supplies.” More supplies are coming in. They have been able to recover some of the materials from their damaged hospitals.

    10:38: They are working 24 hours a day, rotating staff in 12-hour shifts.

    10:46: Mental health teams will be arriving in the next few days. But surgical activities remain the top priority.

    10:47: They have 40 tons of materials on the way.

    10:48: They still expect more people to be pulled out alive of collapsed buildings. It is impossible for me at the moment to estimate the quantity of patients who will be arriving in the coming days.

    10:50: The English-language portion of the call is over.


  • Tylenol Recall: What’s That Smell?

    TylenolJ&J said today that it’s recalling certain lots of Tylenol, Motrin and Rolaids. The issue: “an unusual moldy, musty, or mildew-like odor” according to the press release. There’s a complete list of the lots being recalled at the bottom of the release.

    In a “small number of cases,” the pills were associated to problems such as nausea, vomiting and diarrhea, the company said. The issue is apparently related to a trace amount of a chemical in wood pallets that are used to transport and store product packaging materials. (The chemical is called 2,4,6-tribromoanisole.)

    This has been a problem for J&J for a while now. Customers were complaining back in 2008 that their pills smelled musty, and the company recalled some Tylenol lots last November. An FDA report made public earlier this week says the company didn’t properly follow protocols at some of its manufacturing plants, Dow Jones Newswires reported.

    A spokeswoman for McNeil, the J&J subsidiary that sells the drugs, told Dow Jones that the company “is actively working in consultation with the FDA to address their concerns.”

    Photo: Associated Press


  • Dems May Seek Billions More From Drug and Device Companies

    CapitolSome health-care news out of Washington this afternoon:

    More fees may be coming for drug and device makers, the WSJ reports. Dems may add $10 billion in fees for device makers over 10 years, on top of the roughly $20 billion already included in the House and Senate bills. The final health-care bill may also cut reimbursements or increase fees on drug makers by an additional $10 billion over 10 years, beyond the $80 billion the industry agreed to last year.

    Democrats and big unions cut a deal on the proposed tax on high-end health insurance plans. Unions, some of which offer high-end benefits, don’t like that tax. But it plays a key role in the Senate bill, and President Obama has backed the tax, which he argues would slow the growth in health-care spending by pushing people toward more moderate health-insurance plans.

    Under the deal, collectively bargained contracts (i.e. the kind negotiated by unions) would be exempt from the tax until 2018. The deal would also raise the threshold for the tax on all plans. The Senate bill taxed plans whose premiums were more than $8,500 a year for individuals and $23,000; under the deal, the threshold would rise to $8,900 for individuals and $24,000 for families, the WSJ said. Here’s coverage of the deal from the WSJ, New York Times and Politico.

    Photo: Associated Press


  • The Merck Rating That Got Everybody So Excited

    MerckMerck shares rose 3.7% yesterday; the WSJ, among others, cite Credit Suisse analyst Catherine Arnold’s decision to raise her rating on the stock to “outperform.”

    So what did Arnold say in the note that apparently added a few billion to Merck’s market cap? Here’s a bit of her reasoning:

    The pipeline has potential “to offer upside relative to investor expectiations.” She cites experimental drugs for blood clots and hepatitis, and a vaccine for staph.

    The company may cut spending (i.e. find “synergies”) beyond the $3.5 billion it already plans to cut.

    Merck’s projected earnings-per-share growth is higher than its peers, but its valuation as a multiple of estimated 2010 earnings is average.

    A key Vytorin study (IMPROVE-IT) will have an interim analysis this year, and the data will likely suggest the study should continue, Arnold said. (We should also note that Merck recently said that trial will take longer to complete than it initially estimated.)


  • Haiti’s Immediate and Longer-Term Health Crises

    HaitiWith many medical facilities damaged or destroyed in the earthquake, doctors and aid organizations are scrambling today to care for severely injured patients in Haiti. But once the most immediate phase of the crisis passes, massive public health problems will remain.

    “Right now, you have the acute devastation – people dead, dying,” Warren Johnson, an infectious disease specialist with ties to Haiti told the Health Blog today. But there are other, longer-term problems brewing as well.

    “There’s no running water, there’s no sanitation, there’s no food, there’s no electricity” said Johnson, who is based at Weill-Cornell med school in New York. “A week from now, you’re going to have diarrhea and respiratory infections.”

    Doctors Without Borders runs three health-care facilities in Port-au-Prince; all of them were knocked out of commission by the earthquake. The group is treating patients in temporary outdoor facilities, but “the best we can offer … is first-aid care and stabilization,” the group’s project manager for Haiti, who is based in Toronto, said on a press call today. Many patients have crushed limbs and other severe injuries that “cannot be dealt with” in the temporary facilities, he said.

    The first two days after the quake offer the best chance for saving trauma patients, William O’Neill, a dean at the University of Miami’s Miller School of Medicine, told us.

    The school, which has long-standing ties to nearby Haiti, sent a neurosurgeon, two trauma surgeons and an anesthesiologist to Port-au-Prince on a private jet this morning. But with the city in disarray, it’s unclear where they’ll operate. “We don’t really know what the ground conditions are,” he said.

    Johnson, of Cornell, serves on the board of a Haitian AIDS treatment center called Gheskio; the group’s two main facilities in Port-au-Prince were both “severely damaged” in the quake, he said. Roads are largely impassable, and people with diseases such as tuberculosis and AIDS may not be able to get medicine.

    “We treat 500 people with tuberculosis at Gheskio,” said Dr. Johnson. “Most of them with also have AIDS. Now they don’t have food, they don’t have water, they don’t have TB medications.”

    According to 2006 figures from the WHO, life expectancy in Haiti is about 60 years, and annual per capita spending on health care is $96.

    Photo: Associated Press


  • At Hospitals in China, Caesarean Rate Nears 50%

    ChinaPublic health officials in the U.S. are worried because nearly a third of births here are c-sections, more than twice the rate public officials say would be appropriate. But in China, the rate is far higher: 46%, according to a WHO study published this week in the Lancet.

    The study looked at data from hospitals in nine Asian countries in 2007 and 2008; China’s rate was highest by far, with Vietnam second, at 36%. The rate for the region as a whole was 27%.

    In each country, researchers looked at deliveries in hospitals in three different regions. To be included, a hospital had to do at least 1,000 deliveries a year, and to do at least some c-sections. Because smaller facilities which may have far lower rates were excluded, the findings may not be representative.

    Still, roughly a quarter of the c-sections done in China and examined in the study weren’t medically necessary, the researchers found. When a Caesarean isn’t medically necessary, a traditional birth is safer, according to this study as well as previous research.

    The study didn’t get into the reasons for the c-section rates. But a commentary that accompanied the study called the results “surprising and chilling.” The authors, based at a hospital in Singapore, add that “financial incentives for doing these procedures should be removed or kept to a minimum, and both public and continuing medical education should emphasize the risks of unnecessary caesarean delivery.”

    Image: iStockphoto


  • Sanofi-Aventis CEO on Pharma’s ‘Lost Decade’

    ViehbacherChris Viehbacher, CEO of Sanofi-Aventis, spoke yesterday at that big drug-industry meeting in San Francisco. He described pharma’s “lost decade” of the past 10 years — for many companies, he said, share prices fell despite double-digit earnings growth.

    The familiar culprit: The patent cliff, and the looming revenue hits coming when big drugs like Plavix (which Sanofi co-markets with Bristol-Myers Squibb) face generic competition. And the familiar solution: to “move away from .. this boom-bust cycle that has really frustrated so many of us over the last 10 years.”

    For Sanofi, growth of the vaccines business (which Viehbacher called “the best business you can be in”) is a key part of that diversification. The company’s recent agreement to buy Chattem will also allow it to make a big push into the U.S. over-the-counter drug business with its allergy drug Allegra. And Sanofi, which sells insulin under the Lantus brand, may also expand its diabetes business by selling services and devices, Viehbacher said.

    He added that the company’s R&D holds the greatest possibility for upside surprises in the next few years — because “for the most part people have zero expectations of Sanofi-Aventis research and development,” he said. “We’ve basically cleared out a lot of bad news, and if anything comes along it should be good news.”

    Photo: Associated Press


  • Big Pharma, Generic Competition and Cash

    Drug CostsRegulators don’t seem to like it much when big drug companies pay generics shops in deals that determine when branded drugs will face generic competition.

    Today, for example, the head of the FTC and a few lawmakers will call on Congress to crack down on the deals as part of the pending health-care legislation. (The House health-care bill does this; the Senate bill doesn’t.)

    The FTC will also release a report today that says there were 19 cash settlements in fiscal year 2009 compared with 16 in 2008 and none in 2004, according to Dow Jones Newswires. Settlements where payments are involved typically wind up delaying generic competition by 17 extra months, compared with settlements where there are no payments, according to the FTC analysis. The settlements typically occur after a generic manufacturer has gone to court to argue that a patent on a drug is not valid.

    A similar push is on in Europe. AstraZeneca, GlaxoSmithKline, Roche and Sanofi-Aventis, among others, have received new “information requests” in EU regulators’ ongoing investigation into these types of deals, the Financial Times reports this morning.

    Generics companies and branded drug makers may not agree on much, but both groups argue that the settlements are a valid way to resolve litigation. The deals often result in generic competition before patents expire, the president of the Generic Pharmaceutical Association told the New York Times.

    Image: iStockphoto


  • Help Wanted: Memorial Sloan-Kettering Seeks New Boss

    VarmusIt’s a tough job market, but if you’ve won a Nobel Prize and run the NIH, we may have a gig for you.

    Harold Varmus, the guy with the intimidating CV who has run Memorial Sloan-Kettering Cancer Center for the past decade, has asked Sloan-Kettering’s board to start looking for his successor.

    “I came here with the intention of doing this job for about 10 years, and 10 years have passed,” Varmus told the Health Blog this afternoon. “It’s not retirement; it’s not disease.”

    Varmus is going to keep running a lab and teaching, among other things. He also may be on the hook as president for a while longer; he said he’ll stay on until his replacement has been recruited.

    “Right now, I ‘m doing what I did yesterday,” he said. “I’m trying to run Memorial Sloan-Kettering Cancer Center.”

    Photo of Varmus in 1999 by Associated Press