Author: Jacob Goldstein

Ok, so it’s not super surprising that people respond to a fat government subsidy for an otherwise expensive health-insurance program. Still, given the persistence of high unemployment, and the central role the high cost of health care is playing in the national discourse these days, it seems worth noting an estimate that just came out today.

As part of the stimulus bill passed in February, the feds started subsidizing 65% of health-insurance premiums for certain workers eligible for Cobra insurance, the program that allows people to keep their health insurance for a while after they lose their jobs.

Between March and November, 39% of people who were eligible for the subsidies signed up for Cobra, according to an estimate out today from the consulting shop Hewitt. During the months before the subsidy was created, 19% of people who were eligible for Cobra signed up for the program, Hewitt said. The analysis was based on employees of 200 large U.S. companies.

Without the subsidy, Cobra coverage costs about $8,800 a year on average, though the cost varies widely. The initial government subsidy lasted for nine months, but just this week, a provision added to the big defense spending bill extended government support for people on Cobra to 15 months. For more on the subsidy, check out this WSJ story.

Photo by RussBowling via Flickr

A few quick drug-industry items:

Novartis is buying closely held Corthera for $120 million. That gives the company the rights to a drug called Relaxin, which is in late-stage trials for acute heart failure. Current Corthera shareholders could get hundreds of millions more in milestone payments if the drug pans out (always an iffy proposition).

Novartis is also likely to expand its stake in Alcon soon, WSJ’s Deal Journal said yesterday. The company already has purchased a quarter of the company from Nestlé and is likely to buy another 52%, maybe more. Alcon sells eye-care products, and the buy is a diversification play.

AstraZeneca will pay $350 million to buy Novexel, a company that specializes in new antibiotics, plus another $80 million for the company’s cash. Forest Labs is also in on the deal — the company will pay AstraZeneca half of what it spent on the Novexel deal, and will share development costs of Novexel’s lead experimental compounds. The medicines aim to treat infections that are resistant to existing antibiotics. For all of the wrinkles in the deal, see this story from Dow Jones Newswires.

Pfizer is licensing an experimental drug out to Medicines Co., a small drug maker. Despite the deal’s size, (the upfront payment is only $10 million), it’s a good reminder that deals can flow both ways: Besides prowling for drugs to bring in from smaller players, giants like Pfizer also have drugs in their pipeline they’re looking to license out for a price. In this case, the drug is a cholesterol medicine called ApoA-I Milano, described in this clinical trial published in JAMA in 2003.

Amgen and Roche ended a long fight over anemia drugs. Roche admitted that certain Amgen patents are valid, enforceable and infringed on by Roche’s anemia drug Mircera, Reuters reports. That means Amgen’s drug Aranesp isn’t likely to face generic competition in the U.S. until 2014. A court had already issued an injunction keeping Mircera off the market here.

Earlier filings in the case were pretty spirited. “With all the sincerity of a snake-oil salesman, Roche hyped its infringing product as a purportedly ‘new’ medicine conferring a different medical benefit,” Amgen’s lawyers wrote. Roche said it had acted fairly.

The conventional wisdom these days is that one key to controlling rising health-care costs is reducing the huge variation in spending among hospitals — particularly given the fact that patients at hospitals that spend lots of money don’t typically fare better than patients at hospitals that spend less.

But, as with everything else in health care, this idea gets more complicated when you look more closely.

One of the key sources of information on variation in hospital spending is the Dartmouth Atlas, which looks at how much hospitals spend caring for Medicare patients in the last two years of life. But that analysis doesn’t capture cases where intensive intervention by the hospital winds up saving patients’ lives.

An article in this morning’s New York Times looks at the Ronald Reagan UCLA Medical Center, which scores as an expensive hospital in the Dartmouth analysis.

Inspired by the Dartmouth data, UCLA and five other hospitals studied their data for elderly heart failure patients, but they looked at the living as well as the dead. In an article published earlier this year, the reported that hospitals that spent more appeared to save more lives.

“It doesn’t look like it is all waste,” one of the authors told the Times.

Image: iStockphoto

A yarn on the front page of this morning’s WSJ points to a broad gray area in medicine: What constitutes human experimentation? The issue can be especially tricky when it comes to approved medical devices, which can sometimes be modified without receiving new FDA approval.

A prominent heart surgeon implants a slightly modified version of a ring used to seal leaky heart valves. The ring is similar to one that’s already been approved. Is that experimentation? A lawyer who represents device companies told the WSJ that it “would be a nightmare for the FDA, and companies, if they had to apply for each tweak” to an already-approved device.

The surgeon who implanted the modified device was an author of a medical-journal article that described the “initial experience with a new ring” — language that suggests the doctors implanting the ring should have done so as part of a clinical trial, according to one doctor who didn’t perform the implants.

The surgeon said the article wasn’t a clinical trial report but part of a database of heart-surgery results, and patients consented to be in the database. And he said the modification — bending the ring into a new shape — didn’t introduce new materials.

A patient who had to have her ring removed, and who filed a lawsuit, says she wasn’t informed that the modified version of the ring wasn’t approved by the FDA at the time of her initial surgery. (It was approved later on.) “I didn’t want to be a guinea pig,” she said.

The story is complicated, and there’s a lot of back and forth that we won’t get into here. It’s worth reading the whole thing for yourself.

Photo by CarbonNYC via Flickr

A couple pieces of news today on Merck’s big cholesterol drug Vytorin, which has seen its share of trouble in the past couple years but remains widely prescribed:

The FDA said it’s “unlikely” that Vytorin or Zetia, another Merck drug, increase the risk of cancer. But “an association cannot be definitively ruled out,” the agency said. Vytorin is a combination of two drugs — Zetia and a statin called simvastatin. It’s clear that simvastatin doesn’t raise cancer risk, the FDA said, but there’s not enough data to “definitively rule out” a cancer link for Zetia (known generically as ezetimibe).

The uncertainty comes from a study that found there were more cancers and cancer-related deaths in patients who took Vytorin, compared with those who received placebo. But other studies of the drug have not shown similar risk. Animal studies have not shown a cancer link. And the cancer risk found in the study came from combining several types of cancer together. “It is biologically less likely that a single drug increases the risk of a wide variety of cancer types,” the FDA said.

Mylan, a big generics shop, said it had been sued by a Merck subsidiary for patent infringement because it applied to sell a generic version of Vytorin.

This is is the kind of lawsuit generic drug makers wear like a badge of honor these days. In its statement today, Mylan said it believes it is the first generic company to file this sort of application for Vytorin; if the company is correct, it will get a six-month window during which it’s the only generics company allowed to compete against Merck for sales of the drug.

An exclusivity period on a big drug like Vytorin — and it’s still a very big drug, despite the troubles it’s had — means a windfall for a company like Mylan.

U.S. investment in R&D fell slightly this year, and is expected to start growing again next year, according to a new report out from the Battelle Memorial Institute, a nonprofit group that looks at that sort of thing.

A story in this morning’s WSJ has more on the issue; Health Blog readers may be particularly interested in some numbers from the report on R&D spending at big U.S. drug companies.

Of course, company-by-company figures like these don’t tell the whole story, in part because of the effects of consolidation. For example, Pfizer’s R&D spending may climb next year because of the Wyeth acquisition, but continuing cuts could mean the company’s R&D spending is lower than this year’s combined R&D spending for Pfizer and Wyeth.

Nevertheless, a numbers dump can still be interesting. Here it is:

R&D Spending, in millions of dollars

Photo: Associated Press

A pharma company wants to sell a prescription drug to fight jet lag; the FDA isn’t quite ready to make the call.

Cephalon applied for the approval earlier this year for its drug Nuvigil. The company said a study of 427 people who flew from the Eastern U.S. to France showed that those who took the drug had less jet lag than those who took placebo.

A decision from the FDA was expected this month, but the company said yesterday that the FDA had pushed back the decision deadline by a few months.

Nuvigil and another Cephalon drug, Provigil, are both approved to “improve wakefulness” in people with certain sleep problems. The drugs work in a similar way, though Nuvigil has longer-lasting effects. Cephalon has been raising the price of Provigil — which could face generic competition in 2012 — in what looks like an effort to get people to switch to Nuvigil, which has patent protection through 2023.

The company raised the wholesale price of Provigil by 29% in late November, to $13.62 per pill, Dow Jones Newswires reported this morning. Five years ago, Provigil cost $5.53 per pill. Nuvigil costs $8.98 per pill, according to DJ Newswires.

President Obama signed a big defense spending bill into law yesterday. With all the hollering over the health-care overhaul, that didn’t get much attention. But, as we noted on Friday, the defense bill contains a few key health-care provisions.

For one thing, it re-sets the shot clock on a 21% Medicare pay cut for doctors. The cut was supposed to take effect on Jan. 1; the bill pushes it back by two months. Blocking the cuts has bipartisan support, but Congress has to figure out how to come up with the extra money. They’ll try to do that early next year.

The bill also extends government subsidies for Cobra insurance, a program that allows workers to keep their employer-sponsored health insurance after they lose their job. This WSJ story explains the extension in detail.

Meanwhile, back in the Senate, the endless procedural stuff continues this morning. Barring some hugely surprising shift, the bill will pass this week. The real question now is what will happen in the new year, when negotiators from the House and Senate get together to try to merge the bills from the two houses. Lots of hot-button issues (abortion, the public option, new taxes) will be on the table.

For more House-Senate conference pre-gaming, see stories the WSJ, New York Times and Politico. If you need to step back and clear your head, check out this side-by-side comparison of the House and Senate bills (note that it was updated late last week and doesn’t include a few last-minute changes to the Senate bill, such as the elimination of the cosmetic surgery tax).

Image: iStockphoto