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InnovativeMedicinesSouthAfrica(IMSA)

ValueofInnovativeMedicineValueofInnovativeMedicine.

DefinitionofValue“Valueistheamount,asofgoods,services,ormoney,consideredtobeafairequivalentofsomethingelse;afairpriceorreturn.”TheAmericanHeritage®DictionaryoftheEnglishLanguage,FourthEdition

Copyright©2000byHoughtonMifflinCompany.

PublishedbyHoughtonMifflinCompany.Allrightsreserved

WhatistheValueofInnovativeMedicine?Innovativemedicinesshouldprovideastateofphysical,mentalandsocialwell-being.

InnovativePharmaceuticalsReduceMortalityandMorbidityPharmaceuticals(drugsandvaccines)haveeliminatedorbroughtundercontrolmanydiseasesandconditionsthatoncehadhighmortalityrates(e.g.,influenza,polio,pneumonia,anddiptheria).Pharmaceuticalshavealsohelpeddramaticallyreducemortalityratesforotherdiseasesandconditions(e.g.,AIDS,asthma,heartattacks,strokes,andulcers).80%Early

Infancy

DiseasesDropinDeathRateforDiseasesTreatedwithPharmaceuticals,1965–1995Rheumatic

Fever

andRheumatic

HeartDiseaseAthero-

sclerosisHypertensive

Heart

DiseaseUlcerofStomachandDuodenumIschemicHeart

DiseaseEmphysemaHypertension75%68%67%61%41%31%22%PercentDropinDeathRateNewMedicinesHaveProlongedLifeSource:PhRMA,BasedonBostonConsultingGroup,1993;andUSNationalCenterforHealthStatistics,1998StudyFindsDirectCorrelationBetweenReductionsinMortalityandNumberofNewDrugsforDiseaseOver45percentofthevariationinmortalityacrossdiseasesbetween1970and1991isexplainedbytheextenttowhichnewdrugsareusedtotreatthedisease–makingnewdrugsthemostimportantfactorinexplainingmortalityreductions.Eachofthe436newdrugsintroducedbetween1970and1991annuallyadds11,200aggregateyearsoflifetotheU.S.population.

Source:Lichtenberg,Frank,“PharmaceuticalInnovation,MoralityReduction,andEconomicGrowth,”PresentedattheConferenceontheEconomicValueofMedicalResearch,December1999.PharmaceuticalAdvancesPredictedtoContinuetoReduceMortalityRatesinFutureFourstudiesbytheBattelleInstitutepredictdiseasepatternsin2015intheU.S.,Germany,FranceandtheUnitedKingdom.Thesestudiessuggestpharmaceuticalinnovationwillcontinuetobeamajorfactorinreducingmortality,accountingfor:19to40percentoftheprojectedreductionincoronaryheartdisease;15to40percentofthereductionincerebrovasculardisease;28to65percentofthereductioninbreastcancer;and3to26percentofthereductioninlungcancer.Source:Hall,M,“TheImpactofBehavioralandBiomedicalAdvanceonHealthTrendsOvertheNext25Years,”London,UK:OfficeofHealthEconomics;OfficeofHealthEconomicsBriefing,No.31,November1994.InnovativeHealthCareisSavingLivesIn1950,cardiovasculardiseaseclaimedfourlivesoutofevery1,000annually,todaythatnumberhasfalleninhalf.ThesinglemostimportantfactorinincreasingthelifespanoftheaverageAmericanbetween1950andtodayisthereductionincardiovasculardiseasedeath.Source:Health,UnitedStates2001,CentersforDiseaseControlandPrevention,U.S.DepartmentofHealthandHumanServices,August2001.DatabasedonNationalVitalStatisticsSystem.PrescriptionDrugsSaveLivesandMoneySource:Costs-Bozetteetal.,NewEnglandJournalofMedicineVol.344,No.11,March15,2001;Mortality-CentersforDiseaseControl;dataondrugdevelopmentfromPhRMAandtheNIHOfficeofTechnologytransferHIVMortalityDeclinedDramaticallyAfterIntroductionofFirst“Expensive”Antiretrovirals...

Firstnewdrugsintroduced,1995HighlyActiveAntiretroviralTherapy(HAART)introduced,1996-97Total:$1804Total:$1521DrugCostsIncreaseby34%OtherCostsDecreaseby41%…WhileMonthlyCostsforAIDSPatientsDecreasedby16%AfterHAARTIntroducedWherewereAIDSDrugsDiscovered?122drugstotreatAIDSCentenariansinUSPopulationNumberPerMillion3002502001501005001900192019401960198020002000=2621900=46Source:Caplow,Theodore,etal.TheFirstMeasuredCentury,WashDC:AEI,2001:9CholesterolFightingDrugsReduceRiskofHeartAttackorStrokeCholesterol-loweringdrugs,knownasstatins,safelyreducedtheriskofaheartattackorstrokebyone-thirdintheworld’slargeststudyofpeopleathighriskfortheseconditions.About25millionpeopleworldwidetakestatinstoday.Thenewfindingssuggestthatabout200millionpeopleworldwidewouldbenefitfromthedrugs.Accordingtothestudy’sleadinvestigator,if10millionhigh-riskpatientsstartedtakingstatins,50,000deathswouldbepreventedeachyear.Source:LawrenceK.Altman,“CholesterolFightersLowerHeartAttackRisk,StudyFinds,”TheNewYorkTimes,November14,2001.NewDrugsImprovingQualityofLifePharmaceuticalshelppatientsimprovetheirqualityoflifeinnumerousways:Reducinghospitalizations,includingemergencyroomvisitsAvoidingsurgeryHelpingpatientsremainmoreactiveandindependentNewMedicinesareReducingSideEffectsNewmedicineshavebeenfoundtoreducesideeffects,oftenleadingtoimprovedcomplianceandbetterhealthoutcomes.Forexample,gastrointestinalsideeffectsfromconventionalnonsteroidalanti-inflammatorydrugs(NSAIDs)areestimatedtoberesponsiblefor107,000hospitalizationsand16,500deathsannuallyintheU.S.

(Source:“AdverseUpperGastrointestinalEffectsofRofecoxibComparedwithNSAIDs,”TheJournaloftheAmericanMedicalAssociation,Vol.282,No.20,November24,1999.)Approximately20%to30%ofpatientswhotakeconventionalNSAIDsdeveloppersistentsideeffects,andmorethan10%areestimatedtodiscontinuetreatmentasaresult.

(Source:“Anti-InflammatoryandUpperGastrointestinalEffectsofCelecoxibinRheumatoidArthritis,”TheJournaloftheAmericanMedicalAssociation,Vol.282,No.20,November24,1999.)AnewfamilyofNSAIDsknownasCox-2inhibitorshavebeenproventocauselessstomachirritationandcarryalowerriskofcomplicationsthanconventionalNSAIDs.ValueofMedicinesTheEmployer/PayerPerspectiveGreaterUseofPharmaceuticalsisLeadingtoDeclinesinHospitalAdmissions,Lengths-of-Stay,andSurgicalProceduresHospitaladmissions,length-of-stay,andsurgicalproceduresdeclinedmostrapidlyforthosediagnoseswiththegreatestincreaseinthetotalnumberofdrugsprescribedandthegreatestchangeinthedistributionofdrugs.Theestimatesimplythatanincreaseof100prescriptionsisassociatedwith16.3fewerhospitalstays.Source:FrankR.Lichtenberg,“Do(MoreandBetter)DrugsKeepPeopleOutofHospitals?”TheAmericanEconomicReview,PapersandProceedingsoftheHundredthandEighthAnnualMeetingoftheAmericanEconomicAssociation,May1996.PrescriptionMedicinesMayHelpAvertAsthma-RelatedHospitalizationandEmergencyRoomVisitsTreatmentofallergicrhinitismaykeeppatientsoutofthehospitalandawayfromemergencyroomsaccordingtoarecentstudy.Thestudy,usingclaimsdatafrom4,944privately-insuredpatientsdiagnosedwithbothallergicrhinitisandasthma,foundthatpatientstreatedwithnasalinhaledsteroids,sedatingantihistamines,and/ornon-sedatingantihistamineswereabouthalfaslikelytohaveanasthma-relatedevent(hospitalizationoremergencyroomvisit)thanthosenottreated.

Source:JodiCrystal-Peters,etal.,“TreatingAllergicRhinitisinPatientswithComorbidAsthma:TheRiskofAsthma-RelatedHospitalizationsandEmergencyDepartmentVisits,”JAllergyClinImmunology109(January2002)1:57-62.

DiseaseManagement&FreeAccesstoDiabetesMedicinesLowersEmployeeMedicalCostsTotalMedicalCostsforEmployeesDiagnosedwithDiabetes,CityofAsheville,NC(USA)1996-2001Source:JohnMiall,CityofAshevilleNewDrugsParticularlyCostEffectiveRelativetotheProductsTheyReplaceIllustrationofEstimatedSavingsfromUseofNewerMedications

(assumesaverage“age”ofdrugdecreasesbyabout10years)

Source:ProfessorFrankLichtenberg,“BenefitsandCostsofNewerDrugs:AnUpdate,”NBERWorkingPaper8996,June2002DrugCostIncreaseInpatientSavingsOfficeVisitSavingsHomeHealthSavingsOutpatientSavingsERSavingsNetImpact:$18InvestmentReturns$129inSavings-Ratioof$7SavedforEvery$1InvestedNewDrugsIncreasingWorkerProductivityForemployers,thevalueofpharmaceuticalsisreflectedinincreasedworkerproductivity,reducedabsenteeism,andoverallimprovementsinworkforcehealth.ResearchersatMITstudiedpre-andpost-treatmentworkrecordsforemployeeswithfourconditionstodeterminethenumberofhoursworkedinatwo-weekperiod.Employeesreceivingtreatmentwithpharmaceuticalswereabletosignificantlyincreasethenumberofhoursworked.MedicinesProvideROItoEmployersThroughImprovedWorkforceProductivitySource:NationalCommitteeforQualityAssurance,QualityDividendCalculator,2001;/Ncqa/Index.aspSource:Berndt,etal.,“IllnessandProductivity:ObjectiveWorkplaceEvidence,”WorkingPaper#42-97,MassachusettsInstituteofTechnology(MIT),May1997.AreAdvancesinMedicineWorththeCost?ChangeinTreatmentCostIncreaseinValueSource:Cutler&McClellan,HealthAffairs,Sept/Oct2001DrugsareoneComponentofaComprehensiveapproachtotheCostofTreatingDiseaseDirectCostsDrugsProviderHospitalNursingHomeOtherIndirectCostsDecreasedProductivityAbsenteeismCaregiverIssuesAreallthesecostfactorstakenintoconsiderationwhentreatmentisdecidedonforthepatient?NewDrugDevelopmentNewProductDevelopment-ARiskyandExpensivePropositionSource:TuftsCenterfortheStudyofDrugDevelopment5,000–10,000

Screened250

EnterPreclinicalTesting5

EnterClinicalTesting1

ApprovedbytheFDACompoundSuccess

RatesbyStage1614121086420PhaseII

100–300PatientVolunteersUsedtoLookforEfficacyandSideEffectsPhaseIII

1,000–5,000PatientVolunteersUsedto

MonitorAdverseReactionstoLong-termUseRegulatoryApprovalAdditional

Post-marketingTestingPhaseI

20–80HealthyVolunteersUsedtoDetermineSafetyandDosagePreclinicalTestingLaboratoryandAnimalTestingDiscovery(2–10Years)YearsNetCost:$802millioninvestedover15yearsTheCostofDrugDevelopmentContinuestoIncreaseSources:R.Hansen,Ph.D.,UniversityofRochester;S.N.Wiggins,Ph.D.,TexasA&MUniversity;J.A.DiMasi,TuftsCenterfortheStudyofDrugDevelopment(2002);OfficeofTechnologyAssessment(1993)AverageCapitalizedDevelopmentCostperNCE,1976-2001NominalDollars(Millions)ShrinkingTimeWithoutCompetitionSo-Called“Me-Too”DrugsCreateaHighlyCompetitiveMarketplace1965197519851995YearofTherapeuticClassLaunchSource:FDAOrangeBookPrivateIndustry-InventstheVastMajorityofNewMedicinesSource:DiMasi,Hansen,andGrabowski,TuftsCSDDR&DCostStudy,2002(overalldata);DataonAIDSdrugdevelopmentfromPhRMAandtheNIHOfficeofTechnologytransfer

WhereDidAllNewDrugsApprovedfrom1990-1999ComeFrom?WhereDidAIDSDrugsComeFrom?InvestmentsinNewDrugDevelopmentPublicsectorcannotaffordthehugeinvestmentsneededfornewproductdevelopment.TheworldstillneedsnewdrugsfortreatmentofailmentssuchasHIV/AIDS,Cancer,TBandMalaria.Theincentivetoinvestinnewproductdevelopmentshouldbemaintainedandnurtured.MajorDegenerativeDiseasesSource:Caplow,Theodore,etal.TheFirstMeasuredCentury,WashDC:ADI,2001:137NumberofDeathsPer100,000PopulationPerYear600019004001920194019601980

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