Diabetes mellitus The incidence of dia- betes is on the rise, in both the developed and developing worlds.

Klaus Dugi Professor of Medicine at the University of Heidelberg, Germany, discusses the causes, symptoms and treat- ment of diabetes. Structure of insulin wide have Type 2 diabetes, and this betes mellitus means 'honey sweet Type 1 diabetes typically manifests number is expected to double within flow' and stems from a time in which during childhood or adolescence, but the next 20 years. Most of the increase tasting a patient's urine was still part of it has recently become apparent that will stem from developing and the physician's diagnostic repertoire, adults can also develop this form, in threshold countries such as India and By the sweet taste of the urine, diabetes some cases as late as in their forties or China. In the USA, where the preva mellitus could be distinguished from fifties. Type 2 diabetes is mainly a dis- lence of diabetes is high, it is estimat- diabetes insipidus, another disease ease of the elderly, but as rates of obeed that one in three people will devel- with increased urinary output sity increase, more and more young op Type 2 diabetes The term diabetes mellitus covers adults, and even adolescents, are several disease states with underlying being diagnosed with this form of the Pathophysiology causes that are characterised by an disease. Other forms of diabetes Normal situation abnormal increase in blood sugar include gestational diabetes (pregnan- The body derives glucose from sev (glucose) levels. cy diabetes), diabetes after operative eral sources. Firstly, it is taken up resection of the pancreas, and rare from food in the gut, either directly as Classification forms of genetic diabetes glucose or after more complex carbo In 1997, the World Health hydrates have been digested into glu Organization and the American Epidemiology cose and other simple sugars Diabetes Association agreed on a new About 90% of patients with diabetes Secondly, glucose is synthesised from classification for diabetes mellitus. mellitus have Type 2 diabetes. An other energy sources, mainly in the The most frequent diabetes forms are estimated 150 million people world- liver, in a process known as gluconeo- www.scienceschool.org Science in schoolse 1: Spring 2006 61

INSULIN T More ad M GLUCAGON glucose by muscle cells. In the liver, insulin fails to suppress the produc tion of new glucose and the break- down of glycogen. Thus, insulin resistance tips the glucose homeosta- Glucose regulation sis towards high blood sugar levels (hyperglycaemia). genesis. Thirdly, glucose is stored in hormone that can lower blood sugar the liver, muscles, and other tissues in levels. Insulin is synthesised and Type 1 diabetes the form of glycogen. On demand, secreted only in the beta or islet cells Type 1 diabetes is an autoimmune glycogen is broken down into glucose of the pancreas. It lowers the blood disease. In genetically susceptible and secreted into the bloodstream glucose level by facilitating the individuals, an inflammation of pan- Glucose is transported via the blood, uptake of glucose from blood by all creatic beta cells is triggered, most whence it is absorbed by tissues need cell types, reducing gluconeogenesis, likely by a viral infection. Because ing glucose. After a meal about 80% of and encouraging the storage of glu- beta cells are the only ones able to the uptake of blood sugar is by muscle cose in the form of glycogen. produce and secrete insulin, complete cells. During fasting, however, over Several other hormones, such as insulin deficiency ensues. As a result, 50% of glucose uptake is by the brain. adrenaline, glucagon, thyroid hor all Type 1 diabetic patients require This imbalance is probably because the mone and growth hormone, are insulin replacement therapy. The only sole source of energy for the brain is involved in increasing the blood exception is during the 'honeymoon glucose, and the body needs to safe sugar level. period' that some patients experience guard the brain's glucose supply. If the shortly after diagnosis and initial blood sugar level falls too low (hypo- Insulin resistance treatment, owing to some residual glycaemia), the brain malfunctions, The vast majority of patients with insulin secretion early in the progress Causing such symptoms as lack of con- Type 2 diabetes or pre-diabetes are of the disease centration, dizziness and faintness, or characterised by insulin resistance. in severe cases, convulsions, coma and Despite normal or even elevated Type 2 diabetes death blood levels of insulin, insulin has Type 2 diabetes is a prime example The processes of glucose uptake less effect than in normal individuals of a disease caused by a combination and release are tightly regulated by Peripheral insulin resistance means of genetic and environmental factors. hormones. The most important hor that insulin is less effective at The genetic influence is greater than mone is insulin, because it is the only mediating the uptake of blood for Type 1 diabetes the identical twin 62 Science in school: Spring 2006 www.scienceinschool.org

Islet of Langerhans a-cells secrete glucagon) B-cells (secrete insulin) Stomach Pancreas Acinus (secretes digestive juice into pancreatic duct) Blood vessel recon Madon Duodenum Structure of the pancreas of a Type 2 diabetic patient is almost certain to develop the disease. On the other hand, lifestyle factors such as diet and exercise are also important determinants; in times of scarce food supply, for instance, the incidence of Type 2 diabetes is very low. A good example of the interplay of genetics and lifestyle are the Pima Indians, Those living in Mexico have a dia- betes prevalence of about 8%, whereas those who have emigrated to the USA, where the lifestyle is more sedentary and access to energy- dense (fatty) food is easier, have a diabetes prevalence of about 50%. The most important risk factor for Type 2 diabetes is obesity. Epidemiological studies have shown that, compared to lean individuals, very obese men and women (body mass index >35) have a 60-and 90- fold increased probability of develop ing Type 2 diabetes, respectively (see figure). In terms of genetics, Type 2 diabetes is a multifactorial disease for which no single gene is responsible. In contrast to patients with overt Type 2 diabetes, patients with pre-dia- betes (characterised by insulin resist- ance) do not exhibit hyperglycaemia when fasting. However, after a chal- lenge like an oral glucose tolerance test (OGTT), during which 75 grams of glucose are ingested, patients exhibit pathologically high glucose levels (see Table 1). These patients, therefore, are characterised as having impaired glucose tolerance For a limited period, pancreatic beta cells are able to produce enough insulin to overcome the insulin resist ance, so many pre-diabetic patients actually have elevated plasma insulin levels. However, in most patients, the rate of beta-cell death exceeds that of beta-cell formation in the pancreas, resulting in fewer insulin-producing beta cells. When the insulin.produc ing capacity of the pancreas is over- taken by the increased demand caused by insulin resistance, the patient develops overt Type 2 diabetes. Now Prevalence 50% Prevalence 8% Then Incidence of diabetes among Pima Indians: gene-environment interaction www.scienceinschool.org Science in school issue 1: Spring 2006 | 6

Normal Overt diabetes Impaired fasting glucose or glucose tolerance Fasting glucose"

https://www.coursehero.com/tutors-problems/Nursing/30690538-5-What-should-be-done-in-cases-like-Turing-and-Vale-ant-Pharmaceuti/,"5 $. What should be done in cases like Turing and Vale-ant Pharmaceuticals, where decades-old medications that do not have competitors are purchased and prices are raised exponentially? If you think restrictions should be imposed, what is the justification for treating that case differently than the case where a drug, with patent protection, comes to market and is priced for hundreds or thousands of dollars? 6. How can the United States and other developed countries stimulate greater research and develop-ment of treatments for NTDs and offer those drugs at prices that are affordable?

Read Integrative Case 1.2: The Ethics of Global Drug Pricing as found on pp. 115 - 121 of your text. Write 1-2 paragraphs in response to each of the 6 review questions provided, but tailor your answers specifically to the obligations and ethics related to vaccines and treatments to mitigate the current COVID-19 pandemic. Make sure to properly cite the

In-Depth Integrative Case 1.2 The Ethics of Global Drug Pricing In September 2015. Turing Pharmaceuticals, headed by spending. In 2014, drug prices grew by 12.2 percent from former hedge fund manager Martin Shrkeli, increased the the previous year, and prices for some medications, price of a 62-year-old drug used for treating life-threaten including effective treatments for hepatitis-C, cancer, and ing parasitic infections in HIV and cancer patients by over multiple sclerosis, grew by as much as $50,000 5,000 percent-from US$13.50 to US$750 per tablet! Patients need reliable drugs that can be used to treat Also in 2015, Valeant Pharmaceuticals raised the price of their conditions, however, the costs to patients vary widely a standard-use diabetes pill from US$896 to US$10,020, based on the health care system of the countries in which pills used for Wilson's Disease from US$1.395 and they live, whether they are subject to public or private US$888 to US$21.267 and US$26,139 respectively, and a insurance (or no insurance at all), and various other fac- heart rate medication from $4,489 to $36,811. In the same tors. In the United States, insurance options vary widely, year, Rodelis Therapeuties increased the price of a drug with some patients paying out of pocket, others opting for used to treat multidrug-resistant tuberculosis from around coverage under their employer paid or commercial insur- USS500 to US$10,800 per 30 pills. These highlight just ance, and some utilizing a form of government-paid insur- a few examples of numerous recent extreme price increases ance, like Medicare. The type of provider and type of plan that have fueled the debate regarding the cost of prescrip ultimately determine the cost that the patient must pay out tion medication in the United States, prompting compari- of pocket for any prescription medications. Some plans sons to drug prices in other industrialized countries require co-pays, premiums, or deductibles to cover the Moreover, a related debate has simmered regarding access costs of prescriptions and some pay a certain percentage to life-saving medicine in developing countries, the rela- of prescription costs, leaving the balance to the patient. tively low investments by major global pharma companies in many countries featuring single-payer models, health in developing new medicines for diseases such as tubercu- plans determine which drugs are available and how they Josis and malaria, and the prices major pharmaceutical are to be allocated to patients. In a similar vein, insurance companies charge for HIV/AIDS medications plans in the United States maintain a ""booklet"" or listing of what prescription medications are covered under a Pharmaceuticals and Pricing-A Complicated meaning that one year a given insurance comparty will given plan. This booklet can change from year-to-year, Calculation cover costs for a certain medication and, due to factors The issue of drug pricing is incredibly complex and, as like huge price increases, the medication may not be cov more prescription medications are becoming available ered the following year. the growing global population, that complexity is increas In the United States, prescribing doctors are an impor ing. Debates regarding prescription medication pricing tant stakeholder in this issue. Until recently, their respon involve soch hot button issues as the appropriate levels of sibility and incentives were not always well established corporate profits, the responsibility of the corporations in the past, it was common practice for pharmaceutical who own the medication profit for shareholders versus companies to offer doctors fees for research and clinical providing a need for suffering patients), and insurance assessments. Because these foes created at least the coverage, to name a few. The ethical debate over drug appearance of a conflict of interest, legislation and regu- pricing is not confined to just the United States, but lation began to require greater disclosure and reporting. extends to developed and developing companies alike. The pricing of pharmaceuticals is influenced by a Now, all compensation, including nonmonetary items such as food and entertainment, that pharmaceutical com myriad of stakeholders who represent a wide range of panies provide to doctors in exchange for research and competing interests. These include the patients taking the promotional activities must be reported."" drugs, the doctors prescribing the drugs, the insurance Putting that role aside, doctors are generally expected companies paying for the drugs, the pharmaceutical man ufacturers that either produce or acquire the rights and efficacy levels. Higher prescription drug prices inevitably to treat patients with whatever means result in the highest supply the drug and the governmental forces that often act as a bulk purchase and regulator, policing the entire indicate that these tensions will only grow, the number of Interact with that responsibility. Recent trends sem process. Tensions among these diverse stakeholders are Americans using prescription medication has increased gravated by continued growth in prescription-drug nearly 10 percent since 1999. to 60 percent of Americans 113

and the number of patients who take five or more medica- tions has doubled to 15 percent. As drug prices continue nies like Valeant and Turing buy the rights to specially In the most egregious cases of price increases, compa to soar, doctors are placed in the difficult situation of pre medications that have been on the market for years and for scribing their patients medication that may not be afford- which there are few direct substitutes. These companies able or performing alternative methods with lower efficacy. then raise the prices of the drugs exponentially. Decades- In defending relatively high prices of drugs, pharma- old specialty medications often do not have generic alter- ceutical companies routinely cite the high failure rate of natives due to traditionally low sales volumes. Therefore, new drugs during the FDA approval process and the steep patients who require these medications and have been costs of research and development. Indeed, some esti- using them as standard care are left without any real cost- mates put the price of developing a new drug at nearly effective alternative when prices skyrocket. $3 billion when including the cost of failures and drugs Pharmaceutical companies also argue that they provide that never reach the marketplace. Opponents of this argu subsidies--sometimes significant ones--for patients who ment cite the fact that, in cases where a new drug is suc are not able to pay the full cost. These programs include cessful, it enjoys approximately two decades of protection providing medication free of charge to patients in both from any competition under strict patent laws. Addition developed and developing countries, as well as offering a ally, some companies, especially in the ""orphan"" drug type of financial aid to help other patients obtain the industry, which will be discussed later, receive grants for medication at a discount. Pharma companies' programs to research and development. Finally, in extreme cases of provide access to medicines for patients in developing companies like Valcant and Turing, critics point to the countries are discussed below. fact that those companies do not appear to invest much if When taken together, the many considerations associ any financial resources into developing new drugs. Vale ated with drug costs and pricing conspire to create a con- ant, for example, invests less than 3 percent of revenue fusing web of social, economic, and political challenges, into research and development activities."" some of which are detailed below. The Wall Street Journal conducted an exhaustive investigation into the pricing of drugs at Pfizer, which involved interviewing management regarding pricing for Drug Pricing in the United States and its new breast cancer medication Ibrance. The results around the World revealed that Pfizer's multistep pricing process is not Although the United States is facing rapidly increasing based on a single algorithm but is derived and prescription medication prices, this is not the case in adjusted based on a range of external inputs and inter much of the world. In the United States, a mostly market- nal benchmarks. According to the report, research and based system provides economic and other incentives for development costs had minimal influence on the ulti-companies that develop new drugs or improve existing mate price per dose set by the company. Rather, factors ones. The drug companies in market-based systems, ben- including demand in the marketplace, competition, the efiting from patent protected exclusivity, ultimately opinions of medical professionals, and potential pressure recoup their large research and development investments from insurers heavily influenced the resulting pricing with higher market-based prices for their breakthrough strategy. Pfizer explained that it seeks to reduce this products. In other parts of the world, where public health complex analysis into a three-point approach: patients care and prescription drug purchasing systems are com- receive maximum access to the drug: payers, such as monplace, different factors prevail. insurers, will accept the price; and Pfizer receives strong The Wall Street Journal conducted a study comparing financial returns. In this case, Pfizer spent three years of prescription drug prices in the market-based United States, market research to determine pricing for what was a using the data available through Medicare Part B to the revolutionary medication to treat advanced becast cancer. prices found in three countries with public health care sys- The final step of the process was a meeting of Pfizer tema: Norway, England, and Canada's Ontario province economists to determine the financial impact to the com This investigation used both public and nonpublic data. pany, the health insurers, and the patients. Finally, the Table 1 summarizes the results of that study. Among the commercial team decided to set the price at $9,850 per findings was that, in the case of the top 40 selling drugs, month. This price was approved by Pfizer and, just as prices in the United States were 93 percent higher than in the medication was set to go to market, a competitor Norway. Similarly, England and Ontario also showed sig raised the price of its comparable medication by 9.9 per nificantly cheaper prices than those found in the US cent, putting the monthly cost of the medication at Research seems to conclude that, in general, branded pre- US$687 more than Pfizer's, on the basis of ""reflecting scription drugs are more expensive in the market-based an evolving health care and competitive environment."" US system than in other developed countries."" According to The Wall Street Journal, Pfizer was left The patent protection and exclusivity prevalent in the thinking. ""was $9.850 too low market-based U.S. system are not the only reason for steep

In-Depth integrative Case 1.2 The Ethics of Global Drug Pricing 115 2 mg 500 mg Table 1 Drug Price Comparison Drug Dose Size Lucentis 0.5 mg Eyes Rituan/MabThera Neulasta 6 mg Ayastin Prolia 60 mg Alima Velcade 3.5 mg Herceptin Eligard 100 mg Medicare (US) US $1,936 1,930 3,679 3,620 685 893 604 1.610 858 217 Norway US $ 894 919 1,527 1,018 399 260 313 1,332 483 137 England US $1,159 1,274 1,364 1,072 379 286 250 1,191 424 n/a Ontario US $1.254 1,129 1,820 n/a 398 285 342 n/a 493 247 Drug Used for Macular degeneration Macular degeneration Rheumatoid arthritis White blood cell deficiency Cancer Osteoporosis Lung cancer Cancer Breast cancer Prostate cancer 100 mg . 100 mg 75 mg Source: Jeanne Whalen, ""Why the U.S. Pays More Than Other Countries for Drugs."" The Wall Street Journal, December 1, 2015 drug prices, structural differences in the health care sys- determine the cost-effectiveness of new drugs. Pharma- tem, the lobbying and political power of pharmaceutical ceutical companies submit a price for reimbursement, which must be below the maximum price set by the companies, and the fear of rationing all contribute to the increased prices in the market. Conversely, the state-run agency, and the pharmaceutical companies must file health systems in other developed countries, like Norway, detailed documents outlining the additional benefits and exert strong negotiating leverage with drug companies. In value that the new drug provides that existing drugs do these countries, nearly all drug purchasing is completed not. QALY, or quality-adjusted life year, is a metric that by government agencies, shifting the power from pure is often used to measure the value of the drug."" Interest market demand to a single government purchaser. In these ingly, Medicare in the U.S. is prohibited from incorporat- systems, it is common for government health care agening such an approach. Many drug companies ultimately cies to set firm caps on pricing, require strong evidence discount their drugs to ensure that they are accepted by that becakthrough drugs truly provide higher value than NMA for inclusion in the health care system, though existing medications, and refuse to pay for higher-priced companies are able to resubmit rejected drugs if they can drugs that offer only minimal improvements over cheaper improve the value proposition. alternatives. By contrast, the US marketplace is more England's health-care cost agency, the National Insti- disjointed. Individuals, employers, large and small insur tute for Health and Care Excellence (NICE), is one of ance companies, and even state and federal government Europe's strictest regulators. Providing a high value is agencies foot the bill for medications, resulting in critical to any specific drug's acceptance by NICE, the decreased bargaining power. Furthermore, Medicare, agency evaluates the cost versus effectiveness of drugs, which pays for more medications than any other company ultimately determining whether the medication provides or agency in the country, is legally prevented from nego- enough benefit to warrant coverage. If NICE determines tiating pricing 16 that the value offered by the new drug is too low com- Drug manufacturers and developers are quick to note pared to the price, drug makers have the opportunity to the huge financial disincentives posed by European public try for acceptance again with a revised price point. The health care systems Lower returns coupled with strong level of spending by the National Health Service (NHS) governmental controlarguably result in decreased research on individual drugs is also capped, and the pharmaceuti- investment and less patient access to life-saving drugs cal industry must reimburse the NHS for any additional Without the large profits achieved through the US. prie spending over that cap. Nearly every drug covered by both ing model, new drug development would sharply decline."" Medicare Part B and the English health care system was Per Pharmaceutical Research and Manufacturers of Amer ica (PIRMA) cutive vice president Lori Reilly, ""The more expensive in the US. US has a competitive biopharmaceutical marketplace include a centralized government agency responsible for Though the Canadian health care system does not that works to control costs while encouraging the develop all drug payments and negotiations, the country has been ment of new treatments and cures while to maintain lower drug costs due to government reg- Below is a brief summary of drug pricing approaches wlation. First, maximum drug prices, based on the effec in key European countries. tiveness and overall value of the pharmaceutical product Norway, Canada, and the United Kingdom as well as the cost of the drug in the US and Europe, are Norway created the Norwegian Medicines Agency (NMA) After the price ceiling is set on a particular drug, the phar set by Canada's Patiented Medicine Prices Review Board to determine the appropriateness of specific drugs for treatment. The agency evaluates patient information to maceutical company producing the product is prohibited from increasing the price above the comparable US. O

116 Part 1 Environmental Foundation European price. Additionally, the annual rate of price significant consumer pressure on the drug manufacturer, increase is capped at Canada's rate of inflation. Because When a low reference price is set, consumers become Canada has a nationalized system with heavy subsidies for low- and fixed-income citizens, the Canadian government ing to avoid any additional, uncovered cost. Drug compa- more willing to switch the specific drug that they are tak. also must determine whether or not any specific drug will nies, with the desire to keep consumers, respond by be available to seniors and those on government assistance. lowering their price to as close to the reference price as The Canadian Agency for Drugs and Technologies in possible."" Germany, Italy, and Spain vary slightly in how Health ultimately makes this decision. These regulations reference prices are actually set. In Germany and Spain, appear to effectively reduce costs, especially when com averages are used to calculate the proper reference price, pared to the U.S. For example, of 30 pharmaceutical drugs while in Italy, the lowest price in each drug category covered by both Ontario's Ministry of Health and Long-effectively acts as the reference price, Term Care and the U.S.'s Medicare Part B, only 7 percent Price controls, whether through government agencies of the drugs were more expensive in Canada. or insurers, are often blamed for slowing drug research Obviously, the significant difference in health care sys- and development. While this may be rooted in some truth tems and prescription medication practices makes it the reference price strategy can still result in financial extremely difficult to debate whether the U.S. approach incentive for innovation. When a new, breakthrough drug or the Norway-England Canada approach is better. Of is developed, reference pricing allows for that drug to be more practical relevance, it would be extremely difficul placed into a category by itself, eliminating the price for the U.S. to adopt the approach used in these three competition seen in categories of drugs established with countries. Indeed, the U.S. has (so far) rejected a univer multiple competitors. The new drug is still able to reap sal, government-paid health care system. The arguments the financial benefits of being a first-to-market innovator, for and against that type of system are well-documented likely for many years. Additionally, the reference pricing and will not be addressed here, but it is worth mentioning strategy can encourage innovations within long-estab- that there are valid reasons for opposing it. One is that lished drug categories. When an existing drug within a adopting a universal system could result in the govern- crowed, competitive drug category is improved and its ment being unwilling to pay for certain medications, cost to manufacture is reduced, the drug manufacturer can something that is quite controversial in the U.S., where likewise lower its price point in an attempt to steal market freedom and choice are highly valued. This reality com share. This results in savings to the end consumer. plicates the process for encouraging development of spe As stated already, it is difficult to argue against a system cialty and orphan drugs that by definition treat a very that has prices a fraction of those in the U.S., but it is worth small portion of the population. In these cases, there is mentioning that this system is still difficult to implement usually a lack of effective alternatives or generic medica- in cases where there are no comparable drugs. Further tions and it is only with strong economic incentives that more, companies could shave margins on drugs that have pharmaceutical compa are willing to take the risk of comparable alternatives but attempt to make up those mar- development new products. As such, a public health-care gins in arcas where they provide novel medications. Finally, system does not provide a solution to high drug prices in as seen with Pfizer's pricing example, pharmaceutical com cases where there are little to no alternative treatments."" panies routinely look to competitors for guidance on pric- ing. Implementing a reference-pricing system could incentivize companies to set higher prices knowing that the Germany, Spain, and Italy government will be imposing a bottom price or avea pe Another approach to drug pricing, which has features of price and encourage a type of price-fixing. both a private, market-based system, like that of the United States, and a public system, like that of Norway, can be found in Germany, Spain, and Italy. A New York Specialty and ""Orphan"" Drugs Times analysis described how these countries approach Specialty drugs which are generally understood to be the pricing challenge drugs that are structurally complex and often require spe In Germany, Spain, and Italy, pharmaceutical drugs are cial handling or delivery mechanisms are typically categorized into groupings with other similar drugs. Insur priced much higher than traditional drugs. While some of ers, whether public or private, then set a single specific these drugs have been groundbreaking in the treatment of price that they will pay for any drug that is grouped within cancer, rheumatoid arthritis, multiple sclerosis, and other a specific category. This price is referred to as the chronic conditions, the cost of treating a patient with spe. reference price."" If any individual drug within a category cially drugs can exceed tons of thousands of dollars a is priced higher than the set reference price for that cat year. Over the past decade, the industry has seen signifi egory, the consumer must pay the excess cost if he or she cant increases to the pricing of specialty drugs. Figure ! wants the more expensive drug. This approach results in shows the growth in these costs.

In Depth integrative Case 1.2 The Ethics of Global Drug Pricing 417 Figure 1 Growth in Average Annual Cost of Specialty Drug Regime $60,000 $53,384 $50,000 $48,512 $43,697 $40,000 $36.630 $33,032 Annual Retall Price of Therapy per Drug $30.000 $28.118 $30.127 $25,857 $20,000-$18.240 $10,000 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Anna Gorman, ""California Voters We Have Their Say on Drug Prices."" Konser Health News January 29, 2015. http://m.org newscalforni-voters-will-have-their-say-on drug prices Depending on the effectiveness, demand, and disease Access to Medicine and Pricing in being treated, some specialty drugs cost upwards of Developing countries three quarters of a million US dollars annually. In fact, Prescription drugs are the primary method of medical within the last few years, a third of all spending on pre- treatment in most developing countries and largely domi- scription drugs in the U.S. has been dedicated to me nate total health-care spending in these economies. As a cialty drugs. This has resulted in a surge in the result, drug affordability in emerging countries is critical development of new specialty drugssince 2010, the US. to ensuring medical treatment for those who are in need. Food and Drug Administration (FDA) has been approx. Despite aid from the international community, developing ing more specialty drugs than traditional drugs. For countries still lack access to life-saving medications. Less example, in 2014, specialty drugs accounted for 54 per than 20 percent of all drug importing, and only 6 percent cent of all FDA approvals. of all drug exporting, occurs in emerging nations. Further Another classification of drugs-called orphan more, a full third of people in these countries are without drugs""-are pharmaceutical products aimed at rare dis consistent access to prescription drugs."" cases of disorders. In the market-based U.S. system, One grouping of major global initiatives that are help orphan drugs can be financially lucrative for drug devel- ing to make medication more available to the developing opers, especially since the passage of the Orphan Drug countries is the Neglected Tropical Disease (NTD) pro- Act of 1983. Since the pape of the law, over 400 new grams. NTDs are defined as common, easily transmitted orphan drugs have received FDA approval, resulting in diseases that are most often found in the approximately treatments for nearly 400 rare diseases. In the US orphan 150 developing nations located in tropical regions. The drugs often cost 20 times that of drugs used to treat tra economic impact of these diseases is estimated to be in ditional disease. Additionally, the market for orphan drugs the US$ billions annually, directly and indirectly affecting continues to grow. More than 30 million U.S. citizens. representing almost 10 percent of the entire population, such as unsanitary water and livestock contribute to the more than a fifth of the world's population. Often, factors are estimated to be inflicted with a rare discase. While spread of NTD Specific programs, such as the one demand for traditional prescription drugs is only expected established by the Centers for Disease Control and Pre- to increase 4 percent annually in Japan, the U.S., and Europe through 2020, total sales for orphan drugs will includes attempting to completely eliminate diseases vention (CDC), aim to combat NTDs directly. This increase by Il percent year-over-year. By 2020, nearly a fifth of all nonpeneric drugs sold globally will be orphan well as working together with pharmaceutical companies through Mass Drug Administration (MDA) programs, as drugs As discussed previously, the U.S. spending on pre- and local NGOs. With a lack of formal doctors and nurses scription medication is substantially higher than in most in many of these areas, localized community leaders and other countries. One wrument justifying these high prices volunteers, such as teachers, function as drug administra- is that the high prices for medications in the US and tively and properly provide drugs to the community oes. These volunteers have the training required to effec- some other developed countries make it possible for the same companies to offer medications needed in develop through large drug donations. The U.S. Agency for members. Pharmaceutical companies provide support in countries at a significant discount.

118 Part 1 Environmental Foundation International Development (USAID) is a key partner with and, over time, blindness. MDP approves more than 140 organizations like the CDC and the World Health Orga: million treatments for onchocerciasis annually. Another nization (WHO). In addition, USAID, CDC, and WHO company, Novartis, developed a highly effective malaria also collaborate with other organizations, including foun- treatment called Coartem that was made available in a dations such as the Bill and Melinda Gates Foundation, lemon-flavored disbursable format, making it easier for as well as individual pharmaceutical companies that children to take. It has become one of the largest access donate medications that can combat these diseases In the United States, concern about NTDs and the lack sured by the number of patients reached annually. Since to-medicine programs in the health care industry, mea of incentives for pharmaceutical companies to develop 2001, working with a range of international organizations drugs for those diseases caught the attention of three aca demics from Duke University. In their 2006 paper, Foundation, Novartis has provided more than 600 million such as the World Health Organization and the Gates researchers David Ridley, Henry Grabowski, and Jeffery treatments for adults and children, to more than 60 Moe proposed a voucher system based on the Orphan malaria endemic countries, contributing to a dramatic Drug program to reward companies for investing in the reduction of the malaria burden in Africa. It is estimated development of drugs targeted at treating NTD."" Under that 3.3 million lives have been saved as a result. Inter this system, the incentive provided to pharmaceutical estingly, Novartis chose to sell the drug on a cost-recovery companies developing NTD treatments would be the (not for-profit) basis rather than give away the drug, per- expedited FDA review of a subsequent drug of the com- haps because it believes this approach will make the pro- pany's choice, potentially generating millions of dollars gram more sustainable over the long term. Novartis was of added revenue due to the fact that the chosen drug the first recipient of an NTD priority review voucher would gain market access earlier than would otherwise be described above. the case. The researchers also suggested providing some flexibility in redeeming this reward, including allowing The Future of Drug Pricing around the World the benefit to be sold to another company. In the US, the voucher system idea quickly transformed from concept The question of how to price pharmaceutical drugs is dif- into law; U.S. Senator Sam Brownback adapted and ficult and ethically complex. As an industry directly included the program in the Food and Drug Administra related to the health and welfare of humankind, political tion Amendments Act (FDAAA) of 2007. and ideological decisions regarding health care provision In addition to the above initiatives, pharmaceutical and delivery can be deeply personal for many. In addition, companies are increasingly evaluated and assessed based income disparities both within countries and across the on their ability and willingness to make drugs available developing world are on the rise, and these differences to poor countries. The Access to Medicine Foundation, an pose difficult questions about fairness, equity, and moral independent nongovernmental organization, publishes the obligations ""Access to Medicine Index,"" which ranks pharmaceutical It seems clear that drug pricing will remain a conten companies by their access-related policies and practices. tious and debated issue. From the perspective of global- The index is based on an analysis of 95 indicators, in ization, it is interesting to consider whether or not price relation to 106 countries and 47 diseases. Each company differentials for drugs will persist, or, as is the case in is ranked separately according to its commitment to its many other areas. prices will converge due to growing wealth in developing and emerging markets, regulatory performance in seven categories: (1) General Access to Medicine Management (2) Public Policy and Marketing coordination across jurisdictions, increasing market pres Influence; (3) Research and Development; (4) Pricing, sures, or some combination of these factors Manufacturing, and Distribution; (5) Patents and Licens Questions for Review ing: (6) Capability Advancement; and (7) Donations and Philanthropy. Figure 2 shows the overall ranking for the 1. What is the proper balance for pharmaceutical com top 20 pharmaceutical companies globally panies between delivering the fiduciary obligation In addition, individual companies have taken it upon of earning a profit for owners and providing life themselves to provide free or low cost access to their own saving or life-extending drugs to customers? How production and distribution channels or with partners. For much profit is too much profit and who determines example, the pharmaceutical giant Merck developed a the amount? How does that balance get achieved drug-Mectiran--to fight Onchocerciais, also known as 2. Should the United States consider other methods for river blindness, in 1987 and established the Mectizan controlling drug pricing, such as those used in Donation Program (MDP) to oversee the initia some Propean countries? Are there other ways the tive. Onchocerciasis is found primarily in Latin America United States might me market forces or incentives and Africa. It is transmitted through the bites of black from government programs to control drug prices flies and can cause disfiguring dermatitis, eye lesions, Given that one of the most prevalent and persuasive

In-Depth integrative Care 1.2 The Ethics of Global Drug Pricing 119 3.29 Figure 2 The Access to Medicine Index 2014-Overall Ranking 1 - 1 GlaxoSmithKline plc 2 A6 Novo Nordisk A/S 3 2 Johnson & Johnson 4 A 7 Novartis AG 5. 5 Gilead Sciences Inc. 3.01 2.84 2.84 2.81 6 A 8 Merck KGaA 74 Merck & Co. Inc. 2.77 2.64 2.57 2.56 2.51 2.47 2.30 2.23 83 Sanofi 9 na AbbVie Inc. 10 9 Bayer AG 11 A 15 Eisai Co. Ltd. 1210 Roche Holding AG 13 12 Bristol-Myers Squibb Co. 14 A 17 Boehringer Ingelheim GmbH 15 16 AstraZeneca plc 16 Pfizer Inc. 1714 Lily & Co. 18 20 Astellas Pharma Inc. 19 - 19 Daiichi Sankyo Co. Lid. 2018 Takeda Pharmaceutical Co. Lid. 2.08 194 193 173 156 1.50 1.45 0 4 5 Posson Access to Medicine Index 2012 General Access to Medicine Management Public Policy & Marketinence Research & Development Pricing. Maracturing & Distribution Patents & Licensing Capability Advancement in Product Development Distribution Product Donations & Phop Acties A score of er means lowest and five signifies highest indicatorscore among the companys - Pension Access to Medicine Index 2014 arguments for relatively high drug prices is the high cost associated with research and development and regulatory compliance, is there a way to combat those costs? 3. What are your views on the role of patients in pre- scription medication? What is the proper balance of patent protection for costly research and develop ment versus lack of competition? 4. What should be done on the issue of orphan drugs to combat high costs without viable alternatives? Should there be cost restrictions? Should there be patent restrictions? 5. What should be done in cases like Turing and Vale- ant Pharmaceuticals, where decades-old medications that do not have competitors are purchased and prices are raised exponentially? If you think restric tions should be imposed, what is the justification for treating that case differently than the case where a drug, with patent protection, comes to market and is priced for hundreds of thousands of dollars? 6. How can the United States and other developed countries stimulate greater research and develop ment of treatments for NTDs and offer those drugs al prices that are affordable? Source: This case was prepared by Matthew Vanil of Villanova i wanity or the supervision of Professores Dobs the be So dass die Adres poded by Bee Line is not intended to use the effective effective"

https://www.coursehero.com/tutors-problems/Nursing/30690440-Respond-to-both-1-Learnscapes-for-Healthcare-Delivery-Learnscapes-F/,"Respond to both: 1. Learnscapes for Healthcare Delivery: Learnscapes Four Expansion The Board of Directors of the Health Care System is thinking of expanding services to include a home health agency in the community. They have charged the CEO to ask you, their health care consultant, to help determine whether or not to develop this service. You must analyze overall health care trends, population trends, disease trends, local trends and competitors, utilization of services, and other factors to determine whether or not to recommend opening a home care service. The recommendation will include specific data on services provided, staff required, financial concerns, and a plan to build patient referrals. Review the entire Learnscape and then submit your recommendation to this forum on whether or not Bright Road should expand into Home Health. Back up your recommendation with the analysis gained from staff. Discuss all recommendations by all students throughout the week. 2. Learnscapes for Health Care Finance: Learnscapes Four To Move or Not To Move In this scenario you are the newly appointed CEO for the Continuing Care Retirement Community that is under the large Hospital System. A board retreat is coming up and you must help the board with a critical decision: relocate the facility to a more suburban area, or stay in its current, metropolitan area location. By gaining a solid understanding of the key target ratios that the Board is responsible for, most importantly the growth rate in equity (GRIE) you may find that a more financially feasible alternative should be considered. Discuss your role as you helped the Board decide reach the decision to reolocate to a suburban area or stay in their current urban area. Who did you meet with? What decisions were made and why did you make them?

TEXTBOOK: MANAGEMENT OF HEALTHCARE ORGANIZATIONS BY PETER OLDEN 3RD EDITION

ESSAY QUESTION: How Can an ACO Improve the Health of Its Population? case: Assume Vandalia Medical Center (VMC) developed the Vandalia Care accountable care organization (ACO) as part of VMC's strategic planning. Which external opportunities and which external threats might have led VMC to start the ACO? Which critical issues do you think VMC is trying to resolve by developing the ACO?

Case: How Can an ACO Improve the Health of Its Population?

Vandalia Care, an accountable care organization (ACO), had been successfully developed as part of Vandalia Medical Center (VMC), but the new ACO's leadership had become concerned. Specifically, they worried that their mission to reduce care costs while improving the health of the population was at risk. In the six months since Vandalia Care had been established, the number of patients served had increased, but VMC was having difficulty determining whether and how the ACO model was having an impact on the health of its population. VMC had an electronic health record (EHR) that was operational in both inpatient and outpatient settings, but not all providers could access all elements of the EHR. Now that Vandalia Care had been implemented, a new problem arose with respect to data. Vandalia Care had associated hospitals and providers, but because of the way ACO contracts were written, patients attributed to the ACO were not required to use those facilities and clinicians. As a result, when patients attributed to Vandalia Care visited providers external to the ACO, data about those visits were virtually impossible to collect. Considering that Vandalia Care's goal is to improve the health of the entire ACO population, lack of access to the comprehensive health records of all attributed patients was problematic. Lindsey Dillow, the new manager of care coordination for Vandalia Care, wanted to help solve this problem. Drawing from recent research on ACO development, Dillow believed that Vandalia Care patients, like other ACO patients, did not know they were actually part of the ACO. Patients might be loyal to their primary care physicians, but when they needed specialty care or hospitalization, they went wherever they wanted to go, regardless of whether the setting was part of Vandalia Care. As a result, Dillow did not know these patients had sought services outside the ACO until she received claims data several months after the admission or visit, thus significantly compromising her ability to coordinate care. Further, costs that could have been controlled via ACO contracts with specialists, hospitals, and even skilled nursing facilities were left unchecked. Vandalia Care's launch had included a mass mailing to members of the community, but Dillow believed more needed to be done to engage patients and community members in improving their health. She knew that the ACO's leadership was open to supporting a major initiative to connect with the community, so she needed to carefully consider her strategy. Dillow recognized that a true focus on population health management had to be less about branding the ACO and more about engaging consumers and encouraging them to care about their health. In particular, she believed that an important element of this outreach had to focus on connecting physicians with community members. She wondered whether focusing on a particular segment of the population first�children, for instance� made sense, or whether staging her outreach plan by geographic area or community was a better alternative. Dillow had access to the Vandalia EHR to inform her plan, but she needed to figure out what to do first."