Effect Measure

Ten days ago Secretary of Health and Human Services Kathleen Sebelius announced that the US government was allocating $1 billion to help companies with production costs for a swine flu vaccine. Among the beneficiaries was French vaccine giant, Sanofi-Aventis, whose Sanofi Pasteur unit got a $190 million order. It was likely only the first in a series of expected orders for the company. Sanofi knows how to make vaccines. So what could go wrong?

Drugmaker Sanofi-Aventis has agreed to pay nearly $100 million to settle allegations it cheated Medicaid on the cost of nasal sprays.

The Justice Department said Aventis Pharmaceutical Inc., a wholly owned subsidiary of Sanofi-Aventis U.S. LLC, has agreed to pay the government $95.5 million to settle the charges.

The government charged that between 1995 and 2000, Aventis and its corporate predecessors did not offer Medicaid the best prices for the sprays Azmacort, Nasacort and Nasacort AQ.

[snip]

Under the law, the company was required to tell Medicaid the lowest price that it charged companies for those products, and offer state Medicaid programs rebates based on those prices.

Prosecutors contend that in order to dodge that obligation, Aventis entered into a private deal with the HMO Kaiser Permanente that repackaged Aventis drugs under a new label, allowing them to overcharge Medicaid programs for the same product. (Devlin Barrett, AP; hat tip Health Care Renewal)

In other words, this supposedly ethical company cheated the program that provides medical care for this country’s poor by colluding with a large HMO to disguise the fact it sold its product to others at a cheaper price. Roy Poses at Health Care Renewal asks some pertinent questions related to the fact that while Sanofi-Aventis is not a person, the decisions to cheat the government and through it the poor, was made by specific people:

. . . while human beings authorized or committed the acts that got the organization in trouble, rarely do these people seem to suffer any negative consequences. At most, the organization may pay a fine. In this case, the fine was, in corporate terms, of modest size. However, even a large fine, however, may come out of dividends or the stock price, dispersing the cost to stock-holders, or out of salaries across the board. Thus, those who got the organization into trouble are unlikely to feel pain from it. Perhaps because of reverence for all organizations related to health care, and fear that the bankruptcy of any health care organization, even a health care insurance company, will leave patients in the lurch, prosecutors do not seem inclined to actually prosecute such organizations. The net effect, though, seems to be that dishonest executives of health care organizations can continue to act with impunity.Until bad leadership of health care organizations leads to negative consequences for those practicing it, health care leadership can be expected to continuously degrade. (Roy Poses, HHealth Care Renewal)

The US attorney who helped negotiate the settlement said the government will “vigorously investigate those who scam the Medicaid system.”

He said this just days after that same government placed a $190 million dollar order for a swine flu vaccine. Since there isn’t enough vaccine productive capacity, declining to do business with Sanofi-Aventis is not an option. Bigger fines and considering possible criminal prosecutions would seem to be.

I hope Secretary Sebelius counts the silverware after dealing with these crooks.

Comments

  1. #1 Snowy Owl
    June 2, 2009

    As someone who does regularly my around the World Medical Media Tour, (I read many languages and probably soon be writing proper Englidh, lol), I only see one place in the World where deontological Big Pharma pratices and fair limits on profit can be Imposed and it is only in the US that can be done.

    Other countries do not have enough buying powers nor anti-lobby rempart to not be dragged by Big Pharma.

    Secratary Sebelius can cast two objectives in one motion if she introduce legislation or regulation on Big Pharma.

    Snowy

  2. #2 Orac
    June 2, 2009

    Jumpin’ Jesus on a pogo stick. The antivaccine nuts will have a field day with this.

  3. #3 revere
    June 2, 2009

    orac: Meaning we shouldn’t call them on it?

  4. #4 isles
    June 2, 2009

    FWIW, I think sanofi pasteur is a pretty distinct business from sanofi aventis, even though it is a subsidiary.

  5. #5 Orac
    June 2, 2009

    Meaning we shouldn’t call them on it?

    I would have hoped that you would realize that that’s not what I meant at all to the point where you wouldn’t have even asked a question like that, but apparently I was wrong. I didn’t realize your opinion of me was so low.

  6. #6 Anthony
    June 2, 2009

    Meaning we shouldn’t call them on it?

    Meaning, IMHO, every time the pharmaceutical companies pull a stunt like that they undermine the good they do, reduce public trust in them as an industry and science more generally, and endanger public health. It’s about time they thought about the long-term consequences of some of their actions.

    And yes, they should be called on it until they stop doing it.

  7. #7 FreeSpeaker
    June 2, 2009

    Not only should they be called on it, but the “calling” should be by mainstream medicine. It should be loud and long, and drown out the nut cases.

  8. #8 Lobster
    June 2, 2009

    What a narrow tightrope we walk when it comes to healthcare. If we need it, we must fund it. If it isn’t profitable, no one wants to do it. Thus taxpayer dollars go to developing treatments the taxpayers can barely afford.

  9. #9 Kathleen Seidel
    June 2, 2009

    I agree with Anthony. I also share Orac’s dismay at the inevitable exploitation of a story like this — a story that must be told — by self-serving crusaders like the chest-pounder J.B. Handley, Botoxing careerist Jenny McCarthy, celebrity suck-up Dr. Jay Gordon, and their increasingly fanatical ilk, who routinely and publicly exaggerate the risks of vaccines, minimize the risks and welcome the resurgence of vaccine-preventable diseases, and ultimately seek to dissuade others from vaccinating at all.

  10. #10 Tom DVM
    June 2, 2009

    If we are ever going to get ahead, we will have to go back and carefully examine what worked in our parents generation.

    The astonishing speed and effectiveness by which we responded to the Polio outbreaks of the 1950′s was public funded through Connaught Laboratories…also publically owned.

    The not for profit models that survived into the 1970′s and disappeared with our or rather their preoccupation with Globalization…

    …which history will eventually show benefited the chosen ‘few’ and the expense of the ‘everbody else’.

  11. #11 revere
    June 2, 2009

    orac: My opinion of you remains high. I just wasn’t sure what you meant. You explain (I think) it was just a statement of fact. It could well have meant more, e.g., that there should have been either a balancing of consequences or that I should have phrased it differently. My question was also meant to be straightforward and no offense was intended.

  12. #12 Mathfizz
    June 2, 2009

    This is a comment on the swine flu situation in general, not related to this specific topic.

    I have been trying to estimate reasonable figures for the death rate for swine flu. I’ve used the WHO website’s numbers of “laboratory-confirmed cases” by country.

    The simplest way is to divide the current deaths by the current confirmed cases, giving 1/151. Suppose 20% of the US population gets swine flu by the end of the next season (Australian authorities are suggesting up to 1/3 of us this season). Then we can convert 1/151 to a number of US deaths by the end of next season, and dividing by the oft-quoted (but perhaps unreliable) average flu death figure of 36000, gives a relative figure to compare to average flu seasons. The answers (for 1/151) are 405k deaths, or 11 times worse than average.

    Looking at the WHO tables, however, it’s clear that Mexico is very much an outlier, with nominal death rates of 1-2%. So excluding Mexico, effectively means we can just look at the US numbers (the Canadian numbers look comparable).

    The simplest figure for the US is 15/8975 = 1/598, giving 102k deaths, or 3 times average.

    However this is probably quite optimistic, as swine flu deaths, I’m guessing, tend to occur (on average) some time after (laboratory-confirmed) diagnosis. So we should divide the current deaths in some time period by the number of confirmed diagnoses some time, 7 or 14 days perhaps, earlier. Then the US death rate figures become somewhere in the range 1/200 – 1/400 (very roughly), resulting in 153 – 307 k deaths, or 4-9 times worse than an average flu season.

    So much for a “mild” disease. And, of course, indications are that instead of this flu knocking off grandpa and grandma in the nursing home, it will be killing the grandkids and their mums and dads.

    To get more precise estimates, I would need detailed information on how long after confirmed diagnosis the US deaths have occurred.

    If some of the hospitalized cases only survived thanks to extended time on respirators (or other ICU care) then average death rate figures obtained in the early stages may be considerably smaller than those that result when such equipment is in short supply.

  13. #13 revere
    June 2, 2009

    mathfizz: Unfortunately the problem is more difficult than you portray. Minor point: you are describing a case fatality ratio, not a death rate, but that’s just terminology. The problem is that we don’t have either the numerator (as you point out it is right censored) or the denominator (the total number of infections). The sources of info you use are probably seriously biased, although in which direction and by how much we don’t know. So trying to calculate a CFR from biased data only provides a biased CFR. We’ll have to wait for better data to get a better estimate. We discussed this here.

  14. #14 Noadi
    June 2, 2009

    Here are my thoughts on this just as an interested layperson not a doctor (so if I’m wrong let me know). The other strains of flu aren’t going away, they’ll be circulating as usual this flu season and causing serious disease and death mostly in the elderly and very young. Swine flu so far appears to mostly affect those under 55. If that pattern holds with the difference in victims I think we’re going to see a lot more total flu deaths this flu season even if Swine Flu has the same mortality as typical strains.

  15. #16 revere
    June 2, 2009

    Noadi: You could be right — or not. It is quite possible that the new seasonal strain will outcompete the others and it will be the only one left. Or it could disappear. Or all three could circulate simultaneously (along with flu B), which would be almost unprecedented. We don’t know. But your scenario is certainly very plausible.

  16. #17 Snowy Owl
    June 2, 2009

    Fukuda say’s

    As for the furious illness the average age is 20 to 40 years old.

    He sais that we are looking at severity something as mild, moderate and severe.

    A severity index that will indicate the severuty and what Nations has to implement as a response.

    Snowy

  17. #18 Snowy Owl
    June 2, 2009

    Jason Gale relay the message via
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aT9sIzRoUnNo&refer=home

    Excerp

    The Geneva-based agency, sometime in the next 10 days, will declare the first flu pandemic in 41 years, said the people, who spoke on condition of anonymity because the WHO’s deliberations are private. WHO is using the time before the announcement to help member states prepare.

    “We held a series of consultations with public health officials and academics around the world to understand their concerns and get their advice about moving to level 6,” said Dick Thompson, a WHO spokesman in Geneva. “We are not at phase 6. We’re just exploring the issues associated with announcing a pandemic.”

    ‘Wake-Up Call’

    Following yesterday’s discussion, the WHO is considering a three-point scale to denote different levels of severity once phase 6 has been declared, Keiji Fukuda, the agency’s assistant director-general of health security and environment, said on a conference call with reporters today. The experts said that besides assessing severity, the agency should offer tailored guidance to countries on how to respond to a pandemic, he said.

    “WHO over the past few years has taught the public that a pandemic is a very dangerous thing,” said Peter Sandman, a New Jersey risk-communication consultant whose client list includes the U.S. Department of Homeland Security and the WHO. “If you declare a disaster every time something small happens, then eventually declaring a disaster isn’t a wake-up call.”

    from Jason Gale at Bloomberg

  18. #19 rayj
    June 2, 2009

    Using inflammatory phrases such as “crooks and liars” seems unproductive and inaccurate. Two issues are being confused: (1) can a firm be trusted to produce safe and effective vaccine, and (2) can their Accounting department pay more attention to the contractual details of doing business in a complicated health care market. With a little thought, and a little less rhetoric, I think you could agree to both of these in the case in question.

  19. #20 revere
    June 2, 2009

    rayj: If you think this was an accounting problem, then I have a used Volvo for you. Low mileage. 15 years old, but drives great. Except for the exhaust. That’s an accounting problem. My accounts. If you want unproductive, then a modest fine is unproductive.

    I’ll stand by crooks and liars.

  20. #21 Mathfizz
    June 2, 2009

    Revere: I wasn’t clear. The only reliable figures I have access to are the WHO laboratory-confirmed swine flu cases and deaths. So I was trying to estimate the likelihood of death for someone who has been laboratory-confirmed to have swine flu (and reported to the WHO) – I’ll call this the WHO-CFR if you like. Then the numerator should be (almost) exact. The denominator can be made (statistically) exact if I’m told when each of the cases that died were first reported to WHO as laboratory-confirmed cases (ie we can correct for the right censoring). Or do you believe that there are laboratory-confirmed swine flu cases and deaths in the USA that are not being reported to WHO?

    Then, as you refer to, and as previously posted by you, we can get into debates about the true CFR, with unknown extras on the numerator (swine flu deaths not reported as such) and (a probably relatively larger effect) swine flu infections unreported. It’s the latter, I’m guessing, that’s responsible for Mexico’s very high WHO-CFR. I’m also guessing that, at the moment, the percentage of swine flu cases in the US who get laboratory-confirmed is much higher than normal flu, and may be approaching 100%. (Of course, if there are lots of very mild cases, this won’t be the case.)

  21. #22 revere
    June 2, 2009

    mathfizz: It depends on what your objective is. The WHO numbers are based on data that are certainly biased in the sense that not every infected person has an equal chance of being in the denominator (even if we consider it just a sample of all the cases). The same is true of the numerator. Since we don’t know what the sampling fraction is in either case, we also don’t have any good estimate of the CFR. If the only question is, “what is the risk of dying, given that you were reported to WHO as a lab confirmed case” then it is a better estimate, although its meaning is unclear. Plus, it is right censored and the numerator probably doesn’t represent all the deaths. So you can carry out the exercise, but I’m not sure what it is telling us.

  22. #23 River
    June 2, 2009

    Revere, as you know, the WHO is considering a three level severity scale to accompany a declaration of a pandemic: mild, moderate, and severe. What is the purpose of the scale? Wouldn’t it be counterproductive in regards to the welfare of the general population. If the level is “mild”, most folks will disregard the pandemic (as they are now). If it is “moderate”, only folks in areas where the flu is disrupting daily life will prepare. If it is “severe,” most folks will panic and within hours of the declaration and begin clearing out store shelves. What are your thoughts of the severity scale?

  23. #24 phytosleuth
    June 3, 2009

    How can anyone estimate cases in the U.S. when New Mexico is now only reporting hospitalized cases, some states aren’t reporting on their health department websites at all anymore and the CDC numbers are at odds with the state numbers themselves (not only 4 days late but sometimes they don’t match at all).

    I mean, it’s not like the numbers are going down suddenly. In fact, they look like the cases are expanding in many states…oh, and around the world. Is this the time to stop testing or reporting test results? Am bewildered.

  24. #25 M. Randolph Kruger
    June 3, 2009

    Now… isnt it strange that we have been in a non-pandemic/pandemic for the last two months and they are just now calling it. Isnt even more amazing at the purchases of flu vax stocks by all of these people that aint Republicans and they aint Rumsfeld.

    Its all good. The Sun King reigns and the earmarks are still there, we are 63 trillion in debt, and now we have a pandemic…officially.

    http://www.bloomberg.com/apps/news?pid=20601202&sid=abFpa.MBcrYo&refer=industries

  25. #26 MM
    June 3, 2009

    Thanks for the post phytosleuth. I am bewildered with the CDC response as well. They no longer want reports on hospitalizations and no case investigations period. Can anyone comment on this?

  26. #27 revere
    June 3, 2009

    MM: CDC has said they are moving to the system they use for seasonal flu. There are so many cases that it is not cost effective to do individual investigations and contact tracing for each one. They are looking for large scale patterns and using their resources for focused studies to determine attack rates, CFRs, etc.

    tate and local health departments cannot confirm and diagnose all these cases because we have weakened them. So we shouldn’t complain. We as an electorate said we don’t want to pay taxes. We claim we know what to do with our money better than the government. So we should go out and collect the data we are not paying the government to collect. Go ahead. Use your $600 tax rebate and get the information.

  27. #28 revere
    June 3, 2009

    Randy: If you don’t like earmarks, maybe you should talk to your (Republican) Senator:

    http://www.legistorm.com/earmarks/details/member/2/Sen_Lamar_Alexander/page/1/sort/amount/type/desc.html

  28. #29 phytosleuth
    June 3, 2009

    Revere, that the CDC and states can’t afford to test everyone is reasonable, but this was one of the few ways a citizen can assess what this flu is doing in their neck of the woods.

    What do we do now? I am thinking we need a grassroots effort to locate flu cases. Something like Crowdsourcing Crisis Information effort in Africa:

    http://www.ushahidi.com/

  29. #30 revere
    June 3, 2009

    phyto: I suppose it depends on what we wish to accomplish. If the question is whether there is widespread flu in your area, CDC does provide that info on Fluview (at the CDC site). Virtually all flu A these days is novel H1N1, so if that’s the question I think it’s answered. There is a crowdsourcing effort (I blogged it once; I think it’s called Who is Sick? or something like that) and Jon Brownstein at Boston Children’s Hosp. has been experimenting with Google for this (see his article in NEJM early May).

  30. #31 phytosleuth
    June 3, 2009
  31. #32 walrus
    June 4, 2009

    Drug companies don’t exist to do good. They exist to make a profit any way they can, as much as they can. There idea of good business is to take your last dollar as you take your dying breath.

    I’ve seen their handiwork from the commercialisation of medical research side. Drug companies don’t do research themselves, most of their products are discovered by universities, then backed by venture capitalists to up to and including phase II trials.

    At that stage the drug company might be interested. First they will try and steal your research. If they can’t do that, they will try and destroy your company and buy the results for pennies. If they can’t do that, they will only then negotiate, and still try and cheat you.

    We had a very promising replacement for opiates. Non addictive, no side effects, orally active, and very very effective. We were handed back the licence after Two years by a certain drug company “not profitable compared to nice, addictive, opiates” was the verdict. Go figure.

  32. #33 Jonathon Singleton
    June 7, 2009

    Revere writes, “Since there isn’t enough vaccine productive capacity, declining to do business with Sanofi-Aventis is not an option…”

    I’ve been reading CIDRAP News’ “Obama seeks more funds for novel flu fight” By Robert Roos, News Editor (Jun 5, 2009), attempting to make some sense of the economic cost vaccinating three hundred million Americans will actually run to under the current Sanofi-Aventis and Glaxo dominated model.

    Yeah indeed, the Obama government have placed a $US180 million order for an adjuvant efficient, low cost, and single shot Australian CSL-made swine flu vaccine. But the lion’s share of investment in vaccine production still goes to a Sanofi-Aventis and Glaxo model utilizing inefficient vaccine production technology (in antigen and adjuvant mixing and the two shot dosage required for patient vaccination — see below).

    I was rather surprised by Dr. Paul Jarris’, executive director of the Association of State and Territorial Health Officials (ASTHO), estimate that a nation-wide US H1N1/2009 vaccination campaign could cost as much as $15 billion.

    Like I have done, Dr. Jarris could contact the University of Melbourne’s Professor Lorena Brown (see below letter excerpt) to investigate further the cost-cutting efficient science of CSL Biotherapies’ single dose ISCOMATRIX version of the H1N1/2009 vaccine!?!

    Excerpt: “In an interview this week, Jarris said that 600 million doses of an H1N1 vaccine — two doses per American — could cost about $6 billion ($10 per dose). Administering the vaccine might cost another $15 per dose, or roughly $9 billion, he said.

    “We need to make sure we have the people and resources to give the vaccine to people, which is on the order of $15 per dose,” he said.”

    *************************************

    Effect Measure — “Swine flu: cruise to nowhere” By Revere (May 29, 2009)
    http://scienceblogs.com/effectmeasure/2009/05/swine_flu_cruise_to_nowhere.php

    Edited reader posting #14 by Jonathon Singleton (May 30, 2009):

    I’m saddend by the news US Department of Health and Human Services (HHS)’s Kathleen Sebelius has directed $1 billion toward clinical studies and commercial production of bulk H1N1/2009 vaccine antigen utilizing inefficient aluminum phosphate adjuvants [inefficient vaccine production technology from both Sanofi-Aventis and Glaxo]…

    Spending a significant percentage of one billion taxpayer dollars on inefficient vaccine technology (adjuvants) when antigen supplies are in short global supply is criminal… Global biopharmaceutical companies are playing a stupid game here and US politicians have a responsibility to override the entire mess and act in the best interests of the public…

    ************************************

    To: “Professor Lorena Brown”

    Thursday, May 28, 2009

    Dear Professor Brown, I’m a freelance transgenic pathogen research analyst working from the Westcoast of Australia. I hope you don’t mind me publicly writing and asking a couple of questions. Your name was referenced for further queries in the May 20. J. Virol abstract (see below)…

    Note: Adjuvants are compounds that enhance a vaccine’s immune response, offering the possibility of stretching antigen supplies. Conventional aluminum phosphate (eg. AlPO) adjuvants are much, much, less efficient compared to the recently developed Aussie CSL adjuvant, ISCOMATRIX.

    Professor Brown, you don’t have to convince me of the value of CSL Limited’s adjuvant technology — I’ve done the research. I’ve been attempting to read up on Glaxo’s proprietary adjuvant system, AS03, but there’s not a great deal of info around. I believe it’s a tweaked version of one of the inefficient aluminum phosphate types. I find it very odd the American government are utilizing taxpayer dollars to purchase a less efficient adjuvant — both of us know H1N1/2009 antigen supplies will be limited over the next few months and require the most efficient adjuvant available to increase the number of vaccinations available to the US public at risk from this hyper-evolving cross species virus (an unpredictable virus at risk of swapping genes with H5N1 and/or developing antiviral drug resistance)!?!