Posts Tagged ‘FDA’

Big Pharma: Even Worse Than Used Cars as a Market for Lemons?

Big Pharma: Even Worse Than Used Cars as a Market for Lemons?

Courtesy of Yves Smith at Naked Capitalism 

Fruit at market

Some readers have wondered why this blog from time to time runs posts on the US health care system. Aside from the fact that it’s a major public policy problem in America, it is also a prime example of bad incentives, information asymmetry, and corporate predatory behavior. It thus makes for an important object lesson.

Reader Francois T pointed to an example, a commentary on a paper presented by Donald Light at the annual meeting of the American Sociological Association, “Pharmaceuticals: A Two-Tiered Market for Producing ‘Lemons’ and Serious Harm.” It still appears to be embargoed, but Howard Brody provides an extensive summary on his blog.

Light uses George Akerlof “market for lemons” as a point of departure. For those not familiar with the famed Akerlof paper, a “market for lemons” can occur when consumers are unable to distinguish product quality. The used car market is the paradigm, since the dealer has a much better idea than the buyer of whether a particular car is any good. Unscrupulous operators can stick a lot of hapless chump customers with overpriced clunkers. However, as crooked vendors become more common, buyers wise up a tad and are not longer to pay as much for cars they cannot evaluate. So while the prices buyers are now willing to pay are probably still too high for rattletraps, they are too low for decent cars. People with good merchandise start to look for other channels. Akerlof posits that the market eventually falls apart.

Note that used cars dealers did not set out to create lemons; the cars were bad deals by being overpriced (presumably, if they had been presented, warts and all, they still would have found purchasers, presumably people who thought they could repair them and those who wanted them for parts and scrap). Light contends, by contrast, that major pharmaceutical companies create bad products:

[T]he pharmaceutical market for ‘lemons,’ differs from other markets for lemons in that companies develop and produce the lemons. Evidence in this paper indicates that the production of lemon-drugs with hidden dangers is widespread and results from the systematic exploitation of monopoly rights and the production of partial, biased information about the efficacy and safety of new drugs…Companies will design and run their clinical


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After Avandia: Does the FDA Have a Drug Problem?

This could have been titled, "Does America Have an FDA Problem?"  My yellow highlighting and red comments. – Ilene

After Avandia: Does the FDA Have a Drug Problem?

MIAMI - JULY 14: A bottle of the diabetes drug, Avandia is seen on July 14, 2010 in Miami, Florida. Today, the U.S. Food and Drug Administration panel voted to recommend that GlaxoSmithKline PLC's (GSK) diabetes drug, Avandia, remain on the market despite concerns that the product could raise the risk of heart attacks. (Photo illustration by Joe Raedle/Getty Images)

By Massimo Calabresi with Alice Park, courtesy of TIME 

Five days before a 2007 article in the New England Journal of Medicine showed that the diabetes drug Avandia was linked to a 43% increase in heart attacks compared with other medications or placebos, a group of scientists and executives from the drug’s maker, GlaxoSmithKline (GSK), gathered in a conference room at the offices of the Food and Drug Administration in White Oak, Md. The GSK goal: to convince regulators that the evidence that the company’s $3 billion-a-year blockbuster drug caused heart problems was inconclusive. To do that, the GSK officials focused not on heart-attack data but on a broader, less well defined category of heart problems called myocardial ischemia. The most recent studies of Avandia, the GSK officials told the FDA, had "yielded information that is inconsistent with an increased risk of myocardial ischemic events," according to sealed court proceedings obtained by TIME.

What GSK didn’t tell the FDA was that on May 14, 2007, two days before the White Oak meeting, GSK’s Global Safety Board had noted that a new assessment of Avandia studies "strengthens the [cardiac-risk] signal observed in the [previous] analysis." Or that eight days earlier, the company’s head of research and development, Moncef Slaoui, had sent an e-mail to its chief medical officer saying Avandia patients showed an "increased risk of ischemic event ranging from 30% to 43%!" Or that the day before the meeting, the company had produced a preliminary draft report that showed patients on Avandia had a 46% greater likelihood of heart attack than those in a control group.

But the mixed-evidence argument GSK presented to the FDA worked. After months of deliberation, the agency decided to keep the drug on the market — a move worth billions of dollars to GSK but that also may have put millions of patients at risk.

Such examples of the drug industry’s outmaneuvering FDA regulators are disturbingly common, say both scientists and policymakers who follow drug approval and safety monitoring. More than 140 million Americans take at least one prescription drug in any given month, and they rely on the FDA to ensure those drugs are safe. That trust, the story of Avandia illustrates, is…
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Pfizer Caught Illegally Marketing Bextra, Feds Won’t Prosecute Because “Pfizer Too Big To Nail”

More twilight zone material: progress from the Pinto case stalled at the mercy of the "Too Big To Fail" doctrine. Undoubtedly backed by the misguided "rational human economic model."  In the Pinto case, punitive damages were awarded to prevent future corporate decisions to measure cost/benefits by putting a price tag on tag on human life….   Ilene

pinto Before the Ford experts left Washington to return to drafting tables in Dearborn they did one other thing. They managed to informally reach an agreement with the major public servants who would be making auto safety decisions. This agreement was that "cost-benefit" would be an acceptable mode of analysis by Detroit and its new regulators. And, as we shall see, cost-benefit analysis quickly became the basis of Ford’s argument against safer car design.

Cost-benefit analysis was used only occasionally in government until President Kennedy appointed Ford Motor Company president Robert McNamara to be Secretary of Defense. McNamara, originally an accountant, preached cost-benefit with all the force of a Biblical zealot. Stated in its simplest terms, cost-benefit analysis says that if the cost is greater than the benefit, the project is not worth it—no matter what the benefit. Examine the cost of every action, decision, contract part or change, the doctrine says, then carefully evaluate the benefits (in dollars) to be certain that they exceed the cost before you begin a program or—and this is the crucial part for our story—pass a regulation.

As a management tool in a business in which profits matter over everything else, cost-benefit analysis makes a certain amount of sense. Serious problems come, however, when public officials who ought to have more than corporate profits at heart apply cost-benefit analysis to every conceivable decision. The inevitable result is that they must place a dollar value on human life.

Ever wonder what your life is worth in dollars? Perhaps $10 million? Ford has a better idea: $200,000.  [Pinto Madness, Mother Jones, Oct. 1977]

Pfizer Caught Illegally Marketing Bextra, Feds Won’t Prosecute Because "Pfizer Too Big To Nail"

Courtesy of Mish

CNN Health has an interesting article detailing illegal marketing practices at Pfizer. However, government officials looked the other way because …
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Orphan Drugs Are Good! BioMarin Pharmaceuticals

Orphan Drugs Are Good! BioMarin Pharmaceuticals

Courtesy of Pharmboy

Sick child visited at

A rare disease, sometimes known as an orphan disease, is any disease that is not common. Typically, a rare disease has such a low prevalence in a population that a physician in a busy general practice would not expect to see more than one case a year. Most rare diseases are genetic--present throughout the person’s entire life, even if symptoms do not appear immediately. However, many rare diseases appear early in life, and about 30% of children with rare diseases die before reaching their fifth birthdays.

No single cutoff number has been agreed upon for which a disease is considered rare. A disease may be considered rare in one part of the world, or in a particular group of people, but still be common in another. In the United States of America, the Rare Disease Act of 2002 defines rare disease strictly according to prevalence, as any disease or condition that affects less than 200,000 persons in the United States, or about 1 in 1,500 people.

BioMarin’s (BMRN) core business and research is in enzyme replacement therapies for orphan diseases. They are the first company to provide therapeutics for mucopolysaccharidosis type I (MPS I), by manufacturing Aldurazyme (commercialized by Genzyme Corporation). BioMarin is also the first company to provide therapeutics for Phenylketonuria (PKU)

As of 2005, BioMarin commercialized arylsulfatase B (Naglazyme) as an enzyme replacement therapy for the treatment of mucopolysaccharidosis VI (MPS VI), and in 2007 a drug version of tetrahydrobiopterin (Kuvan), the first medication-based intervention to treat phenylketonuria.

On 11/30/09, BioMarin announced that the FDA has granted orphan drug designation for 3,4-diaminopyridine (3,4-DAP), amifampridine phosphate, for the rare autoimmune disease Lambert Eaton Myasthenic Syndrome (LEMS). 3,4-DAP has previously received orphan drug designation in the E.U. Also, in October 2009, the Committee for Medicinal Products for Human Use of the European Medicines Evaluations Agency adopted a positive opinion recommending approval of amifampridine phosphate for LEMS. If approved by the European Commission, amifampridine phosphate will be the first approved treatment for LEMS, thereby conferring orphan drug protection and providing ten years of market exclusivity in Europe. BMRN expects to meet with the FDA in early 2010 to determine the necessary regulatory path for
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Zero Hedge

Frontrunning: March 27

Courtesy of ZeroHedge. View original post here.

  • Markets Slide on Doubts that Trump Can Deliver (BBG)
  • Dollar hits four-month low as Trump trade deflates (Reuters)
  • These Charts Show Alarm Bells Ringing on Trump Trade (BBG)
  • White House may court Democrats on tax reform (...


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ValueWalk

Six Graphs that Reveal Big Problems for Student and Auto Loans

By Mises. Originally published at ValueWalk.

Student and auto loan debt via Mises

The New York Fed’s most recent household debt report showed ballooning debt and delinquency in student and auto loans. Total household debt has just about reached its previous late-2008 high of over $12.5 trillion.

You’ll notice that housing debt (blue) has not increased much since its 2013 low, meaning that the increases in total debt have mostly come from non-housing debt (red). A closer look at the composition of non-housing debt reveals that the biggest increases in debt have come from student and auto loans (red and green, below).

In fact, the numbers make it look like the housing bubble was almost exactly replaced by new bubbles in education and cars....



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Chart School

Weekly Market Recap Mar 26, 2017

Courtesy of Blain.

Tuesday’s long overdue >1% selloff in the S&P 500 broke a very long and rare streak in the S&P 500.   The S&P 500?s streak without a 1% down day was the longest since May 18, 1995!  A marginal close lower Monday was followed by a 1.2% drop Tuesday (the NASDAQ fell 1.8% that day).

“I think that investors are kind of starting to discount the likelihood of the immediacy of [President Donald Trump’s] policies and the enthusiasm has come off the boil as a lot of his policies got mired in the legislative process,” said Jack Ablin, chief investment officer at BMO Private Bank. “Investors are not throwing in the towel but they are resetting their expectations.”

According to Bespoke, there have been only 11 instances since 1928 where the S&P 500...



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Phil's Favorites

EU Ponders Opening Its Brexit Strategy Book, Asks UK to Do the Same

Courtesy of Mish.

Here’s a negotiating strategy I am quite certain Donald Trump would never consider: EU looks at revealing negotiating positions for Brexit.

Brussels is considering publishing its main negotiating positions in Brexit talks, adopting a policy of full transparency that may wrongfoot the more secretive British side.

“The unity of the 27 will be stronger when based on full transparency and public debate,” Mr. Barnier said in a comment piece for the Financial Times. “We have nothing to hide.”

Theresa May, Britain’s prime minister, has, by contrast, said it is vital to “maintain discipline” and avoid disclosures tha...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Treasury Bears on Reflation Train Face Peaking Price Pressures (Bloomberg)

Investors need to contend with the waning impact of energy base effects on inflation and a terminal rate that lacks momentum before they can aspire to push interest rates higher.

One of Wall Street's most steadfast bulls is worried about stocks (Business Insider)

In a note sent to clients on Friday, Lee said several factors that had supported his views on the market, including attractive valuations and central-bank support, had turned neutral or possibly ne...



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Members' Corner

More Natterings

Courtesy of The Nattering Naybob

[Click on the titles for the full articles.]

A Quick $20 Trick?

Summary

Discussion, critique and analysis of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:

  • Last time out, Sinbad The Sailor, QuickLogic.
  • GlobalFoundries, Jha, Smartron and cricket.
  • Quick money, fungible, demographics, QUIK focus.

Last Time Out

Monetary policy is just one form of policy that effects capital,...



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Kimble Charting Solutions

Fund flows of this size could mark a top, says Joe Friday

Courtesy of Chris Kimble.

A year ago flows into ETFs were extremely low, actually the lowest in years, as many stock market indices were testing rising support off the 2009 lows. The crowd wasn’t adding money to ETFs as lows were taking place. In hindsight, this was a mistake by the majority. Below I look at ETF flows over the past few years with an inset chart of the S&P 500.

CLICK ON CHART TO ENLARGE

Nearly three months into this year, fund flows have surpassed mone...



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OpTrader

Swing trading portfolio - week of March 20th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Digital Currencies

Bitcoin Tumbles Below Gold As China Tightens Regulations

Courtesy of Zero Hedge

Having rebounded rapidly from the ETF-decision disappointment, Bitcoin suffered another major setback overnight as Chinese regulators are circulating new guidelines that, if enacted, would require exchanges to verify the identity of clients and adhere to banking regulations.

A New York startup called Chainalysis estimated that roughly $2 billion of bitcoin moved out of China in 2016.

As The Wall Street Journal reports, the move to regulate bitcoin exchanges brings assurance that Chinese authorities will tolerate some level of trading, after months of uncertainty. A draft of the guidelines also indicates th...



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Mapping The Market

Congress begins rolling back Obama's broadband privacy rules

Courtesy of Jean Luc

I am trying to remember who on this board said that people wanted to Trump because they want their freedom back. Well….

Congress begins rolling back Obama's broadband privacy rules

By Daniel Cooper, Endgadget

ISPs will soon be able to sell your most private data without your consent.

As expected, Republicans in Congress have begun the process of rolling back the FCC's broadband privacy rules which prevent excessive surveillance. Arizona Republican Jeff Flake introduced a resolution to scrub the rules, using Congress' powers to invalidate recently-approved federal regulations. Reuters reports that the move has broad support, with 34 other names throwing their weight behind the res...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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Biotech

The Medicines Company: Insider Buying

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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