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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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All About Trends

Mid-Day Update

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Zero Hedge

Housing Bubble Pop 2.0: Remodeling Collapses To 1 Year Low

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

On the way up, every sell-side strategist points to remodeling as a leading indicator for the housing recovery as confidence in the value of their home prompts real people to "invest" in upgrades and remodel their homes. That has been the story... until now. As NARI reports, the Remodeling Business Pulse (RBP) data of current and future remodeling business conditions show current condition ratings fell significantly in March - in fact they fell from multi-year highs to one-year lows as "homeowners remain slow to make the decision to move ahead with higher-priced projects."...



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Phil's Favorites

Cost Of "Breakfast In America" Soars To Highest In Over 2 Years

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Another day, another indication that 'real' inflation - the kind that reduces standards of living and leeches away purchasing power for 'real' people - is anything but under control... and anything but stable.

With the Oz-ians in the Eccles Building pulling levers to run the world based on their "inflation" measures, it seems that if the price of 'things that matter' soars but the Fed doesn't see them, there is no need to tighten. Last week we discussed the surge in the price of beef, ...



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Chart School

Dead-Cat Bounce Over for the Housing Market?

Courtesy of Doug Short.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

I have been saying this for a while: You can't have a housing recovery unless actual home buyers are involved.

We are very far away from seeing the housing market reach its 2005 highs ... and as time passes, it becomes clearer that this generation may never see them again.

How can I say that?

What we have seen in the housing market since then, but mostly since 2012, in my opinion, is nothing more than a dead-cat bounce scenario -- an increase in prices after a massive decline. The chart below shows how far off we are from the housing prices of 2005.


Chart courtesy of www.StockCharts.com

One of the key indicators I follow in ...



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Insider Scoop

GM Said It Has Shipped Thousands of Replacement Ignition Switches

Courtesy of Benzinga.

General Motors on Wednesday said it has shipped "thousands" of kits needed to repair the defective ignition switches linked to at least 13 deaths.

Partner content partner content url:  http://www.foxbusiness.com/industries/2014/04/23/gm-said-it-has-shipped-thousands-replacement-ignition-switches/?cmpid=prn_benz

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

...

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Market Shadows

Soy Numero Uno

Soy Numero Uno

By Paul Price of Market Shadows

Bunge Limited (BG) is the world’s largest processor of soybeans. It is also a major producer of vegetable oils, fertilizer, sugar and bioenergy.

When commodities got hot in 2007-08, Bunge’s EPS shot up and the stock followed, rising 185% in 19 months.

The Great Recession took its toll on operations, dropping EPS to a low of $2.22 in 2009.  Since then profits have recovered.  They ranged from $4.62 - $5.90 in the latest three years. 2014 appears poised for a large increase. Consensus views from multiple sources see BG earning $7.04 - $7.10 this year and then $7.83 - $7.94 in 2015.

...



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Option Review

Casino Stocks LVS, WYNN On The Run Ahead of Earnings

Shares in Las Vegas Sands Corp. (Ticker: LVS) are up sharply today, gaining as much as 5.7% to touch $80.12 and the highest level since April 4th, mirroring gains in shares of resort casino operator Wynn Resorts Ltd. (Ticker: WYNN). The move in Wynn shares appears, at least in part, to follow a big increase in target price from analysts at CLSA who upped their target on the ‘buy’ rated stock to $350 from $250 a share. CLSA also has a ‘buy’ rating on Las Vegas Sands with a $100 price target according to a note from reporter, Janet Freund, on Bloomberg. Both companies are scheduled to report first-quarter earnings after the closing bell on Thursday.

...

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Sabrient

What the Market Wants: Market Poised to Head Higher: 3 Stocks to Consider

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

Courtesy of David Brown, Sabrient Systems and Gradient Analytics

Yesterday, the market continued its winning ways for the fifth consecutive day.  The S&P 500 closed within 1% of its all-time high, and the DJI was even closer to its all-time high.  Healthcare, Energy and Technology led the sectors while Financials, Telecom, and Utilities finished slightly in the red.  All three sectors in the red are typically flight-to-safety stocks, so despite lower than average volume, the market appears poised to make new highs.

Mid-cap Growth led the style/caps last week, up 2.87%, and Small-cap Growth trailed, up 2.22%. This week will bring well over 100 S&P 500 stocks reporting their March quarter earn...



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OpTrader

Swing trading portfolio - Week of April 21st, 2014

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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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly. Click here and sign in with your PSW user name and password, or sign up for a free trial.

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Digital Currencies

Facebook Takes Life Seriously and Moves To Create Its Own Virtual Currency, Increases UltraCoin Valuation Significantly

Courtesy of ZeroHedge. View original post here.

Submitted by Reggie Middleton.

The Financial Times reports:

[Facebook] The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process. 

The authorisation from Ireland’s central bank to become an “e-money” institution would allow ...



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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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Pharmboy

Here We Go Again - Pharma & Biotechs 2014

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

Ladies and Gentlemen, hobos and tramps,
Cross-eyed mosquitoes, and Bow-legged ants,
I come before you, To stand behind you,
To tell you something, I know nothing about.

And so the circus begins in Union Square, San Francisco for this weeks JP Morgan Healthcare Conference.  Will the momentum from 2013, which carried the S&P Spider Biotech ETF to all time highs, carry on in 2014?  The Biotech ETF beat the S&P by better than 3 points.

As I noted in my previous post, Biotechs Galore - IPOs and More, biotechs were rushing to IPOs so that venture capitalists could unwind their holdings (funds are usually 5-7 years), as well as take advantage of the opportune moment...



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