I learned this week that another valued colleague has “retired” due to the stress of office practice brought on by insurers and government. He went to take a part-time VA job. His patients are scrambling to find someone to provide their care. The sick ones are learning that nobody is eager to help them.

Why do we have this state of affairs? In 1996 the government took over the pay scales for Medicare, Medicaid, and Tricare. For several years, they kept the system as it was set up to provide a fair reimbursement that was tied to the cost of care. However, Congress required that they pay the doctors less whenever the cost of the program grows. Since more and more people are going onto Medicare all the time, the cost of the program has grown. Each year Congress has had to act to prevent what are now draconian cuts in pay (over 30%) mandated by the law, and laws have been passed to keep the rates stable or increase 1%. The situation has resulted in the current payments being 25% below 2000 levels, and well below the cost of providing the care. YES I SAID THE GOVERNMENT PAY SCALE IS BELOW THE COST OF PROVIDING THE CARE (By about 25%). Furthermore, it is illegal to collect more, without leaving the Medicare system entirely, and having the patient sign a contract. In that case, we have to leave Medicare at least TWO YEARS, and if a patient were to see us, the patient cannot submit the claim to Medicare for reimbursement (Patient gets no money from the government for the care).

This is the madness we are dealing with. Every 4-6 months. Due to Congress (president gets the blame also for lack of leadership).

Right now we are told that next month we will be paid more than 30% less for the same work. Since this is about half the cost of caring, this it like saying the government will shut us down in a month. And we put up with this crazy scenario multiple times a year.

So our cost to provide a complex visit may be $200, and we are allowed to charge $160, get paid $140 by the insurer, and they patient has to pay $20, that means $40 has to come from someone else. I am told by my wife that her hair salon visit can run over $200.

In a strange quirk, the system pays the doctor less for every additional minute spent with a patient. This means if I spend 45″ with each patient (often required for a complex case), I get paid half as much per minute as doing simple work which could be done in 15″.  This means doctors either have to lose money taking care of ill people, or refuse to take care of them.

The government has also tweaked the numbers from the originally fair system in 1996 in order to cheat the system further. For example, if you have a procedure with an expensive piece of equipment which requires specialized personnel, the rate is supposed to take into account the cost of maintaining the equipment and how often it is used. So they just adjust the numbers from using it 10% of the time to 90% of the time and pay us less. The other result of the 1996 law, is that they have the last say in setting the rate. We cannot sue, appeal, or have any means to correct the insanity. We can of course write a letter. Wow.

This problem is made worse by several additional factors beyond our control. First, the government in many cases prevents us from collecting the balance. If someone who is poor on Medicaid and Medicare, we are preventing from charging them for anything. This means if the doctor will not accept their insurance, we either give them the care for free or do not see them. In our state and many others, it is ILLEGAL to charge people with Medicaid, so even if someone else wants to pay from them to see the doctor, they cannot do it. This is healthcare prison of course. Did you know that the ObamaCare plan will extend this to most Americans?

Only because the government set these rates, all the insurers now demand them as well. So where does it come from? Nowhere in many cases. Large institutions have market power to negotiate better rates.

So how do some doctors cope? Some quit, especially older good ones. Others have stopped seeing Medicare patients. Some overuse tests which help cover the overhead.

Others do poorer quality care. I have colleagues who see a complex case in less than 10 minutes, don’t review any of the history or records, and shove the patient out the door with a half-baked opinion and fraudulent documentation of what was done during the encounter. They make a lot of money like this. They are called “productive”. This care is unacceptable. These doctors seem to experience little reprisal for this dismal care, indeed, they make a lot of money doing this,  and I have many patients who recount the behavior to me in disbelief. The experienced consumer of health care, who is the chronically ill person, can easily distinguish these doctors. They ask me what should be done about them. I always ask, “did you report what happened to the hospital/medical board/etc?” They never do, and the bad care continues, and the doctor continues to be paid well for doing this bad job.

Other doctors order unnecessary tests. Some practices do multiple tests on everyone like a mill. Usually they are treating the poorest patients on Medicaid. The system pays them and they see many patients and order many tests it is quite profitable. But they will not care for the sicker patients.

Doctors can’t insist on more money from government or insurers. Doctors are BY LAW prevented from negotiating as a group with insurers. We would go to jail. We are not permitted to strike. We always will see someone in an emergency.

How will the system change? Good care is always available, but it will cost you. The good experienced doctors will be inaccessible to people on Medicare, Medicaid, TRICARE, and many of the more profitable insurance companies (United, CIGNA, Aetna). You are going to see more nurses, get lots of mediocre care if you do not act more choosey, and pay more out of your pocket for good care. Why? the government and the insurers are pocketing the savings of paying less than the cost of the care.

The younger generation of doctors is not as committed as the older one. I have interviewed many of these folks and many want to take home a paycheck, work half-time, and have no responsibility. They don’t want to work for the outcomes and feel just as entitled as the patients to good treatment. It is not going to be pretty when they enter the new Obamacare era.

You can change it by insisting that Congress fix the Medicare system properly.

October 11, 2011

For the first time, the congressional advisory committee MedPAC has recommended that Congress should cut Medicare payments to physicians in exchange for ending the Medicare Sustainable Growth Rate (SGR) formula.

If these recommendations are passed by Congress, as a specialist, we will lose approximately six percent of your Medicare payments each year for the next three years. After that your pay will be frozen for another seven years.

This recommendation threatens the very core of neurology—the direct face-to-face time with patients—yet protects reimbursement for non-specialty physicians.

This means effectively that a specialist, with 8 years of graduate medical training, will be paid less than a nurse with less than two years graduate training. This “solution” is unacceptable, which is why we need all AAN members to send a message to Capitol Hill today.

This means that specialists would STOP TAKING MEDICARE ALTOGETHER.

Tell your representatives to reject MedPAC’s outrageous proposal.

Contact Your Legislator!

http://www.usa.gov/Contact/Elected.shtml

Last week Merck KGaA (not the same company as Merck in the USA), the parent company of EMD Serono in the USA, made a decision to halt development of oral cladribine for multiple sclerosis, and withdraw it from the market in Russia and Australia where it had recently been approved. Cladribine had recently been denied approval by both the US FDA and the European Union regulatory agency.

This step backwards for progress in multiple sclerosis cries out for us to analyze and scrutinize the missteps of pharmaceutical companies and regulators. We have lost a tremendous amount of time and resources in the development of a promising therapy for multiple sclerosis.

Why give up? Merck KGa cites discussions with US and European regulators which indicated that ongoing clinical trials would not produce sufficient data to address regulatory concerns (interpret this as safety), more trials would be required (interpret this as expensive) and given the appearance of several new competitors for this market within 1-2 years. The cost of the program thus far – 600 million Euros or about 800 million US dollars.

So how did this go wrong? You will have to hear a long story. Drug development is an expensive and long process, and cladribine is no exception.

Cladribine (2-chlorodeoxyadenosine) was designed in the 1980s by a brilliant Scripps-trained biochemist using information arising from an understanding the genetic defects of severe combined immunodeficiency syndrome, better known as “bubble boy syndrome.” These rare and unfortunate children have a genetic defect in purine metabolism (adenosine deaminase deficiency) from birth which results in an accumulation of certain building blocks of DNA (purines) within key immune cells (lymphocytes), resulting in the death of these cells and severe defects in the immunity which they provide. The biochemist designed cladribine to temporarily cause a similar condition which would kill a large number of lymphocytes in a normal person.

Cladribine was conceived as a “magic bullet” drug and first used to treat cancers of lymphoid tissue, with great benefit for hairy cell leukemia. See more information (http://en.wikipedia.org/wiki/Cladribine ).

When this drug was approved for hairy cell leukemia in 1994, Dr. Jack Sipe, a neurologist at Scripps Clinic in San Diego, proposed it be used for MS to reduce harmful immune cells and preserve those which are required to fight more common infections. Dr. Sipe performed several research trials with the injectable drug in the 1990s with the drug in severely affected MS patients with benefit.

A few concerns had arisen during this research. First, a death occurred in the small trial at Scripps from severe liver failure. I remember this being reported about 1995 at the big neurology meeting. Subsequently, when Dr. Sipe published the treatment data regarding cladribine, no mention was made of any death. Colleagues asked “what happened to the dead guy?” Sipe’s defense was that experts had looked the case over and decided the death was unrelated. Few were convinced. However, work proceeded with a larger multicenter international trial which was still small by modern comparisons. Dr. George Rice and colleagues found that in more serious MS, clinical benefit could not be demonstrated, but benefit on MRI was outstanding, and the work published in 2000 (http://www.neurology.org/content/54/5/1145.abstract ). Dr. Sipe also published a small study of relapsing MS showing clinical benefit (http://msj.sagepub.com/content/1/6/343.abstract ).

 This work ultimately led Serono (a swiss-italian company), working with IVAX, to acquire the rights to oral development of the drug for MS. Serono was experienced at MS drug development having developed and marketed Rebif (an injectable interferon-beta) and marketed Novantrone (a chemotherapy for MS). The development program with oral cladribine led to completion of a placebo-controlled trial and presentation of the data at American Academy of Neurology in May 2009, in Seattle. Cladribine required only a few oral doses to obtain effective control of MS with very few side effects.

http://www.scripps.edu/newsandviews/e_20090601/MS.html                           http://www.wabash.edu/news/displaystory.cfm?news_ID=7982

 In 2006 a vice president for Serono U.S.A. had consulted with me informally to get my input on the development program (as I have a very broad expertise, I usually enjoy such chances to voice my opinion). He indicated that Serono expected to obtain the approval for the drug with no problem due to its outstanding efficacy and safety in the preliminary (phase II) trials. Furthermore, he boasted they would get approval for the oral drug partially by using the prior preliminary trials (some with marginal efficacy) with intravenous formulations. I thought this reflected a bit of overconfidence. This was coming on the heels of withdrawal of Tysabri (natalizumab) from the US market for concerns for a 1:1000 complication of rare brain infection (PML). Indeed the US FDA granted “fast-track” status to oral cladribine development which guarantees a “rapid” evaluation of submitted data for priority drugs (“rapid” to FDA means 6 months). Shortly thereafter Serono was bought by Merck KgaA (also known as Merck Darmstadt).

As usual several phase III trials (for regulatory approcal) were designed, but one was started earlier and designed with a placebo control (CLARITY), and finished in early 2009. Serono as usual kept a tight lid on information about the drug. A colleague at Wake Forest University, Dr. Doug Jeffries shared his concerns with me on several occasions about cladribine, as several reports from the leukemia literature indicated a risk of new malignancies after treatment with cladribine, and one summary “meta-analysis” put this risk at twofold.

When I saw the CLARITY research data in May 2009 I was immediately troubled. First, cladribine had not been tested in a type of patient which would use a new, toxic, or risky drug in practice. They used relatively young, mild and early cohort of MS patients instead. Second, cladribine was highly effective at suppressing MS relapses (58% reduction in relapse)and MRI evident new lesions (more than 95% reduction). But however and finally, one in 200 of the young people with MS who were treated with cladribine developed malignancies (no cancers in the placebo patients), and there was a death from infection, and numerous cases of shingles, as well as profound reduction in lymphocytes. It was clear to me that there was serious concern. Furthermore, a very rare cancer (choriocarcinoma) occurred in the trial.

However, the doctors working with the company immediately went on the offensive about the malignancy issue. When Dr. Daniel Kantor raised this question in the public presentation in September 2009 at ECTRIMS in Dusseldorf, it was clear that the investigators speaking on behalf of the trial were going to maintain that malignancies occurring in different tissues were a non-issue. The investigators (including the distinguished Dr. Gavin Giovannoni in London and Stuart Cook in New Jersey) repeatedly and publicly ignored the existing literature on this risk, and effectively snubbed those physicians with scientific questions on how to address this issue. Moreover, it appeared that the trial was inadequately planned for careful follow up of this issue, so a clear answer was unlikely to be quickly obtained. The results were published in January 2011(http://msj.sagepub.com/content/early/2011/01/11/1352458510391344.abstract )

When two of my colleagues (Dr. Jack Burks, Dr. Daniel Kantor) voiced our opinions when solicited by journalists regarding the potential of cladribine, we included our concerns about the malignancy risk, as well as whether other risks would be apparent subsequently which would alter the decisions to treat people at early stages of MS with cladribine.

I had fresh in my mind lessons learned from a previous MS therapy, mitoxantrone (Novantrone, also for a time a Serono product), which came to the US market in 2000. When mitoxantrone became available (and it was outstandingly effective for MS), doctors raised the questions of malignancy risk and heart failure (a known risk). We were firmly told by the companies marketing Novantrone that these were not a problem and were rare. In 1999 the most experienced doctor in this world with this therapy, the brilliant Dr. Christian Confavreaux, gave a talk in a scientific forum at Consortium of Multiple Sclerosis Centers and told us he has treated 800 patients and seen leukemia once and two cases of heart failure (both in patients receiving more than recommended doses). This turned out to be a gross underestimate of these problems.

By 2005 the FDA had to issue an advisory recommending closer monitoring because of the many heart failure cases. Reports in 2005-2007 from clinics like mine indicated the heart failure risk was nearly 5% and leukemia risk around 1%. Despite the fact many investigators reported to Serono cases of leukemia, to my knowledge, Serono never publicly admitted to the magnitude malignancy issue. A small, company sponsored follow up study of people getting Novantrone reported far less than 1%.

When pharmawire.com reported my comments regarding cladrine and those of my colleagues (http://www.ft.com/cms/s/2/363484d8-332a-11de-9316-00144feabdc0.html ), I was told through the grapevine that colleagues at EMD Serono were not happy with me, but nothing direct was said to me. Since I was not involved directly in this program, I had no conflicts of interest.

Representatives of Serono (“scientific liaisons”) were trained to include statements such as “the cancers couldn’t be related because they were all in different organs.” Such messages were very disingenuous, and I felt meant to mislead doctors with less expertise in the field, since immunosuppressive agents like cladribine present a theoretical risk of increasing all types of cancer, and that multiple scientific reports on the issue were available. However, the drum beating by the marketing division was successful indicating that most US neurologists couldn’t wait to prescribe cladribine for US patients with MS.

First, FDA rejected the cladribine application in late 2009 as “incomplete.” I believe (but don’t know) that this was due to the attempt to include prior trials done by the international group and Scripps in the application for regulatory purposes. Subsequently, the “complete” application was submitted to FDA in early 2010.

The concerns about risks of cladribine did not go away. Cladribine (planned to be marketed first under the name Mylinax and subsequently as Movectro) was perceived in 2009 to be on track to be the first oral drug for MS to market by 2010, but the slow steady pace of drug maker giant Novartis got fingolimod (Gilenya) approved easily, with an overwhelming amount of comprehensive research data and on the market by mid 2010.

The FDA effectively withdrew the fast track designation (officially it was “extended”) for cladribine in 2010, issued a letter in early 2011, which was kept quiet initially, but was subsequently in March reported as a request for more analysis or more trials. The European Union regulators denied the application in September 2010, and repeated with a denial of appeal in early 2011, again citing concerns about a lack of data about risks.

So where are we now? I was hoping FDA would approve the drug for refractory MS with careful monitoring and post-marketing data acquisition. This would have allowed doctors to use it for those patients to whom it was best suited—aggressive multiple sclerosis. More data is coming. Much of the problems which I have discussed here are due to a lack of data. The rush to market, a financial imperative, requires some revenue stream to support the further research. Both the European Community and US regulators are going to deny that to cladribine. This effectively makes the drug inaccessible to MS patients. Essentially Merck is throwing in the towel. I have no ill will towards this company, just wish they wouldn’t be such pansies. They had lots of good advice which they didn’t follow. I guess they want the tax deduction this year for calling the clinical trials a loss on the books.

Did they push regulators too hard without the wealth of data required for approval (a la Novartis’ success)? I will bet so. Were there more complications which have not yet been told about? That is also likely. Are the regulators throwing out the baby with the bath water? Almost certainly. You can’t require a company with a product in full development to double an investment without some kind of revenue stream from the product.

However, the patent for cladribine was just granted last year. It has about 14 years to run (Patent 7713947 Issued on May 11, 2010. Estimated Expiration Date: December 20, 2025). Hopefully some other enterprising company will pick up the ball and license it from Merck KgaA and get it approved. MS patients need all the options they can get for fighting MS. Doctors want to know what the risks are in order that appropriate patients can be selected for each drug.

Meanwhile, regarding future topics…some really exciting drugs are coming. Did you know that MS is more deadly than breast cancer? We will also lament our current regulatory and healthcare system and the state of pharma further. We will talk about these in coming posts.

Samuel F. Hunter, M.D., Ph.D. is a neurologist specializing in neuroimmunology and neuroimaging, and has a remarkably broad background in pharmacology, image analysis, medicine, and neurosciences. He directs the Advanced Neurosciences Institute, Novel Pharmaceutics Institute, and NeuroNexus Center for research and education in Franklin, Tennessee, a suburb of Nashville. He participates and directs a multiple sclerosis clinic and many research trials for multiple sclerosis and its related conditions. He consults or performs contract research and consults for many pharmaceutical companies. Dr. Hunter has previously been a consultant for EMD Serono and its marketing partner in the USA, Pfizer.

Copyright 2011, Dr. Samuel F. Hunter