1953-2003: A Historical Retrospective Of Npc

N ATI O N AL P HAR MAC E U TI C AL C O U N C I L

1953

1963

1973

1983

1993 2003

NPCNOW

First kidney transplant. National Pharmaceutical Council (NPC) incorporated in New York. Dr. Jonas Salk successfully tests a polio vaccine. Watson & Crick identify the double helix structure of DNA.

First immunosuppressant drug used to block transplant rejection. First anti-psychosis drugs enable outpatient treatment and closing of mental institutions.

1953

1954

Tetracycline invented.

1955

Birth of an Industry In 1895, the first pharmaceutical research laboratory was established, and the research-based pharmaceutical industry was born. While previous endeavors had focused on manufacturing and marketing, pharmaceutical companies now began to actively seek out new compounds with therapeutic properties.

1953 - The National Pharmaceutical Council is established by twelve pharmaceutical companies in New York City.

By the turn of the century, the use of manufactured medicines was so enthusiastically embraced by the American consumer that federal oversight was deemed necessary. The modern Food and Drug Administration (FDA), which began as a division of the Department of Agriculture, obtained some regulatory functions with the passage of the Food and Drugs Act of 1906. Treatments at the turn of the 20th century focused primarily on alleviating symptoms of acute illness — aspirin wasn’t even invented until 1897. And although penicillin was discovered in 1928, it was not available in a therapeutically usable form until 1940, when it played a major role in treating injured soldiers in World War II. As the industry evolved, so did legislation and oversight. In 1938, the Federal Food, Drug and Cosmetic Act was passed,

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1956

1957

requiring that new drugs be proven safe before they were marketed. This legislation changed the nature of regulation and refocused responsibility from the consumer to the drug’s developer. In 1953, the department also came under the supervision of the Department of Health, Education, and Welfare, around the same time that medical science took several giant leaps forward. 1953 was an extraordinary year, with two landmark discoveries. Dr. Jonas Salk first successfully tested his polio vaccine, and Watson and Crick published their work identifying the double helix structure of DNA, which would later win them the Nobel Prize in Medicine.

The Early Years of NPC 1953 was also the year that twelve pharmaceutical companies decided to establish the National Pharmaceutical Council with Newell Stewart as its first president.

Thalidomide shown to cause birth defects; FDA keeps drug from U.S. market.

First drug approved as an oral contraceptive.

Kefauver-Harris Act gives the FDA greater control over Rx, requiring substantial evidence of both safety and efficacy; adverse drug reactions required on all advertising.

Pharmaceutical Manufacturers Association (PMA) incorporated in Delaware; known as Pharmaceutical Research and Manufacturers Association (PhRMA) today.

1958

1959

1960

1961

1962

NPC’s Founding Member Companies in 1953 • Abbott Laboratories • Ciba Pharmaceutical Products, Inc. • Hoffmann-La Roche, Inc. • Lederle Laboratories Division, American Cyanamid Company • McNeil Laboratories • The William S. Merrell Company

NPC’s focus was to address the substitution, without the doctor’s authorization, of an alternate product for the brandname drug. Although substitution was generally considered unethical among both pharmacists and physicians, there were few effective controls or laws specifically prohibiting the practice. Board of Pharmacy regulations on the subject were vague or non-existent, and state Boards of Pharmacy were reluctant to take action against offenders unless welldocumented complaints were filed. Under the laws in effect at that time, copies of innovative drugs were often introduced to the market without any review by FDA, based on the theory that they were “generally recognized

• Charles Pfizer & Co., Inc. (J.B. Roerig & Co.) • G.D. Searle & Co. • Smith, Kline & French Laboratories • E.R. Squibb & Sons, Division of Mathieson Chemical Corp. • The Upjohn Company • Winthrop-Stearns Inc.

as safe.” There was thus no assurance that generic drugs were equivalent to brand-name products, and many doctors understandably relied on the reputation of research-based manufacturers when they prescribed for their patients.

1962 - Watson and Crick win the Nobel prize for Medicine for their discoveries concerning the molecular structure of nuclear acids and its significance for information transfer in living material.

NPC’s early years were primarily devoted to addressing concerns about unauthorized substitution at the retail pharmacy level. Positive relationships were established and assistance was provided to state Boards of Pharmacy, state and national pharmacy organizations, and colleges of pharmacy. Within a decade of NPC’s establishment, most states, either through laws or regulations, prohibited substitution when not expressly authorized by the prescribing doctor. 2

First drug targeted at a receptor subtype used for treatment of high blood pressure.

U.S. Congress creates Medicare and Medicaid. 200th anniversary of the beginning of U.S. medical education at University of Pennsylvania.

Measles vaccine licensed in U.S.

1963

1964

1965

In the years that followed, other policies and practices closely related to the initial substitution laws emerged and occupied much of NPC’s attention, expanding its sphere of activity beyond pharmacy. Most significant were new relationships with hospitals, physicians, federal and state government agencies, consumer organizations and related public interest groups. As substitution issues slowly re-emerged in the states, NPC played a significant role in limiting the effects of substitution through its educational efforts with key stakeholders.

1965 - NPC moves it’s offices from New York City to Washingon D.C.

Then in 1959, NPC launched an educational program designed to strengthen the relationship between the industry and the pharmacy community that would continue for decades. The annual pharmacy internship program, a joint project between NPC and the American Pharmaceutical Association (APhA), placed pharmacy students in summer internships within NPC’s member companies in an effort to increase understanding between the two disciplines. The partnership program continued until 1994, at which time APhA became the sole administrator.

1966

1967

York City to Washington, D.C., in 1965. Along with the move came new leadership, as Vernon Trygstad took over as NPC’s president in 1966. Both changes were well suited to NPC’s shift in focus. Concerns about access to health care in the early 1960’s led to the establishment of Medicare, Medicaid and other state medical assistance programs. A major portion of NPC’s attention therefore turned to government policies relating to access to prescription drugs. NPC developed a substantial body of information concerning government and third-party programs and established relationships with health care officials at the federal and state levels. Among the resources NPC developed was the “Compilation on State Welfare Drug Programs,” begun in 1963. This annual publication would later become NPC’s “Pharmaceutical Benefits Under State Medical Assistance Programs.” Known today simply as “the Compilation,” it is still produced and is considered an invaluable resource by many public officials and private analysts.

Putting Down New Roots In order to enable easier access to Washington-based policy makers and regulatory staff, NPC moved its offices from New 3

Under Trygstad’s leadership, NPC partnered with the California Department of Health Care Services to determine whether

Rubella vaccine developed.

American Pharmaceutical Association seeks repeal of state antisubstitution laws and regulations. FDA begins comprehensive efficacy review of all OTC drugs.

FDA requires the first patient package insert.

1968

1969

utilization review and peer review could significantly reduce health care costs. In the four counties studied, health care costs increased to a much lesser degree than in the state as a whole, and the researchers extrapolated that the program could have saved California $117 million per year if implemented statewide. The 30 computer programs and management techniques developed during the study were made available to other states. Elements of the electronic data processing systems were also adapted by the federal government and acknowledged by the U.S. Department of Health, Education and Welfare as a valuable contribution to its own five-volume publication, “Medicaid Management Information System,” developed as a guide for the administration of State Medicaid Programs. Interestingly, the original proposal for the California study included a component to compare medical care costs with and without a formulary, but it was considered infeasible at the time due to lack of sufficient accurate data. NPC went on to sponsor studies in Iowa, Louisiana and Texas examining open drug programs versus closed formularies. Each study provided evidence of the medical and economic advantages of an open drug program.

1970

1971

1972

That same year, the issue of substitution again gained momentum and included a new emphasis on formularies. In 1970, the American Pharmaceutical Association (APhA) adopted a policy to seek the repeal of state antisubstitution laws and regulations. In its efforts, the APhA specifically cited a Massachusetts law requiring a formulary that listed generic drug names, which they claimed mandated generic substitution. APhA’s efforts were unsuccessful and many state laws opposing substitution were actually strengthened in the 1970s. The influence of consumerism on public policy increased significantly in the 1970s, due in great measure to a lack of full and accurate information in the promotion of generic prescribing and substitution. Thus, the patient package insert requirement enacted by the FDA in 1970 for certain types of drugs and the comprehensive review of the efficacy of all overthe-counter medicines begun in 1972 were well timed. As the debate grew to include consumer groups and labor unions aimed at reducing prescription drug and pharmaceutical services costs, NPC again expanded its reach to build relationships with, and provide educational activities for,

The electronic data processing systems developed during the study conducted by NPC and the California Department of Health Care Services were adapted by the federal government and acknowledged by the U.S. Department of Health, Education and Welfare as a valuable contribution to its own five-volume publication.

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Development of the first inplantable drug pump frees patients from daily injections.

A technique for the cloning of DNA is invented by Herbert Boyer and Stanley Cohen. Synthetic insulin for diabetics and a growth hormone for underdeveloped children were made possible by their achievements.

1973

1974

First H2 receptor enables ulcer treatment without surgery.

1975

consumer organizations, medical and pharmacy students and their related organizations, and the Washington-based staff members of federal agencies.

In the 1980s and 1990s the pace of successful research and development by the pharmaceutical industry increased and hundreds of new drugs and biologics entered the market.

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But the push to reduce drug costs was on, and in the latter half of the decade, there was considerable pressure to explore foreign sources if medicines could be obtained at a cost savings. In June of 1978, NPC President Trygstad wrote, “Especially because it is current at the moment, mention should be made of pressures being brought upon Federal agencies, through Congressional hearings, to shop for and procure drugs from foreign sources.”

Unparalleled Successes, New Challenges The industry was again undergoing changes, and NPC changed with it. In 1980, Mark Knowles joined NPC as its president, and in 1985, NPC established its offices in the current location in Reston, Virginia. During the next two decades, the pace of successful research and development by the pharmaceutical industry increased and hundreds of new drugs and biologics entered the market. It was also during this period that new drug therapies began to address chronic disease, in addition to acute conditions. These advances resulted in fundamental changes in the location and the nature of care delivery by enabling more patients to be treated on an outpatient basis. As a result, the

1976

1977

proportion of money spent on medicines, rather than on more intense and invasive therapies such as hospitalizations and surgeries, began to increase. Innovative drugs for conditions such as cardiovascular disease, diabetes, and ulcer changed the quality and length of patients’ lives. And diseases such as cancer and AIDS responded to new treatments, becoming manageable chronic illnesses instead of death sentences. As the health care focus shifted to the delay of disease progression, NPC began to devote significant attention to patient compliance with prescribed medication regimens. Efforts were made to raise awareness that noncompliance was a major health problem in the United States. NPC produced several publications aimed at a wide variety of audiences and sponsored the first national symposium on the subject, featuring then-Surgeon General C. Everett Koop and other leading experts in the field. NPC also developed a widely viewed public service announcement featuring professional tennis player Arthur Ashe. Ashe initially became an advocate for medication compliance as a result of his heart attack and related surgeries. In retrospect, he became an even more compelling spokesperson for the compliance issue due to his later, very public battle with AIDS which he contracted from a tainted blood transfusion during a 1983 heart surgery.

Synthetic human insulin is first biotech drug approved by FDA, eliminates problems with allergies. First documented case of AIDS. Generic Pharmaceutical Industry Association founded; known as Generic Pharmaceutical Association (GPhA) today.

Smallpox eradicated.

1978

1979

The early 1980s brought some positive changes in the regulatory environment. For example, the Orphan Drug Act, which took effect in 1983, was associated with an increase in pharmaceutical research and development, and can be credited in part for the introduction of the first effective anti-retroviral drug for the treatment of AIDS in 1987, less than six years after the first case of the disease was originally documented. But even as these new breakthrough drugs came on the market, previously developed drugs, many of them standard therapies, faced new challenges as the formulary movement began to gain momentum once again.

Medicaid Formularies and Managed Care Throughout the late 1980’s and early 1990’s, NPC continued outreach to policy makers, the medical and consumer communities, and corporate benefit managers about the value of access to pharmaceuticals and the importance of patient compliance. Through a series of educational forums, NPC sought to increase understanding of pharmaceuticals, the industry and related issues. A video titled “Quality Through Research” was widely distributed and used by member companies. In order to help its members respond to questions

1980

1981

FDA issues TamperResistant Packaging regulations.

1982

from consumers and policy makers about the value of pharmaceuticals, NPC also produced a video titled “Spread the Word,” which received the Telly Award for excellence in communications in 1993. Additional attention focused on NPC as a result of the Managed Care Health Outcomes Project in 1996. The study explored the impact of limiting access to prescription drugs and other cost-containment practices on the use of health care services. It focused on patients with one or more of five diseases (asthma, ear infection, arthritis, ulcers and high blood pressure) in six geographically dispersed HMOs. Lead researcher Dr. Susan Horn found “unintended consequences” such that “greater formulary restrictions were associated with increased use of healthcare services, and therefore, greater costs.” The study’s authors also suggested that greater formulary restrictions might result in decreased quality of patient care. Subsequent literature searches by NPC found that component management in the form of restrictions on drugs does not result in overall health care savings. Instead, increased restrictions appeared to shift costs from the pharmaceutical component to other areas of care.

NPC worked with nationally known figures C. Everett Koop and Arthur Ashe to promote better patient compliance.

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Drug Price Competition and Patent Term Restoration Act (HatchWaxman) expedites the availability of generics and allows additional patent protection for new medicines to compensate for time lost during FDA approval process.

First ACE inhibitor drug enables the treatment of high blood pressure by a new mechanism, the modulation of the reninangiotensin system. First biotech-derived interferon drugs for the treatment of cancer approved by FDA; critical to opening up the field of recombinant technology.

Orphan Drug Act passed, promoting research on drug treatments for rare diseases.

1983

1984

1985

In 1996 Karen Williams joined NPC as its president. At the same time, the Board of Directors revisited and refined the vision, mission and objectives of the organization (see box below). NPC also committed to quality improvement initiatives with accrediting agencies, medical societies and government agencies.

NPC Vision Statement NPC communicates the economic, clinical and societal value of pharmaceuticals and advances the appropriate use of pharmaceuticals for the betterment of human health.

NPC Mission Statement NPC conducts, supports and disseminates research for health care decision-makers and public and private payers on behalf of the research-based pharmaceutical industry. NPC has three major strategies: • Development of intellectual assets • Partnering with member companies and outside organizations to achieve maximum impact • Direct dissemination of programs and products

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First “clot buster” dramatically improves survival rates after heart attack or stroke. First SSRI approved for treatment of depression. First protease inhibitor improves drug therapy for AIDS.

1986

1987

A Web site, www.npcnow.org, was launched in order to make NPC’s materials more accessible to globally scattered audiences and membership. Subsequently, a specialized Web site for state officials, www.dmnow.org, was developed on Medicaid disease management. Then in 1999, NPC held its first annual Member Forum in Florida in an effort to bring together a broad crosssection of company representatives. Attendees were hand-

NPC Objectives NPC’s first objective is to replace component management of the drug budget with a systems approach to valuing pharmaceutical therapy based on: • Integrating pharmaceutical care into total patient care • Recognizing the total cost benefit over time • Aligning incentives • Developing more accurate measures for integrated pharmaceutical care The Council’s second objective is to foster appropriate use of pharmaceuticals through: • Timely and accurate diagnosis • Initiation of treatment for diagnosed conditions • Rapid adoption of “state-of-the-art” therapies • Sustained compliance by patients

Human Genome Project begins. The Prescription Drug Marketing Act establishes requirements for distribution of samples and safeguards against the sale of substandard or counterfeit drugs.

First statin approved for lowering cholesterol.

New generation antipsychotic drugs enable the treatment of more patients with fewer side effects.

1988

1989

FDA accelerates the review of drugs for life-threatening diseases.

1990

Prescription Drug User Fee Act (PDUFA) requires manufacturers to pay user fees to enhance FDA staff and resources for faster approvals of new drugs.

1991

selected by their Board members to enhance their awareness of and participation in NPC and related industry issues.

management programs and to include such programs in their plans for Medicare reform.

NPC also worked to demonstrate effective alternatives to restrictive drug policies. The Virginia Department of Medical Assistance Service partnered with NPC to develop a demonstration project in disease management for their fee-forservice Medicaid patients assigned to primary care physicians. NPC and the agency worked with the Virginia Commonwealth University, the state medical society, and pharmacy and nurses’ associations. The results of this project, which became known as the Virginia Health Outcomes Partnership (VHOP), were positive. The pilot program, implemented in eight Virginia counties, increased appropriate medication usage by 25 percent, decreased urgent care visits by 41 percent, and saved an average of three dollars for every dollar spent on physician training. NPC continues to use this project as a platform to educate state officials and others about how disease/case management approaches to care can help states improve the health of their patients and achieve better fiscal outcomes. NPC’s educational programming and technical resources in this area remain popular with state officials. The VHOP model, and subsequent efforts in West Virginia and other states, encouraged federal officials to enable Medicaid agency adoption of disease

As issues of restrictions on access continued to be debated, NPC emphasized the need for patients to have access to a broad pharmacopoeia in order to be responsive to the individual needs of a diverse patient population. Such analyses need to be considered as payers attempt to restrict coverage for individual patients based on the effectiveness of a drug for an “average patient.” Literature reviews demonstrate that physicians must be able to use treatments that allow for the physiological and cultural differences among individuals that may affect medication efficacy, safety, and compliance. Papers focus on the particular clinical needs of a variety of subpopulations including African-Americans, Hispanics and the elderly. For example, comorbidities common in the elderly may necessitate multiple drug therapies that could interact with each other, adversely affect a condition other than the one they are prescribed for, or be processed differently than expected due to changes in organ function as a part of the aging process.

1992

Literature reviews support the need for physicians to consider the physiological and cultural differences among individuals that may affect medication efficacy, safety, and compliance.

At the close of the last century, the environment for pharmaceuticals saw many simultaneous changes. The managed care revolution altered, at least for a time, how health care 8

Chicken pox vaccine licensed in the U.S.

FDA eases restrictions on direct-to-consumer advertising of prescription drugs.

First biguanide drug introduced to treat type 2 diabetes.

Food and Drug Administration Modernization Act reauthorizes PDUFA and mandates wide-ranging improvements in the agency’s regulatory practices. Biotechnology Industry Organization (BIO) incorporated.

1993

By 2000 NPC had evidence that the appropriate use of medicines could produce direct health care cost savings, improvements in workplace productivity, and contributions to longevity and overall quality of life.

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1994

1995

services were evaluated and delivered. While forcing a new level of competition, managed care also tended to encourage better management of chronic disease through increased use of prescription drugs and patient education. Around the same time, the FDA underwent wide-ranging reforms, resulting in faster introduction of many new important therapies. It also relaxed restrictions on the advertising of drugs to consumers, particularly through television advertising. All of these changes increased the demand for proof of the value of spending on pharmaceuticals. By the start of a new century, NPC had a growing collection of work in support of the value of pharmaceuticals to patients, to the economy and to society as a whole. The evidence mounted that appropriate use of medicines could produce direct health care cost savings, improvements in workplace productivity, and contributions to longevity and overall quality of life. A 2001 Capitol Hill briefing, co-sponsored by NPC, the Alliance for Health Reform and Health Affairs/Project Hope, featured a special issue on the value of medical innovation by the peerreviewed journal Health Affairs. A companion primer of Health Affairs articles focused specifically on pharmaceutical innovation. Two NPC-supported studies were among the most compelling in the primer. An analysis of drug spending factors for seven

1996

1997

common medical problems found that spending is driven, not by price, but by more patients being diagnosed with chronic diseases and taking more medicines for more days of the year. A study by award-winning Columbia University economist Frank Lichtenberg found that a modest increase in spending to pay for newer drugs not only contributes to improved life expectancy and quality of life, but can also lead to a four-fold reduction in non-drug spending. Health Affairs and other peer-reviewed journals are the venues for more recent NPC-supported research on the most costly physical and mental health conditions faced by employers and on the positive effects of direct-to-consumer advertising on treatment of important health conditions and on appropriate use of medicines. NPC was established at the same time that the scientific community began unlocking the first pieces of the human genetic code. Fifty years later, with the mapping of the human genome, America is on the brink of a new era in pharmaceutical research. But with new medical discoveries, there will be additional opportunities and challenges for patients, payers and our industry. NPC is proud to have been a part of the history of this important industry and will continue to anticipate the issues, produce strong, evidence-based research, build new partnerships, and demonstrate the benefits of new medicines to patients and to society.

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998

Human Genome Project sequences first human chromosome.

First targeted cancer therapy developed through molecular biology greatly reduces unwanted side effects.

The first bone-formation agent is approved for the treatment of osteoporosis.

1999

2000

2001

2002

The Human Genome Project to complete sequencing of the genome with an accuracy of greater than 99.99 percent.

2003

Board Chairs: The First 50 Years 1953 - Paul Gerden, Abbott Laboratories 1954 - Theodore G. Klumpp, Winthrop Laboratories, Inc. 1956 - Robert A. Hardt, Hoffmann-La Roche Inc. 1958 - Carl K. Raiser, Smith, Kline & French Laboratories 1960 - Nelson M. Gampfer, The Wm. S. Merrell Company 1962 - Henry S. McNeil, McNeil Laboratories, Inc. 1965 - Charles V. Owens, Jr, Ames Company, Inc. 1966 - George Squibb, E.R. Squibb & Sons, Inc. 1967 - J.R. Mason, Sandoz Pharmaceuticals 1969 - Henry F. DeBoest, Eli Lilly and Company 1971 - Robert H. Hensel, Lederle Laboratories 1972 - Garth Quinn, Burroughs Wellcome Co. 1973 - William L. Searle, G.D. Searle & Company 1975 - Irwin Lerner, Hoffmann-La Roche Inc. 1976 - Michael Bongiovanni, E.R. Squibb & Sons, Inc. 1977 - Lawrence C. Hoff, The Upjohn Company 1978 - John E. Lyons, Merck Sharp & Dohme 1979 - George W. Eckelmann, Hoechst-Roussel 1981 - Paul E. Freiman, Syntex Laboratories 1982 - Peter S. Howsam, Burroughs Wellcome Co. 1983 - Robert L. Hanson, Schering Laboratories

1984 - Milton J. Henrichs, Abbott Laboratories 1985 - Alfred A. Mannino, Marion Laboratories 1986 - C.J. Cowles, Parke-Davis 1987 - Douglas J. MacMaster, Jr., Merck Sharp & Dohme 1988 - Thomas W. Hoffmeister, Syntex Laboratories 1989 - John H. Dillon II, Smith Kline & French 1990 - Paul N. Clark, Abbott Laboratories 1991 - E.M. Cavalier, Eli Lilly and Company 1992 - Donald R. Lee, Procter & Gamble Pharmaceuticals 1993 - Peter R. Seaver, The Upjohn Company 1994 - Harold F. Oberkfell, Parke-Davis 1995 - Kurt M. Landgraf, The DuPont Merck Pharmaceutical Co. 1996 - Stephen G. Sudovar, Hoffmann-La Roche Inc. 1997 - David W. Anstice, Merck & Co. 1998 - David B. Goffredo, Abbott Laboratories 1999 - Karen Katen, Pfizer Inc. 2000 - Gerald B. Rosenberg, Bayer Corporation 2001 - Stan Benson, Amgen Inc. 2002 - W. James O’Shea, Sepracor Inc. 2003 - Gerald P. Belle, Aventis Pharmaceuticals Inc.

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N ATI O N A L P H A R M A C E U TI C A L C O U N C I L 1894 Preston White Drive Reston, VA 20191-5433 Phone: 703.620.6390 Fax: 703.476.0904 Web: www.npcnow.org