Growth Hormone and Health Policy

Abstract

GH treatment for short children is representative of many frontline issues in health care policy. In this paper, we highlight key policy issues exemplified by GH, focusing on pharmaceutical innovation, insurance coverage and pricing, and physician decisions, and we discuss their implications for endocrinology and GH use.

Policies to Encourage Pharmaceutical Innovation

Pharmaceutical innovation depends on policies regarding market entry [e.g. U.S. Food and Drug Administration (FDA) approval] and financial return over the product lifecycle (e.g. patent protection and pricing). Two important issues, orphan drug status and patents for biological drugs, illustrate problems arising from policies that incentivize innovation while running counter to policies seeking to reduce costs.

Orphan drug status

Recombinant human GH was one of the first drugs to receive orphan drug protection by the FDA (1985) to treat an estimated 20,000 GH-deficient children (1). The Orphan Drug Act provides manufacturers with incentives including 7 yr market exclusivity plus tax credits (2,3,4) to develop drugs for rare diseases (defined as a U.S. population under 200,000). The Act does not address the drug’s price. Nor does it limit expansion of the drug’s market beyond the small initially estimated population through off-label use or additional FDA approvals (2,3,4,5). Therefore, orphan protection is highly sought by manufacturers, especially for expensive biologicals (3,4,5). Yet, the Act has been criticized as inappropriately restricting competition and facilitating high prices, while permitting market expansion beyond that on which protections were based (3,4,5). GH illustrates these points. After receiving orphan drug status, GH use expanded through off-label use (6), followed by FDA approvals for other indications including idiopathic short stature (Table 1). The European Union has limited market exclusivity to 5 yr if an orphan drug is found to be extraordinarily profitable (3,4).

Table 1.

FDA-approved indications for human GH

Year of FDA approvala	Indication	Recommended dosesb
1985	GH deficiency	0.16–0. 3 mg/kg · wk (up to 0.7 mg/kg · wk approved in pubertal patients)
1993	Chronic renal insufficiency	Up to 0.35 mg/kg · wk until renal transplantation
1996	Turner syndrome	0.33 mg/kg · wk; other approved doses are up to 0.375 or 0.469 mg/kg · wk
1997	Adult GH deficiency	FDA-approved starting dose, schedule for dose increase, and maximum doses varyc
2000	Prader-Wlli syndrome	0.24 mg/kg · wk
2001	Small for gestational age (and failure to manifest catch-up growth by 2–4 yr)	0.33 mg/kg · wk; other approved dose ranges are 0.231–0.469 mg/kg · wk based on initial height and response to treatment and up to 0.48 mg/kg · wk
2003	Idiopathic short stature	Approved doses are up to 0.3 mg/kg · wk, 0.37 mg/kg · wk, and, and 0.47 mg/kg · wk
2003	Short bowel syndrome in patients receiving specialized nutritional support (no pediatric studies when approved)	0.1 mg/kg · d (0.7 mg/kg · wk), up to a maximum of 8 mg/d; administration for more than 4 wk was noted not to have been adequately studied
2003	HIV patients with wasting or cachexia (adults)	From 0.1 mg/kg · d (0.7 mg/kg/wk) if <35 kg to 6 mg/d if >55 kg
2006	SHOX (short stature homeobox-containing gene) deficiency	0.35 mg/kg · wk
2007	Noonan syndrome	Up to 0.066 mg/kg · d (i.e. 0.469 mg/kg · wk)

Unless otherwise stated, data in table refer to children with short stature. Current nonapproved uses of GH in children are cystic fibrosis, steroid-mediated growth failure, HIV, and inflammatory bowel disease. 

^aYear of initial approval by the FDA for the designated indication. Subsequently, the FDA may have approved other GH products for the designated indication. The reader is referred to www.fda.gov/Drugs/InformationonDrugs (drug approvals and databases) for additional information. 

^bDoses shown are based on all GH products with FDA approval for the designated indication. Where there is a wide range of doses, the range is indicated. Data were provided by the FDA. Average wholesale price for most innovator brands of GH is approximately $76/mg and $55/mg for biosimiilar GH (www.AmericourceBergen.com; January 23, 2010). 

^cIssues related to dosing for adult GH deficiency are summarized in The Endocrine Society Clinical Practice Guideline (www.endo-society.org/guidelines/Current-Clinical-Practice-Guidelines.cfm (Evaluation and Treatment of Adult GH Deficiency). 

Patents and biologicals

Human GH was one of the first recombinant-protein drugs, also known as biologicals or biological specialty drugs, approved by the FDA. Biologicals are the fastest growing and most expensive class of pharmaceuticals (7,8,9,10). Even after 7-yr orphan drug market exclusivity expires for a biological, there may be little competition because there has been no federal process for gaining FDA approval of generic versions of biologicals, often called follow-on protein drugs or biosimilars (5,7,11). GH is an early leading example of the issues involved in FDA approval of biosimilars. Despite application by Sandoz for a biosimilar GH (Omnitrope), the FDA did not render an opinion for years (reviewed in Refs. 11 and 12). Only after a lawsuit and judicial directive to render judgment did the FDA approve Omnitrope for treating GH deficiency (2006), the first U.S. approval of a biosimilar (12). With average wholesale price and wholesale acquisition cost estimated at 27–40% less than traditional GH products (www.AmerisourceBergen.com) (13), it remains to be seen whether Omnitrope will gain substantial market share (13).

The general path to FDA approval for most biosimilars has been unclear and controversial. Manufacturers of original biologicals often wish to limit competition, whereas policymakers see biosimilars as a way to substantially cut healthcare costs. The Congressional Budget Office projects biosimilars saving up to $25 billion over 9 yr (14). Many countries have created mechanisms for approval of biosimilars. Reform legislation recently passed by the U.S. Congress (HR 3590; The Patient Protection and Affordable Care Act of 2010, Public Law 111-148) provides, for the first time, a clear statutory mechanism for FDA approval of biosimilars.

Policies that Determine Return on Investment: Insurance Coverage and Pricing

Access to GH and other expensive biologicals depends, in large part, on public and private insurers’ coverage, payment, and benefit policies.

Medicaid

One quarter of U.S. children receive public insurance through Medicaid and the Children’s Health Insurance Program (CHIP) (Ref. 15 and www.kaiseredu.org/tutorials/medicaidbasics2009). Whether (and at what level) short stature is a condition or disease has been debated extensively by medical and bioethics experts; however, policy decisions on this issue by state Medicaid agencies have great practical impact because they influence whether GH is covered under the fundamental Medicaid benefit, Early and Periodic Screening, Diagnostic, and Treatment Services (EPSDT) (www.kff.org/medicaid/7397.cpm). Individual state Medicaid agencies can arrive at different conclusions about such coverage, although, in aggregate, they have been more willing to cover GH than many private insurers (16). This is similar to findings that Medicaid agencies often provide services limited or excluded under private health plans (www.kff.org/medicaid/7397.cpm ), although under current state budget constraints this may change. Moreover, recent legislation (Children’s Health Insurance Program Reauthorization Act of 2009) created a new entity, the Medicaid and CHIP Payment and Access Commission (MACPAC), to advise Congress on a wide range of Medicaid and CHIP issues, including policies on access to services. MACPAC could well influence Medicaid benefit policies and access for expensive drugs like GH.

Payment

Biologicals are costly to develop and typically expensive once marketed, approximately $15,000 to $150,000 per patient annually (11). Limitations on patient access to needed treatment due to costs (11,17) concern policymakers who, in response, see increased use of biosimilars as an effective countermeasure. Therefore, in addition to expediting approval of biosimilars (discussed above), recent reform legislation includes new ways to pay for biosimilars based on average prices of existing similar drugs (HR 3590); this could be an important change because price negotiation has been contentious in federal policy. Although some of these legislative efforts focus on Medicare, Medicare policies often set the standard for Medicaid and private insurers, and therefore such legislation is highly relevant to children and GH (www.kff.org/medicaid/7468.cfm).

Value-based insurance design (VBID) is a concept gaining strength among employers, insurers, and policymakers to encourage more selective consumer choices and induce pressure on prices. In VBID, benefit packages are designed by employers and insurers to provide beneficiaries with greater incentives (lower cost sharing) to use services identified by the insurer as high value for the individual and erect disincentives (higher cost sharing) to the use of low-value services (18,19). The goal is to use data to identify high- and low-value services for individuals, avoid patients’ bypassing high-value services due to out-of-pocket cost, and discourage (but not disallow) consumers from using lower-value services. Health savings accounts are another way of stimulating market forces; annual individual and employer contributions must be used to cover high deductibles for any services, including GH. The VBID concept has been incorporated in recent reform legislation (HR 3590), and health savings accounts are currently in the law. The cost-benefit calculus may drive lower GH use with either of these mechanisms if the resulting heightened price sensitivity drives consumer choices.

Policies on Utilization that Involve Decisions by Physicians

Practice variation

A major concern of policymakers is unexplained variation among physician practices for the same medical condition (20,21,22). Although most analyses of practice variation have focused on adult disorders, data also indicate that primary care physicians vary widely on referring short children to endocrinologists, and pediatric endocrinologists vary in GH treatment decisions for children who are physiologically alike (23,24). For GH, rather than reflecting right or wrong, variation often reflects differences in physicians’ beliefs about the impact of short stature, their perceptions of GH’s positive impact, and the influence of family preferences. Regardless of the bases for practice variation, current legislative proposals seek to curb variation in general by imposing regional penalties for excesses, bundled payments, and other measures.

Relationship of physicians and pharmaceutical industry

The pharmaceutical industry spends approximately $25 billion annually on physician marketing for all drugs, including $7 billion on one-to-one physician marketing (25). With high cost and decision making for GH primarily concentrated in endocrinologists, potential conflicts of interest are inherent in relationships with industry. New state and federal policies attempt to expose or reduce industry gifts, honoraria, and other funding to individual physicians. Recent state laws require drug companies to report how much they pay individual doctors (26), and similar federal legislation imposes penalties for failure to comply.

Comparative-effectiveness research and use of such analyses in healthcare decisions is emerging as a major policy issue (27,28,29,30). Comparative effectiveness, as currently discussed in legislation, emphasizes practical health care delivery: “developing and disseminating evidence-based information to patients, clinicians, and other decision-makers about which interventions are most effective for which patients under specific circumstances” (27). The goals are to determine whether a treatment is better than the alternatives, provide evidence about its value, and assess effectiveness under real-world conditions. This means head-to-head comparisons of treatments as well as systematic reviews (28). Although a clear purpose is to inform physician decisions, comparative-effectiveness analyses might also be used to reduce insurers’ coverage and/or increase cost sharing for treatments assessed as relatively ineffective. In 2009, $1.1 billion was allocated for comparative-effectiveness studies, with broad Congressional support. While policymakers are divided on some aspects of comparative effectiveness, the new reform legislation (HR 3590) creates a new, well-funded, and independent Patient-Centered Outcomes Research Institute and trust fund whose work will be particularly important for expensive drugs like GH.

Conclusion

As illustrated by GH, policies act at several levels of the health system to shape healthcare delivery and treatment use. Policies designed to achieve reasonable goals (e.g. encourage pharmaceutical innovation) often achieve those goals but also have other effects (e.g. restriction of competition and high costs) that, in turn, engender counteracting policies (e.g. policies to increase use of biosimilars).

The influence of policies on pharmaceutical use is particularly important and timely. Annual growth of U.S. prescription drug spending averaged 9.9% from 1999–2007 (31) and, among privately insured Americans, health spending growth from 2001–2006 was highest for pharmaceuticals (32). Pharmaceutical expenses have slowed recently (31,33) but are expected to rise from $244.8 billion in 2009 to $453.7 billion by 2018 (33), with the fastest growing segment being biologicals like GH.

GH costs approximately $20,000 per child per year (34,35). Worldwide, GH expenditures rose 12% between 2006 and 2007 to reach almost $2 billion (7). If all U.S. children with heights below the 1.2 percentile (a primary FDA criterion for GH in idiopathic short stature) were considered for GH, approximately 500,000 could be eligible at potential annual costs exceeding $10 billion.

Although some see such growth as the intended result of policy decisions in stimulating innovation and maximizing access to beneficial treatments, others are concerned about cost effectiveness and undue expansion with diminishing returns. This tension inevitably results from the intricate dance between policy, markets, and medical care. Current policy initiatives with potential to limit costs include increased use of biosimilars, modified orphan drug rules for drugs that become blockbusters (3), varied cost sharing depending on value, and use of comparative-effectiveness analyses to identify best value of different treatment approaches, doses, and durations.

The policy issues illustrated by GH will likely have broad impact. Almost all the major components of health policy are represented in the short history of GH, starting with safety and quality concerns, leading to access to treatment (through FDA approvals and coverage decisions), and now cycling to a focus on cost and outcomes. GH is an exemplar of key policy issues that determine practice and use of emerging treatments. The issues discussed will apply to other treatments for short stature including IGF-I, with annual costs of $29,000 for a 24-kg child (36) and controversy regarding its expanded use (37,38). Lessons learned through GH will likely apply to other expensive and controversial treatments. As illustrated by GH, health policy has great influence on healthcare delivery and will be fundamental to future use of GH and other endocrine therapies.