When doctors administer treatments to patients, some amount of drug is often left behind in the vial. What happens next? It gets tossed. Now, Congress is taking a closer look at this issue and considering new policies aimed at reducing this kind of medical waste.
Meagan Parrish: In pharma, there are a few issues that loom larger over the entire industry than the cost of drugs. And that issue gets all the more frustrating when considering the amount of expensive medicines that are frequently and literally flushed down the drain. Every day in hospitals across America, healthcare providers pull out vials of medicines and administer the proper dose. But because doses are typically based on a patient's weight, some amount of drug is often left behind in a vial that is now no longer sterile. What is there left to do? Nothing but throw it away. Now, with worries mounting that billions are being lost every year by this form of waste, congress is looking for answers and solutions that could impact pharma.
My name is Meagan Parrish, and you're listening to Off Script: A Pharma Manufacturing Podcast that goes beyond the pages of our magazine to discuss the issues that matter to the industry most.
Today I'm joined by Dr. Ted Shortliffe, Chair Emeritus and Adjunct Professor of Biomedical Informatics at Columbia University, to discuss his work examining this problem. Recently, Dr. Shortliffe chaired a committee that studied the implications of discarded drugs for the National Academy of Sciences, which was formed to assess how much federal money is being lost to this kind of waste and offer regulatory and policy recommendations to address the issue. One of their key findings: rebates paid by the industry likely won't work.
Although Congress has been considering legislation that would require manufacturers to pay rebates for discarded drug amounts, the committee argues the drug makers would likely then just simply adjust the pricing of their drugs to recoup those lost rebate costs, meaning that this kind of legislation would do little to lower the government's overall healthcare spend. Instead, the committee argues that the industry should strive for increasing efficiencies in the clinical trials and drug development process and consider more frequently adopting technologies such as multi-use vials to reduce waste.
To learn more about these proposals, I'm joined today by Dr. Ted Shortliffe. Okay, great. Well, Ted, thank you so much for joining me today.
Dr. Ted Shortliffe: Thanks very much for the opportunity to talk about our report and let people know why we reached the conclusions that we did.
Meagan: Absolutely. So I wanted to start by asking you just about this topic in general, I mean, the issue of medical waste in hospitals has definitely been known about and reported on for some time. So, why was this report commissioned now?
Dr. Shortliffe: Well, I think both CMS and the Congress had become aware that there suddenly seemed to be a lot of expense associated with a certain subset of medications. Of course, these are these newer chemotherapeutic agents and immunologics that are infused or injected, they come as liquids, they come in vials, and usually in single dose vials, or in many cases in single dose vials. And because the price of a single vial can be thousands and thousands of dollars, in some cases with these newer agents, and they're very effective, but also very expensive.
The fact that this particular kind of waste seemed to be an especially expensive one, since a little bit of leftover liquid in a vial looked like liquid gold. And people were concerned that maybe we really need to do something to avoid throwing out this very expensive medication, discouraging practices that lead to it being thrown out. And that was why Congress asked CMS to look at this issue in greater detail, and in fact, mandated that they commission a study from the National Academies of Sciences, Engineering and Medicine to look at this. So, the National Academies has often done these kinds of studies at the request of federal agencies, and this was one such study, took us about 14 months.
Meagan: Wow. Yeah. And you actually just kind of touched on this. I was wondering if you could just describe this issue broadly, the issue of waste, what kinds of drugs are we seeing being wasted most often?
Dr. Shortliffe: Well, you know, I'm a physician, I've given a lot of medications myself out of vials over the years. And, by the way, the focus here is on physician or clinician-administered medication. Therefore, it's almost all relevant to Part B of Medicare reimbursement rather than Part D. So, we're really dealing with clinicians treating patients either in hospitals or clinics or private practice setting rather than patients self-administering these medications. So, I as a physician would give medication out of a glass vial or a vial that had a stopper on top that could be pierced with a needle.
And occasionally would notice that we hadn't used it all, but that this vial was now no longer useful on anybody else. And yet, when there's a relatively small cost to the whole vial, you don't have the same impression that you're throwing out something of great value. So, it never really rose to be a big issue until the cost of the vials themselves suddenly became so high. And so it's not really new that we've been discarding liquid in the bottoms of vials for years, decades, but the cost of a vial suddenly has made this seem especially important.
Meagan: Okay. And is this more often related to personalized medicines?
Dr. Shortliffe: Well, it's largely chemotherapy and cancer chemotherapy medications and the newer medications that are immunologic in their function for various issues, antivirals of various sorts, you know, the hepatitis C medications, things like that, that are quite expensive for a full course of therapy for a patient, but very effective in these cases.
Meagan: And am I right in understanding that these costs, and this issue of waste, has increased in recent years?
Dr. Shortliffe: Yes. The cost of these medications, although they are a small percentage of actual prescribed medications are a very high percentage of total drug cost in the country. And we... I don't have them at the tip of my tongue but that's well reported in the study where we looked at exactly why this has become such an important issue. And it's a very large part of overall drug spend.
Meagan: Right. So when a physician takes a vial out of a medication and administers it to the patient, but then ends up having some leftovers that are thrown away, who typically bears the brunt of the cost of this waste?
Dr. Shortliffe: Well, physicians are reimbursed for the cost of the vial. Patients typically pay for the vial. Obviously, if it's CMS, and they're on Medicare, then they're responsible for 20% unless they have supplemental insurance because the 80% is covered under Part B. Many of them do have supplemental insurance. But to the extent that they have copays, deductibles, and out-of-pocket expenses associated with payment, then a portion of that, what they're paying out of their own pockets as individual patients, has gone towards the full vial and not just to the portion that they actually received.
On the other hand, and this becomes important in our overall assessment of the situation, the patient got the treatment that they wanted. And the reason that there was leftover is because their body size was such that they didn't need the whole vial, but they got the treatment that they needed. And they usually are pretty happy that they got the treatment that they needed and are not focused on the fact that they saw a little bit left in a vial.
Meagan: Yeah. Let's talk about the role of clinical trials in this situation. Can you tell me about how the current standard design of clinical trials kind of plays into this sort of flawed system?
Dr. Shortliffe: Well, the reason that's important is because many of these drugs are weight-based dosing, okay? Obviously, if everybody got the same dose, you'd make a vial that was that size, and you'd use the whole vial, and this issue would go away. But since people are often different body sizes and there's an assumption that they need to use weight-based dosing, that's why we end up with not needing the entire vial, or sometimes having to use a portion of a second vial if the first vial isn't even big enough for a very large person. Now, if you go and you look at the...you know, it's not so much the later clinical trials, but in the early stages of new drug development, there is a kind of assumption in the community that these drugs have a narrow tradeoff between efficacy and safety and toxicity.
So for decades, we've seen studies done that assumed that they needed to determine a weight-based dosing. And a large percentage of these agents are administered in a weight-based way. Obviously, it raises the question, do they really all need to be weight-based dosing? And we don't think that that has been asked enough, the FDA has not asked drug developers to look at that issue. And so, by the time you get into your later stage trials, it's being given weight-based. And the trials, therefore, end up providing data about the drug and its utility, on the assumption that it will be given in a weight-based fashion. And then the FDA, of course, therefore, approves it as a weight-based medication, and we end up with this potential problem.
And therefore, one of our recommendations is this is something the FDA could really ask companies to document, and that is that they looked at whether or not weight-based dosing was absolutely required for the agent in question. And we had a fair amount of briefing presentation that led us to believe that it's almost become a habit in the community to assume that these drugs are weight-based, and that they really could be pushing that issue much more in drug development and then subsequently in the clinical trials. And that would help us make sure that they made vials just the right size if, in fact, more and more of these agents or new uses for these agents can be shown to be fine on a fixed dose basis.
I hope that's clear. I mean, that's kind of a technical detail, I suppose, but it actually has a lot to do with why we're throwing out these medications. But I don't want to suggest that everything could be fixed ups. The report acknowledges that some weight-based or body surface area-based dosing will always be required for certain agents.
Meagan: So, are you thinking then, the FDA could ask drug developers to trial both weight-based and standard doses in clinical trials?
Dr. Shortliffe: Well, they may be able to document early in pharmacokinetic studies in the light that a drug has to be weight-based. And in which case, you would not want to do a fixed-dose clinical trial in the later stages, phase two and three trials, for example. But we do think that they need to present data if it is weight-based that they attempted to come up with a fixed-dose and that there was valid reason for them not to use it in the clinical trials. And if there's not a valid reason, then they should do it on a fixed-dose basis.
Meagan: And I know that it's hard to generalize these kinds of things, but I'm wondering how much additional cost would this give to a drug developer if they were sort of asked to analyze whether or not a standard dose could be used instead of weight-based dosing?
Dr. Shortliffe: We don't think that would be a major issue in the early stages of drugs at all. I mean, it would not affect the overall trial once that question had been addressed in the early stages. So, this is not a major issue to have to look at in more detail. Now, I don't want to pretend that it would be no additional hassle and expense but in the grand scheme of things, we believe this will be relatively minor. And for reasons that are clear from the issue, not doing it, even for the system as a whole is leading to significant potential additional expense, currently.
Meagan: So, it's not necessarily the kind of change that would necessarily inspire a lot of pushback from the industry if the FDA were to make that change?
Dr. Shortliffe: No. And remember, drug development is done in a variety of settings, sometimes by the drug companies, sometimes in academia when new agents are developed, and the like. We think all of them should be aware of this issue and be looking to address it. But I think the logic of being sure you ask this question and not just assuming that these all need to be weight-based is such that pushback would be hard to defend.
Meagan: Right. Now, at the moment, do pharma manufacturers really have any incentives to change the way the system is set up?
Dr. Shortliffe: No. Our recommendations are not primarily to the drug industry and the drug developers. They are other stages in the regulatory process. But no, I think right now, they create a vial, they assign a price to it based on how many patients they think it will treat, rather than on how much liquid it contains. And they get reimbursed for that, as that determines the charge and they get that money back. And that's the way their business works. And obviously, there are many expenses that lead to their decision about what the cost of that vial should be. And it's not simply the production of the liquid in the vial, which is one of the reasons why we are arguing that this liquid gold is actually not that valuable. Because why the vial is so expensive is due to many other factors, the research costs, the profit margins, the distribution, the storage. All those issues become important parts of the overall cost.
Meagan: Right. Now, one of the potential ways that you guys brought up to address the situation is vial sharing. This is something that we saw, and we've seen being used with Coronavirus vaccines right now where we have multiple doses in a single vial and then they're pulled out as needed. And you pointed out that this can really have a big impact on reducing waste. I'm wondering, why is this practice not more widespread at the moment with other drug products?
Dr. Shortliffe: We try very hard to get a good answer to that question. And then frankly, the way to first think about this is simply, why are we using single-dose vials rather than multidose vials? The vaccines, the Coronavirus vaccines, that have been given currently are in multidose vials and it's gotten quite a bit of attention in the press when extra doses were found in some of the vials, as you recall, for example. But it is well accepted that the moment you pierce the top of a vial with a needle, the contents are no longer sterile unless you've done something to the contents, for example, adding an antimicrobial or some kind of agent that would, in fact, keep it safe.
There are other factors that we've heard about, in the case of the multidose vials for COVID-19 as well as, vaccines, and those are factors related to how long after it's been removed from refrigeration or freezing, it can still be potent and maintain its utility. So, it's not just a matter of sticking a needle in it that causes the problem. So, we believe that there needs to be a lot more consideration for all these agents, whether things can be done with the vials to allow them to be made into multidose vials. Therefore, you actually get larger vials and treat more than one patient from it. But this would mean dealing with these issues of sterility and storage and the like. And it's not clear that that's been looked at in the most efficient manner so far. And there's, again, no clear evidence that everyone has tried to do a multidose vial for these medications. And that rather, the single-dose assumption is part of the culture almost.
Meagan: I mean, doesn't the situation though with the Coronavirus vaccines really prove that it can be done?
Dr. Shortliffe: Well, yes. I mean, the question is, is there something about these medications, these very expensive medications, that means you can't add some kind of antimicrobial or something of that sort? It's very hard to get good answers to that question. But if you could, then obviously there would be advantages to, for the reasons we've been discussing, of delivering in multidose vials as well, especially for these weight-based medications. We wouldn't know how many patients would be treated from a vial but at least you'd be able to try to utilize everything in there.
Meagan: Right. Yeah. And I mean, to some extent, to be fair, the situation with the Coronavirus and the vaccines is obviously unprecedented. And so, you know, the industry has been really motivated to get as many doses out as quickly as possible. So, I'd imagine that the situation has incentivized the use of these multidose vials.
Dr. Shortliffe: I actually believe that the notion of multidose vials is not new at all. And for years, the public awareness of the issue of multidose vials has certainly gone up because of, you know, especially the situation with the Pfizer vaccine where it was supposed to contain five and people were finding it contained six. And an important thing to point out about that is that subsequently, when it became clear that people were getting six, rather than five doses out of all these vials, Pfizer made it clear that they were going to charge more for the same vials because they were being used on six patients rather than five. Which goes to our point that really the pricing has to do with how many patients are being treated, rather than just the volume inside the vial.
Meagan: Okay, yeah. And I guess what I was getting at is, when we talked about why this isn't more widespread and you said this is just...we don't really have a great answer for that, I was wondering if the incentives are just not there right now for that?
Dr. Shortliffe: Well, maybe it's a little bit like the notion of weight-based dosing, it's kind of we've always done it that way. We've always put them in single dose vials, that we've always used the single dose vial and the like. So, we're raising the question whether we're looking adequately at these. You know, what to the public would sound like arcane issues that are hardly worth worrying about, but they really are worth worrying about for the reasons that we've been discussing. And they certainly have to do with the overall pricing. And they lead to this notion that there's waste going on, even though I think that putting a price, an economic value, on the leftover liquid that's being discarded is extremely difficult. And we've basically said, there's really not much point in doing that.
Meagan: I see. Now you keep bringing up this notion of waste as if you're questioning the idea of waste to begin with. Can you explain that a little bit more?
Dr. Shortliffe: Well, as economic waste. I mean, it's clearly throwing out some liquid that somebody produced, so there's that kind of waste. And it leads to the notion of why are we doing that, and we make recommendations for why we might be able to do less of that, or how we might be able to do less of that. But the notion that this is worth a lot of money, that liquid itself, that's where we talk to economists at length, looked at how drug pricing is done to the extent that you can determine that. It's not exactly an open topic where you can get a lot of detail. But our conclusion was that this is really not money that can be recouped for that liquid that's left in those vials, and we really need to be looking at the overall system that produces vials the way that they are, along the lines of what we've been discussing. What we didn't discuss is for those drugs that cannot be in some way made safe to be in large multidose vials like these vaccines can. Are there technologies that would allow us still to use the leftover in the vial for another patient in the single-dose vial?
In other words, make it more than a single dose vial simply by adequately protecting it. And there are, in organizations that have lots and lots of patients, therefore, a real good chance of efficiently being able to utilize, you know, within the timeframe that's safe, the remainder of the drug on another patient. And the technologies allow those who are actually dispensing the drugs to patients to do so in a way that does not involve breaking the sterility of the vial. That way allows the drug to be used on a second patient. But the reality right now is that those are unique practices, practice settings, where large numbers of patients are being treated for the same disease and where they can even schedule patients with the same problem to come in, more or less, the same day, the same afternoon, and in that way, make a very efficient use of the vials that they have purchased. But this is quite rare, and most practices don't have any way of coordinating in order to make that kind of safe use of a single dose vial.
Meagan: At the moment, are there any regulations currently addressing this, attempting to eliminate waste and make these kinds of practices more widespread?
Dr. Shortliffe: Well, there has been a lot of interest in the Congress about this issue. Because as I mentioned at the outset of our conversation, it looks like a lot of money is being wasted. And that assumption is based on the notion that, for example, if you only use three-quarters of a vial and the vial costs $1,000, then the one quarter that you discard is worth $250. And if you multiply that over all the vials and try to get an estimate of just exactly how much has been thrown out, we come up with estimates in the billions of dollars a year for Medicare or CMS. And therefore, Congress is saying we have to figure out how to get that money back. That has led to draft legislation that actually looks at the issue of asking for rebates, and documenting the amount of what's in the vial that is actually administered to patients and what portion is leftover and discarded.
It was this awareness of large amounts of money that might be saved that led Congress to ask CMS to do this study with the National Academies. Now, a few years ago, in an effort to try to quantify the amount of discarded medication, CMS introduced a special billing code called the JW modifier, which could be used by those who were reporting on the administration of drugs and getting reimbursed for the administration of these medications. And the JW modifier allowed them not only to say that there had been some leftover but also exactly how much leftover there was. This is supposedly required by CMS but it turns out that the compliance with the uses of the JW modifier is extremely poor, we have an entire chapter in our report looking at just how often people actually use it. And one of the reasons they're not highly motivated to use it is they're going to get reimbursed for the total, for the cost of the full vial, regardless of whether they use the JW modifier.
So, you can imagine the overhead that goes into asking people to submit the JW modifier and deal with it at the receiving end and the like. So, there's cost right now associated with even trying to measure that. And for reasons that I think I've already described, we believe that you really can't assign an economic value to that. If you tried to claw back that money, recoup it through rebates from manufacturers, that, to them, would look like a drop in their profit margins for what they believe they've priced for a patient. And much as Pfizer increased the amount that it charged for the COVID vaccine when it found that everybody was getting six patients treated rather than five, we believe that there would just be a kind of reset to pricing and that there'll be very little actual savings.
Meagan: Yeah. So, I did note in the report you guys did not support the idea of rebates because of these consequences. Tell me about some of the solutions that you found, though, that you do think are good ideas?
Dr. Shortliffe: Well, there were several things that we recommended. In fact, our primary recommendation was we don't think there's economic value here and that therefore, we really ought to encourage all these agencies to be looking at how to increase the overall efficiency and question some of the assumptions may be that have led to this problem, seeming to be a significant concern and expense. But then there are detailed recommendations about how maybe to do that and they're broken into two categories. There's a set that has to do with just promoting efficient and effective use of infused or injectable drugs, which may or may not be in single-dose vials for reasons we've already discussed. Maybe they don't all have to be in single dose vials. And the second is to look carefully at the reimbursement system for the clinician administration and infused or injected drugs. How do people get reimbursed?
We talked about using multidose vials whenever possible, trying to come up with technologies that will allow us to share the single-dose vials, asking FDA to actually intervene to require that drugs at least that the drug developers at least demonstrate that weight-based dosing or body surface area-based dosing is necessary for safe and effective treatment of the indication for which they are seeking approval for the agent. And the technologies become an interesting additional issue, which we think could be pressed for by the agencies that see the advantages. And being able, to the extent that they need to use single-dose vials, and weight-based dosing is how to make that more shareable in a way that's still safe and effective.
Meagan: Can you tell me about technologies that could be implemented to make shared vials more safe and effective?
Dr. Shortliffe: These have to do with ways of actually taking the contents of vials in a totally sterile way into machines that then dispense in a fashion that does not require sticking a needle through the top of a vial. And they have been used in other countries, and there are a few experiments in this country that we heard a bit about. We did look at the international situation which, of course, is quite different, especially on the reimbursement side in other countries because of differences in health systems around the world. But one of the things that was particularly intriguing was some of these ways of getting absolutely the most out of every vial by using technologies that keep you from having to throw out too much.
Meagan: So what kinds of technologies? How does it work?
Dr. Shortliffe: Well, we didn't actually see the devices. We heard them described. They were, as I suggested, ways of combining individual vials and safely combining the contents of a vial so that you can essentially take the right sized aliquot without adversely affecting the sterility of the remaining liquid.
Meagan: Okay. So, for pharma manufacturers who are watching this issue, and they're wondering what kinds of new regulations might end up coming down the pipes as a result of your work, they'd be looking for, you know, potentially, like we talked about, the FDA adding or more asking them to look at standard dosing in some of their early drug development, as well as potentially pushing, the FDA could kind of push for the use of these different technologies for vials that allow patients to get more out of...
Dr. Shortliffe: The manufacturers may find themselves doing more multidose vial rather than single-dose vial production. And perhaps, as part of the production process, adding antimicrobials or other methods for allowing the agents that right now are not receiving that kind of component to be transferred into multidose vials instead, so that they can be shared. One vial can be shared across many patients without the fancy technologies that might be necessary for those where antimicrobials can't be inserted for some reason.
Meagan: Right. Now, you've completed your report, and you've handed it off. Now, what's next for this issue?
Dr. Shortliffe: Well, whenever the National Academies makes recommendations, we do everything we can to try to make sure that the people that we're encouraging to act upon them, hear about them and answer questions they may have, try to be as persuasive as we can about the value of the advice that we're offering. So now, it really has to do with... I mean, we've done briefings for Congress already on both the House and Senate sides, in those committees where the staff are very interested in this issue and maybe were involved, for example, in the model legislation, the draft legislation that I've been mentioning. And this kind of flies in the face of some of their recommendations or their assumptions. But we're hoping that the report is in itself persuasive, that there are other ways to address this besides, for example, rebates.
Meagan: Right. And are you sensing a lot of motivation right now among lawmakers, to do something concrete here?
Dr. Shortliffe: I think it's too early to tell, the report's only been out a couple of weeks. Thing was, we were able, certainly, to get enough interest that they participated in briefings that we offered, and several people asked for follow-up information and the like. So, it's on their radar screen, and we hope that it will begin to influence policy and maybe future legislation. But not just in Congress, some of this is FDA regulatory advice. Some of it is CDC. We found some conflict between recommendations that were guidelines that came out of FDA and CDC on the same issues, encourage them to kind of bring their perspectives together and be more consistent. And that's the kind of thing we hope that they will agree that they ought to do.
Meagan: Yeah. Well, we'll be following it closely to see if they keep the ball rolling. Anything else really important, especially in terms of the impact for the pharma industry that we have not discussed?
Dr. Shortliffe: Yeah, I don't think that the pharma industry was identified in any way as being the source of this problem, per se, except perhaps in those early stages of drug development where we need to be much more open to the possibility of fixed dosing. But much of the rest of this really has to do with reimbursement regulation and proper fixing value to what's in a vial, those kinds of questions. And most of that is tied to drug pricing. And there's another Academy report that's about three years old that dealt with how we might try to address problems with the rapidly increasing costs of pharmacologics in the U.S. healthcare system. Although we pointed to that report, that's not the explicit set of recommendations we will make in this one.
Meagan: Well, if the situation, from an industry point of view, is that this is rooted in culture, it seems like that might even be harder to change than getting lawmakers to pass new legislation. Culture changes are always tough.
Dr. Shortliffe: Well, that's why I think this becomes a regulatory issue. I mean, culture still does need to respond to the requirements. Everybody wants to get their medication approved by the FDA. And if the FDA says, show me the data that you need to do this weight-based. We think they'll do it.
Meagan: Yeah, absolutely. Well, thank you, again, so much for taking the time to explain this to me. We really appreciate your insights.
Dr. Shortliffe: My pleasure. Thanks very much.
Meagan: You've been listening to Off Script. Stay safe everyone and be well.