Prepared Testimony of Ed Fritzky

 Good afternoon, Chairman Mack, Vice-Chairman Saxton, and Members of the Committee.  My name is Ed Fritzky.  I am the Chairman and Chief Executive Officer of Immunex Corporation.  I thank you for the opportunity to participate in this biotechnology summit.  I am honored by your invitation to testify and your interest in Immunex’s contributions to medical treatment.

Immunex was founded in 1981 in Seattle, Washington and now employs 1,000 people who are helping discover new ways of treating disease, using advanced biotechnology as tools.  Our research concentrates on mastering the biology of the human immune system and has provided dramatic health benefits for patients.  As a result of our work, for example, older patients suffering from leukemia can live longer with a drug called Leukine®, and rheumatoid disease patients who have failed standard treatments can move again, thanks to ENBREL® (etanercept).

Our research focus has produced a pipeline of potential new products that target some of the most serious medical challenges known to man – cancer and rheumatoid disease, but also multiple sclerosis, heart disease, asthma, and osteoporosis.  Currently, Immunex Corporation markets seven therapeutics to health care professionals in the U.S.

 Our most recently approved product, Enbrel®, is used for the treatment of moderate to severe rheumatoid arthritis (RA).  In November 1998, after ten years and $200 million invested in its development to date, Immunex brought Enbrel® to market, the first of a revolutionary new class of drugs to treat the devastating effects of rheumatoid disease. Enbrel® dramatically illuminates the human face of biotechnology, by

* allowing people to return to work and school;
* giving disabled people the ability to leave their wheelchairs behind and walk again;
* allowing  mothers to play with their children;
* relieving people of the constant pain that once defined their lives; and
* enabling people to reclaim their lives.

 The Tragedy of Rheumatoid Disease:

 To understand just how important the discovery of Enbrel® has been for those with RA, it is essential to understand the heavy toll of this disease.

* RA is a chronic and potentially disabling disease that afflicts two million Americans at their peak of productivity.  RA is a progressive, debilitating, potentially fatal disease.  RA attacks the joints causing constant pain and swelling that can result in crippling and disfigurement.
* RA is typically diagnosed when a patient is in her thirties, forties or fifties, and it affects three times as many women as men.

* Unlike osteoarthritis which results from wear and tear on the joints, RA is a disease in which the body’s immune system mistakenly attacks the joints and surrounding soft tissues.
* RA makes simple tasks such as getting out of bed, walking, shaving, and buttoning a shirt difficult or impossible, and can end a person’s ability to work, take care of a family and enjoy life.

 The human, clinical, and  social impacts of RA have been extensively documented in medical and economic literature.  The financial consequences are enormous.  It is estimated that:

* RA burdens the U.S. health care system with more than 9 million physician visits and 250,000 hospital admissions annually;
* RA and its related conditions lead to $17.6 billion a year in lost productivity due to lost wages and days of work;
* Finally, the indirect economic costs of RA total approximately $5 billion a year.
 
 

The Enbrel® Story: Reducing the pain, disability, and  economic losses attributable to Rheumatoid Disease.

In the late 1980s, Immunex researchers discovered a molecule that is a key player in inflammation.  They developed a novel way to control inflammation, and its deleterious effects, by using the body’s own elegant solution.

Enbrel® interrupts the inflammation process in a highly targeted manner, which is remarkably effective.  Almost two-thirds of those who take Enbrel® experience significant improvement in pain, mobility and swelling within three months, and this includes those for whom no other therapy provided relief.  As one measurement of relief, patients on Enbrel® no longer have to endure three hours of “morning stiffness”, the time it takes to get moving again after sleep or rest. Enbrel® reduces it to just 30 minutes.

This novel therapeutic approach has changed the way rheumatoid disease is – and potentially other serious disorders will be -- treated in the future.

Let me tell you about just two of the pioneers of this new treatment – people on Enbrel® - who have shared their stories with us:

Kaitlyn:  Kaitlyn’s mother Arlene has told us, “People don’t realize how much more work it takes to care for a child who can’t dress herself, brush her teeth, brush her hair, or get her own breakfast.”

Kaitlyn, was severely stricken with Juvenile Rheumatoid Arthritis (JRA) at four and a half months old.  Later this year she will celebrate her ninth birthday.  Arlene describes Kaitlyn as a happy, well-adjusted child who smiles a lot and has friends at school who like to help her.  Although she has used a wheelchair for more than two years, she has been mainstreamed at school and has an aide who accompanies her to all her classes and assists her in using the bathroom.

Kaitlyn’s symptoms began with an erratic high fever and a traveling rash that is characteristic of Juvenile Rheumatoid Arthritis (JRA).  However, it took hundreds of tests, including painful bone marrow biopsies, to pinpoint the diagnosis.  Kaitlyn’s symptoms are systemic.  With the exception of a couple of fingers and toes, all of Kaitlyn’s joints are involved, including her jaw and neck.  Doctors routinely describe Kaitlyn’s case of JRA as the worst they have seen.

Kaitlyn’s hands are deformed, her range of motion limited.  Some of her growth plates have seized, causing Kaitlyn to be very short and slow-growing for her age.  Kaitlyn is a foot and a half shorter than her sister who is sixteen months younger.  Between the age of two and six, Kaitlyn was able to take about ten or 20 steps at a time, but the pain and swelling in her ankles and knees prevented further walking.  When her hips could no longer bear her weight, Kaitlyn was unable to walk.  At just about every visit to the doctor, Kaitlyn rated her pain at a level “10”.

Until recently, Kaitlyn was not able to roll over by herself at night, so Arlene or her husband, Darrell, would have to get up five or six times a night to readjust Kaitlyn and try to make her more comfortable.  Arlene would sometimes have to vary Kaitlyn’s diet, because it was difficult for her to chew properly.

When Kaitlyn was diagnosed with JRA, Arlene quit her job to care for Kaitlyn full-time, which cut the family income in half.  Even though she had worked for the federal government for more than 23 years, Arlene needed two more years of service in order to draw retirement benefits.

Before Enbrel®, Kaitlyn was on heavy doses of prednisone and naprosyn.  At various times, Kaitlyn was also given methotrexate, cyclosporine, and cytoxan, all of which were of limited help and caused severe side effects.  Kaitlyn’s mom was very concerned that the prednisone would bring on early puberty and stop Kaitlyn’s already slow growth.

Kaitlyn started Enbrel® in May of 1999.  After the first shot, Kaitlyn – and her parents – slept better.  After the second shot, she could spread her fingers for the first time in a very long time.  Kaitlyn’s prednisone dosage has been reduced to 1 mg every other day, which is the lowest dosage she has ever been able to tolerate.  She is also off the naprosyn, which was causing blood in her urine.  Kaitlyn’s hemoglobin and platelet counts and sedimentation rates have improved significantly.

Now, Kaitlyn can stand up and take four or five steps on her own.  Arlene marvels that Kaitlyn can now sit on her father’s shoulders.  Kaitlyn is able to write better at school, and she can brush her teeth and sometimes brush her hair.  She has grown an inch and a half and gained several pounds, and her lower jaw has stopped growing.  Arlene has ordered a walker for Kaitlyn and hopes to get her into physical therapy so she can learn to walk again.

Arlene tries to minimize discussion about pain, because she does not want Kaitlyn to focus on her pain, but she has noticed that Kaitlyn does not complain as often about pain since she has been taking Enbrel®.  Arlene can tell, by the way that Kaitlyn carries herself, that she is in much less discomfort.

In addition to getting more sleep, Arlene says she feels more peace of mind now that Kaitlyn is not in constant pain.  “No parent wants to see her child in pain, especially when it’s every day of her life.”  She is also pleased that she has been able to return to work as a secretary at the Naval War College.

Arlene is thankful that her insurer (Blue Cross/Blue Shield) is covering the costs of Enbrel®;  otherwise, she would not be able to afford it.  Without the Enbrel®, Arlene is certain that Kaitlyn would still be waking up in pain, not growing as well, and not learning as well at school because of her discomfort.  “My husband and I have told 25 to 30 people with arthritis to look into Enbrel®.  We’ll tell anyone we can, because it has really helped us so much.”

Joan London:  “There is not an aspect of my life this disease has not touched.”

Joan London was an active healthy, professional bowler and mother of two young boys when the stiffness and pain she was experiencing was diagnosed as RA.   After having her third child, her RA flared up and Joan required wrist surgery to restore mobility.

After this surgery, Joan returned to work as a part-time teacher and started a tutoring service with many fellow teachers working for her.  At this point, Joan’s RA was episodic, sometimes painful and sometimes not.  Joan continued her career, going to graduate school and then becoming a correspondent for the Houston Chronicle.  In 1983, she became the media relations director and Assistant Director of Internal Communications for the Texas Children’s Hospital.  During this time, Joan’s disease progressed to the point where she was unable to stand on her feet because of pain.  She reports,  “I had to hypnotize myself in order to walk down the hall of the hospital.”

When both Joan’s hands needed surgery in 1996, she was no longer able to work.  Joan is now a Medicare beneficiary under the disability eligibility provisions of the program.   Joan tried to pursue a Ph.D. in journalism, with the objective of returning to work to teach journalism.  However, a horrible flare-up of her disease required her to undergo extensive surgery to fuse four vertebrae in her neck.  This surgery will leave her with 30 percent mobility in her neck.  She estimates the surgery costs to be $70,000.  She requires an aide seven days a week and physical and occupational therapy twice per week.

To treat her disease, Joan had been on gold therapy (she was allergic to it) and was on methotrexate for ten years.  Joan would like to be on Enbrel®.  She has a good friend on the drug who has regained significant mobility and no longer lives with constant pain.  However, because she is on Medicare, Joan is not able to get Enbrel®.

Joan says, “I’ve tried to remain an active individual all my life and earn a living, but this disease has interfered at every turn.”

The Medicare Challenge:

Joan’s story illustrates the most difficult challenge we face:  the adverse effects of discriminatory coverage policy in the federal Medicare program.

The federal role in biotechnology research and development can be characterized as a three legged stool:  federal funding, through NIH for example,  invests in basic science research;  the Food and Drug Administration (FDA) determines whether a drug or biologic may come to market with the goal of improving medical care while ensuring safety for consumers;  and federal health insurance programs, like Medicare and Medicaid, reimburse for health care services.  Increasing federal investment in basic research and continuing to streamline and improve the drug approval process are critical to ensuring innovation in high technology.

For the disabled and elderly, the third leg of the stool – coverage under the federal Medicare program – poses the greatest challenge, limiting access to self-injected biotechnology therapies, like Enbrel®, while providing access to intravenous and physician administered therapies.  Access to biotechnology therapies is particularly vulnerable to the design and operation of the federal Medicare program.  Medicare is the single largest payer for health care services in the U.S.  Medicare is the primary source of coverage for seniors in this country.   For many it is the only source.

All new health technologies and therapies that serve seniors must meet Medicare program and policy requirements to be covered and reimbursed.  Unfortunately, Medicare coverage policies are rooted in 1960’s medicine, long before biotechnology enabled us to create these breakthrough therapies.  At that time, biotechnology was not an industry, and coverage updates adopted since 1965 simply have not kept pace with developments in the field.  The result is a program that discourages innovation and denies seniors access to breakthrough therapies.  Medicare’s policy regarding self-injected therapies is an example.

Enbrel® was designed to be easily used by patients.  It is a twice weekly injection that can be self-injected or given by a care-partner at home.  Because biologics are solely human proteins and cannot be ingested, they must be administered systemically (through an injection or intravenously).

Even without a drug benefit, Medicare covers many outpatient administered drugs and influences biotechnology development dramatically.  Currently, Medicare will cover outpatient drugs that are administered incident to a physician’s service in an office, hospital, or clinic setting.  Medicare will NOT cover self-injected drugs or biologics, because they do not require a physician to administer them.

This coverage anomaly means that intravenous therapies that must be administered in a hospital or infusion center are covered while self-injected therapies that are administered by the patient at home and treat the very same disease are not.  This is true even where the self-injected version would be less costly to the Medicare program.  Such a policy encourages development of the less patient-friendly, physician administered drugs, to the detriment of the patient.

Thus, biotechnology companies have an incentive to develop the more expensive, clinic or physician office based therapy.  Companies that want to provide the best therapy in the best form for the treatment of a patient can be penalized by Medicare if this treatment is designed to be self-injected.

Enbrel® is a perfect example.  It is a self-injected biologic.  Thus it is not covered by Medicare. Supplemental insurance does not fill in the Medicare coverage bias against breakthrough biotechnology therapies, because the benefits may include substantial co-payments and are typically capped at levels well below the cost of expensive breakthrough biotechnology therapies.  For many disabled individuals and seniors, paying out of pocket is not feasible, so they are denied access even when no other drug or combination of drugs has successfully controlled the disease.  Yet, approximately 55 percent of RA patients are Medicare beneficiaries.

Every day we hear from patients.  We hear from those like Kaitlyn’s mother whose worst worry is no longer their debilitating disease.  And we hear from people like Joan London who know that a therapy is out there that can eliminate their pain and give them their lives back, yet they do not have access to it because of Medicare coverage policy.

We have Rheumatoid Disease patients making choices between what is covered and what is not, rather than choosing what would be best to treat their case and would allow them to return to work or eliminate the need for daily assistance.

This problematic Medicare drug coverage policy has three economic effects:

1) RA patients remain less productive than they might be if they had access to the full range of therapies.  They are denied the therapy that might move them from disabled to able-to-work status.

2) Private market biotechnology research and development is unintentionally steered toward products that require physician or hospital administration.  This ultimately encourages development of a less efficient and more costly health care system.

3) Health care that relies on hospital or clinic-based delivery is made more difficult for those living in rural or medically undeserved areas.
 
 
 

The Solution:

Whether as part of a Medicare reform proposal or as other legislation, this anomaly in Medicare coverage policy that denies access to self-injected therapies, like Enbrel® must be corrected.

I am encouraged by the tireless efforts of Senators Gorton and Murray to urge the Senate Finance Committee to address this issue in its Medicare reform legislation. Representatives Dunn and Inslee along with the entire Washington House delegation introduced a bill (H.R. 2892, Access to Innovation for Medicare Patients Act) that would correct the problem.  In addition, Representative Cardin’s Medicare prescription drug bill addresses this issue for a set of chronic diseases, among which is RA.  Other proposals, including some sponsored by Members of this Committee, also address this issue by providing stop-loss coverage that would protect those with rheumatoid disease and other patients from running out of insurance coverage when health care expenses reach a certain level.

We should not wait for Medicare reform to address this issue.  This is not a major change in the program.  It is a small change that can help many elderly and disabled Americans enormously.  It is a simple solution to a glaring inequity.  I urge you to cover self-injected biologicals that are used as alternatives to already covered “incident to” drugs.

To ensure that government policy lets the private market work and bring innovations to health care, federal policy must require the Medicare program to cover self-injected biologics that may be prescribed in place of covered therapies.

The human face of biotechnology is all around us.  It’s on the faces of patients who beam in gratitude for the exciting new treatments, it’s the financial community that underwrites the search for new cures, and it’s the industry’s employees from coast to coast who have the vision to create the future, and change the face of medicine forever.

Thank you.