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Q&A: X-Files' Chris Carter Talks Paranoia, Secrecy and Surprise   more similar news »
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Wed Jul 23, 2008
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Trevor Foltz was six months old last fall, fresh off a visit to Disney World in Orlando, when the spasms first began.

Healthy until that point in his life, he began thrusting backward in his car seat, repeatedly and forcefully, as he rode with his parents north toward home in Rhode Island. "I thought it was temper tantrums," says his mother, Danielle. The next day, at home, Trevor was hit with a series of 40 convulsions and rushed to the hospital, where he was diagnosed with infantile spasms, a rare form of epilepsy. Treatment would cost $1,600 per vial of steroid drug H.P. Acthar Gel, and Trevor would need three of them.

As if the idea of a $4,800 tab wasn't bad enough, when the Foltzes submitted their claim, they found out the company that made the drug, Questcor Pharmaceuticals, had just recently jacked up the price—to $23,000 per vial, or $69,000 for a three-vial treatment—and the insurance company wasn't going to pay. And all the while, unbeknownst to anyone at that time, an alternative, for $15, existed.

On Thursday, the Joint Economic Committee will open hearings in Congress on dramatic price hikes for drugs used to treat children, with a focus on companies such as Questcor and Ovation Pharmaceuticals, which in 2006 bought rights to a drug that treats heart problems in premature infants, and increased the price 1,800 percent to $1,875 per three-vial treatment.

"We need answers to why a company would increase the price of a drug 18-fold when costs related to marketing, physician education, and research appear stable," says hearing chair Amy Klobuchar, a Democratic senator from Minnesota.

Politicians say they are not opposed to drug companies earning strong returns on the costs of researching innovative drugs, and understand the high prices of many medications. But they are investigating whether some companies are price-gouging, concerned more about executive stock options than about running innovative companies.

Some of those drugs, like Questcor's, are decades-old drugs that were bought on the cheap and redesignated under the federal government's Orphan Drug Act, which marks its 25th anniversary this year. Not infrequently, the drugs' new owners pass on big price hikes to consumers.

At Questcor, the increase is explained as the cost of doing business with an orphan drug.

"The company was heading toward bankruptcy," says Steve Cartt, executive vice president for business development at Questcor, which is based in Union City, California, an industrial enclave on San Francisco Bay.

"The whole rationale for the price increase was to ensure availability of the product," says Cartt. "We talked to physicians. They wanted the drug to be available. The choice was risk of availability or a price increase."

Originally approved for multiple sclerosis in 1952, Acthar Gel had been owned by pharma giant Aventis, which was losing money on it, when the 11-year-old Questcor acquired it in 2001. Questcor, too, failed to gain traction with M.S. patients, so it sought a new track.

Now the gears at Questcor began to turn more quickly. It won orphan designation for Acthar Gel in 2003, and proceeded to the next step: getting F.D.A. approval to market the drug explicitly for infantile spasms, which under the orphan act would also include a seven-year monopoly for Questcor. The company prepared for a marketing blitz and doubled its sales force early last year. But when the F.D.A. rejected Questcor's application in May 2007, the company quickly slashed its staff and jacked up the price.

Cartt says the price was set "within the range of other orphan drugs," noting that many others go from $50,000 to $500,000 a year or higher. For instance, BioMarin, an orphan-drug specialty company, charges $70,000 a year for Kuvan, a drug to treat phenylketonuria, a genetic enzyme disorder that can cause mental retardation and brain seizures. But unlike BioMarin, which spends 64 percent of sales on research and development, Questcor spends very little; in 2007, Questcor's research and development accounted for 9.5 percent of sales revenue.

What other considerations played into the price Cartt would not say. Sales for 2007, when the price hike took effect, were $49.7 million, and net income was $37.5 million—a net profit margin of 75 percent. It was significant not only for its size, but also because it was the first profit since the company was formed, as Cypros Pharmaceuticals, in 1990.

Investors were pleased, driving up Questcor's share price from 40 cents to over $6 after the August 2007 price hike. But executives at the company started selling their shares in December, seven months after the former C.E.O., James Fares, stepped down and around the time Questcor executive Don Bailey took his place. Since December, Cartt himself has sold shares based on grants and options totaling $1.68 million; many of those options were granted at 46 cents a share. He holds nearly a million more options on Questcor stock.

Doctors were unhappy with the price hikes.

"Most of us in the child-neurology community were outraged at the extent of the price hike, unusual even for orphan drugs," says Eric Kossoff, a pediatric neurologist and infantile spasms expert at Johns Hopkins Children's Center. "Most of us had no choice, unfortunately. At the time it was felt to be the best drug out there, and they're the only company that makes it. This is an incredibly serious form of epilepsy with devastating implications if not treated."

Curiously, though, he found that the price hike "was one of the best things that could have happened." Why? "Because we found something better and cheaper." Far cheaper, it turns out. "We spent a few days going through all the medical literature, looking for what works, what doesn't."

The team turned up a study from the United Kingdom that gave infants high doses of prednisolone, a well-known, generic steroid. Prednisolone had been dismissed as relatively ineffective for infantile spasms-based research that used low doses. The high doses made all the difference: The British study found efficacy rates reached 70 percent and more. Johns Hopkins began using high-dose prednisolone and found it worked in about 70 percent of cases, on par with the hospital's experience with Acthar Gel. And the price was $15 per injection—essentially free—compared with the three-injection $69,000 treatment from Questcor. "It was like in times of war. You get focused, and amazing things come out," Kossoff says. "We don't use [Acthar Gel] at Hopkins anymore for infantile spasms because the oral steroids [high-dose prednisolone] work just as well."

It's unclear, though, how many other doctors and hospitals in the U.S. will switch from the $69,000 drug to the $15 drug.

"I don't understand what's behind the price increase," says Finbar O'Callaghan, a pediatric neurologist at the Bristol Royal Hospital for Children and coauthor of the United Kingdom Infantile Spasms Study, or UKISS. The study showed that high-dose prednisolone and a synthetic form of ACTH, the active hormone in Acthar Gel, were equally effective. He cautioned that the purpose of the study was not to compare the two, but to compare steroid treatment with another drug called vigabatrin. "Having said that, you couldn't get a piece of paper between the results of the prednisolone and the results of the ACTH."

Costs aside, Hopkins is achieving the same results against Acthar Gel. "There is no reason to favor one over the other, unless there is a financial reason for doing so. That's been a big issue in the U.S.," says O'Callaghan. Comparing $15 against $69,000 "puts a different perspective on it," he says.

"Historically, and unfortunately," he adds, "doctors in general are very traditional and tend to use what's worked before."

Asked about the $15 price on prednisolone, Cartt said studies from the 1990s show low efficacy rates for the drug. When informed that those studies looked at low doses, not high doses, Cartt said no one knows the long-term implications of high-dose prednisolone, and said the company's higher profits will help it find out. "We can afford to study the long-term effects" of Acthar Gel and the alternatives, he said.

What the congressional hearing may find is that Questcor had a business problem: While its drug had a potential market of 300,000 multiple sclerosis patients, not enough of them were buying. But among a smaller market, just 2,000 babies per year, Acthar Gel was extremely effective in fighting infantile spasms. Questcor's astronomical rates may simply be a matter of hard business realities in a small potential market.

For the Foltzes, Questcor's high prices proved irrelevant, after much struggle. When at first his insurance company, WorldWide Insurance, rejected the claim, Trevor's doctor faxed in a letter stating that there was a good chance Trevor would end up mentally retarded for life without treatment; the insurer relented. But on Thursday, his mother, Danielle, will join those who testify against companies like Questcor. She says, "I feel they're going to soak every penny if they can get it."



Wed Jul 23, 2008
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Magic Tricks Reveal Inner Workings of the Brain   more similar news »
Magicians don't play with the laws of nature -- just your mind.

Wed Jul 23, 2008
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NASA Scientists Suggest Planting a Lunar Garden   more similar news »
NASA scientists want to send a plant-growing module loaded with dirt and mustard seeds to the surface of the moon.

Wed Jul 23, 2008
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Review: Stephen Hawking's Secret Key to the Universe   more similar news »
George's Secret Key to the Universe, by Stephen and Lucy Hawking, is full of information about the universe, black holes and the wonders of science -- all presented in a gentle, child-friendly way. And the author's scientific credentials are unimpeachable.

Wed Jul 23, 2008
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Why Castlevania Became a Fighting Game   more similar news »
Two-player fighting game Castlevania Judgment returns to a console near you.

Wed Jul 23, 2008
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S.F. Admin Coughs Up Passcodes to Mayor   more similar news »
San Francisco regains control of its network after the city admin who hijacked the system nine days ago turns over the stolen passwords to Mayor Gavin Newsom in a secret jailhouse meeting.

Wed Jul 23, 2008
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Google Throws Open Rival for Wikipedia  Anon Authors Discouraged   more similar news »

Google announced on its official blog Wednesday the debut of Knol, a Wikipedia-like online encyclopedia penned by authoritative sources.

Udi Manber loves cartoons. Not animations, but the single-panel graphics that appear in magazines like The New Yorker. He studies the history of the field, has covered the walls of his house with framed originals, and has edited a book of cartoons about Google, where he works as the head of search engineering.

"Udi's not just a fan, he's a connoisseur," says Robert Mankoff, cartoon editor of The New Yorker.

When not thinking about cartoons, Manber spends endless time thinking about how search can be improved. One big reason many searches don't succeed, he believes, is that despite the 20 billion or so Web pages in Google's indexes -- including the 2 million items in Wikipedia -- the information simply isn't there.

For instance, what if you wanted to learn all about Peter Arno, a celebrated New Yorker cartoonist who died in 1968? You wouldn't get lucky. The items appearing in the first page of results give only the barest information on Arno's life and work.

Of course, it's not just information about cartoonists that's missing -- according to Manber there are thousands of black holes when it comes to things searchers want to know. What people need, Manber concluded about a year-and-a-half ago, is the information that would come "when an expert who knows this topic would tell you, if they had 15 minutes to explain."

So Manber began what he refers to as his pet project -- an effort to generate exactly those kind of answers in the top search results. The product, announced Wednesday, is called Knol.

"It's a nice, very simple word to remember, and it's part of knowledge," says Manber.

Google hopes that Manber's project will give experts who know their stuff a platform to share it with everyone else. Google is especially keen on seeding this information internationally, in languages where the online corpus is sparse.

From the Knol team's loft at Google headquarters, software engineer Mohsin Ahmed works out bugs in front of a panel of monitors at Googleplex. With $20 Ahmed created a simple red, yellow and green light bug detector that glows green above his head.
Photo courtesy Kat Wade/Wired.com

Here's how Knol works. Experts in a given subject log into a Google account and use the Knol software to post an item, also known as a knol. In some senses, the process is like producing a blog post -- but in this case it's not something written off the cuff but carefully crafted to coherently explain a single subject.

One key attribute: Knols are meant to be signed with the author's actual name. With permission, Google will actually verify the writer's identity, either by credit card or phone.

"The process will take 20 seconds with credit cards," says Knol product manager Cedric Dupont. Phone checks will take a minute or so. This vetting, Manber hopes, will give knols accountability and, in the case of high-status authors, the benefit of a solid reputation.

The format and tone are up to the author: Google won't intervene if your knol on F. Scott Fitzgerald opines that The Great Gatsby was really a dud. And it will certainly help if the knol delivers the goods in a pithy, captivating style. (Google won't, however, tolerate knols that violate copyright or include porn.)

Google is attempting to establish a model for a standard item, and has seeded the "Knolosphere" with a few hundred entries appearing on launch, largely in the field of health and medicine. Working with Google on this is Robert M. Wachter, a professor of medicine at the University of California, who also sits on Google's health advisory council.

Just like blogs, knols can include images, video and links. As a special bonus, The New Yorker will allow knol authors to include, free of charge, a single cartoon from the publication's 20,000-image archive to illuminate the subject. (Guess which Googler was behind that deal.)

Knols are treated pretty much like any web page -- found by following links, but readers will encounter most through search results from Google or other search engines. Google says that knols will get no special favors when its algorithms choose results, but clearly expects the best efforts to rocket towards the top of search results. Maybe even ahead of the ubiquitous Wikipedia items.

"A high-quality knol will rise up not just on Google but all the search engines," says Michael McNally, the project's technical lead.

Knol software engineer Ben McMahan concentrates on "firefighting last-minute bugs."
Photo courtesy Kat Wade/Wired.com

There's no limit on how many people can write knols on the same subjects, but presumably the inferior ones will be stalled in the back results pages while searchers encounter the best ones immediately.

Why would an expert on a subject take the time to write a knol? One reason would be an altruistic impulse to share wisdom with the world. There's also the ego juice that might come with being the first authority one encounters in a search for absinthe or Daryl Lamonica. By default, knols use a Creative Commons copyright license, which allows copying and remixing. If they wish, authors can change the settings to register traditional copyright protection.

In addition, there's money involved. If authors OK it, Google will compensate them with revenue from advertisements served by the company's AdSense program. If someone writes a top-ranked knol on a subject that's matched with high-value clicks from Google ads (diseases, travel destinations, personal finance), the payout could be thousands of dollars. (Purists can keep the ads off.)

But Manber is emphatic that his project is not about the bucks. "If Knol doesn't improve search but generates some revenues, that'll be a failure for me," he says.

Many people, however, will find it puzzling that Google thinks it necessary to create a new platform for people to share information. Why bother, when Wikipedia will give you answers whether you're wondering about George M. Dallas (James Polk's vice-president) or the 13th Floor Elevators (an Austin psychedelic rock band formed in late 1965)?

One person asking that question is Wikipedia co-founder Jimmy Wales, who learned about Knol a few months ago, when Google posted a blog teaser about the project.

"What is the added value?" Wales asks. "People already can put up web pages somewhere on the internet, put some ads on it if they want to get revenue or not put ads if they don't want the revenue."

Wales clearly thinks that his brainchild will satisfy most searchers. "If I type in Thomas Jefferson, there's a pretty good chance that the Wikipedia entry is more or less exactly what I'm looking for," he says.

Google says it isn't trying to compete with Wikipedia, but providing an alternative.

"I'm not suggesting one is better than the other, but different," says Manber.

And what would the difference be?

"One article is written by one person, and it's one person's opinion," says Manber. "You know who that person is and where they're coming from."

From the team's loft, Xiangtian Dai makes sure that Knol runs uniformly on different web browsers.
Photo courtesy Kat Wade/Wired.com

During one of my interviews with Manber I asked him to compare the first commissioned knol, about insomnia, with a Wikipedia item. The knol was written by Manber's wife, Rachel, who is an associate professor at Stanford University's Psychiatry and Behavioral Science Sleep Center.

Though Rachel Manber's item is a more coherent and thorough treatment of the subject than Wikipedia's, in some respects it's similar to the crowdsourced entry: a general definition followed by a discussion of causes and treatments.

But the top of the Wikipedia page on insomnia displays this caveat: "This article is in need of attention from an expert on the subject." Touché.

By the way, Google isn't rejecting the wisdom of the crowd. Once an author creates a knol, the general public can improve it. People can suggest corrections, edits and amendments to the content -- a technique Google calls "a moderated edit."

Readers can also leave comments alongside the content. While the author is the arbiter of the item itself, and can reject suggestions, he or she can't delete the comments. Users can also rate knols on a five-star scale.

"I'm sure there will be knol spam," says Dupont, who says that Google will use its experience fighting spam in Blogger and other products to minimize it.

"If Google is able to pull it off, bring expert knowledge to the masses, that's absolutely wonderful," says Jorge Cauz, president of Encyclopedia Britannica, the company best known for providing trusted expert information in an encyclopedia format.

It's not Google that worries him, but Wikipedia, and he sounds like he'd like some help fending off Britannica's crowdsourced rival. "It's not the presence of Wikipedia that's a problem, it's the omnipresence of Wikipedia," he says.

In fact, he says, from what he hears about Knol, "it's very similar to things we're thinking and retooling Britannica to do." He hints that the company might be changing from its subscription model to a scheme where much of its content would be free to users -- and show up in search engines.

"If you're charging for content, you're behind the firewall. And if you're behind the firewall people don't call on you first," he says. As part of this process Britannica now encourages anyone to link to its items. Those following the link can read the full article free. Britannica also posts a daily info-nugget on Twitter.

But Cauz does imply that Google is stepping out of its sweet spot by generating content. "The issue here is that Google will become a publisher and will have moral liability and moral obligation for something that happens under its own brand -- and that is something that Google has never done," he says.

Google sees it differently, viewing Knol as a common-carrier platform like Blogger or YouTube. Knol pages won't even carry a Google logo.

"We are not publishers," says Manber. "We do not want to be editors. We do not want to have influence over what is written." He can't say it enough: It's about search. "There are millions of people with something in their head that they're not writing down," he says. "If I can get some of them to write it down, I'm helping everybody."

If Google's plan works, future searchers will get higher-quality results from searches of subjects commonplace and obscure -- even Peter Arno. In fact, a knol has already been written about The New Yorker cartoonist. If its author posts it -- he hasn't pulled the trigger yet -- Google won't have to work hard to verify the expert who worked for weeks to pen that item. It's Udi Manber.

Most of the Knol team takes a moment from working out last minute bugs to pose for a group shot at Google headquarters in Mountain View, California.
Photo courtesy Kat Wade/Wired.com

---

Disclosure: Wired.com is owned by Condé Nast, publisher of The New Yorker.



Wed Jul 23, 2008
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Indie Game Developers Enlist Algorithms to Do the World-Building for Them   more similar news »

What's the difference between an indie game and a blockbuster? About 5 million man-hours. Producing a big-budget title like Grand Theft Auto 4 requires armies of people to spend years painstakingly sculpting every individual object in the game world. Indie games, which are designed by small teams of geeks, can't possibly match that. But an increasing number of garage coders are building elaborate 3-D environments by outsourcing the design work — not to Bangalore, but to algorithms.

Take the upcoming online game Love (shown here), due out later this year. Around 100 players will be able to explore the virtual world together, establish towns, and fight monsters. And its impressionistic watercolor environment was created by an army of one, Swedish coder Eskil Steenberg.

Love's world starts as a generic landscape divided into almost 100,000 blocks. "The game's engine uses an algorithm to turn the blocks into hills, valleys, and oceans," Steenberg says — a method called procedural generation. It then examines the terrain and adds bridges, tunnels, and buildings to ensure that each area is interesting and accessible. Once the world is created, it can still be modified. "It's like a Lego kit that both the players and the game itself can use," he says. Players can rearrange trees and boulders, reconfigure buildings, or hollow out new caves in hillsides. The gorgeous vistas are also subject to natural phenomena like erosion, thanks to Steenberg's tectonics system.

Love's vast, morphing creation demonstrates how one man can become like a god — he sets the world in motion and lets simple rules, random numbers, and inhabitants do the rest.



Wed Jul 23, 2008
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As Summer Heats Up, An Ode to the Man Behind AC   more similar news »
Summer's indispensable invention is the product of Willis Haviland Carrier's mind. It's too bad his branding didn't catch on: Te called his air-conditioning rig "the Weathermaker."

Wed Jul 23, 2008
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