How President Obama can spur ‘precision medicine’: Stop PBMs From Rationing Them

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  • 02/05/2015
My oped in the NY Post:  How President Obama Can Spur Precision Medicine

President Obama is calling on Congress to improve the nation’s health by increasing the development of precision medicines — treatments that target the underlying cause of life-threatening diseases.
He says he wants to ensure everyone has access to the right drugs at the right time, because it can reduce the cost of health care and save lives.
That’s great. Too bad that, under ObamaCare, people are getting fewer targeted treatments and paying more for them.
In his State of the Union, the president mentioned Bill Elder, a 27-year-old medical student being treated for a rare form of cystic fibrosis with Kalydeco — which, the president noted, “has reversed a disease once thought unstoppable” by turning off the genetic mutation causing his disease.
Yet Kalydeco isn’t easily available under most health plans. Ask Chloe Jones, a 14-year-old Arkansan with the same type of cystic-fibrosis mutation.
Her state Medicaid agency has refused to give her Kalydeco, insisting that she first fail to respond to older, cheaper therapies that treat the symptoms but not the underlying cause. (Kalydeco costs about $200,000 a year.)
That is, she has to get sicker before getting the medicine that shuts off her disease.
Chloe’s not alone. Nearly 70 new treatments precisely target the underlying causes of disease; many, like Kalydeco for CF or Herceptin for breast cancer, target specific disease paths or benefit specific groups of patients.
Compared to trial-and-error or wait-and-see care, matching the right treatment to patients is much more cost-effective, especially for the person who’s sick.
Yet health plans are covering fewer new precision medicines, instead forcing patients with CF, cancer, multiple sclerosis, psoriasis and HIV to get sicker before they can use them.
And when they do allow access, they’re forcing patients to pay up to half the new medicines’ cost.
Yet ObamaCare is exacerbating this pre-existing problem with our system — by accelerating the transformation of prescription-drug coverage to a vast pyramid scheme.
Thanks to the ObamaCare law, health plans now enroll people under the promise of covering anyone with a pre-existing condition — but those same plans make it increasingly difficult, if not impossible, for these people to get the medicines they signed up to receive.
At the center of the scam are pharmacy benefit managers, or PBMs. These are the firms that actually develop and run the drug benefits for health plans.
PBMs bargain with drug makers to get discounts or rebates for including their pharmaceuticals on “formularies” — the list of drugs your health plan covers.
ObamaCare has already accelerated consolidation in this obscure industry, to the point that just two PBMs now control the drug benefits of nearly 200 million Americans.
The two firms are using their vast market power to extract big rebates from drug companies in exchange for including precision medicines on their formularies.
Increasingly, PBMs are only covering one precision medicine for a given condition — the drug made by the company that offers them the biggest rebate.
That’s what happened with the new drugs for Hepatitis C. One big PBM, Express Scripts, is only covering the drug Viekira Pak; the other, CVS/Caremark, has made two other new medicines, Sovaldi and Harvoni, the exclusive “precision” options for patients with hepatitis C.
Left-leaning health-care “reformers” hail these pay-for-play schemes as ways to reduce health-care costs and make new medicines more affordable. But the discounts don’t help patients.
Instead, the PBMs will pocket about $3 billion in rebates from these drugs this year. And you can expect them to apply the same protection racket to medicines for cancer, MS and psoriasis.
Even then, more than 60 percent of health plans require patients to “fail first” on less precise drugs for HIV, multiple sclerosis, cancer, psoriasis and other illnesses.
The outrages don’t stop there. When the PBMs and plans finally stop excluding access to a precision drug, they often still force people to pay thousands out of pocket for the medicines — up to 40 percent of the cost.
Insurers and PBMs profit from all this, but it’s a waste of health-care dollars even though precision drugs are so costly.
Indeed, studies by Columbia University economist Frank Lichtenberg show that access by patients and their health-care providers to new medicines promotes longer, higher-quality life and better health care at a lower total cost.
And health-outcomes expert Dr. Susan Horn has found that when you’re “failing first” on a cheaper drug, you’re not only more likely to miss work, but also to run up other medical bills related to your illness. And even the cheaper drug still costs.
Precision medicines, while expensive, save money by eliminating guesswork, use of ineffective treatment and costly health services. Lichtenberg notes that every $1 spent on new medicines saves about $6 in other medical costs.
If Obama wants to usher in an era of precision medicine, he should work to replace “fail first” or “step therapy” approaches with value-based precision therapy, and to end the practice of forcing patients to pay the highest prices for the most effective medicines.
Precision medicine is the best remedy for PBMs and insurers who get richer by making people like Chloe Jones sicker.

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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