Peter Bach is the Donald Trump of health care policy. I am not referring to his hair or hand size. No, Bach – like the Donald – is a master of enchanting his followers with outrageous statements that scapegoat easy targets and unfairly attack them for acts of greed that you are actually guilty of committing. And it helps to have megaphones in the media who agree with you to promote your false position. (Bach’s newest mouthpiece is Gardiner Harris, who has returned to the NY Times to write fiction about the pharmaceutical industry.)
The most recent manifestation of Bach’s Trumpism is a ‘study’ he published in the British Medical Journal (I am assuming his co-authors were either blackmailed or brainwashed) claiming that US drug companies systematically increase the dose size of biologic injections for cancer and autoimmune disease even though smaller amounts are used for no other reason than profit. Bach and company assert that firms should produce smaller vials of medicines because it would save the US health system $3 billion a year.
But as with most of what Bach does, the BMJ article is a pseudo-economic exercise shorn of relevant facts that undermine his central argument. In fact, the issue of what to do with remaining medicine is more complex.
1. Most medicines – whether they are in injectable or pill form – come in a fixed number of doses. Dose sizes are based on averages of weight, age, severity of disease. They are NOT produced in the amount just right for you and me.
2. Dose size is almost always determined by what the FDA establishes is the safest and most effective dose for an average patient population. Quantity is not driven by profit. Rather, one of the biggest reasons drugs in development do not make it to market is the wrong dose size. Even today, lots of clinical trials flop because companies because companies use the wrong dose in studies to measure clinical benefit. Failure to select an ‘optimal’ dose to show effectiveness is the single reason drugs are either delayed or rejected by the FDA.
3. To minimize risk, developers are often evaluating doses near the maximum tolerated levels. And more to the point about drug waste, companies limit the number of dose sizes tested in order to avoid testing doses that don’t work and then force the company to do every trial over again.
4. Companies must also follow FDA and USP guidelines that govern how much of a drug can be in a vial. The FDA has urged companies to move away from a multiple number of smaller vials to a larger single vial.
5. In addition, many injectable products are now made by generic manufacturers. The increase in the frequency and number of shortages for such drugs is due to a combination of increased production and formulation costs and government fixed prices. The incentive for additional dosage amounts is therefore limited or non-existent.
Since Bach and co-authors are intent on accusing drug companies of simply going with larger doses to rake in profits, it is not surprising that they ignored these important regulatory and scientific factors.
Nor is it surprising that Bach and friends note – incorrectly -- that many cancer drug doses are based on body surface or body weight. In an exclusive New York Times interview timed to the release of their ‘study Bach says sarcastically. “Drug companies are quietly making billions forcing little old ladies to buy enough medicine to treat football players, and regulators have completely missed it,” said Dr. Peter B. Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering and a co-author of the study. “If we’re ever going to start saving money in health care, this is an obvious place to cut.”
Bach increasingly makes statements that support his case and are quotable, that are also false or without substance. (He recently claimed that new drugs that eradicated Hepatitis C virus were NOT a cure.) Similarly, in asserting that drug companies are endangering frail elderly females by giving them enough of a drug to treat a defensive end, Bach fails to mention there is an absence of scientific evidence that such dosing is safer or more effective than flat fixed dosing. The implementation of so-called genotyping and phenotyping strategies, and therapeutic drug monitoring, may probably be of more clinical value.
He also ignores how hospitals and oncologists can benefit from ordering bigger dose sizes. Peter Ubel notes: “Oncologists purchase intravenous chemotherapy from pharmacies. Patients then receive these drugs in the oncologists’ offices, with outpatient chemotherapy being an increasingly common setting for cancer care. The oncologists then bill patients’ insurance companies for the treatments, including billing the payer for the cost of the chemotherapy PLUS a percentage based mark-up.
Medicare, for example, receives bills from oncologists that charge 106% of the cost of the chemotherapy. Many private insurers pay even larger mark-ups, especially from oncology practices that dominate their local markets and thus have pricing leverage.
This “buy and bill” practice creates an incentive for oncologists to prescribe expensive treatments. After all, a $6 mark-up on a $100 treatment doesn’t do much for the bottom line. But that $600 mark-up on a $10,000 treatment? Give that treatment to enough patients and we’ll soon be talking about real money.”
Indeed, it is ironic that Bach and one of his co-authors, Leonard Saltz, became crypto famous by getting Sanofi to cut the price of a cancer drug by 50 percent and writing about it a New York Times op-ed piece. The duo asserted that they wouldn’t prescribe the drug because it cost twice as much as Genentech’s Avastin (bevacizumab), a competing biologic drug with similar expected clinical outcomes for colorectal cancer patients. In response, Sanofi said they would reduce the price of the drug by 50 percent.
In fact, doctors and prescribing hospitals benefited hugely from Sanofi’s pricing move, while payers and patients did not. Zaltrap was sold in a dose twice as large as Avastin, thus the price discrepancy. Further, Sanofi didn’t cut the price of Zaltrap; it gave Memorial Sloan a 50 percent rebate. The price charged to patients remained the same. Which meant that MSKCC raked in even more dough. As an article in Health Affairs noted at the time, “Meanwhile, in the near term, physicians and hospitals will likely enjoy additional revenue opportunities from ziv-aflibercept use. the spread may be considerable: equal to $250 per treatment dose (insurer + patient reimbursement ($750) – discounted acquisition cost ($500)) and for 340B eligible purchases, $450 per treatment dose (insurer + patient reimbursement ($750) – discounted acquisition cost ($300)). Additional revenues may incentivize physicians and hospitals to favor ziv-aflibercept over bevacizumab to treat colorectal cancer among Medicare eligible patients, despite the treatments having equivalent expected clinical outcomes. The strength of the incentive is based on comparing the magnitude of the spread obtained with the use of Zaltrap to that obtained with Avastin.
Finally, hospitals are profiting from the deep discounts they receive on injectable drugs under the previously mentioned 340 B program, a federal policy under which, “hospital outpatient departments can purchase oncology drugs using the deepest discounts available”.
Adam Fein has skewered the 340 B program on a number of occasions. In one article he discussed a study the concluded that some 340B hospitals simply pocket the extra profits. The New England Journal of Medicine paper examined the behavior of “charitable hospitals.” As this summary notes:
“Only 42 percent notified patients of their eligibility for charity care before attempting to collect medical bills and only 29 percent had begun charging uninsured and under-insured patients rates equivalent to private insurance and Medicare rather than standard, higher charge master rates.”
Indeed, another pricing expert noted that the use of drugs for the poor as a profit center is part of the broadere focus of hospitals, PBMs and insurers on generating “primary revenue being from the buying and reselling of drugs”.
That assertion was made by Peter Bach.
So what about drug waste as if the facts mattered?
Many hospitals have robust programs consistent with FDA and USP guidelines to use to make up from lost 5 % of total anticancer drug expenditure The economic loss due to their waste equaled 4.8% of the annual drug expenditure. In particular, hospitals use dose rounding to generate significant cost savings by eliminating drug waste.
So Bach’s effort to blame drug companies for waste generated greed is, like many of his recent attacks on drug prices, largely free of facts and at odds with the reality.