Latest Drugwonks' Blog


Dr. Scott Gottlieb

I have worked with Scott Gottlieb for over a decade on making drug development swifter by making it more scientific and increasing patient access to medical innovations.   Scott played an important role in developing the Critical Path Initiative that has been the FDA's roadmap for moving the agency -- and our health care system -- towards predictive, personalized and participatory medicine.  None of the advances in expediting approval of important new medicines would have been possible in the absence of The Critical Path Initiative. 

I could discuss his accomplishments in the post.  But many others will write about Scott's ability and experience in support of his nomination to be FDA commissioner.  A handful will attempt to demonize him for that very experience.  

So let me tell you what I know about the human being who has been nominated to be FDA commissioner. 

 I know of Scott's calm courage after his cancer diagnosis, his devotion to his family and his dedication to the practice of medicine.  For years (until he had children) he was an internist and hospitalist, seeing and healing patients on weekend, evenings and holidays, all the while performing his duties at FDA and CMS.   He loves medicine and that emotion shapes his view about how to best use advances in science to improve the safety and effectiveness of medical technologies.    He is not an ideologue.  He is data-driven and his views and decisions are informed by the kind of robust discussion and debate that is increasingly rare in our public sphere.  

Finally, Scott has never let the intricacies of policy or statistical hair splitting deter him from thinking about the FDA as an institution that has more control over life and death -- as well as how well we live -- than any other agency on earth.   He knows that patients and their families have as much a right to weigh in on FDA decisions as any so-called expert.  The great medical reformer, William Osler once noted: "The good physician treats the disease; the great physician treats the patient who has the disease."  

Scott is a great physician and will be a great FDA commissioner who puts patients first. 

 
At the recent abuse deterrent opioids summit, CDER Deputy Director for Regulatory Programs Dr. Doug Throckmorton presented the FDA’s position. He said, “We must move on from older to newer technologies. Amen. But how?

Per Dr. Throckmorton, “Ongoing and planned activities reflect the commitment by FDA to integrate the use of all of our available tools to achieve our goals related to the safe use of prescription opioids.” Two crucial aspects of moving forward are smart policy initiatives and regulatory clarity. We are inching our way forward on both. We can and must do better.

A key part of the FDA’s Opioid Action Plan is “Expand access to abuse-deterrent formulations (ADFs) to discourage abuse.” In order to achieve this worthy goal, the agency has issued numerous guidance’s – but actions speak louder than words – and the FDA’s actions have been, at times, confusing. When it comes to the development of new therapies to prevent opioid abuse and addiction, predictability is power in pursuit of the public health.

One of the FDA’s stated goals is to “Incentivize the development of opioid medications with progressively better AD properties and support their widespread use.” Bravo. But the devil is in the details. One area of regulatory clarity that could be improved is the agency’s views on differentiation between extended-release and long-acting (ER-LA) and immediate release (IR) opioids and how new products are tested for abuse-deterrent properties.  This is a critical concern as IR opioids, with over 240 million scripts annual, represent nearly 96% of the entire opioid market. They are the “gateway” drug of prescription opioid abuse and do not have a single approved ADF formulation.

Believe it or not, abuse deterrence is largely defined and determined by how admitted opioid abusers “like” the product.  (Abuse of IR opioid drugs is attractive to abusers because bypassing intestinal absorption and metabolism can lead to a higher Cmax and faster Tmax resulting in a more intense and more immediate high.)

Not surprisingly, abusers prefer immediate release products because they get their highs faster. But, as far as regulatory review is concerned, that also means that IR products under review by the FDA are determined to be less abuse-deterrent.

It’s an apples-to-oranges comparison that is resulting in an uneven ER-LA/IR regulatory playing field. And the unfortunate result is that it’s harder for immediate release opioids to pass FDA muster. Since IR opioids are designed to release “immediately” and last for a short duration (3-4 hours), measurements of drug exposure and “liking” should be taken at earlier, more IR-relevant intervals (when measured against existing, non-abuse deterrent comparator drugs).  Measuring IR products by ER-LA standards is not a real world proposition. (When ER-LA’s are compared to IR’s by abusers – of course they like the immediate “high” better).  The “clinic” experience needs to be reflective of real-world abuse.

Regulatory ambiguity and common sense are not allies. In fact, the agency has identified one of its major challenges as assessing the impact of individual formulations. Admitting the problem is important. Addressing it is urgent.

It’s time for the FDA to reflect on a more nuanced approach in measuring and determining appropriate standards for demonstrating abuse-deterrent properties of immediate release opioid.  Small differences can lead to big benefits in the real world of deterrence.  The key question remains not unanswered, but unaddressed – are the endpoints suggested in FDA’s “Guidance for Industry: Abuse-Deterrent Opioids—Evaluation and Labeling” the most relevant for demonstrating abuse-deterrent properties of an IR opioid?

While the public health imperative must drive the regulatory agenda, another important issue is how agency actions impact continued robust research and development. Minus more up-to-date and predictable FDA review criteria for abuse deterrent opioids, investment in their development is already becoming less attractive. Can we really afford to leave these decisions in the hands of admitted drug addicts? Actions (or inactions) have consequences.

As Dr. Throckmorton said at the recent meeting of the Agency’s Science Board: “FDA will act within its authorities in support of our public health mission to help defeat the epidemic of opioid abuse through a science-based and continuously evolving approach by improving the use of opioids through careful and appropriate regulatory activities, improving the use of opioids through careful and appropriate policy development, improving the treatment of pain through improved science, and improving the safe use of opioids through communication, partnership and collaboration.”

The time to focus on this issue is now. Lives are at stake.
 

Scott Gottlieb in the Pink (Sheet)

  • 03.13.2017
  • Peter Pitts
Some snippets from an excellent article in the Pink Sheet.

Gottlieb Nomination As US FDA Chief Could Signal Changes To Generic Approval Process

Michael Cipriano
 
Former deputy commissioner will also likely push increased use of biomarkers and more flexibility in off-label communication, among other reforms. President Donald Trump's choice of Scott Gottlieb to head the US FDA could signal efforts to bring reforms among a variety of fronts, perhaps none more notable than how the agency approves generic drugs.
 
Peter Pitts, president of the Center for Medicine in the Public Interest and a former FDA associate commissioner, touted Gottlieb as "a great choice." Pitts, who worked with Gottlieb for nearly two years at the agency, tells the Pink Sheet that he "knows the people, he knows the process, and he understands how to make both work harder and smarter."

"He understands the need to bring generic drugs to the market faster," Pitts said. "He understands the importance of addressing the single-source generic issue from a competitive perspective. He also understands, probably most importantly, the need not just for things happening faster, but things happening with greater predictability."
 
Public Citizen, however, was not so rosy about Gottlieb's selection, citing his close ties to industry, as it similarly did when Robert Califf was tapped to head the agency under President Obama.
 
In a statement, Michael Carome, director of Public Citizen's Health Research Group, noted that Gottlieb is currently serving or has recently served on the boards of five pharmaceutical companies, including that of  GlaxoSmithKlein, and that he received at least $413,000 from multiple drug and medical device companies for mainly consulting and speaking fees. Carome called on the Senate to reject his nomination.
 
"When Gottlieb served as FDA deputy commissioner, he was recused from many key meetings and decisions due to his close relationship with industry," Carome said. "If the Senate does not reject Gottlieb, he will have to be recused from key decisions time and time again, otherwise there is no way to be sure he will put the public’s health over industry profits."
 
Pitts, however, contended that close ties to industry "are incredibly important."

"FDA has to be both a regulator of and ally with industry," Pitts said. "And I think Scott is the right guy to practice that nuanced relationship."
Governor Cuomo’s budget aims to control drug pricing through price controls . While this is a good political sound bite, it’s bad public policy with dangerous unintended consequences – the worst of being that it won't lower prices but will reduce patient choice.

Have a look at this interview I did yesterday on Capital Tonight for a robust conversation on PBMs, the value of innovation, the role of the FDA in lowering drug costs, and other timely topics.

 
Finally, some bipartisan sanity on healthcare transparency.

Representatives Doug Collins (R-GA), Buddy Carter (R-GA), Dan Loebsack (D-IA), John Sarbanes (D-MD) and John Duncan (R-TN) have introduced the Prescription Drug Price Transparency Act.

It is designed to:

* Safeguard patient information collected by a PBM (currently used to steer patients to PBM-owned/preferred outlets)
* Prohibit PBMs from requiring patients to utilize a PBM-owned pharmacy (including specialty pharmacy)
* Require maximum allowable cost transparency
* Apply these standards to both Tricare and FEHBP (the Federal Employee Health Benefit program).

In sum, the bill would establish a far more competitive marketplace for brand and generic products and lessen the monopsony of the large PBMs.

Transparency means looking at the whole ecosystem.

 Stay tuned.

Vampire Health Policy

  • 03.01.2017
  • Peter Pitts
To import or not to import? Lawmakers push another bill to combat high drug prices
 
By ED SILVERMAN @Pharmalot
FEBRUARY 28, 2017
 
A group of lawmakers is introducing yet another bill that would allow Americans to import prescription medicines from Canada. And in a bid to quell long-standing criticism of the notion, the latest effort includes several provisions designed to address concerns that medicines bought from online pharmacies in other countries may not be safe.
 
Known as the Affordable and Safe Prescription Drug Importation Act, the bill would instruct the US Secretary of Health and Human Services to issue regulations allowing wholesalers, licensed US pharmacies, and individuals to import prescription drugs from licensed Canadian sellers. And the drugs would have to be made at facilities inspected by the US Food and Drug Administration.

After two years, however, the HHS secretary would have authority to permit importation from countries in the Organization for Economic Cooperation and Development that “meet specified statutory or regulatory standards that are comparable to US standards,” according to the bill. Nearly three dozen countries are members of the OECD.

“In 2014, the US spent about 40 percent more on prescriptions per person than Canada, twice as much as the average major industrialized country,” according to talking points that were distributed with the bill. “… In order to get the medicine they need, millions of people are buying their prescription drugs from other countries.”

The legislation — which is being spearheaded by Senator Bernie Sanders (I-Vt.) and Representative Elijah Cummings (D-Md.), who have conducted various probes into drug pricing — comes amid escalating national angst over the cost of prescription medicines. Poll after poll finds Americans want the federal government to take action, although there has been little movement on the national level.

As many as 77 percent of Americans reported last fall that drug costs are unreasonable, up from 72 percent a year earlier, according to a poll by the Kaiser Family Foundation. At the time, 71 percent favored allowing Americans to buy prescription drugs imported from Canada, among other measures they would like the federal government to pursue to lower their bills.

Although President Trump recently complained about “astronomical” prices,” he has not released any plan. But his remarks have placed drug makers on the defensive. A few pledged to limit annual price hikes to single-digit increases, while others have released data to argue their price increases have been reduced by rebates to middlemen that act on behalf of insurers.

Meanwhile, a bill introduced in the House is gaining support because it would presumably address some price gouging by providing incentives to drug makers to develop generics when there is a lack of competition or a shortage exists. A somewhat similar piece of legislation was recently introduced in the Senate, but it would also temporarily permit prescriptions drugs to be imported in order to mitigate shortages.

Importation is hardly a new idea. In fact, this is only the latest attempt by various lawmakers to find a way for Americans to import medicines from Canada. But given that President Trump has previously voiced support for the idea — and also accused drug makers of “getting away with murder” — they apparently see an opening to renew the call.

Whether the effort can succeed, however, is unclear. Under a 2003 law, the FDA can issue waivers for individuals to import medicines for personal use. But importation is not otherwise permitted until the HHS secretary certifies that importation would not pose a health risk and could lower consumer costs. And ensuring safety of imported drugs has been cited by both drug makers and regulators as a concern. Nearly all Republicans have also dismissed the idea and this latest bill is being pushed by a mix of Democrats and Independents.

“I’ve seen this bill in various iterations many different times and they never really address two major concerns — safety and pricing,” said Peter Pitts, a former FDA associate commissioner who heads the Center for Medicine in the Public Interest, a think tank that is funded, in part, by the pharmaceutical industry.

“We exist in a closed regulatory system and when you bring in drugs from outside FDA control, I don’t care how you phrase it, it’s still caveat emptor. The products can’t be guaranteed, because there are holes [in the legislation], such as not being able to guarantee that product labeling is correct,” he told us.

And no drug from Canada is going to cost less than a co-pay, which is $20 or $30 for many people, so it’s highly unlikely that it will do anything for the majority of Americans with health insurance. So it offers a largely useless alternative. I think this is a good political talking point, but won’t deliver what it promises. Importation is a vampire issue — you can drive a stake through its heart, but it won’t die.”

To assuage safety concerns, the bill states that legally imported drugs must be purchased from an FDA-certified foreign seller and have the same active ingredient, route of administration, and strength as drugs approved in the US. And certain types of drugs, such as certain biologics, could be imported only by wholesalers or pharmacies.

In order to be a so-called certified foreign seller, the bill states that the operation must be a wholesale distributor or licensed foreign pharmacy that is current with applicable registration fees and sells only qualifying prescription drugs. There is a list of criteria to be met, which you can read here.
Americans can buy medicines only from pharmacies licensed in Canada, and only for personal use in quantities that do not exceed a 90-day supply. They must also have a valid prescription issued by a health care practitioner licensed to practice in the US. Any pharmacy selling a counterfeit drug is subject to a $250,000 penalty and 10 years imprisonment. And the HHS is required to ask the US Government Accountability Office to run a report after 18 months to assess the impact.

But the Pew Charitable Trusts raised concerns and argued that it may be difficult to enforce the requirement that medicines must be purchased from an FDA-certified foreign seller and there is no mechanism to make it possible for medicines to have the same electronic security and tracking system, which is used in the US to weed out counterfeits.

“This poses a safety risk with respect to imported product, but also undermines the entire system,” wrote Allan Coukell, who is senior director of the Pew health programs, in a letter to Sanders. And while he acknowledged that competition from imports could prompt drug makers to lower prices in the US, he also speculated that foreign governments might eventually limit imports to the US if domestic supplies become strained.

One backer of importation called it a “step in the right direction.” Gabriel Levitt, who is the president of PharmacyChecker.com, which vets online pharmacies, wrote us that “if passed, the new bill … simply instructs the FDA to finally help Americans do what they already do, purchase lower cost medication from safe, international online pharmacies.”

We should note that one of the lawmakers who is co-sponsoring the bill is Sen. Cory Booker (D-NJ), who last month was one of 13 Democratic Senators who voted against an amendment to a budget procedure that would have allowed imports from Canada. His vote angered progressive Democrats. New Jersey is home to a few large drug makers and numerous smaller ones. The amendment was introduced by Sanders and Sen. Amy Klobuchar (D-Minn).
 
 
Megan and John Crowley (Courtesy of the Crowley Family)

Last night President Trump was attacked for speaking about Megan Crowley a 20-year-old freshman at Notre Dame who was diagnosed at birth with an orphan illness called Pompe Disease.

The reason?  The President used the opportunity to call for more medicines to keep young women like Megan alive. 
 
Here’s what the President said:
 
"Megan was diagnosed with Pompe Disease, a rare and serious illness when she was 15 months old. She was not expected to live past 5.
 
On receiving this news, Megan's dad, John, fought with everything he had to save the life of his precious child. He founded a company to look for a cure, and helped develop the drug that saved Megan's life. Today she is 20 years old -- and a sophomore at Notre Dame.

Megan's story is about the unbounded power of a father's love for a daughter.
 
But our slow and burdensome approval process at the Food and Drug Administration keeps too many advances, like the one that saved Megan's life, from reaching those in need.
If we slash the restraints, not just at the FDA but across our Government, then we will be blessed with far more miracles like Megan."
 
He had not even finished his speech when cynics on Twitter and in the media, belittled the Crowley family’s courage because, in their view, they were tools for what they hysterically call Trump’s reckless gutting of the FDA.  (Note that they never specify what would be gutted but assure us that if Trump got his way, the FDA would turn America into The Walking Dead.
 
Of all the sniping and snide observations, Former FDA commissioner David Kessler and Washington Post reporter Carolyn John stand out as the most obnoxious and condescending.
 
For his part, David Kessler posted on Twitter   @DavidAKesslerMD
 
Trump mischaracterizes Pompe drug approval process. Approved in 9 months based on 39 patients. Not "slow and burdensome."
 
First,  Trump never even mentioned the Pompe drug (Myozyme, the drug Crowley’s company developed) approval. 
 
Second,  “approval” refers to the FDA’s review of all the other studies and data the agency requested.  The FDA is required by law to review such completed applications in 180 days.  Not. Nine. Months. 
 
Meanwhile, it took about 6 years to complete the studies used to establish the drug’s safety and efficacy.  That’s a lot less than the 10 years it takes to evaluate drugs for larger groups of patients. 
 
But third, and most important, Crowley was in the audience because if the FDA was using its current regulatory approach to orphan drugs in 2001, the drug still wouldn’t be approved. Nor is Crowley is calling for gutting the FDA as critics hysterically claim.   As Crowley points out in an op-ed in the New York Observer: “the FDA must always put patient safety first.” 
The problem is that despite having a decade of experience in dealing with rare pediatric conditions like Pompe or Fabry, the FDA now often requires more information than ever before to approve orphan drugs.  As a result, they take as much time and money to get through the FDA as do medicines more common conditions,

But the award for the most sneering and fact-free hit piece goes to the Washington Post’s Carolyn Johnson:
 
“The actual drug, that saved Megan’s life is manufactured in Belgium and was developed by a biotech company founded by a Dutch immigrant — a company that is today owned by a French firm. The drug was invented through a scientific experiment that couldn’t have happened without international collaboration. And a president who has said he wants to bring down drug prices just held up as a shining example of innovation a drug that costs an average of $298,000 a year, per patient.”
 
Key omissions:
 
The company was Genzyme, a US biotech company founded in Boston – not Europe --  to bring orphan drugs to market.  Genzyme was sold to Sanofi, which invests most of its R&D in the United States.
 
Moreover, the cheap shot about drug prices (“a shining example of innovation” Johnson snarks) ignores the fact that the average price of hard to manufacture medicines for very small groups of patients has declined since Genzyme developed Ceredase for Gaucher’s disease in 1990 for a list price of $360000. (That’s $558000 in 2016 dollars.)  
 

The sneering continues:

"It’s also unclear whether the Crowley’s inspiring story and the development of the drug Myozyme (also called Lumizyme) is really an example of how “our slow and burdensome approval process at the Food and Drug Administration keeps too many advances, like the one that saved Megan’s life, from reaching those in need,” as Trump described.
 
Other companies have pointed to Myozyme as an example of the agency’s flexibility in getting drugs approved quickly, based on small amounts of data.
 
Briefing materials prepared by the drug company Sarepta Therapeutics to support the approval of their drug last year cited Myozyme as an “approval precedent” that they hoped to follow.
 
Last April, at a hearing in support of Sarepta’s drug, one of the researchers involved in Myozyme’s approval testified to the advisory committee that its passage through the regulatory process as a helpful parallel to consider.
 
Against the recommendation of its advisory committee, which wanted to see more evidence, regulators approved that drug."
 
Omission: In fact, FDA reviewers virtually told the FDA advisory committee not to approve the Saretpa drug because it followed the Myozyme approach. 
 
No one is suggesting that Myozyme was delayed by the FDA or that the agency in the last couple of years has been quicker in reviewing applications for drug approval. 
 
The issue is whether the FDA could move more quickly by requiring data that has less to do with establishing the safety and benefit of medicines and more to do with employees demanding an increasingly higher degree of statistical certainty that has nothing to do with those goals
 
The issue is whether the Amicus drug for Fabry Disease – approved in Germany, Japan, and Great Britain – requires another randomized study and two more years of data to determine whether patients are more likely to have diarrhea. 
 
The issue is whether patients and their families should have as much to say about the drugs that shape whether they live or die as well how they live, as the naysayers who claim that the experts know better. 
 
The smug elite – like Kessler and Johnson -- realize their power over the FDA review process is slipping away and they are beside themselves that Donald Trump is determined to wrest their control away.  How can you tell?  Because they turned a courageous young woman and her father’s decade-long struggle to save her life into objects of their rage against the new President. 

UN gets it wrong on drug access

  • 03.01.2017
  • Peter Pitts
From today's Pittsburgh Tribune --

U.N.'s errant prescription for drug access

What's the best way to improve health care for billions of people in the developing world? If you answered, “Attack health care firms,” you qualify for a job with the United Nations.

You'd also be dead wrong.

The U.N. recently released a plan to severely weaken patent protections and other forms of intellectual property (IP). U.N. officials believe that this will bring down the price of medicine in the developing world, thereby improving people's access to drugs.

Their recommendations would do the exact opposite. Dissolving IP protections would disincentivize drug research and slow the discovery of new treatments. Patients in both the developing and developed worlds would be worse off.

Drug development is an enormously expensive endeavor. It costs, on average, $2.6 billion to bring a new medicine to market. Just one out of every 5,000 promising compounds makes it from the lab through clinical trials to the pharmacy shelf. And just two out of every 10 approved drugs ever turn a profit.

IP rights are what make risky drug research a worthwhile bet for investors. By temporarily preventing the production of generics and creating a market monopoly, they ensure that the original innovator has a chance to profit from successful new products.

America has the strongest IP protections in the world, and they've driven a spectacular rate of innovation.

We've created more than 500 new medications in the past 15 years alone. That's more than the rest of the world combined. And we account for 70 percent of the 7,000 new drugs now under development globally. We're also home to 12 of the top 20 medical-device companies in the world.

These research efforts are aimed at the most devastating diseases. Today, American scientists are working on 74 new asthma medicines, 92 new arthritis treatments, and 93 therapies for Alzheimer's disease. They're also developing over 800 cancer treatments.

These products lead to longer lives for people all over the world. Consider HIV/AIDS: Back in the 1980s, a diagnosis was a death sentence. Today, antiretroviral cocktails keep patients living for decades. There's no way firms would have plowed billions into researching and developing these therapies without strong patent protections.

Patent protections are not the reason poor patients in the developing world can't access breakthrough medications. Among the 375 drugs the World Health Organization has deemed essential, just 25 are still patented.

Cost isn't a problem either. Poor patients pay just 6 percent of the U.S. retail price for 350 off-patent drugs.

The U.N.'s war on IP rights ignores the real barrier to drug access: insufficient medical infrastructure.

For instance, many developing countries suffer from a severe shortage of health care professionals, particularly in rural areas. In Nicaragua, 50 percent of health personnel work in the country's capital, yet only 20 percent of the country's population lives there.

The U.N. needs to ditch its fixation on intellectual property rights and instead focus on the real problems of the developing world. Undermining IP protections would deter drug development and ultimately deprive needy patients of lifesaving treatments.

Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.

ICER's Attack on Rare Diseases

  • 02.28.2017
  • Robert Goldberg
Today is Rare Disease Day.  It should be an occasion for raising awareness about the fact that, despite progress in treating rare diseases, nearly 27 million people suffering from one of 7000 uncommon medical conditions do so with any effective treatment or cure. 
 
Instead, the rare disease community finds itself under assault as little more than front groups for pharma companies who – critics claim – want the freedom to bankrupt our health care system by charge hundreds of thousands of dollars for medicines that aren’t that safe or effective.
 
The critics are attacking patient groups for strategic reasons: shut down patient groups or at least neutralize their influence and their organizations – anointed as objective and expert – will consolidate their power over the development, pricing and use of new medicines.
 
One of the leaders of this movement is Steven Pearson, the founder of the Institute for Clinical and Economic Review – an organization that claims it’s “a trusted non-profit organization that evaluates evidence on the value of medical tests, treatments, etc.”  Pearson claims the influence of patient groups will drive our health care system and economy into bankruptcy.  As the number drugs for rare diseases for small groups of patients increase, their higher prices (relative to medicines for common medical conditions) will become unaffordable.  And the driving force is the ability of rare disease groups to advocate for new medicines. 
 
Or as he puts in an article entitled, “Which Orphans Will Find a Home? The Rule of Rescue in Resource Allocation for Rare Diseases,” publicity can be a powerful and important tool for advocacy groups, “but it is not an appropriate ethical justification for coverage of particular orphan drugs over others.”   Pearson writes, our nation needs a framework that will restrain “society’s desire to help those weakest among us, especially when their small numbers allow us to see them as unique individuals.”
 
Armed with this noble sentiment (and about $5 million from health insurers and the Laura and John Arnold Foundation) Pearson is positioning ICER to develop this ‘value framework.’
 
In May, ICER will be meeting with patient groups and others to recommend “fair prices that reflect the value of orphan drugs to patients and the health system to allow for broader insurance coverage for innovative new treatments.”  (It is targeting Spinraza™ (a new drug for spinal muscular atrophy and Exondys-51™ for Duchenne muscular dystrophy (DMD))
 
Pearson believes that a “bright line between what constitutes a fair claim on health benefits and what does not will be difficult to draw.” 


To ICER and Pearson, that bright line is $150000 for an additional year of life.  Most new medicines for rare diseases are expensive and don’t save health insurers money.  And ICER measures value from the insurer or government health program perspective.  So most new orphan drugs would have been discounted more than 90 percent of the rebated price a medicine just to stay behind Pearson’s bright line.
 
Next, ICER sets a limit of $915 million on what should be spent on each new drug. It multiplies the price of the drug by the number of people who could benefit.  Going over the cap mean that many people with rare diseases will be denied access to a growing array of new medicines.  ICER uses these bright lines to “improve affordability” with changes to pricing, payment, or patient eligibility 
 
ICER justifies such limits because beyond that cap it “…we’re siphoning off resources for other things we need like better schools and more resources for local police, roads, and bridges. “
 
These claims of budgetary Armageddon are overhyped. Between 2007 and 2014, orphan drugs have increased as a percentage of spending on drugs (from about 2 percent to 4 percent in Europe and 5 percent to 8 percent in the United States) even as the percentage spent on drugs has remained the same.  And a study by Dr. Frank Lichtenberg shows new medicines for rare diseases are reducing the number of life years lost by about five percent a year.
 
Conversely, ICER’s limits on access will hurt people and rob them of their lives. Lichtenberg’s study found in France, which took longer to pay for fewer orphan drugs relative to the US, the number of deaths declined by 1.8 percent.   

It is precisely our moral sense to save lives in immediate danger and at any expense that sustains humanity and economic progress.  We need more orphan drugs not just because more people will be able to enjoy life and live longer. It’s because civilization is enriched when we provide people who are marginalized because of their medical condition the opportunity to contribute to our well-being and happiness.

Pearson and ICER are a threat to that moral vision. They threaten the remarkable advances in medicine that Rare Disease Day celebrates, made possible in large part by the patient advocacy groups that ICER seeks to replace.  
WSJ reporters Jonathan Rockoff and Peter Loftus suggest how PBMs and health plans pocket rebates while charging patients list price even as pharma limits price increases ("Facing Criticism, Drug Makers Keep Lid On Price Increases" 2/16/2017) At the same time, the American Cancer Society Cancer Action Network warns that under the ACA “most plans place many, or even all, covered cancer drugs on the highest cost-sharing tier.”

Specifically, Rockoff and Loftus report:  most of the increases in list prices are not paid by insurers.  PBMs and insurers have their drug costs reduced by rebates and discounts, while consumers (patients) pay the full price.   Here's the chart that demonstrates this fact.
 

Source IMS Health

In addition to pocketing rebates, PBMs and insurers make money by charging consumers of the newest drugs up to 50 percent of the list – not rebated price of the drug.  Indeed, Rockoff and Loftus try to skate past this ripoff by blandly noting: "regardless of discounts to middlemen, patients who have high-deductible health plans may have to pay close to full price for at least part of the year.   Indeed, patients who have high deductible plans are not paying anywhere near full price for any other medical service except prescription drugs. 
 
The article notes: "The discounts mean that manufacturers must share the increased revenue with others, but they can still leave buyers such as insurers paying the higher price, or most of it. And regardless of discounts to middlemen, patients who have high-deductible health plans may have to pay close to full price for at least part of the year."

As if on cue the American Cancer Society Cancer Action Network released its most recent review of drug cost sharing for cancer patients on Obamacare plans and concluded:

 "Unfortunately, most plans place many, or even all, covered cancer drugs on the highest cost-sharing tier. Among the formularies we studied, even generic cancer drugs appeared on the most expensive tier with regularity (41 percent of the time in the case of Etopside, and 61 percent for Imatinib Mesylate). Most of the time, the highest cost-sharing tier requires coinsurance rather than a flat copayment; but it is very difficult for consumers to manually estimate their coinsurance costs because the negotiated drug price on which coinsurance is based is not shown.”

So if drug companies are keeping the lid on drug prices, why aren't cancer patients seeing any difference at the pharmacy?  
 
CMPI

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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