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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, 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?  

Mooning Healthcare

  • 02.27.2017
  • Peter Pitts
An interesting post at OhMD discusses a new study showing that “96% of patients report leaving their doctor’s office with limited knowledge of how to use the patient portal. Of the 40% of patients who said they had attempted to use the patient portal in 2016, 83% said it was too complicated to use.” That means only 7% of patients find it simple enough to use, and actually care to use it.

As the folks at OhMD quip, “As a point of reference, 7% of the American population also believes the moon landing was faked, if that helps give you some perspective.”

Why? Consumer technology (the apps we all use in our daily lives) typically solve a problem in a very simple way.

As I’ve said before – healthcare app-ens.

ProPublica, although calling itself "journalism in the public interest,” remains silent about its own funding and conflicts of interest while it brazenly challenges others. 

A recent article, " Big Pharma Quietly Enlists Leading Professors to Justify $1,000-a-Day Drugs," questions the credibility of respected academic experts who explain and defend the high cost of developing new treatments and cures, simply because they get funding from the pharmaceutical industry. 

Yet, ProPublica receives funding from Arnold Foundation, dedicated to attacking drug pricing, drug spending and by extension the pharmaceutical industry.

Since 2013 ProPublica has received $4 million from the Arnold Foundation.  The support is part of nearly $20 million in multiyear grants to organizations that are being paid by the foundation to develop new policies to attack drug prices in a way that will reduce the development of new treatments and cures.  

In addition, the foundation is funding news outlets like ProPublica to report on the organizations it is funding, and to support a group called Patients for Affordable Drugs who advocate for policies the other Arnold entities are creating and publicizing.  So ProPublica is part of what the foundation calls a 'portfolio of investments' in attacking drug pricing and drug spending. That's journalism in ProPublica's financial interest, not in the public interest.

The piece claims that the scholars (who have a firm called Precision Health Economics of PHE) enlisted by drug companies to defend prices didn’t regularly disclose funding, In fact, the economists who  such as Tom Philipson, Dana Goldman and Darius Lakdawalla have been conducting such research for nearly 20 years and they have been disclosing their funding when required or relevant.  In any event their relationship with companies was well known to everyone in the field.  

Ironically, ProPublica alleges monkey business because of PHE’s failure to disclose in an article But Propublica has also has conflicts which,unlike PSE, it doesn’t disclose at all.

That’s not just being “quietly enlisted: That’s keeping quiet to avoid being criticized for hypocrisy. 

Indeed, Annie Waldman, the author of the article, interviewed several individuals and discusses alternative value frameworks who disagree with the PHE methodology and belittle their assertions about prices reflecting values.   

These sources are funded by the Arnold Foundation as well. 

To discredit the claim that new drugs cost a lot to develop Waldman cites Dr. Aaron Kesselheim who states: “There is substantial evidence that the sources of transformative drug innovation arise from publicly funded research in government and academic labs.” Kesselheim is “an associate professor at Harvard Medical School whose research looks at the cost of pharmaceuticals. Pharmaceutical pricing, he says, is primarily based on what the market can bear.”

And Kesselheim also gets funding from the Arnold Foundation.  

Waldman also discusses the role of ICER in setting drug prices based upon its opinion of value.  She describes ICER as an organization vigorously attacking US drug prices. Waldman states that: “Some patient groups have contended that ICER emphasizes cost savings because it receives funding from health insurers. However, foundations are ICER’s biggest source of funding, and it is also supported by the pharmaceutical industry and government grants. “

ICER does NOT get money from the drug industry. Waldman fails to mention funding from California Blue Cross Blue Shield Foundation or that ICER receives most of its funding -- $4.6 million from the unmentioned Arnold Foundation.

It is perfectly acceptable to criticize PHE approach on substance.  But as a colleague of mine observed: “foundation money is no different than pharma money if the purpose is the same: to support advocacy-driven research.” I applaud the Arnold Foundation for supporting groups that advance its drug pricing agenda and I am grateful to receive funding to advance other ideas about how to make medical innovation accessible and affordable. 

However, if you are going to make funding sources an issue, it should apply to thee and me.   And more to the point, if you are a media outlet receiving money from an organization that also funds the groups you cite in your article and use to research your piece, you should at least tell the public that.   That’s not just nondisclosure.  That’s misleading.   It certainly isn’t journalism.  
Jayne O' Donnell believes that patient groups that get money from biotech and pharma are corrupt.  Her USA Today article: "New patient group focuses on drug prices amid bipartisan concern" starts off with this guilt by association meme:

"A new patient advocacy group launches Wednesday that distinguishes itself by focusing only on drug prices and eschewing money from the pharmaceutical industry at a time when drug makers are pouring millions into a campaign fighting efforts to regulate them."

In otherwords,  groups that get money from biopharma companies are not legitimate.   O' Donnell claims the new group -- Patients For Affordable Drugs -- is the only organization tackling policies to bring down drug prices because they are pharma free.   That is untrue.  What is true is that most patients groups -- and not PAFD focusing on the rigged system wherein PBMs, insurers and government health programs that set drug prices to maximize rebate revenue.  Those are the prices that matter.   If you want to reduce launch prices and price increases of drug companies, change the way drugs are paid for and the cost of drug development.  PFAD ignores both.  Why?

They focus on the immoral practice of getting $100 billion in rebates (that reduce drug prices) and then forcing the sickest patients to pay up to 50 percent of the retail price of the same drugs.  (That's another $30 billion from less than 3 percent of all patients)   But PFAD is perfect because it doesn't take 'drug' money.  So what if it ignores the rebate games, the forced drug switching, fail first step therapy, etc.  So what if it ignores the fact that by passing through rebate dollars the patient share of any drug cost could be zero, without raising premiums.  

PFAD is perfect because it doesn't get drug money and supports government negotiated drug pricing for Medicare without acknowledging that such practices have hurt patients in Medicaid, the VA and everywhere price controls are used around the world. 

Guess what other organizations share the same approach or seek to promote it?  ICER,  the drug pricing group at the   Oregon Health & Science University, and several others.  And they all get money from the John and Laura Arnold Foundation which has publicly stated it wants to build a network of groups attacking drug prices and the 'grass roots' entities to lobby for the policies and approaches the other entities produce. 

So the real debate is how to best increase the pace of medical innovation and ensure that they are accessible.   The Arnold-funded family of groups pursue administrative approaches and regulations to limit price and the pace of drug development.   No mention of PBMs, insurers, etc.   Patient groups are focusing on the system as a whole.  And patient groups are less likely to support more government control over prices and access.  They want a patient-centered drug development process.  Arnold-funded 'experts' want more randomized trials where patients are exposed to placebos half the time. 

To assert that Arnold foundation money is less tainted than money from a biotech company is ridiculous.  If patient groups got money from the Merck Foundation instead of Merck for instance, would it pass O'Donnell's purity test?

(Many companies fought against eugenics in the early part of the 20th century.  Foundations supported eugenics, accusing corporations of simply wanting more immigrants to work in their factories. ) 

It is time to stop branding patient groups as tainted because of their funding sources.  Let's focus on the issues.   The Arnold Foundation is seeking to change policy.   So are patient groups. 

A Virtual Ounce of Prevention

  • 02.21.2017
  • Peter Pitts
The best way to reduce opioid abuse is to reduce the number of opioid tablets being dispensed. That means we need smarter physician prescribing habits. According to the results of a Columbia University Medical Center (published in American Journal of Psychiatry), “people with moderate or more severe pain had a 41 percent higher risk of developing prescription opioid use disorders than those without, independent of other demographic and clinical factors.”

In other words, it’s not just fewer opioids for patients with less severe pain or with conditions for which there are non-opioid alternatives (such as fibromyalgia and diabetic neuropathy). It means we need better ways of tracking the patient experience. One solution to narrowing the gap between prescription and outcomes measurement are mobile apps. The gathering and appraisal of real world evidence can expedite identification of problems before they become deadly. If we can identify misuse earlier, we can help eradicate abuse and addiction.

Apps present us with just that opportunity – a virtual ounce of prevention.

ICER CEO Steve Pearson has tried to salvage what's left of the organization's shredded credibility by claiming ICER's mission is to help patients.  Specifically, ICER argues that it all it wants to do is "spur discussion among stakeholders to ensure that patients have access to the medications at prices that are aligned with the value they bring to patients.” 

In fact, ICER was established to evaluate whether the price of drugs reflected value from the perspective of PBMs and health insurers.  As ICER notes, it uses a "US health system perspective (i.e., focus on direct medical care costs)."  

So when Pearson told MS patients today at an ICER meeting that the institute cannot quantify the benefits of new drugs to MS, it was just another evasion.   In fact, ICER excludes the patient perspective because its mission to maximize the benefits to insurers and PBMs.  Indeed, if spending exceeds that cap and therefore hurts the health system, ICER recommends changes in which MS patients would get medicines and how many would benefit.   Of course none of these components of the ICER analysis were discussed.  The same goes for the impact of limiting spending on each new drug to $915 million.   The goal is to hide ICER's real face, which it shows to a fawning media and its PBM and insurer constituency. 

Similarly, every time discussion turned to step therapy, how patients pay a share of the list price of a drug even as PBMs and insurers grab more rebates through price increases,  Pearson steered the conversation in a different and self-serving direction.   Instead, Pearson reminded everyone how drug prices rose and asserted that if MS drug prices had remained the same, then all of the medicines would be cost-effective.  

Let's deal with this claim before turning to how ICERs value framework affects MS patients

To be sure,  since 2011 the list price for Copaxone, Betaseron, Avonex, and Rebif have risen substantially to keep pace with the launch price of newer MS drugs in an apparent effort to maximize revenue as these injectable products lost market share.   It also turns out that since 2011, rebates and discounts (which go to PBMs and insurers) were 60 percent of the price increase of these older products.  

Further, since 2011 the primary driver in MS drug spending was the introduction of new medicines and greater use of oral MS medications. As the IMS study of drugs use notes: "Oral medicines now account for half of new treatment starts in 2015, steadily increasing since the introduction of these new treatment options six years ago and up from 26% in 2011."   

But here too, rebates and discounts whittled down the actual increase in spending by about 30 percent according to my estimates based on Credit Suisse rebate data. 

Further, even though ICER now attempts to calculate drug prices net of rebates, it is silent about the fact that these savings are pocketed by PBMs and insurers.  (Indeed, Pearson is afraid to raise the issue.)  And ICER is quiet about the fact even as payors rake in cash rebates that reduce the cost of medicines; they continue to charge patients up to 50 percent of the list price of medicines.  

And price increases don't change the fact that If ICER had been in place 15 years ago, not one of the medicines used today would be considered cost effective at $150K per QALY  

Between 2000-2015 the combined deficit in life years lost (those that would not be saved and the additional years lost) would have been 59000 with a loss of $17 billion in value.

Similarly, ICER claims not one MS drug developed since 2015 is cost effective.  I estimate that between 2017-2022 limited use of these medicines would cost patients 11300 life years and $3.9 billion a year.

ICER’s public relations campaign to portray itself as the voice of the patient is deadly deception.   It cannot be trusted to protect patients or fully include the value of new medicines to the people who are most in need of medical innovation. 

In short, ICER’s policy prescriptions will cripple MS patients. 



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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