Latest Drugwonks' Blog

ASCO Revised Framework Takes Slaps At ICER, Abacus

ASCO released Value Framework 2.0 yesterday.  The article “Updating the American Society of Clinical Oncology Value Framework: Revisions and Reflections in Response to Comments Received” published in the Journal of Clinical Oncology makes two changes in how it values medicines.  

First, it uses the hazard ratio – that is the “chance of events occurring in the treatment arm as a ratio of the hazard of the events occurring in the control arm. “ – as a measure of benefit.  In other words, the ASCO framework, replaces absolute increases in benefit with one that measures the probability of benefit as the standard measure

This is a direct slap in the face to Peter Bach’s Abacus and ICER both of which measures increases in overall survival without regard to how bad a prognosis is.  

Also ASCO notes: because an HR expresses a relative difference in risk, a similar HR could be derived for a modest improvement in survival that is measured in weeks or months for a tumor type with a poor prognosis or for a larger absolute gain that is produced by a highly effective therapy in a tumor type more amenable to treatment.

Slap two. 

Third, whereas the first framework devalued progression free survival, in the revision “bonus points are awarded if the test regimen results in at least a 50% relative improvement in percentage of patients alive at a time point that is at twice the median OS or PFS point for the control regimen and if at least 20% of patients receiving the control regimen are alive at this time.” 

This is likely a bar bit too high, but at least the revision framework recognizes that a month of additional average OS or PFS that is a 50 percent increase and affects 20 percent of patients is meaningful to patients.  Again, neither the Abacus or ICER has this feature. 

Slap Three

Further, the framework authors no longer publicly single out cancer drugs as the thing that will destroy the American economy.  And it goes to great lengths to distance themselves from earlier goals of making the framework the tool insurers and PBMs will use to decide which drugs to cover.  

In the 2015 version, the Task Force asserted:

“ASCO recognizes that this work has the potential to influence policymakers and payers as they consider preferred management options and evaluate the relative value of new treatments introduced into the cancer marketplace…As policymakers and payers seek ways to assure the best use of limited resources, they are appropriately turning to physician experts for a better understanding—and definition—of value. ASCO has dedicated significant volunteer time and resources to the issue of cost and has now turned its attention to a formal definition of and strategy for assessing value in cancer care.

…Benefit structures, adjustment of insurance premiums, and implementation of clinical pathways and administrative controls have all been employed as means of controlling cost while emphasizing value. It is in this arena that the ASCO Value in Cancer Care Task Force seeks to contribute to the effort to ensure value for patients while preserving and enhancing quality and sustaining innovation developing policy positions that will help Americans move toward more equal access to the highest-quality care at the lowest cost”.16

Now ASCO states “As currently configured, the framework is not meant to be a policy tool. It is intended for use in the clinical setting between physicians and their patients and is meant to serve as a catalyst and facilitator of individual treatment discussions.”

Slap Four


Ironically, these shifts in values underscores just how subjective any framework will be.   And subjectivity also determines what evidence is used and how it is measured.  The Task Force revisions are welcome.  They don’t go far enough and the adequacy of evidence has nothing to do with it.  

Hence while the Task Force still insists there is no good data to measure patient reported outcomes and drug prices net of rebates, that begs the question: why the framework accepts the lack of data to measure of Net Health Benefit?  

Further, the framework still undervalues incremental benefits to specific groups of patients with limited clinical options.   The tool is still biased against significant changes in outcomes that average measures of clinical benefit ignore.  It is still a highly static tool that cannot take into account the impact of matching patients to combinations of treatments. 

As structured the framework still ignores role of cost shifting, the pocketing of rebates and focuses obsessively on drug prices.  

The Task Force had no problem asserting, “Health care costs in the United States present a major challenge to the national economic well being” and then blaming the danger on “the introduction of costly new drugs and techniques in radiation therapy and surgery.”

The Task Force still fails to acknowledge that PBM and health plan cost shifting and rebate driven formulary decisions are the principal reason patients will face high costs.  ASCO supports oral parity and opposes reimbursement experiments that endanger patients. 

Most important, this still NOT a patient-developed framework. The focus should be on developing one instead of tinkering with and fighting about the patient hostile approaches taken by ICER.   

In sum, the ASCO value framework is an improvement over it’s first version.  It is more patient-centered and less a tool for policy making and political attacks. As a recent comparison of the ICER and ASCO frameworks concluded: “ Substantial drug price reductions may be necessary in order to meet ICER thresholds even when maximum NHBs are present as assessed within the ASCO framework. “

 In that important regard, it is a better value framework than those developed by ICER and Peter Bach. 

 
Here's a link to the report CMPI released entitled: Not At Any Price: How ICER Robs Myeloma Patients of Life and Hope

Off-Label Intramural

  • 05.31.2016
  • Peter Pitts

Lawmakers accuse HHS of delaying FDA guidelines for off-label marketing
By Ed Silverman @Pharmalot

Two high-ranking House Republicans have accused the US Department of Health and Human Services of delaying eagerly awaited guidelines for off-label marketing of drugs and devices. And the charge comes amid growing frustration among companies that the US Food and Drug Administration is squelching their free speech-rights.

In a letter sent Thursday to HHS Secretary Sylvia Burwell, the lawmakers wrote they are “perplexed” the FDA has not yet issued new guidelines covering off-label marketing or held a promised meeting. And they worry that court rulings will, instead, become the basis for determining policy. Then they claimed the delay is the result of disagreement between HHS and FDA leadership.

“It is our understanding that HHS has not allowed FDA to issue its completed draft guidance addressing the scope of permissible ‘scientific exchange,’” of useful information about drugs and devices, wrote Fred Upton, a Republican from Michigan and Joe Pitts, a Republican from Pennsylvania. They also attached a draft bill that would allow companies to market products for unapproved uses.

Drug and device makers have increasingly argued that current regulations prevent them from distributing important data to physicians about unapproved, off-label uses of their products. Doctors can prescribe medicines for any purpose, which is called off-label use, but companies can only promote medicines for uses approved by the FDA.

For its part, the FDA maintains public health can be compromised if marketing claims are not backed up by solid evidence. The agency, however, promised to issue new guidelines after a federal appeals court overturned a criminal conviction of a sales rep for off-label promotion. The court ruled his speech was protected, since the information was truthful and not misleading. The FDA also agreed to holding a meeting on the topic, but that has also been delayed.

The issue accelerated last year when Amarin filed a lawsuit to argue its right to distribute information about unapproved uses of a drug is protected by the First Amendment. Amarin sought to give doctors clinical trial data not directly pertaining to approved uses of a pill. In March, the FDA settled the case by allowing Amarin to proceed if information given doctors is truthful and not misleading.

Only a month before that, a federal court jury in Texas decided that the medical device maker Vascular Solutions and its president were not guilty of off-label promotion since the information the company gave to doctors about a laser therapy device was deemed truthful and not misleading. These developments underscored industry anxiety over the delay in issuing a guidance.

We asked the HHS for comment and will update you accordingly. In a speech earlier this month, FDA Commissioner Dr. Robert Califf said the agency is “reviewing our policies,” but did not provide a timeline for releasing the guidance. An FDA spokeswoman said the agency will review the letter, but did not have any further information on the release of the guidance.

One source, who speaks regularly with both agencies, told us this: “HHS leadership doesn’t trust industry to do the right thing … HHS leadership believes off-label speech will lead to more aggressive marketing of new products that will raise costs to [Medicare and Medicaid]. They are allowing both their prejudices [industry as the bad guy] and priorities [keeping spending down] to get in the way … The White House shares these fears, and as a result the FDA’s desire to issue guidance is stymied.”

One Washington insider cautioned that the may lose the initiative if the agency does not release a guidance.

“After the recent court decisions, the FDA realizes that it must either lead the effort to disseminate off-label information that is truthful, accurate, and non-misleading, or lose its ability to direct the speed, direction, and quality of these communications,” 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 industry. “Things are moving fast and unless the FDA acts, we’ll have federal judges making these decisions for us. That’s not good for the FDA or the public health.”

As for the draft legislation, a spokeswoman for the House Committee on Energy and Commerce wrote us that the bill may not be introduced. She noted that the language was discussed with the FDA during conversations related to the 21st Century Cures Act, but was ultimately not included in the bill.
One consumer advocate, meanwhile, criticized the draft.

“The threat to patient health posed by the draft bill attached to their letter is tremendous,” said Michael Carome, who heads Public Citizen Health Research Group. “FDA approval of a drug for one use tells us nothing about whether the drug is safe and effective for another use. Yet this bill would allow drug manufacturers to advertise and promote drugs and devices, both to doctors and directly to consumers, for uses never approved by the FDA.”

After the ICER Storm

  • 05.27.2016
  • Robert Goldberg
Here are the takeaways from the ICER meeting on” Treatment Options for Relapsed or Refractory Multiple Myeloma”.
 
First, it is obvious that the Midwest Comparative Effectiveness Advisory Council is nothing but a cheap coat of paint used to poorly cover-up the fact that that, from start to finish, ICER and all the so-called advisory councils (whose participants were added a week before the meeting) are run directly by Steve Pearson, the President of ICER who wants to reduce drug spending to pay for roads and bridges.  Either he dreams of being Rationer in Chief or public works czar, maybe both.
 
The voting members of the panel had as much experience in treating myeloma as they did in translating Beowulf into Klingon.   Yet they voted.  They tried to do so with care.  But it became evident early that the panel knew it was clueless and simply deferred to the one panel member who was an expert on myeloma.  They followed, almost blindly, because informed discussion was impossible.
 
Indeed, after sitting through the meeting (in the comfort of my bedroom via live stream) I came away surprised at how unsophisticated and sloppy the ICER presentations were.  Then again, I don’t think ICER was quite ready for how many patient groups and companies were ready to challenge them.   You could sense the discomfort and the confusion of being held accountable.
 
Second, Steve Pearson, made a strategic retreat by NOT voting on the ‘value’ of new myeloma drugs to the health care system.  Pearson knew ICER would be pummeled for forcing a vote that essentially validated his long held view that most new drugs for seriously ill people with rare diseases will ‘siphon’ away resources that could be used to pay for roads and bridges.
 
Rather Pearson insisted that such meetings were just discusson groups and not intended to guide policy.  That is untrue.  ICER studies and votes have been adopted in making coverage decisions for Hep C, cholesterol and heart failure medicines.   Perhaps Pearson forgot about this statement from Express Scripts:
 
“The Institute for Clinical and Economic Review (ICER) has announced that, through a public and transparent review process, it will establish a value-based price benchmark for the PCSK9 inhibitors later this year. We plan to reference the findings from this independent, trusted organization in our subsequent negotiations with manufacturers to ensure that patients get to access this innovative class of drugs at a price the healthcare system can afford. “
 
 
Third, perhaps it was the setting but no one – from the patient community or the panel --- pointed out that drugs for cancer are very small part of health care spending or that more people living longer means more taxes and premium dollars.  It is crucial at the outset of every pricing discussion to establish a context based on facts. 
 
 It would have been useful if that point was made when Ryan Barker of the Missouri Foundation on Health said that he couldn’t vote for using new myeloma drugs because it would take money away from other patients.  Apparently, letting people die is a better way to generate money than reducing hospitalizations and increasing productivity.  
 
Barker told the group that he teachers medical ethics.  Note to Barker: the litmus test of an ethic is whether you apply it to yourself.  So if it’s your kids dying of myeloma, I expect you to reject any myeloma drug that doesn’t have the evidence you needed to vote yes.  That’s my gut reaction to Barker. 
 
Then again, after sitting through the ICER meeting, it became clear that Pearson aside, there is little malice, just a lack of understanding and opportunities to discuss tangible solutions.  As it stands now, ICER is just the blindly ambitious leading the blind.
 
I believe that it’s time to spend less time picking apart ICER and more time working on ways to create and apply the kind of knowledge needed to reward innovation and patient-defined outcomes. 
 
Is anybody else interested in joining me?
 
 
 
 
 
 
 
 
 
 

Truth in Biosimilar Labeling

  • 05.24.2016
  • Peter Pitts
From today’s edition of The Hill  …

Truth in biosimilar labeling
By Peter J. Pitts

Recently the FDA issued draft guidance on labeling for biosimilar products. In two words, no surprises – which for some is better news than for others.

The top of Page 8 will get a lot of attention:

FDA recommends that biosimilar product labeling incorporate relevant data and information from the reference product labeling, with appropriate product-specific modifications. The relevant data and information from the reference product labeling that should be incorporated into the biosimilar product labeling will depend on whether the applicant is seeking approval for all conditions of use (e.g., indication(s), dosing regimen(s)) or fewer than all conditions of use of the reference product for the biosimilar product.

And further:

In sections of the biosimilar product labeling that are based on the reference product labeling, it is anticipated that the text will be similar. Text based on the reference product labeling need not be identical and should reflect currently available information necessary for the safe and effective use of the biosimilar product. Certain differences between the biosimilar and reference product labeling may be appropriate. For example, biosimilar product labeling conforming to PLR and/or PLLR may differ from reference product labeling because the reference product labeling may not be required to conform to those requirements at the time of licensure of the biosimilar product. In addition, biosimilar product labeling may include information specific to the biosimilar product necessary to inform safe and effective use of the product, which could include differences such as administration, preparation, storage, or safety information that do not otherwise preclude a demonstration of biosimilarity.

To “inform safe and effective use.” Sounds good on paper – but what does it mean? Always? Sometimes? What are the parameters? If there’s information available, why not share it all the time? Or not at all? Who’s to judge? Can we rely on regulatory predictability – and this early in the biosimilar experience? Isn't more information better?

Of course, in order to maintain maximum regulatory, um, flexibility --

FDA acknowledges that there will be variations on the general concepts outlined in this section because the approach to product identification will depend on the specific statements.

(Note – author highlights, not FDA’s.)
 
An update article in Modern Healthcare makes an interesting point, “Federal regulators are likely trying to simplify physicians' understanding of the products' efficacy and safety. By definition, a biosimilar product has no clinically meaningful difference in terms of safety, purity and potency.”

If what practicing physicians understand about biosimilars is anything akin to the knowledge scale of the FDA’s Arthritis Advisory Committee -- as demonstrated during the meeting that considered the biologics license application for a proposed biosimilar to Remicade (infliximab) – then the agency’s attempt at “simplification” may result in some very serious unintended consequences. From the very beginning of the adcomm, it was clear the expert members of the committee didn’t understand what biosimilars really are, nor the pathway the agency uses to review them. Not good.

Per being upfront that the product is a biosimilar, the agency is unambiguous:

FDA recommends inclusion of a statement, on the line immediately beneath the initial U.S. approval date in Highlights, that the product is biosimilar to the reference product.

Although the FDA notes that the labeling does not need to be identical to information based on the reference product, it’s a pretty safe bet that manufacturers of biologics will likely take issue with competitors using their data for a product that is not exactly the same.
But from a straightforward public health standpoint, why omit truthful and accurate information from the information available to physicians and patients?

Shouldn’t labeling transparency be a key tenet in the Era of Biosimilars?

Building EvGen

  • 05.16.2016
  • Peter Pitts
What We Mean When We Talk About EvGen Part II: Building Out a National System for Evidence Generation

By: Rachel E. Sherman, M.D., M.P.H., and Robert M. Califf, M.D.

In an earlier FDA Voice blog post, we discussed a pair of concepts – interoperability and connectivity – that are essential prerequisites for the creation of a successful national system for evidence generation (or “EvGen”). In this post, we take a look at how we would apply these constructs as we go about building such a system.

Building EvGen

Creating knowledge requires the application of proven analytical methods and techniques to biomedical data in order to produce reliable conclusions. Until recently, such analysis was done by experts operating in centers that typically restricted access to data. This “walled garden” approach evolved for several reasons: the imperative to protect the privacy and confidentiality of sensitive medical data; concern about the negative consequences that could arise from inappropriate, biased, or incompetent analysis; and, the tendency to see data as a competitive asset. Regardless of the specific reason, the result has been the same: widespread and systemic barriers to data sharing.

If we are to reverse these tendencies and foster a new approach to creating evidence of the kind envisioned for EvGen, we must bear in mind several critical principles:

There must be a common approach to how data is presented, reported and analyzed and strict methods for ensuring patient privacy and data security.
Rules of engagement must be transparent and developed through a process that builds consensus across the relevant ecosystem and its stakeholders.
To ensure support across a diverse ecosystem that often includes competing priorities and incentives, the system’s output must be intended for the public good and be readily accessible to all stakeholders.What Would EvGen Look Like in Practice?

What would a robust national platform for evidence generation look like? It may be helpful to envision EvGen as an umbrella for all activities that help inform all stakeholders about making treatment decisions.

The task of evaluating drugs, biologics, or devices encompasses different data needs and methods. However, all share a common attribute: the characterization of individuals and populations and their associated clinical outcomes after they have undergone diagnostic or prognostic testing or been exposed to a therapeutic intervention.

Moreover, when medical practice itself is part of the evaluation, characterization of the organization and function of delivery systems is critical. In other words, the kinds of evidence needed to evaluate medical products for safety and effectiveness and the kinds of evidence needed to guide medical practice overlap substantially.

Over the last decade, there has been enormous progress in the area of “secondary use,” in which data collected for one purpose (for instance, as part of routine clinical care) can be reused for another (such as research, safety monitoring, or quality improvement).

The Sentinel Initiative, launched in response to a Congressional mandate to develop an active postmarket risk identification and analysis system, is one example. Modeled after successful programs such as the Centers for Disease Control and Prevention’s Vaccine Safety Datalink, Sentinel allows FDA to conduct safety surveillance by actively querying diverse data sources, primarily administrative and insurance claims databases but also data from electronic health record (EHR) systems, to evaluate possible medical product safety issues quickly and securely.

Another example, the National Patient-Centered Clinical Research Network (PCORnet), is a national system that includes many of the attributes needed for EvGen. PCORnet includes participation from government, industry, academia, and patients and their advocates. Whereas FDA’s Sentinel system is built primarily on claims data repurposed for safety surveillance, PCORnet is designed to leverage EHR data in support of pragmatic clinical research.

The NIH’s Health Care Systems Research Collaboratory has demonstrated through its Distributed Research Network that the concept of secondary data use can be extended into the realm of prospective pragmatic interventional trials. The NIH Collaboratory program, which includes many of the same health care systems involved in Sentinel and PCORnet, has 10 active trials underway.

In addition, the Reagan-Udall Foundation Innovation in Medical Evidence Development and Surveillance (IMEDS) Evaluation Program is exploring governance mechanisms to ensure that private-sector entities, notably regulated industry, can collaborate with Sentinel data partners to sponsor safety queries about marketed medical products. Such measures have the potential to expand the involvement of private-sector partners beyond the arena of methodology, further helping to ensure that Sentinel continues its expansion into a national resource.

Similarly, efforts are underway to establish a National Device Evaluation System (NDES). As currently envisioned, the NDES would be established through strategic alliances and shared governance. The system would build upon and leverage information from electronic real-world data sources, such as data gathered through routine clinical practice in device registries, claims data, and EHRs, with linkages activated among specific data sources as appropriate to address specific questions.

As substantial work already is being done in all of these areas, valuable experience is being gained. The next step is to ensure that these pioneering efforts coalesce into a true national resource. More on that in future postings.

Rachel E. Sherman, M.D., M.P.H., is FDA’s Associate Deputy Commissioner for Medical Products and Tobacco
Robert M. Califf, M.D., is Commissioner of the U.S. Food and Drug Administration
 
Yesterday Sara Edmond, the chief operating officer of the Institute for Clinical and Economic Review and I danced around whether ICER is really patient-centered as she claimed, or rebate-centered as I did. 

Ms. Edmond was a panelist at an  excellent Financial Times sponsored  US Healthcare Life Sciences Summit yesterday.     https://live.ft.com/Events/2016/FT-US-Healthcare-Life-Sciences-Summit  She was joined by Peter Bach, Director, Center for Health Policy and Outcomes, Memorial Sloan Kettering Cancer Center Jonathan Emms, Senior Vice President, Global Health and Value, Pfizer Jeff Myers, President and CEO, Medicaid Health Plans of America and Leonard Schleifer, President and CEO, Regeneron.

Praluent, the drug targeting people with untreatable high cholesterol was (along with Amgen’s Repatha) was considered low value by ICER and claimed that it should only be given to 15 percent of all patients who could benefit and at 80 percent of the list price.  

As a Reuters article reports, Dr. Schleifer blasted ICER as unscientific:

"They did all the calculations and they said it's X, which is ok. I could have lived with that. But ... they said society can't afford X, so we are going to say it's one-third X," Schleifer said during a panel discussion.
"They had value-based pricing, but they just decided that well we can't afford it. That wasn't scientific. There was no intellectual honesty there."

ICER Chief Operating Officer Sarah Emond, on a panel with Schleifer, countered that budget impact is part of the equation.
"You're attacking the science of an independent non-profit whose entire mission is tied to opening the black box of pricing," she said.

Which lead me to challenge Edmond from my seat in the audience about ICER’s so called independence. 

I said:  “ICER is not independent, it is largely funded and overseen by PBMs and insurers.”

Edmond responded that most the money came from the Arnold Foundation but I pointed out that the Arnold foundation grant is a one time thing.  

I then said that ICER’s value metric reflects the PBM and insurer interest and ignores patient value.  Further, the low QALY by default becomes a price control or price cap that doesn’t make drugs affordable or available.  Instead, the lower price only maximizes rebates that don't go to patients. More important, for all her talk about opening a black box I noted that ICER never mentions that PBMs run the $115 billion rebate racket.  

She said that since ICER doesn't have rebate data they have to use list price.

People laughed and Schleifer asked:  You estimate everything else, why not rebates? 

Finally I reiterated that under the ICER framework, not only would drugs for HIV, cancer, etc. be rejected but that next generation medicines would not be developed.    She responded, if we pay for Hep C drugs then we will have to lay off teachers and close schools." 

That drew another laugh.  

Edmond claims that ICER "uses science, we use math."  But she was unable to rebut the claim that the math supports the kind of creative accounting that reduces drug prices and maintain PBM and insurer profit margins. 

ICER's self anointed claim of being a trusted and independent organization was debunked.  Indeed, the other FT summit panelists talked about plans, providers and drug companies sustaining innovation and generating value while realizing that in doing so some ‘stakeholders’ – hospitals and PBMs – would go the way of Blockbuster video.   

Maximizing PBM and insurer rebate revenue is a self-serving enterprise that is sustained by increasing the spread between list prices and acquisition cost.   ICER was created and is funded by groups that profit from this enterprise to validate a QALY for that financial goal.  

In its current form ICER stands for the Institute for Constantly Extracting Rebates.

Now the black box is opened. 

The Urgency of the TPP

  • 05.12.2016
  • Peter Pitts
When it comes to global trade, there is no value to living in the past. We no longer trade in barter or beads. The Trans-Pacific Partnership (TPP) acknowledges that we live in a global village – and innovation is an essential commodity. Why are some people finding this so surprising? 

The evolution of the TPP has been long and arduous – but the basic premise has never changed. In order for global trade to flourish in an equitable manner, there have to be rules. Minus the rule of law, chaos ensues and we find ourselves in a survival of the fittest situation without fairness, predictability, or incentives for innovation. In a world without rules, ambiguity trumps investment and risk outweighs rewards.

One of the more important aspects of the TPP is intellectual property (IP) protection for biopharmaceutical innovation. This is of particular importance to the United States, where the U.S. biopharmaceutical research sector leads the world in the development of new medicines with about 4,000 in development or FDA review in the U.S. and more than 7,000 in development worldwide. This sector generates high-quality jobs and powers economic output and exports for the U.S. economy, serving as the foundation upon which one of the U.S.’ most dynamic innovation and business ecosystems is built. 

Read our new report here.
 

 If you give someone the tools they use to commit a crime, are you also responsible? 

Consider the following news item from Reuters about pharmacy benefit managers and their rebate contracts with drug companies: 

U.S. probes contracts between drugmakers, pharmacy benefit managers
 
“The U.S. Attorney's Office for the Southern District of New York is investigating contracts between drugmakers and companies that manage prescription benefits, according to regulatory filings… When drugs are knocked off their formularies, patients may have to pay full price for them. PBMs often keep or dump a product depending on whether they can obtain favorable pricing.”
 
As I have noted PBMs get and distribute about $110 BILLION in rebates each year.  That’s a trillion over a decade.  ICER plays, or seeks to play a role in setting prices and determining what products PBMs choose and insurers pay for that is central to enlarging and maximizing rebates.   And the PBMs are working closely with ICER to develop the price and access parameters of the contracts the  U.S. Attorney for the Southern District of New York is investigating:
 
“ICER’s new program will make a huge difference by providing what is sorely needed: an independent, trusted source of information about new drugs,” stated Steve Miller, MD, Chief Medical Officer of Express Scripts, the nation’s largest pharmacy benefits manager. “I believe many payers and policy makers will find this information of critical importance as they evaluate the new drugs, and we look forward to using it to help us improve the ability of patients to get access to new, innovative drugs at a price the system can afford.”
 
PBMs are also looking to ICER’s Steve Pearson to find reasons to pay less for cancer drugs depending on their indication. As a recent article noted: “ Express Scripts is using data from ICER, as well as the DrugAbacus, to inform its indication-based pilot.”
 
As I have noted before, indication pricing, based on average response and on a QALY measure reflecting PBM profit motives, can endanger patients and discourage companies from investing in treatments for the most difficult to treat tumors.  More generally, first in class or first ever drugs to treat the most severe conditions -- particularly rare diseases --  are likely to show modest benefit on average.  Such medicines will never meet ICER's devalued QALY measure. 
 
The most recent example is ICER has already determined that most new multiple myeloma drugs approved to treat patients whose disease has returned are NOT cost effective, even at 90 percent of the list price of the drug.
 
People with myeloma will bear moral, economic and clinical consequences that ICER ignores and the media barely mentions.   So two days before ICER meets to approve the report’s (foregone) conclusions I will be releasing a white paper that measures these essential values.
 
One important point to consider:  ICER recommendations would lead to drug companies forking over billions in rebates in exchange for putting these drugs on their formulary.   It does NOT mean that patients will get access.   It does mean that ICER is enabling the rebate ripoff scheme that the US attorney is investigating.  It may not be cutting the deals but ICER is supplying the PBMs the justification for the rebate enterprise.   


 
 
 
 
 
 
 

The American Journal of Managed Care ran a Q&A with Express Scripts and ICER consultant Peter Bach about his " DrugAbacus, the importance of using value frameworks, and using the European market as a model to recalibrate the healthcare system in the United States.

Bach likes to claim that he trying to reduce the mismatch between value and price.   That is a presumption without much basis in fact and is largely shaped by his Malthusian definition of value.   
 
Let's once again prove that Bach has an ideological axe to grind that has nothing to do with reality.  

In his interview, Bach claims that "it’s impossible to convince yourself that we are getting any incremental value, period, let alone any incremental value of the excess spending. If we compare ourselves with other countries, there does not seem to be any rationale, except that we simply spend more for all units of healthcare"  

I will get to his inaccurate assertion about other countries in a bit.  But first, let's look at his claim about incrementalism, one he has been repeating for several years.  Today and yesterday, Bach has ignored how cancer survivorship and life expectancy steadily increased over the past 20 years.   More recently, new drugs for lung cancer have doubled response rates and increased survival by 45 percent.  The total drug cost per patient (which includes the part of the price going to PBM rebates, etc.) is estimated to be between $36000-98000.   

He may believe that the  additional increment of average survival (which ignores genomic variation) is not worth spending money on.  But that ignores the fact that treatments are targeted to smaller populations that have fewer options than previous generations.  And he decidely believes that being able to live long enough to benefit from future medicines is a waste of time and money.

Bach knows better.  After all, one of his co-authors in the paper he cites in his NEJM oral hallucination about new drugs not adding more survival despite higher prices, makes that very point in another study: " In the absence of significant pricing and total oncology outlay flexibility by payers, our analysis suggests that private sector investment in small oncology segments, and in stratified medicine generally, may not prove economically sustainable, thus endangering the translation of scientific advances into bedside medicines. Beyond increasing reimbursement, decreasing development cycle time and costs, or both, would most directly improve the economic incentives facing developers. By contrast, extending exclusivity periods, or initiating advance market commitments and awarding prizes would likely have less impact and involve greater implementation challenges." (Trusheim, Berndt "Economics of Stratified Medicine" Personalized Medicine (2012) 9(4), 413–427)  
 
2.  Bach's main point: "The reality is that the drivers of healthcare spending in the US are unit price, not volume."
 To prove his claim Bach asserts: So, if we want to manage healthcare spending, you can make the argument that the excess price above that, which is being paid ambiently in European countries, is actually wasted dollars. It does not make the pill any better by paying 4 times as much for it."

That is untrue on two levels with respect to drugs. 
 
In developed markets, most growth is from new brands and increased volume, not price.  As the chart (from the IHI Oncology Trend Report: 2015
 

 
The IHI report notes: "Oncology drug spending has risen slightly as a percentage of total drug spending over the past five
years in all regions, most notably in the EU5 countries where oncology now represents 14.7% of total
drug spending, up from 13.3% in 2010, while the U.S. has seen oncology increase more modestly from
10.7% to 11.3% of total drug spending over the same period."



Indeed, the US rate of spending was lower compared to Europe even though  US adopts new medicines more quickly than Europe and other developed countries.  
 
 
 
 Yet the share of oncology of total drug spend is lower and increased more slowly in the US.
 
  
The IHI report estimates total spending on cancer drugs in the US is $42 billion.   Forty eight percent of that spend is for targeted therapies ($20 billion)   Total drug spending was $425 billion (without rebates) so new therapies are about 4.7 percent or that amount, which is unchanged since 2010.    Cancer drugs as a percent of total health care spending remains at about 1 percent.    

But Bach claims cancer drugs cost four times as much here than in Europe.  
 
As an aside, Bach’s claim that drugs are 6 times more expensive in the US than in Europe is an absurdity.   I can find a drug on the UK NHS formulary that has been subject to price concessions and price controls for a decade and compare it retail price here.  But that ignores the fact that in most cases the US is using generic drugs that are less expensive than the brand drug Bach has selected.   And with respect to cancer drugs the acquisition price of new products are about the same.   For instance, the retail price of a 50ml vial of Keytruda in the US is about $2200.   In the UK it is $1900.   A year supply of 40 mg crestor is (US dollars) is $4300 and the retail price in the US is  $2280.   A year’s supply of Januvia in the UK is 3326 pounds or $4800 while the retail price in the US is $4552. 
 
 
Finally, he glosses over the inequities of applying a QALY to a class of drugs or indication without regard to genomic variation or the severity  of the tumor being treated.  That's because he has a vested interest in using QALY to devalue new medicines which in turn allows the PBMs and insurance companies he consults for to rake in billions more in rebates.  And this devaluation will also hurt and even cause cancer patients to die. 
 
As I noted in a previous blog reviewing another work of fiction by Bach, "In an article published last year in the Journal of the American Medical Association, he suggested that in an indication-specific arrangement, the monthly price for Eli Lilly & Co.’s cancer drug Erbitux (cetuximab) would plummet from $10,320 a patient to about $470 a patient for its least effective use, treating recurrent or metastatic head and neck cancer. The drug also is used to treat locally advanced head and neck cancer, as well as colorectal cancer."
 
 Bach claims that the use of Erbitux for head and neck cancer is a "least effective use".  Let's set side the curious math used to arrive at the $470 figure.  It is more important to note that Bach ignores not only individual differences in response but the impact of Erbitux relative to existing need and treatment protocols.     Bach uses an average 2.3  months more of survival as his benchmark.   
Here's what we know about pre-Erbitux treatment of recurrent, metastatic squamous cell carcinoma of the head and neck (SCCHN):
 
"None of the trials performed in the past, even those with a reasonable sample size, have shown that aggressive platinum-based combination chemotherapy leads to survival benefit when compared to single agent methotrexate, cisplatin or 5-fluorouracil.
 
What difference does Erbitux makes?  
 
After decades without real progress, a recent European randomized trial showed that adding cetuximab, the first clinically available EGFR-directed monoclonal antibody, to a standard chemotherapy regimen (platinum/5-fluorouracil) leads to an important survival benefit and this, with support of an additional smaller study in the US, has changed practice."  J. B. Vermorken and P. Specenier Optimal treatment for recurrent/metastatic head and neck cancer. Ann Oncol (2010) 21 (suppl 7): vii252-vii261 doi:10.1093/annonc/mdq453
 
Hence, the Bach pricing approach would whittle away payment for the hardest to treat cancers for patients that have had no real advances in care for decades.  Maybe Bach supports paying doctors less for people who are the farthest gone because the relative health gains are well, not worth it??

Bach never comes clean about who benefits from the discounts he proposes.  In the US, it's the PBMs and insurers.  Currently, these special interests rake in about $4-8 billion in rebates on targeted oncology drugs.   Meanwhile patients are forced to use drugs that generate the most rebates and have to pay a large portion of the retail drug cost on top of everything.  

I guess that's linking prices to one set of interests -- PBMs and insurers -- that Bach values more than what is best for patients.  
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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