Latest Drugwonks' Blog
Now a few words about the outrage over EpiPen prices.
The EpiPen’s list price has increased before. And the list price of other generic drugs had been increasing even more. A lot more as the chart below (courtesy of the wise and charming Adam Fein from his wise and charming blog Drugchannels) shows.
In general, these list price hikes reflect increased cost of production and the fact that the only way to increase revenue is to increase prices to account for federal price controls on Medicaid prices, rebates, discounts, etc.
EpiPen’s price hike was modest compared to others on the list.
Meanwhile, the spike in generic prices have abated as the FDA cleared the backlog of generic drug approvals.
So why the outrage now? And why Mylan’s EpiPen?
First, last November Sanofi ($SNY) pulled the main competitor for EpiPen--Auvi-Q--from the market, a turn of events that at time looked as if it “should keep Mylan dominating the epinephrine injection field.”
Mylan already had 85 percent market share.
It’s been running ads for EpiPen ever since. In fact, Mylan ran so many EpiPen commercials during the Olympics I started to wonder if self-injection was a new competitive sport. (It’s not.)
Meanwhile CVS and Express Scripts removed another competitor, Andrenaclick, from it’s formularies. Andrenclick retails at $141 while EpiPen retails at around $600. You tell me why Express Scripts and CVS tossed it from it’s formularies.
At the same time, CVS and Express Scripts moved EpiPen from the lowest cost sharing tier to the highest cost sharing tier most likely to extract rebates from Mylan. Mylan could have said no, which led the PBMs to retaliate. Mylan could have responded by just increasing the amount of money going to patients directly to reduce out of pocket costs. And for the most part, it did as Consumer Reports points out:
“Such is the case for Tracy Bush, of Pfafftown, N.C., whose 14-year-old son relies on EpiPen for his allergies to nuts, eggs, and other foods. Bush has watched the price of EpiPen increase over the past nine years from $146 for a two-pack to more than $600. The total cost of Bush's recent prescription for three EpiPen two-packs came to $1,819.08. Fortunately for Bush, her insurance along with the co-pay coupon she gets through the drug's manufacturer, Mylan, covers a large portion of the costs.”
So what changed was the out of pocket cost of the EpiPen vs the acquisition price of the injectable which can be as low as $240 per two pak (the federal Medicaid price limit).
Mylan offers a coupon that reduces co-pays for insured patients by up to $100 per prescription (for up to a maximum of three two-pack cartons per prescription). Patients without insurance can apply to get EpiPens for free through Mylan’s patient assistance program.
So why the outrage? And why is it only directed at Mylan.
Because it fits the narrative, which is: Big Pharma has monopoly power to jack up prices as a high as they want and force people to go without life saving medicines.
And we are in a season of silliness in which economic illiterates propose price controls and patent seizures to cut costs. (See the incredibly stupid article in JAMA by a bunch of doctors masquerading as real economist entitled The High Cost of Prescription Drugs. There is a reason such crap is published by JAMA and other medical journals. Because the research and approach is so shoddy that it could never pass a peer-review threshold in a real journal of economics. But then again, the media is not interested in differentiating between real economics and propaganda. )
The truth is the EpiPen was probably priced too low to increase capacity fast enough to handle the fact that it’s main competitor’s product tanked. (I think many medicines are price too low given the unmet medicical needs and the huge investment it will take to tackle diseases with innovative medicines. ) And it was price too low in 2007 ($60) for value it delivers, namely saving a child from a potentially fatal anaphylactic shock. The prevention is a bargain for insurers too who otherwise would be required to pay for 1000 times more than the cost of an EpiPen 2-pak in hospital, rehab services.
Further, Mylan is now in the innovator pharma space. In 2014 Mylan invested in a Theravance Biopharma product called Revefenacin, a once-daily, nebulized long-acting muscarinic antagonist (LAMA) to treat chronic pulmonary obstructive disorder.
You see, the improved quality of treatment via EpiPens, reducing the use of high cost medical services and sparing parents the terror of seeing their child choke to death before their eyes. And some of the profits have gone to executive bonuses. So what? Most of it is going into new medicines.
Meanwhile, competitors have seen the market for injectable ephrinefrine explode. Other companies are developing products to compete with Mylan. FDA regulation is a bitch, requiring time and money. But eventually there will be more than one EpiPen competitor.
All this is truth. But it conflicts with the evil Pharma narrative that can be recycled again and again without any originality to generate clicks. The increasingly banal and predictable reporting at Forbes, Bloomberg, the New York Times and WSJ are cases in point. And the reporting is banal and predictable because it is not truthful. As Jonah Goldberg once observed: Journalists define the powerless and powerful based on their own preferred narratives. When the truth interferes with the narrative, the truth must be bent or jettisoned.
The EpiPen’s list price has increased before. And the list price of other generic drugs had been increasing even more. A lot more as the chart below (courtesy of the wise and charming Adam Fein from his wise and charming blog Drugchannels) shows.
In general, these list price hikes reflect increased cost of production and the fact that the only way to increase revenue is to increase prices to account for federal price controls on Medicaid prices, rebates, discounts, etc.
EpiPen’s price hike was modest compared to others on the list.
Meanwhile, the spike in generic prices have abated as the FDA cleared the backlog of generic drug approvals.
So why the outrage now? And why Mylan’s EpiPen?
First, last November Sanofi ($SNY) pulled the main competitor for EpiPen--Auvi-Q--from the market, a turn of events that at time looked as if it “should keep Mylan dominating the epinephrine injection field.”
Mylan already had 85 percent market share.
It’s been running ads for EpiPen ever since. In fact, Mylan ran so many EpiPen commercials during the Olympics I started to wonder if self-injection was a new competitive sport. (It’s not.)
Meanwhile CVS and Express Scripts removed another competitor, Andrenaclick, from it’s formularies. Andrenclick retails at $141 while EpiPen retails at around $600. You tell me why Express Scripts and CVS tossed it from it’s formularies.
At the same time, CVS and Express Scripts moved EpiPen from the lowest cost sharing tier to the highest cost sharing tier most likely to extract rebates from Mylan. Mylan could have said no, which led the PBMs to retaliate. Mylan could have responded by just increasing the amount of money going to patients directly to reduce out of pocket costs. And for the most part, it did as Consumer Reports points out:
“Such is the case for Tracy Bush, of Pfafftown, N.C., whose 14-year-old son relies on EpiPen for his allergies to nuts, eggs, and other foods. Bush has watched the price of EpiPen increase over the past nine years from $146 for a two-pack to more than $600. The total cost of Bush's recent prescription for three EpiPen two-packs came to $1,819.08. Fortunately for Bush, her insurance along with the co-pay coupon she gets through the drug's manufacturer, Mylan, covers a large portion of the costs.”
So what changed was the out of pocket cost of the EpiPen vs the acquisition price of the injectable which can be as low as $240 per two pak (the federal Medicaid price limit).
Mylan offers a coupon that reduces co-pays for insured patients by up to $100 per prescription (for up to a maximum of three two-pack cartons per prescription). Patients without insurance can apply to get EpiPens for free through Mylan’s patient assistance program.
So why the outrage? And why is it only directed at Mylan.
Because it fits the narrative, which is: Big Pharma has monopoly power to jack up prices as a high as they want and force people to go without life saving medicines.
And we are in a season of silliness in which economic illiterates propose price controls and patent seizures to cut costs. (See the incredibly stupid article in JAMA by a bunch of doctors masquerading as real economist entitled The High Cost of Prescription Drugs. There is a reason such crap is published by JAMA and other medical journals. Because the research and approach is so shoddy that it could never pass a peer-review threshold in a real journal of economics. But then again, the media is not interested in differentiating between real economics and propaganda. )
The truth is the EpiPen was probably priced too low to increase capacity fast enough to handle the fact that it’s main competitor’s product tanked. (I think many medicines are price too low given the unmet medicical needs and the huge investment it will take to tackle diseases with innovative medicines. ) And it was price too low in 2007 ($60) for value it delivers, namely saving a child from a potentially fatal anaphylactic shock. The prevention is a bargain for insurers too who otherwise would be required to pay for 1000 times more than the cost of an EpiPen 2-pak in hospital, rehab services.
Further, Mylan is now in the innovator pharma space. In 2014 Mylan invested in a Theravance Biopharma product called Revefenacin, a once-daily, nebulized long-acting muscarinic antagonist (LAMA) to treat chronic pulmonary obstructive disorder.
You see, the improved quality of treatment via EpiPens, reducing the use of high cost medical services and sparing parents the terror of seeing their child choke to death before their eyes. And some of the profits have gone to executive bonuses. So what? Most of it is going into new medicines.
Meanwhile, competitors have seen the market for injectable ephrinefrine explode. Other companies are developing products to compete with Mylan. FDA regulation is a bitch, requiring time and money. But eventually there will be more than one EpiPen competitor.
All this is truth. But it conflicts with the evil Pharma narrative that can be recycled again and again without any originality to generate clicks. The increasingly banal and predictable reporting at Forbes, Bloomberg, the New York Times and WSJ are cases in point. And the reporting is banal and predictable because it is not truthful. As Jonah Goldberg once observed: Journalists define the powerless and powerful based on their own preferred narratives. When the truth interferes with the narrative, the truth must be bent or jettisoned.
It’s as though Turingfreude never made it to Mylan HQ.
Dramatically raising prices on Epipen during a political cycle? Really? That’s the new dictionary definition of (among other things) being tone deaf.
And to make matters even worse, the head honcho at Mylan, Heather Bresch is the daughter of US Senator Joe Manchin (D, WVA). That’s gotta be embarrassing.
The naivity is … Breschtaking.
Have a look at my comments during CNBC’s Power Lunch.
Folks -- you just cannot make this stuff up.
Dramatically raising prices on Epipen during a political cycle? Really? That’s the new dictionary definition of (among other things) being tone deaf.
And to make matters even worse, the head honcho at Mylan, Heather Bresch is the daughter of US Senator Joe Manchin (D, WVA). That’s gotta be embarrassing.
The naivity is … Breschtaking.
Have a look at my comments during CNBC’s Power Lunch.
Folks -- you just cannot make this stuff up.
When it comes to protecting and advancing the public health, some states are leaders, others laggards. Consider biosimilars.
On July 20, Pennsylvania Governor Tom Wolf signed into law Senate Bill 514, which allows pharmacists to substitute for a brand name biological product a less expensive biosimilar product that has been deemed interchangeable by the FDA. Pennsylvania is one of 25 states and territories to enact such a law.
Under the Pennsylvania law, a pharmacist may substitute a biosimilar for a prescribed biologic product only if (1) the biosimilar has been determined by the FDA to be interchangeable with the prescribed product, (2) the prescriber does not designate verbally or in writing on the prescription for that product that substitution is prohibited, and (3) the person presenting the prescription receives notification of such substitution.
A pharmacist must also communicate the substitution to the prescribing physician, unless it is a refill prescription of the same previously dispensed interchangeable biosimilar.
It’s important to note that none of the biosimilars currently approved by the FDA have been approved as “interchangeable.” At least not yet – but as soon as the FDA completes its regulatory pathway, there will be – and there will be many. Those states with Pennsylvania-like legislation in place will recognize larger savings and sounder patient safety faster. That’s a potent public health double play that the folks in Harrisburg have already figured out. It’s time for every state to pay attention.
On July 20, Pennsylvania Governor Tom Wolf signed into law Senate Bill 514, which allows pharmacists to substitute for a brand name biological product a less expensive biosimilar product that has been deemed interchangeable by the FDA. Pennsylvania is one of 25 states and territories to enact such a law.
Under the Pennsylvania law, a pharmacist may substitute a biosimilar for a prescribed biologic product only if (1) the biosimilar has been determined by the FDA to be interchangeable with the prescribed product, (2) the prescriber does not designate verbally or in writing on the prescription for that product that substitution is prohibited, and (3) the person presenting the prescription receives notification of such substitution.
A pharmacist must also communicate the substitution to the prescribing physician, unless it is a refill prescription of the same previously dispensed interchangeable biosimilar.
It’s important to note that none of the biosimilars currently approved by the FDA have been approved as “interchangeable.” At least not yet – but as soon as the FDA completes its regulatory pathway, there will be – and there will be many. Those states with Pennsylvania-like legislation in place will recognize larger savings and sounder patient safety faster. That’s a potent public health double play that the folks in Harrisburg have already figured out. It’s time for every state to pay attention.
Yesterday’s public meeting on the FDA’s PDUFA VI Commitment Letter was a love-fest (mostly) – but as Theresa Mullin, Director of CDER’s Office of Strategic Programs, wisely noted, “the devil is in the details. Indeed.
The meeting was in three panels: Pre-Market Review and Post-Market Safety, Regulatory Decision Tools, and Administrative Enhancements.
A few highlights and comments.
Opening up the day, CDER Director Dr. Janet Woodcock commented that, since the introduction of the first PDUFA in 1993, “It’s a brave new world.” That’s certainly true, but some have been braver than others. As Aldous Huxley wrote in his novel, A Brave New World, ““Most human beings have an almost infinite capacity for taking things for granted.”
Janet (and later on others) spoke about PDUFA VI building a Patient-Focused Drug Development (PFDD) “Bridge.” In other words, moving from holding meetings to developing “fit-for-purpose tools to better reflect the benefit/risk calculus of patients.” A key point, via Janet, is that by doing this the FDA will not be the PFDD “bottleneck." The devil is in the details.
She also pointed to a fully operational and funded Sentinel program as a linchpin not just for advancing safety (specifically pharmacovigilance) more broadly, but also for accelerating the ecosystem of Real World Evidence. RWE was a major focus of the meeting. More to follow. Albeit to say – the devil is in the details.
The factoid of the day was that in FY2015 (to date), the FDA has held over 3000 PDUFA meeting requests. Don’t even bother doing the math, because that doesn’t include the intense meeting preparation division staff must undertake prior to any actual face-to-face (or teleconference) encounters. This is a highly significant statistic insofar as there was much discussion on enhancing sponsor-agency communications. Is more always better? It depends. As Walter Gropius said, “Less is more. But more tastes better.” Communications must now be more about quality than quantity but, from a PDUFA perspective, how can that be measured?
In a small but important improvement, the FDA will provide 72-hour notice to all manufacturers whose products will appear in the quarterly FDAAA-mandated Public Notification of Emerging Postmarket Medical Device Signals (921 Safety Notices).
Per Sentinel, it was mentioned a number of times (including on an FDA slide) that it will be used to “inform important regulatory decisions.” Does this mean Sentinel data will be used “beyond risk” to also “inform” FDA thinking on potential new benefits? Will Sentinel become a tool for validating Real World Evidence? That was not discussed – but maybe it’s time for it to be put on the table, perhaps at one of the RWE meetings promised in the agency’s commitment letter.
As promised, the FDA will publish an updated version of its Structured Approach to Benefit/Risk Assessment in Drug Regulatory Decision-Making. It’s been an arduous journey. It’s important to remember that the key tenet of the PDUFA philosophy isn’t speed, but predictability, and the ability to understand regulatory decision-making (and, ultimately reproducibility) is crucial. This is important for many reasons, not the least of which is the ever-increasing costs of drug development.
There was (Finally! At last!) much discussion about “staff capacity.” Not just more, but better. Not just quantity, but quality. One specific conversation focused on the need for better reviewer understanding of and training in adaptive clinical trial design models. Let’s face it, there aren’t a lot of people inside the FDA considered expert in (among other things) Bayesian statistical design. Better MAPPS and SOPPS (Manual of Policies & Procedures, Standard Operating Policies & Procedures), that were promised and they will help. There have to be internal rules of the 21st century regulatory road as well as external guidance but – the devil is in the details.
Some positive forward motion on biomarker prequalification. Among other things, the FDA will create a website listing the biomarkers it’s working on. Per the agency's presentation, this is designed to help stimulate further development. It’s a start and more needs to be done. (More, always more!) But without the internal expertise, how is the FDA to parse its expert resources? Maybe it’s time for a more serious discussion of intramural cooperation. FDA needs adequate resources – beyond PDUFA funding -- to provide advice and oversee review and decision-making. One solution is to partner with an external entity (perhaps an Intramural Biomarker Consortium-IBC) to develop early advice and serve as an expert sounding board for nascent biomarker efforts. The IBC could be a required or voluntary resource in the review process, especially for initial data package reviews. This approach would allow FDA staff to focus on their primary role of product review and regulatory oversight.
PDUFA is an important path, but it isn’t the only one.
All present (FDA staff, patient groups, industry representatives) were very excited about the opportunities of PFDD next steps and Real World Evidence. But how to get there? As BIO’s Kay Holcombe said, “We cannot put anecdotes on the drug label.” Real World Evidence is the new star on the precision medicine horizon. But the tool set for using this treasure trove of healthcare information is nascent and the tasks as are daunting as the opportunities. Patient passion is important to share. When combined with data and a more dispassionate understanding of regulatory paradigms, a patient-driven pathway can and must evolve into a tool used to impact regulatory decision-making. The devil is in the details.
The most decidedly unsexy but most honest and important part of the meeting came last – a discussion of “administrative enhancements” including electronic submissions and data standard activities, hiring capacity, and financial management. It’s important to note that PDUFA VI is the first time that “hiring capacity” has been directly addressed – and it’s about time. The FDA must have the firepower to not only retain but to aggressively recruit the best and the brightest. Again, it’s not just about body count (quantity) but quality. Quality is not what you put in. It’s what you get out. “Staff capacity” means more (a lot more) than PDUFA-measurable hiring numbers. We need a PDUFA quality metric.
In the immortal words of Admiral Hyman Rickover, “The devil is in the details, but so is salvation.
The meeting was in three panels: Pre-Market Review and Post-Market Safety, Regulatory Decision Tools, and Administrative Enhancements.
A few highlights and comments.
Opening up the day, CDER Director Dr. Janet Woodcock commented that, since the introduction of the first PDUFA in 1993, “It’s a brave new world.” That’s certainly true, but some have been braver than others. As Aldous Huxley wrote in his novel, A Brave New World, ““Most human beings have an almost infinite capacity for taking things for granted.”
Janet (and later on others) spoke about PDUFA VI building a Patient-Focused Drug Development (PFDD) “Bridge.” In other words, moving from holding meetings to developing “fit-for-purpose tools to better reflect the benefit/risk calculus of patients.” A key point, via Janet, is that by doing this the FDA will not be the PFDD “bottleneck." The devil is in the details.
She also pointed to a fully operational and funded Sentinel program as a linchpin not just for advancing safety (specifically pharmacovigilance) more broadly, but also for accelerating the ecosystem of Real World Evidence. RWE was a major focus of the meeting. More to follow. Albeit to say – the devil is in the details.
The factoid of the day was that in FY2015 (to date), the FDA has held over 3000 PDUFA meeting requests. Don’t even bother doing the math, because that doesn’t include the intense meeting preparation division staff must undertake prior to any actual face-to-face (or teleconference) encounters. This is a highly significant statistic insofar as there was much discussion on enhancing sponsor-agency communications. Is more always better? It depends. As Walter Gropius said, “Less is more. But more tastes better.” Communications must now be more about quality than quantity but, from a PDUFA perspective, how can that be measured?
In a small but important improvement, the FDA will provide 72-hour notice to all manufacturers whose products will appear in the quarterly FDAAA-mandated Public Notification of Emerging Postmarket Medical Device Signals (921 Safety Notices).
Per Sentinel, it was mentioned a number of times (including on an FDA slide) that it will be used to “inform important regulatory decisions.” Does this mean Sentinel data will be used “beyond risk” to also “inform” FDA thinking on potential new benefits? Will Sentinel become a tool for validating Real World Evidence? That was not discussed – but maybe it’s time for it to be put on the table, perhaps at one of the RWE meetings promised in the agency’s commitment letter.
As promised, the FDA will publish an updated version of its Structured Approach to Benefit/Risk Assessment in Drug Regulatory Decision-Making. It’s been an arduous journey. It’s important to remember that the key tenet of the PDUFA philosophy isn’t speed, but predictability, and the ability to understand regulatory decision-making (and, ultimately reproducibility) is crucial. This is important for many reasons, not the least of which is the ever-increasing costs of drug development.
There was (Finally! At last!) much discussion about “staff capacity.” Not just more, but better. Not just quantity, but quality. One specific conversation focused on the need for better reviewer understanding of and training in adaptive clinical trial design models. Let’s face it, there aren’t a lot of people inside the FDA considered expert in (among other things) Bayesian statistical design. Better MAPPS and SOPPS (Manual of Policies & Procedures, Standard Operating Policies & Procedures), that were promised and they will help. There have to be internal rules of the 21st century regulatory road as well as external guidance but – the devil is in the details.
Some positive forward motion on biomarker prequalification. Among other things, the FDA will create a website listing the biomarkers it’s working on. Per the agency's presentation, this is designed to help stimulate further development. It’s a start and more needs to be done. (More, always more!) But without the internal expertise, how is the FDA to parse its expert resources? Maybe it’s time for a more serious discussion of intramural cooperation. FDA needs adequate resources – beyond PDUFA funding -- to provide advice and oversee review and decision-making. One solution is to partner with an external entity (perhaps an Intramural Biomarker Consortium-IBC) to develop early advice and serve as an expert sounding board for nascent biomarker efforts. The IBC could be a required or voluntary resource in the review process, especially for initial data package reviews. This approach would allow FDA staff to focus on their primary role of product review and regulatory oversight.
PDUFA is an important path, but it isn’t the only one.
All present (FDA staff, patient groups, industry representatives) were very excited about the opportunities of PFDD next steps and Real World Evidence. But how to get there? As BIO’s Kay Holcombe said, “We cannot put anecdotes on the drug label.” Real World Evidence is the new star on the precision medicine horizon. But the tool set for using this treasure trove of healthcare information is nascent and the tasks as are daunting as the opportunities. Patient passion is important to share. When combined with data and a more dispassionate understanding of regulatory paradigms, a patient-driven pathway can and must evolve into a tool used to impact regulatory decision-making. The devil is in the details.
The most decidedly unsexy but most honest and important part of the meeting came last – a discussion of “administrative enhancements” including electronic submissions and data standard activities, hiring capacity, and financial management. It’s important to note that PDUFA VI is the first time that “hiring capacity” has been directly addressed – and it’s about time. The FDA must have the firepower to not only retain but to aggressively recruit the best and the brightest. Again, it’s not just about body count (quantity) but quality. Quality is not what you put in. It’s what you get out. “Staff capacity” means more (a lot more) than PDUFA-measurable hiring numbers. We need a PDUFA quality metric.
In the immortal words of Admiral Hyman Rickover, “The devil is in the details, but so is salvation.
ICER has come out with a response to what it defines as myths about it’s funding, approach and mission. The rejoinder is an excellent example of President Kennedy’s observation that “the great enemy of the truth is very often not the lie, deliberate, contrived and dishonest, but the myth, persistent, persuasive and unrealistic.”
ICER wants to be perceived as trusted non profit organization that is identifying the best medicines at prices patients can afford. As ICER puts it: “How can we make sure that we can afford the innovation we want for patients in the future?”
And it believes, led by Steve Pearson, ICER’s believer in chief, tha unless ICER rolls up their sleeves to determine the prices of new medicines and who should get them drug spending “would contribute to an increase in overall health care costs at a rate greater than growth in the overall national economy, (and) health system value would be diminished.”
ICER’s publication takes issue with several so-called myths. Some of them address criticism about their belief that an additional year of life is at maximum worth $150K. Another deals with how little ICER includes patient perspectives of health value. I will deal with those in another post.
For now, I will deal with the criticisms I have raised about ICER that it has tried to refute
Myth #5: ICER wants to take money from dying patients in order to “fix potholes.”
ICER claims “much of the more recent criticism has been fueled by a lack of knowledge about ICER or even willful mischaracterization by those who oppose a move toward pricing in alignment with the added value for patients. Some of these distortions have taken on a life of their own, threatening to make it more difficult for patient groups and others to engage constructively in our report development and in the broader debates now going on about value assessment and drug pricing.”
In particular, ICER is ticked off that I claimed that ICER wants to take money from dying patients in order to “fix potholes.” Let’s give Pearson and ICER the floor:
Truth:
This is one of the more remarkable and malicious mischaracterizations of our intentions.
In introducing the broader social and ethical questions that ICER reports are supposed to help address through public dialogue, we have shown data from the state of Massachusetts demonstrating that state spending on health care has risen nearly 60% in the last decade. We also show data on where that money came from: steep reductions in spending on every other major type of social service, including education, fire and police protection, housing, public health, and infrastructure. The same story is echoed in state houses around the country: health care costs are growing rapidly, severely impinging on the ability of states to maintain other services. This obviously does not imply that ICER wants dying patients to be denied treatment in order to fix potholes. What it does mean is that we hope that our reports and the public meetings we convene can lead to a more robust and honest discussion about the real choices and trade-offs that are being made in spending at the state and national level. If the shared hope is to be able to provide innovative drugs for all patients with serious illness, and to be able to also afford good education for our children and other services, then we believe that transparent discussions about whether prices for drugs and other health care services are reasonably aligned with the value they bring to patients are an important way to help us get there.”
It is true that I posted a blog “ICER's Moral Vision: Repair Potholes Instead of Rescuing Lung Cancer Patients”
I used that title because it seemed to capture Pearson’s moral vision. Here’s what he said about lung cancer treatments in article he wrote in 2012 entitled "Which Orphans Will Find a Home":
“Considering…the marginal impact on the length and quality of life, and the implicit opportunity costs of this level of expenditure, our framework would suggest that public and private insurers would be justified in refusing to pay for cetuximab (a lung cancer drug).”
Of note, Pearson claims that lung cancer patients aren't really that sick. They are just louder than other groups. Pearson claims just because an advocacy group creates awareness of a specific disease or need, that's no reason to cover new medicines. In the case of lung cancer drugs Pearson writes: demand is" driven largely by the heightened public consciousness" and that there is "no..obligation to rescue identifiable rare disease patients based on a duty of rescue within personal morality."
Which ties into another charge I have raised that ICER seeks to rebut: the use of QALY’s discriminates against the sickest patients is a myth. (So-called) It claims:
“In fact, starting out with a lower quality of life, whether through a serious illness or disability, offers more “room” for improvement, giving treatments for patients with serious conditions more opportunity to show improvement compared to treatments for patients whose baseline condition is already near perfect health.”
But that is NOT how QALY is applied. Pearson has stated “a sickest-first principle might require allocation of resources even when only minor gains can be achieved and the cost is very high, which is obviously inefficient…coverage decisions must not only incorporate consideration of the benefits gained but the opportunity costs incurred when covering expensive orphan drugs.”
And contrary to Pearson’s claim about not considering cost in recommending what drugs to use, he and ICER are clearly targeted what they believe are “ the growing number of expensive therapies that offer benefit only to small populations” to “ensure that an undue burden is not
placed on others for the sake of a few.”
In addition, ICER and Pearson regards living longer, the result produced cumulatively by new drugs, as a cost which, if it exceeds a specific amount of spending per drug estalblished by ICER, would diminish health system value.
Indeed, as ICER points out it's measurement of QALY is conducted " from a health system perspective, and so does not incorporate costs and effects that might be relevant from a societal perspective, such as productivity, transportation, or caregiver costs."
Moreover, ICER measures costs as the combination of "new treatment on top of existing treatment, as is the case for multiple myeloma drugs.." That "means that to reach standard cost-effectiveness levels the entire regimen, including the older, existing drugs that are part of the regimen, would need to be deeply discounted, or certain costs must be considered “unrelated” and excluded from the economic evaluation.
Pearson's response: "At current wholesale acquisition costs, the estimated long-term cost-effectiveness of these regimens exceeds commonly-cited thresholds."
In other words, myeloma treatments surge about the ICER QALY cap of $150K because people are living longer and have more options to increase survival. They are therefore, from ICER's perspective (and the insurer's perspective a noted above) new drugs that extend life will NEVER be cost-effective.
With regard to the pothole vs dying patient “myth" I was simply writing based on a FAQ that ICER had posted on it’s website until recently but is no longer available:
“When we’re paying for drugs and don’t know the drug’s value, individually, we may pay more out of pocket and more for insurance. While if we’re covered at work and our employer is paying more in premiums, we may not get as big a raise as we otherwise would have. We also pay more in taxes as the government (Medicare, Medicaid, and federal employees) has to pay more for health care. We’re siphoning off resources for other things we need like better schools and more resources for local police, roads and bridges.”
But the claim that spending money on drugs drains money away from other services is an outright falsehood.
Source: National Assoc. of State Budget Officers
As the chart above demonstrates, state Medicaid spending has increased slightly, while other expenditures have remained stable or increased slightly. (Transportation being an exception.) Doesn't look like a siphon to me.
And here’s a look at the Massachusetts budget ICER claims is being savaged by the use of drugs that are expensive and not very valuable (like drugs for dying lung cancer patients, as Pearson suggested.)
Source: Massbudget.org
Turns out Medicaid spending in Massachusetts declined as a percentage of total state spending from 2004-2014.
Finally, let me show that for all of ICER’s deception and spin, Medicaid spending on drugs has remained about the same percentage of total Medicaid spending for the past decade.
(Source, CMS)
Ask yourself this question: If we can't trust ICER to present accurate data about the impact of drug spending on our economy or governent expenditures, can we trust it, as it wants us to do, to determine patient access to new medicines?
ICER wants to be perceived as trusted non profit organization that is identifying the best medicines at prices patients can afford. As ICER puts it: “How can we make sure that we can afford the innovation we want for patients in the future?”
And it believes, led by Steve Pearson, ICER’s believer in chief, tha unless ICER rolls up their sleeves to determine the prices of new medicines and who should get them drug spending “would contribute to an increase in overall health care costs at a rate greater than growth in the overall national economy, (and) health system value would be diminished.”
ICER’s publication takes issue with several so-called myths. Some of them address criticism about their belief that an additional year of life is at maximum worth $150K. Another deals with how little ICER includes patient perspectives of health value. I will deal with those in another post.
For now, I will deal with the criticisms I have raised about ICER that it has tried to refute
Myth #5: ICER wants to take money from dying patients in order to “fix potholes.”
ICER claims “much of the more recent criticism has been fueled by a lack of knowledge about ICER or even willful mischaracterization by those who oppose a move toward pricing in alignment with the added value for patients. Some of these distortions have taken on a life of their own, threatening to make it more difficult for patient groups and others to engage constructively in our report development and in the broader debates now going on about value assessment and drug pricing.”
In particular, ICER is ticked off that I claimed that ICER wants to take money from dying patients in order to “fix potholes.” Let’s give Pearson and ICER the floor:
Truth:
This is one of the more remarkable and malicious mischaracterizations of our intentions.
In introducing the broader social and ethical questions that ICER reports are supposed to help address through public dialogue, we have shown data from the state of Massachusetts demonstrating that state spending on health care has risen nearly 60% in the last decade. We also show data on where that money came from: steep reductions in spending on every other major type of social service, including education, fire and police protection, housing, public health, and infrastructure. The same story is echoed in state houses around the country: health care costs are growing rapidly, severely impinging on the ability of states to maintain other services. This obviously does not imply that ICER wants dying patients to be denied treatment in order to fix potholes. What it does mean is that we hope that our reports and the public meetings we convene can lead to a more robust and honest discussion about the real choices and trade-offs that are being made in spending at the state and national level. If the shared hope is to be able to provide innovative drugs for all patients with serious illness, and to be able to also afford good education for our children and other services, then we believe that transparent discussions about whether prices for drugs and other health care services are reasonably aligned with the value they bring to patients are an important way to help us get there.”
It is true that I posted a blog “ICER's Moral Vision: Repair Potholes Instead of Rescuing Lung Cancer Patients”
I used that title because it seemed to capture Pearson’s moral vision. Here’s what he said about lung cancer treatments in article he wrote in 2012 entitled "Which Orphans Will Find a Home":
“Considering…the marginal impact on the length and quality of life, and the implicit opportunity costs of this level of expenditure, our framework would suggest that public and private insurers would be justified in refusing to pay for cetuximab (a lung cancer drug).”
Of note, Pearson claims that lung cancer patients aren't really that sick. They are just louder than other groups. Pearson claims just because an advocacy group creates awareness of a specific disease or need, that's no reason to cover new medicines. In the case of lung cancer drugs Pearson writes: demand is" driven largely by the heightened public consciousness" and that there is "no..obligation to rescue identifiable rare disease patients based on a duty of rescue within personal morality."
Which ties into another charge I have raised that ICER seeks to rebut: the use of QALY’s discriminates against the sickest patients is a myth. (So-called) It claims:
“In fact, starting out with a lower quality of life, whether through a serious illness or disability, offers more “room” for improvement, giving treatments for patients with serious conditions more opportunity to show improvement compared to treatments for patients whose baseline condition is already near perfect health.”
But that is NOT how QALY is applied. Pearson has stated “a sickest-first principle might require allocation of resources even when only minor gains can be achieved and the cost is very high, which is obviously inefficient…coverage decisions must not only incorporate consideration of the benefits gained but the opportunity costs incurred when covering expensive orphan drugs.”
And contrary to Pearson’s claim about not considering cost in recommending what drugs to use, he and ICER are clearly targeted what they believe are “ the growing number of expensive therapies that offer benefit only to small populations” to “ensure that an undue burden is not
placed on others for the sake of a few.”
In addition, ICER and Pearson regards living longer, the result produced cumulatively by new drugs, as a cost which, if it exceeds a specific amount of spending per drug estalblished by ICER, would diminish health system value.
Indeed, as ICER points out it's measurement of QALY is conducted " from a health system perspective, and so does not incorporate costs and effects that might be relevant from a societal perspective, such as productivity, transportation, or caregiver costs."
Moreover, ICER measures costs as the combination of "new treatment on top of existing treatment, as is the case for multiple myeloma drugs.." That "means that to reach standard cost-effectiveness levels the entire regimen, including the older, existing drugs that are part of the regimen, would need to be deeply discounted, or certain costs must be considered “unrelated” and excluded from the economic evaluation.
Pearson's response: "At current wholesale acquisition costs, the estimated long-term cost-effectiveness of these regimens exceeds commonly-cited thresholds."
In other words, myeloma treatments surge about the ICER QALY cap of $150K because people are living longer and have more options to increase survival. They are therefore, from ICER's perspective (and the insurer's perspective a noted above) new drugs that extend life will NEVER be cost-effective.
With regard to the pothole vs dying patient “myth" I was simply writing based on a FAQ that ICER had posted on it’s website until recently but is no longer available:
“When we’re paying for drugs and don’t know the drug’s value, individually, we may pay more out of pocket and more for insurance. While if we’re covered at work and our employer is paying more in premiums, we may not get as big a raise as we otherwise would have. We also pay more in taxes as the government (Medicare, Medicaid, and federal employees) has to pay more for health care. We’re siphoning off resources for other things we need like better schools and more resources for local police, roads and bridges.”
But the claim that spending money on drugs drains money away from other services is an outright falsehood.
Source: National Assoc. of State Budget Officers
As the chart above demonstrates, state Medicaid spending has increased slightly, while other expenditures have remained stable or increased slightly. (Transportation being an exception.) Doesn't look like a siphon to me.
And here’s a look at the Massachusetts budget ICER claims is being savaged by the use of drugs that are expensive and not very valuable (like drugs for dying lung cancer patients, as Pearson suggested.)
Source: Massbudget.org
Turns out Medicaid spending in Massachusetts declined as a percentage of total state spending from 2004-2014.
Finally, let me show that for all of ICER’s deception and spin, Medicaid spending on drugs has remained about the same percentage of total Medicaid spending for the past decade.
(Source, CMS)
Ask yourself this question: If we can't trust ICER to present accurate data about the impact of drug spending on our economy or governent expenditures, can we trust it, as it wants us to do, to determine patient access to new medicines?
Judge dismisses 1,225 cases against Bayer Healthcare
Fairfield County Business Journal
By Bill Heltzel
August 11, 2016
A federal judge in White Plains has dismissed 1,225 lawsuits against Bayer Healthcare Pharmaceuticals that were filed by women who claimed that the company’s contraceptive device injured them.
U.S. District Court Judge Cathy Seibel concluded that the absence of expert testimony made it impossible to prove that the device can injure women after it was inserted.
“No reasonable jury could find in favor of plaintiffs because there is no evidence in the record from which a jury could find that secondary perforation exists and is capable of causing plaintiffs’ injuries,” Seibel wrote in a July 28 opinion.
“The court reaches this conclusion reluctantly, knowing that it will doom hundreds of cases,” she said, “but in the court’s view it is compelled by the law.”
The U.S. Food and Drug Administration approved Bayer’s Mirena intra-uterine contraceptive device in 2000.
The small, plastic T-shaped IUD releases a continuous dose of a hormone that reduces the chances of pregnancy. A trained health care provider implants the device.
Mirena has been marketed as a convenient form of birth control. It is meant to last for up to five years and it can be removed if a woman wanted to become pregnant.
Women who sued Bayer complained of side effects, such as perforation of the uterus, pelvic inflammatory disease and ectopic pregnancy. Many said the device shifted and caused internal injuries.
The legal issues, Seibel said, are when perforations occur and whether the label adequately warned of all risks associated with perforation.
The Mirena label went through a few versions. For years, it said “perforation or penetration of the uterine wall or cervix may occur during insertion.” In 2014, the label said perforation “may occur most often during insertion.”
Bayer argued that the scientific consensus was that perforations cannot occur after the device is implanted. The plaintiffs contended that secondary perforations can occur.
In March, Seibel barred testimony from seven expert witnesses for the women, concluding that they were unqualified or unreliable to offer expert opinions on clinical issues, causation or regulatory issues.
A biomedical engineer, for example, had no experience with IUDs or hormonal contraception devices like Mirena and no particular familiarity with the anatomy of the uterus. His only experience with the hormone used in Mirena came from reviewing articles that the plaintiffs’ counsel gave him and that he copied and pasted into his expert report.
“This is not the level of rigor an expert in the field would apply and does not pass muster,” Seibel concluded.
A professor of physiology presented a theory on secondary perforation “without confronting scientific literature that refutes this notion,” casting doubt on her reliability.
The plaintiffs’ attorneys tried to salvage their cases by arguing that other evidence could prove their cases. But Seibel ruled that allowing such admissions to substitute for expert testimony would defeat state laws that require experts and would leave the jury to speculate about the cause of injuries.
In 2013, when about 40 cases were pending in 17 federal districts, the Judicial Panel on Multidistrict Litigation consolidated the lawsuits.
The cases shared common factual issues on the alleged risks of perforation and migration and on the adequacy of the product label, the panel said. Placing all cases under one judge would make it easier to accommodate everyone in the pretrial proceedings.
The panel chose the Southern District of New York because it is near Bayer operations in Connecticut, New Jersey, New York and Pennsylvania, where the primary witnesses and documentary evidence would likely be located. The district also is easy to reach for plaintiffs around the country.
Bayer Healthcare once operated a facility in Tarrytown. The operations were moved in 2013 when the Bayer subsidiary opened a new U.S. headquarters in Whippany, N.J.
The panel chose Seibel because she was already presiding over three related cases, “and she is an experienced transferee judge who we are confident will steer this litigation on a prudent course.”
Fairfield County Business Journal
By Bill Heltzel
August 11, 2016
A federal judge in White Plains has dismissed 1,225 lawsuits against Bayer Healthcare Pharmaceuticals that were filed by women who claimed that the company’s contraceptive device injured them.
U.S. District Court Judge Cathy Seibel concluded that the absence of expert testimony made it impossible to prove that the device can injure women after it was inserted.
“No reasonable jury could find in favor of plaintiffs because there is no evidence in the record from which a jury could find that secondary perforation exists and is capable of causing plaintiffs’ injuries,” Seibel wrote in a July 28 opinion.
“The court reaches this conclusion reluctantly, knowing that it will doom hundreds of cases,” she said, “but in the court’s view it is compelled by the law.”
The U.S. Food and Drug Administration approved Bayer’s Mirena intra-uterine contraceptive device in 2000.
The small, plastic T-shaped IUD releases a continuous dose of a hormone that reduces the chances of pregnancy. A trained health care provider implants the device.
Mirena has been marketed as a convenient form of birth control. It is meant to last for up to five years and it can be removed if a woman wanted to become pregnant.
Women who sued Bayer complained of side effects, such as perforation of the uterus, pelvic inflammatory disease and ectopic pregnancy. Many said the device shifted and caused internal injuries.
The legal issues, Seibel said, are when perforations occur and whether the label adequately warned of all risks associated with perforation.
The Mirena label went through a few versions. For years, it said “perforation or penetration of the uterine wall or cervix may occur during insertion.” In 2014, the label said perforation “may occur most often during insertion.”
Bayer argued that the scientific consensus was that perforations cannot occur after the device is implanted. The plaintiffs contended that secondary perforations can occur.
In March, Seibel barred testimony from seven expert witnesses for the women, concluding that they were unqualified or unreliable to offer expert opinions on clinical issues, causation or regulatory issues.
A biomedical engineer, for example, had no experience with IUDs or hormonal contraception devices like Mirena and no particular familiarity with the anatomy of the uterus. His only experience with the hormone used in Mirena came from reviewing articles that the plaintiffs’ counsel gave him and that he copied and pasted into his expert report.
“This is not the level of rigor an expert in the field would apply and does not pass muster,” Seibel concluded.
A professor of physiology presented a theory on secondary perforation “without confronting scientific literature that refutes this notion,” casting doubt on her reliability.
The plaintiffs’ attorneys tried to salvage their cases by arguing that other evidence could prove their cases. But Seibel ruled that allowing such admissions to substitute for expert testimony would defeat state laws that require experts and would leave the jury to speculate about the cause of injuries.
In 2013, when about 40 cases were pending in 17 federal districts, the Judicial Panel on Multidistrict Litigation consolidated the lawsuits.
The cases shared common factual issues on the alleged risks of perforation and migration and on the adequacy of the product label, the panel said. Placing all cases under one judge would make it easier to accommodate everyone in the pretrial proceedings.
The panel chose the Southern District of New York because it is near Bayer operations in Connecticut, New Jersey, New York and Pennsylvania, where the primary witnesses and documentary evidence would likely be located. The district also is easy to reach for plaintiffs around the country.
Bayer Healthcare once operated a facility in Tarrytown. The operations were moved in 2013 when the Bayer subsidiary opened a new U.S. headquarters in Whippany, N.J.
The panel chose Seibel because she was already presiding over three related cases, “and she is an experienced transferee judge who we are confident will steer this litigation on a prudent course.”
Via The Washington Times:
Danger in drugs from Canada
Clinton and Trump are both wrong on importation
ANALYSIS/OPINION:
When it comes to health care reform, Hillary Clinton and Donald Trump have something in common — and it’s dangerously wrong. They support drug importation “from Canada.” It’s a sound-bite solution that won’t offer lower prices but will result in a public health calamity.
Importing drugs from Canada is exceedingly dangerous for a number of reasons. For starters, many internet pharmacies based up north are stocked with drugs from the European Union. And while many people wouldn’t hesitate to take medicines purchased from countries like France, Germany and Great Britain, there’s plenty of risk involved.
The EU currently operates under a system of “parallel trade,” which allows products to be freely imported between member countries. This means that any drugs exported from the United Kingdom to Canada could have originated in an EU country with significantly less rigorous safety regulations, like Greece, Portugal, Latvia or Malta.
Just last year, EU officials seized more than 34 million fake pills in just two months. And in May, Irish drug enforcers confiscated over 1.7 million pounds of counterfeit and illegal drug packages. So if American customers start buying drugs over the internet from Canadian pharmacies, they could easily wind up with tainted medicines of unknown European origin.
It’s also important to note that drugs from anywhere in Europe aren’t even legal for sale in Canada. So when politicians say we can get “the same drugs” that Canadians get, they’re just plain wrong.
Even more worrisome is outright fraud — many “Canadian” pharmacies are actually headquartered somewhere else. Far too often, importing drugs of unknown quality from sketchy pharmacy websites ends in tragedy. Consider the case of one Texas emergency-room doctor, who suffered a stroke after importing what he thought was a popular weight-loss drug. The online pharmacy had actually substituted the doctor’s ordered drug for a counterfeit, stroke-inducing medication shipped in from China. If medical professionals can’t tell the difference between real and counterfeit drugs, regular patients don’t stand a chance.
A 2005 investigation by the Food and Drug Administration (FDA) looked at 4,000 drug shipments coming into the United States. Almost half of them claimed to be from Canada. Of those, fully 85 percent were actually from countries such as India, Vanuatu and Costa Rica.
As part of another investigation, FDA officials bought three popular drugs from two internet pharmacies claiming to be “located in, and operated out of, Canada.” Both websites had Canadian flags on their websites. Yet neither the pharmacies nor the drugs were actually from Canada.
The on-the-ground reality of state and local importation schemes has been dismal and politically embarrassing. Remember Illinois’ high profile “I-Save-RX” program? During 19 months, only 3,689 Illinois residents used the program — that’s .02 percent of the population.
Programs like this wouldn’t do any better on a national basis. A study by the nonpartisan Congressional Budget Office showed that importation would reduce our nation’s spending on prescription medicines a whopping 0.1 percent — and that’s not including the tens of millions of dollars the FDA would need to oversee drug safety for the dozen or so nations generally involved in foreign drug importation schemes. And generic drugs (which represent more than 85 percent of the medicines dispensed in the U.S.) are cheaper here at home than in Canada.
Calling foreign drug importation “reimportation” is a clever way to sell the idea to the American people. But the term simply doesn’t fit with the facts. In reality, in addition to importing foreign price controls, Americans would end up jeopardizing their health by purchasing unsafe drugs while not saving money.
A better policy for both candidates would be to focus on the issue of increasing insurance company co-pays. American patients who head up north or online are motivated by the cut-rate prices they see on the web. Health insurers could help patients avoid this temptation by reducing their co-pays for drug purchases, particularly for low-income patients. If drugs become more affordable in the states, patients won’t feel the urge to look for a bargain abroad.
Dropping drug co-pays would also help patients stick to their prescribed treatment regimes. All too often, people skip a dose, don’t get a refill, or stop taking their drugs prematurely in order to save money. In the long run, though, not adhering to a drug regimen leaves patients less healthy — and increases national medical expenses by an estimated $300 billion annually.
• Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.
Danger in drugs from Canada
Clinton and Trump are both wrong on importation
ANALYSIS/OPINION:
When it comes to health care reform, Hillary Clinton and Donald Trump have something in common — and it’s dangerously wrong. They support drug importation “from Canada.” It’s a sound-bite solution that won’t offer lower prices but will result in a public health calamity.
Importing drugs from Canada is exceedingly dangerous for a number of reasons. For starters, many internet pharmacies based up north are stocked with drugs from the European Union. And while many people wouldn’t hesitate to take medicines purchased from countries like France, Germany and Great Britain, there’s plenty of risk involved.
The EU currently operates under a system of “parallel trade,” which allows products to be freely imported between member countries. This means that any drugs exported from the United Kingdom to Canada could have originated in an EU country with significantly less rigorous safety regulations, like Greece, Portugal, Latvia or Malta.
Just last year, EU officials seized more than 34 million fake pills in just two months. And in May, Irish drug enforcers confiscated over 1.7 million pounds of counterfeit and illegal drug packages. So if American customers start buying drugs over the internet from Canadian pharmacies, they could easily wind up with tainted medicines of unknown European origin.
It’s also important to note that drugs from anywhere in Europe aren’t even legal for sale in Canada. So when politicians say we can get “the same drugs” that Canadians get, they’re just plain wrong.
Even more worrisome is outright fraud — many “Canadian” pharmacies are actually headquartered somewhere else. Far too often, importing drugs of unknown quality from sketchy pharmacy websites ends in tragedy. Consider the case of one Texas emergency-room doctor, who suffered a stroke after importing what he thought was a popular weight-loss drug. The online pharmacy had actually substituted the doctor’s ordered drug for a counterfeit, stroke-inducing medication shipped in from China. If medical professionals can’t tell the difference between real and counterfeit drugs, regular patients don’t stand a chance.
A 2005 investigation by the Food and Drug Administration (FDA) looked at 4,000 drug shipments coming into the United States. Almost half of them claimed to be from Canada. Of those, fully 85 percent were actually from countries such as India, Vanuatu and Costa Rica.
As part of another investigation, FDA officials bought three popular drugs from two internet pharmacies claiming to be “located in, and operated out of, Canada.” Both websites had Canadian flags on their websites. Yet neither the pharmacies nor the drugs were actually from Canada.
The on-the-ground reality of state and local importation schemes has been dismal and politically embarrassing. Remember Illinois’ high profile “I-Save-RX” program? During 19 months, only 3,689 Illinois residents used the program — that’s .02 percent of the population.
Programs like this wouldn’t do any better on a national basis. A study by the nonpartisan Congressional Budget Office showed that importation would reduce our nation’s spending on prescription medicines a whopping 0.1 percent — and that’s not including the tens of millions of dollars the FDA would need to oversee drug safety for the dozen or so nations generally involved in foreign drug importation schemes. And generic drugs (which represent more than 85 percent of the medicines dispensed in the U.S.) are cheaper here at home than in Canada.
Calling foreign drug importation “reimportation” is a clever way to sell the idea to the American people. But the term simply doesn’t fit with the facts. In reality, in addition to importing foreign price controls, Americans would end up jeopardizing their health by purchasing unsafe drugs while not saving money.
A better policy for both candidates would be to focus on the issue of increasing insurance company co-pays. American patients who head up north or online are motivated by the cut-rate prices they see on the web. Health insurers could help patients avoid this temptation by reducing their co-pays for drug purchases, particularly for low-income patients. If drugs become more affordable in the states, patients won’t feel the urge to look for a bargain abroad.
Dropping drug co-pays would also help patients stick to their prescribed treatment regimes. All too often, people skip a dose, don’t get a refill, or stop taking their drugs prematurely in order to save money. In the long run, though, not adhering to a drug regimen leaves patients less healthy — and increases national medical expenses by an estimated $300 billion annually.
• Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.
Jeff Myers wrote a thoughtful response to my post on a Bloomberg article claiming drug companies use patient assistance programs to launder money that is used to pay for new medicines. Jeff suggested I am wee bit naïve to ”suggest that life sciences companies are contributing to these PAPs without regard to the impact it will have on their bottom line because they are altruistic organisms. “
Well, first of all, drug companies are altruistic, providing billions in support for community activities, basic research and yes, ensuring that patients have access to their medicines.
And yes, discounting or covering the cost of a product is a fairly standard way to find a price acceptable to consumers.
And I think Jeff’s point is that instead of using charity to make drugs affordable, why not just reduce the price to patients.
It’s a damn good question.
Consider the confusing and convoluted way government sets prices: The PAP's assistance on behalf of the PAP enrollee does not count towards a Part D beneficiary's true-out-of-pocket cost (TrOOP).. But when Pharmaceutical industry is paying 50% of a brand-name drug cost while you are in the Donut Hole this 50% of retail cost is counted toward your TrOOP or Donut Hole exit point.
Jeff notes that “PAP spending DOES IN FACT cover the deductible/copay in most commercial or ERISA plans, which ultimately allows for the large pricing increases evident in the life sciences sector to get to 3rd party payor coverage.”
But this cost sharing in commercial plans is more of the same. IMS reported that new prices net of rebates declined. About 70 percent of the price increases went to covering rebates. Why don’t rebates, in commercial or government plans, go to patients. Why instead of rebate reduced prices are PBMs and insurers hiking copays for new drugs based on a retail price? Instead of using the money for patient focused pricing, PBMs and insurers (as well as some employers) are redistributing rebate dollars that can be used for anything, including Anthem’s alleged use of rebate dollars to buy back it’s stock in 2009.
Those rebated new drugs are not always available for $70 a month. As a bunch of lawsuits have shown, PBMs and insurers pocket rebates and then place the rebated drug on the highest cost sharing tier.
Drug companies respond to this situation by covering patient out of pocket costs as a percentage of the price set by the PBMs, NOT the rebated price. Or the discounted price.
On the Medicare side of things, the situation is even more of a snafu. Discounts to offset part D out of pocket costs are on top of the rebates drug companies provide. The GAO noted: “The PBMs we interviewed also told us they observed that some manufacturers decreased the amount of rebates for the brand-name drugs they offered, which they believe occurred as a result of the Discount Program.
In comparison, most of the plan sponsors did not observe manufacturers decreasing rebate amounts and most manufacturers reported no effects on their rebate negotiations as a result of the Discount Program.”
Hence, PAP is a subsidy provided indirectly to patients by drug companies after rebates are paid and discounts are provided. Note that the rebates and discounts are based NOT on the rebated price. The whole arrangement is parasitic and idiotic. But it ain’t criminal.
Jeff writes: “If PAP spending were truly altruistic without regard to whether or not getting into the wallets of 3rd party payors was an issue, PAPs would cover those that cannot get medications but are eligible for government assistance…. it would cover those that cannot access a specific medication in a government program like Medicaid.”
But PAPs are mostly prohibited from providing assistance. That's to ensure states and HHS get the maximum amount of rebate dollars. I agree with Jeff that PAP should extend to Medicaid. There is no good reason why they shouldn’t (the rebate revenue government gets by limiting PAP support notwithstanding).
Often government programs don’t cover drugs that are needed. Under Obamacare, PBMs have pocketed rebates, charge patients a share of a retail price to discourage use. So PAPs fill that gap.
By comparison, Langreth and Elgin seem to think that society would be better off if patients were forced to abide by rebate driven practices of PBMs as enabled by Medicare part D regs and the ACA. More to the point, they want to criminalize charity unless is comports with the cost containment goal they believe should be the primary objective of government regulation.
What I think Jeff is ultimately saying, and to which I agree, is that 1) currently charitable support for drug coverage should be extended to really needy patients and 2) rational drug pricing would consist of replacing rebate dollars and discounts paid here and abroad with net prices and charitable support that directly support those who need new medicines but are denied them due to profit driven formulary games (including Express Scripts and CVS eliminating dozens of drugs from their formulary in exchange for bigger rebates from the one or two drug companies whose medicines remain covered).
Tevi Troy at the American Health Policy Institute has formed a Health Transformation Alliance including larger employers who are tired to the rebate shell game. That group is focusing on policy changes to improve access to medicines in order to reduce long term costs and improve quality of life.
Langreth and Elgin ignore the dark underside of rebate driven treatment decisions. Instead they seek to criminalize a charitable activity that provides people who need a medicine the support that PBMs and part D plan sponsors should have provided in the first place.
Well, first of all, drug companies are altruistic, providing billions in support for community activities, basic research and yes, ensuring that patients have access to their medicines.
And yes, discounting or covering the cost of a product is a fairly standard way to find a price acceptable to consumers.
And I think Jeff’s point is that instead of using charity to make drugs affordable, why not just reduce the price to patients.
It’s a damn good question.
Consider the confusing and convoluted way government sets prices: The PAP's assistance on behalf of the PAP enrollee does not count towards a Part D beneficiary's true-out-of-pocket cost (TrOOP).. But when Pharmaceutical industry is paying 50% of a brand-name drug cost while you are in the Donut Hole this 50% of retail cost is counted toward your TrOOP or Donut Hole exit point.
Jeff notes that “PAP spending DOES IN FACT cover the deductible/copay in most commercial or ERISA plans, which ultimately allows for the large pricing increases evident in the life sciences sector to get to 3rd party payor coverage.”
But this cost sharing in commercial plans is more of the same. IMS reported that new prices net of rebates declined. About 70 percent of the price increases went to covering rebates. Why don’t rebates, in commercial or government plans, go to patients. Why instead of rebate reduced prices are PBMs and insurers hiking copays for new drugs based on a retail price? Instead of using the money for patient focused pricing, PBMs and insurers (as well as some employers) are redistributing rebate dollars that can be used for anything, including Anthem’s alleged use of rebate dollars to buy back it’s stock in 2009.
Those rebated new drugs are not always available for $70 a month. As a bunch of lawsuits have shown, PBMs and insurers pocket rebates and then place the rebated drug on the highest cost sharing tier.
Drug companies respond to this situation by covering patient out of pocket costs as a percentage of the price set by the PBMs, NOT the rebated price. Or the discounted price.
On the Medicare side of things, the situation is even more of a snafu. Discounts to offset part D out of pocket costs are on top of the rebates drug companies provide. The GAO noted: “The PBMs we interviewed also told us they observed that some manufacturers decreased the amount of rebates for the brand-name drugs they offered, which they believe occurred as a result of the Discount Program.
In comparison, most of the plan sponsors did not observe manufacturers decreasing rebate amounts and most manufacturers reported no effects on their rebate negotiations as a result of the Discount Program.”
Hence, PAP is a subsidy provided indirectly to patients by drug companies after rebates are paid and discounts are provided. Note that the rebates and discounts are based NOT on the rebated price. The whole arrangement is parasitic and idiotic. But it ain’t criminal.
Jeff writes: “If PAP spending were truly altruistic without regard to whether or not getting into the wallets of 3rd party payors was an issue, PAPs would cover those that cannot get medications but are eligible for government assistance…. it would cover those that cannot access a specific medication in a government program like Medicaid.”
But PAPs are mostly prohibited from providing assistance. That's to ensure states and HHS get the maximum amount of rebate dollars. I agree with Jeff that PAP should extend to Medicaid. There is no good reason why they shouldn’t (the rebate revenue government gets by limiting PAP support notwithstanding).
Often government programs don’t cover drugs that are needed. Under Obamacare, PBMs have pocketed rebates, charge patients a share of a retail price to discourage use. So PAPs fill that gap.
By comparison, Langreth and Elgin seem to think that society would be better off if patients were forced to abide by rebate driven practices of PBMs as enabled by Medicare part D regs and the ACA. More to the point, they want to criminalize charity unless is comports with the cost containment goal they believe should be the primary objective of government regulation.
What I think Jeff is ultimately saying, and to which I agree, is that 1) currently charitable support for drug coverage should be extended to really needy patients and 2) rational drug pricing would consist of replacing rebate dollars and discounts paid here and abroad with net prices and charitable support that directly support those who need new medicines but are denied them due to profit driven formulary games (including Express Scripts and CVS eliminating dozens of drugs from their formulary in exchange for bigger rebates from the one or two drug companies whose medicines remain covered).
Tevi Troy at the American Health Policy Institute has formed a Health Transformation Alliance including larger employers who are tired to the rebate shell game. That group is focusing on policy changes to improve access to medicines in order to reduce long term costs and improve quality of life.
Langreth and Elgin ignore the dark underside of rebate driven treatment decisions. Instead they seek to criminalize a charitable activity that provides people who need a medicine the support that PBMs and part D plan sponsors should have provided in the first place.
When it comes to biosimilar interchangeability, can "totality of evidence" be in the eyes of the beholder?
Consider that, now consider a new study in the Annals of Internal Medicine on biosimilars.
The study specifically looks at biologics that treat inflammation for patients with rheumatoid arthritis and inflammatory bowel syndrome, called TNF-alpha inhibitors. They systematically reviewed 19 studies to determine how these biosimilars compared with the brand-name drugs, focusing on safety and efficacy. According to a story on the Kaiser Health News (KHN) site, “They concluded the biosimilars are “interchangeable” with the original versions, such as Remicade and Humira … We examined one very costly and commonly used class of biologic therapy,” said study author Dr. Caleb Alexander, codirector of the Johns Hopkins Center for Drug Safety and Effectiveness. “The totality of evidence strongly supports the comparability of the biosimilar and branded product.
The Annals paper couldn’t have been that comprehensive since it ignored a well-publicized study from Mercy University Hospital, University College Cork, Centre for Gastroenterology, Mercy University Hospital, Cork, Ireland on … Remicade!
Titled, “Biosimilar but not the same,” the Irish research was presented at the European Crohn’s and Colitis Organisation. It studied the clinical impact of an innovator biologic (Remicade) and its EMA-approved biosimilar (Inflectra). The findings are important.
* 80% of the Inflectra group required hospital readmission versus 5% of the infliximab (Remicade) group. (p=0.00004). 60% of patients in the Inflectra group needed steroid augmentation of standard steroid tapering protocol with 50% requiring multiple increases in steroid dose versus 8% of patients in the Infliximab (p-value = 0.0007). Over the course of 8 weeks, 93% of patients in the Inflectra group had an increase in CRP with 7% remaining unchanged whereas 100% of patients in the infliximab group had a decrease in CRP (p=<0.001).
The conclusion of the Mercy study is not ambiguous, “Our results suggest that biosimilars may not be as efficacious as the reference medicine. The results found reflect the ECCO statement position that the use of most biosimilars in IBD will require testing in this particular patient population and cannot be extrapolated from other disease populations."
Per KHN, “Pharmacist Donald Miller, a professor at North Dakota State University, said the analysis is important because it is the first of its kind for these biosimilars. But the finding that the biosimilar drugs were “interchangeable” with the originals is interesting because the FDA has not yet awarded this designation to either Inflectra or Zarxio. “It is very important to realize that interchangeability of biosimilars has a specific meaning under U.S. law and [the] FDA has not yet issued guidance for any product to define itself as interchangeable to date,” he said.
Miller said many physicians worry that insurance companies will force patients to switch from biologics to biosimilars to save money, risking reactions to the tweaked drug molecules. Indeed, the American College of Rheumatologists’ position statement says that patients should be informed if they’re switched to biosimilars to cut costs and their physician should sign off on it. “Over time, biosimilars can save the health system billions, but only if they’re adopted and only if patients and clinicians and policymakers develop and support mechanisms that promote their adoption,” Alexander said.
Totality of evidence, indeed.
Consider that, now consider a new study in the Annals of Internal Medicine on biosimilars.
The study specifically looks at biologics that treat inflammation for patients with rheumatoid arthritis and inflammatory bowel syndrome, called TNF-alpha inhibitors. They systematically reviewed 19 studies to determine how these biosimilars compared with the brand-name drugs, focusing on safety and efficacy. According to a story on the Kaiser Health News (KHN) site, “They concluded the biosimilars are “interchangeable” with the original versions, such as Remicade and Humira … We examined one very costly and commonly used class of biologic therapy,” said study author Dr. Caleb Alexander, codirector of the Johns Hopkins Center for Drug Safety and Effectiveness. “The totality of evidence strongly supports the comparability of the biosimilar and branded product.
The Annals paper couldn’t have been that comprehensive since it ignored a well-publicized study from Mercy University Hospital, University College Cork, Centre for Gastroenterology, Mercy University Hospital, Cork, Ireland on … Remicade!
Titled, “Biosimilar but not the same,” the Irish research was presented at the European Crohn’s and Colitis Organisation. It studied the clinical impact of an innovator biologic (Remicade) and its EMA-approved biosimilar (Inflectra). The findings are important.
* 80% of the Inflectra group required hospital readmission versus 5% of the infliximab (Remicade) group. (p=0.00004). 60% of patients in the Inflectra group needed steroid augmentation of standard steroid tapering protocol with 50% requiring multiple increases in steroid dose versus 8% of patients in the Infliximab (p-value = 0.0007). Over the course of 8 weeks, 93% of patients in the Inflectra group had an increase in CRP with 7% remaining unchanged whereas 100% of patients in the infliximab group had a decrease in CRP (p=<0.001).
The conclusion of the Mercy study is not ambiguous, “Our results suggest that biosimilars may not be as efficacious as the reference medicine. The results found reflect the ECCO statement position that the use of most biosimilars in IBD will require testing in this particular patient population and cannot be extrapolated from other disease populations."
Per KHN, “Pharmacist Donald Miller, a professor at North Dakota State University, said the analysis is important because it is the first of its kind for these biosimilars. But the finding that the biosimilar drugs were “interchangeable” with the originals is interesting because the FDA has not yet awarded this designation to either Inflectra or Zarxio. “It is very important to realize that interchangeability of biosimilars has a specific meaning under U.S. law and [the] FDA has not yet issued guidance for any product to define itself as interchangeable to date,” he said.
Miller said many physicians worry that insurance companies will force patients to switch from biologics to biosimilars to save money, risking reactions to the tweaked drug molecules. Indeed, the American College of Rheumatologists’ position statement says that patients should be informed if they’re switched to biosimilars to cut costs and their physician should sign off on it. “Over time, biosimilars can save the health system billions, but only if they’re adopted and only if patients and clinicians and policymakers develop and support mechanisms that promote their adoption,” Alexander said.
Totality of evidence, indeed.
Bloomberg fiction writers Robert Langreth and Ben Elgin are pushing the idea that contributions from a pharmaceutical company to a patient assistance programs (PAPs) run by non profits operate on the edges of anti-kickback law or outright illegal. Or put another way: they craft a compelling story that drug companies are using poor patients to launder money and reap profits.
Relying mostly on unsealed documents from a private case brought by an ex-Celgene employee, the duo cite an expert witness that the donations “were actually illegal kickbacks designed to hide the fact that Celgene was contributing these payments to the foundations to get Medicare patients to use more” of Celgene’s cancer drugs, Thalomid and Revlimid.’
Their reporting is, as the movie disclaimer goes: “Inspired by a true story” which begins here:
First, PAP’s have been around for decades to help patients with limited financial ability to pay for out of pocket health care costs, including medicines.
In 2006, the Medicare Part D benefit kicked in. Beneficiaries no longer qualified for assistance under traditional PAP eligibility criteria whereby companies provided support directly to patients because they could run afoul of federal anti-kickback statutes and other law. But many patients who did not qualify for low income subsidies still needed financial help. Hence, the Department of Health and Human Services Office of Inspector General drew up regulations to allow cost-sharing subsidies provided by bona fide, independent charities unaffiliated with pharmaceutical manufacturers… even if the charities receive manufacturer contributions.” These regulations have been continually updated and PAPs are strictly regulated by HHS.
Elgin opines that such arrangements are a ‘grey area.’ He might tell that to HHS and the Department of Justice since they are not a party to this private lawsuit. (More on the intricacies of the suit later. )
Second, drugs not covered on the Medicare Part D plan formulary or drug list are not counted towards the out of pocket costs. The PAP's assistance on behalf of the PAP enrollee does not count towards a Part D beneficiary's true-out-of-pocket cost (TrOOP). In other words, PAP assistance would not fill the donut hole and push patients into the catastrophic part of Part D where the program pays 95 percent of all drug costs.
Third, there are many other patient assistance programs that have also been around for decades to help people with HIV, Hepatitis C and many rare diseases. Apparently the dynamic duo also believe these are “schemes” to gain billions.
Fourth, in addition to ignoring that PAP assistance does NOT boost catastrophic drug spending, Langreth and Elgin rely heavily on the expert testimony provided on behalf of the plaintiff who makes these sweeping claims. (More on the inventive path the expert took to estimate Celgene raked in $19 billion in excess sales over the last decade in another post.)
Fifth, they also ignore the vast body of evidence that co-pay assistance often helps patients whose drugs are not covered and who’s copay or cost sharing have increased much faster than drug prices net of rebates. And often these rebates are generated agreements that specify a “competitor’s drug must have a higher copayment than that of the rebated drug. Other agreements require the sponsor to exclude a competitor’s drugs from its formulary altogether. Rebates were often larger when fewer competitors’ drugs were given preference on the formulary. For example, one sponsor received a 35-percent rebate when the drug was one of two preferred drugs in its class, but a 40-percent rebate when the drug was the only preferred drug in its class on the formulary. “
But I guess helping patients who are powerless to fight such decisions should suffer and die. Perhaps Langreth and Elgin feel that's a small price to pay to strike a blow for tort lawyer settlements.
Here’s what Mick Kolassa, one the world’s experts on drug pricing and reimbursement (and a great blues artist) concludes: “Insurers can argue that these offset programs drive patients to use costlier branded drugs (in lieu of cheaper branded options or generics), but studies have shown that more than 40% of the time, in the absence of a copay-offset program, if the patient cannot pay the OOP expenses, they won’t switch to a cheaper drug—they will simply forgo the medication. The insurance industry will end up losing considerably more money over the long run, in terms of covering related medical expenses that arise when the patients don’t control their conditions through the use of medication.”
To sum up, Langreth and Elgin allege that drug companies and PAPs are colluding to evade anti-kickback laws and overbill Medicare. So they are alleging that the relationship is nothing less than money laundering and racketeering.
I am sure that the article has gotten a lot of clicks. Call me old-fashioned, but I’d trade clicks and self-serving media exposure for being fair and truthful.
Relying mostly on unsealed documents from a private case brought by an ex-Celgene employee, the duo cite an expert witness that the donations “were actually illegal kickbacks designed to hide the fact that Celgene was contributing these payments to the foundations to get Medicare patients to use more” of Celgene’s cancer drugs, Thalomid and Revlimid.’
Their reporting is, as the movie disclaimer goes: “Inspired by a true story” which begins here:
First, PAP’s have been around for decades to help patients with limited financial ability to pay for out of pocket health care costs, including medicines.
In 2006, the Medicare Part D benefit kicked in. Beneficiaries no longer qualified for assistance under traditional PAP eligibility criteria whereby companies provided support directly to patients because they could run afoul of federal anti-kickback statutes and other law. But many patients who did not qualify for low income subsidies still needed financial help. Hence, the Department of Health and Human Services Office of Inspector General drew up regulations to allow cost-sharing subsidies provided by bona fide, independent charities unaffiliated with pharmaceutical manufacturers… even if the charities receive manufacturer contributions.” These regulations have been continually updated and PAPs are strictly regulated by HHS.
Elgin opines that such arrangements are a ‘grey area.’ He might tell that to HHS and the Department of Justice since they are not a party to this private lawsuit. (More on the intricacies of the suit later. )
Second, drugs not covered on the Medicare Part D plan formulary or drug list are not counted towards the out of pocket costs. The PAP's assistance on behalf of the PAP enrollee does not count towards a Part D beneficiary's true-out-of-pocket cost (TrOOP). In other words, PAP assistance would not fill the donut hole and push patients into the catastrophic part of Part D where the program pays 95 percent of all drug costs.
Third, there are many other patient assistance programs that have also been around for decades to help people with HIV, Hepatitis C and many rare diseases. Apparently the dynamic duo also believe these are “schemes” to gain billions.
Fourth, in addition to ignoring that PAP assistance does NOT boost catastrophic drug spending, Langreth and Elgin rely heavily on the expert testimony provided on behalf of the plaintiff who makes these sweeping claims. (More on the inventive path the expert took to estimate Celgene raked in $19 billion in excess sales over the last decade in another post.)
Fifth, they also ignore the vast body of evidence that co-pay assistance often helps patients whose drugs are not covered and who’s copay or cost sharing have increased much faster than drug prices net of rebates. And often these rebates are generated agreements that specify a “competitor’s drug must have a higher copayment than that of the rebated drug. Other agreements require the sponsor to exclude a competitor’s drugs from its formulary altogether. Rebates were often larger when fewer competitors’ drugs were given preference on the formulary. For example, one sponsor received a 35-percent rebate when the drug was one of two preferred drugs in its class, but a 40-percent rebate when the drug was the only preferred drug in its class on the formulary. “
But I guess helping patients who are powerless to fight such decisions should suffer and die. Perhaps Langreth and Elgin feel that's a small price to pay to strike a blow for tort lawyer settlements.
Here’s what Mick Kolassa, one the world’s experts on drug pricing and reimbursement (and a great blues artist) concludes: “Insurers can argue that these offset programs drive patients to use costlier branded drugs (in lieu of cheaper branded options or generics), but studies have shown that more than 40% of the time, in the absence of a copay-offset program, if the patient cannot pay the OOP expenses, they won’t switch to a cheaper drug—they will simply forgo the medication. The insurance industry will end up losing considerably more money over the long run, in terms of covering related medical expenses that arise when the patients don’t control their conditions through the use of medication.”
To sum up, Langreth and Elgin allege that drug companies and PAPs are colluding to evade anti-kickback laws and overbill Medicare. So they are alleging that the relationship is nothing less than money laundering and racketeering.
I am sure that the article has gotten a lot of clicks. Call me old-fashioned, but I’d trade clicks and self-serving media exposure for being fair and truthful.
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.
