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Last week I started a twitter argument about narrow networks with Yevgeniy Feyman a (very nice) fellow at the Manhattan Institute.
He wrote that we don’t know whether narrow networks negatively impact patients.
I responded: BS.  Plenty of evidence.
Feynman asked me to show him the data.
So, after lobbing a couple of snarky comments (that YG swatted away) I realized I had engaged in a Twitter tantrum instead of responding to his request.  
I needed to become more mature and substantive to improve on my original response.  Thank you Yevgeniy for a second chance to act like an adult!
So here goes.
By narrow networks, I meant and mean excluding or restricting access to hospitals, doctors and other services based on price or cost considerations. That includes the VA, Medicaid and now many exchange plans under the ACA.  (Doug Badger doesn’t call these exchange plans “Medicaid lite” for no good reason.)
To be sure, consumer surveys suggest that most people are willing to forgo more choice of providers, hospitals, and medicines in exchange for lower premiums.  People have picked narrow network plans over broader options with increasing frequency and surveys show they tend to be satisfied with their choices.
Moreover, while research examining the quality of care provided by plans with limited networks is relatively sparse, there is some evidence to suggest that these plans have performed just as well as those that offer access to a broader range of providers. 
At the same time, “according to a Consumer Reports survey, 44 percent of those who bought an Affordable Care Act (ACA) plan for the first time in 2015 reported that they did not know the network configuration associated with their plan. 
For the clear majority of consumers, a narrow network can be a good choice and provide good care.
For the 5-10 percent of Americans with chronic, fatal or rate conditions narrow networks, evidence suggests, not only fail to deliver the care people are paying premiums (and deductibles) for.  They can also increase the cost and seriousness of the condition.
It should also be noted that restrictions go beyond access to doctors and hospitals.  Health plans restrict access to medicines in many ways such as formulary exclusions, prior authorization, high cost sharing and step therapy.  In addition, if someone receives care from a doctor outside of a network than the drug prescribed is also not covered.
For example, a recent examination by Harvard researchers of the network composition of health plans offered on the federal Marketplace during 2015 found that nearly 15 percent of the sampled plans lacked in- network physicians for at least one specialty
Narrower provider networks are more likely to exclude oncologists affiliated with NCI-Designated or NCCN Cancer Centers. Health insurers, state regulators, and federal lawmakers should offer ways for consumers to learn whether providers of cancer care with affiliations are in or out of narrow provider networks.
There are dozens of studies demonstrating that narrow prescription drug formularies and narrow pharmacy networks hurts patients.  (I link to those articles that review a number of these studies as well as the most impactful citations.)
While the ACA bars discrimination in proving coverage, health plans, and PBMs narrow choices because by doing so they can discriminate against the chronically ill.  Offering high priced drugs, hospitals and specialists will attract sicker enrollees into the plan

If plans and PBMs narrow networks to avoid adverse selection once someone is enrolled, it is hard to make a convincing case that they do not shift the burden of disease to patients in one way or another.  And the results of studies examining the impact of narrowing on patient well-being (as well as out of pocket costs) strongly suggest that for chronically ill people, such skinny choices can be sickly as well.  
But what if networks were limited to hospitals and medicines that provided the best overall quality and access customized to the specific needs of patients?
This quality and patient-focused approach to network development has guided Horizon Blue Cross Blue Shield of New Jersey’s the development of its network of providers, called the OMNIA plan.  Unlike many top-down efforts that require doctors to follow a cookbook or force people into narrow networks, Horizon Omnia has been collaborating with doctors, hospitals and health professionals to encourage wellness and patient-centered care.  About 750,000 of its members are now receiving this type of care from more than 6,500 physicians.
Horizon has provided the tools but it’s the doctors that are leading the change.  Primary care doctors now see their patients 3-4 times a year because keeping in touch and engaging in some coaching keeps people healthy.   Orthopedists have partnered to reduce lengthy hospital stays and replaced them with teams of physical therapists and home health aides to get people back home and on their feet more quickly.  And important, Horizon, while making these design changes have made this new arrangement one of many choices available to patients. And so far, that has translated into lower premiums and out of pocket costs.
In addition, HBCBS is partnering with GNS Healthcare, a precision medicine company that applies causal machine learning technology to match health interventions to individual patients, to further refine and personalize the Omnia offerings.   As Colin Hill, the CEO of GNS, notes: HBCBS and his company will analyze claims and medical records to predict the disease risks of patients and customize the best treatments.   The goal is to “know the value and efficacy of an intervention for a specific individual, as well as an entire population.”
So, the moral of the story is: The quality of a network is not about who you know, but what you know about who you are treating.   That's the difference between most narrow networks and the Omnia approach. 

Expanded Access Sturm und Drang

  • 08.11.2017
  • Peter Pitts
From the pages of MedPage

Will 'Right To Try' Bill Actually Help Anyone?
Little effect from state laws, and industry largely uninterested

By Shannon Firth, Washington Correspondent, MedPage

WASHINGTON -- If a new federal bill is made law, terminally ill patients anywhere in the country would be allowed to request access to experimental treatments that haven't yet received FDA approval -- and deal directly with the companies developing them.

"Patients with terminal diseases ought to have a right to access treatments that have demonstrated a level of safety and could potentially save their lives," said Sen. Ron Johnson (R-Wis.) in a press statement following the Senate's unanimous approval of his bill, "The Trickett Wendler Right To Try Act," a week ago.

The latest draft of Johnson's bill now heads to the House, where similar bills have already been filed.

Critics of the right-to-try movement say it's unsafe, exploitative, and a "smokescreen" for an anarchist agenda.

Others argue that right-to-try laws are redundant, since the FDA already has an "expanded access" pathway (sometimes called "compassionate use") that allows patients to receive investigational treatments.

The American Society of Clinical Oncology (ASCO) made this argument in stating its opposition to right-to-try legislation.

"ASCO supports access to investigational drugs outside of clinical trials, when adequate patient protections are in place," ASCO chief medical officer Richard Schilsky, MD, said in a statement in April. "We don't support right-to-try legislation, however, because these laws ignore key patient protections without actually improving patient access to investigational drugs outside of clinical trials."

Instead, ASCO backs the FDA's expanded-access program.

But right-to-try proponents view the new federal bill as a critical tool for seriously ill patients, allowing them to bypass the FDA's red tape and decide the course of their own care.

"If a patient truly is dying, and there truly is no other remedy, and they want to try for a 'Hail Mary,' and truly understand the risks and benefits, then it is hard not to offer them an opportunity -- assuming the integrity of clinical trials can be maintained. Because, if not, there can be risks to future patients," said Robert Field, JD, PhD, MPH, a professor of law and health policy at the Dornsife School of Public Health at Drexel University in Philadelphia.

The Senate Bill

As passed by the Senate, Johnson's bill requires that, to be eligible for early access, treatments must be under an active Investigational New Drug application and have completed a phase I trial. And it obliges drug companies to submit annual reports to the agency that include adverse events.
A physician must certify that patients have "exhausted approved treatment options and [are] unable to participate in a clinical trial involving the eligible investigational drug," and patients must have "written informed consent" to the referring physician. Also, current FDA regulations limiting what companies can do to promote or market investigational drugs would still apply.

But the bill also includes several protections for drugmakers who participate. They can't be sued except for "reckless or willful misconduct, gross negligence, or an intentional tort," and the FDA can't use clinical outcomes from use of investigational treatments in its regular review process, unless senior FDA staff make a documented determination that "use of such clinical outcome is critical" for judging the product's safety.

The bill does limit what patients can be charged for investigational drugs to companies' actual direct costs of providing them. (But enforcement could be difficult: companies are not required to inform regulators of what they provide to individual patients, nor the costs to patients.)

The legislation already appears to have support from the White House. Vice President Mike Pence, former governor of Indiana, signed his state's right-to-try bill in 2015.

In 2014, Colorado was the first state to pass a right-to-try law. But the movement began long before that amid the HIV epidemic of the 1980s, as portrayed in the film "Dallas Buyers Club."

In more recent years, the Goldwater Institute, a Phoenix-based libertarian think tank, has led the right-to-try movement. "There's no more fundamental freedom than the right to save your own life ... Right to Try will open new paths to treatments for many patients who are currently out of options," said Victor Riches, the institute's president and CEO, in a press statement.

If someone is desperate, "I don't think a person or agency has a right to tell that terminally ill person, 'I'm sorry I don't think I'm going to let you try this' ... It should be up to them," added Jeffrey Singer, MD, a senior fellow at the Cato Institute, another libertarian think tank.

Singer, a general surgeon in private practice in Phoenix, said passing a federal bill would prevent the FDA from simply overriding state laws.

Industry a No-Show

For the legislation to have any real effect, it will naturally require participation by industry. But that is far from assured. The bill doesn't oblige drug companies to make treatments available. And no pharmaceutical companies have come forward to embrace the bill or promise to make drugs available; some have opposed it.

"While well-intentioned, current 'Right-to-Try' legislation is not in the best interest of patients and is unlikely to help us bring forward innovative, safe, and effective medicines to all patients as quickly as possible," pharma giant Merck & Co. said in a statement issued earlier this year.

Richard Garr, formerly CEO of Neuralstem Inc., which is developing cell therapies and small-molecule drugs for a variety of neurological conditions including spinal cord injury and amyotrophic lateral sclerosis, testified in support of Johnson's bill at a September 2016 hearing.

But Neuralstem's current management disagrees. In a statement sent to MedPage Today, the company said, "We feel that providing access to our investigational therapies outside of our ongoing and critical clinical trials may delay or jeopardize the approval of therapies, by reducing the supply of study agents or adversely affecting the data collection process. By focusing on clinical development and seeking regulatory approval, it is our goal to offer our therapies to the largest number of patients as quickly as possible."

The Pharmaceutical Research Manufacturers Association (PhRMA) has issued a series of noncommittal statements about the legislation as it worked its way through the Senate, all of which stopped short of endorsing the bill.

"We appreciated the opportunity to work with Sen. Johnson on the bill and look forward to continuing to work with his office," wrote Andrew Powaleny, director of public affairs for PhRMA, in a recent email to MedPage Today. "The revised Right to Try legislation that passed the Senate includes important protections for patient safety and the clinical trial process."

Medical ethicist Arthur Caplan, PhD, of New York University, noted that early access to investigational drugs puts drug companies instead of the FDA into the role of gatekeepers, and negative publicity is among their major concerns.

If one patient has a serious adverse event following an experimental therapy, that could scare off investors, Caplan said.

"As long as you have private sector investment driving drug development, the priority is to get the drug approved and sold and not to start giving it away," he noted.

The record with state-level right-to-try laws also suggests lackluster interest from industry. "It's telling that although 37 states have adopted these laws, when asked to provide examples of success stories, one of the primary groups pushing for their adoption can only provide the testimonies of six patients who received access to experimental medicines through a single physician in a single state," Rachel Sachs, an assistant professor of law at Washington University in St. Louis, told RAPS recently.

"The net impact of state right-to-try laws has been absolutely nothing. I don't expect a federal right-to-try law will change that," said Caplan, dismissing Johnson's bill as "a feel-good" exercise.

Redundant, Fraught with Risk

"It's entirely [for] show ... This bill is not going to expedite, accelerate or ease the burden of a single patient getting access to experimental medicine," said Peter Pitts, president and co-founder of the Center for Medicine in the Public Interest, a nonprofit medical issues research group. Pitts is also a former FDA associate commissioner for external relations.

The FDA already approves 99% of the requests for expanded access that it receives, Pitts noted. In fact, in 2016 the agency introduced a streamlined pathway to further accelerate the process, and one report indicated that the agency's average response time is 4 days. An FDA official told MedPage Today that emergency requests are usually granted immediately.

"It's not as if the agency is turning people away," Pitts said.

Carolyn Engelhard, MPA, director of the Health Policy Program at the University of Virginia School of Medicine's Department of Public Health Sciences, in Charlottesville, Va., told MedPage Today that the FDA's expanded access program already offers the same options as right-to-try but with more "checks and balances."

Engelhard predicts that a federal right-to-try program won't produce a "groundswell of drugs" that couldn't have already been accessed through the expanded use program.

Critics also said the bill's stipulation that drugs must have completed phase I testing does not offer very much assurance of safety.

Most drugs entering phase II trials never make it to market, usually because they turn out to be ineffective or because of safety issues not spotted in phase I. "So it is possible that patients will be taking something of no help, or that creates new health problems," Field said.

Mat Staver, JD, founder and chairman of Liberty Counsel, a self-described "international litigation, education, and policy ministry," said he supported the right-to-try concept. But he stressed that whatever new path develops should be monitored from a cost and availability standpoint, and studied to determine whether people are being exploited and whether the pathway is effective.

Engelhard, meanwhile, called the entire effort a "political smokescreen" for anti-regulation ideologues hoping to get patients believing they can sidestep the FDA and go straight to drug companies for treatments.

"It sounds like it's pro-patient, but by removing the FDA it opens the door for greater risk for fraud and abuse," she said.

Senior Associate Editor Charles Bankhead and Managing Editor John Gever contributed to this story.

Embracing Generic Complexity

  • 08.09.2017
  • Peter Pitts
“Generic” does not mean “identical” – nor does it mean “easy.” FDA Commissioner Scott Gottlieb understands these basic tenets of drug development and has created a working group of senior FDA staff that will look for ways to increase generic competition by embracing complexity.

The working group will propose options for using FDA's existing authorities and may develop legislative proposals to respond to changes in technology and in the marketplace that have occurred since the Hatch-Waxman Act was enacted in 1984. For example, it will consider whether and how ANDAs for complex products, such as those combining a drug and a device, may include clinical data. This isn’t a simple change. It’s a revolution in generic drug labeling – recognizing what pharmacologists and physicians have known for decades – that “bioequivalent” doesn’t mean “identical” – and that for some products, that’s more important than for others.

Just as the agency recognizes that biosimilar labeling can recognize both similarity and differences, that recognition will now be used to help determine the appropriate use of generic medicines. Gottlieb has expressed concern for years that FDA policies don’t adequately support the development of generic versions of complex products. To paraphrase Dr. Harry Lever of the Cleveland Clinic, we mustn’t lose control of what patients are swallowing.

Per the FDA, “Consistent labeling will assure physicians, health professionals, and consumers that a generic drug is as safe and effective as its brand-name counterpart.” But “consistent” doesn't mean “identical” – especially when the data says otherwise. We live in the Information Age. Knowledge is power.

Working group members will include Elizabeth Dickinson, an attorney in FDA's Office of the Chief Counsel who served as the agency's Chief Counsel during the Obama administration; Grail Sipes, director of the Office of Regulatory Policy at FDA's Center for Drug Evaluation and Research (CDER); and Maryll Toufanian, deputy director of CDER's Office of Generic Drug Policy.

David Mitchell is the founder of a group called Patients for Affordable Drugs.  He claims he is a consumer advocate crusading against high drug prices.  In fact, Mitchell's organization received a large grant from the Laura and John Arnold Foundation.  P4AD is part of a syndicate of think tanks, advocacy organizations and media outlets the Arnold Foundation is funding to the tune of $25 million.  (For the record, CMPI receives funding from pharmaceutical and biotech firms. )

As for attacking drug companies, it turns out Mitchell took $12 million from pharmaceutical companies to run campaigns in support of the Affordable Care Act.   

Perhaps because he is running a political operation like he did for Obamacare, he cares little about facts or context.  But I do.  And I hope the reporters that now have Mitchell on their Twitter feed do are asked to buy his deceptive narrative do so as well. 

And the fact is Mitchell's sob story about Revlimid doesn't add up. 

He claims his co-pay for Revlimid - the myeloma drug Mitchell takes went from $42 to $250 over the last few years while the list price of Revlimid jumped from $8,000 to $10,691 for a four-week supply over the same time period.  Ergo, his co-pays climbed in response to the price increase. 

But that means the list price increased by 33 percent while the copay increased 500%.   The list price is set by Celgene, but the copay is set by health plans.  So the co-pay increase exceeded the list price increase by a factor of 15.  

Also, since Medicare covers a large portion of spending novel cancer therapies, PBMs also generate rebates and other fees not passed on to the patient.   Such Medicare rebates are about 15-20 percent of the retail price according to recent estimates. 

That means that the PBMs got another $536 per month from Celgene.  Remember that the co-pay increased to $250.  So that means the PBMs did not pass on the rebate and indeed collected more co-pays while pocketing the rebate money.   Moreover, Celgene offers copay assistance to people who can't afford the increase in out pocket cost.  In fact, a study found that "after financial assistance, 86.2% of patients had a direct cost of less than $50 per prescription. That money goes to the PBMs too.   Either way, the PBMs collect an additional $9432 a year from people in Mitchell's plan.    

And yet all Mitchell can think of doing is suing Celgene? 

Mitchell is claiming Celgene is blocking the production of a generic form of Revlimid by refusing to provide generic companies with samples to base production on.  Mitchell also claims that as a result,  his co-pays would go down. 

Let's deal with latter claim first. Indeed, if Revlimid went generic, there is no guarantee that it would reduce out of pocket costs.  PBMs have placed several generic cancer and HIV drugs on the highest cost sharing tier in the past.  Moreover, PBMs -- who set the price of generics when they sell them at drug stores -- mark up the prices.  In addition, they charge a co-pay that often exceeds the cost of the medicine.  Again, Mitchell is silent on these practices.  

Secondly, and contrary to Mitchell's claim, Celgene HAS been working with generic companies to provide their medicines.  As Erika Lietzan Associate Professor of Law, University of Missouri School of Law wrote: "Notwithstanding the rigorous REMS protocol, Celgene has provided Thalomid to generic drug companies that want to develop and test generic copies of the drug and that agree to Celgene’s risk mitigation policies. Celgene has done so when those companies provided documentation and information confirming steps and safeguards that would not only prevent fetal exposure but also minimize the risk for Celgene’s business and reputation, such as risk from products liability litigation. Mylan—one of the generic companies—has declined to provide information requested by Celgene, however, and instead filed an antitrust suit that is still pending in federal court."

Suing Celgene is just a publicity stunt to Mitchell.  But wiping out patent life  would eliminate any future investment.  Over the past few years, Celgene was investing hundreds of millions of dollars in clinical trials to demonstrate the clinical benefit of Revlimid to newly diagnosed myeloma patients.  That will stop when the product goes off patent.   Generic companies don't invest in the future, only the past.  If Mitchell were honest, he would acknowledge that and much more. 



An article in today's Wall Street Journal by Jonathan Rockoff revisits the Epipen price furor.  The main point of the piece is found midway:
“But more than seven months after the introduction of the generic, the more expensive brand-name EpiPen still accounts for more than one-quarter of the market, according to Bernstein Research, even though a brand-name drug’s sales usually shrink after low-cost competition arrives.
One reason, according to multiple people familiar with the drug industry, is that a middleman can profit from the sale of pricier
medicines, such as EpiPen. In the murky world of the U.S. drug-supply chain, higher prices can mean a bigger piece of the pie for middlemen such as pharmacy-benefit managers. There is no way to know exactly how much, however, because the amount a PBM makes is laid out in confidential contracts.”
Rockoff wonders aloud if there is a connection between EpiPen’s market share and rebates.
There is.  And here’s how I think it went down:
First, EpiPen has a lot more of the injectable epi market than what Bernstein reports:
According to a Fortune magazine article: Epipen “controlled about 95% of the epinephrine auto-injector market. But that figure has dwindled to just over 71% as more and more doctors opt for rival products, according to a new report from athenaHealth.” 

In addition, some of the switches may be due to a Mylan’s voluntary Epipen recall in March of 2017 due to potential injector malfunctioning.  However much of the shift is to cash payment of alternatives which, when combined with coupons, reduce the cost of other injectors to near zero.
So what have PBMs done in response? 
Cash paying customers don’t generate rebate revenue.  So as Mylan’s market share has dropped from monopolistic to dominant, the PBMs have carved out a monopoly for EpiPens on their formularies, excluding all other competitors from their national drug lists. 
And that kind of monopoly is a cash cow for PBMs.
Consider that last August, the EpiPen had a monopoly in the epi injector market because of PBM machinations:
In November 2015 Sanofi ($SNY) pulled the main competitor for EpiPen--Auvi-Q--from the market, a turn of events that at the time looked as if it “should keep Mylan dominating the epinephrine injection field.
Mylan already had 95 percent market share.
CVS and Express Scripts had removed another competitor, Andrenaclick, from its formularies.   Andrenclick retailed and still retails at $141 while EpiPen retails at around $600. 
The PBMs helped sustain the monopoly because they could generate more rebate dollars.
But later in the year, PBMs demanded higher rebates for the privilege of being the only drug that it covered. They were getting about $400 rebates per EpiPen pack.
When Mylan balked, CVS and Express Scripts moved EpiPen from the lowest cost sharing tier to the highest cost sharing tier causing patients to scream.  The media and political storm followed.
The shift in out of pocket prices, the result of PBM manipulation, led to the uproar over the EpiPen.
So where are we today?
The leading PBMs- Express Scripts, CVS, OptumRx, and Prime - have excluded all competitors from their formularies and EpiPen is again the monopoly provider.   
Mylan gets a monopoly in exchange for deeper rebates and other concessions (perhaps closer coordination with the PBMs to give them a cut of point of sale coupon revenue) including not covering any other competitors, regardless of cost, ease of use or other factors.
Indeed, other companies were quite willing to meet the PBM demands for retail price and co-pay levels.  But because they didn’t have Mylan’s volume, the rebate volume would, in turn, be less.  Instead of subsidizing PBMs, the other companies are largely subsidizing consumers directly with lower point of sale prices, often at a huge loss.
It sounds confusing but the result is crystal clear:
A year ago, Mylan had a monopoly and didn’t pay up.  It was left twisting in the wind by the PBMs. 
This year they have the monopoly. Again. Because the PBMs said so.
Rebates are part of a rigged system that provides cash for big insurers, PBMs, and hospital systems while patients wind up paying more, not less. Manipulation of the quantity, acquisition cost and fixing the sale and resale price of products are classic aspects of a cartel. 
It’s time for a change. It’s time to bypass the PBMs.  When a business model is so broken, trying to fix it with legislation is a waste of time.  We need to build a new model.  

CORRECTION:  I wrote: "PBMs have carved out a monopoly for EpiPens on their formularies, excluding all other competitors from their national drug lists. "

In fact, as Adam Fein's drugchannels points out: "For 2018, the EpiPen AG and Adrenaclick AG will continue to be treated as tier 1 generics in CVS Health’s 2018 Standard Control Formulary. EpiPen (brand) remains on the formulary as a preferred brand product. AuviQ is excluded.

Express Scripts also became much more aggressive with epinephrine. Its 2018 formulary favors the three Mylan products: EpiPen, EpiPen Jr, and the EpiPen authorized generic (AG). "

Thanks Adam!!

Express Scripts excluded Kaléo’s AUVI-Q

You can watch Celgene's CEO discuss precision medicine and read his op-ed about Celgene's novel and proactive approach to helping patients access it here
From today's edition of Fierce Pharma ...

Hospital Impact—PBMs are worsening the opioid epidemic

For Americans younger than 50, the leading cause of death used to be injuries caused by accidents. Now, the biggest killer isn't car crashes or ladder falls—it's drug overdoses. Overdose deaths surged by 15% from 2015 to 2016, the largest annual increase in American history. Overdoses have pushed up death rates among all racial and ethnic groups

Policymakers and researchers are trying to make sense of this strange new reality. Some have pointed to rising rates of unemployment and disability. Others have blamed an increase in opioid prescriptions.

One overlooked culprit worsening the epidemic, however, comes straight from our healthcare system: pharmacy benefit managers (PBMs). To improve their bottom line, they're blocking access to prescriptions that can help prevent overdoses.

For years, the Food and Drug Administration has encouraged the development and use of "abuse-deterrent formulations" of prescription opioids. ADFs are more difficult to physically alter—i.e. crush for snorting or dissolve for injecting—than traditional pills.  

As a result, ADFs help curb abuse and overdoses. The ADF version of OxyContin, for instance, led to a 65% decrease in snorting, a 56% decrease in smoking and a 51% decrease in injection among patients with a history of abusing the drug, according to a report (PDF) by the Institute for Clinical and Economic Review.

Decreasing the availability of easily abused drugs leads to fewer overdoses. In the first three years after the introduction of ADF OxyContin, overdose deaths reported with a "mention of abuse-related behavior" decreased by 86%.

PBMs, however, refuse to cover the vast majority of ADFs. Their decision impacts more than 266 million Americans insured by employers, unions or government programs like Medicare Part D.

The three biggest PBMs in the country cover no more than three of the 10 ADF opioids approved by the FDA. CVS Caremark, which has nearly 90 million members, doesn't cover a single one. These pharmacies do, however, cover the cheaper, generic forms of opioids—exactly the ones that don't have ADF properties and are readily diverted to abuse. As a result, 96% of all opioid products prescribed in 2015 were non-ADF, according to a new study by the Tufts Center for the Study of Drug Development.

No patient with legitimate medical need would pay extra out-of-pocket for an ADF opioid that the patient has no intention of abusing. But would-be abusers will flock to PBMs where they can be sure they'll be able to convert pills for snorting or injection. By keeping abuse-deterrent medications out of reach, PBMs essentially put out the welcome mat for abusers.

Opioid abuse is often a gateway to even more dangerous substances, like heroin. Those who are dependent on or abuse prescription opioids have a 40-fold increased risk of using heroin, according to a report (PDF) from the National Institute on Drug Abuse.

Unfortunately, PBMs don't seem concerned by the consequences of refusing to cover ADFs and other specialty medicines. They often seem more interested in covering as few medications as possible.

In 2017, for instance, CVS Caremark removed 130 drugs from its formulary, while Express Scripts removed 85. Tasigna, a drug used to treat leukemia; Zepatier, a two-drug medication that treats hepatitis C; and Xtandi, a treatment for prostate cancer, were among the 200-plus drugs cut by the nation's leading PBMs.  

PBMs say that they exclude drugs from their formularies to save patients money. But these short-term savings come with a big cost. When patients can't access the medicine prescribed by their doctor, they get sicker, and the care they require in the long run can be much more expensive. A significant chunk of the cost of the opioid epidemic is a product of exclusion of ADFs from coverage.

In fact, one study (PDF) found that the ADF version of OxyContin could prevent 4,300 cases of abuse and save $300 million in medical costs over a five-year period. But PBMs aren't concerned about long-term savings. They'd rather offer cheaper drugs—non-ADFs, in the case of opioids—and save money for themselves.

The Institute for Clinical and Economic Review, a private organization that suggests drug coverage and pricing, has recommended that PBMs do as much. Despite confirming the savings that ADFs could yield, ICER decided that ADFs did not provide any financial benefit. PBMs since have gladly accepted ICER's mistaken judgment.

CVS Caremark, among other PBMs, claims to understand the nation's drug crisis and to be "doing everything we can to help stop it." But until it starts covering all approved ADFs in its formularies, that's just not true.

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

Expanded Access App-ens

  • 07.25.2017
  • Peter Pitts
The Reagan-Udall Foundation has released an online tool to help patients and doctors find drugs that qualify for the FDA program called expanded access, or compassionate use. These are drugs that are not currently approved, but are being tested and may be suitable to help someone who has a fatal illness.

The Be-all, End-all solution to every issue surrounding expanded access? Hardly. But it's a move in the right direction. Mobile apps are an important tool in advancing all sorts of patient empowerment issues.
Former Sidley Austin partner and product liability specialist Rebecca Wood has been named FDA chief legal counsel. Wood represented multiple life science clients during her nearly 17 years at Sidley, and notably penned briefs in two highly watched U.S. Supreme Court product liability/federal preemption cases, Warner-Lambert v. Kent, Riegel v. Medtronic, Inc . and Wyeth v. Levine.

She replaces Liz Dickinson, who rose to that role through the ranks of the FDA’s Office of Chief Counsel. Dickinson directed the agency’s recent issuance of a controversial FDA memo defending the agency's oversight of off-label communication. Public Health Interests and First Amendment Considerations Related to Manufacturer Communications Regarding Unapproved Uses of Approved or Cleared Medical Products, issued in the final days of the Obama administration, reasserted FDA's stance against off-label communication, which has been opposed by industry and First Amendment advocates for years.

Does the appointment of Wood mean a turn-about on the agency’s views on off-label communication? Watch this space for more details.

Make PBMs Disappear, Not Just Transparent

  • 07.14.2017
  • Robert Goldberg

There have been many articles arguing that the way to reduce drug prices – especially out of pocket costs to patients – is to ensure transparency on rebates. 

For instance, an excellent article in Forbes by my colleague Grace Marie Turner entitled PRICE TRANSPARENCY IS CRITICAL TO DRUG PRICING SOLUTIONS, suggests that  forcing PBMs to disclose drug rebates would help ensure rebates would go directly to consumers and stop PBMs from requiring consumers to pay their share of their prescription drug bills based upon the retail price of the drug.

The fact is, there are already a lot of transparent PBM models.  For example, Medicare Part D requires rebate pass through and transparency. 

And yet, Medicare doesn't realize that the PBMs are socking away about $14 billion in rebates and so-called performance based fees -- esssentialy rebates in the form of claw backs after a drug is sold.  Interestingly, a study published by the pro-PBM trade group, The Coalition for Affordable Drugs revealed just how much of the rebate actually goes to Medicare under the so-called transparent or pass through model.  CMS reports a lot less than the PBMs collect.  

2014 DIR                                    Amount in billions

Rebates reported by PBM.                        $31.7
Rebates reported Medicare by PBM         $17.4
Amount PBMs didn't report to Medicare  $14.3

Where did that $14.3 billion go? 

When Adam Fein of DrugChannels asked Glenn Gliese, the lead author of the report, about the 'discrepancy', Gliese replied he "cannot really comment on what CMS is doing."

I bet.

If $14.3 billion in undisclosed rebate dollars doesn’t highlight the hollow promise of transparency, nothing will. 

The problem is NOT transparency.  The problem is the rebates themselves.  The problem is the existence and growth of PBMs that continually exclude retail community pharmacies that know the needs of their customers and the PBMs increasing use of one size fits all benefit designs and restrictive access to control costs and increase rebates (and prices).  

Transparent PBMs still force the sickest patients to fail first.  And what the don't collect in rebates, the make up for in fees and higher base prices. (Remember, PBMs set the price of the drugs for pharmacies, health plans, patients, pharma.) The so-called pass through of rebates does not change that practice.  PBMs need to eliminate cost sharing, fail first, prior authorization and steering patients to drugs that benefit their bottom line.   Instead of making PBMs transparent we need to make them disappear.  And we need an anti-PBM business model to deliver the drugs that work best for patients at the lowest out of pocket cost.  


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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