Latest Drugwonks' Blog
A new BIO survey finds that more drug sponsors are not seeking special protocol assessment for drug development because they do not believe it improves their chances of getting a product approved. (The survey represents 165 companies and 240 individual clinical development programs.)
According to BIO’s Executive VP for Emerging Companies Section, Cartier Esham, “The reason cited is that they don’t see any objective evidence that utilization is improving chances of success.”
Question: Does that speak to a problem with the pathway or in the design of any given clinical program? One cannot be blamed for the other. SPAs were never meant to promise speed-to-market. Could it be a case of inappropriate sponsor expectations? Just asking.
BIO’s survey also found that the majority of respondents have not utilized FDA’s enhanced communications program, and that the reason people give for not using the program is that they are not aware of its existence or what purpose it serves.
Really? Or is the reason that what the program offers isn’t what sponsors want – or want most – direct communications with their agency review team.
You can't always get what you want
But if you try sometime you just might find
You get what you need.
And, according to the BIO survey, smaller companies often don’t take advantage of FDA meeting opportunities. That’s truly unfortunate since the FDA said its own analysis shows that companies that have milestone meetings with the agency across all phases of development experience shorter clinical development (by a year or more) than those that did not engage at all milestones.
Blame the FDA? What about blaming shortsighted corporate regulatory strategies?
High Noon At The Pharma Pricing Corral
A wrangle over costly hepatitis C drugs portends a transformation in health care reimbursement
By Rick Mullin
Reorganize R&D in pharmaceuticals? Not a problem. It hurt, but faced with petering pipelines and patent expirations on top-selling drugs, major drug companies moved quickly over the past three years to consolidate operations. They closed labs, slashed research staff, and sold off noncore ventures. They replaced those operations by forming partnerships with academic labs and licensing or acquiring promising drug candidates from small biotech firms, hardly skipping a beat on innovation.
Reorganize getting paid in the drug industry? That’s a problem. In fact these days, the business appears to be at crisis point, as the first entries in a new generation of high-priced, highly effective drugs raise alarm and generate pushback from patients, insurance providers, and Congress.
Much of the attention is on two expensive new drugs for hepatitis C—Gilead Sciences’ Sovaldi and AbbVie’s Viekira Pak. Also of concern is a related deal between AbbVie and Express Scripts, a pharmacy benefits management firm, or PBM. Rebelling against Sovaldi’s $84,000-per-treatment price tag, Express Scripts said it would offer Viekira Pak at a significant, but undisclosed, discount and exclude Sovaldi from its formulary. In response, Gilead cut a similar deal with the drugstore chain CVS.
The U.S. Senate, also startled by Gilead’s asking price, convened a committee last year to investigate the drug’s cost. Meanwhile, patient advocates have come forward with concerns over the steep price of highly effective new drugs not only for hepatitis C but also for cancer and a variety of rare diseases. Moreover, they view the likelihood of formulary exclusion via deals between drug companies and PBMs as threatening access to treatment.
It can be argued that nothing out of the ordinary is happening. Products that differentiate themselves from others in any market command high prices—consider the furor over a new smartphone—and two such products will often battle head-to-head for market share. Vying for exclusive deals with payers is a time-honored means of doing battle in many industries.
Indeed, Gilead’s disclosures about such deals in its recent earnings statement led stock analysts at Morgan Stanley to estimate the firm’s average price for Sovaldi and Harvoni, another hepatitis drug, at $51,000 to $52,000 when discounts are taken into consideration.
HEAVY INFLATION
The monthly costs of cancer drugs at the time of FDA approval has soared. SOURCE: Peter Bach of Memorial Sloan Kettering Cancer Center
But drugs are not smartphones. Their critical role in people’s lives, the means by which their value is calculated, the method established for payment, and drugmakers’ outsized expectations for return on investment define a unique economy of access and reimbursement—one that industry watchers claim is no longer sustainable and is in need of change.
The cost of developing and commercializing a new drug has risen to $2.6 billion, a 145% increase, corrected for inflation, over the past 10 years, according to a recent report from the Tufts Center for the Study of Drug Development. And drug companies want to recoup that investment.
But the price of new therapies is increasingly determined by estimates of savings to the health care system over an extended period of time, a calculation that often yields a significantly higher figure than the mere investment cost. In short, if an effective new drug cures a patient of a chronic disease, the cost benefit of not having that person as a patient is factored into the treatment cost. As drugs impacting underserved therapeutic areas emerge, some fear that price and volume will combine to overwhelm the annual budgets of insurance companies and other payers.
“I think of this as pressure building up,” says Glen Giovannetti, global life sciences leader at the consulting firm Ernst & Young, of the attention garnered by the hepatitis C drugs in recent weeks. Although Giovannetti sees nothing fundamentally new in dealings between the drug companies and insurers, he says there is cause for concern over the rise of formulary exclusion as more breakthrough drugs enter the market. According to Giovannetti, Express Scripts is “clearly sending a message” that it is also looking to form exclusive pacts with drugmakers over future cancer treatments.
But the battle over drug pricing may also be a distraction from a more important issue, according to Robert M. Goldberg at the Center for Medicine in the Public Interest, a health care policy research organization. “Discussions about what is best for patients always circle back to outrage over high prices,” Goldberg says. “But this is nothing new. We have been fighting about drug prices since the snake oil salesmen pulled their wagons to town. We rarely have a discussion about value.”
Some of today’s new drugs, he says, are delivering more value to patients and their families than the drugs of 10 years ago did, which means big changes across the health care landscape. “There is less and less economic return going to the traditional institutions, like the insurance companies and the hospitals,” Goldberg says. “These medicines are doing to this business model what digital information did to the recording industry. They are decimating it.”
Goldberg is optimistic that genomics, big data, systems biology, and information technology—what he calls the digitization of the industry—will lead to transformative change in health care, but pricing and reimbursement need to accommodate them and ultimately facilitate patient access to new drugs. “We may need to change the way things are paid for,” he says.
Patient Distress
Whatever the causes, the cost of new treatments is a source of increasing alarm for patient advocacy groups. The Fair Pricing Coalition, a network of patient advocacy groups focused on HIV and hepatitis C, characterizes the high prices of new hepatitis C drugs and the deals between drug companies and PBMs as indicative of heightened obstacles to patient access ahead.
“Hep C is the canary in the coal mine,” says David Evans, director of research advocacy at Project Inform, a member of the coalition. Sovaldi and Viekira Pak are perceived by patient groups as the first in a wave of high-tech, high-cost drugs, he says. They are concerned about the prices of such drugs and how squabbles among corporate giants impact availability.
“As an organization whose first goal is to ensure access to quality and affordable medication for people living with chronic diseases, we have a tremendous fear that the giants involved in this battle are going to try to crush each other to the harm of people with those diseases,” Evans says. “What we see is King Kong versus Godzilla. The pharmaceutical industry is very powerful, as is the insurance industry. And they are playing hardball over price.”
Cancer patient advocates are similarly concerned. “On the very positive side, especially in blood cancer, there has been a tremendous amount of innovation. The options available have increased dramatically,” says Brian Rosen, chief policy and advocacy officer for the Leukemia & Lymphoma Society (LLS). “On the other hand, the price of innovation is very high.” And the current reimbursement model requires patients and payers to pay up front for drugs priced according to estimates of long-term value to the health care system.
Drug companies and payers, Rosen contends, are both reluctant to engage in discussions of altering the pricing and reimbursement model in health care. “But if there come barriers that prevent a product from reaching a patient, then the model becomes unsustainable,” he says. “Currently, it’s our belief that barriers to patient access are increasing.”
LLS hosted a forum a year ago to which it invited drug producers, payers, economists, and data experts. “We came away with the perspective that in order to inform the value equation, we need the patient’s perspective,” Rosen says. “And it is lacking.”
Producers’ Perspective
Cara Miller, vice president of public affairs at Gilead, argues that the savings to the health care system justify the cost of Sovaldi and Harvoni. “Unlike long-term or indefinite treatments for other chronic diseases, Harvoni and Sovaldi offer a cure at a price that will significantly reduce hepatitis C treatment costs now and deliver significant health care savings to the health care system over the long term,” she tells C&EN.
AbbVie makes a similar argument for its hepatitis C drug. “In determining the price of Viekira Pak, we took a number of factors into account including the overall market dynamics, the benefits of the therapy to patients, the cost-effectiveness of treatment, and the value that the product brings to offsetting short-term and long-term costs,” says Stefanie Prodouz, the firm’s senior manager of public affairs. She adds that the deal with Express Scripts is indicative of the company’s efforts to ensure that patients other than just the sickest are able to get Viekira Pak.
Douglas Paul, a partner at Medical Marketing Economics, an Oxford, Miss.-based consultancy to the pharmaceutical industry, agrees that pricing needs to take a drug’s efficacy into account. “Historically with hepatitis C, we paid $30,000 for a 30% cure, $60,000 for a 60% cure, and now we are paying $90,000 for a 90% cure,” he says.
Moreover, Paul contends, the flash point between Gilead and payers over Sovaldi occurred not because of the high price of the drug but because of the high volume of patients seeking access.
“What made this one different is that it was a very accessible drug,” he says. “You had all these people who were warehoused, waiting for this highly efficacious, low-side-effect drug. The price per cure didn’t get the payers; it was the number of people seeking a cure.”
Paul views the recent developments in hepatitis C as normal market activity—two highly differentiated products came on the market at the same time, and price competition led to deals with insurers. He does not view such deals as restricting patient access because the drugs are of equal efficacy. Nor does every hepatitis C patient need the new drugs right away, he adds.
Paul also expresses frustration over payers’ failure to prepare for Sovaldi, which the Food & Drug Administration approved in December 2013, in their budgets for 2014. He and others point to Gilead’s $11 billion acquisition of Pharmasset—which discovered Sovaldi and had taken it through Phase III clinical trials—and the drug’s strong clinical results as sufficient indication that something big was due in hepatitis C.
A PBM Responds
David Whitrap, corporate communications director at Express Scripts, begs to differ. “Nobody anticipated that the $11 billion purchase price of Pharmasset would lead to an $84,000 price of Sovaldi,” he says. “When Gilead did ultimately price Sovaldi at that level, they were able to recoup the entire Pharmasset investment in only one year—far sooner than acquisitions of that level generally pay off.” He adds that budgets for payers are generally set long before the December immediately preceding the benefit year.
Express Scripts also challenges the contention that drug companies and insurers are vying for position at the expense of patients. “We put clinical profile and clinical efficacy first,” says Steve Miller, the firm’s chief medical officer. “Access is an enormous factor,” he says. “And access is proportional to price. It doesn’t matter if you bring great drugs to market if no one can afford them.”
He points out that some patient advocacy groups, including the AIDS Healthcare Foundation, applauded Express Scripts’ deal with AbbVie. Indeed, the group issued a strongly worded statement condemning Gilead for its pricing of Sovaldi.
Miller notes that the issues of drug pricing and reimbursement have garnered interest on both sides of the aisle on Capitol Hill in the wake of the Senate investigation of Gilead and Express Scripts’ deal with AbbVie. Democrats, who have long pushed for price controls, are glad to see the pressure on Gilead, he says. Republicans like that free-market forces are being applied.
Express Scripts also favors free-market mechanisms over price controls and pays for much more expensive drugs than Sovaldi, Miller points out. “We have drugs on our formulary that are $300,000-plus for kids with cystic fibrosis,” he says. “You haven’t heard us complain about this because this is truly adding great value.”
Despite new products such as Sovaldi, Miller faults big pharma on innovation. “Let’s be honest,” he says. “When it comes to the hepatitis drug, Pharmasset was the innovative company. What Gilead did was financial innovation. Pharmasset indicated in public filings that they would have sold the drug at $36,000-per-treatment cost.”
The Push For Change
The American Enterprise Institute, a conservative policy and economics think tank, is among the voices suggesting alternatives to the current payment system. Scott Gottlieb, a fellow at AEI and former FDA deputy commissioner for medical and scientific affairs, coauthored a report last year suggesting various means of spreading payments over time, including reinsurance and amortization.
According to Gottlieb, such a change would be the second shoe dropping on a reengineered drug industry. “They have changed their whole R&D model, but they haven’t changed their payment model,” he says.
But he considers the entire system primed for changes that will impact payers, care providers, and patients alike. “You haven’t seen a lot of financial services sophistication in the market for these transactions,” he says of the recent agreements between drug companies and payers. “I think we are going to have to think about how to bring real financial services constructs into these transactions. And one of these is amortization.”
Although it is unclear why the health care industry has lagged others in adopting such standard financing instruments, Gottlieb points to unique aspects of the industry that set it on its own course. “There is a lot of churn,” he says. “How do you amortize the cost when by the 10th year, you still have the cost but you no longer have the patient?”
Advocates of reform are garnering government backing. Last month, the U.S. Department of Health & Human Services stated a goal that by 2016, 30% of all Medicare provider payments will be transacted through alternative models tied to patient outcomes rather than how much care is provided. The target rises to 50% by 2018. Pharmaceutical Research & Manufacturers of America, a drug industry association, responded that it supports payment plans emphasizing patient outcomes and encouraged the agency to “incorporate clear mechanisms for recognizing the value of new treatment advances.”
Gottlieb doesn’t see any of the stakeholders stonewalling on exploring new modes of finance. Not even the drug companies. “They are not resistant to the idea of amortizing these costs and smoothing out their earnings,” he says.
Most PBMs are also receptive to changes that enhance their growing role as financial service intermediaries. That sector is ripe for change, in Gottlieb’s view. “Simply extracting discounts from drugmakers and passing on some of the discounts to payers is not a sustainable model where the ‘middleman’ sees his margins shrinking.”
At the moment, however, payers and patients are pointing their fingers at the drug companies in what Gottlieb characterizes as a cycle of recrimination that currently puts big pharma in the crosshairs.
“It’s all great theater, but is it good for patients? The answer is no,” Goldberg of the Center for Medicine in the Public Interest says, “because increasingly, patients will be forced to jump through hoops to get the medicine that is right for them and still pay thousands of dollars out of pocket for medicine that might not work in order to get a medicine that will work. There really isn’t a focus on what works best for the patient.”
He says disease advocacy groups such as LLS and the Multiple Myeloma Research Foundation are gathering data on patients that may provide a corrective force. Discrimination lawsuits brought by patient groups against PBMs may have an effect as well, he says.
The current concern over the cost of treating patients with the best drugs needs to be matched with a regard for the cost of not doing so, according to Goldberg. “The healthier the people in your risk pool, the lower your premiums are,” he says. “So why would you not want to use the best technology first to keep people healthy?”
The key, Goldberg argues, is to determine the value of drugs by focusing on their long-range benefit to the health care system and to patients—but to facilitate access up front.
“The faster you get medicines to patients, the lower the cost will be,” he says. “In the short term, patients are going to be whipsawed, but there will be changes made by drug companies and health plans well before legislation kicks in. Things are moving in a very good direction. The next generation of medicines will be priced differently, and cheaper.”
Here’s a question you hear a lot, “Has Big Pharma figured out social media yet?”
That question lacks granularity.
Big Pharma marketers understand (and correctly so) that social media is a long-term play. It doesn’t deliver ROI in the same timeframe as DTC or couponing or any of the more traditional tools of the trade. “Mobile,” as crucial as it is to any successful marketing effort, isn’t social media. It is one platform on which social media exists.
Social media takes time, effort, patience, and investment. Unlike websites, social media isn’t a fire-and-forget proposition. Just because a platform is “digital” doesn’t mean it’s identical. For marketers, whose job it is to sell as much product as possible in the shortest time possible (no, not patent life – stock quarters), the perpetual, largely uncontrolled, multi-contextual aspects of social media are more of a headache than a new frontier. Yes, this is shortsighted – but that’s what the current reward structure assigns as “best practice.”
Have pharma brand marketers “figured out” social media? Yes. They have figured out that it is not ready for prime time in their 20th century "blockbuster" marketing primer. That which gets rewarded gets done.
Corporate communicators feel differently. They see social media as the wave of the present. They understand social media as an indispensible tool not just for crisis communications but for corporate identity, alliance building, and for being at the hub of the healthcare communications ecosystem.
They’ve figured it out – but don’t have the budgets to really make it happen to scale. More’s the pity.
And, of course there are those still “waiting for the FDA.” To those folks, here’s a question to ponder, what about the agency’s Correcting Independent Third-Party Misinformation About Prescription Drugs and Medical Devices draft guidance?
The FDA writes:
If a firm voluntarily corrects misinformation in a truthful and non-misleading manner and as described in this draft guidance, FDA does not intend to object if the corrective information voluntarily provided by the firm does not satisfy otherwise applicable regulatory requirements regarding labeling or advertising, if any.
Bueller? Bueller?
Will expanded government extortion result in fewer settlements? Will the NIH have to admit to its true role in drug development?
From today’s Wall Street Journal:
A “Swear Jar” for Drug Makers
By: Ed Silverman
Should drug makers that break the law be required to pay an extra penalty that would be used to fund the National Institutes of Health?
Sen. Elizabeth Warren (D-Ma.) believes this idea would not only provide needed money for medical research, but would help persuade drug makers to curtail bad behavior. Last month she introduced a bill, the Medical Innovation Act, that she has described as the equivalent of a swear jar.
Basically, drug makers that reach settlements with the federal government for paying kickbacks to doctors, defrauding Medicare or Medicaid, or illegally marketing medicines would have to pay 1% of annual net profits for each blockbuster medicine that originated with government-funded research. However, the law would only apply to drug makers with more than $1 billion in net profit.
The U.S. Department of Health and Human Services would be chartered with calculating payments, which would actually run for five years. Why? This is the same amount of time covering most settlements reached between drug makers and the Department of Justice.
No estimates were given on how much money might be raised for the NIH, but if the law had been in place five years ago, Sen. Warren claims the NIH would have gained an extra 20% in annual funding, or roughly $6 billion, on average, each year. This is real money.
“We should make it easier for the biggest drug companies to help develop the next generation of cures, and harder for them to profit from breaking the law and defrauding taxpayers,” she told a conference last month. The payments, she noted, would be in addition to any settlement paid by a drug maker.
Not surprisingly, the pharmaceutical industry is having none of it. The trade group representing large drug makers slammed the proposal, calling it “misguided” and suggesting that needed money would be “siphoned” from research that develops new medicines.
Some also argue that Sen. Warren wrongly inflates the NIH’s role in creating drugs. She “should acknowledge the reality rather than trying to score political points that don’t match up with the facts,” says industry consultant Peter Pitts, a former FDA associate commissioner for external affairs.
Meanwhile, the amount of money the bill may generate is a question mark, since this depends on the number of settlements. Pat Burns of Taxpayers Against Fraud, a nonprofit funded by attorneys, says numerous cases are under way.
Drug makers are already grumbling that device makers are exempt, because the bill focuses on companies that sell blockbuster drugs. But any company that sells both products could be subject to a penalty. The real issue, though, is that the pharmaceutical industry is expected to fight back.
“This is a very powerful lobby,” says Paul Thacker, a former aide to U.S. Sen. Chuck Grassley (R-Iowa), who led investigations of drug and device makers. “We need more medical research funding, but I think she needs to make a case that these violations lead to poor outcomes that increase health costs. A swear jar sounds great, but this is going to be a tough.”
For more on this, see this story in The Hill.
Specialty Drugs Help CVS Health Meet 4Q Profit Forecasts
In a really, really big way: "growing demand for expensive specialty drugs helped increase revenue from its pharmacy benefits management, or PBM, business nearly 22 percent in the quarter to $23.9 billion."
But there is more to the surge in specialty pharmacy driven profits..It's how CVS and other PBMs are raking in big discounts from makers of specialty drugs and then making it harder for patients to get them. From Rollcall:
Study: Higher Share of Plans Charging Patients Higher Fees for Certain Drugs
"More health insurance plans on the exchanges are placing drugs to treat complex diseases at the highest cost-sharing tier in 2015 when compared to the previous year, according to a new analysis from the Avalere Health consulting firm."I wrote about this pyramid scheme in my NY Post article. WIth exception of Adam Fein, no one else seems to cover this issue or care.
That's because it doesn't fit the narrative of BIG Pharma generating huge profits at the expense of patients.. Which is why no one writing about specialty drugs mentions that reduce total health care spending are only 5 percent of total health care spending.
This simple step could save thousands of lives and increase the number of people seeking to try a new medicine as early as possible.
All of which begs the question of why we need compassionate use exemptions at all. Why not turn Phase 2 and 3 into a study of people using medicines in the real world? Joseph Cooper notes in "Regulating New Drugs that "the ultimate test of safety and efficacy is how man responds in significant numbers under diverse conditions over relatively long periods of time. We have tended to substittue for that ultimate test one of the fads of the times -- the scientifically controlled double blind trial "
Cooper wrote that in 1972.
We have not come very far since then. In fact, the fad of that time has become Holy Writ. Peter and I wrote a publication about how to use molecular markers and digitized real world data to accelerate all drug development and to turn medicine into a true learning system. Very little of what has been written since then is more than a footnote to our original work. And in turn, our work was shaped by the thinking of Cooper and others such as the late Nobel Laureate Josh Lederberg who wondered aloud "if innovation was possible" under the current regulatory regime.
We can learn more in less time using real world data than in a decade of clinical trials. Kudos to the FDA. By removing the obstacles to using new medicines in the real world and by encouraging the sharing of data from these experiences, it has given us -- and policymakers -- a look at how the agency can serve the public health in the century ahead. And it has acknoweldged that patients should and will have more control over what medicines to use and has increased that control.
From the pages of the Washington Examiner …
Industry ties could be at issue for possible FDA pick
Respected cardiologist Dr. Robert Califf appears to be a top candidate to be the next head of the Food and Drug Administration but may face heated Senate queries over close ties to pharmaceutical companies if nominated for the post.
The Duke University cardiologist and researcher was appointed as the agency's deputy commissioner for medical products and tobacco by the FDA last month and will start in March.
At the time, several FDA and industry insiders believed the appointment signaled that Califf would be FDA Commissioner Dr. Margaret “Peggy” Hamburg's eventual successor.
Now that Hamburg officially resigned last week, insiders continue to believe Califf will be selected by President Obama to fill the position.
“I have a short list of one person, and that is Robert Califf,” Peter Pitts, president of the think tank Center for Medicine in the Public Interest, told the Washington Examiner.
Pitts, a former FDA associate commissioner, said Califf would have bipartisan appeal. He was interviewed for the top job during the Bush administration and the Obama administration.
Califf currently serves as vice chancellor of clinical and translational research at Duke University, and was founding director of the Duke Clinical Research Institute, which conducts clinical trials for several drugmakers. He will take a leave of absence from the university to fill the deputy director position.
Califf is a logical choice because he is an accomplished researcher who has more than 1,000 manuscripts to his name, which is a rare feat, Dr. Steven Nissen, chairman of cardiovascular medicine at the Cleveland Clinic, told the Examiner.
Nissen and Califf clashed at times while serving on FDA advisory committees, but Nissen said his colleague has a high degree of scientific integrity.
Califf was part of the Institute of Medicine committees that recommended Medicare coverage of clinical trials and the removal of the unsafe weight-loss supplement ephedra from the market, the FDA said.
While Califf has extensive research credentials, he also has extensive ties to the pharmaceutical industry.
He has received research grants from pharmaceutical giants Novartis, Johnson & Johnson, Lilly, Merck and Schering-Plough. He also consulted for Boehringer Ingelheim, Bayer, Bristol Myers Squibb, device giant Medtronic and other companies, according to a disclosure statement on the Duke institute website.
Califf was named to the board of directors for San Francisco drug manufacturer Portola Pharmaceuticals in 2012 but resigned soon after being appointed to the FDA post.
Nissen conceded that the ties could be a liability and may come up during a confirmation hearing.
The issue is “what if he is in the position to make decisions about companies with whom he has working relationships,” Nissen said. “I think his integrity makes that less of an issue, but that is in the eye of the beholder.”
Public advocates and some members of Congress have previously criticized the FDA for being too close to industry. The advocacy group Public Citizen noted recently that during Hamburg’s tenure the FDA grew even “more cozy with the industries that it regulates.”
Another potential focal point during confirmation could be Califf’s handling of a data fabrication scandal while at Duke. Califf was vice chancellor of Duke’s clinical research division when Dr. Anil Potti was caught in 2012 fabricating cancer research. Califf told CBS News that year he is responsible for retracting Potti’s various papers in medical journals and implementing new oversight procedures at Duke.
To be confirmed, Califf must first be vetted by the Senate Committee on Health, Education, Labor and Pensions.
The White House hasn’t announced a timeline for selecting a replacement. Press secretary Josh Earnest said during a briefing Friday the president will want someone with “impeccable medical and scientific credentials” that can also muster strong bipartisan support.
Califf did not return a request for comment as of press time. During a recent conference call with reporters on the deputy director appointment, Califf said that such a promotion “has not been a part of the discussion,” according to the Wall Street Journal.
State settles Medicaid suit over cystic fibrosis drug
Arkansas Times
Posted By Leslie Newell Peacock on Fri, Feb 6, 2015 at 12:05 PM
The state Medicaid office has settled a federal lawsuit brought by three cystic fibrosis patients who were denied the drug Kalydeco because of cost, the Wall Street Journal reported yesterday.
Catherine Kiger, Elizabeth West and Chloe Jones filed the suit, Kiger v. Selig et al, last year saying the state had violated their civil rights for two years by denying them the drug. The settlement was filed Thursday in federal court in Fayetteville.
Kate Luck, a spokesperson for the state Department of Human Services, said the settlement involved no monetary awards, but the state, which changed its criteria for eligibility for the drug prior to the settlement, has agreed not to change those criteria for two years. Should the state deny the drug to a Medicaid patient, it must provide the court reasons why and the court may jurisdiction over the state's decision. ask the state "to outline the reasons for denial," Krell said.
The courts do not have jurisdiction over the decision. The only thing they can do is ask us to outline the reasons for denial.
The state previously had required the patients to prove that less expensive therapies had failed to work and, according to the WSJ, "patients seeking to have their prescriptions reauthorized by Arkansas Medicaid were required to prove they had better lung function, weight gain and fewer hospitalizations with the drug."
The state no longer requires the patients to use the standard therapy (Pulmozyme and hypertonic saline) for 12 months before being considered for Kalydeco or to show evidence of failure on the standard therapy, Luck said. She said the studies were "made in response to more recent studies that were released on the drug. Arkansas has covered Kalydeco since 2012 and approved its first patient for coverage in 2013."
The manufacturer of Kalydeco, Vertex, of Boston, had declined to provide the drug free through its patient-assistance program. The drug targets a specific genetic cause of CF, and Luck said the state estimates that only seven CF patients in the state Medicaid program whose disease is caused by the particular gene mutation. While Luck said the denials were not "necessarily because of cost," she added that that the drug is "very expensive" and a "lifetime drug."
The annual wholesale cost of the drug is $311,000, according to the WSJ.
The FDA is not a monolithic entity. The agency is comprised of over 16,000 dedicated public servants whose areas of expertise and responsibilities range from pharmaceuticals to food, veterinary products, cosmetics, medical technology, dietary supplements, and beyond.
No one person calls all the shots – but the Commissioner is in charge and sets the tone and direction of the body that regulates more than a quarter of the American economy. A really good commissioner is measured by the impact he continues to have once she has departed. By that measure Peggy Hamburg rates an “A.”
It’s fair to say that Dr. Hamburg came to White Oak at a time when the FDA was under a cloud. Whether or not the criticism the agency was receiving was fair (most of it was not) isn’t the point. Morale was low. Moral authority amongst constituents was fading. Global leadership was ebbing. PDUFA reauthorization was pending. Peggy did not walk into a cushy job and had a steep learning curve.
As every FDA commissioner, she faced many issues. Some specifically worth noting:
· The authority to regulate (at least after a fashion) cigarettes
· Weathering the storm over opioid pain medications – and turning it into a public health victory
· Advancing medical device review reform
· Developing a regulatory pathway for biosimilars
· Producing social media draft guidances
· Expediting expedited review pathways
· Expanding Expanded Access Programs
· Identifying the need for 21st Century bioequivalence strategies
· Facilitating adaptive clinical trial design partnerships
· Rethinking FDA’s role in global harmonization
· Forcing forward motion per Patient-Focused Drug Development
· Beginning an Office of Pharmaceutical Quality
… to name only a few. That’s not to say that all of these items are tied up in a bow, that there haven’t been errors, blunders, sins of omission or that important initiatives are progressing to everyone’s satisfaction – far from it. But as Mark McClellan used to say when he sat in the Commissioner’s chair, “If some people think we’re moving too fast and others think we’re moving to slow – then we must be doing something right.”
A successful FDA Commissioner quickly realizes that a sure path to failure is to try to make everyone happy or micromanage. That ain’t the way it works. Peggy’s empowered the agency’s senior staff to follow her lead and do the right thing as they see it. The best example of this was her decision to allow Plan B (“the Morning After Pill”) to go OTC – publicly bucking political pressure from the White House to submarine the considered decision of the FDA’s professional regulatory staff – and quieting those who claim FDA decisions are “politically motivated.”
Perhaps most importantly is that faith in the FDA is stable and improving and staff morale is vibrant. Rather than the facile and ignorant drumbeat of “blame the FDA,” groups ranging from the pharmaceutical industry, to patients groups, Congress, academia, and healthcare practitioners are beginning to realize (some faster than others) that FDA is a crucial partner – indeed a senior partner -- in the innovation ecosystem.
Peggy Hamburg is leaving the agency in a better place than she found it. She has successfully set the tone for the 21st Century FDA -- an impressive and gutsy millennial course.
And that’s as good a legacy as any commissioner could want.
President Obama is calling on Congress to improve the nation’s health by increasing the development of precision medicines — treatments that target the underlying cause of life-threatening diseases.
He says he wants to ensure everyone has access to the right drugs at the right time, because it can reduce the cost of health care and save lives.
That’s great. Too bad that, under ObamaCare, people are getting fewer targeted treatments and paying more for them.
In his State of the Union, the president mentioned Bill Elder, a 27-year-old medical student being treated for a rare form of cystic fibrosis with Kalydeco — which, the president noted, “has reversed a disease once thought unstoppable” by turning off the genetic mutation causing his disease.
Yet Kalydeco isn’t easily available under most health plans. Ask Chloe Jones, a 14-year-old Arkansan with the same type of cystic-fibrosis mutation.
Her state Medicaid agency has refused to give her Kalydeco, insisting that she first fail to respond to older, cheaper therapies that treat the symptoms but not the underlying cause. (Kalydeco costs about $200,000 a year.)
That is, she has to get sicker before getting the medicine that shuts off her disease.
Chloe’s not alone. Nearly 70 new treatments precisely target the underlying causes of disease; many, like Kalydeco for CF or Herceptin for breast cancer, target specific disease paths or benefit specific groups of patients.
Compared to trial-and-error or wait-and-see care, matching the right treatment to patients is much more cost-effective, especially for the person who’s sick.
Yet health plans are covering fewer new precision medicines, instead forcing patients with CF, cancer, multiple sclerosis, psoriasis and HIV to get sicker before they can use them.
And when they do allow access, they’re forcing patients to pay up to half the new medicines’ cost.
Yet ObamaCare is exacerbating this pre-existing problem with our system — by accelerating the transformation of prescription-drug coverage to a vast pyramid scheme.
Thanks to the ObamaCare law, health plans now enroll people under the promise of covering anyone with a pre-existing condition — but those same plans make it increasingly difficult, if not impossible, for these people to get the medicines they signed up to receive.
At the center of the scam are pharmacy benefit managers, or PBMs. These are the firms that actually develop and run the drug benefits for health plans.
PBMs bargain with drug makers to get discounts or rebates for including their pharmaceuticals on “formularies” — the list of drugs your health plan covers.
ObamaCare has already accelerated consolidation in this obscure industry, to the point that just two PBMs now control the drug benefits of nearly 200 million Americans.
The two firms are using their vast market power to extract big rebates from drug companies in exchange for including precision medicines on their formularies.
Increasingly, PBMs are only covering one precision medicine for a given condition — the drug made by the company that offers them the biggest rebate.
That’s what happened with the new drugs for Hepatitis C. One big PBM, Express Scripts, is only covering the drug Viekira Pak; the other, CVS/Caremark, has made two other new medicines, Sovaldi and Harvoni, the exclusive “precision” options for patients with hepatitis C.
Left-leaning health-care “reformers” hail these pay-for-play schemes as ways to reduce health-care costs and make new medicines more affordable. But the discounts don’t help patients.
Instead, the PBMs will pocket about $3 billion in rebates from these drugs this year. And you can expect them to apply the same protection racket to medicines for cancer, MS and psoriasis.
Even then, more than 60 percent of health plans require patients to “fail first” on less precise drugs for HIV, multiple sclerosis, cancer, psoriasis and other illnesses.
The outrages don’t stop there. When the PBMs and plans finally stop excluding access to a precision drug, they often still force people to pay thousands out of pocket for the medicines — up to 40 percent of the cost.
Insurers and PBMs profit from all this, but it’s a waste of health-care dollars even though precision drugs are so costly.
Indeed, studies by Columbia University economist Frank Lichtenberg show that access by patients and their health-care providers to new medicines promotes longer, higher-quality life and better health care at a lower total cost.
And health-outcomes expert Dr. Susan Horn has found that when you’re “failing first” on a cheaper drug, you’re not only more likely to miss work, but also to run up other medical bills related to your illness. And even the cheaper drug still costs.
Precision medicines, while expensive, save money by eliminating guesswork, use of ineffective treatment and costly health services. Lichtenberg notes that every $1 spent on new medicines saves about $6 in other medical costs.
If Obama wants to usher in an era of precision medicine, he should work to replace “fail first” or “step therapy” approaches with value-based precision therapy, and to end the practice of forcing patients to pay the highest prices for the most effective medicines.
Precision medicine is the best remedy for PBMs and insurers who get richer by making people like Chloe Jones sicker.
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.
