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Amid Opioid Crisis, Insurers Restrict Pricey, Less Addictive Painkillers

Drug companies and doctors have been accused of fueling the opioid crisis, but some question whether insurers have played a role, too.
by Katie Thomas, The New York Times and Charles Ornstein, ProPublica

At a time when the United States is in the grip of an opioid epidemic, many insurers are limiting access to pain medications that carry a lower risk of addiction or dependence, even as they provide comparatively easy access to generic opioid medications.

The reason, experts say: Opioid drugs are generally cheap while safer alternatives are often more expensive.

Drugmakers, pharmaceutical distributors, pharmacies and doctors have come under intense scrutiny in recent years, but the role that insurers — and the pharmacy benefit managers that run their drug plans — have played in the opioid crisis has received less attention. That may be changing, however. The New York State attorney general’s office sent letters last week to the three largest pharmacy benefit managers — CVS Caremark, Express Scripts and OptumRx — asking how they were addressing the crisis.

ProPublica and The New York Times analyzed Medicare prescription drug plans covering 35.7 million people in the second quarter of this year. Only one-third of the people covered, for example, had any access to Butrans, a painkilling skin patch that contains a less-risky opioid, buprenorphine. And every drug plan that covered lidocaine patches, which are not addictive but cost more than other generic pain drugs, required that patients get prior approval for them.

In contrast, almost every plan covered common opioids and very few required any prior approval.

The insurers have also erected more hurdles to approving addiction treatments than for the addictive substances themselves, the analysis found.
Alisa Erkes lives with stabbing pain in her abdomen that, for more than two years, was made tolerable by Butrans. But in January, her insurer, UnitedHealthcare, stopped covering the drug, which had cost the company $342 for a four-week supply. After unsuccessfully appealing the denial, Erkes and her doctor scrambled to find a replacement that would quiet her excruciating stomach pains. They eventually settled on long-acting morphine, a cheaper opioid that UnitedHealthcare covered with no questions asked. It costs her and her insurer a total of $29 for a month’s supply.

The Drug Enforcement Administration places morphine in a higher category than Butrans for risk of abuse and dependence. Addiction experts say that buprenorphine also carries a lower risk of overdose.

UnitedHealthcare, the nation’s largest health insurer, places morphine on its lowest-cost drug coverage tier with no prior permission required, while in many cases excluding Butrans. And it places Lyrica, a non-opioid, brand-name drug that treats nerve pain, on its most expensive tier, requiring patients to try other drugs first.

Erkes, who is 28 and lives in Smyrna, Georgia, is afraid of becoming addicted and has asked her husband to keep a close watch on her. “Because my Butrans was denied, I have had to jump into addictive drugs,” she said.

UnitedHealthcare said Erkes had not exhausted her appeals, including the right to ask a third party to review her case. It said in a statement, “We will work with her physician to find the best option for her current health status.”

Matthew N. Wiggin, a spokesman for UnitedHealthcare, said that the company was trying to reduce long-term use of opioids. “All opioids are addictive, which is why we work with care providers and members to promote non-opioid treatment options for people suffering from chronic pain,” he said.

Dr. Thomas R. Frieden, who led the Centers for Disease Control and Prevention under President Obama, said that insurance companies, with few exceptions, had “not done what they need to do to address” the opioid epidemic. Right now, he noted, it is easier for most patients to get opioids than treatment for addiction.

Faced with competition, some pharmaceutical companies are cutting deals with insurance companies to favor their brand-name products over cheaper generics. Insurers pay less, but sometimes consumers pay more. Adderall XR, a drug to treat attention-deficit hyperactivity disorder, is a case in point.
Leo Beletsky, an associate professor of law and health sciences at Northeastern University, went further, calling the insurance system “one of the major causes of the crisis” because doctors are given incentives to use less expensive treatments that provide fast relief.

The Department of Health and Human Services is studying whether insurance companies make opioids more accessible than other pain treatments. An early analysis suggests that they are placing fewer restrictions on opioids than on less addictive, non-opioid medications and non-drug treatments like physical therapy, said Christopher M. Jones, a senior policy official at the department.

Insurers say they have been addressing the issue on many fronts, including monitoring patients’ opioid prescriptions, as well as doctors’ prescribing patterns. “We have a very comprehensive approach toward identifying in advance who might be getting into trouble, and who may be on that trajectory toward becoming dependent on opioids,” said Dr. Mark Friedlander, the chief medical officer of Aetna Behavioral Health who participates on its opioid task force.

Aetna and other insurers say they have seen marked declines in monthly opioid prescriptions in the past year or so. At least two large pharmacy benefit managers announced this year that they would limit coverage of new prescriptions for pain pills to a seven- or 10-day supply. And bowing to public pressure — not to mention government investigations — several insurers have removed barriers that had made it difficult to get coverage for drugs that treat addiction, like Suboxone.

Experts in addiction note that the opioid epidemic has been changing and that the problem now appears to be rooted more in the illicit trade of heroin and fentanyl. But the potential for addiction to prescribed opioids is real: 20 percent of patients who receive an initial 10-day prescription for opioids will still be using the drugs after a year, according to a recent analysis by the CDC.

Several patients said in interviews that they were terrified of becoming dependent on opioid medications and were unwilling to take them, despite their pain.

In 2009, Amanda Jantzi weaned herself off opioids by switching to the more expensive Lyrica to treat the pain associated with interstitial cystitis, a chronic bladder condition.

But earlier this year, Jantzi, who is 33 and lives in Virginia, switched jobs and got a new insurer — Anthem — which said it would not cover Lyrica because there was not sufficient evidence to prove that it worked for interstitial cystitis. Jantzi’s appeal was denied. She cannot afford the roughly $520 monthly retail price of Lyrica, she said, so she takes generic gabapentin, a related, cheaper drug. She said it does not manage the pain as well as Lyrica, which she took for eight years. “It’s infuriating,” she said.

Jantzi said she wanted to avoid returning to opioids. However, “I could see other people, faced with a similar situation, saying, ‘I can’t live like this, I’m going to need to go back to painkillers,’ ” she said.

In a statement, Anthem said that its members have to meet certain requirements before it will pay for Lyrica. Members can apply for an exception, the insurer said. Jantzi said she did just that and was turned down.

With Butrans, the drug that Erkes was denied, several insurers either do not cover it, require a high out-of-pocket payment, or will pay for it only after a patient has tried other opioids and failed to get relief.

In one case, OptumRx, which is owned by UnitedHealth Group, suggested that a member taking Butrans consider switching to a “lower cost alternative,” such as OxyContin or extended-release morphine, according to a letter provided by the member.

Wiggin, the UnitedHealthcare spokesman, said the company’s rules and preferred drug list “are designed to ensure members have access to drugs they need for acute situations, such as post-surgical care or serious injury, or ongoing cancer treatment and end of life care,” as well as for long-term use after alternatives are tried.

Butrans is sold by Purdue Pharma, which has been accused of fueling the opioid epidemic through its aggressive marketing of OxyContin. Butrans is meant for patients for whom other medications, like immediate-release opioids or anti-inflammatory pain drugs, have failed to work, and some scientific analyses say there is not enough evidence to show it works better than other drugs for pain.

Dr. Andrew Kolodny is a critic of widespread opioid prescribing and a co-director of opioid policy research at the Heller School for Social Policy and Management at Brandeis University. Kolodny said he was no fan of Butrans because he did not believe it was effective for chronic pain, but he objected to insurers suggesting that patients instead take a “cheaper, more dangerous opioid.”

“That’s stupid,” he said.

Erkes’s pain specialist, Dr. Jordan Tate, said her patient had been stable on the Butrans patch until January, when UnitedHealthcare stopped covering the product and denied Erkes’s appeal.

Without Butrans, Erkes, who once visited the doctor every two months, was now in Tate’s office much more frequently, and once went to the emergency room because she could not control her pain, thought to be related to an autoimmune disorder, Behcet’s disease.

Tate said she and Erkes reluctantly settled on extended-release morphine, a drug that UnitedHealthcare approved without any prior authorization, even though morphine is considered more addictive than the Butrans patch. She also takes hydrocodone when the pain spikes and Lyrica, which UnitedHealthcare approved after requiring a prior authorization.

Erkes acknowledged that she could have continued with further appeals, but said the process exhausted her and she eventually gave up.
While Tate said Erkes had not shown signs of abusing painkillers, her situation was far from ideal. “She’s in her 20s and she’s on extended-release morphine — it’s just not the pretty story that it was six months ago.”

Many experts who study opioid abuse say they also are concerned about insurers’ limits on addiction treatments. Some state Medicaid programs for the poor, which pay for a large share of addiction treatments, continue to require advance approval before Suboxone can be prescribed or they place time limits on its use, both of which interfere with treatment, said Lindsey Vuolo, associate director of health law and policy at the National Center on Addiction and Substance Abuse. Drugs like Suboxone, or its generic equivalent, are used to wean people off opioids but can also be misused.

The analysis by ProPublica and The Times found that restrictions remain prevalent in Medicare plans, as well. Drug plans covering 33.6 million people include Suboxone, but two-thirds require prior authorization. Even when such requirements do not exist, the out-of-pocket costs of the drugs are often unaffordable, a number of pharmacists and doctors said.

At Dr. Shawn Ryan’s addiction-treatment practice in Cincinnati, called BrightView, staff members often take patients to the pharmacy to fill their prescriptions for addiction medications and then watch them take their first dose. Research has shown that such oversight improves the odds of success. But when it takes hours to gain approval, some patients leave, said Ryan, who is also president of the Ohio Society of Addiction Medicine.

“The guy walks out, and you can’t blame him,” Ryan said. “He’s like, ‘Hey man, I’m here to get help. What’s the deal?’”
When members of the tort bar start to salivate over a piece of legislation, it’s worthwhile to find out where the red meat resides.

In a rush to pass legislation to “lower drug prices,” lawmakers are pushing forward two pieces of parallel legislation, the Senate’s Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act and another House bill the Fair Access for Safe and Timely (FAST) Generics Act of 2017.

Both bills are being viewed by some as possible CHIP “pay for” legislation.  The Senate Finance is holding a hearing next Wednesday and the House wants a vote by end of September. It’s time to take a breath – because neither of these pieces of legislation will speed generic drugs to market or lower the cost of medicines for a single American. What they will most certainly provide is a windfall for the trial lawyers.  

Both bills aim to provide a series of new legal provisions will make it easier for drug companies to introduce generic alternatives, thus spurring competition and bringing down prices. Both are well intentioned. Unfortunately, they’re worded poorly – leading to dangerous unintended consequences. Instead of bringing generics to market sooner, these bills could endanger patients’ lives and encourage costly, needless litigation.

Both bills strip the FDA of its watchdog role. Under their proposals, generic manufacturers aren’t required to outline testing and safety protocols for the FDA to approve. Even if a generic drug maker’s proposed risk evaluation and mitigation strategies are inadequate, the FDA has no authority to reject or halt the transfer of medicines to the generic company for testing.

Both bills contain ambiguously worded liability provisions that subject innovators to unfair legal risk. Generic drug companies often obtain brand-name drug samples and ship them off to third-party research firms to perform clinical trials. If the third party is negligent with the samples, patients could get hurt. Under the bill’s terms, patients would be able to sue the brand-name drug company, even though it had no control over the testing or safety protocols.

Both bills would allow generic drug manufacturers to sue brand-name manufacturers if they fail to hand over their drug samples for testing within 31 days, or if the companies do not reach an agreement on shared risk evaluation and mitigation strategies for risky drugs. Such subjective wording is music to trial lawyers’ ears.

Both houses of Congress deserve praise for trying to bring generic medicines to market faster, relieving consumers from high drug prices. Yet good intentions don’t change the fact that the CREATES and FAST acts, as currently constructed — are deeply flawed.

Congress could help consumers by reworking the legislative language to end bad behavior without gutting safeguards for patients or enabling unscrupulous trial lawyers to file costly, pointless suits. Whether it’s the practice of medicine or the development of public healthcare policy two rules apply – first, do no harm and, second, be wary of trial lawyers bearing gifts.
Yesterday, at the annual RAPS (Regulatory Affairs Professional Society) meeting, I was pleased to speak on the timely topic of real world evidence and to share the podium with Jonathan Jarow (FDA’s point man on RWE) and Enrica Alteri (Head of EMA’s Human Medicines Research and Development Support Division).

The good news is that there was near total agreement that RWE presents important possibilities and opportunities – but the path forward is still nascent, with many crucial questions still to be addressed.

One of the most difficult items on the RWE list is causal inference (the process of drawing a conclusion about a causal connection based on the conditions of the occurrence of an effect). As both FDA and EMA continue to evolve beyond reviewing new medical products exclusively on the traditional substantial evidence standard, it’s a whole new ballgame.

Or is it?

The panel agreed that we're moving forward into a world where there will be many different kinds of reviews for both drugs and devices. Some will be of the “gold standard” large-scale RCT variety, others will be substantially truncated reviews based on dozens (or fewer) patients, and many will be hybrid models (such as using RWE for confirmatory purposes for a surrogate endpoint).

And then there’s the exciting potential in advancing Causal Inference (CI) models through the tools of Artificial Intelligence (AI).

Who said regulatory science was dull?

The panel also stressed that Real World Evidence and “Big Data” are not the same thing, and that developing interoperability (the idea that different systems used by different groups of people can be used for a common purpose because those systems share standards and approaches) must be a priority.

And not just interoperability, but interaction. When it comes to advancing the regulatory science of real world evidence, industry must become comfortable being not just a regulated entity but also a partner in development. In fact, per Dr. Jarow, the FDA is encouraging all comers to submit questions, data sets, and suggestions via a new email link,

Gentlemen and Ladies – start your engines.

The tools for appropriate validation are urgently needed – but cannot be rushed. That being said, the 21st Century Cures Act requires FDA to establish a framework for use of real-world evidence to approve supplemental indications and satisfy post-approval requirements within 2 years.

Tick. Tick. Tick.

Gottlieb: Speed Saves

  • 09.11.2017
  • Peter Pitts
But how will Pharma calculate the speed-to-price equation? And what of PBMs?

From the pages of Politico:

Gottlieb promotes FDA move away from traditional three-phase clinical trials

FDA Commissioner Scott Gottlieb on Monday laid out new clinical trial approaches and digital techniques that he said could get medicines to patients sooner and at a lower price by moving away from the time-honored, traditional three phases of clinical trials.

"We're on an unsustainable path, where the cost of drug development is growing enormously, as well as the costs of the new medicines. We need to do something now, to make the entire process less costly and more efficient. Otherwise, we won't continue to realize the practical benefits of advances in science, in the form of new and better medicines," Gottlieb said in a speech delivered at the RAPs Convergence Conference.

Although development costs aren't necessarily mirrored in treatment prices, they are an important factor, he said. The steep price of development may also be causing fewer drugs to get developed, particularly because so much of the cost burden of drug development is front-loaded at the earliest stages, he said.

He called for savings in development costs to be passed along to consumers, but gave no details on how the government might ensure savings are shared.

"We need to reduce the risk and uncertainty that makes drug development increasingly costly, he said, "and make sure that we have markets that are competitive, and let us capture those savings in the form of lower prices."

FDA is taking a number of steps to modernize how clinical data can be collected, Gottlieb said.

One approach is "seamless" trials, which already have been used to test drugs on various cancers at a single time. In such studies, instead of conducting the usual three phases of clinical trials, a company conducts one large adaptive trial where data can be observed at certain intervals. This reduces the number of patients needed in the trial and saves time and money.

"This approach is well suited" to drugs being developed now to target specific changes that can be found in different disease states, Gottlieb said.

FDA is also encouraging companies to pursue common control studies, where multiple drugs are tested against the same control arm, and large simple trials, which have large sample sizes and statistical power, thereby providing less ambiguous results and minimizing the effects of random errors.

Another new approach is the master protocol concept, in which a single trial evaluates multiple treatments in more than one subtype of a disease or type of patient. Master protocols have been used in cancer drugs and in antibiotic development, to evaluate medicines targeting pathogens in different parts of the body.

The FDA plans to issue new policy and guidance documents to help companies make better use of these approaches, Gottlieb said.

To protect patients, the agency is adapting its safety screening to these new trial types, he said. For example, informed consent documents for seamless trials need to be updated throughout the trial to reflect new safety and efficacy evidence gathered in the process.

Since these trial designs may allow an entire drug development program to take place in just one study, FDA may also need to build in new regulatory milestone meetings to check on progress and provide oversight and advice.

"This is not 'business as usual' approach. It may require a much more iterative process, with greater communication between all of the stakeholders involved in the clinical trial processes," Gottlieb said.

FDA is also modernizing its evaluation of company data, with more advanced software and sophisticated statistical and computational models. Gottlieb said he wants to increase FDA investment in high-performance computing because access to this technology at the agency is limited.

Computer modeling can help select the optimal dose of a drug or better estimate effect size to figure out the ideal number of patients needed in a clinical trial. It can also help FDA determine whether the trial endpoint a company wants to study is appropriate for the disease at hand.

The agency will convene a series of workshops, publish guidance documents and develop policies and procedures for translating modeling approaches into regulatory review, Gottlieb said. It will also conduct a pilot project to test use of these new computer tools with willing drug companies.

The agency has ongoing projects underway to use software to develop natural history models of diseases like Parkinson's, Huntington's and Alzheimer's disease. This information can make trial recruitment more efficient and help evaluate the effect of a treatment again the normal course of disease.

The agency is developing algorithms that could help speed trials. For example, its working on a lung cancer algorithm it hopes can help classify how well a tumor responds to a drug treatment.

Embedding CDER's Centaurs

  • 09.07.2017
  • Peter Pitts
The FDA needs centaurs – and that’s no myth.


In the parlance of Artificial Intelligence (AI), a “centaur” is a combination of a human brain and computer intelligence. The centaur model sparked the growth of freestyle chess, a context in which Garry Kasparov concluded that “weak human + machine + better process was superior to a strong computer alone and, more remarkable, superior to a strong human + machine + inferior process.”

Now replace “weak human” with “FDA reviewer.” Get it? According to Brad Bush (COO of Dialexia), “Being a centaur in the workplace means taking advantage of the vast analytical capabilities of AI-enabled technology and adding human thinking.”

As AI innovation continues to advance, we should carefully review the centaur model in terms of the FDA review process and consider how combined human and computing power can augment the evolving methodologies for adaptive clinical trial design and statistical analytics being used to achieve approval via the agency’s various expedited review pathways.

Centaurs, far from being mythological, represent a very real opportunity for drug reviews that are both faster and more accurate – a crucial public health double play.

But isn’t AI risky? Consider this -- machines are terrible risk takers and have no capacity to make leaps of faith. It’s easy for a conversation about AI to devolve into a philosophical discussion about consciousness, because that’s what humans bring to the table — a sense of consciousness and intuition that machines don’t possess. AI isn’t about replacing reviewers, it’s about freeing them to do what they do best – think outside the box! It's precisely that kind of hiuman risk taking the FDA's senior leadership want to see from it's staff.

If you’re an FDA reviewer, ask yourself this question, which end of the centaur do you want to be? Perhaps the FDA needs a new position on its organizational chart – Centaur Director.

As Philip K. Dick wrote, “Reality is that which, when you stop believing in it, doesn’t go away.”

Fahrenheit 483

  • 09.01.2017
  • Peter Pitts
FDA Commissioner Scott Gottlieb has gotten the message – closing the loop on agency inspections is taking too long.

Per the Commissioner:

Manufacturing of drugs has become increasingly complex and global, requiring us to remodel our oversight of these tasks, to improve FDA’s efficiency and reach. As a step toward achieving these goals, FDA previously announced that we’re restructuring our field activities, to direct our focus and organization around the programs we regulate, instead of our previous structure, that organized our activities and resources based on geographic regions. This allows us to better align the expertise of our staff and make more efficient use of our resources.

As another key step towards achieving these goals, the FDA’s Center for Drug Evaluation and Research (CDER) and the Office of Regulatory Affairs (ORA) are implementing a new, historic concept of operations agreement to more fully integrate the drug review programs with the facility evaluations and inspections for human drugs. This new collaboration is a model for how we’ll modernize other parts of our organization to better achieve our mission.

This new agreement leverages two efforts to ensure alignment between FDA’s field professionals and the agency’s review staff. First is the use of “Integrated Quality Assessment” teams. This new, team-based approach aligns field and review staff so that we can make closer consideration of all elements that create risk including the drug substance, the drug product, manufacturing processes, and the state of the facilities we regulate.
Second, on May 15, 2017, we previously announced the structural realignment of ORA. It moved ORA’s previous geographically organized staff and management into program-aligned commodity areas, more closely mirroring the organizational model of FDA’s centers and the industries we regulate. This step enhanced the Integrated Quality Assessment, and the new concept of operations that operationalizes these approaches, by enabling better alignment between our field professionals and the review staff who evaluate the products that are being manufactured in the facilities that we inspect. The unifying hallmark of the integrated quality assessment team and the concept of operations agreement is the closer integration of the professional staff charged with inspecting facilities and the review staff involved in evaluating applications. Experts in our drug program, and our field force, will be aligning their efforts. We believe that this sort of collaboration can better inform the work done across each of these domains. Our inspectional force will benefit from insights that might be offered by the review teams who have carefully evaluated products being manufactured. Meanwhile, our review staff will benefit from the deeper understanding they will glean through more direct and regular contact with the professionals who are inspecting facilities and seeing the kinds of things that can go wrong during the manufacturing process.


His full announcement (and explanation) can be found here. Another victory for enhanced regulatory predictability.

A Real World Continuum

  • 08.25.2017
  • Peter Pitts
In a JAMA Viewpoint piece, CDER director Janet Woodcock and colleagues reinforced FDA’s stance on the incorporation of real-world evidence into clinical trials, as well as the use of pragmatic studies pre or post-market to collect data on optimal dosing and treatment effects in subpopulations.

In the piece, FDA defines real-world evidence as any data collected as part of routine clinical care, including electronic medical records and administrative claims data as well as data generated from personal electronic or “smart” devices, social media and socioeconomic tools.

The agency also notes that there is no clear dichotomy between real-world and “non-real-world” evidence and that the two exist in a continuum.

Woodcock and her colleagues reiterated what she told BioCentury in its 2016 Back to School essay about the value of studies that are randomized within the healthcare system, which can allow for the collection of data and results that are more generalizable to how the drug candidate will be used in the real world. They also noted that these studies can be cheaper to conduct and can help to address other regulatory questions post-approval, including optimal dosing, long-term outcomes and benefits in various subpopulations.

Per Woodcock, et al., “It is not feasible to answer all of these questions with traditional RCTs. Using RWE to begin to address these questions is preferable to having no evidence whatsoever.”

CRISPR Questions

  • 08.24.2017
  • Peter Pitts
Cancer survivors can carry germline mutations that will be transmitted to their progeny. Today, many of these mutations have been identified and can be tracked. With the recent development of genome-editing technologies and CRISPR (clustered regularly interspaced short palindromic repeats), the possibility of genetically modifying the human germline—gametes and embryos—has never been closer.

This perspective has sparked a controversy within the scientific community with reactions ranging from calls for a ban on germline modification to cautious approval of further research.

A new article in the DIA journal, Therapeutic Innovation and Regulatory Science, analyzes the possible adoption of CRISPR-based germline engineering to prevent the spread of cancer predispositions in the human population. Implications of CRISPR-Based Germline Engineering for Cancer Survivors discusses whether the genomic edition of human sperm and eggs would contribute to rectifying or altering the heritable genome.

The paper anticipates the emergence of a new form of liberal eugenics fueled by a logic of offer and demand from stakeholders such as cancer survivors and their relatives and offspring, but also from fertility clinics, biotech firms, insurers, and clinicians. From a regulatory perspective, validating the clinical safety and utility of CRISPR-based germline engineering is an essential step. However, with time, gradually perfecting the technology and assessing the economic benefits for stakeholders could soften society’s resistance and align opinions in support of genomic decontamination of human germlines. This progressive shift would be justified in the name of cancer prevention as well as a moral obligation to facilitate the conception of cancer-free children at a cost that is acceptable to individuals and health systems.

It’s a worthwhile read.
Up until recently, Missouri was the only state without a Prescription Drug Monitoring Program for opioids. The good news is that’s changing — sort of. Last month, Gov. Eric Greitens issued an executive order creating one.

The governor’s order directs the state Department of Health and Senior Services to build a database, which will be designed to help identify suspicious patterns of prescriptions of controlled substances — including opioids.

Good news? Seems to be, until you look into the details — where the devil resides. In every other state, doctors and pharmacists can access the database as they write and fill prescriptions, to see where else their patients are getting medications. That won’t be the case under Greitens’ order. What’s wrong with this picture?

Under the new system, dispensers will be required to submit information, but the governor’s order doesn’t give them access to the information. According to Alexandra Dansicker, a policy analyst for the Missouri Foundation for Health, “The intent is to help identify the issues from the supply side of the equation, rather than looking at patient demand and doctor shopping.”

That’s a huge problem that’s being called out by many, including U.S. Sen. Claire McCaskill (D-Mo.), “While I certainly welcome the governor’s attention to this crisis, I have serious questions about how meaningful this action will be if doctors writing prescriptions — and pharmacists filling those prescriptions — don’t have access to this database,” she said in a statement. “The welcome mat is still out for drug dealers to shop for prescriptions in our state.” Instead of an executive order, McCaskill said, state lawmakers should “get off the sidelines and pass a robust statewide program into law that gives law enforcement, pharmacies, and doctors the tools they need.”

Seems obvious, right. What’s going on? Where’s the missing piece? The Kansas City Star offers some valuable reportage: The governor’s executive order was announced “at the St. Louis headquarters of Express Scripts, a pharmacy benefits management company (PBM).”

A seemingly innocuous detail? Hardly. What you smell is the whiff of a smoking gun. It seems that Express Scripts wasn’t recipient of just a gubernatorial visit, but also of a no-bid state contract to administer the PDMP. And here’s another important detail: Express Scripts donated $10,000 to the governor’s inauguration — the PBM’s largest contribution this year and the only one it has made in Missouri.

In addition to the no-bid contract for Express Scripts, Greitens appointed Julia Brncic, the company’s vice president and deputy general counsel, to the governing board of the University of Missouri System.

The Kansas City Star pulls no punches: “The secrecy surrounding Greitens’ fundraising has translated into near constant questions about his motives. And to ethics reform advocates, who argue voters have a right know if special interests are trying to curry favor with politicians, the situation has a corrosive effect on the public’s faith in government.”

Cui bono? Why such largesse from Express Scripts? Is it just a nice gesture for their home state governor? Before you sign onto that chimera, consider this — a $10,000 donation results in a $250,000 no-bid contract. That’s a pretty good return on investment and a nice resume-padder for Ms. Brncic.
Ryan Burns, spokeswoman for the state agency that handles contracting, said data held by Express Scripts and the tools that perform analysis of that data are unique to the company. Under these circumstances, Burns said, state law permits a contract to be awarded without a full competitive bidding process.

But, according to Dr. Robert Twillman, executive director of the Academy of Integrative Pain Management, “No one has designed even simple analytics that make any sense in this arena. If they [Express Scripts] succeed, it will be a modern statistical miracle worthy of some kind of prize. But, of course, we won’t really know what goes into their analytic algorithms, because they’ll keep all that secret. They will just show up to arrest docs and pharmacists on the basis of their black box analytics.”

Now consider with whom the governor is doing business. In 2014, pharmacies sued Express Scripts over its “scheme to deny all claims” for certain customized medications. “The scheme is forcing patients to go without treatment,” the suit stated, “jeopardizing their health and causing bodily harm, or forcing them to pay out-of-pocket sums that they may or may not be able to afford for basic health care needs that have been prescribed by their doctors.”

At a 2014 meeting at the Federal Trade Commission, Dr. Steven Miller (senior vice president and chief medical officer, Express Scripts), said he had research showing that physicians don’t want information from pharmacists telling them which patients have filled a prescription. (Miller was unable to cite the source of this data point.) Well, there are a lot of things “physicians don’t want” — like having to adjust to a world where opioids prescribing must better monitored – but that doesn’t mean they need to be iced out of PDMP access. What does Missouri know that the rest of the nation doesn’t?

Why are Express Scripts and Gov. Greitens being complicit in this illogical PDMP design that is so contrary to the public health? Why the disregard and disrespect for physicians? Part of the answer must lie in the PBM’s historic distrust of doctors’ ability to prescribe what’s best for their patients — as opposed to what’s cheapest. Cui bono indeed — and at whose expense? The opioid epidemic cannot be controlled by disrespecting physicians and pharmacists.

Patients for Affordable Drugs (P4AD) is the faux patient group fronting for the Laura and John Arnold Foundation funded syndicate pushing for European style price controls on drugs.  Along with other Arnold funded academics and organizations, including ICER-  P4AD is demanding that Novartis price it’s breakthrough gene therapy for acute lymphocyte leukemia  ‘fairly’ because “of the fact that U.S. taxpayers invested hundreds of millions of dollars to develop CAR-T before your company became seriously involved.” 

The demand was part of a letter sent by P4AD founder David Mitchell (formerly an executive in a PR firm that received $12 million in drug company funding for Obamacare ads) to Novartis CEO Joe Jimenez. According to a fawning article by Arlene Weintraub in Fierce Pharma, “Mitchell requested a meeting with Jimenez, even offering to bring along two experts in drug pricing: Steven Pearson, president of the Institute for Clinical and Economic Review (ICER), and Aaron Kesselheim, professor at Harvard Medical School and head of its program on regulation, therapeutics and law.” 
Mitchell never reveals that Pearson and Kesselheim also receive funding from the Arnold Foundation.  Weintraub never mentions it either. 

This factual oversight is important since Mitchell proposes that Novartis hold its “price in the United States to the average of prices you receive in six other wealthy nations.”  Or “accepting a value price as established by an independent organization such as the Institute for Clinical and Economic Review (ICER), discounted to reflect American taxpayers’ contributions and assumption of risk.”   

Mitchell’s assertion that NIH invested $200 million in CAR-T that directly contributed to the Novartis drug is a well-crafted lie.  But before dealing with that deception we should explore why discounting the prices of newly developed products that have benefitted in some way from federal support of basic research is a bad idea:

1. It penalizes companies that are successful.

What if the Novartis drug had failed.  Most new medicines never make it to market. Should companies get an NIH rebate when companies invest in products that don’t work? 

2. Why shouldn’t this principle be applied to all successful products developed by people or organizations that at some point in time received federal funding for basic research?

The government had provided billions in support for computing research. About 40 percent goes to universities and 60 percent going to industry and government labs. 
Applying Mitchell’s logic, we should demand that Google, Facebook, Apple, Oracle, etc. should be setting prices “discounted to reflect American taxpayers’ contributions and assumption of risk”.

3. Why stop there?  The government hands out $33 billion a year in Pell Grants to college students.  Shouldn’t these kids starting salaries be “discounted to reflect American taxpayers’ contributions and assumption of risk.”  A third of students getting Pell Grants do not graduate.  Should that money be given back?

When we sell or buy houses, should the prices be “discounted to reflect American taxpayers’ contributions and assumption of risk” in the form of mortgage interest tax deductions?

4. So-called fair pricing requirements reduce private sector investment in NIH sponsored research. 

In 1989 the NIH imposed a reasonable pricing clause on drugs developed using federal basic research support.   The number of direct partnerships between NIH and biotech companies declined steadily declined from 42 in 1989 to 32 in 1995. 

In 1995, the clause was removed.  The NIH director -- Harold Varmus -- noted at the time that the pricing clause had driven industry away from many collaborations with N.I.H. scientists that could have benefited the public. "Eliminating the clause will promote research that can enhance the health of the American people," he said.

By 1997 the number of partnerships surged to 153.  (The NIH averages about 80 such agreements each year. )

Mark Rohrbaugh who ran the technology transfer office at the institutes from 2001 to 2013 and is now an adviser to the agency states that “Companies will not take technologies from us if we say the government will decide in the future what the price will be,” said Mark.  He goes on to say (as noted above) that “after the “reasonable price” clause was struck, he said, there was a threefold increase in partnership deals.”

Now let’s turn to the canard that the NIH invested $200 million in CAR-T research before Novartis dropped a dime. P4AD claims it found 356 NIH projects from1993-2017 containing the phrase “chimeric antigen receptor” (CAR) totaling $204 million. 

There are several problems with this analysis:

1. It includes NIH funding after 2012, the year Novartis began investing.  Replicating PD4D’s search and limiting to 1993-2011 generates 43 grants totaling $18.9 million.
2. Its search is overly broad. It should have at least searched for CAR therapy since CARs are engineered for a variety of research purposes apart from T cell therapy.

A search using the phrase CAR “ therapy” from 1993-2017 yields 33 projects receiving $22.9 million.  But all that funding came AFTER 2011.  Which means that the NIH spent zero dollars on zero CAR therapy projects until Novartis stepped into the picture and after the first results of the CAR-T therapy were published (in 2011). 

Indeed, the Association of Cancer Gene Therapy provided Dr. Carl June who developed the genetically engineered CAR-T approach all the initial funding. NIH provided no funding. 

Dr. June received two grants from ACGT in 2004 and 2008 for his studies in CAR-T therapy for lymphoma and leukemia, and ovarian cancers. On August 10, 2011, Dr. June’s study results were reported in the New England Journal of Medicine and Science Translational Medicine. The results exceeded everyone’s wildest expectations.”

When the FDA advisory committee approved the therapy, June noted: “The funds from ACGT sustained us. When other organizations, including the NIH, considered gene therapy too risky, ACGT believed in the science and funded us when no one else would. ACGT really kept us going and kept the research alive. Without them, we wouldn’t have had a clinical trial and I don’t think we’d be where we are today.”

In 2012, the University of Pennsylvania and Novartis announced a major partnership, in which Penn granted Novartis exclusive rights to its CAR-T therapies. In return, Novartis gave Penn $20 million to fund CAR-T research. Additionally, Novartis is spending hundred of millions of dollars to support clinical trials, manufacturing of genetically engineered T cells and the actual production of the CAR-T therapy which must be tailored to a person's specific genetic and tumor profile. An innovation is something that can be widely used.

P4AD was hoping that the public and media would accept it’s phony $200 million NIH funding estimate at face value to support its equally bogus assertion because it fits the narrative that drug companies are simply free riding off taxpayer funded research or that NIH supported the riskier part of the development process. 

Neither is true.  P4AD is running a  deceptive campaign on behalf of the Arnold Foundation to promote policies that have reduced private investment in NIH research.   If Novartis had been required to negotiate the launch price of CTL019 it would not have provided the $20 million.  It would not have spent hundreds of millions of dollars developing a pilot facility for producing genetically modified T-cells.  In short, many people who were are death’s door and who are alive today – as well as thousands of people in the future facing the same fate – would be dead.


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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