Latest Drugwonks' Blog
As the old saying goes, “Take care of the pennies and the pounds will take care of themselves.” So true. But, when it comes to smart use and aggressive reimbursement for GLP-1 receptor agonists, the adage must be reversed, “Take care of the pounds and the pennies will take care of themselves.”
A new study in the Proceedings of the National Academy of Science, led by researchers at Yale School of Public Health and the University of Florida, demonstrates that it’s time for Uncle Sam step up and to remove the barriers that are hindering appropriate access to effective weight loss treatments. Simply stated, expanding access to GLP-1s such as Ozempic and Wegovy, and dual gastric inhibitory polypeptide and GLP-1 (GIP/GLP-1) receptor agonists, such as tirzepatide could prevent more than 40,000 deaths a year in the United States. This estimate includes approximately 11,769 deaths among individuals with type 2 diabetes — a group particularly vulnerable to the complications of obesity. Even under current conditions of limited access, the researchers project that around 8,592 lives are saved each year, primarily among those with private insurance.
Per Alison P. Galvani, one of the study's authors and the Burnett and Stender Families Professor of Epidemiology (Microbial Diseases) at the Yale School of Public Health, “Expanding access to these medications is not just a matter of improving treatment options but also a crucial public health intervention. Our findings underscore the potential to reduce mortality significantly by addressing financial and coverage barriers."
The study highlights a critical disparity in drug access. Medicare, for example, doesn’t cover these drugs for weight loss and Medicaid coverage varies widely by state. Expanding access to these medications is not just a matter of improving treatment options but also a crucial public health intervention.
The researchers also considered the impact of socioeconomic factors on the effectiveness of expanded drug access. They adjusted their estimates to account for income disparities, finding that even with these adjustments, the potential for lives saved remains significant.
The study also explored how expanded access could affect different regions and socioeconomic groups. States with high obesity and diabetes rates, such as West Virginia, Mississippi, and Oklahoma, stand to benefit the most from increased medication availability. In these areas, expanding access could lead to the largest per capita reductions in mortality.
According to Dr. Burton H. Singer, PhD, another author of the study and adjunct professor of mathematics at the Emerging Pathogens Institute at the University of Florida. "Addressing these challenges requires a multifaceted approach," "We need to ensure that drug prices are more aligned with manufacturing costs and increase production capacity to meet demand. At the same time, we must tackle the insurance and accessibility issues that prevent many people from getting the treatment they need."
A new study in the Proceedings of the National Academy of Science, led by researchers at Yale School of Public Health and the University of Florida, demonstrates that it’s time for Uncle Sam step up and to remove the barriers that are hindering appropriate access to effective weight loss treatments. Simply stated, expanding access to GLP-1s such as Ozempic and Wegovy, and dual gastric inhibitory polypeptide and GLP-1 (GIP/GLP-1) receptor agonists, such as tirzepatide could prevent more than 40,000 deaths a year in the United States. This estimate includes approximately 11,769 deaths among individuals with type 2 diabetes — a group particularly vulnerable to the complications of obesity. Even under current conditions of limited access, the researchers project that around 8,592 lives are saved each year, primarily among those with private insurance.
Per Alison P. Galvani, one of the study's authors and the Burnett and Stender Families Professor of Epidemiology (Microbial Diseases) at the Yale School of Public Health, “Expanding access to these medications is not just a matter of improving treatment options but also a crucial public health intervention. Our findings underscore the potential to reduce mortality significantly by addressing financial and coverage barriers."
The study highlights a critical disparity in drug access. Medicare, for example, doesn’t cover these drugs for weight loss and Medicaid coverage varies widely by state. Expanding access to these medications is not just a matter of improving treatment options but also a crucial public health intervention.
The researchers also considered the impact of socioeconomic factors on the effectiveness of expanded drug access. They adjusted their estimates to account for income disparities, finding that even with these adjustments, the potential for lives saved remains significant.
The study also explored how expanded access could affect different regions and socioeconomic groups. States with high obesity and diabetes rates, such as West Virginia, Mississippi, and Oklahoma, stand to benefit the most from increased medication availability. In these areas, expanding access could lead to the largest per capita reductions in mortality.
According to Dr. Burton H. Singer, PhD, another author of the study and adjunct professor of mathematics at the Emerging Pathogens Institute at the University of Florida. "Addressing these challenges requires a multifaceted approach," "We need to ensure that drug prices are more aligned with manufacturing costs and increase production capacity to meet demand. At the same time, we must tackle the insurance and accessibility issues that prevent many people from getting the treatment they need."
Yes, once again we’re talking about Bernie Sanders. Here’s the full quote from MacBeth:
“Life's but a walking shadow; a poor player, that struts and frets his hour upon the stage, and then is heard no more: it is a tale told by an idiot, full of sound and fury, signifying nothing.”
That’s the “Scottish Play,” but equally tragic (and a lot more comic) is the way the Senator from Ben and Jerry’s thinks that by talking tough, he’ll be taken seriously. Nope. All syrup, no maple tree.
Since, according to Senator Sanders, Novo Nordisk won’t testify about its GLP-1 agonist products, his committee will issue a subpoena. The game’s afoot. Let’s call it the “Danish Play.”
(Reality check: The Health Committee hasn’t issued a subpoena in more than 40 years.)
Per the Green Mountain State’s favorite son, the Senate Health Committee has “reached out time and time again to schedule Novo Nordisk’s voluntary appearance at a hearing … Unfortunately, despite all of our efforts, they have repeatedly denied our requests.” Nope.
Per a written Novo Nordisk clarification, “The company has responded to every request Sanders has made, and said the company is “committed to a hearing that aligns with the Chairman’s established committee practices … On multiple occasions, we have communicated our CEO’s willingness to testify and offered several dates for a hearing. Based on our continued cooperation, we feel that issuing a subpoena is unnecessary.”
But not nearly as much sturm und drang.
It's also interesting that only one manufacturer is being summoned to testify – and not a single Pharmacy Benefit Manager (PBM) has received a similar honor.
If Senator Sanders wants to be taken seriously, he should recognize that his current approach is … much ado about nothing. Just ask Vermont’s favorite fictional representative, Senator Ortolan Finistirre.
For more, see this excellent reporting by STAT.
“Life's but a walking shadow; a poor player, that struts and frets his hour upon the stage, and then is heard no more: it is a tale told by an idiot, full of sound and fury, signifying nothing.”
That’s the “Scottish Play,” but equally tragic (and a lot more comic) is the way the Senator from Ben and Jerry’s thinks that by talking tough, he’ll be taken seriously. Nope. All syrup, no maple tree.
Since, according to Senator Sanders, Novo Nordisk won’t testify about its GLP-1 agonist products, his committee will issue a subpoena. The game’s afoot. Let’s call it the “Danish Play.”
(Reality check: The Health Committee hasn’t issued a subpoena in more than 40 years.)
Per the Green Mountain State’s favorite son, the Senate Health Committee has “reached out time and time again to schedule Novo Nordisk’s voluntary appearance at a hearing … Unfortunately, despite all of our efforts, they have repeatedly denied our requests.” Nope.
Per a written Novo Nordisk clarification, “The company has responded to every request Sanders has made, and said the company is “committed to a hearing that aligns with the Chairman’s established committee practices … On multiple occasions, we have communicated our CEO’s willingness to testify and offered several dates for a hearing. Based on our continued cooperation, we feel that issuing a subpoena is unnecessary.”
But not nearly as much sturm und drang.
It's also interesting that only one manufacturer is being summoned to testify – and not a single Pharmacy Benefit Manager (PBM) has received a similar honor.
If Senator Sanders wants to be taken seriously, he should recognize that his current approach is … much ado about nothing. Just ask Vermont’s favorite fictional representative, Senator Ortolan Finistirre.
For more, see this excellent reporting by STAT.
Abraham Lincoln said that the patent system adds “the fuel of interest to the fire of genius.”
Alas, when it comes to the majority of innovative healthcare technologies, that “fire of genius” rarely comes from Inside the Beltway. And having Senator Bernie Sanders hold forth on pharmaceutical research, development, and manufacturing costs is about as useful and thought-provoking as listening to my 13-year-old Golden Retriever parse the allegorical vicissitudes of Milton’s Paradise Lost.
Senator Sanders, it’s important to remember, doesn’t even believe in patents, but rather in the failed fantasy land of “innovation prizes." Well, in the words of the late Senator Daniel Patrick Moynihan, “Everyone is entitled to his own opinion, but not to his own facts."
In the past, Senator Sanders introduced a bill that would replace our current patent system for pharmaceuticals with a “Medical Innovation Prize Fund. It’s not a new idea. The prize model has been used in the past by the old Soviet Union – and it didn’t work. The Soviet experience was characterized by low levels of monetary compensation and poor innovative performance.
The US experience isn’t much better. The federal government paid Robert Goddard (the father of American rocketry) $1 million as compensation for his basic liquid rocket patents. A fair price? Not when you consider that during the remaining life of those patents, US expenditures on liquid-propelled rockets amounted to around $10 billion. It’s certainly not what Schumpeter had in mind when he wrote about a “spectacular prize thrown to a small minority of winners.” There’s a difference between “Creative destruction” and destroying medical innovation.
As Joe DiMasi (Tufts University) and Henry Grabowski (Duke University) have argued, under a prize program, pharmaceutical innovators would lack the incentive to innovate. To quote DiMasi and Grabowski, “The dynamic benefits created by patents on pharmaceuticals can, and almost surely do, swamp in significance their short-run inefficiencies.”
As DiMasi and Grabowski presciently observed in 2004, “The main beneficiaries in the short-term would-be private insurers and public sector purchaser of pharmaceuticals. Governments and insurers are focused myopically on managing health care costs. They are not likely to be strong advocates for funding new drug development that can increase individual quality of life and productivity."
Let’s take a break from the effervescent political bloviation and look at the facts. It’s time to put the “intellectual” back in “intellectual property. Pursuing misguided policies that siphon funding from the groundbreaking medical research happening in the biopharmaceutical industry will have devastating consequences for patients and society.
When Senator Sanders begins to wonder why GLP-1 agonists can’t be radically reduced in price, it’s because he doesn’t fully understand or appreciate the ecosystem.
Allow me to draw your attention to a recent US Chamber blog post highlighting how the private sector is providing positive and cost-effective solutions for diabetes patients. You can find that blog here: Conquering Diabetes with Cost-Effective Solutions for Patients | U.S. Chamber of Commerce.
Two key points:
* Free enterprise creates competition in the marketplace to keep costs down. Contrary to critics, innovation in diabetes is being pioneered by private sector companies.
* New treatments are possible because of private-sector innovation. America’s life science companies are advancing diabetes care by developing more effective treatments to help people manage their condition.
What’s that? Did you think that medical innovation only comes from the NIH? Consider the facts:
A study in Health Affairs by Bhaven N. Sampat and Frank R. Lichtenberg (“What Are The Respective Roles of the Public and Private Sectors in Pharmaceutical Innovation?”) puts the issue in a data-driven perspective that gives the NIH its due — but in the proper frame of reference.
Per Sampat and Lichtenberg, less than 10 percent of drugs had a public sector patent, and drugs with public-sector patents accounted for 2.5 percent of sales, but the indirect impact was higher for drugs granted priority review by the FDA. (Priority review is “given to drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists.”)
“478 drugs in our sample were associated with $132.7 billion in prescription drug sales in 2006. Drugs with public-sector patents accounted for 2.5 percent of these sales, while drugs whose applications cited federally funded research and development or government publications accounted for 27 percent.”
The NIH plays a vital role in basic research and early discovery, but is robbing Productive Peter to pay Government Paul the best bang for the buck when it comes to advancing public health? The answer is a clear "no."
Per the US Chamber report, “Incredible innovative treatments are currently on the market to treat Type 2 diabetes, one of the most serious chronic conditions, which impacts an estimated 35 million Americans. But contrary to what some critics may say, America’s innovative life science companies are advancing diabetes care by developing more effective treatments to help people better manage their condition so that they don’t develop serious complications, including damage to the heart, blood vessels, eyes, kidneys, and nerves.”
Further, “Effective glucose and weight management are key aspects of diabetes care, but only 50% of people with diabetes in the United States achieve their glucose level goals (measured by the HbA1c test). Glucagon-like peptide 1 drugs (GLP-1) have been proven to reduce a person’s A1c by approximately .8 to 1.6%. This is a tremendous innovation for an unpredictable disease that can cause complications like amputations, heart failure, gum disease, and vision loss. “
Diabetes has a major impact on national economies by reducing productivity and life expectancy while increasing disability and health care costs. People with diagnosed diabetes now account for one of every four health care dollars spent in the U.S.
The Economic Report, which is published every five years by the American Diabetes Association, found that the total annual cost of diabetes in 2022 was $412.9 billion, including $306.6 billion in direct medical costs and $106.3 billion in indirect costs.
The Chamber calls it like it is. “Unfortunately, just as millions of Americans are benefiting from these lifesaving and life-altering diabetic treatments, some members of Congress and activist groups are pushing price control policies that will kill future life-science innovation and undermine the ability of patients to access the newest treatments and cures.”
Research from the Chamber shows that in countries with strict price control regimes, patients receive access to fewer cures and have longer wait times than their peers in free market and free enterprise systems like the United States. For the millions of American patients with diabetes, the idea of waiting longer for fewer cures and treatments is simply unacceptable.
The government should get out of the way and let the market drive innovation, to add the fuel of interest to the fire of genius Doing so will not only lead to the newest generation of treatments and cures but will also lead to more options and choices, improving therapeutic outcomes, and lowering costs for patients and taxpayers.
Alas, when it comes to the majority of innovative healthcare technologies, that “fire of genius” rarely comes from Inside the Beltway. And having Senator Bernie Sanders hold forth on pharmaceutical research, development, and manufacturing costs is about as useful and thought-provoking as listening to my 13-year-old Golden Retriever parse the allegorical vicissitudes of Milton’s Paradise Lost.
Senator Sanders, it’s important to remember, doesn’t even believe in patents, but rather in the failed fantasy land of “innovation prizes." Well, in the words of the late Senator Daniel Patrick Moynihan, “Everyone is entitled to his own opinion, but not to his own facts."
In the past, Senator Sanders introduced a bill that would replace our current patent system for pharmaceuticals with a “Medical Innovation Prize Fund. It’s not a new idea. The prize model has been used in the past by the old Soviet Union – and it didn’t work. The Soviet experience was characterized by low levels of monetary compensation and poor innovative performance.
The US experience isn’t much better. The federal government paid Robert Goddard (the father of American rocketry) $1 million as compensation for his basic liquid rocket patents. A fair price? Not when you consider that during the remaining life of those patents, US expenditures on liquid-propelled rockets amounted to around $10 billion. It’s certainly not what Schumpeter had in mind when he wrote about a “spectacular prize thrown to a small minority of winners.” There’s a difference between “Creative destruction” and destroying medical innovation.
As Joe DiMasi (Tufts University) and Henry Grabowski (Duke University) have argued, under a prize program, pharmaceutical innovators would lack the incentive to innovate. To quote DiMasi and Grabowski, “The dynamic benefits created by patents on pharmaceuticals can, and almost surely do, swamp in significance their short-run inefficiencies.”
As DiMasi and Grabowski presciently observed in 2004, “The main beneficiaries in the short-term would-be private insurers and public sector purchaser of pharmaceuticals. Governments and insurers are focused myopically on managing health care costs. They are not likely to be strong advocates for funding new drug development that can increase individual quality of life and productivity."
Let’s take a break from the effervescent political bloviation and look at the facts. It’s time to put the “intellectual” back in “intellectual property. Pursuing misguided policies that siphon funding from the groundbreaking medical research happening in the biopharmaceutical industry will have devastating consequences for patients and society.
When Senator Sanders begins to wonder why GLP-1 agonists can’t be radically reduced in price, it’s because he doesn’t fully understand or appreciate the ecosystem.
Allow me to draw your attention to a recent US Chamber blog post highlighting how the private sector is providing positive and cost-effective solutions for diabetes patients. You can find that blog here: Conquering Diabetes with Cost-Effective Solutions for Patients | U.S. Chamber of Commerce.
Two key points:
* Free enterprise creates competition in the marketplace to keep costs down. Contrary to critics, innovation in diabetes is being pioneered by private sector companies.
* New treatments are possible because of private-sector innovation. America’s life science companies are advancing diabetes care by developing more effective treatments to help people manage their condition.
What’s that? Did you think that medical innovation only comes from the NIH? Consider the facts:
A study in Health Affairs by Bhaven N. Sampat and Frank R. Lichtenberg (“What Are The Respective Roles of the Public and Private Sectors in Pharmaceutical Innovation?”) puts the issue in a data-driven perspective that gives the NIH its due — but in the proper frame of reference.
Per Sampat and Lichtenberg, less than 10 percent of drugs had a public sector patent, and drugs with public-sector patents accounted for 2.5 percent of sales, but the indirect impact was higher for drugs granted priority review by the FDA. (Priority review is “given to drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists.”)
“478 drugs in our sample were associated with $132.7 billion in prescription drug sales in 2006. Drugs with public-sector patents accounted for 2.5 percent of these sales, while drugs whose applications cited federally funded research and development or government publications accounted for 27 percent.”
The NIH plays a vital role in basic research and early discovery, but is robbing Productive Peter to pay Government Paul the best bang for the buck when it comes to advancing public health? The answer is a clear "no."
Per the US Chamber report, “Incredible innovative treatments are currently on the market to treat Type 2 diabetes, one of the most serious chronic conditions, which impacts an estimated 35 million Americans. But contrary to what some critics may say, America’s innovative life science companies are advancing diabetes care by developing more effective treatments to help people better manage their condition so that they don’t develop serious complications, including damage to the heart, blood vessels, eyes, kidneys, and nerves.”
Further, “Effective glucose and weight management are key aspects of diabetes care, but only 50% of people with diabetes in the United States achieve their glucose level goals (measured by the HbA1c test). Glucagon-like peptide 1 drugs (GLP-1) have been proven to reduce a person’s A1c by approximately .8 to 1.6%. This is a tremendous innovation for an unpredictable disease that can cause complications like amputations, heart failure, gum disease, and vision loss. “
Diabetes has a major impact on national economies by reducing productivity and life expectancy while increasing disability and health care costs. People with diagnosed diabetes now account for one of every four health care dollars spent in the U.S.
The Economic Report, which is published every five years by the American Diabetes Association, found that the total annual cost of diabetes in 2022 was $412.9 billion, including $306.6 billion in direct medical costs and $106.3 billion in indirect costs.
The Chamber calls it like it is. “Unfortunately, just as millions of Americans are benefiting from these lifesaving and life-altering diabetic treatments, some members of Congress and activist groups are pushing price control policies that will kill future life-science innovation and undermine the ability of patients to access the newest treatments and cures.”
Research from the Chamber shows that in countries with strict price control regimes, patients receive access to fewer cures and have longer wait times than their peers in free market and free enterprise systems like the United States. For the millions of American patients with diabetes, the idea of waiting longer for fewer cures and treatments is simply unacceptable.
The government should get out of the way and let the market drive innovation, to add the fuel of interest to the fire of genius Doing so will not only lead to the newest generation of treatments and cures but will also lead to more options and choices, improving therapeutic outcomes, and lowering costs for patients and taxpayers.
Somewhere Bernie Sanders is smiling.
But he shouldn’t be.
A recent study (published in JAMA) found that "estimated cost-based prices" for a range of common diabetes drugs were "substantially lower than current market prices" -- and not just in developed countries like the United States, but also in developing ones like India and Bangladesh.
This finding, while technically true, is worse than uninformative. It is misinformative.
One doesn't need a PhD in economics to understand why the literal cost of manufacturing an already invented medicine is low -- or why it's irrelevant to the medication's much higher development costs and risk premium necessary to incentivize development in the first place. By the authors' logic, the price of a Microsoft Office subscription ought to be a nickel annually (instead of $150) because the software code already exists and the prorated electricity cost for cloud computing is minimal.
The authors further suggest that "robust generic and biosimilar competition could reduce prices" -- and that such competition could be facilitated by "a range of policy tools" including "price controls," "compulsory licensing," and a general weakening of intellectual property protections.
Given that the study finds that prices are supposedly unjustifiably high even developing countries with comparative weak IP protections and mandated price controls, the authors are implicitly endorsing a global IP and price control regime that's more aggressive than even India's and South Africa's.
That would eliminate any incentive to ever invest in developing a new drug again. Wiping out the global drug industry is hardly a good way to "enable expansion of diabetes treatment globally."
And, jeez – sloppy peer review!
But he shouldn’t be.
A recent study (published in JAMA) found that "estimated cost-based prices" for a range of common diabetes drugs were "substantially lower than current market prices" -- and not just in developed countries like the United States, but also in developing ones like India and Bangladesh.
This finding, while technically true, is worse than uninformative. It is misinformative.
One doesn't need a PhD in economics to understand why the literal cost of manufacturing an already invented medicine is low -- or why it's irrelevant to the medication's much higher development costs and risk premium necessary to incentivize development in the first place. By the authors' logic, the price of a Microsoft Office subscription ought to be a nickel annually (instead of $150) because the software code already exists and the prorated electricity cost for cloud computing is minimal.
The authors further suggest that "robust generic and biosimilar competition could reduce prices" -- and that such competition could be facilitated by "a range of policy tools" including "price controls," "compulsory licensing," and a general weakening of intellectual property protections.
Given that the study finds that prices are supposedly unjustifiably high even developing countries with comparative weak IP protections and mandated price controls, the authors are implicitly endorsing a global IP and price control regime that's more aggressive than even India's and South Africa's.
That would eliminate any incentive to ever invest in developing a new drug again. Wiping out the global drug industry is hardly a good way to "enable expansion of diabetes treatment globally."
And, jeez – sloppy peer review!
Excellent piece by Ed Silverman (as always) on the increased usage of Hyrimoz. A few issues that need to be discussed in greater detail: (1) Does this bring us back to the discussion of "biobetters?" If so, should we differentiate between de novo patients and those already on treatment? (2) Will we only see an uptick in biosimilar prescriptions if PBMs can aggressively monitize them? What about putting patients first and not disintermediating healthcare providers? (3) Why is the FDA changing course on its interchangeability guidences AFTER President Biden called for such a course change? Whether or not the science supports such a move, the optics stink of political interference. Asking for a friend. #anotherfdaprocessfoul
Today the New York Times ran a few letters-to-the-editor on it's op-ed on Ozempic and the costs and benefits of GLP-1 agonists. Mine didn't make the cut this time -- but here it is for your consideration:
To the Editor:
Per Ozempic Could Threaten the Federal Budget (NYT, 3/7/24), the authors are talking about the costs while remaining selectively silent on the benefits. According to a new article in the New England Journal of Medicine, if 10% of Medicare beneficiaries with obesity used a GLP-1 receptor agonist, the annual cost to Medicare could be as much as $26.8 billion. In 2023, according to the U.S. Joint Economic Committee, obesity caused $5,155 in average excess medical costs per Medicare patient diagnosed as obese. That’s $520 billion in preventable health care costs — an impressive return on investment. New, better medications are the best and swiftest way for this country to cut down on our health care expenses. And appropriate reimbursement stimulates competition – which drives down prices. When it comes to measuring value, we must embrace a comprehensive view of cost and benefit. Choosing only to only discuss costs without context is dishonest and deleterious to public health.
Peter J. Pitts
Pitts, a former FDA Associate Commissioner, is President of the Center for Medicine in the Public Interest.
Believe it or not, and despite what you’re hearing, when it comes to addressing the American epidemic of obesity, there is no magic pill. The good news, however, is that for the first time, there are new medicines that seem to be magic — because they work.
The new group of medicines called GLP-1 receptor agonists are headline news. Why? Because they are more effective than any previous class of drugs in getting patients to lose weight and, equally important (and in combination with diet and exercise), keep it off. Initially approved by the Food and Drug Administration for patients with diabetes, they have become so popular among people who want to lose weight that the companies that manufacture them can’t keep up with demand.
And many insurance providers (most notably Uncle Sam) are worried that helping America successfully combat obesity will break the national health care piggy bank. Nothing could be more incorrect and shortsighted. Let’s make one thing crystal clear — helping America slim down must be a national priority lest we allow obesity and the diseases that often come with it (heart disease, stroke, diabetes, osteoarthritis, and some cancers, to name a few) to bury us both financially and literally.
Obesity affects 44% of American adults. According to a new article in the New England Journal of Medicine, if 10% of Medicare beneficiaries with obesity used a GLP-1 receptor agonist, the annual cost to Medicare could be as much as $26.8 billion. But payers are talking about the costs while remaining silent on the benefits. In 2023, according to the U.S. Joint Economic Committee, obesity caused $5,155 in average excess medical costs per person diagnosed as obese. That’s $520 billion in preventable health care costs — an impressive return on investment.
New, better medications are the best and swiftest way for this country to cut down on our health care expenses. By more effectively combating disease and improving patients’ lives, drugs reduce long-term medical costs and bolster the overall economy. But as they say in our nation’s capital, where you stand depends on where you sit.
When payers (most notably Medicare) look at GLP-1 receptor agonists, they see only the cost. That’s like the FDA reviewing risks while ignoring benefits when considering new medicines. It has to be about value. And when it comes to measuring value, we must embrace a comprehensive view of cost and benefit. Regarding GLP-1 receptor agonists, the proper denominator isn’t cost; it’s value. Choosing only to only discuss costs without context is dishonest and deleterious to public health.
Kudos, therefore, to Rep. Mike Burgess, Texas Republican and a physician himself, who has introduced the Preventive Health Savings Act, which would permit Congress to ask the Congressional Budget Office to provide estimates on long-term health savings made possible from preventive health initiatives, such as significant reductions in our national obesity rate.
This is especially important because obesity rates are higher for lower-income people and in communities of color. Minus a more comprehensive view of costs and benefits relative to new medical technologies such as GLP-1 receptor agonists, we are redlining these populations out of safe and effective treatment options. That’s the opposite of health equity.
Focusing on short-term costs while ignoring long-term benefits (to patients and our national treasury) is ignoring reality. It’s worth remembering the wise words of President John Adams, who said, “Facts are stubborn things.”
The new group of medicines called GLP-1 receptor agonists are headline news. Why? Because they are more effective than any previous class of drugs in getting patients to lose weight and, equally important (and in combination with diet and exercise), keep it off. Initially approved by the Food and Drug Administration for patients with diabetes, they have become so popular among people who want to lose weight that the companies that manufacture them can’t keep up with demand.
And many insurance providers (most notably Uncle Sam) are worried that helping America successfully combat obesity will break the national health care piggy bank. Nothing could be more incorrect and shortsighted. Let’s make one thing crystal clear — helping America slim down must be a national priority lest we allow obesity and the diseases that often come with it (heart disease, stroke, diabetes, osteoarthritis, and some cancers, to name a few) to bury us both financially and literally.
Obesity affects 44% of American adults. According to a new article in the New England Journal of Medicine, if 10% of Medicare beneficiaries with obesity used a GLP-1 receptor agonist, the annual cost to Medicare could be as much as $26.8 billion. But payers are talking about the costs while remaining silent on the benefits. In 2023, according to the U.S. Joint Economic Committee, obesity caused $5,155 in average excess medical costs per person diagnosed as obese. That’s $520 billion in preventable health care costs — an impressive return on investment.
New, better medications are the best and swiftest way for this country to cut down on our health care expenses. By more effectively combating disease and improving patients’ lives, drugs reduce long-term medical costs and bolster the overall economy. But as they say in our nation’s capital, where you stand depends on where you sit.
When payers (most notably Medicare) look at GLP-1 receptor agonists, they see only the cost. That’s like the FDA reviewing risks while ignoring benefits when considering new medicines. It has to be about value. And when it comes to measuring value, we must embrace a comprehensive view of cost and benefit. Regarding GLP-1 receptor agonists, the proper denominator isn’t cost; it’s value. Choosing only to only discuss costs without context is dishonest and deleterious to public health.
Kudos, therefore, to Rep. Mike Burgess, Texas Republican and a physician himself, who has introduced the Preventive Health Savings Act, which would permit Congress to ask the Congressional Budget Office to provide estimates on long-term health savings made possible from preventive health initiatives, such as significant reductions in our national obesity rate.
This is especially important because obesity rates are higher for lower-income people and in communities of color. Minus a more comprehensive view of costs and benefits relative to new medical technologies such as GLP-1 receptor agonists, we are redlining these populations out of safe and effective treatment options. That’s the opposite of health equity.
Focusing on short-term costs while ignoring long-term benefits (to patients and our national treasury) is ignoring reality. It’s worth remembering the wise words of President John Adams, who said, “Facts are stubborn things.”
When it comes to 21st-century medical progress are the Centers for Medicare and Medicaid Services (CMS) an accelerator or anchor for innovation? If the former, how can it do even better? If the latter, how big of a sea change is required?
Blaming CMS for every setback, frustration, or failure is neither factual nor helpful in working across the health care ecosystem to find new attitudes and pathways that can shine light on and address healthcare reimbursement roadblocks. However, for CMS to do a better job, we must advance the public health together as allies rather than adversaries. Don’t fix the blame, fix the problem.
Problem #1 is regulatory ambiguity. As with many other areas of government policy, peculiar bureaucratic intervention and lack of clarity are causing harm to the entire healthcare ecosystem. Nowhere is this more evident than in the world of therapeutic use of tissue allografts – an exciting and evolving arena of 21st century medicine and one of the many areas of medical products regulated by the FDA. And, as with many other areas of the agency’s jurisdiction, peculiar bureaucratic intervention and lack of clarity are causing harm to patients and costing American jobs. To phrase it less politely, this small case is about a big issue -- whether it’s acceptable for the federal regulation of healthcare in America to be arbitrary and capricious.
The bad news is that, in a recent test case of the powers of the Chevron Deference Doctrine, the United States Court of Appeals for the District of Columbia Circuit thinks otherwise. In its February 14, 2024 decision in the case of Row 1 Inc. D/B/A Regenative Labs v. Xavier Becerra, Secretary of Health and Human Services, the Court affirmed dismissal of Regenative’s case against CMS.
This may seem like a small case of bureaucratic lassitude at best or over-reach at worst. It’s not. This small case is about a big issue -- whether it’s acceptable for the federal regulation of healthcare in America to be arbitrary and capricious where substantive actions are taken sub rosa rather than in view of the public eye, as Congress requires.
The particulars of the case are very geeky. (All the details can be found in the Appellant brief and this recording of the oral arguments held on October 6, 2023.) The gist of the case is that CMS decided Uncle Sam wasn’t going to pay for a certain class of products, which includes Wharton's Jelly Tissue Allografts (human connective tissue used to repair, replace, or supplement missing, damaged, or non-properly functioning tissues, manufactured by Regenative Labs). The Court agrees. The Court is wrong and Regenative is considering petitioning for certiorari to the Supreme Court.
Why? Because CMS must use various on-the-books rules and guidances promulgated by the Food and Drug Administration. (“Promulgated,” is another one of those $50 words. It means, “formal proclamation or the declaration that a new statutory or administrative law is enacted after its final approval.”). The reason this is important, is that we’re not talking about vague or unwritten regulatory practice. We’re talking about what’s already on the books – literally the letter of the law. And feigning ignorance of the rules does not provide an excuse.
CMS’ approach in the Regenative case seeks to avoid any review at all and creates a two-tiered health system where people with money pay cash and get access to interventions that can help address serious and painful problems while Medicare patients suffer the consequences of arbitrary and capricious decisions by nameless, faceless government bureaucrats. Such behavior must not stand and Regenative should continue to stand up against agency overreach and denial of due process.
Advancing healthcare reimbursement policies through less formal and more regular conversations requires not fewer rules but new ones. And those rules must equally apply to everyone. New approaches require well-considered rules because, as Victor Hugo reminds us, “Where the disposal of time is surrendered merely to the chance of incidence, chaos will soon reign.” And, for patients, it’s a reign of terror.
Blaming CMS for every setback, frustration, or failure is neither factual nor helpful in working across the health care ecosystem to find new attitudes and pathways that can shine light on and address healthcare reimbursement roadblocks. However, for CMS to do a better job, we must advance the public health together as allies rather than adversaries. Don’t fix the blame, fix the problem.
Problem #1 is regulatory ambiguity. As with many other areas of government policy, peculiar bureaucratic intervention and lack of clarity are causing harm to the entire healthcare ecosystem. Nowhere is this more evident than in the world of therapeutic use of tissue allografts – an exciting and evolving arena of 21st century medicine and one of the many areas of medical products regulated by the FDA. And, as with many other areas of the agency’s jurisdiction, peculiar bureaucratic intervention and lack of clarity are causing harm to patients and costing American jobs. To phrase it less politely, this small case is about a big issue -- whether it’s acceptable for the federal regulation of healthcare in America to be arbitrary and capricious.
The bad news is that, in a recent test case of the powers of the Chevron Deference Doctrine, the United States Court of Appeals for the District of Columbia Circuit thinks otherwise. In its February 14, 2024 decision in the case of Row 1 Inc. D/B/A Regenative Labs v. Xavier Becerra, Secretary of Health and Human Services, the Court affirmed dismissal of Regenative’s case against CMS.
This may seem like a small case of bureaucratic lassitude at best or over-reach at worst. It’s not. This small case is about a big issue -- whether it’s acceptable for the federal regulation of healthcare in America to be arbitrary and capricious where substantive actions are taken sub rosa rather than in view of the public eye, as Congress requires.
The particulars of the case are very geeky. (All the details can be found in the Appellant brief and this recording of the oral arguments held on October 6, 2023.) The gist of the case is that CMS decided Uncle Sam wasn’t going to pay for a certain class of products, which includes Wharton's Jelly Tissue Allografts (human connective tissue used to repair, replace, or supplement missing, damaged, or non-properly functioning tissues, manufactured by Regenative Labs). The Court agrees. The Court is wrong and Regenative is considering petitioning for certiorari to the Supreme Court.
Why? Because CMS must use various on-the-books rules and guidances promulgated by the Food and Drug Administration. (“Promulgated,” is another one of those $50 words. It means, “formal proclamation or the declaration that a new statutory or administrative law is enacted after its final approval.”). The reason this is important, is that we’re not talking about vague or unwritten regulatory practice. We’re talking about what’s already on the books – literally the letter of the law. And feigning ignorance of the rules does not provide an excuse.
CMS’ approach in the Regenative case seeks to avoid any review at all and creates a two-tiered health system where people with money pay cash and get access to interventions that can help address serious and painful problems while Medicare patients suffer the consequences of arbitrary and capricious decisions by nameless, faceless government bureaucrats. Such behavior must not stand and Regenative should continue to stand up against agency overreach and denial of due process.
Advancing healthcare reimbursement policies through less formal and more regular conversations requires not fewer rules but new ones. And those rules must equally apply to everyone. New approaches require well-considered rules because, as Victor Hugo reminds us, “Where the disposal of time is surrendered merely to the chance of incidence, chaos will soon reign.” And, for patients, it’s a reign of terror.
Back in March, the U.S. Department of Health and Human Services (HHS) and the Department of Commerce (DOC) announced efforts to pursue a whole-of-government approach to review its march-in authority as laid out in the Bayh-Dole Act, which promotes commercialization of research results, maximizes the potential for federally-funded technologies to become products, and serves the broader interest of the American public. HHS created and empowered a new interagency Working Group to develop a framework for implementation of the march-in provision that clearly articulates guiding criteria and processes for making determinations where different factors, including price, may be a consideration in agencies’ assessments.
Yes, you read that right – price -- and now it’s more than a maybe.
According to “unnamed sources” (as reported by Politico), “The Biden administration has determined that it has the authority to seize the patents of certain high-priced medicines, a move that could open the door to a more aggressive federal campaign to slash drug prices.”
The problem, the Bayh/Dole Act doesn’t consider price in its legislative intent for Federal march-in rights. And wishing it were so doesn’t make it so.
Ready for a Christmas surprise? The Commerce Department plans to issue a new framework spelling out factors that federal agencies should weigh in determining whether to take march-in action against expensive drugs or other individual products that were created with federal help. The price and availability of that product to the public are among the factors the department will recommend that agencies consider.
The White House has scrambled to highlight Biden's health accomplishments in recent days, after former President Donald Trump suggested he would repeal and replace the Affordable Care Act if elected in 2024.
Per Politico, “The Commerce Department and Department of Health and Human Services were already expected to issue their determination on the government's march-in authority in the coming weeks, the people familiar with the matter said. But the announcement was accelerated in the wake of Trump's comments, and officials are expected to cite it as evidence that Biden continues to search for new ways to lower prices.”
Just like the IRA’s price control codicils, this ill-considered effort will put another chill on drug development from those who really drive innovation – the biopharmaceutical industry. Will there be lawsuits arguing this federal power grab? Undoubtedly.
Alas, headlines for hyped and misleading “NIH-funded cures” are far sexier than those for “more money for drug regulation.” Pursuing misguided policies that siphon funding from the groundbreaking medical research happening in the biopharmaceutical industry will have devastating consequences for patients and society. The Working Group's bad advice would result in fewer medicines for patients and lost jobs at a time when our economy can least afford it.
Watch this space for more as the saga continues.
Yes, you read that right – price -- and now it’s more than a maybe.
According to “unnamed sources” (as reported by Politico), “The Biden administration has determined that it has the authority to seize the patents of certain high-priced medicines, a move that could open the door to a more aggressive federal campaign to slash drug prices.”
The problem, the Bayh/Dole Act doesn’t consider price in its legislative intent for Federal march-in rights. And wishing it were so doesn’t make it so.
Ready for a Christmas surprise? The Commerce Department plans to issue a new framework spelling out factors that federal agencies should weigh in determining whether to take march-in action against expensive drugs or other individual products that were created with federal help. The price and availability of that product to the public are among the factors the department will recommend that agencies consider.
The White House has scrambled to highlight Biden's health accomplishments in recent days, after former President Donald Trump suggested he would repeal and replace the Affordable Care Act if elected in 2024.
Per Politico, “The Commerce Department and Department of Health and Human Services were already expected to issue their determination on the government's march-in authority in the coming weeks, the people familiar with the matter said. But the announcement was accelerated in the wake of Trump's comments, and officials are expected to cite it as evidence that Biden continues to search for new ways to lower prices.”
Just like the IRA’s price control codicils, this ill-considered effort will put another chill on drug development from those who really drive innovation – the biopharmaceutical industry. Will there be lawsuits arguing this federal power grab? Undoubtedly.
Alas, headlines for hyped and misleading “NIH-funded cures” are far sexier than those for “more money for drug regulation.” Pursuing misguided policies that siphon funding from the groundbreaking medical research happening in the biopharmaceutical industry will have devastating consequences for patients and society. The Working Group's bad advice would result in fewer medicines for patients and lost jobs at a time when our economy can least afford it.
Watch this space for more as the saga continues.
Per reporting in Endpoints News, Medicare beneficiaries paid four times more for prescription drugs than their plan sponsors did in 2021, according to a Government Accountability Office (GAO) report on Medicare Part D drugs.
According to the report, beneficiaries paid $21 billion for prescription drugs in 2021, while plan sponsors only paid about $5.3 billion, according to the study of 79 of the 100 Part D drugs with the most rebates.
The GAO recommends that moving forward, CMS should monitor rebate information to help the agency and Congress determine their impact on formularies and Medicare enrollment.
Plan sponsors raked in $48.6 billion in rebates from manufacturers in 2021, with endocrine metabolic agents, blood modifiers and respiratory agents accounting for about three-fourths of rebates.
GAO explained that across the board, rebates can reduce plan sponsor payments on drugs with a higher gross cost to less than a lower-cost competing drug. This can lower Medicare drug spending since plan sponsor payments are tied to drug costs after rebates.
“However, rebates do not lower individual beneficiary payments for drugs, as these are based on the gross cost of the drug before accounting for rebates,” GAO said. “Thus drugs with higher gross costs generally result in higher beneficiary payments relative to payments for competing drugs with lower gross costs.”
CMS told GAO that evaluating rebate information isn’t necessary because of the agency’s formulary review and noted that CMS is prohibited from interfering with manufacturer and plan sponsor negotiations.
But GAO pushed back on CMS’ explanation, arguing that monitoring rebate information wouldn’t interfere with those negotiations.
“Such monitoring of rebates will be particularly important as the agency implements the provisions of the Inflation Reduction Act of 2022, which will change Part D plan sponsor, beneficiary, and Medicare drug spending responsibility and may affect formulary design and rebates,” GAO said.
According to the report, beneficiaries paid $21 billion for prescription drugs in 2021, while plan sponsors only paid about $5.3 billion, according to the study of 79 of the 100 Part D drugs with the most rebates.
The GAO recommends that moving forward, CMS should monitor rebate information to help the agency and Congress determine their impact on formularies and Medicare enrollment.
Plan sponsors raked in $48.6 billion in rebates from manufacturers in 2021, with endocrine metabolic agents, blood modifiers and respiratory agents accounting for about three-fourths of rebates.
GAO explained that across the board, rebates can reduce plan sponsor payments on drugs with a higher gross cost to less than a lower-cost competing drug. This can lower Medicare drug spending since plan sponsor payments are tied to drug costs after rebates.
“However, rebates do not lower individual beneficiary payments for drugs, as these are based on the gross cost of the drug before accounting for rebates,” GAO said. “Thus drugs with higher gross costs generally result in higher beneficiary payments relative to payments for competing drugs with lower gross costs.”
CMS told GAO that evaluating rebate information isn’t necessary because of the agency’s formulary review and noted that CMS is prohibited from interfering with manufacturer and plan sponsor negotiations.
But GAO pushed back on CMS’ explanation, arguing that monitoring rebate information wouldn’t interfere with those negotiations.
“Such monitoring of rebates will be particularly important as the agency implements the provisions of the Inflation Reduction Act of 2022, which will change Part D plan sponsor, beneficiary, and Medicare drug spending responsibility and may affect formulary design and rebates,” GAO said.
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.
