Latest Drugwonks' Blog
Cary Gross and Abbe Gluck of Yale University get the Billy Madison award for the most incoherent and idiotic article about drug pricing. The piece: Soaring Cost of Cancer Treatment: Moving Beyond Sticker Shock published in the Journal of Clinical Oncology). There was a lot of competition but the authors managed to synthesize every pedestrian and inchoate assault on drug companies into an editorial that took the genre (if I can use this word without disparaging real scholarship) to a new level.
The failing heart of the article, entitled can be obtained by reading one paragraph: ( I am sparing you the painful waste of time required to slog through the entire article and endure the smell of decomposing bromides)
“We know that the cost of cancer drugs has increased dramatically, even though most drugs are brought into the market without compelling evidence that they prolong survival or improve quality of life. We know that these high costs render state-of-the-art cancer treatment unaffordable to patients without insurance and even to some patients with insurance. Furthermore, financial distress associated with paying for cancer treatment is common and is associated with stress, decreased adherence, bankruptcy, and worse outcomes. Finally, we know that the cost of new drugs is not well correlated with their effectiveness, nor with the presence of competing products.”
The authors then conclude that price controls and stricter formularies are the only way to control prices and help patients.
I won’t take on every citation Gross and Gluck (Gross-Gluck sounds like a Borscht Belt act) use to assert perfect knowledge about the havoc price increases have had on society. It is enough to say that once again, they all are written by people on the Arnold Foundation payroll. Or maybe not. As I and Peter Pitts pointed out, the most prolific of the paid hacks, Vinay Prasad, had an article published that was brazenly misleading and inaccurate. (Shame on the medical journals that continue to publish any anti-pharma crap if it fits the narrative.)
So here is my fact-based response to the fictional claims to support government regulation of access to new medicines.
1. As the number (and price) of targeted treatments have increased the percent of health care dollars devoted to cancer spending has remained at 4.6 percent. How? New cancer drugs reduce spending on more expensive medical services. In 2001, 64 percent of cancer care went to hospitals and only 3.6 percent to drugs. By 2016 drug spending ‘skyrocketed’ to about 25 percent of cancer costs but hospitalizations dropped to 38 percent of care. That’s why a government study concluded, “The net value of (cancer) treatment has grown substantially, consistent with medical technology improving over time and leading to better health outcomes at a lower cost per patient.” All these benefits have been generated by new medicines that are only .7 percent of health spending. This relationship – newer, initially expensive medicines (that go generic by the way) reducing the cost of care by letting people live longer and eliminating the need for other medicines -- has held up for nearly half a century.
2. GrossGluck enable the PBM payoff racket by remaining silent on the role PBMs and insurers play in setting cost-sharing levels.
As scientists find the shut-off switch for specific cancer-causing genes, they can make pills that go after cancer cells and block the specific biological mechanisms that produce them. These pills are not only less toxic than conventional IV chemotherapy; they've turned once-incurable cancers such a myeloma, breast cancer, and even pancreatic cancer into manageable diseases. They reduce the cost of cancer care over time but PBMs and insurers have responded by making these medicines more expensive and shifting patients to drugs that pay the most rebates.
Sadly, several studies show, 25 percent of patients don't even fill their initial prescriptions for cancer pills when the co-pays exceed $500. Even more will stop or interrupt treatment. Neither Medicare nor private health insurers are closing the gap between coverage and innovation. Instead, a survey of plans conducted by the Zitter Group found that insurers "recognize that oral therapy cost-sharing requirements actively encourage patients to use infusible products.
A Milliman study found that shifting to co-insurance would only add about $2 per member per month in private health plans. GrossGluck never discuss this solution. Instead, they remain true to the Arnold Foundation edict to give PBMs a pass. By the way, neither has advocated for co-pay reforms that could relieve the burden on patients.
3. They ignore the impact of government price controls on access and innovation. But then again, those with perfect knowledge trust themselves to makes decisions on behalf of everyone else. They don’t mention the National Institute for Health and Clinical Excellence or NICE but they see it as a model for how experts would set prices and determine access for everyone.
So, it is useful to know that NICE has turned down more new cancer drugs than other countries, even in Europe. Hence, 5-year survival rates for all cancers are lower in the UK than in any other European country. It’s mortality rates for many cancers, including breast, prostate, kidney, and others are higher. A study published in Lancet Oncology on cancer survival rates in Europe found.
“Cancer survival rates in Britain still lag well behind many other European countries, a study shows. Survival rates for nine out of ten common cancers are lower than the European average, despite improvements in diagnosis and treatment.
And the discrepancy is even worse among elderly sufferers. Patients with nearly all forms of the disease are more likely to die in Britain compared with patients in France, Germany, Spain, and Scandinavia.
For breast cancer, it found that British women have a 79 percent chance of surviving five years, compared with 86 percent in France, 87 percent in Finland, 85 percent in Norway and 82 percent on average.
Only 9 per cent of lung cancer patients in the UK live beyond five years, compared with the 13 per cent average, 17 per cent in Austria and 15 per cent in Sweden.
For prostate cancer, just under 81 percent of patients in Britain live beyond five years. The rate is 90 percent in Finland and 89 percent in France. Around 68 per cent of over-75s with breast cancer survive beyond five years, compared with 75 percent across Europe. About 45 percent of men over 85 with prostate cancer live for at least five years. The average is 58 percent.”
The only evidence they cite for the effectiveness of their approach is the now old case of Peter Bach claiming he saved patients money by refusing to add Zaltrap to the formulary.
(Indeed, it is ironic that Bach became crypto famous by getting Sanofi to cut the price of a cancer drug by 50 percent and writing about it in a New York Times op-ed piece. )
The duo asserted that they wouldn’t prescribe the drug because it cost twice as much as Genentech’s Avastin (bevacizumab), a competing biologic drug with similar expected clinical outcomes for colorectal cancer patients. In response, Sanofi said they would reduce the price of the drug by 50 percent. In fact, doctors and prescribing hospitals benefited hugely from Sanofi’s pricing move, while payers and patients did not. Zaltrap was sold in a dose twice as large as Avastin, thus the price discrepancy. Further, Sanofi didn’t cut the price of Zaltrap; it gave Memorial Sloan a 50 percent rebate. The price charged to patients remained the same. Which meant that MSKCC raked in even more dough. As an article in Health Affairs noted at the time, “Meanwhile, in the near term, physicians and hospitals will likely enjoy additional revenue opportunities from ziv-aflibercept use. the spread may be considerable: equal to $250 per treatment dose (insurer + patient reimbursement ($750) – discounted acquisition cost ($500)) and for 340B eligible purchases, $450 per treatment dose (insurer + patient reimbursement ($750) – discounted acquisition cost ($300)). Additional revenues may incentivize physicians and hospitals to favor ziv-aflibercept over bevacizumab to treat colorectal cancer among Medicare-eligible patients, despite the treatments having equivalent expected clinical outcomes. The strength of the incentive is based on comparing the magnitude of the spread obtained with the use of Zaltrap to that obtained with Avastin."
For this half-baked convoluted diatribe, GrossGluck get the Billy Madison award:
Principal: Mr. Madison, what you’ve just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points and may G-d have mercy on your soul.
Good news! The FDA is interested in using opioid labels to mandate packaging standards, as well as offer claims similar to those available for abuse deterrent products.
Per Commissioner Scott Gottlieb, labeling claims describing the benefits of packaging could be connected to agency efforts to work with medical societies to create better opioid prescribing guidelines.
Package design "opens up certain possibilities about how we drive more appropriate prescribing," Gottlieb said at the beginning of a two-day meeting on opioid packaging, storage and disposal options to enhance safety. "Could we, for example, require that the immediate-release drugs be packaged in units that comport with the majority of these consensus durations?"
Stand by.
Per Commissioner Scott Gottlieb, labeling claims describing the benefits of packaging could be connected to agency efforts to work with medical societies to create better opioid prescribing guidelines.
Package design "opens up certain possibilities about how we drive more appropriate prescribing," Gottlieb said at the beginning of a two-day meeting on opioid packaging, storage and disposal options to enhance safety. "Could we, for example, require that the immediate-release drugs be packaged in units that comport with the majority of these consensus durations?"
Stand by.
From the page of STAT News …
Gottlieb signals support for both ‘gold standard’ and expedited review for drug approvals
By Meghana Keshavan @megkesh
November 30, 2017
Regulatory standards for some clinical trials may soon slacken, per a new statement from Food and Drug Administration Commissioner Scott Gottlieb. And though his words are vague, they’ve been enough to raise red flags in some corners.
Testifying today before a Congressional committee on the 21st Century Cures Act, Gottlieb sent a mixed message: He wants the agency to “remain steadfast to our gold standard for safety and efficacy,” while making the development of breakthrough products “more scientifically modern and efficient, to meet the urgent needs of patients.”
Gottlieb said that in some cases, “when there’s a clear and outsized treatment effect,” a cancer drug might get expedited approval — and its efficacy will be evaluated only in postmarket studies.
The agency said it intends to release a document soon that will outline how it plans to expand on the Cures Act.
The term “gold standard” has historically referred to rigorous randomized controlled clinical trials. But this form of drug evaluation is onerous and costly — and many argue that it prevents promising experimental medicines from reaching patients quickly enough. The 21st Century Cures Act was devised, in part, to speed up that process — granting the agency $500 million over the course of a decade to work out the intricacies. And President Trump has spoken of hastening drug approvals.
Still, this gold standard is what keeps ineffective, or even dangerous, drugs away from patients. And there isn’t much evidence that speeding along approvals will bring better results to patients. A recent BMJ study, for instance, found that more than half of all new cancer drugs “show no benefits” for either survival or quality of life.
A big sticking point with Gottlieb’s apparent approach is that small clinical trials simply don’t offer enough meaningful data.
“Empirical evidence suggests that the findings from individual trials may be spurious,” said Joshua Wallach, a research fellow at Yale’s Collaboration for Research Integrity and Transparency. He added, as additional studies are performed, the effects observed in small, early stage trials often attenuate — and can even be invalidated.
“With cancer drugs, the patients in these small trials have been so carefully selected, they will do well whether you give them a good new drug or sugar water,” said Dr. Vinay Prasad, an oncologist at Oregon Health & Sciences University.
Meanwhile, the current system for monitoring postmarket drug efficacy remains highly flawed, according to a 2016 report from the Office of Inspector General. Since it’s harder to track a drug’s efficacy in the real world, which functions rather differently than a controlled trial, FDA already has issues with data management and workflow, the report concluded. As a result, many of these studies aren’t completed on time — or even at all, according to an August study in the New England Journal of Medicine.
The concern is that the agency is not equipped to handle a new influx of postmarket data — and much could slip through the cracks. It’ll take substantial investment to help plug those holes and create a smart system for postmarket analysis, Wallach said.
“FDA understands that different products need different regulatory pathways, from both a science and a patient-need perspective,” said Peter Pitts, president of the nonprofit Center for Medicine in the Public Interest.
Gottlieb signals support for both ‘gold standard’ and expedited review for drug approvals
By Meghana Keshavan @megkesh
November 30, 2017
Regulatory standards for some clinical trials may soon slacken, per a new statement from Food and Drug Administration Commissioner Scott Gottlieb. And though his words are vague, they’ve been enough to raise red flags in some corners.
Testifying today before a Congressional committee on the 21st Century Cures Act, Gottlieb sent a mixed message: He wants the agency to “remain steadfast to our gold standard for safety and efficacy,” while making the development of breakthrough products “more scientifically modern and efficient, to meet the urgent needs of patients.”
Gottlieb said that in some cases, “when there’s a clear and outsized treatment effect,” a cancer drug might get expedited approval — and its efficacy will be evaluated only in postmarket studies.
The agency said it intends to release a document soon that will outline how it plans to expand on the Cures Act.
The term “gold standard” has historically referred to rigorous randomized controlled clinical trials. But this form of drug evaluation is onerous and costly — and many argue that it prevents promising experimental medicines from reaching patients quickly enough. The 21st Century Cures Act was devised, in part, to speed up that process — granting the agency $500 million over the course of a decade to work out the intricacies. And President Trump has spoken of hastening drug approvals.
Still, this gold standard is what keeps ineffective, or even dangerous, drugs away from patients. And there isn’t much evidence that speeding along approvals will bring better results to patients. A recent BMJ study, for instance, found that more than half of all new cancer drugs “show no benefits” for either survival or quality of life.
A big sticking point with Gottlieb’s apparent approach is that small clinical trials simply don’t offer enough meaningful data.
“Empirical evidence suggests that the findings from individual trials may be spurious,” said Joshua Wallach, a research fellow at Yale’s Collaboration for Research Integrity and Transparency. He added, as additional studies are performed, the effects observed in small, early stage trials often attenuate — and can even be invalidated.
“With cancer drugs, the patients in these small trials have been so carefully selected, they will do well whether you give them a good new drug or sugar water,” said Dr. Vinay Prasad, an oncologist at Oregon Health & Sciences University.
Meanwhile, the current system for monitoring postmarket drug efficacy remains highly flawed, according to a 2016 report from the Office of Inspector General. Since it’s harder to track a drug’s efficacy in the real world, which functions rather differently than a controlled trial, FDA already has issues with data management and workflow, the report concluded. As a result, many of these studies aren’t completed on time — or even at all, according to an August study in the New England Journal of Medicine.
The concern is that the agency is not equipped to handle a new influx of postmarket data — and much could slip through the cracks. It’ll take substantial investment to help plug those holes and create a smart system for postmarket analysis, Wallach said.
“FDA understands that different products need different regulatory pathways, from both a science and a patient-need perspective,” said Peter Pitts, president of the nonprofit Center for Medicine in the Public Interest.
FDA unveiled a regenerative medicine framework aimed at speeding the development and review of cell and stem cell therapies and tissue-based products, while also cracking down on those that would game the system. The framework, which was outlined in two draft and two final guidances, builds on the agency's previous policy that took effect in 2005.
"Today we’re taking steps to advance an innovative framework for how we intend to apply the existing laws and regulations that govern these products," FDA Commissioner Scott Gottlieb said in a statement. "Our aim is to make sure we’re being nimble and creative when it comes to fostering innovation, while taking steps to protect the safety of patients."
The two final guidances aim to provide clarity on which products are exempt from FDA regulations, and how FDA defines "minimal manipulation" and "homologous use."
The first draft guidance clarifies regulatory pathways for devices used in the recovery, isolation, or delivery of Regenerative Medicine Advanced Therapies (RMAT). In the second draft guidance, FDA explains how it might consider regenerative medicine products for expedited review pathways, including Fast Track, breakthrough therapy and RMAT designations, as well as accelerated approval and Priority Review.
The RMAT designation, which was introduced in December as part of the 21st Century Care Act, applies the principles pioneered in FDA’s breakthrough designation to regenerative therapies including “cell therapy, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products.” In August, Gottlieb announced that FDA will also make some gene therapies eligible for RMAT.
The second draft guidance also proposes the use of "innovative" trial designs, such as basket trials that compare multiple investigational products. Another example is a multi-center trial where individual academic centers use the same manufacturing protocols and share combined trial data to support BLAs from each individual center.
"Our goal is to achieve a risk-based and science-based approach to support innovative product development, while clarifying the FDA’s authorities and enforcement priorities and making sure we are protecting patients," Gottlieb said in his statement.
The second draft guidance also encourages companies to engage with Center for Biologics Evaluation and Research (CBER) review staff during product development. Several companies have voiced concern over the frequency of interaction with FDA, particularly regarding preclinical development of regenerative medicine therapies. In a media briefing Thursday, Peter Marks, director of CBER, said that the guidances aim to address this by providing clarity on “the agency’s interpretation of the regulations.”
FDA did not issue any new warning letters or enforcement actions with the guidances, but said it intends to focus enforcement actions for unlawfully marketed regenerative medicine products on those that pose a higher risk, considering factors such as whether it is for allogeneic use and the route and site of administration. Gottlieb said that providing a clear regulatory framework for developers "gives us the solid platform we need to continue to take enforcement action against a small number of clearly unscrupulous actors."
"Today we’re taking steps to advance an innovative framework for how we intend to apply the existing laws and regulations that govern these products," FDA Commissioner Scott Gottlieb said in a statement. "Our aim is to make sure we’re being nimble and creative when it comes to fostering innovation, while taking steps to protect the safety of patients."
The two final guidances aim to provide clarity on which products are exempt from FDA regulations, and how FDA defines "minimal manipulation" and "homologous use."
The first draft guidance clarifies regulatory pathways for devices used in the recovery, isolation, or delivery of Regenerative Medicine Advanced Therapies (RMAT). In the second draft guidance, FDA explains how it might consider regenerative medicine products for expedited review pathways, including Fast Track, breakthrough therapy and RMAT designations, as well as accelerated approval and Priority Review.
The RMAT designation, which was introduced in December as part of the 21st Century Care Act, applies the principles pioneered in FDA’s breakthrough designation to regenerative therapies including “cell therapy, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products.” In August, Gottlieb announced that FDA will also make some gene therapies eligible for RMAT.
The second draft guidance also proposes the use of "innovative" trial designs, such as basket trials that compare multiple investigational products. Another example is a multi-center trial where individual academic centers use the same manufacturing protocols and share combined trial data to support BLAs from each individual center.
"Our goal is to achieve a risk-based and science-based approach to support innovative product development, while clarifying the FDA’s authorities and enforcement priorities and making sure we are protecting patients," Gottlieb said in his statement.
The second draft guidance also encourages companies to engage with Center for Biologics Evaluation and Research (CBER) review staff during product development. Several companies have voiced concern over the frequency of interaction with FDA, particularly regarding preclinical development of regenerative medicine therapies. In a media briefing Thursday, Peter Marks, director of CBER, said that the guidances aim to address this by providing clarity on “the agency’s interpretation of the regulations.”
FDA did not issue any new warning letters or enforcement actions with the guidances, but said it intends to focus enforcement actions for unlawfully marketed regenerative medicine products on those that pose a higher risk, considering factors such as whether it is for allogeneic use and the route and site of administration. Gottlieb said that providing a clear regulatory framework for developers "gives us the solid platform we need to continue to take enforcement action against a small number of clearly unscrupulous actors."
The Trump administration has received kudos for the appointment (and performance of) CMS Administrator Seema Verna and FDA Commissioner Scott Gottlieb.
Nominating Alex Azar to by HHS Secretary is a trifecta for the agency. The media will make much of his Eli Lilly background. Here we focus on his stellar public service:
"From 2001 until February 3, 2007, Azar worked at the U.S. Department of Health and Human Services, first as the General Counsel of the Department (2001-2005), and then as the Deputy Secretary of Health and Human Services (2005-2007).[8][9] He was twice confirmed unanimously by the U.S. Senate. As Deputy Secretary, Azar worked closely with Secretary Mike Leavitt as the number two official and Chief Operating Officer of the largest civilian department in the federal government, with a budget of $698 billion and more than 66,000 employees reporting up to him.[10]
On behalf of Secretary Mike Leavitt, Azar supervised all operations of HHS, including the regulation of food and drugs, Medicare,Medicaid, medical research, public health, welfare, child and family services, disease prevention, Indian health, mental health services, emergency preparedness and response, and many other activities. Agencies that reported to him included, among others, the Food and Drug Administration, the Centers for Medicare and Medicaid Services, the National Institutes of Health and the Centers for Disease Control and prevention. Azar led the development and approval of all HHS regulations. He was a member of the Deputies Committees of the White House Homeland Security Council, National Economic Council, and Domestic Policy Council, and an ad hoc member of the Deputies Committee of the National Security Council. He also represented the Secretary on the Board of Governors of the American Red Cross and the Board of Trustees of the John F. Kennedy Center for the Performing Arts"
Nominating Alex Azar to by HHS Secretary is a trifecta for the agency. The media will make much of his Eli Lilly background. Here we focus on his stellar public service:
"From 2001 until February 3, 2007, Azar worked at the U.S. Department of Health and Human Services, first as the General Counsel of the Department (2001-2005), and then as the Deputy Secretary of Health and Human Services (2005-2007).[8][9] He was twice confirmed unanimously by the U.S. Senate. As Deputy Secretary, Azar worked closely with Secretary Mike Leavitt as the number two official and Chief Operating Officer of the largest civilian department in the federal government, with a budget of $698 billion and more than 66,000 employees reporting up to him.[10]
On behalf of Secretary Mike Leavitt, Azar supervised all operations of HHS, including the regulation of food and drugs, Medicare,Medicaid, medical research, public health, welfare, child and family services, disease prevention, Indian health, mental health services, emergency preparedness and response, and many other activities. Agencies that reported to him included, among others, the Food and Drug Administration, the Centers for Medicare and Medicaid Services, the National Institutes of Health and the Centers for Disease Control and prevention. Azar led the development and approval of all HHS regulations. He was a member of the Deputies Committees of the White House Homeland Security Council, National Economic Council, and Domestic Policy Council, and an ad hoc member of the Deputies Committee of the National Security Council. He also represented the Secretary on the Board of Governors of the American Red Cross and the Board of Trustees of the John F. Kennedy Center for the Performing Arts"
As recent study by University of North Caroline researcher Stacey Dusetzina and her colleagues found that patients paying the most for their cancer pill prescriptions experienced increases in their monthly out-of-pocket costs. For those whose costs were more expensive than 95 percent of other patients, their out-of-pocket costs increased an estimated $143.25 per month. Those paying more than 90 percent of what other patients paid saw their costs increase by $37.19 per month.
The proportion of medication fills requiring patients to spend more than $100 per month out-of-pocket increased from 8.4 to 11 percent for plans subject to parity laws, while plans outside of the laws saw a slight decline.
Dusetzina said that one issue that may be impacting cost is that the parity laws do not address the affordability of cancer drugs.
Indeed, what good is parity if PBMs and health insurers continue to shift every patient who needs cancer drugs into the co-insurance or highest cost sharing tier?
Adam Fein's analysis of cost shifting underscores why oral parity is being undermined:
"In the charts below, I summarize employers’ 2017 pharmacy benefits by examining (1) cost sharing tier structures, (2) average copayments, by formulary tier, (3) type of cost sharing (coinsurance and copayment), and (4) coinsurance structures. I’ll investigate the growing role of deductibles in a follow-up article.
This year’s results show massive cost-shifting for specialty drugs. For the first time, a majority of plans have four tiers. Economically-debilitating coinsurance—in some cases with no limit on out-of-pocket expenses—is common.
When people complain about “drug costs,” they are actually thinking about the share of costs that they pay. Last week, I highlighted Prime Therapeutics’ data showing very slow growth in post-rebate drug spending. Given the new Kaiser/HRET survey, it looks like patients may not always be getting the benefit of lower costs."
The problem is that much of the price of drugs is being used to subsidize rebates and discounts for PBMs and insurers and the copay assistance required by higher cost sharing. Drug companies are paying rebates and then paying for the markup on the rebated prices at the backend. Where's the incentive to reduce patient costs? Consumerization requires a business model that rewards consumers, instead of exploiting them.
The proportion of medication fills requiring patients to spend more than $100 per month out-of-pocket increased from 8.4 to 11 percent for plans subject to parity laws, while plans outside of the laws saw a slight decline.
Dusetzina said that one issue that may be impacting cost is that the parity laws do not address the affordability of cancer drugs.
Indeed, what good is parity if PBMs and health insurers continue to shift every patient who needs cancer drugs into the co-insurance or highest cost sharing tier?
Adam Fein's analysis of cost shifting underscores why oral parity is being undermined:
"In the charts below, I summarize employers’ 2017 pharmacy benefits by examining (1) cost sharing tier structures, (2) average copayments, by formulary tier, (3) type of cost sharing (coinsurance and copayment), and (4) coinsurance structures. I’ll investigate the growing role of deductibles in a follow-up article.
This year’s results show massive cost-shifting for specialty drugs. For the first time, a majority of plans have four tiers. Economically-debilitating coinsurance—in some cases with no limit on out-of-pocket expenses—is common.
When people complain about “drug costs,” they are actually thinking about the share of costs that they pay. Last week, I highlighted Prime Therapeutics’ data showing very slow growth in post-rebate drug spending. Given the new Kaiser/HRET survey, it looks like patients may not always be getting the benefit of lower costs."
The problem is that much of the price of drugs is being used to subsidize rebates and discounts for PBMs and insurers and the copay assistance required by higher cost sharing. Drug companies are paying rebates and then paying for the markup on the rebated prices at the backend. Where's the incentive to reduce patient costs? Consumerization requires a business model that rewards consumers, instead of exploiting them.
A recent study by University of North Carolina researcher "Stacey Dusetzina and her colleagues found that patients paying the most for their cancer pill prescriptions experienced increases in their monthly out-of-pocket costs. For those whose costs were more expensive than 95 percent of other patients, their out-of-pocket costs increased an estimated $143.25 per month. Those paying more than 90 percent of what other patients paid saw their costs increase by $37.19 per month.
The proportion of medication fills requiring patients to spend more than $100 per month out-of-pocket increased from 8.4 to 11 percent for plans subject to parity laws, while plans outside of the laws saw a slight decline.
Dusetzina said that one issue that may be impacting cost is that the parity laws do not address the affordability of cancer drugs."
Indeed, what good is parity if PBMs and health insurers continue to shift every patient who needs cancer drugs into the co-insurance or highest cost sharing tier?
Adam Fein's analysis of cost shifting underscores why oral parity is being undermined:
"In the charts below, I summarize employers’ 2017 pharmacy benefits by examining (1) cost sharing tier structures, (2) average copayments, by formulary tier, (3) type of cost sharing (coinsurance and copayment), and (4) coinsurance structures. I’ll investigate the growing role of deductibles in a follow-up article.
This year’s results show massive cost-shifting for specialty drugs. For the first time, a majority of plans have four tiers. Economically-debilitating coinsurance—in some cases with no limit on out-of-pocket expenses—is common.
When people complain about “drug costs,” they are actually thinking about the share of costs that they pay. Last week, I highlighted Prime Therapeutics’ data showing very slow growth in post-rebate drug spending. Given the new Kaiser/HRET survey, it looks like patients may not always be getting the benefit of lower costs."
In another blog Fein notes: "For 2017, about 8 out of 10 U.S. workers must meet a general annual deductible before their plan pays for most healthcare services. Prescriptions are typically excluded from the deductible.
However, this year’s survey shows that one-third of workers in high-deductible plans now faces a separate prescription drug deductible. These plans shift 100% of the prescription cost to the patient until the deductible is met.
After reviewing the latest data, I offer some observations on how deductibles are altering the pharmaceutical and pharmacy industries. The bottom line: Patients who must cover the costs of their drugs shop for better deals and cheaper pharmacies. Get ready for the consumerization of the pharmacy industry!"
The problem is that much of the price of drugs is being used to subsidize rebates and discounts for PBMs and insurers and the copay assistance required by higher cost sharing. Drug companies are paying rebates and then paying for the markup on the rebated prices at the backend. Where's the incentive to reduce patient costs? The fact is, even if drug prices were cut, PBMs and insurers would still get their spread and increase cost sharing.
Consumerization requires a model that rewards consumers instead of model screws them. (See below)
The proportion of medication fills requiring patients to spend more than $100 per month out-of-pocket increased from 8.4 to 11 percent for plans subject to parity laws, while plans outside of the laws saw a slight decline.
Dusetzina said that one issue that may be impacting cost is that the parity laws do not address the affordability of cancer drugs."
Indeed, what good is parity if PBMs and health insurers continue to shift every patient who needs cancer drugs into the co-insurance or highest cost sharing tier?
Adam Fein's analysis of cost shifting underscores why oral parity is being undermined:
"In the charts below, I summarize employers’ 2017 pharmacy benefits by examining (1) cost sharing tier structures, (2) average copayments, by formulary tier, (3) type of cost sharing (coinsurance and copayment), and (4) coinsurance structures. I’ll investigate the growing role of deductibles in a follow-up article.
This year’s results show massive cost-shifting for specialty drugs. For the first time, a majority of plans have four tiers. Economically-debilitating coinsurance—in some cases with no limit on out-of-pocket expenses—is common.
When people complain about “drug costs,” they are actually thinking about the share of costs that they pay. Last week, I highlighted Prime Therapeutics’ data showing very slow growth in post-rebate drug spending. Given the new Kaiser/HRET survey, it looks like patients may not always be getting the benefit of lower costs."
In another blog Fein notes: "For 2017, about 8 out of 10 U.S. workers must meet a general annual deductible before their plan pays for most healthcare services. Prescriptions are typically excluded from the deductible.
However, this year’s survey shows that one-third of workers in high-deductible plans now faces a separate prescription drug deductible. These plans shift 100% of the prescription cost to the patient until the deductible is met.
After reviewing the latest data, I offer some observations on how deductibles are altering the pharmaceutical and pharmacy industries. The bottom line: Patients who must cover the costs of their drugs shop for better deals and cheaper pharmacies. Get ready for the consumerization of the pharmacy industry!"
The problem is that much of the price of drugs is being used to subsidize rebates and discounts for PBMs and insurers and the copay assistance required by higher cost sharing. Drug companies are paying rebates and then paying for the markup on the rebated prices at the backend. Where's the incentive to reduce patient costs? The fact is, even if drug prices were cut, PBMs and insurers would still get their spread and increase cost sharing.
Consumerization requires a model that rewards consumers instead of model screws them. (See below)
FDA Commissioner Scott Gottlieb Wednesday called on branded drug companies to “end the shenanigans” they use to block generic competition, and announced new steps to rein in some anticompetitive practices.
Speaking at a Federal Trade Commission meeting on competition in prescription drug markets, Gottlieb noted that drug companies sometimes prolong negotiation over terms of a shared REMS as a tactic to delay approval of generic drugs. To counter such practices, he said FDA is making it easier for sponsors of innovative drugs to cooperate with generic companies to implement a common master file for the implementation of a REMS.
The common REMS master file is a “first step toward making it easier to implement a single shared REMS,” Gottlieb said.
FDA published draft guidance entitled “Use of a Drug Master File for Shared System REMS Submissions” in the Federal Register Wednesday.
While a shared REMS will make it easier for providers to comply with the risk mitigation programs, they can also be used to prevent drug companies from prolonging negotiations with generic companies, Gottlieb said. “Our goal is to see sponsors share REMS systems to reduce burdens on providers. But when branded drug makers drag out these negotiations -- sometimes as a way to forestall generic entry -- we’re going to be in a stronger position now to say enough is enough.”
If branded companies fail to agree on terms of a shared REMS, FDA will “have a stronger basis to issue a waiver that will allow the generic drug makers to go their own way if they have to, and develop their own REMS,” he said at the FTC meeting. In a statement issued to media, Gottlieb said FDA plans to provide more information on how and when generic companies can request a shared REMS waiver and the factors FDA intends to consider.
At the meeting, Gottlieb also vowed to use FDA’s bully pulpit to deter supply chain intermediaries like specialty pharmacies from helping pharma companies deny generic manufacturers access to samples that are needed to conduct FDA-required tests. Gottlieb said he is “going to contact pharmaceutical supply chain intermediaries to inform them of the FDA’s interest in making sure that generic firms can gain access to the doses they need to run bioequivalence studies. When intermediaries sign on to these restrictive games, I want them to know that they’re challenging a broader public health goal.”
Gottlieb made a public health case for competitive drug markets. “Our economic model, which rewards highly innovative drugs with the opportunity to hold monopolies for a limited period of time through patents and exclusivities, and to freely price their products to a measure of the value that a transformative drug offers, also depends on the generic approval process working as intended,” he said. “It depends on the ability to have vigorous competition once those patents and exclusivities have lapsed.”
Comments on the draft guidance are due in 60 days.
Speaking at a Federal Trade Commission meeting on competition in prescription drug markets, Gottlieb noted that drug companies sometimes prolong negotiation over terms of a shared REMS as a tactic to delay approval of generic drugs. To counter such practices, he said FDA is making it easier for sponsors of innovative drugs to cooperate with generic companies to implement a common master file for the implementation of a REMS.
The common REMS master file is a “first step toward making it easier to implement a single shared REMS,” Gottlieb said.
FDA published draft guidance entitled “Use of a Drug Master File for Shared System REMS Submissions” in the Federal Register Wednesday.
While a shared REMS will make it easier for providers to comply with the risk mitigation programs, they can also be used to prevent drug companies from prolonging negotiations with generic companies, Gottlieb said. “Our goal is to see sponsors share REMS systems to reduce burdens on providers. But when branded drug makers drag out these negotiations -- sometimes as a way to forestall generic entry -- we’re going to be in a stronger position now to say enough is enough.”
If branded companies fail to agree on terms of a shared REMS, FDA will “have a stronger basis to issue a waiver that will allow the generic drug makers to go their own way if they have to, and develop their own REMS,” he said at the FTC meeting. In a statement issued to media, Gottlieb said FDA plans to provide more information on how and when generic companies can request a shared REMS waiver and the factors FDA intends to consider.
At the meeting, Gottlieb also vowed to use FDA’s bully pulpit to deter supply chain intermediaries like specialty pharmacies from helping pharma companies deny generic manufacturers access to samples that are needed to conduct FDA-required tests. Gottlieb said he is “going to contact pharmaceutical supply chain intermediaries to inform them of the FDA’s interest in making sure that generic firms can gain access to the doses they need to run bioequivalence studies. When intermediaries sign on to these restrictive games, I want them to know that they’re challenging a broader public health goal.”
Gottlieb made a public health case for competitive drug markets. “Our economic model, which rewards highly innovative drugs with the opportunity to hold monopolies for a limited period of time through patents and exclusivities, and to freely price their products to a measure of the value that a transformative drug offers, also depends on the generic approval process working as intended,” he said. “It depends on the ability to have vigorous competition once those patents and exclusivities have lapsed.”
Comments on the draft guidance are due in 60 days.
David Mitchell, the fact-challenged founder of Patients for Affordable Drugs has never been one to spend more than a nanosecond with the truth when it comes to discussing the value of medical innovation.
He also is allergic to being transparent about his background and funding. Either that or he is exceedingly modest. Mitchell is speaking at an FTC meeting entitled, “Discussion: Potential Next Steps to Encourage Entry and Expand Access through Lower Prices."
Here's his bio for that event:
David has 40 years of experience working on health care and public health policy as a communications specialist. He has worked to reduce teen smoking, increase use of seat belts, to fight drunk driving and improve child health and safety. He helped build and run for more than 30 years GMMB—a cause-oriented, public policy communications firm in Washington, DC. He retired in 2016 to focus his full energy and attention on helping bring about policy change to lower drug costs. You can follow him on Twitter here. Email him at david@patientsforaffordabledrugs.org
Here's what he left out:
Received nearly $60 million in federal contracts after Obama took office, according to an analysis by The Daily Caller News Foundation Investigative Group.
$200 million from the Clinton campaign in 2016 and $389 million from the Obama campaign in 2012
$12 million from Phrma to run pro-Obamacare ads.
Nearly $700 million to promote Obamcare enrollment.
My favorite: $575K to run ads in Jewish news outlets in support of the Iran nuclear deal.
These tidbits are important because it provides some clues about why David would get $500K from the Laura and John Arnold Foundation to set up a patient group.
Indeed, it is curious that in his FTC bio, David left out important background information about his group. Patients For Affordable Drugs claims it " is the only independent national patient organization focused exclusively on achieving policy changes to lower the price of prescription drugs."
First, it is not independent. It receives 87 percent of its funding from one source: the aforementioned Laura and John Arnold Foundation (LJAF). Second, it cooperates and coordinates with other LJAF grantees including ICER and Harvard's Aaron Kesselheim. ICER mind you have deemed most new cancer drugs marginally effective and too expensive despite evidence to the contrary. Have you heard P4AD challenge ICER? You haven't and you won't because they get cash from the same cow. Third, Mitchell's funding is never disclosed when media outlets that also receive LJAF money to run stories about drug prices quoting him. That's deliberate.
Further, it is NOT true that it is the only group pushing for lower drug prices. On the contrary, many other patient organizations who, in addition to providing counseling, funding basic research and covering expenses for cancer patients, have pushed for policies that would reduce the time and cost of drug development and promote generic competition. P4AD is silent on accelerating innovation at the FDA. Moreover, while other groups have fought for caps on drug copays, the elimination of step therapy, passing rebates directly to patients, PFAD has paid lip service to these issues.
It is simply a media outlet for dog whistle messaging about drug prices. Mitchell loves to say he is grateful for medical innovation as a myeloma survivor. But many would argue (including me) that the policies he is promoting have been proven to marginally reduce prices but substantially limit access and future innovations.
Nobody disagrees with the goal of reducing health care costs and drug prices. But P4AD is a hollow advocacy group that does nothing to advance FDA and reimbursement reforms to would make new medicines less expensive and more affordable. By excluding the Arnold affiliation and GMMB's main revenue sources, David is trying to portray himself as a lonely crusader against big Pharma. There's very little truth in that depiction.
He also is allergic to being transparent about his background and funding. Either that or he is exceedingly modest. Mitchell is speaking at an FTC meeting entitled, “Discussion: Potential Next Steps to Encourage Entry and Expand Access through Lower Prices."
Here's his bio for that event:
David has 40 years of experience working on health care and public health policy as a communications specialist. He has worked to reduce teen smoking, increase use of seat belts, to fight drunk driving and improve child health and safety. He helped build and run for more than 30 years GMMB—a cause-oriented, public policy communications firm in Washington, DC. He retired in 2016 to focus his full energy and attention on helping bring about policy change to lower drug costs. You can follow him on Twitter here. Email him at david@patientsforaffordabledrugs.org
Here's what he left out:
Received nearly $60 million in federal contracts after Obama took office, according to an analysis by The Daily Caller News Foundation Investigative Group.
$200 million from the Clinton campaign in 2016 and $389 million from the Obama campaign in 2012
$12 million from Phrma to run pro-Obamacare ads.
Nearly $700 million to promote Obamcare enrollment.
My favorite: $575K to run ads in Jewish news outlets in support of the Iran nuclear deal.
These tidbits are important because it provides some clues about why David would get $500K from the Laura and John Arnold Foundation to set up a patient group.
Indeed, it is curious that in his FTC bio, David left out important background information about his group. Patients For Affordable Drugs claims it " is the only independent national patient organization focused exclusively on achieving policy changes to lower the price of prescription drugs."
First, it is not independent. It receives 87 percent of its funding from one source: the aforementioned Laura and John Arnold Foundation (LJAF). Second, it cooperates and coordinates with other LJAF grantees including ICER and Harvard's Aaron Kesselheim. ICER mind you have deemed most new cancer drugs marginally effective and too expensive despite evidence to the contrary. Have you heard P4AD challenge ICER? You haven't and you won't because they get cash from the same cow. Third, Mitchell's funding is never disclosed when media outlets that also receive LJAF money to run stories about drug prices quoting him. That's deliberate.
Further, it is NOT true that it is the only group pushing for lower drug prices. On the contrary, many other patient organizations who, in addition to providing counseling, funding basic research and covering expenses for cancer patients, have pushed for policies that would reduce the time and cost of drug development and promote generic competition. P4AD is silent on accelerating innovation at the FDA. Moreover, while other groups have fought for caps on drug copays, the elimination of step therapy, passing rebates directly to patients, PFAD has paid lip service to these issues.
It is simply a media outlet for dog whistle messaging about drug prices. Mitchell loves to say he is grateful for medical innovation as a myeloma survivor. But many would argue (including me) that the policies he is promoting have been proven to marginally reduce prices but substantially limit access and future innovations.
Nobody disagrees with the goal of reducing health care costs and drug prices. But P4AD is a hollow advocacy group that does nothing to advance FDA and reimbursement reforms to would make new medicines less expensive and more affordable. By excluding the Arnold affiliation and GMMB's main revenue sources, David is trying to portray himself as a lonely crusader against big Pharma. There's very little truth in that depiction.
How do you spell "mistake?"
The new tax bill would eliminate tax credits used to develop rare-disease drugs. Currently, drug makers get allowed a tax credit of up to 50 percent of certain research costs for rare-disease drugs. The new tax bill would repeal the credit, which falls under the Orphan Drug Act, “for certain drugs, for rare diseases or conditions” starting after this year.
The new tax bill would eliminate tax credits used to develop rare-disease drugs. Currently, drug makers get allowed a tax credit of up to 50 percent of certain research costs for rare-disease drugs. The new tax bill would repeal the credit, which falls under the Orphan Drug Act, “for certain drugs, for rare diseases or conditions” starting after this year.
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.
