Latest Drugwonks' Blog

In Consideration of Janet Woodcock

  • 10.27.2021
  • Peter Pitts
One of my most daunting early tasks at the FDA was to meet with Dr. Janet Woodcock (then the Director of CDER), introduce myself and share my opinions on helping the agency move forward under Commissioner Mark McClellan. After we were done, she stood up and said, “Well, you seem to know what you’re talking about.”

That may not seem like a lot to the casual observer – but it was high praise indeed from the High Priestess of Drug Review. Janet doesn’t suffer fools gladly.

That’s why this article about her (by a journalist I hold in great esteem, Steve Usdin of BioCentury) is so on-point, timely, satisfying, well-deserved – and worth a read.

As Usdin concludes, “… a fair accounting of Woodcock’s legacy will also have to consider the depth and breadth of her contributions to FDA and the patients it serves.”

I just did a radio interview on the COVID-19 vaccine booster FDA adcomm.  I got all my talking points in and then the the host asked me an interesting question, "How can we trust the clinical trial data since it was paid for by Pfizer?" My initial micro-expression was one of surprise. But it was a good question -- with a good answer: That's the way the system works. But it's more complicated than that. (Isn't that always the case.) As all us Drugwonks know, clinical trials are designed and fielded with significant input from the FDA from the very earliest stages and then the data is scrupulously reviewed by the agency.

I pointed out to the man behind the microphone that Pfizer initially asked their booster be approved for everyone ages 12+ -- but the FDA adcomm didn't see the data that way, voting it down 16-2. Based on the data (paid for and provided by Pfizer), the adcomm recommended (18-0 in favor) that boosters be authorized for vaccinated individuals ages 65+ and (vaccinated) people at serious risk of breakthrough infections (specifically calling out healthcare workers and people who are immuno-compromised).

Assuming the FDA follows the adcomm's recommendations (and I predict they will), this is science at work. It's why the clinical trial process works. What doesn't work is when our political leadership gets out ahead of science-based regulatory decision making. A few weeks BEFORE the adcomm, President Biden announced that booster shots would be available to all Americans ages 12+. That was a mistake. It reeks of the White House trying to put it's thumb on the regulatory scale. Let's hope the same "exuberance" doesn't happen with Pfizer's new announcement about vaccines for our citizens ages 5-11.

The road to hell is paved with good intentions.
Last week 132 organizations representing older Americans, patients, family caregivers, people with disabilities, diverse communities, and healthcare providers sent a letter to our Congressional healthcare leadership urging them to address the unaffordable and out of control out-of-pocket (OOP) costs facing America’s seniors. The timing is urgent.

A new analysis by the Kaiser Family Foundation has found that the number of non-Low-Income Subsidy (LIS) beneficiaries reaching the catastrophic phase of the Part D benefit has increased since 2010. In 2019, almost 1.5 million beneficiaries had out-of-pocket expenses exceeding the catastrophic threshold of $5,100 – and the arrow is going in the wrong direction.
Our national reality is that millions of American seniors cannot afford their medication due to high cost-sharing requirements and millions more will not be able to afford their medicines in the future unless Congress directly addresses this crisis. It’s time to “cap-and-smooth” Part D. Specifically:

* Congress should create an out-of-pocket maximum (an annual cap) on Medicare beneficiary Part D out-of-pocket expenses. Medicare is the only major insurer in the U.S. that lacks an OOP maximum. While all proposals under current consideration include an annual OOP cap, patients would derive greater benefit from a consistent, monthly cap on Part D OOP expenses.

* Any proposal that adopts an annual – rather than a monthly – OOP cap in Medicare Part D should be paired with a "smoothing mechanism." Smoothing would allow beneficiaries the option to evenly spread costs over a plan year, thereby avoiding large lump sum OOP expenses. Many beneficiaries cannot afford to make lump sum out-of-pocket payments at the pharmacy counter, leading to abandoned prescriptions and lower treatment adherence. This flexibility should be available to all beneficiaries, at any time during the benefit year, regardless of a beneficiary's level of OOP spending.

* Congress should ensure the program includes strong patient protections, such as hardship exceptions or other mechanisms to allow beneficiaries a payment grace period. There are legitimate reasons a beneficiary might miss a payment (e.g., illness or hospitalization, relocation) that should not disqualify them from utilizing the flexibility. Further, plans should be required to notify patients when they are behind on their payments and inform them of the ability to apply for a hardship exception.

* Congress should ensure that smoothing is the default position rather than requiring Medicare beneficiaries to opt-in or otherwise enroll. This approach will ease implementation and lower administrative barriers to participation.

* Congress should look to CMS’s Part D Senior Savings Model that allows patients with diabetes enrolled in participating Medicare Part D plans to access insulin for $35 per monthly prescription, to determine if expanding a low-cost maximum copay model would broadly improve outcomes for patients with other conditions.

But beware. While all proposals to address prescription drug spending should be evaluated, Congress should reject consideration of comparative cost-effectiveness methodologies. Measurement tools such as the Quality-Adjusted Life Year (QALY) assign a value between 0 (death) and 1 (perfect health) to the people for whom a given treatment is intended. The result is that patients (otherwise known as "people") who are sicker, older or have a disability are assigned lower “life values.” QALYs also fail to account for health disparities, incorporating and institutionalizing a bias that adversely impacts communities of color. When applied to healthcare decision-making by payers, this means that treatments for these more vulnerable beneficiaries are deemed "too expensive" and therefore "not cost-effective" to cover. Healthcare must never be red-lined.
The “ask” of the 132 signatories is simple: “Congress must take action to address the unsustainable OOP burden faced by Medicare Part D beneficiaries. We call on your committees to include Part D reforms that ensure patients can access the medications needed to improve and maintain their health in the budget reconciliation package.”

Let’s get this Part D started!

The Futility of Prior Authorization

  • 08.25.2021
  • Peter Pitts
In a recent op-ed, ophthalmologist and Executive Vice President of the California Academy of Eye Physicians and Surgeons, Dr. Craig H. Kliger points out that Aetna now requires prior-authorization for all cataract surgeries. He is astounded. And rightfully so.

According to Aetna, prior-authorization, “helps [its] members avoid unnecessary surgery.” That’s healthcare shorthand for “We don’t want to pay for it.” H.L. Mencken said, “When somebody says it’s not about the money, it’s about the money.”  As Dr. Kilger comments, “Hard to believe this is any different.”

No other large medical insurer believes such a policy necessary.

Cataract surgery is the most effective and most common procedure performed in all of medicine with some 4 million Americans choosing to have cataract surgery each year and an overall success rate of 97 percent or higher. The impact feels almost biblical, as cataract surgery allows people to see again — and recover their lives. Study after study shows cataract surgery improves quality of life, cuts the risk of falls and car accidents, and reduces cognitive decline among older adults. 

Per Dr. Kilger, “As of this writing, I am aware of numerous cancellations of these surgeries as an unprepared Aetna attempts to implement a process about which it has provided little to no real training and direction.” His article ran three weeks ago.

This issue may be new to ophthalmologists – but it is hardly new.

Prior authorization, also known as pre-authorization, pre-certification or prior notification, is an extra set of steps some insurance carriers require before determining whether they will pay for a medical service or prescription medication. The physician, or other medical provider, is required to obtain approval from the insurance carrier before the carrier will agree to cover the cost of the medical service or prescription medication. Step therapy, also referred to as “fail-first,” requires patients to “fail’ on one or more less costly medications before the health insurance carrier will agree to cover a more expensive medication, even if a physician thinks it is a better option for the patient.

Currently, prior authorization and fail-first protocols are primarily paper-based, and non-standardized. Each insurance carrier has its own set of requirements, which can vary among plans, even within the same carrier’s portfolio of coverage options. To meet prior authorization requirements physicians must complete a time-consuming series of faxes, phone calls, emails, input of data into insurance carrier web sites and, in some cases, letters.  

Two independent nationwide surveys, one by the American Medical Association (AMA) and the other from the American College of Rheumatology (ACR) shows broad physician dissatisfaction with the insidious practices of prior-authorization and step therapy – specifically the ways in which it impacts the ability of physicians to treat patients.

The AMA-conducted survey shows that physicians are running into roadblocks because of prior authorization, or the process of requiring health care professionals to obtain advance approval from health plans before a prescription medication or medical service is delivered to the patient. 

The 1,000 practicing physicians surveyed in December 2020—when new COVID-19 cases were soaring — reported that prior authorization was widespread.  Eighty-three percent of respondents indicated that prior authorizations for prescription medications and medical services have increased over the past five years. Along with this increased volume of requirements, most physicians reported a continued lack of transparency in prior authorization programs, with a majority of physicians stating that it is difficult to determine whether a prescription medication (68 percent) or medical service (58 percent) requires prior authorization. An overwhelming majority (87 percent) of physicians also reported that prior authorization interferes with continuity of care.

“You would think insurers would ease bureaucratic demands throughout a pandemic to ensure patients’ access to timely, medically necessary care. Sadly, you would be wrong,” said AMA President Susan R. Bailey, M.D. 

In parallel, the American College of Rheumatology reports that

* About 48% (47.94%) of patients receiving treatment for their rheumatic disease reported that their provider needed to obtain prior authorization for their prescription in the past year.

* About 47% (46.17%) of patients receiving treatment for their rheumatic disease reported that they were required to undergo step therapy, a process where patients are required to try therapies preferred by their insurance company before they can receive the therapy their doctor originally prescribed — even when doctors are not confident the insurer-preferred option will be effective.

The American Medical Association, the American College of Rheumatology and the American Acadamy of Ophthamology are calling on Congress to remedy the problem by passing The Improving Seniors’ Timely Access to Care Act (HR 3173). 

This bipartisan legislation would require Medicare Advantage (MA) plans to implement a streamlined electronic prior authorization process that complies with technical standards developed by the Department of Health and Human Services, in consultation with relevant stakeholders. In addition, the bill would require increased transparency for beneficiaries and providers, as well as enhance oversight by the Centers for Medicare & Medicaid Services on the processes used for prior authorization. Moreover, to ensure that routinely approved care and treatments are not subjected to unnecessary delays, the program would provide for real-time decisions by an MA plan with respect to certain prior authorization requests.  Importantly, the bill would also require MA plans to meet beneficiary protection standards, such as ensuring continuity of care when patients change plans. 

As for cataract surgery prior-authorization, Aetna has provided no reason and offered no evidence for pre-approval for all cataract surgeries. According to the American Academy of Ophthalmology (AAO), “Because Aetna published no updated policy documents and provided limited prior education, the new policy is already causing chaos at the doctor’s office. This at a time when ophthalmology practices are struggling to fit patients in as they work through a backlog of surgeries due to COVID-19 shutdowns.”

Per the AAO, “The policy has been implemented in such an inefficient manner that we estimate that 10,000 to 20,000 Aetna patients will have their cataract surgery unnecessarily delayed in the month of July alone. Just yesterday, a confused patient called their ophthalmologist in anger to blame him for cancelling surgery. One day before the effective date, and it’s already threatening to erode trust between patients and physicians. There must be a better way to solve this unstated issue Aetna wishes to fix; a way that helps consumers improve their health and simplify their health care experience. The nation’s ophthalmologists are committed to finding a solution that does not delay or deny our patients access to vision-restoring surgery.”

Sadly, prior authorization ends up raising healthcare costs. If doctors can only prescribe “less expensive," less effective treatments, folks will get sicker, be hospitalized more frequently, and require more expensive care. That demand will drive up overall healthcare costs and overwhelm doctors and hospitals with waves of new patients.

It’s time for change. It’s time for action. Lives are at stake.
I had the privilege and pleasure earlier today of participating in the FDA’s webinar, “Remanufacturing of Medical Devices Draft Guidance and Strengthening Cybersecurity Practices Associated with Servicing of Medical Devices Discussion Paper.”

Bottom line – big problems – and it begins with accurately identifying where those problems come from.  According to Josh Silverstein, a CDRH Regulatory Advisor, a majority of the comments, complaints, and adverse event reports received by the FDA that referred to inadequate “servicing” causing or contributing to adverse events or deaths actually related to “remanufacturing.”

What’s the difference? That is a key question, and much of the FDA presentation was focused on clarifying definitions. It’s not as simple as “repair.” The nuances are many and they are all important ranging from reprocessing, servicing, reconditioning and rebuilding, to remanufacturing and repairing.

Importantly, the FDA made it clear from the outset that the draft guidance is not intended to adopt significant policy changes, but to clarify the agency’s current thinking on applicable definitions and “clarify, not change” various regulatory requirements.

Translation – regulation of medical device remanufacturing and servicing is going to become more risk-based, robust and regular – and this will be particularly true when it comes to on-site inspections. This isn’t surprising since the best way to keep people honest is to keep them guessing as to when and where an inspection might happen.

CDRH laid out six “Guiding Principles” –

1- Assess whether there is a change to the intended use

2- Determine whether the activities, individually and cumulatively, significantly change the safety or performance specifications of a finished device

3- Evaluate whether any changes to a device require a new marketing submission

4- Assess component, part, or material dimensional and performance specifications

5- Employ a risk-based approach

6- Adequately document decision-making

In short – there’s going to be a lot more requirements for responsibility and accountability on the part of those medical device owners who oversee, operate and remediate problems When it comes to FDA-regulated medical devices, “Right to Repair," doesn’t mean “cheap and easy.” The FDA has made that very clear. Anyone who thinks otherwise isn’t paying attention – or doesn’t want to.

And that doesn’t even include the discussion of medical device cybersecurity. Per Katelyn Bittleman, CDRH Policy Analyst, “Cybersecurity is a shared responsibility among all stakeholders. The FDA expects manufacturers to appropriately secure their devices to continue to assure the devices’ safety and effectiveness. Non-OEM servicing entities play an important role in maintaining the quality, safety, and efficacy of medical devices without compromising cybersecurity."

Nullum gratuitum grandium.

Addressing "Temporary" Insanity

  • 07.23.2021
  • Peter Pitts
I just googled “temporary vaccine waiver” under “news” and got 31,900 hits.

Then I ran the same exercise for “Pfizer and BioNTech Announce Collaboration with Biovac to Manufacture and Distribute COVID-19 Vaccine Doses within Africa.” I got 1300 hits.

That’s upside down and unfortunate since it’s the Pfizer/BioNTech announcement that’s going to save lives.

Here’s the rest of the story:

Pfizer Inc. (NYSE: PFE) and BioNTech SE (Nasdaq: BNTX) today announced the signing of a letter of intent with The Biovac Institute (Pty) Ltd, known as “Biovac,” a Cape Town-based, South African biopharmaceutical company, to manufacture the Pfizer-BioNTech COVID-19 Vaccine for distribution within the African Union.

“We aim to enable people on all continents to manufacture and distribute our vaccine while ensuring the quality of the manufacturing process and the doses”

Biovac will perform manufacturing and distribution activities within Pfizer’s and BioNTech’s global COVID-19 vaccine supply chain and manufacturing network, which will now span three continents and include more than 20 manufacturing facilities. To facilitate Biovac’s involvement in the process, technical transfer, on-site development and equipment installation activities will begin immediately.

Pfizer and BioNTech expect that Biovac’s Cape Town facility will be incorporated into the vaccine supply chain by the end of 2021. Biovac will obtain drug substance from facilities in Europe, and manufacturing of finished doses will commence in 2022. At full operational capacity, the annual production will exceed 100 million finished doses annually. All doses will exclusively be distributed within the 55 member states that make up the African Union.
“From day one, our goal has been to provide fair and equitable access of the Pfizer-BioNTech COVID-19 Vaccine to everyone, everywhere,” said Albert Bourla, Chairman and Chief Executive Officer, Pfizer. “Our latest collaboration with Biovac is a shining example of the tireless work being done, in this instance to benefit Africa. We will continue to explore and pursue opportunities to bring new partners into our supply chain network, including in Latin America, to further accelerate access of COVID-19 vaccines.”

“We aim to enable people on all continents to manufacture and distribute our vaccine while ensuring the quality of the manufacturing process and the doses,” said Ugur Sahin, M.D., CEO and Co-founder of BioNTech. “We believe that our mRNA technology can be used to develop vaccine candidates addressing other diseases as well. This is why we will continue to evaluate sustainable approaches that will support the development and production of mRNA vaccines on the African continent.”

“We are thrilled to collaborate with Pfizer and BioNTech to produce and distribute the Pfizer-BioNTech COVID-19 Vaccine within Africa. This is testament of the long-standing relationship we have had with Pfizer through the Prevenar 13 vaccine,” said Dr. Morena Makhoana, CEO of Biovac. “This is a critical step forward in strengthening sustainable access to a vaccine in the fight against this tragic, worldwide pandemic. We believe this collaboration will create opportunity to more broadly distribute vaccine doses to people in harder-to-reach communities, especially those on the African continent.”

Pfizer and BioNTech select contract manufacturers using a rigorous selection process based on several factors: quality, compliance, safety track record, technical capability, capacity availability, highly trained workforce, project management abilities, prior working relationship, and commitment to working with flexibility through a fast-paced program. Pfizer and Biovac have worked together since 2015 on the sterile formulation, fill, finish and distribution of the Prevenar 13 vaccine.

To date, Pfizer and BioNTech have shipped more than 1 billion COVID-19 vaccine doses to more than 100 countries or territories in every region of the world. The companies are firmly committed to working towards equitable and affordable access for COVID-19 vaccines for all people around the world, actively working with global governments as well as global health partners with the aim to provide 2 billion doses to low and middle income countries in 2021 and 2022 – 1 billion each year. This includes an agreement to supply 500 million doses to the U.S. Government at a not-for-profit price, that the government will, in turn, donate to the African Union and the COVAX 92 Advanced Market Commitment (AMC) countries, as well as a direct supply agreement with the COVAX facility for 40 million doses.
The “Right to Repair” issue pertains to FDA-regulated medical devices and the unintended negative consequences for patient health and safety that would result if unregulated third-parties were allowed to work on these highly sophisticated pieces of equipment.

“Right to repair” advocates point to FDA’s 2018 report they claim led the agency to “take a pass” on regulating third party device servicing because they could find no evidence of a problem. Cheery-picked quotes describe third-party servicers as providing “high quality, safe, and effective servicing of medical devices … critical to the functioning of the U.S. healthcare system.”

This is out of context, wrong and dangerous. The fact of the matter is that the FDA report said the agency didn’t have enough data to make a definitive conclusion about third party servicing. The FDA doesn’t have that data because unregulated servicers aren’t required to register with the agency and FDA can’t even establish how many third-party servicers are actually out there – though the agency estimates there are between 16,000 - 21,000.

Further, the FDA’s 2018 report showed the majority of inadequate services reported should actually be categorized as remanufacturing, meaning that the device in question is no longer the device the FDA gave clearance/approval to. Big difference. Big problem.

In truth, the agency laid out a roadmap to address this issue and has been executing against it over the last several years through remanufacturing guidance and cybersecurity discussion papers. This is where the FDA should concentrate its efforts: educate, surveil and enforce actions on remanufacturing to ensure service activity doesn’t cross over into regulated activity.

On July 27, the FDA is holding a public meeting on this topic. It couldn’t come at a better time. The proper servicing and security of medical devices and other health care technologies mustn’t be allowed to be undermined by third-party servicing apologists willing to employ bad faith tactics and misrepresent the facts.
The other week, the HHS Inspector General released a report about just how little oversight the Medicare program has over medical device cybersecurity (and what little discretion is does have, it rarely uses).

If you’ve been following the news lately, you’ll know that cybersecurity in the healthcare space is a big problem. Hospitals and health systems large and small have increasingly been on the receiving end of hacks, cyber-attacks and ransomware intrusions. Not to mention that an estimated 275 million medical images are currently vulnerable due to unsecured picture archiving communication systems.  HHS just released another alert about that just days after the Inspector General report came out.

The report focused on the role of Medicare accrediting organizations’ failure to keep proper tabs on whether hospitals were maintaining proper cybersecurity of their networked devices. According to the report: 

CMS’s survey protocol does not include requirements for networked device cybersecurity, and the AOs [accrediting organizations] do not use their discretion to require hospitals to have such cybersecurity plans. However, AOs sometimes review limited aspects of device cybersecurity.

For example, two AOs have equipment maintenance requirements that may yield limited insight into device cybersecurity.  If hospitals identify networked device cybersecurity as part of their emergency-preparedness risk assessments, AOs will review the mitigation plans. AOs told us that in practice, however, hospitals did not identify device cybersecurity in these risk assessments very often

But most importantly, the OIG’s report underscored the lopsided cybersecurity expectations in the healthcare industry. Cybersecurity is supposed to be a shared responsibility between device manufacturers and providers. For their part, the manufacturers are tightly regulated by the FDA and are required ensure their products are secure through a carefully designed protocols subject to frequent updates. Alas, the best-designed devices in the world can’t compensate for negligence or poor practices on the part of the end-user.

Which brings me to the point I raised in The Hill recently about how unregulated medical device servicing poses serious risks for cybersecurity. Original equipment manufacturers and their servicers are regulated by the FDA. Third party servicers – who could really be anyone since there are no universal training and licensing requirements to service these devices either – are not. Third-party servicers claim they’re held to the same standards as OEMs due to hospital accreditation. The OIG report flies in the face of that claim.

If the goal is to get rid of the “blind spots” that lead to cybersecurity incidents, ensuring that those who control repairs and maintenance of these highly sophisticated pieces of health care technology are FDA-regulated makes the most sense to me. Hiding behind accreditations that Medicare isn’t watching doesn’t. It’s clear no one is watching the proverbial coup on the hospitals’ end.

If hospitals and imaging providers can’t keep tabs on their own cyber security, how can we expect them to handle the servicing of highly sophisticated medical devices?
According to the U.S. PIRG, “Manufacturers of ventilators, dialysis machines and other critical medical devices routinely restrict access to essential repair materials. That leaves hospital repair technicians, commonly known as biomeds, without the tools they need to fix medical equipment as soon as it breaks. Instead, they have to wait days, weeks or even a month for a manufacturer-branded technician to travel onsite and make the repair well within the biomed’s capabilities. In the meantime, that broken ventilator can’t be used to deliver life-saving treatment to a patient.”

As my grandmother used to say, “A half-truth is a whole lie.”

At first glance, “Right-to-Repair seems like a good idea. Why not make it easier for consumers to fix their broken electronics, without having to pay a costly sum to the original manufacturer? But, as HL Mencken reminds us, “For every complex problem there is an answer that is clear, simple, and wrong.” The reality is that Right-to -Repair presents many dangerous unintended consequences. The Number One problem is that it compromises patient safety.

The core of Right-to-Repair laws is to require innovative technology companies to make product repair information, replacement parts, and tools readily available to consumers and third-party repair shops. Should that be the case for devices such as Automated External Defibrillators and hospital ventilators? What about electrocardiograph (ECG) machines? Can physicians and patients be confident in non-FDA compliant vendors without the advanced training and technical ability to properly repair and recalibrate life-saving machines? Who could argue that “anyone can do it?”

Well – U.S. PIRG for one.

By allowing third parties without any FDA competence to repair regulated, complicated medical devices, Right-to-Repair also opens the door to breaches in cybersecurity. According to the FDA, “Cybersecurity is a widespread issue affecting medical devices connected to the Internet, networks, and other devices. Cybersecurity is the process of preventing unauthorized access, modification, misuse or denial of use, or the unauthorized use of information that is stored, accessed, or transferred from a medical device to an external recipient.”

In a recent FDA discussion paper, “Strengthening Cybersecurity Practices Associated with Servicing Medical Devices: Challenges and Opportunities,” the agency asks, “How can entities that service medical devices contribute to strengthening the cybersecurity of medical devices?” According to the discussion paper, “FDA defines service to be the repair and/or preventive or routine maintenance of one or more parts in a finished device, after distribution, for purposes of returning it to the safety and performance specifications established by the original equipment manufacturer (OEM) and to meet its original intended use.” In other words, the first step in advancing medical device cybersecurity is to limit and ensure that those who control repairs and maintenance of these highly sophisticated pieces of healthcare technology are regulated FDA manufacturers.

On July 27th, the FDA is holding a public meeting on this topic. It couldn’t be timelier. The proper servicing and security of medical devices and other healthcare technologies is too important for uniformed posturing. U.S. PIRG should know better.


Speaker Pelosi's Mistaken HR 3-Peat

  • 04.22.2021
  • Peter Pitts
Word on the street is that H.R. 3 is going to be reintroduced today.

New Congress. Same bad ideas. A hit parade of bad ideas.  For example:

An International Pricing Index. Patients often lose access to the best medicines when their government adopts price controls. Of the drugs launched in the last seven years, only 60% were available in Sweden. And only half made it to patients in Canada. In the United States, meanwhile, nearly 90% of those medicines were available. Americans will no longer enjoy generous access to the newest drugs if we embrace price controls. Importing the socialist pricing tactics of foreign governments is no way to stand up for Medicare patients. Bad idea when it comes from the White House, Bad idea when it comes from the People’s House.

Direct Government Negotiation. Is the direct federal negotiation of drug prices a good idea? Consider the “non-interference clause” that currently prohibits such actions in Medicare Part D — the federal program that subsidizes prescription drugs for seniors. A repeal of the non-interference clause would result in a sharp increase in Medicare drug prices and a substantial decline in patient choice.

The Congressional Budget Office observed that Part D plans have “secured rebates somewhat larger than the average rebates observed in commercial health plans.” According to the CBO, to achieve any significant savings, the government would have to follow through on its threats of “not allowing [certain] drug[s] to be prescribed.” In other words, the government would drop some drugs from Medicare’s coverage to save money. That would be a raw deal for patients. The average Part D plan provides access to more than 95 percent of the top 200 Medicare Part D Drugs. (PS/ The Non-Interference Clause was written by Senators Ted Kennedy and Tom Daschle.)

Rebates to Off-Set Price Hikes. When Americans say, “My drugs are too expensive,” what they generally mean is that their co-pays at the pharmacy are too expensive. And they’re right. But co-pays aren’t tied to list prices. Consider this: payers negotiate discounts of between 30-50% of the list price – and then base the co-pay off of the list price. What happens to the discount? They pocket the difference. When payers say that higher co-pays are a result of higher list prices they are lying. Surprisingly absent from H.R. 3 is any call for pricing transparency. Shameful.

The primary difference from the previous version is that this “new” itereation will not specify how the funds will be used – Speaker Pelosi’s goal is to use this as a pay-for in the American Family Act

H.R. 3 is a cruel joke. Cruel to patients.

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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