Latest Drugwonks' Blog
Via The Washington Times:
Danger in drugs from Canada
Clinton and Trump are both wrong on importation
ANALYSIS/OPINION:
When it comes to health care reform, Hillary Clinton and Donald Trump have something in common — and it’s dangerously wrong. They support drug importation “from Canada.” It’s a sound-bite solution that won’t offer lower prices but will result in a public health calamity.
Importing drugs from Canada is exceedingly dangerous for a number of reasons. For starters, many internet pharmacies based up north are stocked with drugs from the European Union. And while many people wouldn’t hesitate to take medicines purchased from countries like France, Germany and Great Britain, there’s plenty of risk involved.
The EU currently operates under a system of “parallel trade,” which allows products to be freely imported between member countries. This means that any drugs exported from the United Kingdom to Canada could have originated in an EU country with significantly less rigorous safety regulations, like Greece, Portugal, Latvia or Malta.
Just last year, EU officials seized more than 34 million fake pills in just two months. And in May, Irish drug enforcers confiscated over 1.7 million pounds of counterfeit and illegal drug packages. So if American customers start buying drugs over the internet from Canadian pharmacies, they could easily wind up with tainted medicines of unknown European origin.
It’s also important to note that drugs from anywhere in Europe aren’t even legal for sale in Canada. So when politicians say we can get “the same drugs” that Canadians get, they’re just plain wrong.
Even more worrisome is outright fraud — many “Canadian” pharmacies are actually headquartered somewhere else. Far too often, importing drugs of unknown quality from sketchy pharmacy websites ends in tragedy. Consider the case of one Texas emergency-room doctor, who suffered a stroke after importing what he thought was a popular weight-loss drug. The online pharmacy had actually substituted the doctor’s ordered drug for a counterfeit, stroke-inducing medication shipped in from China. If medical professionals can’t tell the difference between real and counterfeit drugs, regular patients don’t stand a chance.
A 2005 investigation by the Food and Drug Administration (FDA) looked at 4,000 drug shipments coming into the United States. Almost half of them claimed to be from Canada. Of those, fully 85 percent were actually from countries such as India, Vanuatu and Costa Rica.
As part of another investigation, FDA officials bought three popular drugs from two internet pharmacies claiming to be “located in, and operated out of, Canada.” Both websites had Canadian flags on their websites. Yet neither the pharmacies nor the drugs were actually from Canada.
The on-the-ground reality of state and local importation schemes has been dismal and politically embarrassing. Remember Illinois’ high profile “I-Save-RX” program? During 19 months, only 3,689 Illinois residents used the program — that’s .02 percent of the population.
Programs like this wouldn’t do any better on a national basis. A study by the nonpartisan Congressional Budget Office showed that importation would reduce our nation’s spending on prescription medicines a whopping 0.1 percent — and that’s not including the tens of millions of dollars the FDA would need to oversee drug safety for the dozen or so nations generally involved in foreign drug importation schemes. And generic drugs (which represent more than 85 percent of the medicines dispensed in the U.S.) are cheaper here at home than in Canada.
Calling foreign drug importation “reimportation” is a clever way to sell the idea to the American people. But the term simply doesn’t fit with the facts. In reality, in addition to importing foreign price controls, Americans would end up jeopardizing their health by purchasing unsafe drugs while not saving money.
A better policy for both candidates would be to focus on the issue of increasing insurance company co-pays. American patients who head up north or online are motivated by the cut-rate prices they see on the web. Health insurers could help patients avoid this temptation by reducing their co-pays for drug purchases, particularly for low-income patients. If drugs become more affordable in the states, patients won’t feel the urge to look for a bargain abroad.
Dropping drug co-pays would also help patients stick to their prescribed treatment regimes. All too often, people skip a dose, don’t get a refill, or stop taking their drugs prematurely in order to save money. In the long run, though, not adhering to a drug regimen leaves patients less healthy — and increases national medical expenses by an estimated $300 billion annually.
• Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.
Danger in drugs from Canada
Clinton and Trump are both wrong on importation
ANALYSIS/OPINION:
When it comes to health care reform, Hillary Clinton and Donald Trump have something in common — and it’s dangerously wrong. They support drug importation “from Canada.” It’s a sound-bite solution that won’t offer lower prices but will result in a public health calamity.
Importing drugs from Canada is exceedingly dangerous for a number of reasons. For starters, many internet pharmacies based up north are stocked with drugs from the European Union. And while many people wouldn’t hesitate to take medicines purchased from countries like France, Germany and Great Britain, there’s plenty of risk involved.
The EU currently operates under a system of “parallel trade,” which allows products to be freely imported between member countries. This means that any drugs exported from the United Kingdom to Canada could have originated in an EU country with significantly less rigorous safety regulations, like Greece, Portugal, Latvia or Malta.
Just last year, EU officials seized more than 34 million fake pills in just two months. And in May, Irish drug enforcers confiscated over 1.7 million pounds of counterfeit and illegal drug packages. So if American customers start buying drugs over the internet from Canadian pharmacies, they could easily wind up with tainted medicines of unknown European origin.
It’s also important to note that drugs from anywhere in Europe aren’t even legal for sale in Canada. So when politicians say we can get “the same drugs” that Canadians get, they’re just plain wrong.
Even more worrisome is outright fraud — many “Canadian” pharmacies are actually headquartered somewhere else. Far too often, importing drugs of unknown quality from sketchy pharmacy websites ends in tragedy. Consider the case of one Texas emergency-room doctor, who suffered a stroke after importing what he thought was a popular weight-loss drug. The online pharmacy had actually substituted the doctor’s ordered drug for a counterfeit, stroke-inducing medication shipped in from China. If medical professionals can’t tell the difference between real and counterfeit drugs, regular patients don’t stand a chance.
A 2005 investigation by the Food and Drug Administration (FDA) looked at 4,000 drug shipments coming into the United States. Almost half of them claimed to be from Canada. Of those, fully 85 percent were actually from countries such as India, Vanuatu and Costa Rica.
As part of another investigation, FDA officials bought three popular drugs from two internet pharmacies claiming to be “located in, and operated out of, Canada.” Both websites had Canadian flags on their websites. Yet neither the pharmacies nor the drugs were actually from Canada.
The on-the-ground reality of state and local importation schemes has been dismal and politically embarrassing. Remember Illinois’ high profile “I-Save-RX” program? During 19 months, only 3,689 Illinois residents used the program — that’s .02 percent of the population.
Programs like this wouldn’t do any better on a national basis. A study by the nonpartisan Congressional Budget Office showed that importation would reduce our nation’s spending on prescription medicines a whopping 0.1 percent — and that’s not including the tens of millions of dollars the FDA would need to oversee drug safety for the dozen or so nations generally involved in foreign drug importation schemes. And generic drugs (which represent more than 85 percent of the medicines dispensed in the U.S.) are cheaper here at home than in Canada.
Calling foreign drug importation “reimportation” is a clever way to sell the idea to the American people. But the term simply doesn’t fit with the facts. In reality, in addition to importing foreign price controls, Americans would end up jeopardizing their health by purchasing unsafe drugs while not saving money.
A better policy for both candidates would be to focus on the issue of increasing insurance company co-pays. American patients who head up north or online are motivated by the cut-rate prices they see on the web. Health insurers could help patients avoid this temptation by reducing their co-pays for drug purchases, particularly for low-income patients. If drugs become more affordable in the states, patients won’t feel the urge to look for a bargain abroad.
Dropping drug co-pays would also help patients stick to their prescribed treatment regimes. All too often, people skip a dose, don’t get a refill, or stop taking their drugs prematurely in order to save money. In the long run, though, not adhering to a drug regimen leaves patients less healthy — and increases national medical expenses by an estimated $300 billion annually.
• Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.
Jeff Myers wrote a thoughtful response to my post on a Bloomberg article claiming drug companies use patient assistance programs to launder money that is used to pay for new medicines. Jeff suggested I am wee bit naïve to ”suggest that life sciences companies are contributing to these PAPs without regard to the impact it will have on their bottom line because they are altruistic organisms. “
Well, first of all, drug companies are altruistic, providing billions in support for community activities, basic research and yes, ensuring that patients have access to their medicines.
And yes, discounting or covering the cost of a product is a fairly standard way to find a price acceptable to consumers.
And I think Jeff’s point is that instead of using charity to make drugs affordable, why not just reduce the price to patients.
It’s a damn good question.
Consider the confusing and convoluted way government sets prices: The PAP's assistance on behalf of the PAP enrollee does not count towards a Part D beneficiary's true-out-of-pocket cost (TrOOP).. But when Pharmaceutical industry is paying 50% of a brand-name drug cost while you are in the Donut Hole this 50% of retail cost is counted toward your TrOOP or Donut Hole exit point.
Jeff notes that “PAP spending DOES IN FACT cover the deductible/copay in most commercial or ERISA plans, which ultimately allows for the large pricing increases evident in the life sciences sector to get to 3rd party payor coverage.”
But this cost sharing in commercial plans is more of the same. IMS reported that new prices net of rebates declined. About 70 percent of the price increases went to covering rebates. Why don’t rebates, in commercial or government plans, go to patients. Why instead of rebate reduced prices are PBMs and insurers hiking copays for new drugs based on a retail price? Instead of using the money for patient focused pricing, PBMs and insurers (as well as some employers) are redistributing rebate dollars that can be used for anything, including Anthem’s alleged use of rebate dollars to buy back it’s stock in 2009.
Those rebated new drugs are not always available for $70 a month. As a bunch of lawsuits have shown, PBMs and insurers pocket rebates and then place the rebated drug on the highest cost sharing tier.
Drug companies respond to this situation by covering patient out of pocket costs as a percentage of the price set by the PBMs, NOT the rebated price. Or the discounted price.
On the Medicare side of things, the situation is even more of a snafu. Discounts to offset part D out of pocket costs are on top of the rebates drug companies provide. The GAO noted: “The PBMs we interviewed also told us they observed that some manufacturers decreased the amount of rebates for the brand-name drugs they offered, which they believe occurred as a result of the Discount Program.
In comparison, most of the plan sponsors did not observe manufacturers decreasing rebate amounts and most manufacturers reported no effects on their rebate negotiations as a result of the Discount Program.”
Hence, PAP is a subsidy provided indirectly to patients by drug companies after rebates are paid and discounts are provided. Note that the rebates and discounts are based NOT on the rebated price. The whole arrangement is parasitic and idiotic. But it ain’t criminal.
Jeff writes: “If PAP spending were truly altruistic without regard to whether or not getting into the wallets of 3rd party payors was an issue, PAPs would cover those that cannot get medications but are eligible for government assistance…. it would cover those that cannot access a specific medication in a government program like Medicaid.”
But PAPs are mostly prohibited from providing assistance. That's to ensure states and HHS get the maximum amount of rebate dollars. I agree with Jeff that PAP should extend to Medicaid. There is no good reason why they shouldn’t (the rebate revenue government gets by limiting PAP support notwithstanding).
Often government programs don’t cover drugs that are needed. Under Obamacare, PBMs have pocketed rebates, charge patients a share of a retail price to discourage use. So PAPs fill that gap.
By comparison, Langreth and Elgin seem to think that society would be better off if patients were forced to abide by rebate driven practices of PBMs as enabled by Medicare part D regs and the ACA. More to the point, they want to criminalize charity unless is comports with the cost containment goal they believe should be the primary objective of government regulation.
What I think Jeff is ultimately saying, and to which I agree, is that 1) currently charitable support for drug coverage should be extended to really needy patients and 2) rational drug pricing would consist of replacing rebate dollars and discounts paid here and abroad with net prices and charitable support that directly support those who need new medicines but are denied them due to profit driven formulary games (including Express Scripts and CVS eliminating dozens of drugs from their formulary in exchange for bigger rebates from the one or two drug companies whose medicines remain covered).
Tevi Troy at the American Health Policy Institute has formed a Health Transformation Alliance including larger employers who are tired to the rebate shell game. That group is focusing on policy changes to improve access to medicines in order to reduce long term costs and improve quality of life.
Langreth and Elgin ignore the dark underside of rebate driven treatment decisions. Instead they seek to criminalize a charitable activity that provides people who need a medicine the support that PBMs and part D plan sponsors should have provided in the first place.
Well, first of all, drug companies are altruistic, providing billions in support for community activities, basic research and yes, ensuring that patients have access to their medicines.
And yes, discounting or covering the cost of a product is a fairly standard way to find a price acceptable to consumers.
And I think Jeff’s point is that instead of using charity to make drugs affordable, why not just reduce the price to patients.
It’s a damn good question.
Consider the confusing and convoluted way government sets prices: The PAP's assistance on behalf of the PAP enrollee does not count towards a Part D beneficiary's true-out-of-pocket cost (TrOOP).. But when Pharmaceutical industry is paying 50% of a brand-name drug cost while you are in the Donut Hole this 50% of retail cost is counted toward your TrOOP or Donut Hole exit point.
Jeff notes that “PAP spending DOES IN FACT cover the deductible/copay in most commercial or ERISA plans, which ultimately allows for the large pricing increases evident in the life sciences sector to get to 3rd party payor coverage.”
But this cost sharing in commercial plans is more of the same. IMS reported that new prices net of rebates declined. About 70 percent of the price increases went to covering rebates. Why don’t rebates, in commercial or government plans, go to patients. Why instead of rebate reduced prices are PBMs and insurers hiking copays for new drugs based on a retail price? Instead of using the money for patient focused pricing, PBMs and insurers (as well as some employers) are redistributing rebate dollars that can be used for anything, including Anthem’s alleged use of rebate dollars to buy back it’s stock in 2009.
Those rebated new drugs are not always available for $70 a month. As a bunch of lawsuits have shown, PBMs and insurers pocket rebates and then place the rebated drug on the highest cost sharing tier.
Drug companies respond to this situation by covering patient out of pocket costs as a percentage of the price set by the PBMs, NOT the rebated price. Or the discounted price.
On the Medicare side of things, the situation is even more of a snafu. Discounts to offset part D out of pocket costs are on top of the rebates drug companies provide. The GAO noted: “The PBMs we interviewed also told us they observed that some manufacturers decreased the amount of rebates for the brand-name drugs they offered, which they believe occurred as a result of the Discount Program.
In comparison, most of the plan sponsors did not observe manufacturers decreasing rebate amounts and most manufacturers reported no effects on their rebate negotiations as a result of the Discount Program.”
Hence, PAP is a subsidy provided indirectly to patients by drug companies after rebates are paid and discounts are provided. Note that the rebates and discounts are based NOT on the rebated price. The whole arrangement is parasitic and idiotic. But it ain’t criminal.
Jeff writes: “If PAP spending were truly altruistic without regard to whether or not getting into the wallets of 3rd party payors was an issue, PAPs would cover those that cannot get medications but are eligible for government assistance…. it would cover those that cannot access a specific medication in a government program like Medicaid.”
But PAPs are mostly prohibited from providing assistance. That's to ensure states and HHS get the maximum amount of rebate dollars. I agree with Jeff that PAP should extend to Medicaid. There is no good reason why they shouldn’t (the rebate revenue government gets by limiting PAP support notwithstanding).
Often government programs don’t cover drugs that are needed. Under Obamacare, PBMs have pocketed rebates, charge patients a share of a retail price to discourage use. So PAPs fill that gap.
By comparison, Langreth and Elgin seem to think that society would be better off if patients were forced to abide by rebate driven practices of PBMs as enabled by Medicare part D regs and the ACA. More to the point, they want to criminalize charity unless is comports with the cost containment goal they believe should be the primary objective of government regulation.
What I think Jeff is ultimately saying, and to which I agree, is that 1) currently charitable support for drug coverage should be extended to really needy patients and 2) rational drug pricing would consist of replacing rebate dollars and discounts paid here and abroad with net prices and charitable support that directly support those who need new medicines but are denied them due to profit driven formulary games (including Express Scripts and CVS eliminating dozens of drugs from their formulary in exchange for bigger rebates from the one or two drug companies whose medicines remain covered).
Tevi Troy at the American Health Policy Institute has formed a Health Transformation Alliance including larger employers who are tired to the rebate shell game. That group is focusing on policy changes to improve access to medicines in order to reduce long term costs and improve quality of life.
Langreth and Elgin ignore the dark underside of rebate driven treatment decisions. Instead they seek to criminalize a charitable activity that provides people who need a medicine the support that PBMs and part D plan sponsors should have provided in the first place.
When it comes to biosimilar interchangeability, can "totality of evidence" be in the eyes of the beholder?
Consider that, now consider a new study in the Annals of Internal Medicine on biosimilars.
The study specifically looks at biologics that treat inflammation for patients with rheumatoid arthritis and inflammatory bowel syndrome, called TNF-alpha inhibitors. They systematically reviewed 19 studies to determine how these biosimilars compared with the brand-name drugs, focusing on safety and efficacy. According to a story on the Kaiser Health News (KHN) site, “They concluded the biosimilars are “interchangeable” with the original versions, such as Remicade and Humira … We examined one very costly and commonly used class of biologic therapy,” said study author Dr. Caleb Alexander, codirector of the Johns Hopkins Center for Drug Safety and Effectiveness. “The totality of evidence strongly supports the comparability of the biosimilar and branded product.
The Annals paper couldn’t have been that comprehensive since it ignored a well-publicized study from Mercy University Hospital, University College Cork, Centre for Gastroenterology, Mercy University Hospital, Cork, Ireland on … Remicade!
Titled, “Biosimilar but not the same,” the Irish research was presented at the European Crohn’s and Colitis Organisation. It studied the clinical impact of an innovator biologic (Remicade) and its EMA-approved biosimilar (Inflectra). The findings are important.
* 80% of the Inflectra group required hospital readmission versus 5% of the infliximab (Remicade) group. (p=0.00004). 60% of patients in the Inflectra group needed steroid augmentation of standard steroid tapering protocol with 50% requiring multiple increases in steroid dose versus 8% of patients in the Infliximab (p-value = 0.0007). Over the course of 8 weeks, 93% of patients in the Inflectra group had an increase in CRP with 7% remaining unchanged whereas 100% of patients in the infliximab group had a decrease in CRP (p=<0.001).
The conclusion of the Mercy study is not ambiguous, “Our results suggest that biosimilars may not be as efficacious as the reference medicine. The results found reflect the ECCO statement position that the use of most biosimilars in IBD will require testing in this particular patient population and cannot be extrapolated from other disease populations."
Per KHN, “Pharmacist Donald Miller, a professor at North Dakota State University, said the analysis is important because it is the first of its kind for these biosimilars. But the finding that the biosimilar drugs were “interchangeable” with the originals is interesting because the FDA has not yet awarded this designation to either Inflectra or Zarxio. “It is very important to realize that interchangeability of biosimilars has a specific meaning under U.S. law and [the] FDA has not yet issued guidance for any product to define itself as interchangeable to date,” he said.
Miller said many physicians worry that insurance companies will force patients to switch from biologics to biosimilars to save money, risking reactions to the tweaked drug molecules. Indeed, the American College of Rheumatologists’ position statement says that patients should be informed if they’re switched to biosimilars to cut costs and their physician should sign off on it. “Over time, biosimilars can save the health system billions, but only if they’re adopted and only if patients and clinicians and policymakers develop and support mechanisms that promote their adoption,” Alexander said.
Totality of evidence, indeed.
Consider that, now consider a new study in the Annals of Internal Medicine on biosimilars.
The study specifically looks at biologics that treat inflammation for patients with rheumatoid arthritis and inflammatory bowel syndrome, called TNF-alpha inhibitors. They systematically reviewed 19 studies to determine how these biosimilars compared with the brand-name drugs, focusing on safety and efficacy. According to a story on the Kaiser Health News (KHN) site, “They concluded the biosimilars are “interchangeable” with the original versions, such as Remicade and Humira … We examined one very costly and commonly used class of biologic therapy,” said study author Dr. Caleb Alexander, codirector of the Johns Hopkins Center for Drug Safety and Effectiveness. “The totality of evidence strongly supports the comparability of the biosimilar and branded product.
The Annals paper couldn’t have been that comprehensive since it ignored a well-publicized study from Mercy University Hospital, University College Cork, Centre for Gastroenterology, Mercy University Hospital, Cork, Ireland on … Remicade!
Titled, “Biosimilar but not the same,” the Irish research was presented at the European Crohn’s and Colitis Organisation. It studied the clinical impact of an innovator biologic (Remicade) and its EMA-approved biosimilar (Inflectra). The findings are important.
* 80% of the Inflectra group required hospital readmission versus 5% of the infliximab (Remicade) group. (p=0.00004). 60% of patients in the Inflectra group needed steroid augmentation of standard steroid tapering protocol with 50% requiring multiple increases in steroid dose versus 8% of patients in the Infliximab (p-value = 0.0007). Over the course of 8 weeks, 93% of patients in the Inflectra group had an increase in CRP with 7% remaining unchanged whereas 100% of patients in the infliximab group had a decrease in CRP (p=<0.001).
The conclusion of the Mercy study is not ambiguous, “Our results suggest that biosimilars may not be as efficacious as the reference medicine. The results found reflect the ECCO statement position that the use of most biosimilars in IBD will require testing in this particular patient population and cannot be extrapolated from other disease populations."
Per KHN, “Pharmacist Donald Miller, a professor at North Dakota State University, said the analysis is important because it is the first of its kind for these biosimilars. But the finding that the biosimilar drugs were “interchangeable” with the originals is interesting because the FDA has not yet awarded this designation to either Inflectra or Zarxio. “It is very important to realize that interchangeability of biosimilars has a specific meaning under U.S. law and [the] FDA has not yet issued guidance for any product to define itself as interchangeable to date,” he said.
Miller said many physicians worry that insurance companies will force patients to switch from biologics to biosimilars to save money, risking reactions to the tweaked drug molecules. Indeed, the American College of Rheumatologists’ position statement says that patients should be informed if they’re switched to biosimilars to cut costs and their physician should sign off on it. “Over time, biosimilars can save the health system billions, but only if they’re adopted and only if patients and clinicians and policymakers develop and support mechanisms that promote their adoption,” Alexander said.
Totality of evidence, indeed.
Bloomberg fiction writers Robert Langreth and Ben Elgin are pushing the idea that contributions from a pharmaceutical company to a patient assistance programs (PAPs) run by non profits operate on the edges of anti-kickback law or outright illegal. Or put another way: they craft a compelling story that drug companies are using poor patients to launder money and reap profits.
Relying mostly on unsealed documents from a private case brought by an ex-Celgene employee, the duo cite an expert witness that the donations “were actually illegal kickbacks designed to hide the fact that Celgene was contributing these payments to the foundations to get Medicare patients to use more” of Celgene’s cancer drugs, Thalomid and Revlimid.’
Their reporting is, as the movie disclaimer goes: “Inspired by a true story” which begins here:
First, PAP’s have been around for decades to help patients with limited financial ability to pay for out of pocket health care costs, including medicines.
In 2006, the Medicare Part D benefit kicked in. Beneficiaries no longer qualified for assistance under traditional PAP eligibility criteria whereby companies provided support directly to patients because they could run afoul of federal anti-kickback statutes and other law. But many patients who did not qualify for low income subsidies still needed financial help. Hence, the Department of Health and Human Services Office of Inspector General drew up regulations to allow cost-sharing subsidies provided by bona fide, independent charities unaffiliated with pharmaceutical manufacturers… even if the charities receive manufacturer contributions.” These regulations have been continually updated and PAPs are strictly regulated by HHS.
Elgin opines that such arrangements are a ‘grey area.’ He might tell that to HHS and the Department of Justice since they are not a party to this private lawsuit. (More on the intricacies of the suit later. )
Second, drugs not covered on the Medicare Part D plan formulary or drug list are not counted towards the out of pocket costs. The PAP's assistance on behalf of the PAP enrollee does not count towards a Part D beneficiary's true-out-of-pocket cost (TrOOP). In other words, PAP assistance would not fill the donut hole and push patients into the catastrophic part of Part D where the program pays 95 percent of all drug costs.
Third, there are many other patient assistance programs that have also been around for decades to help people with HIV, Hepatitis C and many rare diseases. Apparently the dynamic duo also believe these are “schemes” to gain billions.
Fourth, in addition to ignoring that PAP assistance does NOT boost catastrophic drug spending, Langreth and Elgin rely heavily on the expert testimony provided on behalf of the plaintiff who makes these sweeping claims. (More on the inventive path the expert took to estimate Celgene raked in $19 billion in excess sales over the last decade in another post.)
Fifth, they also ignore the vast body of evidence that co-pay assistance often helps patients whose drugs are not covered and who’s copay or cost sharing have increased much faster than drug prices net of rebates. And often these rebates are generated agreements that specify a “competitor’s drug must have a higher copayment than that of the rebated drug. Other agreements require the sponsor to exclude a competitor’s drugs from its formulary altogether. Rebates were often larger when fewer competitors’ drugs were given preference on the formulary. For example, one sponsor received a 35-percent rebate when the drug was one of two preferred drugs in its class, but a 40-percent rebate when the drug was the only preferred drug in its class on the formulary. “
But I guess helping patients who are powerless to fight such decisions should suffer and die. Perhaps Langreth and Elgin feel that's a small price to pay to strike a blow for tort lawyer settlements.
Here’s what Mick Kolassa, one the world’s experts on drug pricing and reimbursement (and a great blues artist) concludes: “Insurers can argue that these offset programs drive patients to use costlier branded drugs (in lieu of cheaper branded options or generics), but studies have shown that more than 40% of the time, in the absence of a copay-offset program, if the patient cannot pay the OOP expenses, they won’t switch to a cheaper drug—they will simply forgo the medication. The insurance industry will end up losing considerably more money over the long run, in terms of covering related medical expenses that arise when the patients don’t control their conditions through the use of medication.”
To sum up, Langreth and Elgin allege that drug companies and PAPs are colluding to evade anti-kickback laws and overbill Medicare. So they are alleging that the relationship is nothing less than money laundering and racketeering.
I am sure that the article has gotten a lot of clicks. Call me old-fashioned, but I’d trade clicks and self-serving media exposure for being fair and truthful.
Relying mostly on unsealed documents from a private case brought by an ex-Celgene employee, the duo cite an expert witness that the donations “were actually illegal kickbacks designed to hide the fact that Celgene was contributing these payments to the foundations to get Medicare patients to use more” of Celgene’s cancer drugs, Thalomid and Revlimid.’
Their reporting is, as the movie disclaimer goes: “Inspired by a true story” which begins here:
First, PAP’s have been around for decades to help patients with limited financial ability to pay for out of pocket health care costs, including medicines.
In 2006, the Medicare Part D benefit kicked in. Beneficiaries no longer qualified for assistance under traditional PAP eligibility criteria whereby companies provided support directly to patients because they could run afoul of federal anti-kickback statutes and other law. But many patients who did not qualify for low income subsidies still needed financial help. Hence, the Department of Health and Human Services Office of Inspector General drew up regulations to allow cost-sharing subsidies provided by bona fide, independent charities unaffiliated with pharmaceutical manufacturers… even if the charities receive manufacturer contributions.” These regulations have been continually updated and PAPs are strictly regulated by HHS.
Elgin opines that such arrangements are a ‘grey area.’ He might tell that to HHS and the Department of Justice since they are not a party to this private lawsuit. (More on the intricacies of the suit later. )
Second, drugs not covered on the Medicare Part D plan formulary or drug list are not counted towards the out of pocket costs. The PAP's assistance on behalf of the PAP enrollee does not count towards a Part D beneficiary's true-out-of-pocket cost (TrOOP). In other words, PAP assistance would not fill the donut hole and push patients into the catastrophic part of Part D where the program pays 95 percent of all drug costs.
Third, there are many other patient assistance programs that have also been around for decades to help people with HIV, Hepatitis C and many rare diseases. Apparently the dynamic duo also believe these are “schemes” to gain billions.
Fourth, in addition to ignoring that PAP assistance does NOT boost catastrophic drug spending, Langreth and Elgin rely heavily on the expert testimony provided on behalf of the plaintiff who makes these sweeping claims. (More on the inventive path the expert took to estimate Celgene raked in $19 billion in excess sales over the last decade in another post.)
Fifth, they also ignore the vast body of evidence that co-pay assistance often helps patients whose drugs are not covered and who’s copay or cost sharing have increased much faster than drug prices net of rebates. And often these rebates are generated agreements that specify a “competitor’s drug must have a higher copayment than that of the rebated drug. Other agreements require the sponsor to exclude a competitor’s drugs from its formulary altogether. Rebates were often larger when fewer competitors’ drugs were given preference on the formulary. For example, one sponsor received a 35-percent rebate when the drug was one of two preferred drugs in its class, but a 40-percent rebate when the drug was the only preferred drug in its class on the formulary. “
But I guess helping patients who are powerless to fight such decisions should suffer and die. Perhaps Langreth and Elgin feel that's a small price to pay to strike a blow for tort lawyer settlements.
Here’s what Mick Kolassa, one the world’s experts on drug pricing and reimbursement (and a great blues artist) concludes: “Insurers can argue that these offset programs drive patients to use costlier branded drugs (in lieu of cheaper branded options or generics), but studies have shown that more than 40% of the time, in the absence of a copay-offset program, if the patient cannot pay the OOP expenses, they won’t switch to a cheaper drug—they will simply forgo the medication. The insurance industry will end up losing considerably more money over the long run, in terms of covering related medical expenses that arise when the patients don’t control their conditions through the use of medication.”
To sum up, Langreth and Elgin allege that drug companies and PAPs are colluding to evade anti-kickback laws and overbill Medicare. So they are alleging that the relationship is nothing less than money laundering and racketeering.
I am sure that the article has gotten a lot of clicks. Call me old-fashioned, but I’d trade clicks and self-serving media exposure for being fair and truthful.
In a set of joint principles, BIO and PhRMA emphasized that companies should be able to communicate "truthful, non-misleading" information outside of an FDA-approved label to insurance providers, PBMs and government healthcare programs as they consider reimbursement decisions.
“To exercise sound medical judgment in treating patients, health care professionals must understand the full range of treatment options, including both established and emerging information about available medications. Biopharmaceutical companies are uniquely positioned to help health care professionals achieve the best outcomes for patients, because companies can provide timely, accurate, and comprehensive information about both approved and unapproved uses of the medications they research, develop, and bring to patients. PhRMA, BIO and their members believe that the availability of a wider range of truthful and non-misleading information can help health care professionals and payers make better informed medical decisions for their patients, which in turn will benefit patients.”
According to the principles, a company should be able to describe to payers its pipeline, the status of FDA applications, the anticipated uses of products, relevant clinical trial data, pharmacoeconomic information and applicable treatment guidelines. Further, a company should be able to discuss analyses of real-world data derived from "sound and well-described" research methods.
Communications should be tailored to the sophistication of the intended audience, and should provide "scientific substantiation" for information not included in FDA-approved labeling, the document said. A company should provide details on the design and implementation of studies that generated data, including patient populations and statistical analysis plan.
BIO and PhRMA also said that when applicable, companies should inform healthcare professionals that other research led to different results.
No word from White Oak … yet. What is needed from the FDA is though bold action and … clarity.
This is urgent for many reasons: different federal agencies (FDA, FTC, DOJ) with different views on pathways and jurisdiction, and the extreme danger of allowing federal judges dictate regulatory policy. If existing policy has evolved to protect the public from snake oil, the recent Amarin decision is precarious precedent for communications about fish oil – and beyond.
“To exercise sound medical judgment in treating patients, health care professionals must understand the full range of treatment options, including both established and emerging information about available medications. Biopharmaceutical companies are uniquely positioned to help health care professionals achieve the best outcomes for patients, because companies can provide timely, accurate, and comprehensive information about both approved and unapproved uses of the medications they research, develop, and bring to patients. PhRMA, BIO and their members believe that the availability of a wider range of truthful and non-misleading information can help health care professionals and payers make better informed medical decisions for their patients, which in turn will benefit patients.”
According to the principles, a company should be able to describe to payers its pipeline, the status of FDA applications, the anticipated uses of products, relevant clinical trial data, pharmacoeconomic information and applicable treatment guidelines. Further, a company should be able to discuss analyses of real-world data derived from "sound and well-described" research methods.
Communications should be tailored to the sophistication of the intended audience, and should provide "scientific substantiation" for information not included in FDA-approved labeling, the document said. A company should provide details on the design and implementation of studies that generated data, including patient populations and statistical analysis plan.
BIO and PhRMA also said that when applicable, companies should inform healthcare professionals that other research led to different results.
No word from White Oak … yet. What is needed from the FDA is though bold action and … clarity.
This is urgent for many reasons: different federal agencies (FDA, FTC, DOJ) with different views on pathways and jurisdiction, and the extreme danger of allowing federal judges dictate regulatory policy. If existing policy has evolved to protect the public from snake oil, the recent Amarin decision is precarious precedent for communications about fish oil – and beyond.
In draft guidance released Tuesday, FDA outlined its thinking on the use of real-world evidence in making regulatory decisions about medical devices.
The agency described factors it would consider when evaluating the relevance, reliability and quality of real-world evidence, and suggests when it might use such data to make decisions about devices.
To evaluate the reliability of data, FDA will assess how they were collected, their adequacy for answering relevant questions, and whether they were collected in a manner that minimizes bias. The guidance says a prospective protocol is "essential to ensure reliability" of real-world evidence.
The guidance says FDA might use such evidence to expand a device's approved indications, for postmarket surveillance, and as a control for studies of subsequent devices.
Per BioCentury, “FDA's Center for Devices and Radiological Health also has been in the vanguard of the agency's efforts to solicit patient preference data and use it to support approval decisions.” Last year, CDRH used patient preference data to approve the Maestro Rechargeable System from EnteroMedics Inc.
The agency described factors it would consider when evaluating the relevance, reliability and quality of real-world evidence, and suggests when it might use such data to make decisions about devices.
To evaluate the reliability of data, FDA will assess how they were collected, their adequacy for answering relevant questions, and whether they were collected in a manner that minimizes bias. The guidance says a prospective protocol is "essential to ensure reliability" of real-world evidence.
The guidance says FDA might use such evidence to expand a device's approved indications, for postmarket surveillance, and as a control for studies of subsequent devices.
Per BioCentury, “FDA's Center for Devices and Radiological Health also has been in the vanguard of the agency's efforts to solicit patient preference data and use it to support approval decisions.” Last year, CDRH used patient preference data to approve the Maestro Rechargeable System from EnteroMedics Inc.
The AP’s “exclusive“ report on Medicare drug spending excluded many facts that challenge the news outlet’s conclusion that “the rapid rise in spending for pricey drugs threatens to make the popular prescription benefit financially unsustainable.”
By exclusive, AP means selective, since it focused only on 2014-2015 drug spending -- which increased by 15 percent -- and over looked historical and projected changes in drug costs.
Here's some information AP excluded:
Part D spending grew by 15 percent in 2015 and is expected to grow annually, on average, by 10.9 percent between 2015 and 2020. And from 2010-2013 gross drug spending (not including rebates and other expenses) grew 10.1 percent.
A 2013 CBO analysis found that Part D drug costs between 2007-2010 “increased by just 1.8 percent per year per beneficiary, growing more slowly than total per capita drug costs.” From 2010-2013 per capita costs increased by 1.6 percent.
Specialty drugs accounted for only 6.7 percent of total drug spending per beneficiary in 2007 and 9.1 percent in 2011. I estimate that
And AP also failed to note just how much “pricey” new drugs were as a percent of total Medicare spending. In case you’re interested spending on brand drugs for 2015 was $52 billion, around 8 percent of total Medicare spending. Which is about what it is projected to be for the next 20 years.
Further, the AP misreports the impact of rebates. It looks at rebates across the entire program, which includes spending on generic drugs. AP states: “Rebates for individual drugs…averaged nearly 13 percent across the entire program in 2013, according to government figures, and were estimated at about 17 percent for 2015.”
And AP could have also found that both rebates and administrative costs are increasing faster than part D per capita cost trend.
Profits plus administrative costs per beneficiary were higher relative to drug costs in 2010 and in 2015 than in 2007. Which means not all of the slow growth in drug spending was passed back through plan bids
The slow growth in drug spending coincided with a huge increase in the number of Medicare consumers paying thousands out of pocket for drugs deeply discounted under part D. An Avalere report found:
“The average percentage of covered drugs facing coinsurance has risen sharply from 35 percent in 2014 to 58 percent in 2016 among PDPs. While most PDPs have historically applied coinsurance to high-cost drugs on the specialty tier, plans have extended coinsurance to drugs on lower tiers in recent years, including those covered on preferred and non-preferred brand tiers. “
This is important because increased cost sharing reduces the use of medicines and the use of medicines reduces other spending. The Congressional Budget Office notes that a 1 percent increase in the number of prescriptions filled by beneficiaries would cause Medicare’s spending on medical services to fall by roughly one-fifth of 1 percent for all patients. However, the impact on the use of new medicines in reducing other treatment related costs in patients with a diagnosis of a chronic disease without access to a new drug is more significant:
In fact, “improved medication adherence associated with expansion of drug coverage under Part D led to nearly $2.6 billion in reductions in medical expenditures annually among beneficiaries diagnosed with CHF and without prior comprehensive drug coverage, of which over $2.3 billion was savings to Medicare.
Other studies came to the same conclusions: "Implementation of the Medicare prescription drug plan in 2006 was followed by significant decreases in spending on nondrug medical expenditures among beneficiaries who previously had limited drug coverage. After Medicare Part D started, nondrug medical spending in this group was about $1,200 per year less than expected. The savings were driven principally by seniors making less use of hospitals and skilled nursing facilities."
Another study found that part D spending reduced hospitalizations generally by 4.1 percent.
Among beneficiaries with limited or no prior drug coverage Part D reduced the number of overnight hospital stays by about 12%, and among beneficiaries with generous prior drug coverage Part D reduced the number of hospital nights by about 21%.
By contrast, the increase in cost sharing – even as rebates and PBM profits increase and net drug prices rise below the rate of inflation – makes people sicker and increases health spending.
Beneficiaries with higher OOP costs for the more expensive oral cancer drugs were more likely to discontinue or delay drug therapy.
More generally, a survey of all articles that” evaluated the relationship between changes in cost sharing and adherence found that 85% showed that an increasing patient share of medication costs was significantly associated with a decrease in adherence. For articles that investigated the relationship between adherence and outcomes, the majority noted that increased adherence was associated with a statistically significant improvement in outcomes.”
Hence, AP’s exclusive access to Medicare part D data was used to confirm a pre-established claim that new drugs will make the benefit unsustainable. In AP’s world, at least when it comes to drug prices, exclusive means being selective in what information is published to affirm a previously established prejudice.
Shame.
By exclusive, AP means selective, since it focused only on 2014-2015 drug spending -- which increased by 15 percent -- and over looked historical and projected changes in drug costs.
Here's some information AP excluded:
Part D spending grew by 15 percent in 2015 and is expected to grow annually, on average, by 10.9 percent between 2015 and 2020. And from 2010-2013 gross drug spending (not including rebates and other expenses) grew 10.1 percent.
A 2013 CBO analysis found that Part D drug costs between 2007-2010 “increased by just 1.8 percent per year per beneficiary, growing more slowly than total per capita drug costs.” From 2010-2013 per capita costs increased by 1.6 percent.
Specialty drugs accounted for only 6.7 percent of total drug spending per beneficiary in 2007 and 9.1 percent in 2011. I estimate that
And AP also failed to note just how much “pricey” new drugs were as a percent of total Medicare spending. In case you’re interested spending on brand drugs for 2015 was $52 billion, around 8 percent of total Medicare spending. Which is about what it is projected to be for the next 20 years.
Further, the AP misreports the impact of rebates. It looks at rebates across the entire program, which includes spending on generic drugs. AP states: “Rebates for individual drugs…averaged nearly 13 percent across the entire program in 2013, according to government figures, and were estimated at about 17 percent for 2015.”
And AP could have also found that both rebates and administrative costs are increasing faster than part D per capita cost trend.
Profits plus administrative costs per beneficiary were higher relative to drug costs in 2010 and in 2015 than in 2007. Which means not all of the slow growth in drug spending was passed back through plan bids
The slow growth in drug spending coincided with a huge increase in the number of Medicare consumers paying thousands out of pocket for drugs deeply discounted under part D. An Avalere report found:
“The average percentage of covered drugs facing coinsurance has risen sharply from 35 percent in 2014 to 58 percent in 2016 among PDPs. While most PDPs have historically applied coinsurance to high-cost drugs on the specialty tier, plans have extended coinsurance to drugs on lower tiers in recent years, including those covered on preferred and non-preferred brand tiers. “
This is important because increased cost sharing reduces the use of medicines and the use of medicines reduces other spending. The Congressional Budget Office notes that a 1 percent increase in the number of prescriptions filled by beneficiaries would cause Medicare’s spending on medical services to fall by roughly one-fifth of 1 percent for all patients. However, the impact on the use of new medicines in reducing other treatment related costs in patients with a diagnosis of a chronic disease without access to a new drug is more significant:
In fact, “improved medication adherence associated with expansion of drug coverage under Part D led to nearly $2.6 billion in reductions in medical expenditures annually among beneficiaries diagnosed with CHF and without prior comprehensive drug coverage, of which over $2.3 billion was savings to Medicare.
Other studies came to the same conclusions: "Implementation of the Medicare prescription drug plan in 2006 was followed by significant decreases in spending on nondrug medical expenditures among beneficiaries who previously had limited drug coverage. After Medicare Part D started, nondrug medical spending in this group was about $1,200 per year less than expected. The savings were driven principally by seniors making less use of hospitals and skilled nursing facilities."
Another study found that part D spending reduced hospitalizations generally by 4.1 percent.
Among beneficiaries with limited or no prior drug coverage Part D reduced the number of overnight hospital stays by about 12%, and among beneficiaries with generous prior drug coverage Part D reduced the number of hospital nights by about 21%.
By contrast, the increase in cost sharing – even as rebates and PBM profits increase and net drug prices rise below the rate of inflation – makes people sicker and increases health spending.
Beneficiaries with higher OOP costs for the more expensive oral cancer drugs were more likely to discontinue or delay drug therapy.
More generally, a survey of all articles that” evaluated the relationship between changes in cost sharing and adherence found that 85% showed that an increasing patient share of medication costs was significantly associated with a decrease in adherence. For articles that investigated the relationship between adherence and outcomes, the majority noted that increased adherence was associated with a statistically significant improvement in outcomes.”
Hence, AP’s exclusive access to Medicare part D data was used to confirm a pre-established claim that new drugs will make the benefit unsustainable. In AP’s world, at least when it comes to drug prices, exclusive means being selective in what information is published to affirm a previously established prejudice.
Shame.
Per the FDA’s PDUFA VI "commitment letter," the agency will face some real world deadlines to advance the use of real world evidence. But, since we’re dealing with the real world, let’s get real – guidance is unlikely until the end of 2022 at the earliest. (That's the timeline agreed to via the PDUFA VI negotiations.)
Step One towards these new 21st century rules of the regulatory road will be a series of public meetings and regulatory workshops. It will be curious to see who shows up at the table.
PDUFA VI User fees will support agency policy development in the area, and FDA has pledged to meet the following benchmarks:
* End of FY 2018 – Convene one or more public workshops with key stakeholders, including patients, biopharmaceutical companies, and academia, to gather input into issues related to real world evidence (RWE) use in regulatory decision-making.
* End of FY 2019 – Initiate (or fund by contract) appropriate activities (e.g., pilot studies or methodology development projects) aimed at addressing key outstanding concerns and considerations in the use of RWE for regulatory decision-making.
* End of FY 2021 – Publish draft guidance on how RWE can contribute to the assessment of safety and effectiveness in regulatory submissions, for example in the approval of new supplemental indications and for the fulfillment of post-marketing commitments and requirements. FDA will work toward the goal of publishing a revised draft or final guidance within 18 months after the close of the public comment period.
Ground Zero for a real-world evidence regulatory pathway will be Sentinel, the existing public/private program aimed that uses a variety of databases to track, collect and analyze adverse event reports about drugs, vaccines and medical devices.
Modeled after successful programs such as the Centers for Disease Control and Prevention’s Vaccine Safety Datalink, Sentinel allows FDA to conduct safety surveillance by actively querying diverse data sources, primarily administrative and insurance claims databases but also data from electronic health record (EHR) systems, to evaluate possible medical product safety issues quickly and securely.
Sentinel, mandated under the Food and Drug Administration Amendments Act (FDAAA), will get a $50m boost over five years under PDUFA VI. Sentinel currently has information on over 100 million patients.
Similarly, efforts are underway to establish a National Device Evaluation System (NDES). As currently envisioned, the NDES would be established through strategic alliances and shared governance. The system would build upon and leverage information from electronic real-world data sources, such as data gathered through routine clinical practice in device registries, claims data, and EHRs, with linkages activated among specific data sources as appropriate to address specific questions.
As FDA Commissioner Rob Califf and Deputy Commissioner Rachel Sherman recently commented:
Creating knowledge requires the application of proven analytical methods and techniques to biomedical data in order to produce reliable conclusions … There must be a common approach to how data is presented, reported and analyzed and strict methods for ensuring patient privacy and data security… Rules of engagement must be transparent and developed through a process that builds consensus across the relevant ecosystem and its stakeholders … To ensure support across a diverse ecosystem that often includes competing priorities and incentives, the system’s output must be intended for the public good and be readily accessible to all stakeholders.
When it comes to the regulatory science of real world evidence, we are still in early days, but the times they are a changin.’ (And you better start swimmin' or you'll sink like a stone.)
Step One towards these new 21st century rules of the regulatory road will be a series of public meetings and regulatory workshops. It will be curious to see who shows up at the table.
PDUFA VI User fees will support agency policy development in the area, and FDA has pledged to meet the following benchmarks:
* End of FY 2018 – Convene one or more public workshops with key stakeholders, including patients, biopharmaceutical companies, and academia, to gather input into issues related to real world evidence (RWE) use in regulatory decision-making.
* End of FY 2019 – Initiate (or fund by contract) appropriate activities (e.g., pilot studies or methodology development projects) aimed at addressing key outstanding concerns and considerations in the use of RWE for regulatory decision-making.
* End of FY 2021 – Publish draft guidance on how RWE can contribute to the assessment of safety and effectiveness in regulatory submissions, for example in the approval of new supplemental indications and for the fulfillment of post-marketing commitments and requirements. FDA will work toward the goal of publishing a revised draft or final guidance within 18 months after the close of the public comment period.
Ground Zero for a real-world evidence regulatory pathway will be Sentinel, the existing public/private program aimed that uses a variety of databases to track, collect and analyze adverse event reports about drugs, vaccines and medical devices.
Modeled after successful programs such as the Centers for Disease Control and Prevention’s Vaccine Safety Datalink, Sentinel allows FDA to conduct safety surveillance by actively querying diverse data sources, primarily administrative and insurance claims databases but also data from electronic health record (EHR) systems, to evaluate possible medical product safety issues quickly and securely.
Sentinel, mandated under the Food and Drug Administration Amendments Act (FDAAA), will get a $50m boost over five years under PDUFA VI. Sentinel currently has information on over 100 million patients.
Similarly, efforts are underway to establish a National Device Evaluation System (NDES). As currently envisioned, the NDES would be established through strategic alliances and shared governance. The system would build upon and leverage information from electronic real-world data sources, such as data gathered through routine clinical practice in device registries, claims data, and EHRs, with linkages activated among specific data sources as appropriate to address specific questions.
As FDA Commissioner Rob Califf and Deputy Commissioner Rachel Sherman recently commented:
Creating knowledge requires the application of proven analytical methods and techniques to biomedical data in order to produce reliable conclusions … There must be a common approach to how data is presented, reported and analyzed and strict methods for ensuring patient privacy and data security… Rules of engagement must be transparent and developed through a process that builds consensus across the relevant ecosystem and its stakeholders … To ensure support across a diverse ecosystem that often includes competing priorities and incentives, the system’s output must be intended for the public good and be readily accessible to all stakeholders.
When it comes to the regulatory science of real world evidence, we are still in early days, but the times they are a changin.’ (And you better start swimmin' or you'll sink like a stone.)
As I have previously discussed, ICER's initiative to revisit the representatitiveness and scientific validity of his QALY based assessments of drug prices and access is really a crude political makeover. The recent appointment of so-called patient and consumer advocates to his board is example of ICER advertising itself as becoming more open and patient centered when the truth is much different:
"The Institute for Clinical and Economic Review (ICER) has announced the appointment of two new members to its Governance Board. Ellen Andrews, PhD and Frances Visco, JD both join the Governance Board with extensive experience in patient and consumer advocacy....
“These two leaders bring to ICER’s Governance Board tremendous skills honed through years of experience fighting for access to high-quality health care and for the evidence that patients need to participate fully in their health care decisions,” noted ICER’s President Steven D. Pearson, MD, MSc. “This is part of our long-standing plan to augment this perspective among the members of our Governance and Advisory Boards as ICER grows. I know that Ellen and Fran are superbly prepared to join with other Board members in assuring that ICER’s strategic direction and all our efforts are informed by the patient voice.”
They are superbly prepared if by preparation one means that they share Pearson's twisted use of QALYs and budget caps to set drug prices and limit access.
Dr. Andrews was already an advisor to ICER and has written in defense of it's current approach. She has also spouted the party line that insurance companies don't get to vote on ICER decisions (they just fund the organization).
She has also written favorably about Canadian drug price controls and was part of a working group tasked with finding ways states and provinces could could control drug prices.
Fran Visco is also a supporter of using longer, larger clinical trials to slow down access to new medicines.
She is opposed to expanding compassionate use pathways, claiming: The problem is that the expectations for these drugs are unreasonably high. The public has this unrealistic faith in what these new drugs are going to do."
Here's what she said about accelerated approval: "The F.D.A. should learn a lesson and re-evaluate the accelerated approval process itself. The goal is to save lives, not rush to get drugs to the public." She also believes that "public policy should discourage access to investigational drugs
outside of clinical trials. " So much for access.
Visco also support the reimportation of drugs into the US from overseas. She claims that drug importation can be "adequately regulated and can provide immediate cost savings for consumers." As long as you don't mind counterfeit cancer drugs such as fake Avastin.
I have no problem with Pearson packing his boards and committees with true believers or getting financial support from insurers. But don't claim ICER is an objective and trusted organization that uses independent assessments to " evaluate the value of costly, new interventions – whether they are worth what they charge." When you rely upon the QALY and budget caps to set prices across all disease areas, it leads to price controls and rationing. Andrews and Visco believe in both, as does Pearson. Again, ICER can meet and talk all it wants. But it is not patient-centered and it is not trusted or independent. Andrews and Visco are just another couple of human shields to protect Pearson while he runs his anti-patient enterprise
This latest move is another example of why we should let ICER melt away and develop a method of measuring value that reflects the needs and preferences of of patients, their families and communities.
"The Institute for Clinical and Economic Review (ICER) has announced the appointment of two new members to its Governance Board. Ellen Andrews, PhD and Frances Visco, JD both join the Governance Board with extensive experience in patient and consumer advocacy....
“These two leaders bring to ICER’s Governance Board tremendous skills honed through years of experience fighting for access to high-quality health care and for the evidence that patients need to participate fully in their health care decisions,” noted ICER’s President Steven D. Pearson, MD, MSc. “This is part of our long-standing plan to augment this perspective among the members of our Governance and Advisory Boards as ICER grows. I know that Ellen and Fran are superbly prepared to join with other Board members in assuring that ICER’s strategic direction and all our efforts are informed by the patient voice.”
They are superbly prepared if by preparation one means that they share Pearson's twisted use of QALYs and budget caps to set drug prices and limit access.
Dr. Andrews was already an advisor to ICER and has written in defense of it's current approach. She has also spouted the party line that insurance companies don't get to vote on ICER decisions (they just fund the organization).
She has also written favorably about Canadian drug price controls and was part of a working group tasked with finding ways states and provinces could could control drug prices.
Fran Visco is also a supporter of using longer, larger clinical trials to slow down access to new medicines.
She is opposed to expanding compassionate use pathways, claiming: The problem is that the expectations for these drugs are unreasonably high. The public has this unrealistic faith in what these new drugs are going to do."
Here's what she said about accelerated approval: "The F.D.A. should learn a lesson and re-evaluate the accelerated approval process itself. The goal is to save lives, not rush to get drugs to the public." She also believes that "public policy should discourage access to investigational drugs
outside of clinical trials. " So much for access.
Visco also support the reimportation of drugs into the US from overseas. She claims that drug importation can be "adequately regulated and can provide immediate cost savings for consumers." As long as you don't mind counterfeit cancer drugs such as fake Avastin.
I have no problem with Pearson packing his boards and committees with true believers or getting financial support from insurers. But don't claim ICER is an objective and trusted organization that uses independent assessments to " evaluate the value of costly, new interventions – whether they are worth what they charge." When you rely upon the QALY and budget caps to set prices across all disease areas, it leads to price controls and rationing. Andrews and Visco believe in both, as does Pearson. Again, ICER can meet and talk all it wants. But it is not patient-centered and it is not trusted or independent. Andrews and Visco are just another couple of human shields to protect Pearson while he runs his anti-patient enterprise
This latest move is another example of why we should let ICER melt away and develop a method of measuring value that reflects the needs and preferences of of patients, their families and communities.
During a Presidential election cycle, facts are often the first casualty.
Avik Roy argues that the GOP needs a “clear plan to tackle the high and rising price of branded prescription drugs.” He calls it a Republican “blind spot.” And he’s right – but for the wrong reasons (“The GOP Needs to Tackle the High Price of Prescription Drugs").
According to Roy, “Even 66% of Republican voters said high drug prices should be a top policy priority, compared to 60% who said the same of repealing Obamacare.” What he doesn’t share (or more likely doesn’t know) is that for most Americans, “the price of drugs” means the co-pay they hand over at the pharmacy when they pick up their prescriptions. That’s not a drug-pricing problem; it’s an insurance industry problem. It’s so easy to blame Big Pharma. That’s the real blind spot.
Mr. Roy quotes from a recent Kaiser Family Foundation poll which says 72% of their sample find “drug prices” generally unreasonable. But he doesn’t share that the same exact percentage (72%) said they find their drugs affordable. If Mr. Roy is reporting one he should report the other. It’s an issue of probability versus reality.
Mr. Roy discusses consumer purchasing of iPhones and compares it to healthcare. His assumption that consumers can make choices through transparent pricing is false since, in healthcare, there are pesky things called therapeutic outcomes. Even if consumers have pricing information its not good enough to make an appropriate “purchasing decision” since they don't necessarily have or understand the information which drives positive outcomes. This is despite pharmaceuticals being the only segment of healthcare (compared to physician and hospital services ) where pricing and outcomes are the most transparent.
Also, Mr. Roy fails to mention that pharmaceuticals are the only segment of healthcare where the costs plummet after a period of time (brand vs. generics). Today’s expensive medicines are tomorrow's very inexpensive generics. Today’s hospitalizations, alas, are tomorrow's even more expensive hospitalizations. Modern medicines continue to provide value in perpetuity - what value does a site of care, like a hospital or an insurer or PBM provide?
Mr. Roy fails to mention that hospitals actually manipulate and increase drug costs by buying up physician practices and shifting site of care. According to Sloane Kettering data, a medicine administered in a hospital setting is 150% more costly that one administered in physician offices. Hospitals make more money by shifting site of care while vilifying drug companies! They also artificially pad their bottom lines by taking advantage of the 340B program - but he fails to mention that as well.
Of course, drug pricing is a complicated matter -- which is why the pharmaceutical industry should focus on a few basic points when making its case.
Roy argues there’s no relevant connection between the pharmaceutical industry’s investments in R&D and pricing. That’s intuitively and factually wrong.
Since 2000, drugs firms have spent over half a trillion dollars developing new medicines. And research costs for the last year alone totaled more than $51 billion. That’s up from $15.2 billion in 1995.
These are extraordinary spending levels, even compared to other research-intensive industries. In fact, the pharmaceutical sector spends five times more on R&D than aerospace, and 2 ½ times more than the software and computer industry. This is the kind of investment that pharmaceutical innovation demands, and it’s reflected in the economics of advanced drugs.
Big Pharma also needs to do a better job explaining just how many failures firms endure searching for the next breakthrough medicine. Drug companies must develop hundreds of compounds until they find one suitable for testing on humans. Of those rare compounds that make it to phase-1 human trials, fewer than 12 percent win approval from the FDA.
That’s why bringing just one drug to market costs an average of nearly $2.6 billion and takes more than 10 years, according to researchers at Tufts.
If drug companies were open and honest about their frequent and expensive failures, they could quash the myth that pharmaceutical research is obscenely lucrative.
Consider the controversy surrounding the hepatitis C drug Sovaldi. When the medicine came on the market, it quickly became known in the press as “the $1,000 pill.” This may be a great sound bite, but it’s hardly accurate.
In reality, insurers and benefit managers negotiated discounts that reduced the price of Sovaldi by 20 to 50 percent. But they didn’t pass the full discount on to the consumer. Instead, insurers and pharmacy benefit managers pocketed the money to pad their bottom lines and executives’ wallets. Last year, CVS Caremark Corporation, one of the biggest benefit managers, paid its CEO over $32 million.
For many patients, particularly those without insurance coverage, Sovaldi’s manufacturer supplied a coupon ensuring that co-pays for the drug wouldn’t exceed $5.
But Mr. Roy’s key error is focusing on price as the denominator of the conversation. That’s wrong too, in fact it the fundamental error that allows people like Hillary Clinton and Donald Trump to blame for the biopharmaceutical industry for rising health care costs. The true denominator is value.
Consider one pre-Sovaldi “best practice” treatment for Hepatitis C, the drug Pegasys. This requires one injection a week for 48 weeks — and very few patients see the treatment through to completion, so much of that treatment, both physician time and drug cost, is wasted. Nor is it that much cheaper: At about $7,000/month, the full course of treatment is over $70,000 — barely less than cost of the three months needed for Sovaldi to work a cure.
And the price of not using Sovaldi is very high. One in three patients with the Hepatitis C virus eventually develops liver cirrhosis, and managing these patients is costly. A “routine” liver transplant (where the liver is from a cadaver) costs close to $300,000; a “living donor” transplant is even more expensive.
Thanks to Sovaldi, a pill that cures the disease when taken once a day over 12 weeks will eradicate the need, the risks and the costs of liver transplantation. Such radical innovation deserves to be both lauded and rewarded.
But it’s so much easier to place blame than say thank you. When it comes to pharmaceuticals, we have to learn to understand the value proposition. It’s not just the price of the product –it’s the price relative to the value the product provides to individuals and society.
In short, drugs aren’t the cause of rising health-care costs — they’re the solution. Demonizing new treatments distracts from the real problem in the US biopharmaceutical industry: top-down cost-centric policies that focus on the near-term, short-changing long-term patient outcomes, and so endanger “sustainable innovation” by denying fair reimbursement for high-risk investment in R&D.
But it’s so much easier to just place blame. Easy and wrong. Avik Roy should know better.
Avik Roy argues that the GOP needs a “clear plan to tackle the high and rising price of branded prescription drugs.” He calls it a Republican “blind spot.” And he’s right – but for the wrong reasons (“The GOP Needs to Tackle the High Price of Prescription Drugs").
According to Roy, “Even 66% of Republican voters said high drug prices should be a top policy priority, compared to 60% who said the same of repealing Obamacare.” What he doesn’t share (or more likely doesn’t know) is that for most Americans, “the price of drugs” means the co-pay they hand over at the pharmacy when they pick up their prescriptions. That’s not a drug-pricing problem; it’s an insurance industry problem. It’s so easy to blame Big Pharma. That’s the real blind spot.
Mr. Roy quotes from a recent Kaiser Family Foundation poll which says 72% of their sample find “drug prices” generally unreasonable. But he doesn’t share that the same exact percentage (72%) said they find their drugs affordable. If Mr. Roy is reporting one he should report the other. It’s an issue of probability versus reality.
Mr. Roy discusses consumer purchasing of iPhones and compares it to healthcare. His assumption that consumers can make choices through transparent pricing is false since, in healthcare, there are pesky things called therapeutic outcomes. Even if consumers have pricing information its not good enough to make an appropriate “purchasing decision” since they don't necessarily have or understand the information which drives positive outcomes. This is despite pharmaceuticals being the only segment of healthcare (compared to physician and hospital services ) where pricing and outcomes are the most transparent.
Also, Mr. Roy fails to mention that pharmaceuticals are the only segment of healthcare where the costs plummet after a period of time (brand vs. generics). Today’s expensive medicines are tomorrow's very inexpensive generics. Today’s hospitalizations, alas, are tomorrow's even more expensive hospitalizations. Modern medicines continue to provide value in perpetuity - what value does a site of care, like a hospital or an insurer or PBM provide?
Mr. Roy fails to mention that hospitals actually manipulate and increase drug costs by buying up physician practices and shifting site of care. According to Sloane Kettering data, a medicine administered in a hospital setting is 150% more costly that one administered in physician offices. Hospitals make more money by shifting site of care while vilifying drug companies! They also artificially pad their bottom lines by taking advantage of the 340B program - but he fails to mention that as well.
Of course, drug pricing is a complicated matter -- which is why the pharmaceutical industry should focus on a few basic points when making its case.
Roy argues there’s no relevant connection between the pharmaceutical industry’s investments in R&D and pricing. That’s intuitively and factually wrong.
Since 2000, drugs firms have spent over half a trillion dollars developing new medicines. And research costs for the last year alone totaled more than $51 billion. That’s up from $15.2 billion in 1995.
These are extraordinary spending levels, even compared to other research-intensive industries. In fact, the pharmaceutical sector spends five times more on R&D than aerospace, and 2 ½ times more than the software and computer industry. This is the kind of investment that pharmaceutical innovation demands, and it’s reflected in the economics of advanced drugs.
Big Pharma also needs to do a better job explaining just how many failures firms endure searching for the next breakthrough medicine. Drug companies must develop hundreds of compounds until they find one suitable for testing on humans. Of those rare compounds that make it to phase-1 human trials, fewer than 12 percent win approval from the FDA.
That’s why bringing just one drug to market costs an average of nearly $2.6 billion and takes more than 10 years, according to researchers at Tufts.
If drug companies were open and honest about their frequent and expensive failures, they could quash the myth that pharmaceutical research is obscenely lucrative.
Consider the controversy surrounding the hepatitis C drug Sovaldi. When the medicine came on the market, it quickly became known in the press as “the $1,000 pill.” This may be a great sound bite, but it’s hardly accurate.
In reality, insurers and benefit managers negotiated discounts that reduced the price of Sovaldi by 20 to 50 percent. But they didn’t pass the full discount on to the consumer. Instead, insurers and pharmacy benefit managers pocketed the money to pad their bottom lines and executives’ wallets. Last year, CVS Caremark Corporation, one of the biggest benefit managers, paid its CEO over $32 million.
For many patients, particularly those without insurance coverage, Sovaldi’s manufacturer supplied a coupon ensuring that co-pays for the drug wouldn’t exceed $5.
But Mr. Roy’s key error is focusing on price as the denominator of the conversation. That’s wrong too, in fact it the fundamental error that allows people like Hillary Clinton and Donald Trump to blame for the biopharmaceutical industry for rising health care costs. The true denominator is value.
Consider one pre-Sovaldi “best practice” treatment for Hepatitis C, the drug Pegasys. This requires one injection a week for 48 weeks — and very few patients see the treatment through to completion, so much of that treatment, both physician time and drug cost, is wasted. Nor is it that much cheaper: At about $7,000/month, the full course of treatment is over $70,000 — barely less than cost of the three months needed for Sovaldi to work a cure.
And the price of not using Sovaldi is very high. One in three patients with the Hepatitis C virus eventually develops liver cirrhosis, and managing these patients is costly. A “routine” liver transplant (where the liver is from a cadaver) costs close to $300,000; a “living donor” transplant is even more expensive.
Thanks to Sovaldi, a pill that cures the disease when taken once a day over 12 weeks will eradicate the need, the risks and the costs of liver transplantation. Such radical innovation deserves to be both lauded and rewarded.
But it’s so much easier to place blame than say thank you. When it comes to pharmaceuticals, we have to learn to understand the value proposition. It’s not just the price of the product –it’s the price relative to the value the product provides to individuals and society.
In short, drugs aren’t the cause of rising health-care costs — they’re the solution. Demonizing new treatments distracts from the real problem in the US biopharmaceutical industry: top-down cost-centric policies that focus on the near-term, short-changing long-term patient outcomes, and so endanger “sustainable innovation” by denying fair reimbursement for high-risk investment in R&D.
But it’s so much easier to just place blame. Easy and wrong. Avik Roy should know better.
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.
