Latest Drugwonks' Blog
Terrific article in this week’s BioCentury, “Pricing Politics,” by one of our favorite reporters, Steve Usdin.
Here’s the opening paragraph:
Presidential candidates from both parties are tapping into public anger over prescription drug prices and responding by repeating old proposals, like controlling prices or lowering FDA approval standards, that won’t be enacted and probably wouldn’t work if they were put into practice.
Usdin writes about the “corrosive political environment” and “unrealistic prescriptions (aka: Bernie Sanders). He speaks of schadenfreude over our favorite “Pharma Bro” and how the Turing imbroglio has ignited the always-smoldering fire of public discontent over the way the pharmaceutical industry conducts its business.
How to manage this out-of-control Turingfreude? One way is for the innovative pharmaceutical industry to do a better job communicating the value message (I know, this is a recording) and, per Usdin, both PhRMA and BIO are preparing to ramp up their messaging efforts.
This is important beyond the rhetoric of a political season since many states have transparency initiatives that can only be successfully argued through the lens of relentless science and the potency of value.
Cohen was quoted in several articles on drug pricing (at least he was taken out of context and misquoted). And yesterday he was part of a CNBC panel discussion on the cost of medicines.
The headline for the video blares “Rising drug costs only 'getting worse': Expert”
The expert being Peter Bach. The definition of an expert is a person who has a comprehensive and authoritative knowledge of or skill in a particular area.
Bach first claimed that drugs are 20 percent of health care spending. Then he every study shows that drugs like Sovaldi are more expensive than the care it replaces. He then went on to claim such drugs that Sovaldi aren’t a cure because people can get re-infected with Hepatitis C,
Cohen said:
1. Sovaldi is a medical miracle and do ‘really’ cure. Beating the virus into submission is the same as NOT having the disease.
2. The insurer funded Institute for Clinical and Economic Review (ICER) shows that even at list prices, Hep C drugs are cost effective. (Other studies come to the same conclusions.)
3. List price is not what drug companies get. Part of that price become rebates to payers and therefore support a whole posse of PBMs, insurers and oncologists (who get 6 percent of the drug cost as a fee for administering them).
As for the the 20 percent claim, Cohen said that the bigger issue is how to reduce the total cost of care overall and increase value. Who cares if drugs are 90 percent of the cost of a treatment if it leads to more productivity, longevity and lower spending than would be the case in the absence of such medicines?
It was one of the first times that a media outlet allowed a balanced discussion of drug prices. And when given the chance to respond, Cohen nailed it.
Bach made claims that belied a lack of authoritative knowledge.
An article by STAT journalist Rebecca Robbins on drug pricing could use a lot of re-editing for balance and depth. Or maybe should could find another job.
She contrasts public ‘outrage’ (as represented by some well-dressed protestors) about drug pricing with an orgy of greedy indifference on the part of biotech CEOs.
Public anger at drug companies is “an abomination,” Ron Cohen, chairman of the big industry group BIO (my note: you see, even a trade group of small, money losing companies spending billions on medical research is now BIG as in powerful and dangerous), said at the Biotech Showcase. All the talk about pharma profiteering, Cohen said, is “a perversion of reality.”
Which can also describe Ms. Robbins reporting because of what is NOT included.
She follows Cohen’s comments (which were taken out of context: Cohen actually said that to smear everyone in the biopharma industry as all being “greedy profiteeers” is an abomination and perverse) with context free narrative about drug prices:
“Many drug makers have raised prices in the past year. And a slew of new drugs have (sic) hit the market with eye-popping price tags: cancer drugs at more than $11,000 a month; cholesterol drugs at more than $14,000 a year. Then there’s Martin Shkreli, the pharma executive who bought up a decades-old drug and hiked the price 5,000 percent, turning himself into a target of nationwide protests before he was arrested last month on securities fraud charges.”
Yes, linking Turing turd Shkreli who used the Daraprim price hike to short biotech stocks for the sake of his own portfolio, is now lumped in with companies developing new and important medicines that save lives, reduces health care costs and increase well-being is now part of the narrative.
Robbins is not alone in this perversion of reality. The WSJ’ Peter Loftus runs a me-too story that portrays price hikes as disregarding “mounting criticisms of prescription costs in the U.S”
Loftus claims companies “have raised U.S. prices for dozens of branded drugs since late December, with many of the increases between 9% and 10%, according to equity analysts. The increases are on list prices, before any discounts or rebates that manufacturers sometimes provide insurers and other payers. Some of the increases add thousands of dollars to the cost of already expensive drugs, and come on top of repeated price hikes in recent years.”
Let’s look at the price ‘hike’ in context. I will limit this discussion to the deceptive way in which prices are used. I won’t discuss the fact that neither writer discusses the value of new treatments relative to existing therapies for payers and patients.
Since Ron Cohen , CEO of Acorda Therapeutics,Inc. is one of the main characters of these stories, let’s look at how Loftus reports on the pricing of it’s main product Ampyra, which is used to help multiple-sclerosis patients improve walking. Loftus reports that Acorda raised Ampyra’s price by 11% on Jan. 1, to an annual cost of more than $23,650 a patient.
Ampyra revenues (unaudited) in 2015 were about $ 436 million.
When discounts and rebates to PBMs etc are taken into account, Accorda will gain only about 60% of the price increase.
That does NOT take into account that Acorda provides 2 months of free drug to people with new prescriptions, through our First Step program. At this point, 75% of all new prescriptions are First Step (and a higher percent of all commercial Rxs, as we are not allowed by law to give First Step to Medicare/Medicaid patients). The 10-K notes that 38-43% of patients respond to the treamtment, so First Step ensures the physicians and patients have determined that the patient is a true responder before asking the system to pay for the drug.
It also provides a generous PAP program, giving free drug to a significant portion of the population who are uninsured or underinsured
It also provides co-pay assistance so that no commercially insured patient pays more than $40 for an Rx.
All this an Acorda is not yet not profitable as a company since it is investing 1/3 of net sales n 6 clinical programs for innovative drugs to treat, Parkinson’s, epilepsy, stroke, MS and migraine.
Which means that the money given to PBMs and insurers aren't spent on more R&D. Yet neither Loftus or Robbins acknowledge that PBMs and insurers pocket the rebated portion of these prices. Nor do they note that these organizations then force patients pay to up to 30 percent of the price of the drug which is often marked up by insurers and such pharmacy benefit firms as Express Scripts. Payers know that companies will – after forking over rebates – also pay a big share of the patient’s drug bill. (Which explains why per patient sales are way below list price in many cases.) Indeed, Acorda's copay assistance is provided regardless of where insurers price the drug to patients.
Robbins points to a Senate report claiming Gilead priced drugs so that many people and Medicaid programs could not afford Solvaldi. In fact, payers were pocketing the rebates and deny access to the drugs. The Senate report notes a Gilead memo that states: “While many payers responded to these discounts by opening access broadly, some payers have continued to restrict access despite the discounts. “
Moreover, the Senate report, like Robbins and Loftus, ignored the rebates to the states. A report based on Medicaid data showed that Medicaid rebates for HCV brand medications “typically increased over time and averaged roughly 60% during 2014 across all brand medications.”
Medicaid requires companies to provide rebates (to states) of at least “23.1 % of the Average Manufacturer Price (AMP) per unit” or “the difference between the AMP and the best price per unit” to commercial payers if that rakes in more rebates.
On average, AMP is 59 percent lower than Average Wholesale Price, the so-called ‘retail’ price journalists like Robbins and Loftus use. That means the price used to calculate Sovaldi rebates is $49560 per patient. ($84000 x 59%). Gilead then provided rebates of 33 percent of that price according to the Senate report. That comes out to $33205 per person which is a 60 percent cut from retail price. Which means that drug prices are a vehicle for redistributing income to private and public payers.
Finally, neither Robbins or Loftus put drug price increases (net price or otherwise) into perspective. Loftus states that U.S. prescription-drug spending rose 12.2% in 2014, accelerating from 2.4% growth in 2013. But “price increases for protected brands increased spending by $26.3 billion, contributing 8.2% to total market growth on an invoice price basis; estimated net price growth was substantially lower as rising off-invoice discounts and rebates offset incremental price growth and reduced net price contribution to growth to 3.1%.”
That’s an increase in spending of about $7.1 billion. Total US health care spending increased by $100 billion from 2013-2014. So brand drugs were 7 percent of that amount.
I believe the incremental benefit of this spending is, a Donald Trump would say, huge. But first things first. Reporters should not report on drug prices in a context free zone. Doing so, especially since the factual context is easily available, is a deliberate perversion of reality.
GAO Asked to Assess Viability of FDA’s Complex Generics Pathway
The House Energy & Commerce Committee is calling on the GAO to evaluate whether the FDA’s regulatory pathway for generic versions of complex drugs is sufficient.
Specifically, the committee sent a letter Dec. 10 asking the GAO to assess whether generic versions of nonbiologic complex drugs that are not fully characterized present challenges in meeting generic approval standards.
If the agency concludes that meeting approval standards presents challenges, then the GAO should consult with public and private groups to analyze the following questions:
- What requirements should be established regarding the comparability of the manufacturing process?
- What degree of characterization of the proposed generic version and the reference product should be required to determine safety and efficacy?
- What degree of similarity should be required for the active ingredient of the generic version to be deemed the same as the active ingredient in the reference product?
- What types of evidence should be required to demonstrate bioequivalence?
- How much clinical evidence is needed?
Once those questions are answered, the agency should determine whether current ANDA pathways can address the use of reference products. The study also should make recommendations for the FDA, such as developing policy documents and establishing general principles on evidence needed.
Read the letter here: www.fdanews.com/12-15-15-FDAGenerics.pdf.
Compare the approach ASCO takes to the one shaping the Cancer Moonshot 2020 effort.
Today "leaders from large pharma including Celgene and Amgen, biotech including NantWorks, NantKwest, Etubics, Altor Bioscience, and Precision Biologics, major academic cancer centers and community oncologists announced the launch of The National Immunotherapy Coalition (NIC), a historic alliance--in collaboration with Independence Blue Cross, one of the nation’s largest payers and Bank of America, one of the largest self-insured companies in the U.S.--with a singular focus: accelerating the potential of combination immunotherapies as the next generation standard of care in patients with cancer."
This is perhaps the most important scientific initiative undertaken in human history for reasons I will elaborate in another post.
For now, here are the three most important features of this initiative:
1. The QUILT (QUantitative Integrative Lifelong Trial) program is designed to harness and orchestrate all the elements of the immune system (including dendritic cell, T cell and NK cell therapies) by testing novel combinations of vaccines, cell-based immunotherapy, metronomic chemotherapy, low dose radiotherapy and immunomodulators -- including check point inhibitors-- in patients who have undergone next generation whole genome, transcriptome and quantitative proteomic analysis, with the goal of achieving durable, long-lasting remission for patients with cancer.
2. Multiple randomized Phase 2 trials testing genomically and proteomically informed novel combinations of immunotherapy agents, will pave the way to identifying cancer therapy combinations with the lowest toxicity and the highest quality of life.
3. Insurers will be covering whole genome transcriptomic tests in patients receiving immunotherapy. Independence Blue Cross is the first health plan to cover next generation sequencing. The coalition is talking to others, who I think will have to follow.
This is good for patients and innovation. And this approach -- which should be replicated for other illnesses where combinations of treatments - old, new and emerging -- will be gold standard of care.
That mean groups that seek to measure the value of a single cancer drug based on average response -- like ICER, the ASCO Value Framework, and Peter Bach's comical Cancer Drug Abacus etc. will become obsolete. That means Express Scripts effort to use the aforementioned comical Cancer Drug Abacus to establish indication based pricing should be discarded and ignored. Any entity claiming it wants to establish value that does not seek to promote payment and access to precision medicine to match patients to treatments that control and prevent disease most effectively should be considered outdated and obstructionist.
This is a great day for those committed to cures. And that should include everybody.
The death of the transformative musician, artist and filmaker David Bowie to due to cancer underscores once again the value of innovation.
Bowie battled cancer long enough to complete and release his last album on his 69th birthday. You don't have to be a David Bowie to know that using the retail cost of a cancer drug to discourage it's use would sideline many people with a cancer diagnosis.
As Bowie noted: You can neither win nor lose if you don't run the race.
As we move ahead in the US with more biosimilars being submitted for approval – and for interchangeability – attention must be paid to patient outcomes.
Case in point is research presented at the 2013 ACR/ARHP Annual Meeting that hasn’t as yet received the attention it deserves:
Background/Purpose: CT-P13 is an infliximab (INX) biosimilar recently approved by the European Medicine Agency. PLANETAS was a 54-week (wk) randomized double-blind parallel group multicenter Phase I study demonstrating pharmacokinetic equivalence of CT-P13 (5 mg/kg infusion every 8 wks) with INX, in patients (pts) with ankylosing spondylitis (AS) (Park W, ARD 2013;72(S3):516). Here we report results from the extension phase of the Phase I equivalence study, investigating long-term efficacy and safety of extended CT-P13 therapy and switching from INX to CT-P13 in pts with AS.
Methods:
In this open-label extension study, a total of 174/210 pts who completed PLANETAS entered into the extension phase: 88 were continuously treated with CT-P13 (maintenance group) and 86 were switched from INX to CT-P13 (switch group) for 1 additional year.
Results: At wk 54 ASAS20/ASAS40 and ASAS partial remission rates were similar between groups (CT-P13, 70.5%/58.0% and 20.5%; INX, 75.6%/53.5% and 19.8%, respectively). During the extension, ASAS20/ASAS40 rates were similar in the maintenance group (70.1%/57.5% at wk 78 and 80.7%/63.9% at wk 102) and the switch group (77.1%/51.8% at wk 78 and 76.9%/61.5% at wk 102). ASAS partial remission rates were also similar between groups; 21.8% and 21.7% at wk 78, and 27.7% and 28.2% at wk 102, respectively. An overview of the efficacy data are shown in the Table. Anti-drug antibodies (ADA) were comparable between the two groups and positivity was maintained throughout the study (maintenance group, 22.2%, 24.4% and 25.0%; switch group, 26.2%, 31.3% and 30.7%, at wk 54, 78 and 102, respectively). ADA negative pts achieved higher ASAS40 responses (maintenance group, 62.9%/61.5%/66.1%; switch group, 58.1%/60.0%/71.2% at wks 54, 78 and 102, respectively) compared with ADA-positive pts (maintenance group, 38.9%/36.8%/55.0%; switch group, 41.7%/33.3%/45.8% at wks 54, 78 and 102, respectively) with no differences between the maintenance and switch groups. The proportion of pts with ≥1 treatment-emergent adverse event (TEAE) was lower in the maintenance group (48.9%) compared with switch group (71.4%) mainly due to fewer mild and moderate AEs. Serious TEAEs were identical between groups (4 vs 4 pts). Other tolerability and safety outcomes were similar in both groups (Table). TEAEs due to hypersensitivity and infusion-related reactions were similar in both groups (5 pts in maintenance group vs 2 pts in switch group). There was 1 case of TB in each group and 1 report of prostate cancer in the maintenance group (considered unrelated to treatment).
The efficacy data was good. But the safety data is concerning:
|
Safety outcome |
CT-P13 throughout study (N=90) |
Switched from INX to CT-P13 in extension phase (N=84) |
|
|
TEAEs, n |
103 |
162 |
|
|
pts with ≥1 TEAE, n (%) |
44 (48.9) |
60 (71.4) |
|
|
Mild |
20 (22.2) |
27 (32.1) |
|
|
Moderate |
21 (23.3) |
28 (33.3) |
|
|
Severe |
3 (3.3) |
5 (6.0) |
|
|
pts with ≥1 TESAE, n (%) |
4 (4.4) |
4 (4.8) |
|
|
pts with ≥1 infection, n (%) |
23 (25.6) |
29 (34.5) |
|
|
ADA positive, n (%) |
Wk 54 |
20 (22.2) |
22 (26.2) |
|
Wk 78 |
21 (24.4) |
25 (31.3) |
|
|
Wk 102 |
21 (25.0) |
23 (30.7) |
|
|
ADA, anti-drug antibodies; ASAS, Assessment of SpondyloArthritis international Society; ASDAS-CRP, Ankylosing Spondylitis Disease Activity Score C-reactive protein; TEAE, treatment-emergent adverse event; TESAE, treatment-emergent serious adverse event |
Biosimilarity and measurement of efficacy is only one dimension. Attention must be paid to effectiveness relative to real-world patient outcomes data. And that means a much closer pharmacovigilance examination of adverse events for both naïve and switched patients.
I recently referred to a WSJ article on advances in myeloma drugs by tweeting: Will @joewalkerWSJ @JeanneWhalen @jonathanrockoff ignore PBMs, insurers pocket rebates, make patients pay $1000s http://on.wsj.com/1Oxb69P.. Meaning will these reporters follow up with an article on myeloma treatments hat pins the blame on out of pocket drug costs on drug companies as opposed to or in combination with many other decisions undertaken by PBMs and insurers? Will they look at the impact of such medicines in reducing hospitalizations, infusions, etc that insurers pay for and are more expensive than the drugs patients must partially cover?
Below is a chart that has a link to a specific article on drug costs by each WSJ reporter and whether or not the articles discuss specific issues that would put the cost and value of drugs in context.
Maybe this will clear up the confusion.
The Biotechnology Industry Organization changed its name to the Biotechnology Innovation Organization. The group will continue using the "BIO" acronym.
This is more than just cosmetic. It demonstrates the urgency in both promoting and protecting sustainable innovation in biotechnology. If we are going to argue “value” rather than just “price,” than innovation the most important part of the conversation.
We do what we must, and call it by the best names.
Ralph Waldo Emerson
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.
