Price vs. Value. A Distinction with a Difference

• 07.24.2015

Per Drug Prices Soar, Prompting Calls for Justification (NYT, July 23, 2015), while opaque and seemingly arbitrary drug pricing deserves immediate attention, the value of innovation must not be ignored. Innovation is hard. Today it takes about 10,000 new molecules to produce one FDA-approved medicine. This observation itself is disconcerting, but, further, only 3 out of 10 new medicines earn back their R&D costs. Moreover, unlike other R&D-intensive industries, biopharmaceutical investments generally must be sustained for over 2 decades before the few that make it can generate any profit. Innovation is slow. As any medical scientist will tell you, there are few “Eureka!” moments in health research. Progress comes step by step, one incremental innovation at a time.

Biopharmaceutical companies more often profit by improving existing molecules and making processes more efficient than by revolutionizing the whole field with new miracle products. Discontinuous innovation (such as the recent breakthroughs in Hepatitis C) is a wonderful exception to the rule. As Harvard University health economist David Cutler has noted, “Virtually every study of medical innovation suggests that changes in the nature of medical care over time are clearly worth the cost." When it comes to drug pricing it's important to look at the whole picture.

Medical Journals Are Practicing Economics Without A License

• 07.22.2015

More and more medical journals are running articles by doctors on the cost of developing and using new drugs.

I have no idea if and how these articles are peer-reviewed.   My guess is that they are not, otherwise the journals would not allow articles to be published that rely on discredited economic papers or authors or use a framework to measure cost and value that is questionable at best, shoddy at worst. 

In my opinion such articles are written with a very clear agenda: attack drug prices as being too high because the cost of developing new drugs is in fact quite low and 2)  because they offer very little clinical benefit compared to older medicines.   I have no problem with articles that make that case.   I do have a problem when the articles are intellectually and methodologically suspect.   People trust medical doctors more than most other professionals.  But that trust is abused when doctors pose as economists to further a political agenda. 

There are four hallmarks of such pseudo-economic analysis.  I will discuss each on in detail in separate blogs.  Any article published in a peer-reviewed journal that contains these elements should be rejected if submitted, retracted if published.   There is little difference between authors relying upon these methods or analyses and Andrew Wakefield who used similar approaches to conclude that a measles vaccine can cause autism.   

1.   Relying upon the one discredited source to make your case.

Best example is Hagop Kantarjian use of Donald LIght's assertion that it only costs 4 percent of what most studies have estimated as the cost of bringing a new chemical entity to market.   Kantarjian claims it is only $25 million.  That's based on an earlier estimate of drug development costs by Joseph DiMasi of $802 million per new chemical entity.  Kantarjian has also co-authored articles with Light.  

But Light's claim has been rejected by several studies that have shown studies asserting the cost of drug development is much lower than $2-6 billion are all flawed: " they inappropriately mix median values reported for individual drugs with what are mean values for the costs of clinical failures and preclinical fixed costs, and for which the concept of a median has no meaning; they misconstrue the nature of the corporate income tax and incorrectly consider manufacturing tax credits; they use discount rates that are meant for other contexts but that are inappropriate here; they treat line extension approvals as separate and independent units of observation alongside their original approvals; and they grossly misstate the meaning of and misuse figures in our paper on industry-reported data on expenditures on self-originated drugs, licensed-in drugs, and already-approved drugs.

In short, every one of Light and Warbuton's adjustments are invalid. Furthermore, two peer-reviewed papers by current and former FTC economists, also not cited by Light and Warburton, validate our work using other methods and public data (Adams and Brantner, 2006, 2010). They find that R&D costs are likely as high or higher than (DiMasi's) estimates."  (See DiMasi JA, Hansen RW, Grabowski HG. Reply: Extraordinary claims require extraordinary evidence. Journal of Health Economics 2005;24(5):1034-1044. and DiMasi JA, Hansen RW, Grabowski HG. Reply: Setting the record straight on setting the record straight: response to the Light and Warburton rejoinder. Journal of Health Economics 2005;24(5):1049-1053.)

A prima facie analysis of Kantarjian's assertion suggests how absurd it is without having to waste time refuting it.   If it only cost $25 million to bring a new drug to market why aren't hundreds of companies developing them.  It costs up to $140 million to develop a hot new video game for XBox360 or P3 Playstation platforms.    Yet the medical journals such as Blood  publish these claims as if they were reliable.  Why not continue to publish articles citing Andrew Wakefield's article claiming vaccines caused changes in the gut that caused autism???   Kantarjian uses Light like anti-vaxxers use Wakefield.  The only difference is, Kantarjian gets published and Wakefield is discredited. 

Tomorrow I will discuss the misuse and abuse of the assertion that cancer drug prices defy market forces because prices only go up, not down.  

Bam! FDAMN

• 07.16.2015

The pharmacenti were gathered. Policy experts, provider organizations and patient groups, industry, academics and FDA brass. The clock in the White Oak Great Room struck 9AM. The room fell silent. Smart phones were (mostly) on silent mode.

Welcome to PDUFA VI.

The first public meeting on reauthorization of the Prescription Drug User Fee Act (PDUFA) held few surprises but made it clear that this time around there will be more creative tension.

First up was Acting FDA Commissioner Stephen Ostroff. He began with a nod to NASA’s wondrous New Horizons’ space probe.  He offered this alliterative flourish, “Just as with the recent success of NASA’s space probe, PDUFA delivers on its promise because of planning, precision, and predictable performance.” He then called on all present to “aim for the stars” in the forthcoming PDUFA process.

Ostroffian p-values aside, whether or not all parties concerned in PDUFA (those noted above as well as legislators and the White House) can embrace such a Plutonic relationship remains to be seen.

Next up was FDA Deputy Commissioner Rob Califf who said, “an increase in predictability creates a better environment for innovators.” This comment set the meeting’s major theme – that PDUFA VI isn’t just about the founding principle of the user fee concept, ensuring predictability in the review process, but must now also help to facilitate the advancement of regulatory science.

Theresa Mullin, the Director of Strategic Programs within the Center for Drug Evaluation and Research (CDER) then made a point to establish a key FDA talking point – that PDUFA isn’t about policy but rather process. And while that is an accurate statement, it belies the fact that process drives policy. That’s more than semantics. Think about it as the power of the pen – another key PDUFA p-value.

The majority of the day was given over to panels representing the consumer, patient, healthcare professional, industry, and academic perspectives on what should matter most in constructing a thoughtful and forward-looking reauthorization package.

Some highlights:

Allan Coukell (Pew Charitable Trusts) urged that PDUFA VI incorporate funding that would help reduce both the time and expense it takes to design 21^st century clinical trials – and that a good start would be funding programs that address clinical trial methodologies. All heads nodded – particularly that of Rob Califf.

Sally Greenberg (National Consumers League) suggested that there should be user-fees for marketing material review – particularly television ads. She also wants DTC review to be mandatory. She commented that, on this point, she “sounds like a broken record.” Possibly, but what is for certain is (in the Age of Caronia and Amarin) its her message that’s broken. In any event, that’s policy – not process.

Paul Melmeyer (National Organization for Rare Diseases) stressed the urgency of thoughtful and aggressive next steps per the FDA’s Patient-Focused Drug Development (PFDD) program. Indeed, almost every speaker spoke about PFDD as the Jewel in the Crown of PDUFA V – but that more needs to happen.

Jeff Allen (Friends of Cancer Research) spoke to the need for the FDA to collect and share best practices per various expedited review pathways. He also pointed to the need for the agency to more progressively consider real world evidence in its design of post-marketing commitments.

Cynthia Bens (Alliance for Aging Research) observed that, “PFDD meetings have led to a cultural shift across the FDA elevating the way in which regulators view the value of patient input in the drug development process,” but “there is no one-size-fits-all solution to gathering and employing patient input effectively.” And on the Patient-Reported Outcomes (PRO) front, “We would encourage the dedication of resources in PDUFA VI to support additional workshops aimed at feasibility and reliability of incorporating PROs in trials for complex diseases.” Specifically, “We would support the addition of user fee funds in PDUFA VI to allow for new guidance on performance outcome measures, observer reported outcome measures, and clinician reported outcome measures.” Bravo.

Maureen Japha (Milken Institute/Faster Cures) asked that the patient voice (no longer “an honorary voice”) be heard earlier and more regularly in the review process, not just at the end per benefit/risk considerations. The call for a more comprehensive and integrated patient voice was loud and clear during the entire course of the meeting. Process or policy? Where you stand depends on where you sit.

Representatives from healthcare professional organizations (the American Pharmacists Association, the American Academy of Pediatrics, and the American College of Cardiology) focused their comments on the need for more global collaboration (sharing rather than stipulating best practices), continuing to modernize the agency’s drug safety system, and the importance of advancing regulatory science – the red thread of this early PDUFA dialogue.

Industry association presentations (BIO and PhRMA) tended to applaud the successes of PDUFA V and pointing to the need for all parties concerned to make further progress across the broad spectrum of both predictability and regulatory science. The key phrase from industry is that they, “fully support timely reauthorization.” And there was much sharing of success metrics – particularly the approval of new medicines (NMEs – a love story). But all is not smooth sailing. Kay Holcombe (BIO) addressed the specter of budgetary sequestration as something that must be addressed. Kay also addressed the need for enhanced scientific communications that do not require an “official” FDA meeting. Michael Werner (the Alliance for Regenerative Medicine) called for PDUFA to empower the FDA to work with outside bodies to help develop development and review standards– an idea that has resonance beyond regenerative medicine (biomarkers, functional endpoints, etc.)

The academic panel added robust ideas to the more general discussion of advancing regulatory science.

Greg Daniel (Brookings Institution) called for a PDUFA strategy that would drive agency coordination of pre-competitive biomarker development as well as a common biomarker lexicon.

Daniel Carpenter and Aaron Kesselheim (Harvard University and Harvard Medical School) questioned whether various expedited approval pathways were focused on medicines they considered “non-transformative,” what they referred to as “designation creep.” Policy vs. process.

Ernst Berndt (Massachusetts Institute of Technology) broached the topic of “adaptive licensing,” pointing to EMA programs and their progress under the Innovative Medicines Initiative.  To-date, the concept of conditional approvals has found very little support or enthusiasm from either developers or the FDA. Whether or not Dr. Berndt’s suggestion gets traction will depend on how it resonates with any of the various PDUFA constituencies. The last time I spoke with senior members of the FDA, I heard comments like, “What does that even mean?” And, then again, do drug developers really want conditional approval? You invest a lot of time and money to get a conditional approval and then the agency decides to take the product off the market? Is that something to roll the dice on? Unless and until the FDA can ramp up its pharmacovigilance prowess, any kind of provisional approvals will remain problematic. At the moment, the FDA doesn’t have an eye in the sky.

Rena Conti (University of Chicago) raised the topic of drug sourcing. Is there, she asked, an unintended PDUFA incentive to outsource manufacturing – and what are the consequences? She called for greater transparency in who manufactures what – and where.

The final presentation of the day was by Dr. Janet Woodcock (Director, Center for Drug Evaluation and Research). The items on her short list mirrored many of the day’s presentations and themes. Specifically she mentioned the need to advance the agency’s Sentinel program, continue to develop a more advanced view of benefit/risk – and one that includes a more dynamic inclusion of the patient voice, next steps on Patient-Focused Drug Development, better and more regular communications with developers, biomarker development (“still a tremendous amount to be done”), the need for the agency to recruit and retain the best and the brightest, and, of course, advancing regulatory science writ large.

She also warned of getting off the process track – a clear warning shot across the bow to those ready to hang multiple ornaments on the PDUFA Christmas tree.

At the conclusion of the day’s session I was pleased to be able to offer some advice during the open public comment period. Here’s how I concluded my remarks:

“PDUFA VI must continue to provide predictability in the review process and advance regulatory science over a variety of initiatives. But most importantly, PDUFA VI must answer the question of “What next?” for many of the agency’s existing initiatives (biomarkers, risk/benefit evaluation, patient-focused drug development, 21^st century clinical trial design).  PDUFA VI must redefine what “success” looks like. Dr. Ostroff asked us to aim for the stars, but let’s not settle for an easy, clean, comfortable, and low-altitude orbit.

Per aspera ad astra – Through hardships to the stars. We’ve had FDAMA. We’ve had FDASIA. Now we need FDAMN – FDA Momentum Now.

Nobody said it was going to be easy.

"J" is for Janus

• 07.10.2015

The Biosimilars Forum represents many of the leading voices against differential nomenclature -- except when it comes to Medicare coding.

Yesterday this group expressed “grave concern” over the proposed biosimilar payment rule issued by CMS. (CMS is proposing that multiple biosimilars to the same reference product be grouped and issued the same J-code for Medicare reimbursement purposes.)

According to Biosimilars Forum policy advisor Michael Werne, the biosimilars statute, and its legislative history “make clear that each biosimilar product — including multiple biosimilar products associated with the same originally marketed product — should be assigned a unique HCPCS code.”

According to Werne, “The lawmakers who passed the Biologics Price Competition and Innovation Act of 2009 (BPCIA) understood that biosimilars are not the same as generic drugs and should not be treated that way in policy making.”

Per the groups press release, “Furthermore, the statute makes it clear that an interchangeability determination only applies to a specific biosimilar and the reference product, and does not apply between or among multiple biosimilars approved to a single reference product. Issuing unique HCPCS codes is essential to avoid confusion among healthcare professionals, to ensure that the proper products are dispensed to patients, and to allow a fair and predictable reimbursement to purchasers of biosimilars.”

But wait – there’s more. “The law, legislative history, and biosimilar science support the requirement that CMS assign each biosimilar biological product a unique HCPCS code and not consider biologics and biosimilars in the same fashion as generic drugs.”

And yet some members of this group are against differential nomenclature. Go figure.

(The full Biosimilars Forum press release can be found here.)

Hypocrisy is the Vaseline of political intercourse. – Billy Connolly

The FDA's Quality Revolution

• 07.09.2015

Let it be said that the spark that ignited the flame was when FDA leadership asked, “Do we know enough about the quality of drugs that are sold in the United States.”

So said, CDER Director Dr. Janet Woodcock during yesterday’s webinar, “Understanding CDER’s “Super” Office Of Pharmaceutical Quality and Its Effect on You.”  Dr. Woodcock was joined by Dr. Lawrence Yu. I was honored to moderate the FDA News-sponsored session.

(Janet is the acting director of the OPQ and Lawrence is the acting deputy.)

Let’s put the new OPQ into some historical context.

In 2009, the FDA announced its Safe Use of Drugs Initiative.  The theory being that one way to make drugs safer is to ensure that they are used as directed. The main strategy was education and the agency’s efforts were (and are) aimed at physicians, nurses, pharmacists, and patients.

Earlier this year, the agency announced not just an office, but a Super Office of Pharmaceutical Quality, further underscoring that the FDA operates not under a two-dimensional system of safety and efficacy, but a three-dimensional approach that includes quality … with a capital (indeed a “super”) Q.

Since there is no such thing as a safe substandard product, the agency is putting time, resources, and the use of the bully pulpit to go beyond cGMPs, API and excipient sourcing to develop a risk-based approach that includes data gathered from a variety of sources including manufacturing inspections, adverse event reporting, and substandard pharmaceutical events as evidenced in the agency’s bioequivalence- driven actions with bupropion in 2012, metoprolol in 2014, and methylphenidate in 2015.

So, in many respects, pharmaceutical quality is both a pre and post-licensure endeavor and, like Safe Use, a scientific and educational enterprise that requires close coordination with many stakeholders. And it won’t come easily or inexpensively.

Aristotle said that, “Quality is not an act, it is a habit.”

I began the interview by asking Dr. Woodcock, “how is the FDA going to make pharmaceutical quality a habit?” She responded by sharing her belief that industry must “own” quality – and must be able to measure it. As the saying goes, that which gets measured gets done.

The OPQ philosophy is more than just about NDA/ANDA parity. It’s not just a “promotion” for quality – it’s a quality revolution that goes from top to bottom. But, as Audre Lorde reminds us, “Revolution is not a onetime event.” This adage should be inscribed on the wall at OPQ.

Dr. Woodcock stressed the need for the FDA to treat the issue of quality from a much more senior-level perspective. The immediate result will be the creation of a separate policy function for quality issues within OPQ.

(She was wisely noncommittal on whether or not the agency would be requesting additional funding for OPQ via PDUFA VI.)

One of the pillars of quality, of course, is inspection. Dr. Yu made it clear that, in the new OPQ era, the FDA would be going “beyond documentation.” In other words (to borrow a phrase from the arms control lexicon), “trust but verify.”

An immediate result is a new paradigm for inspections and reports that will advance pharmaceutical quality. The new standardized approach to inspection will include:

·      Data gathering to inform “quality intelligence” of sites and products

·      Risk-based and rule-based process, using expert questions

·      Semi-quantitative scoring to allow for comparisons within and between sites

·      More common inspection report structure

·      Positive behaviors recognized and rewarded where facilities exceed basic compliance

OPQ is, as both Janet and Lawrence said, about having the agency speak with “One Quality Voice.” Specifically:

Put patients first by balancing risk and availability

·      Ensure clinically relevant quality standards

·      Integrate review and inspection across product lifecycle

·      Maximize efficiency by applying risk-based approaches

·      Strengthen lifecycle management by using team-based processes

·      Effectively apply staff expertise to enhance quality regulation

·      Encourage innovation by advancing new technology and manufacturing science

·      Enhance cross-disciplinary interaction, shared accountability, and joint problem solving

·      Build collaborative relationships by communicating openly, honestly, and directly

And the major foundation is product quality informatics. In the “knowledge is power” category OPQ recognizes that enabling an efficient science-driven assessment requires significant transformation in how they collect, evaluate, and learn from the product quality data. Specifically:

·      Core areas of Product Quality Informatics: Structured data submission and collection

·      Knowledge management and communication Established conditions

·      Risk mitigation

·      Post-market surveillance and quality monitoring

·      Intelligent data analysis

Both Janet and Lawrence underscored the importance of cross-office cooperation  (via “program alignment agreements”) and specifically mentioned working with the Office of Surveillance and Epidemiology to better understand how pharmacovigilance signals can inform the agency’s actions on quality problems.

The FDA's powerpoint presentation can be found here.

Drs. Woodcock and Yu also spoke to the urgency of a more regular and risk-based approach to changes in API and excipient sourcing, as well as more systematic monitoring of bioequivalence. Both she and Dr. Yu agreed that the agency’s new respect for quality would influence their views on both the review and post-marketing surveillance of both biosimilars and non-biologic complex drugs (NBCDs).

Make no mistake -- the Office of Pharmaceutical Quality is a regulatory revolution, Drs. Woodcock and Yu are regulatory revolutionaries and (as Abbie Hoffman quipped), “the first duty of a revolutionary is to get away with it."

ASCO Value Framework Belittles Cancer Patients Seeking Weeks or Months More of Life

• 07.08.2015

From The ASCO Value in Cancer Care Task Force Framework

Use of new drugs is being driven by “sometimes unrealistic patient and family expectations that lead clinicians to offer or recommend some of these services, despite the lack of supporting evidence of utility or benefit.”  

Cancer patients “overestimate the benefits of treatments that sometimes extend life by only weeks or months or not at all. 

From Lowell Schnipper, Chair of the Task Force:

Three months of added life “is not a large enough benefit to trump the greater benefits to many that would have to be foregone to provide it.”

Now watch what Zach Sobrieth, who died of sarcoma, thinks of three months of life.

For FDA and Amarin, "Terrific" is in the eyes of the beholder

• 07.08.2015

Yesterday, Manhattan District Judge Paul Engelmayer asked some very probing – and some very naive questions regarding Amarin’s request for a preliminary injunction allowing it to tell doctors about the unapproved use of its Vascepa (icosapent) fish oil pill.

Judge Engelmayer engaged Assistant US Attorney for the Southern District of New York Ellen London, why a truthful, non-misleading statement by itself could be considered “actus reus” – the wrongful act of a crime – to support misbranding. London asserted that statements serve as evidence of intended use and require other elements to be prosecuted as misbranding. Good answer – but not good enough for Judge Engelmayer.

The judge kept asking why the FDA allows a heart disease claim for dietary supplements with EPA but does not permit it for Vascepa. His Honor needs a primer on DSHEA – and the FDA had better be prepared to offer it, otherwise this misunderstanding will persist – to the detriment of the agency’s case.

The Judge also questioned London about when the agency would be issuing further guidance on off-label communication, asking if it would be in 2015 or afterwards, or before Labor Day. Ms. London said she has “no idea” when the agency would act or if more speech will be permitted when it does. That looks like a signal that the court wants to grant the agency chevron deference – but not minus a written guidance.

According to Judge Engelmayer, there were “terrific arguments on both sides,” And closed the hearing without making a decision.

 

Note to FDA, “An ounce of action is worth a ton of theory.” (Friedrich Engels)

Biosimilar Nomenclature? WHO Cares.

• 07.07.2015

From BioPharma Reporter:

Top of Form

Bottom of Form

WHO further clarifies ‘biological qualifier’ system for naming biological active substances

The fight over how to name biosimilars has taken a turn toward further clarification, with the WHO (World Health Organization) offering another, updated draft  of its intended policy on "biological qualifiers" (BQ).

Nearly identical to the previous draft , which the USP endorsed , the WHO says the BQ system would not just be for biosimilars but “all biological active substances.” The scheme would assign four random consonants to an active substance, but it would not replace the INN (international nonproprietary name) scheme. Instead it would support INNs to “better harmonise international pharmacovigilance efforts,” as well as to avoid the “proliferation of separate and distinct national qualifier systems.”

As far as what products will use the BQ, the WHO calls on the names to be issued for biologics, biosimilars, as well as non-glycosylated and glycosylated proteins. “Only exceptions will be vaccines, impure mixtures and complex biologically-extracted products like heparin or pancreatin to which INNs are not assigned,” the WHO clarifies.

Companies applying for a BQ for global use will be allowed to use it “for substances made in all manufacturing sites demonstrated to be comparable and by all manufacturing authorisation holders (MAH) distributing products which contain the substance,” the WHO says in the latest draft. “Should a regulatory authority find that a manufacturing site does not produce a comparable product, they may require application for a different BQ for that manufacturing site, but the two BQ’s would be hyperlinked in the INN BQ database.”

The WHO notes that some regulatory authorities have already decided that the use of a trade name and INN are adequate for prescription and dispensing, and that trade name, INN, MAH name and batch number are adequate for pharmacovigilance in conjunction with other tracking systems, such as 2D barcoding.

 But the WHO looks to persuade undecided regulators, such as the US FDA, with the idea that the use of the BQ offers a means to not only uniquely identify the drug substance even if used alone, but to help with crosschecking other information supplied in a prescription/dispensing or pharmacovigilance setting, in the absence of other sophisticated tracking systems.

 “While the FDA has not yet issued draft guidance on how current and future biological products marketed in the United States should be named, the agency intends to do so in the near future,” FDA spokesman Kristofer Baumgartner told us. 

Potential Issues

The WHO also points out in the latest draft scheme a possible area where problems could arise with the BQ system, noting that it is intended that drug substances would have the same BQ as long as it has the same amino acid sequence and is marketed with the same INN, but if “a change is made in which glycosylation is found to be not comparable, then a new Greek letter and BQ would be assigned.

“This lack of comparability would need to be determined by the regulatory authority and the WHO INN should then be informed... This may mean that the same drug substance may have different BQs in different jurisdictions if different assessments of the comparability are made by the regulatory authorities, but this is likely to be rare and hyperlinks between the two database entries would be introduced.”

In addition, if a regulator finds that a manufacturing site does not produce a comparable product, they may require application for a different BQ for that manufacturing site, but the two BQ’s, again, would be hyperlinked in the INN BQ database.

PDUFA VI -- Do Ask. Do Tell.

• 07.06.2015

From today's edition of Morning Consult:

PDUFA VI: Do Ask. Do Tell.

Insurers’ Dirty Tricks Are Undermining a Central Promise of Obamacare

• 06.26.2015

By Robert Goldberg
Special to Roll Call

Thanks to President Barack Obama’s landmark healthcare law, insurance companies are no longer allowed to turn away patients with pre-existing health problems. For millions of sick Americans, this “guaranteed issue” mandate has been transformative, ensuring they can secure the coverage they need to afford vital medications.

Unfortunately, insurers have discovered a sneaky way to undermine this requirement. They’re structuring plans to heap huge costs and bureaucratic burdens onto high-risk patients. Technically, such patients are insured. But they don’t actually have access to medical care.


Federal officials must halt such discriminatory practices. Fortunately, Reps. David McKinley, R-W. Va.,  and Lois Capps, D-Calif., recently introduced the Patients’ Access to Treatments Act (PATA) (HR-1600) to do just that. Lawmakers should pass it immediately.

Insurers strap sick patients with big bills by putting expensive medications into the highest “tier.” Insurers typically divide their drug benefits into different tiers, with the lowest providing the most financial support and the highest providing the least. The higher the tier, the higher the patient’s out-of-pocket expenses.

For example, in the state-level insurance exchanges established by Obamacare, more than half of the popular “Silver” plans place all multiple sclerosis drugs in the top tier. Patients suffering from this devastating conditions are getting hit with huge costs. Many are forced to forego needed treatments.

Making matters worse, the slice of Silver plans requiring enrollees to pay 30 percent or more of the cost for top-tier drugs has jumped dramatically since last year, from 27 percent to over 40 percent.

PATA ensures that patients can afford these life-saving medications. The bill prohibits insurers from grouping specialty drugs in higher cost sharing tiers than the ones used for regular medicines.

Many health insurers also have a “fail first” policy. Patients must first take drugs that are less effective and often less safe — and only when these fail can they receive needed medicines.

In other words, insurers force people to get sicker before offering them lifesaving treatments.

Consider the plight of Shima Andre, a hepatitis C patient in Los Angeles. Shima’s insurance company refused to cover Harvoni — a costly yet highly effective hepatitis drug — because her liver wasn’t damaged enough. Even after repeated pleas from her doctor, the insurer wouldn’t budge.

Technically, Shima is insured. But that coverage means little, since she can’t access the drugs she needs. Rather, she must take older medicines that the FDA warns have a high risk of serious and even fatal side effects.

A new Harvard study suggests insurers are deliberately offering thin coverage for high-cost therapies to dissuade chronically ill patients from signing up in the first place. When people who need costly drugs see treatments’ price tags, they look elsewhere for coverage — which is what insurers want.

Insurers justify such discrimination by claiming it helps contain healthcare costs, keeping premiums affordable. After all, those with serious illnesses disproportionately rely on expensive, specialty medicines. They’re the 1 percent of patients — often referred to as “super spenders” — that account for more than a fifth of the nation’s annual health expenditures.

But this argument is misleading. Expanding access to prescription drugs actually helps bring down long-term healthcare costs — and denying sick patients needed medications drives costs up.

Cancer drugs, for instance, help keep patients healthy and out of the hospital. As a proportion of total cancer treatment costs, drug spending nearly tripled from 2001 to 2011. Over that same time, the share of total costs spent on hospital stays dropped by 25 percent. Spending more on better medications has improved cancer patient health and saved money.

Restricting drug access to trim healthcare expenses usually backfires. The average patient will skip prescribed medications if her monthly out-of-pocket costs exceed $200. Such “non-adherence” typically causes a patient’s condition to worsen to the point where she requires much more expensive medical interventions.


America already spends over a $100 billion a year on avoidable emergency room visits and hospital stays because patients abandon their medication regimens. This will drive up non-adherence even higher and exacerbate these problems.

One of Obamacare’s central promises was that sick patients would no longer suffer from discrimination. Insurers are breaking that promise by strapping vulnerable patients with huge costs and forcing them to fail on less effective treatments. Lawmakers must stop these abuses — and the Patients’ Access to Treatments Act is a good place to start.

Robert Goldberg is vice president of the Center for Medicine in the Public Interest.