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The FDA has posted a Framework for FDA’s Real-World Evidence Program, creating a framework for evaluating the potential use of real-world evidence (RWE) to  help support the approval of a new indication for an already approved drug and help support or satisfy drug post-approval study requirements. (The framework does not cover medical devices.)
 
The framework will evaluate the potential use of RWE to support changes to labeling about drug product effectiveness. This includes adding or modifying an indication, such as a change in dose, dose regimen, or route of administration; adding a new population; or adding comparative effectiveness or safety information. The RWE Program will establish demonstration projects, engage stakeholders, get input from FDA senior leadership when evaluating RWE, and promote shared learning and consistency in applying the framework. FDA will also develop guidance documents to assist sponsors interested in using RWE to support drug development.
 
Fine sentiments but divisional actions speak louder than policy statements.

In the framework, FDA identifies a three-part approach for assessing whether the use of real world data (RWD) to generate RWE is appropriate to answer a regulatory question:  
 
(1) Are the RWD fit for use? 

(2) Can the trial or study design used to generate RWE provide adequate scientific evidence to answer or help answer the regulatory question? 

(3) Does the study conducted meet FDA regulatory requirements (e.g., for study monitoring and data collection)? 

The agency is accepting comments on the framework and encourages interested parties to submit comments to the established docket (FDA-2018-N-4000). 
 
It’s time to get real.

Being and Nothingness in Drug Pricing

  • 11.16.2018
  • Peter Pitts
Pfizer has just issued a statement concerning it’s 2019 price increases. Here’s the headline of the company’s press release:
 
“Pfizer Provides Transparency on Drug Prices in the U.S. 90% of Company’s Prices Will Remain Unchanged”
 
When you separate the spin from the substance, here’s what the headline should be:
 
“Pfizer adjusts 2019 prices in order to achieve 0% net revenue growth”
 
That’s the truth – but it’s not likely to be reported (or tweeted by a certain someone) that way.
 
Here are the facts:
 
Effective January 15, 2019, Pfizer will increase the list price of 41 medicines (10% of its entire drug portfolio).  The increase in list price of this subset of the company’s portfolio will be 5%. The only exceptions are three products that have a 3% increase and 9% for Xeljanz due to the completion of two extensive development programs leading to new medical uses for unmet patient needs.
 
But just as you can’t measure risk without benefit, price increases must be considered relative to cost increases. These increases will be offset by higher rebates and discounts paid by Pfizer to insurance companies and Pharmacy Benefit Managers (PBMs) – resulting in a net effect on 2019 Pfizer revenue growth in the U.S. to zero.  According to the company’s statement, “Given the higher rebates and discounts, we expect that the healthcare system will share those benefits with patients, so they do not experience higher costs for their medicines. In 2018 the net impact of price increases on revenue growth is projected to be a negative one percent in the U.S compared with 2017.”
 
PBMs and insurers should explain what they will do with this enhanced revenue source besides holding it onto it for themselves
 
It’s also important to note that in 2016 Pfizer invested $7.8 billion in R&D, in 2017 that number was $7.7 billion and in 2018 its projected to be between $7.7- $8.1 billion. That’s billion with a capital “B.”  Innovation is hard. Today it takes about 10,000 new molecules to produce one FDA-approved medicine and 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 two decades before the few that make it can generate any profit. The costs to bring a new cancer drug to market are about $2.6 billion. Risk/Benefit anyone?
 
The President, Health & Human Services Secretary Azar, just about every member of Congress, governors, members of state legislatures, policy wonks and media cognoscenti have weighed in on why our healthcare system is broken and requires change – some even have ideas on how to fix it. Per Pfizer Chairman and CEO Ian Read, “We believe the best means to address affordability of medicines, is to reduce the growing out-of-pocket costs that consumers are facing due to high deductibles and co-insurance and ensure that patients receive the benefit of rebates at the pharmacy counter.”  
 
The concept of “zero” is one of the most significant breakthroughs in the history of mathematics. It’s an equally important – and complex -- concept when it comes to pharmaceutical pricing.
 
When you make yourself into zero, your power becomes invincible. -- Mahatma Gandhi

Repatha, Amgen’s breakthrough medicine that attacks treatment-resistant hyperlipidemia, has been shown to save lives and prevent heart attacks and stroke.   PBM policies, enabled by a rigged cost-effectiveness evaluation produced by the Arnold funded ICER, have made it made it impossible to get the medicine.  First, the PBM  prior authorization process has been lengthy and confusing because, it was argued, Repatha was too expensive to make widely available.

So Amgen increased the rebate amount it would provide for Repatha.  Amgen’s rebate deals with payers are 65 percent of Repatha's commercial revenue.  In turn, the PBMs simply pocketed the rebates and charged people who actually got through the step therapy gauntlet up to 50 percent of Repatha’s NON-rebated price.   And of the small percent of patients who actually got permission to use Repatha, nearly 75 percent never filled the prescription because of the huge out of pocket cost. 

A few weeks ago, Amgen cut the list price of Repatha by 60 percent, as a way of reducing the out of pocket cost to patients.   And it also meant that PBMs like Express Scripts were getting less rebate loot.   

It did so in a way that ultimately embarrassed and exposed the PBM rebate game.  

According to the company’s press release: “Amgen is making Repatha available at a reduced list price by introducing new National Drug Codes (NDCs). SureClick®, the most commonly used delivery system, will be available immediately; the Pre-Filled Syringe and Pushtronex® (monthly, on-body infusor) delivery systems will be available in the next 2-3 months. The lower priced Repatha is identical to the Repatha currently available…At the same time, Amgen will continue offering Repatha at its original list price until 2020 or sooner.”

Express Scripts responded to the Amgen gambit by announcing it would create a separate Flex formulary of products with lower list prices.  

It will be interesting to see if such a move gets traction.  Adam Fein notes that someone in Express Scripts said that employers are addicted to rebates.  That may be true, but that begs the question of why are PBMs and health plans are still supplying the employers rebate fix.  

By forcing a real choice between a rebate driven or patient-driven drug benefit Amgen has put the PBM business model on trial.  How many PBM and employers will continue to use the higher price to rake in rebates?  How many will use the lower price?  And how will this affect prior authorization and step therapy?

In the short-term patients may not benefit.  In the long term, I believe Amgen is forging a path other companies will follow.   Amgen cut the price because it aligns with a business strategy based on increasing access and demonstrating value.   And it aligns with Amgen’s recognition that it cannot rely on the newly integrated health plans and PBMs to deliver value.  The company will have to deliver value directly to patients and physicians, something that PBMs are unable to provide.  
What did the President propose?
 
Lowering the price that Medicare pays for the prescription drugs it purchases.
 
The President couched his remarks as part of an effort to battle “unfair foreign prices.” But none of his proposals addressed any change in the pricing policies of any other country. It was only a political talking point for public consumption as we come down the home stretch of the 2018 midterm election cycle.
 
The villain wasn’t the pharmaceutical industry, but “unfair foreign nations who free load off of American drug development."
 
How will this be accomplished?
 
The President wants CMS to negotiate directly with manufacturers to achieve price parity with a basket of reference countries. By 2025, the target price decrease would (assuming all things work out according to a yet undeveloped plan) average around 30%.
 
BUT – it does not address whether or not this decrease in spending would reduce premiums for seniors on Medicare Part B or D or Medicare Advantage plans, although in one scenario (per HHS):
 
“A senior who receives an eye medicine that currently costs Medicare $1,800 a month but other countries just $300, would see their co-insurance drop from $4,400 a year to $900 a year after full implementation of the proposal.”
 
How soon will this happen?
 
These new strategies would be rolled out post 2020 via a pilot program that will be gradually phased-in (and has not yet been developed).
 
Initially, this will take place via CMMI (Center for Medicare and Medicaid Innovation pilot programs). Specific CMMI pilots would each address a specific product.) For the plan to roll out across the entire spectrum would require federal legislation to revoke the existing non-interference clause which prohibits direct federal negotiations. This is why the President spoke about his desire for “bipartisan support.” Political response from Democratic leaders has been tepid.
 
The non-interference clause was written by Senators Ted Kennedy and Tom Daschle. Nobody doubts that Trump and his team are shrewd negotiators. But the sorts of "negotiations" that Trump refers to have nothing in common with haggling over a real estate deal. Instead, the action that Trump has proposed — repealing the non-interference clause would result in Medicare drug prices going up and patient choice going down.
 
Through their own negotiations with drug makers, private insurers that offer Part D plans have had great success in keeping pharmaceutical prices down. In fact, the Congressional Budget Office observed that Part D plans have "secured rebates somewhat larger than the average rebates observed in commercial health plans." The non-interference clause prohibits government officials from intruding in these negotiations.

Doing away with the non-interference clause, on the other hand, "would have a negligible effect on federal spending." In a report from 2009, the CBO reiterated this view, explaining that such a reform would "have little, if any, effect on [drug] prices."

In fact, allowing the feds to negotiate drug prices under Part D likely would have a negative effect on the program. The CBO explains that to achieve any significant savings, the government would have to follow through on its threats of "not allowing [certain] drug[s] to be prescribed."

In other words, the government might drop some drugs from Medicare's coverage. Patients who need those drugs would then be forced to pay for them out-of-pocket, which would make medicines vastly more expensive for the seniors the President wants to help.

This clause has been the key to Medicare's success. Between 2004 and 2013, the Medicare "Part D" prescription drug benefit program cost an extraordinary 45 percent less than initial estimates. Premiums for the program also are roughly half of the government's original projections. These unprecedented results are largely due to Part D's market-based structure. Beneficiaries are free to choose from a slate of private drug coverage plans, forcing insurers to compete to offer the best options to American seniors.

What about Part B drugs?
 
Per Part B, the President announced a move from physician “buy and bill” payments based on the price of a product to a flat fee-for-service platform. This was previously tried during the Obama Administration as a CMMI pilot program and worked pretty well. It would, among other things, remove the incentive for physicians to prescribe a more expensive product when less expensive options are available. This will be particularly important for biosimilars. Such a change would require changes in both the strategies and tactics manufacturers use to incentive physician prescribing. A "target price" will be set for Part B drugs, but even when the pilot program goes live, it will be slowly phased in (and we don't get to the new target price of drugs until 2025 at the earliest).
 
Per the HHS plan, initial CMMI “negotiation” pilots will focus on “single source drugs and biologicals, as they encompass a high percentage of Part B drug spending and are frequently used by physicians that bill under Medicare Part B.”
 
These Part B changes reinforce the absence of any real ties to “foreign prices” since a drug approved in the US before Europe would be priced via domestic negotiation.
 
The focus of Part B drugs “in the line of fire” are largely drugs oncology-related medicines that represent the highest gross cost to CMS.
 
The new HHS document (Comparison of U.S. and International Prices for Top Medicare Part B Drugs by Total Expenditures ) also notes that prices cited in the study, ”may not accurately reflect the actual amount paid in the US or abroad,” because they generally do not show  the effects of rebates offered by  drug manufacturers.” A key question is how the President’s plan will insert more market-based forces into Part B while retaining existing price transparency.
 
HHS is requesting comment in an Advance Notice of Proposed Rulemaking (ANPRM).

What's next?
 
The President’s proposals do not address the “other 90%” of healthcare costs in the U.S. Those that have nothing to do with pharmaceuticals. Are we really willing to risk investment for development of innovative medicines by slicing and dicing 10% of healthcare costs but ignore the middlemen, insurers, PBMs, hospitals and other entities that consume the lion’s share of healthcare spending in the US?
 
Bottom line, nothing is going to happen quickly and nothing will happen comprehensively at least until 2020 at the earliest.

Stay tuned.
The WSJ article on John Arnold and Laura and John Arnold Foundation campaign to reduce spending on new drugs portrays John Arnold as a really rich guy who just wants to reduce the price of drugs.  If only. 

The focus of the Arnold initiative is limiting the development of and access to the new medicines, particularly those for ultra-orphan conditions, by gaining control over the clinical research process, the measurement of health outcomes and the development of institutions to arrive at and enforce clinical decisions.  There is little room for the kind of democratic decision-making and deliberation that characterizes medicine, at least for now. 

It is using ICER, funded by Arnold, (and also funded by insurance companies/PBMs) and the Center for Evidence-Based Decision Making at Oregon Health & Science University, to take control of the coverage decisions of Medicaid, Medicare and of course, health plans. Through these entities, Arnold is increasing the power of PBMs and government agencies to limit access to new medicines, guided of course, by ICER recommendations of the value of these treatments (to PBMs and plans).  They provide a short window for public input, but there is no mechanism for allowing different communities with different traditions to choose treatments based on what they value. 

Value is defined as limiting total drug spending to an arbitrary level.  And that level is in turn based on Arnold’s erroneous belief that new drug spending will drive health plans, families and our economy into bankruptcy.  But it is a fact, based on evidence that Arnold ignores and would never fund, that new drug spending overall reduces the total cost of treating disease.  New drugs do not just compete with old medicines or similar products.  They are substitutes for less effective and more efficient forms of treatment.  The trend in cancer and other disease is towards less hospitalization, more productivity, better health as we spend more on medicines.  As I have noted before, nearly 90 percent of spending on childhood infectious diseases is on medicines.   Would we want to turn back to a time when we didn’t?  Societies have avoided financial and existential catastrophes by using new medicines to stem the progression and incidence of disease. 

This is a calculus that Arnold, with his billions, has purposely rejected.  Instead, he has funded sloppy and misleading research about the cost of drug development and the value of medicines. And he  spent millions funding a network of groups that are using this twisted evidence to take control over drug coverage decisions 

Across the country, ICER and other Arnold funded organizations are packing health technology assessment panels, which are often funded by Arnold or supported by Arnold funded entities to restrict access to new medicines and diagnostics.  And they are doing so by justifying these decisions using the same sloppy and misleading research Arnold funds. 

In Oregon, a panel tasked by the state’s Medicaid program initially rejected coverage for Foundation One genetic testing to determine which drugs work in treating cancer.   The panel was run by the Center for Evidence-Based Decision Making funded by the Arnold Foundation and chaired by Vinay Prasad who is also funded by Arnold.  The Center relied on upon input from ICER, Cochrane Library (Wiley Online Library, Medicaid Evidence-based Decisions Project (MED), and the Washington State Health Technology Assessment Program which contracts with ICER to determine the value of new technologies.  All of these experts receive Arnold funding. 

The Prasad chaired HERC voted against paying for the genetic test and reversed itself only after Brian Druker, who discovered the first truly targeted cancer drug, accused the panel of discriminating against poor people with cancer.  The Center has conducted similar evaluations for 23 state health programs. 

Last year’s National Academy of Science study on making medicines affordable was underwritten in large part by the Arnold Foundation.  In addition, 3 members of the NAS committee guiding the recommendations receive funding from the Arnold Foundation.  The key proposals: limiting patient access to new medicines and forcing them to try cheaper drugs first to save insurers money.

And all these efforts, as well as the Arnold funded researchers that sustain them, are reported in Kaiser Health News, ProPublica and HealthNewsReview.org, all with Arnold funding.  In addition, all these outlets ensure Arnold funded articles are widely syndicated.  

Finally, Arnold is spending nearly $10 million on negative, misleading political ads in New Jersey attacking the Republican candidate for US Senate, former Celgene CEO Bob Hugin.  The actual ad buys are being made by Patients for Affordable Drugs Now, a group fully funded by the Arnold Foundation and, when it is not running malicious ads, attacks real patient organizations as pharma mouthpieces in an effort to reduce their influence. 

For all the talk about lowering drug prices, the Arnold program focuses on reducing incentives for innovation to reduce the number of new medicines, reducing prices by enriching insurers and PBMs by jacking up rebates and most important, deny the poor, minority communities and people with the deadliest and debilitating illnesses states access to the kind of advances wealthier and more entitled groups will get.  Ultimately, the guiding impulse of the Arnold enterpise is that the sickest and most vulnerable people in society aren’t worth spending money on because it comes at the expense of healthier and wealthier people.  

In this regard, the Arnold project is similar in approach and purpose used by earlier philanthropic efforts to address the financial burden of spending more and more money on individuals with hard to treat or intractable conditions.   In 1930, well-intentioned billionaires supported eugenics to solve the rising cost of health care and social services, arguing that reducing the number of such ‘defectives’ was a better strategy.

Today, the Arnold Foundation, without malice and with the same sense of noblesse oblige, supports reducing the development of, access to and spending on new medicines for people with the greatest health risks.   The Arnold Foundation is hell-bent on giving a handful of well-paid elites in academia, business, politics and the media control over technologies that not only determine if we live or die but how we live or die to ensure the economic sustainability of society.   This enterprise, like the eugenics movement it has replaced,  is more dangerous precisely because it is well-intentioned. 
From the Regulatory Focus online publication comes this bit of good news for pharma companies worrying about ICER: 

ICER Plots Early Scientific Advice Program for Biopharma 

The Institute for Clinical and Economic Review (ICER) is looking to help the biopharma industry with earlier reviews of clinical work, adding to their current independent evaluations of the clinical and economic value of prescription drugs, medical tests and other health innovations.
 
“For some time, ICER has been receiving requests from life sciences companies to help them rethink clinical trial design, so that the trials more adequately measure the types of outcomes that matter most to patients and their families,” David Whitrap, ICER VP of Communications and Outreach told Focus.
 
The idea floated is that biopharma companies pay a fee for such a pre-market or pre-clinical review, though it’s unclear at this stage what that fee would be or how such a review would be conducted.
 
“Some international health technology organizations, such as NICE and CADTH, have offered this ‘early scientific advice’ to industry for many years with general success. We are therefore evaluating the options to provide a similar service but have not made any definitive plans,” Whitrap said. 

Translation:  Nice drug you got there, it would be a shame if something happened to it. 

This is a protection racket plain and simple.   Moreover, as Regeneron found out, working with ICER only guarantees deeper rebates, not broader uptake of products. 

Any company that plays ball with ICER deserves what they will get. 

A Kick-Back by Any Other Name

  • 09.21.2018
  • Peter Pitts
In their recent op-ed, Drug Rebates Aren’t Kickbacks, Joe Antos and Jim Capretta claim that rebates are incentives because drug companies charge less when more of their drugs are sold to patients. The facts speak otherwise. Rebates create an environment where higher list prices drugs are favored providing zero incentives for pharma companies to introduce lower priced medicines in competitive therapeutic classes.
 
Over the last five years, according to the Department of Health and Human Services, pharmaceutical spending has increased by 38% while the average individual health insurance premium has increased by 107%. During the same time period, rebates, discounts and fees paid by the biopharmaceutical industry to insurers and PBMs have risen from $74 billion to $153 billion - an increase of 107%. Not only are rebates, discounts and fees outpacing the increase in spending on drugs but they haven’t slowed precipitous premium increases.
 
Because PBMs retain a portion of negotiated rebates and other price concessions as compensation for their services, list prices are rising rapidly even as net prices have held steady. A key unintended consequence of this dynamic is that patients do not directly benefit from significant price negotiations in the market today.  Unsurprisingly, manufacturers are willing to raise prices and transfer the greatest list-price-based rebate value to middlemen to secure preferred formulary position at the expense of real free-market competition while also limiting the therapeutic options of physicians and patients.
 
 
Yesterday the Partnership to Improve Patient Care along with nearly 100 other patient organizations sent a letter to CVS demanding that it abandon the plan to deny patients access to drugs that a private organization has deemed not worth it.
 
CVS is using the Institute for Clinical and Economic Review’s estimate of the value of life ($100K) to determine whether to cover all existing drugs.  Those that are priced above the $100K threshold will not be covered by CVS because, according to ICER, at that price the drugs are not cost effective.
 
The letter notes: ”This type of cost-effectiveness analysis discriminates against people with disabilities and other vulnerable groups like the elderly because it assigns higher value to people in “perfect health” than people in less-than-perfect health.  As the letter states, "policy decisions based on cost-effectiveness ignore important differences among patients and instead rely on a single, one-size-fits-all assessment. Further, cost-effectiveness analysis discriminates against the chronically ill, the elderly and people with disabilities, using algorithms that calculate their lives as 'worth less' than people who are younger or non-disabled."
 
Moreover, the ICER threshold is used to cap total spending on new drugs at a fixed amount ($940 million) each year   If a new drug can cure a disease that’s too bad.  You can’t spend more than that $940 million.  That’s another form of rationing. 
 
According to a BiopharmaDive article, in response a “CVS Health spokesperson described the QALY-based decision plan as non-discriminatory and said it would help patients get treatments "at a price they and the health care system can afford."
 
"We like ICER because it's very transparent," CVS Health Chief Medical Officer Troyen Brennan said in a recent interview with STAT News.
 
"They undertake this activity voluntarily, they're supported largely by philanthropy, and when combined with market pressure, their analysis is every bit as powerful as government regulation might be," Brennan added.
 
In fact, CVS will use get companies to cut their prices to ICER thereby increasing rebates.  CVS will pocket, not pass, those additional rebates based on the ICER price to patients in order to increase access or reduce out of pocket costs. CVS will use ICER guided rationing and cost sharing to ratchet up policies that discriminate against the sickest patients.
 
And Brennan must have forgotten that CVS funds ICER along with Laura and John Arnold Foundation which by the way has invested $9.7 million in the CVS Pass Through Trusts (“created to finance the purchase of, or refinance existing financing, on drugstores. The Trust's drugstores will be leased, subleased, or sub-subleased.”)

There are not many organizations who did not sign the letter.  One notable exception is Patients for Affordable Drugs which is also funded by the Arnold Foundation and has come out in favor of the proposal to use step therapy and cost-sharing tiers to limit access to medicines under Medicare part B.    Perhaps the group and its founder, advertising tycoon David Mitchell, were too busy funneling Arnold dough to run attack ads against Bob Hugin in the NJ senate race.
 
Curiously, the journalists, editorial writers, and news outlets that cover drug cost issues have written nothing.  I could only find the BiopharmaDive article I quoted as well as a great article in Biocentury that provides insight into the impact of applying ICER to formulary access: "ICER has found only one of 14 MS drugs and zero of nine rheumatoid arthritis treatments to be cost-effective. Although the two treatments for tardive dyskinesia, a side effect of antipsychotic treatment, that ICER has reviewed were each deemed not cost-effective, both compounds have breakthrough therapy designation from FDA and would not be eligible for exclusion from the formulary."



  As of this writing STAT and Kaiser Health News have not reported on this controversy.  Ditto, Jayne O’ Donnell at USA Today, Max Nisen at Bloomberg, Carolyn Johnson at the Washington Post, Matt Herper at Forbes or Peter Loftus at WSJ. 
 
I guess the fact that CVS which will soon acquire Aetna and could use the extra cash squeezed out of the sickest patients to boost net revenues and the stock price of the new company is of no interest to these reporters.  Neither is the fact that CVS is outsourcing life and death decisions to an unelected and unaccountable private organization which it also funds. 
 
If health journalism has a pulse, I can’t find it. 
 
Finally, you would think that the CVS assault on patients would get the attention of HHS Secretary Azar.  Not even a tweet.  So much for the administration’s concern about patient access.  Something tells me that the blueprint to reduce drug costs is now being written to facilitate the very shenanigans HHS once condemned. 

(Out of) Pocket Change

  • 09.13.2018
  • Peter Pitts
When it comes to healthcare reform, a key goal is to reduce what patients pay for their medicines. And that means what comes out of their pocket. This is particularly important for seniors and timely, since Congress now has the opportunity to address the so-called “donut hole.”
 
Because of language in the Bipartisan Budget Act of 2018 (BBA), seniors in the Part D donut hole will soon pay five times more than insurers for the brand medicines they rely on. In 2020, the BBA will increase a patient’s cost-sharing costs by $1250, raising out-of-pocket costs for the most vulnerable seniors. Why? Well, among other things, when Congress passed the BBA in February, it made changes to Medicare Part D that threaten the program’s successful competitive structure -- and leaving seniors mired even deeper in the donut hole.
 
Now is the time to aggressively address this issue. When people say, “my drugs are too expensive,” what they mean is “my out-of-pocket costs are too high.” Congress can help. And they can help now.     
 
Congress has the opportunity to make two small fixes that will protect seniors in the Medicare Part D donut hole and save them money on out-of-pocket costs for their medicines.  These fixes would leave seniors with high drug spending better off while stabilizing the program for the long-term. Together these two policy fixes would reduce out-of-pocket costs for seniors with high drug spending them better off and, in 2020, saving them up to 7% on their out-of-pocket costs. 
 
While these changes closed the donut hole a year early, they went much further by lowering insurers’ payment responsibility to just five percent of costs in the donut hole for brand medications. This undermines Part D’s market-based structure by reducing insurance plans’ stake in the program and therefore reducing their incentive to manage program costs, while also creating a significant imbalance in payment responsibility. 
 
When Part D was created, it included a catastrophic phase of coverage where seniors’ out-of-pocket costs would be reduced once their total medicine costs reached a certain amount. Each year the amount of spending required to move into the catastrophic phase increases slightly. A measure originally included in the Affordable Care Act temporarily slowed the growth rate of this increase. But now that measure is set to expire at the end of 2019, reverting back to pre-ACA levels overnight. This will result in a sudden increase in out-of-pocket costs for seniors in the donut hole who will have to reach a much higher spending threshold to get into catastrophic coverage.
 
Congress should take this opportunity to fix the donut hole "cliff" by enacting legislative language that restores balance to payment responsibility. They can act right now to both protect seniors and save them money on out-of-pocket costs.

John Arnold: ICER Can Make PBMs Great Again

  • 08.27.2018
  • Robert Goldberg
Here's the key phrase in John Arnold's article on how to make PBMs great again: "The Laura and John Arnold Foundation has supported the development of value-based pricing through the Institute for Clinical and Economic Review, which can be used by pharmacy benefit managers to select drugs that maximize patient value rather than the size of the rebate. CVS recently announced it would use ICER pricing in establishing its formulary."

Translation: Let a handful of experts decide for millions of Americans about patient access by setting prices based on some abstract estimate of human worth and then enforcing those prices by excluding drugs, step therapy, prior authorization, clinical pathways and cost sharing (albeit at net prices).

Arnold and his foundation cast his effort as an effort to use the best scientific evidence developed by the most expert experts to achieve the greatest good in an era of scarce resources.  Indeed, his investment is part of a long tradition of wealthy individuals funding as Thomas Leonard wrote in "Illiberal Reformers", "scientific experts (who) should be in society’s saddle, determining the “human hierarchy” and appropriate social policies." Indeed, Arnold's entire philanthropic program is based on the belief that a better future would derive from the beneficent activities of expert social engineers (armed with evidence from randomized clinical trials) who would bring to the service of social ideals all the technical resources which research could discover and ingenuity could devise.”

At that time, the progressive solution was eugenics.  And in addition to making the case for experts making decisions about selective breeding and whether or not to spend money on helping the sickest based on randomized controlled trial data.  

And here is the statement of Margaret Sanger, a eugenics proponent: 

"Every single case of inherited defect, every malformed child, every congenitally tainted human being brought into this world is of infinite importance to that poor individual; but it is of scarcely less importance to the rest of us and to all of our children who must pay in one way or another for these biological and racial mistakes." 

Here's the Steve Pearson, the President of ICER:

 “The opportunity cost of supporting the use of ultra-orphan drugs necessitates that patients with a more common disease, for which a cost-effective treatment is available, are denied treatment.”    To reduce that cost we must restrain “society’s desire to help those weakest among us, especially when their small numbers allow us to see them as unique individuals.” In that way, we can “ensure that an undue burden is not placed on others for the sake of a few.”

ICER is part of an enduring feature of progressivism in its prior and current incarnations.  As Leonard points out, "this last Progressive belief—that modern conditions of industrial capitalism no longer permitted a quaint liberal individualism, but demanded wise government by expert elites— is what we can call technocratic paternalism. The idea is that benignly motivated experts should interpose themselves, in the name of the greater good, to better represent the interests of the industrial poor, for whom many reformers felt contempt as much as pity. "

ICER’s assault on people with rare diseases is rooted in such technocratic paternalism.  As Leonard noted: "Progressives believed that modern conditions required the state to assume control of human reproduction."

Today, as articulated and calculated by ICER, they require expert elites to assume control of the human condition.  And instead of eugenics, ICER and John Arnold want to turn an evidence-based approach to Munchausen syndrome by proxy to control drug costs. 

History is scarred with the accounts of societies and governments that deployed the solutions of expert technologists to empower to apply their wisdom to improve humankind.  We know better and have chosen better. Civilization is enriched when people who are marginalized – or have been eliminated -- because of their medical condition are freed from despair. 




 


 
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