Tag: drug prices

Global Pricing Plan Added To Trump’s Attack On Drug Prices, But Doubts Persist

The proposal would have Medicare base what it pays for some expensive drugs on the average prices in other industrialized countries.

Sarah Jane Tribble, Kaiser Health News

President Donald Trump’s new pledge to crack down on “the global freeloading” in prescription drugs had a sense of déjà vu.

Five months ago, Trump unveiled a blueprint to address prohibitive drug prices, and his administration has been feverishly rolling out ideas ranging from posting drug prices on television ads to changing the rebates that flow between drugmakers and industry middlemen.

Thursday, Trump proposed having Medicare base what it pays for some expensive drugs on the average prices in other industrialized countries, such as France and Germany, where prices are much lower. The proposal is in the early stages of rule-making and awaiting public comments.

The U.S., Trump said, will “confront one of the most unfair practices, almost unimaginable that it hasn’t been taken care of long before this.”

The proposal was met with hope and skepticism, with several experts saying they were happy the administration was taking on Medicare Part B’s rising drug prices but questioning its approach.

Walid Gellad, director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh, said in an online post that the administration’s proposed solutions were unclear. And, he said, they would “face insurmountable challenges.”

While some industry watchers pointed to the announcement as a political move, Wells Fargo pharmaceutical analyst David Maris said that this is a broader effort by the president and his administration to attack the root causes of high drug prices.

“The reality is he could very easily not take this on and do what other administrations have done and let the prices keep rising.”

Trump, too, promised more to come and said he will soon announce “some things that will really be tremendous.” On Friday, Health and Human Services Secretary Alex Azar said that, as promised in the blueprint, there would be more changes to Medicare Part D, which covers most prescriptions. Ian Spatz, a public policy expert and senior adviser at Manatt Health, said the overall blueprint was “unprecedented in terms of how many different ideas and areas of ideas that it contained.”

Nothing would happen overnight. The proposal to require drug prices in TV ads could be delayed by litigation and notably, if implemented, does not include any penalties for companies who fail to post their prices.

The proposed rebate rule was delivered to the Office of Management and Budget in July. Matt Brow, president of industry consulting firm Avalere Health, said he expects the administration to publish the rule for comment by year’s end.

Trump’s international pricing plan is not as far along as the rebate proposal. Rather, it is an “advanced notice of proposed rule-making.” The proposed rule could come in spring 2019, and Azar said the new model could begin in late 2019 or early 2020.

Yet, on Friday, Azar signaled the proposal could change, telling an audience at the Brookings Institution that the administration is “open to any number of alternative ideas.”

Avalere’s Brow said there is a good chance the proposal will change significantly.

“The sweeping nature of the proposal makes the stakes higher and makes it harder to implement,” Brow said.

If the administration moves forward, it would bypass Congress and implement a pilot under the Center for Medicare & Medicaid Innovation’s purview. The pilot would phase in over five years and apply to 50 percent of the country. Azar said there would be no changes to Medicare benefits and no restrictions on patient access.

The proposal focuses on drugs covered under Medicare Part B, which are administered in hospitals, clinics and doctors’ offices. It also would alter the reimbursement formula for doctors and providers and would allow private-sector vendors to purchase drugs and then sell them to doctors and hospitals. Medicare would reimburse those vendors at the international pricing level.

Currently, doctors and hospitals administering Part B drugs are reimbursed the average price of a drug plus 6 percent. President Barack Obama’s administration attempted to alter Part B as well but drew intense lobbying opposition and eventually withdrew a proposed pilot project.

Allan Coukell, senior director for health programs at Pew Charitable Trusts, said removing incentives that reward doctors for purchasing costlier drugs and bringing in a new way to control prices “makes a lot of sense.” Drug spending within Medicare Part B reached $22 billion in 2015, and drug costs have increased by an average of 8.6 percent annually since 2007.

Stephen Ubl, president of the industry trade group Pharmaceutical Research and Manufacturers of America, or PhRMA, said imposing foreign price controls from countries with socialized health care systems would harm patients and hinder drug discovery and development.

Azar, a former executive at pharmaceutical manufacturer Eli Lilly, told reporters Thursday that “you may hear the tired talking points” that this will affect innovation. He disputed that idea, concluding that “less than 1 percent of pharma [research and development] could potentially be impacted by this change.”

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Disclaimer: The viewpoint expressed in this article is the opinion of the author and is not necessarily the viewpoint of the owners or employees at Healthcare Staffing Innovations, LLC.

TV Ads Must Disclose Drug Prices, Trump Administration Says

The Trump administration proposed a new rule this week which demands drug makers disclose list prices for medications in their TV commercials.

A new rule was proposed by the Trump administration on Monday that pharmaceutical companies reveal the list prices for all brand name drugs covered by Medicare and Medicaid that cost more than $35 a month in their television advertisements.

The proposed rule pushes for transparency, stating that the price should be listed at the end of the advertisement in “a legible manner” and should be presented against a contrasting background in a way that is easy to read. If approved, however, drug companies cannot be forced to comply, as there is no government-enforced penalty system in place. Instead, federal regulators would make public a list of companies violating the rule and depend on the private sector to take legal action.

This rule is being touted as part of the administration’s “American Patients First” blueprint, their initiative to bring down prescription drug prices. However, it is unclear how disclosing list prices for medications in television ads will lower drug prices, as a drug’s list price is not often closely related to what patients actually pay for their medications at the pharmacy.

As anticipated, the proposed rule is already facing backlash from the drug industry.

“We’re concerned that if you just have the list price in isolation in the ad, it may deter patients from seeking needed care,” Steve Ubl, President and CEO of the Pharmaceutical Research and Manufacturers of America, is quoted as saying.

Disclaimer: The viewpoint expressed in this article is the opinion of the author and is not necessarily the viewpoint of the owners or employees at Healthcare Staffing Innovations, LLC.

Pharma Sales Growth Tied to Price Hikes

Of the roughly $23.3 billion in sales growth seen by 45 top pharmaceutical products, $14.3 billion of that has been tied to price increases, not demand.

61% of the pharma industry’s recent sales growth was apparently, at least in part, a byproduct of price increases on top-selling drugs, according to a new report from investment firm Leerink.

From 2014 through 2017, sales for 45 top pharmaceutical products, including AbbVie’s Humira, Amgen’s Neulasta and Enbrel, and Pfizer’s Lyrica, increased by 28% (roughly $23.3 billion) in the United States. However, more than $14.3 billion of those sales was the result of price increases.

Continued price hikes from pharma companies have faced backlash and much scrutiny in recent years, including at the government level, with the Trump Administration releasing a plan to tackle the rising costs in May.

Disclaimer: The viewpoint expressed in this article is the opinion of the author and is not necessarily the viewpoint of the owners or employees at Healthcare Staffing Innovations, LLC.

Congress Bans Pharmacist ‘Gag Orders’ On Drug Prices

Pharmacists will no longer have to keep it a secret when the cash price for a prescription is less than what someone would pay using their insurance plan.

By Susan Jaffe

For years, most pharmacists couldn’t give customers even a clue about an easy way to save money on prescription drugs. But the restraints are coming off.

When the cash price for a prescription is less than what you would pay using your insurance plan, pharmacists will no longer have to keep that a secret.

President Donald Trump was expected to sign two bills Wednesday that ban “gag order” clauses in contracts between pharmacies and insurance companies or pharmacy benefit managers — those firms that negotiate prices for employers and insurers with drugstores and drugmakers. Such provisions prohibit pharmacists from telling customers when they can save money by paying the pharmacy’s lower cash price instead of the price negotiated by their insurance plan.

The bills — one for Medicare and Medicare Advantage beneficiaries and another for commercial employer-based and individual policies— were passed by Congress in nearly unanimous votes last month. A spokesman for Sen. Susan Collins (R-Maine) said her office had been told the president would sign the bills Wednesday. The White House declined to comment.

“Americans deserve to know the lowest drug price at their pharmacy, but ‘gag clauses’ prevent your pharmacist from telling you!” Trump wrote on Twitter three weeks ago, shortly before the Senate voted on the bills. “I support legislation that will remove gag clauses.” The change was one of the proposals included in Trump’s blueprint to cut prescription drug prices issued in May.

Ronna Hauser, vice president of payment policy and regulatory affairs at the National Community Pharmacists Association, said many members of her group “say a pharmacy benefit manager will call them with a warning if they are telling patients it’s less expensive” without insurance. She said pharmacists could be fined for violating their contracts and even dropped from insurance networks.

According to research published in JAMA in March, people with Medicare Part D drug insurance overpaid for prescriptions by $135 million in 2013. Copayments in those plans were higher than the cash price for nearly 1 in 4 drugs purchased in 2013. For 12 of the 20 most commonly prescribed drugs, patients overpaid by more than 33 percent.

Yet some critics say eliminating gag orders doesn’t address the causes of high drug prices. “As a country, we’re spending about $450 billion on prescription drugs annually,” said Steven Knievel, who works on drug price issues for Public Citizen, a consumer advocacy group. The modest savings gained by paying the cash price “is far short of what needs to happen to actually deliver the relief people need.”

After the president signs the legislation affecting commercial insurance contracts, gag order provisions will immediately be prohibited, said a spokesman for Collins, who co-authored the bill. The bill affecting Medicare beneficiaries wouldn’t take effect until Jan. 1, 2020.

But there’s a catch: Under the new legislation, pharmacists will not be required to tell patients about the lower cost option. If they don’t, it’s up to the customer to ask.

The Pharmaceutical Care Management Association, a trade group representing pharmacy benefit managers, said gag orders are increasingly rare. The association supported the legislation. Some insurers have also said their contracts don’t include these provisions. Yet two members of Congress have encountered them at the pharmacy counter.

At a hearing on the gag order ban, Collins said she watched a couple leave a Bangor, Maine, pharmacy without their prescription because they couldn’t afford the $111 copayment and the pharmacist did not advise them about saving money by paying directly for the medicine. When she asked him how often that happens, he said every day.

“Banning gag clauses will make it easier for more Americans to afford their prescription drugs because pharmacists will be able to proactively notify consumers if a less expensive option may be available,” she said last week.

When Rep. Debbie Dingell (D-Mich.) went to a Michigan pharmacy to pick up a prescription recently, she was told it would cost $1,300. “After you peeled me off the ceiling, I called the doctor and screamed and talked to the pharmacist,” she recalled during a hearing last month. “I’m much more aggressive than many in asking questions,” she admitted, and ended up saving $1,260 after she learned she could get an equivalent drug for $40.

While the legislation removes gag orders, it doesn’t address how patients who pay the cash price outside their insurance plan can apply that expense toward meeting their policy’s deductible.

But for Medicare beneficiaries there is a little-known rule — not found in the “Medicare & You” handbook or on its website —that helps people with Medicare Part D or Medicare Advantage coverage. If they pay the lower cash price for a covered drug at a pharmacy that participates in their insurance plan and then submit the proper documentation to their plan, insurers must count it toward patients’ out-of-pocket expenses.

The total of those expenses are important because that amount affects the drug coverage gap commonly called the “doughnut hole.” (This year, the gap begins after the plan and beneficiary spend $3,750 and ends once the beneficiary has spent a total of $5,000.)

And beneficiaries don’t have to wait until the gag order ban takes effect in two years.

The Medicare rule also says that if a senior asks about a lower price for a prescription, the pharmacist can answer.

Rep. Buddy Carter (R-Ga.), a pharmacist who sponsored the Medicare gag order bill, said he wasn’t surprised by the bipartisan support for the legislation. “High prescription drug costs affect everyone,” he said.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Disclaimer: The viewpoint expressed in this article is the opinion of the author and is not necessarily the viewpoint of the owners or employees at Healthcare Staffing Innovations, LLC.

Drugmakers Play The Patent Game To Lock In Prices, Block Competitors

Drug companies typically have less than 10 years of exclusive rights once a drug hits the marketplace. They can extend their monopolies by layering in secondary patents.

Sarah Jane Tribble, Kaiser Health News

David Herzberg was alarmed when he heard that Richard Sackler, former chairman of opioid giant Purdue Pharma, was listed as an inventor on a new patent for an opioid addiction treatment.

Patent No. 9861628 is for a fast-dissolving wafer containing buprenorphine, a generic drug that has been around since the 1970s. Herzberg, a historian who focuses on the opioid epidemic and the history of prescription drugs, said he fears the patent could keep prices high and make it more difficult for poor addicts to get treatment.

“It’s hard not to have that reaction of, like … these vultures,” said Herzberg, an associate professor at the University at Buffalo.

James Doyle, vice president and general counsel of Rhodes Pharmaceuticals, the Purdue subsidiary that holds the patent, said in an email statement that the company does not have a developed or approved product and “therefore no money has been made from this technology.”

“The invention behind the buprenorphine patent in question was developed more than a dozen years ago,” he wrote. “If a product is developed under this patent, it will not be commercialized for profit.”

Yet, the patenting of a small change in how an existing drug is made or taken by patients is part of a tried-and-true pharmaceutical industry strategy of enveloping products with a series of protective patents.

Drug companies typically have less than 10 years of exclusive rights once a drug hits the marketplace. They can extend their monopolies by layering in secondary patents, using tactics critics call “evergreening” or “product-hopping.”

Lisa Larrimore Ouellette, a patent law expert at Stanford University, said the pharmaceutical industry gets a greater financial return from its patent strategy than that of any other industry.

AztraZeneca in 2001 famously fended off generic versions of its blockbuster heartburn medicine Prilosec by patenting a tweaked version of the drug and calling it Nexium. When Abbott Laboratories faced multiple generic lawsuits over its big moneymaker Tricor, a decades-old cholesterol drug, it lowered the dosage and changed it from a tablet to a capsule to win a new patent.

And Forest Laboratories stopped selling its Alzheimer’s disease drug Namenda in 2014 after reformulating and patenting Namenda XR to be taken once a day instead of twice.

Another common strategy is to create what Food and Drug Administration Commissioner Scott Gottlieb calls “patent thickets,” claiming multiple patents for a single drug to build protection from competitors. AbbVie’s rheumatoid arthritis drug Humira has gained more than 100 patents, for example.

The U.S. Patent and Trademark Office awards patents when an innovation meets the minimum threshold of being new and non-obvious. Secondary patents are routinely granted to established drugs when an improvement is made, such as making it a once-a-day pill instead of twice a day, said Kristina Acri, an economist and international intellectual property expert at the Fraser Institute and Colorado College.

“Is there a better way? Maybe, but that’s not what we’re doing,” Acri said.

The controversial patent that Sackler and five co-inventors obtained is widely known as a “continuation patent.” (The original patent application for the wafer was filed in August 2007.)

Continuation patents do not necessarily extend the patent life of a drug, but they can have other uses. In 2016, Rhodes filed a lawsuit against Indivior alleging patent infringement.

Indivior, formerly part of Reckitt Benckiser, sells a film version of the popular addiction treatment drug Suboxone that is placed under the tongue — an oral medicine similar to what Rhodes has patented. Indivior’s comes in a lime flavor.

Indivior’s film, which federal regulators approved in 2010, dominates the market with a 54 percent average market share, according to the company’s most recent financial report. And the company has vigorously fought rivals, including filing lawsuits against firms such as Teva Pharmaceutical Industries, which sought approval to manufacture generic versions. Indivior declined to comment.

The Rhodes Pharmaceuticals version would be a wafer that melts quickly in the mouth. The inventors list potential flavors including mint, raspberry, licorice, orange and caramel, according to the patent.

For opioid historian Herzberg, the patent battles between companies like Rhodes and Indivior are “absolute madness.”

Decisions on what is available on the market to treat addicts should be based on what is the best way to treat the people who have the problem, he said.

Patent battles, Herzberg said, are “not how you want drug policy getting made.”

Attempts to change the patent system have intensified over the past decade as prices of prescription drugs continue to climb.

In 2011, President Barack Obama signed the America Invents Act, which included the creation of the Patent Trial and Appeal Board. The PTAB is an alternative to using the cumbersome U.S. court system to challenge weak patents. Generic drug manufacturers have used the board’s “inter partes review” process and overturned 43 percent of the patents they challenged, according to recent research.

Critics of the administrative process, including the pharmaceutical industry trade group PhRMA, said it creates “significant business uncertainty for biopharmaceutical companies.” Often companies have to defend their products twice — both in the courts as well as before the PTAB, said Nicole Longo, PhRMA’s director of public affairs.

Drug giant Allergan attempted to overcome the PTAB’s review process by arguing that the patent couldn’t be challenged at the review board because they sold the patent to the St. Regis Mohawk Tribe, which had sovereign immunity. A federal appeals court ruled this summer that Allergan could not shield its patents from the PTAB review this way.

This year, several members of Congress proposed bills that would unwind or limit changes made by the America Invents Act, though nothing is likely to happen before the midterm elections. The STRONGER Patents Act, introduced in both the House and Senate, would weaken the PTAB board by aligning its claims standards with what has been established by court rulings.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Disclaimer: The viewpoint expressed in this article is the opinion of the author and is not necessarily the viewpoint of the owners or employees at Healthcare Staffing Innovations, LLC.

Insulin’s Steep Price Leads To Deadly Rationing

The price of insulin in the U.S. has more than doubled since 2012. Because of this, some diabetics have been forced to take drastic measures, like rationing their insulin.

Bram Sable-Smith, Side Effects Public Media

Diabetic ketoacidosis is a terrible way to die. It’s what happens when you don’t have enough insulin. Your blood sugar gets so high that your blood becomes highly acidic, your cells dehydrate, and your body stops functioning.

Nicole Smith-Holt lost her son to diabetic ketoacidosis, three days before his payday, because he couldn’t afford his insulin.

“It shouldn’t have happened,” Smith-Holt said, looking down at her son’s death certificate on her dining room table in Richfield, Minn. “That cause of death of diabetic ketoacidosis should have never happened.”

The price of insulin in the U.S. has more than doubled since 2012 alone. That’s put the lifesaving hormone out of reach for some people with diabetes, like Smith-Holt’s son Alec Raeshawn Smith. It has left others scrambling for solutions to afford the one thing they need to live. I’m one of those scrambling.

Not Enough Time

Most people’s bodies create insulin, which regulates the amount of sugar in the blood. The roughly 1.25 million of us in the U.S. with Type 1 diabetes have to buy insulin at a pharmacy because our pancreases stopped producing it.

My first vial of insulin cost $24.56 in 2011, after insurance. Seven years later, I pay more than $80. That’s nothing compared with what Alec was up against when he turned 26 and aged off his mother’s insurance plan.

Smith-Holt said she and Alec started reviewing his options in February 2017, three months before his birthday on May 20. Alec’s pharmacist told him his diabetes supplies would cost $1,300 a month without insurance — most of that for insulin. His options with insurance weren’t much better.

Alec’s yearly salary as a restaurant manager was about $35,000. Too high to qualify for Medicaid, and, Smith-Holt said, too high to qualify for significant subsidies in Minnesota’s Affordable Care Act insurance marketplace. The plan they found had a $450 premium each month and an annual deductible of $7,600.

“At first he didn’t realize what a deductible was,” Smith-Holt said. She said Alec figured he could pick up a part-time job to help cover the $450 per month.

Then Smith-Holt explained to her son what a deductible was.

“You have to pay the $7,600 out-of-pocket before your insurance is even going to kick in,” she recalled telling him. Alec decided going uninsured would be more manageable. Although there might have been cheaper alternatives for his insulin supply that Alec could have worked out with his doctor, he never made it that far.

He died less than one month after going off of his mother’s insurance. His family thinks he was rationing his insulin — using less than he needed — to try to make it last until he could afford to buy more. He died alone in his apartment three days before payday. The insulin pen he used to give himself shots was empty.

“It’s just not even enough time to really test whether [going without insurance] was working or not,” Smith-Holt said.

A Miracle Discovery

Insulin is an unlikely symbol of America’s problem with rising prescription costs.

Before the early 1920s, Type 1 diabetes was a death sentence for patients. Then researchers at the University of Toronto — notably Dr. Frederick Banting, Charles Best and J.J.R. Macleod — discovered a method of extracting and purifying insulin that could be used to treat the condition. Banting and Macleod were awarded a Nobel Prize for the discovery in 1923.

For patients, it was nothing short of a miracle. The patent for the discovery was sold to the University of Toronto for only $1 so that lifesaving insulin would be available to everyone who needed it.

Today, however, the list price for a single vial of insulin is more than $250. Most patients use two to four vials per month (I personally use two). Without insurance or other forms of medical assistance, those prices can get out of hand quickly, as they did for Alec.

Depending on whom you ask, you’ll get a different response for why insulin prices have risen so high. Some blame middlemen — such as pharmacy benefit managers, like Express Scripts and CVS Health — for negotiating lower prices with pharmaceutical companies without passing savings on to customers. Others say patents on incremental changes to insulin have kept cheaper generic versions out of the market.

For Nicole Smith-Holt, as well as a growing number of online activists who tweet under the hashtag #insulin4all, much of the blame should fall on the three main manufacturers of insulin today: Sanofi of France, Novo Nordisk of Denmark and Eli Lilly in the U.S.

The three companies are being sued in U.S. federal court by diabetic patients in Massachusetts who allege the prices are rising at the expense of patients’ health.

Eli Lilly and Company did not make anyone available for an interview for this story. But a company spokesman noted in an email that high-deductible health insurance plans — like the one Alec found — are exposing more patients to higher prices. In August, Eli Lilly opened a help line that patients can call for assistance in finding discounted or even free insulin.

A Dangerous Solution

Rationing insulin, as Nicole Smith-Holt’s son Alec did, is a dangerous solution. Still, 1 in 4 people with diabetes admit to having done it. I’ve done it. Actually, there’s a lot of Alec’s story that feels familiar to me.

We were both born and raised in the Midwest, just two states apart. We were both diagnosed at age 23 — pretty old to develop a condition that used to be called “juvenile diabetes.” I even used to use the same sort of insulin pens that Alec was using when he died. They’re more expensive, but they make management a lot easier.

“My story is not so different from what I hear from other families,” Smith-Holt recently told a panel of Senate Democrats in Washington, D.C., in a hearing on the high price of prescription drugs.

“Young adults are dropping out of college,” she told the lawmakers. “They’re getting married just to have insurance, or not getting married to the love of their lives because they’ll lose their state-funded insurance.”

I can relate to that too. My fiancée moved to a different state recently and soon I’ll be joining her. I’ll be freelancing, and won’t have health benefits, though she will, via her job. We got married — one year before our actual wedding — so I can get insured, too.

This story is part of a partnership that includes Side Effects Public Media, NPR and Kaiser Health News. A version of this story appears in The Workaround podcast.

Disclaimer: The viewpoint expressed in this article is the opinion of the author and is not necessarily the viewpoint of the owners or employees at Healthcare Staffing Innovations, LLC.

New Guidances Issued to Promote Generic Drug Access and Drug Price Competition

The guidances issued today by the FDA are part of a larger initiative by the administration to increase patient access to high-quality generics.

By Lyndsay Meyer

“One of the key ways the FDA can increase patient access to high-quality generics is by providing guidance to encourage and foster development of these cost-saving medicines, especially when it comes to complex drugs that can be hard to copy,” said FDA Commissioner Scott Gottlieb, M.D. “By explaining our current thinking and expectations on how to develop specific generic drug products that are therapeutically equivalent to the brand name drug products, we provide an efficient path for these products to receive regulatory approval to enter the market, especially when they don’t currently have any generic competition. Today, we’re releasing detailed guidance on recommendations regarding how to develop generic versions of 15 drugs that don’t currently face any generic competition. With this new batch of guidance documents, we’re not only providing recommendations for some new generic drugs, but the FDA is also modernizing some of its previously-issued guidance to make sure they reflect the most efficient path for developing generics.”

The U.S. Food and Drug Administration today announced a new set of product-specific guidances to support industry in identifying appropriate science-based methodologies and evidence for developing generic drugs. The batch contains 54 product-specific guidances, including 42 new guidances and 12 revised guidances that, when finalized, will describe the FDA’s current thinking and expectations on how to develop generic drugs that are therapeutically equivalent to their respective reference-listed drugs.

Of the guidances issued today, 12 are new draft guidances and six are revised guidances for complex drug products, including 14 products that, to date, do not have generic competition.

The FDA believes that increased transparency on product-specific guidances gives manufacturers seeking to develop generic copies of medicines, including complex drugs, a better opportunity to efficiently allocate drug development resources. The agency aims to make sure that its policies and regulations – and scientific standards – keep pace with the evolving science around developing generic versions of these complex products so that patients have access to affordable medicines.

Greater access to high quality generic drugs is one way the FDA is working to improve competition and promote access to important medicines and advance the public health.

Disclaimer: The viewpoint expressed in this article is the opinion of the author and is not necessarily the viewpoint of the owners or employees at Healthcare Staffing Innovations, LLC.

Trump Administration Sinks Teeth Into Paring Down Drug Prices, On 5 Key Points

Three months after President Trump announced his blueprint to bring down drug prices, administration officials have begun putting some teeth behind the rhetoric.

Sarah Jane Tribble, Kaiser Health News

Three months after President Donald Trump announced his blueprint to bring down drug prices, administration officials have begun putting some teeth behind the rhetoric.

Many details have yet to be announced. But experts who pay close attention to federal drug policy and Medicare rules say the administration is preparing to incrementally roll out a multipronged plan that tasks the Centers for Medicare & Medicaid Services (CMS) and the Food and Drug Administration with promoting competition, attacking the complicated drug rebate system and introducing tactics to lower what the government pays for drugs.

Mark McClellan, director of the Duke-Margolis Center for Health Policy in Durham, N.C., and a former CMS administrator, said that although none of the initial steps has “fundamentally transformed drug prices,” there is “a lot going on inside the administration.”

Two HHS officials who are rolling out the plan, Dan Best and John O’Brien, described their efforts to Kaiser Health News not as a public relations strategy but a push to reform the system.

“This administration is trying to go after root causes” of high drug prices, said Wells Fargo analyst David Maris.

But others are not so optimistic.

Ameet Sarpatwari, an instructor in medicine at Harvard Medical School in Boston, said policies the administration has rolled out thus far “alone will not translate into meaningful cost savings for most Americans.”

Broadly, the strategy falls under a handful of steps:

1. Attacking The Rebates

Health and Human Services Secretary Alex Azar has said Americans “do not have a real market for prescription drugs” because drug middlemen and insurers get a wide range of hidden rebates from drugmakers, but those savings may not be passed on to consumers or Medicare. In July, the administration submitted a proposed rule that could change the way rebates are handled.

Details of the proposal have not been made public. But O’Brien, a deputy assistant secretary at HHS, explained during a recent conference on federal drug spending sponsored by the Pew Charitable Trust: “You don’t have to use market power to get rebates, you can use market power to obtain discounts, to actually lower the price of the drug on the front end.”

Umer Raffat, an investment analyst with EverCore ISI, said “it’s not clear [that drug prices are going down]” but the “rebate structure is changing.”

2. Bringing More Negotiation To Medicare

This week, CMS Administrator Seema Verma announced that Medicare Advantage insurers can use a step-therapy approach to negotiate better prices for Part B drugs — those administered in hospitals and doctors’ offices. These private plans will be allowed to require patients to first select the least expensive drug before stepping up to more costly drugs if the original medications aren’t working.

The administration is also looking at ways to introduce more competition into Part B drug purchasing. That idea was mentioned deep inside the annual Medicare outpatient payment rule released last month.

Peter Bach, director of Memorial Sloan Kettering’s Center for Health Policy and Outcomes in New York, pointed to the possible introduction of a competitive purchasing program in which a firm negotiates with drugmakers to buy their drugs and then sells them to the doctors and hospitals that will administer the medications. Bach said that helps ensure that hospitals and doctors can’t make more money by prescribing more expensive drugs.

Currently, Medicare pays the average sales price plus 6 percent to doctors or hospitals when they purchase drugs, a pricing mechanism that can benefit the providers if the drug costs go up. If there were a third party buying the drugs, it would “have a huge effect,” Bach said.

3. Paying For Value

Trump’s blueprint calls for CMS to encourage “value-based care” to lower drug prices, shifting from paying a set fee for drugs to basing payments on how well the patient does on them.

Louisiana’s Medicaid program could show the way. The state is working with CMS to explore a subscription-based model to pay for hepatitis C medicines. Louisiana would pay a fixed price to a drug manufacturer that would then get unlimited access to treat patients enrolled in Louisiana’s Medicaid program or in prison.

The program would move “from a big payment upfront to paying less over time based on actual outcomes,” said McClellan, who also serves on the boards of health care giant Johnson & Johnson and insurer Cigna.

CMS also approved a Medicaid waiver from Oklahoma in June. Medicaid programs are allowed to negotiate drug prices. Oklahoma’s plan would expand that to negotiate additional prescription price reductions based on value-based purchasing agreements.

Still, CMS’ recent rejection of a related Massachusetts proposal makes it difficult to believe negotiating drug prices will really happen, said Sara Rosenbaum, a professor of health law and policy at George Washington University.

That proposal would have allowed Massachusetts’ Medicaid program to choose drugs based on cost and how well the medicines work.

“They have been very good and quite careful with their [Medicaid] program and so why not let them try this?” Rosenbaum said.

4. Tackling Foreign Drug Costs

Pharmaceutical makers often sell their drugs at substantially lower prices in many foreign countries than they do in the United States. Trump emphasized in May that “it’s time to end the global freeloading once and for all,” saying U.S. consumers were paying part of the cost of the medicines that patients in other countries use.

He directed U.S. Trade Representative Robert Lighthizer to address the situation. Lighthizer’s office declined to comment.

When Sen. Todd Young (R-Ind.) asked during a Senate health committee hearing in June whether trade agreements with other countries should be used to “level the playing field,” Azar’s response was swift: “We absolutely believe we should be using our trade agreements to get them to pay more even as we have our job to pay less.”

Avalere Health President Matt Brow, who has been involved in talks with the administration, said it’s clear the focus on overseas pricing isn’t going away and the administration is “talking a lot about how to get the president what he wants.”

5. Increasing Competition

FDA Commissioner Scott Gottlieb has become the Trump administration’s lead proponent for increasing competition among drugmakers.

Competition resonates with Americans “because people see it every day in their experience in Costco and other places,” said Rena Conti, an associate professor at the University of Chicago.

Gottlieb has announced plans to bolster the use of generic drugs and an “action plan” to encourage the development of biosimilars, which are copycat versions of expensive biologic drugs made from living organisms.

And to combat anti-competitive behavior in the market, Gottlieb said the FDA has passed along information to the Federal Trade Commission and hinted at potential action to come: “I think we’ve handed them some pretty good facts.”

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Disclaimer: The viewpoint expressed in this article is the opinion of the author and is not necessarily the viewpoint of the owners or employees at Healthcare Staffing Innovations, LLC.

New FDA Commissioner Gottlieb Unveils Price-fighting Strategies

The FDA can’t regulate drug prices, but it can implement measures aimed at deterring the types of price hikes that have made so many headlines over more than a year.

from FiercePharma

During the campaign and since the U.S. presidential election, President Donald Trump has pledged to bring down drug costs and, in some cases, railed against the industry for its pricing. Now, his new FDA commissioner is laying out some approaches the agency will take to fight high prices.

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Disclaimer: The viewpoint expressed in this article is the opinion of the author and is not necessarily the viewpoint of the owners or employees at Healthcare Staffing Innovations, LLC.

Taxing Drug Price Spikes: Assessing the Potential Impact

How a proposed tax penalty on drugs with price increases exceeding the inflation could impact patients, public insurance programs, and innovation.

from Health Affairs Blog

On March 29, 2017, senior Democrats introduced comprehensive legislation (titled the Improving Access to Affordable Prescription Drugs Act) in the House and Senate aimed at lowering prescription drug costs and improving transparency. The 129-page bill contains several popular provisions that could help drive its passage or could reappear in a future bipartisan attempt to repair or replace the Affordable Care Act. One such provision is section 202, which establishes an excise tax on drugs with price increases exceeding the inflation rate. The amount of the tax penalty would depend on the size of the price increase. It is modeled on similar rebates already in place for Medicaid, the Department of Veterans Affairs (VA), and the Department of Defense.

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Disclaimer: The viewpoint expressed in this article is the opinion of the author and is not necessarily the viewpoint of the owners or employees at Healthcare Staffing Innovations, LLC.