Determining if Drug Price Increases are Justified

Drug prices continue to increase but the reasons for the increases are often nebulous. The Institute for Clinical and Economic Review (ICER) evaluated the pricing in partnerships with SSR Health Inc, a research firm, calculated the increases excluding discounts and after-market rebates (1). It was the first such annual report by the Boston-based research group, which assesses the cost-effectiveness of drugs.

A list of 78 drugs with price hikes at more than twice the rate of medical inflation was developed. From this list 9 drugs were selected for detailed review because they had the largest increase in drug spending due to a net price change. ICER reviewed these 9 drugs to determine if the price increases were supported by new clinical evidence based on new indications or data suggesting superiority over other drugs. Of these 9 drugs, ICER concluded 7 did not have justification for the price increases.

Advair, Glaxo’s beta agonist/steroid combination was the only bronchodilator on the list but was not selected for detailed review. Rituxan, a drug which can be used to treat granulomatosis with polyangiitis (GPA, formerly known as Wegener's Granulomatosis) and microscopic polyangiitis (MPA) was one of the drugs selected for review and ICER concluded the price increase was not justified.

ICER acknowledged it was difficult to determine the actual increase in spending on the drugs, but said it was confident that the seven drugs cost increase were more than other drugs (2). "If manufacturers weren't raising prices if they haven't shown a new important benefit, I think that would help," ICER Chief Medical Officer David Rind said. He added that he hoped pricing drugs based on new benefits could help slow cost hikes.

Not surprisingly pharmaceutical companies with drugs on the list were critical of the report. Gilead, Lilly, Pfizer and Roche were all critical of the report or defended their drug pricing policies (2). Both California and Vermont now have laws tracking substantial drug price increases, requiring drug manufacturers to submit information that might justify increases above a certain threshold (1). ICER hopes their report is a first step in providing the public and policymakers with information they can use to advance the public debate on drug price increases.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Institute for Clinical and Economic Review. Unsupported price increase report: 2019 assessment. October 8, 2019. Available at: https://bit.ly/31XIdyk (accessed 10/11/19).
2. Humer C. Humira, Rituxan top list of U.S. drugs with biggest price increases: report. Reuters Health News. October 9, 2019. Available at: https://www.reuters.com/article/us-usa-healthcare-drugpricing/humira-rituxan-top-list-of-u-s-drugs-with-biggest-price-increases-report-idUSKBN1WN1BE (accessed 10/11/19).

Cite as: Robbins RA. Determining if drug price incrases are justified. Southwest J Pulm Crit Care. 2019;19(4):123-4. doi: https://doi.org/10.13175/swjpcc064-19 PDF 

California Enacts Drug Pricing Transparency Bill

The Mercury News is reporting that California governor Jerry Brown signed a bill Monday making drug pricing more transparent (1). The legislation requires pharmaceutical companies to notify health insurers and government health plans at least 60 days before making price hikes and explain the reason for the increase. The pharmaceutical industry had lobbied hard against the measure, worried that it could become a national model and the first big step toward price controls. “The essence of this bill is pretty simple,” Brown told a room filled with supporters of Senate Bill 17. “Californians have a right to know why their medical costs are out of control, especially when the pharmaceutical profits are soaring. That’s the take-away message.”

“It is disappointing that Gov. Brown has decided to sign a bill that is based on misleading rhetoric instead of what’s in the best interest of patients,” said Priscilla VanderVeer, spokeswoman for the Washington, D.C.-based Pharmaceutical Research and Manufacturers of America. She added that there is “no evidence that SB 17 will lower drug costs for patients.”

The bill does not actually control drug prices, leading some critics to suggest it is toothless. However, the bill’s backers say that transparency in other health care sectors has been successful in reducing costs. Anthony Wright, executive director of Health Access California, agreed. He said the advance notice and information required under SB 17 “is invaluable” to large health care purchasers such as insurers, union trusts and employers, and would enable them to drive a better deal for consumers.

Brown also signed a related bill on Monday. Assembly Bill 265 will prohibit prescription drug manufacturers from offering discounts for name-brand drugs, if a less-expensive equivalent brand is available, preventing the use of higher-priced drugs when unnecessary.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Seipel T. Gov. Brown signs drug pricing transparency bill. The Mercury News. October 8, 2017 (updated October 9). Available at: http://www.mercurynews.com/2017/10/08/gov-brown-to-sign-drug-price-transparency-bill/ (accessed 8/10/17).

Cite as: Robbins RA. California enacts drug pricing trasparency bill. Southwest J Pulm Crit Care. 2017;15(4):159. doi: https://doi.org/10.13175/swjpcc122-17 PDF 

Gottlieb, the FDA and Dumbing Down Medicine

Gottlieb, the FDA and Dumbing Down Medicine

In the last few weeks several events have occurred that might impact drug approval in the US. President Donald Trump's pick for FDA commissioner, Dr. Scott Gottlieb. Gottlieb, like many of Trump’s picks for administration healthcare positions, is a physician. He also has experience as deputy FDA commissioner from 2005-7.  However, his confirmation hearing before the Senate Committee on Health, Education, Labor and Pensions alarmed some who say his deep ties to the pharmaceutical industry will cause a conflict of interest (1). Others praised Gottlieb as the right man to lead the FDA.

As opposed to Trump, Gottlieb denied any connection between vaccines and autism (1,2). Dr. Gottlieb called the issue "one of the most exhaustively studied questions in medical history," before saying, "There is no plausible link between vaccines and autism. At some point, we have to accept 'no' for an answer." However, Gottlieb did not give a straight answer when asked to share his thoughts on drug importation. While President Donald Trump has supported increased drug importation and is reported to be working with Democratic lawmakers on drug importation legislation, Dr. Gottlieb had previously opposed the measure (1). When asked if he opposes importing cheaper drugs from foreign countries, he said, "I can tell you I have a lot of ideas that I want to work on right away on how I think we can get more product competition onto the market."

Gottlieb stated that the FDA could speed up approval of new drugs and devices (1). However, a letter to the editor published in the New England Journal of Medicine examined compared review times for new therapeutic agents that were approved by the FDA or the European Medicines Agency (EMA), the primary drug regulator in Europe, between 2011 and 2015 (3). The median total review time was 306 days (interquartile range, 239 to 371) at the FDA, as compared with 383 days (interquartile range, 327 to 446) at the EMA.

In welcome news to many physicians, Gottlieb voiced uneasiness over increasing regulation of physicians’ practices (1). “My concern that the agency was losing confidence in physicians and felt it need[ed] …to supplant their judgment for the judgment of doctors,” Gottlieb said. He had previously referred to the FDA’s action on Arcoxia, a pain killer that was rejected in April 2007 because of concern that it could increase the risk of heart attack and stroke with prolonged use despite being meant for short-term pain relief. Gottlieb stated the opioid epidemic would be his "highest and most immediate priority." He added that the epidemic is a "public health emergency on the order of Ebola and Zika" that requires dramatic action from the FDA. "[T]o address it now, the types of actions that we are going to need to take are going to be more dramatic, perhaps, than the types of actions we would have taken 10 years ago."

Gottlieb did not note that some have linked the present opioid crisis to meddling by bureaucrats, administrations and politicians as an unattended consequence of the pain scale, opioid prescribing guidelines and patient satisfaction ratings (4). Furthermore, he did not note that increasing prescribing authority has been given to non-physicians with less education and clinical experience, e.g., unsupervised nurse practitioners in the Department of Veterans Affairs (5). Whether these non-physician clinicians will use drugs any more or less appropriately than physicians is unclear.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Dickson V. Gottlieb favors regulations that empower doctors while keeping FDA standards. Modern Healthcare. April 5, 2017. Available at: http://www.modernhealthcare.com/article/20170405/NEWS/170409965 (requires subscription, accessed 4/11/17).
2. Dodgson L. Trump has suggested vaccines cause autism — an idea that couldn't be more wrong. Business Insider. January 24, 2017. Available at: http://www.businessinsider.com/trump-vaccines-autism-wrong-2017-1 (accessed 4/11/17).
3. Downing NS, Zhang AD, Ross JS. Regulatory review of new therapeutic agents — FDA versus EMA, 2011–2015. N Engl J Med. 2017Apr 6;376:1386-7. [CrossRef] [PubMed]
4. Robbins RA. Pain scales and the opioid crisis. Southwest J Pulm Crit Care. 2017;14(3):119-22. [CrossRef]
5. Department of Veterans Affairs. VA grants full practice authority to advance practice registered nurses. December 14, 2016. Available at: https://www.va.gov/opa/pressrel/pressrelease.cfm?id=2847 (accessed 4/11/17).

Cite as: Robbins RA. Gottlieb, the FDA and dumbing down medicine. Southwest J Pulm Crit Care. 2017;14(4):166-7. doi: https://doi.org/10.13175/swjpcc047-17 PDF 

Lawsuits Allege Price Fixing by Generic Drug Makers

Two years after high generic drug prices became a public controversy, Reuters is reporting that 20 states filed a lawsuit Thursday against Mylan, Teva Pharmaceuticals and four other generic drug makers (1). The suit alleges the companies conspired to fix prices or allocated markets to prop up prices. The civil lawsuit, led by antitrust investigators in Connecticut, comes one day after the U.S. Department of Justice filed criminal charges against two former executives of the generic drug maker, Heritage. The states attorneys general asked the court to order the companies to disgorge ill-gotten gains, which were not defined, pay attorneys' fees and stop collusion. Of the states in the Southwest only Nevada is participating in the lawsuit.

The cases are part of a broader generic drug pricing probe that remains under way at the state and federal level, as well as in the U.S. Congress. In 2014, media reports of sharply rising drug prices led to Congressional hearings. "We believe that this is the tip of the iceberg," Connecticut Attorney General George Jepsen told Reuters in an interview. "Price fixing in the generic industry is widespread and pervasive, and it involves many other drugs and a number of other companies."

Both former Heritage CEO Jeffrey Glazer and former Heritage Vice President of Commercial Operations Jason Malek are expected to plead guilty. According to Reuters, it is typical for the Justice Department to file one lawsuit about an ongoing issue and use evidence from those defendants to build subsequent cases against others. Several companies have publicly disclosed receiving subpoenas from the Justice Department related to generic drug pricing including Mylan, Allergan, Lannett, Impax, Par, Sun and Mayne.

The drugs involved in the Justice Department lawsuit include two older drugs, doxycycline hyclate and glyburide. Doxycycline rose from $20 for 500 tablets to $1,849 between October 2013 and May 2014.

Richard A. Robbins, MD

Editor, SWJPCC

Reference

1. Bartz D, Lynch SN. U.S. states sue Mylan, Teva, others for fixing drug prices. Reuters. December 16, 2016. Available at: http://www.reuters.com/article/us-usa-drugpricing-idUSKBN14420C (accessed 12/17/16).

Cite as: Robbins RA. Lawsuits allege price fixing by generic drug makers. Southwest J Pulm Crit Care. 2016;13(6):313. doi: https://doi.org/10.13175/swjpcc142-16 PDF 

CMS Releases Data on Drug Spending

Yesterday (11/14/16) the Centers for Medicare and Medicaid Services (CMS) released data on spending for drugs under Medicare and Medicaid (1,2). Medicare paid $137.4 billion on drugs covered by its prescription drug benefit in 2015. About $8.7 billion of that spending occurred on drugs that had "large" price hikes, defined as a more than 25 percent increase between 2014 and 2015. In 2015, Medicaid paid $57.3 billion about $5.1 billion of which was spent on drugs that had large price increases.

The Medicare spending database highlights 11 drugs that doubled in price. The Medicaid database identified 20 drugs that more than doubled in price with 9 of these being old, generic drugs. Medicare drugs were led by Glumetza, a Type 2 diabetes drug which saw its price soar 380 percent and hydroxychloroquine sulfate, a generic malaria drug, which went up 370 percent. Medicaid drugs were led by Ativan, an anti-anxiety medication approved in 1977, which increased by 1,264 percent in price between 2014 and 2015. Daraprim, a decades-old antiparasitic drug that helped spark political attention to the issue of high drug prices after former pharmaceutical executive Martin Shkreli hiked the price, leapt up in average cost by 874 percent.

However, drugs commonly used in respiratory diseases also increased in price. These were led by mitomycin, an anticancer drug sometimes used in lung cancer, an antidepressant also used as a smoking cessation aid (Table 1).

Table 1. Medicare Spending on Respiratory Drugs. (Open table in separate window)

The data on price on small prices rises can be deceiving when calculating total costs. For example, Advair Diskus, a bronchodilator, ranked in the top-five of Medicare expenditures, with $2.3 billion in spending in 2015. However, he utilization of the drug has actually declined a little over the last five years. Meanwhile, the total spending has not gone down, but increased. Fueled by relatively modest price increases, from $3.81 per unit in 2011 to $5.28 in 2015, the spending on the drug increased by more than half a billion dollars over that period.

Of particular concern is a rise in price of some generics, a class of drugs that are intended to decrease drug prices and spending. Drugs that were responsible for large amounts of overall spending tended to see smaller increases that gradually increased the government outlay. In one outlier, the price of the hepatitis C treatment, Harvoni, decreased slightly in 2015, even as it led overall spending.

The prices do not include the impact of rebates, which are prohibited by law from being released (3). Those discounts can be significant, and not knowing what they are means the numbers almost certainly overstate how much the government actually paid for these drugs. CMS disclosed that, on average, rebates for brand name drugs were 17.5 percent for medicines covered by Medicare's "part D" prescription drug benefit in 2014.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. CMS. 2015 Medicare drug spending dashboard. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-on-Prescription-Drugs/2015Medicare.html (accessed 11/15/16.
2. CMS. 2015 Medicaid drug spending dashboard. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-on-Prescription-Drugs/2015Medicaid.html (accessed 11/15/16).
3. Johnson CY. Drugs for hepatitis C and diabetes drove Medicare spending in 2015. Washington Post. November 14, 2016. Available at: https://www.washingtonpost.com/news/wonk/wp/2016/11/14/the-drugs-driving-up-medicare-spending/ (accessed 11/15/16).

Cite as: Robbins RA. CMS releases data on drug spending. Southwest J Pulm Crit Care. 2016;13(5):242-3. doi: https://doi.org/10.13175/swjpcc118-16 PDF