JustCare

Tag: Biologics

  • One way to lower the cost of biologics

    One way to lower the cost of biologics

    Peter B. Bach and Mark R. Trusheim offer a proposal to lower the cost of biologics in an op-ed for The New York Times. The authors recognize that “competition” will never lower the price of biologics, or most other drugs for that matter. Their solution is to set the price of biologics at  the cost of manufacturing them plus 10 percent once their patents expire.

    Biologic drugs are made using living cells and can be self-administered by injection or administered by a doctor. They cost the US billions of dollars a year; but, they can extend people’s lives significantly. Herceptin, which helps people with breast cancer, and Humira, which helps people with rheumatoid arthritis, are two examples.

    Because pharmaceutical companies are granted patents on new biologics, they can set prices for these drugs sky high. The patent life is supposed to allow the manufacturers to profit from their innovations. And, it is supposed to end and lead to competition that drives down prices over time.

    Bach and Trusheim explain that the problem with biologics is that they are not simple to manufacture. Competition, therefore, is not as likely in the biosimilars (generic alternatives to biologics) marketplace as in the regular prescription drug marketplace. Moreover, to the extent there have been competitive biosimilars, they have not successfully lowered the drug’s price. So, the price of biologics remain sky high.

    Just to say it, competition is woefully lacking in the prescription drug marketplace writ large. In today’s world, there are many generic drugs that are still priced well-above what they should be priced. Competition in the prescription drug market often does not work to bring down prices.

    Through legislation, Congress has tried to create a competitive market for biologics and has failed. More than eight in ten biologics that could have biosimilar competitors do not. Biologics need to be affordable.

    Bach and Trusheim propose that Congress require pharmaceutical companies to lower the prices of their biologics once their patents expire to 10 percent above their production cost. That reform would reduce the price of biologics significantly. Good luck getting this law enacted and, if enacted, figuring out manufacturing costs for each biologic.

    That said, the Washington Post reports that HR3, the prescription drug pricing bill that passed the House in 2019, has a chance of getting passed in this Congress. It would lower the price of 350 of the most commonly used prescription drugs (50-250 a year) in Medicare and private insurance. The price of a drug would be no more than 120 percent of what six other wealthy nations pay (Australia, Canada, France, Germany, Japan and the United Kingdom) over the next ten years. For some inexplicable reason, it would not lower drug prices for the uninsured.

    Here’s more from Just Care:

  • Trump administration drug proposals will keep prices high

    Trump administration drug proposals will keep prices high

    Nicholas Florko reports for Stat News on minor and arguably risky efforts by the Trump administration to drive competition in the Medicare Part D prescription drug marketplace through the promotion of biosimilars and generic drugs. The administration’s drug proposals will keep prices high. To bring down drug costs, Congress should set prices at the average of what other wealthy countries pay for them.

    One administration proposal would give bonuses to Medicare Part D drug plans if they steered their members towards generic drugs. Right now, drugmakers pay insurers to push their costly drugs, so the insurers tend to do so. Another proposal recommends that insurers create a special low-cost tier in their formularies for lower-cost medicines.

    Promoting the use of generic drugs or biosimilars, which are generic versions of biologicals made from living cells, should not be controversial. They make sense. But, for a host of reasons, patient advocates, pharmaceutical companies, health insurers and pharmacists are pushing back against these proposals. 

    Of course, health insurers should not need to be incentivized to promote generics and biosimilars. But, they are not doing so in many instances where they should be. So, the Centers for Medicare and Medicaid Services (CMS) has proposed that it would factor in the frequency with which Part D insurers have patients taking generics and biosimilars as part of their star-rating, which in turn affects the amount of money CMS pays them.

    One issue is that insurers receive rebates, money back from pharmaceutical companies, when they put certain brand-name drugs on their formularies and promote them. The insurers say that sometimes these rebates make brand-name drugs less costly than generic drugs. So, they argue that pushing generics could drive up costs.

    The pharmaceutical companies argue that biosimilars are not identical to biologics. So, it would be wrong to push the biosimilars in many cases.

    What’s particularly troublesome about the fights over these proposals is that the insurance and pharmaceutical industries seem to win them with the argument that they will drive up costs because pharmaceutical companies will respond with higher prices for drugs. The fact is that any attempt to “save” money can be met with higher brand-name drug prices since Congress has given pharmaceutical companies the power to set prices through the patent system.

    For brand-name drugs, pharmaceutical companies control the price. Insurers will pay an agreed upon high price because they will benefit financially–with a rebate–from the pharmaceutical companies. So long as drugmakers can set the price and insurers can pocket rebate dollars–they can also keep the amount of the rebates secret–there’s no way for the American public to see lower drug prices.

    The simplest and fairest solution in a global marketplace is for the federal government to establish drug prices in the US that are on average what other wealthy countries pay for their drugs. Although President Trump at one point argued that Americans should not be paying higher drug prices than people in other wealthy countries, it appears he has since been swayed otherwise.

    Here’s more from Just Care:

  • Pharmaceutical companies use scare tactics to mislead public about generics

    Pharmaceutical companies use scare tactics to mislead public about generics

    Americans are always being sold, and health care products are no exception. It’s one thing when corporations are pushing the latest snack food or toothbrush, it’s another when they are pushing to make money in ways that endanger our health and well-being. The Washington Post reports that pharmaceutical companies have been using scare tactics to mislead the public about generic drugs and to keep lower-cost drugs off the market.

    We all know that pharmaceutical companies use all the tools in their arsenal to profit off of our health. They charge Americans prices that are double what they charge in other wealthy countries, which regulate drug prices. They pay Pharmacy Benefit Managers to put their higher-cost drugs on insurance company formularies and keep generics off. They pay researchers to help ensure papers are published promoting their latest drugs. They pay TV stations to promote their drugs. They pay disease organizations to support their high prices. They contribute to election campaigns of federal and state policymakers to protect against legislation that would eat into their profits. And, the list goes on.

    Now, they are said to be doing what they can to keep generic versions of their high-cost biologic drugs–biosimilars–off the market. They are misleading people. These generic biosimilar drugs are as safe and effective as the brand-name biologics. They are made with the same ingredients.

    Biologics are made with living cells. And, they can treat a range of life-threatening diseases, including cancer. But, they tend to be extremely costly, often costing many thousands of dollars.  Indeed, the majority of growth in prescription drug costs between 2010 and 2015 can be attributed  to biologics, including Humira.

    If the pharmaceutical companies succeed, it could keep these generics off the market, and many people will be forced to go without necessary treatment. They cannot afford the cost of the biologics; biosimilars could cost as little as half as much. Not surprisingly, drug spending is estimated to be between $54 billion and $200 billion higher over 10 years, if the biosimilars are not available.

    But, what’s curious is that it is the doctors who prescribe these drugs. And, they are perfectly well positioned to tell their patients that biosimilars are as safe and effective as biologics. The Washington Post article does not explain why doctors are not prepared to do so.

    FDA Commissioner Gottlieb suggested that the FDA could step in and issue warning letters to pharmaceutical companies if they are deliberately misleading people. But, it’s hard to imagine that will be helpful.

    Here’s more from Just Care:

  • What to do about high drug prices?

    What to do about high drug prices?

    A new Commonwealth Fund paper, Getting to the Root of High Drug Prices, offers a plan for what to do about high drug prices.  Unless we can address the root causes, we are on a path to an unsustainable health care system; millions of people will be unable to fill their prescriptions and get needed care. Congress needs to fix current incentives to promote innovation and price competition.

    The U.S. is growing larger and older, both of which contribute to overall prescription drug spending. And, people are also taking more drugs. But, the biggest drivers of higher spending between 2010 and 2014 are higher drug prices and shifts in usage to higher-cost drugs.

    The authors find a distortion of federal policies intended to balance innovation and price competition. Innovation should not undermine access to medicines, as it too often does today. Prices, in turn, must be fair and affordable to all stakeholders, including patients, government and taxpayers.

    And, good information on a drug’s value and comparative effectiveness as well as price should be available. The authors argue that drug corporations should be able to explain and justify drug prices.

    The initial price for a new drug has risen astronomically over the last ten years. For example, in the four years between 2010 and 2014, the initial cost of oral cancer drug treatment grew six-fold. And, after introduction, with patent protections granting drug corporations monopoly pricing power, the prices generally keep going up.  In 2015, older adults saw a 15.5 percent increase in the retail price of 268 popular brand name prescription drugs from the prior year—130 times the rate of inflation.

    Federal dollars—taxpayer dollars— fund almost half the research and three out of four new drugs are developed with federal funding. But, taxpayers and patients are not seeing the benefits as much as they should in terms of fair prices.

    One hundred and eighty-two (182) widely used older drugs that have gone off patent still have no generic drug alternative, allowing drug corporations to keep their prices artificially and excessively high.  Many other drugs that have gone off patent do not have adequate competitors to drive prices down. More than 500 drugs only have one generic on the market.

    Why is there so little competition in the prescription drug and biologic drug markets? In Europe, the competition for both is far more robust. In the U.S., however, there are fewer companies manufacturing prescription drugs, in part because of mergers and acquisitions. Unlike in Europe, the U.S. also has not fully developed a regulatory framework for approving biosimilars to compete with biologics.

    Some drug manufacturers appear to be taking actions that undermine competition. Some are under investigation for price fixing and bid rigging. Doxycycline went from $20 for 500 pills to $1,849 for 500 pills in six months.  Three drug corporations manufacturing insulin are also being investigated for price fixing insulin treatments and tripling their prices over ten years.

    And, some drug corporations pay generic manufacturers not to enter the market, costing taxpayers and patients an estimated $3.5 billion. Or, instead of keeping a patented drug on the market, they change it slightly, create a new patent and take the original drug off the market. Or, they create a “patent cluster”—several patents for a single drug—that keeps competitors away.

    We also don’t have a good sense of what different agencies are charging and paying for drugs, and federal law does not require disclosure of this information. Moreover, we too often don’t understand the relative efficacy of drugs.

    And, while states can be part of drug purchasing pools, we restrict states in their ability to negotiate drug prices and decide which drugs they’ll cover based on value.

    If you want Congress to rein in drug prices, please sign this petition.

    Proposed solutions:

    • Shorter patents for new drugs or somehow tying the patent life to the drug corporations’ returns.
    • Create a different way of pricing life-saving drugs for government purchase to protect public health and curb spread of disease.
    • Create ways to generate competition. For example, offer incentives for generic manufacturers to enter the market and drive competition or amend the Hatch Waxman Act so as not to delay the introduction of generics.
    • Prohibit pay for delay and the ability of manufacturers to take patented drugs off the market and replace them with other patented drugs that are not materially different.
    • Invest in comparative effectiveness research.
    • Require manufacturers and PBMs to reveal pricing and price increases and forbid use of coupons that hide pricing.
    • Allow states to operate PBMs so that they have more negotiating power.

    Here’s more from Just Care:

  • New FDA chief has ties to the pharmaceutical industry

    New FDA chief has ties to the pharmaceutical industry

    The nation’s new head of the Food and Drug Administration (FDA), Dr. Scott Gottlieb, is a 44-year-old physician, cancer survivor, and a resident fellow at the American Enterprise Institute, with financial ties to the pharmaceutical industry. His ties to the pharmaceutical industry are a big concern for consumer advocates.

    What can we expect from Dr. Gottlieb? He has said that he wants to focus his energies on opioid overdoses, from which 91 Americans die every day. But, he has little ability to address this issue since the FDA cannot keep doctors from prescribing opioids.

    He has also argued that the FDA needs to give patients access to drugs more quickly through a process called “conditional approval.” This process would allow people to get drugs that had proved safe in Phase 1 trials only. Health care expert, Shannon Brownlee, sees these approvals as undermining patient safety. As it is, nearly one in three drugs that make it through Phase III clinical trials and are approved have been found to be safety risks to patients.

    Gottlieb suggests that he wants to see a speedier FDA approval process of generic drugs as a way to bring down drug prices. But, that requires adequate FDA staff, and President Trump has proposed steep budget cuts to administrative agencies. Gottlieb also wants to change the FDA rules for approval of generic biologics.  Today, the FDA rules make it difficult to approve generic versions of costly biologics, which treat cancer and autoimmune diseases, keeping their prices sky high.

    Gottlieb does not support Trump’s proposal to allow the importation of drugs from Canada and other countries as a way to bring down drug prices. He claims it won’t work.

    Here’s more from Just Care:

  • Biosimilars, almost identical to brand-name drugs at discounted cost

    Biosimilars, almost identical to brand-name drugs at discounted cost

    In this 21st century digital world, it seems like every day a new word or expression surfaces and goes viral. Badass, lit, basic, I can’t keep up. But, when it comes to health care, I try my best! So, I’ve learned that biosimilars are intended to be almost identical to brand-name drugs, essentially generic versions, offering the same outcomes at 20-30 percent less cost.

    Even though biosimilars are made of living cells, a new study published in the Annals of Internal Medicine that looked at one class of biosimilars, indicates that they are safe and effective. Dr. Caleb Alexander, a study author, told Stat news, that after looking at 19 studies, researchers found that the biosimilar drugs for rheumatoid arthritis, inflammatory bowel disease, and psoriasis are essentially “comparable” to the brand-name biologics.

    But, to date, according to Stat news, the FDA has only approved two biosimilars. The alleged concern is that because biosimilars are made of living cells they are slightly different from the brand-name drugs, and those differences could affect their safety. Of course, the drug industry is concerned about the competition that would drive down profits and is investing heavily in keeping biosimilars from being approved.

    Amgen recently won a federal appeals court challenge against a biosimilar manufacturer aimed at slowing down approval of biosimilars. In short, the court prevented the biosimilar manufacturer from marketing its biosimilar drug; it affirmed the lower court opinion that the Biologics Price Competition and Innovations Act keeps manufacturers of biosimilars who receive FDA approval for their drugs from marketing their drugs until 180-days after they give notice of their marketing license, which they only get once the drug is approved.

    This 180-day post-FDA-approval and marketing license period gives brand-name drug manufacturers additional time to sell their brand-name drugs without competition and come up with patent and other challenges to biosimilars.

    More research needs to be done around the safety of biosimilars. And, policies need to evolve to speed up their post-approval entry into the market. Biosimilars open the door to billions of dollars of savings on some critically important and very expensive drugs, like Remicade and Humira, among others.

    Here’s more from Just Care: