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Tag: PhARMA

  • Will Pharma’s campaign contributions to House Democrats keep them from bringing down drug prices?

    Will Pharma’s campaign contributions to House Democrats keep them from bringing down drug prices?

    For the last ten years, the pharmaceutical industry has donated most of its Congressional campaign support to Republican candidates. But, knowing that the Democrats were likely to control the House in 2019, StatNews reports that Pharma gave more than 60 percent of its Congressional contributions to Democrats. Will Pharma’s campaign contributions to House Democrats keep Democrats from introducing legislation to bring down drug prices?

    The health insurance and pharmaceutical companies contributed more than $24 million to Congressional and state candidates, more than ever before for a mid-term election. And, sadly, most Democrats do not reject that money or the corporate influence that inevitably comes with it. Make no mistake, these companies support candidates in order to help garner their legislative support.

    Claire McCaskill and Bernie Sanders were vocal proponents for rejecting this industry money. Unfortunately, McCaskill, a Missouri Senator, lost her bid for re-election. Charles Schumer, the Senate’s Democratic leader, has not spoken against corporate campaign contributions. In response to a question about whether candidates should take money from the pharmaceutical industry, he told reporters: “We do what the right thing is, period, and no ifs, ands, or buts.”

    The health insurance and pharmaceutical industries are two of the biggest contributors to political campaigns, largely supporting incumbents. They donate tens of millions of dollars in an election cycle.  That money allows these industries to build relationships with lawmakers and influence their decision-making down the line.

    Two Democrats, who will be House Committee chairs in 2019, Reps. Frank Pallone (N.J.) and Richard Neal (Mass.), are beneficiaries of health insurance and pharmaceutical industry money. They will wield significant influence now that the House has shifted to a Democratic majority. We must impress upon them that their acceptance of this industry money should not keep them from serving their constituents and the American people well.

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  • What Trump will do about Part B drug prices

    What Trump will do about Part B drug prices

    A new report by ASPE (Assistant Secretary for Evaluation and Planning), a research arm of the US Department of Health and Human Services, confirms that US drug prices for some of the physician-administered drugs covered under Medicare Part B are almost double the prices in other wealthy countries. To date, there is no bill in Congress to do anything about it. And, there is no evidence that President Trump will do anything meaningful about these high prices in his executive capacity, notwithstanding his claims to the contrary.

    The ASPE report explores some of the drivers of high physician-administered (non-retail) drug spending under Part B. Non-retail drug spending for each Medicare enrollee increased 7 percent a year in the five years between 2006 and 2011 and 11 percent a year in the five years between 2011 and 2016. One driver of high non-retail drug spending is that physicians have a financial incentive to administer costlier drugs, as they earn 6 percent of the cost of the drugs they administer.

    Price is another driver of high drug spending. The researchers find that Medicare pays on average 1.8 times more for these non-retail drugs than peer countries. Medicare does not use a formulary as a tool to limit coverage and rein in the price of non-retail drugs. Other countries often rely on a formulary to keep their drug spending in check.

    ASPE compared drug prices for 27 non-retail drugs on which Medicare spends the most. And, it looked at their prices in 17 countries, including the US.

    President Trump claims that he wants to bring these Medicare Part B drug prices down to a level similar to what peer countries pay, sometimes called international reference pricing. If he actually were to do so, it could be a small step forward. But, his proposal leaves one wondering why he is not addressing drug prices under the Part D prescription drug benefit, where drug spending is far higher.

    Moreover, there is no reason to believe Part B drug prices will come down under Trump’s proposed plan, given that he has made all kinds of claims about reining in prescription drug prices, none of which have come to pass.

    Even if Trump’s international reference pricing proposal were implemented, it would likely make no difference on overall drug spending, which in 2017 totaled $489 billion, or reduce out-of-pocket costs for people with Medicare. The administration is claiming a savings of $17.2 billion over 5 years, less than $3.5 billion a year. That represents less than 1.0% of the drug industry’s revenues in 2017.

    It is also easy to imagine that pharmaceutical companies will raise their prices higher elsewhere or otherwise game the system to ensure their profits remain intact. Axios reports that investors are not worried that Trump’s plan will have any effect. The Nasdaq’s Biotechnology Index was up 1.75% after Trump’s announcement.

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

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  • Pharma is undermining the discovery of new drugs

    Pharma is undermining the discovery of new drugs

    Mariana Mazzucato’s op-ed in the Washington Post offers yet another reason why the federal government should be regulating drug prices. Pharma is not investing a meaningful amount of its enormous profits on drug innovations. In fact, Pharma is undermining the discovery of new drugs that we desperately need.

    According to Mazzucato, the data show that nearly 80 percent of the new drugs that the FDA approves are variations on drugs that have already been on the market. And, even when the drugs are truly new, pharmaceutical corporations are not making new drug discoveries to help people with diseases where they cannot profit handsomely. Just one in 25 approved drugs around the world between 2001 and 2011 were aimed to help people with rare diseases.

    Currently, it is legal for a drug company to run out a drug’s patent over 20 years, take that drug off the market to prevent generic competition, and reformulate its drug so that it is administered differently or at different frequencies. It can then get a new patent for its reformulated drug and extend its ability to control the price of the drug. Wherever, possible, that is what drug companies do.

    How can we address this problem? The government should take a mission-oriented approach for the research and development of new drugs, much as it does for the development of breakthrough technologies for national security through DARPA, the US Defense Advanced Research Projects Agency. It should use taxpayer money for the public good, to benefit taxpayers–to drive important new drug discoveries that are needed and to ensure that the new drugs are priced fairly. That’s how the Internet was created, along with the microchip and other major technological advances. 

    We need the US government driving critical medical breakthroughs. The US Department of Health and Human Services (HHS) should be promoting health care innovation, targeting the kinds of discoveries we most need. A well-functioning HHS would have more leverage over how its corporate health industry partners acted for the public good. HHS would ensure more transparency among pharmaceutical companies, so that the public better understood their costs, investments, and profits. Finally, HHS would demand fair drug prices. 

    Today, pharmaceutical companies have far less financial incentive to develop drugs that cure diseases than to develop drugs that people must take for the rest of their lives to control their diseases. It is usually more profitable to keep someone on a drug for decades than to provide the person with a drug that ends their disease once and for all. Goldman Sachs analysts and others should not be asking, “Is curing patients a sustainable business model?”

    We need to put patients ahead of profits. It is a matter of our health security and, as such, a matter of national security. 

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  • Will Congress shift more drug costs onto older adults?

    Will Congress shift more drug costs onto older adults?

    Updated September 27: In 2019, people enrolled in Medicare Part D–the Medicare drug benefit–are supposed to have more comprehensive drug coverage. People with high drug bills should see their drug costs drop. Pharma had been pressuring Congress to undo this benefit for older adults and people with disabilities. Fortunately, Pharma did not get its way. Here’s the background.

    When the Medicare drug benefit was enacted, the standard benefit only gave people with Medicare who had high drug costs, drug coverage to a point (up to $3,750, out of which they paid 25 percent). After that, they fell into a hole in which they were required to pay the full cost of their drugs out of pocket until they reach the limit for catastrophic coverage. That gap in coverage, sometimes called the Medicare donut hole, has shrunk over time. This year’s budget deal passed with a provision to help people with Medicare with high drug costs. It reduces their out-of-pocket costs while in the donut hole, beginning in January 2019.

    Millions of people with Medicare will save a lot of money as a result of this change. But, pharmaceutical companies are not happy because it will cost them. They will need to absorb 70 percent of people’s brand-name drug costs, up from 50 percent today. Pharma tried to wield its enormous power in Congress to shift more drug costs back to people with Medicare.

    Not surprisingly, an AARP poll of people over 50 found that the vast majority of them want the Medicare Part D donut hole to shrink as planned. The question was whether their political pressure will count more than Pharma’s. Now, we know that Pharma will not win this fight.

    Pharma’s influence on Congress is real and effective. In July, 155 Republicans and 50 Democrats  in the House of Representatives called for undoing this law and shifting more costs back onto people with Medicare. Here’s a letter to the House Speaker from House Republicans who support Pharma and want people with Medicare in the donut hole to pay more for their drugs. Here’s a letter to the House Speaker from House Democrats, including Beto O’Rourke, who is running for Ted Cruz’ Senate seat in Texas, also calling to undo this change in the law and benefit Pharma.

    What’s also concerning is that beginning in 2020, the donut hole is set to get bigger if Congress does not act.  Right now, people with Medicare with high drug costs will have to pay even more out of pocket before their catastrophic coverage kicks in. The ACA reduced the increase in the amount that people must pay out of pocket before their catastrophic coverage kicks in through 2019. It is $5,100 in 2019, but it will jump to $6,350 in 2020 unless Congress imposes a fix.

    Reps. Frank Pallone and Richard Neal, Democrats on the House Energy and Commerce and Ways and Means committees, respectively, have introduced a bill, H.R. 6563, that would keep the jump from taking effect and impose a permanent slow growth rate. Time will tell whether that bill becomes law.

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  • Hospital upcharges for prescription drugs provides further justification for federal government drug price negotiation

    Hospital upcharges for prescription drugs provides further justification for federal government drug price negotiation

    A new report by Pharma, the trade association for drug manufacturers, looks at hospital upcharges for prescription drugs and provides further justification for federal government drug price regulation. The report suggests that hospitals are making a bundle off of prescription drugs.

    According to Pharma, which analyzed the prices hospitals charge for all hospital-administered drugs, on average, hospitals charge almost five times (479 percent) the price they pay for these drugs.  Just over half of hospitals (53 percent) charge between two and five times the cost of these drugs. One in six hospitals, 17 percent, are charging at least seven times their cost.  And one in twelve hospitals (8 percent) are charging more than ten times the price they pay for them.

    Uninsured patients may get hit with these exorbitant drug charges in full. Insurers generally pay a negotiated rate for the drugs their enrollees receive in hospital. That negotiated rate is typically more than twice the price that hospitals pay for the drugs, and less than what hospitals charge the uninsured. It’s no wonder the public wants Congress to address health care costs.

    These excessive hospital charges mean ever higher health insurance premiums for Americans.  They also drive people into medical bankruptcy or force them to forego necessary medicines.

    Congress should not permit hospitals to hike up the price of drugs beyond a small administrative fee.  And, health insurers, along with Pharma and the general public, should be calling on Congress to pass legislation that forbids this behavior.

    Unfortunately, our commercial health care system permits pharmaceutical companies, Pharmacy Benefit Managers (PBMs) and the insurance industry, in addition to hospitals, to make out like bandits when it comes to what they charge for drugs. Pharmaceutical companies like to shift blame to hospitals and PBMs for their markups. And, insurers and PBMs tend to keep quiet about the high price of prescription drugs, enjoying the riches they reap from the failure of Congress to negotiate one fair price for everyone.

    It’s time Congress stepped in to negotiate fair drug prices for everyone in this country. If Germany and Japan can do it, so can the US.

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

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  • Pharma suit dismissed in California: State can require notice of drug price hikes

    Pharma suit dismissed in California: State can require notice of drug price hikes

    Ed Silverman reports for StatNews that a federal judge in California dismissed a Pharma lawsuit which attempted to block a state consumer protection law. The law requires drug makers to disclose and justify some price hikes in advance.

    The judge ruled that the court had no authority to hear the case based on Pharma’s submissions. The judge further ruled that Pharma had failed to demonstrate any potential harm from the law. The judge did give Pharma the ability to refile its lawsuit if it could show harm.

    Pharma claims the California law is unconstitutional, violating free speech and interstate commerce. Pharma also blamed the Pharmacy Benefit Managers (PBMs)–the middlemen who decide which drugs an insurer will cover and at what copay level–for increases in the list price of drugs. And, it claimed the law should hold the PBMs accountable.

    The 2017 California law obligates pharmaceutical companies to let health insurers and government health plans know at least 60 days in advance of a 16 percent hike or more, over two years, in the list price of all drugs that cost more than $40. The pharmaceutical companies are also obligated to explain why they are raising the price of these drugs.

    The law may be working to keep at least some drug prices down. A few pharmaceutical companies let California health plans know that they were not going to raise prices on some drugs or they were going to raise prices less.

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  • Pharma frequently not reporting postmarketing studies

    Pharma frequently not reporting postmarketing studies

    Many recent FDA-approved drugs and biologics turn out not to be safe and effective and eventually are taken off the market or given new warning labels. To help ensure a drug’s effects are well understood after they come to market and protect patient safety, the FDA often requires pharmaceutical companies to perform post-marketing studies. A May 2018 study published in BMJ finds that Pharma frequently does not report postmarketing studies as required. Too often, the study results are a black hole.

    Indeed, the BMJ research finds that more than one out of four required studies were not published on clinicaltrials.gov. That’s correct. The results of the postmarketing studies were not publicly available in more than one out of four instances.

    Moreover, the results of clinical studies published on clinicaltrials.gov contained so little information, with an average length of 44 words, as to be unhelpful. The FDA gives pharmaceutical companies a lot of freedom to design these studies. So, the studies often do not address the issues that doctors and patients want to understand.

    Between 2009 and 2012, the FDA required pharmaceutical companies to do follow-up studies of 97 out of 110 new drugs and biologics it approved, imposing 437 post-marketing requirements, including 110 clinical trials. Many study results were not reported by their deadline. Fewer than six in ten post-marketing study results were published in peer-reviewed journals.

    The researchers concluded: “These findings highlight the need for more detailed postmarketing requirement study descriptions, increased FDA transparency, and clearer and more consistent registration and results reporting standards for these critical FDA required studies.”

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  • How the US should negotiate drug prices 

    How the US should negotiate drug prices 

    The public overwhelmingly supports federal drug price negotiation. But, how should the US negotiate drug prices and why would it? There is a simple benchmark. If Congress stood up for Americans and insisted that we not pay more than people in other wealthy countries for prescription drugs, drug price negotiation easily would cut our drug prices in half.

    While there are dozens of ways the government could negotiate drug prices, one simple, practical and fair way is to base prices in the US on the average of what other wealthy countries pay. That would reduce our drug spending by more than half. And, since drug prices have been rising far faster than inflation for the last two decades, we could use 2000 as a benchmark year and increase prices by CPI for every year thereafter. Prices for drugs new to market after 2000 could be set based on their launch year price.

    To arrive at a benchmark price, Congress could rely on the average prices paid by the seven countries with the largest GDPs and at least half of US per capita income. Of course, in exceptional cases, where the evidence shows that a drug lacks any value, or a drug is new to market, the government should be able to tweak the price.

    What would basing US drug prices on the prices paid by other wealthy countries, sometimes called reference pricing, mean for U.S. taxpayers? It should mean a dramatic cut in government spending on drugs, an estimated 50 percent reduction, or savings of at least $160 billion a year. For example, in 2016, Xtandi cost $129,000 in the US and $39,000 in Japan.

    How would reference pricing affect health care spending for individuals? Reference pricing should lead to a meaningful reduction in health insurance premiums and health care costs. With prescription drugs accounting for more than 10 percent of health care costs, a 50 price reduction should result in a health insurance premium savings of  at least 5 percent. It should also mean a sizable reduction in out-of-pocket costs for people who use a lot of drugs, mitigate the problem of persons discontinuing prescriptions because of high prices, or more generally expanding access.

    How would reference pricing affect access to drugs? Reference pricing should have no effect on access to drugs in the US. Today, the US accounts for more than 45 percent of the world’s pharmaceutical market. As a result, the US holds significant leverage over the pharmaceutical industry. Pharmaceutical corporations would be giving up a large chunk of their revenue if they opted out of making their drugs available in the US.

    How would reference pricing affect research and development of new drugs? Today American taxpayers invest about $37 billion in drug research and development through the NIH, and pharmaceutical companies generally invest less than 20 percent of their revenues. And, much of that money is not for ground-breaking research but for me-too drugs. Drug companies might decide to conduct less research than they do today or to stop conducting any research. But, the US would have tens of billions more in savings to invest in groundbreaking research and development.

    Notably, says James Love, Knowledge Ecology International’s Director, a drug pricing expert, and a leading proponent of reference pricing, reference pricing is a bi-partisan solution. It was adopted by the bi-partisan Senate Armed Services Committee in 2017.

    Why is reference pricing critical? Anything short of a wholesale resetting of the price of prescription drugs on behalf of everyone in the US so that they are on a level playing field with other wealthy nations undermines people’s access to life-saving and life-improving treatment. It also confers a legal monopoly on the pharmaceutical industry to set prices for brand name and other drugs sky high; it is corporate welfare at its most egregious.

    What’s the downside of reference pricing? Reference pricing will save the federal government tens of billions of dollars and permit the government to invest more money on research on critical drugs and ensure a robust pipeline of new life-saving medicines. The US government can ensure vital research is ongoing and prioritize need. Moreover, reference pricing in the US should help to drive down drug prices around the globe. While Pharma will threaten to raise prices abroad in response to a move to reference price in the US, it is already squeezing foreign governments hard.  It should not succeed.

    Pharma will always threaten to raise prices. And, so long as pharmaceutical companies can raise prices they will. Moreover, so long as they can sell drugs that people do not need or that are more expensive and less effective than other drugs on the market, they will. Congress should put an end to all these practices and protect Americans.

    Congress just handed Pharma $68 billion in tax cuts, and we see that this financial gift is going to shareholders and drug executives and not to lowering drug prices. So, let’s try paying what other wealthy countries pay and see its effects before jumping to conclusions. We can begin with reference pricing as a simple method of bringing down drug prices and drug spending speedily. And, we can follow it up with data on the drugs that deliver value, recalibrating prices as we understand better whether a drug offers a measurable benefit or not.

    Reference pricing works at the policy level, the political level and the practical level. More than nine out of ten Americans (92 percent) support federal drug price negotiations. Failing to set fair prices for prescription drugs is literally keeping millions of Americans from accessing needed medicines and a death sentence for some not insignificant number of them.

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    *****Mother’s Day Gift: The Ten Should-Do’s for Your Health, Purse and Peace of Mind, Chapter One of Aging, Schmaging, by Diane Archer. For $5, you can help the people you love and support Just Care.

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  • If we can import food safely, why not medicines?

    If we can import food safely, why not medicines?

    Have you ever thought about the difference between importing food and importing medicines? They both require oversight to ensure safety. Curiously, the US Food and Drug Administration, FDA, which is charged with overseeing the safety of food and drugs, has no issue with ensuring the safety of imported foods but prohibits drug importation, allegedly because of safety concerns. Hint: That’s not the reason.

    The FDA could ensure the safety of imported medicines if it can ensure the safety of imported foods. As a new Tarbell investigative piece by Michael McAuliff shows, the principal reason that the FDA bans drug importation is because the pharmaceutical companies want it that way. (Note: Though drug importation is technically illegal, millions of Americans buy drugs abroad, and the US has never prosecuted anyone who bought drugs abroad for personal use.)

    McAuliff details how Pharma has been working with the FDA and Pharma-funded entities to try to make it hard for people to buy drugs online from abroad. And, through its agents, it has enlisted Visa and MasterCard to help; people sometimes cannot use these credit cards to buy drugs from abroad online. Payments to many of the verified pharmacies on Pharmacychecker.com, which verifies pharmacies as legitimate, are by check.

    To be clear, the evidence suggests that drugs purchased from verified pharmacies abroad are as safe as drugs purchased in the US. There is not one report to the contrary that anyone can point to.

    What the data show is that the lax standards for FDA approval of prescription drugs and medical devices in the US as well as for certain chemicals in foods and other products create serious patient safety issues that are not being adequately addressed. Yet, neither the FDA nor Congress is suggesting stricter standards for their approval.

    “Patient safety” should mean access to affordable medicines. Withholding people’s ability to purchase drugs from abroad can put them at far greater risk than making it as easy as possible for them to get the affordable medicines they need.

    ******Mother’s Day Gift: The Ten Should-Do’s for Your Health, Purse and Peace of Mind, Chapter One of Aging, Schmaging, by Diane Archer. For $5, you can help the people you love and support Just Care.

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  • Tax cuts for drug companies a bust for Americans

    Tax cuts for drug companies a bust for Americans

    A new report by Americans for Tax Fairness, a coalition of 425 national and state organizations representing tens of millions of people, reveals that the Republican tax cuts will increase pharmaceutical corporation revenues, but they will not drive down drug prices or increase their employee salaries. They will benefit Pharma shareholders and the highest level executives. They are a bust for Americans.

    The report shows that five of the ten biggest pharmaceutical corporations are benefiting from the tax cuts to the tune of around $6.3 billion this year alone. As of now, not a single one of these companies say that the money will go to research and development, more jobs, lower drug prices, or higher wages.

    Two pharmaceutical companies are sharing less than three percent of their $6 billion savings with their workers, dispensing $169 million in bonuses. As it is, they already avoid paying taxes on their profits, by depositing them in tax havens outside of the US.

    Many of the biggest pharmaceutical companies have announced a total of $45 billion in share buybacks since late 2017. Share buybacks are simply a way to raise the stock price and, with that, executive incomes and incomes of shareholders.

    Looking back over the five years spanning 2011 to 2015, Americans for Tax Fairness projects that the biggest drug corporations increased the prices on their top-selling drugs by about 71 percent. Inflation was 5 percent during that timeframe. And, AARP reports that between 2013 and 2015, the price of 268 brand drugs increased by 15 percent or more a year. Profits for the top ten pharmaceutical corporations increased by nearly 40 percent between 2011 and 2015.

    The recent tax cuts also dramatically reduce the amount the drug corporations owe on their untaxed $500 billion in offshore profits. It cuts those taxes by almost 60 percent, down $76 billion to $58 billion from $134 billion. Pfizer saved a whopping $25 billion dollars in taxes on its offshore profits, which are now down to $15 billion from $40 billion.

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