JustCare

Tag: PhARMA

  • Pharma pays academics to justify high drug prices

    Pharma pays academics to justify high drug prices

    A new report from Pro Publica and Consumer Reports reveals how, behind the scenes, pharmaceutical companies are paying academics to justify their high drug prices. While this has always been the case, it is being taken to a whole other level.

    Pharmaceutical companies have spent hundreds of millions of dollars over the last decade to protect their profits, to keep Medicare from negotiating drug prices, and to change the opinion of those who believe that their research and development costs do not justify their exorbitant prices. Historically, they’ve paid doctors to promote their drugs, donated large sums to non-profit disease groups, and contributed to the campaign funds of policy makers to promote their agendas.  Now they are also paying off health economists.

    Over the last three years, drug companies have enlisted academics and other thought leaders across the country to give talks, write articles, address policy makers in Congress to support their new cures for hepatitis C and persuade Medicare, Medicaid and private insurers to cover them. To facilitate the process, companies have sprung up with the express purpose of enlisting support from health economists and other academics, with Pharma’s financial backing.

    Precision Health Economics boasts that it is “Led by professors at elite research universities,” produces “academic publications in the world’s leading research journals” and helps foster “formal public debates in prestigious, closely watched forums.” Among a wide range of work for the pharmaceutical industry, it consults for three manufacturers of a super high-priced hepatitis C vaccine.

    Precision Health’s team of academics from Stanford, USC and Harvard, among other institutions, tends to make the case that high drug prices are justified to enable innovation rather than that high drug prices are undermining access to medically necessary medicines. It also counsels drug companies on how best to price their drugs.

    Dr. Aaron Kesselheim, an associate professor at Harvard Medical School who studies pharmaceutical costs, argues that “There is substantial evidence that the sources of transformative drug innovation arise from publicly funded research in government and academic labs.”  Kesselheim has determined that drugs are priced at as high a level as drug companies believe they can get away with.

    Leonard D. Schaefer Center for Health Policy and Economics at University of Southern California also gets substantial funding from drug companies. And, a CEO of Amgen is on its advisory board.

    Often academics’ conflicts of interest are not disclosed. Publications like Health Affairs do not require disclosure.

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

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  • Orphan drug act delivers big profits to drug companies

    Orphan drug act delivers big profits to drug companies

    More than 30 years ago, to foster drug innovation for rare diseases, Congress passed the Orphan Drug Act. The law helps drug companies make big profits on drugs that treat rare diseases–orphan drugs–which affect fewer than 200,000 people. As it turns out, the Orphan Drug Act also enables drug companies to drive up drug prices, along with profits, whenever they can show that their mass-market drugs treat rare diseases.

    One in ten Americans has a rare disease, and there are more than 7,000 rare diseases. But, until 1983, drug companies had no profit motive to develop drugs to treat these diseases. The Orphan Drug Act gives drug companies substantial tax credits and seven more years of monopoly pricing power for drugs classified as orphan drugs after their patents expire. In 2016 alone, according to a Kaiser Health News Investigation, the drug companies received $1.76 billion in tax credits for their development and almost $50 billion in tax credits are projected between 2016 and 2025.

    While the law has led to drug innovations to treat rare diseases, it also has led to a number of mass-market drugs being reclassified as orphan drugs, with all accompanying financial benefits. The Orphan Drug Act legally entitles them to these benefits as many times as they can show the FDA that a drug treats a rare disease. For example, Gleevec, a cancer treatment, has nine orphan drug approvals, even though it was originally intended to treat far more than 200,000 people. Novartis, its manufacturer, has successfully sliced up the population into small special needs groups and found ways to show that Gleevec meets their unmet needs.

    To date, pharmaceutical companies have “developed” 450 new orphan drugs with billions of taxpayer dollars. Of those drugs, the FDA has classified more than 70 mass-market drugs, including seven of the top ten best-selling drugs, as orphan drugs. Crestor, which helps lower cholesterol, Abilify, which treats schizophrenia and depression, and Humira, which treats rheumatoid arthritis, are all now classified as orphan drugs. It’s no wonder that orphan drug sales are expected to account for more than 20 percent of all brand-name drug sales.

    The prices for these orphan drugs are astronomical. The Kaiser Health News investigation reveals that in 2014, the yearly cost of an orphan drug was $111,820 instead of $23,331 for other drugs. Express Scripts, a drug benefits manager, told Kaiser Health News that it currently has four orphan drugs on its formulary with $70,000 price tags for a 30-day supply–$840,000 annually. Twenty-nine more orphan drugs have price tags of $28,000 for a 30-day supply–$336,000 annually. And sales of orphan drugs are growing rapidly, at a projected rate of 12 percent a year.

    If you’re wondering why the FDA approves so many-mass market drugs as orphan drugs, the answer appears to be that it has no choice. The Orphan Drug Act gives the drug companies the right to have mass-market drugs reclassified. So, if the FDA denies approval of an orphan drug, its manufacturer is likely to sue the FDA and win.

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

    Here’s more from Just Care:

  • Get engaged in the drug price fight!

    Get engaged in the drug price fight!

    Although it remains unclear whether Congress or the Trump administration will try to tackle the prescription drug price/cost issue this year, the battle lines are being drawn.

    The Pharmaceutical Research and Manufacturers of America (PhRMA)—the drug industry’s lobbying powerhouse—launched its latest ad campaign in January. Dubbed “Go Boldly,” the high-profile campaign (TV, print, digital, radio etc.) is a vigorous defense of the industry’s need for high profits to invest in research, development, and innovation.

    According to the publication Advertising Age, the campaign will cost “tens of millions of dollars each year and last at least three years.” And late last year, the pharmaceutical benefit management (PBM) industry—the middlemen in the prescription drug price and purchasing chain—launched their own lobbying effort via the Coalition for Affordable Prescription Drugs.

    Several large employers (Pitney Bowes and John Deere) are in league on this effort, apparently agreeing to defend the industry against recent attacks that it’s essentially a co-dependent partner in PhRMA’s near monopoly power over drug pricing. Even if you accept that PBMs have saved the employers they work for hundreds of millions of dollars over the last 20 years—largely by shifting consumers to generic drugs and winning 5% to 15% discounts on some brand-name drugs—a broad consensus has emerged that those savings fall far short of what they should have been if the industry was really doing its job.

    Medicare budget analysts last month, projected that prescription drugs will be among the components of health care spending with the largest annual uptick through 2025—accelerating from 5.7% this year to an average of 7% in 2018–19. “This expected higher rate of growth is driven by faster price growth as a result of fewer brand-name drugs losing patent protection,” the analysts report said.

    You’re not powerless in this fight. As is ever the case, you can make your feelings known to your elected representatives. And a new group, launched in late February, provides another avenue for engagement. Patients for Affordable Drugs (P4AD) has the mission of bringing the patient/consumer voice to the debate. P4AD is the brainchild of David Mitchell, former head of the public policy advocacy firm GMMB in Washington, DC. and a cancer patient of six years. He says the drugs that keep him alive cost $26,000 a month.

    “What’s happening in this corner of health care is no longer acceptable,” Mitchell says. “Everyone knows it but I’m convinced we won’t get the reforms we need without patients and citizens in general getting involved and taking action.  That’s what we are about.”   P4AD’s priorities:

    Mitchell says that P4AD will operate on the “fundamental notion that we can have innovation and new drugs at reasonable prices. There’s plenty of money in the system to do both,” he says.

    I agree and believe Mitchell is right that engaged patients and citizens, and their stories, are essential to countering PhRMA’s deep pockets and lobbying clout.

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

    Here’s more from Just Care:

  • Drug prices likely to rise in Trump administration

    Drug prices likely to rise in Trump administration

    The price of drugs remains out of control, and President-elect Trump has vowed to address high drug prices. But, the Republican Congress is set to repeal the Affordable Care Act, which means that the drug companies will lose millions of customers with drug coverage who will no longer be able to afford their drugs. Because drug companies have the power to set drug prices and will want to make up for their lost revenue, drug prices are likely to rise in a Trump administration.

    Since passage of the ACA, the drug industry has seen enormous profits. Regardless, according to StatNews, Pharma is claiming that the ACA didn’t help drug companies as much as pharmaceutical executives expected. Drug makers had to pay billions in fees under the ACA. They also were required to give drug discounts and rebates to people with Medicare through the Part D drug benefit.

    Still, the ACA gave drug companies 22 million more customers with insurance to cover their drugs. And, the Republican Congress has no plans to replace the ACA with equally robust insurance. Consequently, drug companies should be prepared to lose substantial revenue after the ACA is repealed and Congress imposes fewer requirements on the coverage health insurers offer.

    Unfortunately, drugmakers can raise drug prices further to compensate for their loss of business. Indeed, they are likely to raise prices on many drugs significantly. And, notwithstanding Trump’s recent claim to Time Magazine that he is going to bring down drug prices, it is hard to imagine that the Republican Congress will do what it would take to change this likely scenario.

    Speaker Ryan and his Republican allies do not support legislation regulating drug prices. And, they have always supported laws that give drug companies monopoly power over prices for many drugs. The only reason drug companies would not raise drug prices significantly is fear that, if they do, Congress would take some extreme action against them. That seems unrealistic.

    Drug companies will also want to make up for the probable loss of sales stemming from the Republican leadership’s plan to deregulate the health insurance industry. Laws that require insurers to provide more generous drug benefits are not on Speaker Ryan’s or his Republican allies’ agendas. So, it seems inevitable that insurers will further restrict access to costly drugs.

    Health insurers would prefer to deter people with costly conditions who tend to use high-cost drugs from enrolling in their plans through a limited formulary or high cost-sharing. Indeed, they have many ways to cherry pick healthier enrollees. To keep premiums down and profits up, they will no doubt revert to using them as much as possible.

    So long as the Republican leadership opts not to privatize Medicare–a long shot–older adults and people with disabilities may be in slightly better shape than younger people with insurance. Some believe that even if the ACA is repealed, Congress will keep elements of the law that fill the gap in coverage under the Medicare Part D prescription drug benefit, known as the “donut hole.”  If drug costs continue to rise, however, it’s a good bet that Pharma will benefit far more than people with Medicare.

    If you want Congress to keep its hands off Medicare, please sign this petition. Yesterday, more than one million petitions were delivered to Congress, and Congressional Democrats vowed to fight Medicare cuts.

    Here’s more from Just Care:

  • Why has AARP been supporting ALEC?

    Why has AARP been supporting ALEC?

    It appears that AARP has been supporting ALEC, the American Legislative Exchange Council at least since 2014.  ALEC is the Koch-based lobbying group that has been calling for the privatization of Medicare and Social Security, eliminating pensions for public employees, repeal of the Affordable Care Act, more protections for PhRMA, along with many other policies that threaten retirement security in America. So, why has AARP been supporting ALEC, and do AARP members know?

    AARP claims that it has supported ALEC to have a seat at the table with conservative policymakers. Really? AARP, a non-profit organization whose mission is to “advance the quality of life for all as we age” is providing financial support to an organization that works against the interest of retirees in order to talk to the policymakers who work against the interest of retirees.

    Under recent pressure from a number of organizations, AARP is now saying that it will not renew its membership in ALEC. “We would never work against the interests of older Americans and our engagement with ALEC was NOT an endorsement of the organization’s policies, but an opportunity to engage with state legislators and advance our members’ priorities.”

    The Center for Media and Democracy discovered AARP’s ALEC membership and exposed it in late June; it launched a petition to urge AARP to stop its funding of ALEC. Michael Hiltzik in a recent column for the L.A. Times asks why AARP would be allied with ALEC, given that ALEC’s support for repeal of the Affordable Care Act would mean that older adults would once again face a huge gap in prescription drug coverage under Medicare Part D.  ALEC is also opposed to Medicaid expansion. And, it would like to eliminate public pension plans that guarantee workers an annual retirement income in favor of a defined contribution pension plan, which could leave millions of retirees at risk, with retiree benefits subject to the whims of the stock market.

    What’s perhaps most confounding and disturbing about AARP’s ALEC membership is that even big companies like Amazon, Facebook, Google, Pepsi and Coca-Cola pulled their ALEC memberships a while back after the Center for Media and Democracy exposed them. If you’d like to keep pressure on AARP, sign this petition from Social Security Works.

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