JustCare

Tag: Pharmaceutical companies

  • How much profit should shareholders reap from health care?

    How much profit should shareholders reap from health care?

    A group of Yale researchers looked at where all the profits from the health care industrial complex flow. They found that the vast majority of money earned by pharmaceutical corporations, for-profit hospitals, health insurers and other publicly traded companies went to corporate shareholders, reports Sujata Srinavasan for Connecticut Public Radio.

    In the 21 years between 2001 and 2022, the researchers found that $2.6 trillion went to shareholders. Their study is published in JAMA Internal Medicine. The number is shocking for at least three reasons. First, the $2.6 trillion represents 95 percent of the profits. Second, only five percent of the money went to medical research and development, improved hospitals or pharmaceutical research. Third, the returns to shareholders more than tripled over that period.

    Given how much Americans pay for health care and the burden of medical debt on millions of us, it’s time for the government to rein in the prices we are being charged or, at the very least, limit corporate profits with the goal of lowering costs. Today, about 12 percent of adults in the US owe more than $10,000 in medical debt. Should there be a limit on corporate profits to reduce health care costs?

    With increasing vertical integration in health care, e.g. UnitedHealth owning providers, a pharmacy benefit manager, claims processing centers, insurance companies and more, unless there is a limit on corporate profits, it’s more than likely that health care costs will continue to mount. Health care corporations are not putting patients first.

    Corporate shareholder returns are not the only funds being stripped out of our health care system and driving up costs. The researchers did not look at the $1 trillion that private equity firms invested in health care over the last decade. These companies have destabilized a large number of hospitals, taking out profits and leaving them in major debt. They have also profited wildly from investments in home care agencies at the expense of older adults.

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  • President Trump threatens Pharma with tariffs

    President Trump threatens Pharma with tariffs

    President Trump has spent his first few weeks in office undoing much of what President Biden had put in place, but he is not (yet) prepared to undo the Medicare drug price negotiation provisions in the Inflation Reduction Act. In fact, in a meeting with pharmaceutical company executives, he threatened to impose tariffs on pharmaceutical companies if they did not relocate their manufacturing to the US, reports Tristan Manalac for Biospace.

    “Pharmaceuticals, it’ll be 25 percent and higher, and it’ll go very substantially higher over [the] course of a year,” said President Trump. These tariffs would drive up drug prices substantially for working Americans. The Inflation Reduction Act (IRA), passed under the Biden Administration, penalizes drug companies for raising Medicare and Medicaid drug prices more than the rate of inflation.

    President Trump has still not said what he will do about Medicare drug price negotiation. Among other things, the IRA calls for the Centers for Medicare and Medicaid Services (CMS), which oversees Medicare, to negotiate the price of 15 prescription drugs that drive high Medicare spending in 2025.  In 2024, CMS negotiated the price of 10 high-cost prescription drugs. Those new drug prices are set to take effect in 2026.

    Pfizer, Lilly, Merk CEOs all attended the meeting with President Trump. Their trade association, PhRMA, has been trying to undo the provisions in the Inflation Reduction Act that reduce drug company profits. The drug companies have sued the government, so far unsuccessfully, claiming that lower drug prices are effectively a taking of their property. Of course, the only reason they can charge the prices they do in the US is because our government has given them monopoly pricing power on patented drugs, unlike the governments in every other wealthy nation.

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  • Don’t trust TV drug ads

    Don’t trust TV drug ads

    Elisabeth Rosenthal writes for KFF Health News about why you should not trust drug ads on TV. Ignore the celebrity endorsements by Lady Gaga and others; they won’t tell you about a better less expensive drug. If our government were not in the pocket of the pharmaceutical corporations, it would ban all direct to consumer drug advertising as every country other than the US and New Zealand do.

    Pharmaceutical companies spend huge amounts of money to sway you to buy their drugs because their ads work really well, even when the ads promote drugs that are of little value. Indeed, pharmaceutical companies now spend more than $1 billion a month on these ads. They are among the biggest spenders of TV ads.

    The Clinton Administration is responsible for allowing these ads, which had been banned. The FDA thought it could somehow keep the drug companies from misleading people by saying ads could not be misleading and had to list side effects. Really?

    Rosenthal reports on University of Colorado professor Michael DiStefano’s recent study of best-selling drugs, which found that the pharmaceutical companies spent more on ads targeted to individuals, featuring drugs with fewer benefits, than on ads for doctors. DiStefano is concerned: “I worry that direct-to-consumer advertising can be used to drive demand for marginally effective drugs or for drugs with more affordable or more cost-effective alternatives.”

    Thankfully, five of the ten drugs that will have Medicare negotiated prices beginning in 2026, are drugs that the pharmaceutical corporations spent the most advertising to patients.

    The government’s legal challenges to PhRMA’s misleading ads, even by the former Trump Administration, are not easy to win. PhRMA claimed that a requirement to disclose a drug’s list price in an ad violated first amendment rights and prevailed.

    New FDA requirements sound great, but they are so vague and subjective as to be meaningless; moreover, the FDA cannot enforce them effectively. As of November 2023, PhRMA consumer ads must provide a “non-misleading net impression about the advertised drug.” Drug ads should be “clear, conspicuous, and neutral.”  “Audio or visual elements that might interfere with the consumer’s understanding” is not permitted and and anything in writing must be “easy to read.”

    The FDA does not require the pharmaceutical corporations to submit ads for approval before releasing them. The drug companies are expected to self-police. And, the FDA does not have the money or the power to hold pharmaceutical companies to account when they misled. Each year over the last five years, the FDA sent out an average of six “warning letters.” And, it’s not at all clear that the companies receiving those letters did anything about their misleading ads.

    The FDA now has a Bad Ad Program for physicians, The program trains them on misleading ads and gives them a hotline to call to report misleading ads: 855-RX-BADAD. Given the FDA’s limited resources and power, it’s hard to imagine that will do any good. The FTC apparently does not have the power to protect consumers from false and misleading drug ads.

    For the public health, Congress should ban these ads altogether.

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  • If you use an inhaler, your out-of-pocket costs should come down soon

    If you use an inhaler, your out-of-pocket costs should come down soon

    As of Saturday June 8, many people in the US will pay $35 a month out of pocket for their asthma medications, reports NBC News. AstraZeneca and Boehringer Ingelheim have agreed to limit people’s out-of-pocket costs for inhalers. GlaxoSmithKline says it will also limit people’s out-of-pocket costs but not until next year. The cap does not apply to people with Medicare.

    People in other developed countries pay far less than Americans for their inhalers. Americans have been paying 13 times what Brits pay for AstraZeneca inhalers, $645 as compared to $49. Teva charges Americans $286 for their inhalers and Germans $9.

    And, we’re talking millions of Americans are paying insane costs for inhalers. Twenty-seven million Americans suffer from asthma. Five million of them are children.

    Today, even with insurance, many Americans cannot afford their asthma medicines. Costs for insured people with asthma can easily be $350 a month in the US, when you fold in the cost of additional medications such as albuterol.

    Black Americans are more at risk than white Americans. Black Americans have far worse health outcomes. Black children with asthma are 4.5 times more likely to end up in the hospital and 7.6 times more likely to die because of their asthma.

    If you have insurance: Your pharmacy should adjust the price of your inhalers to $35 a month, if it participates in the pharmaceutical companies’ programs.

    If you don’t have insurance or your pharmacy is not participating in the program: You can visit your drug company’s website online and sign up for a $35 copay card.

    It’s still not clear whether people who use multiple medications for their asthma will have to pay $35 a month for each asthma medicine. Some people need a rescue inhaler in addition to a maintenance inhaler.

    It’s great that some pharmaceutical companies have agreed voluntarily to lower people’s asthma medicine costs. But, it’s terrible policy that pharmaceutical corporations can charge pretty much what they will for their drugs, and we have to rely on their voluntary gestures for our drugs to be affordable. Right now, too many Americans are forced to choose between their child’s inhaler and food or rent.

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  • Will insulin ever be affordable in the US?

    Will insulin ever be affordable in the US?

    The pharmaceutical industry is all too powerful in the US. Not only does it spend a lot of money contributing to policymakers’ political campaigns and lobbying them to ensure pharmaceutical companies keep their monopoly drug pricing power, they employ huge numbers of Americans. Not surprisingly, no one in Congress has proposed opening our borders to prescription drug imports–the easiest way to bring drug prices down quickly for everyone in the US. And, Senate Majority Leader Chuck Schumer can’t even make good on his promise to lower insulin copays for everyone in the US, reports Rachel Cohrs Zang for Stat News.

    Two years ago, Senator Schumer announced to a crowd that he was going to ensure the Senate voted to limit insulin costs for every insured American to $35 a month. Since then, he has said it was a “high priority.” But, he has not yet acted.

    Importantly, the Inflation Reduction Act does lower these costs for people with Medicare, but only for people with Medicare. Ideally, federal legislation would protect everyone from high drug costs, including people without health insurance. And, it would require the government to negotiate drug prices. Protecting insured Americans from high insulin costs is a toe in the door, at best, and still it would be a major feat for the Democrats.

    Senator Schumer’s office was unwilling to speak to a reporter about why the Senator has not yet held a vote on legislation that would limit the cost of insulin for insured Americans. Notably half of states have laws limiting these costs. And, pharmaceutical companies have said that they are making it easier to qualify for their programs that help pay for insulin costs.

    Better access to lower cost insulin for more Americans might explain Schumer’s reluctance to move forward with legislation to cover everyone, but it’s not a compelling reason. As recently as August 2022, one in seven diabetics were struggling to pay for their insulin. For sure, hundreds of thousands, if not millions, of Americans are still struggling to pay for insulin. More likely, Schumer doesn’t want to take on the opposing forces or propose legislation that undercuts other legislation to lower insulin costs that his fellow Senators are proposing.

    Politically, Schumer has good reason to take on the insulin issue. Six states that the Democrats would like to win in November –Ohio, Pennsylvania, Michigan, Wisconsin, Nevada, and Arizona–do not provide residents with low-cost access to insulin. And, low-copay insulin could be a winning issue for the Democrats. Pharmaceutical companies don’t mind low copays as they would not affect insulin prices.

    But, the forces opposing low-copay insulin are mighty. Republicans, for one. Patient advocates, for two, because Schumer’s proposal would not lower the cost of insulin, only make it more affordable, shifting costs, and not help people without health insurance.

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  • Some Democrats oppose Biden’s goal of lowering more Medicare drug prices

    Some Democrats oppose Biden’s goal of lowering more Medicare drug prices

    The Lever reports on a cadre of Democratic Congressmen committed to opposing Biden’s goal of lowering more drug prices for people with Medicare. Not surprisingly, these policymakers happen to be the beneficiaries of lots of pharmaceutical industry money. What’s going on?

    The Inflation Reduction Act includes provisions to allow Medicare to pay negotiated drug prices for ten drugs in 2026. It allows Medicare to negotiate drug prices for an additional 150 drugs through 2034. President Biden wants to expand that number to 500 drugs, which would reduce Medicare spending on high-cost drugs and should also reduce people’s copays for those drugs.

    Former President Trump, if reelected, appears interested in weakening Medicare drug-price negotiation. At one point during his presidency he said he supported drug price negotiation, but he has since backed down from that position.

    Democrats Scott Petters of California, Josh Gottheimer of New Jersey, and Wiley Nickel of North Carolina are prepared to go against their president and fight some Medicare drug price negotiation as well. The pharmaceutical industry and other medical industry groups have contributed $300,000 to them in the last year. Gottheimer is considering a run for governor of New Jersey.

    These Democrats are sponsoring legislation that claims to be defending research on orphan drugs, aping the drug industries’ common refrain that negotiated drug prices will compromise investment in research. It is interesting how negotiated drug prices around the world don’t appear to concern them or the fact that Americans are forced to pay three or four times as much as people in other wealthy countries for the same drugs.

    Experts say that pharmaceutical companies will still rake in big profits on orphan drugs with negotiated prices, just not quite as big as they do now. Moreover, the Inflation Reduction Act exempts “orphan drugs” from Medicare price negotiations if they are treating only one rare disease. If Peters, Gottheimer and Nickel get their way, orphan drugs would be excluded from Medicare price negotiations even if they treat multiple rare conditions.

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  • Billions in Medicare savings from Medicare drug price negotiation by 2031

    Billions in Medicare savings from Medicare drug price negotiation by 2031

    A new report from Nicole Rapfogel at the Center for American Progress (CAP) finds that the Inflation Reduction Act’s provision allowing Medicare to negotiate drug prices for its highest cost drugs will reduce drug spending by tens of thousands of dollars a year for millions of people with Medicare and save Medicare millions of dollars a year.

    On September 1, 2024, the Centers for Medicare and Medicaid Services (CMS), which oversees Medicare, will announce the prices it has negotiated with pharmaceutical corporations on ten drugs that treat, among other things, diabetes, kidney disease, blood clots and heart failure. Beginning in January 2026, the cost of these drugs should drop considerably.

    The ten drugs cost Medicare significantly more than other drugs it covers either because they have very high prices or because they are widely used. A total of nine million people currently use their Part D drug benefit to fill prescriptions for these drugs. These ten drugs represent roughly 20 percent of Medicare’s annual drug spending under Part D.

    CAP projects that the price of one insulin product, NovoLog FlexPen will fall $30 a month and the price of one cancer drug, Imbruvica, will fall $6,548 a month. The price of Eliquis, which 3.5 million people with Medicare take, could drop by $123 a month.

    Currently, Americans pay many times more than people in other wealthy nations for several of these drugs. For example, a dose of Stelara, another drug whose price Medicare is negotiating, which treats people with autoimmune conditions, costs $2,900 in the United Kingdom and $16,600 in the US. Moreover, Americans paid $6.5 billion in taxpayer dollars for the development of Stelara.

    While Medicare is only negotiating the price of 10 drugs this year, by 2030 it will have negotiated the price of 80 drugs. CAP estimates that Medicare will save $25 billion as a result of drug price negotiation in the six years between 2026 and 2031.

    Of course, the pharmaceutical corporations are trying to block these price negotiations in the courts, claiming that the government should not be interfering with the prices private corporations set. What they fail to say is that they developed these drugs with $11.7 billion in taxpayer dollars, The Lever reports. And, the pharmaceutical corporations made $70 billion on these drugs in 2022.

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  • Dozens of drug companies owe Medicare rebates from raising prices higher than the inflation rate

    Dozens of drug companies owe Medicare rebates from raising prices higher than the inflation rate

    The Biden Administration just announced that dozens of drug companies owe Medicare rebates from raising prices higher than the rate of inflation. As a result , hundreds of thousands of people with Medicare will save as much as $2,786 per dose of their prescription drugs.

    The Inflation Reduction Act (IRA) prevents drug price gouging–defined as price increases greater than the rate of inflation–by pharmaceutical companies. The IRA also caps out-of-pocket costs for each insulin drug at $35 a month and limits total out-of-pocket drug costs for people with Medicare through Medicare Part D to $2,000 a year beginning in 2025. Yet, Republicans are trying to repeal the IRA.

    In total, the Administration reports that pharmaceutical companies raised prices on 64 drugs more than inflation. For example, the price of Signifor, which treats an endocrine disorder, went up so much that people who use it could see a savings of $311 for a monthly dose of the drug beginning in January.

    President Biden is also heralding his Administration’s decision to allow the government to “March-in” and help bring down the price of drugs developed with federal funding, if the price is unreasonable. This march-in right has always existed but prior administrations have been reluctant to take the position that the government could step in if a pharmaceutical company charged an excessive for the drug.  Of course, the proof of this Administration’s commitment here is in determining that the price of a drug developed with federal money is too high and taking action. Time will tell.

    Meanwhile a story in Becker’s exposes extreme drug price increases for eight drugs, according to ICER.  The story suggests that insurers spent more than $1.3 billion in these drugs in one year. It’s not clear if that means that individuals paid higher premiums to cover the cost of the drugs, but presumably so. The question left unanswered is whether the insurers recouped that money they spent for these drug, through rebates, and left their enrollees’ holding the bag, a likely scenario.

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  • Beware experimental Alzheimer’s drug trials

    Beware experimental Alzheimer’s drug trials

    Melody Peterson reports for the LA TImes on how pharmaceutical companies enlist Californians with Medicare to participate in a clinical trial for experimental drugs intended to stave off Alzheimer’s. Ads promote drug trials for people who are losing their memories, as a way to keep their minds sharp. But, participating in an experimental Alzheimer’s drug trial carries serious risks.

    The pharmaceutical companies see Alzheimer’s drugs as a mega-opportunity to generate outsized profits. The six million-person market is huge and only growing. There’s little limit on what pharmaceutical companies can charge for these drugs. And, if FDA-approved, Medicare must cover them when medically reasonable and necessary.

    Already, the FDA has approved Aduhelm and Leqembi, which costs $26,000 a year, even though neither drug shows significant benefits and both can have serious side effects. Now, the race is on for pharmaceutical companies to market other drugs. But, the pharmaceutical companies need nearly 60,000 individuals to participate in the clinical trials of the 140 drugs being developed that are still experimental. 

    No question that if an Alzheimer’s drug works well, it could improve and extend the lives of people with Alzheimer’s and, arguably, save the health care system money as well. But, the clinical trials are not designed to treat people, only to test a drug’s efficacy. In fact, the trials can severely harm people.

    Some believe the Leqembi trials were responsible for the death of three people, though the drug’s manufacturer claims Leqembi was not likely the cause of their deaths. Four in ten participants in the Aduhelm trials experienced brain bleeding or swelling.

    Do trial participants understand that these experimental drugs come with a risk of brain swelling or bleeding? Is there a financial conflict of interest for the trial investigators who could make big money from the experimental drugs when they recruit trial participants? Do they overpromise?

    One recruiter offers older adults free meals and health tips. Pharmaceutical companies pay for the costs of recruitment activities. Then, their agents get people who are interested in participating in a clinical trial to sign a long consent form.

    But, how can you expect people who are struggling with memory issues to understand the consent form? They’re likely unaware of what they are signing. For that reason, federal regulations forbid people’s enrollment in a clinical trial if they lack the mental ability to understand a consent form, unless someone who has the legal authority to consent on their behalf does so.

    But, the clinical trial recruitment team is not required to have an independent monitor overseeing recruitment activities. And, it is not in their interest financially to ensure that the people they recruit have the ability to understand a consent form. The recruiters generally receive between $40,000 and $75,000 for every person they recruit to participate in a trial.

    What’s equally concerning is that the FDA can approve a drug like Leqembi, even when, based on the findings, experts question whether its benefits are meaningful. When a pharmaceutical company invests in a clinical trial, it does not need to release information on the results. To hide the results when they do not appear favorable, the pharmaceutical company can simply stop the trial.

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  • Merck sues Medicare over negotiated drug prices

    Merck sues Medicare over negotiated drug prices

    Merck just filed a lawsuit challenging the legality of the Inflation Reduction Act‘s provision allowing Medicare to negotiate some drug prices with pharmaceutical companies. The administration is holding firm to doing so, notwithstanding. The law is intended to lower drug prices in Medicare.

    Merck claims that if negotiated drug prices take effect, it will keep drug manufacturers from innovating new drugs. It wants a court to say that it does not have to take part in drug price negotiations with the federal government. If the issue is innovation, the question becomes how much profit do the pharmaceutical companies need to generate to ensure they innovate and innovate for drugs that we need. Last year, Merck profited $14.5 billion.

    In response to the lawsuit, Secretary of Health and Human Services Xavier Becerra said, “We’ll vigorously defend the President’s drug price negotiation law, which is already lowering health care costs for seniors and people with disabilities. The law is on our side.”

    The IRA drug price negotiation provision is not set to take effect for another two and a half years. And, in its first year, only 10 drugs that have been on the market for several years without competition will have lower negotiated prices.

    Merck is claiming the drug price negotiation law is unconstitutional because it is taking of property for the public without fair compensation. In this country at this time, Merck could win. But, the law is not on Merck’s side.

    The IRA drug price negotiation provision is designed to withstand constitutional challenges. It allows Merck to turn down Medicare’s final negotiated price. Merck would then be subject to a tax. But, the tax could end up being hundreds of millions of dollars a day over time, according to Merck’s complaint.

    We still don’t know which drugs are included among the 10 the government intends to negotiate prices for in 2026. But, one of Merck’s drugs, Januvia, which some diabetes patients use, could be among them. And, in future years, another Merck drug, Keytruda, which some cancer patients use, could be another.

    Public Citizen President Robert Weissman issued the following statement:

    “Merck is claiming the U.S. constitution requires the U.S. government and people to be suckers. That’s not true.”

    “There’s no Sucker Clause in the 1st Amendment, 5th Amendment, or anywhere else in the Constitution.”

    “This lawsuit is a desperate attempt by the industry to beat back popular legislation that would curtail Big Pharma’s ability to price gouge Medicare and secure monopoly profits. Full stop.”

    “While Big Pharma’s litigation gambit plays out, it is critical that the federal government continue its preparation for price negotiations. Delay in the commencement of long overdue negotiations will result in billions of dollars in excess costs for taxpayers and consumers.”

    Touche!

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