JustCare

Tag: Pharmaceutical companies

  • Drug companies must now disclose most clinical trial results

    Drug companies must now disclose most clinical trial results

    For years, drug and medical device companies have been able to conduct clinical trials and then, depending upon results, determine which ones to make public. They were not required to let the public know about poor outcomes of clinical trials, even for a drug receiving FDA approval based on a different clinical trial with a beneficial outcome. Now, these companies must disclose most clinical trial results, even if they show a drug or device may not be safe or effective.

    The U.S. Department of Health and Human Services has issued a final rule expanding the conditions under which pharmaceutical companies, medical device companies and manufacturers of biologics must register clinical trials and disclose summary results information on ClinicalTrials.gov, including information about harmful side effects.  The National Institutes of Health has issued a policy that complements the HHS policy for registering and disclosing summary results information on ClinicalTrials.gov for all NIH-funded trials, including trials that are not subject to the HHS final rule.

    NIH Director Francis S. Collins, M.D. said that he wanted to make sure the public got maximum value from clinical trials, whether funded with government money or private money. “Access to more information about clinical trials is good for patients, the public and science.”

    The goal of clinical trials is to ensure that health care drugs and devices are safe and effective. They sometimes also indicate when one medical treatment is better for a specific condition or particular subpopulation (e.g., children, older adults) than another.

    These new requirements should make it easier for people to learn about clinical trials in which they might be interested in participating as well as new possible treatments for their conditions. And, more information about clinical results will enable patients and doctors to make more informed decisions about appropriate treatments. It will also help researchers design studies based on more information about clinical trial results.

    The HHS final rule requires companies to register and disclose summary results for trials of most products that the FDA regulates. However, phase 1 drug and biological products and small studies to determine the feasibility of device products are excluded from the requirement. The NIH policy extends to all NIH-funded trials, including phase 1 clinical trials of FDA-regulated products and small studies to determine the feasibility of products; it also applies to products that the FDA does not regulate, including behavioral interventions.

    Here’s more from Just Care:

  • Why should drug companies have extra monopolies?

    Why should drug companies have extra monopolies?

    In a Health Affairs article, Alfred Engelberg explains that over the course of the last 35 years, Congress has extended the monopoly power of pharmaceutical companies in five different ways. These extra drug company monopolies were intended to spur drug research and innovation. They certainly have added significantly to drug company profits and forced Americans to pay more for their drugs for way longer than reasonable. Whether they have spurred innovation is an open question. So, why should drug companies have extra monopolies?

    The argument for drug company monopolies is that, without them, drug companies would not perform the research needed to discover new life-saving and health-promoting drugs. Research costs too much. As it turns out, drug companies only spend about 10-20 percent of their revenue on research and development. And, additional monopolies are unnecessary, except of course to generate monopoly profits.

    Here are the five extra drug company monopolies that do not apply to other industries:

    1. Generic versions of their orphan drugs are prohibited for at least seven years; generic versions of new small molecule drugs are prohibited for five to seven years; and biosimilars (generic versions) of new biologic drugs are prohibited for 12 years.
    2. They can extend their patents of new drugs approved between five and 14 years.
    3. They can extend their patents for six months if they conduct research to learn whether a drug is suitable for children.
    4. They can delay FDA approval of generic and biosimilar versions of their drugs if they simply claim that the company manufacturing a generic or biosimilar drug is infringing their patent, even if there is no basis in fact for their claim.
    5. They can secure monopoly power over drugs they did not discover–drugs discovered through government research and funding–and to charge whatever they please for these drugs.

    Here’s more from Just Care:

  • Facts about prescription drug prices in the U.S.

    Facts about prescription drug prices in the U.S.

    The High Cost of Prescription Drugs in the United States, a new JAMA paper by Aaron Kesselheim, MD et al. takes a thorough look at the history of high prescription drug prices in the United States and policies that would rein in these prices. You can read the full article here. Here are some of the key takeaways:

    • U.S. per person annual spending on prescription drugs in 2013 ($848) was more than twice as much as the average in 19 other countries ($400). (Top drugs in the U.S. are now three times more expensive than in the U.K.)
    • Prescription drugs represent 17 percent of total health care costs in the U.S.
    • Net spending on prescription drugs rose 20 percent in the two years between 2013 and 2015. The cost of brand-name drugs has grown significantly; so has the cost of some old generic drugs because of lack of competition.
    • Pharmaceutical companies are allowed to set the price of their drugs in the U.S. unlike in any other developed country.
    • The principal cause of the high price of prescription drugs in the U.S. is monopoly power given to pharmaceutical companies through patents. The chief way to rein in drug prices is through generic drugs once the patents have expired. But, business and legal maneuvering often extends the length of patents.
    • And, even when two or more pharmaceutical companies are offering brand-name drugs in the same class, the lack of price transparency in the marketplace allows companies to keep their prices high; doctors tend to prescribe drugs regardless of price and patients tend to be insensitive to price when they have insurance.
    • Pricing of drugs is based largely on what the pharmaceutical companies think they can get for the drug, not research and development costs which represent between 10 percent and 20 percent of drug company revenues. And, since government and insurance are the principal purchasers rather than consumers, the drugs can command higher prices; the government is not allowed to negotiate prices for Medicare and generally is willing to pay for a drug even when lower-cost alternatives are available.
    • Prices only come down when generic substitutes hit the market. The more manufacturers offering the generic drug, the lower the price. If there’s only one generic option, the price goes down to 55 percent of the brand-name drug. If there are 13 or more options, the price goes down to 15 percent of the brand-name drug.
    • States keep prices from going down as much as they might when they require patient consent before a pharmacist can prescribe a generic version of a drug. Twenty-six states have that requirement. And, in 30 states pharmacists are not required to offer the generic substitute to a patient.

    Solutions which, based on the evidence, will not impede innovation:

    • Greater constraints on the length of time drug makers have a monopoly on a new drug
    • Speedier approval of generic alternatives to high-priced drugs
    • Enhanced government power to negotiate drug prices
    • More evidence on the comparable value of different drugs for treatment of the same conditions.

    Here’s more from Just Care:

  • The pharmaceutical marketplace is dysfunctional

    The pharmaceutical marketplace is dysfunctional

    The controversy over the steep price of EpiPen—an injectable device used to treat severe and potentially life-threatening allergic reactions—is among the strongest signals to date that the pharmaceutical marketplace is dysfunctional, and that Congress needs to step in.

    EpiPen’s list price jumped nearly four-fold in five years, from $165 to $608.   The generic drug in EpiPen costs pennies to make and the device has been on the market for over a decade.

    Of course, prescription drugs like EpiPen deliver enormous benefits, improving health and extending lives. They can also save money relative to other forms of treatment. But, over the last few decades, the pharmaceutical industry has become the poster child for poor business ethics and, more recently, out-and-out price gouging.

    Since 1990, for example, the federal government has fined drug companies $15 billion for “off-label” promotion of their drugs—marketing them for uses that the FDA has not approved. Drug companies have also tested their drugs on people in developing countries in unethical and sometimes illegal ways. And, they have been caught hiding study results that show their drugs may not be as safe or as effective as they claim.

    The only justification for raising the price of the EpiPen so substantially was greater profits.  Sales of the device jumped 10-fold from $170 million in 2007 to $1.7 billion in 2015.  That’s primarily because the drug’s manufacturer, Mylan, has a near monopoly in this medical niche, allowing the company to raise the price of EpiPen as high as the market would bear. And, since insurers and the government do most of the buying, Mylan knows that most consumers were shielded from the direct impact.

    But, we all pay the bill in the end, indirectly, through higher insurance premiums, deductibles and copays and in taxes that support public insurance programs such as Medicare and Medicaid.

    Despite this, Mylan’s response to public pressure to simply lower the price of EpiPen has been to act primarily (and predictably) in its own interest and in the interest of its shareholders and the other companies that take the drug from manufacturer to market, including wholesalers and pharmacies.  All take a bite out of the price of every drug.

    First, Mylan agreed to increase the co-pay assistance to people who need but can’t afford the drug.   That’s helpful, but it requires consumers to jump through hoops to qualify and is limited.  When that didn’t quell the outrage, Mylan announced on August 29 that it would sell its own generic version of EpiPen for half the price of the brand-name product—around $300 instead of $600.

    That move keeps the money flowing into Mylan’s coffers and does not anger the supply-chain companies.  It also may stall other generic companies—one is known to be waiting in the wings—from bringing an EpiPen competitor to market.

    What Mylan’s move will not do is make this essential medicine—which, again, probably cost less than $30 to $50 to make—affordable for all who need it and fairly priced for the system as a whole.

    For example, some middle-income families who don’t qualify for the assistance but who have high-deductible health plans or steep co-pays would still be stuck with a sizable out-of-pocket expense for generic EpiPen at $300.

    For the rest of us, EpiPen’s still-too-high price gets built into the cost of insurance, both public and private—along with the rising tab for all prescription drugs.

    As such, EpiPen’s unjustified price hike is the latest reminder that drug pricing needs major reform. We allow drug companies to take advantage of their monopoly power to gouge consumers and undermine people’s health and financial security. And the FDA does not help matters when it is slow to allow competition, preserving drug company monopoly power.

    Here’s more from Just Care:

     

  • Should you care whether doctors take money from pharmaceutical and medical device companies?

    Should you care whether doctors take money from pharmaceutical and medical device companies?

    A recent Pro Publica report finds that doctors at for-profit and southern hospitals are more likely to take money from pharmaceutical companies and medical device companies. What does that mean about the hospitals at which these doctors work? And, why should you care?

    In prior Just Care posts based on earlier Pro Publica research, we’ve explained that some doctors take tens or even hundreds of thousands of dollars in money and gifts from pharmaceutical and medical device companies. You can learn about your doctors’ relationship with these industries here.  We’ve also explained that doctors who accept gifts from industry, even free lunches, are more likely to prescribe the products to which the gifts were linked.

    The question we should care about is whether the doctors who accept industry gifts and use these products are acting in the best interest of their patients. Or, are they conflicted, prescribing drugs and using products on their patients that are more expensive and deliver less value?

    Overall, two out of three doctors take money and gifts from the drug and device companies. In some states, an even higher proportion of doctors take money from these companies. In New Jersey, Pro Publica found that eight out of ten doctors took money and gifts from these companies. And, in Louisiana, Mississippi, Florida, South Carolina and Alabama, more than three out of four doctors accepted drug and device company money and gifts.

    The rate of acceptance appears to turn in part on whether states have had policies in place requiring public disclosure of gifts, policies that predate federal disclosure requirements. In some hospitals, three of ten doctors or fewer accept fees and perks from the drug and device industries. Vermont has the lowest rate, at fewer than one in five doctors.  In Minnesota, three of ten doctors accept fees. And in Maine and Massachusetts, fewer than half do.

    Not surprisingly, hospitals that have rules banning drug and device company reps from meeting with doctors in their hospitals to promote a drug or device have the lowest rates of gift acceptances by doctors. Kaiser Permanente has such a ban. Since 2014, Kaiser staff may not accept anything of value from industry. “Our intent was to disrupt the strategy of using what industry calls ‘food, friendship and flattery’ to develop relationships with prescribers and influence the choice of drugs, the choice of devices, implants, things like that,” said Dr. Sharon Levine, an executive vice president of the Permanente Federation.

    Pro Publica also found some instances in which a small proportion of hospital doctors took money or gifts but that those doctors accepted large gifts.

    There is no consensus as to when it is appropriate for doctors to take money or gifts and, if it is, how much is too much. And, we don’t understand the degree to which these gifts are driving up health care costs or hurting patients. Based on the amount of money the pharmaceutical and medical device companies invest in building and maintaining these relationships, we can be sure it’s helping their bottom lines.

    Here’s more from Just Care:

  • When do drug companies create value?

    When do drug companies create value?

    In a recent Health Affairs article, Uwe Reinhardt explains that health care companies, including drug companies, can create value for both their shareholders and society, or they can simply create value for their shareholders.  Many drug company price hikes create no social value. So, when do drug companies create value for the public?

    When pharmaceutical companies raise their prices, forcing people who need their drugs to pay more, they create no value for the public. Higher drug prices benefit their investors, but they add no value to society. Rather than creating social value, in these cases drug companies simply “value shift.”

    When drug companies create a new drug people need, they may create value for the public. Social value could be calculated as the sum of the prices that different people are willing to pay for the drug. When there is new demand for the drug, it could be argued that the piece of social value the drug company generates in sales revenue is the research and development and production costs plus some profit margin that leads the drug company to innovate.

    But, at some point that profit margin may be so large as to create at best little value for the public. That’s why the public is asking for drug price transparency. We want to understand pharmaceutical company costs better. Many Americans already want prices to come down significantly. Many more people would support lower drug prices if they knew that the drug companies were earning way more profit than needed to incent them to innovate.

    In contrast, drug companies believe that drug prices should simply reflect whatever prices society is willing to pay for them. They do not believe that drug prices need be correlated with the cost of their development and production.  As a result, “value pricing” of drugs may lead patients with costly care needs and their insurers to spend extraordinary sums for them. These purchasers naturally value drugs that extend people’s lives and improve their health enormously.

    But, Americans do not accept value pricing when it comes to drugs. If we did, we would not have seen the outrage stemming from Valeant and Turing raising drug prices enormously.  Indeed, negotiated drug prices would not be a top public priority.

    These drug price hikes are happening throughout the drug market, for drugs that have been available many years and even for some off-patent drugs. In these cases, it’s fair to say the pharmaceutical companies are destroying social value.

    We know that most drug spending is not for research and development; these costs are on average below 20 percent,  Drug companies spend a much heftier percentage of their revenue on marketing. Indeed, the TV industry now generates its primary ad revenue from the drug industry.

    Drug company mergers are another way the drug industry drives up prices. These mergers reduce competition, giving the new company the ability to raise prices further. Again, this represents value shifting. You can read about the effects of health insurance company mergers on Just Care here.

    So what about free enterprise and the drug companies’ right to raise prices however much they like? Here, the truth is that the only reason drug companies can charge such high prices are that government policies permit them to. As Reinhardt explains. “In a very real sense, their industry is partly a creature of government, which protects the industry’s economic turf through patents, market exclusivity, data exclusivity, prohibition of resale of drugs among customers and of parallel imports, and so on. These many protections are provided for defensible reasons. But they inevitably and legitimately invite political considerations into the protected firms’ drug pricing policies.”

    It is due time Congress put a stop to affording the drug industry all these protections and effectively wasting taxpayer dollars to fuel their profits.

    Here’s more from Just Care:

  • Drug industry spending tens of millions to keep states from lowering drug prices

    Drug industry spending tens of millions to keep states from lowering drug prices

    The drug industry is on the defensive. The federal government may be doing precious little to bring down prices, but some states are on the offensive. And, according to Stat News, the drug industry is spending tens of millions to keep states from lowering drug prices.

    However, just last month, Vermont passed a law that requires drug companies to justify price increases. In California, the Senate has passed a similar requirement and there’s an upcoming ballot measure that would limit the price of some drugs. Ohio has a similar upcoming ballot measure.

    Pharmaceutical companies are responding by giving tens of millions to opponents of the ballot measures, which were initiated by the AIDS Healthcare Foundation.  Merck and Pfizer, among others, have given some $68 million to fight the California ballot measure alone.

    At the same time, they continue to raise drug prices ever higher. Why not so long as they can? The average price of brand name drugs rose 14 percent last year, according to the market research firm Truveris. We are now paying three times more than people in the United Kingdom for the top 20-selling drugs in the world.

    Pfizer has raised its drug prices almost 9 percent recently. And, six months ago it had raised its drug prices 10 percent. Johnson & Johnson upped its price for rheumatoid arthritis drugs 30 percent in the last 18 months. Amgen did the same. Biogen’s multiple sclerosis drug now costs 18 percent more.

    The pharmaceutical companies are continuing to blame insurers for high drug prices. But, so long as they charge a lot for unique brand-name drugs, insurers have no choice but to raise premiums, deductibles and/or copays.

    Brand name prices will remain high until there are generic substitutes. And, unfortunately, there is a long list of generic drugs waiting for approval by the FDA.

    Here’s more from Just Care:

  • Drug charity programs help drug company profits

    Drug charity programs help drug company profits

    As drug prices continue to escalate way faster than inflation, an increasing number of people are hard-pressed to pay for their medications–even when they have insurance. Insurers keep premiums down by shifting an ever-larger amount of the cost of drugs to the people who use them through higher copays. A new Bloomberg Businessweek story shows how drug charity programs, which cover these copays for people with low incomes, help drug company profits.

    In short, pharmaceutical companies only make money off their high-priced drugs if people buy them. When insurance copays are exorbitant, people don’t buy them. So, to boost sales, drug companies donate to drug charity programs to ensure people can afford their drug copays.

    Put differently, drug companies can invest in charities in order to improve profits. In 2014, they contributed over a billion dollars to the seven biggest charities that cover copays for people with Medicare. Turing Pharmaceuticals increased the price of Daraprim by a factor of 50 and then donated $1 million to Patient Services Inc. to offset the cost of the drug’s copay for patients who could not afford it.

    Here more from Just Care:

  • Doctors influenced by drug company money

    Doctors influenced by drug company money

    Behavioral psychologists will tell you that none of us are immune from influence both explicit and subtle. Notwithstanding, we’d like to believe that we are free agents. A recent Pro Publica analysis finds evidence to suggest that doctors are influenced by drug company money and gifts.

    Not surprisingly, the drug and device companies spend billions on doctors and hospitals. The Centers for Medicare and Medicaid Services has a database that tracks these dollars by doctor and hospital. In 2014 alone, CMS data reveals that drug and medical device companies spent $6.5 billion on doctors and hospitals.

    Pro Publica found that doctors who take money or gifts from the drug and medical device companies tend to prescribe more brand-name drugs than those who do not–two to three times more.  Pro Publica further found that the more money the doctors take, the more brand-name prescription drugs they prescribe, notwithstanding the availability of lower-cost generic alternatives.

    For example, internists who do not take drug or device money prescribe brand-name prescription drugs 20 percent of the time. Internists who take $5,000 or more prescribe brand-name drugs 30 percent of the time–50 percent more often!

    Pro Publica could not show that doctors who took money from a particular company prescribed more of that company’s drugs.

    Pro Publica
    Pro Publica

    Here’s more from Just Care on drug companies and prescription drugs:

  • Penalties on drug companies for fraud shrinking

    Penalties on drug companies for fraud shrinking

    A new Public Citizen report, 25 Years of Pharmaceutical Industry Criminal and Civil Penalties, 1991-2015, reveals that over the last 25 years government has been reducing the penalties it imposes on drug companies for fraud, from billions in fines to what appears like a spanking.  All told, financial penalties comprise only five percent of drug company profits, seemingly making the penalties worth the crimes.

    Between 1991 and 2015, the penalties on 373 settlements totaled $35.7 billion. One in eight of the settlements, around 45 of them, were for criminal activities.  Almost no senior executive went to jail for any of these violations. And, the government has never kept drug companies from participating in Medicare and Medicaid or required drug companies to reduce drug prices for these programs, as a penalty for the fraud.

    Profits for the top eleven drug companies totaled $711 billion over the ten years between 2002 and 2015.  Public Citizen argues that so long as drug companies continue to profit handsomely from their crimes and misdemeanors, we can be sure they will persist.  And, they are costing taxpayers and people with Medicare billions of dollars.

    Of the drug company violations, the most frequent violation has been overcharging Medicare and Medicaid. Off-label marketing is the violation for which the drug companies have paid the steepest fines. Pfizer, Johnson and Johnson, Novartis and GlaxoSmithKline have been among the biggest violators.

    Public Citizen found that the total number of fraud violations has not decreased significantly in the last three and a half years. But, the federal civil penalties for unlawful promotion of off-label drugs has shrunk by 90 percent.

    Criminal penalties dropped even more significantly in the last two years.  In 2012 and 2013, criminal penalties totaled $2.7 billion.  On 2014 and 2015, they totaled $44 million, only 2 percent of the penalties from the two prior years.

    What explains this drop in penalties?  Public Citizen has no answer but thinks perhaps that the U.S. Department of Justice is focusing on other industries. It recommends that government act to deter drug company frauds through far stiffer penalties.

    Here’s more from Just Care on drug companies and drug policy: