Pres­sure mounts for mea­sures to con­trol drug prices

Modern Healthcare - - NEWS - By Sabriya Rice

The phar­ma­ceu­ti­cal in­dus­try is fac­ing grow­ing push­back on high pre­scrip­tion drug costs.

Last week, more than 100 can­cer spe­cial­ists from across the coun­try pub­lished a let­ter urg­ing more ag­gres­sive fed­eral steps to ad­dress soar­ing drug prices, which they said harm pa­tients. They noted that can­cer pa­tients who re­ceive life-pro­long­ing drugs of­ten face bills that are sev­eral times greater than their an­nual fam­ily in­come.

They urged al­low­ing the Pa­tient-Cen­tered Out­comes Re­search In­sti­tute to in­clude drug pric­ing in its assess­ments of a treat­ment’s value, and let­ting Medi­care ne­go­ti­ate lower drug prices.

In ad­di­tion, the can­cer spe­cial­ists rec­om­mended cre­at­ing a mech­a­nism to re­view fair pric­ing for drugs ap­proved by the Food and Drug Ad­min­is­tra­tion.

Fed­eral law pro­hibits the CMS from ne­go­ti­at­ing drug prices for Medi­care, and gen­er­ally bars HHS from con­sid­er­ing cost in Medi­care cov­er­age de­ci­sions. Ef­forts sev­eral years ago to al­low con­sid­er­a­tion of cost in com­par­a­tive-ef­fec­tive­ness re­search prompted a con­ser­va­tive firestorm over al­leged “death pan­els.”

But a grow­ing num­ber of pol­i­cy­mak­ers and healthcare in­dus­try groups are press­ing for ac­tion to re­duce drug prices, and public opin­ion polls show strong sup­port.

Also last week, the In­sti­tute for Clin­i­cal and Eco­nomic Re­view (ICER) an­nounced it would be­gin re­leas­ing re­ports com­par­ing clin­i­cal ef­fec­tive­ness and prices of drugs, as well as an­a­lyz­ing their po­ten­tial im­pact on the U.S. healthcare sys­tem and econ­omy.

The not- for- profit or­ga­ni­za­tion will set a value-based bench­mark for pric­ing. The pro­ject is funded by a new $5.2 mil­lion grant from the Laura and John Arnold Foun­da­tion.

“What we’re try­ing to do is cre­ate a trans­par­ent way to look at the re­la­tion­ship of the price with the value the drug brings to pa­tients,” ICER Pres­i­dent Dr. Steven Pear­son said. “Drug prices have been trend­ing up­ward quite dra­mat­i­cally in re­cent years. But the idea that in­sur­ers are just go­ing to cover any new drug, at any price, whether or not there is ben­e­fit, is over.”

In a third de­vel­op­ment last week, a white pa­per pub­lished by ad­vo­cacy group Public Citizen and Car­leton Univer­sity found that the CMS could save up to $16 bil­lion a year if it ne­go­ti­ated prices with drug­mak­ers for the Part D pro­gram and wran­gled the same prices paid by Med­i­caid or the Vet­er­ans Health Ad­min­is­tra­tion. The au­thors said U.S. costs per capita for drugs are $1,010, more than twice as much as in other ad­vanced coun­tries that be­long to the Or­ga­ni­za­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment (OECD).

“The good news is that ef­fec­tive new can­cer ther­a­pies are be­ing de­vel­oped by phar­ma­ceu­ti­cal and biotech­nol­ogy com­pa­nies,” ac­cord­ing to the let­ter signed by more than 100 can­cer spe­cial­ists and posted online in the Mayo Clinic Pro­ceed­ings. But “the cur­rent pric­ing sys­tem is un­sus­tain­able and not af­ford­able for many pa­tients.” The cost of a newly ap­proved ther­apy av­er­ages $10,000 a month, with some ex­ceed­ing $30,000 a month, ac­cord­ing to es­ti­mates. The num­ber of Amer­i­cans tak­ing at least $100,000 worth of pre­scrip­tion drugs an­nu­ally tripled from 2013 to 2014, a re­cent re­port found.

The can­cer spe­cial­ists’ let­ter sug­gested that the CMS be al­lowed to ne­go­ti­ate drug prices for Medi­care as a whole. Although the agency can­not ne­go­ti­ate prices with phar­ma­ceu­ti­cal com­pa­nies, pri­vate Part D drug plans, Medi­care Ad­van­tage plans, state Med­i­caid pro­grams and the VHA are al­lowed to ne­go­ti­ate.

The Public Citizen’s white pa­per re­ported that Part D plans pay on av­er­age 73% more than Med­i­caid and 80% more than the VHA for brand-name drugs. It also said Part D plans pay nearly twice the me­dian amount paid for brand-name drugs in the 31 OECD na­tions, most of which have sys­tems for ne­go­ti­at­ing drug prices.

The phar­ma­ceu­ti­cal in­dus­try and many Repub­li­cans ve­he­mently op­pose al­low­ing the CMS to ne­go­ti­ate drug prices.

The first ICER eval­u­a­tions will fo­cus on PCSK9 in­hibitors for choles­terol and a new No­var­tis heart fail­ure drug called En­tresto.

Pear­son said the U.S. needs an in­de­pen­dent, ob­jec­tive source to look at the ev­i­dence on clin­i­cal ef­fec­tive­ness and then fo­cus on the in­cre­men­tal costs down­stream.

Dr. Peter Bach, di­rec­tor of the Cen­ter for Health Pol­icy and Out­comes at the Me­mo­rial Sloan Ket­ter­ing Can­cer Cen­ter in New York City, said he agreed that an in­de­pen­dent body is needed to ob­jec­tively eval­u­ate the ev­i­dence on clin­i­cal ef­fec­tive­ness.

In mid-June he launched a web­site called Dru­gAba­cus as a roadmap for com­par­ing par­tic­u­lar drugs’ po­ten­tial harms with the qual­ity-of-life years they pro­vide, and to use this cal­cu­lus to come up with ap­pro­pri­ate pric­ing for the drug.

“Right now, pa­tients don’t have any fair bound­aries for ab­so­lutely vi­tal health de­ci­sions,” he said. “It’s to­tally un­rea­son­able and un­fair.”

“Drug been trend­ing prices have up­ward quite dra­mat­i­cally in re­cent years. But the idea that in­sur­ers are just go­ing to cover any new drug, at any price, whether or not there is ben­e­fit, is over.”

Dr. Steven Pear­son Pres­i­dent ICER

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