“Kabuki drug-pricing constructs.” Is there pharma, insurance company, pharmacy benefit manager “collusion” on drug pricing?

“HHS Secretary Alex Azar today testified before the Senate’s Committee on Health, Education, Labor, and Pensions (HELP) on the Trump administration’s blueprint to lower drug prices.
Among the administration’s top priorities, said Azar, was creating incentives for drug makers to lower list prices for drugs. “Everybody wins when list prices rise,” he said, “except for the patient.”
Azar said that the administration’s proposal to require disclosure of list prices in direct-to-consumer advertising would be one way to achieve this goal, and he explained that HHS believes that it currently has the authority to require this change to advertising through regulation, although he would welcome congressional action to reinforce its authority in this area.
He added that another approach would include moving away from a system that permits manufacturers’ rebates and toward fixed-price contracts or value-based contracts. Azar highlighted the fact that, concurrently with his testimony, the FDA issued new guidance for industry that clarifies how drug companies can share information with payers about drugs’ effectiveness and other measures of value that can help payers to make their formulary and reimbursement decisions.
Other key concerns for the administration, said Azar, are allowing for negotiation under Medicare Part B by merging Part B with Part D, creating more competition within the pharmaceutical marketplace by publishing names of companies that restrict access to samples of drugs for generic testing and issuing new guidance on Risk Evaluation and Mitigation Strategy requirements, and bringing down out-of-pocket costs by disallowing the use of so-called “gag clauses” that prohibit pharmacists from counseling patients on the lowest-price options for their prescribed drugs.” (JJ)

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HOW HAS THIS POLICY ISSUE EVOLVED? to get a better understanding keep on reading the following “collage”
And look for future updates as this case develops.
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“Insurance companies may be asking people to shell out more money for drug co-payments than the drugs actually cost, a new study suggests.
Generic drug co-payments in the U.S. exceeded the cost of medicines about 28 percent of the time – or for more than one in four prescriptions, researchers found…
Twelve of the 20 most commonly prescribed drugs involved overpayment rates above 33 percent…
To avoid overpayments, patients should always ask the pharmacist if their costs would be lower if they paid cash instead of using their insurance, ..
“Pharmacists might not be allowed to offer this information to patients due to `gag clauses’ but if patients ask, pharmacists can tell them,”” (A)

“When the patent on a brand-name drug expires, and one or more generic versions enter the market, you’d expect consumers to pay less for the generic. That isn’t necessarily the case, thanks to the middlemen known as pharmacy benefit managers.
In a speech last week, FDA Commissioner Scott Gottlieb took aim at these previously little-known but influential players in the health care system. He accused them of colluding with drug makers and insurers to develop “Kabuki drug-pricing constructs.” Gottlieb focused particularly on how such deals affect the generic market.
Once upon a time, drugs were made in manufacturing plants, bought by distributors, and delivered to retail and mail-order pharmacies, which sold the drugs to patients. The cost of drugs were financed through payments covered by insurance companies and patient copays. Today, insurance companies tend to outsource the drug benefit to pharmacy benefit managers. At first, these companies processed drug prescriptions for insurers and helped negotiate lower prices, saving money for insurers and employers…
PBMs use their size to negotiate drug prices with manufacturers, passing on a certain percentage of any rebates downstream to the insurance company and keeping rest of the spread for themselves…(B)

“The prices of some of the most popular brand-name drugs have increased by 12% on average each year from 2012 to 2017, based on Medicare Part D data, according to a report released by Sen. Claire McCaskill, D-Mo. That’s 10 times greater than the rate of inflation during that same period.
Though the number of these prescriptions decreased by 48 million in that window, profits increased by $8.5 billion. Twelve of the 20 medications included in McCaskill’s report saw prices increase by 50% between 2012 and 2017. For six drugs, prices increased by more than 100% during that period…
“Can you imagine if you went to an auto dealership and last year’s exact model was being sold at a 20% markup, and then you went back the next year and it had happened again?” McCaskill said in a statement. “That’s exactly what’s happening in the prescription drug industry, where the cost of identical drugs skyrockets year after year.” “ (C)

“President Trump announced his long-awaited proposal for tackling high drug costs in a speech at the Rose Garden Friday afternoon…
President Trump spared no sector of the drug distribution chain Friday in announcing his administration’s plan to lower prescription drug prices.
“Everyone is involved in this broken system — the drugmakers, insurance companies, distributors, and pharmacy benefit managers (PBMs) and many others contribute to the problem,” Trump said during an address in the sun-filled White House Rose Garden.
“The government is also partly responsible,” Trump added. “Previous leaders have turned a blind eye to this incredible abuse, but under this administration, we’re putting American patients first.”..
He also singled out Big Pharma for special criticism, noting that drug companies spent $280 million on lobbying last year, “more than tobacco, oil, and defense contractors combined.” (D)

“President Trump’s plan, dubbed “American Patients First,” seeks to increase competition, improve negotiation and create incentives to lower list prices of prescription drugs and out-of-pocket costs for consumers.
Here are six key proposals outlined in President Trump’s plan, as outlined by The New York Times.
1. Persuade other countries to pay more for prescription drugs. 2. Try to lower drug prices for Medicare.
3. Include more regulations on drug ads. 4. Ban “gag clauses” for pharmacists. 5. Rein in patent “games”
6. Fix the current rebate system.
Many of these proposals would need congressional action to move forward.” (E)

“President Trump vowed on Friday to “bring soaring drug prices back down to earth” by promoting competition among pharmaceutical companies, and he suggested that the government could require drugmakers to disclose prices in their ubiquitous television advertising.
But he dropped the popular and populist proposals of his presidential campaign, opting not to have the federal government directly negotiate lower drug prices for Medicare. And he chose not to allow American consumers to import low-cost medicines from abroad.
He would instead give private entities more tools to negotiate better deals on behalf of consumers, insurers and employers…
Mr. Trump and other Republicans are eager to show an achievement on health care this year to counter arguments by Democrats who say that Americans are losing coverage because of Mr. Trump’s efforts to sabotage the Affordable Care Act. Soaring pharmaceutical prices are directly hitting consumer wallets, and high-profile cases — like the sudden jump in the price of EpiPens or the jailing of the hedge fund manager Martin Shkreli, who greatly increased the price of a drug under his control — have turned pharmaceuticals into a hot political topic.
Republicans in Congress welcomed the president’s attention to high drug prices and promised to review his proposals, which Mr. Trump said would “derail the gravy train for special interests.”
Democrats embraced the opportunity to push health care back to the center of the political debate.” (F)

“One big idea not included in the blueprint is a call for the federal government to have Medicare negotiate drug prices. “We’re not calling for Medicare negotiation in the way that Democrats have called for,” one of the senior officials told reporters Thursday night.
Democrats blasted the speech, saying that Trump is turning his back on his campaign promise to stop the pharmaceutical industry from “getting away with murder.”
“The President spent last year pressing Congress to pass a massive tax cut — which gives away billions of dollars to drug companies and their executives who are already rich — but this year the President is apparently abandoning his campaign promise to authorize Medicare to negotiate directly with drug companies to lower prices,” House Committee on Oversight and Government Reform Ranking Member Elijah Cummings said in a statement Friday.
The pharmaceutical industry has spent heavily this year on lobbying the federal government, perhaps with Trump’s twice-delayed drug pricing plan in mind. According to a database maintained by the Center for Responsive Politics, spending by industry on lobbying this year totaled $84.8 million through April 24.” (G)

“The industry is now having the last laugh. In a speech Friday on drug pricing, President Trump completed his 180-degree turn on Candidate Trump’s promises. The White House’s new plan, as outlined, does seek to address high prescription-drug costs. “We will not rest until this job of unfair pricing is a total victory,” Trump said. But it doesn’t directly challenge the pharmaceutical industry and the direct role it plays in setting prices. Indeed, the new policy largely meets the goals of big pharma, signaling an ever-tightening bond between Trump and drug manufacturers…
Trump also seemed to take aim at a longtime industry foe in his speech: pharmacy benefits managers, or PBMs. PBMs function as industry middlemen, administering the prescription-drug programs for large insurance programs covering the majority of Americans. These companies handle negotiations between insurers and drug manufacturers on drug prices, including managing rebates from manufacturers that are designed to entice insurers into accepting certain medications on their plans. Drug manufacturers argue that PBMs have wrangled too-high rebates that they keep to themselves instead of passing on to consumers.
In its policy document, the White House vaguely committed to “requiring Pharmacy Benefit Managers to act in the best interests of patients.” Trump was much more forceful in his remarks. “We’re very much eliminating the middlemen,” Trump said, apparently referring to PBMs. “The middlemen became very, very rich.” (H)

“The commissioner of the Food and Drug Administration, Scott Gottlieb, on Thursday suggested that a key federal law on kickbacks could be reinterpreted by the government to help rein in the prices of prescription drugs.
Drug companies are currently being sued by lawyers who believe that the Byzantine system of rebates that flow between pharmacy benefit managers, drug manufactures, and insurers are really kickbacks. The current interpretation of the federal law shields these rebates from legal scrutiny.
But Gottlieb, in remarks delivered at the annual conference of the Food and Drug Law Institute, signaled that might change…
The pharmaceutical industry has engaged in a massive lobbying campaign to shift the blame for high drug prices from the manufacturers, who set the list prices, to pharmacy benefit managers and insurers, who help determine how the products are paid for through a system of rebates. It’s an issue that has also vexed lawmakers, who are questioning the “black box” of drug pricing.” (I)

“Dr. Scott Gottlieb, the commissioner of the Food and Drug Administration, recently vowed to bring “new science” to market faster, in hopes that patients benefit from treatment advances sooner…
On its face, this shift seems practical. The nature of pharmaceuticals has changed. Instead of developing broad-spectrum medicines that work for the masses, drugmakers are pursuing personalized therapies that work for — and thus only need to be tested in — much smaller populations whose conditions share the same genetic profiles. That can make large clinical trials seem wasteful.
But, if we’re not careful, the changes now underway may do more harm than good. It’s easy to argue that red tape is bad, especially when lives are at stake. But regulations were created for a reason, and history is rife with examples of what happens when we don’t have them.
Drug approval has become so lax and relatively inexpensive, one recent study suggested that companies could theoretically test compounds they know to be ineffective with the hope of getting a false positive result that would enable them to market a worthless medicine at an enormous profit…
Dr. Gottlieb and others say that patients facing long odds and potentially fatal diseases don’t have time to wait for more clinical trials. That’s a fair point. Reasonable people can disagree over where the fulcrum between speed and evidence should be placed. But a new drug is only innovative if lives are extended or improved, and we can’t know if they will be without more data.” (J)

U.S. Food and Drug Administration chief, Scott Gottlieb, criticized pharmacy benefit managers, health insurers and drugmakers on Wednesday for “Kabuki drug-pricing constructs” that profit the industry at the expense of consumers…
“Patients shouldn’t face exorbitant out-of-pocket costs, and pay money where the primary purpose is to help subsidize rebates paid to a long list of supply chain intermediaries,” Gottlieb said at the meeting of America’s Health Insurance Plans (AHIP). “Sick people aren’t supposed to be subsidizing the healthy.”..
He criticized the health industry for failing to promote access to so-called biosimilar versions of drugs, and for pricing practices that harm consumers.
Biosimilars are copies of original drugs that are supposed to be as effective but cheaper. Kabuki is a form of Japanese theater characterized by dramatization and elaborate costumes.
Gottlieb said practices in the healthcare industry “obscure profit taking across the supply chain that drives up costs” and discourage competition.” (K)

“ “It looks like retail list price increases were flat last year. Is that because of President Trump’s tweets?” one Health and Human Services Department official asked at a briefing last month.
“There’s some reality to that. Manufacturers heard they were in the crosshairs, and a number of them came out and said they weren’t going to take their prices up above double digits,” a second HHS official responded.
Such an explanation would be a political boon for the Trump administration. But it is also, according to experts, likely untrue.
It’s true that spending on prescription drugs has slowed. Spending last year grew by just 0.6 percent after accounting for rebates and discounts, the slowest rate of growth since 2012. Net prices for brand drugs grew by just 1.9 percent, after taking into account rebates, discounts and other factors.
But experts argue that the slowdown has been driven by a series of factors unconnected to the White House. There have been relatively few (expensive) blockbuster drugs released over the past year. Fewer people are using some of the blockbuster drugs of years past. Pharmacy benefit managers continue to negotiate rebates to help bring down the prices people actually pay at the pharmacy counter. And generic prices are decreasing, too…,
Experts cast doubts, too, on the idea that mere rhetoric — like the kind likely to fill Trump’s coming speech on drug pricing issues next week — could ever have a meaningful impact on the prices patients face at the pharmacy counter.” (L)

“A drug-price sea change isn’t going to happen overnight, confirmed Health and Human Services (HHS) Secretary Alex Azar. “It will take time to reorder an entire complex multibillion-dollar system,” he says. Azar was formerly the president of Eli Lilly’s U.S. operations — the company is ranked 12th in revenues.
Azar cited “four major challenges”: • high list prices for drugs; • seniors and government programs overpaying for drugs due to lack of the latest negotiation toolsl; • high and rising out-of pocket costs for consumers; • and foreign governments free-riding off of American investment in innovation
The plan sets two basic types of reform: changes by the administration and changes by Congress.
At USA Today, Andy Slavitt labeled the plan a “huge relief for drug companies. There were no calls for negotiation or drug re-importation.” That means they escaped basically unscathed, and there is still no ability to negotiate drug prices by Medicare, payers, and other pharmacy benefits management programs which protects profits and hurts consumers, he says.
Call it as it is: Medicare is forbidden to negotiate drug prices. Other countries’ national health services can bargain drug prices to under half the amount paid by Medicare here: Australia and the United Kingdom are just two.” (M)

“When President Trump unveiled his plan to lower prescription drug prices in a Rose Garden speech last month, he said he would inject more competition into the market by bolstering negotiating powers under Medicare. But experts analyzing the plan warn of a possible side effect: The proposal could significantly increase out-of-pocket costs for some of the sickest people on Medicare.
At the heart of the president’s plan is a proposal to switch some expensive drugs from one part of Medicare to another part — moving them from Part B, the medical benefit created in the original 1965 Medicare law, to Part D, the outpatient drug benefit added by Congress in 2003.
Under Part D, the government contracts with private health insurance companies to manage the benefit and negotiate discounts with drugmakers. There is no such negotiation for the drugs covered by Part B, which are administered by infusion or injection in doctors’ offices or hospital outpatient departments.
But Medicare beneficiaries typically pay a larger share of the costs for Part D drugs. Many beneficiaries have supplemental insurance, such as a Medigap policy, to help pay their share of the bill for drugs covered under Part B. Medigap policies are not allowed to cover Part D expenses.
AARP, the lobby for older Americans, and advocates for cancer patients are already expressing concerns. The problems are not inevitable, they say, but will be difficult to solve.
“People may see a lot higher out-of-pocket costs if a drug moves from Part B to Part D,” said David M. Certner, the legislative policy director of AARP.” (N)

“Medicare recipients filled fewer prescriptions for pricey brand-name drugs — but spent more on such meds anyway, says a government report due out Monday. It blames rising manufacturer prices for squeezing older people and taxpayers.
The Health and Human Services inspector general’s office says it found a 17 percent drop in the overall number of prescriptions for brand-name medications under Medicare’s “Part D” drug program over a recent five-year period.
But beneficiaries’ share of costs for branded drugs went in the opposite direction. From 2011 to 2015, their annual costs rose by 40 percent, from $161 in 2011 to $225 on average. Data for 2011-2015 were the most recent available for the analysis.
“Increases in unit prices for brand-name drugs resulted in Medicare and its beneficiaries paying more for these drugs,” said the report. Rising Medicare payments for brand-name drugs “will continue to affect Part D and its beneficiaries for years to come.” (O)

“As part of President Donald Trump’s promise to curb high drug prices, the FDA posted a list of pharmaceutical companies that makers of generics allege refused to let them buy the drug samples needed to develop their products. For approval, the FDA requires so-called bioequivalence testing using samples to demonstrate that generics are the same as their branded counterparts.
The analysis shows that drug companies that may have engaged in what FDA Commissioner Scott Gottlieb, MD, called “shenanigans” to delay the entrance of cheaper competitors onto the market have indeed raised prices and cost taxpayers more money over time.
The FDA listed more than 50 drugs whose manufacturers have withheld or refused to sell samples, and cited 164 inquiries for help obtaining them. Thirteen of these pleas from makers of generics pertained to Celgene’s blockbuster cancer drug Revlimid, which accounted for 63% of Celgene’s revenue in the first quarter of 2018, according to a company press release.
Kymriah, a cancer drug that grew out of research conducted and supported by the National Institutes of Health, costs $475,000 for a one-time treatment.Novartis Pharmaceuticals Corporation” (P)

“On Aug. 30, the Food and Drug Administration approved a radical new cancer treatment that harnesses a patient’s immune system to attack tumor cells. The drug, known as Kymriah, grew out of research conducted and supported by the National Institutes of Health.
Seven weeks later the F.D.A. approved a second cancer therapy that uses similar technology. This treatment, Yescarta, “got its start right here at N.I.H.,” said Dr. Francis S. Collins, the director of the health institutes. It was developed by Kite Pharma using technology licensed from the N.I.H.
Kymriah costs $475,000 for a one-time treatment, and Yescarta goes for $373,000.
As President Trump vows to lower prescription drug prices, consumer advocates and health policy experts are increasingly saying that the government should insist on reasonable prices for drugs developed with taxpayer funds. New pharmaceuticals can seem miraculous — Kymriah and Yescarta are made from souped-up versions of a patient’s own immune cells — but they are useless if unaffordable, patient advocates say…
“We have an incredibly powerful, incredibly productive research and development program being run by N.I.H.,” Ameet Sarpatwari, an instructor at Harvard Medical School, said. “Taxpayers put in money that is paying big dividends, and yet we pay higher prices for prescription drugs than any other country. In effect, we have taxpayers paying twice.”
Officials at the health institutes say that nearly every new drug has some basis in research funded by their agency. But they oppose any stipulations that would limit or regulate the prices of drugs developed with the fruits of federal research.
Some in Congress disagree. Senator Ron Wyden, Democrat of Oregon, has been saying for years that federal health officials should focus on the affordability of drugs developed with the help of federal funds.” (Q)

“The Trump administration is shaming brand-name drugmakers who refuse to sell samples so generics can be made from their products. (Illustration created using Getty Images)
Makers of brand-name drugs called out by the Trump administration for potentially stalling generic competition have hiked their prices by double-digit percentages since 2012 and cost Medicare and Medicaid nearly $12 billion in 2016, a Kaiser Health News analysis has found.
As part of President Donald Trump’s promise to curb high drug prices, the Food and Drug Administration posted a list of pharmaceutical companies that makers of generics allege refused to let them buy the drug samples needed to develop their products. For approval, the FDA requires so-called bioequivalence testing using samples to demonstrate that generics are the same as their branded counterparts.”(R)

“President Trump’s plan to curb drug prices will allow Medicare to negotiate prices in a “more aggressive approach than has ever been tried before,” Health and Human Services Secretary Alex Azar said Monday.
And he can do much of it without Congress’ help, Azar said.
Azar, along with CMS Administrator Seema Verma and FDA Commissioner Scott Gottlieb, explained how they expect to execute the plan President Trump announced Friday aimed at curbing drug prices in the U.S.
And Azar said he intends to use his ability to regulate, modify programs, conduct demonstration programs and experiment through the Centers for Medicare and Medicaid Innovation.
“This pen has a lot of power at HHS,” Azar said, picking up a generic ballpoint pen that sat in front of him as he addressed a room of reporters. “And we intend to use the full scope of the power contained in this pen on any of these rather than sitting back and waiting for Congress.”
Here’s a look at what else he had to say about what his office can do with a pen.
Medicare negotiating power: “You’ve probably heard Medicare could save tons of money by directly negotiating drug prices. This just isn’t true,” Azar said, pointing to Congressional Budget Office estimates which support his statement.
Instead, Azar said the administration will issue a request for proposal to make new use of an alternative system for buying Part B drugs called a Competitive Acquisition Program and has called for HHS to merge Medicare Part B into Medicare Part D, which does have a system for negotiating prices.” (S)

“There were high expectations for Trump after a campaign in which he accused drug companies of “getting away with murder” with their unchecked prices, and vowed to take them on. Americans are unified in how they want their government to respond; 92% say it should use its negotiating power to reduce drug prices for Medicare. Sensing a populist wave, in one of his most important and surprising campaign pledges, then-candidate Trump said he would “negotiate like crazy.” He even promised that his negotiating skills would save taxpayers $300 billion annually…
So far Trump hasn’t made a dent. Since he became president, the prices of over 2,500 drugs already on the market have increased by at least double digits. That was all supposed the change with Trump’s big speech Friday. But even as he vowed to press on to “total victory,” there was no trace of even a fraction of $300 billion in savings, or any immediate relief for consumers.
Instead, Trump’s speech and accompanying “American Patients First” blueprint turned out to be a huge relief for drug companies. There were no calls for negotiation (there was even a recommended boost for drug companies to get higher overseas prices) or drug re-importation — the two campaign promises that would have had the biggest impact on consumers.” (T)

“Plenty of attention has been paid to the link between payments from pharmaceutical companies and the drugs a doctor prescribes, including opioids.
But a new study shows something as simple as a meal may be making the difference in just how many opioids are getting prescribed.
Published this week in JAMA Internal Medicine, researchers said they found physicians who received lunches from drug companies prescribed 9% more opioids than doctors who didn’t.
The increase took place even as the overall rate of opioid prescriptions was falling, he said.” (U)

“Medicare already negotiates drug prices. There’s long been a myth out there that within the Medicare prescription drug program, also known as “Part D,” Medicare doesn’t negotiate drug prices. But Medicare does negotiate drug prices, and has done so since the program was created in 2003.
As the Congressional Budget Office put it in a 2014 report, “The competitive structure of Part D gives plan sponsors significant incentive to hold down spending…sponsors use three main approaches: They encourage the use of less-expensive brand-name drugs, they negotiate lower prices for brand-name drugs, and they encourage the use of generic drugs.” (Emphasis added.)
This negotiating process is why Part D spending has come in massively under budget, representing the most successful cost-control experiment in Medicare’s history.
When Medicare Part D was enacted in 2003, people on the left complained that it administered the program through private insurers and PBMs. They wanted Part D to be a government-run, single-payer program, and have long agitated for Part D to be changed in this way. That’s what people mean when they talk about Medicare directly negotiating drug prices. But the Congressional Budget Office has repeatedly evaluated this idea, and concluded that the effect would be “limited” and “modest,” because Part D plans already negotiate on Medicare’s behalf.” (V)

“The cost of prescription drugs can make an unaffordable Utah even tougher to live in. But the KSL Investigators found it pays to shop around to cut down high prescription drug costs if you’re paying cash rather than going through insurance.
It worked for one Utahn, who was quoted wildly different prices for the same medication…
When Olson’s health insurer denied the claim for the drug, he set out to pay cash at his local CVS Pharmacy. The price grounded him: $861.99 for a one month supply of pills.
“That was just a shocker,” said Olson. So he did something he’s never done before. He called another pharmacy. Costco quoted Olson a price of $37.07 for the exact same generic Provigil (Modafinil) CVS was charging $861.99 for. That one call saved him almost $825. That’s a 96 percent savings…
Consumer Reports price shopped recently too. It saved $131 on generic Plavix and $182 on generic Cymbalta. They price shopped five common medications and saved $862.
So what’s going on?… “There’s always a solution, you just want to find a pharmacy where the pharmacist or someone on the staff has time to take a few minutes and talk about the prices.”
We found other ways to cut down your prescription costs too. Ask if a different form of the drug is available that’s cheaper, like a capsule instead of a tablet, or a cream instead of a pill. And if you use insurance, ask if there’s a cheaper pharmacy you can order from. One of our colleagues saved nearly $60 on a common cholesterol drug by switching to a mail order pharmacy.” (W)

“FDA commissioner rattles healthcare industry with ‘warning shot’ over drug rebates. The healthcare industry is growing worried after the head of the FDA suggested that a federal law to prevent kickbacks should be used to rein in high drug prices. Wall Street analysts say FDA Commissioner Scott Gottlieb’s remarks signal that the administration could be more aggressive than it has been in taking on high drug prices and the drug rebate system. Gottlieb and Health and Human Services Secretary Alex Azar recently have been criticizing the rebate system used by insurers and drug middlemen, called pharmacy benefit managers, to negotiate for discounts to pharmaceuticals. The officials have said that consumers don’t receive enough of the discounts negotiated between payers and drugmakers. But Gottlieb surprised the healthcare industry Thursday during a speech before the Food, Drug and Law Institute in Washington. He said the federal government could re-examine if the rebates should no longer be exempt from a federal law that prohibits kickbacks…
Rick Weissenstein, an analyst with the Cowen Washington Research Group, wrote in a note Thursday. “Gottlieb is warning that if you don’t let the market work, you will be faced with more draconian solutions in the future.” (X)

“President Donald Trump.. ”said drug companies in the next two weeks will announce “massive drops in drug prices.” …… Trump said he would “take on one of the biggest obstacles to affordable medicines: the tangled web of special interests,” including drugmakers, insurers, distributors and pharmacy benefit managers.” (Y)

“Rebates are a key cog in the largely secretive pricing agreements ironed out between drugmakers and pharmacy benefit managers, the companies that manage prescriptions for insurers and large employers. Rebates have become more common in recent years, and some critics point to them as a factor behind soaring drug costs. Aetna and UnitedHealthcare say they want to make prescription drug pricing more transparent and simplify the process for customers.
Pharmaceutical companies offer rebates to benefits managers as a carrot to get their drugs included in formularies, or lists of covered drugs. These concessions are usually a percentage of the initial price set by the drugmaker, or the list price.
Pharmacy benefit managers typically pass rebates on to the insurers and large employers that hire them. Those clients often use the money to reduce their plan’s spending on drugs or the cost of coverage. Only 4 percent said they passed rebates directly to customers at the point of sale, or when they buy the drug, the Pharmacy Benefit Management Institute found in a 2017 report…
Aetna estimates that 3 million customers could receive rebates when it starts offering them next year, while UnitedHelathcare’s plan will initially apply to over 7 million people. Those are big numbers but small slices of the more than 67 million U.S. customers these companies cover in total.
In addition, CVS Health’s pharmacy benefits business offers point-of-sale rebates through plans that cover about 10 million of its 94 million customers…
Plus Trump has proposed giving rebates directly to Medicare prescription drug customers.” (Z)

“In the latest look at the financial ties between physicians and drug makers, a new analysis finds that oncologists who received payments for such activities as consulting or speaking were more likely to prescribe medicines sold by those companies.
Specifically, doctors who received either research funding or general payments — which included meals and travel expenses — were nearly twice as likely to prescribe a kidney cancer drug sold by a company that marketed the medicine. And the odds were 29 percent higher that doctors would prescribe a chronic myeloid leukemia sold by a company that provided such payments.” (AA)

“CVS Health will address this problem with a robust set of initiatives, including the new CVS Pharmacy Rx Savings Finder, which will enable the company’s retail pharmacists for the first time to evaluate quickly and seamlessly individual prescription savings opportunities right at the pharmacy counter.
The Rx Savings Finder will show pharmacy teams:
1. First, if the prescribed medication is on the patient’s formulary and is the lowest cost option available.
2. Second, if there are lower-cost options covered under the patient’s pharmacy benefit – such as a generic medication or therapeutic alternative with equivalent efficacy of treatment.
3. Third, if the patient may be able to save money by filling a 90-day prescription rather than a 30-day prescription.
4. Finally, if neither a generic nor a lower-cost alternative is available, other potential savings options for eligible or uninsured patients where allowed by applicable laws and regulation.
Pharmacists can also help patients enroll in the ExtraCare Loyalty Program and sign them up for Pharmacy and Health Rewards. Through Pharmacy and Health Rewards, patients receive $5 in ExtraBucks for every 10 prescriptions filled, earning up to $50 in ExtraBucks annually.” (BB)

“Two weeks after President Trump in May unveiled a plan to lower drug prices for Americans, promising “it will start to take effect very soon,” the drug company Bayer hiked the list prices of two cancer drugs by more than $1,000 per month.
Bayer wasn’t alone. A research note by Wells Fargo analyst David Maris found that although fewer drug-price increases occurred in May than in previous months, dozens of increases did occur.
“We believe drug pricing remains a risk for the pharmaceutical industry,” Maris wrote. “The President has highlighted lowering the cost of healthcare as a key objective and we do not expect the negative commentary around the cost of medicines will soon subside.”
Many of the price increases Maris tracked — particularly the double-digit-percentage increases — involved older, generic drugs. There were also price reductions on a slew of older medicines. But the 8 percent price increases that Bayer instituted are notable because the drugs, Stivarga and Nexavar, have already raised some concerns because of their cost. It is the second price increase for the two drugs in six months.
Stivarga, which is used for patients with colorectal, liver and gastrointestinal cancers, now carries a list price of about $16,860 per month. Nexavar, used in kidney, liver and thyroid cancers, carries a list price of about $18,670 per month. The prices for both drugs are now both 13 percent higher than they were during 2017.” (CC)

“The Food and Drug Administration will launch one of its first programs following the release of the Trump administration’s new drug price plan this week.
The agency will launch on Thursday a website that offers more details on the branded drugs generic drugmakers have trouble getting their hands on, said FDA Commissioner Scott Gottlieb, M.D. The website will retroactively include information on about 150 inquiries made about 50 brand-name medications and will be updated on ongoing basis in the future, he said.
Some drugs had several inquiries from generic drug manufacturers, while others may only have had one, he said.
The FDA head gave a look into the agency’s plans as part of the Trump administration’s overall strategy to lower drug prices at a briefing with reporters on Tuesday morning.
“Branded companies are on notice,” Gottlieb said.
It will also indicate which drugs require a Risk Evaluation and Mitigation Strategy (REMS) and which could make it harder for generic drug companies to acquire samples for development. The FDA will note if it sent an official letter to the brand-name drug company in the case, Gottlieb said.
Generic drug companies have long complained of impeded generic drug development by brand-name drug manufacturers who hinder access to samples. Increasing competition in the markets by encouraging generic drug and biosimilar development is a key element of the White House’s plan to lower drug prices, which was unveiled last Friday.” (DD)

“Pharmacy Benefit Managers arose simply because there was a lacuna in the healthcare market: put simply, nothing constrained the price of prescription drugs; Doctors would prescribe the drugs they thought necessary, pharmaceutical companies would charge whatever they wishes for drugs still on patent, and the insurance companies would foot the bill without any real recourse other than to raise their prices the following year.
Pharmacy Benefit Managers do two principal things: First, they negotiate prices for on-patent drugs. The high prices reported for new drugs are appropriately shocking, but those are not what insurance companies pay: they frequently negotiate a steep discount, which in turn allows insurance companies to keep premiums lower.
The second thing PBMs do is encourage competition in the drug market. They steer doctors to prescribe generic equivalents or other substitutes when available. For instance, while many activists decry the production of “me too” drugs that merely seek to duplicate existing drugs, rather than spending resources developing new drugs for other illnesses, such drugs allow PBMs to put pressure on the pharmaceutical company that makes the original drug to lower its prices.” (EE)

“If President Trump has his way, television viewers who see commercials for the drug Keytruda will learn not only that it can help lung cancer patients, but also that it carries a price tag of $13,500 a month, or $162,000 a year.
Viewers who see advertisements for Neulasta, a drug that reduces the risk of infections after chemotherapy, would learn that the list price for each injection is $6,200. And magazine readers would see a new bit of information in ads for Humira, the world’s best-selling drug, prescribed for rheumatoid arthritis and other autoimmune diseases: its list price, which has been widely reported as approximately $50,000 a year.
The disclosure of such data is perhaps the most eye-catching goal of Mr. Trump’s plan to lower drug prices. The president is determined to bring “price transparency” to the market in an effort to stimulate competition and overturn the current convoluted, opaque system in which everyone but the consumer benefits from higher prices, said Alex M. Azar II, the secretary of health and human services.” (FF)

“Doctors should get out of the business of making money off of providing prescription drugs to Medicare beneficiaries, Health and Human Services Secretary Alex Azar said Monday.
Currently, physicians who administer drugs paid for under Medicare Part B — which covers drugs administered in the physician’s office — pay for the drug themselves up front and then are reimbursed at the average sales price plus a 6% markup. This system “gets into the notion of physicians or facilities making money off the arbitrage between acquisition price and reimbursement,” Azar explained at a briefing with reporters following a speech he gave on President Trump’s plan to lower the cost of prescription drugs.
Instead, the administration is proposing a “competitive acquisition program” for Part B drugs. “The concept of the competitive acquisition program is not to have physicians take title to the medications they’re administering, but rather, have a competitive program where those drugs would be purchased and the capital outlay would occur elsewhere,” so the doctor doesn’t have to buy the drug “and the physician is paid … a fair, appropriate level of reimbursement for their services in administering the drug,” Azar said.” (GG)

“But don’t worry folks. Big Pharma has the solution. It’s called outcomes-based contracting. The basic idea — pay for this drug, and if it doesn’t work, you get your money back.
If you think this is a good deal, I have a bridge to sell you. But don’t take my word for it.
This study, appearing in the Annals of Internal Medicine, looks at the PCSK9 inhibitor evolocumab.
This is a novel lipid-lowering agent that comes in at a whopping $14,500 per year — the price the market will bear. Clinical trials show that this drug does save lives, at a cost of around $324,000 per quality-adjusted life year saved. Most health economists “value” a life-year at $100,000, so one could argue this drug costs more than three-fold what it is worth.
But Amgen, the maker of evolocumab, has a deal for you. If you have a heart attack or stroke within 5-years of starting the drug, you get your money back.
Sound good?
It’s not.
The Annals paper quantifies what you should feel in your gut. Strokes and heart attacks are rare – only about 3% per year in the high-risk group that would be receiving evolocumab. That means that 97% of people are paying full price.
This drug, which is three times more expensive than it should be based on a value-model, is now “price-reduced” to 97% of its original value.” (HH)

“Mr. Jones enters the pharmacy expecting to pick up his prescription. But when he gets to the window, he gets a rude awakening. His acne cream is $200, much too expensive for him to afford. Mr. Jones (not his real name) was told that his doctor needed to fill out paperwork for the insurance to pay for his medication. He leaves the pharmacy upset, and without the prescription.
A study my colleagues and I recently published in JAMA Dermatology found that when patients like Mr. Jones do not pick up their prescriptions, out-of-pocket costs are the primary reason why.
These costs may be from copays or prior authorizations needed through a patient’s insurance. Even as the Affordable Care Act has made great strides in improving the insurance coverage gap in the U.S., more and more patients are now covered by high-deductible plans, leading to higher out-of-pocket costs.
As doctors, we are taught to think about safety and effectiveness when choosing treatments. But the reality is that these standards do not exist in a vacuum. In fact, they exist within fixed monetary constraints on an individual level and for the health system. The question is not simply: Should I prescribe drug A, which sometimes works, or drug B, which always works? Doctors must consider that drug A is 100 times cheaper, so we should probably try that first, unless there is sufficient injury or urgency to justify drug B. There is not necessarily a direct relationship between the cost of a medication and its effectiveness.” (II)

“Legislation would require licensing of pharmaceutical reps.
The legislation specifically targets pharmaceutical sales representatives, bad actors among the group, requiring all drug sales representatives to become licensed by the State Board of Medical Examiners.
“The reason for the bill is because of the consistent news reports, including a recent case where there’s been a plea of guilty, for pharmaceutical reps who are in fact using their positions to enhance the sale of their drugs over others, in particular the opioid market,” said state Sen. Joe Cryan, who is sponsoring the bill.
The bill is in response to a former Insys Pharmaceutical sales representative, admitting bribery and kickback schemes to get doctors to prescribe highly-addictive painkillers. The money was handed out under the guise of “speaker fees.” Investigations show doctors across the state received more than $1.5 million in so-called speaker fees in exchange for prescribing opioids from 2013 to 2015. Cryan, the bill’s sponsor, calls it drug dealers in pinstripe suits. (KK)

(A) Drug copays sometimes exceed costs, by Lisa Rapaport, https://uk.reuters.com/article/us-health-medicines-copays/drug-copays-sometimes-exceed-costs-idUKKCN1GP2P4
(B) A costly PBM trick: set lower copays for expensive brand-name drugs than for generics, by HAIDER WARRAICH, https://www.statnews.com/2018/03/12/pbm-copays-brand-name-drugs-generics/
(C) Report: Brand-name drug prices grew 10 times faster than inflation over last 5 years, by Paige Minemyer, https://www.fiercehealthcare.com/finance/rising-drug-prices-healthcare-costs-claire-mccaskill
(D) D.C. Week: Trump Announces Plan to Tackle High Drug Costs, by Shannon Firth, https://www.medpagetoday.com/washington-watch/washington-watch/72852
(E) 6 key proposals unveiled in Trump’s plan to combat rising drug costs, by Alia Paavola, https://www.beckershospitalreview.com/supply-chain/6-key-proposals-unveiled-in-trump-s-plan-to-combat-rising-drug-costs.html
(F) Trump Promises Lower Drug Prices, but Drops Populist Solutions, by Robert Pear, https://www.nytimes.com/2018/05/11/us/politics/trump-prescription-drugs-plan.html
(G) Pharma breathes easy as Trump’s drug pricing plan fizzles, by David Lim, https://www.biopharmadive.com/news/pharma-breathes-easy-as-trumps-drug-pricing-plan-fizzles/523380/
(H) Big Pharma Gets a Big Win From Trump, by Vann R. Newkirk II, https://www.theatlantic.com/politics/archive/2018/05/big-pharma-gets-a-big-win-from-trump/560219/
(I) Federal kickback law might be used to bring down drug prices, FDA commissioner suggests, by IKE SWETLITZ, https://www.statnews.com/2018/05/03/federal-kickback-law-drug-prices/
(J) Easier Drug Approval Isn’t Cutting Drug Prices, https://www.nytimes.com/2018/06/08/opinion/drug-approval-cutting-prices.html
(K) FDA’s Gottlieb blames industry ‘Kabuki drug pricing’ for high costs, by Yasmeen Abutaleb, https://www.reuters.com/article/us-usa-healthcare-gottlieb/fdas-gottlieb-blames-industry-kabuki-drug-pricing-for-high-costs-idUSKCN1GJ29H
(L) Can Trump use the bully pulpit to lower drug prices? Don’t bet on it, by ERIN MERSHON, https://www.statnews.com/2018/05/04/drug-prices-trump-effect/
(M) Will Trump’s Proposal Ease the Pain of Drug Prices?, Burroughs Healthcare Consulting Network
(N) Trump Plan to Lower Drug Prices Could Increase Costs for Some Patients, by Robert Pear, https://www.nytimes.com/2018/06/02/us/politics/medicare-drug-costs.html
(O) Report: Skimping can’t save seniors from upped prescription drug costs, https://www.cleveland.com/metro/index.ssf/2018/06/skimping_cant_save_seniors_fro.html
(P) Trump Admin Puts Brand-Name Manufacturers in Crosshairs, by Sydney Lupkin, https://www.medpagetoday.com/publichealthpolicy/publichealth/73086?utm_source=Sailthru&utm_medium=email&utm_campaign=PopMed_052418&utm_term=Pop%20Medicine
(Q) ‘Paying Twice’: A Push for Affordable Prices for Taxpayer-Funded Drugs, https://www.nytimes.com/2018/05/28/us/politics/drug-prices.html
(R) Drugmakers Blamed For Blocking Generics Have Jacked Up Prices And Cost U.S. Billions, by Sydney Lupkin, https://khn.org/news/drugmakers-blamed-for-blocking-generics-have-milked-prices-and-cost-u-s-billions/
(S) Azar explains how HHS can address prescription drug prices ‘with a pen’, https://www.fiercehealthcare.com/hospitals-health-systems/azar-explains-how-medicare-will-negotiate?mkt_tok=eyJpIjoiTkRCbVpqUmpOemxqWVRFNSIsInQiOiJaRjkyRXlLb2ZLNkJIS0NWT2J3cjVkNVFTbTZBTzNuTHJiOUMyWDJIcnFWTnpFVUxzZ3FKZERPVCt1TkdsVW5Eb3N1YU5aTEkrcXNmTVpVVllEcTNqMU5XaVExMFExbWVNb3FMdzAxSHlwY21mc1hibnd1K3BwcTNTVVFFMTlUYyJ9&mrkid=654508
(T) Trump gave up bargaining chips on prescription drug prices, got nothing for them, by Andy Slavitt, https://www.usatoday.com/story/opinion/2018/05/16/donald-trump-caves-prescription-drug-prices-column/616070002/
(U) No free lunch? Study finds meals from pharma linked to uptick in opioid prescriptions, by Scott Hadlund, https://www.fiercehealthcare.com/hospitals-health-systems/no-free-lunch-study-finds-meals-from-pharma-linked-to-uptick-opioid?mkt_tok=eyJpIjoiWmpKaU4yWTJNbVJrTnpKbCIsInQiOiJscjZhXC9ZVWxCZW5kRXJ2YnMwdHQ1ek96Y3BaTnJjVHpxTEVqMkozdmVpdFlxK1NLSURBTyt6dk5WbVlIZG5QWjBCY1lhcTVKK09lOVNzWFNIVHZJbVgxbzdnRTlIWFE3WDV0ZVNzaTZMcDZCRFJ2SDlRK0p5NEtRS2tqd29ndnEifQ%3D%3D&mrkid=654508
(V) The Trump Plan To Reduce Prescription Drug Prices Will Have A Major Impact, by Avik Roy, https://www.forbes.com/sites/theapothecary/2018/05/14/the-trump-plan-to-reduce-prescription-drug-prices-will-have-a-major-impact/#5959b8c72691
(W) A little detective work can save you hundreds on prescription medications, https://www.ksl.com/article/46316110/a-little-detective-work-can-save-you-hundreds-on-prescription-medications
(X) Daily on Healthcare: FDA commissioner rattles industry, May 5, 2018
(Y) Voluntary Drug Price Cuts Coming in Two Weeks, Trump Says While Signing ‘Right-to-Try’ Bill, https://www.raps.org/news-and-articles/news-articles/2018/5/voluntary-drug-price-cuts-coming-in-two-weeks-tru
(Z) Insurers could pass drug price breaks onto consumers, by Tom Murphy, https://www.app.com/story/money/business/consumer/2018/04/13/insurers-drug-price-breaks-consumers/33780499/
(AA) Drug company payments appear to influence oncologists’ prescribing habits, by Ed Silverman, https://www.statnews.com/pharmalot/2018/04/10/drug-maker-payments-oncologists-prescribing/?utm_source=STAT+Newsletters&utm_campaign=431b02b011-MR&utm_medium=email&utm_term=0_8cab1d7961-431b02b011-149527969
(BB) The Health 202: UnitedHealthcare will hand some consumers more money for drug prices, by Paige Winfield Cunningham, https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2018/03/07/the-health-202-unitedhealthcare-will-hand-some-consumers-more-money-for-drug-prices/5a9ee55530fb047655a06b26/?noredirect=on&utm_term=.e8a80b9942e0
(CC) Two weeks after Trump unveiled plan to lower drug prices, two cancer drugs got a $1,000-per-month price hike, by Carolyn Y. Johnson, https://www.washingtonpost.com/news/wonk/wp/2018/06/08/two-weeks-after-trump-unveiled-plan-to-lower-drug-prices-two-cancer-drugs-got-a-1000-per-month-price-hike/?noredirect=on&utm_term=.7532c6feb089
(DD) Gottlieb: FDA to kick-start plans to increase competition in drug markets this week, https://www.fiercehealthcare.com/regulatory/scott-gottlieb-fda-drug-prices-trump-administration-generics?mkt_tok=eyJpIjoiWmpKaU4yWTJNbVJrTnpKbCIsInQiOiJscjZhXC9ZVWxCZW5kRXJ2YnMwdHQ1ek96Y3BaTnJjVHpxTEVqMkozdmVpdFlxK1NLSURBTyt6dk5WbVlIZG5QWjBCY1lhcTVKK09lOVNzWFNIVHZJbVgxbzdnRTlIWFE3WDV0ZVNzaTZMcDZCRFJ2SDlRK0p5NEtRS2tqd29ndnEifQ%3D%3D&mrkid=654508
(EE) Pharmacy Benefit Managers Are Not The Cause Of High Prescription Drug Prices, by Ike Brannon, https://www.forbes.com/sites/ikebrannon/2018/06/06/pharmacy-benefit-managers-are-not-the-cause-of-high-prescription-drug-prices/#1ec4d3836b9a
(FF) Requiring Prices in Drug Ads: Would It Do Any Good? Is It Even Legal?, by Robert Pear, https://www.nytimes.com/2018/05/19/us/politics/drug-prices-ads.html
(GG) Get Docs Out of Drug-Buying Business, HHS Chief Urges, by Joyce Frieden, https://www.medpagetoday.com/publichealthpolicy/healthpolicy/72869?xid=nl_mpt_DHE_2018-05-15&eun=g1223211d0r&pos=3&utm_source=Sailthru&utm_medium=email&utm_campaign=Daily%20Headlines%202018-05-15&utm_term=Daily%20Headlines%20-%20Active%20User%20-%20180%20days
(HH) Drug Doesn’t Work? Get Your Money Back!, by F. Perry Wilson, https://www.medpagetoday.com/blogs/themethodsman/72110
(II) Expensive prescriptions have patients skipping their meds. What can doctors do about it?, by JULES LIPOFF, https://www.statnews.com/2018/04/03/doctors-cost-prescribing-medications/
(JJ) Azar Testifies on the Need to Reduce Drugs’ List Prices, Provider Group Raises Concerns, by Kelly Davio, http://www.centerforbiosimilars.com/news/azar-testifies-on-the-need-to-reduce-drugs-list-prices-provider-group-raises-concerns
(KK) Legislation would require licensing of pharmaceutical reps, by Briana Vannozzi, https://www.njtvonline.org/news/video/legislation-would-require-licensing-of-pharmaceutical-reps/

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