Welcome to the week in review in prescription drug pricing.
1. Pharma’s GOP force field dissolving
Republicans are eyeing patent reform to lower drug prices. — (Axios)
2. Coast to coast
In California, Democratic Gov. Gavin Newsom wants to leverage California’s buying power to negotiate drug prices in the state’s massive Medicaid program. Massachusetts Republican governor Charlie Baker wants drug corporations to come to the bargaining table, too. — (KHN & The Boston Globe )
3. Too Much Is Never Enough
Vertex and England have been locked in a battle for three years over the price of the company’s charity-funded cystic fibrosis medicines. As patients suffer, Vertex says it just can’t offer a deal — even after reporting that Q4 profit doubled. — (The Guardian)
4. Our heroes
P4AD named two more drug pricing heroes this week — read more about Sen. Chuck Grassley (R-Iowa) and Ohio resident and cancer patient Bob Fowler — (P4AD)
5. Required reading
Settle in over the weekend for a deep dive into why drugs are so expensive. — (NY Review of Books)
Two important people wrote Medium posts this week. You maybe missed this one.
Welcome to the Week in Review in Prescription Drug Pricing.
1. News from our founder
Patients For Affordable Drugs Founder David Mitchell shared tough news this week — his cancer has relapsed. Even on his worst days, he is buoyed by the bravery of our community of patients. — (Medium)
2. Exploitation over Innovation
A young man relying on a drug to walk saw his costs rise from $0 to $375k — and all a drug corporation did was grab the patent, add a preservative, and give the product a new name. — (NBC Nightly News)
3. J&J caves to transparency pressure
Johnson & Johnson will begin to advertise on television the cost of one of its medications, giving in to pressure from the Trump administration to list drug prices in TV ads. We maintain advertising tax credits should be abolished, or the ads should end all together. — (AP)
4. CREATES is BACK
Congress needs to pass the bipartisan bill that would increase drug competition and save taxpayers more than $3 billion — (Center for Biosimilars)
5. CEOs to testify
After a dressing down by Senate Finance Committee Chairman Chuck Grassley (R-Iowa), five Big Pharma CEOs agree to testify at the committee’s drug pricing hearings later this month. — (STAT)
WASHINGTON, D.C. — In response to comments President Trump made in his State of the Union Address about prescription drug prices, David Mitchell, a cancer patient and the founder of Patients For Affordable Drugs Now, issued the following statement:
“We appreciate President Trump’s continued focus on the country’s drug pricing crisis. But, two years into his term, prices are still going up, patients are still struggling, and Big Pharma is breaking records lobbying Congress to keep it that way.
“We’re glad the President touched on his plan to bring U.S drug prices more in line with what other wealthy countries pay. The International Pricing Index would lower the cost of America’s most expensive drugs by 30 percent. The plan has merit, and we urge the President to advance this proposal.
“That being said, not nearly enough has been accomplished and additional action is urgently needed. The list prices of drugs need to come down. Patients need Congress and the Executive branch to fix our broken system.
“Every day, Americans experience heartbreaking stress and financial pain due to high drug prices. Ruth Rinehart, of Tampa, Florida’s $52,000 prescription drug costs forced her to declare bankruptcy and lose her family home. The time for action is now.”
BACKGROUND
Drug costs are out of control
Americans spend more than $450 billion each year on prescription drugs — by some estimates, nearly one-fifth of all health care costs go toward prescription drugs.
The main driver of prescription drug spending is patent-protected brand-name drugs, which make up only about 10 percent of prescriptions but account for three-quarters of drug spending.
Americans pay more for drugs than any other country
CNN: “Americans pay anywhere from two to six times more than the rest of the world for brand name prescription drugs.”
The New York Times: “A government study said Medicare was paying 80 percent more than other advanced industrial countries for some of the most costly physician-administered medicines.”
Senate Finance Congressional Testimony: “Revenues generated just from sales in America would fund 176 percent of the global pharmaceutical research and development budgets for these companies.”
Drug prices are rising, not falling
Associated Press: An analysis found that through the end of last July there were 4,412 brand-name drug price increases and merely 46 price cuts—a ratio of 96-to-1.
Health Affairs/Vox: “Prices for drugs of all types and from all classes (brand-name, specialty, generics/oral or injectable) have been rising faster than inflation…from 2008 to 2016.”
High drug prices hurt patients
Kaiser Family Foundation: 1 out of 4 patients report that in the past year they or a family member have not filled a prescription (24 percent) or have skipped a dose or cut pills in half (19 percent) because of the cost.
NPR: “Insulin’s high cost leads to lethal rationing.”
Vox: “It means that our system, even if we don’t like to admit it, has to pick and choose who gets access to lifesaving drugs.”
Drug companies are rich and excessive
The Washington Post: “9 out of 10 big pharmaceutical companies spend more on marketing than on research.”
JAMA: “From 1997 through 2016…DTC prescription drug advertising increased from $1.3 billion to $6 billion with a shift toward advertising high-cost biologics and cancer immunotherapies.”
Axios: “Nine drug companies are spending a combined $50 billion on new share buyback programs…The large buyback programs are rolling out while the same pharmaceutical companies raise drug prices and while Americans struggle to afford their prescriptions.”
Big Pharma rigged the system
Open Secrets: “Pharmaceutical groups are spending heavily to influence public opinion and policy as rising drug prices become an increasingly mainstream political talking point. The industry claimed the top spot among lobbying spenders in 2018 — roughly $280 million — with no other industry coming close.”
STAT News: “PhRMA spent a record-breaking $27.5 million on lobbying in 2018.”
Axios: “Those totals don’t include the millions individual drug companies spent on their own lobbyists. They also don’t include the industry’s campaign contributions, which topped $17 million in the 2018 cycle.”
Americans demand reform
Harvard/Politico: 8 in 10 Americans want Congress to act and lower prescription drug prices.
Kaiser Family Foundation: “72 percent of people think the drug industry has too much influence in Washington — outweighing the 69 percent who feel that way about Wall Street or the 52 percent who think the NRA has too much power.”
GS Strategies: There is overwhelming bipartisan support for the CREATES Act. More than 83 percent of voters support passage of the CREATES Act and almost 6 in 10 strongly support it.
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Ready your chicken wings, chili bowls, and Tony Romo prediction bets.
But first, it’s the week in review in prescription drug pricing!
1. Storms are a-brewing
What’s colder? This wind chill or Pharma’s ice-cold refusal to testify before the Senate Finance Committee? — (The Hill)
2. Middlemen called out
The Trump administration took a step in the right direction by increasing transparency and ending rebates to drug middlemen in government programs. The hope is savings would reach patients instead. — (The Washington Post)
3. Touchdown!!! ??
The Super Bowl may be the most-watched event this week, but we’re also excited about a Congressional kickoff — a probe into insulin costs — (FiercePharma)
4. Strong armed no more?
There’s been a surprise twist in a three-year drug pricing standoff between the UK and Vertex — the maker of groundbreaking-but-pricey cystic fibrosis therapies. A British politician is pushing parliament to issue a license that would allow a generic drug maker to make copies of a Vertex medicine. — (STAT)
5. California Love
The governor of the country’s most populous state signed an executive order directing the state’s massive Medicaid program to negotiate prescription drug prices for 13 million recipients. — (Reuters)
WASHINGTON, D.C. — After today’s Senate Finance Committee and House Committee on Oversight and Reform hearings on skyrocketing prescription drug prices, David Mitchell, a cancer patient and the founder of Patients For Affordable Drugs Now, issued the following statement:
“Today’s hearings are an encouraging start. It’s clear that there is bipartisan support to rein in Big Pharma’s monopoly pricing power.
“We are not surprised that drug corporations refused the Senate Committee’s invitation to participate. Those drug company CEOs can’t defend the indefensible.
“We look forward to helping Congress stand up to the drug industry and begin to actually lower drug prices for patients. Unchecked, drug company executives will continue to hold patients hostage to increase their profits. Congress needs to let them know that these abuses won’t stand any longer.”
The government’s failure to negotiate on drug prices hurts patients and taxpayers. According to a recent study in JAMA, Medicare Part D could have saved $14.4 billion in 2016 alone by negotiating as the Department of Veterans Affairs does.
A recent Harvard/Politico poll showed that 80 percent of American people say that Congress’ top priority should be action to lower drug prices.
PATIENT PERSPECTIVE:
Joan Tramontano, 77, of Venice, Florida spent a career in public relations, saving all she could for retirement. After doctors diagnosed her with GIST, or gastrointestinal stromal tumor, she was prescribed Gleevec in 2009, a Novartis drug that rose in price from $26,000 in 2001 to $140,000 in 2017, an increase of nearly 440 percent.
“My out-of-pocket for that drug with Medicare Part D insurance has come, so far, to $60,000, cutting deeply into my retirement money, which is incredibly devastating and scary. I’m so glad to see Congress, with investigations and hearings, focusing this week on Novartis and a drug that has caused so much financial devastation and worry to me. Patients like me need Congress to act to lower drug prices soon. We hope the future will bring legislation to finally negotiate drug prices, crack down on excessive price hikes, bring more transparency to our system, and protect patients from unfair price gouging.”
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It’s drug pricing palooza!
Welcome to the week in review in prescription drug pricing.
1. LOL Pfizer
Pfizer spun its January price hikes as impacting an itsy bitsy portion of its drugs. Too bad the 41 drugs it hiked represent half the pharma giant’s revenue. — (Axios)
The Republican-controlled Senate and Democratic-controlled House are kicking off 2019 by lighting up out-of-control drug pricing with Senate Finance and House Oversight committee hearings Tuesday.— (The Hill)
4. It’s a thing. A 2020 thing. Potential presidential candidates are staking claims in the drug pricing debate. Smart move,
since 80 percent of the public wants our elected leaders to lower drug prices. — (KHN)
5. Highly Illogical
The drug lobby’s arguments against holding down prices in Medicare Part B just don’t add up. — (STAT)
Welcome to the Week in Review in Prescription Drug Pricing!
1. Laboratories for lower drug prices
States aren’t waiting around for the federal government to act on drug prices. Maryland wants a board to hold Big Pharma accountable. — (The Baltimore Sun)
2. Close the Big Pharma Tax Loophole
Sen. Jeanne Shaheen (D-NH) introduced legislation to prohibit pharmaceutical corporations from claiming tax deductions for direct-to-consumer advertising expenses. Big Pharma spent $6 billion on direct-to-consumer ads in 2016 alone. — (STAT News)
3. Azar on the move
HHS chief Alex Azar is on the move on Capitol Hill, stumping for lower drug prices, especially in Medicare Part B. — (The Washington Post)
4. Pfizer Pflops
Pfizer hiked the prices on 41 prescription drugs this week, in blatant disregard for the financial health and wellbeing of all Americans. It’s not OK. — (P4AD)
5. ✈️✈️✈️
Are the executives at Pfizer, Johnson & Johnson, and Novartis doing a lot of “innovating” on their private airplanes? — (Twitter)
WASHINGTON, D.C. — Big Pharma is at it again. On Wednesday, the drug lobby will roll out its objections to the proposed HHS Part B Demonstration. During a media briefing at its Washington headquarters, PhRMA is sure to pull out all the tired scare tactics: “socialized medicine,” ‘‘reducing access,” “interference in the doctor/patient relationship,” “rationing,” and other well-worn claims from its playbook.
Here are three questions for PhRMA and a fact check ahead of the media briefing:
3 Questions for PhRMA
Since the only way patients would receive worse care is if drug companies withhold drugs from Medicare, are PhRMA member companies willing to withhold drugs while being paid 126 percent more than other countries?
What are two proposals PhRMA supports to lower the list price of drugs? Not PBM reform or Medicare policy changes. How is PhRMA willing to lower drug prices, since drug companies collect 66 percent of Part D drug spending and an even higher share of Part B spending?
If high prices are necessary for quality care, how does PhRMA account for thesuperior outcomes and life expectancy in international countries despite lower prices for prescription drugs?
FACT CHECK: PhRMA’s False Claims About the Medicare Part B
MYTH #1: The Part B demonstration will restrict access to lifesaving drugs. FACTS:
Americans ration drugs today based on price.
NPR: “Insulin’s high cost leads to lethal rationing.”
Vox: “It means that our system, even if we don’t like to admit it, has to pick and choose who gets access to lifesaving drugs.”
There is no evidence the Part B demonstration would harm patient accessto drugs unless drug corporations choose to withhold drugs from patients.
HHS: The proposal is to “lower drug prices—without any restrictions on patient access.”
All protected classes of drugs in Medicare will be maintained.
HHS: “We propose no changes to the Medicare benefit, just more discounts from drug companies.”
Bloomberg: “The aim is to drive down the cost of those medications by 30 percent.”
MYTH #2: The Part B demonstration will establish drug prices that are impossibly low — damaging drug companies and hurting our health system. FACTS:
Americans would still pay Pharma more for drugs than other developed countries.
The New York Times: “A government study that said Medicare was paying 80 percent more than other advanced industrial countries for some of the most costly physician-administered medicines.”
Secretary Azar: “Over the next five years under this model, we will go from paying 180 percent of what other countries pay for these drugs to 126 percent of what they pay.”
Lowering prices in Part B will have little to no impact on innovation.
National Academy of Sciences: “NIH funding contributed to published research associated with every one of the 210 new drugs approved by the Food and Drug Administration from 2010–2016. “
HHS: “The possible savings American patients would receive over five years represents less than 1 percent of pharmaceutical R&D spending during that time; and the pharmaceutical industry has offered no evidence of that amount having a meaningful impact on innovation.”
Drug companies can easily make that up by reducing advertising and marketing spending.
Washington Post: “Nine out of 10 big pharmaceutical companies spend more on marketing than on research.”
JAMA: “From 1997 through 2016…DTC prescription drug advertising increased from $1.3 billion to $6 billion with a shift toward advertising high-cost biologics and cancer immunotherapies.”
MYTH #3: The demonstration will result in worse care for patients. The government should not replace a market-based system with government price setting. FACTS:
The 16 countries used for reference by and large have betterhealth outcomes and longer life expectancy than the U.S., while spending about half as muchper capita for health expenditures.
Central Intelligence Agency: Of the 16 other developed economies in the IPI, Americans have shorter life expectancies than 13 of them: Austria, Belgium, Canada, Finland, France, Germany, Greece, Ireland, Italy, Japan, Spain, Sweden, and the United Kingdom.
World Bank: Of the 16 other developed economies in the IPI, Americans spend more on health care as a percentage of GDP thanall of them: Austria, Belgium, Canada, Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Japan, Portugal, Slovakia, Spain, Sweden, and the United Kingdom.
The current system is broken.
CNN: “Americans pay anywhere from two to six times more than the rest of the world for brand name prescription drugs.”
Wall Street Journal: “Compared with the U.S., drug prices are far lower in many overseas countries…Critics have long held that the [U.S.] percentage-based ‘add-on’ fee create incentives for doctors to use higher-priced drugs.”
The Part B demonstration does nothing to slow the FDA approval process. Multinational drug corporations will still want early access to the higher prices in the U.S.
MYTH #4: Americans do not support the Part B proposed changes. FACTS:
According to a GOP pollster, Americans overwhelmingly support the International Pricing Index to lower drug prices.
Voters support the HHS proposal to lower drug prices by a 71-point margin (80 percent support vs. 9 percent oppose).
Majorities from both parties agree that Democrats and Republicans in Congress should support the proposal.
Notably, 8 in 10 voters believe the proposal will result in better care or have no impact on the care they receive.
