The Week in Review in Prescription Drug Pricing

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)

 
2. Johnny Depp would be proud. 

• PhRMA is running ghost ships now. — (WaPo)

 
3. All the hearings

• 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)

The hills are alive with the sound of drug pricing reform.
 
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

1. 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?
    
2. 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?
    
3. 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 access to 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 better health outcomes and longer life expectancy than the U.S., while spending about half as muchper capita for health expenditures. 
  • Kaiser Family Foundation and Peterson Center on Healthcare: Of the 16 other developed economies in the IPI, Americans have worse health outcomes than: Austria, France, Germany, Japan, Sweden, and the United Kingdom.
  • 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 than all 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.

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It’s a new year and drug pricing reform is here to stay. Here are our top 5 takeaways from 2018:
 
1. Patient Voices Grew Louder — Drugs Don’t Work If People Can’t Afford Them.

• Patients delivered this bipartisan message to their elected officials, to the media, and with their votes. They wrote letters, signed petitions, and testified on Capitol Hill and at statehouses, determined to lower drug prices. Patients like Pam Holt, a retired schoolteacher thrown into debt to afford her prescription for multiple myeloma, are fueling a growing movement to lower the prices of prescription drugs.
  
  “Sick people should not have to increase the profits of these huge drug corporations,” Holt told CBS This Morning. “At some point, there needs to be understanding that people should be able to have the drugs that they need to survive.”

 
2. Patient Influence Expanded in Washington, DC

• Patients helped block a terrible $4 billion Big Pharma bailout, killing a deceptive, months-long pharmaceutical industry lobbying campaign aimed at federal lawmakers. Congress passed legislation banning gag clauses, improving transparency, and helping patients get the best price for their prescriptions at the pharmacy counter. And, after patients took action to stop pay-for-delay deals that stall cheaper biosimilars from coming to market, Sens. Klobuchar and Grassley heard the outrage and proposed bipartisan legislation to address the issue. 

3. States Took A Stand

• States like Maryland have become trendsetters for federal reform. And where states don’t at first succeed — it’s try, try again. Maryland reforms that went into effect Oct. 1, 2018 influenced federal legislation. Maryland patient advocates are continuing their work to establish a board to negotiate drug prices on behalf of patients and taxpayers.
  
  Patient Advocates in 2018 spoke in favor of drug pricing legislation in states like Connecticut and Oregon where transparency legislation passed, requiring Big Pharma to submit price reports on planned prescription drug price hikes. In 2018, reporters sought and received records on planned price hikes made public by California’s first-in-the-nation drug pricing transparency law, opening secretive, routine drug price hikes to fierce public scrutiny. (BTW, make sure to check out our new legislative map, which features state drug pricing legislation proposed in 2018.)

4. From the Kitchen Table to the Ballot Box

• Runaway prescription drugs prices know no party. It’s a kitchen table issue, and voters stood ready to act in 2018. In Massachusetts, voters powered Gov. Charlie Baker to victory after he listened to patients and promised action to lower drug prices. Voters ousted industry apologists like incumbent Rep. Pete Sessions, R-Texas, who took industry cash and told seniors to “shop around” for lower drug prices. Similarly, Big Pharma CEO Bob Hugin drove cancer patients into debt and then lost his bid for a New Jersey U.S. Senate seat.

5. The Blinding Glare of Patient Scrutiny

• A Midterm campaign run by Patients For Affordable Drugs Action proved Rep. Anna Eshoo, D-Palo Alto, has long done pharma’s bidding, leaving patients who rely on expensive life-saving drugs exposed to higher drug prices, longer. Eshoo — who is the likely chair of the House Energy and Commerce subcommittee on health — knows patients are watching.

 
Happy 2019. Cheers to a fruitful year of drug pricing reform!
 
— The Team at Patients For Affordable Drugs Now.

WASHINGTON, D.C. — As Big Pharma spends millions to kill proposed reforms in Medicare Part B, it’s important to keep in mind why: The proposal will lower drug prices and reduce patient out-of-pocket costs. Under the draft proposal from the Department of Health and Human Services, prices for expensive infused drugs administered in physician offices and hospitals would be brought more in line with what people in other wealthy nations pay. Read a snapshot of what patients, legislators, and experts are saying about the potential reform.

WHAT PEOPLE ARE SAYING ABOUT MEDICARE  PART B REFORMS

Sen. Lamar Alexander (R-TN): “Tennesseans often struggle to afford prescription drugs, and this proposal appears to put patients and taxpayers first.” [WSJ, 10/25/18]

Avik Roy: “The administration unveiled a new proposal to substantially reduce the price of certain costly drugs administered under Medicare.” [Forbes, 11/26/18]

Bloomberg News: “Trump’s plan is a refreshing change: an idea for lowering drug prices that might actually work.” [Editorial Board, 10/26/18]

Ruth Rinehart, Primary Immune Deficiency Patient: “As a patient who is reliant on the services of Medicare Part B and continues to the pay the price for drugs for which Medicare cannot negotiate, I am strongly in favor of the Trump Administration’s proposal to lower Part B drug prices.” [Tampa, FL, 12/18/18]

Sen. Bill Cassidy (R-LA): “The administration has taken a proposal that we had suggested in Medicare Part B … we speak about market basket reference pricing. Taking a market basket of pricing paid by developed economies — Germany, Great Britain, Australia, and Japan — and the United States pays some multiple. The administration has put out a rule to do this in Medicare Part B where ultimately the American consumer will pay 1.26 times that market basket average. There are ways to get at this.” [STAT, 11/30/18]

Professor Rachel Sachs: “Of all the drug pricing proposals the Trump administration has introduced so far – and there have been many – this is by far the most ambitious.” [Health Affairs, 10/26/18]

Paul Kleutgen, cancer patient and former pharmaceutical executive: “The International Pricing Index Model for Medicare is a bold step to lower prices and out-of-pocket costs for people taking some of the most expensive drugs out there. That’s why the groups that profit from the current system are trying to stop it.” [St. James, NC, 12/18/18]

Dr. Peter Bach: “The proposed Part B payment model has multiple strong elements. It is an evaluation, if it works well it can be expanded, but if it doesn’t it can be sunset….It acknowledges that if the US does not have the political will to determine how much taxpayers should be paying for drugs, the US can still piggyback on the negotiations of other countries that have a strong tradition of fiscal responsibility with regards to health care and pharmaceutical costs.” [12/17/18]

Santa Rosa Press Democrat: “The Trump Administration wants to bring down those Medicare drug prices, keeping them more in line with prices charged abroad. A similar plan floated by the Obama Administration drew fierce opposition and was shelved.” [Editorial Board, 11/24/18]

Dr. Vincent Rajkumar: “Yes this may reduce Part B prices if it survives the onslaught of comments and lobbying that is sure to come from @PhRMA.” [Twitter, 10/27/18]

Mike Gaffney, cancer patient:“It is deeply frustrating to me that Medicare does not have the ability to negotiate, meaning that we pay 80% more than other wealthy countries like ours. That is why I am supportive of the Trump Administration’s plan to lower Medicare Part B drug prices for drugs like the infusion I received for a year and a half.” [Olympia, WA, 12/18/18]

Dr. Aaron Kesselheim: “The IPIM would likely lower prices in the U.S. because many other countries evaluate the value a new drug provides as part of a process of negotiating a price with the manufacturer.” [12/17/18]

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‘Tis the season — for drug corporations to spend tax windfalls buying back billions in stock while refusing to lower drug prices.
 
Welcome to the Week in Review in Prescription Drug Pricing!
 
1. AstroTurf: Activate! 

• Big Pharma is whipping its hundreds of pharma front groups into a fury to try to stop a good idea from *even becoming a federal proposal.* Why? Because the Medicare Part B International Pricing Index demo project would actually lower drug prices. — (AJMC) 

2. CEO carolers: “All I want for Christmas are my company’s own shares”

• Big Pharma CEOs could use their massive tax windfalls to lower drug prices. They are buying back billions of dollars in shares instead to enrich themselves at the expense of patients. — (Axios)

3. Now streaming

• You need a weekend drug pricing documentary in your life. So watch the new film, “DRUG$: The Price We Pay.” — (KALW & L.A. Times)  

4. In honor of Alec Smith

• Minneapolis resident Alec Smith died in 2017 after rationing insulin he could not afford. Lawmakers in Minnesota, where nearly a half million people live with diabetes, are ready to fight for a bill that would push back on insulin price gouging. Legislation named for Alec failed to pass last session.  — (Star Tribune) 

5. THAWED: That laughable Pfizer price hike freeze

• Sen. Tammy Baldwin, D.-Wis, demanded transparency from Pfizer and accused the pharma giant of playing political games in her latest letter to CEO Ian Read. The drug corporation is expected to raise prices on 41 drugs in January following empty promises of a price hike freeze.  — (FiercePharma)

WASHINGTON, D.C. — Big Pharma is opening its wallet and pulling out the same old scare tactics to block a proposal that would lower drug prices in Medicare Part B. Under a draft proposal from the Department of Health and Human Services, Medicare would pay only 26 percent more than other wealthy countries for drugs administered by physicians or in hospital settings instead of the 80 percent more it pays today. But before public comments have been filed, special interest groups and drug company lobbyists are mounting an effort to kill the proposed reforms. A Big Pharma front group is bankrolling a $1 million ad campaign to falsely smear proposed Part B changes. The claims in the ads are lies — pure and simple. Patients For Affordable Drugs NOW will be sending letters to radio stations requesting that they cease airing these misleading ads immediately.

BIG PHARMA SPENDING TO KILL A MEDICARE PART B CHANGE

Radio ads: A Pharma-funded front group secretly bought $998,884 in radio ads across the country. The ads encourage residents to call Senators and tell them to oppose the Part B proposal. See a list of the ad rates and stations running the spot here and here, and listen to the ad here.

Digital Ads: The drug industry’s lobbying arm, PhRMA, is blanketing Washington health publications in an attempt to mislead policymakers and the public. Click here to view the PhRMA-sponsored ads.

New Web Pages: PhRMA’s misleading campaign includes a raft of blogs packed with inaccurate information that suggests patient care would be under threat if drug prices are lowered in the Medicare program.

AstroTurf Tactics: A coalition of hundreds of so-called patient advocacy groups entangled with Big Pharma interests sent a misleading letter to Congressional leadership. Read the letter here. 

MYTH vs FACT 

Blog posts and advertisements by Big Pharma contain a multitude of falsehoods, misleading statements, and outright lies. Here are a few:

Big Pharma Myth: Changes to Medicare Part B “threaten patient access to treatment options and care.”
Fact: As an organization that represents patients who are kept alive by Part B drugs, we are outraged that Big Pharma claims the proposal would hinder patient access. Under this proposal, Medicare would pay only 26 percent more than other wealthy countries, down from the current average of 80 percent more. This move would increase access to lifesaving drugs by bringing U.S. prices more in line with other wealthy nations. There is no evidence this proposed Part B demonstration would impact patient access to drugs unless drug corporations withhold drugs from patients.

Big Pharma Myth: The system works fine just the way it is and the government should not “replace a market-based system with government price setting.”
Fact: The system is broken. Doctors who administer Medicare Part B drugs are incentivized to choose higher-priced medications because they benefit from the reimbursement structure in the Medicare program. Patients are forgoing medication because they cannot afford the drugs. Medicare already sets the prices for these drugs –– it is the average sales price plus 6 percent, which is 80 percent higher than what people pay in other wealthy nations.

Big Pharma Myth: The Part B demonstration will “weaken incentives for the development of new treatments for serious, life-threatening diseases.”
Fact: Nine out of 10 big pharmaceutical companies spend more on advertising and marketing than on research. Taxpayers foot the bill for basic science that leads to new drugs through the $37 billion spent by the National Institutes of Health. According to HHS, the proposed Medicare changes could reduce drug company R&D spending by less than one percent. We can have both innovation and lower prescription drug prices.

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1. More $$$ for Big Pharma? Thank u, next. 

• Drug companies are asking Congress to reduce their contributions to the Medicare Part D program. A new study finds that under the PhRMA proposal, beneficiaries could spend an additional $1.3 billion and patients would see increased premiums and higher out-of-pocket costs. — (PEW) 

2. Straight to the naughty list.

• The drug maker Actelion Pharmaceuticals agreed to pay a $360 million settlement stemming from an investigation into illegally funneled kickbacks through a patient-assistance charity. — (NYTimes)

3. You get a patent! You get a patent! Everyone gets a patent! 

• Drug giant Amgen has filed a grand total of 57 patents for its arthritis drug Enbrel, extending the drug’s market exclusivity through 2029. — (Axios)

4. Lower prices or stock buybacks?

• Multiple members of Congress criticize drug manufacturers for using savings from the tax overhaul to buy back shares rather than lowering prices for patients. — (WSJ) 

5. What do a Democratic senator and a Republican senator have in common? Drug pricing reform. 

• Senator Chuck Grassley and Senator Ron Wyden introduce a bipartisan drug pricing bill tackling manufacturers using tactics to overcharge taxpayers for Medicaid rebates. —  (The Hill)