Drug pricing and the 80/20 rule

According to an analysis conducted by Blue Cross Blue Shield, “expensive branded drugs” accounted for 79% of prescription spending while accounting for just 17% of the prescriptions written. The largest contributors to the 17% came from just 3 drugs: Humira, Remicade, and Enbrel. See a trend? These are all biologic treatments for rheumatoid arthritis (with some Crohn’s Disease sprinkled in). “No sh!+,” said this writer’s mother-in-law who has RA and can’t afford treatment. There are more expensive drugs on the market than these 3 but they tend to treat smaller populations than those with RA and Crohn’s. To be fair (and intellectually honest), the BCBS analysis doesn’t include the impact of rebates, which you just learned 2 articles ago is a big deal. Don’t you retain anything you read? Here’s a list of the top 10 most expensive drugs in the US. Yikes!

No more “freeloaders” in clinical development?

While “America First” is a rallying cry for supporters of President Donald Trump, one thing they don’t want to be first in is prescription drug pricing. Following up on last week’s proposal to mandate the displaying drug pricing in TV ads, the US President took aim at the pharmaceutical industry for charging more in the States as compared to other industrialized nations. He criticized those countries for freeloading on the US’s inflated prices saying, the “American middle class is effectively funding virtually all drug research and development for the entire planet.” To address this, the Department of Health and Human Services released a proposal that would tie Medicare Part B payments for medicines to the levels that other nations pay. HHS Secretary Alex Azar did note this could cause companies to stop selling some drugs in other countries… probably not a big concern for the America First crowd.

“Patients are getting screwed”

Direct quote from Leonard Schleifer, the 66-year-old co-founder and CEO of Regeneron. Do tell, Lenny – we call him Lenny. According to Schleifer, the difference between a $10,000 drug with a $4,000 rebate and a drug simply priced at $6,000 is that the former lets the benefit manager crow about the savings it delivers and pass money back to the company buying the health plan (not the patient). He would like to see the rebate system go away. What’s this? A pharma executive who believes in “transparent” pricing? Yep. But it’s not completely altruistic as Schleifer’s drive is for the industry to police itself before the government steps in. The article cited above is a good read/story of Regeneron, and Schleifer puts his money where his mouth is when Regeneron submitted to external reviews to come up with fair prices for Dupixent and their cholesterol treatment.

Important imports?

The Department of Health and Human Services has directed the FDA to consider the importation of foreign drugs to address price spikes. The proposed policy would only apply to drugs unaffected by patent or exclusivity, in an effort to avoid intellectual property issues. However, pharma companies may still have something to say through their lawyers if such a policy were to be implemented, especially as an act of a federal agency instead of legislation. If it were implemented though, it would avoid patient access issues in situations like when an HIV medication jumped in price from $13.50 to $750, which had the incredibly unfortunate side effect of catapulting Martin Shkreli’s infinitely punchable face into the limelight. That drug still costs $750 by the way. Or just 5-10 cents in India.

Pfizer postpones price hikes

Pfizer announced price increases on about 40 drugs at the beginning of July. But after discussions with President Donald Trump and Health & Human Services Secretary Alex Azar, they’ve decided to cut-it-out. Trump had lambasted drug companies earlier in the week for price increases, noting that other markets like Europe get lower prices. After their meeting, Pfizer decided to roll-back the increases to pre-July figures, “to give the president an opportunity to work on his blueprint to strengthen the healthcare system and provide more access for patients.” And they’re leaving the price drops announced at the beginning of the month intact. The hikes aren’t completely gone though, Pfizer’s just holding off until 2019 or until that aforementioned blueprint takes effect. For a (pink) blueprint you don’t have to wait for, click here.

Cancer spending up. Duh.

According to a new report by the IQVIA Institute for Human Data Science, spending on cancer therapies has doubled over the past 5 years. And the retail price tag on these drugs is up, too. The average retail price of the 2017 launches was over $150,000, compared to $79,000 for those launched in 2013. You know, when they were practically garage sale prices. But before we get our knickers in a twist, IQVIA reports the average annual out-of-pocket spend for someone with commercial health insurance was just $500. With 1.7 million cancer diagnoses and over 600,000 deaths in the US alone forecast for 2018, that doesn’t seem like such a bad deal.

The eyes have it

What is “it,” you ask? Spark Therapeutics’ new gene therapy Luxturna which can cure blindness in a single treatment. The condition causing the blindness only affects a few thousand people, so the FDA has designated it as an orphan drug. The single dose and orphan drug aspects of this gene therapy combine for a rather expensive R&D bill, and translate into a bit of sticker shock at the selling price: $425,000 per eye. Spark is trying out some interesting commercialization practices to get the drug to patients, like giving rebates to patients whose eyes don’t see better over time. They’re also considering selling the therapy directly to insurance companies so that health care providers don’t have to pay and store the treatment without a guarantee it’ll ever be used.