AARP to pharma: dough-not mess this up for us

In 2019, drugmakers will cover more costs for patients enrolled in Medicare Part D, and the AARP is intent to make sure it stays that way. The new policy is focused on the plan’s “donut hole,” or coverage gap between initial coverage and catastrophic coverage. Donut explanation here. Currently, manufacturers provide drugs for that gap at a 50% discount, but the new policy pushes that to 70%. The “lame duck” legislative session between now and the end of the year could be the pharma industry’s last chance to lobby against that measure. To ensure that doesn’t happen the AARP is launching a radio, digital, and print ad campaign to get legislators to reject pharma lobbying. So you can expect to see seniors shaking their canes at Congress this December in addition to their traditional yearly yelling at carolers.

Not playing by your own rules

The well-known oncology researcher José Baselga has resigned his position as Chief Medical Officer at Memorial Sloan Kettering after an NYT/ProPublica investigation showed he failed to disclose millions in payments from pharma and healthcare companies in dozens of his research articles. The payments themselves aren’t at issue, it’s the fact that he didn’t make his ties explicitly known. Which is kinda funny since those financial reporting rules were set by the American Association for Cancer Research while he was president of the group. Critics say Baselga’s fall illustrates the bigger problem of the revolving door between academic research and industry, as well as a general laziness towards enforcing ethical standards from the academic community. Expect a rush of researchers who ‘forgot’ to include their financial ties in previous papers to quietly go add those in.

Sell shovels or mine for gold?

It’s the age-old question that gets at your risk profile. Drug Channels has provided a wonderful analysis of Fortune 500 companies that are involved in the drug channel business (McKesson, CVS, Express Scripts) and pharma companies (Pfizer, Amgen, Biogen). Highlight #1 – The average revenue for the 7 drug channel companies ($131B) is 4x greater than the 11 pharma companies ($29B). Highlight #2 – Profit, as a percent of revenue, is ~7x greater for the pharma companies (14.6%) than for the drug channel companies (2.2%). Highlight #3 – The return to investors was dramatically higher for pharma (14.9%) than for drug channel companies (-9.3%). Can anyone say Amazon? Can anyone say Trump? It looks like either selling shovels or mining for gold seems like a pretty good proposition, but remember we are looking at the best of the best in this analysis.

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.

There’s an app for that

Novartis recently launched an app that enables patients taking part in ophthalmic clinical trials to self-report data, which could potentially speed the development of new therapies. Here’s lookin’ at you kid. According to a wonderful report from Deloitte, “the number of apps produced by pharma more than tripled from 2013 to 2016, but the year-over-year growth rate of downloads slowed from 197% between 2013 and 2014 to just 5% between 2015 and 2016.” Maybe pharma lies outside the circle of trust? The Deloitte report also states, “pharma apps are trusted by 32% of consumers, compared to 76% for apps developed by patient communities.” Look for more pharma-association collaborations like the Quitter’s Circle from Pfizer and the American Lung Association. Is it better that the Novartis app is for clinical trials? Hear InsightCity’s take on this article with this short podcast. (It’s our first one. We’re not pros. Don’t be mean.)

InsightCity Podcast Episode #1

In our first episode, we dive into a discussion about pharma’s issues with app development.

Pairs well with our article “There’s an app for that”

Email with feedback or ideas on what to talk about next episode.

InsightCity Podcast Episode #1