The new US hospital pricing transparency law…what do you think?
Well, for some cohorts, yes, drug spending in 2017 was down. Holy schneikies. What’s more is that, according to the Express Scripts 2017 Drug Trend Report, drug spending increased by only 1.5% for their commercial plan sponsors and it declined for nearly half of commercial payers. For a really good synopsis of the report, go here. In what we can only assume will be a politically unpopular analysis, Drug Channels points out that specialty drug costs are not the problem because “Specialty unit costs grew by 3.2% for commercial payers, while utilization grew by 8.1%. In other words, spending increased because more people were treated, and more prescriptions were dispensed. That’s not a drug price problem.” Son of a … But it’s not all sunshine and roses, as 6.3% of people spent more than $1,000 out-of-pocket for prescription drugs in 2017. Sorry for the buzzkill.
The U.S. President—“Nobody knew health care could be so complicated.” *Sigh*. Sometimes it is so complicated that it is hard to even follow the money. A recent New York Times article sheds some light on how messy things can be. The premise is that some pharmacy benefit managers and insurance companies are directing patients to take brand name products when there are approved generic options. Whatchu talkin’ bout Willis? With more biosimilars coming to market to “replace” high priced biologic medications, it’s likely that patients and advocacy groups will get vocal. If you look at the top drugs in terms of volume, the word “generic” appears in most of them and you have to get down to #39 before you see Cialis. We will leave it there for another Insight City article.
It’s one thing to make a profit but it’s another to excessively charge uninsured patients nearly double the amount for the same diagnostic tests that insured patients receive. Two separate lawsuits filed in New Jersey and North Carolina allege that diagnostics firms, LabCorp and Quest Diagnostics purposefully made their billing forms difficult to interpret and routinely overcharged uninsured patients at rates far above the market price. Ouch. Plaintiffs are seeking reimbursement of fees and damages. Both lab companies maintain they haven’t engaged in any shenanigans. Is this where we begin to analyze the difference between what’s “legal,” “immoral,” and “amoral?”
A wise man once said, “if at first you don’t succeed, you’d better hope your rivals don’t either,” or something like that. Republicans in Congress had their chance to shine, but with the recent failure of the American Health Care Act, Democrats are looking to beat them to the punch by improving the existing Affordable Care Act. A coalition, led by Senator Al Franken, proposed a bill that would require transparency from drug companies in R&D cost, acquisitions, investments, and other areas that influence pricing, and that information would then be publicly available. If passed, this bill could make congressional Democrats the modern-day healthcare heroes. They would be good enough, smart enough, and “doggone it” people would like them. Apparently, Sen. Franken already knows that.
Want to shave 60 days off your drug’s approval by NICE in the UK? No problem, just ensure your product (drug, device, treatment) adds one year of quality life for a patient for less than £10,000. Done. Last Thursday, NICE announced it is seeking comments on a proposal to cut the approval time from 90 days to 30 days, stating products that “have a likely cost per QALY (quality adjusted life year) of up to £10,000 would be dealt with more quickly under a ‘lighter touch’ process.” There is also a provision for treatments that address rare diseases (aka – the Highly Specialised Technologies programme). PS, you have until January 13, 2017 to respond to NICE with your comments. Pencils up.
Pricing – the hot topic throughout all of pharma. Hillary Clinton announced her plan to combat the “outrageous” pricing and protect the patient, especially from price increases of “old” drugs. The plan proposes a watchdog group composed of federal health officials and advised by patient advocates and pricing experts. Their objective is simple – to “draw a line between price increases that are acceptable and those that are not,” according to a Washington Post article. The drug industry has its questions, of course. How long until a drug is considered old? What makes a price increase excessive? How can this unelected panel impose fines and permit the importing of similar drugs? One thing is certain, expect this argument to heat up with November right around the corner.
The election is coming! The election is coming! With Novartis’ CEO Joe Jimenez playing the role of Paul Revere (though without a horse and much less urgency), he told the Financial Times that pharma will feel the pressure from the new president’s administration. In that article, Jimenez said, “We believe that, no matter which candidate wins, we will see a more difficult pricing environment in the U.S.” He also said that Europe would certainly be affected, and drug makers “will be in trouble” if they are not quick to change. Look for companies to develop strategies in the coming months for how to deal with a sudden change in pricing models.