Tag Archives: Medicare

03/26/19

Runaway Pharma Gravy Train

© Gui Yongnian | 123rf.com

The Pharmaceutical Research and Manufacturers of America (PhRMA) spent $27.5 million on lobbying in Washington last year. This was a new record, surpassing the previous high set in 2009, when PhRMA spent over $27 million. “The new record also topped 2017’s lobbying spend—$25.43 million, at a time when Trump was taking office and pricing was often on the airwaves—by about 8%.” The increases parallel steadily increasing prices for several years. For example, Medicaid drug costs nearly doubled to $31 billion.

Rep. Elijah Cummings initiated an investigation of 12 pharmaceutical companies in an effort to uncover pharma pricing practices. Cummings sent letters seeking information and documents about the companies’ pricing practices. This is the first step of the Committee on Oversight and Reform’s review of pricing practices. The Committee will also hold hearings in order to hear from experts and patients affected by rising drug prices.

The Centers for Medicare and Medicaid Services projects that spending on prescription drugs will increase more rapidly than spending on any other health care sector over the next ten years.  The federal government bears much of the financial burden of escalating drug prices through Medicare Part D, which provides drug coverage to approximately 43 million people.  The government is projected to spend $99 billion on Medicare Part D in 2019.  In 2016, the 20 most expensive drugs to Medicare Part D accounted for roughly $37.7 billion in spending.

The hearing was held on Tuesday, January 29, 2019, just two weeks after Rep. Cummings sent out his letters. There also seems to be bipartisan support to rein in drug prices.  FiercePharma wondered whether this was real bipartisan unity or just talk. Rep. Mark Meadows, A Republican from North Carolina, said President Trump asked him to make sure the House knew on this issue, “He’s serious about working in a bipartisan way to lower prescription drug prices.” At the hearing Cummings acknowledged Trumps support, but said: “But tweets are not enough—we need real action and meaningful reforms.”

STAT News reported that Cummings is asking for “10 years worth of sales, revenue, pricing, rebate, discount, and commercialization data.” Additionally he’s asked for information detailing research and development expenses; information on patents and indications; employee compensation and bonus details; each company’s interaction with federal agencies; and details of company’s contracts with PBMs (pharmacy benefit mangers). Although his probe already includes most of the country’s largest pharmaceutical companies, he’s not finished. “There’ll be more.” Other congressional committees, such as Energy and Commerce and the Senate Finance Committee, are planning to do their own investigations.

The ten most expensive brand-name drugs accounted for $15.6 billion of spending in the catastrophic coverage phase of the Medicare Part D benefit in 2015. While the number of prescriptions fell by 17%, the Part D payments for brand-name drugs increased by 62% from 2011 to 2015. The payments for about 94% of commonly used medications more than doubled. The percentage of Medicare Part D beneficiaries who paid at least $2,000 out-of-pocket for their drugs almost doubled from 2011 to 2015. Cummings is focusing his inquiries on drugs that are among the costliest to Medicare Part D. If you’re curious, there is a link in the article to a list of the companies and drugs for conditions ranging from arthritis, cancer and cholesterol to diabetes.

An NPR and Center for Public Integrity investigation found drug companies have penetrated almost all aspects of the process that determines how their drugs are covered by taxpayers. Doctors on obscure committees advising state Medicaid programs receive free dinners and consulting contracts with the pharmaceutical companies. Speakers who don’t disclose their financial ties to the pharmaceutical companies are asked to testify about the companies’ drugs. State Medicaid officials are invited to attend all-inclusive conferences for free where they mingle with drug representatives.

Beyond that, drugmakers use other tactics to get their products paid for by the Medicaid programs: lobbying state lawmakers to achieve their goals or helping doctors fill out extra paperwork to get Medicaid to pay for the costlier drugs as Warner Chilcott did. The result is that Medicaid sometimes spends more than necessary and may pay for medicines inappropriate for patients.

The drug companies say they are not responsible for the problems. A spokesperson for PhRMA said: “As an industry, our priority is ensuring that patients have access to the medicines they need . . . . States should consider changes to Medicaid that are in line with the intended goal of ensuring robust access to medically necessary drugs.” Pharmaceutical companies have strong incentives to be included on states’ lists of approved drugs. Doctors are far more likely to prescribe an approved drug to Medicaid patients and may encourage other insurers to do the same. To gain a spot on the coveted lists, drug makers offer the states “supplemental rebates,” which are on top of other price concessions required by federal law. “The drug committee meetings where those list decisions are made are a frequent destination for drug company representatives — and those who benefit from their largesse.”

Across the country, drugmaker representatives and pharma-friendly clinicians with industry ties swarm these low-profile drug committees, a review of meeting minutes shows. Center for Public Integrity and NPR reporters saw similar dynamics play out this spring in meetings in Arizona, Washington, D.C., and Louisiana. The committees, usually known as pharmacy and therapeutics committees or drug utilization review boards, are typically made up of volunteer pharmacists and doctors.

Critics of the practice say when pharma companies target these committees, the states don’t get good deals. They also can make bad decisions for their patients. Three out of five doctors voting on state Medicaid decisions received perks from pharmaceutical companies. There are at least 38 states with doctors serving on their Medicaid drug committees who collected more than $1,000 from pharmaceutical companies while they served on the committees. Consider that while this amount may point to how money influences Medicaid decisions, a study in JAMA Internal Medicine, “Pharmaceutical Industry-Sponsored Meals and Physician Prescribing Patterns for Medicare Beneficiaries” found that when doctors get as little as a $20 lunch, they are more likely to prescribe the company’s drugs.

As compared with the receipt of no industry-sponsored meals, we found that receipt of a single industry-sponsored meal, with a mean value of less than $20, was associated with prescription of the promoted brand-name drug at significantly higher rates to Medicare beneficiaries. The differences persisted after controlling for prescribing volume and potential confounders such as physician specialty, practice setting, and demographic characteristics. Furthermore, the relationship was dose dependent, with additional meals and costlier meals associated with greater increases in prescribing of the promoted drug.

The NPR article told of a nonprofit organization, the American Drug Utilization Review Society (ADURS), whose mission is to provide a forum of leadership and support for its members. It hosted a free conference for Arizona state Medicaid officials in Scottsdale, where Michael Magnotti, an endocrinologist, gave a talk on diabetes. He was paid $1,545 for the talk by Sanofi-Aventis; and he received more than $108,000 in consulting fees from pharmaceutical companies for that year.  Sanofi S.A. is the world’s fifth-largest multinational pharmaceutical company. And it was one of the companies to receive a letter from Rep. Cummings.

A more disturbing ADURS conference took place in 2003 when Purdue Pharma helped to fund it. A speaker told his audience that addiction from the medical use of opioids was rare, and he then described a phenomenon called “pseudoaddiction.” A slideshow of the presentation (linked in the STAT article) said pseudoaddiction included “appropriate drug seeking behavior” such as demanding doses before they are scheduled. In support of his claims, he referenced a letter published in the New England Medical Journal back in 1980: “Addiction Rare in Patients Treated with Narcotics.”

This article has been repeatedly misused by pharmaceutical companies (like Purdue) as they assert that the risk of addiction from the medical use of opioids is almost nil. The potential influence of pharmaceutical companies like Purdue on opioid prescribing and the opioid epidemic has received significant attention in the media. Currently 24 states and Puerto Rico have sued Purdue for downplaying or concealing the risks of its painkillers. See the book by Barry Meier, Pain Killer for more on this issue. Also see “Doublespeak in the Opioid Crisis,” Part 1 and Part 2 for more about the misuse of the 1980 article. See “Giving an Opioid Devil Its Due” for more on Purdue Pharma. This concern is now being looked at in the research literature.

A new study released on January 18, 2019 in JAMA Network Open suggested there may be a link between aggressive marketing, drug company money and overdose death rates. The researchers found that counties receiving pharmaceutical marketing of opioids to physicians subsequently experienced increased mortality rates. Commenting on the study, Science Alert said while the study did not demonstrate a cause-and-effect relationship, it did suggest that frequent trust-building visits, like lunches sponsored by drug sales reps, did more to promote prescribing the company’s drugs than high-dollar payments to physicians. One of the researchers said: “What seems to matter most wasn’t the amount of money doctors were paid, it was the number of times they were paid.”

Our findings suggest that direct-to-physician opioid marketing may counter current national efforts to reduce the number of opioids prescribedand that policymakers might consider limits on these activities as part of a robust, evidence-based response to the opioid overdose epidemic in the United States.

While Pharma’s spending on lobbying and advertising to doctors (and consumers) continues to rise, so do the negative consequences. Pharma knows marketing has a tremendous potential to grow its profits. So spending on lobbying has increased alongside that of marketing to doctors and consumers. The public pays a price by permitting these activities to continue unhindered. Unchecked greed seems to have helped facilitate the opioid crisis. Hopefully the efforts of legislators like Elijah Cummings will make it out of their respective committees and into law. We need to stop the runaway Pharma gravy train.

11/24/17

“Cash Cows” for the Drug Industry

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The AARP, the American Association for Retired Persons, completed a report looking at the trends in the retail prices of prescription drugs used by older Americans between 2006 and 2015.  And the report’s findings were disturbing. Between 2014 and 2015, the retail prices of 268 widely used brand name prescription drugs increased by 15.5%, the fourth year in a row of double-digit increases. The increase was almost 130 times faster than that of inflation—15.5% to .1% for inflation. The average annual retail cost for one brand name drug was over $5,800 in 2015, almost $1,000 more than the annual cost in 2014. “For the average older American taking 4.5 prescription drugs per month, the annual cost of [drug] therapy would have been more than $26,000 for 2015—more than three times the cost seen 10 years earlier.

This was an industry-wide trend, as the prices of the identified drugs, from all 35 drug manufacturers with at least two brand name drugs assessed within the study, increased faster than the rate of general inflation in 2015. “All but one of the therapeutic categories of brand name drugs had average annual price increases over 5% in 2015. . . . The higher costs are typically passed on to the consumer in the form of higher cost sharing, deductibles, and premiums.”  These increases were far beyond the price increases for other consumer goods and services between 2006 and 2015. The following graph compares the annual price of brand name prescription drugs to rate of general inflation for the corresponding year.

The next figure illustrates how the average annual cost for widely used brand name drugs by older adults grew more than 300% from 2006 to 2015. The Medicare Part D program was first implemented in 2006. Older Americans fill an average of 4.5 prescriptions for medications per month. If they used brand name prescription drugs, their average annual retail cost for medications would be $26,132. “This annual retail cost of brand name prescription drugs exceeds the median annual income for a Medicare beneficiary ($24,150).”

It is no coincidence that these price increases for medications commonly used by older adults occurred after The “Medicare Prescription Drug, Improvement, and Modernization Act” was approved in 2003. “It expressly prohibited Medicare from negotiating bulk prescription drug prices.” But the Veterans Health Administration and the Defense Department were allowed to negotiate lower prescription drug prices. Prohibiting Medicare from negotiating bulk drug discounts seems directly related to increases in medications noted above.

The AARP Public Policy Institute found there were six specific brand name drugs with the highest percentage changes in retail price from 2006 to 2015. FIVE of them were from the same pharmaceutical company—Valeant. One mg and two mg tablets of Ativan (for anxiety) increased 2,873% and 2,080% respectively in their retail price. Cara .5% cream (certain skin disorders) increased 2,395%. Wellbutrin (for depression) increased 1,185%. Zovirax 5% cream (certain skin disorders) increased 783%. Eli Lilly’s Humulin R (U-500) 500 units/ml, an insulin drug used to treat diabetes, ONLY increased 530%.

If recent trends in brand name drug prices and related price increases continue unabated, the cost of drugs will prompt increasing numbers of older Americans to stop taking necessary medications due to affordability concerns. Continued excessive brand name drug price increases will also lead to increased cost sharing and premiums, which could ultimately make health care coverage unaffordable and lead to poorer health outcomes and to higher health care costs in the future.Given that health care reform expanded the number of people using prescription drugs, it would have been reasonable to expect smaller brand name drug price increases. Instead, brand name drug prices have accelerated substantially. Clearly, the economics of the pharmaceutical market are not working as expected.

Andy Slavitt, when he was the acting administrator for the Centers for Medicare & Medicaid Services, told the pharmaceutical industry in November of 2016 at a conference that increased medication costs were pervasive. Total prescription drug spending in 2015 was $457 billion, 16.7% of health care spending. Mylan’s Epipen was not even in their top twenty list for high price increases for 2015. Specialty drugs (like hepatitis C drugs) were a big part of the cost increase. They accounted for 31.8% of spending, while representing only 1% of prescriptions. Out of the 20 drugs with the highest per-unity cost increases in Medicaid, seven were generic drugs. Those increases were not to recoup drug development expenditures. See “Pharma’s not Getting the Message” for more on this topic.

The NYT reported there has been a sharp rise in polypharmacy, the use of three or more psychotropic drugs, with older adults. Almost half of these patients DID NOT have a diagnosis for mental health or pain disorder on record. Dr. Maust, a geriatric psychiatrist and lead author of the study, told Psychiatric News: “This begs the question of why physicians are exposing patients to all the risks of these medications, but not for the diagnoses they are intended to treat.” He thought the pattern suggested some inappropriate prescribing. Dr. Dilip Jeste, a geriatric neuropsychiatrist and past president of the American Psychiatric Association, said he was stunned to hear “that despite all the talk about how polypharmacy is bad for older people, this rate has doubled.” Over 90 percent of the office visits examined in the study occurred outside the psychiatric setting.

The AARP Public Policy Institute reported that 65% of adults over the age of 65 reported using 3 or more prescription drugs in the past 30 days. Ninety percent reported using one prescription drug in the past 30 days, while 39% said they used five or more. See the following figure from “Prescription Drug Abuse Among Older Adults.”

Disturbingly, this study looked at polypharmacy with medications noted within the Beers Criteria, named after its originator with the American Geriatrics Society twenty years ago. The Beer Criteria lists dozens of medications and their mutual interactions that are potentially harmful when prescribed to older adults. “Geriatric medical organizations have long warned against overprescribing to older people, who are more susceptible to common side effects of psychotropic drugs, such as dizziness and confusion.” The Psychiatric News article linked above has a chart of the Beer’s list of CNS medications, their potential risks and alternative clinical recommendations. The classes of medications examined in the study include: antipsychotics, benzodiazepines, sedative hypnotics for sleep (like Ambien), antidepressants (tricyclics and SSRIs) and opioids. An article in the Journal of the American Geriatrics Society on the 2015 updated Beers Criteria is available here.

Data reported by the AARP Public Policy Institute in “Prescription Drug Abuse Among Older Adults” also noted that older adults has several unique risk factors making them particularly susceptible to misuse of prescription drugs. Misuse is defined here as “the use of prescription drugs in a way a doctor did not direct.” First, older adults use more prescription drugs than any other age group. They also have higher rates of pain, anxiety, and sleep disorders. There could be memory problems that interfere with taking medications at the right time and in the right doses. The high rates of polypharmacy can also lead to potentially dangerous drug interactions.

Age-related physiological changes can also increase the potential for prescription drug abuse. Changes in metabolism, weight, and body fat can affect how a medication works in the body, increasing the potential for misuse and abuse and potentially dangerous side effects. The combination of alcohol and medications can bring about particularly adverse reactions among older adults, as their bodies detoxify and eliminate medications and alcohol more slowly.

Recommendations to prevent drug misuse with older adults include: regular reevaluation of drug dosages to help compensate for physiological changes and declining drug metabolism. Monitor for any inappropriate prescribing of prescription medications. Use of the Beer Criteria discussed above would be helpful. here Because patients often see multiple healthcare providers and obtain multiple prescriptions, keep an eye on a patient’s entire regimen of prescription and nonprescription drug use.

It seems hard to deny that pharmaceutical companies corralled older adults over the past twenty years and branded them as “cash cows” for the drug industry.