Download Reasons for Hope

Reasons for Hope?
Consumer Outrage, Physician
Anger and State Efforts to
Address Predatory Pricing
Sharon Levine MD
The Permanente Federation
June 15th, 2017
We’ve been at this a long time…
 1959-1963 Kefauver Commission hearings: excess profits of
the US Pharmaceutical companies at the expense of US
consumers
 “ Witnesses told of conflicts of interest for the AMA whose
journal received millions of dollars in drug advertising and was,
therefore reluctant to challenge claims made by drug
companies”
 “..frenzied advertising campaigns designed to sell trade
name versions of that could otherwise be prescribed under
generic names at a fraction of the cost
 “..marketing of new drugs that were no improvements
on drugs already on the market, but heralded as
dramatic breakthroughs without proper concern for
effectiveness or safety
Kefauver – Harris Drug Act of 1962
 A modest proposal for reform
 Require proof of efficacy and safety prior to FDA approval – for
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the first time
Require drug advertising disclose accurate, accessible
information about side effects
Prohibit the marketing of generics, under a new name, as
expensive brand drugs
Kefauver “accused of expanding the power of government
excessively, interfering with the freedom of doctors and
patients, and threatening the viability of the pharmaceutical
industry” – appeared likely to fail
Thalidomide disclosures, end of 1961, saved the legislation
What hasn’t changed since 1962?
 Egregious pricing and excess profits at the expense of
US consumers
 Conflicts of interest
 Frenzied advertising campaigns
 Aggressive pricing of “breakthrough drugs” which
offer marginal improvements
What has changed since 1962?
 Consumer attitudes
 Physician attitudes
 Impact on State and Federal budgets – forced choices
between education, infrastructure and drug costs for state
employees and Medicaid beneficiaries
Consumer Attitudes:
 Growing frustration with the impact of drug prices on out-of-
pocket costs and insurance premiums over the last two decades
 2002 AARP Survey: Americans 45 and older
92% concerned/72% very concerned about impact of drug
prices on employer-sponsored coverage; 84% “make generics
more available”; 81% “close loopholes preventing generics from
coming to market”; 24% “unable to afford a prescription”
 2003: passage of the Medicare Modernization Act
 2010: passage of the ACA, gradual closure of the “doughnut
hole”….
Consumer Attitudes: 2016-2017
 Rx drug prices “too high” – 84%
 Financial burden too great – 62%
 Financial tradeoffs as a result of cost of Rx drugs – 77%
 Rx prices result of “pharmaceutical company monopolies”: 73%
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agree
Rx drugs have brought health and productivity gains: 70% agree
Rx drug pricing needs “major reform” to address “out of control
pricing”: 83% agree
Who is to blame: PHRMA, 65%; Govt, 12%; Insurers 6%
62% have stopped taking a Rx drug because of cost
Patients for Affordable Drugs
 National organization focused exclusively on achieving policy changes
to lower the prices of prescription drugs
 Educate, activate and mobilize patients in support of change at the
Federal and State level
 Advocacy through collecting and sharing patient stories
 Founded and initial funding by a cancer patient, David Mitchell; no
funding from organizations that “profit from the development and
distribution of prescription drugs”
 www.patientsforaffordabledrugs.org
Changing Physician Attitudes
 Important: 86% of consumers report “favorable image” of their
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physician, 51% “very favorable”
Shift in position of organized medicine and specialty societies
Bundled payments, alternative payment models (APMs), CMS
focus on Part B drugs, and the human toll on vulnerable patients
significantly impacted by their piece of the cost
The Sunshine Act (Grassley), and Open Payments Database
Significant change in employment status of physicians: from self
employed (2015 <20% in 1-2 person practices; 35% in groups
of >100) to employment by hospitals, large practices –
institutional policies, including conflict-of-interest policies
Oncologists leading the way
 Oncology drugs a “poster child” for
“because we can” pricing
 More effective, with occasional genuine
breakthrough therapies
 Many more with marginal improvements
for astronomical prices
Good News/Bad News
Value in Cancer Care Consortium
 Launched at ASCO June 2017
 Development of “value-oriented regimens”
 Driven by concern about “Grade 5 Financial Toxicity”, and the
enormous “side effects” on cancer patients:
> Personal bankruptcies 3-4 times greater in 20 to 50 yo’s with
cancer, compared to age, sex and geography matched controls
> Increased debt load
> Financial sacrifices (HA Jan 2016)
> Medicare patients with cancer, on average, spend 25%
household income on cancer treatment (JAMA Oncology
11/2016)
Value in Cancer Care Consortium
 Lower drug costs without taking on the issue of drug pricing
 Phase IV studies to identify opportunities for lower dosage,
fewer doses, shorter duration of therapy, increased
bioavailability with food and/or pharmacokinetic enhancers,
use of therapeutic substitution without sacrificing quality
outcomes
 Looking for 50% or more cost savings -
Action at the State and Federal level
 Majority of the action so far at the state level, and “action”
defined as introduction of legislation
 31 bills introduced in 18 states this year, addressing
transparency
> Transparency for all drugs priced over a certain level
> Transparency on price increases
> Transparency/justification for a list of state-selected drugs
> Transparency/justification for drugs in a certain class,
e.g. diabetes drugs in Nevada
TRANSPARENCY
PRICE REGULATION
PHARMACY BENEFIT MANAGERS
STUDY
OTHER
VOLUME PURCHASING
COMPILATION
So, the question is – is there reason
for hope that these and other efforts
will bend the curve, and lessen the
burden of drug pricing in the US?