Archive for the ‘Drugs’ Category

The Earth Is Moving Under Medicare And The Price Of Drugs ― But Slowly.

Friday, November 4th, 2022

Prologue

This is a story, 16 years in the making, of government-enabled corporate greed. It’s complicated and somewhat dense. It has to be to go on that long. It’s a story of how one industry, the Pharmaceutical industry, has done Olympian good while achieving Titanic profit, which has been surgically excised, Midas-like, from the hides of American taxpayers who never felt the touch. The story ends with a different way, a better way, but a way we common folk won’t likely see.

The story

Medicare Part D, a prescription drug benefit plan for Medicare beneficiaries, became law on 1 January 2006 under the George W. Bush administration and a Republican controlled Congress. The legislation was enacted with no funding provisions whatsoever. Since then, Washington politicians have been arguing over whether this government program should be allowed to negotiate with pharmaceutical companies the prices it pays for drugs its members need. Medicare beneficiaries, all 64 million of them, and the public at large, have overwhelmingly supported such a move. Over the years, pharmaceutical companies have spent a king’s ransom donating to politicians to secure―should we say “buy?”―their votes in opposition.

What’s been the result?

  • A study published recently in the Journal of the American Medical Association concluded more than a quarter (27.2%) of Medicare spending is now for prescription drugs;
  • That would be $180 billion, as reported by the Medicare Payment Advisory Commission for 2020;
  • According to the Kaiser Family Foundation, the total we in the US spent on prescription drugs in 2017 was $333 billion; and,
  • The Rand Corporation studied and compared US prices to 32 other OECD countries (The Organization for Economic Cooperation and Development – the most developed nations) and reported our prices are “nearly twice those of other countries after adjusting U.S. prices downward to account for rebates and other discounts paid by drug companies.”

And now, the gravy train may be slowing.

In August 2022, Congress finally passed―without a single Republican vote―and President Biden signed, the Inflation Reduction Act, which, among other things, allows Medicare to move forward with drug price negotiations―sort of. Right about now, you may be asking what prevented Medicare from doing that all along since 2006 as a normal part of its drug-purchasing process?

As the Kaiser Family Foundation explains:

Under the Medicare Part D program, which covers retail prescription drugs, Medicare contracts with private plan sponsors to provide a prescription drug benefit. The law that established the Part D benefit included a provision known as the “noninterference” clause, which stipulates that the HHS Secretary “may not interfere with the negotiations between drug manufacturers and pharmacies and PDP [prescription drug plan] sponsors, and may not require a particular formulary or institute a price structure for the reimbursement of covered part D drugs.”

In other words, although Medicare is buying drugs for its members, all 64 million of them, it has not been allowed to even hint that a lower price might be more fair and appropriate for the government to pay. That is the very definition of a “sweet deal” for drug manufacturers.

Giving the negotiation contrarians the benefit of a doubt they more than likely don’t deserve, their argument in opposition hangs on the slim thread that negotiations will lower the income of drug manufacturers, and that will, in turn, reduce the amount of money the companies invest in research and development to discover new life-saving drugs. My own opinion is that this argument is chock full of what makes the grass grow green and tall. And, by the way, the Congressional Budget Office agrees with me, although their analysists said it with a bit more eloquence.

And what does the aforementioned Inflation Reduction Act do, anyway?

It does a number of things, one of which is to lay down new rules for price negotiations. These are its major health care provisions, leaving out, for the moment, the negotiation issue. It will:

  • Require drug companies to pay rebates to Medicare if prices rise faster than inflation for drugs used by Medicare beneficiaries, beginning in 2023;
  • Cap out-of-pocket spending for Medicare Part D enrollees and make other Part D benefit design changes, beginning in 2024;
  • Limit monthly cost sharing for insulin to $35 for people with Medicare, beginning in 2023. This might be the most far reaching and important item in the entire legislation.
  • Eliminate cost sharing for adult vaccines covered under Medicare Part D and improve access to adult vaccines in Medicaid and CHIP, beginning in 2023;
  • Expand eligibility for full benefits under the Medicare Part D Low-Income Subsidy Program, beginning in 2024; and,
  • Further delay implementation of the Trump Administration’s drug rebate rule, beginning in 2027.

Notice the years in which these provisions take effect. In most cases, it’s 2023.

The negotiation provision of the Inflation Reduction Act:

  • Requires the federal government to negotiate prices for some drugs covered under Medicare Part D and Part B* with the highest total spending, beginning in 2026. Note the year.

This provision targets the most expensive drugs. Here’s how.

Under the new Drug Price Negotiation Program, Medicare will negotiate the price of 10 Part D drugs for 2026, another 15 for 2027, another 15 for 2028, and another 20 for 2029 and later years. The drugs to be chosen for negotiation will be selected from among the 50 drugs with the highest total Medicare spending. The number of drugs with negotiable prices  will accumulate over time.

So, beginning four years from now, the law goes after the most expensive Medicare drugs.

There are debatable reasons for delaying implementation until 2026, all dealing with operational processes. The period of negotiation between the Secretary of Health and Human Services and manufacturers of the selected drugs will occur between 1 October 2023 and 1 August 2024, and the negotiated “maximum fair prices” will be published no later than 1 September 2024 and will go into effect 1 January 2026.

This seems to me a rather long and drawn out negotiation process, but it is, after all, a political compromise.

The better way

And now for the better way.

There is another government health care organization that has never had a prohibition with respect to negotiating drug prices. It is the Department of Veterans Affairs. The VA.

In January, 2021, the Government Accountability Office released a study that concluded:

“the Department of Veterans Affairs (VA) paid, on average, 54 percent less per unit for a sample of 399 brand-name and generic prescription drugs in 2017 as did Medicare Part D, even after accounting for applicable rebates and price concessions in the Part D program.”

This means what the VA pays is in line with those other 32 OECD countries.

Moreover, the GAO found that 233 of the 399 drugs in the sample were at least 50% cheaper in the VA than in Medicare, and 106 drugs were at least 75% cheaper. Only 43 drugs were cheaper in Medicare than in the VA.

What are the operational differences between the two organizations?

For one thing, the programs pay for drugs differently. Medicare reimburses the Part D plan sponsors to pay pharmacies through the middlemen―Pharmacy benefit Managers, but the VA buys drugs directly from manufacturers. It cuts out the middlemen. The VA can get lower prices because it can:

  • Negotiate as a single health system with a unified list of covered drugs; and,
  • Use discounts defined by law that Medicare doesn’t have.

As in everything political, it all comes down to economics. The VA, with only nine million health care beneficiaries, as opposed to Medicare’s 64 million, could fly under the political radar and avoid congressional restraint. It was able to keep the congressional camel’s nose and, more to the point, its sticky fingers out of its tent.

Medicare is so big, it could never do that.

And here we are.

______________________

*Medicare will also negotiate in a similar manner the prices of Part B drugs. These are drugs administered in physicians’ offices or hospital outpatient departments.

On Health, History And The Fine Art Of Fudging Data

Wednesday, August 10th, 2022

The cost of insulin, or, half a loaf is better than none

The Inflation Reduction Act (IRA), passed this past Sunday in the Senate and now sitting for certain passage in the House this week, will cap the cost of an insulin vial at $35 for Medicare beneficiaries with diabetes. However, for those not on Medicare, insulin costs will remain unchanged.

Of the 30 million Americans who have diabetes, more than 7 million of them require daily insulin. A Kaiser Family Foundation study released in July, 2022, found 3.3 million of the 7 million are Medicare beneficiaries  and documented the rise in insulin’s cost since 2007.

Aggregate out-of-pocket spending by people with Medicare Part D for insulin products quadrupled between 2007 to 2020, increasing from $236 million to $1.03 billion. The number of Medicare Part D enrollees using insulin doubled over these years, from 1.6 million to 3.3 million beneficiaries, which indicates that the increase in aggregate out-of-pocket spending was not solely a function of more Medicare beneficiaries using insulin.

The IRA is great news for the Medicare beneficiaries who make up nearly half of the population needing daily injections of insulin to live, but a provision in the original bill that would have capped the cost at $35 for all diabetics, not just those on Medicare, never made it to the final bill. Left out in the cold are the 3.7 million diabetics requiring insulin to keep living who are privately insured or not insured at all. That was an expense bridge too far for Republicans.

Will you permit a bit of cynicism here? Needing 60 votes to pass, 57 senators voted in favor of capping insulin at $35 per vial for all diabetics, 50 Democrats, seven Republicans.  Americans overwhelmingly support this as is shown in this Kaiser Family Foundation poll taken recently:

Eighty-nine percent consider this a priority, 53% a top priority. I suggest Republican leadership, never intending to allow this to pass, permitted those seven, standing for reelection this fall, to vote for the bill to give them cover in the upcoming election. Is that too cynical?

If that’s not bad enough, a study by Yale University researchers, published in Health Affairs, also in July, concluded that “Among Americans who use insulin, 14.1 percent reached catastrophic spending over the course of one year, representing almost 1.2 million people.” The researchers defined “catastrophic spending” as spending more than 40 percent of postsubsistence family income on insulin alone. Postsubsistence income is what’s left over after the cost of housing and food.

Nearly two-thirds of patients who experience catastrophic spending on insulin, about 792 thousand people, are Medicare beneficiaries. The IRA will help these people immensely. However, as it stands now it will do nothing to assist the non-Medicare diabetics who annually face catastrophic spending due to the cost of insulin. This group numbers about 408 thousand who need insulin just to go on living, and, yes, these are poor people with few resources.

Not to put too fine a point on it, but we should not forget that insulin isn’t the only medical resource diabetics use and need. There are also the syringes used to inject the stuff, not to mention the testing strips and glucose monitors that analyze the levels of blood glucose, which diabetics have to track religiously. Diabetes is an expensive disease, and insulin is only one part of the expense.

Every time I and others write about the cost and quality of health care in the US, it almost seems as if we’re all standing on the shore throwing strawberries at a battleship expecting some sort of damage. The Inflation Reduction Act contains the first significant health care move forward since the Affordable Care Act of 12 years ago. It’s progress at last, but so much more is needed.

A great historian and better American is now history himself

David McCullough has died. We have lost a giant.

McCullough had that special gift of telling stories of our past in ways that made us think we were there when they happened. He put us solidly in the shoes of the people he was writing about. For him, history is not about a was; it is about the is of the time. Like us, his subjects lived in a present, not a past. He never judged the choices made in the past; he just told the truth through stories meticulously researched and empathically written. That’s how he could win two Pulitzer Prizes, two National Book Awards and a Presidential Medal of Freedom.

I first met McCullough in the 1980s through his first book, The Johnstown Flood, published in 1968. I could not put it down. Read it through in one sitting. It was the start of his brilliant career, and its success gave him  hope he could actually devote himself to history and do well at it. But he never wrote for the money. What drove him was his love for and curiosity about understanding from whence we came.

In a 2018 interview for Boston Magazine with Thomas Stackpole, he was discussing his latest, and last, historical work, The Pioneers, about a group of New Englanders in the 19th century who picked themselves up, headed west,  settled Ohio, and courageously kept it an anti-slavery state. During the interview, he said:

There are an infinite number of benefits to history. It isn’t just that we learn about what happened and it isn’t just about politics and war. History is human. It’s about people. They have their problems and the shadow sides of their lives, just as we do, and they made mistakes, as we do. But they also have a different outlook that we need to understand. One of the most important qualities that history generates is empathy—to have the capacity to put yourself in the other person’s place, to put yourself, for example, in the place of these people who accomplished what they did despite sudden setbacks, deaths, blizzards, floods, earthquakes, epidemic disease. The second important thing is gratitude. Every day, we’re all enjoying freedoms and aspects of life that we never would have had if it weren’t for those who figure importantly in history.

Today’s Americans seem to think history begins about ten years ago. It is a modern day tragedy, and we own it.  Consequently, humanity keeps making the same mistakes over and over again, never learning from those who showed us where the land mines were lying, hidden underfoot. McCullough did that for 50 years. He leaves a large hole in our American universe.

Fudging data with style

Heading back to diabetes for a moment. You may recall the old adage, “Figures lie, and liars figure.” Well, this is not about that. The fudging I’m going to show has not a lie in it. What it does have is deception on a grand scale, and it comes from our CDC, which, usually, I greatly admire. But not this time.

As we’ve all learned throughout the COVID pandemic, the CDC tracks and reports data — a lot of it.

One of the things the CDC  reports about is Diabetes Mortality By State. It’s been doing it since 2005, and it’s in the last six years that we see, if we look, deception.

Here is how the CDC reported this data in 2015:

The redder things are, the worse they are, so this looks bad, and it is.  The scale above shows the distribution of the colors for the states, starting at 13.4 in Colorado and Nevada and ending at 32.4 in West Virginia. Those are deaths per 100,000 people.

Now, here is how the CDC reported diabetic mortality six years later in 2020:

In 2015 there were three dark red states, eight almost dark red states, and 20 almost almost dark red. But now we have only two dark red, three almost dark red, and those 20 semi dark states have turned to light tan. Wow! What an improvement.

One could be forgiven for going away happy….if one did not look at the actual numbers.

In 2015, Mississippi and West Virginia were the highest mortality states, 32.4 and 31.7 deaths per 100,000 people, respectively. Their numbers in 2020 soared about 30% to 41.0 and 43.1. The states with the lowest mortality in 2015, Nevada and Colorado (13.4 and 15.9), in 2020 are 18.0 and 24.2 deaths per 100,000. Wyoming now comes in with the second lowest mortality at 20.7.

But things look so much better. The distribution scale is different, but who looks at that?

The CDC has done something shameful; it has moved the goalposts and didn’t tell anyone. In reality, diabetic mortality has gotten much worse over the last six years, but unless you dug deep, not only would you not know that, you’d think there was an actual big improvement.

This is another reason why the insulin provision in the Inflation Reduction Act is a big deal.

 

 

COVID-19: Two Updates

Tuesday, May 19th, 2020

Who pays?

The last question asked in our question-filled Post of 13 May was the same as the first question asked, namely: Who’s the guy at the end of the line left holding the bill for COVID-19 workers’ compensation claim costs?

Right now, as we have written here, each state is addressing this in its own way; fifty different plans for one national crisis.Thus far, workers’ compensation is the pot out of which, in one way or another, claims are addressed. Employers do not like this.

Employers of essential workers haven’t wanted to scream too loudly about being the last in line guy, what with so many of their  workers falling ill, even dying, every day. That kind of crass insensitivity would be bad for business. But inwardly, they have to be nervous about getting stuck with the check, the cost of which, as we have documented here, could be enormous.

Employers have already taken a high hard one to the side of the head with the complete and utter devastation COVID-19 has done to their economic well being, and the requirement to pay the workers’ compensation claims which are going to avalanche over the top of them is something with which they strongly disagree. For what it’s worth, I think they have a point.

Back at the state capitals, I would venture, governors don’t really care where the money comes from, just as long as it’s not coming out of their state treasuries.

And throughout history, insurers have resisted paying for occupational disease claims. Witness the 20-year fight to avoid paying the costs of pneumoconiosis, which resulted in the Federal Coal Mine Health and Safety Act of 1969, amended four years later by the Black Lung benefits Act, which created the Black Lung Disability Trust Fund.

So, if the states don’t pay and if insurers don’t pay and if employers don’t pay, who is left?

Brothers and sisters, the federal government is left, which is another way of saying we are left. We will all share the risk and share the costs. If you cannot bring yourself to believe that, you haven’t been paying attention.

In fact, a model exists: The September 11th Victim Compensation Fund, which:

…provides compensation to individuals (or a personal representative of a deceased individual) who were present at the World Trade Center or the surrounding New York City exposure zone; the Pentagon crash site; and the Shanksville, Pennsylvania crash site, at some point between September 11, 2001, and May 30, 2002, and who have since been diagnosed with a 9/11-related illness.  The VCF is not limited to first responders.  Compensation is also available to those who worked or volunteered in construction, clean-up, and debris removal; as well as people who lived, worked, or went to school in the exposure zone.

The wheels are already in motion. Last week, a bipartisan group in the House unveiled the Pandemic Heroes Compensation Act, a plan to compensate essential workers who fall sick or die from COVID-19. The Act is modeled on the September 11th Victim Compensation Act.

Senate democrats are also proposing legislation. Like everything else in D.C. these days, the road from here to eventual victim compensation will be tortuous, but I cannot see any other way of paying for this national catastrophe other than with a national program. Can you?

The Moderna results

For a number of years, I chaired the Board of a BIOTECH pre-clinical Contract Research Organization (CRO). We took compounds, whose makers hoped would become the next blockbuster drugs, and tested them in mice, rats, guinea pigs, rabbits, pigs and non-human primates (that’s right, monkeys). In the biotech business, everyone knows everyone else, and we certainly knew a lot of scientists trying to develop vaccines.

Yesterday, the Boston pharmaceutical company Moderna reported a vaccine it was developing for COVID-19 produced antibodies in humans. In vaccine development, this is the beginning of a Phase One trial, and its purpose is to confirm the vaccine is not toxic. Moderna’s Phase One trial is composed of 45 participants, eight of whom  Moderna says produced the antibodies. We know nothing of the other 37.

While encouraging, you won’t find respected scientists getting too excited yet. They know what Moderna has done is to take the ball out of the end zone and reach the one yard line. Nintey-nine to go.

Two things are exciting, however. First, Moderna was able to get to this point at light speed. What Moderna did in about 70 days usually takes three to four years. That is over the moon fast, but the other ninety-nine yards are going to be increasingly more arduous. Second, there are more than 100 other groups around the world, both pharmaceutical and academic, who are also going hell bent for leather to develop the vaccine that will eradicate COVID-19. Although I have every confidence one of these groups, maybe Moderna,  will cross the goal line at the other end of the field, it will take a miracle on the order of the Raising of Lazarus for this to happen before mid to late 2021.

Until then: Constant vigilance. Complacency will kill you. Really. Please keep this in mind as all the beaches and parks open this coming Memorial Day weekend. It will be highly tempting to revert to former form.

 

The Wizard Behind The Curtain – Addendum To Drive Home The Point

Thursday, February 14th, 2019

Among other things, yesterday’s post made a point about the way the PBM system (if you can call it that) makes it difficult for uninsured Type 1 diabetics to buy insulin, because of price. To beat that horse even deader, here is an excerpt from a Kaiser Health News article, in partnership with NPR, published yesterday entitled, Insulin At A Fraction Of US Cost:

Almost one year to the day after her daughter’s diagnosis, Lija Greenseid and her family were visiting Quebec City, Canada, in July 2014. Her daughter’s blood sugar started spiking and Greenseid feared her insulin might have gone bad, so she went to a pharmacy. With no prescription and fearing that her daughter’s life was on the line, Greenseid was prepared to pay a fortune.

Instead the box of insulin pens that normally costs $700 in the U.S. was only around $65 or so.

“At that point I started tearing up. I could not believe how inexpensive it was and how easy it was,” Greenseid said.

“I said to [the pharmacist], ‘Do you have any idea what it’s like to get insulin in the United States? It’s just so much more expensive.’ And he turned to me and said, ‘Why would we want to make it difficult? You need insulin to live.’”

The more Greenseid traveled with her family, the more they realized how inexpensive insulin was everywhere except in the United States. In Nuremberg, Germany, she could get that $700 box of insulin pens for $73. The same box was $57 in Tel Aviv, Israel, $51 in Greece, $61 in Rome and $40 in Taiwan.

“We get so accustomed in the United States to thinking that health care has to be difficult and so expensive that people don’t even consider the fact that it could be so much easier and less expensive in other places,” Greenseid said. “In fact, that is the case in most countries.”

Take a moment out of your busy day and think about that. Please.

And answer this question: Do you  believe America’s 1.3 million Type 1 diabetics  who require insulin every day ─ just to stay alive ─ should be forced to pay hundreds, even thousands, of dollars a month for that medicine? Or are they not worthy enough to be treated like their fellow diabetics the world over?

The Wizard Behind The Curtain – Part 2

Wednesday, February 13th, 2019

Let me tell you a story.

The year is 2015, and a workers’ compensation consultant is sitting in a highly respected insurer’s plush conference room. The consultant is meeting with the insurer’s Senior Vice President of Claims to negotiate price for an innovative specialty medicine program. What kind of program? Doesn’t matter.

The consultant has come armed with pro formas showing all costs of the program. Down to the penny. The problem is the insurer and the program are miles apart on what the insurer will pay the program’s doctors for each patient encounter. The Senior Vice President says, “Look, this isn’t exactly in our fee schedule, but the closest we can come to what is in the fee schedule is to pay your folks $85 per visit.” Hearing this, the consultant once again begins to explain why the fee needs to be $150 per visit.

This goes on for another half hour. The Senior VP finally says, “Well, maybe we could go to $91 per visit, but it’s the best we can do. Take it or leave it.” The consultant offers $140, but won’t go lower, because to do so would torpedo the program, which has demonstrated far more success, accompanied by significant cost savings, than others of its kind.

And then, it happens. The Senior Vice President in that plush conference room of this highly respected insurer says, “Hang on a minute. I’ve got it. You’re a specialty program, so we have a little latitude there. Charge us $300. We’ll pay you $150, and save our insureds $150 in the process.”

And that was how it was done. And it’s perfectly legal.

I tell that story by way of analogy.

Now let’s dream a bit. Imagine for a moment you are a pharmaceutical company CEO. You produce drugs that help sick people be healthy. Trouble is, the great big US healthcare system in which you operate makes Rube Goldberg seem like Thomas Edison. And in the center of your part of it sit pharmacy benefit managers, PBMs.

As we saw in Part One, the PBM industry has evolved in a rather chaotic way since Pharmaceutical Card System, Inc., invented the plastic benefit card in 1968. Over the intervening years, pharmacies and PBMs have developed into sometimes incestuous relationships. Today, three PBMs, Express Scripts, CVS Caremark and Optum RX, control 78% of the market. They wield tremendous power in drug pricing in a system designed to be opaque.

Essentially, the PBM’s job is to negotiate with pharmacies and drug companies, like yours, on behalf of their insurer and health plan clients. They create formularies, negotiate prices down (you give them a big discount in return for your drug being listed in their formulary), return some of the savings, called rebates,  to the clients (nobody really knows how much), and keep some for themselves. Seems simple, right? Well, it’s not. It’s infinitely more complicated and complex. And because only a very few actually understand PBMs, they remind me of the shenanigans in The Wizard Of Oz. However, it is that way only because we have allowed it to happen over the last four decades.

But back to you, Here’s your issue as a drug company CEO: You know, regardless of what price you set for your super-duper drug, you’re going to have to give a lot of it back as a discount to the PBM so it can give rebates to its clients. What’s a busy CEO to do?

Well, one answer is to set the price, the list price, so high that you’ll be able to provide a generous discount and still make what your finance folks say you must have for a profit. Just like in my analogy from above.

In a weird sort of way, this works most of the time for patients, but only if they have health insurance. What happens if they don’t? This is where things get sticky. Uninsured people get stuck paying the full list price, the one you inflated in order to provide the discount that allows you to make a profit and PBMs to (kind of) save money for their customers. This has been especially difficult for some uninsured Type 1 diabetics, who, as we have written previously (here and here), have had great difficulty paying for the insulin they need to take every day ─  just to stay alive.

Many employers have had enough of this. According to the National Business Group on Health, 75% of surveyed employers believe the rebate system does not serve to lower prices for employees, and 91% believe an alternative, more simple approach is required. Then there is CMS’s Alex Azar, of Ely Lilly fame, who wants you to price your drugs like Europeans do, which is a water fall lower than prices in the US. And let us not forget the current occupant of 1600 Pennsylvania Avenue, who, as yet unable to fulfill a campaign promise about a wall, has an outside chance of fulfilling one about drug prices.

Neither the healthcare industry, nor the US Chamber of Commerce like any of this. I imagine it might also be a bit awkward for quite a few US legislators who have been significant beneficiaries of the healthcare industry’s largesse, largess of the campaign contribution variety.

Regardless, I’m an optimist, and I keep hoping that in some way the wizard behind the healthcare curtain will go ‘poof,’ and be gone. Silly me.

 

 

What Price Life? Part Two

Wednesday, December 12th, 2018

Part Two

“Insulin is my gift to mankind” – Frederick Banting

In Part One, we noted the critical need for daily insulin injections to keep Type 1 Diabetics (T1Ds) alive. We described how Frederick Banting’s team of himself, Charles Best and James Collip recovered and purified insulin from the fetal pancreases of cows and pigs in 1922, how they successfully tested it on humans, how Banting won the Nobel Prize the following year for his discovery, how the team sold the patent for the discovery to the University of Toronto for $3.00 and how they and the University agreed to license the manufacturing rights to pharmaceutical companies royalty-free, because, in Banting’s words, “Insulin is my gift to mankind.” The team and the university wanted to incentivise drug companies to improve on the Banting team’s discovery, so the University and Banting agreed to allow the companies to improve Banting’s formulation if they could and patent any new discoveries that arose. Their hope was that drug companies would share their vision of making it possible for T1Ds to live high-quality lives and to keep insulin prices low to help them do it.

Immediately after the sale of the patent to the University of Toronto, the University licensed the manufacturing rights for insulin to Eli Lilly and Company, located in Indianapolis, Indianna, and Nordisk Insulin laboratorium in Copenhagen. Meanwhile, a few kilometers away in Copenhagen, Novo Terapeutisk Laboratorium succeeded in producing a stable liquid insulin product which it called Insulin Novo. Decades later, in 1989, these two companies would merge to become Novo Nordisk.

In the beginning, the pharmaceutical companies had the best of intentions. After all, they were manufacturing and marketing the world’s first “life-saving” drug.

Over time, the “best intentions” became the quarterly bottom line and shareholder value. The emphasis was now on next generation patents, which would stifle competition and prevent the emergence of insulin generic drugs. To this day, there isn’t one.

It is not an exaggeration to say insulin made Eli Lilly and Company and Novo Nordisk two of the top pharmaceutical companies in the world. It also hasn’t hurt the bottom line of Sanofi, the company that rounds out the insulin producing triumvirate and is the world’s fifth largest pharma by sales.

In the last 20 years, these insulin producing companies have become swept up in the craziness of U.S. health care, where prices are on a rocket ride to the moon. During that time, the list price of insulin has increased more than 700%. Of course, T1Ds who have employer sponsored health insurance don’t pay list price. The price they pay, which is much lower, is  negotiated by their insurance company or Pharmacy Benefit Manager. This also applies to T1Ds who have secured insurance either through the expansion of the Affordable Care Act or some other means. They find their insulin relatively affordable, unless they have a prescription deductible which forces them to pay the full amount for insulin until they reach the deductible total. Finally, diabetics on Part D must pay 45% of list price when they fall into the infamous “donut hole.”

But children without insurance are in a very bad place, and there are a lot of them – 3.9 million in 2017 under the age of 19 (300 thousand more than 2016).

This situation is worse, twice as worse, in states that have not expanded Medicaid through the Affordable Care Act.

Kids with Type 1 Diabetes make up about .05%, of the uninsured group. That’s 195,000 children. And then there are the young, T1D adults who can no longer be on their parents insurance plan, because they are over the age of 26. Recently, we have learned of  T1Ds who have been forced to ration their insulin. This has resulted in tragic deaths. Parents and guardians have begun to protest at pharmaceutical company gates, some carrying the ashes of their dead children. Think about that.

So, here’s a question: Should anyone in the United States who requires a daily drug just to stay alive be forced to come up with the money to pay for it? Or, should that be a government-sponsored, health care right, as in the Declaration Of Independence’s “self-evident…unalienable right…to life.”

While you ponder that, I’ll leave you with this. Banting, Best and Collip would be tremendously gratified that their “gift to mankind” has enabled millions upon millions of Type 1 diabetics to lead productive, fulfilling lives. But they would be horrified that the drug’s price is now exacting a human price of obscene proportions.

 

 

What Price Life?

Thursday, November 29th, 2018

Part One

“Insulin is my gift to mankind” – Frederick Banting

A Quick Quiz

Question 1: Name a chronic disease requiring medication, which, if not taken every day, guarantees death within two weeks.
Answer: Type 1 Diabetes.

Question 2: Name the medication.
Answer: Insulin.

Question 3: What is the monthly cost of insulin for a Type 1 diabetic?
Answer: As we shall see, that depends.

Question 4: If Type 1 diabetics cannot afford the cost of insulin, without which they will surely die, what should they do?
Answer: This is happening at this moment, and people are dying.  In these two blog posts we’ll examine why and what can be done about it. But we need to first posit some truths about diabetes, and then describe how, in 1922, Canadian doctor Frederick Banting made the ground-breaking discovery that allowed Type 1 diabetics, for the first time in history, to live.

Ten Fast Facts

  1. Insulin is a hormone made by the pancreas that allows the body to use sugar (glucose) from carbohydrates in the food we eat for energy or to store glucose for future use. Insulin helps keeps blood sugar levels from getting too high (hyperglycemia) or too low (hypoglycemia). Type 1 diabetics, T1Ds, can no longer produce insulin. They have none of it. Although older adults can also contract Type 1 diabetes, it usually strikes children and young adults. Without insulin, whether old or young, they die.
  2. There are about 1.3 million T1Ds in the U.S. They comprise one half of one percent of the population. Currently, there is no cure for any of them. Without insulin, they will die.
  3. There are about 29 million Type 2 diabetics. T2Ds still make some insulin. In most, lifestyle changes will improve their health, sometimes to the point where they will no longer require insulin or any other medical prescriptions. Some will become insulin-dependent, and without it, they face life-changing complications.
  4. Diabetic Retinopathy is the leading cause of blindness.
  5. Diabetes is the leading cause of non-traumatic amputation.
  6. Diabetes is a leading cause of heart attack and stroke.
  7. Diabetes is the leading cause of kidney failure.
  8. Complications from diabetes sometimes cause workplace injuries and often exacerbate the severity and length of recovery.
  9. In 2017, the nation’s total direct medical costs due to diabetes were $237 billion. Average medical expenses for diabetics were 2.3 times higher than for non-diabetics. The extent to which diabetes added to workers’ compensation medical costs is unknown.
  10. Based on information found on death certificates, diabetes was the 7th leading cause of death in the United States in 2015, with 79,535 death certificates listing it as the underlying cause of death, and 252,806 listing diabetes as an underlying or contributing cause of death. However, diabetes is underreported as a cause of death; studies have found that only about 35% to 40% of people with diabetes who died had diabetes listed anywhere on the death certificate and only 10% to 15% had it listed as the underlying cause of death. An example of best practice would be, “Death caused by infection contracted from hemodialysis due to kidney failure, a complication of the patient’s diabetes.”

Banting and Insulin

Image result for photo of frederick banting

Frederick Banting is perhaps Canada’s greatest hero. Born in 1891, he graduated medical school with a surgical degree in 1915 and found himself in a French trench by the end of 1917. In December of that year, he was wounded during the Battle of Cambrai, the first great tank battle in history. He remained on the battlefield for 16 hours tending to other wounded soldiers until he had to be ordered to the rear to have his own wounds treated. For this action he won the British Military Cross, akin to America’s Silver Star. After returning to Canada, he continued his studies and, in 1920, secured a part time teaching post at Western Ontario University. While there, he began studying insulin Why? Serendipity. Someone had asked him to give a talk on the workings of the pancreas.

Banting became interested – and then obsessed – with trying to come up with a way to get insulin to people who couldn’t make any of their own. In November 1921, he hit on the idea of extracting insulin from fetal pancreases of cows and pigs. He discussed the approach with J. R. R. MacLeod, Professor of Physiology at the University of Toronto. MacLeod thought Banting’s idea was doomed to failure, but he allowed him to use his lab facilities while he was on a golfing holiday in Scotland. He also loaned him two assistants, Dr. Charles Best and biochemist James Collip. Collip devised a method to purify the insulin Banting and Best obtained from the fetal pancreases.

To MacLeod’s surprise, Banting’s procedure worked, and in 1922 Banting and Best successfully treated the daughter of US Secretary of State Charles Evans Hughes.

In 1923, one year later, Banting, at the age of 32, won the Nobel Prize, which, to his disgust, he had to share with MacLeod. To this day, Frederick Banting is the youngest person ever to win the Prize in Physiology or Medicine.

His discovery could have made Banting mind-numbingly rich, but he would have none of that. Along with Best and Collip, Banting patented his method and then the three of them sold the patent to the University of Toronto for the princely sum of $3.00. When asked why he didn’t cash in on his discovery, Banting said, “Insulin is my gift to mankind.” With Banting’s blessing, the University licensed insulin’s manufacturing to drug companies, royalty free. If drug companies didn’t have to pay royalties, Banting thought they would keep the price of insulin low.

And they did. For decades.

But patents expire, and capitalism being what it is, people get greedy, and greed is why we have no generic, low-cost insulin today and why, over the past 20 years, insulin prices have risen anywhere from 800% to 1,157%, depending on the variety and brand. It’s why, lacking health insurance, some Type 1 diabetics have recently been driven to ration their precious insulin. Some of them have died.

More about all that in Part Two.

 

 

 

Reactions To “Pharma’s Nine Words”

Monday, May 15th, 2017

We received a lot of thoughtful feedback to last week’s post on drug company Direct To Consumer (DTC) television advertising. I thought I’d share a couple that are representative of the whole.

This from a doctor in Florida:

You have acutely illustrated the challenge that allopathic physicians now battle with every day. In short, big Pharma has found a way to circumnavigate the drug salesperson and physician and go directly to the end consumer
Every physician feels significant pressure to satisfy their patients even when the request for certain pharmaceuticals is unreasonable; if the patient walks out of your office empty-handed chances are they won’t come back, so at the very least most patients have some prescription in hand upon their exit.

And this from a C-Suite Chief of Marketing:

I must confess upfront that I was one of those “DTC advertisers” in the early 2000s, having worked with Eli Lilly, Boehringer Ingelheim and Pfizer to name a few former clients.

Over the years I’ve read conflicting studies on DTC’s effectiveness and impact.  This said, there is typically a relationship between the largest category spender and market share.

You may also be interested in a dated survey from the FDA on the subject.  While there are definitely some “pro’s” associated with these efforts, including but not limited to patient empowerment (more prepared for doctor’s appointment, asking thoughtful questions, generally being more involved in one’s health, and better conversations about one’s condition and possible treatments). But there are also some “con’s,” including but not limited to:  overpromises/over statements of a drug’s potential benefits (and a corresponding downplay of possible side effects); pressure on physician’s part to prescribe a patient-requested drug, among others.  (But let’s not forget that there were physicians who were also in pharma’s pockets long before DTC, prescribing certain drugs based on lucrative relationships with companies.  Certainly not all of them… but unfortunately there were – and likely still are – some “bad apples.”)

It will be interesting to see how this debate evolves as baby boomers age.  Let’s hope that the patient is the ultimate winner here!

We can all agree with that last bit about hoping the “patient is the ultimate winner.”

We welcome responsible, thoughtful comments from our readers.

 

 

Pharma’s Nine Words

Thursday, May 11th, 2017

Any idea what the nine most frequently spoken words on US television are? How about:

My doctor said…

Tell your doctor…

Ask your doctor…

These words come at the beginning, “My doctor said,” the middle, “Tell your doctor,” and the end, “Ask your doctor,” of Direct To Consumer (DTC) television advertising with which Big Pharma bombards Americans every day. This is especially true during the morning network shows between 7:00 and 9:00 AM, the evening news hours and the occasionally funny prime time sitcoms that follow. The ads also feature a swell story with great looking actors and sweet music that plays as someone doing a voiceover tells us all about the 25, or so, ways the drug being pushed can kill us.

DTC ads come in many forms, but in 2015  69% of them were television ads with about a third of those coming from Pfizer. These ads have been allowed since the mid-1980s, but gained momentum in 1997 when the FDA relaxed the rules regarding television. Since then, it’s been Katy bar the door.

According to Pharmacy and Therapeutics (P&T), a peer reviewed journal for managed care and hospital formulary management:

The average American television viewer watches as many as nine drug ads a day, totaling 16 hours per year, which far exceeds the amount of time the average individual spends with a primary care physician.5,23,27

Since beginning the recovery from the Great Recession, television DTC has seen staggering growth:

 

 

According to Kantar Media, 72% of the commercial breaks in the CBS Evening News now have at least one pharmaceutical ad in them. These ads have a specific demographic target: Baby Boomers. Until 2012, they were mainly aimed at conditions such as dry eyes, erectile dysfunction, smoking cessation, chronic pain, constipation, heartburn, allergies and cholesterol. But in the last five years, they’ve made a deep dive into cancer, rheumatoid arthritis, and other illnesses to seniors. And, a reflection of our time, Opioid Induced Constipation hit the field during the 2015 Super Bowl. I can still hear the collective national gasp from that one.

Kantar Media reports Pharma spent $6.4 billion on DTC in 2016, with television garnering more than two-thirds of the spend. Since 2012, television spending is up 62%. During that time, the number of drug companies annually spending more than $50 million and the number spending more than $100 million has doubled. For example, last year, makers of Viagra and Cialis spent a combined $306 million convincing older (and increasingly younger) men that without those magic little pills their once prodigious sexual prowess, rapidly approaching Wooly Mammoth-like extinction, will never rise again, literally (but watch out for that 4-hour thing).

And when a new drug hits the market, first year spending can be breathtaking. Consider Opdivo, which debuted in 2015. The drug treats a certain kind of end-stage lung cancer (non-small cell lung cancer), which has a US patient population of less than 200,000. Yet Bristol-Myers Squibb, Opdivo’s maker, spent $93 million marketing it in its first year.

All this money begs an obvious question: Does it work? Well, even Pharma’s not sure, saying ROI is only one measure of a brand’s marketing success. Who is sure? The American Medical Association, which, in 2015, saying it was a colossal waste of money, called for an “outright ban” on Direct To Consumer advertising. The AMA also said doctors felt pressured by vulnerable patients who were looking for relief from one thing or another and that older drugs often work just as well, or even better, than the newer high-priced brands. Of course, it is preposterous to think we’ll ever return to to good old days of the 1980s before DTC advertising became more than a gleam in a marketer’s eye. The drug lobby is nearly omnipotent and there is the  little matter of commercial free speech. Moreover, drug makers claim they are providing valuable information with which consumers can make informed choices. Yet, according to the World Health Organization, “DTC is used to drive choice, not to inform it.”

America is one of only two countries in the world that allow Direct To Consumer drug advertising, the other being New Zealand, a country with a population of less than 4 million. The medical community doesn’t like it there, either.

Pharma has long had a wish to bring DTC to the European Union. That’s not going to be happening, however, as last year 22 of the 27 members rejected the idea.

The P&T white paper, mentioned above is presents an excellent analysis of DTC advertising, and ProCon.org has a nifty for-and-against page regarding DTC advertising. They’re both worth a look.

More on the opioid crisis and the fentanyl factor

Wednesday, May 4th, 2016

Here in the state where the world headquarters of Lynch Ryan is housed, we learn the unsettling news that Massachusetts has seen a 190% increase in opioid deaths in five years. Jessica Bartlett of Boston Business Journal notes:

“Despite Gov. Charlie Baker releasing a $27 million plan to address the opioid epidemic in June, opioid deaths have continued to rise, with recent data from the Department of Public Health showing a 12.5 percent increase in estimated deaths in 2015 compared to the year before.

Compared to just five years ago, the estimated 1,526 unintentional opioid-related deaths in 2015 represents a 190 percent increase.”

Things might have been even worse. In 2015, the “opioid antagonist” Naloxone was administered 12,982 times, so we can only guess what the tally might have been without such intervention. It doesn’t look like 2016 will bring much relief: An estimated 400 deaths have have already occurred in the first three months of the year.

Bartlett notes a disturbing trend:

“While the high number of deaths is nothing new, the state has for the first time released the number of deaths with a confirmed presence of fentanyl, a synthetic opioid 50 to 100 times more potent than morphine.

Of the 1,319 confirmed opioid deaths in 2015, 754 of them tested positive for fentanyl.”

Felice J. Freyer and J.D. Capelouto recently reported on this in the Boston Globe: Fentanyl factored in more than half of 2015 OD deaths, state reports

A Massachusetts law criminalizing fentanyl trafficking took effect in February, with sentences of up to 20 years in prison for selling more than 10 grams.

The health department data released Monday provide the most reliable portrait to date of the opioid crisis in 2015, confirming that 1,379 people died from overdoses. A deeper analysis of cases from 2014 raised the number of confirmed fatal overdoses for that year, to 1,282.

The state’s findings do not distinguish between heroin overdoses and those caused by prescription opioids. Health officials are unable to make that distinction because most prescription opioids, as well as heroin, break down into morphine in the bloodstream. But fentanyl, a synthetic drug, turns into a substance that can be detected by a test.

Southern California Public Radio features a story on Why it’s so hard to track the powerful opioid fentanyl. Rebecca Plevin reports:

First, doctors treating overdose victims are mainly looking for the better-known opioids, like Vicodin. And when they check for drugs, standard tests often miss fentanyl. A special lab analysis is often necessary, and doctors – especially in busy ER’s – don’t always think of that. Another problem is that not all hospitals are set up to conduct the special lab analysis.

All of this is complicated by the fact that illegally manufactured fentanyl may be mixed with heroin or counterfeit pills that look like normal prescription medications, so people may not be aware that they’re exposing themselves to the drug.

The rise in fentanyl use has health officials particularly worried, given its tremendous potency. To try to get a handle on the problem, the state has asked all local hospitals to report suspected fentanyl overdoses. State officials have also asked providers to test for fentanyl when ordering drug screening in cases of suspected overdose.

This is a disturbing news in the worsening opioid crisis. A simple search of Google news will show that officials in Ohio, Pennsylvania and other states are seeing surges in fentanyl overdoses.

In his post Opioids, spines, and dead people, Joe Paduda talks about physicians and prescribing, giving context to the issue:

In a related piece, Michael Van Korff ScD andGary Franklin MD MPH summarize the iatrogenic disaster driven by opioid over-prescribing. Over the last fifteen years, almost 200,000 prescription opioid overdose deaths have occurred in the US, with most deaths from medically-prescribed opioids.

Doctors prescribed opioids that killed well over a hundred thousand people.

Today, about 10 million Americans are using doctor-prescribed opioids; somewhere between 10% – 40% may have prescription opioid use disorder – they may well be addicted.

Van Korff and Franklin note that 60% of overdose fatalities were prescribed dosages greater than a 50 mg morphine equivalent.

In days gone by, drug deaths were primarily associated with illicit or street drugs, but today, it’s prescription drugs – and prescriptions are seen as the gateway to street drugs, rather than the reverse.  We now lose more people annually to drug overdoses than by car crashes or firearms.

In 2013, the most recent year for which data is available, 46,471 people in the United States died from drug overdoses, and more than half of those deaths were caused by prescription painkillers and heroin.

That compares with the 35,369 who died in motor vehicle crashes and 33,636 who died from firearms, as tallied by the federal Centers for Disease Control and Prevention.

Combating the public health scourge of prescription drug-related addiction and deaths will require a concerted effort on all fronts: physicians as prescribers; employers and insurers in the workplace; public health, elected officials and law enforcement in our communities. On that front, there have been some promising approaches in moving from a crime to a treatment approach: Connecticut Cops Consider ‘Angel’ Program to Combat Heroin Scourge

Another approach, pioneered in Gloucester, Massachusetts, shows promise and has been attracting increasing attention around the country. In Connecticut, Groton has adopted it and Manchester is considering a similar program.

Launched on June 1, the Gloucester Angel Initiative makes police the point agency in moving addicts directly into treatment. Addicts are allowed to surrender any drugs and needles they have with the understanding that they will not face arrest and that police and community volunteers called “angels” will help them toward recovery.

About 350 admitted addicts have sought help in Gloucester through the program, department spokesman John Guilfoil said on Jan. 8. As a side benefit, crime fueled by addiction, particularly thefts, dropped 33 percent last summer compared with the summer of 2014, Guilfoil said.

Fifty-three police agencies in the country have adopted similar programs, and two to three more join each week through a partnership called the Police Assisted Addiction and Recovery Initiative, Guilfoil said.

Prior related posts: