As Madness grips the nation’s attention for three weeks, changes to our nation’s healthcare system March on. Bernie Sanders thinks broadcasters are betting on their favorites, while some new pricing plans want to bust payer brackets and replace them with a whole new system. Read on for our “Final Four” in The Week That Was!
WILL NEW CMS CHIEF PULL AN UPSET OVER CURRENT MEDICAID SYSTEM?
Fresh of her confirmation as administrator of the Centers for Medicare and Medicaid Services (CMS), Seema Verma took a three-point shot, urging governors to make changes to state Medicaid programs including charging insurance premiums, adding co-pays for ER visits, and developing incentives for beneficiaries to find employment. Although Medicaid is funded jointly by the states and federal government, states have significant flexibility in determining coverage and eligibility. About half of all lives newly covered by the ACA were added through Medicaid expansions.
Verma’s recommendations reflect her past consulting work developing Medicaid expansion plans for conservative governors—including a stint in Indiana under then-Governor Mike Pence. Her approach aims to add responsibilities for Medicaid recipients; however some states found these requirements overly burdensome for both beneficiaries and the state. What does that mean for biopharmas? Insurance insecurity will likely beget medication non-compliance, with beneficiaries unable to obtain or fill prescriptions during coverage lapses. We expect patients with mental health conditions or substance abuse issues to be hardest hit by new cost-sharing and employment requirements. Companies with products in those categories, in particular, will likely see revenue decline and calls for patient assistance grow under Verma’s approach.
CANCER DRUGS: THE HIGH SCORERS IN PRICING GAME
A new paper published in Nature Reviews: Clinical Oncology and covered in Modern Healthcare finds the price of oncology drugs to be “unsustainable” with median launch prices of a new anticancer drugs coming in at $10,000/month. On a similar note, Kaiser Health News examined the true “value” of cancer medicines priced so high they force patients into difficult treatment decisions. Both articles point to cancer experts questioning often ‘scant’ benefits of oncology drugs as compared to their costs. Modern Healthcare suggests these high prices will “break the economy” while KHN deems they “break the bank” for patients. Either way, both articles point to the fact that healthcare providers are considering price in prescribing decisions.
Despite this scrutiny, Novartis came off the bench this week and scored PR points with its newly approved cancer drug Kisqali, which will be offered in three dosages and priced accordingly. Fierce Pharma and a number of other publications commented favorably on this flexible pricing structure, suggesting this approach as an innovative, less expensive option to cancer drug pricing.
How did Novartis make this slam dunk in the midst of a generally negative outlook on oncology pricing? By eliminating the guess work. Novartis announced its pricing during a conference call on the day of approval. The dose-to-price calculations are straightforward and based on dosages related to the clinical trial. With the increasing focus on the ‘financial toxicity’ of cancer treatment, drug makers need launch communications that include “real world” pricing and prescribing practices (when possible), both to manage expectations and avoid misinterpretation of pricing and costs.
LAWMAKERS CALL FOULS ON MEDIA, PBMS
Taking a page from a new playbook, policymakers spent the week calling for drug pricing transparency from everyone but pharmacos. Bernie Sanders (D-VT) sent a letter to executives at several major television networks criticizing the lack of coverage of high drug prices, his call for more media attention prompted by a recent Media Matters for America study. Sanders questioned the influence of advertising dollars on the networks and invited executives to Washington to discuss how to increase coverage on the issue. In another full court press, Sen. Ron Wyden (D-OR) targeted Pharmacy Benefit Managers this week by introducing legislation aimed at revealing some of the inner workings of the role of PBMs in the industry. The bill, Creating Transparency to Have Drug Rebates Unlocked Act, would require PBMs to disclose rebates provided by manufacturers, as well as the portion of rebates that benefit health plans and actually lower costs for patients.
Policymakers are determined to get to the bottom of the drug pricing conundrum; while the call for transparency is nothing new, the expanded scope of focus suggests that Washington is finally starting to look for answers beyond drug makers. In this environment, any lack of clarity is perceived as evasive. We counsel our clients to develop clear, content-rich messages for communications, government relations, and field reps to use proactively to increase awareness and understanding of those areas that are consistently called into question like pricing and access, costs of innovation, and efforts to work with the other stakeholders in the pharmaceutical supply chain.
MARATHON’S STAR RECRUIT EMFLAZA TRANSFERS TO PTC
Marathon Pharma announced the sale of Emflaza to PTC Therapeutics just a month after the FDA approved the now-infamous drug for Duchenne muscular dystrophy. You may recall that Marathon was met with an uproar from patient advocates, federal lawmakers and media once they caught wind of its $89,000 price tag. Seems like a bargain for a rare disease treatment; however, generic deflazacort, a corticosteroid, has been available outside the U.S. for years for as little as $1,200/year. After the sale was announced, Marathon posted a letter on its website praising PTC’s “deep-rooted experience with Duchenne” and emphasizing that this move will “ensure the greatest number of patients with Duchenne who might benefit from Emflaza can receive this drug.”
The sale is an interesting exit strategy for Marathon, which has been battling disastrous PR since the approval. For PTC, the acquisition provides a foothold in Duchenne treatment in the U.S.; the company’s only other marketed product (ex-U.S.) Translarna targets just 13 percent of Duchenne patients with a specific genetic mutation. PTC Chief Executive Stuart W. Peltz said the company would gather input from patients, families and advocacy groups before announcing a price. Our two cents? Tread carefully, PTC. Given that the industry is still reeling from Turing Pharmaceuticals’ buy-then-hike pricing strategy for Daraprim in 2015, your harshest pricing critics may be other drug makers looking to distinguish true innovation from “lucky” approvals under the Orphan Drug Act.
The game clock is at 00:00, sounding the final buzzer—that wraps another edition of TWTW. We’ll be back next week with more on health reform, pricing and access news, and maybe even a few more sports references. Thanks for reading.
Until next week,
– The Issues Management Practice @inVentiv Health PR