For once, CSPAN was enthralling in the lead up to the choice Speaker Paul Ryan made last Friday to pull the American Health Care Act after failing to secure enough support from his party. The AHCA was the “repeal and replacement” bill for the Affordable Care Act (aka, Obamacare) and it would’ve presented a number of changes for pharmacos and patients to navigate. While the AHCA is dead for now, don’t let that catch you ill-prepared for the next time healthcare policy is debated. Check out this Podcast with inVentiv experts Jeff Stewart, Meg Alexander and Nicole Hamilton and their opinions about what would, and would not, have worked for drug makers under the AHCA.
But the AHCA wasn’t the only noteworthy news. We saw developments related to the ODA, DTC, and PBMs-whew, that’s a lot of letters.
Enjoy The Week That Was, alphabet-soup style.
GAO SAYS WHOA WHOA WHOA TO Orphan Drug EXPLOITERS
More than thirty years after Congress passed the law, the Government Accountability Office (GAO) has agreed to investigate the Orphan Drug Act (ODA) at the formal request of Senators Orrin Hatch (R-Utah), Chuck Grassley (R-Iowa) and Tom Cotton (R-Ark.). The Senators’ concern was peaked after “recent press reports suggest[ing] some pharmaceutical manufacturers might be taking advantage of the multiple designation allowance in the orphan drug approval process.” Senator Grassley and others in Washington have been calling for the re-evaluation of the ODA due to concerns that it may promote the wrong incentives and lead to high drug prices. The GAO is still determining the scope it will look into, which according to its managing director for public affairs, could take several months.
We hate to say “I told you so…” but we did, about a month ago. If you recall, Congressional concern started with a Kaiser Health News investigation but this is actually the culmination of steadily increasing scrutiny on orphan drug pricing. Press volume on orphans has been growing at a rate of about 40% annually over the last 5 years (we did the math). But with over 300 articles already out this quarter, coverage is on track to be nearly 2.5 times that of last year. Certainly, some misguided actions have been front and center. But don’t let one bad apple spoil the bunch because (to mix metaphors), there are plenty of good eggs out there. No one will argue against the importance of developing therapies for those with very rare diseases. Companies launching these drugs need to plan early for the risks and begin to educate the value the drug delivers to key stakeholders – letting them echo those arguments for you. Read our blog on Pharmaceutical Executive for a few tips we offered on orphan pricing communications..
DTC ADS FACE INTERRUPTED SIGNALS AHEAD
Have you felt like there have been a lot of drug ads during the morning talk shows lately? It’s because there are. Pharmaceutical advertising hit $6 billion+ last year and spending is up 62% since 2012. Industry advertisements now account for the sixth largest category of TV advertising expenditures. With the microscope focused on drug pricing, the debate on the merits of pharmaceutical advertising has also made its way back into the public eye. Patients, doctors, policymakers, associations and manufacturers are at odds with one another about the impact of DTC drug ads. In opposite corners are: those who argue the ads help educate and improve the health of consumers versus those who argue DTC leads consumers to unnecessarily request specific medicines that may drive up drug costs. But, the finger is not pointed solely at manufacturers. Studies show physicians are prescribing medications for patients who do not always need, but who have demanded a specific drug.
With the AHCA now in a casket, many policymakers will continue to curry populist favor by castigating biopharmaceutical companies. Expect to see increased focus on marketing expenditures and legislation proposals targeting drug advertising. But, there’s no need to rush to change marketing strategies; legislators will likely encounter many hurdles in their quest to reform DTC strategies (including the First Amendment). Instead, communicators should shift their immediate focus to being ready to answer tough questions about promotional expenditures that may be coming their way. Be prepared to speak to DTC costs, the impact of those costs on drug prices, and why this component of your strategy cannot be achieved through other means.
TRANSPARENCY EFFORTS CREATES UNLIKELY BEDFELLOWS
Manufacturers and PBMs alike are trying their hands at new, innovative approaches to combat ongoing scrutiny of drug prices. Earlier this week, Eli Lilly joined the growing list of big pharmacos attempting to increase transparency on drug pricing by releasing a report and supplemental blog post from the company’s CEO. These publications point to insurance design—not the manufacturer’s drug price – as the driving factor in what people actually pay for prescription drugs. Lilly also discussed programs to improve affordability of its medicines, such as value-based contracts it forged with health insurers and a recently launched partnership with Blink Health and PBM Express Scripts to provide pharmacy discounts to patients without insurance or with high-deductible plans. Sounds good, but does it sound familiar…? Lilly and Express Scripts aren’t alone in their pharmaco/PBM partnership. CVS Health also recently announced a new prescription savings program, ReduceRx™, offering discounts on select medications (currently only Novo Nordisk insulin products) through the company’s PBM, CVS Caremark. This program cuts out insurance companies, offering the discounts directly to patients.
Since details around negotiations with payers are proprietary, pharma has long been perceived as a secret and opaque industry. However, unrelenting scrutiny on pricing has given rise to the need for more details and transparency. Companies that are in pursuit of painting a clearer picture of an inherently complex topic should be careful not to be perceived as simply shifting the blame to others in the industry. If you’re planning to jump on the “transparency” and “access-centric” bandwagon these days, be prepared to be incredibly thorough and to answer to higher expectations of what is considered to be transparent and in the best interest of patients.
That’s a wrap for now, but as the GOP regroups on next steps and whether to continuing pursuing healthcare reform, we expect to see more policy action (and reaction) ahead. Stay tuned.
Until next week,
– The Issues Management Practice @inVentiv Health PR