Brrrrrrr… If you’re one of our East Coast readers, we shivered with you through a blizzard and this icy weekend. We wish we had some news to warm your heart and ease you into a tranquil week. But, no such luck (no one ever accused us of sugarcoating). Bundle up for the following The Week That Was headlines, which are chill-inducing unto themselves:
EXPRESS SCRIPTS’ POPULIST PLAYLast week, pharmacy benefit manager, Express Scripts launched its 2016 Commercial Drug Trend Report, which found the list prices for medicines rose about 11% last year while unit prices for drugs purchased by Express Scripts clients rose just 2.5%. The drug costs to employers increased 3.8% per person. While high list prices sound bad, when you dig past the headlines, this actually represents a 27% decrease in price growth compared to 2015. That should be a better message for big pharma, right? Well, not entirely. The report detailed the 15 most expensive therapeutic areas based on per-member-per-year (PMPY) spend. The top five areas were: inflammatory conditions, diabetes, oncology, multiples sclerosis and pain/inflammation. (By the way, these all happen to be categories ICER reviewed in the last year). Express Scripts CEO Tim Wentworth stopped by CNBC to discuss the company’s report and claimed transparency (including Express Scripts’ own effort) “has brought prices down.” Wentworth signaled the PBM was investing in future support services to help patients understand the lowest cost options for their prescriptions.
OUR TAKESince a major generics company testified before Congress about the players contributing to the price of medicines in the pharmaceutical supply chain, PBMs have been getting more ink. Clearly the attention is concerning the major PBMs enough to start providing context around their value in the healthcare system. Express Scripts pulled no punches in the populist dialogue about drug prices, stating: “Drug makers set the prices for their medications. They can lower them at any time,” whereas Express Scripts, “… puts medicine within reach – to make it more accessible and affordable for the clients and members we serve.” Unfortunately for pharma, this is a complex (and highly proprietary) conversation. Regardless of the discounts and rebates PBMs demand behind closed doors, pharma bears the burden of setting list prices. As such, it will likely be fingered as the cost driver in the system. In this environment, the best defense is a good offense: explain your medicine’s value to stakeholders in concepts in terms that matter to them…before you face scrutiny.
ONCOLOGISTS TELL PHARMA: TAKE A HIKE!
Cancer drugs, which cost more than $100,000 a year, have made oncology medicines enormously profitable, yet terribly unsustainable, according a group of academic researchers and oncologists who published their perspectives in Cell. Their proposed solution: increase academic-driven research and seek out newer, smaller commercial partners like non-profits and biotechs that are willing to “cap prices.” There is no question that the cancer drug market is growing: IMS Health forecasts the oncology drugs will be $150 billion by 2020. But, the industry must juxtapose that with other uncomfortable facts: in the U.S., cancer bills are the leading cause of personal bankruptcy – and in the UK, more expensive therapies are outright rejected for coverage. The case for prudence in cancer drug pricing is not new, similar pleas were made by 100 US oncologists in the Mayo Clinic Proceedings in 2015. That group called for importing drugs from Canada, among other measures to lower costs.
Oncology developers take heed; the piece in Cell is part an increasing drumbeat among physicians and patients who are galvanized about the unsustainable cost of cancer therapies. The potential impact of some new cancer therapies is nothing less than “miraculous,” yet, as we face a future of layered therapies and personalized medicines…nearly all societal stakeholders are starting to ask… “How can we sustain this?” If you’re about to launch a new oncology therapy with a higher list price, an important fact to remember is that the average American household makes about $74,000 a year. With this in mind, we suggest it is imperative to demonstrate the personal and societal value of your medicine, communicate what patients actually pay for a therapy after insurance discounts…and consider innovative payment models over time that match our innovative medicines.
VP TWEETS SUPPORT ON RTT
READ ME: especially if you are an oncology, rare, ultra-rare or gene therapy developer. Last week, Vice President Pence tweeted and told advocates that he and President Trump support improving patients’ ability to access investigational medicines (those not yet approved by the U.S. FDA). The support validates a movement called the Right-to-Try (RTT) that has sponsored and passed symbolic bills in 30 states. Currently, there’s a federal bill introduced in the House and Senate supporting the “right-to-try.” If made law, the bill would largely eliminate the FDA’s review of manufacturer compassionate use programs, which are also commonly referred to as Expanded Access Programs. The bill wouldl also remove FDA regulations that may hinder a company’s decision to provide early access. For example, adverse events arising from compassionate use could not be considered as part of the FDA’s review of an application. Granting access to an investigational drug would not be mandatory for developers under the bill, but we expect an increase in scrutiny paid to pharmaceuticals’ expanded access programs…or lack of them.
When you take the FDA out of the statutory decision-maker seat…guess who that puts all the pressure on? Drug developers! With the Administration’s support, it’s now much more likely that a Right-to-Try bill will pass during this session of Congress. Companies don’t have to grant expanded access to their investigational drugs, but we expect the laws to confuse and mobilize desperate patients with terminal conditions. More companies will come under pressure, especially emerging companies who, for monetary or risk reasons, can’t expand access. Regardless, all manufactures are now required to disclose their Expanded Access Policy in compliance with the 21st Century Cures Act. Call on inVentiv, who specializes in this if you need assistance navigating EAP.
Stay warm! Until next week,
– The Issues Management Practice @inVentiv Health PR