Posts Tagged ‘Medicaid’

Service of 5 Plus 2 Equals 10: A Hard Pill to Swallow

Thursday, March 7th, 2019

Photo: mathspig.wordpress.com

Of course the math in the headline is wrong. I’m writing about drug prices in this country and nothing about what they cost and why computes either.

Did you see the alarming New York Times editorial, “Getting Answers on Drug Prices,” published the day before last week’s hearing at which seven heads of pharmaceutical companies were to meet the Senate Finance Committee? They represented Pfizer, Sanofi, Janssen, Bristol-Myers Squibb, AstraZeneca, Merck and AbbVie.

Photo: Microsoft.com

Between DJT’s trip to Vietnam and the Michael Cohen hearing, the results of the big pharma exec hearings were largely buried, at least on the news shows I hear/see. What I found didn’t really answer one eye-opening fact—why drugs cost so much more here than elsewhere. According to the editorial, a month’s worth of Actimmune to treat malignant osteoporosis costs under $350 in Britain versus $26,000 here. The editorial contends that drug prices have skyrocketed to the point that many who take them for such ailments as high blood pressure, cancers, allergies and more ration them “at great peril.”

NBC News politial reporter Leigh Ann Caldwell reported that the top exexs “could not commit to lower the price of commonly used prescription drugs even as they admitted that they control those prices. And one executive acknowledged that the high cost of medicines hits poorest patients the hardest.” That executive was Kenneth Frazier, Merck Chairman and CEO. Note: According to Caldwell the pharma industry spent a record $28 million on lobbying last year.

Photo cnn.com

The execs blame Medicare regulations. “‘The system itself is complex and it is interdependent, and no one company could unilaterally lower list prices without running into financial and operating disadvantages,’ Frazier said.” He suggested that by sitting all parties around a table “‘I think we can come up with a system that works for all Americans.’

“They pointed to a statistic that consumers on Medicare pay 13 percent out-of-pocket for prescription medication, compared to just 3 percent for a hospital stay. Some senators connected the large salaries of executives or the profitability of the company to drug costs.” In 2016, Medicare Rx drug spending, according to the Kaiser Family Foundation, accounted for 30 percent of all.

In a Wall Street Journal analysis of the hearings, Peter Loftus summarized questions directed at AbbVie CEO Richard Gonzalez, responsible for “about the biggest-selling medicine in the world, Humira, a treatment for rheumatoid arthritis and gut disorders. Humira generated $19.9 billion in global sales for AbbVie in 2018, up 8% from the year before.” In 10 years list price for a box of two pre-filled syringes went from $1,524 to $5,174 today. The company has maintained exclusivity on the drug by taking patents out on the nine or 10 diseases the drug addresses.

People—and companies that pay for their health care—are desperate to find reasonable alternatives not always with acceptable success. Sheila Kaplan wrote about the F.D.A. accusation against Canadian drug distributor CanaRx. According to her New York Times article the F.D.A. claimed that the company was selling “unapproved and mislabeled medicines to unsuspecting Americans looking to save money on prescriptions, and warned it to stop.”

Photo: fda.gov

F.D.A. commissioner Dr. Scott Gottlieb “was especially concerned about CanaRx’s sale of drugs with special safety requirements because they were high-risk and needed to be carefully managed to protect vulnerable patients.” Tracleer, for pulmonary arterial hypertension and CellCept, for transplant patients, were two on the agency’s warning list.

Through its attorney Joseph Morris, CanaRx denies the charge. He told Kaplan “Every prescription that is dispensed through a CanaRx program is dispensed directly to the patient from a licensed, regulated, brick-and-mortar pharmacy in Canada, Britain or Australia, and the patient can be sure that medicine she receives is the medicine that her doctor ordered.” Morris explained that CanaRx “serves as a broker between the companies’ employees and pharmacies and physicians in Canada, Australia or Britain.” The employees are encouraged to buy their meds to save their employer money by sending their Rx to CanaRx “which finds a foreign doctor to reissue it, and have it filed locally.”

The Times editorial began by comparing the promise of these hearings with one in 1994 in which the heads of seven of the country’s biggest tobacco companies admitted the truth about cigarettes. “The hearing ushered in a public health victory for the ages.” I fear nothing like this will result from last week’s hearings with big pharma.

I’d accept a difference of a few hundred dollars between medicine sold in the UK and here to make up for our complex Medicare and Medicaid pricing regulations and rules, but isn’t a difference of $25,650, in the instance of Actimmune, a bit of a stretch? With technology on the side of efficiency and cost-savings, why does a vial of insulin cost $1,500 today vs. $200 a decade ago? Could the paucity of TV news coverage about these hearings be related to the enormity of pharma ads on these shows? Will anything rattle the industry sufficiently so it becomes more responsible and less greedy?

Service of Side Effects of Drug Prices

Monday, October 19th, 2015

 

High prices 2

I read about the fallout of dodgy if legal pricing practices by big pharma from three viewpoints in recent weeks causing both curious and predictable side effects.

James Surowiecki wrote “Taking on the Drug Profiteers,” in The New Yorker, about the infamous Martin Shkreli and concluded that the problem with Shkreli’s exploiting loopholes in the pricing of drugs is “not with the man but the system that has let him thrive.” Shkreli, who owns Turin Pharmaceuticals, raised the price of Daraprim from $13.50 to $750 a pill because he could. This is “rent seeking,” that Surowiecki defined as “increasing profits not by adding real value for customers but by exploiting loopholes.” Daraprim, first sold in 1953, treats toxoplasmosis. After public uproar Shkreli lowered the price of the drug that among other things treats AIDS and malaria. 

Big pharma 1It’s not the only example of the rent-seeking model, he wrote, adding to the list Thiola, to treat kidney disease. The company that makes it is also owned by Shkreli. Last year the price increased “twenty fold.” A company called K-V Pharmaceutical increased the price for a shot that thwarts preterm births from $15 to $1,500. “There have also been alarming increases in the pries of common drugs like doxycyclene. Generic-drug makers have been merging with each other, leaving fewer competitors.”

Innocent people who are sick aren’t the only victims according to Michelle Celarier’s article, “Stuck in the Mud,” in the New York Post last week. She wrote about battered portfolios of some “hotshot hedge fund activists” and big pharma accounted for one of the headaches. She reported Bill Ackman of Pershing Fund’s “5.7 percent stake in Canadian pharmaceutical giant Valeant, which announced late Wednesday that it is under investigation by federal prosecutors in New York and Massachusetts regarding pricing of drugs,” as one of the problems. “Valeant has lost 36 percent of its value since Aug. 1.” Pershing Fund is down $600 million as a result.

big pharma 3The Wall Street Journal dug a bit deeper into drug pricing. In “Valeant Probe Reprises Focus on Drug Pricing,” Jonathan D. Rockoff reported that pharmaceutical companies paid $3 billion + in fines in the last 10 years “to resolve pricing cases.” I can hear Jackie Gleason in his role in the “Honeymooners” referring to “a mere bag of shells.” According to Google, the global industry represents $300 billion a year.

The fines are largely due to overcharges to Medicare and Medicaid. According to the law, a company must offer Medicaid its best rate. Merck didn’t do that.with Zocor–a cholesterol lowering drug and a painkiller no longer on the market, Vioxx. Merck settled at $650 million. [But how much did it make?] Rockoff listed other examples in the past but you get the idea. Pfizer’s Wyeth division is currently being investigated for overcharging Medicaid for heartburn medicine Protonix.

That’s not all. Big pharma gives money to charities that in turn pay for the prescriptions of needy patients. Valeant spent $544 million in 2014 and anticipates $630 million this year. That’s legal. What’s not is when the charity directs the patient to a certain drug. That’s considered a kickback. Let’s get real: Who wouldn’t promote the products of a company that supports your charity/your job?

What do you think of a corporate model that takes advantage of loopholes to raise prices dramatically to make money to the detriment of its often desperate customers? Do you think relatively tiny fees act as the slightest deterrent to a corporation intent on making a profit by skirting the law? What about Valeant giving $millions to charity that comes back in business for its products?

loopholes

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