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How Trump’s Latest Plan to Cut Drug Prices Will Affect You

The Trump administration has made lowering drug prices one of its top priorities, and last week it unveiled a proposal that could vastly rewrite the way drugs are sold in the United States.

The proposal takes aim at the secret deals that drug companies strike with pharmacy benefit managers, the industry intermediaries that negotiate the price of drugs for insurers and large employers.

These after-the-fact discounts, called rebates, have come under harsh criticism and are blamed for helping to push up the list price of drugs, which consumers are increasingly responsible for paying.

Under the proposed rule, released on Thursday, pharmacy benefit managers would lose the legal protections that allow them to accept rebates from drug companies for brand-name drugs covered under the Medicaid and Medicare government programs. Any such discounts would instead have to be credited at the pharmacy counter when patients fill a prescription.

The Trump administration says this could result in significant savings for people 65 and older, who increasingly have been forced to pay out-of-pocket costs based on the rising list prices of drugs. People who are covered by Medicaid, the health care program for low-income Americans, generally pay little to nothing out-of-pocket.

If carried out, the plan is likely to upend the overall market for prescription drugs. Drugs paid for through Medicare accounted for 30 percent of the nation’s retail drug spending in 2017, according to the Kaiser Family Foundation.

But whether the rule will ultimately be adopted is still unclear. It faces an intense lobbying battle — and perhaps a legal one — from the pharmacy benefit managers, and the politics will also be tricky.

I have a Medicare prescription drug plan. How will this affect me?

Let’s answer this question with a question: Do you take an expensive medication for a chronic condition?

If you need expensive drugs, your out-of-pocket costs are likely to go down. Under the current system, your deductible and any coinsurance — a requirement that you pay a percentage of a drug’s cost yourself — is based on something close to a drug’s list price.


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Under the new plan, those amounts would be based on a lower net price, or the cost after discounts had been deducted. The proposal estimates that seniors’ monthly out-of-pocket drug costs would decline, on average, $1.70 to $2.74 a prescription in 2020.

That average, however, obscures the significant savings some people will see if they have extremely high drug costs: Some could save about 30 percent on their out-of-pocket costs, the administration estimated.

Not everyone will benefit. Pharmacy benefit managers secure rebates only when there is competition between manufacturers who sell similar brand-name drugs, like two kinds of blood pressure medications.

But many costly drugs — cancer treatments, for example — have little or no competition and carry either no rebates or small ones. Patients needing these drugs would not see extra savings.

If you don’t take expensive drugs, your monthly costs are likely to rise because premiums will go up. Insurers would no longer be able to apply rebate money from the drugs to lower premiums.

The typical Medicare beneficiary will see costs rise $2.70 to $5.64 a month, estimates indicate.

About one-third of people with Medicare drug plans will directly benefit from lower out-of-pocket costs, but it’s unclear how the other two-thirds will see an advantage. That’s why some consumer groups, such as AARP, have opposed similar proposals.

The trade-offs — slight increases in costs for most people and sizable help for those who need expensive drugs — would make the system more fair, proponents contend.

After all, insurance typically works by spreading the high costs of caring for a few across a large group, including healthy people. Patients needing very expensive treatments do not pay the full cost.

I regularly reach the so-called doughnut hole, or Medicare coverage gap. Will this help me?

Seniors enter the Medicare coverage gap — requiring them to pay for a bigger share of their drug costs — once spending for their medications exceeds $3,820 in a year.

With lower net prices under the new plan, many seniors wouldn’t reach that threshold until later in the year, and some wouldn’t reach it at all.

Fewer people would also reach the “catastrophic phase,” once out-of-pocket drug spending exceeds $5,100, at which point the federal government picks up much of the bill. Seniors must still pay 5 percent of a drug’s cost, but that too would be based on the lower net price.

Drug makers are expected to benefit because they must help pay for the costs of drugs once seniors enter the doughnut hole. If fewer people reach the doughnut hole, the companies pay less. And if fewer people enter the catastrophic phase, the government would save money, too.

Will this end up costing taxpayers more or saving the government money?

The Trump administration says that a lot will depend on how companies react. If the plan takes effect next year, it could cost the government an extra $2.8 billion to $13.5 billion that same year.

But longer-term projections indicate that the plan could wind up saving the government nearly a hundred billion dollars, if drug spending and drug pricing methods change.

“It’s clear from the proposal that the administration is genuinely unsure about how pharmaceutical companies and insurers and P.B.M.s will respond to this proposal,” said Rachel Sachs, an associate professor of law at Washington University in St Louis.

How would this affect the 156 million Americans who are insured through an employer?

The short answer is it wouldn’t — at least directly. The only way rebates could be eliminated entirely for all insurance plans, including those provided by an employer, would be for Congress to pass legislation.

Many companies are already introducing plans that allow employees to share in some, if not all, of the discounts when they go to the pharmacy counter. About a quarter of large employers expect to have a program like that this year, according to the National Business Group on Health, which represents large employers, and the largest pharmacy benefit managers are already working with large companies to pass on savings.

How likely is this to happen?

Industry analysts are generally skeptical the administration will be able to get these proposals in place by 2020. Although the drug industry has come out in favor of the plan, pharmacy benefit managers are likely to pursue legal action against it.

Industry analysts are generally skeptical the administration will be able to get these proposals in place by 2020. Although the drug industry has come out in favor of the plan, pharmacy benefit managers are likely to pursue legal action against it.

In addition, Speaker Nancy Pelosi and other powerful Democrats have already voiced opposition. “The Trump administration’s rebate proposal puts the majority of Medicare beneficiaries at risk of higher premiums and total out-of-pocket costs, and puts the American taxpayer on the hook for hundreds of billions of dollars,” Speaker Pelosi said in a statement.

You can also expect heavy lobbying from the nation’s largest insurers, since they are now joined at the hip with the pharmacy benefit managers. Aetna is now part of CVS Health, Cigna owns Express Scripts, and both Anthem and UnitedHealth Group have in-house pharmacy operations.

These combined companies “have a bigger voice at the table,” said Ana Gupte, an analyst at SVB Leerink.

I’m still confused. Can you give me an example?

In a speech last week, Alex M. Azar II, the health and human services secretary, pointed to the story of a woman named Sue, whose annual income was $24,000 a year and who could not afford the $7,200 a year in out-of-pocket costs for a drug to treat a genetic skin condition.

“This backdoor system of kickbacks isn’t set up to serve Sue, and it isn’t set up to serve you, the American patient,” Mr. Azar said in remarks to the Bipartisan Policy Center.

But Sue’s case underscores how any one proposal to fix high drug prices is unlikely to solve the broader problem. (This is one of several proposals the Trump administration has put forward in the past year.)

Sue’s out-of-pocket costs would fall, but perhaps not enough to make a difference in her budget: After a 33 percent discount, her out-of-pocket costs would still be $5,544 per year.

Original Publication: Katie Thomas and Reed Abelson, New York Times

Washington measles outbreak climbs while other states grapple with the disease

This year, Washington state is averaging more than one new measles case a day as officials try to stop the disease's spread.

Since January 1, Clark County Public Health has confirmed 49 cases of measles. In King County, home of Seattle, at least one confirmed case was reported.

A vast majority of those who came down with measles – 41 – were not vaccinated against the disease, Clark County officials said. One patient received a vaccination against MMR (measles, mumps and rubella), but the health agency declined to provide more details on that case "to protect the patient's privacy."

Most of the Washingtonians affected – 34 – are children between the ages of one and 10.

"Clark County Public Health is urging anyone who has been exposed at an identified location and believes they have symptoms of measles to call their health care provider prior to visiting the medical office to make a plan that avoids exposing others in the waiting room," the agency said.

Washington isn't the only state grappling with the disease. Officials in Harris County, Texas, which includes Houston, reported three cases of measles Monday, bringing the total number of cases in the state this year to six.

According to the US Centers for Disease Control and Prevention, at least 10 states have reported cases of measles in 2019: California, Colorado, Connecticut, Georgia, Illinois, New Jersey, New York, Oregon, Texas and Washington.

In all, at least 79 cases have been reported nationwide this year.

Two other outbreaks have also been reported this year, the CDC said, in New York state and New York City. Health officials have said those outbreaks are within observant Jewish communities.

According to the New York State Department of Health, at least 209 cases have been reported there since October: 64 in Brooklyn and 145 in Orange and Rockland counties as of last week.

The outbreaks began when travelers to Israel and Ukraine returned with the illness. There are large measles outbreaks ongoing in both of those countries.

"In a given year, more measles cases can occur for any of the following reasons: an increase in the number of travelers who get measles abroad and bring it into the U.S. and/or further spread of measles in U.S. communities with pockets of unvaccinated people," the CDC website says.

The measles vaccine – known as the MMR vaccine – is very effective. One dose is about 93% effective at preventing measles if you come in contact with the virus. Two doses are about 97% effective.

Experts recommend that children receive the vaccine in two doses: the first between the ages of 12 months and 15 months and the second between four and six years old.

Original Publication: Holly Yan and Debra Goldschmidt, CNN

CLINICAL UPDATES

FDA Approves Record Number of Drugs in 2018

In the 2018 fiscal year, the Food and Drug Administration set a record by approving and tentatively approving 971 generic drugs, including a record-breaking month with 110 generic drug approvals in October. This eclipses the previous record set in 2017 of 937 approvals. and 835 in 2016, both also the highest in their turn.

Generic drugs play an important role in the US pharmaceutical market by providing patients with alternative, and often much cheaper, treatment options. With US drug prices among the highest in the world, generics provide significant financial relief for millions using prescription drugs. As FDA Commissioner Scott Gottlieb recently announced, “Through our efforts, generic drugs entering the market from January 2017 through July 2018 saved consumers $26 billion through the lower prices they enabled.”

This graph shows the continued upswing in the number of FDA approvals for generic drugs:

fda-drug-approval-increases-94-percent

Regulatory Focus. FDA Sets Record for Number of Generic Drug Approvals Again Published on Oct. 11, 2018



There are several new generic product offerings to the marketplace, including drugs for multiple sclerosis, attention deficit disorder and erectile dysfunction.

New Generic approvals:

EnvisionRx

See Perspective on the Rx Pipeline from EnvisionRx for further reading

The 5 drugs to watch in 2019

Optum

Not every new drug that emerges from the FDA approval process becomes a big seller. In fact, most do not. But some new agents are better bets than others. To keep you apprised of prescription drugs that may hit your bottom line, here are five new and potentially expensive treatments that could make a big financial impact in 2019 and beyond.

  1. A Gene Therapy for Duchenne Muscular Dystrophy
  2. Duchenne Muscular Dystrophy (DMD) is a devastating and incurable muscle-wasting disease, associated with specific errors in the gene that codes for dystrophin, a protein that plays a key structural role in muscle fiber function. DMD is always fatal, usually before age 30, and generally due to respiratory or cardiac failure.

    If approved, Golodirsen will offer a new treatment option for DMD patients with a certain genetic makeup. While an existing medication in the class, Exondys-51™, works on the 13% of DMD patients who have a mutation on an area of the Duchenne gene known as exon 51™<, Golodirsen instead targets the 8% of DMD patients who have a mutation on exon 531. As with Exondys-51, expect Golodirsen to be costly. Sarepta Therapeutics Inc., which makes both drugs, charges approximately $300,000 per year for the average patient using Exondys-512.

  3. A New Option for Multiple Sclerosis
  4. Most people with the most common form of multiple sclerosis, relapsing-remitting MS (RRMS), go on to develop secondary progressive multiple sclerosis (SPMS) after 10 to 25 years since disease onset3. SPMS is a form of MS that leads to progressive, irreversible disability, such as the need for enhanced walking aids and wheelchairs, bladder dysfunction and cognitive decline. Researchers have long sought a drug to delay onset of SPMS.

    Novartis Pharmaceuticals claims that siponimod is the first investigational medicine to show a significant delay in disability progression in typical SPMS patients. If approved, siponimod would be the first oral disease-modifying therapy for SPMS patients4.

  5. An Oral Insulin Adjunct for Type 1 Diabetes
  6. Left unchecked, the elevated blood sugar levels associated with type 1 diabetes can lead to a variety of serious health complications. Accordingly, patients with type 1 diabetes are dependent on injections of insulin to control blood sugar. Yet, studies show that most people with type 1 diabetes fail to meet glycemic guidelines.5

    If approved, Zynquista (sotagliflozin) would be the first oral antidiabetic drug used in combination with insulin to control blood glucose levels in type 1 diabetics. Sotagliflozin has an FDA action date of March 22, 2019. Some analysts are optimistic about approval, citing strong efficacy and safety results presented at a European conference in early October. Peak sotagliflozin sales are predicted to reach $1.3bn by 2024 in the U.S.6

  7. An Injectable for Psoriasis
  8. There is no shortage of drugs used to treat autoimmune conditions. Indeed, two drugs in this class, Humira® and Enbrel®, are currently first and second in overall spending for all medications in the U.S.7

    Risankizumab is currently being evaluated by the FDA for the treatment of plaque psoriasis, an autoimmune disease. Risankizumab has demonstrated greater efficacy in reducing psoriasis symptoms in clinical trials vs. an existing market leader.8 Looking forward, risankizumab is also being studied for other autoimmune conditions, such as Crohn's disease and ulcerative colitis.9

  9. A Longer-Duration Drug for a Rare Blood Disorder
  10. Paroxysmal nocturnal hemoglobinuria (PNH) is a condition that leads to early destruction of red blood cells. The disease also impairs disease fighting white blood cells as well as blood-clotting platelets.10 PNH can cause a wide range of debilitating symptoms and complications, including thrombosis, which can occur throughout the body, and result in organ damage and premature death.

    Made by Alexion Pharmaceuticals, Ultomiris™ was approved on Dec. 21, 2018. According to Alexion, Ultomiris offers longer intervals between injections for PNH than its current medicine in the class, Soliris®. Instead of the current the two-week interval for Soliris, Ultomiris is intended for dosing intervals of up to 8 weeks.11 The estimated average cost of Ultomiris is approximately $458,000 per year, which Alexion estimates to be about 10% less than Soliris.12

  1. Sarepta Therapeutics. “Exon-Skipping for Duchenne.” Accessed at: https://www.sarepta.com/pipeline/exon-skipping-duchenne.
  2. Stat News. “Sarepta to charge $300K for Duchenne drug.” Accessed at: https://www.statnews.com/pharmalot/2016/09/19/sarepta-duchenne-drug-prices/.
  3. National Multiple Sclerosis Society. “Secondary progressive multiple sclerosis.” Accessed at: https://www.nationalmssociety.org/What-is-MS/Types-of-MS/Secondary-progressive-MS.
  4. Lancet. “Siponimod versus placebo in secondary progressive multiple sclerosis (EXPAND): a double-blind, randomised, phase 3 study.” Accessed at: https://www.ncbi.nlm.nih.gov/pubmed/29576505.
  5. Current Diabetes Reports. “A Review of Adolescent Adherence in Type 1 Diabetes and the Untapped Potential of Diabetes Providers to Improve Outcomes.” Accessed at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4692366/#.
  6. Pharmaceutical Technology. “Lexicon/Sanofi’s Zynquista divides experts on FDA approval prospects in T1D.” Accessed at: https://www.pharmaceutical-technology.com/comment/lexicon-sanofis-zynquista-divides-experts-fda-approval-prospects-t1d/.
  7. IQVIA Institute. “Medicine Use and Spending in the U.S.” Accessed at: https://www.iqvia.com/institute/reports/medicine-use-and-spending-in-the-us-review-of-2017-outlook-to-2022.
  8. New England Journal of Medicine. “Risankizumab versus Ustekinumab for Moderate-to-Severe Plaque Psoriasis.” Accessed at: https://www.nejm.org/doi/full/10.1056/NEJMoa1607017.
  9. Lancet. “Risankizumab in patients with moderate to severe Crohn's disease: an open-label extension study.” Accessed at: https://www.thelancet.com/journals/langas/article/PIIS2468-1253(18)30233-4/fulltext.
  10. Genetics Home Reference. “Paroxysmal nocturnal hemoglobinuria.” Accessed at: https://ghr.nlm.nih.gov/condition/paroxysmal-nocturnal-hemoglobinuria.
  11. Blood Advances. “Ravulizumab (ALXN1210) in patients with paroxysmal nocturnal hemoglobinuria: results of 2 phase 1b/2 studies.” Accessed at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6134221/.
  12. Stat News. “Alexion wins approval for rare disease drug, aims to switch patients from blockbuster Soliris.” Accessed at: https://www.statnews.com/2018/12/21/alexion-wins-approval-for-rare-disease-drug-aims-to-switch-patients-from-blockbuster-soliris/

Reprinted from Optum.com, https://www.optum.com/resources/library/5-drugs-to-watch-2019.html

PHARMACY BENEFIT TIPS

Kaiser Clinicians Share Opioid Reduction Tips

Clinicians from three Kaiser Permanente divisions have advice for healthcare providers who want their patients to accept and succeed with treatment plans that reduce the use of opioids for the alleviation of chronic pain.

“Be empathetic,” said Quan Nguyen, Assistant Area Medical Director for Kaiser Permanente of Orange County, Calif., during the Tuesday morning session Focus on Triple Aim Objectives: A Population Health Approach to Opioid Use Improvement, presented during the 53rd ASHP Midyear Clinical Meeting in Anaheim, Calif.

Nguyen described the AIDET (Acknowledge, Introduce, Decision, Explain Treatment) approach as one that has succeeded for his organization.

“Acknowledge that the person has pain,” Nguyen said. He said this is an important first step for clinicians, because their patients are anxious and want caregivers to believe that the pain is real and the healthcare provider wants to help.

He said clinicians next need to introduce to patients the fact that past practices for the treatment of chronic pain have caused harm, including death from opioid overdoses. New, safer treatment recommendations place much less emphasis on opioids and more on nonopioid and nonpharmacologic methods of pain control, but patients may be unsettled by those changes.

Instead of simply altering the patient’s treatment plan to adhere to current recommendations, Nguyen advised, “Tell them why you’re doing something different.”

He said the “Decision” part of the AIDET approach is an opportunity for clinicians to say that they no longer prescribe the medications or dosages that patients have received in the past. When speaking with patients, Nguyen said, clinicians can explain that the decision is based on evidence, clinical experience, and national prescribing recommendations, and is meant to make therapy safer.

He said empathy is particularly important in the final part of the approach, in which the clinician explains the new treatment recommendations and works with the patient to personalize the treatment plan. He said patients may need to be reassured that the changes will be implemented gradually, and the care team will support the patient throughout the process.

Nevertheless, he said, “it is a hard conversation.”

Elizabeth D. Bentley, Director of Clinical Pharmacy Services for Kaiser Permanente Northwest, said the organization uses a population-based approach to identify patients to target for opioid reduction efforts.

She said about 5 percent of the integrated health plan’s patients who seek treatment for pain have complex medical conditions and high healthcare costs and are most likely to have poor outcomes from opioid use. At the bottom end of the risk profile are the 60–80 percent of patients with easily managed pain and one or more concomitant minor conditions.

The remainder are “rising-risk patients,” she said. This population consists of patients with uncontrolled conditions in addition to pain who haven’t yet reached the high-risk category but could do so without intervention.

“That’s where the opportunity really is to make a difference,” Bentley said. She said pharmacists have many opportunities at Kaiser Permanente to help these patients, such as by monitoring drug therapy, working with patients as they taper off opioid therapy, and providing academic detailing services to clinicians.

She said targeted interventions have led to large reductions, sustained over time, in morphine milligram equivalent dosages prescribed to patients in the northwest division, and Kaiser overall has seen reductions in high-dosage opioid prescribing across the organization.

William D. Gersch, Clinical Pharmacy Specialist in pain management for Kaiser Permanente Colorado, said his division uses a stepped approach to improve opioid prescribing without a large outlay of staff resources.

Gersch said long-term users of opioids are classified as being at low, medium, or high risk for overdose. Factors such as the patient’s substance abuse and psychiatric history, opioid dosage, and concomitant use of benzodiazepines and hypnotics are included in the risk assessment.

He said the low-risk population is monitored passively with the aid of a Kaiser-developed registry of opioid use and related factors, identification of gaps in care, and education of the healthcare team about appropriate opioid prescribing and use.

Gersch said clinicians who care for medium-risk patients receive about two months of “pain e-consult” services from pharmacists and physicians who specialize in pain management. Additional support, such as shadowing the specialists and participating in monthly meetings to share struggles and best practices, are also provided to these clinicians.

Kaiser has determined that the pain e-consults save the health system about $7,770 in healthcare costs per patient annually.

*Kate Traynor https://www.ashp.org/news/2018/12/05/kaiser-clinicians-share-opioid-reduction-tips

National Prescription Drug Take Back Day

The National Prescription Drug Take Back Day is April 27, 2019. It addresses a crucial public safety and public health issue. According to the 2016 National Survey on Drug Use and Health, 6.2 million Americans misused controlled prescription drugs. The study shows that a majority of abused prescription drugs were obtained from family and friends, often from the home medicine cabinet.

The DEA’s Take Back Day events provide an opportunity for Americans to prevent drug addiction and overdose deaths.

Visit the DEA Take Back Day website to locate authorized collection sites for disposal on April 27 and year round using the Collection Site Locator.