Massachusetts thread in NYTimes story on drug price rekoning

The New York Times reports:

As complaints grow about exorbitant drug prices, pharmaceutical companies are coming under pressure toHIT DEST disclose the development costs and profits of those medicines and the rationale for charging what they do.

So-called pharmaceutical cost transparency bills have been introduced in at least six state legislatures in the last year, aiming to make drug companies justify their prices, which are often attributed to high research and development costs.

One of them is Massachusetts. Also,Vertex comes up for the price of its CF drug — see recent post .

Finally, Tufts Center for the Study of Drug Development takes a knock for its oft-cited development cost reports.

Pharmaceutical executives do not typically tie the price of any particular drug to its development cost. But they do say that their sales have to recoup their investment in research and development if the companies are to stay in business.

They often cite the Tufts Center for the Study of Drug Development at Tufts University, which last year said companies spent an average of $2.6 billion to bring a drug to market, up from an estimate of $800 million in 2003. That includes the cost of failures. And almost half the figure is opportunity cost, the amount a company might have earned if it had invested money elsewhere rather than spending it on drug development.

Critics are skeptical of that figure, saying that the Tufts center gets funding from the pharmaceutical industry and uses data supplied by the drug companies, but does not disclose which drugs are used as the basis of the estimates.

Here’s what Tufts has to say about that:

Our Approach to Research

The Tufts Center for the Study of Drug Development (Tufts CSDD) conducts its research by working closely with government regulatory authorities and with drug developers and manufacturers of all sizes in the U.S. and abroad. Data are collected from the people who create it — pharmaceutical and biotechnology companies. They cooperate because they know Tufts CSDD will generate a comprehensive and objective picture of the drug development process, while strictly ensuring that individual company data are not disclosed. Adhering to stringent methods of quantitative analysis, Tufts CSDD validates its data and develops findings based on rigorous academic standards.

Worth noting here that not all their research is  from ad industry POV. For example:

Dr. Joshua Cohen utilizes his background in health economics to examine public policy issues that concern prescription drug reimbursement and market access. His areas of research include pharmacy benefits management as it relates to the Medicare prescription drug benefit, formulary regulations established by the Centers for Medicare and Medicaid Services, ethics and the distribution of pharmaceutical care resources, comparative effectiveness research, market access to biopharmaceuticals in the US and Europe, role of clinical and cost-effectiveness in clinical practice guideline development, drug development targeting neglected diseases, and decisions by drug regulatory agencies regarding prescription (Rx) to over-the-counter (OTC) switches.

  • Patient access to newly approved oncology drugs in US and Europe
  • Clinical, regulatory, and economic challenges facing pharmacogenomics
  • Prescription-to-over-the-counter switches in US and Europe
  • Trends in biosimilar market uptake

Why won’t the Cystic Fibrosis Foundation comment on the high price of the new Vertex drug?

Robert Weisman of the Globe reports today:

California scientist Paul M. Quinton learned that he has cystic fibrosis at age 19 and has speVertexLogoSOPnt his long career in his lab working on ways to cure it.

He is, in short, not the kind of person you’d expect to be fighting with Vertex Pharmaceuticals Inc., the company developing a new class of breakthrough drugs for the obstructive lung disease.

But he and a group of prominent cystic fibrosis doctors are doing just that. For the past three years, they have engaged in a private and largely fruitless dialogue with Vertex over their complaints that the Boston biotechnology firm is overcharging for its medicines.

At the end of the story he checks in with the group  that represents the interests of patients. They don’t say much:

ssA spokeswoman for the Cystic Fibrosis Foundation wouldn’t comment specifically on the price of Orkambi. But in a statement, the foundation said that the cost of doctors, hospitals, drugs, and diagnostics together places “a tremendous financial burden on people with the disease and their families.”

Worth noting that the CFF’s so venture philanthropy — non-profit investment in drug development — let to the ultimate development of one of Vertex’s CF drugs the new drug. A Nov. NYTimes story notes the foundation expected to receive $3.3 billion from selling the rights to the royalties to those drugs.

Proponents say it speeds drug development while also providing potential monetary rewards that can pay for even more research.

But there is some concern that a profit motive could divert the organizations from their primary mission — helping patients — and create a conflict of interest. For instance, the price of the main drug developed through Cystic Fibrosis Foundation’s investment is $300,000 a year. Kalydeco treats the underlying cause of cystic fibrosis 

Critics say that perhaps because a higher price means higher royalty payments, the foundation did not do enough to bring the cost down.

“I would like to see them do more to get the price of this drug down to something that is going to be sustainable,” said Paul M. Quinton, a cystic fibrosis researcher at the University of California campuses in Riverside and San Diego, who has the disease himself. “And I have some concern about the possible appearance of a conflict.”

My latest from Health Leaders: disparities, quality & TripleAim

by Nora Valdez. Click for more.

by Nora Valdez. Click for more.

Fueled by the financial incentives built into the healthcare reform law, the Institute for Health Improvement’s concept is generating meaningful changes in the way healthcare is delivered, research finds.

Value-based care brings new urgency to the effort to end disparities in healthcare access and outcomes for minorities.

Boston news from #BIO2015: Will old labs make good housing? Do expensive drugs reduce health costs?

Over here in Kendall Square, pharma has invested a lot of money in buildings that look like they were designed by Ikea. If this bubble is about to burst, as suggested below, the city could use some nice low-rise housing. photo2 (1)

This story also includes the argument that pricey drugs save the system money by, for example, curing HepC patients and keeping them out of the hospital. Will the push by insurers to pay for effectiveness put some numbers to that claim?

More From Robert Weisman.

PHILADELPHIA — The funding model for drug development is under severe strain as venture capitalists shift money to safer investments, the US government bankrolls less basic research, and a backlash builds against high-priced medicines, a panel of biotechnology industry leaders warned Monday.

Joshua Boger, founder and former chief executive of Vertex Pharmaceuticals Inc. in Boston, said drug companies should be enjoying a reputation for helping the health care system to save money by keeping patients healthy and out of the hospital.

“We’re the cost-lowering part of the medical world, and instead we’ve taken on the role of the whipping boys on cost. And it’s just not true.” Boger said.

Health insurers and lawmakers have complained about the high cost of new specialty medicines such as the hepatitis C drug Sovaldi, which can cost $1,000 per pill. Vertex itself charges more than $300,000 per patient each year for a drug that treats some cystic fibrosis patients

Should the FDA approve Vertex’s new cystic fibrosis drug?

The scene at the FDA hearing was familiar. All the  advisory committees have seen it play out again and again. Yesterday, it was the Pulmonary-Allergy Drug committee: The pharma doc with the convincing statement. The weeping patients. The drug likely to cost a couple thousand a month offering a slim  benefit over an existing drugs. But it works, and it’s safe.

From the Globe:VertexLogoSOP

“I think this is a much-needed advance for patients with cystic fibrosis,” said committee member Dr. Michelle S. Harkins, associate professor of medicine at the University of New Mexico Albuquerque, one of the majority voting to recommend approval.

The lone dissenter in the 12-1 vote recommending approval of the drug, Dr. Yanling Yu, the president and cofounder of Washington Advocates for Patient Safety in Seattle, said she was not convinced the data generated by the Vertex testing supported the approval of Orkambi.

“I really understand the patients critically need a new drug, but sometimes a new drug does not provide [the needed effectiveness],” she said.

From The New York Times story:

An issue for the advisory committee was that Orkambi had what the F.D.A. said was only modest effectiveness, improving lung function by only about 3 percentage points relative to placebo.

Some family members or advocates, some of them crying, pleaded with the committee to endorse the drug.

Some patients who took the drug in clinical trials said it had made a huge difference in their lives, reducing their coughing, allowing them to exercise better, helping them gain weight or reducing how often they ended up in the hospital…

Michael Yee of RBC Capital Markets, for instance, expects the price will be $225,000 to $250,000 a year.

The vote is advisory. The FDA staff will make the final call.

More here:

The financial stakes for Vertex.

FDA briefing for meeting.

Vertex briefing for the meeting

Hospitals consolidation: Brill says yes, new Massachusetts AG says no

From Shirley Leung’s Monday column in the Globe:

partnersNo judge or jury delivered a verdict on the Partners HealthCare settlement Monday, but we didn’t need either after Attorney General Maura Healey’s three-page court filing.

She thinks the deal stinks, and if given the chance, she would bring an antitrust suit to block Partners’ efforts to expand. And just like that, the 43-year-old rising political star dared to rock the biggest boat in Massachusetts health care. In the wake of her threat, Healey left a list of winners and losers.

From Steven Syre’s column in today’s Globe:

Maura Healey has been on the job less than a week, but we don’t have to wonder where she stands on the biggest health care conflict in Massachusetts.

And, a Q. & A. from Steven Brill, author of “America’s Bitter Pill: Money, Politics, Backroom Deals and the Fight to Fix Our Broken Health System. That book looks at focuses on the debate over the Patient Protection and Affordable Care Act. But it also returns to Brill’s indictment of high hospitals costs that filled an entire issue Time magazine in 2013. His solution looks very much like a combination of the Kaiser Permanente insurer-plus-provider approach and the Partners’ plan.

HLM: Why will this consolidation approach work to curb costs where other reforms have failed?

Brill: The reason this idea may work is it is going to happen without my writing about it. It’s going to happen. The question is, do we seize that momentum, turn it around jujitsu- style and attach a whole bunch of regulations to it?

I really started thinking about this after my [heart] surgery. I decided: New York Presbyterian, it’s a damn good place and the guy who runs it is a good guy. [Later] I was watching a panel including Toby Cosgove [CEO of Cleveland Clinic] and someone said: You’re gobbling up Cleveland and your market share is way too high.

Cosgrove said, the FTC would never let us have too much of a market share. I’m thinking, this guy Cosgrove, he’s a celebrated surgeon, a war hero. He seems like a pretty good guy to me. The idea the he wants to control and provide healthcare all over Ohio, why is that such a bad thing?partners-logopartners-logo

Yale’s Dr. Ross and the promotion of me-too meds

From ProPublica on me-too meds. Yale’s Dr. Joseph Ross gets a quote in this story. , Vox offers a summary of his NEJM piece on digital marketing to docs. More here on his work into the accuracy of clinical trial registries.

Here’s the NEJM abstract: Pharmaceutical marketing can lead to overdiagnosis, overtreatment, and overuse of medications. Digital advertising creates new pathways for reaching physicians, allowing delivery of marketing messages at the point of care, when clinical decisions are being made.

From ProPublica

Vying for Market Share, Companies Heavily Promote 2018 Me Too’ Drugs

by Charles Ornstein and Ryann Grochowski Jones ProPublica, Jan. 7, 2015, 2 p.m.

propub logoThis story was co-published with the New York Times’ The Upshot.

For more than five decades, the blood thinner Coumadin was the only option for millions of patients at risk for life-threatening blood clots. But now, a furious battle is underway among the makers of three newer competitors for the prescription pads of doctors across the country.

The manufacturers of these drugs 2014 Pradaxa, Xarelto and Eliquis 2014 have been wooing physicians in part by paying for meals, promotional speeches, consulting gigs and educational gifts. In the last five months of 2013, the companies spent nearly $19.4 million on doctors and teaching hospitals, according to ProPublica’s analysis of federal data released last fall.

The information, from a database known as Open Payments, gives the first comprehensive look at how much money drug and device companies have spent working with doctors. What it shows is that the drugs most aggressively promoted to doctors typically aren’t cures or even big medical breakthroughs. Some are top sellers, but most are not.

Instead, they are newer drugs that manufacturers hope will gain a foothold, sometimes after failing to meet Wall Street’s early expectations.

“They may have some unique niche in the market, but they are fairly redundant with other therapies that are already available,” said Dr. Joseph Ross, an associate professor of medicine and public health at Yale University School of Medicine. “Many of these, you could call me-too drugs.”

In almost all cases, older, cheaper products are available to treat the same conditions. Companies typically try to differentiate the new drugs by claiming they are easier to use; carry fewer side effects; work faster than competitors; or have medical advantages.

The makers of Pradaxa, Xarelto and Eliquis, for example, say their drugs are at least as effective as Coumadin for certain conditions but do not require routine blood tests or limitations on what patients can eat. (Patients taking Coumadin, also known as warfarin, shouldn’t eat grapefruit or cranberries and have to limit green leafy vegetables in their diet.)

Officials at the Centers for Medicare and Medicaid Services, which administers Open Payments, and the Pharmaceutical Research and Manufacturers of America, the drug industry trade group, said they had not analyzed the data in order to rank spending by drug.

When told of ProPublica’s analysis, John Murphy, PhRMA’s assistant general counsel, said drug makers’ spending should be seen not only as a marketing strategy, but also as a way of ensuring the best treatment options for patients. “On paper, a drug may not look like it is monumentally better than another drug, but to an individual patient, it might be,” Mr. Murphy said.

* Note: General Payment figures do not include royalties. Source: Centers for Medicare and Medicaid Services, Food and Drug Administration, ProPublica reporting

According to ProPublica’s analysis, Victoza, a diabetes medication made by Novo Nordisk, was the drug associated with the most payments to doctors, by dollar amount. The company spent more than $9 million on physician interactions related to Victoza in the last five months of 2013, excluding research payments and royalties, which relate more to drug development than marketing. (ProPublica created a tool that lets you look up any drug, device or company and compare it with any other.)

Victoza, through a once-a-day injection, helps lower blood sugar among diabetics, but researchers and advocacy groups have said drugs of its class carry an increased risk of thyroid cancer and pancreatitis. Dr. Todd Hobbs, chief medical officer of Novo Nordisk in North America, said the company’s spending reflected Victoza’s newness and the need to address such safety concerns.

“We just received a huge amount of interest and questions and need for education,” Hobbs said, referring to inquiries by health care professionals, particularly primary care doctors. “You see the fruits of that in this report.”

Eliquis, the anticoagulant jointly marketed by Bristol-Myers Squibb and Pfizer, ranked second in its link to spending on physicians, with nearly $8 million, our analysis showed. In a statement, the companies said their spending helps ensure physicians understand the appropriate use of Eliquis. Because the drug is prescribed by physicians in different specialties, the statement said, “it is critical to have a speaker program that adequately provides robust education to these physicians.”

The drug associated with the third-most payments to doctors was Brilinta, a different type of blood thinner made by AstraZeneca that vies for sales with Plavix, which is now available generically. In an email, AstraZeneca said it had identified Brilinta as one of its “key platforms for growth” and increased speaker and research spending on it. “Physicians are also indispensable partners in our efforts to bring new medicines to patients,” the company said.

ProPublica has tracked drug companies’ payments to doctors since 2009 through a searchable database called Dollars for Docs. But this covers only 17 companies, most of which have been compelled to release this information under legal settlements with the government. It has no information from medical device makers.

The list of most promoted drugs featured many recent arrivals: 14 of the top 20 were approved by the Food and Drug Administration since 2010. Some treat similar conditions, including diabetes, schizophrenia and chronic obstructive pulmonary disease, so the competition among them is fierce. “They’re fighting over the same doctors, I guarantee you,” said Rhonda Greenapple Simoff, founder of a consulting firm that advises pharmaceutical companies in Bernardsville, N.J.

Largely absent from the top of the list were drugs that cure disease, such as a new class of hepatitis C treatments, or those that significantly extend life, particularly for cancer patients. If a drug is either the first to treat a disease or is much better than existing drugs, said Dr. Sidney Wolfe, the founder and now senior adviser to Public Citizen’s Health Research Group, “they ‘sell themselves’ on the merits of their unique benefits.”

According to ProPublica’s analysis, a few of the most heavily promoted drugs, including Samsca, which treats low sodium levels in the blood, have serious side effects that came to light after their approval by the federal government. The manufacturers of several others, including Copaxone, Latuda, Xarelto, Daliresp and Humira, have been faulted by the F.D.A. for improper promotion.

Subsys, approved in 2012 to treat cancer pain, ranked 23rd in spending on doctors. It’s often prescribed for off-label, or unapproved, uses; in November, The New York Times reported that some of the doctors paid the most to promote the drug had disciplinary or legal troubles. In a statement to The Times, Insys Therapeutics, the drug’s maker, said its marketing of Subsys was appropriate.

The medical device associated with the most payments to doctors was Intuitive Surgical’s da Vinci surgical robot system, which the company has marketed as an effective, less invasive option for an array of procedures. Critics have complained that the device is needlessly expensive and overused, and say it has been linked to patient complications and deaths.

Intuitive spent nearly $12.8 million on physician interactions to promote the robot in the last five months of 2013, not including royalties and research. The spokeswoman Paige Bischoff said in an email that about half of the company’s outlays for education and training were “pass through” spending: Surgeons or hospitals paid the company for services, and the company, in turn, paid doctors to provide them.

Dr. Robert Takla, an emergency room physician in the Detroit area, earned about $75,000 in the last five months of 2013 by delivering promotional talks about several of the most heavily marketed anticoagulants and blood thinners, particularly Brilinta, according to Open Payments.

He said he enjoys speaking on behalf of companies and thinks he offers a different perspective than cardiologists and internists 2014 the usual prescribers of the drugs 2014 because he treats complications of blood clots in the emergency room.

Dr. Takla said he reviews clinical studies before deciding to speak for a drug and turns companies down when he isn’t impressed. He said he no longer spoke on behalf of Pradaxa because of what he characterized as public backlash against it, driven by a spate of lawsuits against its manufacturer, Boehringer-Ingelheim. (The company agreed to pay $650 million last year to settle the suits.) He accepts fees to speak about Xarelto, a drug he has taken himself for a deep vein thrombosis.

“It’s a very fertile and very robust marketplace right now,” he said of the anticoagulants.

News applications developer Mike Tigas contributed to this report.

Methodology: How we calculated company payments to doctors

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