Posts Tagged Drug Cost

Oncology Drugs — shortcuts and high cost

ShortcutSome shortcuts just don’t work out.  The US oncology drug industry has found ways to reduce the time from drug discovery to market by taking shortcuts called “surrogate endpoints”.

The two most important questions cancer patients have when thinking about cancer drugs are 1) how much life do I gain? (survival) and 2) will I feel OK while I survive? (quality of life).  The problem for drug makers is it is expensive and time consuming to answer those questions (to use endpoints of survival and quality of life).

Drug surrogates are measurements that show some effect of a cancer drug but are not absolutely related to those 2 primary questions.  An example of a surrogate endpoint is “event-free survival”.  This is a measure of time, like the time from when chemotherapy is given before something bad happens.  Clearly important, but not the same as survival or quality of life.

The Federal Drug Administration (FDA) has a list of surrogate endpoints it will accept in order to approve cancer drugs.  Drug companies have progressively moved research to those surrogate endpoints.  The graph below is based on the data of Martel.Cancer Treatment Endpoints

Many times this shortcut is helpful for patients but it is always helpful for drug makers.  It has decreased the costs associated with marketing a drug.  But, the cost of drugs has gone up at a faster rate than the prolongation of life the drugs impart.  And, that survival may not be a benefit in quality of life.  Now, virtually all new anticancer drugs exceed the $50,000 per quality life year many social researchers say is the amount our economy can afford.  It means insurance can’t include those drugs otherwise premiums would be so high the average citizen could not afford the insurance.  Here is a very disturbing graph from an article by Howard.chemo costs and life year

The vertical axis is that cost being paid for one year of life provided by a cancer drug.  The horizontal axis is the year in which that drug was approved.  Meaning it’s not a very good deal — the cost of one year of life gained by chemotherapy is rising and you likely can’t afford such drugs.  The economics are really depressing and the situation is absolutely not sustainable.  Rather than hoping a treatment will be invented we will be hoping the cost of that treatment is within reach.

There are signs the cancer drugs are overpriced, inflated by speculation and simple price gouging.  To the extent such unethical practices exist they need to be rooted out and stopped.  Given the past history of big pharma there is likely a lot that needs to be fixed.

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Control Drug Costs — help from the ACA

costThe Affordable Care Act (ACA) does have some teeth to reduce drug prices.  The ACA formed a 15 member group intended to restrain the growth in cost of Medicare without reducing benefits.  The Independent Payment Advisory Board (IPAB) has powers to improve efficiency and prevent Medicare from being victimized by business interests.

Mergers of large pharmaceutical companies have created near monopolies for setting prices — the new specialty drugs are a case in point.  Also, by repeatedly suing smaller companies and generic manufacturers the competition is under siege if not defeated.   The huge rise in drug prices have become a national disaster because individuals and Medicare just can’t afford the price gouging.

The IPAB has some power to help the problem — hopefully they will act to implement reference pricing of new drugs.  It forces drugs with a similar effect to charge the same amount — old drugs and new.  So if a new wonderful drug “Neximabob” is no better for arthritis than ibuprofen then the prices must be the same.

The Federal Drug Administration can not require drug-comparison research.  This has been a wonderful marketing loophole for big pharma.  It’s time consuming to do comparison research.  By the time “Neximabob” is found to be a sham, billions of prescriptions have been filled,billions of dollars have been paid and Medicare has lost billions.  But, you will be happy to know, the FDA says “Neximabob” is safe and effective.

The IBAP can act on expert opinion rather than wait for full comparison research.  One option for drug companies is to do the comparison research (which they fight) or do more lobbying (more that the hundreds of millions they already spend).

Guess where the money for drug lobbying comes from?  the very tax payers and Medicare recipients who pay for the medications in the first place — it’s just not fair.  Next time you hear the IBAP is so so bad you will know who is speaking — it’s not consumers!


Note:   According to the Congressional Research Service the IBAP is not currently active because the rise in Medicare cost in 2015 is not enough to trigger actions by the committee.  There is some thought it may become active in 2017 unless repealed by Congress.

 

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Warning: Price could cause ulcers — CMS drug data

purplepillThe purple pill tops the list of the most expensive drugs for government health programs in 2013.  No, your first reaction to blame the government is wrong — the drug is prescribed by health care providers — and, the government is prevented by law from negotiating drug prices.  Why is this a problem? –there was a perfectly fine OTC generic substitute available in 2013 at only 6% of the cost.

WHAT???  Prescribers wrote prescriptions for a drug that could have been substituted by an equivalent drug and saved 94%.  OK, at the margins of the argument, at the fringes of reality, at the level it makes no clinical difference, big pharma says it might not be a perfect substitute.  A good example where the “perfect”  is the enemy of the very good.

But, how could prescribers and patients have the wool pulled over their eyes? — fantastic marketing.  And, by the way, if you take this drug, send me your name, address, social security number, and bank account number,  I have a nice bridge to sell you.brooklinbridge

The magnitude of the problem became crystal clear when CMS published prescription data.  The following data is widely reported from CMS as the spending on drugs through Medicare’s Part D prescription-drug program in 2013:

Rank Brand Name Generic Name Number of Claims Cost in Billions
1 NEXIUM ESOMEPRAZOLE 8,192,362 $2.53
28 OMEPRAZOLE OMEPRAZOLE 32,250,368 $0.64

Omeprazole is a very good substitute for Nexium for heartburn and reflux.  Despite the cloud of industry generated studies many pharmacists say the two drugs have equal effects.  As the table above shows omeprazole was prescribed 4 times as often as Nexium but the providers who chose Nexium created a vastly larger and unnecessary cost.  Why Nexium is even be on the Medicare Part-D formulary is a mystery.  Who pays the bill? — taxpayers, of course, and the patients who paid a co-pay higher than the full cost of an equivalent.

In 2015 Nexium became an over the counter drug (OTC) and just as you might suspect it now costs about the same as OTC omeprazole — about $32 for 56 pills (at Costco) rather than $300.

Where is the oversight?  Where is the cost control?  Why is US healthcare so expensive?  Need more examples? Just look at the other medications on the list.

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