The Pressure for Drug Pricing Reform Intensifies

Jayson S. Slotnik

Regulatory actions have significantly reduced oncologists’ pay in recent years, as part of the effort to improve value, but reforms are needed much higher up the drug distribution chain, a panel of pharmaceutical industry professionals said at the Oncology Market Access & Pricing conference held in Philadelphia this month by eyeforpharma.

Legal actions on drug pricing and access are putting increasing pressure on drug manufacturers to join the reform, and there are signs that the administration of President Donald Trump is poised to take executive action on a policy to streamline generic drug access and spur CMS to start approving value-based contracts with drug manufacturers, said Jayson S. Slotnik, moderator of the panel and the founder of Health Policy Strategies, a Washington DC-based consulting firm.

Addressing an audience of pharma industry professionals, Slotnik said the drug pricing issue has intensified this year partly because of a class-action racketeering lawsuit lodged against Mylan for the strategies it employed that dramatically increased the cost of the anti-allergy device EpiPen. The suit alleges that the price of EpiPen was raised 17 times in a decade, from $90 to $600.

Self-serving practices in the pharmaceutical industry are not the whole picture, he said. There is unfairness and misunderstanding as well, ranging from the heavy financial risk providers in the Oncology Care Model are being asked to undertake to the unwillingness of payers to fully accept drug manufacturers' desire to recoup billions of dollars in research and development costs. These factors make it more difficult to deliver value in oncology; however, “The one thing we all try to seek is a good outcome for the patient,” Slotnik said.

The panel discussion included Burt Zweigenhaft, former president of the National Association of Specialty Pharmacy. He recalled a time when oncologists earned an average of $1 million a year and now receive about $400,000. More prior authorizations required for drug use and protocols for therapy plans have also changed the payment picture. The “buy and bill” days, when physicians had tremendous freedom to prescribe, are over, he said.

Some reform programs may not survive the transition to precision medicine, he said. For example, the bundling of costs for established therapeutic patterns has been a tool in the value-based armamentarium, but this relies on the ability to accurately estimate costs. Such a tool will likely become obsolete as potentially thousands of biomarkers for cancer are discovered and therapy is increasingly targeted. The variation will vastly complicate treatment protocols for doctors and patients, he said.

“That’s going to bring even more subtypes and a lot more heat over drug costs, utilization, and total cost of treatment.” As potential variations in treatment balloon, payers and providers will shy away from bundled care models that force them to take downside financial risk on total costs of care. “You only bet on what you know.”

Amid the pressure on pricing, specialty pharmacy has grown enormously and has taken on some of the roles traditionally handled by physicians, the panelists said. These intermediaries in the drug distribution chain now are increasingly designing programs that do more than simply fill prescriptions. The most sophisticated of these systems follow up with patients and monitor their dosing, how much medication they may have left, whether they are refilling, how they are affected by drugs, and helping to arrange financing for medication, said panelist Anita Dopkosky, director of national accounts for Walgreens and a former clinician.

“At Walgreens, based on how a patient answers a question, that determines what the next question is going to be,” she said. There should be contact information available to the patient so that when emergencies arise they can get in touch with their specialty pharmacy, even on holidays. “Last, but not least, is really supporting that patient, not just clinically but financially. There are all these wonderful co-pay programs out there.” Modern specialty pharmacy should make those available to patients “proactively, and that’s a challenge sometimes. At Walgreens, we want to absolutely, positively support that patient, and not just give them a phone call but make sure we’re doing all we can to make sure they get that assistance.”

The competition this has engendered has been heathy for the healthcare industry, Dopkosky said. “That’s a good thing. It keeps everyone on their toes and it makes us all better.”

To really compete, specialty pharmacies must demonstrate that they not only provide a patient with therapy but keep them on it over time, “and that’s easier said than done,” she said. This challenge has resulted in a very high-touch model of care that includes communicating with physicians throughout the dispensing process. “The last thing we want to hear from a physician is ‘We sent this prescription to a specialty pharmacy and it went into a big black hole.’ We know it doesn’t, but we don’t ever want them to think that.”

Drug pricing and limited distribution practices and even manufacturer drug discount programs were blamed for access to medication problems faced by patients. Part of the problem is that the public isn’t fully aware of how manufacturer and even CMS regulatory decisions impact the availability of needed funds for oncology medications, said Clorinda Walley, executive director of the charity Good Days, which connects patients with oncology funding.

These barriers lead to the deaths of many oncology patients who cannot afford their medication. She recalled a patient who told her he felt his only option was to “put the cats outside the house and burn it down. I feel as if we don’t control the outcome and we’re not telling our story,” she said.

The panelists said specialty pharmacy doesn’t get the respect it deserves for extent to which it is helping patients. Walley said it serves as a middleman between physicians, caregivers, charities, and other advocates. “When a specialty pharmacy does it right, all a patient has to do is open the door and get those meds on the spot.” However, health plans and pharmacy benefit manufacturers don’t compensate specialty pharmacy “for being the 24/7 clinician that they are.”

Zweigenhaft spoke in defense of the manufacturing establishment. Recently, attorneys general in various states have subpoenaed drug manufacturers for information about their patient assistance programs, which are often used to promote a company’s brand products instead of improving access to cheaper, generic drugs. It’s within a drug manufacturer’s rights to promote its own brands, Zweigenhaft said. “There’s a lot of bad press … but there’s no proof that manufacturers are supporting financial assistance and copay programs so people can’t afford their medicines.” If these patients don’t get the brand drugs, they’re not going to be treated and it’ll end up costing society more, he said.