Saturday, July 25, 2020

Preliminary Thoughts on Trump's Drug-Price EO's

Okay, so as we all know, drug prices ARE out of control, here in America, a problem that we all had hoped ACA/Obamacare would help with - the idea of insuring everybody, by creating a government fair-market price to compete with regular price.

The government "fair-market" insurance option to compete with commercial insurance options was brilliant in theory, but had some major problems in practice when it came to income limits and tax penalties, most of which have been fixed - but with the main problem has not been fixed, and can't unless we come up with some form of price regulation itself. 

Because in response to ACA/Obamacare, instead of lower their prices to compete with the government market plan, all that participating commercial insurance companies and pharma companies did was just raise their prices, so that prices all around, government market and regular commercial insurance, were even higher than before (just like gas prices can raise and lower their prices at whim) and then tried to blame Obamacare for making their doing so necessary.

So it became clear that we do need some sort of restrictions - but the question is then how can we do that, while still maintaining fair-market competition?

And as we all know, I'm a Democrat, so you would think I would like these new EO's, yes?

Well, I'm still reading on it, these are just my preliminary thoughts, so forgive me if I'm off in full understanding - but from what I've read thus far - not so much.


Because these are complex systemic issues that putting a single-cap threshold on price/out-of-pocket cost won't solve.

That's exactly the problem with Medicare as it is - Medicare is not allowed to negotiate the price of drugs, like commercial insurance companies - they're only allowed to just give a blanket threshold cap on price (which affects, but does not limit commercial price) -  which is why we know a cap threshold won't work (see this and other reasons why below.)

Also, it's not JUST the fault of pharma, like Trump said - it's also the fault of insurance companies themselves (again, see below).

More importantly, EO's don't carry as much power/weight as congressional law, especially in healthcare - they won't make much, if any, difference.

In fact, Trump's decision seems more of a reckless, sudden, desperate "karate chop" of a slapping a Band-Aid down on the gushing-artery of a systemic, complex, bleeding problem.

(Perhaps after largely ignoring/neglecting the issue entirely, for the last 3-1/2 years, as well as because he's dropping like a rock in the polls behind Biden in the polls, after his Portland stunts and COVID response? ;).

Although, I'm a Democrat, contrary to propagandized and popular belief, we do NOT want everything free - we just want more assistance to people who genuinely cannot afford certain necessities, and we want more consumer protection laws and labor protection laws for them as well.

Thus, I'm a fan of fair-market competition, because it actually works -when it truly is "fair-market competition," and includes both consumer protection laws and labor protection laws.

(Also, valuing "fair-market competition" should NOT be confused valuing "trickle-down economics" - they are not one in the same. "Trickle down" theory has been repeatedly proven to only work locally, and has never once proven to work at the national corporate or international corporate level.)

The problem is, it's NOT a fair, competitive market, it's being abused with little to no consumer protection - and despite Trump blaming JUST Big Pharma for that - both pharma AND insurance companies should share the blame.

Because even though we have generics and biosimilars on the market, some prices still never come down, the way they're supposed to when there's lot of viable competition - which is the fault of pharma.

*HOWEVER* insurance companies are equally to blame, especially for the patient out-of-pocket cost share.

That is because insurance companies choose a particular drug as being on preferred or non-preferred formulary, often based more on whatever contracting deal with discounts/rebates that they receive from the manufacturer, rather than the actual efficacy and safety of the drug.

They DO take clinical efficacy into account, but if there are two similar drugs, they're going to put the one on "preferred" formulary if the manufacturer gives them the better deal, even if somewhat inferior. 

In other words, out of two similar drugs, insurance companies will often choose to put on their preferred formulary  (cheaper-cost to the patient) - whichever drug  manufacturer offered them the biggest discount and rebates - even if that drug has been proven less effective and less safe than the other option. 

As a result, you, the patient, will often have to step through and trial/fail the generics AND the preferred brand first, before you can get to the better/safer drug - simply because the more effective/safer drug did not offer the insurance company better rebates/discounts versus the other one - which will cost you, the patient, more out of pocket, because it's on the "non-preferred"formulary, based on the manufacturer-insurance contracting deal.

As you might imagine, this broken aspect of our current healthcare system pisses off doctors and pharmacists like nothing else, because they believe they should have most of decision power on treatment for a patient, not the insurance company. 

 They're okay with passing checkpoints for coverage, but are NOT always okay with the fact that in the end, the insurance company decides what drug treatment the patient is on, based on the almighty dollar being king.

You will also find that most doctors, ethical ones, don't even care if they, personally, get to share in the drug-manufacturer rebates - they still would prefer choosing the best treatment over the cost/rebates (at least the ethical ones, do) - because they took an oath to provide the best care possible to the patient, not provide the best bottom line profit.

This is why I say corporate health insurance companies are just as much to blame as Big Pharma, and why we Americans say that healthcare has become too commercialized, as well as why we would all like more transparency on how commercial insurance companies make their formulary decisions on a particular drug, as well as want to allow Medicare to be able to negotiate price, just like commercial insurance does.

Thus, one threshold-cap price oversimplifies all of the complexities of the actual clinical aspects of the drugs themselves, not taking into account that all drugs are not equal even in the same class - what drugs have already been tried/failed, safety and tolerability, black-box warnings/drug-drug interactions, routes of administration, mechanisms of action, subgroups that would benefit from a certain drug versus another, etc.

As I've mentioned, I currently have two gigs as a contractor - one as a medical transcriptionist for a large university hospital and clinic, and the second is transcribing the interviews between independent marketing research companies, who have been hired on behalf of various pharmaceutical manufacturers.

Just as a brief overview of what I'm typing on this second gig, without giving any private info away, the independent marketing researchers have been hired by various manufacturers to get feedback from expert physicians, insurance-company medical directors, insurance CFOs, hospital and clinic P&T finance committee members, pharmacists, and pharmacy directors.  

The interviews are blinded - meaning the respondents (and myself) do not know who the pharmaceutical company is nor the name of their product, and the pharmaceutical company doesn't know who they are.  

The interviews are conducted either before or during a clinical trial, to find out what they'd like to see as far as trial design - primary and secondary endpoints for clinical trials on new drugs -  and/or what they think of the preliminary results of these trials.  

Above all, they always ask their input on price point, especially compared to other drugs already existing in the same class (if there even is a class yet, but usually there is, because we still don't have a lot of actual revolutionary cures yet, besides some gene therapies are promising). 

They will also offer different "what if" scenarios, regarding whether their new drug came in at parity, lower, or  higher compared to other drugs in the class. 

That's about all I can say about that ;)

However, general point being, all of the groups - clinical, payer, pharmacy - are all carefully weighing the efficacy value versus safety value versus the route of administration (oral, infusion, injection) value versus price value of all the other drugs in the class, before they give those answers. 

What I have learned is how complex trying to do this really is, how hard it is to know where to come in, if you have a new product in the same class.   

If you're not an actual cure, but your drug's efficacy, safety, and routine of administration (oral/infusion/injectable) may be better/preferred - which is the case most of the time - you're still competing against a drug that came out three years before your product and has more time of real-world usage.

Therefore, despite clinical trials, both clinicians, and especially insurance companies, are still likely going to reach for what they know and are comfortable with using in the real world, where we know we have lots of patient compliance/adherence problems, versus a controlled clinical trial that shows better efficacy, but where it's ensured patients will receive the dose.

So IMO, not reflective of anyone else but me - the problem is with the price of that very first drug in the class that becomes the key comparator - that's where we need some sort of restriction, but  - not all the "me toos" that come after that have to compete with it, that are often improved versions with better efficacy?

However, this isn't as easy as a "cap" - because there IS value in a drug in a disease that we had absolutely no options in before, and there should be.

HOWEVER, at present, that first drug in class, despite not being an actual cure, can charge whatever they want, the sky is the limit, because there's nothing else in that class to compare it to - even if it doesn't do all that much, isn't all that safe, and they're charging 100 times what it costs to actually make the drug. 

If a drug is not an actual cure and isn't all that safe, there is no good reason it should cost $400,000 a year, I'm sorry - and you know dang well it doesn't cost the company even half of that to make, including research and development and clinical trials. 

Also to be kept in mind, the first drug in class will typically not be the best - within 3 to 5 years, a better brand will come along, as well as generics and biosimilars - and yet, as I said, doctors, and particularly insurance companies - will still want to reach for that tried-and-true, real-world drug they're comfortable with before that new, better one.

However, when I say "some sort of restrictions on that first drug in class," I do NOT mean just placing a blanket threshold restriction on the first drug in class - because what if the next drug in the class truly is better, or even an actual cure - is there not greater value in that?

For example, right now, we have lots of drugs aimed at heart disease with different mechanisms of actions, it's a very crowded space.

At present, we can't actually repair or cure heart disease with a drug - we can only try to prevent or help reduce the calcium plaque burden by lowering cholesterol.

But what if we had a drug that could actually repair heart vessels, reverse the damage?

Though it's first in class, it would ordinarily set the price; however, if there's a threshold cap, it doesn't matter - the price for the actual cure will be the same as the drugs that only help prevent - is it fair the actual cure for the disease would have to come in at parity or lower than the non-cure?

Of course not.

Now, the non-cure still has some value, because it can still help prevent heart disease in people who don't have it yet; so theoretically, according to fairomarket economics, they would lower their price to compete with the cure, right?

However, what incentive would they have to do that, considering the cost of the cure and the non-cure are at exactly the same price threshold?

On the other hand, let's say the drugs have similar mechanisms of actions and similar targets; let's say they both lower cholesterol, but the newer brand is actually better and safer than the first drug in class.   

With a threshold cap, even though the first drug is an inferior and less safe product, they're still priced the same. Is that fair?

Of course not.

So you see the problem with trying to place a single threshold cap price on all drugs.

Some of the interviews I transcribe are international - U.K., France, Spain, Germany. 

Of course, they have varying degrees of socialized healthcare and we don't - but I think we should do a thorough evaluation of their systems, what works and what doesn't, before we start laying down blanket generalization restrictions on things without considering what's happened before us, when people tried to do that.

In other words, study what works and what doesn't, regarding these other systems first. 

Contrary to popular belief, in the U.K, they do NOT just blanket price restrict medications, with one cap price on everything - there are varying levels of thresholds, based on all of the issues I mentioned above - PLUS- QALYs, which is unique to almost all other nation's healthcare systems.

What's a QALY?

QALY stands for Quality Adjusted Life Year - meaning they also take into account quality of life for the patient with a point  system that factors into that price. 

Some people think it's absurd and irrelevant, some people think it's the greatest thing since sliced bread, particularly clinicians.

Because what it means is, unlike here in the U.S., UK's payer system is just as concerned about the quality of life for the patient as the clinicians are - not just better lab values and less costly overall treatment. 

Now, here in America, insurance companies look at bottom line - i.e., do the patient's vitals and labs look better, have they had less days in the hospital/doctor visits?

Doesn't really matter that the patient has missed a week of work, hasn't slept in three years, visits the hospital still once a month instead of 3 times a month - all they want to know is if definable endpoint lab values are met and if they avoided the ER more. 

However, the U.S. DOES have a point with not yet adopting a QALY system - because how DO you objectively measure quality of life?

These assessments are subjective, based on patient and doctor feedback attestation, whereas the other data is objective, measurable data.  

Because you could be having a flare of a disease or a bad day, and are feeling overly negative while your quality of life is being assessed, right?  

Or what if the patient has mild dementia or cognitive impairment and can't assess their quality of life properly, and the physician doesn't know if they're able to complete their normal activities of daily living well?

And yet quality of life DOES still have value to be considered -  because if you're still missing days of work, can't sleep or eat, does it really matter that your lab values show mild improvement and you only go to the ER only once a month  instead of 3 times a month? 

No --  but that's all your insurance company cares about here in the U.S.   They don't care if you miss work or can't sleep or eat, they only care that about what they had to pay for. 

So I'm wondering if there's a balance between the two if there's value between totally ignoring quality of life issues entirely, like we do in the U.S., and overrating them, which often happens in the U.K - that we could perhaps consider and factor into these drug-price issues as well? 

Regardless, these are weighty decisions, that take committees and subcomittees, weighing the true value proposition of a drug, clinically, quality of life, and economic impact - not a blanket-price threshold?

However, I don't have an MBA or an MD - but that's precisely my point - these issues are way too complex for us to just over-simplify and blanket generalize by putting a threshold cap on price? 

Just my opinion.


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