Big Pharma Using Mail-Order Pharmacies to Maintain High Prices

The United States has the dubious honor of paying the highest prescription drug costs in the world. Many healthcare economists attribute this to relatively lax cost regulation compared to other wealthy countries; however, a decade of insurers paying only for generic drugs when available and limiting drug choice in specific formularies has had little modulating effect. The most recent focus has been on the newer, very costly agents that have come to market. Targeted cancer therapies may be priced at $70,000-$115,000 per year, reformulated chemotherapeutics may also reach the six-figure level and the new hepatitis C therapies are major effective advances, but cost about $80,000 for a 12-week course. Unlike the above diseases, multiple sclerosis requires life-long treatment and the latest player, Plegridyis, is pegged at $62,000 per annum.

 

As opposed to being feted for prolonging life and easing suffering, the major pharmaceutical companies are being attacked for price gouging at the expense of the public. The industry has pushed back, citing that the 10% of healthcare dollars going to prescription drugs has been the same percentage since 1960. Moreover, they emphasize that drug development is long (10-15 years), rather inefficient as most formularies never get to market, and costly (about $1.3 billion). This investment in time and money is reflected in the final price of the medication. The arcana of drug pricing is beyond my pay grade, given the variables of the potential market, duration of therapy, efficacy of treatment, socioeconomics, and societal commitment to equitable healthcare. A simple, transparent and fair pricing system may be more utopian than feasible and the politics of effecting change is a maelstrom of special interests.

 

However, there is one villain trying to sidestep the barriers on pricing whom I find particularly reprehensible. Several small pharmaceutical manufacturers circumvent restraints by insurers and pharmacists to switch patients to generics by promoting mail-order pharmacies affiliated with the drug company. The high-priced drugs are delivered quickly and copays are subsidized and because some insurers will pay the often exorbitant charges, the scheme is economically viable. Here are examples-- Horizon Pharma has a pain reliever, Duexis, which contains two generic equivalents of Motrin and Pepcid. It is targeted to patients as offsetting the gastrointestinal side effects of the NSAID.  Daily Duexis therapy costs about $1500/month, while the two drugs sold separately cost $20-$40/month as generics or OTC. The company says that combining the drugs into a single pill taken three times daily makes compliance more likely as patients will get the benefit of stomach protection. Valeant Pharmaceuticals does much the same thing for its dermatology products with its specialty pharmacy Philidor Rx Services

 

This is sophistry at its finest. Fortunately these attempts of dampening the sticker shock of using these drugs have caused many benefit managers to refuse all payment for these products. Moreover, these companies have also received subpoenas from federal prosecutors in New York and Massachusetts seeking more information on their pricing practices. Of more immediate harm, investors have seen the light as Valeant’s market capitalization has decreased 70% since August. This all begs the question: who writes these prescriptions and why? We do, and I cannot think why.

 

By Norman Silverman, MD, with Ryan McKennon, DO and Ren Carlton

 

The Alienation Of America’s Best Doctors

The best and the brightest simply don’t want to become doctors anymore. Physicians are burning out. They are leaving the profession. They are going bankrupt. They are selling their private practices to big hospitals. They are retiring early. We are facing a growing doctor shortage.

Better to Live and Die in the U.S.A.

The United States healthcare system is often berated for how it treats patients near the end of life. They are purportedly attached to tubes and machines and subjected to unnecessary invasive procedures that cause inordinate pain with no potential benefit, there is underutilization of more compassionate hospice services. This “travesty” is expensive, as the care of dying seniors consumes over 25% of Medicare expenditures. We hear this story so often; it is almost taken as gospel-- but is it actually true? Is it more expensive and invasive to die in America than in other developed countries?

Gun Ownership and Doctors?

According to the Pew Research Center, there are approximately 32,000 gun-related deaths annually in the United States; 19,000 are suicide, 11,000 are homicide, and the rest are accidents, police shootings or of unknown causation. Moreover, there are more than 78,000 nonfatal gun wounds each year. Given the disproportionate number of victims that are less than 40 years of age, the morbidity and mortality of gun violence is significant. Physicians are involved with many types of public health issues, but few are as controversial or divisive as gun safety. Is it really an issue that falls within the medical domain?

O Tempora, O Mores: Affordable Care Act - Big Dream or Big Let Down?

I confess I was a strong proponent of the Affordable Care Act. My reasoning was subtler than the hallowed pantheons of its staunch supporters and the apocalyptic predictions of its detractors. Forty years after graduating medical school I concluded, after many stutter steps, the American healthcare delivery system was economically unsustainable and the citizenry was neither living longer, nor better, despite medical expenditures that dwarf any other developed nation. My career also allowed me to personally interact with cardiac surgeons from all continents and see that their clinical results and research efforts were laudatory by any standards.

High Depression Rates in Resident Physicians — Fact or Fiction?

The December 8, 2015 issue of JAMA had a startling key clinical point; the prevalence of depression or depressive symptoms among resident physicians in training was 28.8%. The data was generated by meta-analysis of 31 cross-sectional and 23 longitudinal studies published in peer-reviewed journals involving 17,560 trainees. Two-thirds of the trainees were in North America, but the others were from Asia, Europe, South America, and one from Africa. Sensitivity-analysis confirmed that no individual study affected overall prevalence by more than 1% and that the incidence of depression was not influenced by study design, continent of origin, surgical vs nonsurgical program nor level of residency year.

Can a Robot Outperform Your Surgeon?

In the current competitive environment, healthcare providers often attempt to separate themselves from their competition by marketing themselves as using the newest technologies for their procedures. This is an age defined by finding the next best thing and the American public responds to this strategy. My personal experience has been in cardiac surgery, but the principles are equally applicable to other specialties, particularly tertiary referral practices.

Hospital Administration Attempts to Cut Costs and Increase Quality at Expense of Physicians

A nonprofit hospital care system in Oregon with 450 beds has been in an acrimonious negotiation with its staff hospitalists for the past 2 years. The mounting economic pressures on this small, community oriented institution have had the expected consequences of hiring new administrators to implement the latest trends to rein in the budget and effect efficiencies of healthcare delivery-- as if that has been so successful in the rest of the country. The battle has really centered over the physicians losing control of their work time allocation, individual decision-making for diagnostic and treatment plans, as well as bristling at bonuses based on the administration’s definition of quality.

Michigan Physicians Society Supports Inner-City Education

Yesterday afternoon I had the privilege of helping to honor the graduating class of 2016 at Experiencia Preparatory Academy. They have 3 graduates this year that have overcome a special set of challenges, including moving from Mexico to the United States and having English as a second language.

Affordable Care Act: Affordable for whom?

Entering its third annual open enrollment period, Obamacare is the subject of cacophonous political acrimony, again, championed by its supporters and vilified by its opponents. Each side presents its own “metrics” of success or failure

Mental Health Spending: A Story of Failed Supply and Demand

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Photos - MPS Auto Show Event - Lingenfelter Collection!

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Michigan Physicians Society Auto Show Event - Lingenfelter Collection!

We are excited to announce our next MPS event! MPS members will enjoy an exciting evening of learning, networking, and fun at the Lingenfelter Collection, one of the most notable car collections in the world! Learn about car collecting as an alternative investment strategy while enjoying a private tour of the Lingenfelter Collection.

Physicians Role in Drug Pricing

Two new drugs, Repatha and Praluent, were approved by the Food and Drug Administration several months ago amid much ballyhoo. Both are antibodies that specifically target PCSK9, a protein which reduces the number of receptors on the liver that remove LDL cholesterol from the blood. By blocking PCSK9’s ability to work, more receptors are available to clear LDL. This novel mechanism was proven safe and effective in clinical trials, lowering LDL cholesterol levels by 40% or more in patients already taking statin drugs. However, powerful treatment comes with a powerful cost-- over $14,000 per year for each patient.

Physician or Salesperson? - The Ethics Behind Patient Donors

Maybe it’s because we have entered the silly season with a full cast of presidential aspirants, but I have recently mulling over the perception of behavioral impropriety. To translate from spin doctor to medical doctor, I mean professional behavior that may not be overtly unethical, but exudes self-interest over patient well-being. In the academic world, full disclosure includes financial interest with potential conflict, disclaimer of previous publications, responsibility for informed consent and approval by the appropriate research committee. In our practices, particularly in the clinic or hospital setting, much focus is on constructing a firewall between the pharmaceutical and the medical-device sales force and medical providers.
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