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Top Cancer Researcher Failed To Properly Disclose Pharma Ties

Reprinted with permission from ProPublica.

One of the world’s top breast cancer doctors failed to disclose millions of dollars in payments from drug and health care companies in recent years, omitting his financial ties from dozens of research articles in prestigious publications like The New England Journal of Medicine and the Lancet.

The researcher, Dr. José Baselga, a towering figure in the cancer world, is the chief medical officer at Memorial Sloan Kettering Cancer Center in New York. He has held board memberships or advisory roles with Roche and Bristol-Myers Squibb, among other corporations; has had a stake in start-ups testing cancer therapies; and played a key role in the development of breakthrough drugs that have revolutionized treatments for breast cancer.

According to an analysis by ProPublica and The New York Times, Baselga did not follow financial disclosure rules set by the American Association for Cancer Research when he was president of the group. He also left out payments he received from companies connected to cancer research in his articles published in the group’s journal, Cancer Discovery. At the same time, he has been one of the journal’s two editors in chief.

At a conference this year and before analysts in 2017, he put a positive spin on the results of two Roche-sponsored clinical trials that many others considered disappointments, without disclosing his relationship to the company. Since 2014, he has received more than $3 million from Roche in consulting fees and for his stake in a company it acquired.

Baselga did not dispute his relationships with at least a dozen companies. In an interview, he said the disclosure lapses were unintentional.

He stressed that much of his industry work was publicly known although he declined to provide payment figures from his involvement with some biotech startups. “I acknowledge that there have been inconsistencies, but that’s what it is,” he said. “It’s not that I do not appreciate the importance.”

Baselga’s extensive corporate relationships — and his frequent failure to disclose them — illustrate how permeable the boundaries remain between academic research and industry, and how weakly reporting requirements are enforced by the medical journals and professional societies charged with policing them.

A decade ago, a series of scandals involving the secret influence of the pharmaceutical industry on drug research prompted the medical community to beef up its conflict-of-interest disclosure requirements. Ethicists worry that outside entanglements can shape the way studies are designed and medications are prescribed to patients, allowing bias to influence medical practice. Disclosing those connections allows the public, other scientists and doctors to evaluate the research and weigh potential conflicts.

“If leaders don’t follow the rules, then we don’t really have rules,” said Dr. Walid Gellad, an associate professor of medicine at the University of Pittsburgh and director of its Center for Pharmaceutical Policy and Prescribing. “It says that the rules don’t matter.”

The penalties for such ethical lapses are not severe. The cancer research group, the AACR, warns authors who fill out disclosure forms for its journals that they face a three-year ban on publishing if they are found to have financial relationships that they did not disclose. But the ban is not included in the conflict-of-interest policy posted on its website, and the group said no author had ever been barred.

Many journals and professional societies do not check conflicts and simply require authors to correct the record.

Officials at the AACR, the American Society of Clinical Oncology and The New England Journal of Medicine said they were looking into Baselga’s omissions after inquiries from The Times and ProPublica. The Lancet declined to say whether it would look into the matter.

Christine Hickey, a spokeswoman for Memorial Sloan Kettering, said that Baselga had properly informed the hospital of his outside industry work and that it was Baselga’s responsibility to disclose such relationships to entities like medical journals. The cancer center, she said, “has a rigorous and comprehensive compliance program in place to promote honesty and objectivity in scientific research.”

Asked if he planned to correct his disclosures, Baselga asked reporters what they would recommend. In a statement several days later, he said he would correct his conflict-of-interest reporting for 17 articles, including in The New England Journal of Medicine, the Lancet and the publication he edits, Cancer Discovery. He said that he did not believe disclosure was required for dozens of other articles detailing early stages of research.

“I have spent my career caring for cancer patients and bringing new therapies to the clinic with the goal of extending and saving lives,” Baselga said in the statement. “While I have been inconsistent with disclosures and acknowledge that fact, that is a far cry from compromising my responsibilities as a physician, as a scientist and as a clinical leader.”

The Corporate Imprint on Cancer Research

Baselga, 59, supervises clinical operations at Memorial Sloan Kettering, one of the nation’s top cancer centers, and wields influence over the lives of patients and companies wishing to conduct trials there. He was paid more than $1.5 million in compensation by the cancer center in 2016, according to the hospital’s latest available tax disclosures, but that does not include his consulting or board fees from outside companies.

Many top medical researchers have ties to the for-profit health care industry, and some overlap is seen as a good thing — after all, these are the companies charged with developing the drugs, medical devices and diagnostic tests of the future.

Baselga’s relationship to industry is extensive. In addition to sitting on the board of Bristol-Myers Squibb, he is a director of Varian Medical Systems, which sells radiation equipment and for whom Memorial Sloan Kettering is a client.

In all, Baselga has served on the boards of at least six companies since 2013, positions that have required him to assume a fiduciary responsibility to protect the interests of those companies, even as he oversees the cancer center’s medical operations.

The hospital and Baselga said steps had been taken to prevent him from having a say in any business between the cancer center and the companies on whose boards he sits.

The chief executive of Memorial Sloan Kettering, Dr. Craig B. Thompson, settled lawsuits several years ago that were filed by the University of Pennsylvania and an affiliated research center. They contended that he hid research conducted while he was at Penn to start a new company, Agios Pharmaceuticals, and did not share the earnings. Thompson disputed the allegations. He now sits on the board of Merck, which manufactures Keytruda, a blockbuster cancer therapy.

Hickey said the cancer center cannot fulfill its charitable mission without working with industry. “We encourage collaboration and are proud that our work has led to the approval of novel, life-saving cancer treatments for patients around the world,” she said.

Some Disclosures Are Required; Others Aren’t

After the scandals a decade ago over lack of disclosure, the federal government began requiring drug and device manufacturers to publicly disclose payments to doctors in 2013.

From August 2013 through 2017, Baselga received nearly $3.5 million from nine companies, according to the federal Open Payments database, which compiles disclosures filed by drug and device companies.

Baselga has disclosed in other forums investments and advisory roles in biotech start-ups, but he declined to provide a tally of financial interests in those firms. Companies that have not received approval from the Food and Drug Administration for their products — projects still in the testing phases — do not have to report payments they make to doctors.

Serving on boards can be lucrative. In 2017, Baselga received $260,000 in cash and stock awards to sit on Varian’s board of directors, according to the company’s corporate filings.

ProPublica and The Times analyzed Baselga’s publications in medical journals since 2013, the year he joined Memorial Sloan Kettering. He failed to disclose any industry relationships in more than 100, or about 60 percent of the time, a figure that has increased with each passing year. Last year, he did not list any potential conflicts in 87 percent of the articles that he wrote or co-wrote.

Baselga compiled a color-coded list of his articles and offered a different interpretation. Sixty-two of the papers for which he did not disclose any potential conflict represented “conceptual, basic laboratory or translational work,” and did not require one, he said. Questions could be raised about others, he said, but he added that most “had no clinical nor financial implications.” That left the 17 papers he plans to correct.

Early-stage research often carries financial weight because it helps companies decide whether to move ahead with a product. In about two-thirds of Balsega’s articles that lacked details of his industry ties, one or more of his co-authors listed theirs.

In 2015, Baselga published an article in the New England Journal about a Roche-sponsored trial of one of the company’s drugs, Zelboraf. Despite his financial ties to Roche, he declared that he had “nothing to disclose.” Fourteen of his co-authors reported ties to Roche.

Baselga defended the articles, saying that “these are high-quality manuscripts reporting on important clinical trials that led to a better understanding of cancer treatments.”

The guidelines enacted by most major medical journals and professional societies ask authors and presenters to list recent financial relationships that could pose a conflict.

But much of this reporting still relies on the honor system. A study in August in the journal JAMA Oncology found that one-third of authors in a sample of cancer trials did not report all payments from the studies’ sponsors.

“We don’t routinely check because we don’t have those kind of resources,” said Dr. Rita F. Redberg, the editor of JAMA Internal Medicine, who has been critical of the influence of industry on medical practice. “We rely on trust and integrity. It’s kind of an assumed part of the professional relationship.”

Jennifer Zeis, a spokeswoman for The New England Journal of Medicine, said in an email that it had now asked Baselga to amend his disclosures. She said the journal planned to overhaul its tracking of industry relationships.

The American Association for Cancer Research said it had begun an “extensive review” of the disclosure forms submitted by Baselga.

It said that it had never barred an author from publishing, and that “such an action would be necessary only in cases of egregious, consistent violations of the rules.”

Among the most prominent relationships that Baselga has often failed to disclose is with the Swiss pharmaceutical giant Roche and its United States subsidiary Genentech.

In June 2017, at the annual meeting of the American Society of Clinical Oncology in Chicago, Baselga spoke at a Roche-sponsored investor event about study results that the company had been counting on to persuade oncologists to move patients from Herceptin — which was facing competition from cheaper alternatives — to a combination treatment involving Herceptin and a newer, more expensive drug, Perjeta.

The results were so underwhelming that Roche’s stock fell 5 percent on the news. One analyst described the results as a “lead balloon,” and an editorial in The New England Journal called it a “disappointment.”

Baselga, however, told analysts that critiques were “weird” and “strange.”

This June, at the same cancer conference, Baselga struck an upbeat note about the results of a Roche trial of the drug taselisib, saying in a blog post published on the cancer center website that the results were “incredibly exciting” while conceding the side effects from the drug were high.

That same day, Roche announced it was scrapping plans to develop the drug. The news was another disappointment involving the class of drugs called PI3K inhibitors, which is a major focus of Baselga’s current research.

In neither case did Baselga reveal that his ties to Roche and Genentech went beyond serving as a trial investigator. In 2014, Roche acquired Seragon, a cancer research company in which Baselga had an ownership stake, for $725 million. Baselga received more than $3 million in 2014 and 2015 for his stake in the company, according to the federal Open Payments database.

From 2013 to 2017, Roche also paid Baselga more than $50,000 in consulting fees, according to the database.

These details were not included in the conflict-of-interest statements that are required of all presenters at the American Society of Clinical Oncology conference, although he did disclose ownership interests and consulting relationships with several other companies in the prior two years.

ASCO said it would conduct an internal review of Baselga’s disclosures and would refer the findings to a panel.

Baselga said that he played no role in the Seragon acquisition, and that he had cut ties with Roche since joining the board of a competitor, Bristol-Myers, in March. As for his presentations at the ASCO meetings in the last two years, he said he had also noted shortcomings in the studies.

The combination of Perjeta with Herceptin was later approved by the FDA for certain high-risk patients. As for taselisib, Baselga stands by his belief that the PI3K class of drugs will be an important target for fighting cancer.

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Amid Opioid Crisis, Insurers Restrict Pricey, Less Addictive Painkillers

Reprinted with permission from ProPublica.

 

This story was co-published with The New York Times.

At a time when the United States is in the grip of an opioid epidemic, many insurers are limiting access to pain medications that carry a lower risk of addiction or dependence, even as they provide comparatively easy access to generic opioid medications.

The reason, experts say: Opioid drugs are generally cheap while safer alternatives are often more expensive.

Drugmakers, pharmaceutical distributors, pharmacies and doctors have come under intense scrutiny in recent years, but the role that insurers — and the pharmacy benefit managers that run their drug plans — have played in the opioid crisis has received less attention. That may be changing, however. The New York State attorney general’s office sent letters last week to the three largest pharmacy benefit managers — CVS Caremark, Express Scripts and OptumRx — asking how they were addressing the crisis.

ProPublica and The New York Times analyzed Medicare prescription drug plans covering 35.7 million people in the second quarter of this year. Only one-third of the people covered, for example, had any access to Butrans, a painkilling skin patch that contains a less-risky opioid, buprenorphine. And every drug plan that covered lidocaine patches, which are not addictive but cost more than other generic pain drugs, required that patients get prior approval for them.

In contrast, almost every plan covered common opioids and very few required any prior approval.

The insurers have also erected more hurdles to approving addiction treatments than for the addictive substances themselves, the analysis found.

Alisa Erkes lives with stabbing pain in her abdomen that, for more than two years, was made tolerable by Butrans. But in January, her insurer, UnitedHealthcare, stopped covering the drug, which had cost the company $342 for a four-week supply. After unsuccessfully appealing the denial, Erkes and her doctor scrambled to find a replacement that would quiet her excruciating stomach pains. They eventually settled on long-acting morphine, a cheaper opioid that UnitedHealthcare covered with no questions asked. It costs her and her insurer a total of $29 for a month’s supply.

Erkes, who is 28, is afraid of becoming addicted and has asked her husband to keep a close watch on her. “Because my Butrans was denied, I have had to jump into addictive drugs,” she said. (Kevin D. Liles for The New York Times)

The Drug Enforcement Administration places morphine in a higher category than Butrans for risk of abuse and dependence. Addiction experts say that buprenorphine also carries a lower risk of overdose.

UnitedHealthcare, the nation’s largest health insurer, places morphine on its lowest-cost drug coverage tier with no prior permission required, while in many cases excluding Butrans. And it places Lyrica, a non-opioid, brand-name drug that treats nerve pain, on its most expensive tier, requiring patients to try other drugs first.

Erkes, who is 28 and lives in Smyrna, Georgia, is afraid of becoming addicted and has asked her husband to keep a close watch on her. “Because my Butrans was denied, I have had to jump into addictive drugs,” she said.

UnitedHealthcare said Erkes had not exhausted her appeals, including the right to ask a third party to review her case. It said in a statement, “We will work with her physician to find the best option for her current health status.”

Matthew N. Wiggin, a spokesman for UnitedHealthcare, said that the company was trying to reduce long-term use of opioids. “All opioids are addictive, which is why we work with care providers and members to promote non-opioid treatment options for people suffering from chronic pain,” he said.

Dr. Thomas R. Frieden, who led the Centers for Disease Control and Prevention under President Obama, said that insurance companies, with few exceptions, had “not done what they need to do to address” the opioid epidemic. Right now, he noted, it is easier for most patients to get opioids than treatment for addiction.

Leo Beletsky, an associate professor of law and health sciences at Northeastern University, went further, calling the insurance system “one of the major causes of the crisis” because doctors are given incentives to use less expensive treatments that provide fast relief.

The Department of Health and Human Services is studying whether insurance companies make opioids more accessible than other pain treatments. An early analysis suggests that they are placing fewer restrictions on opioids than on less addictive, non-opioid medications and non-drug treatments like physical therapy, said Christopher M. Jones, a senior policy official at the department.

Insurers say they have been addressing the issue on many fronts, including monitoring patients’ opioid prescriptions, as well as doctors’ prescribing patterns. “We have a very comprehensive approach toward identifying in advance who might be getting into trouble, and who may be on that trajectory toward becoming dependent on opioids,” said Dr. Mark Friedlander, the chief medical officer of Aetna Behavioral Health who participates on its opioid task force.

Aetna and other insurers say they have seen marked declines in monthly opioid prescriptions in the past year or so. At least two large pharmacy benefit managers announced this year that they would limit coverage of new prescriptions for pain pills to a seven- or 10-day supply. And bowing to public pressure — not to mention government investigations — several insurers have removed barriers that had made it difficult to get coverage for drugs that treat addiction, like Suboxone.

Experts in addiction note that the opioid epidemic has been changing and that the problem now appears to be rooted more in the illicit trade of heroin and fentanyl. But the potential for addiction to prescribed opioids is real: 20 percent of patients who receive an initial 10-day prescription for opioids will still be using the drugs after a year, according to a recent analysis by the CDC.

Several patients said in interviews that they were terrified of becoming dependent on opioid medications and were unwilling to take them, despite their pain.

In 2009, Amanda Jantzi weaned herself off opioids by switching to the more expensive Lyrica to treat the pain associated with interstitial cystitis, a chronic bladder condition.

But earlier this year, Jantzi, who is 33 and lives in Virginia, switched jobs and got a new insurer — Anthem — which said it would not cover Lyrica because there was not sufficient evidence to prove that it worked for interstitial cystitis. Jantzi’s appeal was denied. She cannot afford the roughly $520 monthly retail price of Lyrica, she said, so she takes generic gabapentin, a related, cheaper drug. She said it does not manage the pain as well as Lyrica, which she took for eight years. “It’s infuriating,” she said.

Jantzi said she wanted to avoid returning to opioids. However, “I could see other people, faced with a similar situation, saying, ‘I can’t live like this, I’m going to need to go back to painkillers,’ ” she said.

In a statement, Anthem said that its members have to meet certain requirements before it will pay for Lyrica. Members can apply for an exception, the insurer said. Jantzi said she did just that and was turned down.

Erkes, who is petting her dog, Kallie, once visited her pain doctor every two months. Since her insurer denied coverage of Butrans, she has gone back much more frequently, and once went to the emergency room because she could not control her pain. (Kevin D. Liles for The New York Times)

With Butrans, the drug that Erkes was denied, several insurers either do not cover it, require a high out-of-pocket payment, or will pay for it only after a patient has tried other opioids and failed to get relief.

In one case, OptumRx, which is owned by UnitedHealth Group, suggested that a member taking Butrans consider switching to a “lower cost alternative,” such as OxyContin or extended-release morphine, according to a letter provided by the member.

Wiggin, the UnitedHealthcare spokesman, said the company’s rules and preferred drug list “are designed to ensure members have access to drugs they need for acute situations, such as post-surgical care or serious injury, or ongoing cancer treatment and end of life care,” as well as for long-term use after alternatives are tried.

Butrans is sold by Purdue Pharma, which has been accused of fueling the opioid epidemic through its aggressive marketing of OxyContin. Butrans is meant for patients for whom other medications, like immediate-release opioids or anti-inflammatory pain drugs, have failed to work, and some scientific analyses say there is not enough evidence to show it works better than other drugs for pain.

Dr. Andrew Kolodny is a critic of widespread opioid prescribing and a co-director of opioid policy research at the Heller School for Social Policy and Management at Brandeis University. Kolodny said he was no fan of Butrans because he did not believe it was effective for chronic pain, but he objected to insurers suggesting that patients instead take a “cheaper, more dangerous opioid.”

“That’s stupid,” he said.

 

Erkes’s pain specialist, Dr. Jordan Tate, said her patient had been stable on the Butrans patch until January, when UnitedHealthcare stopped covering the product and denied Erkes’s appeal.

Without Butrans, Erkes, who once visited the doctor every two months, was now in Tate’s office much more frequently, and once went to the emergency room because she could not control her pain, thought to be related to an autoimmune disorder, Behcet’s disease.

Tate said she and Erkes reluctantly settled on extended-release morphine, a drug that UnitedHealthcare approved without any prior authorization, even though morphine is considered more addictive than the Butrans patch. She also takes hydrocodone when the pain spikes and Lyrica, which UnitedHealthcare approved after requiring a prior authorization.

Erkes acknowledged that she could have continued with further appeals, but said the process exhausted her and she eventually gave up.

While Tate said Erkes had not shown signs of abusing painkillers, her situation was far from ideal. “She’s in her 20s and she’s on extended-release morphine — it’s just not the pretty story that it was six months ago.”

Dr. Shawn Ryan, who runs an addiction treatment practice in Cincinnati, said too many insurance companies put onerous barriers on patients needing medications to treat their addictions. (Andrew Spear for The New York Times)

Many experts who study opioid abuse say they also are concerned about insurers’ limits on addiction treatments. Some state Medicaid programs for the poor, which pay for a large share of addiction treatments, continue to require advance approval before Suboxone can be prescribed or they place time limits on its use, both of which interfere with treatment, said Lindsey Vuolo, associate director of health law and policy at the National Center on Addiction and Substance Abuse. Drugs like Suboxone, or its generic equivalent, are used to wean people off opioids but can also be misused.

The analysis by ProPublica and The Times found that restrictions remain prevalent in Medicare plans, as well. Drug plans covering 33.6 million people include Suboxone, but two-thirds require prior authorization. Even when such requirements do not exist, the out-of-pocket costs of the drugs are often unaffordable, a number of pharmacists and doctors said.

At Dr. Shawn Ryan’s addiction-treatment practice in Cincinnati, called BrightView, staff members often take patients to the pharmacy to fill their prescriptions for addiction medications and then watch them take their first dose. Research has shown that such oversight improves the odds of success. But when it takes hours to gain approval, some patients leave, said Ryan, who is also president of the Ohio Society of Addiction Medicine.

“The guy walks out, and you can’t blame him,” Ryan said. “He’s like, ‘Hey man, I’m here to get help. What’s the deal?’”

Have you had trouble paying for prescription drugs? Tell us about it.

ProPublica deputy data editor Ryann Grochowski Jones contributed to this report.

Generic Drug Prices Are Declining, But Many Consumers Aren’t Benefiting

Reprinted with permission from ProPublica.

 

Not all drug prices are going up.

Amid the public fury over the escalating costs of brand-name medications, the prices of generic drugs have been falling, raising fears about the profitability of major generic manufacturers. Last week, Teva Pharmaceuticals reported that it had missed analysts’ earnings estimates in the second quarter and planned to lay off 7,000 workers. Its share price plummeted 24 percent in one day as investors worried there was no end in sight.

Share prices of other generic drugmakers also declined, as did those of wholesalers, which profit from the sales of generic drugs and have said they expect prices to continue declining.

Mylan, another large generic drugmaker, will report its second-quarter earnings on Wednesday. Mylan also sells the EpiPen, the brand-name allergy treatment whose price increases have stoked outrage over the past year, but the company’s primary business is as a seller of generic drugs.

This may seem like good news for consumers, but it’s unclear how much they will save.

Why are generic prices falling?

Generic drugs are copycat versions of brand-name products and — to a point — their prices are expected to drop over time. When a brand-name drug first loses its patent protection, prices fall slowly. Over the next couple of years, as more competitors enter the market, the prices drop even more, until the pills become commodities and sell for pennies. Blockbuster drugs that have recently taken this path include Lipitor and Plavix, the cholesterol-lowering and blood-thinning pills that now cost as little as $10 for a monthly prescription.

Generic drug prices have been declining in the United States since at least 2010, according to a August 2016 report by the Government Accountability Office.

They have fallen even in the face of high-profile exceptions: Dozens of old generic drugs have risen in price in recent years, for reasons that include supply disruptions and competitors’ leaving the market.

For example, the price that pharmacies paid for the antibiotic doxycycline hyclate increased to $3.65 a pill in 2013 from 5.6 cents in 2012, according to an analysis of pricing data by Adam J. Fein, president of Pembroke Consulting, who researches the drug-distribution industry. The spike in prices of doxycycline and other generic drugs led to a congressional investigation as well as state and federal inquiries into price-fixing that are still underway. A coalition of state attorneys general have accused a number of companies of colluding to keep prices high.

Fein said the price of doxycycline has since declined to 60 cents a pill. “That’s a big switch,” he said.

Despite these cases, the trend toward deflating generic prices appears to have accelerated as companies have more aggressively undercut each other’s prices.

Making matters worse for the generics companies, they are missing out on peak profit potential because not as many brand-name products are losing patent protection. The six-month period after a drug goes generic is typically the most lucrative time for the first company to market. And the Food and Drug Administration has been clearing out a backlog of generic-drug approvals, meaning more competitors are now entering markets for certain drugs.

In a recent call with Wall Street analysts, George S. Barrett, the chairman and chief executive of Cardinal Health, a major drug distributor that reported declining profits last week, said generic deflation was not new, but that the company historically had been able to anticipate it. “It just looked a little different than we had seen,” he said.

In recent years, generic companies have gone on acquisition sprees in an effort to head off some of these challenges. But they have been outmaneuvered by those who buy their products, a trend that has been intensifying. Major pharmacy chains, drug wholesalers and pharmacy benefit managers (which operate drug plans for insurers) have united into colossal buying groups. For example, Express Scripts, a large pharmacy benefit manager that runs its own mail-order pharmacy, teamed up with Walgreens Boots Alliance in May to purchase generics.

“What we’re seeing is incredible competition — and we’re causing it,” said Dr. Steve Miller, the chief medical officer for Express Scripts.

So are consumers saving any money?

The declining prices are broadly beneficial to the health care system, and may put some slight brake on rising premiums.

But most of those with health insurance pay a fixed co-payment — $10, for example — for each generic prescription, and therefore don’t pay more or less, regardless of any fluctuation in the actual price. And even those who do pay cash for generics may not notice a drop in price because many generics are already cheap.

Retail drug prices dropped 2.4 percent over the last year, based on a weighted average of 92 generics that have been on the market for at least a year, according to an analysis conducted for The New York Times and ProPublica by GoodRx, a site that tracks prices that consumers pay at the pharmacy. (Weighted averages account for how often each drug is prescribed.)

But that figure hides vast variations. The retail price for clopidogrel, the generic for Plavix, dropped 37 percent, to $3.77 from $6.03 a pill, GoodRx found. Conversely, the blood pressure drug metoprolol went up about 70 percent, to 59 cents a pill from 35 cents. But GoodRx noted that consumers can almost always do better than paying the retail price, or sometimes even their co-payments, using websites — like its own — that offer discounts.

Does this mean the problem with high drug costs has eased?

Overall drug spending is still on the rise because of the skyrocketing price of new, brand-name drugs.

For example, a report by QuintilesIMS, an industry research firm, found that in 2016, drug spending increased by nearly 5 percent, after accounting for discounts and rebates paid by manufacturers. Generic drugs accounted for 89 percent of prescriptions dispensed in 2016, but only 26 percent of the costs, according to QuintilesIMS. Each year, generic drugs make up a larger share of the prescriptions filled, while accounting for a smaller portion of drug costs, said Chester Davis Jr., the president of the Association for Accessible Medicines, the generic industry trade group.

New treatments for conditions like cancer and multiple sclerosis often enter the market with annual price tags in the tens of thousands — and sometimes hundreds of thousands — of dollars. Many manufacturers also raise the price once or twice a year, compounding the problem.

“Generic drugs are among the best-value products in health care,” said Dr. Aaron S. Kesselheim, an associate professor at Harvard Medical School. But for those who must take a brand-name drugs because there is no other alternative, “they’re the ones bearing the burden or the brunt of the drug price increases in recent years.”

Is this trend likely to continue?

Generic manufacturers say they expect it will, and are worried that lower prices could put pressure on profits and threaten the viability of the companies. This could lead to a wave of mergers and acquisitions, reducing competition and leading to higher prices.

David Maris, an analyst for Wells Fargo, dismissed the idea that companies would go out of business. “Right now we have a very healthy generic market,” he said.

The new commissioner of the Food and Drug Administration, Dr. Scott Gottlieb, has made increased competition in the drug market a key part of his policy platform. He said he wanted to make it easier for generics manufacturers to get clearance for hard-to-copy products like eye drops, topical creams and asthma inhalers. And he wants to reduce barriers to ensure new players can enter the market for existing generic drugs, possibly lowering prices further.

“We’re looking to create competition where there isn’t competition,” he said.

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Take The Generic Drug, Patients Are Told — Unless Insurers Say No

Reprinted with permission from ProPublica.

It’s standard advice for consumers: If you are prescribed a medicine, always ask if there is a cheaper generic.

Nathan Taylor, a 3-D animator who lives outside Houston, has tried to do that with all his medications. But when he fills his monthly prescription for Adderall XR to treat his attention-deficit disorder, his insurance company refuses to cover the generic. Instead, he must make a co-payment of $90 a month for the brand-name version. By comparison, he pays $10 or less each month for the five generic medications he also takes.

“It just befuddles me that they would do that,” said Taylor, 41.

A spokesman for his insurer, Humana, did not respond to multiple emails and phone calls requesting comment.

With each visit to the pharmacy, Taylor enters the upside-down world of prescription drugs, where conventional wisdom about how to lower drug costs is often wrong.

Consumers have grown accustomed to being told by insurers — and middlemen known as pharmacy benefit managers — that they must give up their brand-name drugs in favor of cheaper generics. But some are finding the opposite is true, as pharmaceutical companies squeeze the last profits from products that are facing cheaper generic competition.

Out of public view, corporations are cutting deals that give consumers little choice but to buy brand-name drugs — and sometimes pay more at the pharmacy counter than they would for generics.

The practice is not easy to track, and has been going on sporadically for years. But several clues suggest it is becoming more common.

In recent months, some insurers and benefit managers have insisted that patients forgo generics and buy brand-name drugs such as the cholesterol treatment Zetia, the stroke-prevention drug Aggrenox and the pain-relieving gel Voltaren, along with about a dozen others, according to memos and prescription drug claims that pharmacies shared with ProPublica and The New York Times. At the same time, consumers are sounding off on social media.

Now it appears the practice is spreading to biosimilars, the competitors for expensive, complex biologic drugs that are beginning to arrive on the market.

Consumers have become increasingly angry over what they pay for drugs, and that outrage has caught the attention of lawmakers from both parties. Democrats have identified lowering drug prices as a pillar of their economic agenda, and President Donald Trump has raised the issue repeatedly. But for now, solutions have proved elusive.

The continued success of the brand-name drug Adderall XR, long after generic competitors arrived on the market, is a case in point.

Dr. Lawrence Diller, a behavioral pediatrician in Walnut Creek, California, said he began noticing “very odd things” going on with Adderall XR and other attention-deficit drugs about two years ago. He began receiving faxes from pharmacies telling him that he had to specify that patients required brand-name versions of the drugs.

He had been practicing for 40 years, but until then had never had a pharmacy tell him he had to prescribe a brand-name drug instead of a generic.

“It’s Alice-in-Wonderland time in the drug world,” he said.

Some insurers require members to have prescriptions filled with brand-name drugs and do not charge them more than for generics. But 29 percent of Americans with health insurance paid for by their employer have a high-deductible plan. And they acutely feel the cost difference between branded and generic drugs because they often have to pick up the full sticker price of medications until they have paid out thousands of dollars.

Naomi Freundlich, a Brooklyn writer, had been buying the generic version of Adderall XR for two years to treat her son’s attention-deficit hyperactivity disorder. Her family had a $3,000 annual deductible, and the relatively lower price helped keep medical costs down.

Then, in 2014, her pharmacist told her that her insurance plan would cover only the brand-name drug, which cost her family some $50 more a month than the generic. If she paid for the generic herself, it would not have counted toward her deductible. Freundlich complained to her insurer, UnitedHealthcare, but could not get a clear answer.

“It’s hard to explain because it doesn’t really make sense,” she said.

UnitedHealthcare has continued to favor Adderall XR and certain other brand-name drugs over generics, according to claims provided by independent pharmacists and reviewed by ProPublica and the Times. The insurer also recently told health providers that it preferred Remicade, the expensive rheumatoid arthritis drug made by Johnson & Johnson, over biosimilars that have a lower list price and are just beginning to come on the market.

A spokesman for UnitedHealthcare, Matthew N. Wiggin, said the insurer does at times prefer brand-name drugs. “By providing access to these drugs at a lower cost, we are able to improve affordability for our customers and members,” he said in an email.

Asked whether consumers sometimes end up paying more because of these choices, he said pharmacies and doctors could seek an exemption from the insurer if they want the generic instead. Several patients said they had not been told of that option.

Shire, the maker of Adderall XR, and some other brand-name drug manufacturers are no longer content to allow sales of their products to plummet when generic competitors arrive on the market. Instead, they are negotiating deals with insurers and pharmacy benefit managers to give priority to their versions. Consumers are given no details about these deals.

A Shire spokeswoman said the company had been able to hold on to market share for Adderall XR by offering insurers and government programs prices that are competitive with those of generic manufacturers.

Adderall XR, the long-acting version of Shire’s popular treatment Adderall, had for years been the company’s top-selling product, bringing in $1.1 billion in sales in 2008, about one-third of its revenue that year.

But mindful that its blockbuster could soon face generic competition, Shire acted aggressively to protect its franchise.

First, in the mid-2000s, Shire sued generic drug companies to block them from bringing cheaper copies to the market, alleging patent infringement. Then, it made deals with two makers of generic drugs to sell authorized copies of its drug, a tactic in which the branded manufacturer supplies its product in exchange for a share of royalties. Those agreements soured after the two companies, Teva Pharmaceuticals and Impax Laboratories, accused Shire of not playing fair by failing to supply them with enough pills to compete in the marketplace. More lawsuits ensued, followed by settlements.

Then, a few years ago, Shire tried a new tactic: giving ever-larger discounts to pharmacy benefit managers and insurers for preferential treatment over the generics. That did not mean lowering the list price of the drug but rather negotiating rebates that were paid not to the patients, but to insurers and middlemen such as CVS Caremark.

Benefit managers and insurers have been passionate advocates of generic drugs, arguing that the cheaper products save patients and their employers billions of dollars. Indeed, generic drugs have come to dominate the market, and today account for nearly 90 percent of all prescriptions filled in the United States.

Shire has managed to hold on to a much larger share of the market through its deals than most companies do when their drugs come off patent and face generic competition.

Adderall XR, the brand-name version of extended-release mixed amphetamine salts, accounted for 29 percent of the 13.1 million prescriptions for the drug in 2016, according to QuintilesIMS, a health information company that purchases the data from pharmacies and sells it to clients that include drug companies. The average market share of brand-name products dwindles to less than 6 percent two years after the first generic competitor arrives, according to QuintilesIMS.

The list price of Adderall XR has remained $7.12 per pill since mid-2012. But according to data from SSR Health, a research firm that tracks drug prices, the portion that Shire keeps has steadily declined.

In the first quarter of 2017, SSR estimated that Shire kept only $1.73, down from $2.93 per pill in the first quarter of 2013. Shire does not break out how much it pays to each middleman in the system, from distributors to pharmacy benefit managers.

But Ryan Baum, an analyst at SSR Health, said it was clear that Shire’s declining share of the list price reflected “just a really aggressive instance of trying to hang on.”

“It’s irrefutable, really,” he added.

In contrast, the generics cost as low as $3.89 per pill, but that does not include unspecified concessions that generic makers offer to pharmacies and distributors, according to Truven Health Analytics, another research firm that tracks the prices wholesalers pay for drugs.

A spokeswoman for Shire, Gwendolyn Fisher, said that while Shire did not make decisions about how much patients pay in out-of-pocket costs, “Shire is helping to deliver cost savings to the system and greater patient access to an important medicine.”

Shire said last week that it was considering spinning off the portion of its business that sells attention-deficit drugs in order to focus on developing rare-disease treatments.

Generic drug makers say they have seen an increase in efforts by manufacturers of brand-name drugs to fight to retain sales after they lose patent protection.

“You definitely see a much more aggressive posture than you used to see,” said Christine Baeder, senior vice president for customer and marketing operations at Teva, the world’s largest generic drug manufacturer.

In December, CVS Caremark, one of the largest benefit managers, sent a memo to pharmacies informing them that some of its Medicare prescription drug plans would cover only brand-name versions of 12 drugs. Some of the drugs, such as the antipsychotic medication Invega, have had generic competitors for over a year.

Also on the list was Copaxone, a brand-name drug sold by Teva that treats multiple sclerosis and that recently lost patent protection on its daily injection. Though Teva primarily makes generic drugs, in a twist it has taken a page from brand-name manufacturers to preserve sales of one of its key products.

In a statement, Teva said many patients had moved to its three-times-weekly version of Copaxone, for which there is no generic, but said it wanted to ensure that patients who “wish to remain on therapy continue to have access.”

Consumers taking other medications said they had experienced the same phenomenon. Lisa Hopkins, a disabled food and nutrition supervisor in Pennsylvania, went to fill a prescription for the anti-inflammatory Voltaren gel this year.

Hopkins, 52, said her pharmacist told her that her drug plan, CVS’s SilverScript, denied her claim because it was for a generic.

“I said to the lady at the insurance company, ‘That’s really, really odd to me,'” Hopkins said. “She said, ‘Yes. It’s happening more and more that the name brand is covered but the generic isn’t.'”

Hopkins has osteoporosis and bulging spinal disks and has been on disability for almost a decade. She is covered through Medicare and receives extra help from the government for her medications, lowering her out-of-pocket costs. That means that when her drugs cost a lot, taxpayers pay the bill. By law, Medicare cannot negotiate directly with drug manufacturers and instead gets a share of any rebates collected by insurers and benefit managers, like CVS Caremark, which operate Medicare’s drug plans.

In an email, a spokeswoman for CVS Caremark, Christine Cramer, said consumers never pay more in the rare instances in which the company favors a brand-name drug over a generic. “This generally occurs when there is limited or no competition among generics,” she said.

Pharmacists say they are noticing the trend, too, and it takes time to understand the denied claim and pursue a remedy, including sometimes calling the doctor. While favorable treatment for a brand-name drug doesn’t happen all the time, it is startling when it does, said Robert Frankil, president of Sellersville Pharmacy Inc. in Pennsylvania, which owns two pharmacies.

“There’s only one reason why they’re requiring you to use a more expensive product,” Frankil said. “Because somewhere down the road, somebody is earning more money.”

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