Medicare Part D Transparency: Are We Healthier or Simply Poorer?

Posted on | May 1, 2015 | 2 Comments

Mike Magee

This has been a week focused on drugs – not illegal drugs, prescription drugs. If you like health policy, and you like controversy, pharmaceuticals is the place to be.

On the one side you find Americans, with all their ills, real and imagined, hoping for a “miracle cure”, a quick fix that avoids the hard work of prevention or behavioral change; something that will rescue them from terrible and poorly understood conditions like cancer, or autoimmune diseases, or autism, or…. The answer they say is more discoveries, and their voice is amplified by pharmaceutical companies, and their funded patient groups, that make urgent pleas for faster drug approvals that tip the balance toward risk and away from benefit, and deliver extended patent protection, and expanded profitability.

On the other side of the equation, you find skeptical health professionals, consumers, and health economists, who see an industry that has managed to amass billions and billions of dollars by over-marketing products with marginal benefits for conditions whose basic science understanding is far from complete. They preach caution, restraint, less liberal treatment criteria, reasonable risk management, and the economics of prevention.

In such high stake battles, where literally billions of dollars are at stake, opportunists with expansive organizations, financial and legal resources, and fiscal incentives tend to prevail. In the wake of the Thalidomide disaster, with the subsequent Kefauver-Harris Amendments, 20 years of caution, and claims of a “drug lag” compared to approvals in Europe (reinforced by a nasty recession), laid the stage for three decades of liberalization and expansion of drug approvals in the US. But this movement required opportunism to become a reality. It was the fear, stigma, death and human suffering associated with HIV/AIDS, worsened by a Reagan administration stuck in denial, that brought all forces into alignment.

Since that time, over now three decades, we have seen progressive waves of enhanced FDA drug approval, as well as a shift to generics (many now marketed by their brand company parents), which now constitute nearly 90% of all prescriptions filled in the US. A brief list of the enabling legislation would include: Orphan Drugs Act – 1983, Hatch – Waxman Act – 1984, Priority Review – 1992, Prescription Drug User Fee Act -1992, Accelerated Approval – 1993, FDA Modernization Act – 1997, Fast track – 1988, Public Health Security and Bioterrorism Preparedness and Response Act – 2002, FDA Amendments Act – 2007. Add to this now the Century Cures Act, which is currently before Congress and is raising more than a few eyebrows.

Under the multiple, current, easement programs, approximately 1/3 of all recently approved products, made it to the market under the auspices of these exemption programs that sped up pass through and usually attached additional financial rewards to the sponsoring company, either directly or as a result of patent extentions. Where, in the late 1970’s, pharmaceutical advocates decried “drug lags”, now over 60% of new drug approvals occur first in the US.

This weeks release of the Medicare Part D prescription database begins to ask some uncomfortable questions of the “Medical-Pharmaceutical-Industrial Complex”. To begin with, the results show a peculiar non-alignment between the ten most prescribed drugs and the ten drugs generating the most cost to Medicare. Over a million prescribers generated prescriptions for 36 million elder Americans that cost the government and its’ Medicare program $103 billion in 2013 for over 3000 different drugs. The ten most prescribed drugs were all generics, with the most expensive coming in with a government bill of $911 million. Six of the ten were for either cholesterol control or hypertension. Now, let’s contrast that with the ten most expensive drugs – all brand named. Their cost – $19 billion.

Now, you must be thinking, of course, these are for incredible breakthroughs, modern day miracles, hard-fought discovery victories, deserving of our dollars. But uncomfortable, this is generally not the case. In the generic category, we have 4 high blood pressure meds, 2 cholesterol meds, 1 diabetes med, 1 thyroid med, 1 pain med, and 1 acid reflux med. In the wildly expensive brand med category, we have 1 acid reflux med (ranked #1 at $2.5 billion), 1 cholesterol med, 2 diabetes meds, 2 breathing meds, 2 psychiatric meds, and 1 cancer med(ranked #10 at $1.3 billion).

If we dig just a bit deeper, it gets interesting. Let’s start with expensive brand #1, Nexium, sold by AstraZeneca, and generating top cost honors to Medicare Part D at $2.5 billion. For that investment, this rather poorly differentiated (read “Me-Too”) drug treated about 1.5 million seniors, roughly a quarter of those treated by its’ close generic cousin, omeprazole (formerly Prilosec), which made it only to #6 on the generic list, and treated 6.4 million recipients at a cost of only $643 million, roughly 1/4 of the Nexium spend. Just to emphasize: they treated 4 times more patients at 1/4 of the cost.

Then consider Abilify. It’s primarily approved for the treatment of schizophrenia and bipolar disorder, but ranked #4 on the brand list generating $2.1 billion for its Japanese maker, Otsuka Pharmaceutical. Who knew there were so many schizophrenic, bi-polar adults? Scratch the surface of the Abilify website and you’ll find this suggestion: “Use as an add-on treatment for adults with depression when an antidepressant alone is not enough.” Wonder why all your nursing home seniors are falling out of their hospital beds, fracturing hips, or lying somnolent and unintended across America. Look no farther than Abilify.

But there are bigger questions here, and I’d like to cue up just one or two:

1. Has the liberalization of our indications for chronic disease management of conditions like high cholesterol and hypertension paralleled the liberalization of the FDA approval for new drugs?

2. Having given up the right to negotiate best prices for Medicare Part D drugs, should we at least be able to avoid “Me-Too” varieties that are so clearly wasting taxpayer dollars?

3. Have the large number of new drugs granted fast through-put by the FDA actually made us healthier, or simpler poorer?

For Health Commentary, I’m Mike Magee.

Comments

2 Responses to “Medicare Part D Transparency: Are We Healthier or Simply Poorer?”

Denise Link
May 1st, 2015 @ 2:17 pm

Thank you, Mike, for this informative essay about the enormous amounts of profit being realized by pharmaceutical companies (assisted by disease focused advocacy groups) for very little, if any, benefit to patients. I would like to add my personal pet peeve to the list of contributors to the problem of run away medication expenditures; the prescribing healthcare providers who feed at the company sponsored dinner troughs to obtain “education”. I don’t buy the assurances of my colleagues that attend these events that they are not influenced by the free meal or whatever else they are being offered- if it didn’t work, the pharms would not invest in them.
Mike Magee
May 1st, 2015 @ 4:06 pm

Thanks, Denise. Having seen it from both sides, I agree with your observation.