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The Pressure for Drug Pricing Reform Intensifies

Tony Hagen @oncobiz
Published: Monday, Jun 19, 2017

Jayson S. Slotnik

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.”

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