The evolving picture on drug price hikes

With help from Allie Bice, Arthur Allen, Rachana Pradhan and Brianna Ehley

PROGRAMMING NOTE: Prescription Pulse will not publish on Friday July 5, but will be back on schedule Tuesday, July 9.

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— Drug prices are still rising but with a smaller margin.

— Part D seniors could overpay for specialty generics without reform.

— DOJ wants to reschedule fentanyl, but HHS has concerns.

Happy Tuesday and welcome back to Prescription PULSE. It’s a short week but don’t worry — I’ll be back in your inbox on Wednesday morning to send you off with pharma news into the (hopefully long) weekend. As always, send news and tips to Sarah Owermohle (sowermohle@politico.com or @owermohle). Sarah Karlin-Smith returns in September!

THE EVOLVING PICTURE ON DRUG PRICE HIKES — Data for the first six months of the year show prices are still rising — although apparently at slimmer margins — but many big drug makers sat out the usual July 1 round of price increases. All in all, the trend picture was muddy.

On the one hand, data from Rx Savings Solutions — which included a broad range of products from pricey cancer therapies to very low-cost hospital infusions — shows prices rising 10.5 percent overall in the first six months of the year and spiking 13.1 percent yesterday.

Meanwhile Bernstein analysts say their tracking of the U.S.’ 100 top-selling drugs plus 30 smaller branded medicines showed prices for these rose just 3.1 percent the first half of the year. That’s a smaller data set to be sure, but it ropes in many of the most recognizable — and the system’s costliest — medicines. And 3.1 percent is still above inflation.

“The data has something for everyone in it,” said one drug industry analyst (not Bernstein), who noted that Congress is moving towards a bill regardless of drug pricing trends. “That said, it’s hard to imagine what [drugmakers] are thinking. Keeping your head down would seem to be a much better strategy.”

Some notables: Sanofi slashed the price of its insulin biosimilar Admelog by 44 percent, while Mylan lowered the price of its Gleevec generic by up to 43 percent, according to Elsevier. And of course Pfizer, the target of a presidential tweet last July, hasn’t made any midyear movements yet.

Keep an eye out: Some drug makers that stayed quiet yesterday may still announce price hikes — perhaps as soon as this week’s holiday.

BAD SIGNALS: PART D PATIENTS PAYING MORE FOR GENERICS — The current Medicare Part D structure might mean patients are paying more out-of-pocket for certain generics than for their brand-name counterparts, a group of health policy experts write in Health Affairs.

How it happens: When patients hit the catastrophic phase of coverage, the prices paid for generics and brand-name drugs aren’t large, the authors, including Vanderbilt’s Stacie Dusetzina, explain. That’s especially true for specialty drugs with limited generic competition. And while the Bipartisan Budget Act of 2018 lowered out-of-pocket spending for biosimilars in a bid to encourage their use, it didn’t touch generic spending. The authors think a higher threshold for entering the catastrophic phase—the planned bump from $5,100 in 2019 to $6,350 in 2020 — will further exacerbate this issue.

Policymakers should remove the manufacturer discount from out-of-pocket spending calculations or extend the discount to all generic drugs, they write. Read the full article.

NOT SO FAST WITH NATURAL MONOPOLIES — American Enterprise Institute fellows pushed back this morning on the idea — proposed earlier this year by Memorial Sloan Kettering Center’s drug pricing policy expert Peter Bach — that biologics have a natural monopoly, which means biosimilars can never truly succeed at lowering costs. The only option, Bach suggested, was price regulation.

Not so, say AEI’s Alex Brill and Benedic Ippolito in a Health Affairs blog post publishing this morning. Brill, Ippolito and Bach all point to estimated 30 percent savings as a result of biosimilar competition for branded drugs like Amgen’s Neupogen, which has had rivals for a few years. But while Bach says that’s not enough to affect the system, Brill and Ippolito say it’s only the start — noting the 30 percent drop happened over a relatively short time.

“We completely agree that there are a variety of policy challenges facing the biologic market, but theory and data are clear: as most predicted, biosimilars do impose real downward pressure on prices,” Ippolito said.

DOJ, HHS IN DUSTUP OVER PERMANENT SCHEDULING OF FENTANYL — Justice Department officials held a briefing with reporters Monday to discuss legislation they are pushing on Capitol Hill that would permanently classify all new fentanyl substances as “schedule 1” drugs — the most highly controlled category. The DEA in February 2018 imposed a temporary emergency order scheduling fentanyl through February 2020. But officials warn that the administration’s work curbing deadly substances coming in from China and the southern border could lose ground if Congress doesn’t pass legislation to permanently schedule the drug.

… However, the legislation, S. 1622 (116), faces opposition from research and advocacy groups and resistance from Trump’s own Health Department, which says it could prevent crucial research needed to address the opioid epidemic. An HHS spokesperson told Pro’s Brianna Ehley that the department is working with FDA to crack down on international shipments of fentanyl, but said research on those drugs is crucial. Changing the classification to schedule 1 — reserved for drugs with no accepted medical treatment value — could make it hard to do.

The challenges researchers face in conducting research with schedule 1 drugs — including adding a long list of analogues to the category without streamlining the registration process — “could slow valuable research aimed at addressing the opioid crisis,” she said.

PROVIDEGx ROLLS OUT NEXT DRUG ON SHORTAGE — ProvideGx, the generic drug sourcing subsidiary of group purchasing organization Premier, today announced that it had struck a deal to source cysteine hydrochloride, a nutritional infusion that’s been on shortage lists since 2015 — and imported from Canada for just under a year due to short supply.

North Carolina-based Exela Pharma Sciences will produce the drug, and it has FDA approval for a formulation with less aluminum than older versions, Premier said. ProvideGx — launched in January — has made six other partnernships with generic drugmakers to stabilize the supply of medicines suffering shortages.

REPRODUCTIVE RIGHTS GROUPS PUSH BACK ON FDA — A coalition of 75 reproductive rights organizations and physicians wrote to FDA calling for the agency and other government officials to remove barriers for patients to access abortion pills. The pills are supplied by a Dutch pharmacist through the website AidAccess.Org, but in March the FDA warned the site to stop selling unapproved versions of the two drugs — mifepristone and misoprostol — to U.S. consumers.

The groups, including Planned Parenthood and National Organization for Women, argued in their letter that the medicines have been proven safe and effective and if laws and regulations “were based on science – not politics” they would be readily available. Read their full letter.

…FDA said in its letter that the drugs are only approved in the U.S. for termination of an early pregnancy, and that even then they come with a risk management program that can’t be provided in online sales. But as it stands, many state regulators that have cracked down on abortion are unsure how to stop the flow of the medication. And there are signs more women are seeking it.

GRASSLEY, WYDEN PROBE NONPROFIT RELATIONSHIPS WITH OPIOID MAKERS — The Senate Finance Committee leaders want to know the extent to which opioid makers are funding tax-exempt groups such as medical professional societies — and whether these payments influence pain treatment policies and practices.

Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.) are asking 10 groups for details on the dollars they’ve received from manufacturers, any collaborations with the companies, information on conflict of interest policies and more. The groups include the American Society for Pain Management Nursing, Federation of State Medical Boards and the Joint Commission, which accredits thousands of health programs.

One of the groups in the probe, the American Pain Society, announced Friday that it filed for bankruptcy. The group’s finances had deteriorated, in part, because of mounting legal fees from fighting lawsuits alleging its policies contributed to the nation’s opioid epidemic, according to a news release.

MARYLAND’S DRUG AFFORDABILITY BOARD TAKES EFFECT — The first-in-the-nation entity as of Monday can cap payments for expensive drugs, if a legislative committee signs off on the limits. Starting in 2022, the board can review any new brand-name drugs that cost $30,000 or more per year, existing brand name drugs whose price increases more than $3,000 per year, and generics with price hikes over 200 percent per year, as well as any other drug deemed to create affordability challenges.

GOVERNMENT JOINS FIGHT OVER PHARMA SETTLEMENTS — Conflicts among government agencies, politicians and pharmaceutical a leaders may slow a myriad of pending lawsuits against opioid drug manufacturers for their roles in the opioid crisis, NPR reports. Last week, a federal judge in Ohio halted efforts that sought to help nearly 24,000 communities combat the opioid crisis, because of legal conflicts. On June 12, the Centers for Medicare and Medicaid Services sent a letter to Oklahoma’s medicaid director stating it was entitled to part of the money from the state’s settlement with Purdue Pharma. That further complicates the state’s efforts to figure out how to allocate the money.

AMAZON COUNTER PICK-UP OPTION OPENS IN RITE AIDS — Amazon’s option for picking up pharmaceutical products, called “Counter,” has opened in over 100 Rite Aids, TechCrunch reports, and the online behemoth plans to expand the service to 1,500 stores by year’s end. Amazon purchased PillPack, an online pharmacy, last year.

President Donald Trump is expected to appoint Tomas Philipson, a health care policy expert, to serve as the head of the White House Council of Economic Advisers, POLITICO’s Victoria Guida first reported.

A survey funded by the Association for Accessible Medicines found that 55 percent of registered voters support so-called pay-for-delay agreements while 92 percent believed branded drugmakers, “manipulate the medical system for their own benefit at the expense of regular people and patients.”

Reps. Scott Peters (D-Calif.), Gus Bilirakis (R-Fla.), Bill Pascrell (D-N.J.), Kurt Schrader (D-Ore.), Richard Hudson (R-N.C.) and George Holding (R-N.C.) introduced legislation that would give CMS more time to report data on reimbursements for laboratory services.

FDA issued a final rule on procedures and timeframes of reviews for devices within the Center for Devices and Radiological Health.

FDA published an announcement seeking public comments on the draft of its de novo guidance.

FDA released draft guidance for industry on recommendations for labeling the drug abuse and dependence section of prescription drugs and biological products.

FDA released draft guidance for recommendations on the “validation of bioanalytical assays for chemical and biological drug quantification.”

FDA published a proposed amendment to its rules concerning use of the master files for biologics.

FDA released final guidance on developing drugs for the treatment of epidermolysis bullosa.

A DECEPTIVELY EASY CURE? Over on Slate.com, journalist Shannon Palus explores the brave new world of telemedicine prescriptions while exploring her own past of anxiety and stage fright. She examines the practices of online health websites like Hims, Hers and Kick, where you can hook up to an appointment with a doctor who, without much trouble it seems, will prescribe plenty of beta blockers to handle the jitters you feel before delivering that company PowerPoint.

… The problem is that this is a relatively unstudied, off-label treatment for anxiety. While the pills are generally harmless, they could dangerously lower your blood pressure or produce a tolerance that would raise it in the long run. Also it might not be good to regularly use a drug to deal with a fairly normal life challenge, Palus writes. Beta blockers “can all too easily become a crutch that ends up preventing progress and making things worse, especially for folks with underlying anxiety,” she writes. Read the whole story.