Tag: prescription drug costs

Regulating the Medication Gatekeepers: The Need for Federal PBM Reform

The Petrie-Flom Center Staff Leave a comment

by Rupa Palanki

On September 20, the Federal Trade Commission (FTC) filed a landmark lawsuit against the three largest prescription drug benefit managers (PBMs) — Caremark Rx, Express Scripts, and OptumRx — and their affiliated group purchasing organizations. The FTC alleges that these entities engaged in “anticompetitive and unfair rebating practices,” artificially increasing insulin drug prices and shifting costs to vulnerable patients.

This litigation is not an isolated case, but rather represents a broader effort by federal agencies and lawmakers to curb the power of PBMs and reduce drug costs. This article explores the role of PBMs in the health care system and potential next steps for federal reform.

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Steps 1, 2, 3, 4 signpost.

The Ongoing Step Therapy Debate

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By Laura Karas

Senator Lisa Murkowski’s (R-AK) reintroduction this February of a federal bill, the Safe Step Act, has revived the debate over the prudence of step therapy protocols.

Step therapy is an insurer utilization-management tool imposed in response to high drug prices. As its name implies, step therapy requires “steps” before a patient can receive his preferred medication (i.e., the one his provider has prescribed). Typically, a patient must “try and fail” a less costly medication or series of medications before becoming eligible for insurance coverage of the medication in question. In effect, step therapy allows an insurer’s “preferred therapy” to supersede patient and provider preference.

The need for step therapy is closely bound to the problem of high drug prices. But the crux of the step therapy debate boils down to the following: Who should decide which pharmaceutical drugs your health plan covers? You and your doctor, or your insurer?

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Hundred dollar bills rolled up in a pill bottle

New Rule Might Increase Out-of-Pocket Drug Costs for Patients

The Petrie-Flom Center Staff Leave a comment

This blog post is adapted from a commentary published in the American Journal of Managed Care.

By Bryan Walsh and Aaron S. Kesselheim

Patients may face increased out-of-pocket drug costs as a result of a new rule finalized by the Centers for Medicare & Medicaid Services (CMS) in July 2020 that would permit wide use of co-pay accumulator adjustment programs (CAAPs).

These increased costs may have effects on medication adherence, and in turn may affect health outcomes. In a recent commentary published in the American Journal of Managed Care, we explain the background to this rule and suggest ways CMS could narrow it to avoid these potential negative effects.

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Gavel surrounded by piles of money.

3 Challenges to Patents on Therapeutic Monoclonal Antibodies

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By Gregory Curfman

Three new developments — two based on litigation and one based on a federal statute — may have significant effects on pharmaceutical manufacturers’ use of patents to fend off competition and maintain high prices for therapeutic monoclonal antibodies.

Highly specific monoclonal antibodies have played an increasingly important role as precision therapies for a growing number of diseases, including malignant, cardiovascular, and inflammatory conditions. As therapies derived from research and development, therapeutic monoclonal antibodies may be — and usually are — patented, providing manufacturers with protection from competition and the prospect of high revenues.

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Hundred dollar bills rolled up in a pill bottle

AbbVie Wins First Round in Humira Antitrust Lawsuit

The Petrie-Flom Center Staff Leave a comment

By Ryan Knox and Gregory Curfman

Since receiving FDA approval for Humira® (adalimumab) in 2002, AbbVie, the drug’s manufacturer, has filed hundreds of submissions to the U.S. Patent and Trademark Office for secondary patents – almost half of which were filed after 2014, just two years before the expiration of its core patent.

These patents were largely directed to methods of use and potential formulation changes, but they did not include claims that affect the clinical efficacy of the biologic, which is used in the treatment of rheumatoid arthritis, Crohn’s disease, and psoriasis, among other conditions. Instead, the purpose of the secondary patent filings was to assemble a thicket of patents, 132 in all, to prohibit competition from biosimilar companies.

And so far, the strategy has worked. AbbVie remains the sole U.S. manufacturer of the biologic, and has successfully defended its domain: in June 2020, a federal district court judge in Chicago dismissed an antitrust lawsuit against AbbVie.

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Map of United States made up of pills.

Monthly Round-Up of What to Read on Pharma Law and Policy

Ameet Sarpatwari Leave a comment

By Ameet Sarpatwari, Beatrice Brown, Neeraj Patel, and Aaron S. Kesselheim

Each month, members of the Program On Regulation, Therapeutics, And Law (PORTAL) review the peer-reviewed medical literature to identify interesting empirical studies, policy analyses, and editorials on health law and policy issues.

Below are the citations for papers identified from the month of September. The selections feature topics ranging from commentaries on political pressures and questions of integrity facing the FDA, to a critique of the financial incentive structure for antibiotic development, to an estimation of how much NHS England would spend if it paid U.S. Medicare Part D prices. A full posting of abstracts/summaries of these articles may be found on our website.

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a pill in place of a model globe

Monthly Round-Up of What to Read on Pharma Law and Policy

Ameet Sarpatwari Leave a comment

By Ameet Sarpatwari, Beatrice Brown, Neeraj Patel, and Aaron S. Kesselheim

Each month, members of the Program On Regulation, Therapeutics, And Law (PORTAL) review the peer-reviewed medical literature to identify interesting empirical studies, policy analyses, and editorials on health law and policy issues.

Below are the citations for papers identified from the month of August. The selections feature topics ranging from a commentary on the need for rigorous scientific evaluation of COVID-19 vaccine candidates in the face of political and economic pressures, to an evaluation of patients’ and pharmacists’ experiences with pill appearance changes, to an examination of the extent and cost of potentially inappropriate prescription drug prescriptions for older adults. A full posting of abstracts/summaries of these articles may be found on our website.

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Large pile of amber prescription pill bottles

Monthly Round-Up of What to Read on Pharma Law and Policy

Ameet Sarpatwari Leave a comment

By Ameet Sarpatwari, Beatrice Brown, Neeraj Patel, and Aaron S. Kesselheim

Each month, members of the Program On Regulation, Therapeutics, And Law (PORTAL) go through recent, peer-reviewed medical literature to identify interesting empirical studies, policy analyses, and editorials on health law and policy issues.

Below are the citations for papers identified from the month of July. The selections feature topics ranging from an assessment of excess prescription drug spending associated with delayed generic competition, to an analysis of the differences between the use of advisories by drug regulatory bodies in various countries, to a commentary on the pitfalls of using SSR Health data for estimating net prescription drug spending. A full posting of abstracts/summaries of these articles may be found on our website.

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Blister pack of pills, but instead of bills dollar bills are rolled up in the packaging

To Cut Prescription Drug Spending, Stop Delays for Generic Competition

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By Beatrice Brown and Benjamin Rome

Prescription drug spending in the U.S. remains high and continues to rise, accounting for about 20% of national health expenditures. While generic competition is crucial for reducing drug prices, brand-name drug manufacturers can utilize several strategies to delay such competition by increasing the length of market exclusivity for their drugs.

Although brand-name drugs only account for 18% of all prescriptions filled, they comprise 78% of total drug spending. By contrast, equally-effective, interchangeable generic drugs can offer discounts of up to 80% off their brand-name drug counterparts.

Generic competitors can only be introduced after brand-name drugs have completed their period of market exclusivity, which typically lasts 12-16 years and is largely determined by the patents covering the drug. Brand-name pharmaceutical manufacturers have strong financial incentives to prolong this market exclusivity period and delay entry of generic products.

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A male pharmacist is examining a drug from a pharmacy inventory.

How Policies Enacted During COVID-19 Might Reduce Future Drug Spending

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By Beatrice Brown

The COVID-19 pandemic has prompted several states to take steps to temporarily authorize therapeutic substitution of drugs experiencing sudden shortages, whether due to spikes in demand or supply chain disruptions.

Although these instances of replacing patients’ typical prescription drugs with different drugs intended to have the same therapeutic effects have been prompted by necessity, therapeutic substitution more generally might reduce drug spending in the United States.

In a recent piece in the BMJ, Jonathan Darrow, Jessica Chong, and Aaron Kesselheim explore using state laws to expand the authority of pharmacists to substitute clinically similar alternatives in order to help cut spending. Actions taken by states to temporarily allow therapeutic substitution can help them gain experience with this strategy and potentially lead to broader and more permanent drug substitution policies that could help decrease drug spending.

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