South Florida Business Journal Guide to Healthcare - Dr. Fialkow re drug costs

As prescription drug prices continue to rise, a look at the alternatives

Reusing old products is a tried-and-true way to save money, both in business and in our personal lives. Amazon.com founder Jeff Bezos’ spaceflight company Blue Origin has successfully launched and landed a reusable rocket that represents an important step toward the goal of lower-cost space travel. Parents dress their younger children in the hand-me-down clothes that once belonged to their older siblings. This approach can even help curtail the rising cost of prescription drugs. That’s what Weston-based Cantex Pharmaceuticals is doing with its research into repurposing an older drug, Disulfiram, to fight a highly aggressive and malignant type of brain cancer.

A staggering amount of money is spent on prescription drugs in the U.S. According to a recent report by the IMS Institute for Healthcare Informatics, a firm that tracks the pharmaceutical industry, Americans spent $424 billion in 2015. Consumer Reports finds that number continues to rise, primarily because there are few regulations that can prevent drug companies from raising prices simply to raise their profit margins.

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The nonprofit organization, known for its product reviews, discovered in March that about 32 million people were hit with price hikes within the past year, costing them an average of $63 more for a drug they routinely take, including generics used to treat common conditions such as diabetes, high blood pressure and high cholesterol. As a result, more people adopt habits that worsen their health and end up costing them and their insurance providers – if they have health insurance – more money over the long term. They don’t keep their doctor appointments, don’t show up for tests and procedures, and either don’t take their medications as directed or don’t take them at all.

Unfortunately for the companies that develop and manufacture new medications like Cantex, the smirking visage of Martin Shkreli, former CEO of Turing Pharmaceuticals, has become the face of the entire industry.

In 2015, Turing acquired a life-saving anti-parasite medication called Daraprim, and promptly increased the price 5,000 percent – to $750 from $13.50 a dose.

In response to public outcry, Shkreli was summoned before Congress. He repeatedly rolled his eyes and laughed in response to questions from members of the House Committee on Oversight and Government Reform. An irate Rep. Elijah Cummings, D-Maryland, admonished him by saying “drug company executives are lining their pockets at the expense of some of the most vulnerable families in our nation. It’s not funny, Mr. Shkreli. People are dying and they’re getting sicker and sicker.”

Shkreli refused to answer questions, invoking his Fifth Amendment rights, and later called Congress “imbeciles” on his Twitter account.

Last month, Mylan NV came under intense public criticism for steadily marking up the price of its EpiPen allergy treatment by more than 400 percent over the last few years. Mylan did announce it will offer a savings card that covers as much as $300 of the $600 cost of an EpiPen two-pack for those paying full price. The decision came only after calls for an immediate price cut by several members of Congress, Democratic presidential candidate Hilary Clinton, and the American Medical Association.

Turing and Mylan have one thing in common: They acquired medications that are decades old. Therefore, they did not have to spend any money on research and development. Turing’s price increase on Daraprim, a generic drug, is an example of a broader trend of profitmaking as the primary motivator for price increases. A joint House and Senate investigation found that the annual cost hikes for 10 generic drugs ranged from 390 to 8,200 percent.

These two cases are just the most recent examples of what critics, including former Washington insider and current South Florida resident Bill Johnson, see as evidence of the sway the pharmaceutical industry has on lawmakers.

Johnson spent 12 years in the 1990s and early 2000s as a congressional aide in the House and Senate. He says he experienced firsthand the frustration of trying – and failing – to keep drug prices down.

“The Big Pharma lobby is very powerful and has enormous influence over legislation that comes to votes before committees and the floor,” Johnson says.

While working as state director for Rep. Tom Allen, D-Maine, Johnson helped craft what he calls “the simplest bill I’ve ever seen – short and to the point.”

The Prescription Drug Fairness for Seniors Act of 1998 would have ensured senior citizens on Medicare paid the same prices charged to military veterans through the Department of Veterans Affairs for medications. At the time, the VA could negotiate drug prices because it purchased bulk quantities.

Johnson says the bill was in response to numerous letters and phone calls that Allen received from senior citizens who were worried about the rising costs of their prescription drugs. Many would resort to traveling to Canada, where the same medications cost about one-third less than in the U.S.

The committee Allen presented the bill to did not vote on it, killing it before it could reach the House floor.

Johnson says he thought of that loss when he heard about the Turing Pharmaceuticals story. It compelled him to write a column for the July 2016 issue of The Parklander magazine, in which he recounts his experience nearly 20 years ago as “powerful evidence of the power of the pharmaceutical lobby.”

Stories of profiteering and arm-twisting lobbyists overshadow the necessarily high costs of researching and developing new drugs and treatments. It’s simply not feasible for government to try to reduce health care costs by requiring that all drug companies reduce the prices of their medications.

Dr. Stephen G. Marcus is the CEO of Cantex, a clinical-stage pharmaceutical company that develops and manufactures medications for the treatment of cancer and blood disorders. He says complying with the FDA’s strict requirements is always expensive, time-consuming and risky.

Pharmaceutical manufacturers must conduct clinical trials to collect data regarding the safety and efficacy of new drug and device development, and report the results to the FDA. The process requires several steps before a drug or device can be sold in the consumer market, assuming it passes all the tests.

“There is not a uniform cost or timeframe for all drugs that are developed, but, in general, the costs range from $100 million to several billions of dollars,” Marcus says. “The process itself is very long, and can last between 10 and 14 years. It’s also important to note that all this money and time that goes into drug development is at great risk, because the product can fail at any point in the testing process. If that happens, everything invested up to that point is lost and cannot be recovered.”

One approach to keeping research and manufacturing costs down, and speeding the clinical testing process, is to develop new ways to use old medications. That’s what Cantex is doing by repurposing an older drug called disulfiram to fight glioblastoma, a highly aggressive and malignant cancer. Glioblastomas usually contain a mix of cell types, which makes them difficult to treat because some cells may respond well to certain therapies, while others may not be affected at all.

Marcus says that, based on preclinical results that did not include cancer patients, the company believes altering the available dosing form of disulfiram and administering it with copper can make it an effective cancer treatment.

“The average survival time for someone diagnosed with recurrent glioblastoma is less than a year, and we hope we can greatly enhance the quality and length of life of people with this terrible illness,” he says.

There are other measures health care professionals, the pharmaceutical industry and even patients can take to keep drug costs down that do not require government intervention.

Dr. Jonathan Fialkow, managing member of Miami-based HeartWell LLP, a medical practice with 23 cardiologists in nine South Florida offices, says he was glad to see the AMA issue a statement calling for a price reduction on the EpiPen. He wants to see that happen more often.

“Medical organizations have been somewhat lax in discussing pharmaceutical prescribing trends, especially in terms of costs,” he says. “I think we all need to look more carefully at the overall value of a particular drug and ask: ‘What’s the outcome relative to the costs of achieving that outcome?’ Sometimes, doctors and their patients do not need to pursue the most expensive treatment and medication options.”

Fialkow is leading an effort to educate physicians in South Florida and nationwide on why they need to consider a drug’s price along with its efficacy before writing a prescription.

“We’re pushing to get physicians to understand they’re accountable for the cost of what we prescribe, in addition to the medical benefits,” he said. “We have to think about what it costs the patient or the payer, and look at the total cost of caring for a patient, as opposed to the cost of a specific episode or drug. Those of us on the front line need to insist on using lower-cost alternatives where appropriate.”

Fialkow points out that it’s often the patients, not their doctors, who refuse to consider using generic medications.

“They may have a low co-payment, so they don’t worry about taking a higher-cost drug today,” he says. “What they don’t recognize is that having their insurance companies pay more for their drugs now often leads to higher premiums or fewer benefits next year.”

Fialkow cautions that every patient’s case is different and, while a drug may be more expensive than an alternative today, that may not be true in the future. He adds that it’s critical for patients to take responsibility for their own care, and demand their doctors and health care payer present all treatment options, not just the quick fix of one name-brand pill.

“Physicians and patients need to look at the costs over a six- to 12-month period,” he says. “If the more-expensive medication keeps people out of the hospital, or the less-expensive alternative causes side effects that requires a patient to take additional medications, the medication that costs more upfront may actually be cheaper over the long term.

“Certainly there are cases of profiteering on the parts of doctors, hospital systems, drug companies,” Fialkow says. “You are your own best advocate. Don’t accept a lifetime prescription. Always ask what you can do to get off a pill, and what alternatives are available.”

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