Congress Is Making Quiet Progress on Drug Costs

Progress on drug costs

While the Trump administration has taken small steps to implement its blueprint to lower prescription drug prices, Congress has recently made quiet progress on some policies that could help lower drug costs for patients.

First, both the Senate and House advanced legislation to ban “gag clauses” that prevent pharmacists from telling patients that they can save money on medications by paying for them out of pocket. Certain prescription benefit managers (PBMs) have used gag clauses as part of their formulary design. While this is not a widespread industry practice, a 2016 survey of community pharmacists found that nearly 60 percent had encountered a gag clause in the previous 10 months. Two bills (S. 2553 and H.R. 6733) would prohibit private Medicare plans from instituting gag clauses. A third, related bill (S. 2554) — passed by the Senate on Monday with overwhelming support — prohibits private health insurance plans from using them. While they enable pharmacists to advise patients on how to spend less at the pharmacy counter, these bans won’t necessarily lower the prices of drugs.

Second, a lesser-known provision of S. 2554, added by the Senate Committee on Health, Education, Labor and Pensions (HELP), could help lower drug prices by shedding light on patent-settlement agreements between drug manufacturers. Brand-name manufacturers sometimes use these agreements to extend their monopolies and keep drug prices higher by directly and indirectly compensating generic manufacturers for voluntarily delaying generics from coming to market. The Congressional Budget Office has found that setting a standard to rein in these types of settlements would produce $2.4 billion in savings over 10 years.

The HELP committee provision would require manufacturers of biologics (large-molecule drugs) and biosimilars (nearly identical copies of original biologics) to report patent-settlement agreements to the Federal Trade Commission (FTC) — an important step in understanding and preventing abuse of what is sometimes referred to as “pay for delay.”

Pay-for-Delay Stalls Drug Competition, Costing Patients Billions

In 2003, Congress required patent-settlement agreements between brand-name and generic small-molecule drug manufacturers to be filed with the FTC for review after they are made. (Currently most drugs sold are small-molecule drugs, but the biologics market is growing rapidly.) Such agreements effectively delay the sale of lower-cost generic drugs by nearly 17 months longer than agreements without payments, according to a 2010 report by the FTC. These anticompetitive agreements cost taxpayers approximately $3.5 billion each year.

In 2012, the U.S. Supreme Court decided in FTC v. Actavis that a brand-name drug manufacturer’s payment to a generic competitor to settle patent litigation can violate antitrust law. After the Court’s decision, the number of pay-for-delay agreements declined two years in a row. With drug companies now required to report these settlements to the FTC, the agency has been able to act to protect patients from anticompetitive deals that delay cheaper, generic drug products from coming to market. The FTC reviews reported settlements and, if it determines an agreement violates antitrust law, the agency challenges the agreement in the courts.

For example, in 2008 the FTC sued Cephalon, Inc., for paying four generic companies $300 million to delay marketing of their generic versions of Cephalon’s sleep-disorder drug, Provigil, until 2012. In 2015, the FTC reached a settlement with Cephalon’s owner, Teva Pharmaceutical Industries, Ltd., which agreed to ending pay-for-delay agreements for all their U.S. operations. The company also paid $1.2 billion in compensation for Cephalon’s anticompetitive behavior.

FTC Reporting Requirement Does Not Apply to Biologic and Biosimilar Manufacturers

The FTC reporting requirement applies only to small-molecule drugs, however, and not to far more expensive biologics and biosimilars. The potential savings of having biosimilars available for sale are significant: even one biosimilar competing against a brand-name biologic can result in a 35 percent lower price for patients and payers. Without delays in competition with brand-name biologics, biosimilars could save $54 billion to $250 billion over 10 years.

But there are concerns that manufacturers are entering into pay-for-delay agreements to keep prices for these drugs artificially high. Since 2015, when the biosimilar pathway was implemented, the FDA has approved 12 biosimilars, yet only three are currently available to patients — likely because of patent litigation and pay-for-delay agreements.

FTC Review Is Part of the Solution

In his remarks upon releasing the U.S. Food and Drug Administration’s Biosimilars Action Plan in July, FDA commissioner Scott Gottlieb noted the FTC’s key role in monitoring U.S. markets to protect consumers from anticompetitive behaviors, including those of prescription drug manufacturers. He also pointed out the patent litigation tactics manufacturers use to delay biosimilar competition.

As it does for the small-molecule drug market, the FTC can play a proactive role in monitoring what is happening in the biologic and biosimilar markets. At a workshop on drug pricing held last year, acting FTC chair Maureen Ohlhausen said that while her agency has been making progress in eliminating pay-for-delay agreements, it has not seen the last of them. She said they will remain a target. But to move forward, the FTC needs clearer authority to review patent settlements between biologic and biosimilar manufacturers.

With Senate passage of S. 2554 and its FTC reporting provision, Congress has taken an important step in encouraging a robust biosimilar market. (While the House has not passed a similar measure, the Senate bill could be added to a reconciliation of the House and Senate gag clause bills.) Engaging all the relevant market regulators — including the FTC, the U.S. Patent and Trademark Office, the Centers for Medicare and Medicaid Services, and the FDA — will inject needed competition into this nascent market and help lower drug prices for U.S. consumers.


Hospitals eye making generics for 20 drugs that they say are overpriced or in short supply|facebook&par=sharebar

Image result for Hospitals eye making generics for 20 drugs that they say are overpriced or in short supply

Several hundred hospitals that plan to form their own generic drug company are eyeing making “about 20” pharmaceutical products whose existing versions either cost too much or are in short supply for no good reason, the CEO of one of those hospitals said Thursday.

Dr. Marc Harrison, chief of Utah-based Intermountain Healthcare, during an interview on CNBC’s “Closing Bell,” would not identify the existing drugs that the new company wants to replicate on its own, or have done on a contract basis.

Harrison said, “We think it will be early ’19 before our first drugs come to market.”

And he said the group also is hoping to possibly get additional financing from “philanthropists who are sick of this activity” by drug companies that is “creating shortages and driving prices in an irrational fashion.”

Intermountain is leading the collaboration with several other large hospital groups, Ascension, SSM Health and Trinity Health, in consultation with the U.S. Department of Veterans Affairs, to form a not-for-profit drug company. The groups together represent more than 450 U.S. hospitals.

Harrison said on “Closing Bell” that the project was spurred by feedback by patients who at times were saying “they can’t get ahold of drugs or they’re way too expensive.”

“We’re experiencing that in the hospital as well, and we’ve been thinking about this for a couple of years now,” Harrison said.
“We worked hard to come up with a plan … now is the time to get to work.”

He said that one of the big problems in the pharmaceuticals market today is that some “individuals and groups have gone ahead and gotten sole control over a given drug.”

“They create shortages and drive the prices up, and our patients can’t get ahold of the drugs we need,” Harrison said.

“We as a team will do the opposite,” he said. “We’ll make sure drugs are available in good quantities and reasonable prices.”
Harrison said the members of the consortium will contribute funds to finance the new drug company.

“Over time, the business plan says we’ll get our money back,” he said.

Harrison also said that he expects the new firm to provide just a small fraction of pharmaceutical products that the hospitals have to purchase.

“We expect that the vast majority of drugs we buy will still come in the same channels we have always gotten them,” he said. “We think most pharmacies are doing a great job and drug manufacturers are doing a great job.”

“We’re only interested in those organizations that are creating shortages and driving drug prices up in an irrational fashion,” Harrison said.





Healthcare Is The No. 1 Issue For Voters; A New Poll Reveals Which Healthcare Issue Matters Most

Depending on which news outlet, politician or pundit you ask, American voters will soon participate in the most important midterm election “in many years,” “in our lifetime” or even “in our country’s history.”

The stakes of the November 2018 elections are high for many reasons, but no issue is more important to voters than healthcare. In fact, NBC News and The Wall Street Journal found that healthcare was the No. 1 issue in a poll of potential voters.

What’s curious about that survey, however, is that the pollsters didn’t ask the next, most-logical question.

What Healthcare Issue, Specifically, Matters Most To Voters?

To answer this question, I surveyed readers of my monthly newsletter. Will the opioid crisis sway voters at the polls? What about abortion rights? The price of drugs? The cost of insurance?

To understand the significance of these results, look closely at the top four:

  1. Prescription drug pricing (58%)
  2. Universal/single-payer coverage (57%)
  3. Medicare funding (50%)
  4. Medicaid funding (40%)

Notice a pattern here? All of these healthcare issues come down to one thing: money.

Healthcare Affordability: The New American Anxiety

Because the majority of my newsletter readers operate in the field of healthcare, they’re well informed about the industry’s macroeconomics. They understand healthcare consumes 18% of the gross domestic product (GDP) and that national healthcare spending now exceeds $3.4 trillion annually. The readers also know that Americans aren’t getting what they pay for. The United States has the lowest life expectancy and highest childhood mortality rate among the 11 wealthiest nations, according to the Commonwealth Fund Report. But these macroeconomic issues and global metrics are not what keeps healthcare professionals or their patients up at night.

Eight in 10 Americans live paycheck to paycheck. Most don’t have the savings to cover out-of-pocket expenses should they experience a serious or prolonged illness. In fact, half of U.S. adults say that one large medical bill would force them to borrow money. The reality is that a cancer diagnosis or an expensive, lifelong prescription could spell financial disaster for the majority of Americans. Today, 62% of bankruptcy filings are due to medical bills.

To understand how we’ve arrived at this healthcare affordability crisis, we need to examine the evolution of healthcare financing and accountability over the past decade.

The Recent History Of Healthcare’s Money Problems

Until the 21st century, the only Americans who worried about whether they could afford medical care were classified as poor or uninsured. Today, the middle class and insured are worried, too.

How we got here is a story of evolving policies, poor financial planning and, ultimately, buck passing.

A big part of the problem was the rate of healthcare cost inflation, which has averaged nearly twice the annual rate of GDP growth. But there are other contributing factors, as well.

Take the evolution of Medicare, for example, the federal insurance program for seniors. For most of the program’s history, the government reimbursed doctors and hospitals at (approximately) the same rate as commercial insurers. That started to change after a series of federal budget cuts (19972011) and sequestration (2013) reduced provider payments. Today, Medicare reimburses only 90% of the costs its enrollees incur and commercial insurers are forced to make up the difference. As a result, businesses see their premiums rise each year, not only to offset the growth in their employee’s medical expenses, but also to compensate hospitals and physicians for the unreimbursed portion of the cost of caring for Medicare patients.

Combine two high-cost factors: general health care inflation and price constraints imposed by Medicare and what you get are insurance premiums rising much faster than business revenues.

To compensate, companies are shifting much of the added expense to their employees. The most effective way to do so: Raise deductibles. By increasing the maximum deductible annually, the company reduces the magnitude of its expenses the following year, at least until that limit is reached. A decade ago, only 5% of workers were enrolled in a high-deductible health plan. That number soared to 39.4% by 2016, and jumped again to 43.2% the following year.

High-deductible coverage holds individual patients and their families responsible for a major portion of annual healthcare costs, anywhere from $1,350 to $6,650 per person or $2,700 to $13,3000 per family. This exceeds what the average available savings for most American families and helps to explain the growing financial angst in this country.

And it’s not just employees under the age of 65 who are anxious. Medicare enrollees also fear that the cost of care will drain their savings. As drug prices continue to soar, Medicare enrollees are hitting what has been labeled “the donut hole,” which means that once the cost of their “Part D” prescriptions reaches a certain threshold, patients are on the hook for a significant part of the cost. Now, more and more seniors find themselves having to pay thousands of dollars a year for essential medications.

When it comes to paying for healthcare, the United States is an anxious nation in search of relief. The fear of not being able to afford out-of-pocket requirements is the reason so many voters have made healthcare their No. 1 priority as they head to the polls this November. And it’s why both parties are scrambling to deliver the right campaign message.

On Healthcare, Each Party Is A House Divided

In the last presidential election, the Democratic Party chose a traditional candidate, Hilary Clinton, whose views on healthcare were closer to the center than her leading challenger, Bernie Sanders. Two years later, the party is divided by those who believe that (a) the only way to regain control of Congress is by fronting centrist candidates who support and want to strengthen the Affordable Care Act as the best way to attract undecided and independent voters, and (b) those who will accept nothing less than a government-run single payer system: Medicare for all. The primary election of New York congressional candidate Alexandria Ocasio-Cortez, a Sanders supporter, over long-time incumbent Joseph Crowley, represents this growing rift within the party.

The Republicans also face two competing ideologies on healthcare. Since his election in 2016, President Donald Trump has sought to dismantle the ACA. In addition, he and his political allies want to shift control of Medicaid (the insurance program for low-income Americans) from the federal government to the states—a move that would lower healthcare spending while eroding coverage protection. There are others in the Republican Party who worry that shrinking Medicaid or undermining the health exchanges will come back to bite them. Most of them live and campaign in states where voters support the ACA.

Do The Parties Agree On Anything?

Regardless of party, everyone, from the president to the most fervent single-payer advocate, understands that voters are angry about the cost of their medications and the associated out-of-pocket expenses. And, not surprisingly, each party blames the other for our current situation. Last week, the president gave the Medicare program greater ability to reign in costs for medications administered in a physician’s office. In addition, Trump has promised a major announcement this week to achieve other reductions in drug costs. Of course, generous campaign contributions may dim the enthusiasm either party has for change once the voting is over.

Playing “What If” With Healthcare’s Future

If both chambers remain Republican controlled, we can expect further erosion of the ACA with more exceptions to coverage mandates and progressively less enforcement of its provisions. For Republicans, a loss of either the Senate (a long-shot) or the House (more likely), would slow this process.

But regardless of what happens in the midterms, no one should expect Congress to solve healthcare’s cost challenge soon. Instead, patient anxiety will continue to escalate for three reasons.

First, none of the espoused legislative options will do much to address the inefficiencies in the current delivery system. Therefore, prices will continue to rise and businesses will have little choice but to shift more of the cost on to their workers.

Second, the Fed will persist in limiting Medicare reimbursement to doctors and hospitals, further aggravating the economic problems of American businesses. whose premium rates will rise faster than overall healthcare inflation.

Finally, compromise will prove even more elusive since so many leading candidates represent the extremes of the political spectrum.

Politics, the economy and healthcare will all be deeply entangled this November and for years to come. I believe the safest path, relative to improving the nation’s health, is toward the center. Amending the more problematic parts of the ACA is better than either of the two extreme positions. If our nation progressively undermines the current coverage provisions, millions of Americans will see their access to care erode. And on the other end, a Medicare-for-all healthcare system will produce large increases in utilization and cost.

It’s anyone’s guess what will happen in three months. But, whatever the outcome, I can guarantee that two years from now healthcare will remain top-of-mind for voters.



How drug companies are beating Trump at his own game

People pass the Pfizer headquarters in New York. |Getty Images


Recent price freezes and rollbacks are symbolic measures with little lasting impact.

A July tweet from President Donald Trump sent panic through the C-suites of some of the world’s biggest drug companies, prompting Pfizer and nine other companies to roll back or freeze prices.

But there’s less to those announcements than meets the eye. The gestures turned out to be largely symbolic — efforts to beat Trump at his own game by giving him headlines he wants without making substantive changes in how they do business.

The token concessions are “a calculated risk,” said one drug lobbyist. “Take these nothing-burger steps and give the administration things they can take credit for.”

Of the few companies that actually cut prices, for instance, most targeted old products that no longer produce much revenue — such as Merck’s 60 percent discount to a hepatitis C medicine that had no U.S. revenues in the first quarter.

Others volunteered to halt price increases for six months — in some cases, just weeks after announcing what is normally their last price hike for the year.

“A lot of this shit is meaningless to satisfy Trump,” said another drug lobbyist.

The industry’s deft response to Trump’s tweet shaming has also become a test of whether his administration is serious about following up with an aggressive crackdown on the companies or will simply declare victory based on token measures and move on.

“I think right now it’s a lot of noise, not a lot of substantial impact to the companies,” said Les Funtleyder, a health care portfolio manager at E Squared Asset Management, which owns shares in Pfizer. The prospect for meaningful change “is out there … but that will take motivation on the part of regulators and policymakers.”

Analysts are in broad agreement that the spate of recent concessions won’t hurt bottom lines, or rein in drug prices beyond this six-month period, because many companies already increased prices this year — in some cases, just weeks before publicly pledging to freeze them for the rest of 2018.

“There’s the glass-half-full and glass-half-empty interpretation,” said Walid Gellad, director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh. “Glass half full says we have never before seen pharma promise not to raise prices anymore. So this is a step forward — including for patients. Glass half empty is that these are token measures — either on drugs few people use, or drugs that just had their price raised, and that prices will just go up next year.”

Either way, Gellad said, “this is not the kind of structural change we want in the market so that prices go down.”

Drug prices are a fixation for Trump, who rants about them in conversations with aides and advisers, according to people close to the president. He sees the issue as a political winner, especially among his conservative — and largely older — base, which relies heavily on prescription drugs. And after facing huge hurdles moving his legislative priorities through Congress, he sees this as something he can win on by using his executive authority.

That has put huge pressure on Health and Human Services Secretary Alex Azar, a former top official of Eli Lilly and Co.

“They talk three times a week, and they never have a conversation where drug pricing isn’t a topic,” said one person briefed on the conversations, adding that Trump has also interrupted Cabinet meetings to encourage Azar to brief the group on the latest developments.

But even as Azar implements his 44-page blueprint aimed at lowering prices, Trump has grown impatient with the glacial pace of rulemaking and arcane details of drug policy.

His outlet is Twitter, where he can marshal the rage of his millions of followers in an instant. White House aides say he sees his Pfizer tweet as a warning shot to other drug companies — part of a public “shaming” campaign designed to pressure companies to take voluntary steps to lower prices.

That strategy diverges sharply from what Azar is saying publicly — raising doubts about how serious the administration is about cracking down on drugmakers.

The HHS secretary’s rhetoric often targets pharmacy benefits managers — the obscure middlemen who manage the drug side of patients’ health insurance benefits — not drug companies. And targeting the middlemen is a play directly out of pharma’s strategy book — drug companies have long sought to pin patients’ frustration with rising costs on PBMs. HHS has also signaled it wants to overhaul a drug discount program for hospitals that could put money back in pharma’s pocket.

Pfizer CEO Ian Read himself praised the president’s blueprint on the company’s recent second-quarter earnings call, just a few weeks after Trump’s Pfizer tweet.

“I don’t think the administration is gunning for [pharma],” said Ronny Gal, a financial analyst at Sanford Bernstein. Everything they are doing right now is “scratching around the problem,” he said.

“You can tell by the way the stock has performed that investors aren’t too concerned,” Funtleyder said. “They figure, ‘OK, the pharma companies waved the white flag for now, so they’re out of the cross hairs.‘”

Meanwhile, HHS and drug industry officials have worked closely to show Trump they are getting results, administration and pharmaceutical industry sources tell POLITICO.

In private meetings with drug officials, HHS officials ask what steps they’ve taken that they might relay to Trump to keep the president satisfied, said drug company sources.

“They’re also like, ‘Hey, don’t be stupid. If you’re going to do something you feel like we can mutually take some credit for, let us know. … If you can get a good tweet out of it, don’t be an idiot. Let us know [ahead of time],’” said one person familiar with the conversations.

“They’ve said: ‘What would it take for you to lower prices?’” said another top drug industry official.

“There is a real fear that Trump only understands things very simplistically,” said a lobbyist for several drug companies. “So they want to keep tossing treats for him or he will go after blunt instruments,” like government drug price negotiations — steps neither the conservative leadership at HHS nor the drug industry want.

Observers both inside HHS and outside the administration see Azar’s drug pricing team as a buffer for the drug industry.

“To be candid, the secretary is pro-patient, pro-innovation and pro-competition and, quite frankly, really standing in between the industry and some faster ways to lower prices that some would say are not pro-competition,” said HHS’ John O’Brien, a senior adviser to Azar, at a drug cost event one day after Trump’s tweet attacking Pfizer.

Azar prefers the industry and HHS work to make change together, rather than it being adversarial, according to people familiar with HHS’ strategy.

He publicly touts industry price freezes and reversals “in part to show Trump they’re making progress, but also to show the industry that you get recognized for playing ball,” said a person familiar with the discussions.

The White House, meanwhile, was thrilled about the industry’s recent price freezes, even as officials acknowledged the companies’ announcements are only a first step — and promised what one official characterized as a “deluge” of drug price-related regulatory action in the coming months.

“Nothing about what they do or don’t do is going to really turn the tide in a major, major way on a voluntary basis,” the official said of the drug companies’ actions, promising that the administration will take aggressive action.

In the meantime, the White House isn’t ruling out more Twitter shaming.

“You’ll see continuing of the tweeting and announcing different actors doing good or bad things in the market,” the official said.

That will get particularly tricky for the industry come January, when drugmakers would typically take their biggest price increases of the coming year — and when their public concessions sunset.

“They can live with the changes that were made — but they can’t live with not raising prices forever,” Gal said. “It’s a noose they put their head into. In January, we will see what happens with that noose. Does it tighten or not?”


Walmart drug program cheaper for many Medicare patients

Grand Opening At A New Wal-Mart Store

Walmart’s $4 generic prescription drug program ends up being cheaper for some Medicare patients than their own health insurance, according to a new study released Monday.

It’s more evidence that patients cannot always rely on their health insurance to get them the lowest prices for their prescription drugs, said Dr. Joseph Ross of the Yale School of Medicine, who led the study.

“Patients were paying more out of pocket when they were using their insurance than when they went to Walmart,” Ross told NBC News.

The study, published in the Annals of Internal Medicine, documents that Walmart provides a better deal than the government’s health insurance plan for people over 65. And that is bad news for Medicare, because if people don’t take their drugs, whether for cost or for other reasons, they tend to get sicker and then end up costing even more to treat.

“Everyone’s talking about pharmacy costs these days,” Ross said. “We did this study in part because of all the discussion about pharmacy gag rules.”

Pharmacy gag rules prevent pharmacists from telling patients that they could save money on drugs, for instance by not using their health insurance.

Pharmacy benefit managers are the middlemen between drug companies and pharmacies, and some of those companies have agreements forbidding talk of discounts. But some states have also banned pharmacists from giving this information to customers.

According to the National Conference of State Legislatures, at least 22 states have some kind of gag rule legislation.

One way patients can get around this is to ask, but few people think to do so.

Ross and colleagues decided to see what would happen if Medicare patients just took advantage of Walmart’s program offering $4 generic prescription drugs.

They looked at Walmart’s generic list for drugs commonly used to treat heart conditions, including high blood pressure and high cholesterol.

“Next, we used Medicare prescription drug plan data from June 2017 to determine beneficiary out-of-pocket costs for the lowest-priced dose of each drug in each plan,” they wrote. They got data on more than 2,000 Medicare prescription drug plans, including Medicare Advantage plans.

Overall, 21 percent of the plans asked patients to pay more out of pocket for the drugs than they would pay if they just got them for $4 at Walmart, the team reported.

Medicare Advantage plans were the most expensive for patients, Ross said. And the higher-tier programs were the worst, he found.

“Twenty percent of the time, at least, we should go to Walmart,” Ross said.

It doesn’t help that Medicare is very complicated. Patients can choose from dozens of different plans, depending on where they live, and it can take a great deal of research to find out which plan is most likely to cover a particular person’s health conditions for the least amount of money.

“Each Medicare drug plan has its own list of covered drugs (called a formulary),” the Center for Medicare and Medicaid Services says on its website.

“Many Medicare drug plans place drugs into different ‘tiers’ on their formularies. Drugs in each tier have a different cost. A drug in a lower tier will generally cost you less than a drug in a higher tier.”

Ross said it is time-consuming to compare one Medicare plan to another. But understanding one of the many plans tells people very little about what the others might offer.

“If you have read through the details and material for one plan, you have read through the details and materials for one plan. It’s very hard to compare,” he said.

In addition, any given plan may change the drugs that it covers and their prices throughout the year.

Ross said he studied Walmart because its $4 price for a 30-day supply of a generic drug seemed like the least expensive option, but other retailers also have inexpensive drug plans. Some grocery-based pharmacies even offer free drugs, such as antibiotics.

These offers get customers into the store, and the hope is that they’ll buy something else while they are there.

Ross said no patient should decide on a Medicare plan based solely on whether Walmart offers a better deal on prescriptions.

Switching plans might not be the best idea, because different plans provide different levels of coverage for doctor visits, medical procedures and other health needs.

“What we are showing is there may be some ways to save some money on some drugs by going to Walmart,” Ross said.

According to the Kaiser Family Foundation, about 90 percent of prescriptions filled in the U.S. are for generic drugs. Most people get health insurance through an employer, and the typical co-pay for a generic drug for a patient covered by employer-provided health insurance is $11, Kaiser found. For a brand-name drug, the average co-pay is $33.

Walmart is moving aggressively to get a big share of the U.S. health care market. Besides having large pharmacies, stores offer free health screenings and the company has said it intends to expand its locations of retail walk-in health clinics.

Walmart is also negotiating a closer partnership with health insurer Humana, including the possibility of buying it outright, according to CNBC.

The discount retailer’s $4 generic prescriptions beat Medicare’s co-pays 21 percent of the time, a study found.




Some Drugmakers Are Canceling Price Hikes – but Not Because of Trump

Pfizer may have decided to roll back drug price hikes after being criticized by President Trump, but Bloomberg reports that several other large drugmakers are canceling or reducing planned price increases, perhaps in part because of a new California drug pricing transparency law that requires them to provide at least 60 days’ notice of price increases greater than 16 percent during a two-year period.

“In the past three weeks, Novartis AG, Gilead Sciences Inc., Roche Holding AG and Novo Nordisk A/S sent notices to California health plans rescinding or reducing previously announced price hikes on at least 10 drugs,” Bloomberg’s Ben Elgin, Cynthia Koons and Robert Langreth write.

The law is being challenged in court by the industry, but manufacturers have been complying while the case plays out.

Still, one industry analyst tells Bloomberg that the California law won’t actually slow the rate of price hikes. “If what you are trying to do is limit price inflation, this is not the way to go about it,” said Richard Evans, an analyst at investment research firm SSR. “This is not going to change mainstream list price behavior at all.”

Evans says that the drugmakers involved are probably just “throwing up a smokescreen” to hide the details of their price increases from competitors and patients.

Why it matters: These early results from California’s law might look encouraging, but it’s still a far cry from structural reforms that will keep prices in check.



HHS proposes allowing some drug importation, but impact would be limited

Money pile and medicine pills representing medical expenses

Nevertheless, the proposed policy could take Martin Shkreli-like practices “out of the ballgame,” expert says.

Regulators could allow importation of certain drugs in an effort to keep prices down, under a proposal from the Department of Health and Human Services.

On Thursday, HHS Secretary Alex Azar requested that Food and Drug Administration Commissioner Scott Gottlieb create a working group to find how to safely import drugs from abroad in cases when their US-made marketed equivalents undergo dramatic price increases.

However, experts said the effect of such a policy on prices – if it passes – will be limited.

Azar pointed to the now infamous example of the toxoplasmosis drug Daraprim, whose price manufacturer Turing Pharmaceuticals increased from $13.50 per pill to $750 in 2015, drawing nationwide scorn for Turing and its CEO, Martin Shkreli. Shkreli was sentenced to seven years in prison in April following his August 2017 conviction on charges of securities fraud and conspiracy. Turing, which has since changed its name to Vyera Pharmaceuticals, is currently losing money, STAT reported, and shareholders will vote Friday on a proposal to change the name again, to Phoenixus.

Several political leaders have proposed allowing importation of drugs. In May, Republican Vermont Gov. Phil Scott signed a bill that would allow importation of drugs from Canada, though HHS must still certify the law. Independent Vermont Sen. Bernie Sanders also introduced a bill in the Senate, S. 469, The Affordable and Safe Prescription Drug Importation Act, that would allow the same, with cosponsorship from several Senate Democrats. The bill would wholesalers, pharmacies and individuals to import a range of medications.

However, the HHS proposal is more narrow, focusing specifically on drugs that have seen significant price increases. Gerard Anderson, professor of health policy and management at Johns Hopkins University, and several colleagues made a similar proposal in a paper published in JAMA in February 2016. Under their proposal, GlaxoSmithKline – the original manufacturer of Daraprim – would be able to import the drug from the United Kingdom, where it sells for less than $1 per tablet. The paper compared the proposal to FDA allowances for importation during shortages of critical medications.

Still, Anderson said in a phone interview that the HHS proposal will not likely have a broader spillover effect on drug prices, but will only affect the specific drugs that are included. “For a very narrow subset of medications, it could take the Martin Shkrelis out of the ballgame because these drugs are very inexpensive in other countries,” he said.

In addition to Turing, other companies that have become notorious for raising drug prices include Shkreli’s prior company, Retrophin, and Valeant Pharmaceuticals. Questcor Pharmaceuticals raised the price of Acthar Gel from $1,650 per vial to $23,269 in 2007, and the price has risen to $38,892 since Questcor’s 2014 acquisition by Mallinckrodt Pharmaceuticals. More recently, larger drug companies have also taken heat for smaller price increases. Pfizer backed down from a plan to raise the prices of about 100 of its medications after criticism from the Trump administration, while Novartis and Merck & Co. have pledged to limit price increases as well.

The government stipulating what constitutes a “dramatic price increase” could create a de facto price ceiling that drugmakers would stay under when changing their prices, said Lev Gerlovin, vice president at Boston-based consultancy Charles River Associates, in a phone interview. It’s hard to assess whether that would have a material effect on the industry, given that the ceiling may be greater than what most manufacturers already tend to do as a matter of course. However, while cautioning that he is not a Washington observer, Gerlovin said likely industry pushback citing patient safety concerns makes the proposal appear unlikely to pass.