The Alliance

The Weekly Dose | 02.22.19

February 22, 2019 2:51 pm

Congress was in recess this week, but lawmakers will be back inside the Beltway Monday and will continue discussions regarding drug pricing. The Senate Finance Committee will hear Tuesday from a group of company CEOs. These leaders will face tough questions and possibly some false attacks. But unlike other industry executives who have been hauled before Congress for public shaming, it’s important to remember that these are companies whose business depends on making people healthier and, in some cases, saving lives. That’s what patient Jean Walsh explained this week in STAT News and Pacific Research Institute CEO Sally Pipes noted in the New York Daily News (read below for both columns).


Have questions about what to expect at the hearing, or about what you heard? Need more info for a story? Email us. We look forward to working with you.



Patrick O’Connor – Executive Director

Rosemarie Calabro Tully – Communications Director



APMI Executive Director Patrick O’Connor had a letter to the editor in the Laredo Morning-Times that discusses pharmacy benefit managers.



 In a recent report, @ExpressScripts found that "in 2018, U.S. #drug spending increased 0.4 percent for commercial plans, the lowest trend in 25 years." Why do patients have higher out-of-pocket costs?

"@MassHealth #drugcosts are rising faster than in the private market because innovative treatments are being discovered for dreaded diseases with smaller patient populations. Should we lament these discoveries + their availability to the most vulnerable?”

 Pharmacy benefit manager consolidation harms consumers. Or, as Michael Carrier wrote in @Health_Affairs last August: “As #PBMs have consolidated, prices have risen.”



Don’t Believe Everything You Read – Or See On TV. If you’re looking for balanced reporting about healthcare costs, avoid TV news. Earlier this week, NBC News ran a two-minute segment on Humira, a wildly effective drug manufactured by AbbVie that is used to treat Crohn’s disease. The story was representative of how much of the media has covered the debate around drug prices: one-sided, with pharmaceutical companies cast as the villain. Read the full blog post here.

Context On Medicaid Outpatient Prescription Drug Costs. The Kaiser Family Foundation (KFF) recently issued a report that examines Medicaid spending and utilization trends for outpatient prescription drugs. It showed the average price per Medicaid outpatient prescription increased by less than $11 over three years, from $73.80 in 2014 to $84.50 in 2017. Read the full blog post.


In case you missed them, here are some other recent posts on the APMI blog:

 - Private Sector Drives Drug Research.

 - The Worth Of A Thing Is What It Will Bring.

 - There’s More to Health Care Spending Than Drug Costs… Much More.



 The Best News We Heard All Week. According to Modern Healthcare, the U.S. Department of Health and Human Services is “is exploring cracking down on a practice insurance plans use to make a patient start over on step therapy if they switch plans.”

Advice To Congress: Just Say No To ICER. In STAT News, Dr. William Smith, a visiting fellow at the Pioneer Institute and author of the report, “Key Questions for Legislators on the Institute for Clinical and Economic Review,” argues cost-effectiveness models have no place in the American healthcare system.

Why Are Americans Paying More For Insulin? Writing at USA Today, Pacific Research Institute CEO Sally Pipes says pharmacy benefit managers are responsible for rising insulin prices. Pipes explains that with a $300 vial of insulin a “PBM might negotiate the net price down to $85. But if the patient’s insurance requires 25 percent co-insurance, she’d pay $75. If co-insurance were instead based on the net price, the patient would owe just $21.” Pipes also appeared in the New York Daily News this week where she described how new pharmaceutical innovations are cutting cancer death rates.

Hospitals Mark Up Drug Prices. Axios recently featured research by the Wall Street firm AllianceBernstein, which found hospitals mark up drug prices 3–7 times above their average sales prices.

 PBM Ordered To Pay Back Overcharges. Via Axios and Reuters: the Ohio Attorney General has formally asked the pharmacy benefit manager OptumRx to, pay back $16 million in “overcharges” related to handling drug benefits for the state. FierceHealthcare and The Columbus Dispatch have more.

 Canadian Health Experts Oppose Importation Legislation. The United States already has angered Canada by imposing tariffs on its steel and aluminum products, now our friends to the north aren’t liking proposals to allow importation of medicines from Canada. Politico reports, “[N]ow that President Donald Trump and Democrats are pushing to make those cross-border sales legal, Canadian health experts are issuing a dire warning: It could destroy Canada's drug market.”



Jean Walsh – a patient who suffers from Friedreich’s ataxia, a rare disease that causes damage to multiple systems in the body, including the nervous systems – writing in STAT News:

“From my perspective as someone with a rare disease, the conversation about the biopharma industry — which is essentially ‘bad pharma’ — appears scarily without nuance. … [F]or me, and for the millions of people like me with rare diseases, advancements in research over the past 30-plus years, many of them from the biopharma industry, offer not just hope but extra years of life.”


Kathy Chase, Cardinal Health director of Drug Cost Control Services, talking to Pharmacy News:

“There are many reasons for rising drug costs … A couple of the key ones we see are the development and release of a lot of the newer specialty biologicals that focused on cancer care or rheumatoid disease.”



Tuesday, Feb. 25, 10:15 a.m.

Location: U.S. Senate, 215 Dirksen Senate Office Building

Topic: “Drug Pricing in America: A Prescription for Change, Part II”


 - Richard A. Gonzalez, Chairman and CEO, AbbVie Inc.

 - Pascal Soriot, Executive Director and CEO, AstraZeneca

 - Giovanni Caforio, Chairman and CEO, Bristol-Myers Squibb Co.

 - Jennifer Taubert, Executive Vice President and Worldwide Chairman, Janssen Pharmaceuticals

 - Kenneth C. Frazier, Chairman and CEO, Merck & Co., Inc.

 - Albert Bourla, CEO, Pfizer

 - Olivier Brandicourt, CEO, Sanofi

Contact: 202-224-4515