Drug Price Hikes Already Have Started for 2022

Speaker 1 (00:05): Welcome to 340B Insight from 340B Health. David Glendenning (00:14): Hello from Washington DC. And welcome back to 340B Insight, the podcast about the 340B drug pricing program. I'm David Glendenning with 340B Health. We are happy to be back in our regular recording studio after our trip to San Diego for this year's 340B coalition winter conference. Our guest today is Lauren Aronson, the executive director of the Campaign for Sustainable Drug Pricing. This group is a broad coalition of healthcare system leaders, providers, hospitals, patients, health plans, and others that monitor the latest developments in drug pricing and promote bipartisan solutions aimed at lowering US drug prices. 340B Health is one of these coalition members. We spoke with Lauren about some of the drug pricing hikes that occurred in the first few weeks of 2022. We also discussed the role that the campaign and 340B play in the prescription drug pricing debate that has heated up in recent years. But before we go to that interview, let's take a minute to cover some of the latest news about 340B. David Glendenning (01:28): The number of drug companies imposing restrictions on 340B pricing for drugs dispensed at contract pharmacies has risen to 13. Pfizer is the latest company to announce that it would impose a restrictive policy. The action, which is set to take effect March 1st includes one of Pfizer's best selling products, Xeljanz, which is a drug used to treat rheumatoid arthritis and other chronic conditions. Hospitals that do not provide contract pharmacy claims data for Xeljanz will no longer have access to 340B pricing when the drug is dispensed through contract pharmacy arrangements with certain strict exceptions. Pfizer also said it would revise its 340B payment policy for 11 oral oncology drugs that the company distributes through a limited network. 340B Health members can access more details about the Pfizer policy changes in the show notes. David Glendenning (02:22): And now for our feature interview with Lauren Aronson with the Campaign for Sustainable Drug Pricing. CSRxP has been a key player in the national drug pricing debate for the better part of the past decade. That debate is in the forefront of legislative priorities for the current Congress while drug companies continue announcing new pricing increases. So there was no better time to sit down with Lauren to explore the lay of the land for drug pricing, as well as where 340B has shown up on that map. Our own Myles Goldman recently sat down with Lauren to hear more. Here's that conversation. Myles Goldman (03:06): Thank you, David. I'm joined by Lauren Aronson, the executive director of CSRxP. Lauren, there's been a lot of news about drug pricing over the first month or so of the new year. And I'm looking forward to diving into all of it with you. Welcome to 340B Insight. Lauren Aronson (03:22): Thank you, Myles. It's great to be with you here today. Myles Goldman (03:25): Can you share with our listeners what CSRxP is and how it was formed? Lauren Aronson (03:30): So CSRxP, the Campaigned for Sustainable Drug Pricing started in 2014, largely as a response of Sovaldi. Once Sovaldi hit the market we had a public outcry over the price associated with that drug. When I think back to when we had drugs hit the market in the late 80s to a significant public outcry, we had outcry for a drug that was $2,000 in 1989. And you think about drugs coming to market now that are upwards of $1 million. So CSRxP was born and early on our initial goals were really just to have a high level dialogue and to inform the public about drug price increases. Over the years, our membership has grown and we now represent a variety of organizations across the board, hospitals, nurses, physicians, health plans, pharmacists, et cetera. And what really unites our members is a concern about how brand name manufacturers are really not only controlling the market, but our members don't have any ability to push back on price increases. Lauren Aronson (04:33): It has a huge impact on what consumers are paying at the pharmacy counter and what they're paying in terms of their premiums. It has a huge impact on how hospitals are trying to budget. And then all of a sudden you may have a huge price increase on a drug that you didn't anticipate on. So you think fast forward to where we are in 2022 now, we have seen a significant amount of even continued worse activity from brand name manufacturers. They are raising prices multiple times a year for no rhyme or reason. And consumers are tired of it. Payers are tired of it. Congress is tired of it. It's one of the few things we have seen where there is bipartisan interest in really addressing this issue. And so for CSRxP, this is sort of the moment to try to continue and to push and really bring down prices for consumers. Myles Goldman (05:19): And are there a few pillars you're particularly focused on? Lauren Aronson (05:23): Yeah, so we focus on I say three main areas, transparency, competition, and value. We have zero insight into how manufacturers determine the price of their product. And so from a transparency perspective, really understanding how manufacturers price their product, what are the inputs? We often hear manufacturers talk about research and development costs, but there have also been numerous studies to suggest that actually prices that manufacturers impart on consumers have nothing to do with research and development costs. In fact, manufacturers actually spend more on marketing and advertising than they do on research and development costs. Lauren Aronson (06:00): So again, having more transparency into manufacturers is really critically important from our perspective. The second pillar is really competition. From our perspective, the market is broken and we need market based solutions that are going to put pressure on manufacturers to bring down prices. And one of the key ways of doing that is by having more competition in the market. So more generic drugs, more biosimilars, having more drugs on the market is really going to help bring down these prices and give consumers and payers more choices. The third bucket is value. We want to make sure that we're paying drugs for their value itself and making sure that when we're having a conversation about manufacturers and drugs, that drugs that are being approved are actually going to be efficacious and helpful to consumers. Myles Goldman (06:43): In the first month or so of the new year, a number of drug companies have announced price increases for their products. What are some of the trends you are seeing? Lauren Aronson (06:52): So according to GoodRx, just in January alone of this year, we've seen manufacturers as hike prices on 765 brand name drugs, which is an average of about 4.8%. We've seen egregious pricing practices across the board from a variety of manufacturers. We have seen manufacturers continuously raise their prices sometimes 20 times rate of inflation going back to 2014. So the egregious pricing practices and this trend is just continuing. Myles Goldman (07:21): Do some manufacturers or specific drugs stick out to you? Lauren Aronson (07:26): It's unfortunately across the board, but just to give you a couple of examples. So in January, some of the most egregious practices we've seen was from Pfizer. Pfizer hiked prices on more than 100 drugs, including a whopping 16.8% price increase on a popular drug that treats arthritis and blood diseases in cancers. GlaxoSmithKline raise prices on more than 30 drugs, including a cancer drug. Gilead raised prices on HIV drugs. So we're really seeing it across the board from brand name manufacturers. Myles Goldman (08:00): Are there more price increases to come this year? Lauren Aronson (08:03): I would love to say that this is a one time and we're done, but we know manufacturers continue to price their products whenever they want to. We see multiple price increases usually several times a year. The biggest increases generally come in January and June, July, but I would say unfortunately, giddy up because we are going to continue to see price increases for quite some time until there's either administration or congressional pressure on manufacturers. Myles Goldman (08:30): And I'm glad you alluded to different government actions. And I do want to talk more about those, but first I want to talk about a subject that's very familiar to our listeners, the 340B drug pricing program. It's celebrating its 30th anniversary later this year. How do you think 340B has affected drug pricing? Lauren Aronson (08:48): 340B has been an incredibly valuable program for safety and institutions. There's no question that hospitals and patients would be seeing significant prices on several drugs had it not been for the 340B program. So we think the 340B program is really just an incredibly value add to our nation. And we are greatly concerned by seeing brand name manufacturers, really trying to stop that program from being as effective as it can be. It really is very concerning to CSRxP that we are seeing brand name manufacturers, not only try to assault the program, but go to court to stop the program itself. Myles Goldman (09:30): I want to look ahead now just kind of to the future of drug pricing. We're seeing some new drugs coming to market with astronomical prices. Aduhelm has become the latest example. What can be done to reign in these prices? Lauren Aronson (09:46): When we're thinking about the drug pricing problem, members of Congress sometimes really want to focus on one solution to one problem. But the challenge here with drug pricing is that it's some multifaceted problem. I think about it in three different buckets. So we have new drugs coming to market with significant prices associated with them. And Aduhelm is certainly one of them to your point. The second bucket are drugs that have been on the market for several years and we're seeing repeated, I mean, incremental, but repeated increases multiple times a year, which really has a lasting impact on consumers, on hospitals, and payers. And the third bucket, we're seeing, I consider sort of the Martin Shkreli's of the world or the drugs that have been in the market for 30, 40, 50 years who have significant price increases for no rhyme or reason. Lauren Aronson (10:34): So as we're thinking about how to address these issues, we need to think about the problem we're trying to solve. With respect to Aduhelm, one of the biggest challenges with that drug is just the questionable efficacy of the drug itself. CSRxP was quite disappointed to see the FDA approve the drug, given that there really isn't a ton of data to show that this drug will not only help Alzheimer's patients, but it actually in many instances could be harmful. So we have grave concerns about drugs that are being approved that are not necessarily efficacious. And then you go one step further and really think about the price tag associated with that drug. Aduhelm was originally priced at about $56,000. Biogen lowered it only under significant pressure from the public. And my question back to Biogen is why, why couldn't the drug be priced even lower? Lauren Aronson (11:20): Why all of a sudden just reduce the price because of the public pressure? I mean, that just shows that these manufacturers are determining the price based on what they believe the market will bare not based on any sort of science. So from our perspective, we need to try to do a number of different things. One, we need more transparency into how manufacturers determine the price of their product. Two, we really need to hold manufacturers accountable for the egregious pricing practices that we're seeing. And three, we need to have a real serious conversation in this country about whether or not we need to really start to reimburse and pay for drugs based on their efficaciousness. Myles Goldman (11:57): And so, as we think about those solutions, Congress has been debating drug pricing for several years now. Has there been any progress? Lauren Aronson (12:07): Absolutely. The way we like to think about is we don't want perfect to be the enemy of good, and yes, there are a lot of things that still need to be dealt with, but we have seen Congress make great strides the last couple of years. We had a bill become law several years ago called the CREATES Act, was just trying to stop some very discrete practices where brand name manufacturers we're trying to block generic manufacturers from getting access to samples to do bio equivalence testing. We're seeing all sorts of different kinds of shenanigans and Congress is addressing them one by one. We are very excited by several of the provisions in the Build Back Better plan that is currently being discussed in Congress. Holding drugs down to the rate of inflation is really incredibly important from our perspective. We are also very encouraged by provisions in the bill that will hold manufacturers accountable and make them pay additional dollars in the catastrophic phase of the Medicare part D program. With drug prices increasing as substantially as they are, manufacturers need to be held accountable. Myles Goldman (13:05): As we await to see what happens with Build Back Better, what are the next big steps you think Congress should take to reign in drug prices? Lauren Aronson (13:13): Well, we're seeing a number of committees do investigations, which we think is incredibly important. As I mentioned earlier, transparency is something that really lacks in this market. We've seen the house oversight committee do a variety of investigations into manufacturers, and we've learned a number of things from reports like oversight committees reports. We've learned that manufactures when they're determining the price of their product, really has no correlation directly to the research and development costs. So when I think about what Congress can and should be doing, we need to continue to focus on that oversight perspective. Because we do see egregious pricing happening across the board. We're also very encouraged by work happening in the judiciary committee, looking at patent abuse and patent thickets. And so there is a variety of work that's happening and we remain very hopeful that Congress will continue its work. Myles Goldman (14:01): You mentioned patent thickening. Can you tell me more about what that is? Lauren Aronson (14:05): So patent thickets are basically when you have a brand name manufacturer, try to file a variety of patents on one drug. One of the best examples here is Humira. Humira has been on the market since 2002. AbbVie is the manufacture of Humira. And one of the practices that AbbVie actively engages in to protect their market share is to what we call to contribute and to create a patent thicket where basically you're filing not one, not two, but hundreds of patents on various elements of the drug to prevent any sort of competition. And so it forces any sort of generic avascular manufacturer to really challenge each individual patent, which basically just means that AbbVie can continue its monopoly over Humira for as long as this litigation is underway. Lauren Aronson (14:55): So by having multiple patents on a drug or even the processes around a drug really prevents any sort of lower cost competition from coming to market. The Senate finance committee held a hearing in 2019 talking about this and had several CEOs come up and testify on it. And I remember vividly hearing Senator John Cornyn really questioned the CO of AbbVie aggressively to say, I don't understand it's one drug. Why are there hundreds of patents on this one drug? Myles Goldman (15:22): What do you think are the odds of drug pricing legislation being enacted this year? Lauren Aronson (15:28): I'm an internal optimist, but I do feel pretty of confident that we'll see something significant happen. There are obviously a lot of drug pricing policies in the BBB. Obviously the House did pass that package. The Senate's probably going to start over with a different base, but we do know that the drug pricing pieces are one of the few things that do unite the democratic caucus right now in the Senate, even Senator Joe Manchin has been very clear that he is very supportive of a lot of the drug pricing provisions in the BBB. So we do expect there to be significant pricing policies that become law this year. Myles Goldman (15:59): You mentioned before about the Biden administration and its interest as well in drug pricing. Are there ways you would encourage the administration to take executive action on drug prices? Lauren Aronson (16:11): Yeah, it's a great question. I mean, I think one of the biggest challenges we saw here was just that the, going back to your question about Aduhelm is having the FDA approve a drug that is questionable in terms of its outcomes is really quite startling and concerning. On the flip side though, hardened to see CMS take appropriate action by saying, you know what, the evidence here is questionable and we are only going to cover it in very limited circumstances. And so to the extent that FDA and CMS can coordinate on those things we think is incredibly important. We do also believe that we've seen a lot of work happening between and coordination across the government. So not only within HHS, but also working with the patent trade office. There's a lot that could be done there to help reduce some of the abuses we're seeing from manufacturers as it relates to patent abuse. And just seeing more of a cross agency approach is really encouraging. Myles Goldman (17:01): Well, Lauren it's going to be interesting to see how drug pricing continues to play out. I know our listeners will be watching as they continue to try to make sure that patients get access to the medications they need. Thank you so much for taking the time to speak with us. Lauren Aronson (17:18): My pleasure. Thank you for having me. David Glendenning (17:20): Our thanks again to Lauren Aronson for her unique insight into the drug pricing hike so far this year, and for her perspective on where the drug pricing debate in the US might lead us. We are grateful for the work that CSRxP does and are proud to be a member of the coalition. And speaking of coalitions, we so enjoyed seeing so many of you in person at the recent 340B coalition winter conference in San Diego. It was great to see so many 340B professionals gather for the first time in two years. Thank you to all who stop by our plexiglass recording studio, especially those of you who sat down with us for interviews. We are very excited to share those conversations in the coming weeks. If you couldn't make the trip to San Diego or missed us while you were there, we still want to hear from you. Please email episode ideas and feedback to podcast@340Bhealth.org. We will be back in a couple of weeks. As always, thanks for listening and be well. Speaker 1 (18:25): Thanks for listening to 340B Insight. Subscribe and rate us on Apple Podcasts, Google Play, Spotify, or wherever you listen to podcasts. For more information, visit our website at 340bpodcast.org. You can also follow us on twitter @340bhealth. And submit a question or idea to the show by emailing us at podcast@340bhealth.org.