Is This a Step Toward Lower Medication Prices?

Is This a Step Toward Lower Medication Prices?

MS_Wire_Ed_Tobias

Here in the U.S., the price we pay for medications is complicated.

The usual process is for a pharmaceutical company to set a high price for a medication when it first hits the market. But, like buying a car, that “sticker” price is negotiable. Health plans use pharmaceutical benefit managers (PBMs) to do that negotiating. They bargain with the pharma companies to receive rebates. A portion of those rebates is used to reduce what the health plan pays for the medications. And a portion is supposed to go toward lowering the cost of what patients pay for their medications. There’s some debate, however, about how much actually trickles down to patients.

The PBMs also create formularies, the lists of the medications that insurance companies will, and won’t, cover and their copay amounts. That power provides the PMBs with a good deal of negotiating muscle.

A broken pricing system

Because of this, a recent story by Reuters is of more than passing interest. The story reports that the largest PBM in the U.S., Express Scripts, thinks that the rebate model for medication pricing is “broken.” Express Scripts plans to change that model and its first targets will be some upcoming medicines that treat migraines. One of those medications is Aimovig (erenumab), which may receive government approval by May 17. Aimovig is codeveloped by Novartis and Amgen, and its sticker price is expected to be around $10,000 per year.

To try to lower that cost, Express Scripts is indicating that it may limit access to Aimovig by favoring less expensive migraine treatments on its formulary or by requiring that other medications be tried first.

Express Script Chief Medical Officer Steve Miller told Reuters, “Should [pharma companies] price these things too high they will probably not be able to achieve much market share.”

A smaller PBM, Abarca Health, is also on board with this approach. Referring to the manufacturers of two new, high-priced cholesterol medications that had trouble gaining traction because of their cost, CEO Jason Borschow said in the article, “If [pharmaceutical companies] Amgen and Sanofi had it to do over again, I think they would have priced at half the list price and made a whole lot more money.”

Refunds if the treatment doesn’t work

Express Scripts also has another weapon in its arsenal. It’s considering requiring medicine makers to provide refunds to patients if their medications don’t perform as advertised inside a defined timeframe. Specifically, it’s talking about demanding a refund of two-thirds of the cost of one of these migraine medications if a patient stops treatment within 90 days because it didn’t work or it caused major side effects.

At least one pharmaceutical company, Lilly, has indicated it’s on board with at least part of this approach. According to Reuters, Lilly Chief Executive David Ricks told analysts that his company “has been pushing PBMs ‘for years’ to create contracts that take medication performance into account. … Ricks said he was happy that Express Scripts ‘is now changing their view and support this kind of construct. We’ll be happy to work with them on it.'”

Will pharma fight back?

It’s hard to say how this will all play out, particularly for our multiple sclerosis medications, which can far exceed $10,000 a year. In fact, Amgen’s research chief, Sean Harper, earlier told Reuters that demands by PBMs and health plans for larger rebates have forced pharmaceutical companies to raise their sticker prices.

Awrghhh!!!

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Note: Multiple Sclerosis News Today is strictly a news and information website about the disease. It does not provide medical advice, diagnosis, or treatment. This content is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition. Never disregard professional medical advice or delay in seeking it because of something you have read on this website. The opinions expressed in this column are not those of Multiple Sclerosis News Today or its parent company, BioNews Services, and are intended to spark discussion about issues pertaining to multiple sclerosis.

Ed Tobias is a retired broadcast journalist. Most of his 40+ year career was spent as a manager with the Associated Press in Washington, DC. Tobias was diagnosed with Multiple Sclerosis in 1980 but he continued to work, full-time, meeting interesting people and traveling to interesting places, until retiring at the end of 2012.
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Ed Tobias is a retired broadcast journalist. Most of his 40+ year career was spent as a manager with the Associated Press in Washington, DC. Tobias was diagnosed with Multiple Sclerosis in 1980 but he continued to work, full-time, meeting interesting people and traveling to interesting places, until retiring at the end of 2012.

14 comments

  1. marty burns says:

    I take gilenya and the list price is 95000yr.I’m lucky and have insur. but am concerned about those that don’t.however drug works well.don’t want drug co.not to develop drugs like this

  2. Jason says:

    Blue Shield of Northeastern New York approved 2007
    Humana approved 2008
    Priority Health approved 2008
    Blue Cross & Blue Shield of Illinois approved 2008
    Blue Cross & Blue Shield of Kansas City approved 2008
    State of Arizona approved 2008
    State of California approved 2008
    Blue Cross & Blue Shield of North Carolina approved 2008
    Aetna approved 2008
    Blue Cross & Blue Shield of Illinois approved 2009
    Medicaid of Illinois approved 2009
    Blue Cross & Blue Shield of Kansas approved 2009
    Blue Cross & Blue Shield of Illinois approved 2009
    Aetna approved 2010
    Blue Cross & Blue Shield of Kansas approved 2010
    MAXIMUS (thru State of California) overturned Health Net Life Insurance Company Denial 2010
    Blue Cross Blue Shield California approved 2010
    ODS/Moda Health approved 2010
    BCBS of GA approved 2010
    BCBS of Illinois approved 2011
    BCBS of Illinois approved 2011
    Managed Medical Review Organization (MMRO) IRO overturned BC_BS MN denial 2011
    MediCARE Plus Blue approved 2011
    Federal Blue Cross/Blue Shield approved 2011
    United Healthcare Choice Plus-HRA approved 2012
    Aetna approved 2012
    Wellmark of South Dakota approved 2012
    Aetna approved 2012
    United Healthcare approved 2012
    Cigna approved 2012
    BCBS Regence approved 2012
    Health Alliance approved 2012
    Blue Cross & Blue Shield of North Carolina approved 2012
    Optum Health approved 2012
    Wellmark of South Dakota approved 2012
    BCBS Federal Program approved 2012
    Anthem Blue Cross Blue Shield of Maryland approved 2012
    Kaiser Southern California approved 2012
    CA Anthem Blue Cross – PPO approved 2013
    Anthem Blue Cross approved 2013
    State of Illinois approved 2013
    State of Illinois approved 2013
    State of Illinois approved 2013
    BCBS Federal Program approved 2013
    Care First BCBS approved 2013
    Cigna approved 2013
    Humana Military approved 2013
    BCBS Regence approved 2013
    Anthem BCBS approved 2013
    BCBS of Illinois approved 2013
    State of Texas overturned BCBS of Texas denial 2013
    PHCS United Health Group denial was overturned by independent review 2013
    Blue Cross Blue Shield Federal Employee Plan approved 2013
    BCBS of Oregon approved 2013
    Aetna approved 2013
    Blue Cross & Blue Shield of Kansas City approved 2013
    Medicare/Medical Mutual of Ohio approved 2013
    HealthAlliance (state of Illinois plan) approved 2013
    Humana approved 2014
    United Healthcare approved 2014
    Tricare Standard North Region (Health Net Federal) approved 2014
    Blue Cross & Blue Shield of Alabama approved 2014
    Cigna approved 2014

    Here are just a few of the providers.

  3. Steve says:

    Big Pharma will never be altruistic. Innovative competitive ideas and perhaps even laws are needed to drive costs down. MS drugs are a perfect example since prices increase every year even as new drugs are available. In case you think MS situation is unique, look at what Abbvie has done with an important oral cancer drug, Imbruvica. It was available in 140 mg capsules typically prescribed at 3x or 4x daily depending on the type of blood cancer. It’s very effective albeit with significant side effects for some, but it must be taken for the rest of your life (sound familiar?). Because of how it works, quite a few patients found that they only needed two or even one a day which minimized side effects for them. The standard dosage cost about $450 per day, but the drug was priced on a per capsule basis. Abbvie has taken the capsules off the market and only sells 28 day blister packs of 140, 280, 420 or 560 mg tablets priced at about $450 per day REGARDLESS of dosage amount. No word yet on insurance companies response to this.

  4. Jason says:

    Country Worldwide Facilities Frequently Updated
    USA Northwestern University
    Division of Immunotherapy and Autoimmune Diseases (DIAD)
    Professor Richard Burt

    USA Fred Hutchinson Cancer Research Center
    825 Eastlake Avenue E. Seattle, WA 98109-1023
    “Colorado Blood Institute 1721 East 19th Avenue, Suite 300
    Denver, CO 80218

    Israel CTCI
    International Center for Cell Therapy & Cancer Immunotherapy (CTCI) Tel Aviv, Israel
    Professor Shimon Slavin

    Mexico Clinica Ruiz
    Dr. Guillermo Ruiz

    Russia The A.A. Maximov Department of Hematology and Cellular Therapy,
    National Pirogov Medical Surgical Center
    Dr. Denis Fedorenko

    Germany Universitätsklink Heidelberg
    Prof. Dr. med. Anthony D. Ho

    Sweden Stockholm Care AB
    Karolinska Hospital
    South Africa UCT Private Academic Hospital
    Prof.Nicolas Novitzky

    Denmark Rigshospitale

    Canada Ottawa General Hospital, Ottawa, Canada
    Dr. Mark Freedman

    Italy Careggi University Hospital, University of Florence, Florence, Italy
    Dr Riccardo Saccardi
    Poland Klinika Hematologii i Transplantacji Szpiku w Slaskim Uniwersytecie Medycznym

    Here you go people. The sooner this gets out, the better a vast majority will be.

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