Overpriced drugs hurting seniors

by Sen. Al Franken, D-Minnesota

April 12,  2016--Many budget-strapped seniors are being forced to choose between buying doctor-prescribed medications and paying for other basic necessities

• Companies should not be allowed to delay generic drugs from hitting market

At a recent meeting in St. Cloud, some older Minnesotans shared stories that they should never have to tell.

Like millions of other Americans, these seniors feel powerless as their health and financial well-being is often jeopardized by ever-rising prescription drug prices. Recent double-digit increases – far beyond the U.S. inflation rate – are putting essential, even life-saving, medicines out of reach for too many people.

In short, many budget-strapped seniors are being forced to choose between buying doctor-prescribed medications and paying for other basic necessities like food, rent or gas. For some, it means cutting their pills in half to make them last longer, or even taking the risk of forgoing medications altogether.

At the St. Cloud meeting, a local woman shared the price of just one of her husband’s many medications has increased by $100 per month since January. 

Now, to save money, he no longer takes it each day as recommended by his doctor, but is spreading each dose over two or three days.

Her story was gathered as part a “Prescription Drug Cost Listening Tour” my office conducted throughout the state to hear about the impact of skyrocketing drug prices.  

As a member of the Senate Health Committee, I plan to share stories like hers with my congressional colleagues so they can hear firsthand about the urgent need to address this problem.

Real problem

Rising prescription drug costs are a very real and growing problem for many nationwide. Lack of competition has allowed drug companies to hike prices exorbitantly – even on generics. 

And a number of new specialty drugs come with staggering prices that are being passed on from insurers to everyone else.

Last fall, Americans were enraged when Turing Pharmaceuticals hiked the price of one life-saving drug by more than 5,500 percent  – from $13.50 to $750 per pill. 

The company was able to game the system because there is little or no competition. As outrageous and excessive as this was, it’s not the only example of an exorbitant price increase. In short, it showed millions of Americans – especially vulnerable seniors – can be devastated by sudden spikes in drug prices.

And with Americans spending hundreds of billions each year on prescription drugs, the problem of isn’t going away soon. Since January, Pfizer raised the prices of 60 brand name drugs by an average of 10 percent. 

Eight of those drugs went up by at least 20 percent. With treatments for some diseases like cancer costing more than $100,000 annually, out-of-pocket costs can quickly cripple the financial well-being of elderly Americans, even those with comprehensive insurance. Such increases are also driving up insurance premiums for everyone else.

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My solutions

We have to fight back. That’s why I’m taking several steps to slow the advance of drug costs.

First, I am pressing legislation to “pay-for-delay,” where brand-name drug manufacturers pay generic drug makers to delay bringing cheaper, generic alternatives to market. 

By eliminating generic-drug competitors, big drug companies can reap large profits by keeping brand-name prices high. My bill would help millions of Americans by stopping these deals and bringing affordable medications to the market sooner.

I also plan to re-introduce a measure to cut drug prices and save taxpayers up to $24 billion by allowing the federal Medicare program to negotiate lower prices for drugs used by older Americans. 

Unlike other federal health programs like Medicaid and those run by the Veterans Administration, Medicare officials are banned by law from negotiating lower prices with drug manufacturers.

Most industrialized countries use their buying power to negotiate lower prices for their citizens. In fact, many drugs developed and manufactured in the United States cost much less in other countries. 

That’s why we need to lower barriers to importing lower-cost drugs from countries like Canada, so seniors can save money and import their medications safely and legally.

In March, I introduced a measure to end a tax break that allows drug companies to write off the billions of dollars they spend on television, magazine and Internet advertisements to sell more expensive brand-name drugs, even when cheaper, equally effective drugs are on the market. 

The United States is one of only two countries that allows these “direct-to-consumer” ads, which ultimately drive up health care costs. American taxpayers spend too much to fund this tax break – that’s money that can be put to better use.

We have to do more to bring down prescription drug prices that disproportionately hit seniors. 

That’s why I’m working in Washington to enact common sense measures to cut the cost of the prescriptions that Minnesotans need.  And it’s why I’ve been listening to them in communities across Minnesota and sharing their stories in Washington.

Sugar Shock: Insulin Costs Tripled in 10 Years, Study Finds

Both yearly spending by people with diabetes, and cost per milliliter, up sharply – outpacing costs for other blood sugar medications

Newswise, April 7, 2016 — People with diabetes who rely on insulin have seen the cost of that drug triple in just a decade -- even as doctors have prescribed higher doses to drive down their blood sugar levels.

Meanwhile, the cost of other diabetes drugs has stayed about the same or even gone down.

The rise in insulin costs was so large that since 2010, the per-person spending on insulin has been higher than per-person spending on all other diabetes drugs combined.

Published today in the Journal of the American Medical Association, the findings estimate in constant dollars what patients and their insurance plans paid from 2002 to 2013 for all antihyperglycemics, or medicines that reduce blood sugar levels.

The authors of the study say the rise in insulin compared with other therapies means it’s time to look again at the effect, and the cost-effectiveness, of non-insulin therapies. 

They also note that the price of insulin is not likely to drop because of competition from generic forms, because of the way it is regulated.

The research was done by a team from the University of Melbourne in Australia and the University of Michigan, using data from the federal Medical Expenditure Panel Survey that asks patients and insurers about care and costs.

“In the United States, the more than 3-fold increase in the cost of insulin over the past decade is alarming. It is a burden to both patients and payers and may deny some people access to a lifesaving therapy,” says William Herman, M.D., MPH, the Michigan co-author and a longtime diabetes care researcher. 

“Although the newer, more expensive insulin analogs appear to have incremental benefits compared to older, less expensive insulin preparations, their premium price requires us to ask whether they are really necessary, and if so, for whom?”

Herman, a professor of internal medicine at the Medical School and of epidemiology at the School of Public Health, is a member of the U-M Institute for Healthcare Policy and Innovation.

“What our study shows is how quickly things can change and why there is a need to focus on the costs as well as the benefits when deciding treatment options for people with diabetes,” says Philip Clarke, Ph.D., the study’s senior author and a professor in Melbourne’s School of Population and Global Health and Centre for Health Policy.

Rising prices & doses

Insulin injections keep people with Type 1 diabetes alive, and they take multiple daily injections often starting in childhood. 

In adults with advanced Type 2 diabetes, doctors prescribe it to control blood sugar and stave off devastating damage throughout the body – usually after diet and exercise, and other medications, have failed to reduce blood sugar levels enough.

In the time period studied, the total cost of insulin more than tripled, from $231 a year to $736 a year for each patient, in 2013 dollars. The cost per milliliter of insulin nearly tripled in that same time, from $4.34 to $12.92.

And in the same period, the average annual usage went from 171 mL to 206 mL, as prescribed doses went up. This likely happened due to increasing overweight and obesity, which increase the amount of insulin needed by a person, as well as new national recommendations that stress lower sugar levels for all people with diabetes.

Meanwhile, the per-person spending on all other blood sugar medications was $502 in 2013, down from about $600 in 2002 in constant dollars. The cost of these medications combined dropped over the first nine years, bottomed out in 2011 and rose slightly since then.

The cost of metformin, which is available as a generic drug, plummeted from $1.24 per tablet in 2002 to just 31 cents in 2013. Even the newer class of drugs known as DPP4 inhibitors only got 34 percent more expensive since they hit the market in 2006.

The researchers analyzed data from nearly 28,000 people who received treatment for diabetes in the 11-year period, a time when diabetes was rising steadily. The average age was around 60.

About one in four of the participants used insulin to control their blood sugar, and two-thirds were taking an oral medication. In the latter part of the study period, a small percentage began taking new injectable drugs designed to complement oral drug use.

More study needed

The researchers could not separate out users of synthetic human insulin, the least expensive form currently available, from those who use the more recently introduced “analog” forms that act more slowly or quickly in the body depending on the desired effect. 

They also didn’t have data on what insulin users spent on the needles and other devices used to inject insulin, except when that cost was included in drug costs, such as for pre-filled insulin pens.

And, they didn’t have information on which oral medication users took generic forms, which are less expensive. 

But they note that prices of oral medications are likely to drop over time as generics become available, while the fact that insulin is regulated as a biologic medication by the Food and Drug Administration means that prices won’t likely drop as generic competitors enter the market and encounter the strict rules governing biologics.

Further research using data that includes these details could further enhance understanding of how costs have changed for people with diabetes over the years.

In addition to Clarke and Herman, the research team included three Melbourne researchers: first author Xinyang Hua, M.Sc., Natalie Carvalho, PhD, and Michelle Tew, MPH; and Elbert S. Huang, MD of the University of Chicago. The study was supported by grants from the U.S. National Institutes of Health (DK090435) and the Australian National Health and Medical Research Council (1028335 and 1079621). Reference: JAMA, doi:10.1001/jama.2016.0126

Big Pharma Settlements Highlight the Need for Tougher Enforcement

Public Citizen Report Catalogues 25 Years of Pharmaceutical Industry Lawbreaking; Sharp Decline in Settlements, Penalties in 2014-2015

WASHINGTON, April 5, 2016 - Stronger enforcement is needed to deter pharmaceutical manufacturers from continuing to break the law and defraud federal and state health programs, according to a Public Citizen report released today.

The report – an update to a previous study released in 2012 with additional data through 2015 – catalogues all major financial settlements and court judgments between pharmaceutical companies and federal and state governments from 1991 through 2015, which totaled $35.7 billion.

Of the 373 settlements over those 25 years, 140 were federal settlements totaling $31.9 billion, and 233 were state settlements totaling $3.8 billion. GlaxoSmithKline and Pfizer reached the most settlements and paid the most in financial penalties – $7.9 billion and $3.9 billion, respectively.

From 1991 through 2015, 31 companies entered into repeat settlements with the federal government. The violation resulting in the most federal penalties was unlawful promotion, usually off-label marketing.

Twenty-nine states and the District of Columbia reached at least one single-state settlement with a pharmaceutical company during the 25-year period studied. The most common violation was drug-pricing fraud against state Medicaid programs.

Hawaii recovered the most money as a proportion of Medicaid drug expenditures; South Carolina recuperated the most money per enforcement dollar spent; Louisiana claimed the most single-state settlements; and Texas finalized by far the most whistleblower-initiated settlements.

Another key finding is that both the number and size of settlements decreased significantly in 2014 and 2015. Just $2.4 billion in federal financial penalties were recovered in 2014-2015, less than one-third of the $8.7 billion in 2012-2013 and the lowest two-year total since 2004-2005.

Moreover, there were just 20 state settlements in 2014-2015, the lowest two-year total since 2006-2007. This reflected a dramatic decrease in federal financial penalties for unlawful drug promotion and a similarly sharp decline in the number of single-state settlements stemming from overcharging government health programs.

The report explores several possible reasons for this drop in settlement activity. The possibilities include a decline in federal enforcement; a shift in the focus of federal prosecutions away from off-label marketing and toward other forms of illegal activity, asalluded to (PDF) by U.S. Department of Justice officials in 2012; changes in state Medicaid pharmaceutical reimbursement strategies; and shifts in industry marketing strategies.

“We don’t yet know why there were fewer and smaller settlements in the 2014 to 2015 period,” said Dr. Sammy Almashat, researcher with Public Citizen’s Health Research Group and lead author of the report.

“But we do know that, in addition to the rarity of executive accountability, previous penalties never have been large enough to deter the most common types of pharmaceutical fraud. So it would be surprising if the industry suddenly decided, of its own accord, to comply with laws it has routinely violated for decades.”

The pharmaceutical industry’s $711 billion in global net profits from just one decade (2003-2012) dwarf the $35.7 billion in penalties recovered over the last quarter century.

The largest settlement announced since Public Citizen’s last report – and the third-largest health fraud settlement in history – demonstrates the stark imbalance between the penalties for and the profits made on implicated products.

In 2013, Johnson & Johnson paid $2 billion after pleading guilty to off-label promotion of its antipsychotic Risperdal for use in elderly patients with dementia.

Risperdal brought in $11.7 billion in sales for the company in just the first 12 years after its approval (1994-2005), nearly six times the total settlement amount.

“Breaking the law shouldn’t be profitable, especially not when patients’ health and lives are on the line,” said Dr. Sidney Wolfe, founder and senior adviser to Public Citizen’s Health Research Group.

“The recently reduced settlement activity is still indicative of ongoing, systematic wrongdoing, which is costing American consumers and taxpayers enormous sums and endangering patients. Larger financial penalties, especially for repeat offenders, and jail time for executives implicated in criminal activity might actually change the calculus, so that the consequences of lawbreaking are no longer just a cost of doing business for Big Pharma.”

The report’s authors conclude that federal and state governments need to ramp up enforcement and discuss several more effective strategies to deter future fraud.

Legislation introduced by U.S. Sen. Bernie Sanders (I-Vt.) and U.S. Rep. Elijah Cummings(D-Md.) in September 2015 would terminate any remaining marketing exclusivities, granted by the U.S. Food and Drug Administration, for drugs implicated in illegal activity.

“Time and time again, drug companies defraud American taxpayers while making billions off government-granted monopolies,” Sanders said in response to Public Citizen’s report.

“Enough is enough. The greed of the pharmaceutical industry must end. I urge my colleagues to stand up to the pharmaceutical industry and pass legislation to send a clear message that crime will no longer pay.”