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The Healing American Healthcare Podcast
The Healing American Healthcare Podcast

Episode 8 · 1 year ago

Drug Pricing in the US

ABOUT THIS EPISODE

Ed Eichhorn and John Dalton discuss the state of prescription drug prices & spending in the US, how it compares to other countries and steps the nation could take towards lowering the costs for Americans. 

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Morning. Welcome to the three minute read podcast. I'm John Dalton, editor of the twice a monthly newsletter of the healing American healthcare coalition. Joining me again today is at Ikorn, the coalition's CO founder and Co author of healing American healthcare, a plan to provide quality care to all while saving one trillion dollars a year. Together, ed and I have more than a century of healthcare experience and we're still trying to figure it all out. We can find our background and contact information at the end of this podcast. We're here today to discuss the February tenth issue of the three minute read. As you can see from the contents, it begins with Johnson and Johnson applying for an emergency youth authorization for their vaccine, and then the next three articles really focus on drug pricing. Has Been a lot of chatter in the literature about the high cost of prescription drugs and these three articles kind of summarize some of the issues. And then we conclude with Ed ichorns monthly blogged summary of this podcast on three ways to lower drug course now, so let's begin with the J and j announcement. The first article was summarized was Johnson and Johnson applies for emergency use authorization for nineteen vaccine. That was reported on NPR by Dustin Jones on February fourth. So Johnson Johnson is applied to the food and Drug Administration for its Jansenvaccine. Some key facts about their vaccine. If the EAY is granted, Janej expects to supply a hundred million doses through June. It's overall effectiveness is sixty six percent. In the US clinical trials it was seventy two percent effective. The most important is proven to be eighty five percent effected in preventing severe forms of Covid nineteen. So reduced spell zations reduced deeps from covid nineteen. So eighty five percent is very important. It requires only one injection. I'm like the MODERNA and FISOR biontech vaccines. The JJ a vaccine requires only...

...one injection, which reduces some logistical challenges, and it can be stored for at least three months at thirty six to forty sixty rease Fahrenheit routine refrigeration. So the good news is that having a single dose vaccine available that doesn't require cold storage should accelerate getting more Americans vaccinated. The FDA is expected to hold the first meeting of its outside advisors next week to review the application that we feedru twenty six. If approval moves forward, it could be in use by mid March at anything else on the Vaccine Update? Sure, let me add a few things done. We are recording this. So on February nineteen and much of the nation has suffering from extensive snowstorms, even all the way down to Houston, Texas, and even as we are recording this, there are twelve dates that have severe weather restrictions and this is impacting the delivery of vaccines around the nation. The main humb for this, for Fedex, is actually in Memphis, Tennessee, and there's difficulty getting in and out of Memphis at this time and they're moving to other hubs around the country to try to distribute medication and this this problem will continue for a while because much of the nation is ready to provide the injections and it's become a supply and demand issue because the supply is certainly not reaching the demand. But that will be corrected over time. In fact, last Thursday President Biden held his first town meeting in Wisconsin and during his response to the questions from the audience, he said that he hopes to have six hundred million doses available in the June July time frame so that anyone who wants a vaccination will be able to get one. He is used a defense act to ask fiser and what Dirner to produce more vaccine and he hopes that Jay and j will be approved by the FDA at the end of February or the beginning of March. That will certainly continue to add...

...to the supply. So I think the future for vaccination is certainly looking up. Without the snowstorm that we've had around the country over the last week, United States has been reaching about one point six to one point seven million injections a day and it's anticipated with the increased availability of Supply that we've just talked about, it could go up to about three million doses a day, which would certainly improve our nation's ability to move forward. As of now, about on average, twelve percent of Americans have received their first injection and about five percent have received the second injection, and that's kind of where we stand at this point. John Yeah, and here in New Jersey, although yesterday was disrupted to many of the vaccination sites that was reforded were one point five million doses have been administered here in the state and four very seven thousand of those with a second doses. So five percent of New Jersey's population that has received both doses of the vaccine and about twelve percent have received the least one dose. So that's all good news on the Vaccine Front. Let's see what else is happening in drug prices. The next articles entitled here's how much more the US spends on prescription drugs, has written by Christina Fiori, director of enterprise and investigator, report from medpage and it appeared on January twenty eight, two thousand and twenty one. The recent Rand Corporation analysis took a look at prescription drug pricing throughout the OECD, the Organization for Economic Cooperation Development, which is the major at countries in the world. It's found that we are paying about two and a half times as much for drugs in the US as do thirty two other countries that they looked at. Total drugs spending in two thousand and eighteen they looked at was seven hundred and ninety five billion, so approaching almost a trillion dollars throughout the OCD. And here's what they found. For brand name drugs. The US is paying almost three and a half times more than...

...other OCD countries, but we are paying sixteen percent less for generics. That's the good news. And here in the US generics account for eighty four percent of our volume. So to me that suggests that we will gotten the message that brand name drugs are expensive. Those of us who have Medicare, par D or other Medicare plans have been working with our physicians to make sure that we when there's a generic available, we get the generic rather than the brand name drug. Other OCD countries, because drugs are much more affordable, generics only account for thirty five percent of the volume here in the US. The brand name drugs are only eleven percent of total volume, but they account for eighty two percent of total spending. Among the g seven countries, the major Western democracies, the UK, France and Italy, have the lowest prescription drug prices. For Board. Member of colleague of mine used to be VP of government relations one an agent pharmaceutical companies, and he always used the beman having to go to the UK and France and negotiate drug prices with the government's there because they always felt to give a squeezing them too hard. But they're getting a much better deal than we are here in the US. So the conclusion from Rand Andrew Mokay, who is the ACHIEF researcher combat quote. Many of the most expensive medications are the biologic treatments that we often see advertised on TV, and he expressed hope that competition from biosimilars will begin to drive down prices and spending for biologics. And, as most of you know, you can harpably spend an hour watching TV without having three or four high priced brand named drugs being taverned. The next article is entitled States Move Ahead with Canada drug infrotation while the waiting signal from Biden. That was written by Phil Gailo. It's on the Kaiser Health News January twenty nine in two thousand and three America and active Canadian drug invirotation wall. The required that the AHH has secretary certify...

...it as such drugs could be imported safely and effectively and over, Ahhj Secretary Alex Days are certified. That last September. That's seventeen years later. Why are we looking at Canada? Canada limits how much drug makers can charge for medicines. So these are acting in September. In November, the pharmacutical research and Manufacturing Association filed suit in DC Flet court to stop the drug purchasing initiatives. Why? Because we're paying higher prices here in the US, forward and Colorado and several New England states, Maine, New Hampshire. The months are moving ahead with efforts to import prescription drugs from Canada. Canadians are willing to export drugs so long as they have enough to satisfy their own consumers and patients demands. Anything excess would be available for export to the US. And we already read stories of folks in Washington's State and Hampshire, Vermont, instead of coursing the border to buy for scripting drugs in Canada and then coming back across the border with their lower prices drugs. Yeah, some high priced drugs in the law, such as insulin and other injectables, are excluding and importation. So even though the lowest passing no three, it did exclude certain drugs from being aligible for import experts, on the other hand, are questioning whether the savings could be significant because of the expensive setting up and running an importation program where each state would set up their own program for patients and consumers in their state, and that could be a fairly expensive ramp up, not dissimilar from what happened as various states set up their own health care insurance exchanges under the affordable care act. The third article was in titled Seniors Face Crushing Drug Costs as Congress stalls on capping Medicare out of pocket. Course. This is also from cars of Health News January. Fourth, written by Harris Meyer. Now,...

...except for very low income beneficiaries, a medicare part dea drug plans don't cap the patient's Co instuence course once they hit six thousand five hundred fifty dollars, until the drugs spending. So they have pay five percent of any in excess. Since many of the high course cancer drugs now are available in oral form from pharmacies, some of our seniors now face crushing course if they're fighting cancer. The article indicated the from two thousand and ten through two thousand and eighteen, the average prices for fifty for all the administ answer drugs increased by forty percent and the average for the fifty four for one years treatment will be a hundred sixty seven thousand nine hundred four dollars. So for a Medicare beneficiary paying five percent co insurance on top of that, that would amount to something like eighty four hundred dollars a year. So high prices in the coverage gaps force many of the patients to rely on the financial assistance programs altered by drug companies and their foundations. Or applying for such assistance is very complex process and requires filling out forms and reap flying on an annual basis, so it's available difficult to access and, surprisingly, with cancer centers throughout the US, including many major brand names, only five percent of US cancer centers have an expert on staffer and health patients who are facing problems with paying for their care and paying for these early ministry drugs. So it's little wonder that nearly seventy percent of seniors want Congress to pass an annual limit on out of pocket drug spending formaticare beneficiaries. But the hold up is that Congress can't figure out a way to finance that they'd like to push it back onto the drug companies and, of course, farm it is probably one of the most active and effective lobbying groups in DC, right alongside marcus health insurance plans, who represent the insurers...

...in DC. With that is a setting at icins monthly blog talked about drug pricing. Ed. Why don't you walk us through some of the ways that the US might be able to help reduce drug house now be happy to do that, John. My blog was entitled American needs lowered drug prices. Now here are three ways to do it, and what I was looking at was the challenge of that we have when compared with the OECD nations, almost all of them a negotiate drug prices on a national basis, as John alluded to, and in Canada, but that's a very tall order in the United States. Pharmaceutical industry market in the United States is about five hundred billion dollars a year and they employ over eight hundred and eighty lobbyists on a regular basis. If you think about that for a moment, there are four hundred and thirty five congressmen and Congresswomen in the House of Representatives and one hundred people in the Senate. That would be a total of five hundred and thirty five elected officials in Congress. But the pharmaceutical industry employs an additional three hundred lobbyists above the total number of people who we've elected to Congress, and you know they are a real force to bring their representations to Congress when there is a threat to the pharmaceutical industry, and certainly national negotiation would be a big threat to them. There are three ways, though, that I believe Congress could act the for approaching and national negotiation bill, which would be very difficult to pass given the lobbying pressure that Congress would receive. The first of these is in hospital drug pricing. Approximately forty percent of the more expensive drugs are provided to patients in the hospital setting and these prices are not regulated, and there's been a lot written about hospital mark up of drug prices. The most significant work,...

I believe, was done by Stephen Brill in his book. That was in final America's bitter pill. He found out that, for example, a time old pill distributed in the hospital actually cost the patient more than the bottle of til costs on a wholesale basis, and there was a study done by the maccon group in Philadelphia where they found that in some cases hospital markup of drugs was as high as four hundred and eighty seven percent. So the hospital markup of drugs is certainly an area that could be controlled and we would recommend that hospital drug markup be approximately ten percent to reflect the cost of inventory and the delivery of the drug to the bedside. The second area is on orphan drugs. Orphan drug legislation that was passed in nineteen eighty three is extremely important because it encourages pharmaceutical companies to develop medications for diseases that affect two hundredzero or less people, and more than three hundred drugs have been produced that actually extend or save lives. However, the price of orphan drugs since nineteen eighty three is gone up by a factor of sixty four times. In one thousand nine hundred and eighty three, the actual cost of from cuticles that were orphan drugs was around one fifteen hundred dollars, and today it's well over a hundred thousand dollars. In fact, the seventh highest cost drugs in the United States right now are hepatitis seed drugs that were developed under the orphan drug rule, and the average cost of those drugs is between fifty and eighty thousand dollars a month, anywhere from eight to twenty weeks for that. So that area of expense should be controlled. The other aspect of this that is troubling is a drug that...

...has been on a market for a number of years can actually be found to have an orphan drug use. That means the price will go up. There is a drug that's used for arthritic care but also, I was recently found that it would deal with infant symptoms that could be fatal. These infant symptoms are such that it is requires as drug. Well, anyway, the treatment using this drug that used to be twenty dollars of ill can cost five hundred thousand dollars. So it's good to have these treatments, but we ought to have a way to control the price so that it's not exorbitant, especially in drugs that have been on the market for a long time. I think pharmaceutical company should be able to double a triple those prices, but they shouldn't be able to multiply that by a factor of a thousand. In order to help the new price. The last thing was covered in part of John's presentation, and that is allowing drug importation. It really makes sense to promote international ordering and drugs to lower costs for Americans. But, as John indicated, it took seventeen years for health and human services to certify imports from Canada as being safe and effective. For a long time pharmaceutical industry said that importing drugs may not be safe. Well, if the drugs are made by the pharmaceutical companies in United States and ex supported or made in a foreign country under their cloudy control systems, it should be safe to bring a drug back into the United States. So with these three things, I think we can have an impact on drug costs in the United States much before we can get to national negotiation for drug pricing. It took seventeen years they get Canada for imagine the curdles we have to go through we wanted to win court drugs from the UK or France or Belgium or Sweden. All of them have plants operated by American pharmaceutical companies. To me it just seems incredible. And it took seventeen years just...

...to get Canada. Are Neighbor to the north proved port importation of certain drugs, so long as they're safe and effective and epic Agis. I like you ED's recommendation of the Stephen Brills book, quote a bitter pill, close quotes. It's one of the best books in terms of insights into the complexity and some of the hurdles that we face in delivering healthcare here in the US as compared with the other ONLYCD member nations, all of whom have universal health care systems. So, that said, we are interested in what you're thinking. We'd like you to go to our website, wwwe filling American healthcare dot org and take a brief survey. We've already received responses from the number of folks. We're interesting your thoughts if you haven't depleted in yet, and in future podcasts will share feedback with our listeners on issues that include universal healthcare, which is not, by the way, medicare for all. It's Medicare for it's just one approach. You never sealth care, and we'll be talking about the icon and Hutchinson all care plan, part of which you just heard from it. In terms of the three steps for controling the drug course, now so if there are issues of particular interest the day you would like to see covered, please feel free to contact us. If you'd like to join our mailing lists, just text heal healthcare to two, two, eight, to eight to get started, and we'll look forward to see you again. Continue to wash your hands, watch your distance and wear a mask. Thanks.

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