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The Healing American Healthcare Podcast
The Healing American Healthcare Podcast

Episode 8 · 11 months 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 minuteread podcast. I'm John Dalton, editor of the twice a monthly newsletter ofthe healing American healthcare coalition. Joining me again today is at Ikorn, thecoalition's CO founder and Co author of healing American healthcare, a plan to providequality care to all while saving one trillion dollars a year. Together, edand I have more than a century of healthcare experience and we're still trying tofigure it all out. We can find our background and contact information at theend of this podcast. We're here today to discuss the February tenth issue ofthe three minute read. As you can see from the contents, it beginswith Johnson and Johnson applying for an emergency youth authorization for their vaccine, andthen the next three articles really focus on drug pricing. Has Been a lotof chatter in the literature about the high cost of prescription drugs and these threearticles kind of summarize some of the issues. And then we conclude with Ed ichornsmonthly 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 wassummarized was Johnson and Johnson applies for emergency use authorization for nineteen vaccine. Thatwas reported on NPR by Dustin Jones on February fourth. So Johnson Johnson isapplied to the food and Drug Administration for its Jansenvaccine. Some key facts abouttheir vaccine. If the EAY is granted, Janej expects to supply a hundred milliondoses through June. It's overall effectiveness is sixty six percent. In theUS clinical trials it was seventy two percent effective. The most important is provento be eighty five percent effected in preventing severe forms of Covid nineteen. Soreduced 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 biontechvaccines. The JJ a vaccine requires only...

...one injection, which reduces some logisticalchallenges, and it can be stored for at least three months at thirty sixto forty sixty rease Fahrenheit routine refrigeration. So the good news is that havinga single dose vaccine available that doesn't require cold storage should accelerate getting more Americansvaccinated. The FDA is expected to hold the first meeting of its outside advisorsnext week to review the application that we feedru twenty six. If approval movesforward, it could be in use by mid March at anything else on theVaccine Update? Sure, let me add a few things done. We arerecording this. So on February nineteen and much of the nation has suffering fromextensive snowstorms, even all the way down to Houston, Texas, and evenas we are recording this, there are twelve dates that have severe weather restrictionsand this is impacting the delivery of vaccines around the nation. The main humbfor this, for Fedex, is actually in Memphis, Tennessee, and there'sdifficulty getting in and out of Memphis at this time and they're moving to otherhubs around the country to try to distribute medication and this this problem will continuefor a while because much of the nation is ready to provide the injections andit's become a supply and demand issue because the supply is certainly not reaching thedemand. But that will be corrected over time. In fact, last ThursdayPresident Biden held his first town meeting in Wisconsin and during his response to thequestions from the audience, he said that he hopes to have six hundred milliondoses available in the June July time frame so that anyone who wants a vaccinationwill be able to get one. He is used a defense act to askfiser and what Dirner to produce more vaccine and he hopes that Jay and jwill be approved by the FDA at the end of February or the beginning ofMarch. That will certainly continue to add...

...to the supply. So I thinkthe future for vaccination is certainly looking up. Without the snowstorm that we've had aroundthe country over the last week, United States has been reaching about onepoint six to one point seven million injections a day and it's anticipated with theincreased availability of Supply that we've just talked about, it could go up toabout three million doses a day, which would certainly improve our nation's ability tomove forward. As of now, about on average, twelve percent of Americanshave 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, andhere in New Jersey, although yesterday was disrupted to many of the vaccination sitesthat was reforded were one point five million doses have been administered here in thestate and four very seven thousand of those with a second doses. So fivepercent of New Jersey's population that has received both doses of the vaccine and abouttwelve percent have received the least one dose. So that's all good news on theVaccine Front. Let's see what else is happening in drug prices. Thenext articles entitled here's how much more the US spends on prescription drugs, haswritten by Christina Fiori, director of enterprise and investigator, report from medpage andit appeared on January twenty eight, two thousand and twenty one. The recentRand Corporation analysis took a look at prescription drug pricing throughout the OECD, theOrganization 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 muchfor 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 hundredand 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 payingalmost three and a half times more than...

...other OCD countries, but we arepaying sixteen percent less for generics. That's the good news. And here inthe US generics account for eighty four percent of our volume. So to methat 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 beenworking 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 ofthe volume here in the US. The brand name drugs are only eleven percentof total volume, but they account for eighty two percent of total spending.Among the g seven countries, the major Western democracies, the UK, Franceand Italy, have the lowest prescription drug prices. For Board. Member ofcolleague 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 Franceand negotiate drug prices with the government's there because they always felt to give asqueezing them too hard. But they're getting a much better deal than we arehere in the US. So the conclusion from Rand Andrew Mokay, who isthe ACHIEF researcher combat quote. Many of the most expensive medications are the biologictreatments that we often see advertised on TV, and he expressed hope that competition frombiosimilars will begin to drive down prices and spending for biologics. And,as most of you know, you can harpably spend an hour watching TV withouthaving three or four high priced brand named drugs being taverned. The next articleis 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 Januarytwenty 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 importedsafely and effectively and over, Ahhj Secretary Alex Days are certified. That lastSeptember. That's seventeen years later. Why are we looking at Canada? Canadalimits how much drug makers can charge for medicines. So these are acting inSeptember. In November, the pharmacutical research and Manufacturing Association filed suit in DCFlet court to stop the drug purchasing initiatives. Why? Because we're paying higher priceshere in the US, forward and Colorado and several New England states,Maine, New Hampshire. The months are moving ahead with efforts to import prescriptiondrugs from Canada. Canadians are willing to export drugs so long as they haveenough to satisfy their own consumers and patients demands. Anything excess would be availablefor export to the US. And we already read stories of folks in Washington'sState and Hampshire, Vermont, instead of coursing the border to buy for scriptingdrugs 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 andother injectables, are excluding and importation. So even though the lowest passing nothree, it did exclude certain drugs from being aligible for import experts, onthe other hand, are questioning whether the savings could be significant because of theexpensive setting up and running an importation program where each state would set up theirown program for patients and consumers in their state, and that could be afairly expensive ramp up, not dissimilar from what happened as various states set uptheir own health care insurance exchanges under the affordable care act. The third articlewas in titled Seniors Face Crushing Drug Costs as Congress stalls on capping Medicare outof 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 oncethey hit six thousand five hundred fifty dollars, until the drugs spending. So theyhave pay five percent of any in excess. Since many of the highcourse cancer drugs now are available in oral form from pharmacies, some of ourseniors now face crushing course if they're fighting cancer. The article indicated the fromtwo thousand and ten through two thousand and eighteen, the average prices for fiftyfor all the administ answer drugs increased by forty percent and the average for thefifty four for one years treatment will be a hundred sixty seven thousand nine hundredfour dollars. So for a Medicare beneficiary paying five percent co insurance on topof 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 relyon the financial assistance programs altered by drug companies and their foundations. Or applyingfor such assistance is very complex process and requires filling out forms and reap flyingon an annual basis, so it's available difficult to access and, surprisingly,with cancer centers throughout the US, including many major brand names, only fivepercent of US cancer centers have an expert on staffer and health patients who arefacing 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 anannual limit on out of pocket drug spending formaticare beneficiaries. But the hold upis that Congress can't figure out a way to finance that they'd like to pushit back onto the drug companies and, of course, farm it is probablyone of the most active and effective lobbying groups in DC, right alongside marcushealth insurance plans, who represent the insurers...

...in DC. With that is asetting at icins monthly blog talked about drug pricing. Ed. Why don't youwalk us through some of the ways that the US might be able to helpreduce drug house now be happy to do that, John. My blog wasentitled 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 whencompared with the OECD nations, almost all of them a negotiate drug prices ona national basis, as John alluded to, and in Canada, but that's avery tall order in the United States. Pharmaceutical industry market in the United Statesis about five hundred billion dollars a year and they employ over eight hundredand eighty lobbyists on a regular basis. If you think about that for amoment, there are four hundred and thirty five congressmen and Congresswomen in the Houseof Representatives and one hundred people in the Senate. That would be a totalof five hundred and thirty five elected officials in Congress. But the pharmaceutical industryemploys an additional three hundred lobbyists above the total number of people who we've electedto Congress, and you know they are a real force to bring their representationsto Congress when there is a threat to the pharmaceutical industry, and certainly nationalnegotiation 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 ofthe more expensive drugs are provided to patients in the hospital setting and these pricesare not regulated, and there's been a lot written about hospital mark up ofdrug prices. The most significant work,...

I believe, was done by StephenBrill in his book. That was in final America's bitter pill. He foundout that, for example, a time old pill distributed in the hospital actuallycost 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 foundthat in some cases hospital markup of drugs was as high as four hundred andeighty seven percent. So the hospital markup of drugs is certainly an area thatcould be controlled and we would recommend that hospital drug markup be approximately ten percentto 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 innineteen eighty three is extremely important because it encourages pharmaceutical companies to develop medicationsfor diseases that affect two hundredzero or less people, and more than three hundreddrugs have been produced that actually extend or save lives. However, the priceof orphan drugs since nineteen eighty three is gone up by a factor of sixtyfour times. In one thousand nine hundred and eighty three, the actual costof from cuticles that were orphan drugs was around one fifteen hundred dollars, andtoday it's well over a hundred thousand dollars. In fact, the seventh highest costdrugs in the United States right now are hepatitis seed drugs that were developedunder the orphan drug rule, and the average cost of those drugs is betweenfifty and eighty thousand dollars a month, anywhere from eight to twenty weeks forthat. So that area of expense should be controlled. The other aspect ofthis that is troubling is a drug that...

...has been on a market for anumber of years can actually be found to have an orphan drug use. Thatmeans the price will go up. There is a drug that's used for arthriticcare but also, I was recently found that it would deal with infant symptomsthat could be fatal. These infant symptoms are such that it is requires asdrug. Well, anyway, the treatment using this drug that used to betwenty dollars of ill can cost five hundred thousand dollars. So it's good tohave these treatments, but we ought to have a way to control the priceso that it's not exorbitant, especially in drugs that have been on the marketfor a long time. I think pharmaceutical company should be able to double atriple those prices, but they shouldn't be able to multiply that by a factorof a thousand. In order to help the new price. The last thingwas 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 humanservices to certify imports from Canada as being safe and effective. For a longtime pharmaceutical industry said that importing drugs may not be safe. Well, ifthe drugs are made by the pharmaceutical companies in United States and ex supported ormade in a foreign country under their cloudy control systems, it should be safeto 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 Statesmuch before we can get to national negotiation for drug pricing. It took seventeenyears they get Canada for imagine the curdles we have to go through we wantedto win court drugs from the UK or France or Belgium or Sweden. Allof them have plants operated by American pharmaceutical companies. To me it just seemsincredible. And it took seventeen years just...

...to get Canada. Are Neighbor tothe north proved port importation of certain drugs, so long as they're safe and effectiveand 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 interms of insights into the complexity and some of the hurdles that we facein 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 ourwebsite, wwwe filling American healthcare dot org and take a brief survey. We'vealready received responses from the number of folks. We're interesting your thoughts if you haven'tdepleted in yet, and in future podcasts will share feedback with our listenerson 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 sealthcare, 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 forcontroling the drug course, now so if there are issues of particular interestthe 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 totwo, two, eight, to eight to get started, and we'll lookforward to see you again. Continue to wash your hands, watch your distanceand wear a mask. Thanks.

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