As its name suggests, Patients For Affordable Drugs is focused on just one subject – the high cost of prescription medicines in the US – which has become an inescapable controversy for the nation with the highest drugs prices in the world.
In his State of the Union address in January 2018 President Donald Trump presented his own strong views on drug prices:
There’s no doubt that the cost of health insurance and, in particular, the out-of-pocket costs Americans must pay for prescription medicines, is one of the biggest issues in the US today. That’s because prescription drug spending per capita is far higher in the US than any other comparable country.
The result is that, by 2015, US spending on pharmaceuticals exceeded $1,000 per person and was between 30% and 190% higher than nine European countries in the Commonwealth Fund Study. Deutsche Bank estimates that between 2013 and 2015 the cost of drugs was rising by more than 20% a year. These rises have now moderated, but prices still went up 7.2% last year, far above the rate of inflation.
Against this background, David Mitchell set up Patients for Affordable Drugs, the first, and only, not-for-profit US patient organisation to focus solely on the issue of medicines prices. And, while the US drugs system is a complex and secretive one, including pharmacy benefit managers (PBMs) and health insurance, as well as pharma companies, it’s the latter that are seen as the villains of the piece by the American public.
So, while Donald Trump may only have a rudimentary understanding of how US healthcare works, he has tapped in to a very real public anger about drug prices.
Mitchell expands on this strength of feeling: “Oh, they’re furious at drug companies, furious, you know. 82% of Americans think drug company prices should be set by government, and that’s majorities of Democrats, Independents and Republicans. I don’t think that everyone understands the role of PBMs. They don’t understand that PBMs run the drug insurance programmes, they don’t know what a PBM is, but they’re angry about their drug insurance programmes. I see the anger growing at a system that people perceive as rigged against them, and in fact it is rigged against them. The system has been built over 40 years to benefit the people who make money off of it, and the folks who pay are patients, consumers and taxpayers, so the anger isn’t abating.”
David Mitchell has a very personal insight into drug prices. Diagnosed with multiple myeloma in 2010, he was prescribed Celgene’s Revlimid for his condition. While grateful that the drug helped to keep his condition at bay, he grew outraged by the annual price rises imposed and the growing burden on patients who don’t have adequate insurance coverage. In the six years he took Revlimid he saw his co-payment rise from $42 for a 4-week supply of the drug to $250. Last year he even launched a legal action against Celgene, alleging that the company had gamed the system to block generic competition.
Mitchell says Celgene has been abusing the Risk Evaluation and Mitigation Strategy, or REMS, an FDA safeguard originally intended to prevent harm to patients. But now Celgene, and other companies, are accused of using it to prevent generic copies from being launched. Mitchell says Celgene has used patients like a piggy bank and has vowed to change the law to prevent these and other abuses.
67-year old Mitchell is also well placed to understand how Washington works, including pharma industry lobbying and influence. He spent more than 30 years working in Washington DC as a public policy and communications executive and lobbied for causes such as increased seatbelt use in cars and persuading teenagers not to smoke.
After he retired in 2016, he decided to use his knowledge of Capitol Hill to take on drug industry prices. He says there is a clear need for a patient-led group to confront the industry and politicians on the issue of drug prices – something that the many patient advocacy groups in the US have failed to do.
“There wasn’t an independent patient voice on drug pricing as all of the major patient organisations take money from the drug companies. They put that money to good use – they use it for patient education, patient support. That’s very important. We don’t want them to lose that funding, so we said if they can’t, or won’t, maybe we can, and so we stepped in where there was a void. There wasn’t someone doing what we’re doing, and yet there was tremendous energy and anger and fear from patients, and we thought we could tap into that.
Mitchell believes the system is broken and it is hurting patients. He describes the patients’ experiences he hears about every day:
“There are 6,500 stories posted on our website. These are people who tell us about skipping doses, cutting pills in half, going without food to be able to buy their drugs. One patient has multiple myeloma and multiple sclerosis and they don’t take their multiple sclerosis drugs because if they did they couldn’t afford their multiple myeloma drug. People who have diabetes who are trying to manage their blood sugar with diet and exercise are waiting until their blood sugar spikes before they take their insulin, which is very dangerous.
“It is the drug company executives who charge whatever the market will bear, and then the PBMs who take a cut on the way down, and others in the system who are profiting on the backs of patients. It needs to change and we’re going to keep fighting to change it. And if we can’t get it done at the federal level then we’re going to do it at the State level, where there is much more of an appetite.
Another important reason for setting up the organisation was because of the patient groups that are owned and operated by pharma, he states. “One is called Patients Rising – completely a creature of the drug companies – another is called Aimed Alliance. There’s a group called PIPC [Partnership to Improve Patient Care] run by a former congressman named Tony Coelho.
Mitchell believes there is momentum growing in Congress for legislative change. The most significant draft Bill is the CREATES Act, which would remove many of the existing obstacles to faster generics, including those alleged REMS abuses. He explains that Patients For Affordable Drugs was invited to two hearings in Congress, one in the Senate Help Committee, one in an Energy and Commerce Sub Committee, to present the patient’s voice.
“We are helping to fill a gap – to provide an authentic patient voice. We may not have everything right, in terms of the policies we work on, but we’re doing our best,” Mitchell states.
He thinks the reason that the CREATES Act has bipartisan support is because it is about a very conservative, fundamental free market notion: competition.
“From a very conservative, free market point of view, there is strong Republican support for allowing the Hatch-Waxman framework to work and for competition through generics to work as intended after the period of exclusivity.”
And what is the pharmaceutical industry’s response?
“The bad actor drug companies are fighting this tooth and nail. They’re sending their CEOs, they have personal visits with people, they’re making phone calls, they’re using all of their political muscle and money to stop it.
“The FDA reports receiving 150 letters from generic manufacturers who have sought REMS products and been unable to receive them over the past couple of years.”
And Mitchell can’t see any company that’s breaking away from the old pricing model. He cites how many drug companies made big drug price increases in the range of 9-9.5% at the start of the year and says they are raising the prices ‘as much as they think they can get away with’.
“I see no bright spots in the drug company firmament in terms of changing their pricing practice.”
Nor does he see hope in the recent breakthroughs in cell and gene therapy that are introducing pay-for-performance and outcomes-based measures.
“Outcomes pricing does not lower the price,” he explains. “When Novartis priced Kymriah, the first CAR-T drug that was approved at $475,000, they said they were not going to charge the people who didn’t respond in the first 30 days. Based on the clinical trials we know that’s about 16% of people, so all Novartis did was make sure it set the price to take that into account, so outcomes pricing doesn’t work to lower prices for patients.”
However, the value pricing that is practised by the Institute for Clinical and Economic Review (ICER) that looks at the value of a drug to patients, is the kind of analysis that he acknowledges is useful as one input that can go into negotiating a price.
ICER is a new, independent US organisation which undertakes health technology assessments of new drugs. Whilst this is nothing new in Europe, such cost-effectiveness reviews in the US are a novelty. Its judgements concluding that drugs are overpriced have been unpopular with pharma companies, but these assessments are increasingly influencing reimbursement decisions in the US.
“I’d much rather start with an ICER value analysis than just the monopoly pricing power of a drug company to dictate price as a place to start negotiations. But we also need to take into account what it actually cost the company to develop the drug and what kind of profit they are going to realise on it.
Mitchell’s point is that a value framework from ICER measures cost effectiveness but doesn’t actually measure what is truly affordable for the US healthcare system or US taxpayers. He wants to see pharma companies get a fair return on their R&D, no more, and no less.
“If we only use a value framework from ICER then we will not take into account the other societal questions – and there are ethical questions and economic questions about what is a fair return for a company.
“Another example of this is Sovaldi and Hep C drugs. In this country we don’t ration using a government entity to figure out what we can and can’t afford – we just do it by price. And so, there are tens of thousands, maybe hundreds of thousands, of patients in the United States who can’t get access to the Hep C drugs because they’re too expensive. We could cure Hep C.”
PBM Express Scripts took some credit for taking on Gilead to lower the price of Sovaldi, but Mitchell says it’s not their place and Medicare should be able to negotiate directly with the drug companies.
“We don’t think we need PBMs to do that. Every other country in the world has governments negotiating directly with drug companies over price and we pay two to three times more than they do. If PBMs were so effective in negotiating price, why are we paying so much more?
It’s fair to say that the President is blowing hot and cold on drug pricing and has frequently failed to follow up on his memorable sound bites. Adding to these mixed signals is the controversial appointment of Alex Azar as the new Health and Human Services Secretary at the end of January. He is a former senior executive at pharma company Eli Lilly and many commentators are concerned that this is too big a conflict of interest.
Speaking at the confirmation hearing, Azar stated, “I don’t know that there is any drug price of a branded product that has ever gone down from any company on any drug in the United States, because every incentive in this system is toward higher prices.”
So, while Azar understands the problem, Mitchell is sceptical about what he may achieve. In contrast, he says Scott Gottlieb is a ‘bright spot’ in the administration, noting the steps he is taking to speed generics to market, to get rid of the backlog, and to identify and target off-patent brands that need competition.
Even without the consistent support of President Trump, the sustained debate behind drug prices is having an impact. The biggest health insurer, United Healthcare, announced in early March that it would start to pass on the rebate it gets from pharma to some patients by 2019, a move which could be the beginning of a major shift in the market. Across the country, numerous States are taking matters into their own hands and proposing new laws on drug pricing or reviving the longstanding idea of importing cheaper medicines from across the border in Canada.
The mid-term elections in November could see the Democrats seize control of Congress and push to pass laws which Republicans can’t or won’t. All of that means that pharma will need to review business models and look for ways to sustain profits without high annual increases and ever-higher launch prices. Certainly, the leading companies are beginning to respond to this environment, but reliance on US growth will be a hard habit to break.
While the US is unlikely to undergo a radical shift in policy, the wind is only blowing in one direction. And Mitchell is determined that his organisation, and the patients it represents across the country, will play an active role in bringing about change.
David Mitchell is President and Founder of Patients For Affordable Drugs.
He was diagnosed with multiple myeloma in 2010, and treatment helped him until he relapsed in 2014. It was his own experience of the high cost of his treatment which led him to set up Patients For Affordable Drugs.
He is a strong supporter of innovation and new drugs to extend his life, and the lives of other patients, but says drugs don’t work if people can’t afford them.
He has 40 years of experience working on health care and public health policy as a communications specialist, and retired in 2016 to focus his full energy and attention on helping to bring about policy change to lower drug costs.
Andrew McConaghie is pharmaphorum’s managing editor. He writes on a range of topics covering pharmaceutical and biotech R&D, marketing and market access, and issues affecting patients and global healthcare systems, especially the UK’s NHS.
Contact him on Andrew.McConaghie@pharmphorum.com