KHN Morning Briefing

Summaries of health policy coverage from major news organizations

full issue

When Exciting Breakthrough Treatments Come With Astronomical Price Tags

News outlets report on stories related to pharmaceutical pricing.

The New York Times: New Gene-Therapy Treatments Will Carry Whopping Price Tags
The first gene therapy treatment in the United States was approved recently by the Food and Drug Administration, heralding a new era in medicine that is coming faster than most realize — and that perhaps few can afford. The treatment, Kymriah, made by Novartis, is spectacularly effective against a rare form of leukemia, bringing remissions when all conventional options have failed. It will cost $475,000. (Kolata, 9/11)

NPR: R&D For Cancer Drugs May Cost A Fraction Of What Industry Claims
The analysis, published in the current issue of JAMA Internal Medicine, concludes that it costs, on average, $650 million to develop a new cancer drug. The authors add in another $100 million or so to account for income those companies could have had if that money had been invested in the stock market instead of in new products. That total is far lower than the $2.7 billion figure that the drug industry frequently points to when it justifies the soaring cost of medicine. (It's far higher than $320 million — an inflation-adjusted figure from a 2001 study by the consumer group Public Citizen). (Harris, 9/11)

Stat: Why Is The FDA Chief So Worried About Pharma Profits?
Developing new drugs is a costly business. So, too, is paying for the ever more expensive therapies that come to market each year. Statutorily, neither of those things is the Food and Drug Administration’s problem. But the agency’s new commissioner argues forcefully that the FDA can bring down drug prices for patients — by making life a little easier for Big Pharma. (Garde, 9/11)

Stat: FDA's Gottlieb Plans To Close An Orphan Drug Loophole
Amid rising complaints that drug makers are exploiting loopholes to win approval of so-called orphan drugs, the Food and Drug Administration plans to close at least one of them. In a blog post, FDA Commissioner Scott Gottlieb acknowledged concerns that the Orphan Drug Act, which allows the agency to approve medicines for treating rare diseases affecting fewer than 200,000 people, needs fixing. As he put it, some drug makers are using orphan designations “as a way to sidestep other important public health goals set out by Congress.” (Silverman, 9/12)

The Wall Street Journal: Drug Companies Tie Costs To Outcomes
For decades, health insurers and patients have paid for prescription drugs based on the volume of pills or vials purchased—whether or not the medicines helped individual patients as intended. Now the outcry over high drug prices has raised the profile of a different approach to paying for prescription drugs. Pharmaceutical companies increasingly are offering to tie a portion of their reimbursements from insurers to how well drugs work in patients. (Loftus, 9/12)

Modern Healthcare: Providers Reduce Waste To Work Around Ballooning Drug Prices
Cleveland Clinic is one of the most prolific users of the heart drugs nitroprusside and isoproterenol, so when their respective prices surged 30-fold and 70-fold over a three-year span, it caught the provider's attention. Doctors have long relied on the widely used drugs during life-threatening situations. They use nitroprusside to lower blood pressure and treat critical hypertension and congestive heart failure, as well as to keep blood pressure low during surgery. Isoproterenol is used primarily for treating low heart rate and heart block and is used to increase a patient's heart rate while doctors operate. Valeant Pharmaceuticals acquired the rights to the off-patent drugs in 2015 and drastically increased the prices. (Kacik, 9/11)

Stat: Pharma's Five Favorite Tricks To Protect A Monopoly
If you invent a wonder pill, you get a patent and thus a monopoly. The catch is that the patent must one day expire, opening the door to cheap generics and forcing inventors back to the well to start the cycle all over again. But it can be quite hard to say goodbye to a monopoly and the riches it brings. And so drug companies tend to get creative in the waning days of patent exclusivity, stretching the law to translucent lengths in the name of protecting profits. That became quite evident (again) last week, when Allergan surprised the pharma world by announcing it had sold patent rights on a lucrative eye drug to a Native American tribe to avoid facing certain legal challenges by generics. (Garde, 9/11)

The New York Times: How To Protect A Drug Patent? Sell It To A Native American Tribe
The drugmaker Allergan announced Friday that it had transferred its patents on a best-selling eye drug to the Saint Regis Mohawk Tribe in upstate New York — an unusual gambit to protect the drug from a patent dispute .Under the deal, which involves the dry-eye drug Restasis, Allergan will pay the tribe $13.75 million. In exchange, the tribe will claim sovereign immunity as grounds to dismiss a patent challenge through a unit of the United States Patent and Trademark Office. The tribe will lease the patents back to Allergan, and will receive $15 million in annual royalties as long as the patents remain valid. (Thomas, 9/8)

The Wall Street Journal: Allergan Partners With Indian Tribe To Protect Drug Patents
Allergan has taken a novel step to protect top-selling drug Restasis from generic competition: The company has sold the drug’s patents to an Indian tribe in upstate New York. The aim is to block rivals from challenging the patents for the dry-eye drug at the U.S. Patent and Trademark Office based on the tribe’s special legal status as a sovereign government, which the tribe says gives it immunity from patent-office review. (Rockoff, 9/8)

Bloomberg: This Shield of Patents Protects the World’s Best-Selling Drug
Humira, a treatment for inflammatory diseases such as rheumatoid arthritis and psoriasis made by AbbVie Inc., is the planet’s best-selling drug. It’s also been around almost 15 years. Those two facts alone would normally have rival drugmakers eagerly circling, ready to roll out generic versions that could win a piece of the aging medicine’s $16 billion in annual sales. Yet last year, when the patent on Humira’s main ingredient expired, not a single competitor launched a copycat version. Figuring out how to manufacture it wasn’t the obstacle. The real challenge was the seemingly impregnable fortress of patents AbbVie has methodically constructed around its prized moneymaker. (Koons, 9/7)

NPR: First FDA-Approved Drug For Chagas Raises Price Concerns
The Food and Drug Administration recently approved the first U.S. treatment for childhood cases of Chagas disease — a parasite-driven illness that, over time and unless treated early, can cause serious heart problems in about a third of the people it infects. There are perhaps 300,000 cases in the U.S., according to the Centers for Disease Control and Prevention; the illness is much more common in Latin America, where it affects millions. (Columbus, 9/10)

Stat: Amgen's Cholesterol Drug Would Have To Sell For Around $2,000 To Be Cost Effective
An updated analysis of Amgen’s (AMGN) Repatha, which is one of the newest cholesterol drugs, has been released and suggests the price would have to drop a whopping 85 percent to 88 percent off the existing list price of $14,500 in order to be considered cost effective. This works out to between $1,725 and $2,240, which is still substantially less than the $8,970 price after Amgen gives rebates and discounts to payers, according to sales data cited in the new report from the Institute for Clinical and Economic Review, a non-profit that assesses the value of medicines. (Silverman, 9/11)

NPR: One-Third Of People Stop Taking Prescriptions And Don't Tell The Doctor
Almost one-third of people have stopped taking a prescription drug at some time without telling their health care provider, according to the latest NPR-Truven Health Analytics Health Poll. And while cost certainly influences whether and how people take their drugs, only 10 percent of people in this poll cited it as the reason for their behavior. A separate question asked people who filled a prescription recently whether they missed at least one dose. A full quarter said they had. (Hobson, 9/8)

Stat: California Moves Closer To Adopting A Drug Pricing Transparency Law
A California bill that would require drug makers to report and justify price hikes took a big step toward reality on Monday night. The state Assembly overwhelmingly passed the legislation and it now goes to the Senate for approval, which legislative sources say may occur as soon as today. The bill, which has been vociferously fought by the pharmaceutical industry, could become one of the most comprehensive state efforts to address pricing transparency. For instance, drug makers would have to provide 60-day notice to insurers and government health plans before increasing list prices of a medicine that costs more than $40, by 16 percent in a two-year period. (Silverman, 9/12)

San Jose Mercury News: California Assembly Passes Drug Price Transparency Bill
The California State Assembly on Monday overwhelmingly approved Senate Bill 17, controversial legislation that could soon become the nation’s most comprehensive law aimed at shining a light on prescription drug prices. ... It would enable health insurers to negotiate lower prices for drugs or, in many cases, replace those drugs with cheaper alternatives, according to its supporters. (Seipel, 9/11)

Stat: Vertex Shuts Down Study Of Long-Acting Kalydeco But Insists Development Still On Track
Vertex Pharmaceuticals (VRTX) terminated a small clinical trial involving an important, long-acting version of its cystic fibrosis drug Kalydeco that was acquired from Concert Pharmaceuticals (CNCE) earlier this summer. An update to a listing on the government web site ClinicalTrials.gov shows Vertex shut down the study of the drug known as CTP-656 on Sept. 10. No reason other than “decision by sponsor” is given. (Feuerstein, 9/11)

The Wall Street Journal: Alexion To Cut Workforce By 20%, Shift Headquarters To Boston
Alexion Pharmaceuticals Inc. is cutting its workforce by 20%, relocating its headquarters to Boston and closing sites as it works to reduce its overhead and move on from a sales-practices controversy. The rare-disease drugmaker has seen a slew of management changes during the past year, including hiring a new chief executive, after an internal investigation showed senior management pressured staff to persuade customers to order its flagship drug earlier than needed to meet financial targets. (Hufford, Rockoff and de Avila, 9/12)

The Associated Press: Judge To Hear Arguments On Whether To Lock Up Pharma Bro
A judge is set to hear arguments about whether the provocative online antics of former pharmaceuticals company CEO Martin Shkreli are bad enough to put him behind bars. The hearing before U.S. District Judge Kiyo Matsumoto on a government demand to revoke the convicted Shkreli’s bail was scheduled for Wednesday in federal court in Brooklyn. (Hays, 9/13)

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.