Blog Home

Archive for the 'Pharma' Category




Narrative Matters: A Chronic Pain Sufferer Navigates The Maze Of Opioid Use


July 17th, 2014

In the July Health Affairs Narrative Matters essay, a woman living with chronic pain tries to manage her condition while maneuvering through the maze of opioid medications. Janice Lynch Schuster’s article is freely available to all readers, or you can listen to the podcast.

Read the rest of this entry »

Positive Results For 2012 Physician Quality Reporting System And eRx Program


July 17th, 2014

In April, the Centers for Medicare & Medicaid Services (CMS) released the 2012 Physician Quality Reporting System and Electronic Prescribing (eRx) Experience Report, showing a significant increase in participation in two programs that allow eligible professionals to earn incentive payments through voluntary participation.

Record Participation in 2012

With over 430,000 professionals participating in the Physician Quality Reporting System (PQRS) and more than 340,000 e-prescribing, the 2012 report marks encouraging progress in efforts to improve quality measurement and reporting through the PQRS and eRx programs. Thanks to increased participation, more clinicians are actively measuring and reporting on quality and focusing on improvement.

CMS is beginning to add this information to Physician Compare, a website that can be viewed by patients. Measuring, transparently sharing, and improving quality performance provide the keys to a better health system.

At CMS, we are pleased by the success of these programs and other CMS quality measurement programs. We are also encouraged by the potential of these initiatives to empower patients and providers with information that can support care coordination and improved delivery of care.

Read the rest of this entry »

The Era Of Big Data And Its Implications For Big Pharma


July 10th, 2014

Editor’s note: For more on the topic of big data, check out the July issue of Health Affairs In addition to Marc Berger, Kirsten Axelsen and Prasun Subedi also coauthored this post. 

Health care research is on the cusp of an era of “Big Data” — one that promises to transform the way in which we understand and practice medicine.

The Big Data paradigm has developed from two different points of origin. First, significant efforts to digitize and synthesize existing data sources (e.g., electronic health records) have been driven by policy and practice economics. Second, a wide range of novel ways to capture both clinical and biological data points (e.g., wearable health devices, genomics) have emerged.

The era of Big Data holds great possibility to improve our ability to predict which health care interventions are most effective, for which patients, and at what cost.

Read the rest of this entry »

New Drug And Device Approval: What Is Sufficient Evidence?


July 1st, 2014

Editor’s note: In addition to Jonathan Darrow, this post is also coauthored by Aaron Kesselheim. 

The federal Food, Drug, and Cosmetic Act gives the Food and Drug Administration (FDA) the authority to evaluate all prescription drugs and high-risk medical devices before they can be marketed to physicians and patients to ensure that they are safe and effective.

However, there is growing pressure to lessen the traditional standards for defining “safe and effective” for particularly promising therapies and accelerate patient access to these products.

A recent national health policy conference in Washington, D.C., explored the nature of the evidence needed for the regulatory approval of new therapeutics and the implications for patient care. The conference was organized by the Program On Regulation, Therapeutics, And Law (PORTAL) at Brigham and Women’s Hospital/Harvard Medical School, the National Center for Health Research, and the American Academy for the Advancement of Science (AAAS).

Read the rest of this entry »

Correcting The Blind Spot In Accountability: The Role Of Pharmacy Care


June 25th, 2014

Editor’s note: In addition to William Shrank, this post is also coauthored by Andrew Sussman, Patrick Gilligan, and Troyen Brennan.

The Centers for Medicare and Medicaid Services (CMS) recently issued a Request for Information (RFI) to solicit suggestions about how to improve the Accountable Care Organization (ACO) programs. CMS stated that they seek recommendations about how the ACO program might evolve to “encourage greater care integration and financial accountability.”

The RFI explicitly stated that they seek information about how to better integrate Part D expenditures into ACO cost calculations to make pharmaceuticals part of the approach to care delivery and health care transformation.

The deadline for comments about encouraging Part D integration in ACOs has now passed. But the issue extends beyond ACOs. In addition, bundled payments and patient-centered medical home programs target hospitals and primary care providers to promote higher quality and lower cost care. All these programs have largely excluded prescription drug costs in their calculus, and offer no direct incentives for Part D plans to participate in and improve care.

Nonetheless, retail pharmacies and Part D plans have developed a number of strategies to participate. As CMS and policymakers reconsider ACO regulations to stimulate greater integration of prescription drug use in delivery system reform, we thought it important to offer a description of the marketplace response to payment reform activities at large.

Read the rest of this entry »

Behind The Numbers: Slight Rise In Health Care Spending Growth Projected


June 24th, 2014

PwC’s Health Research Institute (HRI) released its ninth annual Medical Cost Trend: Behind the Numbers report today. This forward-looking report is based on interviews with industry executives, health policy experts, and health plan actuaries whose companies cover a combined 93 million members. Findings from PwC’s Health and Well-being Touchstone Survey of 1,200 employers from 35 industries are also included.

HRI projects that after a five-year contraction in spending growth in the employer-sponsored market, the growth rate will rise to 6.8 percent in 2015, up from the 6.5 percent projected last year.

What are the biggest drivers of the growth in health care costs? We identify four cost inflators in this report, and I would like to highlight two. First, the economy. More than five years after the end of the Great Recession, the improved economy is finally translating into greater medical spending. Consumers are now addressing health issues they ignored or postponed previously.

Secondly, the high cost of specialty drugs. While only four percent of patients use specialty drugs, those medications account for 25 percent of total U.S. drug spending. And estimates are that U.S. specialty drug spending will quadruple by 2020

Read the rest of this entry »

The Role Of Sales Representatives In Driving Physicians’ Off-Label Prescription Habits


June 19th, 2014

Off-label prescribing is widespread in Canada and the United States (U.S.). One in nine prescriptions for Canadian adults are for off-label uses with the highest percentages coming from anticonvulsants (66.6 percent), antipsychotics (43.8 percent), and antidepressants (33.4 percent). Overall, 79 percent of the off-label prescriptions lacked strong scientific evidence for their use.

For 160 drugs commonly prescribed to U.S. adults and children, 21 percent were for off-label indications totaling 150 million prescriptions. In this case, 73 percent had little to no scientific backing and once again psychoactive drugs such as gabapentin had the highest level of off-label use.

Moreover, doctors do not seem to know what are and are not approved FDA use for many of the drugs that they prescribe. Now an article published in the June issue of Health Affairs by Ian Larkin and colleagues points to active promotion by sales representatives as one reason for the widespread off-label use of antipsychotics and antidepressants in children.

Read the rest of this entry »

The End Of The Blockbuster? Implications For Pricing Of New Drugs


June 16th, 2014

Editor’s note: In addition to Elias Dayoub, Anupam Jena and Darius Lakdawalla also coauthored this post. 

The productivity slowdown in drug innovation has been identified and widely discussed in recent years. In addition, the stagnation in the number of novel drugs (new molecular entities and new biologics) approved by the U.S. Food and Drug Administration (FDA) has also been well-documented.  Less well-appreciated, however, is the decline in the “applicability” of new drug approvals.  Each new drug treats fewer disease indications than drugs approved in earlier years.

Measuring the applicability of new drugs serves a dual purpose in helping better understand drug innovation. For one, assessing the number of indications for new drugs adds more nuance to assessments of growth or slowdown in the development pipeline. The relevant question is not necessarily how many new drugs are launched, but how many patients and diseases can be newly treated.  By accounting for the number of indications a new drug treats, one can better assess the number of patients the new therapy may benefit as well as the potential impact the drug approval will have on pharmaceutical spending.

The second important reason to measure pharmaceutical applicability is that it sheds light on how the costs of drug development translate into drug prices. If a drug has broad applicability to a larger number of indications, a drug developer can reasonably anticipate a greater number of patients will take the new medication. Conversely, if the drug treats only one indication, a developer expects fewer patients will use their drug.

Read the rest of this entry »

Roll-Out Of New TB Drug Must Be Handled With Care


June 13th, 2014

Janssen Pharmaceuticals, a subsidiary of Johnson and Johnson, has announced that it will make its breakthrough new tuberculosis (TB) drug, Sirturo, available at a discount in 130 developing countries. As the first new antibiotic to be approved to treat TB in over 40 years, Sirturo will be an important new weapon in the aging arsenal of medicines used to treat this deadly disease.

Sirturo’s approval was a breakthrough for global health and TB treatment. In 2012, the airborne disease killed about 1.3 million people, making it second only to HIV/AIDS in the ranks of infectious killers. While the number of people dying from TB each year is slowly falling, drug-resistant strains are proliferating. According to the World Health Organization, ninety two countries have reported cases of extensively drug resistant TB since it was first reported in 2006.

Tuberculosis Treatment Programs

Now that Sirturo is ready for prime time – and poised for international distribution – it’s critical that the roll-out is meticulously managed by health care systems in each and every country that plans to administer it. TB drug resistance usually arises from poorly managed tuberculosis treatment programs. Treatment is long – about six months for basic treatment, and up to two years for drug-resistant strains – and only adds to the challenge of successful treatment completion. With improper or inadequate treatment, virulent new forms can evolve.

Read the rest of this entry »

Wynne, Jost Posts Lead Health Affairs Blog Most-Read List For May


June 10th, 2014

Billy Wynne’s post on the 340B Rx Drug Discount program was the most-read Health Affairs Blog post in May. The top-15 list also featured several contributions from Tim Jost; his posts on the final 2015 Exchange and Insurance Market Standards rule (part 1 and part 2) and COBRA/ACA interaction made the top five. Also in the top five was James Rickert’s look at patient satisfaction and perceptions of care.

Read the rest of this entry »

When ICD-10 Implementation Becomes A Game


June 9th, 2014

Editor’s note: For more on this topic, stay tuned for the upcoming Health Policy Brief update on transitioning to ICD-10. 

The on again, off again plans for ICD-10 code set implementation leaves many organizations at a crossroads. In a previous blog post, we discussed the details of ICD-10 and assessed the industry’s readiness for implementation.  This assessment assumed the improbability of a further delay.  In February, CMS Administrator Marilyn Tavenner had seemingly given the green light, declaring, “There are no more delays and the system will go live on October 1.”

However, at the end of March 2014 Congress passed another temporary delay of Medicare physician reimbursement rate cuts that also included language unexpected to many — including CMS — that ICD-10 would be delayed until October of 2015.  Given this latest development, ICD-10 implementation has begun to feel like a high stakes game of the childhood pastime, “Red Light, Green Light,”  in which players must run forward at full speed, until the words ‘red light’ are called out with no warning, forcing them to stop on a dime.  In this case, countless organizations and institutions may be feeling a little disoriented by the latest change.

Some entities are grateful. Congress’s “red light” gives them extra time to prepare.  A February 2014 survey of over 570 physician group practices conducted by the Medical Group Management Association revealed that a large number of providers aren’t ready for the transition to ICD-10.  The survey showed that:

Read the rest of this entry »

The Cost Of A Cure: Medicare’s Role In Treating Hepatitis C


June 5th, 2014

Editor’s note: In addition to Tricia Neuman, Jack Hoadley and Juliette Cubanski also coauthored this post.

For a patient with hepatitis C, a potentially deadly disease, the prospect of finding a cure with minimal side effects is a really big deal. Also a big deal is the cost of Sovaldi (sofosbuvir), an oral drug approved by the Food and Drug Administration in December 2013 for the treatment of chronic hepatitis C. Sovaldi has been priced by its manufacturer, Gilead, at $1,000 per pill, or an estimated $84,000 for its entire 12-week regimen. It joins the treatment arsenal with several older drugs generally thought either to be less effective or to have more side effects, and another newly approved drug to be taken in combination with other drugs. More drugs are expected to gain approval within the year.

Sovaldi’s price tag has drawn attention in part because an estimated 3 million Americans have the hepatitis C virus and could be considered candidates for new drugs. Patients will clearly benefit from a long-awaited cure, and public and private payers could potentially see a reduction in health care spending over the long term if Sovaldi successfully cures this disease and fewer patients require high-cost liver transplants. But private insurers and public programs will face significant budgetary pressures if a large number of patients receive this treatment at current prices.

To date, attention has focused on cost implications for private health plans, Medicaid, and the Department of Veterans Affairs (VA). For example, UnitedHealth reported that the cost of Sovaldi was “multiple times” its expectations. State Medicaid officials and Medicaid plans have warned that the cost of the new treatments will pose significant fiscal challenges to state budgets and plan payment rates, even though Medicaid receives a 23.1 percent rebate (discount) for all brand drug purchases. The VA has decided to cover the drug and secured from Gilead a discount of 44 percent, one that applies to certain other federal purchasers, but is targeting treatment to the sickest patients while waiting for less expensive drugs to become available.

Less attention has been paid to the cost implications for Medicare, where coverage of Sovaldi will fall under Part D, the program’s outpatient prescription drug benefit administered by private plans. Given the drug’s effectiveness, most if not all of Part D plans will likely cover Sovaldi. The anticipated impact on costs to Medicare will be revealed to CMS later this month, when plans submit premium bids for 2015. Plans will increase their bids to cover the expected costs of new treatments, which will raise costs for both the federal government and Part D enrollees who pay premiums. CMS will release the average Part D premium for 2015 in August.

Read the rest of this entry »

Health Affairs June Issue: Where Can We Find Savings In Health Care?


June 2nd, 2014

The June issue of Health Affairs, released today, features various approaches to cost-savings in the U.S. health care system. A variety of articles analyze the effects of potential policy solutions on the Medicare and Medicaid programs and their impact on the health of beneficiaries and tax payer wallets.

Federal approaches to reduce obesity and Type 2 diabetes rates by improving nutrition could work—but the how matters. Sanjay Basu of the Stanford University School of Medicine and coauthors modeled the effects of two policy approaches to reforming the Supplemental Nutrition Assistance Program (SNAP), which serves one in seven Americans. They found that ending a subsidy for sugar-sweetened beverage purchases with SNAP dollars would result in a decrease in obesity of 281,000 adults and 141,000 children, through a 15.4 percent reduction in calories by the lowering of purchases of this source. They also found that a $0.30 credit back on every dollar spent on qualifying fruits and vegetables could more than double the number of SNAP participants who meet federal guidelines for fruit and vegetable consumption.

With more than forty-six million people receiving SNAP food stamp benefits, the authors suggest that policy makers closely examine the implications of such proposals at the population level to determine which will benefit people’s health the most and prove most cost-effective.

If you’re between ages 15–39 when you are diagnosed with cancer, the implications later in life extend well beyond your health. Gery P. Guy Jr. of the Centers for Disease Control and Prevention and coauthors examined Medical Expenditure Panel Survey data and determined that survivors of adolescent and young adult cancers had annual per person medical expenditures of $7,417, compared to $4,247 for adults without a cancer history. They also found an annual per capita lost productivity of $4,564 per cancer survivor — because of employment disability, missed workdays, and an increased number of additional days spent in bed as a result of poor health — compared to $2,314 for adults without a cancer history.

The authors suggest that the disparities are associated with ongoing medical care needs and employment challenges connected to cancer survivorship, and that having health insurance alone is not enough to close the gap. They stress the importance of access to lifelong follow-up care and education to help lessen the economic burden of this important population of cancer survivors.

Read the rest of this entry »

Implementing Health Reform: Final 2015 Exchange And Insurance Market Standards Rule


May 17th, 2014

On May 16, 2014, the Centers for Medicare and Medicaid Services released a final rule on Exchange and Insurance Market Standards for 2015 and beyond. The rule was accompanied by a fact sheet and a set of Frequently Asked Questions.

This is a lengthy rule, running to over 400 pages including the preface. This is remarkable, given that the notice of proposed rulemaking on which it is based was published less than two months ago, in mid-March. I blogged about it here. The rapid turnaround on this rule indicates the urgency CMS has felt to lay down the rules that insurers must play by for 2015, as they are even now deciding whether or not to offer coverage through the exchanges and establishing their rates for 2015.

The rule not only establishes exchange and insurance market rules for 2015, however; it also addresses a range of issues that had been left unresolved by earlier rulemaking. Some of these are very technical, but others are quite important.

This post will address five of the most important and controversial issues addressed by the final rule: the regulation of navigators; changes in the premium stabilization programs; the regulation of fixed-indemnity plans; provisions for state regulators to veto employee choice in the SHOP exchange for 2015; and procedures for enrollees to obtain an exception to formulary restrictions in exigent situations.A subsequent post will analyze the remaining issues addressed by the rule. The second post will also discuss the FAQ and guidance released by the IRS on May 16.

Read the rest of this entry »

New Health Policy Brief: Breakthrough Therapy Designation


May 16th, 2014

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation describes a new expedited drug development pathway designed to speed up the Food and Drug Administration’s (FDA’s) premarketing approval process for drugs and devices that treat serious or life-threatening conditions.

Created under a 2012 law, the Food and Drug Administration Safety and Innovation Act (FDASIA), a drug may be designated a “breakthrough therapy” if it shows far more promise over comparable treatments already on the market. At that point, the FDA will initiate a special rapid approval process.

The pharmaceutical industry has responded positively to this law, and as of last month the FDA has received 178 requests for this designation. The law, whose full impact will not be known for several years, carries significant implications for approaches to clinical development, patient access to new drugs, and the drug regulations process itself.

Topics covered in this brief include:

Read the rest of this entry »

The Coming Storm Over The 340B Rx Drug Discount Program


May 6th, 2014

Beneath the glare of the wind-down of the ACA open enrollment period and wind-up of the 2015 Medicare regulation cycle, another Administration document is sitting at a few top officials’ desks for final review. It’s targeted for release in June but could come any day.

That proposed regulation relates to a program you may not be familiar with, that is if you don’t work with a pharmaceutical manufacturer or safety net provider. It’s called 340B (for the section in which it resides in the Public Health Service Act) and it requires manufacturers to provide steep discounts to such providers for qualifying patients. But the nature of those discounts and — especially — that pivotal identification of qualifying patients is very likely to change soon.

So here we provide a brief overview of the program as it stands now, some of the key developments in recent years, and the top issues likely to be addressed in this forthcoming rule.

Read the rest of this entry »

Recent Health Policy Briefs: Regulating Compounding Pharmacies and Basic Health Program Update


May 1st, 2014

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation examines the Compounding Quality Act, a law signed by President Obama in November 2013, which seeks to fill the gaps in the Food and Drug Administration’s (FDA’s) inspection and enforcement oversight of compounding pharmacies.

This law was enacted in the wake of a 2012 fungal meningitis outbreak, linked to a Massachusetts drug compounding company. The outbreak caused more than 700 people to become ill and left sixty-four dead. Before the new law was passed, compounding pharmacies were primarily regulated by states, not the FDA.

The compounding pharmacy industry initially catered to patients with specialized needs. Since the 1990s, many compounding pharmacies have also begun engaging in what is now called nontraditional compounding: manufacturing certain drugs in large quantities for sale to doctors’ offices and hospitals. This health policy brief traces the evolution of compounding pharmacies and the changes brought to this industry by the new law.

Also posted today: an update to an earlier brief that provides more information on the issues surrounding the Basic Health Program and outlines options for states.

Read the rest of this entry »

Implementing Health Reform: The Latest Affordable Care Act Coverage Numbers (Updated)


April 18th, 2014

On February 17, 2014, the White House announced that 8 million Americans have signed up for private health insurance coverage through the health insurance marketplaces, or exchanges. This significantly exceeds the White House’s original goal of 7 million enrollees. It is far more than the Congressional Budget Office’s recent projections of 6 million.

The number of actual enrollees will be smaller than this number. The CBO’s projections are for the average number of those actually enrolled in coverage over the course of a calendar year. To calculate the average number of enrollees, one must subtract from the 8 million the number of individuals who fail to pay their premiums and thus are never actually enrolled in coverage, as well as those who will drop coverage at some later point during the year. To that reduced number, then, must be added back the number who become newly covered through special enrollment periods during the remainder of the year. In the end, 6 to 7 million average enrollees is probably a reasonable estimate.

This does not, however, exhaust the number of Americans who are now covered under the Affordable Care Act. The fact sheet states that 3 million young adults are covered under their parents’ plans because of the ACA. This number is probably high, but it is clear that the ACA has dramatically increased coverage of Americans between the age of 19 and 25 — the age group most likely to lack health insurance prior to the ACA (and still).

Read the rest of this entry »

Accelerating Medicines Partnership: A New Public-Private Collaboration For Drug Discovery


April 8th, 2014

Editor’s note: This post is also coauthored by Yongtian Tan and is published in conjunction with the April issue of Health Affairs, which explores the many subjects raised by Alzheimer’s disease including a new public-private research collaboration designed to produce improved treatments.

Earlier this year, the National Institutes of Health joined forces with ten major pharmaceutical companies and several nonprofit disease interest groups to create the Accelerating Medicines Partnership (AMP). With an integrated governance structure consisting of representatives from all partners, the AMP venture aims to combine public-private expertise and pooled resources to reduce the time and cost of  developing biomarkers for therapeutic targets.

The initial capitalization is reported to be $230 million.  The AMP is the first national cross-sector partnership of its size and scale, and is the latest initiative in the drug development market to embrace open data exchange, encouraging collaboration over competition as pathways for promoting innovation.

The AMP management chose to focus on four diseases—Alzheimer’s disease, type 2 diabetes mellitus, rheumatoid arthritis, and systemic lupus erythematosus—in which there was solid knowledge about the underlying pathophysiology, a sufficient level of potential therapeutic targets open to pursuit, and a lack of substantial individual manufacturer commitment.  The latter criterion explains why more prevalent diseases such as cancer did not make the list.

Read the rest of this entry »

Clinical Nuance: Benefit Design Meets Behavioral Economics


April 3rd, 2014

On Capitol Hill, there’s a growing chorus of support from both sides of the aisle to move the focus of health care payment incentives from volume to value. Earlier this month, legislators introduced proposals that would have fixed the sustainable growth rate in Medicare, as well as made other changes, including allowing for clinical nuance in Medicare benefit designs. The Centers for Medicare and Medicaid Services, too, is embracing this trend, recently asking for partners in a demonstration project to used value-based arrangements in benefit design. These efforts of policymakers and agencies to innovate Medicare’s benefit design are crucial both for the health of seniors and to ensure value in the Medicare program.

The concept of clinical nuance, implemented using value-based insurance design (V-BID), is a key innovation already widely implemented in the private and public payers. It recognizes two important facts about the provision of medical care: 1) medical services differ in the amount of health produced, and 2) the clinical benefit derived from a medical service depends on who is using it, who is delivering the service, and where it is being delivered.

Today’s Medicare beneficiaries face little clinical nuance in their benefit structure. Medicare largely uses a “one-size-fits-all” structure that does not recognize that some treatments, drugs or tests are more important to health than others. Not only does it create inefficiencies in the health system, it can actually harm the health of beneficiaries.

Read the rest of this entry »

Click here to email us a new post.