Pharmaceutical drug development: high drug prices and the hidden role of public funding.

In 2019, the record for the most expensive drug was broken at US$2.1 million per patient. The high costs of new drugs are justified by the pharmaceutical industry as the expense required for maintaining research and development (R&D) pipelines. However, this does not take into account that globally the public pays for between one to two-thirds of upfront R&D costs through taxpayers or charitable donations. Governments are effectively paying twice for medicines; first through R&D, and then paying the high prices upon approval. High drug prices distort research priorities, emphasising financial gains and not health gains. In this manuscript, issues surrounding the current patent-based drug development model, public funding of research and pharmaceutical lobbying will be addressed. Finally, innovations in drug development to improve public health needs and guaranteeing medication access to patients will be explored.

A comparison between the effects of drug costs and share of family income on drug costs in determining drug price.

ABSTRACT: High health care and medication expenditures pose a financial burden on Americans seeking care. It is imperative to determine the role of affordability in influencing access to health care and medications.To investigate the association between financial burden and health care access by comparing the effects of absolute and relative financial burdens, measured by total health care/medication expenditure (Expenditure) and health care/medication expenditure as a share of annual family income (Expenditure Share), respectively.Delay in receiving health care services and delay in obtaining prescription medications.A cross-sectional analysis of the 2017 Medical Expenditure Panel Survey using multivariate logistic regressions with Expenditure and Expenditure Share variables standardized to facilitate comparison.While both absolute and relative financial burdens were found to be positively associated with the outcomes, the relative measure had a significantly higher association that was about twice as much as the absolute one. For the outcome of delay in getting health care, the standardized odds ratios (OR) for health care expenditure and health care expenditure as a share of family income were 1.13 (95% confidence interval [CI] = 1.09-1.18) and 1.25 (95% CI = 1.20-1.32), respectively. For the outcome of delay in getting medications, the standardized OR for medication expenditure and medication expenditure as a share of family income were 1.11 (95% CI = 1.08-1.15) and 1.23 (95% CI = 1.18-1.29), respectively.The study illustrated the importance of including income in policy considerations intended to balance value, access, and affordability. Specifically, income should be included in measures assessing the value of medications.

Availability of Cost-effectiveness Studies for Drugs With High Medicare Part D Expenditures.

Importance: Prescription drug spending in the US requires policy intervention to control costs and improve the value obtained from pharmaceutical spending. One such intervention is to apply cost-effectiveness evidence to decisions regarding drug coverage and pricing, but this intervention depends on the existence of such evidence to guide decisions. Objective: To characterize the availability and quality of cost-effectiveness studies for prescription drugs with the greatest Medicare Part D spending. Design, Setting, and Participants: In this national cross-sectional analysis, publicly available 2016 Medicare drug spending records were merged with 2016 US Food & Drug Administration Orange Book data and the Tufts Medical Center Cost-Effectiveness Analysis (CEA) Registry. All studies published through 2015 that evaluated the cost-effectiveness of the 250 drugs for which Medicare Part D spending was the greatest in US-based adult patient populations were included. Data were analyzed from September 2018 to June 2020. Main Outcomes and Measures: The presence and quality of published cost-effectiveness analyses for the 250 drugs for which Medicare Part D spending was greatest in 2016 were assessed based on the inclusion of key cost-effectiveness analysis elements and global ratings by independent reviewers for the Tufts CEA Registry. Results: Medicare Part D spending on the 250 drugs in the sample totaled $122.8 billion in 2016 (84.1% of total spending). Of these 250 drugs, 91 (36.4%) had a generic equivalent and 159 (63.6%) retained some patent exclusivity. There were 280 unique cost-effectiveness analyses for these drugs, representing data on 135 (54.0%) of the 250 drugs included and 67.0% of Part D spending on the top 250 drugs. The 115 drugs (46.0%) without cost-effectiveness studies accounted for 33.0% of Part D spending on the top 250 drugs. Of the 280 available studies, 128 (45.7%) were industry sponsored. A large proportion of the studies (250 [89.3%]) did not meet the minimum quality requirements. Conclusions and Relevance: In this cross-sectional study, a substantial proportion of 2016 Medicare Part D spending was for drugs with absent or low-quality cost-effectiveness analyses. The lack of quality analyses may present a challenge in efforts to develop policies addressing drug spending in terms of value.

Evaluating essential medicines for treating childhood cancers: availability, price and affordability study in Ghana.

INTRODUCTION: Access to childhood cancer medicines is a critical global health challenge. There is a lack of sufficient context-specific data in Ghana on access to essential medicines for treating childhood cancers. Here, we present an analysis of essential cancer medicine availability, pricing, and affordability using the pediatric oncology unit of a tertiary hospital as the reference point. METHOD: Data on prices and availability of 20 strength-specific essential cancer medicines and eight non-cancer medicines were evaluated using the modified World Health Organization (WHO)/Health Action International method. Two pharmacies in the hospital and four private pharmacies around the hospital were surveyed. We assessed their median price ratio using the WHO international reference price guide. The number of days wages per the government daily wage salary was used to calculate the affordability of medicines. RESULTS: The mean availability of essential cancer medicines and non-cancer medicines at the hospital pharmacies were 27 and 38% respectively, and 75 and 84% respectively for private pharmacies. The median price ratio of cancer medicines was 1.85, and non-cancer medicines was 3.75. The estimated cost of medicines for treating a 30 kg child with Acute lymphoblastic leukaemia was GHÈ» 4928.04 (US$907.56) and GHÈ» 4878.00 (US$902.62) for Retinoblastoma, requiring 417 and 413-days wages respectively for the lowest-paid unskilled worker in Ghana. CONCLUSION: The mean availability of cancer medicines at the public and private pharmacies were less than the WHO target of 80%. The median price ratio for cancer and non-cancer medicines was less than 4, yet the cost of medicines appears unaffordable in the local setting. A review of policies and the establishment of price control could improve availability and reduce medicines prices for the low-income population.

THE MOST FAVORED NATIONS MODEL INTERIM FINAL RULE IS FATALLY FLAWED AND MUST BE RESCINDED-YET THE PROBLEM IT ADDRESSES DEMANDS A SOLUTION.

DISCLOSURES: No funding supported the writing of this letter. The author has nothing to disclose.

Análisis del cumplimiento del plan de consumo de los medicamentos de alto costo. Matanzas. 2012-2017 / Analysis of the fulfillment of the consumption plan of high cost medications. Matanzas. 2012 - 2017

RESUMEN Introducción: los medicamentos de alto costo son medicamentos nuevos, altamente específicos y utilizados en condiciones clínicas complejas, como el tratamiento de algunos tipos de cáncer; enfermedades que comprometen el sistema inmunológico, enfermedades inflamatorias o infecciosas. Objetivo: determinar cumplimiento del plan de consumo de los medicamentos de alto costo en la provincia de Matanzas, en el quinquenio 2012-2017. Materiales y métodos: estudio descriptivo, observacional de seguimiento sobre el cumplimiento del plan de consumo de los medicamentos de alto costo, en la población matancera del año 2012 al 2017. Se analizó el universo de medicamentos incluidos en esta categoría, a partir de la base de datos de suministro de medicamentos que emplea la Empresa Comercializadora de Medicamentos. Se identificaron las variables estudiadas. Resultados: en todo el período de estudio se observó un incremento creciente de los medicamentos de alto costo, en el 88,9 % de ellos el consumo ha estado por encima de la planificación realizada por la provincia. Los costos se incrementaron en un 233 % y además en las prescripciones realizadas de estos productos, se encontraron problemas como escaques vacíos, antibióticos sin impresión diagnóstica y omisión de la forma de presentación del medicamento y/o dosis indicada. Conclusiones: el consumo de muchos medicamentos de alto costo fue mayor que la planificación realizada en la provincia de Matanzas, durante el período analizado. Implicó un incremento significativo del presupuesto destinado a estos fines y se detectaron dificultades en el cumplimiento de lo establecido en las prescripciones de dichos medicamentos (AU).

ABSTRACT Introduction: high cost medications (HCM) are new highly specific medications and used in complex clinical conditions as in treatment of some types of cancer, diseases that compromise the immunological system, inflammatory or infections disorders. Objective: to determine the fulfillment of the consumption plan of high-cost medications in the province of Matanzas in the period 2012-2017. Materials and methods: a descriptive, observational, follow up study on the fulfillment of the consumption plan of high-cost medication by the population of Matanzas2012 year to 2017. The universe of drugs included in this category was analyzed on the bases of the drug-supplying database used by the Drug Commercializing Enterprise (ENCOMED in Spanish). The studied variables were identified. Results: it was observed a growing increase of high-cost drugs use during all the period; in 88.9 % of them the consumption has been above the planning made in the province. The costs increased in 233 %, and besides that in the prescriptions made of these drugs there were found problems like empty boxes, antibiotics without diagnostic impression and omissions of the drug presentation forms and/or the prescribed doses. Conclusions: the consumption of many high-cost drugs was higher than the planning made in the province of Matanzas for the analyzed period. It implied a significant increase of the budget destined for these aims and difficulties were found in the fulfillment of the terms for prescribing these drugs (AU).

Treatment With Liposomal Amphotericin B for All Confirmed Cases of Human Visceral Leishmaniasis in Brazil: A Budget Impact Analysis.

OBJECTIVES: To estimate the budget impact of the expansion of liposomal amphotericin B use for all confirmed cases of visceral leishmaniasis (VL) in Brazil. Currently, the first-line medicine for VL treatment is meglumine antimoniate. Liposomal amphotericin B is indicated only for patients with a greater risk of severity by the disease. METHODS: The analysis was performed from the perspective of the Brazilian public healthcare system over 3 years, considering the following 2 scenarios: the reference scenario with the current recommendations for VL treatment and the alternative scenario based on the use of liposomal amphotericin B for all patients. A diffusion rate of 60% was used in the first year, 80% in the second year, and 100% in the third year. The epidemiological parameters used in the analysis came from the Notifiable Diseases Information System and from a clinical trial that evaluated the efficacy and safety of medicines for the treatment of VL in the country. The costs were related to the treatment of VL and to hospital and outpatient care. RESULTS: In the reference scenario, the total cost for treatment of the 3453 VL confirmed cases in 2014 was $1 447 611.75. The incremental budget impact with the use of liposomal amphotericin B for all the VL confirmed cases was $299 646.43 in the third year. CONCLUSIONS: The analysis presented will support the decision process for the use and expansion of liposomal amphotericin B for all VL confirmed cases in Brazil.

The Problem of Cancer Drugs Costs: A Payer Perspective.

Chemotherapy and supportive drugs constitute 70% of a cancer patient's medical costs during active therapy. Payers use several approaches to keep those costs affordable including paying lower margins for "buy and bill" oncologists, prior authorization, pathways, or performance-based compensation. Payers also utilize financial tools such as deductibles, copayments, or coinsurance to shift more of the cost of health care coverage to employees or the insured. The strengths and weaknesses of those approaches are reviewed in this article. Policy changes that address drug protection from competition or negotiation, monopoly status of health care systems, and Food and Drug Administration approval of new medications will affect how effective any payer strategy will be in the future.

The Cancer Journal Article for Theme Issue: The Problem of Cancer Drug Costs.

Modern medical costs fall beyond most peoples' ability to pay and cause severe adverse effects that impact patients and families. It is time to team up with all stakeholders to provide solutions to systemic issues that thwart oncology's true goal to help patients survive their care and their cancer. Patients need realistic approaches that include (1) access to affordable treatments, (2) accountability and oversight toward patient costs and results in research, and (3) cost-effective drug supply once commercialized. Physicians play a critical role helping patients develop a plan that fits each person's medical, financial, and life situation.

Bending Versus Transforming the Drug Cost Curve: A Matter of Political Will.

There is increasing consensus that comprehensive reforms are needed to curb the rising costs of specialty drugs and growing bipartisan agreement on the basic principles that these reforms must address (1) constraints on yearly inflation of drug prices, (2) limits on practices to extend patents and restrict generic competition, (3) increased transparency of rebates provided by pharmaceutical companies to pharmacy benefit managers and insurance companies, and (4) caps on the total yearly out-of-pocket costs for Medicare patients. While such reforms will improve the current system, they are unlikely to be truly transformative. Transformative change requires that all the relevant stakeholders be forced, by a legislative or administrative mandate, to come to an agreement on value. Whether federal policy makers have the will to do so will determine whether we truly change the trajectory of the currently unsustainable drug cost curve.

Pricing and Paying for Cancer Drugs: Policy Options for Fixing A Broken System.

The US system for pricing and paying for cancer drugs is badly broken. The evidence is all around us-whether we focus on total spending, the breathtakingly high prices for chimeric antigen receptor T-cell therapy, the exceedingly high prices for many recently introduced drugs that offer only marginal improvements over existing treatments, or the increasing unaffordability of patient copayments. These problems are compounded by the distortions created by our payment policies, which do not take account of the value of competing treatment options and are structured in ways that distort physicians' incentives. We review the key drivers of cancer drug spending and consider the trade-offs of various policy options for addressing this problem.

Cancer Drugs in Asian Populations: Availability, Accessibility, and Affordability.

Accessibility to effective cancer treatments is a goal of Universal Health Coverage; yet, achieving this in the context of escalating costs in a diversity of Asian nations with different socioeconomic development is extremely challenging. Value-based assessments within the context of each health care system, financing infrastructure that will facilitate appropriate prioritization of high-cost medications, transparency in international pricing and reducing out-of-pocket costs through national insurance programs are measures that Asian countries should take toward Universal Health Coverage for cancer care. Encouraging sharing data on pricing through the World Health Organization, sharing expertise in health technology assessments and regulatory approvals, and exploring bulk negotiations would also strengthen the process of price control. For each individual country, rational selection of national cancer formulary, aiming at price reduction and sound procurement strategies for each drug, is important toward ensuring affordable access to quality cancer medications.

Pharmacoeconomic Evaluations: Guidelines for Drug Purchasers.

OBJECTIVE: To propose a set of guidelines for use by health care organizations in the United States that seek useful, comparative clinical information and economic analysis on pharmaceutical products to make sound drug purchasing decisions. PRACTICE INNOVATION: Based on a therapy intervention approach, the guidelines provide a structured framework to help managed care purchasers become more consistent in how they evaluate drug products for inclusion in the formulary. The guidelines factor in the need to examine the impact of new drug products on overall costs within the entire health system. PRACTICE SETTING: Intended for use by managed care organizations in the U.S. that purchase prescription drugs. INTERVENTION: Not applicable. MAIN OUTCOME MEASURE: Not applicable. RESULTS: The guidelines provide MCOs with a new systematic approach for identifying the overall cost and clinical outcomes impact of drug therapies. The guidelines are designed to take into account the characteristics of the patient population being treated and the fact that patients generally are redistributed among different treatment categories once a new drug product is introduced, thus offering MCOs an analysis model that extends beyond the traditional partial cost-outcomes approach. Emphasis is placed on looking at the cost-outomes impact of a new drug or therapy within a systems or disease area framework in which the redistribution of patients between therapy options is explicitly modelled. The guidelines specify that the following information elements be used in pharmacoeonomic analysis: product description, place in therapy, comparator products, therapy intervention framework, supporting clinical data, supporting pharmacoeconomic data, system impact assessments-costs-outcomes, overall assessment, and bibliography and supporting materials.

Evolution of the AMCP Format for Formulary Submissions.

DISCLOSURES: No funding was required for this project. The authors are or have been members of the Format Executive Committee.

Power of 1 Malaysian Ringgit: A Low-Cost Prescription Cost-Sharing Model in Malaysia.

OBJECTIVES: To calculate the total revenue under a hypothetical 1 Malaysian Ringgit (MYR) prescription cost sharing model in government healthcare facilities in Pahang, Malaysia. METHODS: A cross-sectional study was conducted at outpatient pharmacy in all government healthcare facilities in Pahang from year 2013 to 2017. Each dispensed medication was calculated as 1 MYR and contributed to the total revenue. RESULTS: A total of 11 hospitals and 81 health clinics were recruited into the study. A hospital could generate 0.311 million MYR per year, and a district health department could generate 0.623 million MYR per year, giving a total of 10.268 million MYR revenue every year in Pahang, Malaysia. Under the prescription medicines cost sharing scheme, it was shown that an average of 9.4% of the total pharmaceutical spending could be recovered. The recovery percentage was approximately fourfold higher in health clinics (16.5%-21.7%) when compared with that in hospitals (4.3%-5.2%). CONCLUSION: An estimated 10 million MYR or 10% from the total Ministry of Health pharmaceutical spending could be collected under the proposed 1 MYR prescription cost sharing model.

Indication-specific pricing of drugs: a utopian idea, a pragmatic proposition or unrealistic in economically constrained settings?

The concept of indication-specific pricing (ISP) of drugs means that the cost of a drug will vary depending on the reasons for its use. ISP is a novel concept and its beneficial or detrimental effects are unknown. Experience from richer countries suggests that it is fraught with many administrative, ethical and regulatory challenges. It seems, though, that prices of some drugs have been set using this model. The barriers, real and potential, to the implementation of ISP in low- and middle-income countries are discussed. Implementation of ISP is impractical in such environments because of the large impoverished population, low frequency of health insurance, generally poor health infrastructure, lack of regulatory oversight, and the fact that most healthcare expenditure is borne personally.

Value-based pricing: Toward achieving a balance between individual and population gains in health benefits.

OBJECTIVES: Value-based pricing of oncology drugs provides a best estimate for the price of a drug, as it relates to the benefits it provides for individual patients. To date, the impact of value-based pricing to reference cost-effectiveness thresholds (λ) on individual and population-level health benefits remains uncharacterized. The current study examined the potential benefits of value-based pricing by quantifying the incremental net health benefit (INHB) of publicly funded oncology drugs, if funding occurred at manufacturer-submitted price without value-based pricing. METHODS: Pan-Canadian Oncology Drug Review (pCODR) submissions were reviewed to identify eligible drug indications from which final economic guidance panel reports were reviewed for incremental costs (ΔC) and quality-adjusted life-years (ΔQALY) from manufacturer-submitted, pCODR lower-limit (pCODR-LL) and upper-limit (pCODR-UL) re-analyzed estimates. Annual number of cases in Ontario for each drug indication was obtained from population databases. Annual QALY gain per drug indication was determined by (ΔQALY × cases). Population QALY gain/loss in the absence of value-based pricing to reference λ was estimated by the INHB: (INHB = [ΔQALY - (ΔC/λ)] × cases). RESULTS: In total, 34 drug indications (4629 cases) were identified. Annual gain in QALYs for the funded drug indications using manufacturer, pCODR-LL, and pCODR-UL estimates was 1851, 1617, and 1301, respectively. At a λ $100 000/QALY, funding in the absence of value-based pricing resulted in loss of 2311, 2519, and 2604 QALYs. This would result in a provincial net annual loss of 460, 902, and 1303 QALYs. CONCLUSIONS: Despite an annual gain in QALY per funded drug indication, a net loss in QALY for the province, in the absence of value-based pricing, was demonstrated. Supportive evidence exists for value-based pricing toward the promotion of health benefits for the greater population.