Tag: drug pricing

FDA Approval of New Alzheimer’s Drug May Harm More Than It Helps

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This post is a part of our Bioethics in the News series

By Jennifer Carter-Johnson, PhD, JD

On June 7, 2021, the United States Food and Drug Administration (FDA) approved a controversial new Alzheimer’s Disease drug—aducanumab—to be sold by Biogen under the name Aduhelm. Alzheimer’s disease is estimated to currently be affecting over 6 million Americans plus their families, who must watch the mental decline of their loved ones and provide increasing levels of care as the disease progresses.

Controversy

Unfortunately, the approval of Aduhelm has generated a large amount of controversy because the FDA approval came despite the rejection of the studies of the drug’s efficacy by the FDA advisory committee. The opposition to the FDA’s approval has been so heated that three of the eleven-person advisory committee have resigned.

Detailed discussions of the science behind Alzheimer’s disease and the Aduhelm clinical studies can be found elsewhere. In summary, as Alzheimer’s disease progresses, protein plaques—amyloid and tau—build up in the patients’ brain. The progression of these plaques correlated with decreased mental acuity in patients. Therefore, drug candidates that target these plaques have been of interest to scientists for many years.

While the clinical data associated with Aduhelm supported a decrease in brain plaques in early-stage Alzheimer’s patients, the data did not show that decreasing plaques by the drug resulted in slowed progression of Alzheimer’s disease. In addition, the data showed that some patients have brain swelling as a result of the drug. Using this data, the FDA approved Aduhelm for broad use for all Alzheimer’s patients.

FDA Approval Process

Generally, to gain approval to sell a new drug, a company will complete a series of clinical trials to determine if a drug candidate is safe and effective for a given disease. Safety and efficacy are balanced against each other and consideration is given to the severity of the disease to determine if approval will be granted. As an example, a highly effective drug that is also highly toxic would not be approved as a simple headache remedy but may be approved as a treatment against a fast-growing, inoperable form of brain tumor. Conversely, an ineffective drug should never be approved no matter how safe it is—such are the wares of snake-oil salesmen of the past.

The FDA also has an Accelerated Approval pathway to allow drugs for diseases that have few treatments to proceed to market more quickly. It is under this accelerated path that the FDA approved Aduhelm. The accelerated pathway allows companies to use biomarker changes rather than disease improvement to show efficacy in the drug approval process. The FDA used the decrease in amyloid plaques as the biomarker for approval of the new Alzheimer’s drug—despite the fact that the clinical trial studies were submitted to show efficacy against disease progression. Moreover, the advisory committee was not informed of potential accelerated approval. Only after the clinical trial data was found unacceptable by the advisory committee did the FDA switch to the accelerated approval pathway. Perhaps most importantly, other drug candidates have been abandoned after amyloid plaque removal did not halt progression of the disease, so biomarkers may not be effective ways to judge the halt of Alzheimer’s progression.

The accelerated approval is, in effect, a contingent approval. Biogen will be allowed to sell Aduhelm, but it must gather data as to whether the drug is actually effective. If clinical data does not eventually support reduced disease progression, then the FDA can rescind the approval, and Biogen will no longer be able to sell the drug. The FDA’s approval of the Aduhelm may be harmful in the long run for several reasons.

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Image description: A close-up photo of an IV drip containing clear liquid. Image source: stux/Pixabay.

Trust in FDA

The move by the FDA to approve Aduhelm could lead to a decrease in trust in the agency. First, the controversial nature of its approval over the recommendations of the scientists who reviewed the data created a controversy that is playing out across the news media as people wonder why an ineffective drug has been approved.

In fairness, the accelerated approval process is contingent, but due to the way the accelerated approval was used scientists did not have the opportunity to weigh-in on the use of biomarkers in that approval. That way in which the accelerated approval process was tapped, only after the regular approval process seemed doomed to fail, may well erode trust that the FDA evenly applies its own rules. Additionally, it is very difficult to rescind these accelerated approvals, and if the drug approval is rescinded public perception will likely be highly negative. Finally, according to Biogen it may take up to nine years to gather the data to complete the required studies.

New Drug Development

Aduhelm is not the only drug candidate in its class in clinical trials for Alzheimer’s disease treatment. Other drug candidates that include patients who receive a placebo rather than the drug candidate are undergoing clinical trials. Since these studies tend to be double-blinded—neither the doctor nor the patient knows if the drug or the placebo has been administered—patients will likely drop out of these other studies in order to be assured of receiving some drug. Thus, Alzheimer’s drug development will be slowed, in favor of a drug that has no demonstrable efficacy. Additionally, these new drug manufacturers may also ask for similar approval, based on biomarkers that may not be indicative of clinical effectiveness.

False Hope

Patients and Alzheimer’s advocates pushed for approval of this drug. But a drug with contingent approval may give these patients and their families false hopes. We have seen in Right to Try legislation–legislation allowing patients to use un-approved drugs in the FDA approval pipeline–both a fundamental lack of understanding of the FDA approval process as well as the desperation of patients for whom there are no clear treatment options. I have argued before that Right to Try laws prey on the emotionally fragile. Here the FDA’s controversial accelerated approval may have the same result—patients clamoring for a drug that does not work.

In addition, the cost of the drug will be borne by insurance companies that may well decide not to cover the drug. While the drug is approved for all stages of Alzheimer’s, clinical studies were only aimed at early-stage disease. In effect, the FDA has shifted its responsibility as gatekeeper for effective drugs to insurance companies for whom profit is a driving force.

Drug Cost

The cost of Aduhelm in light of the lack of efficacy data presents its own problems. Biogen has indicated that the average yearly cost of Aduhelm will be $56,000, not including the cost of doctors, hospital or clinic visits, and supplies to receive the infusions, or the cost of brain scans to monitor for swelling and brain bleeds as side effects. This cost, like most drugs, will be passed on to consumers through direct payments, increased insurance premiums, and higher budget expenditures for Medicare and Medicaid. One study reported that if 500,000 people on Medicare are prescribed the drug, it would cost $29 billion per year with copays of over $11,000 per year.

Biogen defends its pricing of the drug. According to its own press release, Biogen “established the price of Aduhelm based on the overall value this treatment is expected to bring to patients, caregivers, and society.” This expected value seems high for a drug that may not work but admittedly reflects normal drug company calculations in a system where insurance covers most prescriptions and the uninsured either do without or rely on the generosity of the drug company.

Because FDA approval is contingent, the FDA can remove the drug from the market if the required data do not show efficacy. However, the money paid for the failed treatment regime will not be refunded. Patients are paying to take this risk.

In the end, the FDA’s approval of Aduhelm will impact the way the agency is perceived, and the way other companies approach the drug approval process. Neither of these changes will be for the better.

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Jennifer Carter-Johnson, PhD, JD, is Associate Dean for Academic Affairs and Associate Professor of Law at the Michigan State University College of Law.

Join the discussion! Your comments and responses to this commentary are welcomed. The author will respond to all comments made by Monday, July 5, 2021. With your participation, we hope to create discussions rich with insights from diverse perspectives.

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Web of Interests Surrounding Medicines Makes Patient Access Increasingly Difficult

Bioethics in the News logoThis post is a part of our Bioethics in the News series

By Jennifer Carter-Johnson, PhD, JD

A recent New York Times article described the problems that patients are having gaining access to a new class of cholesterol reducers, called PCSK9 inhibitors. This difficulty extends not just to the uninsured but also to patients with insurance. The drug costs are exorbitant, listing as more than $14,000 per year for a drug that may need to be taken indefinitely. Insurance companies are balking at paying so much for the new drug when cheaper cholesterol reducers are available. Patients for whom the old cholesterol reducers do not work are forced to jump through many time-consuming hoops – mountains of paperwork, proof that other drugs have failed, and appeals after initial denials of coverage – before drug coverage approval for the PCSK9 inhibitors.

It is easy to blame the drug companies in this situation. Why must they charge so much?!?! This question has become more common considering recent news stories about drug company price increases designed only to increase profits. But high drug costs are only one obstacle for patients to access drugs. Insurance coverage dictates cost of drugs to patients from nominal co-pays to out-of-pocket self-funding. Attempts to address one issue without addressing the entire web of interests is doomed to failure.

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Image description: A close-up photograph of a spider web that is covered in water droplets. The web takes up the entire frame and is in focus, the background is blurred and includes green and purple tones. Image source: nils.rohwer/Flickr Creative Commons

Drug Companies and Federal Regulations

Drugs cost money and time to develop and produce. All drugs must undergo scrutiny from the U.S. Food and Drug Administration, where drug developers must prove both the safety and efficacy of the potential drug before it is sold. The process takes on average 12 years between lead compound identification and final approval, and often costs close to a billion dollars absent streamlined approval processes for certain rare diseases. The billion-dollar cost estimate includes the cost of research for the failure of the many compounds that enter clinical trials but are deemed either unsafe or ineffective for the disease to be treated.

Thus, drug companies charge prices to recoup this huge research investment. Prices also pay for manufacturing and advertising as well as profit margins of close to 20% to fuel further investment. While there are mechanisms in place to incentivize generic drug manufacturers to enter the market and decrease prices through competition, branded drug companies have strategies to delay generic entry that have come under recent legal scrutiny.

Private Insurance and Federal/State Medical Programs

While drug costs are high due to the myriad factors described briefly above, patients are often insulated from some of those costs by insurance companies that cover the cost of drugs. Insurance comes in a variety of forms. Private insurance may be procured on the open market or through employer coverage. In the latter, the employer may cover some or all the costs of the insurance. Senior citizens rely on the Federally-sponsored Medicare program for medical coverage, though private supplements insurance policies are also the norm. Those too young for Medicare and too poor for private insurance (with or without an employer subsidy) are forced to rely on state Medicaid programs.

Unfortunately, not every insurance plan covers every drug. Insurance companies produce a formulary of covered drugs for each plan. The insurance plan negotiates a price, often significantly cheaper than the drug’s list price, that it will pay the drug manufacturer. More expensive drugs may require insurance pre-approval and multiple rounds of paperwork from the prescribing doctor.

Insurance companies have an incentive to reduce the usage of expensive drug alternatives. For private insurance companies, that incentive is profit. In fact, for-profit insurance companies know how to play this game quite well; many have profits in excess of 6 billion dollars. Medicaid and Medicare programs have limited budgets for all medical costs including drugs. While increased Medicaid funding for states offered through the Affordable Care Act was effective in decreasing uninsured rates, government funding is always in flux due to political pressures.

Doctors and Pharmacists

Doctors have great discretion in prescribing drugs. While doctors hold their patients’ health as the highest goal, knowledge of insurance (or its lack) may influence the doctor’s choice of drugs. Denial of a drug may well mean many, many more forms for a doctor who wants to make sure her patient has the best, most expensive drug. Doctors who do this for multiple patients could soon find themselves spending as much time on drug paperwork as medical care. Many doctors have taken to giving samples of drugs – left by drug companies as part of their advertising budgets – to patients who cannot afford the drug but need it.

Pharmacists exist at the epicenter of the patient’s dilemma. Patients often find out that insurance is not covering the drug when the pharmacist explains the situation. More troubling is the fact that drug prices are sometimes cheaper for a patient without insurance. For instance, a patient may have a twenty-dollar co-pay, but the drug may only cost ten dollars. For years, pharmacists have been subject to “gag clauses” in contracts between pharmacies and pharmacy benefit managers that prevent them from disclosing to the patient the cheaper alternative. Recent legislation signed this month has banned this practice.

Patients

Caught in this web of diverse and conflicting interests are the very people for whom drugs are created and vetted and prescribed – patients. Drug manufacturers must be able to recoup costs, but if no one can afford the drug how will they make sales? Additionally, drug pricing is a convoluted process that varies between insurance policies, pharmacies, and branded or generic formulations. Insurance coverage is often dictated by employer, age, or resources. Lack of coverage for a specific drug might mean the patient is faced with choosing a different drug or a different job. But asking about insurance formularies during a job interview would be quite difficult even if switching jobs in the midst of a medical crisis were possible. On the other hand, determining drug needs in advance is almost impossible. Finding a doctor with the time to work with a patient on an involved approval process is becoming more difficult given the increasing shortage of doctors in the United States.

Sitting in the center of this web of interests, patients have the most to gain and the most to lose from any overhaul of our drug system. It is impossible to fix all the problems by focusing only on the problems in one area. Unfortunately, patients are also a very small voice in the web that includes pharmaceutical companies, insurance companies, and medical professionals.

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Jennifer Carter-Johnson, PhD, JD, is an Associate Professor of Law in the College of Law at Michigan State University. Dr. Carter-Johnson is a member of the Michigan State Bar and the Washington State Bar. She is registered to practice before the U.S. Patent and Trademark Office.

Join the discussion! Your comments and responses to this commentary are welcomed. The author will respond to all comments made by Thursday, November 1, 2018. With your participation, we hope to create discussions rich with insights from diverse perspectives.

You must provide your name and email address to leave a comment. Your email address will not be made public.

More Bioethics in the News from Dr. Carter-Johnson: Humanity in the Age of Genetic Modification; Defining The Spectrum of “Normal”: What is a Disease?; Dawn of False Hope: Spread of “Right To Try” Laws across the U.S.; Designing Children: Patents and the Market are not Sufficient Regulation

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Greed Is God: The Divine Right to Avaricious Drug Pricing

Bioethics in the News logoThis post is a part of our Bioethics in the News series

By Leonard M. Fleck, PhD

Some recent headlines worth noting: “U.S. Prescription Drug Costs Are a Crime,” “Americans Say They are Suffering as Drug Costs Continue to Rise,” “When $65,000 for a Drug is Applauded.” There were also headlines about Trump saying he was going to do something about unconscionable drug prices. This sounded like fake news, so I passed over those headlines.

At a recent health insurer conference, David Mitchell, president of Patients for Affordable Drugs, was quoted as saying, “The system is not working right, and it starts with drug companies setting the price. But everybody in the system is making more money on the higher retail price – PBMs (Pharmacy Benefit Managers), insurers, doctors administering drugs in the office … It’s exacerbated down the supply chain.” Mitchell has multiple myeloma with drug costs of $400,000 per year.

In 2001, imatinib (Gleevec®) made the cover of Time magazine. Imatinib is used to treat chronic myelogenous leukemia (CML). Over 70% of patients treated with this drug were still alive after ten years. The cost of the drug in 2001 was $36,000 per year. By 2017, the cost of the drug had risen to $146,000. Nothing changed about the drug during that interval. Production costs were the same; no additional research was necessary. Patients, however, were economic captives. Greed works.

Human life is priceless. That was the theme of a pharmaceutical video ad from a couple years ago. The implicit theme was that if your friends and family were unwilling to pay $100,000 for a drug for an extra year of life, they were obviously heartless, unethical atheists. Recall the drug sofosbuvir for hepatitis C, the $1000 per pill drug. Gilead Sciences bought the drug for $11 billion from a small research company. Sales of the drug in year one came to $10.4 billion, thereby recouping the entire cost of its “research.” It cost $10 per pill to make the drug. Gilead could charge $100 per pill, which yields a profit of 900%. However, human life is priceless, so it is more ethical to make a profit of 9900%. Greed is clever.

money pills 2 Lisa Yarost flickr
Image description: an orange pill bottle is shown on its side with capsules spilling out onto a white surface. The capsules are transparent and filled with shredded U.S. currency. Image source: Lisa Yarost/Flickr Creative Commons.

More than 90 targeted cancer therapies have FDA approval with costs per year or per course of treatment from $100,000 to $250,000 or more. They treat metastatic cancer; none of them is curative, generally yielding gains in life expectancy measurable in months, not years. For example, palbociclib (Ibrance®) is used to treat hormone-receptor positive advanced breast cancer. In treatment-naïve patients the cost per Quality-Adjusted Life-Year (QALY) gained is $768,498, while in patients who failed earlier treatments the cost per QALY is $918,166. These are cost-effectiveness figures.

In the United States, an intervention is judged cost-effective below $100,000 per QALY. The National Institute for Health Care Excellence (NICE) in the UK initially refused to include palbociclib as a covered medication in the National Health Service, but reversed that decision after price concessions. Congress, however, is prevented by law from permitting the use of cost-effectiveness as a basis for excluding a drug from Medicare coverage. This law was a product of intense lobbying by the pharmaceutical industry in 2006 using as an “ethical argument” that no patient should be denied access to a safe and effective drug merely because of price. Medicare was also forbidden by law (same lobbying effort) from either dictating the price of a drug or using its 44 million covered lives to extract huge price discounts from pharmaceutical companies in the way European countries do. Greed is politically savvy.

Pharmaceutical companies claim massive research costs. The Tufts Center for the Study of Drug Development claimed a successful cancer drug costs $2.6 billion. Dr. Jerry Avorn, faculty in the Division of Pharmacoepidemiology and Pharmacoeconomics at Harvard Medical School, has critically assessed that work and concluded a more honest number is about $650 million. These debates make it appear that enormous analytical accounting work goes into justifying the price of a drug. However, the Wall Street Journal (no apologist for left-wing anti-pharmaceutical rhetoric) reported how the price of Ibrance was initially set at $9,850 per month in 2015. A bunch of executives sat around a table, looked at what insurance companies were willing to pay for comparable cancer drugs, and set the price accordingly. Before that price was made public, these executives noted that the price of everolimus (Afinitor®) had just been raised by $1,300 per month ($14,350). They were concerned they had set the price too low. Greed fell short there.

Overall, however, greed is amply rewarded. Researchers Vinay Prasad and Sham Mailankody looked at ten cancer drugs with development costs of $9 billion. Those ten drugs have generated revenue of $67 billion thus far, with years remaining on their patents. Greed pays well.

Pharmaceutical companies have purchased expensive academic talent to justify the cost of their drugs, such as Precision Health Economics (PHE), founded by Tomas Philipson, Dana Goldman, and Darius Lakdawalla, all full professors at the University of Chicago or the University of Southern California. In one article, “The Long-Term Impact of Price Controls in Medicare Part D,” associates of PHE found that proposed price controls would reduce the life expectancy of the cohort born 1991-95 by two years. In addition, “We find that price controls would reduce lifetime welfare by $5.7 to $13.3 trillion for the US population born in 1949-2005.” (Moreno G et al.) Those are scary numbers, relative to which cost-effective numbers of hundreds of thousands of dollars for various cancer drugs are economic crumbs. PHE has been intensely criticized in one ProPublica essay. Greed is seductive.

It is hard to imagine Big Pharma being inundated with warm fuzzies from the general public. However, Big Pharma has millions of zealous adherents ready to mount the legislative barricades on their behalf. 83% of patient-advocacy organizations received funding from the pharmaceutical industry and 36% have an executive from one of these firms on their board. Efforts to control drug prices are denounced as rationing or as threats to further life-saving innovation. Further, these drug companies are perceived by patients as being generous and compassionate because they provide coupons worth thousands of dollars each to patients faced with high co-pays. If a patient needs a $65,000 drug and has an unaffordable co-pay of $15,000, it is good business sense to cover that $15,000 cost to obtain $50,000 from the insurance company for a drug costing $5000 to produce. Greed is compassionate (toward the insured).

Compassionate greed has become a political, economic, and ethical reality, perfectly congruent with the Gospel of Prosperity. Health and wealth will be yours if you have unshakeable faith in the innovative grace of Big Pharma and respect their God-given right to price drugs at heavenly prices. If you prefer not to pray at the altar of Big Pharma, consider sending a copy of this essay to your member of Congress.

Fleck smallLeonard M. Fleck, PhD, is a Professor in the Center for Ethics and Humanities in the Life Sciences and the Department of Philosophy at Michigan State University.

Join the discussion! Your comments and responses to this commentary are welcomed. The author will respond to all comments made by Thursday, April 5, 2018. With your participation, we hope to create discussions rich with insights from diverse perspectives.

You must provide your name and email address to leave a comment. Your email address will not be made public.

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