Tag: "drugs"

Advice to Trump: Leave Medicare Drug Prices to the Free Market

President-elect Donald Trump has bashed drug prices on numerous occasions. During his campaign, he championed the idea of having the government directly negotiate the price of Medicare drugs for Part D drug plans. Trump seemingly dropped the idea later in his campaign only to resurrect it again mid-January. Many Democrats also believe the government could secure a lower price for the drugs Medicare reimburses on seniors’ behalf. However, Republicans have long opposed the idea of government meddling in private markets and codified a non-interference clause in the Medicare Modernization Act of 2003.

PPI: Pharma Prices Are Dropping!

BLSDecember’s Producer Price Index rose 0.3 percent. However, prices for most health goods and services grew slowly, if at all. Fifteen of the 16 price indices for health goods and services grew slower than their benchmarks.*

The outlier was health and medical insurance for final demand, which increased by 0.2 percent, the same rate as final demand services (less trade, transportation, and warehousing.) The largest decline (relative to its benchmark) was for prices of new health care building construction, which declined twice as fast as prices of overall building construction did.

Prices of hospital outpatient care and nursing home care declined versus their final demand services (less trade, transportation, and warehousing) and also absolutely. Pharmaceutical prices decreased 0.1 percent, a 0.4 percent drop versus the price increase for final demand goods less food and energy.

See Table I below the fold:

Why Did The FDA Approve 57 Percent Fewer New Medicines Last Year Than 2015?

captureThe Food and Drug Administration has reported it approved only 19 innovative new medicines last year, versus 51 in 2015. To be sure, 2015 was a high-water mark. Nevertheless, such a dramatic drop signals a problem for patients eager for new treatments. These new drugs, though few, represent advances in the treatment of ovarian cancer, Hepatitis C, and multiple sclerosis, among other diseases.

The FDA excuses itself for the slowdown, claiming it is receiving fewer applications from drug makers. However, this is symptomatic of a vicious circle. The regulatory burden of approval has increased so much, it is contributing to a significant reduction in the rate of return on capital invested in pharmaceutical development. According to new research by Deloitte, the rate of return has collapsed from 10.1 percent in 2010 to 3.7 percent last year.

PPI: Most Health Prices Tame, Inflation Picks Up

blsNovember’s Producer Price Index rose 0.4 percent. However, prices for most health goods and services grew slowly, if at all. Nine of the 16 price indices for health goods and services grew slower than their benchmarks.*

The major exceptions were prices for pharmaceutical preparations, which increased 0.4 percentage points more than prices for final demand goods less food and energy; and nursing homes, for which prices increased 0.3 percentage points more than prices for final demand services less trade, transportation, and warehousing.

Prices of health goods for intermediate demand, were lower than their benchmark. Perhaps slow price increases for medicinal and botanical chemicals, and biological products will flow through to prices of pharmaceutical preparations but that has not previously been the case.

Over the last twelve months, prices of nine of the 16 health goods and services have increased slower than their benchmarks. Three stand out as having increased significantly more than their benchmarks: Pharmaceutical preparations (7.0 percentage points), biological products (1.8 percentage points), and dental care (1.7 percentage points).**

(See Table I below the fold.)

Rational Drug Prices Require Rational FDA Regulations

The House has passed and the Senate is expected to pass the pork barrel-bloated, 21st Century Cures Act. Aside from $6 billion worth of pork, the Cures Act would reform the drug approval process at the U.S. Food and Drug Administration (FDA). A rational path to drug discovery is badly needed. Once a drug finally makes it through the regulatory process to approval, it is guaranteed years of monopoly pricing due to the plethora of regulatory barriers that inhibit competition.

Opioid Mouth Spray Costs 200 Times More than Patch

become-richThe drug fentanyl — which is up to 50 times stronger than heroin — is available in generic form. It is also a highly addictive street drug, manufactured in back-alley labs and laced in heroin to boost its potency. Fentanyl is used to treat extreme chronic pain that is unresponsive to other opioid pain relievers, such as breakthrough pain cancer patients often suffer. A fentanyl transdermal patch costs from $5 to $12 depending on the dose per hour. A 12 micrograms (mcg) per hour patch retails for about $5 and offers 72 hours of pain relief, whereas the 100 microgram per hour patch is about $12 with GoodRx coupon. Sounds like a bargain; pain-free bliss for $2 to $4 a day. That works out to about $50 to $125 per month.

Big Pharma and Access to Medicines

prescription-drugsHaving written critically about a decision made by Doctors Without Borders /Médecins Sans Frontières (MSF) to reject a donation of vaccines by Pfizer, Inc., I am grateful for a new report which ranks research-based pharmaceutical companies on a number of measurements of how they make medicines available to patients in low-income countries.

Jointly funded by the Bill & Melinda Gates Foundation and British and Dutch taxpayers, the Access to Medicine Index ranks 20 large drug makers. It is a very thorough report:

PPI: Health Prices Tame, Inflation Flat

BLSOctober’s Producer Price Index was flat. However, prices for most health goods and services grew slowly, if at all. Seven of the 15 price indices for health goods and services declined. The major exception was prices for dental care, which increased 1.5 percent. Dental care is dominated neither by government nor private insurance, so dental price increases are not explained by NCPA’s usual theory of health inflation. I addressed dental price increases in a previous article.

Prices of pharmaceutical preparations for final demand increased 0.4 percent, but that was in line with all goods for final demand. Prices for construction of both health facilities and other buildings increased 0.7 percent. This bears closer watching as President-elect Trump promises more spending on infrastructure, including hospitals.

Prices of health goods for intermediate demand, especially medicinal and botanical chemicals, and biological products, actually dropped. Perhaps this will flow through to prices of pharmaceutical products but that has not previously been the case.

Over the last twelve months, prices of health goods and services have increased faster than overall PPI, which grew 0.8 percent. The tables are turned: 12 of 15 health categories experienced larger price increases than PPI did. Pharmaceutical preparations continue to stand out dramatically, having grown 8.4 percent.

(See Table I below the fold.)

FDA Can’t Hire Workers, Despite Six-Figure Salaries

Variety of Medicine in Pill BottlesWould a starting salary of over $160,000 turn you off? Well, maybe if you had a scientific PhD and had to wait four months before the employer could decide whether to hire you or not, you would find a spot elsewhere.

This is the situation the Food and Drug Administration finds itself in, according to the Washington Post:

The Food and Drug Administration has more than 700 job vacancies in its division that approves new drugs, and top officials say the agency is struggling to hire and retain staff because pharmaceutical companies lure them away.

“They can pay them roughly twice as much as we can,” Janet Woodcock, who directs the FDA’s Center for Drug Evaluation and Research (CDER), said at a rare-diseases summit recently in Arlington, Va.

(Sidney Lupkin & Sarah Jane Tribble, “Despite ramped-up hiring, FDA continues to grapple with hundreds of vacancies,” Washington Post, November 1, 2016.)

They Can’t Even Give It Away: Global Charity Rejects Free Vaccines

vaccine-shotDoctors Without Borders /Médecins Sans Frontières (MSF) has decided to reject a donation of one million doses of pneumonia vaccine from Pfizer, Inc. The global health charity’s convoluted reasoning goes like this:

There is No Such Thing as “Free” Vaccines

Pneumonia claims the lives of nearly one million kids each year, making it the world’s deadliest disease among children. Although there’s a vaccine to prevent this disease, it’s too expensive for many developing countries and humanitarian organizations, such as ours, to afford.

Free is not always better. Donations often involve numerous conditions and strings attached, including restrictions on which patient populations and what geographic areas are allowed to receive the benefits.

Critically, donation offers can disappear as quickly as they come. The donor has ultimate control over when and how they choose to give their products away, risking interruption of programs should the company decide it’s no longer to their advantage.

This remarkable document goes on to praise GSK, a competitor of Pfizer’s, for having declined to offer pneumonia vaccines for free, but instead offer them for $3.05 per dose to all humanitarian organizations. I don’t know about you, but I will take free over three bucks any day.