Skyrocketing Drug Prices: A Bitter Pill to Swallow

Skyrocketing Drug Prices: A Bitter Pill to Swallow

>>I’m just gonna very briefly
introduce panel members. This is Doctor Redonda Miller, the president of Johns
Hopkins Hospital and I learned that she first came to Hopkins as a medical. (laughs)>>Yes. 28 years ago.>>So she has a great
perspective that will be really interesting on drug
prices and drug access from that perspective and we
also have Doctor Jeremy Greene. He is a historian of medicine. He’s written a bunch of
great books on generic drugs and has been a great source to me, always, for my reporting on drug prices. So he gives kind of the long view which is kind of refreshing in this age of sort of short-term news
pegs that we’re in. So I’m gonna start with
questions that if people have, if things arise, please participate. I think that would make it a lot better but we’re gonna start. President Trump is giving us the news peg that this week, he is
expected to finally give a long awaited speech on drug prices and what his plan is to lower them. This has been rumored and
awaited for a really long time since he campaigned on this issue and no one knows exactly what to expect but the rumor mill is running and I just wanted to ask both of you maybe to start what you expect him to say and maybe what you hope, if you could whisper in his
ear, what you might suggest. Redonda?
>>Sure! I will be honest, I don’t
know what he will say. I have suspicions just
from hence he’s gleaned over the last year, two things
he might be thinking about. Certainly, along part B, Medicare, I think he’s probably talking a lot about insurers negotiating
prices directly. For part D, patients feeling
these prices out of pocket and I think he might be thinking
a little bit about rebates. You know, patients usually
get their medicines through a pharmacy benefit manager who then contracts with the supplier, the manufacturer, the pharma company and there’s a discount involved and whether those rebates
make it to the patient or not and what percentage, so I think he might have
something to say on that. Maybe, he might wanna go to bulk purchasing for part D. We have not done that as a country. It’s not legal right now
but changing statutes such that Medicare could
bulk purchase drugs and perhaps compete with some
other developed countries and personally, I hope he
talks a little bit about problems with the generic market and just transparency in
general around pricing. Just transparency in general. I think that would be a good watch word from my vantage point.>>I would second that. I would love to see the
president’s policies take on the problem of
off-patent drug pricing and how they have been
escalating in particular. So far, we’ve seen very little indication that that will be on the table but then again, none of us
really know what he will say. I think, very famously, of
course, on the campaign trail, the president mentioned that
the pharmaceutical industry is getting away with murder and that he would take this on directly. There would be tough talk for
the pharmaceutical industry. There was a day of tough talk. Since then, it’s been hard
to see a tremendous amount of daylight between the
president’s policy proposals and the interest of the research-based pharmaceutical industry. That will be a very
important thing to watch for, the what he takes on. That being said, I do
think that if we analyze what has been put forward to
the president’s budget so far, I just wanna say I’m
representing not only myself but we have a interdisciplinary team of healthcare policy and those working on the problem of pharmaceutical
pricing at Johns Hopkins headed up by my colleague Jerry Anderson, Professor Jerry Anderson. So far, that analysis really suggests that there’s been very
little that would move on the generic drug issue so far and that the policy would wind
up substantially benefiting the research-based
pharmaceutical industry. That being said, two things
I do think we will see, well one thing is it seems hard to avoid the benefit of value-based
pricing at this point in time. So I think we’ve reached the point where many different stakeholders across industry, across
government, payer’s groups, insurers, consumers groups will say, we need to start thinking
more carefully about value when it comes to pharmaceutical pricing. That being said, when so many stakeholders agree on one thing,
it’s almost a guarantee that it means different
things to each of them and there are many different definitions of what value-based pricing
is so getting that right and looking carefully at
that will be important. I agree entirely with Redonda about the importance of transparency. I think, if I could ask for a single thing for the president’s policy to lean on, it would be increasing the transparency in the pharmaceutical pricing process that the many steps between
producer and consumer in which prices become inflated can actually be opened up, aired out, and something could be done to figure out where the problem lies.>>We’ll see! I’m just gonna maybe also to step back. I write for a general
audience about this issue and people have really strong feelings because they’ve all been to the pharmacy or have friends and family
have been to the pharmacy and been shocked at a
price they saw in a bill or the price that they paid for a medicine or a price they couldn’t
afford but I think, as a reporter about this issue, you just quickly become,
find yourself like taking the Russian doll apart and you’re like, “Wow!
A drug price is this “but it also includes all these fees “and there’s the part the patient pays, “what the insurer pays,
what society pays.” And there’s levels of, as you said, no transparency into that. Maybe just when you
think about the problem of skyrocketing drug prices, what do you even think is the drug price? How do you talk about it in a specific way without just making a political point? What’s the real core of the problem to both of you?>>I would say as a provider, I see patients in a
community health center in East Baltimore and the
price that’s most important to me on a weekly basis, a daily basis, is the out-of-pocket price
for the patient because then again, in my practice,
I also see a lot of uninsured and underinsured patients and so this gets to the question of what is a list price versus a net price versus the price the payer sees. The list price, and I think
many people in this room will already know this but
for those of you who don’t, the list price is an elaborate fiction and it is suspended by a
number of different sources. It ultimately winds up being higher than what is actually paid by the payer and that’s a different thing from what the actual patient pays
out of pocket in the pharmacy. At the same time, the difference between the list price and the net price has to do with what discounts
are applied along this chain of consumer between the manufacturer, the wholesaler, the
pharmacy benefit manager, or group purchasing organization
and the ultimate consumer but one of the problems
that we have is that if you don’t have insurance, the list price is the price that you pay. So even though I can say, on the one hand, the list price is a fiction, for many people, list price is
a very hard and fast reality and I face that regularly in my clinic.>>You know, for me, number
one, first and foremost, the price that we worry about most is just what Jeremy said. It’s the price the patient feels and in the era of high-deductible plans, when many of our citizens
across the country are turning to those plans, I think we’re one in three now? Maybe have a high-deductible
plan, it’s huge. That price that you pay that
you feel out of pocket is key. If I put on my hospital
administrator hat though and I think about what
the price means to me, obviously, it’s the book of business, the drugs that we purchase. At the Johns Hopkins Hospital, we spend about 147 million a year, one hospital, on our medications. Between 2014 and 2015, the cost of those drugs
escalated exponentially on the order of 20% over that one year and a lot of that was due to issues with the generic loss of competition in the generic market, perhaps some behavior
with sudden escalations and drug prices but nonetheless,
a decent rise for us. When you think about
Johns Hopkins in totality, now, I say this just as an illustration for health systems in general
and also employers in general. So if you add in what our hospital spend for medications for patients, but then you think about
our book of business in the out-patient arena, and what we spend on our employees, we have our own insurance
program for our employees, we’re self-insured and
so we buy medications, the total amount spent
for one health system was $655 million and over two years, it went up 28%. Now just multiply that by
not only other health systems across the country but
employers in general and you can see the challenge we’re facing as a country and how dire it is. So when I think about drug
price, it’s all of that mixed in. What we spend as a health system trickles down to the patient, right? It eventually trickles down to the patient and that’s our number one concern.>>Yeah. Why don’t we talk about
some specific drugs? Right now, we’re on the age of this exciting new scientific time where there are gene therapies, there are new ways of treating previously untreatable diseases, potentially curing diseases. That is kind of the coolest stuff. It’s the kind of stuff
hospitals, doctors love, get excited about but it is
coming with huge price tags. Drugs, merely a million
dollars, maybe more. There was an analyst note today about hemophilia gene therapy speculating on how much that one could be. So how do you think about
this new age we’re in and the trade offs that it involves?>>I like to think we spent a
decade sequencing the genome and all of that good
labor is now bearing fruit in the fact that we’re seeing these revolutionary gene products, biologics in general,
able to target diseases with precision, unprecedented. It’s actually just what you would expect from the advancement of medicine. The problem is, we’re so new
and the therapies are so new that they’re on patent, there
hasn’t been market competition so the prices haven’t fallen
as you would expect long term. I think about specific
examples at the hospital. Spinraza, are you
familiar with nusinersen? Let me tell you. This is a story that I think illustrates a lot of what we’re facing with this new technology. Spinraza nusinersen is the generic name is a medication that treats
spinal muscular atrophy. This is a disease, a genetic disease. You are born with it and it’s
usually a spontaneous mutation but type one, there are different types. Type one is the most severe. Children who have type one
spinal muscular atrophy rarely live to see age three. I’d like to think of it sort of like a Lou Gehrigs of children in a way that you lose muscle mass and eventually, your
diaphragm is a muscle, and it’s a fatal disease. This new therapy is revolutionary. We are a center of excellence at Hopkins and Doctor Crawford, a
pediatric neurologist, saw these patients, was
instrumental in bringing it in clinical trials to the bedside and has a cohort of patients where we can see the videos. These children that
historically would have died, you can see them over time
crawl, start to walk upstairs, it seems to halt progression. The price tag the first year is $750,000. It’s lifelong therapy
and every year subsequent to the first year is $325,000
every year in perpetuity. You can imagine how do we pay for this not only from a hospital perspective but from a societal perspective. How are we going to afford to do this? But yet, in your heart,
how can you afford not to? You have this child’s life in your hand. So that illustrates some of
what we’re wrestling with if that helps at all.>>Carolyn: What has access been like for patients at Hopkins?>>So we focused on, and
this was also historic too, we focused on patients who were similar to who was treated in the trial, right? The children with type one? The problem is, or maybe it’s
the good thing in this case, is usually the FDA approves medications based on what the indications
were in the trial. So if this population of patients
were studied in the trial, that is who the drug is approved for. But because this was so revolutionary, the FDA did not put restrictions or limits or in their approval process that, “Well, you should only
treat kids in this age group “with type one.” They said it’s so promising, it might help everyone. So type two, type three, all ages, adults, do you treat someone who’s had
slowly progressive disease, who’s 50 and doing reasonably well but continues to deteriorate? How do you make those judgment calls? It has caused a lot of
ethical conversations, not only in institutions who
are delivering this therapy, but across the country at national meeting of professional organizations, where’s the right cut off? How do we wrestle with it? I will tell you, Hopkins
doesn’t have the answers yet and we’ve really focused on rolling it out to our patients who need it the most with the hopes that we’re gonna continue to roll it out over time to
everyone who would benefit. But it’s tough.>>Carolyn: Yeah, I mean
in even that small delay in terms of logistics of a
hospital system to a family, it’s like an eternity.
>>Correct.>>They follow the family
that was just waiting for insurance approval for months and they had been trying
to get into the trials and for them, they’re
just watching their son slowly get worse and it’s heartbreaking cause you can understand but
the timeframe for a family and the timeframe for hospitals is like geologic time versus like the blink of an eye, I feel like. Jeremy, you’ve written
so much about the problem of off-patent drugs and
competition and that space and it’s kind of a different problem cause often, these drugs
at least, they’re old. They’re not so hard to make
depending on what the drug is and the idea is that they should be cheap because the kind of leash
of patent protection that gives the power of the drug company to price that drug however
they want has expired. So you’re expecting, those
drugs should be the ones that are like a slam dunk, no problem, but what are your kind of, is there any drug you would
highlight in this area?>>There are unfortunately several. I wish that it were the case that the problem of off-patent
drugs increasing in prices is really rare and isolated
but we’ve learned that more than a third of off-patent drugs since The Hatch-Waxman act, like we can get more to in a little bit, which balances innovation and access and created the pathway
for generic drugs in 1984. A survey I did with some
colleagues showed that more than a third of these drugs are produced by three
or fewer manufacturers which means there’s not a
truly competitive market. We see the prices, of course, in general, the price of generic drugs have gone down and this is just a thing
that we’ve come to expect that we’ve naturalized
the life use of drugs that in the first patent
protected phase of it’s existence, the drug is expensive and we
say it needs to be expensive to recoup the cost of innovation but when that federally supported monopoly or market exclusivity ends, then the invisible hand swoops in, all these competitors come in, generic competition works
and brings prices down and that’s how we tend to
balance access and innovation in The United States, at least. And yet, it’s been breaking down in so many different arenas. Martin Shkreli certainly helped to popularize this and became briefly, I think the Internet’s most hated person. Of course, that’s a hard
thing to hold on to these days but he was recently convicted of a fraud on an independent charge. You may remember that at the time when asked why he did what he does, he effectively said,
“Well, it’s not illegal. “I did it because I could.” And in the state of
Maryland, a number of us at Hopkins worked carefully to try to think about policy mechanisms that could be brought to bare
to help close that loophole. Many of you may know the state
of Maryland last year passed a law making price gouging on an uncontainable price increase of an off-patent drug illegal. Now that became the subject
of a constitutional challenge and the fourth circuit recently ruled that the Maryland law was unconstitutional because it violated what is known as the dormant commerce clause. And we can get into that later, suggesting that actually
the federal government on the current reading, suggests that only the federal
government can take action on price gouging and
off-patent prescription drugs. You asked for a specific
example, I’m sorry. One I would give that’s very
much on my mind right now is insulin. I can ask this room,
although this is not really a Q and A yet, how many
generic insulins are available in The United States? I think the answer properly is zero. They are to follow on biologicals now which have very modest
price decreases compared to the originals but this is a drug. Insulin was first invented in 1921. It was first patented in 1923. Cause really in the past 10 years, it took me a while in my practice to begin to realize that of
the many different reasons that patients struggle to control their diabetes with insulin,
there’s many problems. It’s a hard drug to use, it’s
a hard regimen to keep up. I didn’t think cost would be one of them because the drug had been around forever but if you actually study
what happened with insulin, there’s been a series of
different patented versions of insulins that emerge
just about when the old one is going off patent and so we
have not seen the development of a robust insulin market or generic insulin market in this country. One in four of patients
living with diabetes in The United States today
reported that in the last year, they have either rationed or not been able to use insulin for a period of time because of costs. And so here we have an old drug, 95 years since it’s patent which is increasing and accessible. Insulin price have rose by one account, 270% in the last decade.>>Yes, that’s a great example and yeah, as a reporter, having written about that, again, it’s one where patients rightly have kind of no idea why they should, I mean, why should there
be any class sharing at all on insulin? It’s in the health system
and payer’s interest to keep you out of the
hospital and out of having like life threatening
reactions to being off of it but that’s our system. So maybe, to get to the topic of blame which is one that is commonly, there’s a lot of finger
pointing in this space, and it becomes almost
just hard to distinguish what the truth is once the
finger pointing really starts because it can get so back and forth. I guess where do you see blame? A lot of health policy
experts that I talk to always talk about how everyone
likes to blame everyone else but high drug prices
basically sort of benefit everyone in the system
a little bit arguably except for the patient
including potentially doctors who might get a percent off
the list price in some cases or hospitals, on their margins. Given all the lack of
transparency in the system means it’s often hard to tell
how much that’s the problem but it makes it also hard to
really get to the root of it. So I guess when you think
about blame or places to focus, where do you think the best
pressure point would be?>>It, really in my mind, comes down to a couple different problems. I’ll go first to what I said
initially is just transparency. To your point, it’s so complicated how the price someone feels, whether you’re a patient, a hospital, it’s so complicated. So just trying to lay it
all out and understand the formulas and the structure behind it would be incredibly helpful. Blame is a tough word. It’s hard to finger point, like you said, when everyone perhaps is
acting in a way they feel is their right or is okay, but I think, when I think
about the drug pricing problem, it sorta comes down to
two categories for me. One is the product of new
technology, new innovation, and how do we deal with that? And that feels like a different answer than the second issue I’ll
talk about in a second. So with that first issue,
these are great new treatments, specialty drugs, they are
high cost but highly complex, hard to administer, they
really are revolutionary. I think 10 years ago,
there were maybe five or six specialty drugs and now, they’re 40% of the market, soon to be 50% of the drug market. So they’ve just proliferated and it’s the product of this revolution. And so how do we price those? And I think I will be the first to say, research and development, R and D needs to be appropriately recouped for format, absolutely, because without that, we won’t
continue to have innovation. But how do we also price
them based on value? And we can talk about that
perhaps in a little bit but in my mind, not every
new therapy brings huge value to the patient. Some are tiny little
steps, some are me too, some have incremental huge gains in value. So thinking about how we
might price along those lines would be helpful to me. The second group that
I talked about would be going back to the generic’s
sole source provider of a medication in the marketplace
and how we handle that. Blame there is perhaps, some of that has to go with ethical behavior, I will say. We need to have someone
watching over that, watching over our marketplace, whether this is a central office
in the federal government, a czar, so to speak, someone
who can look for changes in our generic marketplace
and implement regulations, reform, controls, whatever we need to do to make sure that doesn’t happen and keep that above board. It’s easier to put blame in that area as opposed to the product
of the new revolution, so to speak.>>Yeah.>>Yeah, I think that’s
a really important point you’re raising here that there’s a structural
transformation that’s happened and that there’s a system that
seemed to work fairly well for a while for small
molecules, perhaps, right? We would balance innovation access we have talked about before, and yet, there’s a
number of transformations that have changed that. The emergency of the
specialty market for whom the guarantee that there
will be some moment in which these incredibly
expensive medications become affordable is
really not there, right? There’s not a tremendous
amount of faith right now. There’s hope for biosimilars perhaps and following biologicals to do this but so far, we really
haven’t seen much evidence that they will provide
the kind of robust pathway for dramatic cost savings that
allow very expensive drugs to become affordable and of course, the price that we need to come down from in the specialty market is so much higher than anything was. Like I would a blockbuster
drug like Lipitore, it was just like pennies in comparison to where these prices are at any rate. The element and the specialties
is one part of this problem. The other has to do with a
decrease in competitiveness happening within the generics sector so what has happened
with an industry which when Hatch-Waxman was passed, was a bunch of small companies
that really seem to jump in to try and produce
competitive marketplaces, has seen a lot of mergers and
acquisitions has consolidated so on some level, one thing
this czar would need to do would be to actually work,
for example, with the FTC to really closely oversee what are the long term consequences of mergers that happen by
increasingly large generic firm? So generic firms are now
as large as any other form of multinational pharmaceutical firm. We exist in a very different environment but the other thing I would
mention in terms of blame is the importance of
coming back to transparency that right now, we have a
system which all parties are able to blame each
other in a way that helps create a form of churn in
which nothing is really done. If you are a pharmaceutical manufacturer, and by the way, I’m
certainly not anti-industry. Any of my comments that
come across in that respect, I’m entirely dependent on the industry both as a doctor and a patient but if you’re on industry, if you’re a pharmaceutical manufacturer and you can say, “Well, I need
to have this high list price “because these steep
discounts need to happen “before I actually see my profit.” Meanwhile, if you are a
PVM of the benefit manager, and you’ll say, well,
“I’m actually involved “in helping medicines cheaper “but I can’t disclose my discounts “because that would make my model “of reducing the costs
for everybody impossible.” We have a process where not only is everyone blaming each other but everyone’s blaming each other in a way in which the obvious solution which would be the increase transparency that will get you to see
what the discounts are, still somehow is reserved from the table. It’s an arena in which
without strong federal action, we’re not gonna actually
see anything happen. There are parties within
the federal government that could make drug
pricing more transparent and I think that’s really
what needs to happen for us to make progress here.>>Yeah, well again, we’ll see. One of the things, because you think about this one in a historical perspective and we talked in the past, it always feels like a very present issue. Drug prices are too high and it’s part of this new moment we’re in and it’s the past three
years that we’ve been in and Congress gets really angry at CEOs but this isn’t a new issue, right? What can the past teach us
about the moment we’re in? What do we expect?>>Well, thank you for
that opening, Carolyn. As a historian of medicine, I’m always grateful for the opportunity to talk about the importance
of history in the present and I think we oftentimes
have a policy memory when we talk about health
policy in this country which if we go back 10 years, that’s considered a decent stretch and here, we can go back much further and if we look at the hearings
of Senator SD Kieff Alver which began in the late 50s
and went into the early 60s, Kieff Alver at the time,
think about this, right? Here, you have this moment
when the first generation of post-World War II wonder drugs, this real expansive moment in which the American
pharmaceuticals were predominantly is showing the ability to
build entire new categories of drugs, antibiotics, cardiovascular drugs into hypertensives, drugs to actually combat mental illness. They’re all going off patent and yet they’re all still really expensive and it is increasingly a
problem for consumers to bare and Kieff Alver held a series
of wide-ranging hearings using the power of the subpoena to actually bring all parties
in the system together and demonstrate what
was a brand name drug? What was the generic name of a drug? Where did the industry make it’s profits? If all these drugs are
basically do the same thing, why are they being sold differently? It was a quite remarkable moment. It was an initial moment I would point to in which we see widespread politicization of prescription drug prices. It’s something that
we’re both at the moment becoming untenable and also, we’re a key element of national policy. Now, since tonight, I would
regularly see these rise and falls moments where drug prices become seemingly untannible. They reach a threshold where
these prices cannot be born. There are hearings but very
little is done about them and we can see this recursive moment that you’re talking about. The thing that comes with this, every historian thinks
about continuity and change. Simply saying history is a
cycle doesn’t really describe the fact that it’s a slightly
different every time. I do think that we have reached a moment where the prices of new drugs
are becoming so untanible that it becomes hard for us to justify the public health benefit of them. If the average American does not feel they will be able to
share in that innovation. And so I think we’re at a moment where real change is possibly on the horizon but it requires political will and it’s gonna be very interesting to see what happens tomorrow, for example, and in coming months.>>Yeah. Are there any questions for the panel?>>Audience Member:
Speaking of political will, I wondered if you had any thoughts about the recent right
to try legislation that failed to move forward and
any impact that might have on drug pricing with new products and that value to the patient.>>Will you take that?
>>Sure. Personally, I was a bit puzzled by the right to try legislation because it was one of these situations, of course, we have this balance between federal and state prerogatives and in this policy arena as with any and yet, most states have provisions for right to try. The actual number of
patients who are at a stage in which compassionate
care demands the ability to actually try these medications. Who would not already have been covered by existing measures that
would’ve been covered by the federal measure. It was very hard for me to
see the difference there. It’s my personal analysis there but I’m not sure how the
right to try legislation would have improved problems of drug costs but it is a very important
issue to continue following.>>Audience Member: Yeah,
I’ve always been interested in why we have very large,
global, pharmaceutical companies but we don’t, as individual countries, come up with a multinational approach because Maryland is no match for Pfizer but a multinational
conglomerate of discussions between Canada and all
these other countries would certainly be a start
in coming up with something that we could all use to address everybody and a question I always have and I’d love to hear your thoughts on, whether as a country, should we decide whether healthcare is a
right or is it a commodity? Because the solutions are different because as a commodity, we like to use language like free market when we know it’s not a free market and then if we think it’s a right, what happened to bedel and walking rights and marching rights and
all those sorts of things, that we don’t seem to
ever discuss publicly. Thank you.>>I think your comments
about a multinational approach are very interesting and certainly, there is power in numbers, so to speak. Right now, there’s a bit of an imbalance in drug pricing across
the developed countries. As you know, the price
of certain drugs here are significantly higher
for patients in the U.S. than say, Denmark or Sweden or Canada and some of that has to
do with bargaining power. So I don’t know how much the
other countries are interested in talking about perhaps a leveling of that pricing across boarders but nonetheless, the other
difference I might say between some of the other countries, they have a more advanced system of asking for value of new drugs than we do. They have national bodies. We do to but not necessarily
with the authority, picking a vice or other
groups but in general, they have a more robust process
of actually evaluating drugs for their citizens and
what value they may bring as is the extension of life or the improvement of disease
worth this dollar amount, probably perhaps where we
need to give some thought too in our country. I don’t know that it’s
come across the table. There’s so many differences. I think we could learn from each other and probably as a unified voice, if we meet in the middle
on certain places, it could be very powerful. Thanks for bringing that up.>>Yeah, and I would echo a bit. It’s interesting that your suggestion of the multinational approach cause I would almost lean on other nations having strong national approaches which is why we can explain the significant cost discrepancies. Insulin costs six times less in Europe than it does in the United States but predominantly because other countries have had different abilities to use bargaining power on price. That being said, there has
been examples in the past of multinational approaches
with The United Nations or the World Health
Organization maintains a list of essential medicines. Started off in the late 70s
that when it was first set up, it was quite contentious
because the concept is saying an essential medicine is
something that should be available at a reasonable price for
all citizens everywhere because it is of such
public health importance that it just needs to
effectively be like water and clean air. The United States was very opposed to this when this took shape and actually, the US FDA had wrote to the secretary-general
of the WHO and said, “You might not want to
call them essential. “If you called them basic medicine “such that other medicines
were more advanced, “The United States would be
willing to get onboard with that “but if you call them essential, “then other things seem
frivolous or extraneous “then we really can’t agree with that.” That being said, since that moment, we haven’t seen so much success of using multinational bodies like The World Health Organization to really create a
leverage point for price. I think the nation’s state has been a much more effective tool.>>Audience Member: I’d like
to as about the relationship between drug prices and drug shortages. I’ve read a little bit periodically about Princeton’s shortages
of mission-critical products in the operating room and
I wonder if it’s thought that pricing contributed
to or was a factor in those shortages or if that’s really quite
a different situation.>>I can speak to this a little bit because we have a list. At the Johns Hopkins Hospital, we have a list of drugs on shortage that we work everyday. That list is around 150 drugs. And how we approach those is we have a multidisciplinary team come together around each drug, doctors, nurses, pharmacists, and think about what we could do to mitigate that for our patients. Is there a way we can obtain more somehow? Can we make it ourselves? Can we substitute equally
effective medications? Always with safety and quality front and foremost in our minds. We don’t want a patient to be harmed, but what can we do to make
sure we have the quantity? The reason behind those shortages is multifactorial as you can imagine. The most recent mini bags,
that saline mini bags was because of hurricane
action in Puerto Rico and Baxter loss their
manufacturing capability, so that was a problem. Other times, it is related to, there are two factories and
one factory was just shut down by a governmental agency
because of violations and now we’re left with another
factory that can’t keep up. Some of it is related to shortages. I’m trying to think of an
example recently on price and I’m struggling with
that because honestly, as a hospital, you would
never not give a medication to a patient based on price. I’m thinking of nitroprusside, what happened in the year 2015. Nitroprusside is a generic drug that has been around forever. It’s an IV-drip drug
that you give to patients with very severe hypertension. Their blood pressures are so high that they could have a
stroke or a heart attack and literally within months, it went from $40 a vial
to over $800 a vial and that and two or three other drugs cost us an incremental
$4 million that year but you know what? We gave ’em to the patients
because you had to do it. So I’m trying to think
about price as a factor. I mean, we did try to figure
out if there were substitutes in certain, absolutely, but in the end, we gave the drug because
it was the right thing to do for the patients but drug shortages is a fascinating topic that we rest with everyday so
thanks for bringing that up.>>I would add in here that
these are closely alike fields. The same things that place
a drug at risk for shortage, are the very similar side effect that places a drug at risk
for a price hike, right, to say like you have a reduced
number of manufacturers–>>Chicken and the egg.
>>Yeah, and so they move together which is to say that it’s part of the expanded
public health justification by which the Food and Drug Administration has taken action recently to
try and create a fast track for non-competitive off-patent medications so that there can be an
acceleration of generic competitors. We should say it’s one
of these tricky points for the United States where
the FDA is not supposed to take economic considerations
into account in general like they’re a regulatory agency, a science-based regulatory agency is supposed to look at
efficacy and safety, they’re supposed to
ensure consumer wellbeing but recognizing here is in area in which there is actually such a
confluence between pricing problems and shortages actually has helped the FDA to take some action in this arena.>>That’s a very good
point, looking at it. In my mind, the chicken and the egg. Some of the shortages
are real opportunities for the price hikes that we face. Thank you.>>Go ahead.>>Lisa: Hi. Lisa Chiu, I’m with and I just have one question. One of the things that I
haven’t heard in this discussion is that some of the very basic
research that is being done is being funded by U.S. taxpayers. In fact, an awful lot of it is that has turned into the discoveries that allowed us to lay the
groundwork for the new drugs and some of the blockbusters
that have been around are the really transforming ones and is it a political issue
that that’s not being brought up in general overall or is it just a failed argument at this point? Because I know 15 years ago,
they were bringing this up.>>You go ahead.>>I would just say, I don’t
think it’s a failed argument. We would just say it’s an argument but its not argument that has
actually resulted in action but I do think that there’s
a substantial question of who would exercise marching rights and I think marching rights
were brought up earlier. I think there are a number
of very credible arguments just to have a federal
government could take a very close look at areas
in which marching rights would be a very reasonable step to help make sure drugs
were more accessible but I don’t see any of the
relevant parties that could do so really taking steps to do that right now.>>Yes. That’s such a great point I
think about the NIH dollars which are taxpayer dollars
funding the bench research that then translates years later into a valuable medication.>>Audience Member: There are two thoughts that this brought up. I wonder if you could
speak to Doctor Greene. You particularly. I wonder if the research that the military did some years ago on expiration dates of drugs has spread to the dating of drugs for more general use and
the other question is if you’d say anything about where the drug manufacturer and pricing fits with worldwide drug counterfeiting.>>So I wish I could say more about how the military’s work on expiration has led to impacts of drug pricing but I haven’t seen it but I’d be interested in
having you expand a bit more in your ideas and where it would.>>Audience Member: My
understanding is that they examined drugs’ expiration dates and said the drugs were quite
good well past the dates, maybe a little bit weaker and acted on, I assume that their policy for the VA and for the military medical establishment was based on the results of that research, that was my understanding, and I wondered if that is correct and I don’t recall from
when I was studying this whether that has resulted in any change in the expiration dates that are listed for drugs more generally. It is, I don’t know. I was just–>>Only in my own medicine
cabinet at home, just (laughs), I know! Yeah, that’s still
good, I’m gonna keep that! I think you brought up a really good point and we talk about it in our
own pharmacies in the hospital but right now, to my mind,
at least not on a hospital or a health system level,
no one’s wiLling to do that. We pay very close attention to the expiration dates and follow it but your point in the era of we would have a national emergency and our national stock piles. I’m not up to speed on where we are, whether those rules have changed or not so forgive me. Perhaps they have and perhaps
they are keeping cipro for anprax longer or
not, I just don’t know. If drugs are more readily available because the expirations aren’t
as strict as they used to be, could that impact pricing in some degree? I have not given that
the appropriate thought but that’s an interesting comment.>>Yeah, thank you for that. As for your second question
on counterfeit drugs, I’m personally quite interested
in accusations of cetric because the birth of the
generic drug industry was mired in acquisitions
from the brand name industry that all generic manufacturers
were counterfeiters and so on the one hand,
we have to be careful about what allegations
of counterfeit drugs do, much like the question of, does a drug not work if
it’s a couple days past that expiration date? Yet at the same time, we
know from a very careful empirical worth that drug counterfeiting is a substantial problem. I think it’s most well known, most well documented in sub-Saharan Africa particularly in the context
of the HIV-AIDS pandemic and what happens with drugs moving over particularly from Chinese
and Indian manufacturers to sub-Saharan Africa in
which it affects practices where many patients will assume that they need to take
a higher dose of drugs to have a better chance of
actually getting the amount of drug that they need into their body to manage their disease. What does that have to do
with American pharmaceuticals? It’s increasingly a problem for the FDA in recognizing the globalization
of drug production. The last report I saw on
this topic for the FDA and how it actually
monitors overseas elements of the drug production change was that the average active
pharmaceutical ingredient or API goes through more than
80 different locations in the process of it’s preparation so actually figuring out how the FDA can leverage it’s admittedly, we all would wish for
better funding for the FDA. I think the resources that
it has in so many sights around the world to try
to accurately make sure that drugs that are proof for sale are what they say they are. That’s to say that I’m
sympathetic to this problem being one simultaneously of politicization but also of an empirical reality that is more complex by
the increased globalization of pharmaceutical production
in the 21st century.>>I think we’re near the end of our time so I’ll just thank you. I just wanna say one thing though, cause value came up a few times. One of the funniest exchanges
and it was the most insightful and recently-deceased health
economist, Ovay Reinhart, one of the last things we talked about, he sent me a slide he had
of value-based medicine and he had a picture of
like a guy in a desert just like crawling behind
his camel and he was like, “To the man in the desert, “the value of a bottle
of water is infinite.” And that is what might happen
with value-based pricing. It’s just that kind of interesting. This is definitely where
drug pricing is headed next and there are a lot of
good arguments to have but there’s also a trap there that I felt was really
interesting to be warned about.>>Value to a population versus
value to a single patient when it’s you is very different lens.>>And there’s a piece by
Kaiser Alton Bark and Peter Bark on the problem of the
multiple different things that Colton saw as value-based pricing which they identified basically five completely different frameworks that are all considered
value-based pricing which can be evoked by
different stakeholders. I think of in normal times. I think this idea of watching
carefully what value is when we agree that value-based
pricing is the future is going to be very
important for all of you that are reporting on
this issue in the future.>>Thank you both.
>>Thank you also.>>Thank you.
>>Thank you for your questions.
(audience applauding)


  1. Let’s not forget that many of Trumps’ cronies have offspring who work in the Pharmaceutical industry & “the Swamp” he wanted to drain has only become more mired & much deeper. We need to demand complete TRANSPARENCY! ALL my medications have escalated in price even I do everything I can to keep my costs down. There are many I take that are “old time”medications & I have refused to allowed my doctors to put me on newer expensive drugs. So why have my prices shot up to outrageous levels? I buy in bulk from a mail order pharmacy; same issue! I did some investigation & discovered Mylan Pharmaceuticals bought out all the meds I am on (both the generics & brand name) THEN jacked up the prices to outrageous levels! THAT type of business practice is immoral & smacks of price-fixing! Medications I used to be able to purchase a 90 day supply for a few hundred now costs thousands of dollars! That is unconscionable behavior on the part of a drug company! Just because a person “can raise the prices of drugs” doesn’t mean they should! What has happened to the RICO laws & laws against Business Monopolies?

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