Protect 340B, Cardiologist Asks Congress at Hearing on Drug Prices

by Admin | April 28, 2016 12:48 pm

April 28, 2016—The chief clinical officer of one of Indiana’s largest safety-net hospitals implored Congress to protect the 340B drug discount program in light of “hyperinflation in pharmaceutical pricing.”

“I understand that some are calling for significant restructuring of the 340B program,” said cardiologist Dr. Richard Fogel of St. Vincent health system in written testimony submitted for an April 27 hearing by the Senate Special Committee on Aging. “As pharmaceutical companies are increasing prices at an alarming rate, I can’t think of a worse time to be thinking of cutting a program designed to make drugs more affordable for those at the lower end of the income spectrum.”

The hearing was the third by the Senate committee[1] on extraordinary price hikes by Valeant and Turing Pharmaceuticals. Valeant has been under fire for raising the price of the widely used heart medications Isuprel by 521 percent and Nitropress by 259 percent the day after buying both from another company. The latest hearing explored fallout from Valeant’s decision to raise the prices of Syprine and Cuprimine, two treatments for the genetic disorder of copper processing Wilson’s disease, by about 1,500 percent and 3,000 percent, respectively, after purchasing them in 2013. The original producer of both drugs, Merck, kept their consumer cost at about $1 per tablet for more than 20 years.

The committee invited Dr. Fogel to testify at the hearing about how St. Vincent and Ascension, the nation’s largest nonprofit health system to which St. Vincent belongs, have been harmed by the price increases. Dr. Fogel was joined by a patient with Wilson’s disease who was forced to stop taking Syprine after its cost to her rose from $700 to more than $10,000 a year and Valeant rejected her for patient assistance. Dr. Fred Askari, director of the Wilson Disease Center of Excellence at the University of Michigan Hospital, told the committee his clinic “has had to hire two full-time employees just to deal with the red tape caused by the price hikes, such as paperwork for the patient assistance program and associated insurance claims.”

“I have worked with dozens of patients to obtain Syprine through Valeant’s patient assistance program,” Dr. Askari said. “It is time-consuming and frustrating….Even when patients are approved for patient assistance, they cannot be certain they can stay in the program—they have to reapply every year. While the process of applying for patient assistance programs is difficult enough as is, it is especially difficult for Wilson disease patients. Some have neurological conditions, which can make it even more difficult for them to navigate the programs. Many patients who are able to get the drug they need worry they may lose access in the future, and may hoard pills or skip doses to prevent being caught without.”

“Pharmaceutical prices in general are rising much faster than inflation, and prices for hospital-administered drugs are growing even faster than general pharmaceutical price inflation,” Dr. Fogel told the committee in his written remarks. “Drug spending at Ascension has increased 11 percent over the last year. This resulted in an increase of $73.9 million in our drug spending from February 2015 to February 2016. Double-digit increases are not out of the norm. In fact, we have seen increases of 500 percent, 1,000 percent, and even up to 3,000 percent on select products, both branded and generic.”

“While pharmaceutical price inflation is nothing new, the increases that we have seen in the last few years are simply unprecedented,” he continued. “What I find particularly troubling is when drugs that have been around for decades – and whose formulations have not changed – are suddenly and steeply increased with no apparent justification.”

Dr. Fogel noted that drug price increases “are not limited to only a few drugs.” He said Ascension tracks cost changes on a weekly basis “and we are projecting no change in the 11 percent year-over-year inflation for the foreseeable future.”

Dr. Fogel said Ascension has responded by assembling pharmacy and medical experts from its 137 hospitals to research how to safely substitute drugs whose prices have exploded or, when substitution isn’t possible, how to safely reduce dosages.

“This work is not easy,” Dr. Fogel said. “It takes much time and effort to gather the data, create potential alternatives, socialize, move through an approval process, and then implement….What is disheartening is that all this work can be wiped out with a stroke of a pen by a pharmaceutical company with no equivalent patient benefit. Steep price increases, with little or no justification, often following consolidation or change in ownership in the manufacturing rights to a drug, do not serve patients, but they do serve the new company’s bottom line.”

St. Vincent’s decreased operating margins due to drug price increases “affect our ability to provide other patient-centered services that we deliver as part of our mission,” such as fighting the opioid epidemic and providing the rural poor with healthcare, food, transportation, and housing, Dr. Fogel pointed out. “These efforts do not provide revenue for St. Vincent, but they are services we provide because it is the right thing to do for individuals in our communities.”

Dr. Fogel urged the committee to support the Campaign for Sustainable Rx Pricing’s multi-point plan to control runaway drug prices[2], to require drug companies to be more transparent about pricing, and to accelerate FDA approval of drugs to either create or increase competition.

“In addition…I would also urge your support for the 340B program,” Dr. Fogel said. In 2014, he noted “the St. Vincent Joshua Max Simon Primary Care Clinic served more than 62,000 patients and filled more than 66,000 340B prescriptions. Patients served at the clinic are charged for drugs on a sliding scale based on their income. Most of those served pay only 20 percent of the 340B discounted price, with the remainder covered by St. Vincent. Without the 340B program, the clinic would not be able to provide its patients the prescription medications they need at a cost they can afford.”

At Ascension-owned health system Via Christi in Kansas, “a woman was diagnosed with a rare, typically fatal neuromuscular disease that affects only 1 in 40,000 people,” Dr. Fogel continued. “The only medication available to treat her disease was investigational and costs about $400,000 per year. With the 340B program, the drug’s price was reduced by one-third, and Via Christi covered the remaining cost.”

“At our St. Thomas Hickman Hospital in Tennessee,” Dr. Fogel said, “a patient suffering from bipolar disorder had been hospitalized multiple times because she could not afford her medications. The closest psychiatric hospital is 60 miles away from her home. Because of the 340B program, the patient was able to obtain her medications free of charge from a local pharmacy. As a result, she has been able to remain well enough to stay out of the hospital.”

Outgoing Valeant CEO and Director J. Michael Pearson also testified at the hearing. In written testimony, Pearson said the company under his leadership “was too aggressive in pursuing price increases on certain drugs.”

“Let me state plainly that it was a mistake to pursue, and in hindsight I regret pursuing, transactions where a central premise was a planned increase in the prices of medicines, such as our acquisitions of Nitropress and Isuprel,” Pearson said.

Person said Valeant has responded to criticism about price increases by providing hospitals “with tiered volume rebates up to 30 percent for the hospitals that are the most frequent users” of Nitropress and Isuprel.

Committee Chair Susan Collins (R-Maine) and Ranking Member Clair McCaskill (D-Mo.) both said committee staff had looked into the matter and could not find a single hospital that had either received or been offered such a rebate.

  1. hearing was the third by the Senate committee:
  2. plan to control runaway drug prices:

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