Do Consumers Deserve Rx Savings? (Part 2)

Guest Blog By: Marcus J. Hopkins, Blogger 

In last week’s guest blog, Do Consumers Deserve Rx Savings?, I discussed the various issues surrounding pharmaceutical pricing, as well as the possibility of the Centers for Medicare and Medicaid Services (CMS) switching where drug rebates are applied by requiring sponsors to pass on a minimum percent of the cost-weighted average of rebates on to consumers. Essentially, who deserves the drug rebates more: health insurance companies, pharmacies, and pharmacy benefit managers (PBMs), or consumers?

Photo Source: prweb.com

In November 2017, CMS put out a Request for Information (RFI) about a proposed rule that would revise the Medicare Advantage program (Part C) and the Prescription Drug Benefit program (Part D) that would require payors to pass on a percent of the drug rebates negotiated with pharmaceutical manufacturers on to consumers at the Point of Sale (POS). This would, ostensibly, lower the out-of-pocket costs to consumers by reducing the amount they pay at the register when purchasing a medication during the deductible phase of their insurance plan, when they pay the full cost of the co-pay/drug.

A personal example of this is my prescription for the HIV combination drug, Genvoya (Gilead). Under my current insurance plan, Highmark BlueCross/BlueShield (BC/BS), my monthly co-pay for this drug is $250 until I reach my deductible and/or out-of-pocket maximum. Luckily, West Virginia’s Ryan White program uses the Part B AIDS Drug Assistance Program (ADAP) funds to pay my co-pay, or I’d be considerably financially stressed, each month. Highmark BC/BS has negotiated a price discount for this drug and may also receive rebates that they can apply to each purchase of the drug each month (neither of which are publicly available per the trade secrets laws I mentioned, last week).

Now, imagine if I, as a consumer and client of Highmark BC/BS went to pick up my medications (or ordered them over the phone to be shipped, as is the case), and instead of the normal $250 co-pay, I received the rebate (let’s say $50) rather than Highmark BC/BS receiving it at the end of the month. My co-pay would be reduced to $200 (which is still a stretch if you’re on a tight budget), and Highmark BC/BS doesn’t. Any consumer who cares more about their pocketbooks than insurance companies’ profits would jump at the chance to pay less.

And that’s where Highmark BC/BS, represented by America’s Health Insurance Plans (AHIP) disagree. Despite any discounts they may negotiate with Gilead over the cost of Genvoya, they have also grown to expect access to significant drug rebates on top of not having to pay the list prices. So, let’s say they pay for 100 fills of Genvoya (which comes in a standardized bottle, so the number of pills is irrelevant) at a 50%-60% discount off the list price (let’s use $250/bottle as that cost). On top of that, they also have negotiated to get a $50 rebate per bottle sold. They would spend $25,000/month on those 100 bottles and expect to receive $50/bottle rebate for an extra $5,000/month back into their pockets. Essentially, they’re paying $20,000/month, and pocketing $5,000/month.

It isn’t just insurance companies and PBMs who are doing this – it’s also certain pharmacies and AIDS Service Organizations (ASOs) who operate their own pharmacies.As an ADAP program, they negotiated significantly lower prices than even the health insurance programs and get rebates back on top of it. It is no wonder, then, that these organizations are staunchly against passing on these rebates to consumers: they do their financial planning based upon the belief that they’re going to receive these rebate dollars. They argue that consumers will actually pay more if they don’t get the rebates. They argue that, because they know that they will pass along those costs to consumers, if they don’t get their way.

Pharmaceutical companies, ironically, are arguing that consumers should receive the rebates, rather than their opponents. This may have to do with the fact that there have been several Congressional hearings and inquiries into the considerably overinflated prices of their drugs. Therefore, it behooves them to appear to support anything that would ostensibly save consumers out-of-pocket costs. Moving these rebates to the POS would, essentially, cut out the middlemen in the process – the payors – and would allow those rebates to passed directly to the register when you buy your drugs. 

Photo Source: Actionable Books 

So – do consumers “deserve” this? Yes. But, that’s not all they deserve; it’s not the single solution to the astronomical costs of drugs. It has to be part of a bigger plan to reduce costs. There need to be multiple rebates at play – the ones for the payors and ones for consumers that they can receive directly to further lower the price. So, on top of the negotiated $50 back foe Genvoya on the payor side, I’d like to stack on top of that another $10-$30 consumer rebate I can download off their website or receive in an app that can be activated at the POS to take my $250 co-pay down to potentially $180. That would be much more manageable, particularly for people on fixed incomes. It’s still not great, and an overall overhaul of how drug prices are determined is still needed. But, it’s something.

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates. 

Do Consumers Deserve Rx Savings?

Guest Blog By: Marcus J. Hopkins, Blogger

In 2017, President Trump became infamous for proclaiming, “Nobody knew healthcare could be so complicated.” In reality, every legislator and policy wonk in America knew healthcare was complicated; but, for everyday Americans, healthcare is often no more complicated than going to a physician and being treated. When you get into the weeds of how the whole system (in America…) works, it becomes needlessly complex with so many working parts, it’s no wonder a stable genius can make neither heads, nor tales of it.

Photo Source: Me.me

This is the case with drug pricing. For people living with HIV/AIDS (PLWHAs) and other chronic illnesses that require “specialty” pharmaceutical products (read: drugs), what happens between our prescriptions being written and the price we pay for purchase is often so nebulous that trying to decipher the process as a layman is nigh impossible.

High drug prices have long been fodder for impassioned debates between manufacturers who insist that they only price drugs at “what the market will bear,” patient advocates who insist that out-of-pocket costs are too high, and government officials who wring their hands about drug prices, but do little to actually control or lower them. Are these higher brand name drug prices justified? Is it ethical for companies to exponentially increase the price of medicines? What is the purpose of having a Wholesale Acquisition Cost (WAC – which is the list price set by manufacturers) if no one is going to pay it after rebates, discounts, coupons, and pricing agreements? None of these questions ever REALLY get answered, because doing so would send shockwaves through the pharmaceutical industry – and frankly, that’s not such a bad idea.

All these price negotiations and rebates are done behind the scenes, all of which are protected by existing trade secrets laws that prevent the final cost of drugs from being publicly listed, meaning that consumers rarely ever know or realize that the end price they pay when they pick up their prescriptions reflects a price that could be lower if insurance plans changed where those rebates are discounted. Furthermore, as healthcare costs continue to increase by large margins while real wages have stagnated, U.S. consumers end up paying considerably more for medications than any other nation in the industrialized world.

As the cost of health insurance continues to increase, the number of consumers saddled with High-Deductible Health Plans (HDHPs) continues to burgeon, meaning that, during the deductible phase of the policy, patients who have not yet met their deductible are accountable for the full cost of their medications. In most existing payor landscape, if the payor (the insurance company/plan) has negotiated a rebate with the manufacturer, the patient assumes the full burden of the drug cost up front and the payor later receives the rebate on the back end. Payors argue that this practice allows them to “keep member benefit costs – deductibles, co-pays, and premiums – lower.” What ends up happening, however, is that consumers end up paying more, while payors are able to pocket more of the money and lower their share of cost.

Another model, however, exists, where manufacturer rebates are applied at the Point of Sale (POS), lowering the cost to consumers. This requires the payor to assume a greater share of the costs, but those can be offset by minute increases in premiums, allowing the consumer to pay less overall.

If all of this seems mind-numbingly wonky, that’s because it is. The whole landscape of pricing, payors, 340B, ADAP, Medicaid, Medicare, and consumers is such a snarled web of negotiations, rebates, discounts, coupons, and double-dipping, it’s virtually impossible to walk away with an operational understanding of the system in a single blog post. It would likely take an entire year of blog posts just to demystify every aspect of what goes into this mess, and even then, a lot is still protected by trade secrets laws.

If the Centers for Medicare and Medicaid Services (CMS) under this Administration is so determined to save consumers money on drug prices, what really needs to be done is for manufacturers to just lower drug prices. But, that doesn’t serve their primary goal of making more money. The pharmaceutical industry has established a web of systems wherein each individual entity (e.g. – pharmacies, insurers, Medicaid, ADAP) has to individually negotiate with them for a private gross price (“gross,” in this instance not meaning disgusting…but, only just) for the purchase of their products. On top of that, the manufacturers offer them rebates for each purchase, which drives the cost to the payor even lower (and they keep the difference between the gross and rebated prices).

Photo Source: Piper Report

Because those negotiated prices can’t be revealed publicly, it allows the manufacturers the ability to charge different entities higher or lower prices, thereby increasing or decreasing their profit margins. This kind of pricing structure is virtually unheard of in other parts of the world, because those governments were smart enough to adopt a universal healthcare model, rather than this patchwork quilt system we have in America. Instead, we get stuck with this Frankenstein’s Monster that allows these companies to amass record profits, all while pretending that the cost of research and development justifies the outlandish prices they charge for their products (much of which has already been paid for using taxpayer dollars, meaning they’re essentially selling these products BACK to us).

While it’s great that the pharmaceutical industry claims it wants to help consumers by moving rebate discounts to the front end, their efforts do nothing to mitigate the rising cost of healthcare.

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates. 

NASTAD Releases Updated 2017 ADAP Formulary Database

By: Brandon M. Macsata, CEO, ADAP Advocacy Association

Allowing people living with HIV/AIDS ("PLWHAs") to make informed decisions about their own healthcare has been a cornerstone of the ADAP Advocacy Association's mission since the organization launched in 2007. All too often, local service providers and advocacy organizations take a paternal approach to PLWHAs, evidenced by the complaints expressed directly by the people themselves. One organization should be commended for their efforts to put important treatment-related information directly at the fingertips of PLWHAs, specifically as it relates to drug formularies under the AIDS Drug Assistance Program ("ADAP").

Photo Source: lookfordiagnosis.com

The National Alliance of State & Territorial AIDS Directors ("NASTAD") announced late last year that it had updated its Online AIDS Drug Assistance Program (ADAP) Formulary Database (2017 version). According to NASTAD, its database provides "an online, searchable, publicly available resource detailing state-by-state ADAP coverage of medications both individually and by drug class including HIV antiretroviral ("ARV") treatments, A1 Opportunistic Infections ("A1 OI") medications, treatments for hepatitis B and C, mental health and substance use treatment medications, and various vaccines and laboratory tests."[1]

The database offers the following:[2]

• General Information
• Antiretroviral medications
• ARV Generic Equivalents
• “A 1” opportunistic infection medications
• Hepatitis B treatments
• Hepatitis C treatments
• Substance use treatment medications
• Mental health treatment medications
• Other medication categories
• Vaccines
• HIV & STD diagnostics
• Hepatitis C diagnostics

NASTAD's 2017 Online AIDS Drug Assistance Program Formulary Database is available online at https://www.nastad.org/adap-formulary-database.

Making such a valuable resource available directly to PLWHAs (and others) cannot be under-estimated in its importance. Access to timely, appropriate care and treatment is essential to achieving improved medication adherence, greater peace-of-mind, and better health for people living with any chronic health condition. Yet we know one of the most stressful things for PLWHAs are their medications. More efforts like NASTAD's database should be implemented across the treatment cascade.

In fact, that is the very reason why we launched our ADAP Directory. It offers PLWHAs (and others) a one-stop online resource center for the latest ADAP information for better decision-making for HIV/AIDS care; improved quality of HIV/AIDS information; and assistance for advocates and medical staff. It also includes an ADAP Eligibility Calculator. The ADAP Directory is available online at http://adap.directory.

Yes, that was a shameless plug for our flagship program. Now back to NASTAD's efforts...

NASTAD's database is very comprehensive. Some key findings from the updated 2017 ADAP Formulary Database include:[3]

• 12 ADAPs have “open formularies” in which all FDA-approved medications are included, excluding designated exceptions
• 39 ADAPs cover one or more hepatitis B treatment medication
• 40 ADAPs cover one or more hepatitis C ("HCV") treatment medication
• 34 ADAPs cover one or more of the curative direct acting antiviral ("DAA") HCV treatment medications
• 46 ADAPs cover one or more of the most frequently prescribed mental health treatment medications
• 27 ADAPs cover one or more substance use treatment medication

Any questions about NASTAD's database should be directed to Amanda Boyles at abowes@NASTAD.org. Kudos, NASTAD! Kudos!

__________

[1] Penner, Murray (2017, November 29); NASTAD Releases Updated 2017 ADAP Formulary Database; National Alliance of State & Territorial AIDS Directors (NASTAD). 
[2] National Alliance of State & Territorial AIDS Directors (2017, November 29); 2017 ADAP Formulary Database; National Alliance of State & Territorial AIDS Directors (NASTAD); page 4. 
[3] Penner, Murray (2017, November 29); NASTAD Releases Updated 2017 ADAP Formulary Database; National Alliance of State & Territorial AIDS Directors (NASTAD). 

Gary was One for the Roses

By: Brandon M. Macsata, CEO, ADAP Advocacy Association

In late 2006, Bill Arnold approached me about starting a national organization whose mission would be solely dedicated to promoting and enhancing the AIDS Drug Assistance Program (ADAP). Long before anyone else, Bill predicted the "Perfect Storm" that would befall the increasingly cash-strapped program. The idea behind the ADAP Advocacy Association was putting into place a platform to educate and mobilize people living with HIV/AIDS (and others) long before this storm rolled in. Next, Bill said, "If we're going to do it, then we're going to need Gary Rose on board."

Bill was right!

Gary Rose, after all, had years of specialized experience working to improve access to care and treatment for people living with HIV/AIDS, as well as viral hepatitis and leukemia. As a consultant, Gary worked closely with Millennium Pharmaceuticals, Roche, GlaxoSmithKline, Bristol-Myers Squibb and others to advance key advocacy programs and policies in oncology, rare disorders and other conditions with serious impacts on patients and their carers. He also worked with the U.S. Department of Health and Human Services Office of National AIDS Policy. In the late nineties through 2004, Gary served as Senior Vice President with Hyde Park Communications. His work included health systems consulting for clients including Hoffmann-La Roche, Bristol-Myers Squibb, Pfizer, and the TAEP Project. In the 1990s, he served as the Research and Treatment Coordinator for the AIDS Action Council in Washington, DC. While at AIDS Action, Gary helped to form the ADAP Working Group and the Patients' Coalition for Responsible FDA Reform. He also served as a co-chair of the National Associations Responding to AIDS (NORA).

Gary R. Rose, JD

After I had learned about Gary's accomplishments and experience with so many big organizations, I was skeptical at the time that Gary would be interested. But he was thrilled with the idea of starting the ADAP Advocacy Association! I remember his exact words when Bill approached him about it. Gary said, "I'm in."

Throughout the early part of 2007, Gary served on the Organizing Committee charged with laying the foundation for the organization (along with Bill Arnold, John D. Kemp, Esq., Joyce Turner Keller, Keita Simmons, Philip A. Haddad, MD, and Rani G. Whitfield, MD). This Organizing Committee eventually was seated as the first Board of Directors after the organization was legally established on July 6, 2007.

Gary immediately left his imprint on me when he proposed a set of value statements. In his words, "They would be the foundational ideals under which the ADAP Advocacy Association operates." To this day the value statements are listed on our website, and they include:

• That the organization consistently strives to achieve them, while encouraging its supporters to do the same.
• That the voice of persons living with HIV/AIDS shall always be at the table and the center of the discussion.
• That HIV/AIDS advocates should welcome the opportunity to join the skills, experience and voices with others on issues of disability and access to adequate healthcare for all Americans.
• That advocacy efforts targeted to our federal government shall always carry the needed messages applicable at the state and local level.
• That messages and information shall be in accessible formats understandable to - and also deliverable by - grassroots advocates in any setting.

Gary only served on our Board of Directors for one year, but he left his lasting mark on the organization in so many ways. Gary understood the importance of people living with HIV/AIDS being front and center on all advocacy efforts. In fact, he felt it was one area where some existing national organizations had lost their way. He constantly reminded us that an HIV organization cannot represent people living with the disease if they're not seated at the table, making the tough decisions. He also embraced the need to engage the broader disability advocacy movement because the two had gone their separate ways after the Americans with Disabilities Act was signed into law. Finally, Gary often lamented on the division within the HIV community itself, and stressed the need for the new organization to strive to bring all stakeholders together. That is why the following statement is also embedded in our work: The ADAP Advocacy Association works with advocates, community, health care, government, patients, pharmaceutical companies and other stakeholders.

On December 30th, Gary left us to go meet his Maker. I'm sure upon entering the pearly gates, Gary was looking how to make Heaven a better place because that is how he lived his life here on Earth. Gary was our friend, our colleague, our mentor, our leader and often times, our conscience. Gary was one for the roses, and that much is certain. Gary, you will be missed...

Gary R. Rose speaking at SAVE ADAP event in Wash-DC