HDA UK Media And Political Bulletin – 21 December 2016
|Big pharma braces for further bruising publicity over drug prices
Financial Times, David Crow, 18 December 2016
The Financial Times reports on the issue of high drug prices in the US. Theoretically, the pharma industry was relieved by the election of Donald Trump over fears that Hilary Clinton would implement strict policies to curb the cost of medicines. However, this approach could be short-sighted and the issue of drug prices remains high on the agenda with increasing public scrutiny expected in 2017. Brent Saunders, chief executive of Allergan, the first company to publish a “social contract” with patients, urges the industry to self-regulate.
DDA, Ailsa Colquhoun, 20 December 2016
The three mainline wholesalers have supplied their Christmas delivery information. Please download the information you require to ensure your supplies to patients.
Chemist and Druggist, Thomas Cox, 20 December 2016
The Department of Health and National Assembly for Wales have agreed concessionary prices for the following items for December 2016 prescriptions.
|House of Commons Oral Answers, 20 December 2016, Community Pharmacies
Lyn Brown (West Ham) (Lab)
7. What steps his Department is taking to work with community pharmacies to reduce (a) waste and (b) the cost of medicines.
The Parliamentary Under-Secretary of State for Health (David Mowat)
NHS England has a range of initiatives for waste and medicine cost reduction. We estimate that there is a prize of up £150 million a year to be realised across the system on waste. Community pharmacies have a significant role to play in that, partly through their existing duty to review prescriptions when repeat dispensing and partly through the separately commissioned medicine use reviews.
The Minister is absolutely right to say that community pharmacies have an important role to play. On 17 October, he told the House:
“We do not believe that any community pharmacies will necessarily close as a result of these cuts.”—[Official Report, 17 October 2016; Vol. 615, c. 597.]
However, the impact assessment published by his Department just two days later described a possible scenario in which 1,000 pharmacies close. Will the Minister confirm that nobody in Britain will have to travel further to get to a chemist as a result of his cuts?
The impact assessment set out an upper range, which we do not believe represents an accurate reflection of what will happen. The facts of the matter are that we need our community pharmacy network to move towards services and away from dispensing. Paying every community pharmacy in the country, or 91% of them, £25,000 just for having an establishment does not achieve—[Interruption.]
Order. The hon. Member for West Ham (Lyn Brown) should not chunter from a sedentary position in an attempt to hector the Minister, who should glide seamlessly above the attempted provocation. Minister, continue.
The Minister has finished.
He has finished his answer. Very well; I call Alistair Burt.
Alistair Burt (North East Bedfordshire) (Con)
To ensure not only that unnecessary costs are reduced, but that the best community pharmacy services are provided, will the Minister do all that he can to make sure that clinical commissioning groups engage as effectively as possible with pharmacies? Preferably, that would be by getting more people on CCG boards to ensure that the crucial connection between the provision of health services and pharmacy is absolutely at the heart of what we do.
My right hon. Friend is right; CCGs are variable in the extent to which they commission pharmacy services. However, we have set out the minor ailments scheme, it will be rolled out nationally by April 2018 and we expect every CCG to take a part in it.
Sir Kevin Barron (Rother Valley) (Lab)
As chair of the all-party group on pharmacy, I have seen many examples of drugs that have been prescribed and not used, as I am sure we all have. Should we not renegotiate the national contract, which currently pays community pharmacies more than 90% of their income through prescribing? Surely we can do things differently.
The right hon. Gentleman rightly says that we must change the contract to move away from 90% of the income coming from dispensing. Far more must come from services, which are separately commissioned by CCGs and others. The Murray review, which he will be aware of from his work on the all-party group, sets out a road map for that, and NHS England is determined to implement it.
Mr Stewart Jackson (Peterborough) (Con)
May I pay tribute to the excellent work of pharmacies in my constituency? Last night, “Look East” demonstrated the pressure that urgent care centres in the east are under because of extra patient footfall. Will the Minister give me an undertaking that he will put in place guidelines to CCGs to encourage them to work much more closely with pharmacies to reduce that footfall?
My hon. Friend raises an important point, and he is right to say that we must move the community pharmacy network away from just dispensing and into services, which will include minor ailments and repeat prescriptions. I will be encouraging CCGs to do that.
Martyn Day (Linlithgow and East Falkirk) (SNP)
Community pharmacies, which were developed in Scotland 10 years ago, are there for minor ailment, chronic medication and public health services. Although the Minister has expressed admiration for the Scottish system, does he not recognise the need to work with the pharmacy profession to develop the full potential within community services?
I have mentioned on previous occasions that Scotland has, in some respects, gone further and faster than we have in England so far on community pharmacies. The £300 million that we have set aside in the integration fund for the rest of this Parliament is going to be used to do just the things that the hon. Gentleman has mentioned, in terms of minor ailments and repeat prescriptions. We are determined to make that happen.
Julie Cooper (Burnley) (Lab)
Over the festive period, in every town and city in the UK, community pharmacies will be open to dispense emergency prescriptions, and to provide specialist services and professional advice. Does the Minister appreciate that service, which not only helps the public, but takes pressure off other parts of the NHS? Will he join me in thanking community pharmacies and their staff for the work they do? Will he commit to reconsider budget cuts that will lead to a reduction of this valuable service, and instead meet the Royal Pharmaceutical Society and the National Pharmacy Association to discuss extending the role of community pharmacies, to deliver savings for the NHS?
I have met the royal college of pharmacies on a number of occasions, and indeed it has worked with us on the Murray review, which is an essential road map that sets out how we are going to move the community pharmacy network away from a remuneration model based just on dispensing and on to services as well. I agree with the hon. Lady that the 11,000 community pharmacies across the country all provide excellent services, and we expect that to continue.
|Big pharma braces for further bruising publicity over drug prices
Financial Times, David Crow, 18 December 2016
Pharmaceutical executives are steeling themselves for 2017 to be another year defined by public outcry over the price of drugs, even as some investors bask in Donald Trump’s election victory.
The issue of high drug prices was never far from the headlines during the presidential campaign and shareholders had feared a victorious Hillary Clinton would implement policies to curb the cost of medicines.
Price controls would have crimped industry profits in the US, the world’s largest and most profitable healthcare market: Mrs Clinton’s loss was pharma’s gain or so the theory went.
But some executives insist it is too soon for relief and many are predicting another 12 months of bruising publicity over the price of medicines.
“I don’t think this election changes a thing,” says Dr Steve Miller, chief medical officer of Express Scripts, a pharmacy benefits manager that negotiates drug prices on behalf of US employers and health insurers.
“Trump has been a populist — if a company does something irresponsible, I don’t think he’s going to stand on the sidelines,” adds Dr Miller. “It is premature for the industry to relax and celebrate because drug prices are still going to be an enormous issue next year.”
Mr Trump has pledged to lower the price of medicines. “I’m going to bring down drug prices,” he told Time earlier this month, as the magazine named him person of the year. “I don’t like what’s happened with drug prices.”
His comments knocked roughly 3 per cent off biotech stocks, but they recovered in the following days, in a sign that investors are relatively sanguine about the threat.
Brent Saunders, chief executive of Allergan, best known for its Botox wrinkle treatment, says Republican dominance in Washington augurs well for the sector because the party is less inclined to introduce new regulations.
But he warns it would be foolish for pharma companies to cling to the pricing policies that landed the industry with such a toxic reputation. “We shouldn’t make the mistake of believing they will allow egregious behaviour to continue.”
Rather, he urges rival executives to use Mr Trump’s victory as an opportunity to police themselves. “I think if we self-regulate and stop doing these big double-digit price increases, we will be in a much stronger position.”
In September, Allergan became the first company to publish what it called a social contract with its patients, pledging to refrain from raising prices more than once a year and to limit any increases to low, single-digit percentages.
Since then, others have followed suit. Novo Nordisk, the diabetes specialist, said it would not increase its prices by more than 10 per cent a year.
Last week, Eli Lilly launched a scheme to shield some diabetes patients from high prices. It said it would discount the list price of its insulins by up to 40 per cent for those who have to pay for drugs out of their own pocket.
The Eli Lilly scheme is designed to tackle a flaw in the way US drugs are priced.
Although list prices are continuing to rise sharply, pharmacy benefit managers have started to extract larger discounts and rebates, meaning the real price received by the manufacturer is lower.
In 2016, the list price of drugs rose by between 6 and 7 per cent, but net price inflation — after all the discounts were subtracted — was lower, at between 2 and 3 per cent, according to QuintilesIMS, the research group.
On the face of it, the market is functioning as it should. Pharmacy benefit managers amass big groups of patients — 85m in the case of Express Scripts — and use their clout to extract large savings from drug companies, which they pass on to their clients: employers and health insurers.
Theoretically, it should result in lower premiums for consumers.
But in fact it has resulted in much higher costs for patients because their “out-of-pocket” expense is still calculated using the list price, rather than the net price.
This is particularly hard on those without insurance who buy their medication with cash and those with “high-deductible” policies, who have to shell out thousands of dollars on medicines before their insurer picks up the burden.
An increasing number of Americans fall into this trap, either because they have bought cheaper policies on the Obamacare exchanges or because their employers have switched them to less generous plans to save costs.
Ronny Gal, analyst at Bernstein, estimates that roughly 50 per cent of US patients will be exposed to a high-deductible plan in 2017.
Most high-deductible plans have a set amount — $5,000, for instance — that a patient must pay for medicines before their insurance kicks in. In the majority of cases the threshold is reset in January, meaning many families are about to see a big spike in their drug costs.
Soaring family bills will only deepen anger against the drugs industry, and politicians and reporters are ready to pounce on any egregious examples.
“With the media’s attention on this topic primed from 2016, [a pharma company] will likely end up in the wood-chipper,” predicts Mr Gal.
The potential time-bomb explains the trickle of drugmakers putting policies in place to defend themselves against accusations of price gouging.
Yet there is disagreement within the industry over whether specific policies and promises are the best way to deal with the debate over pricing. Merck, the third-largest US drugmaker by market value, has declined to publish its own pledge.
“We’ve had a very disciplined approach to pricing for years,” says Ken Frazier, chief executive of Merck. “We haven’t decided to come out with a big PR blitz. I think actions speak louder than words in this area and Merck has a track record of trying to be a responsible company.”
Mr Frazier wants to shift the focus from the price of drugs to the ballooning cost of healthcare in general. He cites Keytruda, his company’s revolutionary “immunotherapy” drug, which can significantly extend the lives of some of the sickest cancer patients. It costs roughly $150,000 a year.
“If you take a 45-year-old diagnosed with lung cancer, how much is that going to cost society from that point until a person dies?” he asks, pointing to the huge expenses associated with hospitalisation and end-of-life care.
“It’s going to be a lot more than this drug,” he says.
Generic drug prices under the microscope
The best tonic for the soaring price of prescription medicines is generic drugs. When a branded medicine loses patent protection, cheaper copycat versions are supposed to flood the market and reduce the price of a pill to just a few pennies.
However, drugmakers are facing accusations that they are manipulating the generics market to keep prices artificially high. On Friday, Actavis was accused of charging the NHS “excessive” price increases for generic hydrocortisone tablets.
The UK Competition and Markets Authority said the company, owned by Teva, the world’s largest generic drugmaker by volume, had raised the price of the tablets by more than 12,000 per cent since 2008, from 70p to £88.
It comes just a week after Pfizer was fined a record £84m for charging excessive prices for a drug to treat epilepsy. As with Actavis, the CMA said Pfizer had exploited a loophole for generic treatments, which are not subject to price regulation in the UK.
In the US, the majority of generic drugmakers are co-operating with a federal investigation into whether they colluded to keep prices high. Last week, the first criminal charges were brought against former executives at a relatively small drugmaker, Heritage Pharmaceuticals.
Larger names, such as Teva and Mylan, are still co-operating with the antitrust probe. And last week 20 states filed a lawsuit accusing Teva and Mylan — and four other generic drugmakers — of illegally fixing prices.
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