A LinkedIn post from Healthcare and Drug Guru Bryce Platt ( https://www.linkedin.com/in/bryce-platt/ ) put me on to an April 18, 2023 JAMA Forum article on whether the U.S. is getting its bang for the buck with Medicare Part D. And the results to me were very shocking. We take for granted that when a doctor prescribes a drug, it is the right move. But America has so much drug marketing by Big Pharma that doctors’ and our decision-making may be skewed. At least that is what a JAMA Network article points to.
The JAMA Network assessment asked the question: “What was the added therapeutic benefit of the 50 top-selling drugs in Medicare in 2020, as assessed by key non-U.S. health technology assessment (HTA) organizations?”
What is an HTA anyway and how are drugs evaluated?
An HTA is undertaken by public and private entities around the world to assess the clinical effectiveness, cost-effectiveness, and safety of a given proposed drug, device, test, procedure, and more in the healthcare system. In its broadest form, an HTA will also include an analysis of ethical, social, and legal considerations. In theory, these assessments would steer the nation to a safe and outcome-oriented health system.
With regard to drug approvals, in other developed countries, comparative clinical effectiveness (i.e., whether the drug offers greater health benefits than others) and cost-effectiveness take on a major role. These assessments essentially dictate whether the drug will be placed on a national or plan drug list or formulary as well as what the price will be in that national system.
What happens here in the United States on drug decisions?
If other nations zero in on comparative effectiveness as well as cost-effectiveness, America’s system largely looks at the clinical effectiveness and safety. If the drug is found to be both, it gets approved by the Food and Drug Administration (FDA) regardless of its relative value against other drugs in the same or similar therapeutic classes.
Now, America is inching toward comparative effectiveness and cost-effectiveness in evaluating drugs. It does not have an HTA agency as in other developed nations, but the Inflation Reduction Act’s Medicare drug price negotiations mandate that the Centers for Medicare and Medicaid Services (CMS) look at these issues. The Kaiser Family Foundation (KFF) has issued several briefers on the drug price law and I have posted one below. Kaiser touches upon this issue. The first ten drugs have prices set for 2026, but we don’t know yet what factors CMS actually used to consider each of the drugs against others in the market. This will be released in 2025. But as outlined by KFF, CMS should do the following under the law (I have paraphrased below, but have shortened explanations).
- Use the price of therapeutic alternatives for determining the initial price offer for the maximum fair price under the law. This is net of all concessions (including rebates) for Part D drugs and/or the Average Sales Price (ASP) of Part B drugs. (Part B drugs will be subject to negotiation in the future.)
- If there are no therapeutic alternatives, CMS should use the federal Supply Schedule or Big Four Agency prices. These are discount schedules negotiated for various programs of the federal government.
- CMS will then adjust the initial offer based on evidence about the clinical benefit of the drugs relative to its therapeutic alternatives. This includes safety concerns and side effects and whether there is a therapeutic advance or improvements in clinical outcomes. Comparative effectiveness data on patient-centered outcomes and patient experiences would also be looked at.
- If there are no therapeutic alternatives, evidence about the drug’s clinical benefit and whether the drug fills an unmet medical need will be considered.
My guess is that not a lot of this was done in a thorough form and that CMS will mature over time on this requirement.
What did the study in JAMA Network find?
With that setting of the table so to speak, what did the assessment find? The assessment found that more than half of the fifty top drugs in Medicare Part D did not receive a “moderate or high added therapeutic benefit rating” by the national HTA organizations of France, Germany, or Canada. The twenty-seven drugs that missed the designations accounted for $19.3 billion in net spending — 11% of Medicare net Part D costs in 2020. Drugs with a low added therapeutic rating were most commonly used to treat endocrine disorders (11 or 41%) and respiratory diseases (6 or 22%).
The study also found something very interesting beyond the sheer cost: drugs with a low added therapeutic rating were used by more Medicare beneficiaries. They did have lower net beneficiary spending, but that does not excuse the potential limited value.
Conclusion
The authors say these findings could play an important part in the Medicare drug price negotiation process. The authors argue that CMS should ensure the low-benefit drugs are not priced higher than reasonable therapeutic alternatives, especially with Americans paying 2 to 3 times more for brand drugs than citizens on other developed countries.
In the end, our FDA and overall healthcare system emphasizes the proliferation of high-cost brand drugs in given categories that fight for market share. Each day patients go to their doctor and ask for a given drug they may have seen advertised. As well, many doctors give into the temptation that “new must be better” and prescribe those requested medications or others he or she learns of. But the fact is that legacy medications that are much cheaper and other treatments could have as much therapeutic value. Without that unbiased evaluation at the national level, we will continue to be victims of high costs, inefficiency, and low value.
JAMA Forum Article: https://jamanetwork.com/journals/jama/fullarticle/2803804
Kaiser Family Foundation: https://www.kff.org/medicare/issue-brief/faqs-about-the-inflation-reduction-acts-medicare-drug-price-negotiation-program/#initial_offer
#drugpricing #fda #ira #branddrugmakers
— Marc S. Ryan
