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Global pressure on health spending is forcing the $1 trillion-a-year pharmaceutical industry to look for new ways to price its products: charging based on how much they improve patients' health, rather than how many pills or vials are sold...In the United States, both parties are promising fresh action on drug prices whoever wins the White House. In Europe, economies are stalled, squeezing state health budgets. And in China and other Asian markets, governments are getting tougher with suppliers...Pricing drugs based on clinical outcomes is one way to ensure that limited funds bring the most benefits to patients now and pay for the most promising medical advances in future. Some experiments in pricing have already been made...shifting the overall industry to a new model requires improvements in data collection and a change in thinking...The aim is a flexible pricing system that rebates healthcare providers when a drug doesn’t work as planned and charges more when it works well...

Pfizer and Allergan weren’t the only ones that were unhappy with the U.S. Treasury’s April move to block their $160 billion proposed megamerger. The U.S. Chamber of Commerce and one Texas business group were, too--and now they’re doing something about it...The pair sued the federal government...claiming that the Treasury Department’s move to tighten the reins on inversion deals violated the law...According to the allegations, the government tweaked the Internal Revenue Code itself after Congress refused to get on board with President Barack Obama’s inversion-limiting legislative changes--and the way Thomas Donohue, the chamber’s president and CEO, sees it, "this is not the way government is supposed to work."..."Instead of breaking the rules to punish companies engaged in lawful transactions, Washington should just do its job and comprehensively reform the tax code...The inversion crackdown that scuttled the Pfizergan transaction wasn’t the first of its kind. The April actions represented the third time the U.S. Treasury took matters into its own hands, with the first set--in October of 2014--toppling a proposed AbbVie-Shire merger....

A coalition of pharmacy industry organizations has asked congressional leaders to weigh proposals that would free certain biologic drugs from adherence to U.S. Pharmacopeia standards...the American Pharmacists Association and eight other groups sent a letter to the chairman and ranking members of key House and Senate committees expressing concern about proposals by the Food and Drug Administration and a provision in Section 11 of the FDA and NIH Workforce Authorities Modernization Act that would exempt certain biologics — including biosimilars — from USP public standards for quality, including the naming of biologic and biosimilar medicines...USP’s work provides a uniform quality standard, clarity for health care practitioners and confidence for patients...Pharmacists rely on USP quality standards. Removing requirements to adhere to these standards will raise additional questions and concerns about the safety of these emerging products...Our organizations share a commitment to patient safety and, as such, we believe that biologics and biosimilars should be required to have the same nonproprietary names based on existing standards and mechanisms...the pharmacy industry groups said in the letter. "Given the broad and negative implications of such potential naming proposals, as well as their controversial nature, we are requesting that FDA not finalize current guidance and proposals and that legislation not include these provisions."

The next time that employees at Xiamen Origin Biotech want to lie to regulators about what they are doing, they may want to make sure that the doors to nearby rooms are closed...During an inspection last January of its facilities in the southeastern Chinese province of Fujian, an employee told a US Food and Drug Administration inspector that the company did not keep any drugs on location. But while they reviewed company operations in a conference room, the inspector happened to notice that an adjacent room was being used to warehouse relabeled medicines...The same Xiamen employee also thought nothing of telling the inspector that the company had stopped relabeling drugs in January 2015. But during the inspection, the FDA staffer reviewed a list of exported drugs that showed Xiamen had distributed them until January 2016...Pharmaceutical and ingredients manufacturers in China and India have come under intense scrutiny in recent years due to a series of disturbing events...the flow of FDA warning letters about companies based in these countries receives added attention, sometimes deservedly so. Xiamen, for instance, also lied to its customers, according to the FDA...The company falsified and omitted information on certificates of analysis...which are supposed to verify the veracity of its products...

The pharmacy industry’s role in the 340B Drug Pricing Program continues to expand...latest analysis finds that nearly 18,000 pharmacy locations contract with 340B-eligible covered entities. That accounts for more than one in four U.S. retail, mail, and specialty pharmacy locations...Walgreens remains the biggest player, with about the same number of locations as those of Walmart, CVS, Rite Aid, Kroger, and Albertsons combined...Amidst the contract pharmacy boom...what’s really going on. How many prescriptions do contract pharmacies provide at discounted prices to uninsured, underinsured, and low-income patients? Who is really benefiting from the contract pharmacy business?…a 340B contract pharmacy doesn’t earn traditional spreads and dispensing fees. They instead profit from fees paid by the 340B entity. Given providers’ substantial profit opportunities, a 340B entity can afford fees that often far exceed a pharmacy’s typical profits from dispensing a third-party-paid prescription...There are many other profit opportunities...The extensive use of 340B contract pharmacies allows hospitals and other providers to benefit from 340B drug discounts earned from commercially paid prescriptions dispensed by contract pharmacies...Do needy patients benefit? No one knows. Covered entities are not specifically obligated to share any 340B savings with financially needy or uninsured patents, nor are they required to disclose how they use profits from the 340B program...

Cephalon has reached a $125 million settlement with 48 states in connection with its alleged efforts to delay generic versions of its blockbuster sleep disorder drug Provigil from entering the market, New York Attorney General Eric Schneiderman said...The settlement...comes a little more than a year after the company struck a $1.2 billion parallel settlement with the Federal Trade Commission...The FTC accused the company of protecting its monopoly on Provigil by paying generic drug makers to drop their challenges to Cephalon's patent, in what is known as a "pay-for-delay" deal...the company successfully delayed generic competition of the drug by six years through filing patent infringement lawsuits and then settling them by paying competitions to delay selling generic versions of Provigil, Schneiderman said...When pharmaceutical companies put profits ahead of people by illegally restricting competition, it harms patients...

Arizona-based health services operator Banner Health said...that it was the victim of a cyberattack potentially affecting about 3.7 million patients, physicians, health plan members and others across seven states...The organization, which operates a community hospital in Fallon and facilities in Fernley, did not confirm whether any Nevada patients’ information was compromised in the attack...Jennifer Ruble said she didn’t yet have data on the number of people affected in each of the seven states in which the health system operates...The nonprofit system is mailing letters to possibly affected individuals, has contacted law enforcement and has taken actions to block cyberattackers, according to a statement...

Most health policy experts knew, and many warned, that the Affordable Care Act would lead to massive consolidation in the health care industry, including hospitals, physicians’ practices, and especially health insurers. Now the Justice Department is pushing back by opposing the mergers of four large health insurers—Aetna with Humana and Anthem with Cigna —as they try to survive the Obamacare wasteland...The Obama administration defended its opposition by claiming the mergers would reduce competition. Attorney General Loretta Lynch explained, "If allowed to proceed, these mergers would fundamentally reshape the health insurance industry." That’s rich, since nothing has reshaped the health insurance industry more than Obamacare—and by design...Obama officials dismiss the health insurer losses, claiming that many of the insurers are still profitable. But that’s because health insurers often have several lines of business, some of which may be profitable even as they lose hundreds of millions of dollars selling in Obamacare exchanges. No responsible board of directors will let such losses continue indefinitely...Policyholders will likely be receiving the notice that their premiums are rising or policy is being canceled in September or October—just before the election...

As a rule, principal investigators for clinical trials should not be trading in the stocks of companies whose drugs they are testing. But the feds allege that Dr. Edward Kosinski ignored this dictum and now faces charges of insider trading...Kosinski sold his shares in Regado Biosciences after receiving bad news about a clinical trial in which he was the principal investigator, according to...Securities and Exchange Commission. In the first stock trade, he avoided $160,000 in losses, and in the second transaction he made more than $3,000 by exercising options...He faces a maximum term of imprisonment of 20 years...alleged episode of insider trading is only the latest instance involving the pharmaceutical industry or those working with drug makers. The issue has increasingly raised concerns in connection with clinical trial work, as well as deal-making and the drug approval process, which some fear can be distorted by such activities.

Justin Gallagher, associate publisher of The American Journal of Managed Care. Welcome to This Week in Managed Care, From the Managed Markets News Network.