Prescription Drugs
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Hill staffers know the drill. Every time legislation to limit drug prices begins to move, patient advocacy groups visit their offices, accompanied by sick and dying patients flown in for the occasion. Their mission: to stop any law they fear will decrease spending on drug research. 

Take, for example, the response from patient groups to a Trump administration effort in 2018. Borrowing from what left-of-center groups have advocated for years, the Centers for Medicare & Medicaid Services proposed pegging prices for some drugs to the far lower prices paid abroad.

“Why should other nations like Canada—why should other nations pay much less than us?” the president shouted last July before helicoptering off for another round of golf. “They’ve taken advantage of the system for a long time, pharma.” Indeed, a recent study published in Health Affairs found that the 15 largest drug companies generated an additional $116 billion in revenue by charging higher prices in America than they charge in Europe for the same drugs.

With that and other proposals to lower drug prices on the table, patient advocacy groups—led by some of the nation’s preeminent cancer, AIDS, and rare-disease charities—sprang into action. Only, it wasn’t in support of lower prices. Rather, they mobilized their lobbyists and extensive grassroots networks in opposition.

A typical position comes from Carl Schmid, the former deputy executive director of the AIDS Institute and current cochair of the Presidential Advisory Council on HIV/AIDS. “We don’t support the international pricing index or negotiations by Medicare” to lower drug prices, he told me last year, when he still worked at the AIDS Institute. The American Cancer Society Cancer Action Network (ACS CAN) also opposed the proposal. It was consistent with their past stances. Early last year they spearheaded a national ad campaign condemning a different cost control measure proposed by the administration. “When you limit drug therapies, you threaten lives,” read the headline of a full-page ad, signed by 57 patient advocacy groups, that ran in The New York Times, The Washington Post, and other publications, according to ACS CAN’s spokesperson.

The American Cancer Society, one of the nation’s oldest, largest, and best-funded patient advocacy organizations, is among more than 1,000  disease-specific patient advocacy groups registered as nonprofit charities. They range from other large and well-heeled organizations, like the American Heart Association, to small groups advocating for patients with rare diseases. Almost none have challenged the pharmaceutical and biotechnology industries over prescription drug prices. Often, in fact, they go to bat for the doctors and hospitals who get a bigger cut when drug prices surge. 

Out of the more than 1,000 disease-specific patient groups, almost none have challenged the pharmaceutical industry over prescription prices. Often, in fact, they go to bat for the doctors and hospitals who get a bigger cut when drug prices surge.

To explain this paradox, congressional studies and investigative press reports often point to the large donations pharmaceutical companies give to disease advocacy groups. A 2017 survey published in The New England Journal of Medicine, for example, found that 86 of the 104 largest organizations admitted accepting donations from the pharmaceutical industry, with most of the rest failing to disclose who their donors are. 

What gets less attention is the substantive argument that most disease advocacy groups at least tacitly endorse. Since the 1950s, the drug industry has advanced a single idea to justify high prices: Without them, private-sector investment in research and development would decline and medical innovation would wither. Coming up with new wonder drugs is costly and risky, the thinking goes. If we want to have newer and better drugs than the rest of the world, we have to reward drugmakers with higher prices. Some consumer groups push back on this. But after two months of reporting, talking to representatives from about a dozen disease-specific advocacy groups, and reading hundreds of comments on bills submitted by groups and their members, I’ve found only a couple of disease advocacy groups that challenge high drug prices publicly.

As logical as the drug companies’ argument may seem, however, it’s mostly wrong. Aside from a few legitimate breakthroughs, usually for extremely rare diseases, the life expectancy increases from medical advances these days are measured in months, not years. High prices, meanwhile, are driving up co-pays and deductibles, and making drugs unaffordable for millions of people. 

Fortunately, many well-vetted policies are available that would give us lower prices and medical breakthroughs. But these policies don’t have a chance of becoming law without the support of patient advocacy groups. These organizations are seen as moral authorities when it comes to health policy. Until they’re willing to publicly dispute the industry’s claims, no major reform to bring down prices will succeed.  

The rising cost of medication has begun to feel like an epidemic. Almost monthly, reports come of deaths similar to that of 21-year-old Jesimya David Scherer-Radcliff, who died last summer after skimping on his insulin. “The cost of insulin is ridiculous,” Jesimya’s father told a local television station. “I just think this country is backwards. I am a veteran, so I’ve been around the world; I’ve seen other countries [and] how they operate.” 

Two-thirds of Americans—including more than half of Republicans—support greater government regulation of the drug industry, according to a recent Kaiser Family Foundation poll. Given the breadth of public support, you’d expect patient groups to be on the front lines fighting for lower drug prices. Yet on issue after issue, they have held off criticizing pharmaceutical companies and lobbied against efforts to cut prices. 

One likely reason is that these groups take in a lot of cash from pharmaceutical and biotech companies—
often the ones making the specific drugs that their members already rely on. Drugmakers also buy goodwill through funding programs that provide help to poorer patients who can’t afford their co-pays and deductibles. These include the Patient Access Network Foundation, the Patient Advocate Foundation, and the Chronic Disease Fund, all of which receive substantial donations from big drug companies. The programs amount to a hidden subsidy, since they make it easier for doctors to prescribe more expensive drugs when cheaper but equally effective ones are available. And by softening the financial blow for the neediest patients, they make it easier for advocacy groups to remain silent about escalating drug prices. 

Some patient groups go beyond silence, echoing the industry’s argument. “The manufacturers say you have to price drugs a certain way to provide a return and invest in innovation to find the next generation of therapies that will be even more effective,” Randy Beranek, the CEO of the National Psoriasis Foundation, said. “They have to fund all the drugs that never make it to market.” The National Organization for Rare Disorders touted the same line in its comments on the Trump administration’s proposed international price indexing rule. “We are concerned, however, that substantially altering the reimbursement for these therapies has the potential to unduly hurt innovation,” its comments read. 

The problem is that the argument doesn’t hold up under scrutiny. For the most part, private companies’ research isn’t all that innovative. It typically results in drugs that replicate those already on the market or offer modest improvements to rare conditions. A new drug for metastatic lung or colon cancer that extends life for three months is considered a major success these days and is far more common than a new treatment that could wipe out an infection like hepatitis C. 

Because pharmaceutical companies are driven to maximize profits, they have historically focused on maladies for which there are large markets but might not otherwise be considered a priority in medical research. The Food and Drug Administration (FDA) approves anywhere from about 180 to 260 new drug applications each year. But very few of those are actually new drugs. A Government Accountability Office study published in November 2017 found that just 13 percent of new approvals were “innovative products that serve previously unmet medical need or help advance patient care.” Most of the rest were different dosing or new uses for old drugs. 

For instance, last April, the California-based pharmaceutical company Amgen won FDA approval for Evenity, an osteoporosis treatment for postmenopausal women. The company already had a drug, called Prolia, for the same condition. Prolia’s $2 billion in annual sales were jeopardized by the imminent loss of patent protection, and competitors’ drugs were eating into its market share. Evenity was Amgen’s answer to holding on to the market: something new that wasn’t really any better.

In fact, Amgen’s new entry for osteoporosis had worse side effects than the older drugs. It caused more heart attacks and strokes. “Women may be better off taking a cheaper generic version of an existing drug than gambling on Evenity,” declared Cynthia A. Pearson, executive director of the National Women’s Health Network, in a press release when the drug was approved. 

Sometimes research budgets go toward clinical trials whose main goal is making doctors aware of a drug, essentially a marketing technique. Do your patients taking anti-inflammatories for arthritis pain complain about acid reflux? Why not enroll them in this trial to see if Nexium works for them? We’ll even pay you a fee for every patient you enroll. Nexium, an acid indigestion pill, generated more than $33 billion in sales for AstraZeneca over the past decade despite there being equally effective nonprescription alternatives available at a tenth the cost.

Pharmaceutical companies’ research often isn’t fruitful for another reason. Developing a novel approach to treating a disease begins with understanding its biomolecular origins and pathways, which is a long, arduous process. It requires decades of investment in researchers who devote their lives to investigating a particular disease, something the private sector won’t support because the results aren’t patentable. Virtually all of this basic science research takes place in laboratories funded by the government—the National Institutes of Health (NIH), the Walter Reed Army Institute of Research, and a few other agencies—or by a few well-heeled charities, like the Howard Hughes Medical Institute. 

Fortunately, many well-vetted policies are available that would give us lower prices and medical breakthroughs. But these policies don’t have a chance of becoming law without the support of patient advocacy groups.

Over the years, the government has also gotten involved in developing interventions—the drugs, medical devices, and other treatments based on those findings. Most of the early HIV/AIDS drugs and many cancer drugs were wholly developed in government-funded labs. 

Private-sector drug development is almost entirely dependent on this research. A recent study in the Proceedings of the National Academy of Sciences showed that NIH research was cited in patent applications for every one of the more than 200 drugs approved by the FDA between 2010 and 2016. 

Individual advocacy groups that stay silent on high drug prices may nonetheless think they are doing the best they can for patients in a world where pharmaceutical companies have so much power. Each group on its own lacks the power to win structural reforms, so they settle for trying to get a drug company to fund their work and possibly give discounts on drugs to some of their members. In the meantime, these groups desperately hope that drug companies will come up with a breakthrough for their patients. But unless groups work together and challenge the trade-off the drug companies offer, the harm to their members will only get worse.

To break this deadlock, patient groups must push the U.S. to come up with a more rational, cost-effective, and humane system for developing drugs. That means abandoning the false hope that major breakthroughs are just around the corner if only we pour more money into the pharmaceutical industry’s coffers.

The failure to come up with an effective Alzheimer’s treatment is a perfect example. Despite the fact that the few existing medications have minimal impact, pharmaceutical companies continue to profit by creating similar drugs. The sad truth is that until scientists have a better understanding of the multiple causes of dementia, we won’t be able to develop better treatments, no matter how much money is extracted from patients through higher prices. A better strategy would be to sharply lower the price for these relatively ineffective drugs and use the savings in government health care spending to substantially increase the basic science funding at the NIH.

This is only a starting point. Patient groups should demand more effective use of antitrust laws to prevent and roll back the mergers and acquisitions that keep making pharmaceutical companies bigger and less innovative. The number of deals per year has grown from about 100 in the late 1980s to almost 800 now. This consolidation leads not only to monopoly prices, but also to less innovation as merging corporations no longer have to compete with each other. Many mergers have eventually led to layoffs of research scientists.

Disease organizations are seen as moral authorities when it comes to health policy. Until they’re willing to publicly dispute the industry’s claims about the necessity of high drug prices, no major reform will succeed.

Patient groups should also be at the forefront of efforts to reform patent abuse. Almost 80 percent of new patents in the industry go to medications that are just minor variations on existing drugs. Drugmakers are gaming the regulatory framework by winning FDA approval of so-called market exclusivities. If exclusivity is granted, a drug gains several extra years of protection from competition from generics. As a result, companies are able to charge far higher prices for longer periods of time.

Another approach advocates should insist on is the use of “march-in” orders. These come from provisions in a 40-year-old law, the Bayh-Dole Act, that empower the executive branch to force drug companies to reduce prices on drugs created with the help of federal research funds. (See Alicia Mundy’s article on this subject, “Just the Medicine,” in our November/December 2016 issue.) Patient groups should also push for the creation of an independent government agency to assess drugs’ cost-effectiveness. Currently, agencies like the Patient-Centered Outcomes Research Institute look at how clinically effective different drugs are in treating the same conditions, but they are legally forbidden from examining which treatments bring the most benefit for the least cost. 

Ultimately, medical innovation needs to be unlinked from the prices patients and their insurers pay for treatments. It makes no sense—indeed, it is immoral—to pin the prospects for better therapies on a pricing system that makes many existing drugs unaffordable.

Delinking research from the pricing system is possible. In July 2019, 15 U.S. senators introduced legislation that would fund the National Academies of Sciences, Engineering, and Medicine to study alternative ways to promote medical innovation without resorting to high prices. They included establishing a prize fund that gives its highest rewards to new drugs that do the greatest good for the greatest number of people.

Patient groups wouldn’t be alone in the fight for these reforms. For decades, a cadre of left-of-center public interest groups and politicians have pushed for such policies and challenged drug companies’ arguments. The current drug price crisis has already led a few mainstream patient advocacy groups to join the chorus. “I don’t buy the argument that high prices are needed to support R&D,” Marc Boutin, CEO of the National Health Council, said. “It’s an easy sound bite. This constant escalation in prices that has gone well beyond inflation is just not acceptable.”

Until more patient groups begin making that argument in the public square, the drug industry’s lobbying machine will continue to hold sway in Washington. Patient groups will continue to be the pharmaceutical industry’s bulwark against legislation to rein in exorbitant prices. Saddest of all, they will be prolonging the financial toxicity of the current drug payment system, which is undermining the health of the very patients they are supposed to represent.

Correction: A previous version of the article stated that Amgen’s drug for osteoporosis, Evenity, essentially duplicated a drug called Prolia, which the company already sold for the same condition. This was not accurate; the two drugs have different mechanisms of action. We regret the error. 

Merrill Goozner

Merrill Goozner, a former editor of Modern Healthcare, publishes “GoozNews” on Substack.