Category: Drug Costs

Dear Group, In keeping with yesterday’s post of a locally placed, thinly disguised ad by an impressive group of pharmaceutical companies aimed at insuring their continued profits I encourage you to: Click and read My Wife’s Expensive Cancer Drug, Doug Muder’s January 14, 2019 entry for his weekly email blog, the Weekly Sift. I have written of my own experience with our un-free market pharmaceutical pricing system in this country. Mr. Muder looks at it in greater depth through his personal experience with his wife’s cancer treatment.  Keep to the high ground, Jerry P.S.  I encourage you, in the left hand column of The Weekly Sift webpage, to sign up to receive Doug Muder’s weekly email, delivered to your inbox. I find it a level-headed bird’s eye view of the latest national news. I look forward to reading it every Monday.

Dear Group,

The chemical 5-fluorouracil (5-FU) was patented originally in 1956. It came into medical use only six years later in 1962. As a drug It interferes with DNA production, fouling up the machinery necessary for rapidly growing cells to divide and multiply. 5-FU is used in the treatment of systemic cancers, including cancer of the breast, ovary, and colon. It is NOT a fancy new drug requiring expensive research and development. 

Some of my readers may have used this drug as a topical treatment for the precursors of skin cancer. As a topical 5% cream 5-FU is remarkably safe and effective, and, until recently, was quite inexpensive. Never heard of 5-FU, you say? How about the trade names Efudex, Carac, or Fluoroplex? 

I visited my dermatologist recently and received a prescription for Efudex Cream 5% to “Apply to Scalp BID [twice a day] until red, raw, irritated.” Along with the prescription came some non-medical advice. “Your price point is around fifty dollars,” she said. 

“Fifty dollars!” I exclaimed.

“Oh, yes,” she said. “A while ago patients started calling me back to say they couldn’t afford the Efudex I’d prescribed. Some of them told me of charges up to $300 for a 40 gram tube. Now I spend a portion of every day explaining how to avoid paying ridiculous prices for a drug that used to be cheap. If I don’t spend the time explaining, some of my patients will simply skip the treatment and show up later with invasive skin cancer requiring major surgery.” 

I was stunned. This is a drug I heard about in medical school in the early 1980s. The last time I bought a 40 gram tube of Efudex (5-FU), maybe ten years ago, it was about twenty dollars.

Forewarned, I called my usual pharmacy to ask what it would cost me to fill the prescription.. “Your net cost after insurance will be $100,” I was told. 

“After insurance?” I asked. “What would it cost me if I bought it outright?”

“Two hundred and eighty-four dollars.” she said. I wanted to scream…but it wasn’t her fault. She’s caught in the same un-free market that I am.

Let’s think about this a minute. I could hand over my credit card and accept the $100 cost. If I weren’t a physician myself and if my dermatologist hadn’t prepared me, I probably would have just grumbled and paid, just like a lot of busy people. But what are the consequences to the whole cost of medical care in an un-free market like ours?

I don’t know how much of the quoted $284 goes to the pharmacy, how much to the drug company and how much to the stockholders, but I can guarantee we feel the economic effect in our health insurance bills. Consider: as this scenario is repeated across all the subscribers to my health insurance, the insurance company has to ramp up the premium by some amount to cover the payment to the pharmacy. Insurance, you recall, serves to smooth out unexpected cost over all the subscribers. As long as their money-making business model is not threatened, insurance executives have little reason to try to micromanage ridiculously inflationary drug costs. Why should they bother? Just pass through the average extra cost to the whole pool of subscribers. The drug company and the insurance company both make a profit and the subscriber is none the wiser.

While the patient/consumer understandably complains about the ever rising cost of insurance, McMorris Rodgers and her Republican/Libertarian colleagues blame the Democrats and the Affordable Care Act, intoning “free market,” “personal choice,” and the evils of “government intrusion” into our personal lives. 

A free market requires symmetry of information for supply and demand to establish the proper price for an item, but in the drug and insurance world the corporations have a massive advantages they wield in their pursuit of profit. First, the patient/consumer often feels as though there is no choice about whether or not to buy the drug. To add to the asymmetry, pharmaceuticals are marketed under multiple brand names, a generic name, and multiple sizes and formulations. Sorting out the history, side-effects and efficacy of any given drug can be a time-consuming task. The doctor prescribing the drug and the pharmacist filing the prescription have dozens of other things they should be spending their time on besides trying to make the patient/consumer aware of the price structure for every medicine. 

How much time is there in a life for every patient/consumer to dig around the way I did with 5-FU to figure out the least expensive method of obtaining a drug? “It’s my health! The doctor prescribed it. I must buy it, if I can’t come up with that kind of money, well, I’ll just have to make do without it.” Life goes on…until a vastly more expensive and dangerous surgical procedure might be required to treat the disease easily dealt with by the original prescription.

The ridiculously inflated price of 5-FU has another unintended effect: For a caring doctor trying to provide treatment for pre-cancer that a patient can afford there is another option, an in office light treatment that is often fully covered by health insurance. Never mind it is not quite as effective and never mind it requires repetitive monthly $200 visits. But, voila! the patient/consumers out of pocket cost (the $100 I was quoted for a tube of Efudex) might be less or nothing. Never mind the overall accumulated cost to the health care system is more…

Run this economic scenario through your head again and again with different drugs and different patients and you will have a hint of how broken our system is, why it is so ridiculously expensive, and why we, as a country, have worse health outcomes and pay more for health care than much of the developed world.

Meanwhile, McMorris Rodgers’ solution to the problem? Here’s her full statement from her essay published September 30 in the Spokesman:

I also believe we need to address skyrocketing prescription drug prices. I’ve led on legislation to bring transparency to Pharmacy Benefit Managers (PBMs) who are the middlemen between drug companies and local pharmacists and are often the source of pricing increases. Just this week, I supported legislation to ban gag clauses – contractual provisions that bar pharmacists from informing patients when it’s cheaper for them to pay out-of-pocket for their prescriptions than go through their insurance. If our pharmacists, health insurers and PBMs can know the real cost of prescriptions, so should our patients.

What?? We’re going to control drug prices in a hopelessly rigged and complex market by empowering (not mandating) middlemen to tell patients about drug prices? This is going to result in cost reduction? Even if she grasps some part of the problem of the lop-sided un-free market, this is barely the beginning of a solution.

In contrast, Lisa Brown wrote in her essay of the same day:

I will work to lower the cost of prescription drugs – the federal government can and should use its buying power to negotiate lower costs.

That comment suggesting government intervention is unthinkable to a doctrinaire “free” market Republican/Libertarian like our incumbent. McMorris Rodgers offers to tinker with an un-free market problem that is beyond tinkering. Have her pharmaceutical sponsors convinced her that to have huge government volume buyers like Medicare use their bargaining power in the marketplace would be unfair to them and their stockholders? 

By the way, that $284 tube of 40 grams of 5% Efudex for my scalp? I’m getting it through a Canadian pharmacy for $51.58 USD. I took time out of my life and I had the resources to play the game. Not everyone has that time and resources–nor should they be expected to. It should be a function of government to guard our health care system from profit driven predation in an un-free market.

Read Lisa Brown’s whole essay here. It is a breath of fresh air and comprehension. Lisa gets it.

Keep to the high ground,

Jerry

Dear Group,

Remember Martin Shrkeli, the nasty, un-repentent founder and chief executive of Turing Pharmaceuticals? He was briefly infamous for jacking up the price of a tablet of Daraprim (an old antibiotic) from $13.50 to $750.00 overnight in 2015. Do you remember a sense of satisfaction when he was sentenced to prison for seven years? Did you think, well, he got what was coming to him for such a heinous act? Think again. He may have gotten what was coming to him, but he wasn’t sent to prison for an immoral price hike that put people’s lives at risk. He was put in prison for defrauding the investor class.

Think about that. In 2015 Daraprim (pyrimethamine) had been around for sixty-two years. As an ophthalmologist, I used Daraprim to treat a vision-threatening infection by a parasite, Toxoplasma gondii. Later, its main use was for treatment of AIDS patients with a life-threatening systemic infection with the same pathogen. In 2015 when Shrkeli hiked the price of Daraprim, Turing was the only manufacturer. Cost to produce a tablet? In India at the time a dose of pyrimethamine could be purchased for as little as $0.10. The price hike left patients (and their doctors) scrambling to find funding for vision-saving or even life-saving treatment. The money from the inflated prices went to Shrkeli and Turing’s stockholders. Some patients no doubt had to forego treatment. These were folks too sick to navigate the complex web of pharmacy insurance or lacking the wherewithal to smuggle the drug into the country, Such people are in no condition to mount a political campaign. In our system they can be allowed to suffer. Their collective voice is too quiet for a free market Republican to hear. 

It is a grim irony that Shkreli went to prison not for a price hike that fell on the vulnerable, likely blinding some and hastening the death of others. No, he went to prison for “defrauding investors in two failed hedge funds.” Such is our system, such is the fealty the Republican/Libertarians pay to the “free market.” There were dramatic hearings in 2015 in the Republican majority House…and no action whatsoever. 

What does Daraprim cost today in the United States? $746.18 per tablet at Costco according to a quick online search. In Canada? $1.38 per tablet is the highest price I could find.

Outraged yet? It would take only a minute to come up with numerous other examples of immorally priced drugs, each affecting a relatively small group of patients, patients who spend time struggling with health insurance companies for coverage of inflated drug prices, patients who go without essential medicines or take half doses because they simply can’t afford the price, patients who pay ridiculous insurance premiums in part because of the unconscionable prices drug companies are allowed to charge.  

If you take this issue to McMorris Rodgers’ local office, perhaps her staff (funded by your tax dollars-Member’s Representational Allowance) will help you find some compassionate program to help you pay the bill…or perhaps you can appeal to Go-Fund-Me. What you will NOT get from McMorris Rodgers is any action to rein in the cost of pharmaceuticals. You will not get a bill to encourage reimportation from Canada. You will not get legislation to allow Medicare/Medicaid to volume bargain with the drug companies on price. Those straightforward ideas are contradictory to Republican/Libertarian “free market” ideology. Never mind health care and drugs are not part of a free market.

While McMorris Rodgers remains in office and in a Republican majority remains in Congress there will be no relief. Voting her out won’t fix this right away, but it is a necessary beginning. Lisa Brown understands health care economics and will work toward rational drug pricing. Here is your chance to elect a Representative to get things started.

Keep to the high ground,

Jerry

P.S. Please understand I am convinced of Cathy McMorris Rodgers’ fundamental desire to do good, but I fear she lacks the open mind, the education, and the mental bandwidth to deal with many issues. Her deep, unfounded faith the “free market” will solve all problems blinds her to circumstances where the market is not free. Drug prices and health care are cardinal examples.

Dear Group,

Megan Perez is leaving McMorris Rodgers’ staff, according to her LinkedIn page, Most of you have probably never heard of Ms. Perez, but I find her story most interesting. Ms. Perez has served McMorris Rodgers as her “Legislative Director” for a year and eight months and as “Policy Advisor” for the ten months prior. As Legislative Director Ms. Perez annualized salary was $94,000 (see page 1370). Her LinkedIn page is worth visiting. Ms. Perez lays claim to a pivotal roll in legislation with which we are familiar, for example, the ABLE Act and the Steve Gleason Act, as well as work to “analyze and provide guidance on legislative policy on healthcare.” It is probably fair to assume Ms. Perez contributed to the last minute insertion into the Omnibus Appropriations (Spending) Bill a nice perk for the Omeros Corporation. I wonder if she is also responsible for McMorris Rodgers, framing the Omeros perk as ensuring access to “safe, innovative, and life-changing drug[s]?” The sole purpose at least of the Omeros drug in question, Omidria, is to dilate the pupil in cataract surgery, (For more detail check out my post from March 27, 2018.)

Ms. Perez is leaving McMorris Rodgers to join the Petrizzo Group. Never heard of it? Neither had I, but through the wonders of the internet you can visit its public face with just a click. I encourage you to visit and read what they offer…and to whom they offer it.  The website mentions no partisan lean, only that they “…excel at complicated, high-stakes endeavors that blend skilled thinking, sophisticated strategy and precise execution.” Among the notable accomplishments they cite is “engaging influential policymakers on national healthcare issues.” They appear to me as the perfect example of a firm that makes its money by lobbying. Photos of the U.S. Capitol and Lincoln’s statue in the Lincoln Memorial are featured on the website. (Is Lincoln’s image borrowed as code for a Party whose major fundraising event is a “Lincoln Day” dinner?)

I pursued Ms. Perez’ imminent migration to the Patrizzo Group from McMorris Rodgers’ office while wondering if Ms. Perez were leaving what she may perceive as McMorris Rodgers’ sinking ship. Was she bailing out to the safety of a lobbyist position, part of the infamous D.C. “revolving door” between lawmaker’s offices and the lobbyists who are paid to influence them? While visiting the Petrizzo Group website, I clicked “Our Clients.” There I found eleven corporate insignia from the familiar (Starbucks), to the obscure (BSquare). But right there in the middle was Omeros, one of the companies for which McMorris Rodgers inserted a nice little perk paying out a total $26 million dollars over ten years, according to the Congressional Budget Office. Even better, some investors must have gotten advance word, since the stock price of Omeros jumped 45% over the Wednesday night before the Omnibus Spending Bill finally passed on Friday.

On Good Friday at Centerplace in Spokane Valley McMorris Rodgers was specifically asked about the newspaper reports on the Omeros perk. For an instant she appeared flustered…and immediately reverted to message, defending her insertion to the bill as necessary “to provide patients across the country access to safe, innovative, life-changing drugs.” Omidria, a $400 per dose drug for dilating the pupil, fits none of those adjectives. Either McMorris Rodgers did not do her homework to understand the drugs for which she was putting forward this exception to Medicare rules or she did understand them and assumed the voters would be mollified by her messaging. In either case she failed us and she seems unwilling to live up to that failure. Even if we believed health care in this country were really a free market (it isn’t), how can she justify legislating a specific exception to Medicare rules for the benefit of a select few drug companies?

There is a pattern here. McMorris Rodgers and her Republican colleagues want to rein in the costs of “entitlement” programs, i.e. Social Security, Medicare, Medicaid, and the Affordable Care Act. She votes for a Balanced Budget Amendment to the Constitution. It is just too expensive, too much of a strain on the federal budget to continue, she says…and then she legislates special expenditures out of those same tax coffers for a handful of drug companies.

She is either appeasing a Republican donor or she is in over her head. Either way, she is not representing my best interests or the interests of eastern Washington.

Keep to the high ground,
Jerry

P.S. The Petrizzo Group is not on K Street, the infamous location of so many lobbying firms. If proximity is any measure of wealth and influence take note: the Petrizzo Group is located at an easy ten minute walk from the U.S. Capitol. K Street is twice as far away.

P.P.S. Ms. Perez LinkedIn resume shows she has worked for U.S. Representatives since she graduated from the University of South Florida with a B.A. in Political Science in 2011. While still in college she served as an intern with Rep. Bill Young of south Florida, at time the longest-serving Republican member of Congress. It is probably fair to guess Ms. Perez will be amply rewarded in her new position with the Petrizzo Group. Not bad for someone apparently in her late twenties with an undergraduate degree in Political Science.