Why U.S. Biologic Drugs Are So Expensive

By Sarah Jane Tribble, Kaiser Health News

Europeans have found the secret to making some of the world’s costliest medicines much more affordable, as much as 80 percent cheaper than in the U.S.

Governments in Europe have compelled drugmakers to bend on prices and have thrown open the market for so-called biosimilars, which are cheaper copies of biologic drugs made from living organisms. The brand-name products — ranging from Humira for rheumatoid arthritis to Avastin for cancer — are high-priced drugs that account for 40 percent of U.S. pharmaceutical sales.

European patients can choose from dozens of biosimilars, 50 in all, which have stoked competition and driven prices lower. Europe approved the growth hormone Omnitrope as its first biosimilar in 2006, but the U.S. didn’t follow suit until 2015 with cancer-treatment drug Zarxio. 

Now, the U.S. government stops short of negotiating and drugmakers with brand-name biologics have used a variety of strategies — from special contracting deals to overlapping patents known as “patent thickets”— to block copycat versions of their drugs from entering the U.S. or gaining market share.

As a result, only six biosimilars are available for U.S. consumers.

European countries don’t generally allow price increases after a drug launches and, in some cases, the national health authority requires patients to switch to less expensive biosimilars once the copycat product is proven safe and effective, said Michael Kleinrock, research director for IQVIA Institute for Human Data Science.

From $50 to $1,300 a month

If Susie Christoff, a 59-year-old who suffers from debilitating psoriatic arthritis, lived in Italy, the cost of her preferred medicine would be less than quarter of what it is in the U.S., according to data gathered by GlobalData, a research firm.

Christoff tried a series of expensive biologics before discovering a once-a-month injection of Cosentyx, manufactured by Swiss drugmaker Novartis, worked the best.

Without the medicine, Christoff said, her fingers can swell to the size of sausages.

SUSIE CHRISTOFF (KAISER HEALTH NEWS PHOTO)

SUSIE CHRISTOFF (KAISER HEALTH NEWS PHOTO)

“It’s 24/7 constant pain in, like, the ankles and feet,” said Christoff, who lives in Fairfax, Va. “I can’t sleep, [and] I can’t sit still. I cry. I throw pillows. It’s just … awful.”

At first, Christoff’s copay for Cosentyx was just $50 a month. But when a disability led her to switch to a Medicare Advantage plan, her out-of-pocket costs ballooned to nearly $1,300 a month — more than three times her monthly car loan.

Christoff, with the help of her rheumatologist, Dr. Angus Worthing, tried Enbrel, Humira and other drugs before finding Cosentyx, the only drug that provides relief. Christoff’s case is “heartbreaking,” Worthing said.

Novartis declined to respond to questions about Cosentyx’s price. Instead, like other pharmaceutical companies, Novartis says it offers patient assistance programs for those who can’t afford the drug. Christoff said she doesn’t qualify for financial assistance.

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Like other biologics, Cosentyx costs thousands of dollars per month. The annual cost of Christoff’s treatment runs about $65,000 in the U.S. In Italy, where competition and price negotiations play a bigger role, it would run about $15,000, according to GlobalData.

In England, Dr. Christopher Griffiths, a lead researcher at the National Institute for Health Research who treats patients with Cosentyx, said the National Health Service would pay about 10,000 pounds, or less than $13,000.

And those drastic price differences are true even though there is no biosimilar version of Cosentyx yet available in Europe, and might not be for years.

The cost of the drug is taking a toll on Christoff. This past summer, her progressive disease made it difficult to enjoy the annual family vacation with her three grown children and their kids in Virginia Beach, Va.

“I can’t get down on the sand to play with my kids without help. I can’t get up without help,” Christoff recalled. “I’m not ready to stop trying. But I’m also not ready to go through my entire retirement fund to walk.”

Unlike Cosentyx, rival drugs — Humira, Enbrel and Remicade — all face biosimilar competition in Europe. Only Remicade has competition from a lower-cost biosimilar in the U.S., and Humira isn’t expected to have a copycat competitor in the U.S. market until 2023. Humira, made by AbbVie, is the world’s top-selling drug.

In late October, Wall Street analyst Ronny Gal at Sanford C. Bernstein & Co. noted that AbbVie agreed to drop Humira’s price by 80 percent in one Nordic country to combat biosimilar competition. During the company’s quarterly conference call, AbbVie chief executive Richard Gonzalez said the drug’s discount was as low as 10 percent and as high as 80 percent across the continent, with the highest discounts in Nordic countries.

“These are markets where it’s ‘winner takes all’ across the entire… category, so includes Remicade and Enbrel as well,” Gonzalez said in November, adding that Nordic countries represent about 4 to 5 percent of overall revenue in AbbVie’s international business.

Concerned about how much biologics cost the U.S. health system and patients, Food and Drug Administration Commissioner Scott Gottlieb announced an “action plan” this summer that included tapping the Federal Trade Commission for help, saying he was “worried” about the biosimilar market.

“The branded drug industry didn’t build its success by being business naive; they are smart competitors,” Gottlieb told an audience full of advocates, industry insiders and researchers at the Washington, D.C.-based Brookings Institution in July. “But that doesn’t mean we need to embrace all of these business tactics or agree with them and think they are appropriate.”  

Rebate Traps

One of these business tactics involves so-called rebate traps, in which financial deals are cut to make sure patients can get only a biologic, not a biosimilar. International drugmaker Pfizer alleged in a September 2017 lawsuit that exclusionary contracts created by Johnson & Johnson prevented use of its biosimilar by health insurers, hospitals and clinics.

Johnson & Johnson’s wildly successful biologic Remicade, the brand-name version of infliximab, produced $6.3 billion in worldwide in 2017. Pfizer launched its copycat drug, Inflectra, in the U.S. in October 2016, noting in the announcement that it would price the drug at a 15 percent discount to Remicade’s wholesale price.

Still, health systems such as Geisinger Health, based in Pennsylvania, say they have had difficulty switching to the less expensive alternative.

“J&J has done a really good job of entrenching themselves in the market,” said Jason Howay, manager of formulary services at Geisinger.

The health system ultimately decided it wanted to switch all adults to Pfizer’s biosimilar, saying it provided the same quality of treatment. But Johnson & Johnson had “bundled” the prices of other drugs with Remicade. So if Geisinger stopped using Remicade on adult patients, J&J could stop providing discounts on other drugs, such as those used for cardiology, Howay explained. “It weaves a very tangled web.”

A spokeswoman for Janssen, Johnson & Johnson’s main pharmaceutical subsidiary, says the drugmaker does offer “more attractive contract terms” to buyers who use a wider range of J&J medicines. “Our contracting approach has always prioritized access for patients and their providers,” Meredith Sharp says.

Geisinger negotiated with biosimilar maker Pfizer and won still lower prices to make up for lost savings on the other J&J drugs. It’s now transitioning all adult patients to the less expensive biosimilar.

Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation.

The Man Who Sold America on Vitamin D

By Liz Szabo, Kaiser Health News

Dr. Michael Holick’s enthusiasm for vitamin D can be fairly described as extreme.

The Boston University endocrinologist, who perhaps more than anyone else is responsible for creating a billion-dollar vitamin D sales and testing juggernaut, elevates his own levels of the stuff with supplements and fortified milk. When he bikes outdoors, he won’t put sunscreen on his limbs. He has written book-length odes to vitamin D, and has warned in multiple scholarly articles about a “vitamin D deficiency pandemic” that explains disease and suboptimal health across the world.

His fixation is so intense that it extends to the dinosaurs. What if the real problem with that asteroid 65 million years ago wasn’t a lack of food, but the weak bones that follow a lack of sunlight? “I sometimes wonder,” Holick has written, “did the dinosaurs die of rickets and osteomalacia?”

Holick’s role in drafting national vitamin D guidelines, and the embrace of his message by mainstream doctors and wellness gurus alike, have helped push supplement sales to $936 million in 2017. That’s a ninefold increase over the previous decade. Lab tests for vitamin D deficiency have spiked, too: Doctors ordered more than 10 million for Medicare patients in 2016, up 547 percent since 2007, at a cost of $365 million. About 1 in 4 adults 60 and older now take vitamin D supplements.

But few of the Americans swept up in the vitamin D craze are likely aware that the industry has sent a lot of money Holick’s way.

A Kaiser Health News investigation found that he has used his prominent position in the medical community to promote practices that financially benefit corporations that have given him hundreds of thousands of dollars — including drugmakers, the indoor-tanning industry and one of the country’s largest commercial labs.

In an interview, Holick acknowledged he has worked as a consultant to Quest Diagnostics, which performs vitamin D tests, since 1979.

Holick, who is 72, said that industry funding “doesn’t influence me in terms of talking about the health benefits of vitamin D.”

DR. MICHAEL HOLICK

DR. MICHAEL HOLICK

There is no question that the hormone is important. Without enough of it, bones can become thin, brittle and misshapen, causing a condition called rickets in children and osteomalacia in adults. The issue is how much vitamin D is healthy, and what level constitutes deficiency.

Windfall for Vitamin D Industry

Holick’s crucial role in shaping that debate occurred in 2011. Late the previous year, the prestigious National Academy of Medicine (then known as the Institute of Medicine), a group of independent scientific experts, issued a comprehensive, 1,132-page report on vitamin D deficiency. It concluded that the vast majority of Americans get plenty of the hormone through diet and sunlight, and advised doctors to test only patients at high risk of vitamin D-related disorders, such as osteoporosis.

A few months later, in June 2011, Holick oversaw the publication of a report that took a starkly different view. The paper, in the peer-reviewed Journal of Clinical Endocrinology & Metabolism, was on behalf of the Endocrine Society, the field’s foremost professional group, whose guidelines are widely used by hospitals, physicians and commercial labs nationwide, including Quest. The society adopted Holick’s position that “vitamin D deficiency is very common in all age groups” and advocated a huge expansion of vitamin D testing, targeting more than half the United States population, including those who are black, Hispanic or obese — groups that tend to have lower vitamin D levels than others.

The recommendations were a financial windfall for the vitamin D industry. By advocating such widespread testing, the Endocrine Society directed more business to Quest and other commercial labs. Vitamin D tests are now the fifth-most-common lab test covered by Medicare.

The guidelines benefited the vitamin D industry in another important way. Unlike the National Academy, which concluded that patients have sufficient vitamin D when their blood levels are at or above 20 nanograms per milliliter, the Endocrine Society said vitamin D levels need to be much higher — at least 30 nanograms per milliliter. Many commercial labs, including Quest and LabCorp, adopted the higher standard.

Yet there’s no evidence that people with the higher level are any healthier than those with the lower level, said Dr. Clifford Rosen, a senior scientist at the Maine Medical Center Research Institute and co-author of the National Academy report. Using the Endocrine Society’s higher standard creates the appearance of an epidemic, he said, because it labels 80 percent of Americans as having inadequate vitamin D.

“We see people being tested all the time and being treated based on a lot of wishful thinking, that you can take a supplement to be healthier,” Rosen said.

Patients with low vitamin D levels are often prescribed supplements and instructed to get checked again in a few months, said Dr. Alex Krist, a family physician and vice chairman of the U.S. Preventive Services Task Force, an expert panel that issues health advice. Many physicians then repeat the test once a year. For labs, “it’s in their financial interest” to label patients with low vitamin D levels, Krist said.

In a 2010 book, “The Vitamin D Solution,” Holick gave readers tips to encourage them to get their blood tested. For readers worried about potential out-of-pocket costs for vitamin D tests — they range from $40 to $225 — Holick listed the precise reimbursement codes that doctors should use when requesting insurance coverage.

“If they use the wrong coding when submitting the claim to the insurance company, they won’t get reimbursed and you will wind up having to pay for the test,” Holick wrote.

Holick acknowledged financial ties with Quest and other companies in the financial disclosure statement published with the Endocrine Society guidelines. In an interview, he said that working for Quest for four decades — he is currently paid $1,000 a month — hasn’t affected his medical advice. “I don’t get any additional money if they sell one test or 1 billion,” Holick said.

A Quest spokeswoman, Wendy Bost, said the company seeks the advice of a number of expert consultants. “We feel strongly that being able to work with the top experts in the field, whether it’s vitamin D or another area, translates to better quality and better information, both for our patients and physicians,” Bost said.

Since 2011, Holick’s advocacy has been embraced by the wellness-industrial complex. Gwyneth Paltrow’s website, Goop, cites his writing. Dr. Mehmet Oz has described vitamin D as “the No. 1 thing you need more of,” telling his audience that it can help them avoid heart disease, depression, weight gain, memory loss and cancer. And Oprah Winfrey’s website tells readers that “knowing your vitamin D levels might save your life.” Mainstream doctors have pushed the hormone, including Dr. Walter Willett, a widely respected professor at Harvard Medical School.

Today, seven years after the dueling academic findings, the leaders of the National Academy report are struggling to be heard above the clamor for more sunshine pills.

“There isn’t a ‘pandemic,’” A. Catharine Ross, a professor at Penn State and chair of the committee that wrote the report, said in an interview. “There isn’t a widespread problem.”

Ties to Drugmakers and Tanning Salons

In “The Vitamin D Solution,” Holick describes his promotion of vitamin D as a lonely crusade. “Drug companies can sell fear,” he writes, “but they can’t sell sunlight, so there’s no promotion of the sun’s health benefits.”

Yet Holick also has extensive financial ties to the pharmaceutical industry. He received nearly $163,000 from 2013 to 2017 from pharmaceutical companies, according to Medicare’s Open Payments database, which tracks payments from drug and device manufacturers. The companies paying him included Sanofi-Aventis, which markets vitamin D supplements; Shire, which makes drugs for hormonal disorders that are given with vitamin D; Amgen, which makes an osteoporosis treatment; and Roche Diagnostics and Quidel Corp., which both make vitamin D tests.

The database includes only payments made since 2013, but Holick’s record of being compensated by drug companies started before that. In his 2010 book, he describes visiting South Africa to give “talks for a pharmaceutical company,” whose president and chief executive were in the audience.

Holick’s ties to the tanning industry also have drawn scrutiny. Although Holick said he doesn’t advocate tanning, he has described tanning beds as a “recommended source” of vitamin D “when used in moderation.”

Holick has acknowledged accepting research money from the UV Foundation — a nonprofit arm of the now-defunct Indoor Tanning Association — which gave $150,000 to Boston University from 2004 to 2006, earmarked for Holick’s research. The International Agency for Research on Cancer classified tanning beds as carcinogenic in 2009.

In 2004, the tanning-industry associations led Dr. Barbara Gilchrest, who then was head of Boston University’s dermatology department, to ask Holick to resign from the department. He did so, but remains a professor at the medical school’s department of endocrinology, diabetes and nutrition and weight management.

In “The Vitamin D Solution,” Holick wrote that he was “forced” to give up his position due to his “stalwart support of sensible sun exposure.” He added, “Shame on me for challenging one of the dogmas of dermatology.”

Although Holick’s website lists him as a member of the American Academy of Dermatology, an academy spokeswoman, Amanda Jacobs, said he was not a current member.

Dr. Christopher McCartney, chairman of the Endocrine Society’s clinical guidelines subcommittee, said the society has put in place stricter policies on conflict of interest since its vitamin D guidelines were released. The society’s current policies would not allow the chairman of the guideline-writing committee to have financial conflicts.

A Miracle Pill Loses Its Luster

Enthusiasm for vitamin D among medical experts has dimmed in recent years, as rigorous clinical trials have failed to confirm the benefits suggested by early, preliminary studies. A string of trials found no evidence that vitamin D reduces the risk of cancer, heart disease or falls in the elderly. And most scientists say there isn’t enough evidence to know if vitamin D can prevent chronic diseases that aren’t related to bones.

Although the amount of vitamin D in a typical daily supplement is generally considered safe, it is possible to take too much. In 2015, an article in the American Journal of Medicine linked blood levels as low as 50 nanograms per milliliter with an increased risk of death.

Some researchers say vitamin D may never have been the miracle pill that it appeared to be. Sick people who stay indoors tend to have low vitamin D levels; their poor health is likely the cause of their low vitamin D levels, not the other way around, said Dr. JoAnn Manson, chief of preventive medicine at Brigham and Women’s Hospital in Boston.

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Only really rigorous studies, which randomly assign some patients to take vitamin D and others to take placebos, can provide definitive answers about vitamin D and health. Manson is leading one such study, involving 26,000 adults, expected to be published in November.

A number of insurers and health experts have begun to view widespread vitamin D testing as unnecessary and expensive. In 2014, the U.S. Preventive Services Task Force said there wasn’t enough evidence to recommend for or against routine vitamin D screening. In April, the task force explicitly recommended that older adults outside of nursing homes avoid taking vitamin D supplements to prevent falls.

In 2015, Excellus BlueCross BlueShield published an analysis highlighting the overuse of vitamin D tests. In 2014, the insurer spent $33 million on 641,000 vitamin D tests. “That’s an astronomical amount of money,” said Dr. Richard Lockwood, Excellus’ vice president and chief medical officer for utilization management. More than 40 percent of Excellus patients tested had no medical reason to be screened.

In spite of Excellus’ efforts to rein in the tests, vitamin D usage has remained high, Lockwood said. “It’s very hard to change habits,” he said, adding: “The medical community is not much different than the rest of the world, and we get into fads.”

Kaiser Health News coverage related to aging and improving care of older adults is supported in part by The John A. Hartford Foundation. KHN is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Prescription Pain Creams Flagged for Medicare Fraud

By Julie Appleby, Kaiser Health News

Medicare pays hundreds of millions of dollars each year for prescription creams, gels and lotions made-to-order by pharmacies — mainly as pain treatments. But a new report finds that officials are concerned about possible fraud and patient safety risks from products made at nearly a quarter of the pharmacies that fill the bulk of those prescriptions.

“Although some of this billing may be legitimate, all of these pharmacies warrant further scrutiny,” concludes the report from the Office of the Inspector General for the Department of Health and Human Services.

In total, 547 pharmacies — nearly 23 percent of those that submit most of the bills to Medicare for making these creams — hit one or more of five red-flag markers set by investigators.

Those included what the researchers called “extremely high” prices; large percentages of Medicare members getting identical drugs — 16 of the pharmacies billed for identical drugs for 200 or more customers; “greatly increased” year-over-year billing — 20 pharmacies increased their billing by more than 10,000 percent; or having a single medical provider writing more than 131 prescriptions.

More than half of those pharmacies hit two or more measures — and 10 hit all five.

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One Oregon pharmacy, for example, submitted claims for 91 percent of its customers. A pharmacy in New York submitted 5,342 prescriptions ordered by one podiatrist, while a Florida pharmacy saw its Medicare billing for such treatments go from $7,468 in 2015 to $1.8 million the following year.

Many of the pharmacies are clustered in four cities: Detroit, Houston, Los Angeles and New York.

The report comes amid ongoing concern by Medicare officials about these custom-made — or compounded — drugs. In addition to questions like those raised in the report about overuse and pricing, safety has been a key issue in recent years. A meningitis outbreak in 2012 was linked to a Massachusetts pharmacy that did not maintain sterile conditions and sold tainted made-to-order injections that killed 64 Americans.

When done safely, pharmacy-made compounded drugs provide a legitimate option for patients whose medical needs can’t be met by commercially available products mass-produced by pharmaceutical companies. For example, a patient who can’t swallow a commercially available prescription pill might get a liquid version of a drug.

State boards of pharmacy generally oversee compounding pharmacies, and the drugs they produce are not considered approved by the Food and Drug Administration.

Rising Cost of Compounded Drugs

The new report focuses on concerns with compounded topical medications.

Medicare spending for such treatments has skyrocketed, rising more than 2,350 percent, from $13.2 million in 2010 to $323.5 million in 2016. Price hikes and an increase in the number of prescriptions written drove the increase, the report said.

It is not the first time the inspector general has looked at compounded drugs. A 2016 report found that overall spending on all types of compounded drugs — not just topical medications — rose sharply.

The U.S. Postal Service inspector general and the Department of Defense also have raised concerns about rising spending and possible fraud for compounded drugs.

In response to those previous reports, the International Academy of Compounding Pharmacists, the industry’s trade group, has said that legitimately compounded drugs “can dramatically improve a patient’s quality of life,” noting that proper billing controls need to be in place. The inspector general’s report in 2016, it added, found that “such controls are not in place.”

This report, which the compounding trade group has not yet reviewed, focuses on topical drugs and a subset of the 15,290 pharmacies that provide at least one such prescription each year. It looked at billing records from the 2,388 pharmacies that do at least 10 such prescriptions a year — providing 93 percent of all compounded topical drugs paid for by Medicare.

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Most of the prescriptions were for pain treatment, made from ingredients such as lidocaine, an anesthetic, or diclofenac sodium, an anti-inflammatory drug.

On average, those compounds were more expensive than non-compounded drugs with the same ingredients.

For example, Medicare paid an average of $751 per tube of compounded lidocaine, and $1,506 for the diclofenac, according to the inspector general’s report. Non-compounded tubes of those drugs averaged $445 and $128, respectively.

FDA Commissioner Scott Gottlieb recently outlined new efforts his agency is taking to oversee compounded drugs in the wake of legislation passed by Congress following the meningitis outbreak.

“The FDA is inspecting compounding facilities to assess whether drugs that are essentially copies of FDA-approved drugs are being compounded for patients” who could otherwise take a product sold commercially, he said in a statement issued on June 28.

Gottlieb also said the FDA plans to make more information available to patients and their doctors about compounded topical pain creams, including information about their effectiveness and any potential safety risks.

Not being effective is a safety risk, noted Miriam Anderson, a researcher with the inspector general’s office who helped write the report.

The report urged the Centers for Medicare & Medicaid Services to clarify some of its policies to emphasize that insurers can limit the use of compounded drugs by requiring prior authorization or other steps. The agency concurred with the recommendations, according to the report, including the need to “follow up on pharmacies with questionable Part D billing and the prescribers associated with these pharmacies.”

Anderson said the inspector general’s office is continuing to probe the issue.

“We will investigate a number of leads on specific pharmacies and prescribers who were identified as having these questionable patterns,” she said. “Whenever we see that kind of increase in spending, it raises concern about fraud, waste and abuse.”

Kaiser Health News’ coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation.

Chronic Pain Patients Caught in Debate Over Opioids

By Will Stone, KJZZ

It started with a rolled ankle during a routine Army training exercise. Shannon Hubbard never imagined it was the prologue to one of the most debilitating pain conditions known to exist, called ­­­­­­­complex regional pain syndrome.

The condition causes the nervous system to go haywire, creating pain disproportionate to the actual injury. It can also affect how the body regulates temperature and blood flow.

For Hubbard, it manifested years ago following surgery on her foot — a common way for it to take hold.

“My leg feels like it’s on fire pretty much all the time. It spreads to different parts of your body,” the 47-year-old veteran said.

Hubbard props up her leg, careful not to graze it against the kitchen table in her home east of Phoenix. It’s red and swollen, still scarred from an ulcer that landed her in the hospital a few months ago.

“That started as a little blister and four days later it was like the size of a baseball,” she said. “They had to cut it open and then it got infected, and because I have blood flow issues, it doesn’t heal.”

She knows it’s likely to happen again.

Over the past three years, I’ve been prescribed over 60 different medications and combinations; none have even touched the pain,” she said.

Hubbard said she’s had injections and even traveled across the country for infusions of ketamine, an anesthetic that can be used for pain in extreme cases. Her doctors have discussed amputating her leg because of the frequency of the infections.

“All I can do is manage the pain,” she said. “Opioids have become the best solution.”

For about nine months, Hubbard was on a combination of short- and long-acting opioids. She said it gave her enough relief to start leaving the house again and do physical therapy.

But in April that changed. At her monthly appointment, her pain doctor informed her the dose was being lowered. “They had to take one of the pills away,” she said.

Hubbard knew the rules were part of Arizona’s new opioid law, which places restrictions on prescribing and limits the maximum dose for most patients. She also knew the law wasn’t supposed to affect her — an existing patient with chronic pain.

Hubbard argued with the doctor, without success. “They didn’t indicate there was any medical reason for cutting me back. It was simply because of the pressure of the opioid rules.”

Her dose was lowered from 100 morphine milligram equivalents daily (MME) to 90, the highest dose allowed for many new patients in Arizona. She said her pain has been “terrible” ever since.

“It just hurts,” she said. “I don’t want to walk, I pretty much don’t want to do anything.”

Hubbard’s condition may be extreme, but her situation isn’t unique. Faced with skyrocketing drug overdoses, states are cracking down on opioid prescribing. Increasingly, some patients with chronic pain like Hubbard say they are becoming collateral damage.

New Limits On Prescribing

More than two dozen states have implemented laws or policies limiting opioid prescriptions in some way. The most common is to restrict a patient’s first prescription to a number of pills that should last a week or less. But some states like Arizona have gone further by placing a ceiling on the maximum dose for most patients.

The Arizona Opioid Epidemic Act, the culmination of months of outreach and planning by state health officials, was passed earlier this year with unanimous support.

It started in June 2017, when Arizona Gov. Doug Ducey, a Republican, declared a public health emergency, citing new data, showing that two people were dying every day in the state from opioid overdoses. He has pledged to come after those responsible for the rising death toll.

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He has pledged to come after those responsible for the rising death toll.

“All bad actors will be held accountable — whether they are doctors, manufacturers or just plain drug dealers,” Ducey said in his annual State of the State address, in January 2018.

The governor cited statistics from one rural county where four doctors prescribed 6 million pills in a single year, concluding “something has gone terribly, terribly wrong.”

Later in January, Ducey called a special session of the Arizona legislature and in less than a week he signed the Arizona Opioid Epidemic Act into law. He called it the “most comprehensive and thoughtful package any state has passed to address this issue and crisis to date.”

The law expands access to addiction treatment, ramps up oversight of prescribing and protects drug users who call 911 to report an overdose from prosecution, among other things.

Initially, Arizona’s major medical associations cautioned against what they saw as too much interference in clinical practice, especially since opioid prescriptions were already on the decline.

Gov. Ducey’s administration offered assurances that the law would “maintain access for chronic pain sufferers and others who rely on these drugs.” Restrictions would apply only to new patients. Cancer, trauma, end-of-life and other serious cases were exempt. Ultimately, the medical establishment came out in favor of the law.

Pressure On Doctors

Since the law’s passage, some doctors in Arizona report feeling pressure to lower patient doses, even for patients who have been on stable regimens of opioids for years without trouble.

Dr. Julian Grove knows the nuances of Arizona’s new law better than most physicians. A pain doctor, Grove worked with the state on the prescribing rules.

“We moved the needle to a degree so that many patients wouldn’t be as severely affected,” said Grove, president of the Arizona Pain Society. “But I’ll be the first to say this has certainly caused a lot of patients problems [and] anxiety.”

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“Many people who are prescribing medications have moved to a much more conservative stance and, unfortunately, pain patients are being negatively affected.”

Like many states, Arizona has looked to its prescription-monitoring program as a key tool for tracking overprescribing. State law requires prescribers to check the online database. Report cards are sent out comparing each prescriber to the rest of their cohort. Clinicians consider their scores when deciding how to manage patients’ care, Grove said.

“A lot of practitioners are reducing opioid medications, not from a clinical perspective, but more from a legal and regulatory perspective for fear of investigation,” Grove said. “No practitioner wants to be the highest prescriber.”

Arizona’s new prescribing rules don’t apply to board-certified pain specialists like Grove, who are trained to care for patients with complex chronic pain. But, said Grove, the reality is that doctors — even pain specialists — were already facing pressure on many fronts to curtail opioids — from the Drug Enforcement Agency to health insurers down to state medical boards.

The new state law has only made the reduction of opioids “more fast and furious,” he said.

Grove traces the hypervigilance back to guidelines put out by the Centers for Disease Control and Prevention in 2016. The CDC spelled out the risks associated with higher doses of opioids and advised clinicians when starting a patient on opioids to prescribe the lowest effective dosage.

Psychiatrist Sally Satel, a fellow at the American Enterprise Institute, said those guidelines stipulated the decision to lower a patient’s dose should be decided on a case-by-case basis, not by means of a blanket policy.

“[The guidelines] have been grossly misinterpreted,” Satel said.

The guidelines were not intended for pain specialists, but rather for primary care physicians, a group that accounted for nearly half of all opioids dispensed from 2007 to 2012.

“There is no mandate to reduce doses on people who have been doing well,” Satel said.

In the rush to address the nation’s opioid overdose crisis, she said, the CDC’s guidelines have become the model for many regulators and state legislatures. “It’s a very, very unhealthy, deeply chilled environment in which doctors and patients who have chronic pain can no longer work together,” she said.

Satel called the notion that new prescribing laws will reverse the tide of drug overdose deaths “misguided.”

The rate of opioid prescribing nationally has declined in recent years, though it still soars above the levels of the 1990s. Meanwhile, more people are dying from illicit drugs like heroin and fentanyl than prescription opioids.

In Arizona, more than 1,300 people have died from opioid-related overdoses since June 2017, according to preliminary state numbers. Only a third of those deaths involved just a prescription painkiller.

Heroin is now almost as common as oxycodone in overdose cases in Arizona.

A Range Of Views

Some physicians support the new rules, said Pete Wertheim, executive director of the Arizona Osteopathic Medical Association.

“For some, it has been a welcome relief,” he said. “They feel like it has given them an avenue, a means to confront patients.” Some doctors tell him it’s an opportunity to have a tough conversation with patients they believe to be at risk for addiction or overdose because of the medication.

The organization is striving to educate its members about Arizona’s prescribing rules and the exemptions. But, he said, most doctors now feel the message is clear: “We don’t want you prescribing opioids.”

Long before the law passed, Wertheim said, physicians were already telling him that they had stopped prescribing, because they “didn’t want the liability.”

He worries the current climate around prescribing will drive doctors out of pain management, especially in rural areas. There’s also a fear that some patients who can’t get prescription pills will try stronger street drugs, said Dr. Gerald Harris II, an addiction treatment specialist in Glendale, Ariz.

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Harris said he has seen an increase in referrals from doctors concerned that their patients with chronic pain are addicted to opioids. He receives new patients — almost daily, he said — whose doctors have stopped prescribing altogether.

“Their doctor is afraid and he’s cut them off,” Harris said. “Unfortunately, a great many patients turn to street heroin and other drugs to self-medicate because they couldn’t get the medications they need.”

Arizona’s Department of Health Services is working to reassure providers and dispel the myths, said Dr. Cara Christ, who heads the agency and helped design the state’s opioid response. She pointed to the recently launched Opioid Assistance and Referral Line, created to help health care providers with complex cases. The state has also released a set of detailed prescribing guidelines for doctors.

Christ characterizes this as an “adjustment period” while doctors learn the new rules.

“The intent was never to stop prescribers from utilizing opioids,” she said. “It’s really meant to prevent a future generation from developing opioid use disorder, while not impacting current chronic pain patients.”

Christ said she just hasn’t heard of many patients losing access to medicine.

It’s still too early to gauge the law’s success, she said, but opioid prescriptions continue to decline in Arizona.

Arizona saw a 33 percent reduction in the number of opioid prescriptions in April, compared with the same period last year, state data show. Christ’s agency reports that more people are getting help for addiction: There has been about a 40 percent increase in hospitals referring patients for behavioral health treatment following an overdose.

Shannon Hubbard, the woman living with complex regional pain syndrome, considers herself fortunate that her doctors didn’t cut back her painkiller dose even more.

“I’m actually kind of lucky that I have such a severe case because at least they can’t say I’m crazy or it’s in my head,” she said.

Hubbard is well aware that people are dying every day from opioids. One of her family members struggles with heroin addiction and she’s helping raise his daughter. But she’s adamant that there’s a better way to address the crisis.

“What they are doing is not working. They are having no effect on the guy who is on the street shooting heroin and is really in danger of overdosing.” she said. “Instead they are hurting people that are actually helped by the drugs.”

This story is part of a partnership that includes KJZZ, NPR and Kaiser Health News. It is republished with their permission.

Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.

Medical Marijuana’s Catch-22: Policy Before Science

By Marisa Taylor and Melissa Bailey, Kaiser Health News

By the time Ann Marie Owen turned to marijuana to treat her pain, she was struggling to walk and talk. She also hallucinated.

For four years, her doctor prescribed the 61-year-old a wide range of opioids for her transverse myelitis, a debilitating disease that caused pain, muscle weakness and paralysis.

The drugs not only failed to ease her symptoms, they hooked her.

When her home state of New York legalized marijuana for the treatment of select medical ailments, Owens decided it was time to swap pills for pot. But her doctors refused to help.

“Even though medical marijuana is legal, none of my doctors were willing to talk to me about it,” she said. “They just kept telling me to take opioids.”

While 29 states have legalized marijuana to treat pain and other ailments, the growing number of Americans like Owen who use marijuana and the doctors who treat them are caught in the middle of a conflict in federal and state laws — a predicament that is only worsened by thin scientific data.

ANN MARIE OWEN (ALLYSE PULLIAM FOR KHN)

ANN MARIE OWEN (ALLYSE PULLIAM FOR KHN)

Because the federal government classifies marijuana a Schedule 1 drug — by definition a substance with no currently accepted medical use and a high potential for abuse — research on marijuana or its active ingredients is highly restricted and even discouraged in some cases.

Underscoring the federal government’s position, Health and Human Services Secretary Alex Azar recently pronounced that there was “no such thing as medical marijuana.”

Scientists say that stance prevents them from conducting the high-quality research required for FDA approval, even as some early research indicates marijuana might be a promising alterative to opioids or other medicines.

Patients and physicians, meanwhile, lack guidance when making decisions about medical treatment for an array of serious conditions.

“We have the federal government and the state governments driving a hundred miles an hour in the opposite direction when they should be coming together to obtain more scientific data,” said Dr. Orrin Devinsky, who is researching the effects of cannabidiol, an active ingredient of marijuana, on epilepsy. “It’s like saying in 1960, ‘We’re not going to the moon because no one agrees how to get there.’”

The problem stems partly from the fact that the federal government’s restrictive marijuana research policies have not been overhauled in more than 40 years, researchers say.

Only one federal government contractor grows marijuana for federally funded research. Researchers complain the pot grown by the contractor at the University of Mississippi is inadequate for high-quality studies.

The marijuana, which comes in a micronized powder form, is less potent than the pot offered at dispensaries, researchers say. It also differs from other products offered at dispensaries, such as so-called edibles that are eaten like snacks. The difference makes it difficult to compare the real-life effects of the marijuana compounds.

Researchers also face time-consuming and costly hurdles in completing the complicated federal application process for using marijuana in long-term clinical trials.

“It’s public policy before science,” said Dr. Chinazo Cunningham, a primary care doctor who is the lead investigator on one of the few federally funded studies exploring marijuana as a treatment for pain. “The federal government’s policies really make it much more difficult.”

Cunningham, who received a five-year, $3.8 million federal grant, will not be administering marijuana directly to participants. Instead, she will follow 250 HIV-positive and HIV-negative adults with chronic pain who use opioids and have been certified to get medical marijuana from a dispensary.

“It’s a catch-22,” said Cunningham, who is with the Albert Einstein College of Medicine. “We’re going to be looking at all of these issues — age, disease, level of pain — but when we’re done, there’s the danger that people are going to say ‘Oh, it’s anecdotal’ or that it’s inherently flawed because it’s not a randomized trial.’’

Don’t Ask, Don’t Tell

Without clear answers, hospitals, doctors and patients are left to their own devices, which can result in poor treatment and needless suffering.

Hospitals and other medical facilities have to decide what to do with newly hospitalized patients who normally take medical marijuana at home.

Some have a “don’t ask, don’t tell” approach, said Devinsky, who sometimes advises his patients to use it. Others ban its use and substitute opioids or other prescriptions.

Young adults, for instance, have had to stop taking cannabidiol compounds for their epilepsy because they’re in federally funded group homes, said Devinsky, the director of NYU Langone’s Comprehensive Epilepsy Center.

“These kids end up getting seizures again,” he said. “This whole situation has created a hodgepodge of insanity.”

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The Trump administration, however, has resisted policy changes.

Last year, the Drug Enforcement Administration had been gearing up to allow facilities other than the University of Mississippi to grow pot for research. But after the DEA received 26 applications from other growers, Attorney General Jeff Sessions halted the initiative.

The Department of Veterans Affairs also recently announced it would not fund studies of using marijuana compounds to treat ailments such as pain.

The DEA and HHS have cited concerns about medical supervision, addiction and a lack of “well-controlled studies proving efficacy.”

Patients, meanwhile, forge ahead.

While experts say they don’t know exactly how many older Americans rely on marijuana for medicinal purposes, the number of Americans 65 and older who say they are using the drug skyrocketed 250 percent from 2006 to 2013.

Some patients turn to friends, patient advocacy groups or online support groups for information.

Owen, for one, kept searching for a doctor and eventually found a neurologist willing to certify her to use marijuana and advise her on what to take.

“It’s saved my life,” said the retired university administrative assistant who credited marijuana for weaning her off opioids. “It not only helps my pain, but I can think, walk and talk again.”

Mary Jo, a Minnesotan, was afraid of being identified as a medical marijuana user, even though she now helps friends navigate the process and it’s legal in her home state.

“There’s still a stigma,” said Mary Jo, who found it effective for treating her pain from a nerve condition. “Nobody helps you figure it out, so you kind of play around with it on your own.”

Still, doctors and scientists worry about the implications of such experimentation.

In a sweeping report last year, the National Academies of Sciences, Engineering and Medicine called on the federal government to support better research, decrying the “lack of definitive evidence on using medical marijuana.”

The national academies’ committee reviewed more than 10,000 scientific abstracts related to the topic. It made 100 conclusions based on its review, including finding evidence that marijuana relieves pain and chemotherapy-induced nausea. But it found “inadequate information” to support or refute effects on Parkinson’s disease.

‘I Broke Federal Law’

Yet those who find that medical marijuana helps them can become fierce advocates no matter what their doctors say.

Caryl Barrett, a 54-year-old who lives in Georgia, said she decided to travel out of state to Colorado to treat her pain from her transverse myelitis and the autoimmune disease neurosarcoidosis.

“I realized it worked and I decided to bring it back with me,” she said. “I broke federal law.”

Georgia, meanwhile, permitted limited medicinal use of marijuana but did not set up dispensaries. As a result, patients resort to ordering it online or driving to another state to get it.

The conflict in the law makes her uneasy. But Barrett, who had been on opioids for a decade, said she feels so strongly about it working that “if someone wants to arrest me, bring it on.”

Others experience mixed results.

Melodie Beckham, who had metastatic lung cancer, tried medical marijuana for 13 days in a clinical trial at Connecticut Hospice before deciding to quit.

 “She was hopeful that it would help her relax and just kind of enjoy those days,” said her daughter, Laura Beckham.

Instead, it seemed to make her mother, who died in July at age 69, “a little more agitated or more paranoid.”

The marijuana “didn’t seem effective,” nor did it keep her mother from hitting her pain pump to get extra doses of an opioid, her daughter said.

The researchers running the trial at Connecticut Hospice spent two years getting necessary approvals from the Food and Drug Administration, the National Institute on Drug Abuse (NIDA) and the DEA.

Started in May, the trial has enrolled only seven of the 66 patients it plans to sign up because many patients were too sick, too close to death or simply couldn’t swallow the pills. So far, the trial has shown “mixed results,” said James Prota, director of pharmacy for the hospice.

Researchers point out they are still exploring the basics when it comes to marijuana’s effects on older adults or the terminally ill.

“We just have no data on how many older adults are using medical marijuana, what they are using it for and most importantly what are the outcomes,” said Brian Kaskie, a professor at the University of Iowa’s College of Public Health. “It’s all anecdotal.”

Kaskie, who specializes in public policy and the aging, received grants from the state of Colorado and the Chicago-based Retirement Research Foundation to survey the use of medical marijuana by older Americans.

In many quarters, there’s a growing appetite for solid information, he said.

“When I first started this, my colleagues joked we were going to find all the aging hippies who listen to the Grateful Dead,” said Kaskie, who has been studying medicinal marijuana for years. “Now, they’re starting to realize this is a legitimate area of research.”

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drug policy alliance

Twenty researchers received marijuana from the federal program last year, which was more than any previous year since 2010, according to NIDA statistics.

In a recent funding announcement, the National Institutes of Health requested grant applications to study the effects of marijuana and other drugs on older adults and pain.

NIH, however, continues to funnel much of its funding into studying the adverse effects of marijuana, researchers said.

Although NIH acknowledged in one of the announcements that some research supports “possible benefits” of marijuana, it emphasized “there have not been adequate large controlled trials to support these claims.”

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente. KHN’s coverage of end-of-life and serious illness issues is supported in part by the Gordon and Betty Moore Foundation.

Hospital Opioid Shortages Cause Pain & Medical Errors

By Pauline Bartolone, Kaiser Health News

Even as opioids flood American communities and fuel widespread addiction, hospitals are facing a dangerous shortage of the powerful painkillers needed by patients in acute pain, according to doctors, pharmacists and a coalition of health groups.

The shortage, though more significant in some places than others, has left many hospitals and surgical centers scrambling to find enough injectable morphine, Dilaudid and fentanyl — drugs given to patients undergoing surgery, fighting cancer or suffering traumatic injuries. The shortfall, which has intensified since last summer, was triggered by manufacturing setbacks and a government effort to reduce addiction by restricting drug production.

As a result, hospital pharmacists are working long hours to find alternatives, forcing nurses to administer second-choice drugs or deliver standard drugs differently. That raises the risk of mistakes — and already has led to at least a few instances in which patients received potentially harmful doses, according to the nonprofit Institute for Safe Medication Practices, which works with health care providers to promote patient safety.

In the institute’s survey of hospital pharmacists last year, one provider reported that a patient received five times the appropriate amount of morphine when a smaller-dose vial was out of stock. In another case, a patient was mistakenly given too much sufentanil, which can be up to 10 times more powerful than fentanyl, the ideal medication for that situation.

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In response to the shortages, doctors in states as far-flung as California, Illinois and Alabama are improvising the best they can.

Some patients are receiving less potent medications like acetaminophen or muscle relaxants as hospitals direct their scant supplies to higher-priority cases.

Other patients are languishing in pain because preferred, more powerful medications aren’t available, or because they have to wait for substitute oral drugs to kick in.

The American Society of Anesthesiologists confirmed that some elective surgeries, which can include gall bladder removal and hernia repair, have been postponed.

In a Feb. 27 letter to the U.S. Drug Enforcement Administration, a coalition of professional medical groups — including the American Hospital Association, the American Society of Clinical Oncology and the American Society of Health-System Pharmacists — said the shortages “increase the risk of medical errors” and are “potentially life-threatening.”

In addition, “having diminished supply of these critical drugs, or no supply at all, can cause suboptimal pain control or sedation for patients,” the group wrote.

The shortages involve prefilled syringes of these drugs, as well as small ampules and vials of liquid medication that can be added to bags of intravenous fluids.

Drug shortages are common, especially of certain injectable drugs, because few companies make them. But experts say opioid shortages carry a higher risk than other medications.

Small Mistakes Lead to Big Errors

Giving the wrong dose of morphine, for example, “can lead to severe harm or fatalities,” explained Mike Ganio, a medication safety expert at the American Society of Health-System Pharmacists.

Calculating dosages can be difficult and seemingly small mistakes by pharmacists, doctors or nurses can make a big difference, experts said.

Marchelle Bernell, a nurse at St. Louis University Hospital in Missouri, said it would be easy for medical mistakes to occur during a shortage. For instance, in a fast-paced environment, a nurse could forget to program an electronic pump for the appropriate dose when given a mix of intravenous fluids and medication to which she was unaccustomed.

“The system has been set up safely for the drugs and the care processes that we ordinarily use,” said Dr. Beverly Philip, a Harvard University professor of anesthesiology who practices at Brigham and Women’s Hospital in Boston. “You change those drugs, and you change those care processes, and the safety that we had built in is just not there anymore.”

Chicago-based Marti Smith, a nurse and spokeswoman for the National Nurses United union, offered an example.

“If your drug comes in a prefilled syringe and at 1 milligram, and you need to give 1 milligram, it’s easy,” she said. “But if you have to pull it out of a 25-milligram vial, you know, it’s not that we’re not smart enough to figure it out, it just adds another layer of possible error.”

During the last major opioid shortage in 2010, two patients died from overdoses when a more powerful opioid was mistakenly prescribed, according to the institute. Other patients had to be revived after receiving inaccurate doses.

Pfizer Manufacturing Problems

The shortage of the three medications, which is being tracked by the FDA, became critical last year as a result of manufacturing problems at Pfizer, which controls at least 60 percent of the market of injectable opioids, said Erin Fox, a drug shortage expert at the University of Utah.

A Pfizer spokesman, Steve Danehy, said its shortage started in June 2017 when the company cut back production while upgrading its plant in McPherson, Kansas. 

The company is not currently distributing prefilled syringes “to ensure patient safety,” it said, because of problems with a third-party supplier it declined to name.

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That followed a February 2017 report by the U.S. Food and Drug Administration that found significant violations at the McPherson plant. The agency cited “visible particulates” floating in the liquid medications and a “significant loss of control in your manufacturing process [that] represents a severe risk of harm to patients.” Pfizer said, however, that the FDA report wasn’t the impetus for the factory upgrades.

Other liquid-opioid manufacturers, including West-Ward Pharmaceuticals and Fresenius Kabi, are deluged with back orders, Fox said. Importing these heavily regulated narcotics from other countries is unprecedented and unlikely, she added, in part because it would require federal approval.

DEA Reduced Opioid Supply

At the same time, in an attempt to reduce the misuse of opioid painkillers, the Drug Enforcement Administration called for a 25 percent reduction of all opioid manufacturing last year, and an additional 20 percent this year.

“DEA must balance the production of what is needed for legitimate use against the production of an excessive amount of these potentially harmful substances,” the agency said in August.

When the coalition of health groups penned its letter to the DEA last month, it asked the agency to loosen the restrictions for liquid opioids to ease the strain on hospitals.

The shortages are not being felt evenly across all hospitals. Dr. Melissa Dillmon, medical oncologist at the Harbin Clinic in Rome, Ga., said that by shopping around for other suppliers and using pill forms of the painkillers, her cancer patients are getting the pain relief they need.

Dr. Shalini Shah, the head of pain medicine at the University of California-Irvine health system, pulled together a team of 20 people in January to figure out how to meet patients’ needs. The group meets for an hour twice a week.

The group has established workarounds, such as giving tablet forms of the opioids to patients who can swallow, using local anesthetics like nerve blocks and substituting opiates with acetaminophen, ketamine and muscle relaxants.

“We essentially have to ration to patients that are most vulnerable,” Shah said.

Two other California hospital systems, Kaiser Permanente and Dignity Health in Sacramento, confirmed they’re experiencing shortages, and that staff are being judicious with their supplies and using alternative medications when necessary.

At Helen Keller Hospital’s emergency department in Sheffield, Ala., earlier this month, a 20-year-old showed up with second-degree burns. Dr. Hamad Husainy said he didn’t have what he needed to keep her out of pain.

Sometime in January, the hospital ran out of Dilaudid, a drug seven times more potent than morphine, and has been low on other injectable opioids, he said.

Because Husainy’s patient was a former opioid user, she had a higher tolerance to the drugs. She needed something strong like Dilaudid to keep her out of pain during a two-hour ride to a burn center, he said.

“It really posed a problem,” said Husainy, who was certain she was in pain even after giving her several doses of the less potent morphine. “We did what we could, the best that we could,” he said.

Bernell, the St. Louis nurse, said some trauma patients have had to wait 30 minutes before getting pain relief because of the shortages.

“That’s too long,” said Bernell, a former intensive care nurse who now works in radiology.

Dr. Howie Mell, an emergency physician in Chicago, said his large hospital system, which he declined to name, hasn’t had Dilaudid since January. Morphine is being set aside for patients who need surgery, he said, and the facility has about a week’s supply of fentanyl.

Mell, who is also a spokesman for the American College of Emergency Physicians, said some emergency departments are considering using nitrous oxide, or “laughing gas,” to manage patient pain, he said.

When Mell first heard about the shortage six months ago, he thought a nationwide scarcity of the widely used drugs would force policymakers to “come up with a solution” before it became dire.

“But they didn’t,” he said.

Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.

Rising Cost of Arthritis Drugs Defies Economics

By Julie Appleby, Kaiser Health News

Renda Bower knows well the cost of drugs to treat rheumatoid arthritis – her husband, son and daughter all have the painful, disabling autoimmune disease. And the family’s finances revolve around paying for them.

Even with insurance, Bower’s family last year faced $600 a month in copayments for the drug, plus additional payments on another $16,000 in medical bills racked up in 2016 when a former insurer refused to cover all the doses her 9-year-old daughter needed.

Bowers, of Warsaw, Ind., said her family tries to keep up with prices by cutting back on her children’s sports and extracurriculars and skipping family vacations. She also works as a part-time teacher.

But financially, it’s hard. “The cost should not be this high,” she said.

Wholesale prices for Humira and Enbrel, the two most commonly used treatments for rheumatoid arthritis, known as RA, increased more than 70 percent in the past three years.

Since the first RA drug came to market a decade ago, nearly a dozen have been added. If basic economics prevailed, RA treatments and patients would have benefited from competition.

But, because of industry price-setting practices, legal challenges and marketing tactics, they haven’t. The first RA drug cost $10,000 a year. It now lists for more than $40,000 — even as alternatives have entered the U.S. market.

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“Competition generally doesn’t work to lower prices in branded specialty drugs,” said Peter Bach, director of Memorial Sloan Kettering’s Center for Health Policy and Outcomes.

Humira is the world’s No. 1 prescription drug by revenue. AbbVie manufactures and markets the drug and is on track to reach revenue from the product of $17 billion this year.

Other RA treatments are also among the top 10 drugs by revenue sold in the U.S. Enbrel, made by Amgen, ranks as No. 3. Remicade, by Janssen Biotech, is fifth. Some RA medications are approved for other conditions, including psoriatic arthritis, Crohn’s disease and psoriasis.

About 1.5 million Americans have rheumatoid arthritis. The Bowers found some relief this year but not because prices dropped. Rather, Renda’s husband left his job at an engineering firm to work as a machinist at a medical device company that has an insurance plan with lower copayments. Her daughter was accepted into a clinical trial at Cincinnati Children’s Hospital. The trial covers the drug’s cost but not the associated expense of weekly travel, among other things.

Middlemen Benefit As Wholesale Price Rises

The complicated pharmaceutical supply chain in the United States means middlemen — such as pharmacy benefit managers (PBM) and, in some cases, hospitals and doctors’ offices — can gain financially by choosing more expensive drugs. That’s because PBMs usually get a rebate from the drugmakers on top of whatever profit they get from selling or administering the drug.

Those rebates often are based on a percentage of the list, or wholesale, price. So, the middlemen who get the rebates take in more money when drugmakers raise those sticker prices.

But who pockets the rebates? PBM firms, which oversee drug benefits for millions of Americans, say they share all or part of them with the insurers or employers who hire them. In some cases, the rebates go directly to specialty pharmacies, medical clinics or physicians dispensing the treatments.

The rebates rarely end up directly in patients’ pockets.

Those rebates affect the market in another way: They can make it harder for some companies to offer new treatments or they can thwart less costly rival products.

“We could give [our new drug] away for free and … it would still be more economically advantageous” for insurers and PBMs to send patients to Humira first, said Andreas Kuznik, a senior director at Regeneron Pharmaceuticals, at a conference examining the cost and value of RA treatments.

Thomas Amoroso, medical director for medical policy at Tufts Health Plan, said at the same March conference that he has found drug industry sales representatives to be persistent in tracking how their drugs are positioned on plan formularies.

If insurers decide to add a new, lower-cost drug as the preferred alternative, “our Humira rep would be knocking on our door next week and saying, ‘Hey, that rebate we gave you? We’re taking it back,’” Amoroso said.

The roundtable at which they spoke was part of an assessment of RA drug pricing convened by the Institute for Clinical and Economic Review, a nonprofit that evaluates the value of medical tests and treatments for insurers and other clients.

PBMs won’t disclose the rebates they provide to clients, but studies provide a clue. It’s a huge amount of money.

The Berkeley Research Group, a consulting firm that advises major employers, said that rebates and other discounts paid to insurers, PBMs and the U.S. government for brand-name drugs grew from $67 billion in 2013 to $106 billion in 2015.

Most RA drugs are a complex type of medication, called biologics, which are made in living organisms. Nearly identical copies of biologics are called biosimilars. They hold the promise of lower prices, just as generic drugs did for less complex medications.

While several biosimilar RA treatments have won Food and Drug Administration approval, including replicas of Humira, Enbrel and Remicade, most are tied up in court battles over patents. And those biosimilars that have made it to market are now the subject of new areas of legal challenge.

In mid-September, Pfizer filed what will be a closely watched antitrust lawsuit against Johnson & Johnson. The case alleges that J&J is using exclusionary contracts and the threat of withdrawing rebates to protect Remicade from Pfizer’s lower-priced biosimilar, Inflectra, which hit the market last winter.

J&J defends its contracts, saying they are “driving deeper discounts that will lead to overall lower costs.”

Arguments For And Against Rebates

Rebates are under increasing scrutiny, amid growing alarm about soaring prescription drug prices in the United States. But the Pharmaceutical Care Management Association, the PBM industry’s trade lobby, said that complaints that rebates help fuel higher prices are unfounded.

These rebates, the lobby says, help save the health system millions of dollars by shifting dollars back to insurers or other clients, who can then use them to lower future premium increases. This year, it commissioned a study that found no correlation between rebates and the rising list prices of the top 200 brand-name drugs, suggesting higher rebates didn’t necessarily drive higher prices.

“The rebate system exists because [insurers, employers and other clients] want discounts,” said Steve Miller, chief medical officer for Express Scripts, one of the nation’s three largest PBMs.

Express Scripts offers clients an option to give patients the discount directly, but most choose not to, he said.

“While individual patients would get the benefit, everyone else’s premiums would go up [because the rebate savings would not flow back to the insurer],” Miller said. “Changing where the rebate goes doesn’t lower the price of the drug.”

But rebates play a role in what some patients pay at the pharmacy counter.

It stems from a simple calculation: whether a patient’s insurance copayment is based on a percentage of the drug’s wholesale price or the drug’s price after rebates are given to the middlemen.

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Heidi Barrett , a mother of five from Everett, Wash., faces a 10 percent copay whenever she or one of her four children who have RA, all of whom have been on medication for years, go for their monthly infusion of Remicade.

Although Barrett is shielded from much of the cost because she has good employer-based insurance through her husband’s job, the question of whether her monthly copayments are based on the wholesale price or the after-rebate price rankles her.

“I have asked that question of the insurance company. I’ve asked that of our union,” said Barrett, 47, a paralegal who isn’t working because she spends so much time on her children’s treatments. “I never got any answers back.”

Based on data analyzed by Bach’s group at Sloan Kettering to determine the cost of 100 milligrams of Remicade, it appears she is paying based on the pre-rebate price.

Here’s how that works: Barrett’s 18-year-old son recently received a 600 mg dose that required a copay of $655. That is close to 10 percent of Remicade’s average U.S. wholesale price for that dose of $6,450, the Bach analysis showed.

Barrett is not benefiting from the rebate that middlemen receive.

Rebates and discounts, however, drive down the price for pharmacy benefit managers, hospitals or doctors.

According to the analysis, the average net cost of a 600 mg dose is $4,140, once all discounts are calculated. If Barrett could use that base price as her copay, she would save more than $240. For her entire family — all her children and Barrett take similar doses — that equals a savings of $1,000 a month.

With her current insurance, Barrett quickly meets a yearly $12,900 deductible. She considers herself lucky that her insurer then picks up the drug’s full cost. But the experience has changed her motherly advice to her children, who are 10, 18, 19 and 25, about what to hope for in life.

“I tell them, you can be anything you want when you go grow up. But you need to go to a company with good health insurance, even before you look at the salary or whether you’ll be happy there, your first priority is health insurance,” Barrett said. “It’s an insane world we live in.”

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.