What pharmaceutical companies say about price hikes

KUSA - TEGNA Media investigators focused on eight major players in the pharmaceutical industry for the Side Effects series looking into increasing prices of prescription drugs.

Editor's note: For a description of this TEGNA Media investigation, scroll to the end of the article.  

These eight include a variety of major manufacturers, companies that have already come before Congress for nefarious actions related to drug pricing, or are the manufacturers of some of the nations’ most relied upon pharmaceutical products.

We also reached out to the Pharmaceutical Research and Manufacturers of America, or PhRMA, the industry group that promotes public policies on behalf of drug manufacturers and research companies.

After reading some of our series, they sent us the following:

Discussions about the cost and affordability of medicines – and health care more broadly – are important. At the same time, conversations need to look at spending across the health care system and not just the share of spending going toward life-changing medicines. New medicines are transforming care for patients fighting debilitating diseases like cancer, hepatitis c, high cholesterol and more. In the midst of all this progress, the share of spending on retail medicines remains the same as it was 50 years ago. In fact, government actuaries project that spending on prescription medicines will grow in line with overall health care spending through the next decade. This is possible due to a competitive marketplace for medicines where significant negotiation occurs and generic utilization rates are nearly 90 percent. While the price of a medicine may increase or decrease over its lifetime, prices fall dramatically as competition occurs among brand-name medicines – and even further with the introduction of generics. Innovator companies invest in research to develop new medicines, and, over time, they become available as lower-cost generic versions that typically cost up to 80 percent less.

With that, despite more Americans having insurance, we know many more are facing high pharmacy deductibles, rising out-of-pocket costs and other barriers to care putting their ability to stay on needed therapy at risk. Patient assistance programs sponsored by America’s biopharmaceutical research companies are one option to help patients maintain access to needed medicines if they are uninsured or underinsured.

AbbVie is the maker of Humira, one of the most widely used drugs in the United States. The price of Humira increased 149 percent since 2012, according to the National Average Drug Acquisition Cost, reported by the Centers for Medicare and Medicaid Services.

In response to our questions about price hikes and marketing practices, AbbVie sent the following, via email: 

“Humira was the first fully-human biologic and AbbVie continues to invest in the continued development of new indications and enhancements for patients with unmet medical need. AbbVie's innovation with Humira has resulted in an unprecedented 10 FDA-approved indications, three of which have received orphan drug designation. The Humira Complete Savings Card is a standard industry co-pay assistance program that provides financial assistance for commercially-insured patients regardless of financial situation. In addition, the not-for-profit AbbVie Patient Assistance Foundation helps people facing financial difficulties access their medication by providing medicines, including Humira, at no cost to eligible patients.

AbbVie prices its medicines based on the value that those medicines bring to patients and the competitive environment. Manufacturers compete for their medicine's appropriate place in a patient's treatment plan and do so on the basis of clinical evidence, physician and patient experience and cost.”

A second company our team examined was Teva Pharmaceuticals, one of the largest manufacturers of generic drugs worldwide.  Our research showed that at least 29 generic drugs doubled or more since 2012. While there are many makers of generic drugs, Teva produces and markets many of them.

In response to our questions, Teva sent us the following response:

“Teva acknowledges that the pharmaceutical industry as a whole needs to be mindful and responsible as to when pricing medications and each company’s role in keeping down healthcare costs.

Generics, specifically, create tremendous additional savings.  As the largest generic drug manufacturer in the U.S. market, Teva is responsible for 12.7 percent of the total savings accruing from generic drugs. This amounts to approximately $214 billion in savings in the last decade attributable to Teva. Of the $214 billion in generic healthcare savings attributable to Teva, $82 billion accrued to the federal government, $62 billion to Medicare, and $20 billion to Medicaid (state and federal).”

Novo Nordisk, Eli Lilly and Company and Sanofi are the three largest insulin manufacturers worldwide, producing the popular insulin labels: Lantus, Levemir, Novolog and Humalog.

We did not receive a response from Eli Lilly and Company, but both Novo Nordisk and Sanofi provided responses to our questions.

From Novo Nordisk:

“We know that patients face a lot of challenges in today’s healthcare system and know that they’re looking for answers. Our data show that a small (but growing) number of patients using Novo Nordisk medicines are in high-deductible plans and are in the coverage gap.

Through our work with payers, and through our patient assistance programs, we know that the vast majority of people using our medicines are able to access them through co-pays between $1 - $1.40 a day.

In fact, according to a study by Kaiser Family Foundation, large shares of covered workers in HMOs (93%), PPOs (91%), and POS plans (89%) are enrolled in plans where the general annual deductible does not have to be met before prescription drugs are covered. http://kff.org/report-section/ehbs-2016-section-seven-employee-cost-sharing/ That said, we are seeing this as an issue among plans run by exchanges and some individual plans. http://kff.org/health-costs/issue-brief/patient-cost-sharing-in-marketplace-plans-2016/

For commercially insured patients with high out-of-pocket costs, we offer savings through our co-pay assistance programs. Our Portfolio Savings Card program allows eligible patients to pay as little as $25 for a 30-day supply of Levemir, NovoLog or NovoLog Mix with a maximum savings of $100. We also produce human insulin which is an affordable treatment option for appropriate patients.

Price increases support our research and develop of new medicines, and support our ultimate goal – finding a cure for diabetes.

Novo Nordisk also produces Vagifem, one of a number of drugs to help treat menopause that made our list.

“Recent price increases on Vagifem are in-line with what payers have experienced in the past and Vagifem remains competitively priced in the local estrogen therapy category. An Authorized Generic version of Vagifem became available on October 1, 2016, to help enhance patients’ ability to buy this medicine.”

Sanofi is the maker of Lantus, the most popular insulin brand on the market. According to the Centers for Medicare and Medicaid Services data, the cost of Lantus doubled since 2012.

“Sanofi is committed to helping patients get the treatments that they are prescribed. We have not increased the list price of Lantus since November 2014, and the net price of Lantus over the cumulative period of the last five years actually went down. In setting prices for our insulin medications, we work to balance helping patients manage their diabetes today and developing ways to improve care in the future.

Sanofi also has assistance programs for patients in need (www.sanofipatientconnection.com) as well as copay programs for qualified patients whose prescriptions are not paid in part or full by any state or federally funded program.”

Valeant Pharmaceuticals is yet another company whose chief executive officers were called before Congress in 2016 to answer for skyrocketing drug prices. Several of the drugs under question were decades old. In the company’s 2015 SEC filings, marketing, sales and administrative costs outpaced research and development costs four-fold.

However, after the hearing, Valeant Pharmaceuticals hired a new CEO, Joe Papa, and sent us the following:

“Valeant’s Patient Access and Pricing Committee has committed that the average annual price increase for the company’s prescription pharmaceutical products will be set at no greater than single digits and below the 5-year weighted average of increases within the branded biopharmaceutical industry. This approach to product pricing reflects our commitment to ensuring that appropriate pricing practices are met and that the investments we make in our R&D pipeline continue to result in innovative products that improve people's lives. Our R&D spending has increased by 38% year over year as marketing spend has decreased, and we currently have a total of 134 active programs in our R&D pipeline.  We believe that these actions are consistent with our commitment to ensure that patients continue to have access to the medicines they need and demonstrate that we are taking our approach to responsible pricing seriously.”

Our team also reached out to Pfizer, Mylan and Eli Lilly and Company. Pfizer and Mylan declined to comment for this story. Eli Lilly and Company has not yet returned our numerous requests for comment.

Andy Pierrotti, Chris Vanderveen, Katie Wilcox, Anna Hewson and Nicole Vap contributed to this report. 

EXPLANATION: 

“Outrage over price increases of the life-saving EpiPen that jumped up 600 percent since 2007 prompted investigators at TEGNA Media TV stations to research other drugs with skyrocketing prices. Our investigative team spent months compiling a list of 100 prescription drugs, both brand name and generics,  that have seen price increase over the past four years of anywhere between 70 and 12,000 percent.

The average price increase of the drugs on the TEGNA Media list is 400 percent. Our investigators chose drugs that have been around for years, that treat a variety of diseases and many of which are life-saving medications. We used federal data compiled by the Centers for Medicare and Medicaid Services, called the National Average Drug Acquisition Cost (NADAC), to compile the list. More than half of the drugs on the list were FDA approved before 2002. At least a quarter of the drugs on our 100 list have been on the market for more than 25 years.”

Copyright 2016 KUSA


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