Drug companies claim HHS rule violates their first amendment rights, but added web links to drug prices in their TV ads anyway
Will American consumers ever see the prices of their
prescription drugs? That almost happened this summer, when a Trump
administration healthcare transparency initiative would have required
pharmaceutical companies to include prices in drug advertisements. But that
requirement was halted by a federal judge one day before it was scheduled to take
effect.
The measure, which passed in May, was intended to provide
healthcare consumers with price transparency for some prescription medications
and help lower prescription costs. However, a federal judge placed the new law
on hold citing government over-reach.
This is a significant development for clinical
laboratory managers, pathologists,
and others watching efforts that will enable patients to see the cost of their
medical care in advance of service. Also, few were surprised to learn that this
court case was filed by pharmaceutical companies with the goal of preventing
prescription drug prices from being disclosed in these advertisements.
HHS Tells Big Pharma to ‘Level with People’ About Drug
Costs
Reducing prescription drug prices is a critical issue for
healthcare consumers. Therefore, any policy that helps lower costs should
provide benefits for both patients as well as the healthcare industry overall.
That’s why President Trump signed the initiative that required pharmaceutical
companies to include drug prices in television advertisements.
“We are telling drug companies today: You’ve got to level with people [about] what your drugs cost,” Health and Human Services (HHS) Secretary Alex Azar (above) stated after Congress passed the President’s proposal, STATreported. “Put it in the TV ads. Patients have a right to know, and if you’re ashamed of your drug prices, change your drug prices. It’s that simple.” [Photo copyright: Washington Times.]
The controversial proposal, which would have applied to all prescription
drugs that cost more than $35 for a one-month supply, was scheduled to go into
effect over the summer until it was blocked by Federal Judge Amit Mehta of
the US District Court for the District of Columbia.
Judge Mehta ruled that HHS does not have the regulatory
power to force pharmaceutical companies to include the prices of prescription
drugs in their TV ads and that the agency had violated laws passed by Congress.
“That policy very well could be an effective tool in halting
the rising cost of prescription drugs. But no matter how vexing the problem of
spiraling drug costs may be, HHS cannot do more than what Congress has
authorized,” Mehta wrote in his decision, NPR
reported.
Drug companies Amgen
(NASDAQ:AMGN), Eli Lilly (NYSE:LLY) and Merck (NYSE:MRK) along with the Association of National Advertisers (ANA) filed
lawsuits over the regulation stating it was a violation of their free speech
rights. They won the reprieve on July 8, just one day before the regulation would
have gone into effect.
Mehta stated in his opinion
that the Social
Security Act, which HHS used as its basis for the regulation, does not
“empower HHS to issue a rule that compels drug manufacturers to disclose list
prices,” Fierce
Pharma reported.
In August, the Trump administration filed an appeal after the
federal judge struck down the regulation. The exact basis for that appeal has
not been disclosed.
Drug Companies Decry New Law as Unconstitutional
Many drug makers are not happy with the rule. Drug industry
trade group Pharmaceutical Research and
Manufacturers of America (PhRMA) believes that mandating drug companies to
disclose pricing in TV commercials is a violation of their First Amendment
rights, STAT reported.
Nevertheless, PhRMA proposed that pharmaceutical companies
provide a web link in their TV advertisements that directs consumers to pricing
information online. And some companies also are experimenting with going a step
further and voluntarily complying with the original regulation.
In a news
release, PhRMA states, “To help patients make more informed healthcare
decisions, [PhRMA] member companies today announced their commitment to
providing more transparency about medicine costs. PhRMA member companies’
direct-to-consumer (DTC) television advertisements will soon direct patients to
information about medicine costs, including the list price of the medicine,
out-of-pocket costs, or other context about the potential cost of the medicine
and available financial assistance. The biopharmaceutical industry will also
launch a new platform that will provide patients, caregivers, and providers
with cost and financial assistance information for brand-name medicines, as
well as other patient support resources.”
However, Azar said that action is not in compliance with the
rule. “They put $4 billion a year into television advertising because the
television ad is where people are getting their information, and to point them
to the internet would be the equivalent of saying that they should simply be
putting their ads on the internet and not running them on TV,” he told the
press, STAT reported.
Opponents of the rule noted that actual drug costs for
consumers can vary widely depending on coverage and that patients might forgo
their medications if they are concerned about the costs, reported Politico
following passage of the measure in May.
Critics also claimed that that there were no enforcement
mechanisms outlined for companies that did not comply with the ruling, and that
it relied on the pharmaceutical industry to police itself. If a particular
company failed to include the required information in its TV ads, competitors
could file suit against it under the deceptive and unfair trade practice
provisions of the Lanham Act,
Politico noted.
Solutions to the public’s demand for price transparency in
healthcare may be forthcoming. However, at press time, no further information
concerning the status of this HHS regulation was available. Dark Daily
will continue to monitor the situation and inform readers of any developments.
Meanwhile executives and pathologists at the nation’s
clinical laboratories should continue to develop strategies to serve patients
who want to know the prices of their medical laboratory tests before they arrive
to have their specimens collected.
This summer, several pharma companies may have succeeded in
getting a federal court to stop this particular rule to disclose prescription
drug prices. But the trend toward price transparency has deep roots and will
continue forward.
New value-based healthcare payment models could have far-reaching effects on medical laboratories and the testing they provide
Hospitals, physicians, and medical laboratories recognize the transition from “volume to value” that’s underway in the American healthcare system. Fee-for-service payments for clinical services (regardless of whether they are needed or effective) will soon cease and providers will be increasingly paid on how much value they deliver to patient care. This will fundamentally alter the complete care continuum, from hospital stays to pathology consults to clinical laboratory testing services.
One such change involves value-based drug contracts with pharmaceutical manufacturers. According to an article in The BostonGlobe, in an effort to reduce the ever-increasing cost of prescription drugs while still “giving patients access to costly treatments,” Harvard Pilgrim Health Care (Harvard Pilgrim)—one of Massachusetts’ largest health insurers with more than 1.3 million members—is negotiating value-based agreements with major pharmaceutical manufacturers. How much money Harvard Pilgrim pays for certain drugs will depend on how much the healthcare organization contributes to curing/improving their patients’ conditions.
Value-Based Pharmaceutical Agreements
Harvard Pilgrim first made news for their value-based drug contracts in 2015 when they contracted with three companies:
Harvard Pilgrim currently has 12 value-based pricing contracts with pharmaceutical companies. According to a news release, the contracts enable Harvard Pilgrim to monitor “specific criteria in patients following discharge” for the effectiveness of medication. “If the medicines fail to meet the agreed upon outcomes criteria in real patients, Harvard Pilgrim will be charged a lower amount,” the news release states.
The graph above is from an analysis by Avalere Health, a strategic advisory company in Washington, DC, that develops solutions for healthcare. It shows how, according to Avalere, “a majority of health plans are interested in forming outcomes-based contracts with biopharmaceutical manufacturers that tie product reimbursement to patient outcomes.” (Image copyright: Avalere Health.)
These contracts link a drug’s cost to its overall effectiveness in ways that make companies accountable for results in terms of real-world patient outcomes, rather than controlled trial results. Michael Sherman, MD, Harvard Pilgrim’s Chief Medical Officer and SVP of Health Services, stated in the news release that they put drug companies “at risk for delivering” on their promises.
Can Medical Laboratories Participate in Value-based Models?
The rise of value-based healthcare models affects more than just pharmaceutical companies; medical laboratories nationwide are considering how value-based systems might affect their work and mission as well. In an Orchard Software whitepaper titled, “The Value of the Laboratory in the New Healthcare Model,” Daniel J. Scully, CEO of New York’s Buffalo Medical Group, stated that the “50-million dollar” question for laboratories is “does the laboratory offer enough value in service and speed of results” for the new value-based healthcare models?
Clinical laboratories play such a vital role in healthcare quality—providing accurate diagnosing and crucial monitoring, as well as data collection and risk assessment—they may find themselves affected by value-based healthcare changes. Because of the high costs of equipment and testing, laboratories may also find themselves scrambling to eliminate costs and improve on efficiency, by monitoring resources and testing outcomes in connection to patient needs.
Clinical pathologists may also find themselves more frequently called upon to assist in guiding clinicians to more “effectively utilize lab services to achieve better care,” according to the Orchard Software white paper.
Clinical Associations Say Medical Laboratories Crucial to Success of Value-based Healthcare
An ASCP white paper states that clinical pathology data has become increasingly important as “clinical laboratory data are now used to measure provider performance, both individual and organizational, as well as to inform value-based purchasing that optimizes healthcare resources and decreases costs.”
In a position statement, the AACC noted that laboratory testing was crucial to this new model, and that “laboratory professionals are uniquely positioned” to help increase value within healthcare by helping “clinicians identify the most effective testing protocol and interpret the results accurately. Clinical laboratorians can further reduce healthcare costs by developing new, more precise tests to personalize patient care and creating computerized clinical decision support interventions to aid test selection.” Some types of testing, however, particularly expensive molecular and genetic testing, may end up a target of similar value-based agreements between the labs that perform these tests and the provider organizations that use the tests.
Much of the focus on value-based healthcare is currently on value-based pharmaceutical contracts, such as those from Harvard Pilgrim. Nevertheless, clinical laboratories will likely play vital roles in providing care, guiding testing, and evaluating care outcomes under these new payment models. They also could find themselves part of a larger debate concerning overuse of testing or data collection.
Changes to healthcare from pay-for-service to pay-for-value will undoubtedly have far-reaching effects as healthcare fields attempt to cut costs while providing better services. Every clinical laboratory must be proactive in finding its place in these new models.
Pathologists in medical laboratories creating laboratory-developed tests (LDTs) should be aware that some in the scientific community want more transparency about technology and methods
Developers of clinical laboratory tests and medical diagnostic technologies might soon be feeling the pressure to increase their push for transparency and standards that ultimately would make replication easier.
That’s thanks to a review project’s inability to reproduce results from three of five high-profile cancer studies.
The review project is called the Reproducibility Project: Cancer Biology and is a collaboration between network provider Science Exchange of Palo Alto, Calif., and the Center for Open Science in Charlottesville, Va. They attempted to independently replicate selected results from high-profile cancer biology papers in an open fashion. (more…)
Antibody validation standards would help ensure reproducibility of research studies and improve the consistency medical laboratory test results
As science and industry gets better at measuring things and assessing quality, the acceptable standard often comes into question. This seems to be happening with antibodies, the most common reagents used in diagnostics, clinical laboratory diagnostic tests, and medical research. In many cases, the end result is that companies and their suppliers must use new technologies and quality methods to revise the “old way” and create products that have measurable better quality.
The techniques currently used to validate antibodies is the topic of a recently-published scientific paper. The authors of a paper published in the March, 2010, issue of Biotechniques pointed out, antibody validation and standardization ensure study reproducibility, which is critical to accuracy. And yet, no standard guidelines define how these important biological tools should be validated prior to use.
Thus, researchers participating in a recent webinar, presented by The Scientist expressed concern that—without improved antibody validation and standardization—the accuracy of published research is in question and diagnostic test results, such as those produced by medical laboratories, will continue to be inconsistent. (more…)
Researchers sequenced the entire genomes of 2,636 Icelanders and gained useful insights into how human genes evolve and mutate
Over the past 15 years, Iceland has managed to be at the forefront of genetic research tied to personalized medicine and new biomarkers for diagnostics and therapeutics. This is true because, as most pathologists know, Iceland has a small population that has seen little immigration over the past 1,000 years, along with a progressive government and business community.
The relatively closed society of Iceland makes it much easier to identify genetic sequences that contribute to different diseases. The latest example of such research findings comes after the genomes of 2,636 Icelanders were sequenced. In addition to this being the world’s largest-ever study of the genetic makeup of a single population, the findings suggest a strategy for analyzing the full-spectrum of genetic variation in a single population.
