Drug Pricing Presents: More Naughty Than Nice

by Susan Hayes

 

As an early Holiday present, we have provided to you the last three years’ price increases for Brand and Generic drugs which might have you reaching for some spiked egg nog as you budget for the 2017 year.  Drug price increases have hit some dangerous highs.

We took the top dollars spent by one of our largest, nationally based, demographically diverse clients (in terms of age/gender) and sorted volumes by the most utilized drugs in terms of dollars spent.  Then we compared the unit prices for these drugs as of January 2014, January 2015, January 2016 and October 2016 as well as providing a cumulative price increase from January 2014 to October 2016 – a 44 month time span.  We did not try to separate Brands from Specialty, since there is no clear industry definition, so specialty drugs are included in the brand illustration.  The findings are below.

 

Comments on Brands

You will note that the range of increases for brand drugs was 5% to 100%, with Epipen at the highest of the range.  The CEO of Mylan, the manufacturer of Epipen, Heather Bresch has been lambasted by Congress for the price increase states that half of the increase has gone to fuel rebates to PBMs (http://abcnews.go.com/Politics/mylan-ceo-defend-epipen-price-increase-congress/story?id=42232002).  Other significant price increases include the highly advertised Humira and Enbrel, both drugs approved for rheumatoid arthritis and psoriasis, experiencing a 60%+ increase over the 44 month period. The fact that the competing products experienced similar price increases does not purport with economic theory that competition reduces the price of competing products.  There are several diabetic medications in the top 25 brands (Lantus, Novolog, Victoza and Januvia) so if your population has a large diabetic population, these cost increases may be hitting your bottom line.  As of 2010, 25.8 million people—8.3% of the population—have diabetes; 1.9 million new cases of diabetes were diagnosed in people aged 20 years or older in 2010 (www.cdc.gov/diabetes/consumer/research.htm).

 

Comments on Generics

Generic drugs are supposed to be the least costly drugs and many generics experienced price decreases over the last 44 months, but some generics have taken a historically unprecedented jolt upwards in costs.  Metformin, another diabetic drug, has had a 959% increase in the last 44 months in Average Wholesale Price.  However, many chain pharmacies are offering Metformin for $4 a month and I would suspect some PBMs have Metformin fairly affordable on MAC (Maximum Allowable Cost) price lists.  Remember that PBMs set MAC prices, not an outside source.  So by increasing a very popular AWP of a diabetic drug, then setting the MAC price considerably lower, it allows PBMs to make your overall MAC performance guarantee much easier and allows the PBM to upcharge other generic products and still meet an AWP discount for generic products.  Make sure your performance guarantee is at least 80% off AWP going into 2017.

There is another important point about Metformin.  The drastic price increase has been for the Metformin HCl Tab SR 24HR Modified Release 1000 MG tablet which is a Valeant product (Glumetza) with another manufacturer (Lupin).  From a clinical perspective there are several other generic metformin products available that have had price increases over the last few years but not as drastic as the modified release dosage form.  Plans should not cover the Valeant/Lupin products due to the ridiculous price.  You will recall that Valeant has also been in the press over the last few years, with Commercial RICO charges (http://www.frierlevitt.com/articles/pharmacylaw/health-plans-file-rico-suit-valeant-philidor-secret-relationship-signaling-continued-scrutiny-pharma-pharmacy-relationships/) and other charges of fraudulent behavior with a contracted mail order firm, Philidor, who then contracted with other retail pharmacies when Philidor could not fill prescription in some states due to Medicare fraud (http://www.nytimes.com/2016/03/29/business/dealbook/valeants-accounting-error-a-warning-sign-of-bigger-problems.html, http://www.latimes.com/business/la-fi-1101-valeant-pharmacy-20151101-story.html).  According to the suit, Philidor was:

 

• Actively changing codes on prescriptions to ensure that the prescriptions would be filled with a Valeant drug rather than a generic equivalent
• Using false pharmacy identification information to bill payors/PBMs for prescriptions in order to fraudulently bypass payors’ denials of claims for reimbursement
• Submitting prescription renewals for reimbursement and falsely representing to payors/PBM that patients had requested renewals of their prescriptions when no such request had been made
• Waiving patient co-pays through manufacturer coupons or otherwise to remove patients’ incentive to seek out cheaper drugs
• Using affiliate pharmacies within the “Valeant Enterprise” to enable Philidor to indirectly operate in States where it had been denied a license

You should make sure your PBM reimburses you for all Valeat/Philidor claims for the period of September 2015 and prior for all Valeant products.  Many of these claims will be for compounded creams for dermatological products or just useless (clinically) products like Jublia for toe-nail fungus.

Omeprazole/sodium bicarbonate is nothing more than a Proton Pump Inhibitor and an antacid combination and we recommend that you do not cover this prescription drug as both products are available over the counter. Omeprazole/sodium bicarbonate has had a staggering 722% increase.  Lidocaine ointment has experienced a 304% increase and is one of the most diverted (stolen) drugs in America.  If you have many claims for this drug, you should question your PBM’s fraud, waste and abuse program.  This drug is a “top 10” drug that I find in pharmacies with diversion and fraud problems, particularly in the Miami area.

Rosuvastin has actually increased by 30% in costs (generic Crestor) which makes little sense.  Crestor was one of the most marketed statin drugs in a very crowded therapeutic class.  The fact that the generic has increased in costs is counter-intuitive to what we think happens when brands become generically available which is the cost of the generic drops.  We will continue to watch this interesting generic drug and its AWP cost.

 

Ho, Ho, Hold on to your Santa Caps

We will update this chart so watch for another blog in January when we get the January 2017 price increases.  Until then, I guess you can say that manufacturer price increases leave many prescription drug benefit managers with a lump of coal in our stockings and a bill that only Santa can afford.  Naughty results for nice people.

 

Brand Drugs

Drug Name	October 2016 Unit AWP	Percent Change	Jan 2016 Unit AWP	Percent Change	Jan 2015 Unit AWP	Percent Change	Jan 2014 Unit AWP	2014-Q32016 Cum %
HUMIRA PEN   INJ 40MG/0.8	$2,458.24000	18.58%	$2,073.03500	18.58%	$1,748.18500	16.42%	$1,501.56500	63.71%
HARVONI      TAB 90-400MG	$1,350.00000	0.00%	$1,350.00000	0.00%	$1,350.00000
ENBREL SRCLK INJ 50MG/ML	$1,254.41582	9.90%	$1,141.42092	27.95%	$892.08929	15.34%	$773.41327	62.19%
HUMIRA       KIT 40MG/0.8	$2,458.24000	18.58%	$2,073.03500	18.58%	$1,748.18500	16.42%	$1,501.56500	63.71%
TECFIDERA    CAP 240MG	$126.30000	5.00%	$120.28000	16.21%	$103.50000	5.01%	$98.56000	28.15%
SOVALDI      TAB 400MG	$1,200.00000	0.00%	$1,200.00000	0.00%	$1,200.00000	0.00%	$1,200.00000	0.00%
LANTUS       INJ SOLOSTAR	$29.82067	0.00%	$29.82067	0.00%	$29.82067	22.98%	$24.24933	22.98%
COPAXONE     INJ 40MG/ML	$540.40000	0.00%	$540.40000	7.91%	$500.80000
ADVAIR DISKU AER 250/50	$6.69267	0.00%	$6.69267	12.32%	$5.95833	5.00%	$5.67467	17.94%
NOVOLOG      INJ FLEXPEN	$39.46000	7.91%	$36.56800	16.42%	$31.41067	20.88%	$25.98400	51.86%
SUBOXONE     MIS 8-2MG	$8.86800	0.00%	$8.86800	5.00%	$8.44600	0.00%	$8.44600	5.00%
ENBREL       INJ 50MG/ML	$1,254.41582	9.90%	$1,141.42092	27.95%	$892.08929	15.34%	$773.41327	62.19%
NOVOLOG      INJ 100/ML	$30.64800	7.90%	$28.40400	16.46%	$24.38900	20.87%	$20.17800	51.89%
GILENYA      CAP 0.5MG	$269.73033	9.09%	$247.24367
EPIPEN 2-PAK INJ 0.3MG	$365.16500	14.90%	$317.81500	32.02%	$240.73000	32.02%	$182.34500	100.26%
XTANDI       CAP 40MG	$93.70008	5.90%	$88.47983	5.90%	$83.55033	5.90%	$78.89550	18.76%
VIAGRA       TAB 100MG	$57.93667	12.90%	$51.31667	23.56%	$41.53233	21.92%	$34.06633	70.07%
OTEZLA       TAB 30MG	$51.72433	7.85%	$47.95967	27.89%	$37.50000
AUBAGIO      TAB 14MG	$251.87500	9.18%	$230.69643	6.00%	$217.63857	21.46%	$179.17929	40.57%
SPIRIVA      CAP HANDIHLR	$13.63733	8.00%	$12.62733	6.00%	$11.91233	6.00%	$11.23800	21.35%
VICTOZA      INJ 18MG/3ML	$99.68444	7.95%	$92.34000	17.66%	$78.48000	9.88%	$71.42444	39.57%
IBRANCE      CAP 125MG	$591.00000	0.00%	$591.00000
ANDROGEL     GEL 1.62%	$8.34080	9.90%	$7.58947	9.90%	$6.90573	14.28%	$6.04307	38.02%
ELIQUIS      TAB 5MG	$7.19833	7.90%	$6.67133	5.90%	$6.29983	18.69%	$5.30783	35.62%
JANUVIA      TAB 100MG	$14.53600	0.00%	$14.53600	9.90%	$13.22633	16.49%	$11.35367	28.03%

 

Generic Drugs

	Quarter 3, 2016			January 2016			January 2015		January 2014		2014-2016
Drug Name	Avg. Unit AWP	Percent Change	Avg. Unit AWP		Percent Change	Avg. Unit AWP		Percent Change		Avg. Unit AWP		Cum %
METFORMIN    TAB 1000MG	$126.90950	75.47%	$72.32400		458.57%	$12.94800		8.12%		$11.97600		959.70%
TAMSULOSIN   CAP 0.4MG	$4.20387	1.58%	$4.13838		-2.93%	$4.26315		-6.84%		$4.57606		-8.13%
AMPHETAMINE  CAP 30MG ER	$8.20545	-3.48%	$8.50147		0.00%	$8.50147		-2.13%		$8.68639		-5.54%
HYDROXYCHLOR TAB 200MG	$3.22922	8.88%	$2.96590		11.89%	$2.65076		58.85%		$1.66875		93.51%
AMPHETAMINE  CAP 20MG ER	$8.67317	-3.76%	$9.01206		0.00%	$9.01206		-2.69%		$9.26128		-6.35%
METFORMIN ER TAB 1000MG	$23.10453	29.99%	$17.77435		31.74%	$13.49181		-15.32%		$15.93223		45.02%
MOMETASONE   SPR 50MCG	$12.90417	5.14%	$12.27320		4.01%	$11.80052		10.42%		$10.68654		20.75%
OMEGA-3-ACID CAP 1GM	$2.22218	2.34%	$2.17144		0.64%	$2.15772		1.50%		$2.12579		4.53%
ROSUVASTATIN TAB 10MG	$6.76816	5.32%	$6.42639		1.69%	$6.31965		3.77%		$6.09027		11.13%
HYDROCO/APAP TAB 10-325MG	$1.52100	0.56%	$1.51255		1.61%	$1.48859		1.07%		$1.47278		3.27%
OXYCOD/APAP  TAB 10-325MG	$3.90080	0.21%	$3.89281		-0.20%	$3.90078		2.57%		$3.80291		2.57%
ROSUVASTATIN TAB 20MG	$7.04793	4.04%	$6.77394		1.99%	$6.64195		22.03%		$5.44297		29.49%
BUDESONIDE   CAP 3MG DR	$19.12296
CELECOXIB    CAP 200MG	$7.45740	2.85%	$7.25096		-3.73%	$7.53178		7.26%		$7.02212		6.20%
OMEPRA/BICAR CAP 40-1100	$76.67126	74.40%	$43.96167		331.80%	$10.18093		9.20%		$9.32356		722.34%
LIDOCAINE    PAD 5%	$14.25997	12.53%	$12.67241		1.54%	$12.48083		-1.39%		$12.65614		12.67%
LIDOCAINE    OIN 5%	$8.29416	29.37%	$6.41135		74.91%	$3.66558		78.91%		$2.04880		304.83%
OMEPRAZOLE   CAP 20MG	$5.07453	1.69%	$4.99006		3.09%	$4.84026		0.65%		$4.80900		5.52%
ESOMEPRA MAG CAP 40MG DR	$9.51460	0.30%	$9.48575		-0.26%	$9.51001		2.34%		$9.29263		2.39%
AMPHET/DEXTR TAB 20MG	$2.78691	-4.68%	$2.92387		-0.52%	$2.93922		2.65%		$2.86347		-2.67%
ATORVASTATIN TAB 20MG	$5.59934	-0.63%	$5.63511		-2.86%	$5.80101		-2.49%		$5.94921		-5.88%
BUDESONIDE   SUS 0.5MG/2	$5.59210	-4.73%	$5.86950		-0.61%	$5.90580		-0.77%		$5.95158		-6.04%
ATORVASTATIN TAB 40MG	$6.06721	-1.32%	$6.14865		-2.20%	$6.28705		-1.36%		$6.37380		-4.81%
DULOXETINE   CAP 60MG	$8.94312	1.16%	$8.84060		-0.90%	$8.92130		-3.49%		$9.24429		-3.26%
HYDROCO/APAP TAB 5-325MG	$1.16906	-0.68%	$1.17712		1.97%	$1.15443		-0.57%		$1.16105		0.69%