Prescription drugs are used by 80% of Americans and are essential in the treatment and prevention of acute and chronic conditions. The improper, unsafe, and inefficient use of medications leads to billions of dollars of avoidable healthcare costs.
Affiliated with the Center for Research on Health Care, the Center for Pharmaceutical Policy and Prescribing (CP3) conducts research in pharmacoepidemiology, drug pricing, and opioids. The goal of CP3 is to inform pharmaceutical regulation and improve patient and prescriber decision-making around prescription drugs.
In March, CP3 landed an impressive three publications in a special theme issue of JAMA on drug pricing. Notably, these publications include contributions from the CRHC’s Drs. Walid Gellad and Bernie Good, work led by medical students, and significant authorship from women in research.
Changes in Drug Prices, Discounts in US
First, Drs. Gellad and Good authored “Changes in List Prices, Net Prices, and Discounts for Branded Drugs in the US, 2007-2018” alongside lead author Dr. Inmaculada Hernandez and Dr. Alvaro San-Juan-Rodriguez. This retrospective descriptive study aimed to fill the gap of studies that examined drug prices based on list prices without factoring in discounts. The research asked:
To what extent have manufacturer discounts offset increases in list prices of branded pharmaceutical products in the US?
The study found variability in discounts across classes, with substantial mean increases in list and net prices. For example, the list price of multiple sclerosis treatments increased 439%. Accounting for the 64% of the increase offset by discounts, the net prices of these treatments still more than doubled
Overall, list prices increased by 159% and net prices increased by 60%. Discounts increased from 40% to 76% in Medicaid and from 23% to 51% in other payers—these increased discounts offset 62% of increases in list prices.
Dr. Hernandez describes the study in her tweet thread following the March 3rd JAMA release. Her key takeaways were that “after discounts, net prices still increased 3 times faster than inflation” and “the widening gap between net and list is concerning because it will exacerbate disparities in access.”
“How much have drug prices increased after discounts?” “To what extent have discounts offset increases in list prices?” We are excited to finally answer these questions! In @JAMA_current , @walidgellad @CBgood23 @asjrodriguez and I show that:
— Inmaculada Hernández (@ihdezdelso) March 3, 2020
1. In 2007-2018, list prices increased by 159%, and net prices by 60%. Discounts offset 62% of increases in list prices.
2. Discounts increased from 40% in 2007 to 76% in 2018 in Medicaid, and from 23% to 51% in other payers
— Inmaculada Hernández (@ihdezdelso) March 3, 2020
3. There was wide variability across classes. There was a widening gap between list and net for insulins and TNF inhibitors. Actually, net prices of insulins decreased since 2014. However, prices of MS drugs more than doubled after accounting for discounts!
My take-aways: 1. After discounts, net prices still increased 3 times faster than inflation. 2. The widening gap between net and list is concerning because it will exacerbate disparities in access (uninsured and underinsured patients are exposed to list!)
— Inmaculada Hernández (@ihdezdelso) March 3, 2020
Two final notes: 1) Discounts include any manufacturer concession, not only rebates. 2) This was all thanks to @SSRHealth data
This study has also been covered by multiple news sources, including U.S. News & World Report, Al Jazeera, and American Journal of Managed Care.
Gene Therapy Trials Funding
Next, Dr. Gellad teamed up with medical students Zachary Kassir (lead author) and Brian Kocak, as well as Dr. Ameet Sarpatwari (of the Program On Regulation, Therapeutics And Law at Brigham & Women’s Hospital, Harvard Medical School) and CP3’s Dr. Courtney Kuza for the research letter “Sponsorship and Funding for Gene Therapy Trials in the United States.” The researchers searched ClinicalTrials.gov to quantify the sources of sponsorship and funding for U.S. gene therapy trials.
Of 341 included trials, analysis revealed that sponsorship varied by trial type and phase. The biopharmaceutical industry sponsored or funded less than half of gene trials. However, industry sponsored all of phase 3 trials, whereas NIH and academia sponsored almost half of phase 2 trials.
Dr. Gellad shared the findings in his tweet thread, saying that “most importantly, the study shows that NIH and academia are involved in more than just ‘basic science discovery’ when it comes to gene therapy. They’re running phase 1 and 2 trials.” He further explains, “Only 36% of trials were funded solely by industry,” whereas “50% of trials solely funded by academia/NIH.”
A lot to read today in @JAMA_current on drug prices. Take a look at our short research letter describing funding of ongoing clinical trials for gene therapy in US. Majority of these trials funded by academia or NIH.
— Walid Gellad (@walidgellad) March 3, 2020
Few points. We searched 341 gene therapy trials on http://clinicaltrials.gov, active as of Jan 2019. What does sponsorship of those trials look like? 10% NIH 40% industry 50% academia (figure shows it broken down by phase) more detail on gene therapy trials, divided by in vivo (e.g, insert a gene) versus ex vivo (e.g. use genes to alter cells removed from body), type of gene therapy, and disease area (e.g. cancer vs. non cancer).
— Walid Gellad (@walidgellad) March 3, 2020
Most importantly, the study shows that NIH and academia are involved in more than just 'basic science discovery' when it comes to gene therapy. They're running phase 1 and 2 trials. (only 36% of trials were funded solely by industry. 50% of trials solely funded by academia/NIH)
— Walid Gellad (@walidgellad) March 3, 2020
important limitations: this is only trials listed on http://clinicaltrials.gov (some phase 1 may not be listed), and the website is not perfect. We are not looking at preclinical funding and not quantifying funding. But....these numbers should inform discussion.
Pricing & Drug Shortages
Finally, CP3 authors Drs. Hernandez, Tina Batra Hershey, and Julie Donohue asked, “Drug Shortages in the United States: Are Some Prices Too Low?” in their Viewpoint article. This is a timely issue, as noted by the authors citing a recent increase in the number of drugs in active shortage and nearly 100 drug-pricing bills introduced in Congress.
The discussion reviews the generic drug manufacturing and purchasing system to uncover the root causes of drug shortages, and proposes potential solutions to these increasingly concerning issue.
Dr. Hernandez’s tweet includes a helpful figure showing the relationship between all of these moving pieces.
In the same theme issue of @JAMA_current on pharmaceutical policy, we also review the generic drug purchasing system, and discuss the causes of #drugshortages
— Inmaculada Hernández (@ihdezdelso) March 3, 2020
Congratulations to the entire team at CP3 for these incredible successes, and much gratitude for their hard work and important contributions to drug pricing research.
March 17, 2020 • Michelle Woods