Pharmaceutical industry put on hot seat over impact on health costs

Dr. Don Berwick told Joldersma it was "courageous of you to show up"

THINKSTOCK
THINKSTOCK

BOSTON, OCT. 18, 2016…..After hearing various health industry representatives and political figures voice concerns about drug prices over the course of two days, the state’s Health Policy Commission welcomed a pharmaceutical group representative with something resembling praise, before grilling her on her industry’s practices.

“I hope you’re well paid, because you have a tough job,” commission Chairman Stuart Altman told Lisa Joldersma, the vice president of policy and research for the trade group Pharmaceutical Research and Manufacturers of America.

Dr. Don Berwick told Joldersma it was “courageous of you to show up” to take part in a panel on strategies addressing pharmaceutical spending growth in Massachusetts.

Listen to: Panel Discussion

Referencing price increases for insulin and for the allergy treatment EpiPen, Berwick asked Joldersma if there was “any pricing pattern which PhRMA regards as ethically unacceptable, and have you spoken out about that?”

“I’m not paid well enough to answer that,” Joldersma quipped. She said the EpiPen price increase has “touched everyone, and we all want to know what caused that, how is it possible that this could come to be in this country, so yes, at PhRMA, we do look with great interest at those fact patterns, and we do look for ways to address challenges within the market where we know they exist.”

Joldersma called the EpiPen increases a “textbook example, frankly, of regulatory barriers getting in the way of markets,” and said the state could help knock down those barriers.

“You can help us communicate with federal regulators about the need to clear the backlog of generic drug applications,” she said. “You can help us talk about the need to make it less expensive to bring new drugs to market.”

Spikes in the costs of life-saving drugs have engendered outrage over the past year while also helping push health care expenditures last year beyond a benchmark the state hoped would be met.

Berwick, the former administrator of the Centers for Medicare & Medicaid Services and a 2014 Democratic candidate for governor, told the News Service the attention-grabbing price spikes are part of a larger shift.

“There’s a general trend for pharmaceutical makers to price as high as they possibly can,” Berwick said before the Health Policy Commission began its second day of hearings on health care cost trends.

The attorney general’s office found health plans’ pharmaceutical drug spending in Massachusetts “significantly outpaced overall health care spending growth.”

Along with diagnostic tests, office visits, surgeries and spending on other medical treatments, the amount spent on medications, especially specialty drugs, helped push health care expenditures to $57.4 billion in 2015, up 4.1 percent and beyond the 3.6 percent benchmark, according to the Center for Health Information and Analysis.

“We need to get our arms around the fact that spending in the prescription drug and in the pharmaceutical space is growing. It’s growing exponentially especially for certain kinds of drugs,” Attorney General Maura Healey told the News Service after testifying to the commission Tuesday. She said, “I think we need to distinguish between the behavior of somebody like Turing Pharmaceuticals that gouged the market in a way that was really, really harmful from other kinds of practices that may be the result of innovation and research and development, and sort of the necessary expense attendant to creating these, in some instances, vitally important treatments.”

Vertex, Sanofi Genzyme and Novartis are only a few of the major pharmaceutical companies with a presence in the Boston area, providing jobs and research aimed at engineering better health.

“What we have right now is a tale of two cities,” said Partners HealthCare Chief Operating Officer Gregg Meyer. “The one city, largely located around Kendall Square, is our biotechnology innovation hub, which is really important to our regional economy. The other is represented here and is represented in these struggles of everyone trying to get access to medications at a reasonable cost.”

Meyer suggested the state could “bring those parties together in a dialogue.”

The Massachusetts Biotechnology Council said it will continue advocating for national policy changes to accelerate the approval of generics, and that many of the drug companies it represents are working with insurers “to ensure patients are only paying for the value a medicine provides.”

“The true ‘cost’ of innovative medicines and cures cannot be calculated in a vacuum. Biotechnology has revolutionized the delivery of healthcare and has meaningful impact on both patient well-being and public health,” MassBio President and CEO Robert Coughlin said in a statement. “The cutting-edge therapies and technologies, in some cases being discovered right here in Massachusetts, can also add material value to the healthcare system not necessarily captured through snap-shot cost analyses.”

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