First Opinion is STAT’s platform for interesting, illuminating, and provocative articles about the life sciences writ large, written by biotech insiders, health care workers, researchers, and others.
To encourage robust, good-faith discussion about issues raised in First Opinion essays, STAT publishes selected Letters to the Editor received in response to them. You can submit a Letter to the Editor here, or find the submission form at the end of any First Opinion essay.
“Noah Lyles’ collapse with Covid: How not to manage health at the Olympics,” by Arthur L. Caplan
While I agree that physicians have a role in protecting athletes from potential harm, I believe that the paternalistic approach of removing competitors against their will should only be used in exceptional circumstances. Life encompasses more than just maintaining health. We celebrate achievements like climbing Mount Everest or landing on the moon, recognizing that pushing the boundaries of human capacity often involves risk. Given the pursuit of excellence that drives athletes, it may be an oversimplification to automatically disqualify someone with Covid-19 and a history of asthma. If the athlete is otherwise well, I argue their risk of severe illness remains low. Although Lyles collapsed, there does not seem to be any major repercussions for his health at this time.
In the meantime, he secured the bronze medal — which seems like a pretty good trade to me.
— Tseun Han James Kong, Bellin Hospital, Green Bay, Wisconsin
“An aging geriatrician wonders: Who will care for me?” by Jerry H. Gurwitz
Let’s look a little more realistically at this inversion of the demographic pyramid. It is a multipronged problem. Yes, we don’t have enough geriatricians, and generally geriatricians are underpaid and underappreciated. But the elephants in the room are the expansion of the lifespan paired with a Social Security system geared to the demography of the 1930s. This old template promotes early retirement, which generally leads to a loss of skills and vigor, resulting in an increase in overall morbidity. Add to that a hedonistic approach to adulthood with an emphasis on avoiding childbearing with its attendant responsibilities and financial stresses, and the results are obvious: too few young people paying into Social Security to meet the burgeoning care needs of an aging population. Oh yes, there won’t be enough geriatricians either!
Demographers suggest the crisis will be unavoidable toward the latter part of the century.
— Kate Schlaerth
“The FDA should withdraw approval of more than 400 tainted medicines,” by Suzanne Robotti
Thank you for this important commentary. I had previously read that the FDA had refused to provide a list of these questionable drugs to the public, and that was an outrageous decision. But now that I see that the European Medicines Agency took these drugs off the market, I am left wondering why the FDA did not do the same. Why is the FDA so much more concerned about protecting pharmaceutical companies’ profits than they are about protecting patients and consumers?
There is no excuse to justify paying for drugs that the FDA knows may not work and may not be safe because the data provided about them was fraudulent.
As this article points out, this undermines public trust in all generic drugs, in addition to undermining trust in the FDA.
The U.S. has the most expensive health care system in the world — Americans deserve better treatment than this from the FDA.
— Diana Zuckerman. National Center for Health Research
***
There are other consequences that immediate removal of products would cause in a situation like this. It could precipitate drug shortages. I agree that the FDA has an obligation to do more, but the issue is not impurities or too much or too little drug in the product as bioequivalence testing labs implicated do not test for these attributes.
The FDA has taken action to change the therapeutic equivalence code of these products from AB to BX, which means that while the products are still approved and may be prescribed, automatically substituting them at the pharmacy (or by a pharmacist) for the brand name drug is not recommended. The fact that a series of adverse drug events have not been reported to FDA that causes the agency concern permits people currently stabilized on a product to continue taking it without interrupting their therapy. If the FDA confirms there is a problem with the product (such as it is not bioequivalent to the reference listed drug), the agency will almost certainly likely take action to remove the product from the market, as it has done in similar situations.
— Michele Sinoway, consultant and former FDA Deputy Director Office of Generic Drugs
“Give pharmaceutical execs the benefit of doubt — but they need to work for it,” by Fred D. Ledley
In this First Opinion essay, I described research suggesting that the distinct financial structures of large pharma manufacturers and smaller, science-based biotech companies coupled with historical patterns of investment and valuations in biotech could enable the industry to maintain profits and productivity at current levels despite the reductions in drug prices anticipated under the Inflation Reduction Act (IRA). Pharmaceutical executives seem to agree!
Since the essay was published, the CEOs of four pharma companies whose products were subject to drug price negotiations this year — AstraZeneca, Novartis, Bristol Myers Squibb, and J&J — addressed the implications of the IRA in their second quarter comments to investors. They described likely impacts as being “very limited” or “manageable,” with one executive commenting that “we are increasingly confident in our ability to navigate the impact of IRA… .”
While each of the executives also indicated they were still concerned about future impacts of the IRA, each offered optimistic growth projections. Astra Zeneca set out “new revenue ambition.” Novartis stated that it expected to “…grow every year” through at least 2028. And J&J reiterated that it “…expects to grow its business by 3% next year and then 5% to 7% out through 2030…” Even Bristol Myers Squibb, which is currently experiencing headwinds to its core business and presented a more sober analysis of future growth, expressed enough optimism for its stock to rise by 8% that morning.
Even allowing for the tendency of executives to express optimism to their investors in their quarterly reports, their scripted comments suggest that the industry leaders recognize that they can successfully manage the price reductions anticipated under the IRA. Jennifer Taubert from J&J was very explicit about their attitude towards the IRA, stating “…while we are not in alignment with IRA and the price setting process, those numbers have been included in the guidance that we provided last year at EBR, that still looks very good to us today. It is very consistent today.”
It is time to put to rest the claims that the drug pricing provisions of the IRA represent a significant threat to pharmaceutical companies, their shareholders, or pharmaceutical innovation. As I and two colleagues have noted elsewhere, “the greater threat may be persistent claims by the industry that the IRA will have a negative impact, which could cascade into negative sentiment among investors and negative market dynamics.”
— Fred D. Ledley, M.D., director of the Center for Integration of Science and Industry at Bentley University in Waltham, Mass.
“Some ‘inconvenient’ truths about pharmacy benefit managers,” by T. Joseph Mattingly II, David A. Hyman, and Ge Bai
This essay raises three presumed “facts” about pharmacy benefit managers (PBMs).
The first “fact” is that PBMs exist because insurers and self-insured employers use them. This is analogous to George Constanza’s contention that people will watch Seinfeld “because it’s on TV.” The authors contend that human resources departments seek proposals from PBMs through a competitive and transparent process, although they acknowledge that less sophisticated purchasers may need to hire biased brokers and consultants to assist them in signing self-serving contracts.
Having witnessed such negotiations first-hand, it is anything but a fair fight. Large PBMs often dazzle overmatched HR staff with promises of sophisticated algorithms that catch the smallest errors and disease management programs that will all but eradicate absenteeism, all while generating enough rebate dollars to fund a lavish holiday party. A few weeks later a phone-book sized contract will arrive, in English, but equally uninterpretable in any language. To call this process competitive and transparent is hardly a fact.
The second “fact” the authors offer is that high drug prices are primarily due to two acts of Congress, not PBMs, who they contend are the last line of defense in restraining drug prices. The two acts — patents for new drug development and protection from anti-kickback regulations — are important and broadly accepted, although one can debate specifics. What is most off-putting is a lack of discussion on the role PBMs play in increasing drug prices. I would refer those interested in more detail to the recent FTC report cataloging PBM behaviors, ” Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies.”
In response to such criticisms, PBMs argue that drug prices would be higher in their absence. This is true not because they are efficient nor benevolent but rather because at their core they function as large group purchasing organizations. The largest PBMs negotiate on behalf of tens of millions of consumers and their size provides increased leverage in playing one manufacturer against another to obtain larger rebates. While pro-consumer in theory, the lack of transparency and inability of plan sponsors to assess how much PBMs generate in savings and how much they retain for themselves is the root issue, with plan sponsors and others having little to no ability to monitor PBM behavior.
Mattingly, Hyman, and Bai also ignore how PBMs’ thirst for larger rebates leads to higher drug prices. An executive of a large drug manufacturer said that during price negotiations a PBM representative said “if you raise your prices we will consider putting your drug on a lower (more favorable) tier.” They did not explicitly say raise your rebate, but the message was clear — increase the spread between the list and net price and we will reconsider your formulary status. The key is the degree to which negotiated discounts are passed on to plan sponsors and their members through reduced premiums and/or lower cost-sharing at the point-of-sale. PBMs provide valuable services and should be fairly compensated, but industry wide profits of $25 to $30 billion annually seem too high.
I have no argument with the authors’ third fact, which is that every player in the prescription drug supply chain wants to make money. This is true in U.S. health care markets more broadly, where private firms are simply responding to the demands of their shareholders and the financial incentives embedded in both commercial markets and government-funded programs such as Medicare and Medicaid. Recent revelations of upcoding and over-billing by health insurers in the Medicare Advantage program underscore this point. As the authors note, PBMs do not act in the interest of their clients because they are neither required nor incentivized to do so.
So what can be done? One option is to regulate PBMs under the federal Employee Retirement Income Security Act of 1974. ERISA sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in those plans. In essence, federal regulators would require the PBMs to act in the best interests of their clients. Giving ERISA regulators oversight of PBMs would change much of what is wrong in the pharmaceutical supply chain. It would return PBMs to their original and still important role of efficiently administrating drug benefits.
— Geoffrey Joyce, is director of health policy at the Leonard D. Schaeffer Center for Health Policy & Economics at the University of Southern California
