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Medicare Rx price negotiations backed.

WASHINGTON -- A significant number of Americans say the Medicare program should be able to negotiate with drug companies to set lower medication prices, a practice currently prohibited by law, according to a survey released last month.

The poll conducted by the Kaiser Family Foundation found that 87% of people surveyed want Medicare to have the authority to press drug makers for greater discounts. The skyrocketing prices for crucial medicines have hit both health insurers and consumers, who are being asked to cover a higher proportion of their medications' cost.

"People don't understand why these drugs cost so much, and they don't understand why, in America, you can't negotiate for a better price," said Mollyann Brodie, executive director of public opinion and survey research at Kaiser Family Foundation.

Efforts to allow Medicare to negotiate drug prices have not been successful, due to opposition over government interference in the marketplace. Drug manufacturers say their prices reflect the billions of dollars they spend in research and development, both for treatments that are approved and for the many more that fail.

Previous Kaiser polls underlined other frustrations over drug costs. A top priority for Americans in April was making drugs affordable for people with chronic conditions such as diabetes.

In a June poll, nearly three-fourths (73%) of participants thought prescription drug prices were unreasonable. Over three-quarters of those people said it was because manufacturers set prices too high.

Public dissatisfaction has been on the rise since a controversy last year over Gilead Sciences Inc.'s novel hepatitis C cure. The drug, Sovaldi, came with a list price of more than $80,000, or $1,000 for a single pill.

Insurers and state health officials warned that treating a majority of U.S. hepatitis C patients could cost several hundred billion dollars and bankrupt local budgets. When a competing medicine from Abb Vie Inc. was approved late last year, private health insurers pressured both companies to lower prices significantly.

Relatedly, with drug prices for cancer and many other conditions soaring to new highs amid questions about their true value to patients, the Institute for Clinical and Economic Review (ICER) last month launched a program to transform the way new drugs are evaluated and priced in the United States. Funded by a $5.2 million grant from the Laura and John Arnold Foundation (LJAF), ICER will produce public reports on new drugs that have the potential to significantly change patient care and health system budgets. The reports will be produced near the time of FDA approval, with 15 to 20 reports planned in the first two years. Each report will include a full analysis of a drug's comparative effectiveness, cost-effectiveness and potential budget impact.

In addition, ICER vows to use transparent methods to calculate for each new drug a value-based price benchmark anchored to the real benefits the drug brings to patients.

"ICER's new program will make a huge difference by providing what is sorely needed: an independent, trusted source of information about new drugs," stated Steve Miller, chief medical officer of Express Scripts, one of the nation's largest pharmacy benefits managers. "Many payers and policy makers will find this information of critical importance as they evaluate the new drugs, and we look forward to using it to help us improve the ability of patients to get access to new, innovative drugs at a price the system can afford."

LJAF invests in organizations such as ICER that are focused on reducing costs and improving the quality of care. ICER, an independent nonprofit research institute known for its scientific evaluation of the evidence supporting new health care treatments, including the blockbuster drugs for hepatitis C, is leveraging UAF's support to launch this new drug assessment program.

"We need prices that make sense," said ICER president Steven Pearson. "Right now, it's often a black box: We don't know if we are getting good value with new drugs at these higher prices.

"With the Laura and John Arnold Foundation's support, ICER hopes to create a path toward a future in which prices better mirror how much better a new drug actually is in improving patients' lives. This will help reward innovation that makes a difference for patients while making the overall costs of drugs in the health care system a better value."

ICER is launching its new initiative amid the intensifying public concerns about the rising costs of drugs, particularly "specialty pharmaceuticals" for conditions such as cancer, arthritis and multiple sclerosis. In 2014, more than a half-million patients had medication costs in excess of $50,000, an increase of 63% over the previous year, according to a recent Express Scripts report.

Cancer drugs now routinely carry annual price tags of upwards of $100,000.
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Title Annotation:Rx: RETAIL PHARMARCY
Publication:Chain Drug Review
Date:Aug 10, 2015
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