Addicts… how many is just dependence left untreated ?

I am sure that there is some truth to the statement that “their addiction started with a prescription for some opiate pain medication “

Recently there was a article by F. Perry Wilson, MD  http://www.medpagetoday.com/PainManagement/PainManagement/62462  who claims that 1.3% of addicts started with a prescription.  When you consider that there are abt 230 million adults out of our population of 330 million and there are an estimated 2.1 million serious opiate addicts… or about 1% of our adult population.

After 1-2 yrs, a addict finds it more difficult to “get high” because of their tolerance to “getting high” from a opiate… they continue using because of withdrawal issues what they refer to as “dope sick”.

Just think how many people get pain medication for an acute issue and after several weeks or so … they are told to stop the medication because the source of their pain is – or should be – resolved… Whoever prescribe the medication does not concern themselves with the potential withdrawal the pt is going to experience and does nothing to help them wean themselves off the dependency of the opiate.

All the person knows is that they feel like hell and can’t function and their prescriber just “cuts them off” and left them to deal with the withdrawal issues.

The once pt is now left in withdrawal and without any support…  all they know is that taking some opiate – any opiate – they resolved the withdrawal symptoms.  We have all to often heard of the path they end up on … stealing opiates from medicine cabinets from family and friends, buying on the street and when they run short on cash… first they start selling their positions and buying the least expensive opiate – normally Heroin on the streets.. and the downward spiral into a “addicts hell” begins.

These people don’t suffer from the mental health issue of an addictive personality.  Perhaps these are the same people that we see the addiction rehab facilities promoting as their “success stories”, and their success stories may be just the failures of our medical system… of making sure that those who are prescribed opiates for acute pain… are allowed to properly treat the known withdrawals that some may not be able to deal with on their own.

We know that we have an estimated 45 million alcoholics, 35 million nicotine addicts, 150,000 addicted to gambling and untold numbers that are addicted to some activity or thing that we don’t track.

It would seem that most homo sapiens have some degree of an “addiction gene” in them… in some individuals they are not able to suppress its influence on their behavior and they are totally out of control, others need a little extra support to know how to manage their “addiction issues”.

It has been proven time and again… abstinence does not work to control or prevent addiction. Apparently we keep electing politicians that after 240 yrs have still not got that figured out ?

The right to LIFE, LIBERTY, PURSUIT OF HAPPINESS… unless the DEA objects ?

From my INBOX:

Heroin use does not “usually begin with the use of legally prescribed opioid pain killers” and studies bear this out. The rate of addiction (3-6% of the population) and misuse of prescription medications by Chronic Pain Patients (CCPs = 30-34% of the population) is no greater than all forms of addictions in the general population. Drug seeking behavior / addiction is a mental illness and very few addicts obtain their abused substances through legal means. They obtain the prescription meds from illicit sources and while an argument can be made that greater legitimate prescribing / dispensing can result in greater diversion and hence abuse the link of addiction to legitimate prescribing/ supply use can not be made.  Continued focus on the addiction side of the story rather than the CPP population leads to denied access to those in need.

 Here is a link to an NIH study with sub-links related to this subject:

 

https://www.ncbi.nlm.nih.gov/pubmed/18489635

  What percentage of chronic nonmalignant pain patients exposed to chronic opioid analgesic therapy develop abuse/addiction and/or aberrant drug-rela… – PubMed – NCBI

www.ncbi.nlm.nih.gov

Pain Med. 2008 May-Jun;9(4):444-59. doi: 10.1111/j.1526-4637.2007.00370.x. Meta-Analysis; Review

The irony in the Florida DOH letter titled ” Emerging Health Threat” indicates that the DOH views restricted supply and access to needed medications, in this case Hydromorphone, as a “threat’ to public safety yet they turn a blind eye and ignore aggressive and overzealous big pharmacy corporate policy making decisions that deny access to needed medications to patients with legitimate medical needs. CVS, Walgreens, and Walmarts blacklist certain prescribers as “inappropriate” and their computer systems prevent the filling of any prescriptions from these prescribers even if the patient has legitimate medical need for the medications. The prescribers are usually first blacklisted simply by the number of controlled prescriptions written as a percentage of the whole. The DEA scrutinizes any doctor who writes a high number of controlled prescriptions even if that doctor is specialized in pain management and in due course would in fact write a high number of controlled prescriptions in the specialty practice. The same applies to pharmacies that fill a high number of controlled prescriptions and once the percentage reaches 20-30% red lights go off at the DEA for scrutiny. This leads to irrational fear of DEA sanctions by the corporations and implementation of the policies that “threaten” public health and safety for the CPPs in need. It is bit of a”Catch 22″ scenario.

 

The implementation of corporate policies to protect company interests that limit access do so by usurping and interfering with the individual Pharmacist’s Professional Judgment. Even if this highly educated professional, trained to critically access and vet each individual controlled prescription for validity and medical necessity, deems the unique patient and the patient’s health status / diagnosis as legitimate the Pharmacist is coerced to refuse that valid prescription and refuse access to needed care. This coerced refusal is done by fear of retribution and loss of employment. The conflict of interest between corporate protectionism and the ethics of the profession of pharmacy in which Pharmacists are sworn by oath to “relieve pain and suffering” only does disservice to those patients in need.

 

The interference with a Pharmacist’s professional judgment is an act disallowed by any entity in Florida Pharmacy Laws and Rules. https://www.flrules.org/gateway/readFile.asp?sid=0&tid=16866377&type=1&file=64B16-27.831.doc. Several more points of  Florida Pharmacy law prohibit any interference as well. Interference with the professional judgment of a Pharmacist’s professional judgment is subject to disciplinary action and fines but the DOH and MQA take no action against the corporations even when the residents of Florida are inappropriately denied access to care. The mission of the DOH is to protect the people and the integrity of the various professions but it fails miserably. 

 

The coerced refusal to fill valid and legitimate prescriptions mandated by corporate policy has the consequence of violating Patient Rights’ as spelled out in State and Federal guidelines for Medicare, Medicaid and American Disabilities Act. The corporations force the Pharmacists to violate Patient Rights and violate these laws which has potential personal liability for the Pharmacists who can be sued individually for those violations by the patients. If that were to occur, and it has, I am certain the corporation would deny all responsibility. The Centers for Medicare/Medicaid Services (CMS) and Florida Medicaid are aware of these practices by the corporations yet while charged with protection of the people and their Rights also fail to take any action to do so.

 

The heroin epidemic regardless of why it is occurring and having reach the current level of attention has done great harm to the CPP population. These patients are treated like criminals in their attempts to gain access to needed medications. Sometimes good people with legitimate needs end up at the office of a “dirty” doctor as that’s their last resort.  In their situation they have often lost their jobs and insurances and lack adequate transportation to get to better and needed care. They spend an inordinate amount of time doing the “pharmacy crawl” trying to find a pharmacist / pharmacy that will help them. These patients lack the resources to reach the best care of certified pain management clinics, physical therapy, psychological care, surgical care and addiction treatment if needed. Obtaining some medication that affords them some quality of life is all they have.

 

The pharmacist in fear of retribution from employers and unwarranted scrutiny by the DEA refuse to maintain adequate inventory to help the patients. The corporations don’t count the controlled prescriptions in calculating pharmacists work so many pharmacist feel why bother if they don’t get credit for the work. The Chronic Pain Patient story is the story that should be told.

 

“Suspicious” painkiller orders, DEA suspends a FL drug distribution center’s sales

 

.

“Suspicious” painkiller orders, DEA suspends a FL drug distribution center’s sales

http://www.fox4now.com/news/suspicious-painkiller-orders-fl-pharmaceutical-drug-distribution-sales-suspended

Pharmaceutical drug supplier McKesson Corporation has been fined and suspended from sales of certain controlled substances in several states, including Florida, after failing to flag a series of “suspicious orders,” according the Drug Enforcement Administration (DEA). 

Mckesson has been fined $150 million and must suspend sales of controlled substances from distribution centers in Florida, Colorado, Ohio, and Michigan.

The DEA says Mckesson fulfilled a series of “suspicious orders” for controlled substances such as oxycodone and Hydrocodone which are often abused. The opioid painkillers have also fueled the current heroin epidemic which in 2015 caused more deaths than gun-related homicides, according to the Centers for Disease Control and Prevention. 

Addiction Psychiatrist at Nextep Treatment Center in Fort Myers, Brandon Short, says the penalty Mckesson received is a sign of a greater problem. 

“This is a supply and demand issue,” said Short. 

He provides rehabilitation treatment and therapy to patients battling addiction, and says recently most of them have been seeking help for opiate addiction. 

“There is a direct correlation between the amount of availability in this country of oxycodone, [and other] opiates that is killing Americans, which is turning Americans into opiate addicts [and] into heroin addicts,” said Short.

The Florida Department of Health, sent an email to pharmacist across the state this week warning them of a pending drug shortage. The statement was later retracted because DOH officials said it was “found to be confusing,” and the suspension would “only impact one distribution center in Florida and impacts only the handling of hydromorphone.” 

According to DOH, the the distribution center affected by the suspension is located in Lakeland. However, Mckesson can still supply Florida pharmacies with hydromorphone by routing the orders through out-of-state distribution centers. Fort Myers Pharmacist T.J. Depaola says simply disrupting the supplier isn’t helpful because it places a burden on pharmacist treating patients with legitimate chronic pain issues. 

“It’s a terrible way of policing, essentially what they’re going to try do is, rather than go in and physically shut down what they call ‘pill mill physicians’ or ‘dirty doctors’ they cut the supply,” said Depaola. He also says it can have an opposite effect and turn more people to illicit drugs. 

“You have patients that were being treated for chronic pain; all of a sudden they couldn’t get meds, they went to heroin because that’s the closest thing to what they were on before,” said Depaola. 

It’s not clear how long Mckesson will be banned from processing sales from its Florida distribution center. 

According to the DEA, the settlement also impose new and enhanced compliance regulations on Mckesson’s distribution system. 

Trump Signs Order to ‘Ease the Burden of Obamacare’

Trump Signs Order to ‘Ease the Burden of Obamacare’

http://www.medscape.com/viewarticle/874779?

Soon after he was sworn in, President Donald Trump signed a series of executive orders, including one to “ease the burden” of the Affordable Care Act (ACA), according to news reports.

The executive order was not yet on the White House website as of press time. But in a version posted on Twitter, the order first notes the President’s intention to seek the “prompt repeal” of the ACA, and says that in the meantime, it was seeking to offer flexibility to states to create a more “free and open healthcare market.”

The order grants authority to the heads of all federal agencies, including the Secretary of Health and Human Services to “waive, defer, grant exemptions from or delay the implementation of any provision or requirement of the Act that would impose a financial burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”

Essentially, this means that any tax imposed by the ACA would be overturned.

The executive order also directs federal agencies to grant states maximum flexibility in implementing “healthcare programs,” and to encourage the development of “a free and open market in interstate commerce for the offering of healthcare services and healthcare insurance with the goal of achieving and preserving maximum options for patients and consumers.”

During the campaign, President Trump said that he wanted to make it possible for insurers to sell policies across state lines.

FL Healthcare providers… BEWARE… your pts might not have access to their pain meds

Not sure if just Pharmacists or all licensed medical healthcare providers got this email in Florida… warning them that the actions of the DEA against Mc Kesson drug wholesaler may compromise their pt’s ability to obtain their necessary controlled medications.

This warning is a result of actions by the DEA 

McKesson said it would pay $150 million settles investigation on controlled substances

in which – as usually – the DEA took actions based on “HARD FACTS” that the DEA came to based on their opinions, beliefs, and suspicions.  Of course, the collateral damage to pts that have a valid medical necessity for taking controlled substances… is just not really the problem of the DEA…

ACLU to the rescue …discriminatory practice on women health issues

Walgreens again in hot water over refusal to fill prescription

https://www.abqjournal.com/931967/yt.html

ALBUQUERQUE, N.M. — The two women had never met, but it took only a few moments for them to connect over a singular act that still makes them shudder – first with shock, then with anger – just like it did when they each walked into a Walgreens pharmacy and felt as if they were hurled back into the Dark Ages.

“It’s just hard to believe this is still happening,” says Susanne Koestner, a married woman in her 30s who made headlines when she fought back after a pharmacist refused to refill her prescription for birth control pills in June 2012 because of his religious beliefs. “It freaks people out when I tell them the story.”

That story led to a January 2013 agreement from the nationwide drugstore chain to affirm its policy of filling prescriptions, including birth control medications, “as efficiently as other prescriptions without imposing any burden on the customer.”

But four years later and in spite of that agreement, here we are again with another case alleging that a prescription was not filled because of a Walgreens pharmacist’s refusal to do so – a violation of the state Human Rights Act, the American Civil Liberties Union of New Mexico contends.

And so here we are with the two women in the offices of the ACLU, which supported Koestner and now plans to do the same for the latest Albuquerque woman to accuse a Walgreens pharmacist of denying her service.

As a reminder, it is 2017.

In a letter submitted Jan. 12 by the ACLU to Walgreens corporate honchos in Deerfield, Ill., the woman in the latest story is listed as Jane Doe. In this conference room, she is a longtime Albuquerque Public Schools teacher in her 40s and the mother of a teenage daughter. It is the latter role that leads her to ask not to be named so as not to identify her daughter.

She says that because of struggles with difficult menstrual cycles and birth control medications, her daughter, in consultation with her gynecologist, opted to try an intrauterine device. In preparation for the procedure in August 2016, Doe said, she went to a Walgreens at Coors and Montaño NW to fill her daughter’s three prescriptions – a mild pain reliever, an anti-anxiety medication and misoprostol, a synthetic hormone used to soften the cervix in preparation for the insertion of the IUD.

Misoprostol is also often prescribed to treat stomach ulcers. But it also can be used to induce an abortion.

That last usage is believed to be the conclusion the pharmacist erroneously jumped to – as if he should have jumped at all.

The teen’s mother was told the first two prescriptions would be filled but the misoprostol would have to be picked up at another Walgreens, even though the medication was in stock. When she asked the pharmacist why he could not fill the misoprostol prescription, she says, he told her that it was against his “personal beliefs.”

Like Koestner had been years ago, the teen’s mother says she, too, was confused at first. Stunned. Ashamed, though she didn’t know why.

But as she made her way through rush-hour traffic to another Walgreens about 3 miles away, anger and indignation set in.

Koestner knew those feelings too.

“It’s like someone else takes power over your life, your choices,” Koestner says. “It’s like you are being judged.”

Doe says she turned around and went back to the first Walgreens, confronted an assistant manager and then the pharmacist.

“I told him he was discriminating against me, that he should be ashamed for judging us, that he didn’t know my daughter’s medical history or her complications or conversation with her doctor that explained everything about sexual health and how can accessories like the Juno panty vibrator can help with this. That he didn’t know what the medication was for,” she says. “And he just looks at me and says, ‘Oh, I have a pretty good idea.’ ”

Like Koestner, she started making calls to Walgreens officials. She contacted the Southwest Women’s Law Center, which in turn helped her contact the ACLU of New Mexico.

The ACLU letter to Walgreens points out that forcing customers to travel to another pharmacy after being denied service places a significant burden on the woman – especially if the woman relies on public transportation or has limited time or if that woman lives in a rural area where Walgreens pharmacies are few and far between.

As it did in the letter written on Koestner’s behalf, the ACLU also asked the company to immediately address the discriminatory practice and specify what steps the company planned to take to prevent a similar occurrence – and a lawsuit contending a violation of the state Human Rights Act, which protects from discrimination, including on the basis of gender.

“Religious liberty does not mean the right to discriminate against others,” attorney Erin Armstrong wrote. “Walgreens should take reasonable steps to accommodate employees’ religious beliefs and practices, but it cannot do so by imposing additional discriminatory burdens on women.”

Walgreens issued the following statement late Tuesday:

“We take very seriously our responsibility to serve the prescription needs of our patients. While we cannot comment on the specifics of this incident, we can tell you that our policy is intended to meet the needs of our patients while also respecting the sincerely held views of our pharmacists. We believe our policy has been very effective in doing that.”

After our meeting, the two women hugged, happy to have found some solace in knowing they were not alone, troubled by not knowing how many other women had been similarly denied and how many more might still be in the future.

UpFront is a daily front-page news and opinion column. Comment directly to Joline at 823-3603, jkrueger@abqjournal.com or follow her on Twitter @jolinegkg. Go to www.abqjournal.com/letters/new to submit a letter to the editor.

FDA says investigations underway into counterfeit medications

FDA says investigations underway into counterfeit medications

http://www.walb.com/story/34304503/fda-says-investigations-underway-into-counterfeit-medications

DEA now getting involved in ILLEGALLY IMPORTED medications that ARE NOT CONTROLLED SUBSTANCES… The question has to be asked is where did they get the statutory authority under the CONTROLLED SUBSTANCE ACT to do this…  the medications that they are referring to in this article are not controlled substances ?

ALBANY, GA (WALB) – Justice Department officials say they are concerned that more Americans are buying medication illegally from foreign pharmacies, and investigations into the growing problem are underway.  The Feds tell me that counterfeit medicines could be a prescription for disaster.

Justice Department officials say they are seeing an increase in Americans using the Internet to buy medications from foreign pharmacies, and they say they see an increase of counterfeit drugs being sent instead.
Drug Enforcement Administration Diversion Program Manager David Hargroder said “And we are starting to look at those.  And we are starting to do investigations against these types of imports of controlled substances.”

DEA agents say across the nation more Americans are buying prescription pills and medications from foreign sources, but warn that customers more and more are getting counterfeit medicine, not what they want.
Hargroder said “There is no FDA approval on them.  There is no over site on these types o of drugs. And a lot of them are synthetic made.”
Instead of being what the Doctor ordered, Pharmacists warn that buying  from unknown sources could really hurt your health.

U-Save-It Pharmacist Betsy Urick said “You are thinking you are taking a medication that’s going to lower your blood pressure, but in fact it’s just inert or inactive ingredients, you are not going to be getting any benefit from that.”

The reason more people are buying medications from foreign sources is lower prices.  Pharmacists say instead you should talk to them about cutting costs.
Urick said “We can work with anyone who has, say a high cost medication, to look into finding something that may be less expensive for them, but equally effective. “

The DEA warns besides the counterfeit concerns, it’s illegal to get prescription medications from foreign sources, and they are cracking down.
DEA officials say they have investigators in some of the countries where these counterfeit medications are coming from, trying to combat the problem from the source.
Copyright 2017 WALB . All Rights Reserved

 

The THEORY of how prescription monitoring programs are suppose to work

Prescription Drug Monitoring Programs   <— click to open PDF

Reality of how they really work is a whole DIFFERENT ANIMAL.. Unfortunately, the vast majority – if not all –  of politicians/bureaucrats … still believe in the THEORY after a couple of decades.

 

Former Tomah VA Doctor David Houlihan Surrenders Medical License

Former Tomah VA Doctor David Houlihan Surrenders Medical License

http://www.disabledveterans.org/2017/01/19/tomah-va-candy-man-david-houlihan-md-surrenders-license/

Veterans Affairs

After a three year battle, former Tomah VA chief of staff David Houlihan MD agreed to surrender his medical license to evade further investigation.

In a statement from Sen. Ron Johnson (R-Wis.), Dr. David Houlihan has reportedly agreed to permanently surrender his license to practice medicine in Wisconsin.

Despite never admitting fault in the numerous instances of malpractice at Tomah VA, the psychiatrist will no longer practice medicine in the state.

This is a major win for advocacy groups, journalists, and my own clients who fought against the whitewash pushed by Wisconsin lawmakers in covering up Tomah VA failures before 2014. Dr. Houlihan and his supporters fought like mad to keep a lid on the opiate scandal that led injury and death to numerous veterans.

Personally, Dr. Houlihan’s attorney threatened me for writing about the truth as reported by victims and other journalists concerning his outrageous conduct. I am glad he was finally taken to task by Wisconsin even though VA refused to do the right thing.
Houlihan Victory A States Rights Win

This was a States Rights win over attempts by the federal government to whitewash the bad conduct of a powerful employee. Glad fellow Wisconsinites won the day on this one.

The Department of Veterans Affairs needs to reconsider its overt disrespect for the state law and patient rights in medical centers like Tomah VA.

Maybe next time, the agency will cooperate when American citizens confront a medical center about wrongdoing. Tomah VA, despite being small relative to other VA medical centers, received a ton of negative press since the scandal escalated.

Though, had it not been for agency arrogance, no one would have leaked the Hungry Hungry Hippos video clip of Tomah VA employees playing human Hungry Hippos on company time last Halloween.

Or, what about this classic video leaked to me where Tomah VA staff made a vaccine parody using Ghost Busters to encourage employees to get the flu vaccine in an attempt to increase employee vaccination from 54% to 60%?

 

Big Senate Report

Last May, the Senate Homeland Security and Government Affairs Committee released a 359-page report covering the Tomah VA scandal. The report detailed systemic failures by VA and VA OIG in their investigation of the crimes at the facility. According to that report, which led to the newest development, problems included:

“The lack of transparency and not having an independent watchdog over the facility are the primary culprits. Now that appropriate oversight and publicity have occurred, those responsible for these tragedies have been held accountable. They no longer work for the VA, and can do no further harm to veterans. I look forward to working with VA officials and the new VA inspector general that I was proud to help confirm to enact necessary reforms to prevent tragedies like what occurred at the Tomah from ever happening again. The finest among us – our veterans – deserve no less.”

Dr. Houlihan never admitted fault, but he will also never touch another Wisconsin citizen ever again, at least in his capacity as a psychiatrist. As part of his settlement, he agreed to the black marks being including in a national registry against him.
Sen. Ron Johnson Tomah VA Press Release

Wednesday, January 18, 2017

WASHINGTON — Sen. Ron Johnson (R-Wis.), chairman of the Senate Homeland Security and Governmental Affairs Committee, had this to say following reports that Dr. David Houlihan, also known as “candy man” at the Tomah VA Medical Center in Tomah, Wis., permanently surrendered his license and registration to practice medicine in Wisconsin. Chairman Johnson issued a 359-page report in May 2016 detailing the tragedies at the Veterans Affairs Medical Center in Tomah. The report can be found here.

“This news brings to mind the Wisconsin veterans and families who were affected by the tragedies at the Tomah VA Medical Center. According to the Wisconsin Department of Safety and Professional Services, Dr. Houlihan failed to provide appropriate medical care to at least 22 veterans and engaged in misconduct over the course of several years. As my committee’s investigation also found, the Tomah VA and Houlihan repeatedly failed to honor this nation’s promises to the finest among us. Our veterans deserve world class care, as well as accountability for those who fail to provide it.”

Wednesday’s order from the Wisconsin Department of Safety and Professional Services means that Houlihan will never practice medicine in Wisconsin again and that the state’s ruling will be placed in a national physician database.

###

Now that Candy Man is shut down, at least in Wisconsin, does anyone else wonder exactly what human research he was conducting at Tomah VA with his zombie cocktail that zapped the life out of veterans he treated, both figurative and literally speaking?

Again, this is a massive win for States Rights. The federal government wanted this one to go away, but Wisconsin said, “Hell no!”

I want to give a shout out to my friend Ryan Honl and reporter Aaron Glantz for being on the forefront. Had I not reported on what Glantz wrote, I never would have been erroneously threatened with a SLAPP suit by Houlihan’s attorney.

MIDDLEMEN… Why your prescriptions costs SO DAMN MUCH

Money is like Medicine drug costsThe black hole of drug pricing explained (ahem by industry)

http://medcitynews.com/2017/01/black-hole-drug-pricing-explained/

A new study conducted by the Berkeley Research Group provides some fresh insight into how the pharmaceutical supply chain works, who pays what, and where the profits go.

There is one major caveat to note upfront: The study was funded by PhRMA, an industry lobbying group for biopharmaceutical companies.

Taking that into account, the data and discussion still add valuable context and another perspective to the drug price debates.

Importantly, the study helps explain some of the factors influencing pharmaceutical list prices. These numbers are determined by the manufacturer and often trigger fresh outcry from politicians, providers and patients.

Gilead’s Sovaldi sells for $84,000. Alexion’s Soliris is priced at $537,000 per year and the most recent sticker shock, Biogen’s Spinraza, is listed at $750,000 for the first year of treatment.

That’s not an issue in of itself, explained Aaron Vandervelde, a managing director at BRG and co-author of The Pharmaceutical Supply Chain: Gross Drug Expenditures Realized by Stakeholders.

The list price is nearly always subject to retrospective rebates, discounts and fees throughout the pharma supply chain, he said. That ultimately impacts how much different stakeholders pay for the drug and how much the manufacturer receives.

The industry and PhRMA have been saying this for some time, but the BRG study may be one of the first to back it up with numbers.

For brand-name drugs, manufacturers made $219 billion in 2015. That amounts to 63 percent of ‘total gross spending,’ aka the list price, the report states.

Over one-third of the list price was lost through rebates to pharmacy benefit managers (PBMs), health plans, the government, or retained by other stakeholders in the supply chain.

vandervelde_phrma-2017_figure5

Source: Berkeley Research Group

In a recent phone interview, Vandervelde said that his firm’s research also found that the rebates and discounts are getting larger every year. BRG looked at data beginning in 2013 and saw a substantial increase in the discounts PBMs and health plans negotiated from manufacturers.

“In 2013, manufacturers paid about $67 billion in retrospective rebates, discounts and fees,” Vandervelde said. “By 2015, that amount had grown to $106 billion. That was the single biggest contributing factor to the decreasing percentage of the gross drug expenditures that are retained by the brand manufacturers.”

Herein lies the issue with list prices. The manufacturer has total say. If mandatory rebates and discounts rise, it can increase the list price to offset those added costs. It’s a vicious cycle that might already be in play.

“I think there is an argument to be made that manufacturers may be responding to that growth by increasing list prices,” Vandervelde said, though he stressed that it is very complicated and his firm’s research didn’t address that question directly.

A significant percentage of the rebates are mandated, including those that fall under the Medicaid Drug Rebate Program or that qualify for 340B discounts. Both of these categories have grown in recent years, Vandervelde said, which puts pressure on biopharma profits.

Other rebates are optional, usually made by the drug companies to improve patient access or to remain competitive when other drugs are made available in their therapeutic space.

Study co-author, Aaron Vandervelde of the Berkeley Research Group

Study co-author, Aaron Vandervelde

While critics of the industry often fixate on the list price of a drug, it’s really only an opening bid.

“Are some payers paying list price? Yes. Is that the case for the life cycle of a drug? Very rarely,” Vandervelde said. “It’s much more common at the launch of the drug and then typically as the therapeutic class becomes more competitive you’ll see steeper and steeper discounts over time.”

It also depends on the therapeutic area. Hepatitis C drugs introduced today will be taking a significant hit on their list price. Gilead had a lot more power to resist those forces when its first-in-class drugs, including Sovaldi, were introduced.

What does all of this mean for drug pricing? Biopharmaceutical companies aren’t off the hook, but there’s a lot more happening behind the scenes.

Some experts argue that drug companies are exploiting the complexities of the supply chain. The Washington Post recently highlighted the manipulative use of coupons. Others have argued that pharma companies overcompensate for the discounts by raising the list price by more than 10 percent a year.

Based on this latest report, it appears there is a significant amount of inefficiency in the supply chain. If drug prices are too high, the wider health system needs to be taken into account.

The list price is used for the first point of sale, from the manufacturer to the wholesaler. To turn a profit, the wholesaler charges what are commonly referred to as prompt pay discounts and stocking fees. Wholesalers then contract with both pharmacies and providers. 

Pharmacy benefit managers (PBMs) are not part of this supply chain — unless they operate a mail order pharmacy. For the most part, their role is to negotiate reimbursement rates with the pharmacies and the manufacturers, on behalf of their health plan clients.

At the end of the day, it’s too complex to summarize in a 140-character tweet on drug prices. Pharma companies may have been using that to their advantage, pointing to the rebates and discounts as an excuse for high list prices. Whether that’s true or not, the argument isn’t working. New regulations and penalties are surely on the horizon.