Crisis will spur new biotech deals on worse terms

A Costly, Yet Mild Biotechnological Innovation

Recently, you may have heard or read in mass media sources about the issue of pharmacy benefit managers who have clients that are prescribed biologic medications. These patients are required to pay a great deal of money for such meds due to the placement of these types of medications on their PBMs. This is due to the status on the PBM of biopharmaceutical medications, which is known as Tier 4 status, which requires patients to pay higher co-pays for these meds. Tier 4, which also includes lifestyle meds, is determined by the PBM based on variables such as rebates and discounts from the manufacturer, which are intended to be passed on to the PBM clients, and is as similar to PBMs requiring prior approval before reimbursement. However, in some cases, the PBMs fail to do this, and have been penalized for their self interest above patient interest as required when this activity is discovered. Regardless, because of the tier 4 status of biopharmaceuticals, very sick patients have to pay a great deal of money for these meds. PBMs, by the way, are pharmacy benefit managers created for the pharmaceutical needs of employees normally, and is a benefit along with their insurance through their employer. Typically, PBMs are an element of managed health care plans, yet determined by employers as far as what is paid through negotiations with PBMs, typically.
First of all, biopharmaceutical meds are specialty meds created differently than other typical meds, and therefore are have a unique molecular complexity that are designed for serious illnesses such as anemia or multiple sclerosis. Because of their uniqueness and exclusivity, they are very expensive- costing thousands a month for the payers. In addition, generics are not authorized to be produced as of yet for these types of meds. The cost of these biological meds is due more to the complex process of their creation, as the material costs are typically less expensive than traditional molecular medications, it is believed.
Biologic medications began to be used primarily in the 1980s and now presently make over 60 billion a year, with about 20 percent growth in this market annually. With anemia patients, oncology and dialysis clinics are targets for such meds in this category, as anemia is associated with their treatment and conditions for such diseases.
Yet, some claim that biopharmaceutical meds benefit patients to only a certain degree, as they do in fact extend the life of such patients, such as those on chemotherapy or dialysis, but by only a few months. So the high cost of these meds is questionable and has been analyzed by others, yet no substitutes exist for biopharmaceuticals, which is probably why the producers of these drugs can charge so much for these products. Efficacy of these biologic meds have also been questioned as well in other treatment aspects aside from life extension.
Then there is the issue of fraud with kickbacks and overuse of some of the biopharmaceutical meds used to treat anemia in dialysis clinics in particular. On a few occasions, doctors and clinics have been penalized for overusing the meds and for kickbacks in the form of discounts of the manufacturers. Ironically, the dialysis process was never patented, yet the many centers that exist have proven to be very profitable, more for some than others. An example is the situations where dialysis doctors, called nephrologists, have been accused of over-dosing patients with biologic meds to increase their income through their discount arrangement through the manufacturer of such meds, such as those biologics for anemia, and this arrangement is being investigated by regulators and encouraged by the representatives of such meds.
Presently, there are many that approach the FDA to aggressively insist that generic biologics be allowed into the market for the benefit of these critically ill patients, and this would be of great benefit for such patients, and this can be done, as far as the generic creation of these types of medications. And their efforts have been somewhat successful, as generic equivalents of biopharmaceuticals, called biosimilars, could be manufactured and available within the next few years. However, this situation of delays illustrates one of many flaws in the U.S. Health Care System- when the sickest have to complicate their illnesses by possible financial stress, such as the case with biologic meds. Relief is needed, and should be demanded by the public. After all, why be so sick, and then be financially burdened? One solution or suggestion is to either lower the cost of these types of drugs, or allow generic forms to enter the market faster than what the situation is presently.

“A little learning is a dangerous thing.” ---- Alexander Pope

Dan Abshear