Pharmaguy's Insights Into Drug Industry News
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Pharmaguy's Insights Into Drug Industry News
Pharmaguy curates and provides insights into selected drug industry news and issues.
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Mylan Achieved an ROI of 2.7 by Overcharging Medicaid for EpiPen!

Mylan Achieved an ROI of 2.7 by Overcharging Medicaid for EpiPen! | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Mylan will pay $465 million to settle claims that it overcharged states for its signature EpiPen, according to a Thursday Department of Justice press release. The company also signed an agreement with the federal government to enter into a review of its Medicaid pricing practices.

 

For years, Mylan classified EpiPen in a way that forced Medicaid to overpay for the product, according to the Centers for Medicare and Medicaid Services. The company may have overcharged taxpayers as much as $1.27 billion over 10 years, the Department of Health and Human Services’s watchdog organization said in May.

 

Lawmakers slammed the federal agencies on Thursday for letting Mylan get off the hook too easily with the settlement. Sen. Richard Blumenthal (D-Conn.) called it “completely insufficient,” and Sen. Chuck Grassley (R-Iowa) cast is as “disappointing” in statements. Mylan, meanwhile, called the settlement, “the right course of action,” and said that the product has been reclassified under Medicaid as of April 1.

 

[“Mylan ripped off the government big time,” said Public Citizen, “and the U.S. Department of Justice is letting the company get away with it. Mylan misclassified EpiPen in such a way as to provide less generous discounts to Medicaid purchasers than the law requires.

 

Today’s shameful settlement is for barely a third of the amount of the rip-off, and it fails to include an admission of guilt – an appalling omission for a decade-long scheme that enabled Mylan to fatten its bottom line by more than a billion.]

 

Further Reading:

  • “Letters to "Pharma Sis" to Cut EpiPen Price to Improve Goodwill Will Fall on a Tin Ear”; http://sco.lt/8mfk5x
  • “Mylan CEO Bresch, aka "Pharma Sis," Defends Price Gouging, Tax Evasion as Job Savers”; http://sco.lt/7uKmLB
  • “FDA is Cause of Mylan's Monopolistic Pricing of EpiPen, Says WSJ. Allergist Has Cure.”; http://sco.lt/7F88nJ
  • “Mylan's Patient Assistance is a "Convoluted Scheme," Says Public Citizen”; http://sco.lt/8NWO0H
  • “Sarah Jessica Parker to Stop Shilling for Mylan Because of EpiPen Pricing: What Did She Expect?”; http://sco.lt/7oM4HZ
  • “Awash in Criticism, Mylan Has Decreased its Fearmongering Awareness Advertising”; http://sco.lt/6WeuSv
  • “Mylan, EpiPen Price Gouger, Ranks No. 2 in U.S. #Pharma Exec Pay!”; http://sco.lt/6lVvf7
  • “Is There No End to Mylan's Shenanigans? Paying Off Patient Groups to Lobby!”; http://sco.lt/6Sl0ld
  • “Mylan CEO's Mom Used Position with Education Group to Boost EpiPen Sales Nationwide”; http://sco.lt/8tL3kP
  • “Yes, Mylan DID "Misclassify" EpiPen as a Generic, Says Medicaid”; http://sco.lt/5aJWEb
  • “Mylan "Gamed the System" and Refuses to Testify at Senate Hearing About EpiPen Costs to Medicaid”; http://sco.lt/4mtPaj
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Insurance is Driving Physicians Mad; Nearly Half Now Say They’d Prefer Single-Payer

Insurance is Driving Physicians Mad; Nearly Half Now Say They’d Prefer Single-Payer | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Nearly half of the 500 doctors who responded to a February LinkedIn survey said they would support a single-payer healthcare system, or Medicare-like coverage for everyone, not just the elderly, instead of the current patchwork model of insurance coverage.

 

The reasons that patients delay care until they can’t wait any longer are complex. But a barrier doctors said they consistently see is a fragmented system: People either don’t have health insurance or can’t find a doctor who accepts their coverage.

 

The physician sentiment comes as Congress is locked in a debate about what to do about the Affordable Care Act. Republicans in the House last week pulled a bill that would have significantly altered the insurance landscape.

 

But for many physicians, the issue comes down to efficiency. In their responses, they cited the administrative hassle of working with multiple insurance companies, each with its own rules and billing procedures. And they pointed to some of the less visible costs, like patients who bounce from one healthcare provider to another as their health plans change.

 

A total of 48% of physicians said they would be in favor of single-payer healthcare, while 32% were opposed and 21% said they didn’t know.

 

Our survey was conducted Feb. 7-19 and reached 511 physicians in the U.S. A total of 449 respondents are currently practicing in patient care. They were chosen at random, and reflect a number of different specialties and years of experience.

 

Further Reading:

  • “Kaiser Poll: 63% Positive About ‘Medicare-for-All’ vs 44% for ‘Single Payer’"; http://sco.lt/5ZAj45
Pharma Guy's insight:

Pharma's strategy to position insurance companies as the culprit causing high drug prices may have backfired if this survey is any indication. 

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Mylan "Gamed the System" and Refuses to Testify at Senate Hearing About EpiPen Costs to Medicaid

Mylan "Gamed the System" and Refuses to Testify at Senate Hearing About EpiPen Costs to Medicaid | Pharmaguy's Insights Into Drug Industry News | Scoop.it

In a move that angered a key Senate lawmaker, Mylan Pharmaceuticals has declined to testify at a planned Nov.30 Senate hearing to review a $465 million settlement the drug maker purportedly reached with the US Department of Justice for shortchanging Medicaid.

In a letter to Sen. Chuck Grassley (R-Iowa), who chairs the Senate Judiciary Committee, an attorney for Mylan explained the company will not appear for three reasons – the “stated focus of the hearing,” because the hearing involves a “pending matter,” because both the Justice Department and the Centers for Medicare & Medicaid Services have already said they will not send officials to testify. The letter was signed by Kathryn Ruemmler, who previously worked as President Obama’s chief lawyer and is now at the Latham & Watkins law firm.

Grassley responded by blasting the feds, as well as the drug maker.

“The Obama Administration is dodging accountability for an expensive problem, and now a company is following its bad example,” he said in a statement. “Taxpayers have paid and [reportedly] continue to pay hundreds of millions of dollars more for the EpiPen than they have to pay. This happened because either the agencies in charge dropped the ball, the company gamed the system, or both.”

“Ironically, the company was eager to talk about this problem a few weeks ago in a press release to investors but not before the United States Senate. It’s a shame government agencies and the company are ducking accountability under a voluntary process. One way or another, I intend to get answers for patients and taxpayers.”

Pharma Guy's insight:

Related article: “Yes, Mylan DID ‘Misclassify’ EpiPen as a Generic, Says Medicaid”; http://sco.lt/5aJWEb

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Pfizer Gets Lucky: Will Pay Only $784M to DOJ for Overcharging Medicaid

Pfizer Gets Lucky: Will Pay Only $784M to DOJ for Overcharging Medicaid | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Pfizer is forking over $784 million to settle claims that it overcharged Medicaid for its heartburn med Protonix. The agreement marks one of the biggest settlements to date from drugmakers who are facing similar allegations.


Pfizer, which inherited the case after buying Wyeth in 2009. That year, the U.S. Department of Justice (DOJ) filed a lawsuit against Wyeth over Medicaid rebates for Protonix. The DOJ claimed that between 2001 and 2006, the company did not give state Medicaid programs the same discounts for the drug that it did for nongovernment customers, running afoul of federal law.

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HHS: Mylan Overcharged Medicaid $1.27B. DOJ: Nothing to See Here, Move On!

HHS: Mylan Overcharged Medicaid $1.27B. DOJ: Nothing to See Here, Move On! | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Mylan may have overcharged taxpayers as much as $1.27 billion over 10 years for its signature EpiPens, according to an analysis released Wednesday by the Department of Health and Human Services’s watchdog.

 

The pharmaceutical company has been in hot water for potentially misclassifying its signature epinephrine auto-injector in a way that enabled it to charge a higher price to Medicaid (read “Mylan ‘Gamed the System’ and Refuses to Testify at Senate Hearing About EpiPen Costs to Medicaid”; http://sco.lt/4mtPaj). Because the pens were classified as generic, rather than brand-name products, Mylan paid Medicaid a 13 percent instead of a 23 percent rebate — despite the company being told its classification was incorrect. That allegation came to light in the fall.

 

In October, it was reported that Mylan agreed to a $465 million settlement over these accusations, although the status of this settlement remains unclear.

 

The new calculation of unpaid rebates underscores earlier concerns that taxpayers may get shortchanged by the proposed settlement. As Sen. Chuck Grassley (R-Iowa) noted in a statement, the $465 million settlement is much less than the $1.27 billion Mylan allegedly overcharged.

 

Now the first hard estimate of the overcharging, from the Office of the Inspector General for HHS, reveals that taxpayers may have paid as much as $444 million from 2006 to 2014, and $826 million from 2015 and 2016 — amounting to $1.27 billion in all. Letters from the inspector general stress that these estimates are limited because they do not take into account “supplemental rebates” that individual states may have received.

 

The Department of Justice declined on comment on the settlement Wednesday, saying that “there is no settlement to report.”

 

Further Reading:

Pharma Guy's insight:

Boy! Pharma Sis is lucky Trump won and saved her ass by appointing a do-nothing Dept of Justice (DOJ) leader!

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Here’s What Big Pharma Will Likely Get From a “Deal” with Trump

Here’s What Big Pharma Will Likely Get From a “Deal” with Trump | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Congressman Greg Walden, a key House Republican for pharmaceutical policy, suggested this week that President Trump wants to encourage drug makers to enter value-based contracts with private health plans and the government insurance programs. Maybe that’s what the president has meant all along in his vague promises to change bidding and negotiations.

 

If that’s true, the drug industry could actually see some federal policy changes it has long sought.

 

But the companies argue existing rules limit their ability to enter into these kinds of agreements. If Trump is serious about pursuing them, some changes might be necessary, changes drug companies would likely welcome.

 

A few hurdles stick out.

 

Drug makers say that federal anti-kickback statutes restrict their ability to talk with payers and patient groups before a drug is on the market. Those rules are intended to prevent any illicit financial arrangements, but the industry believes they have a chilling effect on new payment models. There are also Food and Drug Administration regulations limiting what they can communicate about their products.

 

Both sets of restrictions have to be accounted for if companies explore value-based contracts with federal insurance programs or private insurers. So, the thinking goes, allowing more open pre-sale communication could facilitate more of those arrangements.

 

“Will FDA Open a Path to Off-Label Promotion from Pharma to Payers & Not Patients or Providers?”

 

In the private market, there is another obvious target for reform, one that drug companies have been focused on for a while.

 

A Medicaid rule requires drug makers to offer discounts based on the “best price” — the lowest price — that any purchaser in the country pays for the drug. The lower that price, the bigger the discount. Drug makers argue that this rule discourages them from entering into value-based contracts that could drive the “best price” lower — because then they’ll have to provide a bigger discount to the entire Medicaid program.

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Yes, Mylan DID "Misclassify" EpiPen as a Generic, Says Medicaid

Yes, Mylan DID "Misclassify" EpiPen as a Generic, Says Medicaid | Pharmaguy's Insights Into Drug Industry News | Scoop.it

After weeks of controversy, the Centers for Medicare and Medicaid Services formally blamed Mylan Pharmaceuticals for misclassifying EpiPen with the Medicaid Drug Rebate Program. Under the program, companies must accurately report and pay a rebate on drugs paid for by Medicaid.

“CMS has, on multiple occasions, provided guidance to the industry and Mylan on the proper classification of drugs and has expressly advised Mylan that their classification of EpiPen for purposes of the Medicaid Drug Rebate program was incorrect,” the agency said in a statement. But CMS declined to say what steps are being taken to correct the misclassification.

The statement followed nagging questions about how Mylan classified the emergency allergy device. The company reported EpiPen as a generic, instead of a brand-name, product. This is a significant distinction, because the classifications are used to determine the size of rebates that companies pay Medicaid. Rebates, which are paid in exchange for having their products covered, are lower for generics. For background, read: Did Mylan "Misclassify" EpiPen as "Non-Innovator" to Ripoff Medicaid & Taxpayers?

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Oregon Medicaid Hopes to Pit One Pharma Company Against Another For a "Sweet" Deal on Hepatitis C Drugs

Oregon Medicaid Hopes to Pit One Pharma Company Against Another For a "Sweet" Deal on Hepatitis C Drugs | Pharmaguy's Insights Into Drug Industry News | Scoop.it
The head of pharmaceutical drug purchasing for Oregon’s Medicaid program has a message to hepatitis C drug makers: Let’s make a deal. Oregon is seeking to severely restrict use of Sovaldi – the $84,000 hepatitis C pill sold by Gilead Sciences - among Medicaid beneficiaries and expects competing treatments to come on the U.S. market in the next year. And when one or more of those new treatments does become available, Oregon will start bargaining for a deep discount.
Pharma Guy's insight:


Oregon already receives a 23.1% discount on Sovaldi by way of a rebate from Gilead, which is mandated by federal law.


So, kind of deal is Oregon hoping for?  To bring the negotiated price down to $40,000 or $50,000. Sweet or Not Sweet?

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