Obama precision medicine plan blocked by insurers

The introduction of the 21st Century Cures Act reflects a broad bi-partisan commitment to speed the development of tomorrow’s cures.  The legislation includes a wide range of proposals to achieve this goal, from reducing the time dying patients have to wait for new medicines, to increased NIH funding for breakthrough research and giving CMS the tools to pay for the most effective treatments. 

The overarching mission of the legislation was articulated best by President Obama in his State of the Union address when called upon Congress to accelerate the development of precision medicine and ensure that everyone would have “access to treatments that deliver the right treatment at the right time.”

There has been broad support for the legislation and the President’s vision.  Patients groups, researchers, biotech firms, physicians have endorsed the goal of commercializing precision medicine. 

The only interests standing in the way of progress are health insurers and PBMs.   Rather, they have made it clear they oppose anything that speeds new treatments to patients.

The opposition exposes the orchestrated outrage over drug prices, led by AHIP National Coalition on Healthcare and big pharmacy benefit managers such as Express Scripts and CVS Health, as nothing but part of cynical plan to limit access to precision medicines.  

A recent New England Journal of Medicine study found that health plans and PBMs are working to together to discriminate against sick people.   They are forcing people with HIV, cancer, psoriasis, multiple sclerosis and many other diseases to fail first on cheaper medicines before accessing precision medicines.  And even when the precision medicines are made available, patients have to pay thousands of dollars to use them.   The plans and PBMs know that such out of pocket costs will discourage people from starting new drugs. 

Plans and PBMs have often required consumers to pay more for brand drugs when a generic version is available.  But as the NEJM study found: the goal of this  “adverse tiering”— is not to influence enrollees’ drug utilization but rather to deter certain people from enrolling.”

That’s bad enough.  But health plans and PBMs are also profiting from these discriminatory tactics as well.   The PBMs are also covering one new medicine for a disease and no other precision drugs to the drug company giving them the highest cash rebate.

For instance, PBMs are covering one hepatitis C drug and excluding others.  As drug benefit expert Adam Fein points out, these pay to play schemes allow PBMs to rake in  “as much as $2,600 to $3,100 per (hepatitis C) patient. “   That comes out to about $3 billion. When approach is extended to precision medicines for cancer the PBMs could make up to $15 billion by next year.

As more precision medicines are developed, PBMs and insurers work hand in glove to it harder and more expensive to get them. Fein notes: “Express Scripts has 66 products on its 2015 formulary exclusion list, compared with 48 in 2014. CVS Caremark’s 2015 list has 95 products, including 72 carryovers from the 2014 formulary. “

On top of these restrictions, health plans are forcing patients with cancer, cystic fibrosis, multiple sclerosis, psoriasis and HIV to fail first on cheaper drugs.  The NEJM study looked at HIV drugs and found that HIV patients have to pay over $3000 due to adverse tiering.  In fact, many insurers require copayments of up to 40 percent of the cost of over 20 groups of precision medications for patients with chronic conditions.   And since PBMs are forcing patients to use one drug based on price, not based on what’s best, patients will have to try several other medicines.  That assures the PBMs of repeat business on their terms.

It is noteworthy that AHIP, and the PBMs have contributed nothing to the discussion around the bi-partisan 21st Century Cures Initiative.  If they really cared about the cost of medicines, they would propose ways to reduce the time and money needed to bring them to market and promote more competition.  The 21st Century Cures Act does that.

The discrimination against precision drugs is very profitable to insurers and PBMs in the short term.  But it stands in stark contrast to economic evidence that demonstrates access by patients and their healthcare providers to all medicines promotes longer life, higher quality life and better healthcare at a lower cost. Precision medicines, while expensive, saves money by eliminating guesswork, use of ineffective treatments, and costly health services.  Long term a healthier, more productive population means lower premiums.   

To achieve a value based health care system built on precision medicine, Congress and the President will have to ensure access to innovative treatments.  To usher in a 21st century of cures, our elected officials will also have to stop PBMs and insurers from getting richer by making people sicker.

Goldberg, PhD, is vice president of the Center for Medicine in the Public Interest.