High-Cost "Specialty" Brand Drugs

Greatest Areas of U.S. Brand Drug Pricing Abuse: Extreme-Cost "Specialty Drugs"

• After widespread U.S. patent expirations last decade, high-cost "specialty" drugs accounted for a large proportion of the remaining "blockbuster' U.S. brand drugs
• Multiple sclerosis, diabetes, cancer, rheumatoid arthritis, rare/orphan diseases and few others
• Massive price increases on "old" U.S "specialty" drugs has led to even higher prices on new drugs reaching the market

U.S. Brand Drugs in the Two Whistleblower Cases

• Multiple Sclerosis: Biogen’s Avonex and Tecfidera; Teva’s Copaxone; Pfizer/EMD Serono's Rebif; Bayer's Betaseron; Novartis' Gilenya
• Insulins:  Sanofi’s Lantus and Eli Lilly’s Humulin
• Cancer Drugs: Novartis’ Gleevec and Tasigna; Bristol-Myer's Sprycel
• Rheumatoid Arthritis: AbbVie’s Humira and Amgen’s Enbrel
• Other Major U.S. brands: Pfizer's Lyrica, Premarin, Viagra, Celebrex, Chantix and Relpax

High-Cost "Specialty" Drugs:

• Massive secret "pharma fees" to Health Insurer/PBMs, while minimal "rebates/discounts" for patients, clients and taxpayers
  • "Pharma fees": tied directly to massive "sticker" prices and price increases in secret national contracts
    • Often as Rxs were rapidly declining
    • Health insurers/PBMs standardly keep ALL "pharma fees"
  • Health insurer/PBM typically gets an 8% "pharma fee" based on a U.S. "specialty" drug's "sticker" price
    • Link to the Whistleblower case discussion of the 2017 Pharmaceutical industry report discussing "fees" paid to PBMs tied to U.S. "sticker" prices

• "Specialty" drug rebates/discounts are typically small or absent despite massive U.S price increases

• • U.S. multiple sclerosis (MS) manufacturer rebates: only 7% in 2011 to 2016
    • Despite a massive increase in U.S. MS drug prices from $15K/patient/yr range in 2005 to the $100K range now
    • Link to the District of Rhode Island (D-RI) Whistleblower case discussion of the 2017 PBM industry report admitting the low level of MS drug rebates despite massive U.S. price increases

• • U.S. rheumatoid arthritis (RA) rebates: only 11% in 2011 to 2016
    • Despite a massive increase in U.S. RA drug prices from the $12K/patient/yr range in 2005 to the $75K range now
    • Link to the SDNY Whistleblower case discussion of the 2017 PBM industry report admitting the low level of RA drug rebates despite massive U.S. price increases

• • U.S cancer drug rebates are often minuscule or zero
    • Despite a massive increase in U.S. cancer prices over the past decade
    • Link to the Whistleblower case discussion of the Express Scripts CEO public admission of the lack of manufacturer rebates for cancer drugs despite massive U.S. prices and price increases
• Typical U.S "specialty" drug prices and "fees" paid to the dominant health insurer/PBMs:

                            "Sticker" Cost/Patient/Yr           Fees/Patient/Yr (8% rate)

Cancer drug                     $200K-300K                            $16,000-24,000

Multiple Sclerosis                  $100K                                       $8,000

Rheumatoid Arthritis               $75K                                       $6,000

• What are the massive "Specialty" drug "pharma fees" being paid to the health insurer/PBMs for?
  • Often driven only by massive price increases for brands in sharply declining use
  • Health insurer/PBMs getting a lot more "pharma fees" for doing a lot less legitimate work to support patients
  • "Old" blockbuster MS, rheumatoid arthritis and other "specialty" drugs that patients have been using chronically for many years
  • Biogen's Avonex and Teva's Copaxone (MS, U.S. launch 1996); Amgen's Enbrel and AbbVie's Humira (RA, U.S. launch 1997 and 2003, respectively; Novartis' Gleevec (cancer, U.S. launch 2001); Sanofi's Lantus and Eli Lilly's Humulin (U.S. launch 2000 and 1982, respectively
    • Often little legitimate PBM "support" for these "old" "specialty" drugs, beyond shipping Rxs to patients from mail order pharmacies