President & Group Managing Director: Dr.Shelly Ahmed | Editor in Chief & Group CEO: M H Ahssan

Sunday, June 25, 2017

How Two Common Medications Were Combined Into One $455-Million Specialty Pill?

Vimovo costs way more than the two individual medicines. So how have its manufacturers managed to make it sell?

Everything happened so fast as I walked out of the doctor’s exam room. I was tucking in my shirt and wondering if I’d asked all my questions about my injured shoulder when one of the doctor’s assistants handed me two small boxes of pills.

“These will hold you over until your prescription arrives in the mail,” she said, pointing to the drug samples. Strange, I thought to myself, the doctor didn’t mention giving me any drugs.

I must have looked puzzled because she tried to reassure me. “Don’t worry,” she said. “It won’t cost you any more than $10.”

I was glad whatever was coming wouldn’t break my budget, but I didn’t understand why I needed the drugs in the first place. And why wasn’t I picking them up at my local CVS?

At first I shrugged it off. This had been my first visit with an orthopaedic specialist and he, Dr Mohnish Ramani, hadn’t been the chatty type. He’d barely said a word as he examined me, tugging my arm this way and bending it that way before rotating it behind my back. The pain made me squirm and yelp, but he knew what he was doing. He promptly diagnosed me with frozen shoulder, a debilitating inflammation of the shoulder capsule.

But back to the drugs. As an investigative reporter who has covered health care for more than a decade, the interaction was just the sort of thing to pique my interest. One thing I’ve learned is that almost nothing in medicine – especially brand-name drugs – is ever really a deal. When I got home, I looked up the drug: Vimovo.

The drug has been controversial, to say the least. Vimovo was created using two readily and cheaply available generic, or over-the-counter, medicines: naproxen, also known by the brand Aleve, and esomeprazole magnesium, also known as Nexium. The Aleve handles your pain and the Nexium helps with the upset stomach that’s sometimes caused by the pain reliever. The key selling point of this new “convenience drug”? It’s easier to take one pill than two.

But only a minority of patients get an upset stomach, and there was no indication I’d be one of them. Did I even need the Nexium component?

Number cruncher
Of course I also did the math. You can walk into your local drugstore and buy a month’s supply of Aleve and Nexium for about $40. For Vimovo, the pharmacy billed my insurance company $3,252. This doesn’t mean the drug company ultimately gets paid that much. The pharmaceutical world is rife with rebates and side deals – all designed to elbow ahead of the competition. But apparently the price of convenience comes at a steep mark-up.

Think about it another way. Let’s say you want to eat a peanut butter and jelly sandwich every day for a month. You could buy a big jar of peanut butter and a jar of grape jelly for less than 10 bucks. Or you could buy some of that stuff where they combine the peanut butter and grape jelly into the same jar. Smucker’s makes it. It’s called Goober. Except in this scenario, instead of its usual $3.50 price tag, Smucker’s is charging $565 for the jar of Goober.

So if Vimovo is the Goober of drugs, then why have Americans been spending so much on it? My insurance company, smartly, rejected the pharmacy’s claim. But I knew Vimovo’s makers weren’t wooing doctors like mine for nothing. So I looked up the annual reports for the Ireland-based company, Horizon Pharma, which makes Vimovo.

Since 2014, Vimovo’s net sales have been more than $455 million. That means a lot of insurers are paying way more than they should for their Goober.

And Vimovo wasn’t Horizon’s only such drug. It has brought in an additional $465 million in net sales from Duexis, a similar convenience drug that combines ibuprofen and famotidine, AKA Advil and Pepcid.

This year I have been documenting the kind of waste in the health care system that’s not typically tracked. Americans pay more for health care than anyone else in the world, and experts estimate that the US system wastes hundreds of billions of dollars a year. In recent months I’ve looked at what hospitals throw away and how nursing homes flush or toss out hundreds of millions of dollars’ worth of usable medicine every year. We all pay for this waste, through lower wages and higher premiums, deductibles and out-of-pocket costs. There doesn’t seem to be an end in sight – I just got a notice that my premiums may be increasing by another 12% next year.

Complex deals
With Vimovo, it seemed I stumbled on another waste stream: overpriced drugs whose actual costs are hidden from doctors and patients. In the case of Horizon, the brazenness of its approach was even more astounding because it had previously been called out in media reports and in a 2016 congressional hearing on out-of-control drug prices.

Health care economists also were wise to it.

“It’s a scam,” said Devon Herrick, a health care economist with the National Center for Policy Analysis. “It is just a way to gouge insurance companies or employer health care plans.”

Unsurprisingly, Horizon says the high price is justified. In fact, the drug maker wrote in an email, “The price of Vimovo is based on the value it brings to patients.”

Thousands of patients die and suffer injuries every year, the company said, because of gastric complications from naproxen and other non-steroid anti-inflammatory drugs. Providing pain relief and stomach protection in a single pill makes it more likely patients will be protected from complications, it said.

And Horizon stressed Vimovo is a “special formulation” of Aleve and Nexium, so it’s not the same as taking the two separately. But several experts said that’s a scientific distinction that doesn’t make a therapeutic difference. “I would take the two medications from the drugstore in a heartbeat – therapeutically it makes sense,” said Michael Fossler, a pharmacist and clinical pharmacologist who is chair of the public-policy committee for the American College of Clinical Pharmacology. “What you’re paying for with [Vimovo] is the convenience. But it does seem awful pricey for that.”

Public outrage is boiling over when it comes to high drug prices, leading the media and lawmakers to scold pharmaceutical companies. You’d think a regulator would monitor this, but the Food and Drug Administration told me they are only authorised to review new drugs for safety and effectiveness, not prices. “Prices are set by manufacturers and distributors,” the FDA said in a statement.

Horizon acquired Vimovo in November 2013 from the global pharmaceutical giant AstraZeneca. Horizon knew it faced challenges trying to get top dollar for inexpensive ingredients. “Use of these therapies separately in generic form may be cheaper,” it said in its 2013 report to investors. But the company executed a shrewd strategy to give everyone – insurers, patients, doctors and pharmacies – the incentive to use Vimovo. It’s instructive to review its playbook.

To get Vimovo covered, Horizon made deals with insurance payers and pharmacy benefit managers – the intermediaries who help determine which drugs get reimbursed. The contracts generally included special rebates and even administrative fees for these intermediaries, the Horizon reports said, so the drug maker got paid much less than the sticker price, though it wouldn’t say how much. But the company’s net sales show the deals worked.

Complex calculations
Horizon put boots on the ground to get the prescriptions rolling, expanding its sales force by the hundreds and focusing its marketing and sales efforts on doctors who already liked to prescribe brand-name drugs. The company’s message to doctors emphasised the convenience of prescribing the two ingredients in a single pill and that the single pill protected patients by making it more likely they would take their medication as directed.

Horizon also primed the medical community by giving donations totaling $101,000 to the American Gastroenterology Association, a specialty nonprofit for physicians. Some doctors refuse drug-industry money, if only to at least avoid the appearance of a conflict of interest. ProPublica has done loads of stories showing why doctors taking money is indeed problematic, including one about drug makers’ influence on physician specialty groups. When I went on the American Gastroenterology Association’s website, the first thing I saw was a pop-up ad from a drug company. Several of the association’s board members have received drug-company money, too. Horizon has made clear in its annual reports that donations to the group “help physicians and patients better understand and manage” the risks of pain relievers causing gastric problems.

Horizon also zeroed in on patients’ worries about drug costs. To encourage them to fill their prescriptions, Horizon covered all or most of their out-of-pocket costs. That’s why my doctor’s office could promise me I wouldn’t spend too much for my Vimovo. The programme, Horizon told investors in reports, addressed the impact of pharmacies switching to less expensive alternatives and could “mitigate” the effect of payers searching for cheaper alternatives.

The strategy worked on me. I didn’t even know why I was getting the prescription, but when they told me it wouldn’t cost more than I would spend on lunch with a friend, I gave it the OK. A pharmacy I’d never heard of sent me a bottle of Vimovo for $10, even though my insurance company rejected the claim.

Turns out paying the patient’s costs motivated my doctor, too. I waited until the end of my next visit to bring up Vimovo, and then we had a follow-up conversation on the phone. Ramani didn’t know the price of the drug and found it “disturbing” when I told him. That was a surprise to me, but not to him. He said he leaves billing to his staff and doesn’t even know how much he gets paid for a lot of the procedures he performs, let alone how much insurers are being charged for drugs. The marketing arms of companies like Horizon must count on this sort of blindness.

Ramani doesn’t receive money or gifts from Horizon. (I confirmed this on ProPublica’s Dollars for Docs website, which lists drug-company payments.) He said he likes Vimovo because Horizon covers the patient’s out-of-pocket costs, entirely in many cases. Prescribing the generics or over-the-counter medications separately would actually cost more, he said. Which of course is exactly the company’s plan. But Ramani agreed that the high cost of the drug to insurers ultimately raises overall health care costs for all Americans.

Knowing Vimovo’s price, I asked him if he would continue to prescribe it. “It changes my thought process,” he said. “But at the end of the day, I have to think about the patient and whether the patient will be able to pay out of pocket or not.”

Ramani said the Horizon drug rep told him Vimovo prescriptions had to go through a particular pharmacy for the patient to receive financial assistance. In its 2016 annual report, Horizon wrote that prescriptions for its drugs might not be filled by certain pharmacies because of insurance-company exclusions, co-payment requirements, or incentives to use lower-priced alternatives. So that’s why they didn’t give me the option of picking up my pills at my neighborhood drugstore.

Instead, my Vimovo was mailed to me from White Oak Pharmacy in Nutley, New Jersey, which is about 45 minutes from my house. I drove there to find out why. The neighborhood pharmacy is on the bottom floor of a two-story brick building on a street corner, next to a hair salon.

Vishal Chhabria, the pharmacist who owns White Oak, told me the drug company sets the price of Vimovo. He insisted his pharmacy has no special relationship or contract with Horizon. Maybe the drug company steers prescriptions his way, he said, because his pharmacy will process the coupons that reduce or eliminate the patient costs, which some pharmacies don’t.

Chhabria said there is no approved generic alternative to Vimovo, so he can’t suggest one to patients. And while other drugs, like over-the-counter medications, would be cheaper for the health system overall, they are more expensive for the individual patient, he said.

In poring through Horizon’s financial filings, it appears the drug’s run may be ending. Horizon said in its report for the first quarter of 2017 that fewer insurance companies have been willing to cover Vimovo and many that do have demanded larger rebates. As a result, Horizon has been eating more of the costs of providing the drug to patients, as they must have in my case. The prescriptions have still been coming in, but net sales were just under $5 million in the first quarter of this year, down 81% from the first quarter of 2016.

Critics of Vimovo say that’s still more than patients should be spending on the drug. “That number should be zero,” said Linda Cahn, an attorney who advises corporations, unions and other payers to help reduce their costs. “If you want to talk about waste, that’s waste.”

Herrick, the health care economist, said Horizon cashed in by eliminating many of the barriers in the system that are meant to control costs. The company got patients on board by covering their out-of-pocket costs. It appealed to doctors by promoting the benefits to patients. And it did an end-run around chain pharmacies, which typically might suggest a lower-priced alternative, by steering prescriptions to pharmacists who would participate in their patient-assistance program.

“Somebody brainstormed: ‘How can we nullify any consumer check and balance in this supply chain? What can we do to keep the customer from asking questions?’” Herrick said.

The scheme that played out with Vimovo is bound to happen again, Herrick said. Maybe it already is. Drug companies are always on the lookout to deploy similar strategies.

I dutifully took my Vimovo for several days, until I noticed it kept me awake until 3 in the morning – a rare side effect. (Perhaps they need to add a third drug to the combo.) I probably have more than 50 pills left in the bottle on my bedside table. Maybe I could sell it back to Horizon for $1,500.

Friday, June 16, 2017

Ramadhan Kareem: Mumbai Doctor Starts Ramzan Fundraiser To Help 700 Underprivileged Heart Patients

Akbar Sheikh, who lives in Govandi in Maharashtra, suffered a heart attack last month. Doctors told him that he had four blockages in his heart and that he required surgery urgently in order to survive. Sheikh's son told the INNLIVE that the cost of the surgery was ₹2.10 lakh, but the family could only managed to put together a sum of ₹50,000.

Exclusive: Race To Rashtrapathi Bhavan

2019 Calculations May Decide BJP’s Choices For President, Vice President. The unexpected is widely expected. The Modi government likes to surprise, keeping its cards close to its chest until it has to play them. We will know the name of the BJP's nominee for the post of President of India on 23 June and it may be none of the names in speculation until 22 June.

The Real Problem With India’s Jobs Data Is That They Hide More Than They Reveal

Employment data in India have rarely been robust or foolproof. Measures of employment are released sporadically and exclude a number of sectors, notably the informal economy that employs over 80% of Indians. While the Narendra Modi government has put in place a task force to address these gaps, there is still no clarity over how the new data will be computed or how often they will be published.

Media In The Modi Era: How Did India’s Watchdog Press Become Docile?

The government does not need to impose any kind of direct curb on the media.

India is talking about the 1975 Emergency again even as its 42nd anniversary, on June 25, hovers around the corner. Some people believe that freedom of the press is endangered once again. Yet how many people are really bothered about the freedom of the press?

Thursday, June 15, 2017

Mother of all land scams has blown in the face of KCR government in Telangana

The illegal deal is reported to have caused a loss of Rs 587 crore to the state exchequer.

Just a week after K Chandrasekhar Rao claimed no government land in Telangana had passed on to private hands, the chief minister is on the back foot. It has now come to light that Telangana Rashtra Samiti senior leader and Rajya Sabha MP Kesava Rao's family purchased 50 acres of land in Hafeezpur village in Ibrahimpatnam mandal near Hyderabad.

The Harsh Reasons These Housewives In Bangalore Chose To Become Sex Workers

Editor’s note: For decades, sex workers in India have been pushed to the margins, forced to deal with shame and stigma from society. ‘Unheard Stories’ is a series of stories by INNLIVE that aims to bring these narratives to the fore, to build a more inclusive and accepting society.

I am illiterate and unskilled. I need money to run my household. Now, this (sex work) is my job and I am proud of it as I have sacrificed a lot for my family,” says Jaya Prabha (name changed) with a stoic face. For her, sex work is a lesser evil than watching her children starve.