The polio vaccine was never patented. The insulin patent was sold for $1. The average price for epinephrine is around $109 while the 2-pack EpiPen sells for somewhere between $650-$700. How does the conversation for the moral value of medication — not just market value — keep getting shoved under the rug?
That’s the question Canadian drug maker Medicure Inc. and Winston-Salem, NC-based Marley Drug were contending with when, in a moment of brilliance, they decided to align their operations for the sake of U.S. patients seeking access to affordable medication. Loosely translated, “aligning” meant Medicure would acquire Marley Drug, a transaction that was finalized in mid-December 2020. So why would a pharmaceutical company acquire a pharmacy? And is that even legal? The answer may surprise you. “It was an obvious opportunity for us and our patients. Medicure shares our moral mission to cut drug costs for consumers,” says David Marley, founder of Marley Drug along with his wife, Elizbeth. “You have a small pharmaceutical manufacturer who is willing to buck the system with us.” “Bucking the system” could well be Marley’s motto. In the relatively small world of independent pharmacy, he’s well-known for being a “loud and proud” voice of pharmacy benefit manager (PBM) reform. Among his other advocacy efforts, Marley is the founder of Pharmacists United for Truth and Transparency (PUTT), a non-profit he formed with other pharmacy owners in 2011 to spread awareness of the types of systemic PBM abuse that now dominate the news: spread pricing; contract “gag clauses” that prevent pharmacists from telling patients about therapeutically equivalent — but less expensive — alternatives; extorting rebate kickbacks from manufacturers; reimbursing pharmacies below drug acquisition price while charging patients and their health plans drug cost plus a sizeable mark-up … the list goes on. Winnipeg-based Medicure has its own view of working with PBMs. The small, publicly-traded company specializes in the development of medications for the U.S. cardiovascular market. Medicure came to prominence after taking its hospital-based drug Aggrastat® from 2% to 65% market share, offering a high-quality therapeutic alternative to a higher-cost brand at an affordable price. Attempts to make its cholesterol drug Zypitamag® — a new generation statin with a low risk of adverse interaction with a patient’s other medications — commercially available to patients in the U.S. were not so successful. The reason: the contract demands of PBMs, self-appointed administrators of the U.S. prescription drug market who serve as the gatekeepers and price-setters of insurance-covered medications. “When we launched, our approach, which I think is pretty standard, was to set a high WAC (Wholesale Acquisition Cost) price, but then to offer a steep rebate with the hope of getting coverage from PBMs,” says Medicure president Neil Owens, Ph.D. “Our assumption was that we would gain coverage, and then a provider would decide if it was right for their patient. Unfortunately, we didn’t gain very much coverage and the high WAC ended up being the cash price for anyone without insurance or who cannot use our discount card by law, such as someone on Medicare Part D.” At first, U.S. PBMs were willing to carry Zypitamag to a limited extent … for $697 per 90-day supply. Yet Medicure can sell Zypitamag for $90 for a 90-day supply and still be profitable. “As our company moved from a hospital-based product to a consumer prescription product, my expectation was that Zypitamag would be assessed based on its clinical benefit for patients, however, the only factor that seemed to be considered was the rebate provided. I’ve never asked (our PBM contacts) what would happen to our coverage situation if we lowered our price to $90 per 90 days, but I am guessing they would not be interested in providing coverage, and would likely drop our existing coverage,” Owens continues, “and only have (competitor) Livalo as an option.” (note: Livalo continues to raise its WAC price each year and is now $1,117 for 90 days). “Our understanding is that the PBM inflates our WAC price to the insurance company by about 10%, then offers them a rebate of 35–40%, which results in the patient bearing a significant portion of the cost.” Even with an agreed-upon price of nearly $700 per 3 months’ supply, PBMs would not make Zypitamag available to patients until they had tried — and failed with — at least two other medications... Continue Reading
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