Lanton Law Will Speak at New York Bar's Food Drug & Cosmetic Section's Annual Meeting

We are proud to announce that Lanton Law will be presenting at the NY State Bar Association's Spring Meeting. We are excited about our presentation titled Drug Pricing Wars: "Trends, Politics and Policies." To register and hear the other great presentations click the link below. To register click here

Pharmaceutical Commerce Speaks with Lanton Law about New Drug Pricing Models

Pharmaceutical Commerce interviews Ron Lanton; Partner at Lanton Law on newly emerging pricing models such as the cost plus drug model. Ron gives his insight on what impacts these emerging models will have on the pharmaceutical industry. The interview can be seen here.

Pharmacy Times Speaks with Lanton Law About "Vanity Drugs"

In an interview by Aislinn Antrim of Pharmacy Times called “Calling Them ‘Vanity Drugs,’ Some Insurers Refuse to Cover New Anti-Obesity Drugs,” Ron Lanton III, Esq., Partner at Lanton Law, discussed why insurers are refusing to cover new, highly effective anti-obesity drugs and how some prescribers are getting around the issue. Lanton said that this is a common issue across many different disease spaces and drug types, but some policy changes may be able to help.

The interview can be seen here.

We have taken the text that appears on Pharmacy Times.com from the interview and placed it below in case you have trouble accessing the video.

Aislinn Antrim: Hi, I'm Aislinn Antrim with Pharmacy Times, and I'm here with Ron Lanton, principal at Lanton Law, to discuss how and why some insurers are considering new weight loss and anti-diabetes drugs to be “vanity drugs.” So, there are several new drugs on the market, and they've shown significant weight loss in clinical trials. But some insurers are calling these “vanity drugs” and are not covering them. Do you have a sense of what this term, vanity drugs, means?

Ron Lanton III, Esq.: No, I don't. I think whenever somebody askd me, like, “What does that mean?” I’m always like, okay, let's go to the legal definition. And I don't think there really is a legal definition of vanity drugs, which is something that we say. But to me, whenever I hear something like that characterized as vanity drugs, it's just another excuse. We're not going to pay for it. Right? So, I got a couple of ideas about what I think is going on behind that terminology, but I just wanted to talk a little bit about what this drug is and kind of the history about why it got here and where we are.

So, the brand name drug is Wegovy, because it's just too complex for me to say the generic form of the name of it, but it was approved last year in June by the FDA. And apparently, this is a new generation of highly effective hormone-based obesity medications. And specifically, what it does is that it targets a hormone, GLP-1, which is secreted in the gut, and then targets receptors throughout the body. And it makes it so that there is some kind of positive response, where you do lose the weight. And for this drug, it was prescribed for patients that are obese, who have a BMI or body mass index of greater than 30, or a BMI greater than 27 accompanied by weight-related medical problems, such as high blood pressure and type 2 diabetes and cholesterol, things like that. It’s definitely something that I believe would be beneficial to the patient because if you do take it, if it works as it says, we're not going to jump to those other more expensive disease states that cost a lot of money to treat.

But, going back to like the whole vanity drug classification of it, yes, this isn't a proven curative drug, I think they were saying like up to 13% of individuals don't lose any weight that take this drug. But, you know, insurance companies have for a while used thing called step therapy, where they're like, try drug A first before you go to drug B, and a lot of time is wasted. And a lot of dollars can be wasted too, because that's that kind of one-size-fits-all approach to everything. Whereas, you know, if we're doing more curative, something that just kind of goes right to your specific biological makeup, that could have a lot better of an outcome for a patient and at a lower cost. So, I think they're coming at it from a step therapy mindset.

And, too, there is a policy that's been weakened a little bit ago by the court, but the copay accumulator, where they're stopping you from having the rebates from a manufacturer go to the deductible and the patient's maximum allowable cost. So, it's like you have those mindsets of let's try not to pay it. But I think, you know, with our medicine and science getting a lot better, we're going to have to think past that old traditional reimbursement system.

Aislinn Antrim: Yeah, absolutely. This seems to be kind of a widespread issue—you talked about Wegovy, and it's been applied to a couple of these other similar new drugs. What are pharmaceutical lobbyists really doing to kind of get insurers to pay for these?

Ron Lanton III, Esq: That's an interesting question. So, I can't speak for pharma, I don't know what they're doing. I talked to pharma interests, I did look at their website, and one of their policy issues is called “Build a better patient-centered agenda.” And I like where they're going with that, because essentially, what it's saying is we want insurance to work like insurance is supposed to work. Which is, if we have something that's wrong with us, we go see the doctor, the doctor prescribes. And the doctor says, “This is what we think is good for that patient to have a good outcome.” And the insurance is supposed to just pay for it. Now, you know, there's all kinds of things, and I know why there's rules about it and there's all kinds of special circumstances. But you know, more times than not, we're fighting the insurance company to pay for things that seem to be common sense. So, I think there is a bill, which I'll talk about in a little bit, on the obesity issue that we're talking about here. But instead of it being what I call a hard lobbying issue, which is I'm going to go directly to my congressman, or my senator and we'll go lobby about how we need this particular drug. It seems to be more of a soft lobbying issue to me, where the pharmaceutical industry would have to reach out to the payers to have that conversation about why the manufacturers think this is a good thing with the patients today. They have to talk to the patient themselves and educate the patient. So, if the patient feels comfortable enough, what you're dealing with is years of stigma and everything about this. Again, this is getting out of traditional health care and going to the root of the problem. And instead of just treating a symptom, you know, we're really trying to figure out what's going on here. So that's the other thing. And then really, the last thing that I see as kind of the soft lobbying by pharma is educating the doctors about this drug and why this is here, and why they should start to utilize this in their weapons system of fighting whatever it is that they're dealing with patients. So that's what I call more of a soft lobbying issue.

Aislinn Antrim: Interesting. Are there policy changes that could address this issue?

Ron Lanton III, Esq: The court system is weakening the copay accumulators, which I mentioned earlier, and there have been several state and state efforts. And, definitely, there's a federal bill right now on step therapy, where they're trying to get rid of that, because again, it's like, why are we doing all these things that may not work, and it's wasting time and it's causing a lot of money. And we could just get right to the heart of the problem, especially when the doctors are saying, you really shouldn't get in between my relationship with my patient, because I know the patient. And, you know, I'm the closest that's here. So, this is what I think.

There is an interesting bill that I want to bring up about policy changes that you had asked about. So, there is a bill, HR 1577, and there's also a senate version of this—SB 596 is a companion bill. So it’s basically the same bill that's in the house is also in the Senate, same language, and everything. It’s called the Treat and Reduce Obesity Act and let me tell you just really quick what this is. The bill would allow for coverage for therapy that is provided by a physician who's not a primary care physician, or other health care providers and approved counseling programs, if you have a referral from your PCP. Currently, the therapy is covered only if provided by a PCP. The bill would also allow coverage under Medicare's prescription drug benefit, so under Part D, for the treatment of obesity, or weight loss management for individuals who are overweight. So, this really targets what we're talking about right now. And if we actually have this bill go through, I think this conversation will be a lot easier, because we already have the regulatory scheme for it, instead of having to build it from scratch and just kind of convince people that this is a good thing for patients to take. Again, when we're coming at it from the traditional mindset of “Let's try not to pay for things and if we do, let's try the cheaper stuff first, before we get to something that might actually help,” I think that's just backwards.

Aislinn Antrim: Yeah, absolutely. Do you see similar issues in other drug classes or treatment areas?

Ron Lanton III, Esq: A long while ago—well, it's about 2013, so seems like a long while ago, with everything that's happened between then—[we had] Sovaldi with hepatitis C, you know, at $4,000. For the treatment, I think it was 12 course treatment, and people were like, “Oh, my God.” I know there's still an issue but, you know, if 9 out of 10 times a patient takes this, they get better, those are pretty decent odds. So why not try it for a little bit? So, that would be my kind of form of step therapy, which is let's just try, and if it's not working, then okay, we can get off of it. But this kind of seems to be what I call a best-in-breed prescription out there. So, like, if this is the best thing, let's take it and see what happens. And I think, again, with drugs that are curative and more expensive, because the upfront cost has to be there, because you're not going to have the repeat customer because they're getting cured. But at the same time, I think somebody has to do a cost analysis at the payer by saying, if we put patient on drug A and it costs this, but if we put them on drug B, it's going to cost all this other stuff and the patient's going to get sicker. It's just that's just not really what we should be doing. I do know that there's this balance of, you know, we have to have something that's affordable for patients to take. So it's $84,000. And I hate to bring up old wounds, but it's at $4,000, something that is reasonable or not. And I think that's, you know, something that the pharma and the insurance just still haven't quite worked out yet, especially since we keep seeing this thing about drug price from congress, and why is this stuff so high? But I think now there's a lot more scrutiny starting to come into the picture with the Federal Trade Commission, and how they're now saying, okay, well, high drug prices and what are these PBMs doing and let's find out a little bit more about this. So, that's something we should continue to watch. But those are the policies. You know, if we get bills like this, we have an FTC that is really scrutinizing both pharma and the PBM industry, I think we'll start to slowly but surely get to an answer that's tolerable for everybody.

Aislinn Antrim: Well, that's good to hear. Some companies have found kind of an interesting workaround by marketing these drugs as diabetes treatments, rather than weight loss drugs. And in some cases that seems to have worked. Does this seem like an effective solution? Or what are your thoughts on this?

Ron Lanton III, Esq: I think it obviously depends on what the doctor is seeing from the patient. I mean, if you're pre-diabetic, then you know, if you don't do anything, you're going to get over into type 2 diabetes, potentially. So, I can understand the rationale behind it. But I don't think it's really that different than off labeling. I mean, you know, if you have a drug and it's supposed to be used for cancer A but also works for cancer B, it’s not approved for cancer B, but, you know, there may be times as a patient where your condition doesn't have something that is FDA approved, but the doctor is looking at these studies and trying to see what can help you. Again, that's that patient-doctor relationship that you just have to trust. And that's what the patient is looking for. So, I think it's really no different than off labeling and if that really goes to the result that we're getting to, I'm all for it.

Aislinn Antrim: Absolutely. Why do list prices vary for the same drug with different indications? So, with diabetes versus for obesity?

Ron Lanton III, Esq: Yeah, that's the million-dollar question. Literally, if you live with these high-priced drugs, right? I don't know if I can give you an answer. I think the best people to ask this question to would be the pharmacy benefit managers, because the more and more they've gotten involved, the more and more prices have gone up. And that is because the manufacturer has to hire the higher price because they have to compensate for the rebate that they're giving to the pharmacy benefit manager. So why is that? And I think that, you know, like I was telling you earlier, the scrutiny with the Federal Trade Commission going in and just seeing exactly what PBMs are doing with these drug prices, and then, you know, either getting some federal standards around it, and what they can and can't do or be giving the PBM a federal regulator. They don't have one, you know, and it's just this piecemeal stuff that they're doing by state. I think those days are numbered, as far as just having a PDMP and unregulated entity. But I think the more layers that start to get peeled back, the more attention that's coming. Again, this stuff doesn't happen overnight. None of this happened overnight at all. I mean, PBMs really didn't grow until the ‘90s. So, we're talking from the ‘90s until now, there's been some changes, gradual changes, but there's been a shift. And I think we're starting to start to shift that backwards to where we can get an answer. We'll find out these things.

Aislinn Antrim: Wonderful. Is there anything else you wanted to add on this topic?

Ron Lanton III, Esq: No. I think this is definitely not the last thing that we're going to see. I just think it's, I hate to say it, I know it's a different disease state, but it's just Sovaldi in a different form. I mean, we have these drugs that are promising to do things, and if 13%—and I know that's one study, but I mean, if somebody tells me “Okay, 13% of people this may not do anything for them.” I'm at least willing to give it a shot, because it's better than what we have now. And it's definitely better than some of the step therapy protocols that patients are going to have to go through.

Aislinn Antrim: Definitely, thank you for talking to me about this.

Ron Lanton III, Esq: Definitely. Thank you for asking.

House Committee on Oversight and and Reform Releases Report on Drug Pricing

Last week Representative Maloney (D-NY) who is the Chairwoman of the Committee on Oversight and Reform released the final staff report, resulting from a multi-year investigation into drug pricing. The Committee investigation was originally started by the late Representative Cummings. 

Here are a few findings from the report.

• Drug companies aggressively raise prices to meet revenue targets, and executive compensation structures create incentives to raise prices.  The companies in the Committee’s investigation collectively raised prices more than 250 times on the 12 drugs examined.  The drugs in the Committee’s investigation are now priced at a median of almost 500% higher than when they were brought to market.  The Committee ’s investigation revealed evidence that company executives made aggressive price increases to meet ever-increasing revenue targets and earnings goals.  All ten companies have compensation structures that tie incentive payments to revenue and other financial targets, and several companies directly tied incentive compensation to drug-specific revenue targets. 
   

• Drug companies target the U.S. market for higher prices and use the Medicare program to boost revenue.  Internal strategy documents show that drug companies targeted the U.S. market for price increases—while maintaining or lowering prices in the rest of the world—in part because Medicare cannot negotiate directly for lower prices.  The Committee’s analysis found that taxpayers could have saved more than $25 billion over a five-year period for just seven of the drugs investigated—Humira, Imbruvica, Sensipar, Enbrel, Lantus, NovoLog, and Lyrica—if private Medicare Part D plans had obtained the same discounts as other federal health programs that are empowered to negotiate. 
   

• Drug companies abuse the patent system and FDA market exclusivities to suppress competition.  Collectively, the companies in the Committee’s investigation have obtained more than 600 patents on the 12 drugs examined, which could potentially extend their monopoly periods to a combined total of nearly 300 years. 
   

• Drug companies use strategies to suppress competition and maintain monopoly pricing.  Every company in the Committee’s investigation engaged in one or more strategies to suppress competition from generics or biosimilars.  These strategies include what are often described as “life-cycle management” or “loss of exclusivity” strategies:  (1) shifting patients to new products or formulations of a drug just before facing generic competition for the old formula (known as “product hopping” or “evergreening”); (2) pursuing contracts with PBMs and insurers that condition rebates and discounts on excluding competitor products; and (3) aggressively marketing directly to patients and physicians to drive sales, especially as drugs faced generic competition. The Committee’s investigation also uncovered new evidence of “shadow pricing,” a practice in which would-be competitor companies follow each other’s price increases.
   

• Drug companies use patient assistance programs as a public relations tool to boost sales.  The Committee’s investigation uncovered new evidence that companies emphasized the significant returns on investment from these programs in the form of increased sales, particularly for drugs approaching loss of exclusivity.  Internal documents show that companies view these programs as an important public relations tool, but that companies’ spending on patient assistance programs is minimal compared to the enormous amount of revenue brought in by these drugs.  These programs often do not provide sustainable support for patients and do not address the burden that the company’s pricing practices have placed on the U.S. health care system.
   

• Research and manufacturing costs do not justify price increases.  The Committee’s investigation found that companies’ investments in R&D are far outpaced by revenue gains.  The investigation also found that even if the pharmaceutical industry collected less revenue due to pricing reforms, drug companies could maintain or even exceed their current R&D expenditures if they reduced spending on stock buybacks and dividends.  From 2016 to 2020, the 14 leading drug companies spent $577 billion on stock buybacks and dividends—$56 billion more than they spent on R&D over the same period.  In addition, companies dedicated a significant portion of their R&D expenditures to research intended to extend market monopolies, support the companies’ marketing strategies, and suppress competition.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life sciences and technology. Our healthcare and life science practice has been helping entities nationwide with operational issues, mergers and acquisitions, regulatory inquiries, audits, licensure, employment issues and contracting. Our lobbying efforts help stakeholders nationwide achieve improved business climates through carefully crafted legislation.  

If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Oregon Proposes New Policy to Control Drug Prices

Drug prices have been fiercely debated in Congress and in various state capitols before COVID-19 brought everything to a halt. Vermont was the first state in the country to require pharmaceutical manufacturers to explain drug price increases. That initiative was followed by Maryland in 2019 as the state created its five member Prescription Drug Affordability Board to monitor prices. It seems now the attention is focused on Oregon. 

SB 844 proposes to establish a Prescription Drug Affordability Board in the Department of Consumer and Business Services to review prices for prescription drug products meeting specified cost criteria. Business Services will review prices for prescription drug products meeting specified cost criteria. The bill also requires the board to establish an upper payment limit for drugs that are or are expected to create affordability challenges for health systems and patients in Oregon or health inequities for communities of color.

An insurer, pharmacy benefit manager or other person that pays for or reimburses the cost of prescription drugs in this state may elect to opt out of the upper payment limit for specific drugs to allow the payer to negotiate with a manufacturer for the cost of the drug. 

Additionally, the Prescription Drug Affordability Board shall annually assess fees to be paid by manufacturers that sell prescription drug products in this state. The fees shall be established in amounts necessary to meet the costs of the board. The fees shall be imposed based on a manufacturer’s share of gross revenue from sales of prescription drug products in this state.

Lanton Law is a national boutique law and lobbying firm that focuses on healthcare/life science and technology. If you are an industry stakeholder with questions about the current telemedicine landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

New White House Drug Pricing Executive Order Released

On September 13, 2020, the Trump Administration released a new Executive Order (EO)  targeting drug pricing. The EO directs the Secretary of HHS to implement a “Most Favored Nation” drug pricing program for Medicare Parts B and D. This policy relies on international price competition and seeks to provide Americans with the same lower prices for prescriptions that we see in other countries.

Drug pricing has been a major point of contention as manufacturers and insurer/pharmacy benefit managers exchange blame over why drug prices are rising. Drug pricing has been a major issue that had been getting Congressional scrutiny until COVID-19. 

This issue will come back once a COVID-19 vaccine is available as there may be questions around the vaccine’s price. Additionally, once COVID-19 dies down, drug pricing for new therapies is expected to be front and center again.

Lanton Law is a national boutique law and government affairs firm that focuses on healthcare and technology. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today!

White House Issues Executive Order Advocating for Importation

The White House has issued an Executive Order titled “Executive Order on Increasing Drug Importation to Lower Prices for American Patients,” which seeks to advocate for having supply chain entities proceed with importation. 

“One way to minimize international disparities in price is to increase the trade of prescription drugs between nations with lower prices and those with persistently higher ones.  Over time, reducing trade barriers and increasing the exchange of drugs will likely result in lower prices for the country that is paying more for drugs.  For example, in the European Union, a market characterized by price controls and significant barriers to entry, the parallel trade of drugs has existed for decades and has been estimated to reduce the price of certain drugs by up to 20 percent.  Accordingly, my Administration supports the goal of safe importation of prescription drugs.” 

The Executive Order gives stakeholders three methods to accomplish the goals of this order. Either allow reimportation of insulin products from Canada, finalize the December 2019 proposed rule addressing importation, or allow individuals to import drugs as long as the importation is designated by the Food & Drug Administration (FDA) as safe and results in lower costs to patients.  

• (a)  facilitating grants to individuals of waivers of the prohibition of importation of prescription drugs, provided such importation poses no additional risk to public safety and results in lower costs to American patients, pursuant to section 804(j)(2) of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 384(j)(2);

• (b)  authorizing the re-importation of insulin products upon a finding by the Secretary that it is required for emergency medical care pursuant to section 801(d) of the FDCA, 21 U.S.C. 381(d); and

• (c)  completing the rulemaking process regarding the proposed rule to implement section 804(b) through (h) of the FDCA, 21 U.S.C. 384(b) through (h), to allow importation of certain prescription drugs from Canada.

Lanton Law is a national boutique law and government affairs firm that focuses on healthcare/life sciences, technology and finance. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today. 

Is the Insulin Price Reduction Act the Right Answer to High Insulin Prices?

I have a new article in The Centers for Biosimilars titled Is the Insulin Price Reduction Act the Right Answer to High Insulin Prices? You can find the article by clicking on the following link: https://www.centerforbiosimilars.com/contributor/ron-lanton-III-esq/2019/10/is-the-insulin-price-reduction-act-the-right-answer-to-high-insulin-prices

If you cannot access the link above, I have put the text of the article below.

At this point in the legislative calendar, it is time to take a look at what may have a likely shot at passing Congress before the 2020 election season gets underway. With the contentious debate on drug pricing that has occurred during the last several months, insulin pricing is still garnering plenty of attention.

This summer saw the unveiling of bipartisan legislation aimed to deliver a policy solution to rising insulin prices. Titled the Insulin Price Reduction Act, otherwise known as S.2199, the proposed legislation sponsored by Senators Tom Carper, D-Delaware; Jeanne Shaheen, D-New Hampshire; Susan Collins, R-Maine; and Kevin Cramer, R-North Dakota, seeks to hold payers, manufacturers, and pharmacy benefit managers accountable for insulin price increases.

According to Senator Carper’s press release, the bill would create a new insulin pricing model “where the use of rebates would be restricted for any insulin product for which the manufacturer reduces the list price back to a level no higher than the price of the product in 2006. For the most popular insulins, this would result in more than a [75%] decrease in prices compared to what we can expect to see in 2020. These rebate restrictions would apply in Medicare Part D and the private insurance market. Private insurance plans would also be required to waive the deductible for insulin products that met the list price reduction criteria. To keep these rebate exemptions and deductible waivers in future years, the manufacturer would have to limit any list price increase to no more than medical inflation.”

The bill does have support from industry stakeholders. This bill has been endorsed by the JDRF, the American Diabetes Association (ADA) and the Congressional Diabetes Caucus, and the need for insulin access is there. According to the ADA, “Between 2002 and 2013, the average price of insulin nearly tripled. For more than 7.4 million Americans, including all individuals with type 1 diabetes, insulin is a life-sustaining medication for which there is no substitute.”

While having stakeholder support is important, it is not the only factor that determines whether this bill advances. There are several bills in Congress proposing similar solutions to insulin pricing, on top of FDA’s interest in lowering insulin prices via the development of biosimilar and interchangeable insulin products. Not to mention the fact that the US Department of the Treasury has implemented guidance aimed at making chronic medication access easier for beneficiaries with High Deductible Health Plans that include Health Savings Accounts.

While the bill is bipartisan, it would help if more senators from both sides signed on to show broadening support. However, with the looming election season, it remains questionable whether both sides can agree on if the Insulin Price Reduction Act is the right vehicle to lower insulin prices.