Seth J. Baum, MD

In 2013 Dr. Tom Frieden, Director of the CDC, judiciously proclaimed that “even one preventable death is one too many.” Just three years later we are mired in debates concerning cost effectiveness of innovative medicines. We argue about not only the price of drugs, but also the monetized value of a human life. On August 16, 2016 Kazi et al published their analysis of the PCSK9 inhibitors in the prestigious Journal of the American Medical Association  (JAMA), declaring that these medications, the undisputed greatest advance in cholesterol management in 30 years, are not cost effective. How did we get here?

Examining three issues will enable us to unravel the complexities that make this conversation appear indecipherable: the cost of drugs; the valuation of not only medicines, but also human lives; and the previously sacrosanct patient doctor relationship. First though, let’s put this issue in proper context. Cognizant of the gravity of the PCSK9 inhibitor conundrum, the American Society for Preventive Cardiology convened a Town Hall meeting with leadership from the prestigious American College of Cardiology, American Association of Clinical Endocrinologists, National Lipid Association, and FH Foundation to examine these issues and ultimately recommend apposite solutions. Patients and other stakeholders were also invited to share their views. The event was so successful that it became the subject of CardiologyToday’s most widely read article in September 2016. A follow up solution-centered symposium was held at the American Heart Association meetings, on November 14, 2016.

Now let’s examine cost. To do so, we must grasp the non-obvious; drug prices we read about are not the prices that pharmaceutical companies actually charge for their drugs. Observe the PCSK9 inhibitors. Though Kazi and colleagues attributed a $14,350 per person per year price tag to these agents, in reality the cost is much lower. Pharmaceutical companies have negotiated a variety of lower-cost constructs when selling the medicines through Pharmacy Benefit Managers (PBMs). Some of these arrangements include value-based propositions. For example, in addition to realizing deep discounts, Cigna has negotiated rebates if the PCSK9 inhibitors fail to perform as predicted. Yet, in the JAMA paper, and essentially everywhere else, such discounts are hidden from the public eye. Revealing them would not fit the narrative of overpriced medicines and greedy pharmaceutical companies. But patients and doctors are not interested in narratives; we want facts.

Other groups such as The Institute for Clinical and Economic Review (ICER) also play a principal role in the cost benefit assessment. ICER predicted that the PCSK9 inhibitors would cost $7.2 billion dollars in their first year after FDA approval, yet the real price tag was $83 million, or 1.2% of ICER’s estimate. Sadly ICER’s gross overestimation of the projected cost of PCSK9 inhibitors likely contributed to their underuse and over-denial (up to 90% denial rate) by the insurance providers/PBMs. ICER is not alone in blocking patient access to such medications. Major medical organizations like the American College of Cardiology (ACC) attempt to guide physicians with Expert Opinion papers and formal Guidelines. Disturbingly though, their words are often used against the very patients they try to protect. For example, some insurance providers have already cited a July 2016 ACC expert opinion paper, written with the best of intentions, as a reason to deny PCSK9 inhibitors and other vital therapies. A single sentence taken out of context is all the PBMs need to make their case, no matter how frail their case may be.

When evaluating costs of prescription drugs, one must also recognize the financial burden attributable to the PBMs. These companies evolved from clerical aids in prescription management in the 1960s to become the monsters they are today. They now negotiate and control drug costs for nearly every American. Four large PBMs, Express Scripts, CVS Caremark, OptumRx, and Prime Therapeutics, have captured the lion’s share of the industry. Their combined annual revenues exceed $300 billion and each of their CEOs earns well over $10 million per year. These companies receive far more remuneration than do the pharmaceutical companies; yet, they provide no innovation, scientific growth, or observable value for the end consumer – the patient. And they fly well beneath the radar, often invisible to patients and doctors. When searching for cost savings we need to focus on PBMs rather than the pharmaceutical innovators who continuously fight to eradicate diseases such as Alzheimer’s, strokes, heart attacks, and cancers.

Value is another factor that must be better understood. How does one value a life? Such a valuation is necessary in order to create the medication cost effectiveness analyses used by ICER and others. Quality of Adjusted Life Years, or QALY is the current metric used by ICER and many others. Four assumptions are used to create this measure, each of which the European Commission Project finds unacceptably flawed. In fact, their recommendation is for all nations to abandon the use of QALYs in their cost benefit analyses. Even our very own Affordable Care Act disqualifies this metric from all health care policy decisions. Consider this though: Exploiting QALYS, Kazi et al found that the PCSK9 inhibitors would be cost effective if they were priced at $4,536 per patient per year. Aside from the fact that their calculations are wholly flawed – they assume lifelong use of the drug, which ignores future innovations; they assume a constant cost of the medicine, which fails to acknowledge future competition-driven price reductions; they underestimate the LDL-lowering capacity of the medicines, thereby minimizing their efficacy; they do not consider the long term social, economic, and emotional impact of hospitalizations for life-threatening ailments among not only patients, but their spouses and children as well; and they assume that every eligible patient will receive the medicine, a projection that is patently absurd – the notion that their conceded prevention of 4.6 million strokes, heart attacks, or cardiac deaths has value only at a lower price tag is reprehensible. We are talking about over 4 million lives. What happened to Dr. Frieden’s  2013 noble decree that “even one preventable death is one too many?”

Finally let’s examine the patient doctor relationship, the bedrock of high quality medicine. Our President’s Precision Medicine Initiative relies on doctors and patients working together to identify the path best suited for a given patient. Obama’s initiative hinges on the premise that every human being is unique, each requiring a special and distinct evaluation and resultant medical plan. In no way do any of the aforementioned cost benefit analyses fit into Obama’s construct. Additionally, whether it is the intricate 17 page document doctors must complete in a typically futile effort to get a PBM’s approval to use a PCSK9 inhibitor for their patients, or ‘step therapy’ – a system mandated by insurers in which patients must first fail cheaper medications in order to receive more costly ones – patients uniformly get short shrift. In truth, the solution is actually quite simple when it comes to the PCSK9 inhibitors (as well as other emerging novel therapies). Resurrect the patient doctor relationship. In 2015 the FDA approved these medicines for specific and well-defined indications. Why not let doctors prescribe these medications accordingly? Forget ICER; ignore the ACC expert opinion; abolish the PBM mandates. Let’s leave it to the patients and their doctors to follow the rules and use their collective intellects and expertise to determine what is best for them.