Pharmaceutical Care Management Association response to New York Times article on biotech medicine costs

Apr 18 2008

The Pharmaceutical Care Management Association (PCMA) issued the following statement today regarding a story to be published in tomorrow's New York Times:

"The New York Times has missed another opportunity to explain the real reasons behind increased spending on biotech medications. In the April 14, 2008 piece, 'Co-payments Soar for Drugs with High Prices,' the Times blames employers and plan sponsors for the high cost of biotech treatments. Then, in a piece dated tomorrow, 'Paid to Control Costs, Yet Pushing Some Prices Higher,' the Times blames high prices on those who dispense biotech products and manage related care. Meanwhile, both articles strangely downplay the role of those who actually set prices: the biotech manufacturers. They also ignore the fact that spending has increased because more patients have access to these life-saving medicines than ever before.

"Below are four fundamental issues the Times has either neglected or ignored:

• First, the Times confuses those who price the biotech products (biotech manufacturers) with those who dispense them (specialty pharmacies). It's unfair to quote a source saying that benefit managers 'can raise prices at will' when manufacturers, not specialty pharmacies, set the prices for these products.
• Second, the article virtually ignores that a key reason for high biotech prices is a legal loophole that protects biotech manufacturers from generic competition. Unlike traditional pharmaceuticals, there is no clear regulatory pathway for the FDA to approve generic versions of biotech products. For years, specialty pharmacies and pharmacy benefit managers (PBMs) have been fighting for legislation to allow biogenerics and competition to bring down biotech prices.
• Third, the Times fails to report that more patients now have greater access to these products than ever before. That's good news, but it also costs more. Nearly 60 percent of the increase in spending on specialty biotech products last year was due to increased utilization, not price increases.
• Fourth, the article distorts the role of limited distribution networks, which only apply to less than 2 percent of biotech prescriptions, specifically for treatments used by very small patient populations. These small populations often require extremely specialized care, such as infusions administered by highly trained nurses. This care prevents side-effects, reduces product wastage, and monitors possible inappropriate utilization.

Traditional wholesaler and retail networks are simply not equipped to provide this specialized and targeted care. To imply that limited distribution networks are somehow the cause of higher prices is grossly misleading.

In fact, the FDA requires that certain drugs be limited to one pharmacy due to special circumstances surrounding the medications."

PCMA is the national association representing America's pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 210 million Americans with health coverage provided through Fortune 500 employers, health insurance plans, labor unions, and Medicare Part D.