Report says drugmakers failing to give Medicaid adequate price data

Oct 4 2010

Several news outlets report on drug policy issues.

The New York Times: "Drug manufacturers often flout a federal law that requires them to provide the government with pricing data needed to calculate discounts on medications prescribed for poor people under Medicaid, federal investigators say in a new report. The information is not submitted at all, is filed late or is incomplete, the investigators said, and as a result Medicaid overpays for prescription drugs. The problem, they said, could become more significant under President Obama's new health care law, which increases the amount of the discounts and promises to add millions of people to the Medicaid rolls. In a new initiative intended to force compliance, Daniel R. Levinson, the inspector general at the Department of Health and Human Services, who led the investigation, said he would impose civil fines on drug manufacturers that fail to meet their price-reporting obligations. ...
Mr. Levinson said he found that more than three-fourths of drug manufacturers did not fully comply with the law requiring them to provide price data. They are supposed to file monthly and quarterly reports on what wholesalers paid them for drugs eventually sold to retail pharmacies. ..."

"Ann Leopold Kaplan, deputy general counsel of the Pharmaceutical Research and Manufacturers of America, a trade group, said drug companies 'take compliance issues very seriously.' But, she added, 'reporting of the average manufacturer price is very complex,' and the task has been made more difficult by many recent changes in laws (Pear, 10/2).

In a separate story, The New York Times reports that nursing homes and doctors say patients "have become unintended casualties in the war on drugs because of a new level of enforcement intended to prevent narcotics from getting into the wrong hands. About 1.4 million Americans live in nursing homes. The D.E.A. is investigating pharmacists in 'about five states' for dispensing the drugs to nursing homes without direct written orders from a doctor, said Gary L. Boggs, an executive assistant in the agency's Office of Diversion Control. Earlier this year, the Senate's Special Committee on Aging heard testimony from long-term-care professionals describing delays in delivering pain medications to patients. Two Democratic committee members, Senators Herb Kohl of Wisconsin and Sheldon Whitehouse of Rhode Island, have urged Attorney General Eric H. Holder Jr. to find a solution. 'We keep hearing the right things from the D.E.A. on this issue, but we haven't seen any action,' Mr. Kohl said through an aide. Mr. Boggs said the agency was just trying to protect patients" (Leland, 10/2).

The Wall Street Journal reports on a new effort being made to improve clinical trials for drugs. "The trial, called I-Spy 2, employs several innovative approaches to improve the notoriously slow and inefficient process of developing new cancer drugs. Using the latest advances in genetics, I-Spy 2 aims to match experimental drugs with the molecular makeup of tumors most likely to respond to them. And it tests multiple drugs at once, with the intent of getting the most effective ones into late-stage trials more quickly. The goal is to reverse a dismal record, in which 60% to 70% of late-stage cancer studies fail, and to dramatically reduce the time and cost required to get promising new drugs to the market. ... The study focuses on women with aggressive breast cancers that have not spread to other organs. It aims to collect information about experimental drugs that would then enable drug companies to design leaner, faster late-stage trials that enroll only patients whose tumors had a high probability of responding to the treatment" (Winslow, 10/2).