October 30, 2014—Hospital groups are protesting Genentech’s decision to make them buy three very expensive and much-used cancer drugs exclusively through specialty distributors, saying the change is raising their costs and potentially compromising patient care without enhancing patient safety or supply-chain security. [ms-protect-content id=”2799″]
State Medicaid directors, meanwhile, have told leading members of Congress there’s “a strong case” to be made for direct federal price controls on Sovaldi and other ultra-high-cost specialty medications soon coming to market.
Genentech’s transfer of Avastin, Rituxan, and Herceptin into specialty distribution this month and the continuing controversy over Sovaldi, the $1,000-per-pill hepatitis C treatment, have drawn yet more attention to the boom in specialty drugs and their role in driving up health care costs.
In mid-October, Safety Net Hospitals for Pharmaceutical Access sent a letter to Genentech asking it “to immediately rescind” its movement of Avastin, Rituxan, and Herceptin into the specialty drug category. SNHPA represents more than 1,000 hospitals in the 340B drug discount program.
“This change will not, to our knowledge, make patients any safer and, in fact, could cause delays in their care,” SNHPA said. “It also will significantly increase safety-net hospitals’ costs.”
Six other hospital groups made similar points in a joint letter to Genentech this week. The letter came from: America’s Essential Hospitals, American Hospital Association, Association of American Medical Colleges, Catholic Health Association, Children’s Hospital Association, and Federation of American Hospitals.
Genentech’s move “will add unnecessary costs to the delivery system and produce supply disruptions by requiring complicated new delivery procedures,” they wrote. “It will have a major impact on access to care and will ultimately result in higher costs for cancer patients.”
A Genentech executive told Time magazine this week, “We do believe this is the best distribution model for these medicines,” adding, “we understand that there may be a business impact on hospitals.”
Also this week, the National Association of Medicaid Directors wrote to the chairs and ranking members of four congressional committees about their deep concerns with the high cost of new hepatitis C drugs.
“Simply put, the federal Medicaid statute is not designed to allow states to respond to” expensive new drugs like Sovaldi, the group wrote. “As more of the specialty drugs that are brought to market adopt this same pricing rationale, new thinking and approaches are required to safeguard the financial integrity of state Medicaid programs and ensure low-income patients are able to access appropriate medical innovations.”
One possible solution is for Congress to “exert downward pricing on Sovaldi and similarly priced specialty drugs targeting large patient populations,” NAMD suggested. “While we recognize that direct price controls would be a politically volatile topic which could be expected to encounter substantial pushback, a strong case can be made for the unique circumstances of hepatitis C in particular.”
Another option, NAMD said, would be for the federal government to purchase all available supply, with subsequent discounted distribution to the states. [/ms-protect-content]