Hawai'i-Pacific Chapter
A quarterly e-newsletter for the Hawai'i Pacific Chapter of ACHE Summer 2018 Vol. 2
In This Issue
Messages from Chapter Leadership
Message from the Regent
Message from the Chapter President
Diversity within ACHE
Articles of Interest
Essential Leaders Skills: Critical Thinking
Drug Pricing: Transparency, Affordability and Access...Who will lead the charge?
Calendars and Recent Events
2018 Congress on Healthcare Leadership
Calendar of Events
Calendar of Educational Events
News & Committee Updates
News from the Education Committee
News from the Guam Committee
Updates for Students
Postgraduate Fellowship Spotlight: Kaiser Permanente
Membership Report: New Fellows, Members, and Recertified Fellows
ACHE Resources
ACHE National News
Career Corner
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As a leader in healthcare, what issue concerns you the most?
Physician burnout
Value-Based Care and Payment Transformation
Rising costs of prescription drugs
Opioid epidemic
Access to behavioral and mental health services


Gidget Ruscetta, FACHE

Micah Ewing, MBA, FACHE

Nick Hughey, RN, MBA, FACHE 

Chuck Tanner, FACHE

Suzie So-Miyahira

Emiline LaWall, MA

Kecia Kelly, FACHE


Josh Carpenter | Education

Sally Belles | Communications

Bobbie Ornellas, FACHE | Diversity

Kecia Kelly | Membership, Nominating

Nick Hughey, FACHE | Sponsorship

Miguel Guevara | Audit


Travis Clegg

Andrew Giles

Nancy Hanna

Laura Bonilla

Ryan Sutherland

Delma Guevara

Angel Vargas


Denise Della

Articles of Interest
Drug Pricing: Transparency, Affordability and Access...Who will lead the charge?
Sally M Belles, MBA/HCM, RDN, CDE

Determining the cost and access to life changing drugs is multifarious and wrought with complexity.  Rising drug costs and bottlenecks in getting affordable drugs to market have consequences.  Chronically ill patients or those with potentially untreatable conditions are casualties of this larger issue.  Between 2002 and 2013, the cost of insulin in the U.S. nearly tripled with $15 billion spent on insulin annually to treat persons living with diabetes1.  During his testimony before the U.S. Senate Special Committee on Aging on May 8, 2018; Dr. William T. Cefalu, American Diabetes Association (ADA) Chief Scientific, Medical and Mission Officer fielded questions and shared findings of the ADA white paper, "Insulin Access and Affordability Working Group:  Conclusions and Recommendations" recently published in Diabetes Care V 41, Issue 6, June 2018.  Cefalu made mention of ADA's resolution calling on all entities in the supply chain to significantly increase transparency in pricing.  The resolution, unanimously passed in November of 2016, also made demands upon Congress to hold hearings with all entities involved to identify the causes for such dramatic price increases as insulin.  According to the ADA, over 30 million Americans live with diabetes, and approximately 25% of them require life-sustaining insulin, including 1.5 million persons diagnosed with type 1 diabetes2.  Since its discovery in 1921, insulin has saved countless lives and no alternative exists for those who require the drug.  

The Centers for Medicare and Medicaid Services (CMS) published a new Medicare Part D Drug Spending Dashboard & Data resource.  The CMS drug spending dashboard
(https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-on-Prescription-Drugs/MedicarePartD.html) is dated to 2016 and revealed $174 billion was spent on prescription drugs, approximately 23 % of the insurance program's budget.  This represents an increase from the $ 109 billion Medicare spent in 2012 representing 17% of its budget for such medications.  Patients and health care providers are increasingly aware and there is a demand for more transparency and accountability of drug costs.  Along with price list increases comes an increase in out of pocket costs.  The annual growth rate between 2012 and 2016 under Medicare Part D for Lantus (insulin glargine) and Januvia are 18.6% and 12.7% with average yearly spending per beneficiary of $2,514 and $2,822 respectively.  The CMS dashboard highlights 2016 sales of $2.53 billion for Lantus Solostar, making the drug one of the Part D program's highest expenses covering more than 1 million beneficiaries.  Because the dashboard focuses on price lists and does not integrate market forces or the role of pharmacy benefit managers (PBMs) in setting drug prices based on negotiated rebates some argue the dashboard data is inflated.  The dashboard is the result of the increasing pressure to make more drug pricing data available to the public and has potential to build on the development of market-based metrics.


Many specialty and chemotherapeutic drugs have a single manufacturer which significantly affects the cost of such drugs and negatively impacts access.  The CMS dashboard shows the total spending in 2016 of Velcade (Bortezomib) at $15 million and average yearly spending per beneficiary of $28,059.  [cost per dosage unit = $1,620.36].  This represents approximately 544 beneficiaries in need of targeted chemotherapy for the treatment of multiple myeloma and mantle cell lymphoma.  Revlimid, another drug used to treat multiple myeloma has no generic counterpart.  The current cost per beneficiary in 2016 was $75,200 and cost Medicare Part D nearly $3 billion.  The absence of a generic alternate for Revlimid resulted in a price hike of 40 percent since 2012.  Harvoni, a drug used in the treatment of Hepatitis C cost Medicare Part D $4 billion in 2016 with a $1,118.58 per dosage unit price tag.  The availability of specialty and experimental drugs such as those to treat certain types of cancer is of national concern which is why the US Food and Drug Administration (FDA) established its˜expanded access program" which allows the use of an investigational medical product outside the constraints of a clinical trial.  This is also termed "compassionate use3." In addition, house lawmakers voted 250 to 169 passing the "right-to-try" bill which was then signed into law by President Trump on May 30, 2018.  Proponents of the law argued that it may provide an alternative means for individuals to get access to experimental and potentially life-saving medications outside of a clinical trial.  Patients living with a terminal illness who cannot enroll in a clinical trial often run out of options during discussions with their health care provider.  Thus, "right-to-try" allows patients and their treating physician to work directly with drug companies to obtain such drugs.  The law indemnifies physicians and drug companies with the exception of "reckless or willful misconduct" or "gross negligence."  Yet the law is controversial and has been met with criticism including that of the American Cancer Society (ACS) and the American Society of Clinical Oncology (ASCO).  Those who opposed the legislation expressed safety and ethical concerns that the legislation removes vital patient safeguards in bypassing the FDA.  Many, including drug companies assert that investigational drugs are available through the FDA's expanded access program and that more than 99% of physician requests received by the FDA are eventually approved.  Whatever the case, disputes over the trade-offs between access to treatment and safety protections remain.

The FDA's Office of Generic Drugs (OGD) has a role to ensure development of and accessibility to generics.  Studies of samples test for quality, potency, purity and effectiveness in order to demonstrate bioequivalence of a generic drug to its branded counterpart.  To be "bioequivalent" means the generic drug must reach the specific part of the body where the drug is intended to work at the same time and equal amount.  The FDA requires and oversees a rigorous drug review process to ensure safe generics get to market.  In fact, 9 out of 10 prescription refills in the U.S. are for generic drugs.  The introduction of generics into the marketplace creates and encourages competition that supports fair pricing.  Affordable treatment in turn creates and expands access for patients.  In contrast, the alleged withholding of bioequivalence testing by drug companies results in soaring prices of branded drugs, costs Medicare and Medicaid billions each year, and burdens the health care system.  Broadening the manufacture of generic drugs increases product distribution, availability and competition; simultaneously lowering pricing albeit gradually.  FDA analysis of retail sales data for single-ingredient brand name and generic drug products sold in the U.S. from 1999 through 2004 reveals generic competition is associated with lower drug prices, with the entry of the second generic competitor being associated with the greatest price reduction4.

Although the attention of the U.S. Congress is divided between domestic and international priorities, health policy issues remain at the forefront for the current (WH) Administration.  The FDA, headed by FDA Commissioner Scott Gottlieb, is leading efforts to promote availability of testing samples to encourage generic competition.  In a press release on May 17, 2018, Gottlieb reiterated previous statements made by U.S. Secretary of Health and Human Services (HHS) Alex Azar that "no patients should be priced out of medicines they need to support their health."  In his statement, Gottlieb emphasized this as "one of the Administration's highest priorities."  Advancing health policies to improve new and generic drug competition and pave the way to make drugs more affordable and accessible requires innovation.  Political, economic, technological and regulatory influences can serve to help or hinder policy advancement.  The FDA is taking a multi-pronged approach and focusing on specific abuses when it comes to drug costs.  "One such abuse, says Gottlieb is a practice by brand companies to create obstacles for generic developers in purchasing samples of their brand drugs.  A generic drug developer needs 1,500 to 5,000 units of the brand drug to perform what are often relatively straightforward studies for FDA approval5."  Generic drug manufacturers are less able to develop generic alternatives without such testing samples.  In response, the FDA posted a list of companies identified as potentially blocking access to samples of their brand drugs.  Drug companies objecting to the list complain of the lack of both appropriate context and responses from companies represented on the list.  FDA's list is available here.  Meanwhile, Congress is reviewing the CREATES Act sponsored by Senator Patrick Leahy (D-VT) and co-sponsored by Senator Chuck Grassley (R-Iowa).  CREATES stands for "Creating and Restoring Equal Access to Equivalent Samples".  The legislation aims to promote competition and serve as a strong deterrent to drug companies that employ anticompetitive practices as a tactic to delay low-cost generics from getting to market.  The FDA has not commented publicly in support of CREATES although there appears to be evidence regarding such practices by drug makers6.

Perhaps in the future we will see voluntary price cuts for prescription drugs, more uniform formularies, or a significant overhaul in the supply chain.  Innovations and the potential disruption occurring outside of healthcare may very well influence the industry.  Recall January 30, 2018 when Amazon, Berkshire Hathaway, and JP Morgan announced their plans to start up an independent company with the overarching goal of reducing the burden the cost of healthcare places on the economy while improving outcomes for its 1.2 million employees and their families.  Offering healthcare services at lower, more affordable costs will involve more transparency, including drug pricing.  

In conclusion, soaring costs of prescription drugs including generics, current FDA initiatives, and increasing public awareness have all spurred the drive for more transparency and less restrictions.  Patients and their families are not in a position to negotiate for themselves.  Diverse groups have a stake in managing drug prices with some wielding more power and influence than others.  Pharmaceutical companies, pharmacy benefit managers (PBMs), insurers, employers, and government all have an important role to play in the process that ultimately affects drug prices.  

1.    Hua X, C. N. (2016). Expenditures and prices of antihyperglycemic medications in the United States. JAMA, 315: 1400-1402.
2.    Newsroom/press-releases. (2018, May 8). Retrieved from American Diabetes Association: http://www.diabetes.org/newsroom/press-releases/2018/insulin-affordability-white-paper-release.html
3.    Expanded Access. (2018, May 23). Retrieved from US Food & Drug Administration: https://www.fda.gov/NewsEvents/PublicHealthFocus/ExpandedAccessCompassionateUse/default.htm
4.    About the Center for Drug Evaluation and Research. (2018, May 29). Retrieved from U.S. Food & Drug Administration: www.fda.gov
5.    FDA Press Announcements. (2018, May 17). Retrieved from U.S. Food & Drug Administration: www.fda.gov
6.    Lupkin, S. (2018, May 29). Pharmaceuticals. Retrieved from Kaiser Health News: https://khn.org/topics/pharmaceuticals/


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