Prime Therapeutics Releases Annual Drug Trend Insights Report

Annual spending on prescription drugs posts lowest increase ever recorded; rising acceptance of generic medications and flat usage rates offset effects of inflation


ST. PAUL, Minn., Aug. 13 /PRNewswire/ -- Prime Therapeutics, a thought
leader in pharmacy benefit management, today released its 2008 Drug Trend
Insights report which revealed that its 2007 prescription drug trend increased
by just 2.9 percent -- the lowest annual increase it ever recorded, and less
than half of what the company recorded in 2006.

Tim Dickman, Prime Therapeutics' president and CEO, said the biggest
factor in the low drug trend was the rising acceptance of generic medications,
which shifted the drug mix toward lower cost drugs and offset cost increases
due to inflation. Prime's generic drug utilization rose five percent during
2007, to 56.7 percent of total prescriptions filled.

"We're very encouraged with how we've been able to drive generic
utilization for our members and consumers because we know that the use of
generic medications is the most effective way to keep prescription drug
spending manageable," said Dickman. "A lack of blockbuster drugs in the
pharmaceutical development pipeline along with increasing acceptance of
generic drugs by consumers suggests that the low increase we saw during 2007
will be sustained for some time to come."

According to the U.S. Centers for Medicare and Medicaid Services, spending
on prescription drugs accounts for approximately ten percent of total health
care expenditures each year. As the most commonly accessed health benefit, the
sector provides unique opportunities to slow or reduce the rising costs of
health care, helping to keep coverage as affordable and accessible as
possible.


In addition to overall drug spending, the 2008 Drug Trend Insights found
that during 2007:


-- Prescription fill rates were relatively flat -- up just two percent
from 2006.

-- Cholesterol (lipid lowering) medications represented the largest drug
cost category (8.6 percent of total drug spending), followed by medications
for blood pressure management and depression.

-- Lifestyle drugs (contraceptives, smoking cessation medications, acne
treatments and other prescriptions pursued for reasons other than illness) saw
the greatest annual spending increase among all drug categories, at 24
percent.

-- The fastest growing per member per month (PMPM) drug spending was seen
for attention deficit hyperactivity disorder (ADHD), anticonvulsant (for
management of seizures) and respiratory disorder medications, respectively.

-- Specialty drugs (those drugs generally prescribed for people with
complex, ongoing medical conditions such as multiple sclerosis, hemophilia,
hepatitis and rheumatoid arthritis) accounted for 14.1 percent of drugs
prescribed, and an overall increase in spending over 2006 of 8.9 percent.


Most notable in the area of quality improvement, the report cited two
Prime studies that found a correlation between out-of-pocket costs and the
length of time members continue taking prescribed medications. Specific to
specialty drugs, where out-of-pocket costs can be extremely high under
traditional plan structures, Prime found that members facing a copay greater
than $250 were 4.6 times more likely to decline to fill the prescription. This
can result in decreased quality of life and lead to even more expensive
in-hospital costs. For this reason, Prime recommends that plans consider
including an out-of-pocket maximum on co-pays for specialty drugs.


Drug Trend Insights is Prime's annual report on the factors that influence
prescription drug spending, along with a review of its efforts to control cost
increases while improving health care quality. Prime publishes this report to
help clients better understand the role of pharmacy benefits within the larger
health care environment. Offering detailed data as well as insights on
industry trends, the report can be used as a tool to guide future pharmacy
benefit decisions.


For a copy of Prime Therapeutics 2008 Drug Trend Insights, visit
http://www.primetherapeutics.com.


Prime Therapeutics LLC is a pharmacy benefit management company dedicated
to providing innovative, clinically-based, cost-effective pharmacy solutions
for clients and members. Providing pharmacy benefit services nationwide to
approximately 14.6 million covered lives, its client base includes Blue Cross
and Blue Shield Plans, employer and union groups, and third party
administrators. Headquartered in St. Paul, Minnesota, Prime Therapeutics is
collectively owned by 10 Blue Cross and Blue Shield Plans, subsidiaries or
affiliates of those Plans. Learn more at http://www.primetherapeutics.com.



SOURCE Prime Therapeutics LLC



Copyright © 2008 PR Newswire. All rights reserved.

Kennedy urges tough tests for generic biologic drugs

By Diedtra Henderson, Globe Staff | March 7, 2007

WASHINGTON -- Federal regulators charged with approving generic versions of the world's most expensive drugs should follow the lead of their cautious European counterparts, according to Senator Edward M. Kennedy . In Europe, requirements for approval are tailored to the complexity of an experimental drug and can include clinical trials that cost millions for generic manufacturers to conduct.

Tomorrow, the Senate Health, Education, Labor and Pensions Committee, which Kennedy chairs, will hear opposing views about legislation that would give the Food and Drug Administration the ability to approve generic versions of biologic drugs. Name brand biologics, which are based on living organisms, help patients suffering from serious ailments but can cost thousands of dollars per month.

On average, each day the FDA approves one new generic version of a conventional drug that is the chemical equivalent of its branded counterpart and can cost 60 percent less.

But the FDA says it lacks the regulatory power to approve generic versions of expensive specialty drugs, such as insulin , human growth hormone , and biologic therapies that treat multiple sclerosis and anemia . One estimate, disputed by the biotechnology industry, suggests that generic competition for just those four classes of specialty drugs could save $71 billion over the next 10 years .

A bill cosponsored by New York Democratic senators Charles E. Schumer and Hillary Clinton , a member of the Health, Education, Labor and Pensions panel, would open the door for lower-cost generic biologics to enter the US market. Such business leaders as General Motors Corp. and Aetna Inc. , which face staggering increases in their healthcare spending due to specialty biologics, support the legislation.

"We have a responsibility to expand the horizons of medical science in every responsible way possible so people can live longer and fuller lives," Kennedy said yesterday in a statement. "Our goal in legislation should be to enable companies to invest in new medical breakthroughs while doing all we can to cut costs for patients and protect safety."

Following Europe's example would give generic manufacturers guidance about the type of analyses and clinical trials needed to gain FDA regulatory approval, according to a Kennedy staffer.

Kennedy's willingness to require generic-biologic manufacturers to conduct clinical trials is a stance endorsed by local biotech leaders, including Genzyme Corp. and Biogen Idec Inc. Both companies sell brand-name biologic drugs and could face competition from generic versions.

"The public safety is at stake. The public confidence is at stake. You can't force the issue. You have to do it carefully," said Henri Termeer , Genzyme chief executive.

Termeer expects US regulators ultimately will follow the European example, even if it slows approval times for generic biologics. "It's very carefully considered wording where every protein -- because every protein is different -- is considered by itself."

Tim Hunt , a Biogen Idec spokesman, is among those who argue that waiving clinical trial requirements for manufacturers of generic versions of biologics is "lowering the bar on drug safety. To achieve safety, you're probably going to need to run clinical trials," Hunt said.

Schumer and other congressional backers of the bill object to the biotechnology industry's criticism.

"Safety is not an issue here. It's a bogus issue brought by those who wish to prevent change," Schumer said last month when the bill was introduced in the House and Senate. "We can be very smart about how we do this. We want the science to take the lead."

Still, if the bill that passes both houses of Congress follows Europe's lead, it could add millions to the cost of developing generic biologics.

For instance, to satisfy European regulators reviewing its application to sell a generic version of an anemia treatment, Hospira Inc. was asked to conduct a number of analytical studies, preclinical studies, and clinical trials comparing its product to branded versions.

The approval requirements were "quite burdensome," said Terry Gerrard , president of TLG Consulting Inc. and a former FDA reviewer who handled biologic approvals.

Because generic drugs have narrower profit margins than branded versions, a shift toward costly clinical trials could have a chilling impact, said Jim Bianco , chief executive of Cell Therapeutics Inc. The Seattle company recently established a spin-off company, Aequus BioPharma Inc. , to develop a technology that could speed commercialization of generic biologics.
"If the hurdles are too high, even though the markets are attractive, then one looks at the whole time-value-money consideration for where else they make their investments," Bianco said.

Diedtra Henderson can be reached at dhenderson@globe.com.
© Copyright 2007 Globe Newspaper Company.

Generic biotechs may be on way

Lawmakers seek to force FDA to set up approval system

By Bruce Japsen
Tribune staff reporter
Published February 25, 2007

Drugs derived from living cells, hailed for saving lives but known for their huge costs, could face generic competition under legislation gaining momentum in the newly emboldened Democratic-controlled Congress.

Many of the biotechnology drugs, first created in the 1980s when technology cleared the way for genetic engineering on DNA, are only now beginning to face patent expirations.

But the U.S. Food and Drug Administration is currently not prepared to approve generic versions of these or other expensive biotechnology-derived medicines because there is no regulatory pathway to bring what the industry calls "biogenerics" or "biosimilars" to market.

The 1984 Hatch-Waxman law that established the structure to win FDA approval of generic drugs is based largely on products derived from chemicals, such as the antidepressant Prozac or the popular cholesterol pill Zocor. Both were once blockbusters for the companies that developed them. Generic versions of drugs are now saving patients and taxpayers $10 billion a year, according to congressional estimates.

And opening the door to generic biotech drugs would save even more. Some of the drugs, like the anti-anemia drug Epogen, can cost more than $10,000 a year per patient. Other biotech treatments for cancer, multiple sclerosis and rheumatoid arthritis can cost even more.

"What many don't realize is that there is still no competition for one of the fastest growing and most expensive categories of drugs: so-called biotech drugs," said Rep. Henry Waxman, an influential California Democrat who is pushing generics legislation designed to bring cheaper biotech drugs to market.

Epogen alone cost the Centers for Medicare & Medicaid Services about $2 billion in its 2005 fiscal year, making it one of the federal government's most expensive outlays for a pharmaceutical, government records show.

If an approval process is established, tens of thousands of kidney dialysis patients, their employers and taxpayers may be in position to get a price break on Epogen in about four years. That's when California-based biotech company Amgen Inc., which launched the expensive product in 1989, will begin losing patent protection for the drug, which it calls one of the world's "first biologically derived human therapeutics."

"The biotech drugs really were not on the radar when Hatch-Waxman was approved," said Theresa Gerrard, a former FDA official who is now a regulatory consultant to drugmakers. "These biotech drugs are not as rare as they once were. They are mainstream medicines."

The prospect of making a cheaper version of Epogen might normally have the generic drug industry salivating at the idea of providing consumers with a cheaper alternative for an array of medicines for treating everything from cancer to multiple sclerosis.

Even if they sell it for half of what Amgen does, generics-makers would reap large revenues and U.S. consumers would potentially save hundreds of millions of dollars annually.

Generic biotech medicines could save health plans and patients more than $70 billion over 10 years, according to a recent study published by Express Scripts, a pharmacy benefit firm that is pushing for legislation that would require the FDA to establish guidelines for testing and approving generic biotech drugs.

The existing process to approve chemically derived generics, which is streamlined from the process used to approve the initial brand name drug, does not require clinical trials that involve testing in patients, and the application process takes only a few months.

Bills gaining momentum in Congress would create a streamlined path for generic biotech medicines that its supporters say would make drugs derived from living sources more affordable.

One of the bills has bipartisan support from Sens. Hillary Rodham Clinton (D-N.Y.) and Susan Collins (R-Maine). In the House, Rep. Rahm Emanuel (D-Ill.) and Rep. Jo Ann Emerson (R-Mo.) are among those leading the charge for the bill. A bill was introduced by Democrats in the House last fall but died under Republican control of Congress.

"These drugs are often life-saving," said Waxman, whose name is on the landmark 1984 generic drug bill that he co-authored with Republican Sen. Orrin Hatch of Utah. "Unfortunately, they also frequently cost tens of thousands of dollars per year, even hundreds of thousands. And there is no pathway for approving low-cost competing versions of these drugs, even after patents have expired."

The biotechnology industry is fighting the bill, saying their drugs are made in a more complex manner and therefore need more rigorous scrutiny and testing.

Brand name biotech companies say their medicines are derived from humans, animals and other natural sources and are not as simple to make as drugs made from chemicals that speed through an abbreviated application process.

"The legislative discussion on biosimilars must be focused on patient safety, based on sound science including clinical evidence, and consider input provided by scientists, physicians, patients, academia and the industry as part of a transparent process," said Amgen spokeswoman Kelley Davenport, adding that ongoing innovation will likely make generics outdated anyway.

The most likely process to get approved, according to industry analysts, will be modeled, in part, on regulations in Europe that make generic companies test biotech drugs.

Testing of generic biotech drugs in Europe can last five years but varies from drug to drug, companies working through the European process say. By comparison, it can take brand name companies several times that amount of time to develop just one drug at costs of hundreds of millions of dollars.

Lake Forest-based Hospira Inc. is working with a German-based drugmaker, Stada Arzneimittel AG, to bring a generic version of Epogen to market and is hoping to get an approval in Europe by the end of this year.

"Without a pathway established in the U.S. for the FDA to approve generic biologics, patients will not be able to get access to affordable alternatives to proprietary biologics," said Tom Moore, Hospira's president of global pharmaceuticals.

"If the Amgens and other [biotech companies] were indeed the only people who could produce these drugs, then why did they invest in these elaborate patent estates in the first place," Moore said.

Drugmakers like Hospira are confident that Congress will eventually approve a law creating a pathway for generic biotech drugs to win approval, possibly this year. With that in mind Hospira has begun early development of a generic Epogen for the U.S. market.

It plans to test its generic version of Epogen in its laboratories and in patients so that its testing will be completed in time to submit an application for FDA approval once Amgen patents begin to expire, assuming Congress has passed a law.

Hospira said it is investing undisclosed amounts of money preparing for biotech drugs to come off patent. It would not say what it planned to charge for a generic of Epogen.

"Despite the fact that there is no generic regulatory pathway we have come to the conclusion that it is inevitable," Moore said. "We would not be doing this unless we could not bring value in the marketplace for the patient."

Other companies, too, that have an expertise in either injectable pharmaceuticals or generics are expected to look at the generic biotech business. These include Teva Pharmaceutical Industries and Barr Pharmaceuticals Inc., industry reports say.

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bjapsen@tribune.com


Copyright © 2007, Chicago Tribune

Congress looks to give FDA authority to approve biogenerics

US branded drugmakers have expressed concern about the possibility of new legislation that has been introduced by Congress that could give the Food and Drug Administration authority to approve generic versions of biologics.

'The Access to Life-Saving Medicine Act,' a bipartisan bill which is backed by a number of high-profile politicians including Hillary Clinton and Henry Waxman, would mean that the FDA would be able to decide, on a case-by-case basis what clinical trials a generics firm would have to do to win approval for biologics once their patents had expired.

Rep Waxman said the bill would "lead to healthy competition and long-term savings for patients and payers," adding that "no policy in this bill will undercut safety and effectiveness in the interest of saving money." The safety issue has been the branded pharmaceutical makers' biggest problem with the issue of generic versions of biologics and the big biotechnology firms like Amgen and Genentech have said that the treatments are highly complex and cannot be, in most cases, replicated without lengthy clinical trials.

However the cost issue is also a major factor. Express Scripts, one of the largest pharmacy benefit management companies in North America, which serves over 55 million patients, claimed that generic biotech medicines could save US plan sponsors and patients $71 billion over ten years, with $3.5 billion of the savings occurring in the first year.

It added that these medicines "treat chronic or complex illnesses that affect less than 3% of the general population," but they come with a significant price tag," as these patients account for 25%-30% of a company's overall pharmacy costs. Express Scripts added that said its projected savings figure assumes a 25% discount off the price of medicines in four categories of drugs - insulin for diabetes, erythropoietins for anaemia, growth hormones and treatments for multiple sclerosis.

Unsurprisingly, the USA's Generic Pharmaceutical Association (GPhA) expressed its "strong support" for the legislation and its chief executive Kathleen Jaeger who said "safety is and always will be our number one priority. That's why we support the approval pathway created in this legislation that gives the FDA the authority it needs to ensure safety, efficacy and timely access to affordable biogenerics."

The GPhA noted that the market for biopharmaceuticals "is growing at an astonishing rate," almost twice the rate of traditional medicines and accounting for approximately $30 billion in US sales, "yet in spite of this tremendous growth opportunity for these life-saving treatments, their high cost puts them out of reach for many Americans." It claims that treatment with Roche and Genentech's cancer drug Avastin (bevacizumab) costs $100,000 per year, while Genzyme's Cerezyme (imiglucerase), used to treat Gaucher disease, costs an average of $200,000 per year, and some patients are paying more than $500,000 a year.