We’ve reported several times on the disparity of specialty drug pricing based on where the drugs are administered. None of our readers would be surprised that significant pricing disparity continues in the marketplace and that pricing, in declining order, is most costly at hospitals, then physician practices and finally at specialty pharmacies.

None the less, it is good to keep tabs on exactly how broad the disparity is today. A new survey released by AHIP has updated stats on a basket of ten leading specialty therapies that include the following….. Darzalex, Keytruda, Lucentis, Ocrevus, Opdivo, Orencia, Prolia, Remicade, Rituxan, and Tecentriq. 

Key findings:

• On average, physician offices marked up drug prices over the price charged by a specialty pharmacy by $1,559 (+23%) and hospitals applied a markup of $8,278 (+118%). 
• The percentage of markup varied a lot on a drug by drug basis but in all cases hospitals charged the most followed by physician practices. 

It should not be a surprise that the American Hospital Association (AHA) would fire back questioning the accuracy of the article and the study as “fraught with half-truths and methodological flaws.” Yet, the AHA response pivoted saying, “High and rising drugs prices, as well as unaffordable cost-sharing requirements imposed by health plans, put considerable strain on patients and hospital resources. These resources hospitals need to deliver a wide range of high-acuity services that only they can provide, as well as to continue serving as the only site of care that treats all patients regardless of ability to pay,” the association said. 

What the AHA is really saying is that they can push their cost of operation onto patients who, increasingly, are now paying huge $$$s through deductibles and coinsurance for hospital administered and dispensed drugs.

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How Specialty Pharmacies Compare to Provider, Hospital on Drug Pricing

Drug pricing is a major concern among employers and insurers, but research has highlighted a possible price control mechanism.

April 17, 2023 – AHIP released updated data on drug pricing increases, comparing hospital costs and the prices that physician offices pay compared to specialty pharmacies.

The payer organization analyzed price increases for the ten drugs that are frequently delivered through specialty pharmacies. Data for these 10 drugs came from the Merative MarketScan Commercial Database. The data reflect hospital, physician office, and specialty pharmacy prices from the start of January 2019 through the end of December 2021.

The ten drugs that the payer organization assessed were Darzalex, Keytruda, Lucentis, Ocrevus, Opdivo, Orencia, Prolia, Remicade, Rituxan, and Tecentriq.

The study found that drugs were less costly for patients when payers leveraged a specialty pharmacy. On average, physician offices marked up drug prices by $1,559 and hospitals applied a markup of $8,278.

“Specialty pharmacies lower a patient’s health care costs by preventing hospitals and physicians from charging exorbitant fees to buy and store specialty medicines themselves,” the study explained. “Secure, direct delivery is more efficient and effective and reduces health care costs.”

In a hospital setting, the cost of drugs was, on average, around $8,200 higher than it would be if the drugs were obtained through a specialty pharmacy. Hospitals charged 118 percent more than specialty pharmacies for the same drugs.

The difference in physician offices was not as stark but remained significant. In physician offices, the same drug could cost $1,500 more than it would through a specialty pharmacy. Drug prices in physician offices were 23 percent more than specialty pharmacies’ prices.

Prolia, a treatment for osteoporosis, saw the most dramatic price difference when comparing physician office and hospital drug prices to specialty pharmacy drug prices. In the hospital setting, the price of Prolia was 212 percent of the cost through a specialty pharmacy or $2,795 more. The drug price was 49 percent higher than specialty pharmacies in the physician office setting or $651 more.

The hospital price was closest to the specialty pharmacy price for the drug Ocrevus, a therapy for multiple sclerosis. But even in this case, the hospital price was 65 percent higher than the specialty pharmacy alternative and the markup was worth $22,078, which is more than any of the other markups.

Among physician offices, the price difference was smallest for Remicade, which treats Crohn’s Disease and psoriasis, and Rituxan, which treats rheumatoid arthritis. Physician offices priced these drugs six percent higher than specialty pharmacies. Nevertheless, the small markups were still worth hundreds of dollars. Physician offices marked up Remicade by $277 on average and Rituxan by $579.

“Specialty pharmacies improve health care affordability while protecting patient safety. AHIP encourages lawmakers to support the use of specialty pharmacies, and to reject policies that take away lower-cost choices from patients,” the study concluded.

Payers have turned increasingly to specialty pharmacies to control rising drug costs. In November 2022, Elevance Health announced plans to acquire a specialty pharmacy that would focus on chronic disease management.

Employer groups have recommended that employers leverage specialty pharmacies to break into biosimilar adoption. At the beginning of 2023, experts anticipated that this strategy would take root.

By Kelsey Waddill, Health Payer Intelligence

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AHIP, AHA point fingers on cost of specialty drugs

Rylee Wilson

Insurer groups say hospitals are to blame for higher costs of specialty drugs, while hospitals say the problem stems from drug manufacturers and pharmaceutical benefit managers. 

In a report published April 17, AHIP found the average cost per treatment was nearly $8,300 higher for physicians-administered drugs purchased in hospitals than for drugs obtained through specialty pharmacies. 

AHIP’s report compared prices for the 10 physician-administered drugs that accounted for the most Medicare spending in 2020. 

“Health insurance providers are developing innovative solutions every day to make prescription drugs more accessible and affordable, and specialty pharmacies have a big role to play,” AHIP President Matt Eyles said in a April 17 news release. “They represent a safe alternative to hospital and physician purchased drugs that can boost access and affordability for all Americans.”

Specialty pharmacies handle drugs for rare or chronic conditions not stocked in retail pharmacies. These medications often have high prices. 

PBMs often operate their own specialty pharmacies. 

In an April 25 blog post, the American Hospital Association said AHIP’s report is “fraught with half-truths and methodological flaws.”

In the post, the association said AHIP’s report does not take into account safety issues that can arise from “brown-bagging” or “white-bagging” drugs, where patients receive medications from a specialty pharmacy and must bring them to their physician to be administered. 

The AHA also criticized AHIP’s methodology, writing that AHIP drew “sweeping conclusions” from a review of just 10 drugs. 

The blame for high prices rests with drug manufacturers, not hospitals, according to the AHA. 

“High and rising drugs prices, as well as unaffordable cost-sharing requirements imposed by health plans, put considerable strain on patients and hospital resources. These resources hospitals need to deliver a wide range of high-acuity services that only they can provide, as well as to continue serving as the only site of care that treats all patients regardless of ability to pay,” the association said in the blog. 

“Neither health insurers, nor their PBM and specialty pharmacy affiliates, have any such obligation to their communities,” the AHA added.

The FDA recently approved a new gene therapy, Omisirge (omidubicel-onlv) from Gamida Cell Ltd., for use in adult and pediatric patients (12 years and older) with hematologic malignancies who are planned for umbilical cord blood transplantation following myeloablative conditioning to reduce the time to neutrophil recovery and the incidence of infection. 

Approval was granted with a Boxed Warning for fatal or life-threatening infusion reactions, graft versus host disease (GvHD), engraftment syndrome and graft. Such adverse reactions are similar to other approved unmanipulated cord blood (UCB) products.

The recommended course of therapy for Omisirge is a single dose for infusion provided by the manufacturer as 2 separate components (CF and NF). Omisirge CF and Omisirge NF are infused one after the other once the patient has received an appropriate conditioning regimen. Each Omisirge unit is specific to each patient. 

The company indicated that Omisirge will be available in the United States to transplant centers for appropriate patients.  Gamida Cell did not offer details as to distribution logistics.

CLICK HERE for prescribing information

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FDA approves Omisirge to reduce time to neutrophil recovery and infection in patients with hematologic malignancies

On April 17, 2023, the Food and Drug Administration approved omidubicel-onlv (Omisirge, Gamida Cell Ltd.) for use in adult and pediatric patients (12 years and older) with hematologic malignancies who are planned for umbilical cord blood transplantation following myeloablative conditioning to reduce the time to neutrophil recovery and the incidence of infection.

Safety and efficacy were evaluated in Study P0501 (NCT02730299), an open-label, multicenter, randomized trial of omidubicel-onlv transplantation or unmanipulated cord blood (UCB) unit transplantation following myeloablative conditioning in patients with hematologic malignancies. In total, 125 patients were randomized–62 patients to receive omidubicel-onlv and 63 to the UCB group. Fifty-two patients were transplanted with omidubicel-onlv receiving a median CD34+ cell dose of 9.0 X 106 cells/kg (range 2.1 – 47.6 X 106 cells/kg). Fifty-six patients were transplanted in the UCB arm with one or two cord units (66% received two cord units). In the 42 patients with reported post-thaw cell dose, the median CD34+ cell dose was 0.2 X 106 cells/kg (range 0.0 – 0.8 X 106 cells/kg). Multiple conditioning regimens were used, including Total Body Irradiation-based or chemotherapy-based options.

The main efficacy outcome measures were time to neutrophil recovery following transplantation and the incidence of Blood and Marrow Transplant Clinical Trials Network (BMT CTN) Grade 2/3 bacterial or Grade 3 fungal infections through Day 100 post transplantation. The median time to neutrophil recovery was 12 days for those receiving omidubicel-onlv (95% CI: 10-15 days) and 22 days in the UCB arm (95% CI: 19-25 days). Eighty-seven percent in the omidubicel-onlv arm and 83% percent in the UCB arm achieved neutrophil recovery. The incidence of BMT CTN Grade 2/3 bacterial or Grade 3 fungal infections through Day 100 post transplantation was 39% and 60%, respectively, in the two groups.

Among 117 patients who received omidubicel-onlv for any disease, infusion reactions occurred in 47% of patients, acute GVHD in 58%, chronic GvHD in 35%, and graft failure in 3%.

In patients with hematologic malignancies in Study P0501, the most common Grade 3-5 adverse reactions were pain (33%), mucosal inflammation (31%), hypertension (25%), and gastrointestinal toxicity (19%).

The recommended omidubicel-onlv dose is two sequential infusions consisting of:

a Cultured Fraction: a minimum of 8.0 × 108 total viable cells with a minimum of 8.7 percent CD34+ cells and a minimum of 9.2 × 107 total CD34+ cells, followed by

a Non-cultured Fraction: a minimum of 4.0 × 108 total viable cells with a minimum of 2.4 × 107 CD3+ cells.

This application was granted priority review, breakthrough designation and orphan drug designation. FDA expedited programs are described in the Guidance for Industry: Expedited Programs for Serious Conditions-Drugs and Biologics.

What do ‘ya get from a DNA modified pig?

…………. wait for it………………..

           ………….wait for it………………..

…………………..CRISPR BACON! 😊

DNA modification is about to trigger a tsunami level change in the pharmaceutical world. New products are already marching towards approval and, with proof of concept, the wave will predictably build rapidly.

Specialty pharmacy is in the bullseye for CRISPR sequenced therapies since  many of the therapies under the SP umbrella target genetic illnesses. Early research using CRISPR based technology has focused on hematologic conditions that are currently served by specialty pharmacies with drugs that only treat symptoms.

Will specialty pharmacies have a role in the emerging CRISPR world? Maybe.

These next-gen, DNA modified therapies will logistically resemble recently approved last-gen gene therapies. Current gene therapies are uber expensive and require hand holding throughout the patient journey. Hence, the arrival of the rare disease pharmacy.

But the new therapies won’t necessarily be limited to ultra-rare orphan conditions. If the therapies are highly efficacious, i.e., cures,  then the need for dispensing may disappear completely and the pharmacy relationship would transition to distribution (to the physician / hospital), patient monitoring and data capture. With fewer and fewer patients requiring treatment over time, the need for multiple dispensing specialty pharmacies would likely diminish as well. So, the role of the specialty pharmacy industry as we know it may be tenuous.

Read the interview below for some great insights into the next generation of pharmacy.

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Has the CRISPR revolution arrived yet?

A decade after scientists developed the ability to edit DNA using the CRISPR sequence, the first drugs using the technique are approaching the market, with the potential to transform the lives of people with certain genetic illnesses. But questions of ethics, access, and pricing remain. We talked with Dr. Greg Licholai, a biotech entrepreneur and a lecturer at Yale SOM, about the state of the technology.

Q: What is the state of CRISPR right now?

There have been a lot of developments. We’re on the verge of having the first CRISPR-based drugs approved, and there’s a whole pipeline of new therapies on the way. A Noble Prize has been awarded and patent battles between Berkeley and MIT have been settled. Also, there’s been a major controversy in terms of human experiments and ethical transgressions resulting in a scientist going to jail for experimenting on human embryos. So it’s been pretty dramatic and it continues to be.

Q: We last spoke about CRISPR in 2018 . Has the amount of change in the last five years been what you expected? Has it been in the direction you expected?

It’s about on pace to get from lab experiments to being on the verge of getting a drug approved—that’s a pretty good timing. The pipeline is clustered around hematologic disorders, so perhaps I might have expected there to be more progress in other diseases, but it’s about on pace.

Q: How far are we from having CRISPR-based drugs in the pharmacy or in a doctor’s toolkit?

It’s very exciting. We’re very close.

The drugs that are nearest for approval are being co-developed by Vertex Pharmaceuticals and CRISPR Therapeutics, and they’ve collaborated on a product called Exa-cel, which is for sickle cell anemia and beta thalassemia, two blood disorders. They presented the results at the end of last year at major hematology conferences, and they’re planning to submit the BLA, which is the licensing application to the FDA this year. It takes about nine months or a year to go through the process, so we could see the first therapeutic approved at the end of this calendar year.

Q: What kind of impact would you expect for someone with sickle cell anemia? Is this an incremental change? Is this a big change?

It would be a huge, sweeping, revolutionary change, with the potential of giving a single dose of a drug and changing the way these patients produce their own blood cells so that they’d be potentially cured of the disease.

It would have the effect of doing a bone marrow transplant, which is done in cancer centers, and is high risk and very difficult for patients. CRISPR would be much easier and better tolerated. With CRISPR doctors take blood cells, use CRISPR technology to alter the defective genes, and the reinfuse the new and improved cells, which go on to produce healthy red blood cells in the patient. In sickle cell anemia, patients have a pain crisis because the cells have a problem with their morphology. Beta thalassemia is a type of anemia, and similarly, the red blood cells have a genetic problem with their ability to carry hemoglobin. The preliminary data from 31 patients suggests that a course of treatment may cure the disease. So it’s a very dramatic improvement.

Q: What do you foresee as the accessibility of these kinds of therapies? Are the prices extremely high? Will insurance cover them? Will there be economic or racial disparities in access?

The science has progressed. However, what’s lagged are the regulatory standards and any conclusions about pricing as well as improved access to novel therapies. There just hasn’t been guidance established yet. So we’ll have to wait to see about that.

The pricing question could be dramatic. Previously approved gene therapies are incredibly expensive, over $1 million, sometimes close to $3 million. This is because the argument from the pharmaceutical manufacturer is that typically drugs need to be given repeatedly, so they expect long-term sales. But with the ability to give a single dose and cure a patient, companies say they’ll never recoup their R&D investment, especially in rare diseases.

So their argument is essentially, “Look, the system would be paying more over the life of the patient. We’re just bringing the payment upfront.” Because these drugs have not been approved yet, we don’t know what pricing assumptions that the companies will make, but I’m sure they’re struggling with those questions right now.

On the regulatory front, that’s another unknown because every time a new class of biology goes to the FDA, they have to determine the best way to study safety and effectiveness. A single dose drug that affects somebody’s entire life raises questions about the appropriate timeline to monitor safety events. It also raises important questions about potential effects for not just this individual, but perhaps their children. So how long do you monitor before you say, “OK, the safety portion of the trial has been concluded and we feel comfortable with that”? Those decisions have yet to be codified as standards..

Q: You mentioned that the focus has been in the hematological area. Are there other diseases that theoretically could be addressed in the same way but are further back in the pipeline?

There’s another rare disease called A-1AT, which is Alpha-1 antitrypsin deficiency. That’s in early stage development. It’s a combination pulmonary and liver disease. There’s another one in development for a rare condition called hereditary angioedema, plus some others that are earlier in the pipeline.

The critical issue is getting enough of the CRISPR drug into the cells that need to be altered so that you can have the beneficial effect for the patient. For some of these, like A-1AT, you’d want to be targeting the liver, and it’s a little bit easier to give an infusion since drugs go straight to the liver and they get distributed appropriately. But when other organs are involved, that would be a lot more challenging to get a wide distribution of a CRISPR drug, or a gene therapy or even regular drugs. For instance, getting into the brain and getting broad distribution of a complicated drug like this would be challenging.

Q: Five years ago, we talked about the possibility of making a genetic change to avoid a disease entirely when someone is still an embryo. Is that still a possibility?

There have been genetic animals produced using CRISPR through that method. There have been CRISPR modified pigs and even cows. By far the most frequent use of CRISPR right now is to produce genetically modified mice for lab experiments. In the past, this was a time-consuming thing where researchers would have to create a “knockout mouse”—they would try to insert a gene into the mouse’s genome—and it was very hit or miss. Now it’s become almost routine to produce these genetically altered CRISPR mice for research purposes.

So we know it’s theoretically possible to do all this in mammals. There’s famous, highly controversial and unethical work that was done by a researcher in China, who altered the embryos of human babies in order to prevent them from acquiring HIV from a parent. When that researcher announced results, there was global backlash, including from China, the scientist’s home. He was sentenced to three years in jail. I believe they reacted appropriately by condemning that use of human embryos. There continues to be a moratorium on human experimentation.

Q: What about using gene editing on animals to prevent the spread of animal-borne diseases?

It continues to be possible, but there remains to be a lot of caution about doing that, which is appropriate. The big concern is that altering an animal’s genes may change their reproductive cells, leading to new genetic lines with mutations that may be introduced into the population and have unknown consequences. That’s possibly the biggest long-term concern.

Q: You mentioned a few risks and ethical concerns. Would you talk about risks in general and where the balance is in terms of risk and benefit at this point?

The biggest risk is that the CRISPR edits cause a germline mutation, which is the reproductive cell mutation, and those altered genes are get transferred to offspring and an entire population with unknown consequences. There’s an absolute moratorium on doing that in human beings. So that is currently a theoretical risk, and I do trust researchers and drug companies to honor those boundaries.

However, there’s a theoretical possibility that infusing CRISPR-altered cells as stem cells could have other unknown consequences, perhaps germline, perhaps other things. There’s only a small possibility that it’ll happen, but it should be monitored. There is also the possibility that the genetic benefits will not last the expected duration or patients’ lifespans. So patients will have to be monitored to be confident that lifelong benefit are achieved as well as avoiding risks.

Q: What are the other open questions being discussed in and around CRISPR?

I think the biggest question is around the business model and whether society will accept extremely expensive single-dose drugs for rare conditions, and whether payers or governments will pay. Ultimately, if there’s a contraction in the willingness to pay for these types of novel, very expensive therapies, it’ll be difficult for biotech companies to be funded. But it’s a business risk that probably the biggest pharmaceutical companies are going to be cautious about entering into until they see economic validation plus scientific proof of concept.

Provided by Yale University by Ben Mattison, Yale University

Credit: CC0 Public Domain

This week the FDA approved a new therapy, Qalsody (tofersen) from Biogen MA, Inc., for the treatment of amyotrophic lateral sclerosis (ALS) in adults who have a mutation in the superoxide dismutase 1 (SOD1) gene. Continued approval for this indication is contingent upon providing more data on the drug’s effectiveness and clinical benefit in confirmatory, post-launch trial(s).

Qalsody is the first available treatment targeting a genetic cause of the disease. Approval is based on trial data that showed it reduced levels of neurofilament protein, an indicator of nerve cell degeneration believed to be tied with disease progression. 

According to the CDC, between 16,000 and 32,000 Americans are currently living with ALS. Approximately 2% of ALS cases are associated with mutations in the SOD1 gene. The agency estimates there are fewer than 500 patients with SOD1-ALS in the United States.

Qalsody is administered by intrathecal injection by a trained health care provider. Patients receive three initial doses administered at 14-day intervals, followed by a maintenance dose every 28 days.

Biogen confirmed that it expects to launch Qalsody on par with other ALS therapies on the market. Relyvrio, approved for ALS in 2022, costs about $158,000 annually, while older Radicava costs about $170,000 annually.

Qalsody is likely to launch through specialty pharmacy distribution given its cost, very small patient population and requirements to capture real-time clinical data.

CLICK HERE for prescribing information

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FDA approves treatment of amyotrophic lateral sclerosis associated with a mutation in the SOD1 gene

04/25/2023 — FDA approved Qalsody (tofersen) to treat patients with amyotrophic lateral sclerosis (ALS) associated with a mutation in the superoxide dismutase 1 (SOD1) gene (SOD1-ALS). Qalsody is an antisense oligonucleotide that targets SOD1 mRNA to reduce the synthesis of SOD1 protein. The approval was based on a reduction in plasma neurofilament light (NfL), a blood-based biomarker of axonal (nerve) injury and neurodegeneration. 

Disease or Condition

Similar to sporadic ALS, where there are no associated risk factors and no family history of the disease, SOD1-ALS is a progressive neurodegenerative disease that attacks and kills the nerve cells that control voluntary muscles. Voluntary muscles produce movements such as chewing, walking, breathing, and talking. ALS causes the nerves to lose the ability to activate specific muscles, which causes the muscles to become weak and leads to paralysis.

Effectiveness

The effectiveness of Qalsody was evaluated in a 28-week, randomized, double-blind, placebo-controlled clinical study in 147 patients with weakness attributable to ALS and a SOD-1 mutation confirmed by a central laboratory. The study randomly assigned 108 patients in a 2:1 ratio to receive treatment with either Qalsody 100 mg (n = 72) or placebo (n = 36) for 24 weeks (three loading doses followed by five maintenance doses).

The participants were approximately 43% female; 57% male; 64% White; and 8% Asian. The average age was 49.8 years (range from 23 to 78 years).

Patients receiving Qalsody had nominally significant reductions in plasma NfL concentration at Week 28 compared to the placebo arm. The findings are reasonably likely to predict a clinical benefit in patients. The observed reduction in NfL was consistent across all subgroups based on sex, disease duration since symptom onset, site of onset, and use of other medications for ALS treatment.

Qalsody is approved under the accelerated approval pathway, under which FDA may approve drugs for serious conditions where there is an unmet medical need and a drug is shown to have an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit to patients. To confirm the clinical benefit of Qalsody, a Phase 3 randomized, double-blind, placebo-controlled trial is ongoing in individuals who are carriers of the SOD1 genetic mutation who do not yet have symptoms. The study will assess the proportion of individuals treated with Qalsody who develop symptoms of ALS during the trial compared to placebo. 

Safety Information

The most common side effects were pain, fatigue, arthralgia (joint pain), increased cerebrospinal (brain and spinal cord) fluid white blood cells, and myalgia (muscle pain).

Designations

Qalsody received priority review, orphan drug and fast track drug designations.

Most would agree that the US has been a litigious-heavy country for decades. As we know, healthcare is one of the biggest targets for lawsuits of every complexion. And under the healthcare umbrella, pharmacy follows physicians and hospitals as a major target for litigation.

We’ve seen lots of lawsuits filed by patients claiming harm following a refill with a generic drug switched at the pharmacy from their beloved brand name product. However, the article below details the case of a patient claiming harm when their generic drug was dispensed by the same generic drug….. but from a different manufacturer. Who’d a expect that?

One reason that we are covering this lawsuit in today’s Report is that the pharmacist and even the pharmacy technician were named in the suit. The pharmacist and technician were eventually released from the suit but experienced the hassle and expense of mounting a defense. Also not good PR in the media.

Specialty pharmacies should always be on the watch for potential litigation. The case below is a learning experience for SP management and should be shared with pharmacy legal counsel.

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Patient Files Negligence Suit After Receiving a Different Generic Version

Apr 24, 2023

Individual alleges that an equivalent product from another manufacturer precipitated series of seizures.

Issue of the Case

A patient who presented a prescription for dispensing received an equivalent product from a different manufacturer and alleged that a series of seizures resulted from the change. Will she prevail in her negligence lawsuit against the pharmacy?

Facts of the Case

The patient had been taking the antiseizure medication levetiracetam for 10 years, always receiving it in a form described as yellowish white. She presented a new prescription at a chain pharmacy and received a pink version of the medication. She asked the pharmacist whether this new version would be safe to use; he told her it would.

After starting to use the new version, the patient experienced 3 seizures, which led to her being admitted to the hospital. This was cause for concern, because she had been using the yellowish-white version for 10 years and had not had a seizure for 7 years.

She filed a lawsuit against the pharmacy, the pharmacist, and the pharmacy technician involved in dispensing the medication. The patient subsequently added the manufacturer of the pink dosage form as a defendant.

The patient’s attorney advanced several legal theories as the basis for liability and made submissions to the state trial court that had jurisdiction. A total of 4 amended complaints were submitted on behalf of the patient as the matter progressed. As is sometimes appropriate, a complaint would be submitted and rejected by the court but with authorization to revise it and resubmit. Through this process, the pharmacist and technician were deleted as defendants, but the matter was decided as amended against the pharmacy chain and the manufacturer.

The trial court judge received a motion from the attorneys for the defendants to dismiss the lawsuit and reviewed the legal arguments and theories advanced by the attorneys for the patient. All arguments were rejected and the lawsuit was dismissed. The plaintiff appealed to the state’s appellate court.

The Ruling

The appellate court reviewed the various arguments of the plaintiff and the lower court judge’s decisions. All decisions were affirmed on appeal. The matter was dismissed.

The Court’s Reasoning

The negligence claim advanced by the plaintiff argued that the pharmacy had a legal duty to dispense the medication without a change in source, as well as to warn of potential dangers associated with the version dispensed. The pharmacy chain responded that the prescription was issued using generic product identification and that the various expectations found in the state’s drug product selection statute, which were the basis for the plaintiff’s arguments, did not apply. Moreover, the chain argued that any duty to warn of danger associated with the medication rested with the prescriber under the learned intermediary doctrine. The appellate court agreed with the pharmacy chain.

Next, the patient’s allegation that the pharmacist’s response that use of the different version of medication would be OK did not give rise to any legal duty on the part of the pharmacist or pharmacy in the view of the appellate court judges.

The plaintiff’s attorneys also argued that the pharmacy had a legal duty to dispense the medication without changing the source. The court agreed with the pharmacy chain that because the prescriber had not marked the portion of the prescription form that read “DAW [dispense as written]: No product selection indicated,” that interchange of product source had not been prohibited by the prescriber.

In another revision, the plaintiff argued that the sub potency of the dispensed product resulted in it being considered adulterated. That led to the argument that the pharmacy had been negligent because of obtaining tablets in an adulterated state that were initially made in a form less than 500 mg. The pharmacy chain responded that it was not the manufacturer of the dosage forms and thus the plaintiff should not prevail with this argument. The court agreed.

The manufacturer of the tablets that had been dispensed argued that the FDA had found its version to be therapeutically equivalent to the product the patient had originally received. If there were a difference in therapeutic effect, the sole enforcement authority for that rested with the FDA under a specific provision in the relevant federal statute. The trial court judge dismissed that argument by the plaintiff, and the court of appeals affirmed it.

Finally, the plaintiff had argued that the pharmacy knew about the purported defect in the medication dispensed and had ignored that, resulting in her injury. In response, the defendants pointed out that plaintiff had been in possession of the allegedly subpotent dosage forms for more than 2 years with an opportunity to examine the chemical composition of the tablets. The plaintiff had never allegedly pursued such testing and had made no direct allegation of a defect existing in the dosage forms.

In conclusion, the court of appeals rejected all arguments advanced by the plaintiff in the various amended complaints, affirmed the decisions of the trial court, and, overall, affirmed dismissal of the lawsuit.

About the Author

Joseph L. Fink III, JD, DSS (Hon), BSPharm, FAPHA, is professor emeritus of pharmacy law and policy at the U of Kentucky College of Pharmacy in Lexington.

Pharmacy Times

The article below is one that a specialty pharmacy’s legal counsel might find most interesting. In short, the US District Court ruling below said that Humana could not pursue RICO charges against Biogen and ACS Pharmacy because it did not have standing in the matter. Humana would have needed to be the “purchaser” to have standing and the court deemed it was only the “payer”.  Hmmmm

The difference between purchaser vs. payer may be difficult for the non-legal-eagles in our midst to fully fathom. But it does clarify how the courts perceive the manufacturer and the specialty pharmacy in these instances. And, ultimately, specialty pharmacies can face a much bigger legal hill to climb if charged with a RICO violation.

Fortunately for the industry, there have been fewer legal black-eyes related to financial shenanigans by specialty pharmacies in recent years. That’s good for the industry especially in a reactionary legislative environment.

Click here to read the full text of the opinion.

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RICO – Standing – Indirect Purchaser

U.S. District Court

By: Mass. Lawyers Weekly Staff April 6, 2023

Where a plaintiff insurance company has filed a complaint under the Racketeer Influenced and Corrupt Organizations statute alleging that the defendant made unlawful charitable donations to fund patient copays of its multiple sclerosis drugs, the defendant’s motion to dismiss should be allowed because the plaintiff is an indirect purchaser of the pharmaceutical products at issue, so it does not have standing to assert a civil RICO claim.

“This is an action arising out of an alleged scheme to increase the number of prescriptions of drugs used to treat multiple sclerosis (‘MS’) through improper charitable contributions. Plaintiff Humana, Inc. is a health-insurance company. Defendant Biogen, Inc. is a biotechnology company and manufacturer of three different drugs used to treat MS. Defendant Advanced Care Scripts, Inc. (‘ACS’) is a specialty pharmacy company. According to the complaint, Biogen made unlawful donations to different charities to fund patient copays of its MS drugs, thereby increasing the sales of those drugs.

“… Although Humana was the ultimate payor of the prescription drugs at issue — putting to one side the requirement of a patient copay — it did not purchase the drugs directly from Biogen. Instead, it paid pharmacies for the drugs, who had purchased the drugs from wholesalers or distributors (or possibly from Biogen itself). Humana was thus an ‘indirect’ purchaser.

“Under the ‘indirect purchaser rule,’ first developed by the Supreme Court in the antitrust context, only a direct purchaser of goods has standing to assert a claim for violation of the antitrust laws. Every circuit to have considered the issue has held that the rule also applies to civil RICO actions, and that indirect purchasers therefore do not have standing to assert RICO claims. The First Circuit has not yet addressed the question. While there may be practical and policy reasons to question the application of that rule in the health-insurance context, for the reasons that follow, this Court will follow the majority rule. It will therefore dismiss the civil claims for failure to state a claim on that basis. …

“Accordingly, because Humana is an indirect purchaser of the pharmaceutical products at issue in this case, it does not have standing to assert a civil RICO claim. Count 1 will therefore be dismissed.”

Humana, Inc. v. Biogen, Inc., et al. (Lawyers Weekly No. 02-154-23) (34 pages) (Saylor, C.J.) (Civil Action No. 21-11578-FDS) (March 31, 2023).

The FDA recently approved a therapy previously approved in 2021….. but with a very different indication and a new NDC. The approval was granted for Syfovre (pegcetacoplan injection) from Apellis Pharmaceuticals, Inc for the treatment of geographic atrophy (GA) secondary to age-related macular degeneration (AMD). It is the first and only therapy approved to treat geographic atrophy.  It is approved for intravitreal administration only by a qualified physician.

This is the second approval for the drug. The FDA first approved pegcetacoplan in paroxysmal nocturnal hemoglobinuria, a rare blood disorder where the immune system attacks red blood cells and platelets. It is marketed as Empaveli in that indication.

Although the approval did not include a black box warning the therapy can trigger ocular and periocular infections, active intraocular inflammation, endophthalmitis and retinal detachments among other adverse events.

The recommended dose for Syfovre is 15 mg (0.1 mL of 150 mg/mL solution) administered by intravitreal injection to each affected eye once every 25 to 60 days.

The injection should be on the market by the beginning of March. The company announced launch price at $2,190 per vial before discounts. That translates into between $13,200 and $26,400 annually based on 30 vs. 60-day dosing.

Apellis did not announce distribution plans for Syfovre. Given its cost it is likely that it will be distributed by a specialty pharmacy distributor.

CLICK HERE to access prescribing information

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US FDA approves Apellis’ geographic atrophy therapy Syfovre

Syfovre is indicated for geographic atrophy patients with or without subfoveal involvement.

The US Food and Drug Administration (FDA) has granted approval for Apellis Pharmaceuticals’ Syfovre (pegcetacoplan injection) to treat geographic atrophy (GA), an advanced form of age-related macular degeneration (AMD).

Syfovre has been approved for use in people with GA with or without subfoveal involvement and offers to dose flexibility with a regimen of every 25 to 60 days for patients and physicians.  It provides comprehensive control of the complement cascade, which is part of the immune system of the body, by targeting C3.

Apellis Pharmaceuticals co-founder and CEO Cedric Francois said: “Today marks an extraordinary milestone for patients, the retina community, and Apellis. With its increasing effects over time and flexible dosing, we believe that Syfovre will make a meaningful difference in the lives of people with GA. GA is a complex disease that the field has spent decades trying to address, so we are humbled and proud to bring forward the first-ever treatment.”

The regulatory approval is based on positive data from the Phase III OAKS and DERBY trials conducted across a broad and representative population of GA patients. Syfovre reduced the GA lesion growth rate compared to sham injections in the OAKS and DERBY studies.

It also showed increasing effects of treatment over time, with up to 36% lesion growth reduction occurring between months 18 and 24. Syfovre’s safety profile is well-demonstrated after approximately 12,000 injections over 24 months.

Ever get a letter from more than 400 people? 

Not 400 letters…. 1 letter with four hundred+ signatories!

Over the last week more than 400 of the tippity topest brass in Pharma signed onto an open letter protesting the recent Texas court ruling blocking the sales of Mifepristone. Pharma’s response is generating as much news as the original ruling.

So what’s the unique motivation for so many big Pharma heavy weights to raise the alarm? Money and market stability

The primary worry is that a court could, on a whim (or a bias), rule that ANY drug approved by the FDA should be delisted nationally.  A monkey wrench in the gears could cost a manufacturer a huge amount of money even in the short term due to loss of revenue while sidelined, the disruption of physician prescribing preference, and the loss of patient confidence in their therapy….. just to cite a few impacts.

Expand the theory a bit and the same ‘legal logic’ could be applied to drugs in development questioning validity of drug trials and the FDA review and approval process. Drug development is very expensive and ‘time to launch’ in a competitive market translates into BIG money. Even the specter of such events would make any Pharma CEO quake in their lab booties.

CLICK HERE to read the open letter….. and even add your signature while at it.

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300 Biotech and Pharma CEOs Call for a Reversal of the Abortion Pill Ban

An open letter calls for a potential ban on abortion pill mifepristone to be reversed.

April 10, 2023 — Conflicting court rulings by federal judges in Texas and Washington last week left the future of a commonly used abortion pill in doubt. Now, more than 300 executives from biotech and pharmaceutical companies have signed an open letter opposing a Texas judge’s decision to stop the pill from being sold.

“We call for the reversal of this decision to disregard science, and the appropriate restitution of the mandate for the safety and efficacy of medicines for all with the FDA, the agency entrusted to do so in the first place,” the CEOs wrote in the letter.

The CEO of pharma giant Pfizer, Albert Bourla, signed the letter, along with hundreds of smaller American biotech companies, including ReCode Therapeutics, Blackfynn, and Ovid Therapeutics. 

Roe v. Wade was overturned by the U.S. Supreme Court last summer, which had previously granted access to abortion health care nationwide. In the aftermath of that reversal, states independently decided whether or not abortion would be allowed or effectively banned. 

Last Friday, Trump-appointed U.S. District Judge Matthew Kacsmaryk ordered a suspension of the federally approved mifepristone, a drug that has been used for over two decades to terminate pregnancies. On the same day, Washington State’s U.S. District Judge Thomas O. Rice, who was appointed by the Obama administration, called for the opposite and directed the FDA not to roll back the abortion pill. 

“If courts can overturn drug approvals without regard for science or evidence, or for the complexity required to fully vet the safety and efficacy of new drugs, any medicine is at risk for the same outcome as mifepristone,” the CEOs’ letter says.

By Prarthana Prakash, Fortune Magazine

Announcements for newly approved specialty drugs often state that the product will be available through specialty pharmacy in limited distribution. However, the press releases rarely specify the specialty pharmacy(ies) selected as the designated partner(s).

Here are three LD deals that have been recently publicly confirmed subsequent to the approvals.

ORSERDU Available through Biologics by McKesson

CARY, N.C., Feb. 10, 2023—Biologics by McKesson, an independent specialty pharmacy specializing in oncology and rare disease areas, was selected by Stemline Therapeutics Inc., as a limited distribution network specialty pharmacy provider for Orserdu (elacestrant).

ORSERDU Available through Onco360

ORSERDU is an estrogen receptor antagonist indicated for the treatment of postmenopausal women or adult men with estrogen receptor (ER)-positive, human epidermal growth factor receptor 2 (HER2)-negative, ESR1-mutated advanced or metastatic breast cancer with disease progression following at least one line of endocrine therapy.

Biologics Named Exclusive Pharmacy for SKYCLARYS (omaveloxolone)

Biologics by McKesson was selected by Reata Pharmaceuticals as the sole specialty pharmacy provider for Skyclarys (omaveloxolone), the first and only treatment for Friedreich’s ataxia (FA). Skyclarys was approved by the U.S. Food and Drug Administration (FDA) on Feb. 28, 2023, for the treatment of FA in adults and adolescents aged 16 years and older, along with a rare pediatric disease priority review voucher.

If you have you ever tried to explain all the nuances behind the host of decisions to launch a new specialty therapy through limited distribution, then look no further. The article below does a yeoman’s job of explaining the ins and outs, ups and downs, and even some sideways of LD.

Limited distribution is the holy grail for a specialty pharmacy. Being selected as even one of a dozen (or more) specialty pharmacies ensures that the lucky SP will get a slice of what are typically a high ticket (and hopefully high margin $$s) prescriptions. Many a specialty pharmacy has gone from a ‘little engine that could’ to a behemoth SP in short order due to their success in landing limited distribution deals. At the other end of the spectrum, the ‘blessed’ SPs that are selected as the exclusive distribution partner for a new high-ticket therapy can see revenues skyrocket overnight (cash flow is the rocket fuel that SPs need to grow). 

SPs learned that breaking the limited distribution glass ceiling was their ticket to the big time. That also means being offered preferred contracts by PBMs and Payers for reimbursement (since the manufacturer’s selection alone doesn’t always guarantee payment.) And, that contract usually opens the door to other non-limited-distribution therapies that might have also been previously blocked to them.

The article below focuses on limited distribution for Oncology products…. which represent the bulk of all LD programs. It also provides some key metrics that determine what qualifies as a limited distribution therapy even beyond Oncology.  New hires working the specialty pharmacy segment would do well to familiarize themselves with this important area of specialty.

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Developing a Limited Distribution Plan for Oral Oncology Products

Mar 21, 2023 — The portfolio of oral oncology products has evolved over the past few years and so has the traditional model of distribution.

Distribution strategy is one of several key decisions that a manufacturer must make early in the process when launching a new oral oncology product. As the market has shifted from traditional community-based products to specialty medications, expanded solutions to better serve these products have evolved.

High-touch, oral oncology products require distribution solutions that are targeted toward maximizing patient outcomes. Limited distribution through a carefully selected specialty pharmacy network offers a greater level of patient care but also brings more complexity and the need for greater understanding to identify the right solution.

Why Select a Limited Specialty Pharmacy Distribution Model for Your Product?

CLICK HERE to access the full article