Columnist Michael Levin: Opportunities for Integrative Medicine in a Recent AARP Report on Drug Price Escalation

Summary: Integrator columnist Michael Levin, founder of Health Business Strategies, is a long-time promoter of integrative medicine strategies that challenge the often costly, unsafe and quality of life-damaging interventions promoted by Big Pharma. So when Levin, who has been an executive with both pharmaceutical and dietary supplement firms, saw the new AARP report on drug price trends pre and post the implementation of the Medicare Drug Benefit, he analyzed it both for what Pharma had already extracted, and for what integrative medicine might. Here is Levin's brief report and view of opportunities.

Sponsors report on drug costs

If one is seeking low-hanging fruit in showing the potential value of integrative practices relative to conventional interventions, pharmacy substitution is particularly succulent if one considers outcomes such as cost, quality of life, functionality and safety.

Integrator adviser and columnist Michael Levin, founder of Health Business Strategies, has advocated such approaches and research for a decade. So Levin, who has been an executive with both pharma and dietary supplement firms, was doubly curious when he saw that the AARP had published a Watchdog Report on drug price trends since Congress passed the Medicare Drug Benefit. He first examined what Pharma had already extracted in the way of price increases. Then he explores the opportunities for integrative medicine "underneath the AARP report." Here is Levin's brief. He can be reached at

Prescription Drug Price Trends – Underneath the AARP Report

- Michael D. Levin, Health Business Strategies, Clackamas, OR

Michael Levin, Health Business Strategies

On March 5, 2008, the AARP Public Policy Institute released its report on drug price trends. Price data for 300 of the most widely used drugs by Medicare beneficiaries is reported over a five year period (2002–2007). The report provides visibility into Pharma’s pricing strategies pre-and post implementation of the Medicare Drug Benefit (Part D).

The data reveal several obvious trends, a few not-so-obvious trends and opportunities for integrative medicine to deliver both cost offsets and improved outcomes.

Obvious Trends

• Cumulative changes in average prices over the five year period were roughly 2.5 times the general inflation rate. No surprise here.

• Average annual inflation for the most widely used brand name drugs pre-Medicare benefit ranged from 5.3% to 6.6%. After the benefit was implemented, average inflation was 7.1% in 2006 and 7.4% in 2007. Coincidence?

• Looking more closely at the point-to-point timing of the price change increases, it’s notable that three of the biggest “bumps” occurred when: a) the House and Senate passed the bill; b) the President signed the bill; and c) Part D went into effect.  Coincidence?

• Some of the most widely used drugs, as measured by annual dollar spending, were subject to utterly enormous increases. Example: Ambien 5mg rose a total of 160% over the five year period, which included 30% annual increases in both 2006 and 2007. This drove sedatives, as a therapeutic class, to the highest manufacturer price increases in 2007 (23.9% for all sedatives measured) out of all 36 therapeutic categories measured. In that same year, the general inflation rate was 2.9%.
  

Not-So-Obvious Trends

• Accelerated inflation in post-Medicare Drug Benefit costs = higher costs to drug plans faster, which pushes enrollees into the “donut hole” much more quickly. (What is the donut hole? Observers noted in 2006 that Medicare is set to pay 75% of initial drug costs up to $2,250 after a $250 deductible for most seniors. But then the program pays nothing until drug expenses reach $5,100, after which the government pays 95% of all costs. The complete lack of coverage for drug spending between $2,251 and $5,100 is often called Medicare's "donut hole" by Washington analysts and lawmakers. For more on the donut hole, see this link.
• Prices reported are WAC (wholesale acquisition cost). This commonly used benchmark may not reflect true costs negotiated between the provider and supplier. Therefore, there is likely to be some distortion in these numbers, but, in the large view, this is likely to be comparatively minor.

Opportunities for Integrative Medicine

• Ambien versus Valerian   Sleep-inducing Ambien 10mg is the 22nd most costly drug under Medicare Part D. It has had the highest inflationary rate for the period reported. A well-designed clinical trial comparing safety, effectiveness and direct costs of Ambien versus Valerian is clearly justified. Might NIH have an appetite for funding such a study? Researchers interested in discussing this opportunity may wish to contact the author at: .

• Safety  Particularly striking are the rapidly increasing monies spent on newer anti-psychotics, anti-dementia agents and antidepressants in this population. Thirteen of the top 50 Medicare drugs fall into these three categories, each of which equaled or exceeded the annual drug price inflation rate. In short, these categories propelled total inflation higher. We know that Ambien can significantly impair cognition and behavior (Remember Patrick Kennedy’s misadventure in disoriented driving?). Rx hypnotics can be dangerous drugs. Ambien is reportedly among the 10 most common drugs associated with traffic accidents. In healthy adults, the drug often causes confusion and "fugue states" or sonambulism. One becomes amnesiac, operating on automatic pilot, with lights on but nobody's home). Imagine what the drug is doing to the elderly: a senior takes the drug, acts strange. Before you know it, he's prescribed anti-psychotic and anti-dementia drugs! Care is progressively more expensive. I cannot help but wonder if Ambien usage plays a significant role in driving these three other categories of drugs. If so, this could represent significant indirect savings achieved by substituting Valerian for Ambien.

• Quality of Life  Reviewing the list of top Medicare drugs along with their corresponding annual inflation rates reminded me once again of how quality of life can be improved for so many, at far lower costs, through diet, nutrition, exercise and counseling. A disease carve-out demonstration project in which these modalities are consistently delivered to this population makes economic and moral sense. Though not as simple as a single-variable, reductionist trial, this area of research might produce compelling results for the tangible value of integrative medicine.

A Crawl-Walk-Run Research Strategy

The soaring, potentially linked costs, offer great research opportunity for a "crawl, walk, run" strategy which could transform research from a reductionist approach to a whole person approach.

• Crawl: demo pilot project with Ambien and Valerian. Safety, effectiveness, cost, other drug use, quality of life (including cognition). It's reductionist and easy to understand.

• Walk: Same study, plus another research arm to include diet, exercise, nutrition, education, counseling and mind/body. Compare outcomes.

• Run: larger, sufficiently statistically powered study.
  

Note that this is one of the only applications where a dietary supplement can use an effective structure/function claim and still be "legal." Valerian can be said to "induce rapid onset of sleep" (rather than the health claim of "treats insomnia").

Conclusion

It appears to this observer that Pharma, economically pressured by expiring patents and lack of pipeline drugs, capitalized on the Medicare opportunity at taxpayers expense. Though this observation has been periodically alleged by others, this data seems to confirm prior reports.

Secondly, integrative medicine has some compelling opportunities, associate with cost, safety and quality of life, if only it creates the research which will focus on the issues which are driving these costs.