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In 2010, after observing high volumes of charges for urine drug screenings, the Centers for Medicare & Medicaid Services (CMS) limited their billings. Some clinics responded by replacing simple cup testing with more specialized machine testing. While urine cup testing allows for the screening and billing of multiple drugs in one pass, the machines allow for each drug to be billed individually to Medicare. This paved the way for the opening of lucrative pain clinics, which derived most of their profits from urine drug screenings. A report from Kaiser Health News investigated Medicare billing practices related to drug testing.

In 2010, after observing high volumes of charges for urine drug screenings, the Centers for Medicare & Medicaid Services (CMS) limited their billings. Some clinics responded by replacing simple cup testing with more specialized machine testing. While urine cup testing allows for the screening and billing of multiple drugs in one pass, the machines allow for each drug to be billed individually to Medicare. This paved the way for the opening of lucrative pain clinics, which derived most of their profits from urine drug screenings. A report from Kaiser Health News investigated Medicare billing practices related to drug testing.

The report found that, despite the efforts of CMS, the number of urine tests paid for by Medicare has continued to rise. Testing for a select number of drugs, including opiates and synthetics, cocaine, amphetamine or methamphetamine, and phencyclidine (PCP), numbered nearly 20 million in 2014. For the same drugs, this is in increase in testing volume by about ten times from 2009 and more than twenty times from 2005.

This rise continues while the medical necessity of urine screenings remains questionable, with a lack of clear guidelines for frequency of testing and insufficient data to support the usefulness of testing. Urine testing can be used as a means of monitoring pain prescriptions and preventing or catching abuse. But who exactly gets tested, how often, and for which drugs is left to the physician to decide, and individual physicians may not agree on the same standards for what is medically necessary. Some might suggest weekly drug screenings, while others would argue weekly screenings are too frequent. Additionally, urine screenings rarely detect new drugs such as the illegal hallucinogenic PCP, and data on drug abuse detected by urine testing is hard to come by. Some pain doctors make the majority of their Medicare income from drug tests, but it may not be easy to determine whether this is a symptom of a drug abuse epidemic or a symptom of unnecessary drug testing.

The line between medically necessary and unnecessary is not clearly defined, and unfortunately the high volumes of billings for urine screenings suggest that some providers have taken advantage of the system for the sake of profit. Although CMS has tried to address this, without clearer standards for drug screenings, there may still be room for abuse of the system.

In an interview with Kaiser Health News, current Food and Drug Administration commissioner Scott Gottlieb expresses hopes to increase access to lower-cost alternatives to drugs by reducing roadblocks to competition in the drug market.

In an interview with Kaiser Health News, current Food and Drug Administration commissioner Scott Gottlieb expresses hopes to increase access to lower-cost alternatives to drugs by reducing roadblocks to competition in the drug market.

One of the FDA's considerations is the 180-day exclusivity period generic manufacturers. Following the expiration of a branded drug's patent, one generic manufacturer can be granted a period of 180 days in which no other generic alternative can enter the market. In some cases, brand-name manufacturers and generic manufacturers can strike deals in which the former pays the latter to not enter the market at all. The brand-name manufacturer can earn profit that exceeds the amount paid, and other potential generic competitors are still blocked from entering the market. As a result, the original manufacturer extends the period during which no competition exists for its drug.

The FDA is also looking into the possibility of generic manufacturers purchasing drugs from the European market without having to perform bridging studies. Bridging studies are done to prove the European drugs are the same as those in the American market. Generic manufacturers need to purchase large quantities of branded drugs in order to develop alternatives, but brand-name manufacturers often prevent generic companies from doing so. Turning to the European market may help generic companies circumvent this issue.

The FDA also aims to increase the rate at which new drugs are approved for market entry. In 2017, 46 new drugs were approved - the highest figure in 21 years. However, when drugs are approved quickly, the degree to which these newer drugs can improve quality of life or extend lifespan is more questionable. Still, the FDA commissioner believes that a high standard for new drugs can be maintained while avoiding more extensive and costly development processes.

By encouraging a free market for competition, helping to facilitate the drug development process, and increasing the rate at which drugs are approved, the FDA aims to address the issue of extremely high pricing of prescription drugs.

A coupon has the immediate and obvious effect of lowering the amount one pays upfront. To examine the potential effects of coupons on the drug market, HealthAffairs considered the 200 highest expenditure drugs of 2014.

A coupon has the immediate and obvious effect of lowering the amount one pays upfront. To examine the potential effects of coupons on the drug market, HealthAffairs considered the 200 highest expenditure drugs of 2014.

Of the 200 drugs, 90 had coupons. These 90 were branded drugs for which one of the following was true: a generic equivalent existed, only imperfect substitutes existed, or no generic equivalent existed (meaning either there was no competition for the drug or only branded equivalents existed). Each category has a different potential impact on the drug market.

Researchers found that for branded drugs with generic substitutes, a coupon may incline consumers to purchase the more expensive brand-name drug instead of the lower-priced generic. If using a coupon means a consumer is responsible for the same copayment for a brand-name drug as for its generic equivalent, the generic equivalent's lower cost is meaningless for the consumer. On the other hand, for branded drugs with no substitute or only brand-name substitutes, a coupon can increase affordability for consumers by lowering copayments. This means improved access to drugs for patients, which is a clear benefit.

The debate on the usage of drug coupons has two extreme arguments on either side: in some situations, coupons can lead to higher costs of branded drugs (as borne by insurance companies and therefore by individuals); on the other, coupons can increase accessibility to patients, especially if no generic substitute for the drug exists. In the case of brand-name drugs with imperfect substitutes, the potential effects on the drug market are more variable: substitutes may be suitable replacements for some patients, but for others, the substitutes may not be viable candidates due to drug interactions or other circumstances. Policy on drug coupons will need to take into account these various situations in order to avoid hurting the beneficiaries of coupons while trying to rein in drug prices.

When the price of Daraprim, a drug used to treat parasitic infection, was increased from $13.50 to $750 per pill by Turing Pharmaceuticals, company executive Martin Shkreli became the poster child for what was perceived as a profit-driven, villainous pharmaceutical industry. Daraprim is only one example of the sky-high pricing for prescription drugs that has led to public outrage and highlighted a clear need for lower-cost alternatives. Generic alternatives create competition for brand name drugs and, in doing so, should drive down market prices. Unfortunately, drug pricing does not play out so simply. A recent New York Times article considered the case of Syprine, a drug used for the treatment of the rare Wilson disease.

When the price of Daraprim, a drug used to treat parasitic infection, was increased from $13.50 to $750 per pill by Turing Pharmaceuticals, company executive Martin Shkreli became the poster child for what was perceived as a profit-driven, villainous pharmaceutical industry. Daraprim is only one example of the sky-high pricing for prescription drugs that has led to public outrage and highlighted a clear need for lower-cost alternatives. Generic alternatives create competition for brand name drugs and, in doing so, should drive down market prices. Unfortunately, drug pricing does not play out so simply. A recent New York Times article considered the case of Syprine, a drug used for the treatment of the rare Wilson disease.

Syprine, manufactured by Valeant Pharmaceuticals International, jumped in price in 2015 from around $500 to over $20,000. Teva Pharmaceuticals announced a generic competitor but unfortunately did not offer the discount patients may have been hoping for: a bottle of one hundred pills will cost $18,375.

Although the price is extremely high, it is not totally unexpected. Wilson disease affects only around 10,000 people in the United States, and Teva's generic is the only competition for Syprine, which had already set the market price at over $20,000. Having multiple competitors for a single drug can be helpful in reducing prices. So, because Syprine has limited reach and limited competition, Teva's generic discount was limited as well.

The FDA publishes a list of off-patent drugs without competition in order to encourage the manufacture of generics. On the manufacturing side, the cost of developing drugs is estimated to be anywhere from several hundred million to $5 billion, according to a Washington Post article. For drugs that treat rare conditions, like Syprine, there is a limited reach and a relatively lower number of annual prescriptions to be filled. For for-profit pharmaceutical companies, the cost benefit may not be worth the investment unless the price of the drug is high enough.

In an article on waste in health care, ProPublica examines a study in Washington state by the nonprofit Washington Health Alliance, which sought to determine the price of unnecessary medical care by analyzing insurance claims for 1.3 million patients over one year for 47 tests or services. These tests or services had been deemed frequently overused by the U.S. Preventive Services Task Force and the American Board of Internal Medicine Foundation's Choosing Wisely campaign.

In an article on waste in health care, ProPublica examines a study in Washington state by the nonprofit Washington Health Alliance, which sought to determine the price of unnecessary medical care by analyzing insurance claims for 1.3 million patients over one year for 47 tests or services. These tests or services had been deemed frequently overused by the U.S. Preventive Services Task Force and the American Board of Internal Medicine Foundation's Choosing Wisely campaign.

What the Washington Health Alliance found was $282 million spent on unneeded treatment for 600,000 patients. Additionally, more than a third of the total amount spent on the 47 tests or services was for unnecessary care. This included annual cervical cancer screenings, tests for low-risk surgery, and annual heart tests on low-risk patients.

Other states have also analyzed waste in health care: for a single year, a study in Virginia found the price of waste to be $586 million, while a Minnesota study on 19 low-value services had found $55 million wasted. Citing a figure from from the National Academy of Medicine, ProPublica puts the price of unnecessary care at $765 billion per year, or a quarter of the total amount spent on health care annually.

A simple doctor's visit can carry with it an expectation for a diagnostic test, a prescription, or some other tangible evidence that the patient is being treated. A wait-and-see approach can often feel like not enough. On the doctor's end, financial incentives can encourage recommendations for procedures. This combination can lead to unnecessary procedures and tests being done - neither of which comes free. To avoid wasteful medical care, the Washington Health Alliance proposes a transition to a system that pays for the value of care rather than the volume.