Tag Archives: cost

Patients and Insurers Pay Big for Discarded Cancer Drugs

By ThinkReliability Staff

A recent study has found that the size of vials used for cancer drugs directly results in waste, and a significant portion of the high – and steadily increasing – cost of cancer drugs.  With most cancer medications available in only one or two sizes, usually designed to provide an amount of medication for the largest patients, many times medication is left over in each vial.

The researchers estimate that about $2.8 billion is spent by Medicare and other insurers reimbursing for medication that is discarded.

This cost – paying for medication that is literally thrown out in most cases – can be considered an impact to the property goal.  As the cost increases for drugs, it’s not only Medicare and other insurers that are impacted, but patients, many of whom pay a fixed percentage of their drug costs.  This impacts the patient services goal.  The disposal of these drugs has a potential environmental impact, impacting the environmental goal.  The impacts to the goals as a result of an issue, as well as the what, when and where of that issue, are captured in a problem outline, which is the first step of the Cause Mapping process, which develops a visual diagram of the cause-and-effect relationships (a type of root cause analysis).

The second step of the process is to begin with an impacted goal and develop the cause-and-effect relationships.  This can be done by asking “why” questions and ensuring that all the causes necessary to result in an effect are included.  In some cases, more than one cause is required to produce an effect.  In these cases, the causes are both connected to the effect and joined with an “AND”.

In this case, beginning with the property goal, we can ask “Why do Medicare and other insurers have increased costs?”  This is due to the increased cost of cancer drugs, which results from significant amount of medications being thrown away.  We can add evidence to the causes to support their inclusion in the Cause Map or provide additional information.  For example, the study found that the earnings on disposed medication made up 30% of the overall sales for one cancer medication.

A significant amount of medication is being thrown away because there is medication left over in each vial used to deliver the medication, and the leftover medication in the vials is thrown away.  Both these causes are required to result in the medication waste.  Leftover medication is thrown away because it can only be used in rare circumstances (within six hours at a specialized pharmacy).  There is leftover medication in the vials because the vials hold too much medication for many patients.  (Most medication is administered based on patient weight.)  The vials hold too much medication because many medications are provided in only one or two vial sizes.  This is true of 18 of the top 20 cancer drugs.  Providing alternate vial size is not required by regulators, whose concern is limited to patient safety or potential medical errors.  Specifically, Congress has not authorized the US Food and Drug Administration (FDA) to consider cost. Drug manufacturers select vial size based on “marketing concerns” or, effectively, profit.  The study found that providing more vial sizes for one medication would reduce waste by 84% but would also reduce sales by $261 million a year.

Several of the vials for cancer medications are sized based on a larger (6’6″, 250 lb.) patient.  According to one drug manufacturer, this is done by design, resulting from working with the FDA for a vial that would provide enough medication “for a patient of almost any size.”  At least one drug manufacturer has suggested that the full vial be administered regardless of patient size, but one of the study’s co-authors says that extra medication does nothing to help patients, so it would still be wasted.

Instead, the researchers propose that the government either mandate the drugs be distributed in multiple vial sizes that would minimize waste, or that the government is refunded for wasted quantities.  They point out that alternate vial sizes are provided in Europe, “where regulators are clearly paying attention to this issue”, says Dr. Leonard Saltz, a co-author of the study.

To view the initial outline, Cause Map and proposed solutions, please click on “Download PDF” above.  Click here to view the study and drug waste calculator.

Price of Daraprim jumped ~5,000%

By Kim Smiley

The cost of prescription drugs have been in the news the last several years as the United States struggles to deal with rising health care costs, but few stories have come close to generating as much outrage as the recent massive price increase of Daraprim.  As new specialty drugs hit the market, they are often expensive as drug companies recoup the costs of development and maximize profits while the drug is covered by patents, which may be frustrating but is understandable.  That is not what happened in the case of Daraprim, a lifesaving drug used as an antimalarial drug and to treat toxoplasmosis.  The medication has been around since the 1950s and isn’t covered by any patents.

So why has the price of Daraprim suddenly increased about 5,000 percent?  A Cause Map, or visual root cause analysis, can be used to intuitively show the causes that contributed to the issue.  (To view an outline and a High Level Cause Map, click on “Download PDF” above.) This is one of those issues where it may be tempting to identify the “root cause” or focus on a single cause that contributed to the issue, but there are many factors that need to be considered.  The piece of the puzzle that is probably the easiest to focus on is the fact that a new company bought the only company with regulatory approval to sell the drug in the United States and significantly raised the price.  Basically, there is demand for the drug and the company which has a monopoly on the supply in the US took advantage of it by increasing the price per pill from $13.50 to about $750.

The CEO of the company has been widely villainized for what many consider a predatory price increase, but it is important to remember that the Daraprim price increase was legal.  Many find the price increase distasteful, but there are currently no laws or regulations that prevent huge medication price increases, which is another cause that contributed to the issue.

While a generic version of the drug is available in many other countries for less than a dollar a pill, it cannot be sold in the US without going through a lengthy and expensive approval process. Possible solutions to prevent similar price increases in the future could be to create laws that limit price increases on drugs without patents on them or to increase the supply of medications sold in the US by allowing some sort of reciprocal approvals with countries that have strong regulatory systems in place.  A senate committee is requesting documents and information relating to the pricing of Daraprim and several other medications and there are lawmakers pushing to create legislation that would limit price hikes.

Another enterprising company seems to have found their own solution to the problem of the high cost of Daraprim – creating a cheaper alternative. Imprimis Pharmaceuticals has stated that they will produce a substitute drug that will be priced as low as $99 for a 100 pills.  The alternative drug isn’t a generic version of Daraprim, but rather a compounded drug that combines two FDA approved drugs (pyrimethamine, the only ingredient in Daraprim, and leucovorin) that are often used together.  The compounded drug would not be FDA approved, but doctors can prescribe it specifically for a patient based on the rules governing compounded medications.

It isn’t as elegant as having another FDA-approved supplier of Daraprim, but it seems like a viable work-around for many patients.  It also seems like satisfactory justice for the price of 60-year-old pyrimethamine drugs to end up cheaper in the US after they were hiked up to such high levels.

Concerns over Faulty Implants

By Kim Smiley

Thousands of women received faulty breast implants between 2001 and 2010.  These implants contain substandard silicone, not approved for medical use, and are also rupturing at a usually high rate.  It isn’t clear at this time what the long term health risks associated with these implants might be.  The faulty implants were manufactured in France, but eighty percent were exported so the wide spread nature of the problem also complicates the implementation of any possible solutions. (These implants were not sold in the US.)

This issue can be investigated by building a Cause Map, an intuitive, visual root cause analysis.  A Cause Map is built by asking “why” questions to determine what causes contributed to an issue.  In this example, women are facing health risks because they received faulty breast implants.  The implants are considered faulty because they are filled with substandard, non-medical grade silicone and they are rupturing at twice the industrial average.

The implants were filled with industrial grade silicone, instead of medical grade, because industrial grade silicon is far less expensive and the company was trying to cut costs.  Hundreds of thousands of these implants were manufactured before any quality issues were raised so inadequate oversight should also be considered as a potential cause.  It isn’t clear why the implants are rupturing at an unusually high rate at this time, but that information can be added to the Cause Map once it is available.

The long term health consequences of this issue also aren’t clear yet.  The substandard silicone used may have impurities in it that could pose a health risk in addition to any health effects that result from the ruptured implants in general.  There are concerns that the implants are increasing the risk of breast cancer, but there isn’t any hard evidence that this is the case at this point.  All the countries involved are struggling to weigh the known risks of removing the implants with the unknown risks of leaving them in place.  There is also the question of costs and who will pay for removal or replacement of the faulty implants. Ongoing monitoring for signs of leakage and ruptures are recommended for any woman who chooses to keep the implants.

Increased Cost of Drug May Increase Potential for Pre-Term Labor

By Kim Smiley

In 2003, a study by the National Institutes of Health determined that administering hydroxyprogesterone caproate (also known as17P) could reduce the risk of preterm delivery.  Preterm delivery can cause many health issues for infants.  However, there was no commercial source of 17P, so pharmacies compounded it upon request for $10-$20 an injection.  Injections are generally taken starting at weeks 16-24 of pregnancy for up to 20 weeks.

Concern about availability and quality of this compounded drug helped lead to development and expedited U.S. Food and Drug Administration (FDA) approval of a name brand version.  The name brand version was approved on February 3, 2011 and was granted 7 years of market exclusivity under the “Orphan Drug Act”, an FDA incentive to develop products.  The name brand version of the drug was priced at $1,500 an injection.  Concern over the price increase, which could total nearly $30,000 a pregnancy, led to concerns of increases in preterm labor due to the unaffordable drug.  This on turn led to concerns about patient safety and patient services.  Additionally, there has been general outrage over the increase in cost, leading to a request for a Federal Trade Commission (FTC) investigation into the pricing of the drug and a loss of market share for the manufacturer.

To attempt to alleviate the concerns regarding access to the drug, the manufacturer has lowered the price to $690 an injection and has developed a host of other programs to increase affordability of the drug.  The price drop and other programs were announced on April 1, 2011.  The FDA announced on March 30, 2011, that it will not stop pharmacies from continuing to compound 17P, in a rare move to ensure drug availability.  However, some doctors are concerned that prescribing a pharmacy-compounded drug. when there is a brand name drug available, will leave them open to legal action if safety concerns arise.

The impact of this issue on the future of preterm labor and drug pricing is unclear at this point.  It appears that more action may be required to reduce the risk of preterm labor, either by the manufacturer or the FDA, or both.  View the analysis of this issue, including a timeline, problem outline, Cause Map and solutions, by clicking “Download PDF” above