Drug Prices
is piecemeal, with each of the country’s
thousands of health insurers negotiating
drug prices with manufacturers and some
larger insurance plans are able to negoti-
ate a better price because of the number of
patients enrolled in the plan.
However, Medicare, which covers
more than 55 million Americans aged 65
years and older, is legally prohibited from
negotiating certain drug prices or decid-
ing which drugs to cover. The insurance
program must cover all drugs that are
approved by the FDA at the price set
by the manufacturer.
Of course, the actual cost or net
price of the drug ends up looking much
different from the list price, thanks to
the bevy of intermediaries who handle
the drug as it makes its way from the
manufacturer to the patient. The com-
plicated supply chain also is why CMS
often quotes an “average sales price” for
a drug – which is defined as a manufac-
turer’s sales of a drug during a calendar
quarter divided by the total number of
units of the drug sold by the manufac-
turer in that same quarter. 6
After a drug receives marketing
approval, the pharmaceutical manu-
facturer sets the list price. Typically, the
first step along the drug supply chain is
the wholesale distributor. Wholesalers
(companies like McKesson and Cardi-
nal Health) serve as the bridge between
manufacturers and pharmacies, and
purchase prescription medicines
from the manufacture at the wholesale
acquisition cost or average manufacturer
price – before any discounts, rebates,
or other price reductions are applied.
Ultimately, wholesalers play a relatively
minor role in drug pricing, according
to Darius Lakdawalla, PhD, a health
economist and health policy expert at
the University of Southern California’s
School of Pharmacy.
In return for the wholesalers’ dis-
tribution services, manufacturers pay
them a distribution service fee based
on a percentage of the WAC. These
fees, discounts, and rebates are negoti-
ated individually and can vary with
each manufacturer and wholesaler. 7
So, when a wholesaler purchases a
drug with a list price of $100 per pill,
it can collect a 4.5-percent distribution
fee, or $4.50 per pill, bringing their
actual cost per pill down to $95.50.
Pharmacies then purchase drugs
from wholesalers at a discount to the
WAC. Again, this discount varies
based on the size and purchasing
power of the individual pharmacy.
Using the previous example, when the
wholesaler sells that $100 pill to phar-
macies for a discounted price of $96, it
retains $0.50 on each pill sold.
When an insured patient pur-
chases that prescription drug from the
pharmacy, he or she pays an amount
outlined by his or her insurance plan.
58
ASH Clinical News
The amount of this cost-sharing is deter-
mined by the pharmacy benefit of his or
her health insurance plan, which is itself
determined by the insurers’ negotiations
with pharmacy benefit managers (PBMs).
Insurers hire PBMs to negotiate rebates
for Medicare Part D drugs (or those that
are dispensed through a pharmacy and
not in outpatient clinics or in the hospi-
tal) on their behalf. These PBMs – which
are dominated by Express Scripts, CVS
Caremark, and OptumRx – work with the
manufacturer to help negotiate the insur-
ance benefit for that drug. 7
“The role of the PBM is like that of a
sports agent,” explained Dr. Lakdawalla.
“They represent the interest of their insur-
ance company or employer clients and are
trying to secure the best prices from drug
companies on their client’s behalf.”
So, if a PBM purchases that $100 pill at
a 25-percent discount for its insurer client,
it passes that savings on to its insurer client.
The insurer then reimburses the PBM at
a privately negotiated rate. The PBM also
receives rebates and discounts from the
manufacturer and the dispensing phar-
macy, which it retains.
The difference between what the PBM
charges a health plan and what the PBM
pays to the pharmacy that dispenses a drug
is known as “spread pricing” and is partly
how PBMs make a profit. If the amount
BESPONSA™ (inotuzumab ozogamicin) is indicated for the treatment of adults
with relapsed or refractory B-cell precursor acute lymphoblastic leukemia (ALL)
AIM FOR DEEP
REMISSION
Deep remission refers to MRD-negative
remission, defi ned in the INO-VATE
ALL study as leukemic cells comprising
<1 x 10 -4 of bone marrow nucleated
cells per fl ow cytometry. 1
The effi cacy of BESPONSA was established on the basis of CR (35.8% [39/109; 95% CI,
26.8-45.5] with BESPONSA vs 17.4% [19/109; 95% CI, 10.8-25.9] with SC), the duration of
CR (8.0 months [95% CI, 4.9-10.4] with BESPONSA vs 4.9 months [95% CI, 2.9-7.2] with SC),
and the proportion of MRD-negative CR (89.7% [35/39; 95% CI, 75.8-97.1] with BESPONSA
vs 31.6% [6/19; 95% CI, 12.6-56.6] with SC) in the fi rst 218 randomized patients. 1
IMPORTANT SAFETY INFORMATION
WARNING: HEPATOTOXICITY, INCLUDING HEPATIC VENO-OCCLUSIVE
DISEASE (VOD) (ALSO KNOWN AS SINUSOIDAL OBSTRUCTION
SYNDROME) and INCREASED RISK OF POST–HEMATOPOIETIC STEM
CELL TRANSPLANT (HSCT) NON-RELAPSE MORTALITY (NRM):
• Hepatotoxicity, including fatal and life-threatening VOD, occurred in
patients who received BESPONSA. The risk of VOD was greater in
patients who underwent HSCT after BESPONSA treatment. The use
of HSCT conditioning regimens containing 2 alkylating agents and
last total bilirubin ≥ upper limit of normal (ULN) before HSCT were
signifi cantly associated with an increased risk of VOD
• Other risk factors for VOD in patients treated with BESPONSA
included ongoing or prior liver disease, prior HSCT, increased
age, later salvage lines, and a greater number of BESPONSA
treatment cycles
• Elevation of liver tests may require dosing interruption, dose
reduction, or permanent discontinuation of BESPONSA.
Permanently discontinue treatment if VOD occurs. If severe
VOD occurs, treat according to standard medical practice
• There was a higher post-HSCT non-relapse mortality rate in patients
receiving BESPONSA, resulting in a higher Day 100 post-HSCT
mortality rate
Hepatotoxicity, Including Hepatic VOD: Hepatotoxicity, including fatal and
life-threatening VOD, occurred in 23/164 patients (14%) during or following
treatment with BESPONSA or following subsequent HSCT. VOD was reported
up to 56 days after the last dose during treatment or follow-up without an
intervening HSCT. The median time from HSCT to onset of VOD was 15 days.
Patients with prior VOD or serious ongoing liver disease are at an increased
risk of worsening liver disease, including development of VOD, following
treatment with BESPONSA. Monitor closely for signs and symptoms of VOD;
these may include elevations in total bilirubin, hepatomegaly (which may be
painful), rapid weight gain, and ascites. For patients proceeding to HSCT,
the recommended duration of treatment with BESPONSA is 2 cycles. A third
cycle may be considered for patients who do not achieve a CR or CRi and
MRD-negativity after 2 cycles. Monitor liver tests closely during the fi rst
month post HSCT, then less frequently thereafter, according to standard
medical practice.
Grade 3/4 increases in aspartate aminotransferase, alanine aminotransferase,
and total bilirubin occurred in 7/160 (4%), 7/161 (4%), and 8/161 (5%)
patients, respectively.
Increased Risk of Post-HSCT Non-Relapse Mortality (NRM): There was a
higher post-HSCT NRM rate in patients receiving BESPONSA, resulting in a
higher Day 100 post-HSCT mortality rate. The rate of post-HSCT NRM was
31/79 (39%) with BESPONSA and 8/35 (23%) with investigator’s choice of
chemotherapy. In the BESPONSA arm, the most common causes of post-
HSCT NRM included VOD and infections. Monitor closely for toxicities post
HSCT, including signs and symptoms of infection and VOD.
Myelosuppression: Myelosuppression, and severe, life-threatening, and
fatal complications of myelosuppression, including hemorrhagic events
and infections, have occurred with BESPONSA. Thrombocytopenia and
neutropenia were reported in 83/164 patients (51%) and 81/164 patients
(49%), respectively. Febrile neutropenia was reported in 43/164 patients (26%).
Monitor complete blood counts prior to each dose of BESPONSA and
monitor for signs and symptoms of infection, bleeding/hemorrhage, or
other effects of myelosuppression during treatment and provide appropriate
management. As appropriate, administer prophylactic anti-infectives during
and after treatment with BESPONSA. Dose interruption, dose reduction, or
permanent discontinuation may be required.