Innovation in Oncology Drug Pricing: A Comparative Study of Savings Potential - Ruchika Talwar & Brian Cortese
June 28, 2023
Ashish Kamat hosts Ruchika Talwar and Brian Cortese to discuss a study comparing costs of generic oncology drugs bought via Mark Cuban Cost Plus Drug Company and Medicare. Dr. Talwar and Mr. Cortese expound on the significant savings potential for Medicare beneficiaries and the financial toxicity caused by expensive prescriptions. Dr. Talwar critiques the US system's complex nature, involving Pharmacy Benefit Managers, insurers, and drug companies, and contrasts it with cheaper alternatives abroad, such as Canada, India, and Mexico. Mr. Cortese introduces online tools like GoodRx and Amazon, aiding patients in reducing costs, despite certain restrictions. The dialogue concludes with questions for Mark Cuban concerning future drug provision and insurance innovations. Their study's implications could potentially stimulate changes in healthcare policy and Medicare drug price negotiations.
Biographies:
Ruchika Talwar, MD, Urologic Oncology Fellow, Department of Urology, Vanderbilt University Medical Center, Nashville, TN.
Brian Cortese, MD/MBA Candidate, University of Pennsylvania, Perelman School of Medicine and the Wharton School of Business, Philadelphia, PA.
Ashish Kamat, MD, MBBS, Professor, Department of Urology, Division of Surgery, University of Texas MD Anderson Cancer Center, President, International Bladder Cancer Group (IBCG), Houston, TX.
Biographies:
Ruchika Talwar, MD, Urologic Oncology Fellow, Department of Urology, Vanderbilt University Medical Center, Nashville, TN.
Brian Cortese, MD/MBA Candidate, University of Pennsylvania, Perelman School of Medicine and the Wharton School of Business, Philadelphia, PA.
Ashish Kamat, MD, MBBS, Professor, Department of Urology, Division of Surgery, University of Texas MD Anderson Cancer Center, President, International Bladder Cancer Group (IBCG), Houston, TX.
Read the Full Video Transcript
Ashish Kamat: Hello and welcome to UroToday's Bladder Cancer Center of Excellence. I'm Ashish Kamat, Professor of Urology Oncology at MD Anderson Cancer Center, and it's a pleasure to welcome today Dr. Ruchika Talwar, who is currently a urologic oncology and health services fellow at Vanderbilt University and has already made a name for herself in all aspects of this field. And also Brian Cortese, who's currently a medical student and a business major student as well, who is looking forward to a career in urology and has made his mark with a very important publication in JCO that just came out recently. So welcome Ruchika and Brian.
Ruchika Talwar: Thank you so much for having us here.
Brian Cortese: It's a pleasure.
Ashish Kamat: So Brian, if you would give us a little brief introduction and then launch into your talk on the slides and the data that you have. We'd be interested to see what you have to say. And then after that we'll wrap it up with a little discussion on some of the finer details.
Brian Cortese: Thank you so much for having us. So we'll briefly go over our paper that was recently published in JCO titled Projected Savings for Generic Oncology Drugs Purchased via Mark Cuban Cost Plus Drug Company Versus in Medicare. So a little bit of background. We wanted to set up the discussion to understand a bit more about the landscape of Part D spending and specifically within oncology. So the use of specialty drugs drives increased prescription drug spending over time. And one of the most shocking statistics that we came across was this idea of how oncology drugs only account for less than 1% of sales volume, but nearly 13.5% of spending as of 2020. So the hope is that after generics enter into the market, prices begin to drop due to increased competition. However, we have not always seen this. Prices sometimes remain high even after this generic entry.
And the issue is that since patients are still paying a lot out of pocket for these generic anti-cancer drugs, patients can experience significant financial toxicity manifesting in a host of ways. Some of those include reducing spending on housing and food, experiencing increased stress and anxiety, as well as missing and skipping doses of their crucial potentially life-saving medications. So there's been a resurgence of some older outlets for cheaper generic drugs such as GoodRx and emergence of new outlets such as Amazon Pharmacy and the subject of our study, specifically the Mark Cuban Cost Plus Drug Company.
So this brought us to our key question, how much could Medicare spending be reduced if Part D plan prices were matched to those available through the Mark Cuban Cost Plus Drug Company for cash paying customers? To shed some light on a bit of the methodology, we wanted to estimate potential Part D savings using cost plus drug pricing compared to Medicare Part D pricing, as well as the volume from the Medicare Part D spending dashboard. So the first step was identifying the seven generic oncology drugs that we wanted to look at that were available via the cost plus drug website. The seven drugs were Abiraterone, Anastrozole, Imatinib, Letrozole, methotrexate, Raloxifene, and Tamoxifen. The next step was to identify the most up-to-date price and volume data, which I think is a very nuanced thing that I want to shed a little bit more light on.
Specifically within pricing, there's about a three-month delay for the pricing data to be the most up-to-date. So that is why at the time of our study the most up-to-date pricing was this quarter 3 2022 Medicare Part D formulary data. Within this dataset, there's all of the Part D plans and their sponsors as well as all of the prices normalized to the per pill price for all of these drugs. So we are able to use that data to identify the 25th, the 50th, and the 75th percentile prices for let's just say a pill of abiraterone. The next step was identifying the price per pill at the Mark Cuban Cost Plus Drug Company website, for example, abiraterone, it's its cost plus that 15% markup, the $3 pharmacy fee as well as the $5 shipping fee. We normalize that price to a per pill price in order to make the comparison more apples to apples. And the last thing was to identify the volume data to really understand what is the large scale impact this could have, and the most up-to-date volume is about two years prior.
So we're currently in 2023, so the most up-to-date volume data would be currently 2021. So at the time that we did this study, it would be 2020. In order to make this calculation. It was quite simple and I think rather elegant. We essentially found the difference between that normalized per pill price through the Part D formulary data, subtracted out the Mark Cuban Cost Plus Drugs price and multiplied it by the total volume of the number of pills that were dispensed through Medicare. And of course we had to make certain assumptions such as perfect compliance through our beneficiaries for their annual consumption of these anti-cancer drugs. Some of the roles results were pretty striking with the median cost plus drug pricing for seven generic oncology drugs conferred significant savings for thousands of our beneficiaries. Just a few call-outs on the left side, specifically the median price savings was approximately $650 million with a range of 250 million to about 2.1 billion at the 25th and 75th percentiles respectively.
We wanted to make sure we ran a sensitivity analysis to understand a little bit more about what are the range of savings we could expect. Additionally, the two major drugs, Abiraterone and Imatinib specifically the 400 milligram version were the two drugs that conferred the most cost savings at the median price. Abiraterone was approximately 350 million. With Imatinib being approximately 200 million. Three drugs specifically surprised us with being pretty fairly priced at the median cost savings with Anastrozole, Letrozole, and Tamoxifen technically being a negative cost savings for Mark Cuban's Cost Plus Drug Company, which means that the formulary prices were approximately what Mark Cubans offered. And within table one, specifically the number of impacted beneficiaries. This column shows that we could impact potentially hundreds of thousands of beneficiaries that are currently on Medicare Part D plans that could be using some of the savings through the Mark Cuban Cost Plus Drug Company. So I wanted to hand it over to Dr. Talwar to shed some light on a little bit more about the clinical and fiscal and policy implications of this study.
Ruchika Talwar: Absolutely. Thanks so much Brian. Obviously our results make clear that Medicare and its Part D plan sponsors are overpaying for these generic oncology drugs. But more importantly, our primary driver of this study was to get the word out to both physicians and patients about these cash pay options that often actually offer lower prices to beneficiaries if they choose to bypass their insurance coverage and just pay cash. I think it's a concept that people don't necessarily realize. You think you're paying into an insurance plan, you think you're getting adequate coverage, but in reality, the role of PBMs or Pharmacy Benefit Managers in this whole system have made it such that sometimes bypassing your insurance totally can confer significant cost savings. We have a lot of issues with financial toxicity and cancer care. Drug pricing is just one aspect of this, but we want to make sure that both physicians and patients know that this strategy can help alleviate some of the financial stress that a cancer diagnosis brings.
Another important policy implication here is because of the recent passage of the inflation reduction Act, there is actually going to be some role for Medicare to be able to negotiate prices. And in addition, there's also going to be out-of-pocket caps for patients to help address some of these financial concerns. But when we run analyses like these, it gives Medicare a benchmark to use for their negotiations. So that's why getting this study out was incredibly important to make sure that physicians and patients are aware, but also to serve as the foundation for eventual policy changes that can help alleviate some of these issues with high drug pricing. Also, as urologists and specifically as a urologic oncologist seeing Abiraterone, the degree of savings there is huge. A lot of people think generic abiraterone through insurance coverage is the way to go for patients who often are on dual therapy.
Now even triplet or drug regimens that include up to four agents, it's important to realize that sometimes cost plus or other pharmacy programs can help confer cost savings to patients as well. We do have a few limitations that I think it's important to be aware of when looking at our study. We obviously had to use the most up-to-date data available. So we did compare generic drug use in 2022 in terms of pricing, but we used the volume that was filled in 2020. So that's one key assumption there that obviously may have changed over the subsequent two years. Also, the generic price market is constantly changing. This is one key to Mark Cuban's Cost Plus Drug Company, and the reason I think it was so successful, we don't have any predictability of how generic drug pricing changes in the market. However, in Cost Plus they have a standard pricing regimen, it's the price of manufacturing the drug plus 15%, plus their standard markup for dispensing and shipping the drug.
So those prices are a lot more predictable and there's a lot of transparency that I think gives patients and physicians a lot of comfort. They know what they're paying for. Another important limitation here is that we had to assume, as Brian mentioned earlier, the beneficiaries had perfect compliance for their drugs in that we assume that everyone took their drug every day at the prescribed time, but that's obviously not always the case. So the actual cost savings may have actually been a bit less. However, despite those limitations, we do think this is an important study, in that it demonstrates some of the major flaws with Medicare Part D pricing. It also helps us get the word out there to patients and physicians that patients can really get a lot of their financial toxicity concerns addressed by looking, as I've said, outside of their insurance plans. Finally, we hope that our analysis can help serve as a benchmark for future Medicare drug negotiations. Thank you.
Ashish Kamat: So thanks so much. I mean, that was a very succinct presentation that both of you gave and I think in many ways you covered a lot of the key points that our audience would want to hear about when it comes to what are the nuances and what are the finer details of your study. So let me pivot a little bit, and not to put you guys on the spot, but talk about something that might be a little bit broader and not specific to your study, simply because you guys did such a phenomenal job covering the data within your study.
So if I could first bring it up to you, I guess Ruchika, since you've been involved in this in a while. I mean we all know that in the US the way the drug pricing has come about over the years where people have been forced in many ways to go through their insurers and then Medicare and et cetera, it's unfortunately a self-fulfilling prophecy for the payers, not so much the patients or the physicians dispensing the medication. With that in mind, using this data, what would you recommend as it next steps both within the US and outside the US for those that might be listening in other countries?
Ruchika Talwar: Yeah, I'll start actually with the relevance in the United States. Here, we've actually seen an increase in drug pricing that corresponded to Medicare Part D coverage. So we actually originally, Medicare when it was created, did not offer prescription drug coverage. Patients had their healthcare covered, but they paid out of pocket. In an effort to help make drugs more affordable congress then included a Part D benefit to address coverage of those medications. However, by doing so, they gave companies, whether it's drug companies, insurance companies, a mechanism by which they could increase prices because less of those costs were directly patient facing initially. However, the system has now become extremely convoluted. We have PBMs or Pharmacy Benefit Managers who are hired by insurance companies to essentially negotiate pricing. They take a cut, so they provide rebates for certain drugs, they take a cut. It's very complex and that's the problem here.
I think people are fed up with not understanding why they're paying a premium every month. And then in addition to that, when they go to fill their drugs, they have a copay and they just want transparency. They don't understand where the money's going. They don't understand if it's going to the insurer, to the drug company, to the physician. And so that's the beauty of cost plus. It gives patients a predictable way to understand that there's a price of manufacturing the drug. There's a standard fee that helps just run the business, and then there's just the cost of dispensing and getting the drug. So it alleviates some of that frustration.
Drug pricing, internationally, is a bit different. Because they don't have this system. Drugs in Canada, in India and in other countries are actually a lot cheaper. And for that reason patients often turn to pharmacies in Canada, pharmacies in India, pharmacies in Mexico to get their drugs at a cheaper rate because they're cutting out all of these middle men in the system. So I don't have all the answers to your question about how we got to the state. I think there's a lot that went on behind the scenes we were not aware of. But overall part of the landscape is indeed a self-fulfilling prophecy due to the fact that we've built in these insurance coverage mechanisms that allow for prices to inch higher and higher and higher.
Ashish Kamat: Yeah, and that's glad you emphasized that point because it is a very regionally focused sort of deficiency that we tend to have in the US, not so much in other parts of the world. And many patients have been reaching out on their own, as you mentioned, overseas. India, which is the largest manufacturer of generics. I mean people are, sometimes you go to the pharmacy here in the US across the street and 90% of the drugs are actually not made in the US, but you're paying that market as you mentioned. Now, just to throw a wider net, Brian, and not come off as an advertisement for Mark Cuban's Cost Plus Company, what is some of the sense that you have, because I'm sure you did this, maybe not published, but looking at other avenues where patients can save on their prescription. I mean you mentioned GoodRx and others. Do you have some sense in a broad, maybe not specific way as to what are some of the other avenues in which patients could go and follow a similar route and save money?
Brian Cortese: Yeah, absolutely. Dr. Talwar and I, as well as a few other collaborators are currently working on a review, a special article focused on exploring this landscape of alternative online tools for patients to become more informed consumers in order to reduce their out-of-pocket costs. And I would say it falls into four buckets for us. You have these GoodRx type models where it is like a pharmacy card where you're able to physically go to a pharmacy and offer those discounts. The benefit of those is for a lot of the times patients have this trusting relationship with their local pharmacy. They know the pharmacist there, it's close to their home, they're able to physically go and pick up this medication for them. The issue with that type of model is that a lot of the savings change by time and geography. If I'm in Nashville with Dr. Talwar, I might not be able to get the same price for that generic medication as I would in Philadelphia.
Additionally, if I pay $1.50 time for my 30 count of medications due to a one-time deal, I can't expect that same $1.50 savings the next time that I go pick up my medication. So when it comes to an informed consumer, I can't bet on this is my projected out-of-pocket costs over a year. The next bucket is Amazon, which is this amazing pharmacy where you have both pill pack, which is this really interesting offering for complex patients that are taking multiple medications, three, four, five medications per day. And they are able to use this pharmacy technology that they have in order to dispense these medications in little daily packets where they're able to say, you take all of these medications in the specific packet at 8:00 in the morning on Tuesday, June X, and it's really great for patients who have trouble with some of those medications or polypharmacy where there's lots of issues with making sure that you're taking the right medication at the right time.
There is a barrier to entry. We tried to look at some of the savings and you honestly must have that Amazon Prime membership running about $150 per year in order to access those savings. And there the last bucket outside of Mark Cuban Cost Plus Drug Company is this Part D plan finder. So of course some of the Part D plans will have some of the best prices for your specific medication. So let's just say hypothetically you got the one percentile or first percentile Abiraterone Part D plan and that's the only medication that you take. That might be the best option for you, but you really have to make sure that Part D plan is available to you in your state at a premium that works for you.
Ashish Kamat: Great, great discussion. And again, we could chat on this topic for a long time, but we do have a promise of sorts from Mark Cuban to come on this forum and engage in a discussion. So with that in mind, I'm going to flip it back to you as a closing statement. Brian, what is one question you would want to ask Mr. Cuban when he comes on, and then Ruchika, what is a question you would want to ask him that you haven't asked him already?
Brian Cortese: One of the questions that's really interesting to me is he has teased the idea of doing sterile injectables and potentially biologics. So moving forward, what are some of the regulatory barriers that he's facing and potential timeline for offering those sorts of medications to patients?
Ruchika Talwar: That's a great question, Brian. So yes, I actually got the opportunity to ask him my questions already, but during our discussion he talked a lot about the concept of insurance. So just backing it up more broadly, we discussed the fact that insurers really don't even insure anymore, because of this concept of high copays, cost sharing, deductibles, et cetera. So my question to him is how does he see the role of cost plus going direct to employer? So being the actual provider of services to a specific employer and cutting out the insurer totally. Does he think that's something that cost plus can do? Is it scalable? I'd be really interested to see innovations in that space.
Ashish Kamat: Great questions, and again, congratulations on this really important study in getting it out in a high profile journal and of course for spending time with us today on UroToday and getting the message out to our audience. Thanks guys.
Ruchika Talwar: Thank you so much for having us. We appreciate it.
Brian Cortese: Thank you.
Ashish Kamat: Hello and welcome to UroToday's Bladder Cancer Center of Excellence. I'm Ashish Kamat, Professor of Urology Oncology at MD Anderson Cancer Center, and it's a pleasure to welcome today Dr. Ruchika Talwar, who is currently a urologic oncology and health services fellow at Vanderbilt University and has already made a name for herself in all aspects of this field. And also Brian Cortese, who's currently a medical student and a business major student as well, who is looking forward to a career in urology and has made his mark with a very important publication in JCO that just came out recently. So welcome Ruchika and Brian.
Ruchika Talwar: Thank you so much for having us here.
Brian Cortese: It's a pleasure.
Ashish Kamat: So Brian, if you would give us a little brief introduction and then launch into your talk on the slides and the data that you have. We'd be interested to see what you have to say. And then after that we'll wrap it up with a little discussion on some of the finer details.
Brian Cortese: Thank you so much for having us. So we'll briefly go over our paper that was recently published in JCO titled Projected Savings for Generic Oncology Drugs Purchased via Mark Cuban Cost Plus Drug Company Versus in Medicare. So a little bit of background. We wanted to set up the discussion to understand a bit more about the landscape of Part D spending and specifically within oncology. So the use of specialty drugs drives increased prescription drug spending over time. And one of the most shocking statistics that we came across was this idea of how oncology drugs only account for less than 1% of sales volume, but nearly 13.5% of spending as of 2020. So the hope is that after generics enter into the market, prices begin to drop due to increased competition. However, we have not always seen this. Prices sometimes remain high even after this generic entry.
And the issue is that since patients are still paying a lot out of pocket for these generic anti-cancer drugs, patients can experience significant financial toxicity manifesting in a host of ways. Some of those include reducing spending on housing and food, experiencing increased stress and anxiety, as well as missing and skipping doses of their crucial potentially life-saving medications. So there's been a resurgence of some older outlets for cheaper generic drugs such as GoodRx and emergence of new outlets such as Amazon Pharmacy and the subject of our study, specifically the Mark Cuban Cost Plus Drug Company.
So this brought us to our key question, how much could Medicare spending be reduced if Part D plan prices were matched to those available through the Mark Cuban Cost Plus Drug Company for cash paying customers? To shed some light on a bit of the methodology, we wanted to estimate potential Part D savings using cost plus drug pricing compared to Medicare Part D pricing, as well as the volume from the Medicare Part D spending dashboard. So the first step was identifying the seven generic oncology drugs that we wanted to look at that were available via the cost plus drug website. The seven drugs were Abiraterone, Anastrozole, Imatinib, Letrozole, methotrexate, Raloxifene, and Tamoxifen. The next step was to identify the most up-to-date price and volume data, which I think is a very nuanced thing that I want to shed a little bit more light on.
Specifically within pricing, there's about a three-month delay for the pricing data to be the most up-to-date. So that is why at the time of our study the most up-to-date pricing was this quarter 3 2022 Medicare Part D formulary data. Within this dataset, there's all of the Part D plans and their sponsors as well as all of the prices normalized to the per pill price for all of these drugs. So we are able to use that data to identify the 25th, the 50th, and the 75th percentile prices for let's just say a pill of abiraterone. The next step was identifying the price per pill at the Mark Cuban Cost Plus Drug Company website, for example, abiraterone, it's its cost plus that 15% markup, the $3 pharmacy fee as well as the $5 shipping fee. We normalize that price to a per pill price in order to make the comparison more apples to apples. And the last thing was to identify the volume data to really understand what is the large scale impact this could have, and the most up-to-date volume is about two years prior.
So we're currently in 2023, so the most up-to-date volume data would be currently 2021. So at the time that we did this study, it would be 2020. In order to make this calculation. It was quite simple and I think rather elegant. We essentially found the difference between that normalized per pill price through the Part D formulary data, subtracted out the Mark Cuban Cost Plus Drugs price and multiplied it by the total volume of the number of pills that were dispensed through Medicare. And of course we had to make certain assumptions such as perfect compliance through our beneficiaries for their annual consumption of these anti-cancer drugs. Some of the roles results were pretty striking with the median cost plus drug pricing for seven generic oncology drugs conferred significant savings for thousands of our beneficiaries. Just a few call-outs on the left side, specifically the median price savings was approximately $650 million with a range of 250 million to about 2.1 billion at the 25th and 75th percentiles respectively.
We wanted to make sure we ran a sensitivity analysis to understand a little bit more about what are the range of savings we could expect. Additionally, the two major drugs, Abiraterone and Imatinib specifically the 400 milligram version were the two drugs that conferred the most cost savings at the median price. Abiraterone was approximately 350 million. With Imatinib being approximately 200 million. Three drugs specifically surprised us with being pretty fairly priced at the median cost savings with Anastrozole, Letrozole, and Tamoxifen technically being a negative cost savings for Mark Cuban's Cost Plus Drug Company, which means that the formulary prices were approximately what Mark Cubans offered. And within table one, specifically the number of impacted beneficiaries. This column shows that we could impact potentially hundreds of thousands of beneficiaries that are currently on Medicare Part D plans that could be using some of the savings through the Mark Cuban Cost Plus Drug Company. So I wanted to hand it over to Dr. Talwar to shed some light on a little bit more about the clinical and fiscal and policy implications of this study.
Ruchika Talwar: Absolutely. Thanks so much Brian. Obviously our results make clear that Medicare and its Part D plan sponsors are overpaying for these generic oncology drugs. But more importantly, our primary driver of this study was to get the word out to both physicians and patients about these cash pay options that often actually offer lower prices to beneficiaries if they choose to bypass their insurance coverage and just pay cash. I think it's a concept that people don't necessarily realize. You think you're paying into an insurance plan, you think you're getting adequate coverage, but in reality, the role of PBMs or Pharmacy Benefit Managers in this whole system have made it such that sometimes bypassing your insurance totally can confer significant cost savings. We have a lot of issues with financial toxicity and cancer care. Drug pricing is just one aspect of this, but we want to make sure that both physicians and patients know that this strategy can help alleviate some of the financial stress that a cancer diagnosis brings.
Another important policy implication here is because of the recent passage of the inflation reduction Act, there is actually going to be some role for Medicare to be able to negotiate prices. And in addition, there's also going to be out-of-pocket caps for patients to help address some of these financial concerns. But when we run analyses like these, it gives Medicare a benchmark to use for their negotiations. So that's why getting this study out was incredibly important to make sure that physicians and patients are aware, but also to serve as the foundation for eventual policy changes that can help alleviate some of these issues with high drug pricing. Also, as urologists and specifically as a urologic oncologist seeing Abiraterone, the degree of savings there is huge. A lot of people think generic abiraterone through insurance coverage is the way to go for patients who often are on dual therapy.
Now even triplet or drug regimens that include up to four agents, it's important to realize that sometimes cost plus or other pharmacy programs can help confer cost savings to patients as well. We do have a few limitations that I think it's important to be aware of when looking at our study. We obviously had to use the most up-to-date data available. So we did compare generic drug use in 2022 in terms of pricing, but we used the volume that was filled in 2020. So that's one key assumption there that obviously may have changed over the subsequent two years. Also, the generic price market is constantly changing. This is one key to Mark Cuban's Cost Plus Drug Company, and the reason I think it was so successful, we don't have any predictability of how generic drug pricing changes in the market. However, in Cost Plus they have a standard pricing regimen, it's the price of manufacturing the drug plus 15%, plus their standard markup for dispensing and shipping the drug.
So those prices are a lot more predictable and there's a lot of transparency that I think gives patients and physicians a lot of comfort. They know what they're paying for. Another important limitation here is that we had to assume, as Brian mentioned earlier, the beneficiaries had perfect compliance for their drugs in that we assume that everyone took their drug every day at the prescribed time, but that's obviously not always the case. So the actual cost savings may have actually been a bit less. However, despite those limitations, we do think this is an important study, in that it demonstrates some of the major flaws with Medicare Part D pricing. It also helps us get the word out there to patients and physicians that patients can really get a lot of their financial toxicity concerns addressed by looking, as I've said, outside of their insurance plans. Finally, we hope that our analysis can help serve as a benchmark for future Medicare drug negotiations. Thank you.
Ashish Kamat: So thanks so much. I mean, that was a very succinct presentation that both of you gave and I think in many ways you covered a lot of the key points that our audience would want to hear about when it comes to what are the nuances and what are the finer details of your study. So let me pivot a little bit, and not to put you guys on the spot, but talk about something that might be a little bit broader and not specific to your study, simply because you guys did such a phenomenal job covering the data within your study.
So if I could first bring it up to you, I guess Ruchika, since you've been involved in this in a while. I mean we all know that in the US the way the drug pricing has come about over the years where people have been forced in many ways to go through their insurers and then Medicare and et cetera, it's unfortunately a self-fulfilling prophecy for the payers, not so much the patients or the physicians dispensing the medication. With that in mind, using this data, what would you recommend as it next steps both within the US and outside the US for those that might be listening in other countries?
Ruchika Talwar: Yeah, I'll start actually with the relevance in the United States. Here, we've actually seen an increase in drug pricing that corresponded to Medicare Part D coverage. So we actually originally, Medicare when it was created, did not offer prescription drug coverage. Patients had their healthcare covered, but they paid out of pocket. In an effort to help make drugs more affordable congress then included a Part D benefit to address coverage of those medications. However, by doing so, they gave companies, whether it's drug companies, insurance companies, a mechanism by which they could increase prices because less of those costs were directly patient facing initially. However, the system has now become extremely convoluted. We have PBMs or Pharmacy Benefit Managers who are hired by insurance companies to essentially negotiate pricing. They take a cut, so they provide rebates for certain drugs, they take a cut. It's very complex and that's the problem here.
I think people are fed up with not understanding why they're paying a premium every month. And then in addition to that, when they go to fill their drugs, they have a copay and they just want transparency. They don't understand where the money's going. They don't understand if it's going to the insurer, to the drug company, to the physician. And so that's the beauty of cost plus. It gives patients a predictable way to understand that there's a price of manufacturing the drug. There's a standard fee that helps just run the business, and then there's just the cost of dispensing and getting the drug. So it alleviates some of that frustration.
Drug pricing, internationally, is a bit different. Because they don't have this system. Drugs in Canada, in India and in other countries are actually a lot cheaper. And for that reason patients often turn to pharmacies in Canada, pharmacies in India, pharmacies in Mexico to get their drugs at a cheaper rate because they're cutting out all of these middle men in the system. So I don't have all the answers to your question about how we got to the state. I think there's a lot that went on behind the scenes we were not aware of. But overall part of the landscape is indeed a self-fulfilling prophecy due to the fact that we've built in these insurance coverage mechanisms that allow for prices to inch higher and higher and higher.
Ashish Kamat: Yeah, and that's glad you emphasized that point because it is a very regionally focused sort of deficiency that we tend to have in the US, not so much in other parts of the world. And many patients have been reaching out on their own, as you mentioned, overseas. India, which is the largest manufacturer of generics. I mean people are, sometimes you go to the pharmacy here in the US across the street and 90% of the drugs are actually not made in the US, but you're paying that market as you mentioned. Now, just to throw a wider net, Brian, and not come off as an advertisement for Mark Cuban's Cost Plus Company, what is some of the sense that you have, because I'm sure you did this, maybe not published, but looking at other avenues where patients can save on their prescription. I mean you mentioned GoodRx and others. Do you have some sense in a broad, maybe not specific way as to what are some of the other avenues in which patients could go and follow a similar route and save money?
Brian Cortese: Yeah, absolutely. Dr. Talwar and I, as well as a few other collaborators are currently working on a review, a special article focused on exploring this landscape of alternative online tools for patients to become more informed consumers in order to reduce their out-of-pocket costs. And I would say it falls into four buckets for us. You have these GoodRx type models where it is like a pharmacy card where you're able to physically go to a pharmacy and offer those discounts. The benefit of those is for a lot of the times patients have this trusting relationship with their local pharmacy. They know the pharmacist there, it's close to their home, they're able to physically go and pick up this medication for them. The issue with that type of model is that a lot of the savings change by time and geography. If I'm in Nashville with Dr. Talwar, I might not be able to get the same price for that generic medication as I would in Philadelphia.
Additionally, if I pay $1.50 time for my 30 count of medications due to a one-time deal, I can't expect that same $1.50 savings the next time that I go pick up my medication. So when it comes to an informed consumer, I can't bet on this is my projected out-of-pocket costs over a year. The next bucket is Amazon, which is this amazing pharmacy where you have both pill pack, which is this really interesting offering for complex patients that are taking multiple medications, three, four, five medications per day. And they are able to use this pharmacy technology that they have in order to dispense these medications in little daily packets where they're able to say, you take all of these medications in the specific packet at 8:00 in the morning on Tuesday, June X, and it's really great for patients who have trouble with some of those medications or polypharmacy where there's lots of issues with making sure that you're taking the right medication at the right time.
There is a barrier to entry. We tried to look at some of the savings and you honestly must have that Amazon Prime membership running about $150 per year in order to access those savings. And there the last bucket outside of Mark Cuban Cost Plus Drug Company is this Part D plan finder. So of course some of the Part D plans will have some of the best prices for your specific medication. So let's just say hypothetically you got the one percentile or first percentile Abiraterone Part D plan and that's the only medication that you take. That might be the best option for you, but you really have to make sure that Part D plan is available to you in your state at a premium that works for you.
Ashish Kamat: Great, great discussion. And again, we could chat on this topic for a long time, but we do have a promise of sorts from Mark Cuban to come on this forum and engage in a discussion. So with that in mind, I'm going to flip it back to you as a closing statement. Brian, what is one question you would want to ask Mr. Cuban when he comes on, and then Ruchika, what is a question you would want to ask him that you haven't asked him already?
Brian Cortese: One of the questions that's really interesting to me is he has teased the idea of doing sterile injectables and potentially biologics. So moving forward, what are some of the regulatory barriers that he's facing and potential timeline for offering those sorts of medications to patients?
Ruchika Talwar: That's a great question, Brian. So yes, I actually got the opportunity to ask him my questions already, but during our discussion he talked a lot about the concept of insurance. So just backing it up more broadly, we discussed the fact that insurers really don't even insure anymore, because of this concept of high copays, cost sharing, deductibles, et cetera. So my question to him is how does he see the role of cost plus going direct to employer? So being the actual provider of services to a specific employer and cutting out the insurer totally. Does he think that's something that cost plus can do? Is it scalable? I'd be really interested to see innovations in that space.
Ashish Kamat: Great questions, and again, congratulations on this really important study in getting it out in a high profile journal and of course for spending time with us today on UroToday and getting the message out to our audience. Thanks guys.
Ruchika Talwar: Thank you so much for having us. We appreciate it.
Brian Cortese: Thank you.