Leading Professors Getting Paid Thousands by Big Pharma

Emily Scott at her home in the Cumberland Gap region of eastern Tennessee. Scott was denied the treatment for hepatitis C by Tennessee’s state Medicaid program. (Ben Corda for ProPublica)

The drug is “not cheap, but it’s a good deal” for patients who need it, Goldman said, after his team’s economic models calculated its net value between $3.4 trillion and $5.1 trillion over 20 years.

ICER’s finding that the PCSK9 inhibitor was overpriced was later affirmed in a related study published in the peer-reviewed Journal of the American Medical Association, or JAMA. Associates of Precision Health Economics again rushed to Amgen’s defense. Philipson and an Amgen executive wrote a letter to the editor of JAMA to dispute the study’s conclusion that the price should be about $4,500 per month, less than a third of the drug’s average price.

The two studies made different assumptions that shaped their conclusions. Dr. Dhruv Kazi, one of the authors of the JAMA study and an associate professor at the University of California San Francisco, said that the Precision Health Economics study assumed that there were fewer eligible patients who would take the drug, lowering the cost to society. It also posited that they had a higher risk of cardiac events, like heart attacks, boosting the drug’s value as measured in lives saved.

“This is an example where you would end up assuming that the population is at higher risk than is true for the real world population and that would make your drug look better,” Kazi said. “It’s not a wild idea to think that a cost-effectiveness study funded by industry would look more favorable” to the industry’s viewpoint, he said. “If that weren’t the case, they wouldn’t fund it.”

Jena said the patient population for the Precision Health Economics study more accurately reflected the real world. One should not automatically assert that a study is “invalid or flawed” because of industry funding, he added.

The JAMA study “over-exaggerated the cost” of the drug and “unnecessarily rang ‘alarm bells,’” said Amgen spokeswoman Kristen Neese.

Amgen has ties to all three founders of Precision Health Economics. Working for other firms, Philipson has twice testified as an expert witness for Amgen, defending the company’s rights to drug patents, according to his curriculum vitae. The other two founders, Goldman and Lakdawalla, are principals at the Leonard D. Schaeffer Center for Health Policy and Economics at USC, which received $500,000 in late 2016 from Amgen for an “innovation initiative,” according to public disclosures. Goldman said the funds were unrestricted and could be used at the center’s discretion. Robert Bradway, the CEO and chair of Amgen, is on the advisory board of the university center, and Leonard Schaeffer, a professor at USC and the namesake of the center, sat on Amgen’s board of directors for nearly a decade.

With funding from Amgen, the Schaeffer Center hosted a forum in Washington, D.C., in October 2015 on the affordability of specialty drugs. Before a panel focused on the new cholesterol treatment, Goldman cautioned against lowering drug prices.

“We know that the pricing of these treatments is often controversial,” he told the crowd of policymakers, which included Sen. Bill Cassidy, R-La., a physician who sits on the Health, Education, Labor and Pensions Committee. “If we dropped all the prices today, in the long run, we wouldn’t have any innovation.”

The PCSK9 inhibitor’s price inhibits access for some patients who need it. Scott Annese, a 50-year-old computer technician from South Daytona, Florida, has diabetes and a total blood cholesterol level topping 260. After he suffered a heart attack and had two stents inserted in his left coronary artery, his doctor prescribed a statin, a low-cost drug to lower cholesterol. However, the statin combined with his diabetes to cause painful side effects, including muscle aches, cramping, and soreness in his legs that incapacitated him, he said. Amgen’s drug, his doctor told him, was the only other option.

But Annese, who makes $13.50 an hour, couldn’t afford the new drug. He doesn’t have health coverage through his job and says Obamacare, especially with its rising premiums, is too expensive for him. He tried to get insurance through Medicaid, but he earns too much to qualify. His last option, he said, is Amgen’s patient assistance program, which he has applied for. His application is pending.

“If you’re in the industry to help people, you’re not helping them if you raise the drugs to the point that they can’t afford it,” said Annese. “The drug companies are hurting the people who need it most.”

Gilead Sciences’ $84,000 list price for its highly effective treatment for the hepatitis C virus prompted dozens of state Medicaid programs and prison systems to restrict treatment to only the sickest patients. A congressional investigation in 2015 found that Gilead, which purchased the drug from a smaller pharmaceutical company, had set the price of the treatment at the peak it thought the market could bear, more than double what the drug’s original developers had suggested.

“Gilead pursued a calculated scheme for pricing and marketing its hepatitis C drug based on one primary goal, maximizing revenue, regardless of the human consequences,” said Sen. Ron Wyden, D-Ore., when he presented the findings of the congressional investigation.

While Precision Health Economics often portrays itself as an advocate for wider access to vital medications such as the hepatitis C drugs, the high price of those drugs forces some payers, such as the Medicaid programs, to ration them. As a result, the professors may influence who ultimately gets the drug and who doesn’t. The impact is reverberating in the rugged hills of eastern Tennessee, where hepatitis C is spreading due to the opioid epidemic. Because the virus can be asymptomatic for years, only a fraction of those infected know they are carriers, leading many to spread the potentially fatal liver disease unknowingly, mostly by sharing needles.

Over the past seven years, the number of acute cases of hepatitis C in Tennessee has tripled. The state has estimated that more than 100,000residents are likely to have a chronic version of the disease without realizing it. Just last year, the state issued a public-health advisory addressing the crisis, but the rates of infection continue to rise.

It took years for Emily Scott, the factory worker from the Cumberland Gap region of eastern Tennessee, to find out she had the virus. After donating blood in January 2016, she received a certified letter from the blood bank informing her that her blood could not be accepted because it had tested positive for hepatitis C.

She didn’t believe the letter at first, hoping they had mistaken her blood with that of another donor. After all, she had never experienced any symptoms. But a local doctor reran her blood work and her diagnosis was confirmed.

Like many in her community, Scott had battled an addiction to drugs, mostly painkillers, and she had used syringes in the past for her highs. She’d been clean for the past four years but believes that she contracted the disease through her drug use.

“I made some mistakes,” said the 26-year-old Scott. “But I didn’t ask to be sick.”

Shortly after her diagnosis, Scott learned from a television advertisement that the new drugs had a cure rate of 90 percent. But getting the treatments would prove elusive.

Raising her two sons on her own, Scott barely supports the family with her weekly income of about $350 from sewing shirts at an apparel factory. She is one of more than 11,000 Tennesseans on Medicaid who have been diagnosed with hepatitis C, according to the most recent state data. If all of them received the new medication, the state estimated that it would cost over $1.6 billion, more than double what Tennessee’s Medicaid program spends on drugs in a year.

Originally published as “Big Pharma Quietly Enlists Leading Professors to Justify $1,000-Per-Day Drugs” on ProPublica

Written by Annie Waldman

Annie Waldman is a reporter covering education at ProPublica. She recently graduated with honors from the dual masters program at Columbia’s School of International and Public Affairs and the School of Journalism, where she was a recipient of the Pulitzer Traveling Fellowship. Her work has been published with the BBC, Vice, Mic, and The New York World.