July 20, 2017

Prescription Drugs – The Price Game

Prescription Drugs in The US 

Frank Magliochetti Report


If we look back ten years ago, the price of prescription drugs were fairly low and it was easy for patients to buy their medication from the pharmacy.   2016 has not only brought new innovative medical drugs and vaccines, it has brought drug prices that are much higher than before.

We might put the blame on the companies who research and manufacturer the drugs, however, the truth is  this huge influx in pricing is simply that drug companies have the right to monopolize and set  pricing how it sees fit; many wonder if the government should get involved in the pricing of a private industry produced product.

Though the products are approved by the FDA, naturally, the company/manufacturer claims they are simply working to get back their initial investment back.  Add to that private insurers and third party pharmacies, which all benefit when from the companies producing the drugs and want the market to turn towards them. It’s a loop that goes round and round from the manufacturer to the pharmacy.

frank-magliochetti-report-drug-pricingThe influx in price does not end here. With so many rare drugs created this year to fight specific diseases, there are specific companies that are the sole manufacturer of the approved drugs. The US government allows the companies to lay claim to their drug for at least twenty years after it is released. With a price rate at 100%, many people are unable to buy these drugs and hence may have to wait years for the generics to arrive in the market. These generics are priced 45% less than the original drugs.

Many place some portion of blame on the FDA due to the lengthy process and expense it takes for a drug to be accepted by the committee and then approving a virtual monopoly for the company first to the finish line.  With years of testing and billions of dollars invested in making the drug, the company is required to make further changes if the FDA does not approve the drug.

Manufacturer’s reason that the drugs are sold at high prices because they have to recoup on the research and trail funding (among other expenses) needed to bring the product to market.

The prices for drugs to fight Hepatitis or the recent EpiPen increase are two recent examples of companies exercising their right to price the drugs however they want.frank-magliochetti-report-drug-pricing

What can be done to help curb the escalating cost of new medications entering the market?  Is it a more economical FDA approval process which will help lessen the initial trial investment or more government involvement in the research and development of these much needed drugs and their pricing matrix.

A 2016 study published in the journal of the American Medical Association cites the following five reasons for the rise in prices.

Drug manufacturers in the U.S. set their own prices, and that’s not the norm elsewhere in the world.

Go to the official post by clicking the link below:


Countries with national health programs have government entities that either negotiate drug prices or decide not to cover drugs whose prices they deem excessive. No similar negotiating happens in the U.S.

When a Republican-majority Congress created the Medicare drug benefit in 2003, they barred the program that now covers 40 million Americans from negotiating drug prices. Medicaid, on the other hand, must cover all drugs approved by the Food and Drug Administration, regardless of whether a cheaper, equally or more effective drug is available. And private insurers rarely negotiate prices because the third party pharmacy benefits managers that administer prescription drugs, such as Express Scripts and CVS Health, often receive payments from drug companies to shift market share in their favor, according to the study.

We allow “government-protected monopolies” for certain drugs, preventing generics from coming to market to reduce prices.

In an effort to promote innovation, the U.S. has a patent system that allows drug manufacturers to remain the sole manufacturer of drugs they’ve patented for 20 years or more. The FDA also gives drug manufacturers exclusivity for certain products, including those that treat people with rare diseases.

But sometimes, drug companies deploy questionable strategies to maintain their monopolies, the study says. The tactics vary, but they include slightly tweaking the nontherapeutic parts of drugs, such as pill coatings, to game the patent system and paying large “pay for delay” settlements to generics manufacturers who sue them over these patents.

And this is a serious problem, the study concludes, because drug prices decline to 55% of their original brand name cost once there are two generics on the market and to 33% of original cost with five generics.

The FDA takes a long time to approve generic drugs.

Application backlogs at the FDA have led to delays of three or four years before generic manufacturers can win approval to make drugs not protected by patents, the study says.

Sometimes, state laws and other “well-intentioned” federal policies limit generics’ abilities to keep costs down.

Pharmacists in 26 states are required by law to get patient consent before switching to a generic drug, the authors wrote. This reportedly cost Medicaid $19.8 million dollars in 2006 for just one drug: a statin called simvastatin whose brand name is Zocor. Costs ran higher because pharmacists didn’t get patient consent and Medicaid had to pay for the costlier brand name drug even though a cheaper product was available.

Drug prices aren’t really justified by R&D.

Although drug manufacturers often cite research and development costs when defending high prescription prices, the connection isn’t exactly true. Most of the time, scientific research that leads to new drugs is funded by the National Institutes of Health via federal grants. If not, it’s often funded by venture capital. For example, sofosbuvir, a drug that treats hepatitis C, was acquired by Gilead after the original research occurred in academic labs.

This is an ongoing issue with little short term relief in place for patients in need of pricey medications to help them live a longer healthy life.

Related information:

Reasons for the Rise in Prices

Prescription drug prices are skyrocketing in the United States due in large part to government regulations, a new analysis finds.

These regulations allow drug manufacturers to charge monopolistic prices that aren’t opposed by competing market forces, the researchers believe.

The result? For each person in the United States, $858 was spent on prescription drugs, compared with an average of $400 per person across 19 other industrialized nations. Prescription medications now comprise an estimated 17 percent of overall health care expenses, the authors of the new report said.

Drug makers charge high prices for drugs thanks largely to “market exclusivity” regulations intended to allow them to recoup the research and development costs for new breakthrough medications

To read the entire article please click the link below to head to the official CBS site:


Help with the high cost of hepatitis C drugs

Information below is aggregated from a USA Today article

After legal battles and lobbying efforts, thousands of people with hepatitis C are gaining earlier access to expensive drugs that can cure this condition.

States that limited access to the medications out of concern over sky-high prices have begun to lift those restrictions – many, under the threat of legal action.   And commercial insurers such as Anthem Inc. and United HealthCare are doing the same.

Massachusetts is the latest state to decide that anyone with hepatitis C covered by its Medicaid program will qualify for the newest generation of anti-viral drugs. [https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-06-30-2.html] Previously, managed care plans serving Medicaid members often limited the drugs, with a list price of up to $1,000 a pill or more, to people with advanced liver disease only.

The expansion follows a threatened lawsuit against drugmakers by Massachusett’s attorney general, which induced companies to offer the state bigger rebates on the medications, making them more affordable.

Click the link below to head to the official USA Today site to read the entire article


Hepatitis C drug costs leave many without care

Hepatitis C treatment costs tens of thousands of dollars per patient. The illness progresses slowly over decades, so most states’ Medicaid programs control costs by treating the sickest first and requiring others to wait.  The conflict over hepatitis C drugs heralds a challenge likely to persist into the future, as new drugs for other illnesses thrill doctors and patients with their effectiveness — and scare health plans with their prices.

Hepatitis C is a big concern for government, because it disproportionately affects low-income people, who are more likely to be on Medicaid, and prisoners, whose care is also the state’s responsibility. An estimated 3 million to 5 million Americans, and 67,000 to 100,000 people in Massachusetts, are infected with hepatitis C, although only half know it.

Click the link to jump to the official Boston Globe website to read the entire article:


Mylan CEO Bresch: ‘No one’s more frustrated than me’ about EpiPen price furor

Watch the video below

Frank Magliochetti is Managing Partner for Parcae Capital.

  • North Andover, Massachusetts

This column of posts is directed at the Healthcare Industry.  Frank plans to release a new site dedicated to the industry.  He currently assists companies who are building, restructuring, transforming and resurrecting there business’s. An example of his client base are, Xenetic Biosciences , IPC Medical Corp, Just Fellowship Corp, Environmental Services Inc., Parsons Post House LLC, ClickStream Corporation as well as having a business talk radio show; The Business Architect on the URBN network.


Innovative Developments in Medical History

Preventative Vaccines:  Bexsero & Trumenba

Frank Magliochetti Report

One of the biggest public health epidemics occurred back in 2014; Ebola and Meningococcal B were responsible. These two diseases took 10,000 people in Sierra Leone, Guinea and Liberia. These three countries have weak health systems, which is the reason why they were unable to treat their people.

In order to fight this disease, which made its first appearance in 1976,  WHO (World Health Organization) had been trying to find a cure for many years. On August 8, 2015, WHO declared that Ebola and Meningococcal B is a disease of international concern and thus began the search for its vaccine. By late October, 2015 WHO had finally come up with two vaccines that were guaranteed to prevent Meningococcal B. Sadly; the cure for Ebola has not yet been found however, its vaccines trials are currently being conducted in Sierra Leone.who_frankmagliochettireport

Meningococcal B is caused by bacteria called “Neisseria Meningitidis”. Neisseria Meningitidis has five serogroups: B, C, Y, W and A. The most common serogroups that affect people in the US is B, C and Y.

Meningococcal B disease is not caught through the air. In fact, it is a diseasewhich is transmitted from one person to another in close physical contact. The disease commonly spreads faster in the family due to the exchange of fluids from daily contact. The disease is found at the back of the throat and later causes sepsis. Sepsis is transferred to the blood that infects the blood stream, which causes damage to the brain and spinal column. Meningococcal B often results in liver failure, vision loss, amputation of limbs and death.

bexsero-frankmagliochettireportThe two vaccines Bexsero and Trumenba specifically treat Meningococcal B and were approved by the FDA in October 2015. The trials for Bexsero were conducted in UK, Chile, Australia and Canada amongst 2,600 young adults and adolescents. The results were that the three infectious strains that cause Meningococcal were destroyed.

Another 5,000 participants in the trials conducted in the USA experienced headache, muscle and joint pain, chills, fatigue and diarrhea after receiving the vaccine. Whereas, 15,000 participants experienced less side effects. All in all, the FDA approved the vaccines because the side effects were not viewed aslong term or fatal.

An accelerated approval was used by the FDA to make this vaccine go public claiming that Meningococcal B is a life-threatening disease. The effectiveness of Bexsero was approved two months prior to the trials being conducted.

FDA recommends that the vaccine should be given to infants, children from the ages of ten till twenty three and people who have a weak immune system. It is recommended that more than one dosage should be given to people having serogroup B Meningococcal.

Anna Jaques, a non-profit Hospital in Newburyport, Massachusetts has taken extra measures and brought more doctors and experts on anna_jaques_hospitaltheir team to prepare themselves if a patient with Ebola or Meningococcal B comes to their door.


Anna Jaques is a remarkable medical facility housed with some of the top health care professionals North of Boston.

Frank Magliochetti

With 2016 being the year of medical innovations, the vaccine for Meningococcal B has come as a godsend that will save millions of lives in rural areas where this disease is commonly found. The vaccines are set to be released worldwide by the end of the year.

Other News and information on Trumenba and Bexsero

Trumenba Offical Website:


Important Safety Information

  • Trumenba should not be given to anyone with a history of a severe allergic reaction after a previous dose of Trumenba
  • Individuals with weakened immune systems may have a reduced immune response
  • The most common adverse reactions were pain at the injection site, fatigue, headache, muscle pain, and chills
  • Data is not available on the safety and effectiveness of using Trumenba and other meningococcal group B vaccines interchangeably to complete the vaccination series
  • Tell your healthcare provider prior to the vaccination if you are pregnant, or plan to become pregnant
  • Ask your healthcare provider about the risks and benefits of Trumenba. Only a healthcare provider can decide if Trumenba is right for you or your child



  • Trumenba is a vaccine indicated for individuals 10 through 25 years of age for active immunization to prevent invasive disease caused by Neisseria meningitidisgroup B
  • Trumenba is approved based upon demonstrated immune response against four group B strains representative of prevalent strains in the US. The effectiveness of Trumenba against diverse group B strains has not been confirmed


Official Site


Important Safety Information


BEXSERO is a vaccine indicated for active immunization to prevent invasive disease caused by Neisseria meningitidis serogroup B. BEXSERO is approved for use in individuals 10 through 25 years of age.

Approval of BEXSERO is based on demonstration of immune response, as measured by serum bactericidal activity against three serogroup B strains representative of prevalent strains in the United States. The effectiveness of BEXSERO against diverse serogroup B strains has not been confirmed.Bexsero_logo_4C_temp_norDNA_bigger

  • BEXSERO is contraindicated in cases of hypersensitivity, including severe allergic reaction, to any component of the vaccine, or after a previous dose of BEXSERO
  • Appropriate observation and medical treatment should always be readily available in case of an anaphylactic event following the administration of the vaccine
  • The tip caps of the prefilled syringes contain natural rubber latex, which may cause allergic reactions in latex-sensitive individuals
  • Syncope (fainting) can occur in association with administration of BEXSERO. Ensure procedures are in place to avoid injury from falling associated with syncope
  • The most common solicited adverse reactions observed in clinical trials were pain at the injection site (≥83%), myalgia (≥48%), erythema (≥45%), fatigue (≥35%), headache (≥33%), induration (≥28%), nausea (≥18%), and arthralgia (≥13%)
  • Vaccination with BEXSERO may not provide protection against all meningococcal serogroup B strains
  • Vaccination with BEXSERO may not result in protection in all vaccine recipients

AAP issues meningococcal B vaccine ( Trumenba & Bexsero)  guidelines for adolescents
Trumenba and Bexsero have both been approved for the prevention of serogroup B meningococcal disease in individuals aged 10 through 25 years by the American Academy of Pediatrics Committee on Infectious Diseases.

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Pfizer heads back to school with Trumenba vaccination campaign

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Teaching kids to share is usually a parental goal, but a new ad from Pfizer may have some parents rethinking the parameters.

The first campaign for meningococcal group B vaccine Trumenba highlights the dangers of MenB, which can be spread through habits common among teens–including kissing and sharing drinks and food.

The TV ad shows a mother in the hospital with her stricken son, asking “how did we get here?” The ad then goes back through events earlier in evening showing the son sharing food and drinks with several different friends at a party and kissing a girl.

“The campaign was designed to reach parents of teens and young adults during the summer and back-to-school season, when many parents are thinking about steps they can take to help protect their child’s health, including vaccination,” she said.

Trumenba is one of two vaccinations to protect against MenB, along with GlaxoSmithKline’s Bexsero. But last year, the CDC’s Advisory Committee for Immunization Practices (ACIP) stopped short of granting the pair universal recommendation. The vaccines are recommended for young adults ages 16 to 23, with a preferred age of 16 to 18, which means that doctors decide on an individual basis whether to vaccinate their patients against MenB.

watch the ad on iSpot.tv


Frank Magliochetti is Managing Partner for Parcae Capital.

  • North Andover, Massachusetts

This column of posts is directed at the Healthcare Industry.  Frank plans to release a new site dedicated to the industry.  He currently assists companies who are building, restructuring, transforming and resurrecting there business’s. An example of his client base are, Xenetic Biosciences , IPC Medical Corp, Just Fellowship Corp, Environmental Services Inc., Parsons Post House LLC, ClickStream Corporation as well as having a business talk radio show; The Business Architect on the URBN network.