At the end of September, the Office of the Inspector General (OIG) for the Department of Health and Human Services (DHHS) released an initial report on the U.S. Food and Drug Administration's (FDA) accelerated medicine approval program, which allows for earlier approval of drugs that treat serious conditions. The gist of the findings in the FDA's continuing evaluation is that the Medicare and Medicaid programs spent $18 billion over three years on drugs for which no benefit had been confirmed. Once drugs were approved, manufacturers failed to complete the clinical trials necessary to establish their medications' efficacies. Apparently, there were no negative consequences for the drug makers, so the process became systemically diluted.
This is the tip of an iceberg. For context, consider that in 2021, U.S. drug spending totaled $577 billion. This figure includes all drugs purchased through commercial coverage and through federally funded programs like Medicare and Medicaid. Contrast that with the $6 billion per year wasted on unproven drugs in the OIG report, which is just a bit more than 1% of total U.S. drug spending, a literal drop in the bucket.
More to the point, prescribing drugs that deliver unproven results is not only nothing new, but rampant. In 2015, Kim and Prasad reported in JAMA Internal Medicine that, between 2008 and 2012, two-thirds of cancer drugs approved by the FDA "have unknown effects on overall survival or fail to show gains in survival." Really consider that for a moment; the consequences are staggering.
Worse, the complexities involved with the many variables that affect drug efficacy have resulted in wide-ranging prescribing patterns across all of medicine. This problem is perhaps most evident in the often strikingly poor "control" rates among chronic disease patients. With their downstream impacts, these conditions consume 85% or more of all healthcare expenditures. For instance, the CDC estimates that only about one in four (24%) of adult U.S. hypertension (HTN) patients' conditions are under control. For Heart Failure with Reduced Ejection Fraction (HFrEF), the CHAMP HF-Registry found that only 1.1% of patients were under control. The number of prescribing permutations for HTN exceeds 300 million. For HFrEF, it exceeds 850 million. In many cases, it is simply beyond reasonable comprehension, with so many competing priorities, to understand healthcare choices, to juggle and assess the number of variables at play to accurately identify the correct drugs and dosages for a given patient and condition.
The drug excesses - both in unit pricing and in utilization - that have become so common in U.S .healthcare have facilitated a crop of new medication management companies dedicated to enabling more value-driven perspectives. One company has developed an AI tool, the MedsEngine, that guides precise physician prescribing for major chronic diseases, based on a patient's individual characteristics. In pilots, chronic condition control rates have soared.
Companies like Vivio Health and Ascella Health track whether prescribed drugs, dosages, administration sites and other options are the best clinical and value-based choices. Others - like Illuminate Health - leverage pharmacists to more effectively manage patients on complex drug regimens, as pharmacists are more often embedded into care teams participating in a more integrated, team-based approach.
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Another promising area of recent focus is the identification of gene-to-drug interactions, representing an entirely new information source that can profoundly refine prescribing accuracy. Blue Genes Lab provides pharmacogenetic profiling, as do many other labs, that can be accessed by patients and clinicians. They have additionally developed a mobile app that, based on the patient's genetic profile, delivers push notifications of problematic drug choices, lists drugs that are genetically compatible and screens for potential drug-drug interactions. The intention is to permit physicians to maximize effectiveness and employ precision medicine best practices. Drugs are avoided that cannot benefit a particular patient or result in costly adverse drug reactions.
These are major advances with the potential to improve health outcomes dramatically, while eliminating a hugely wasteful percentage of current drug spending. Many value-focused companies will warranty their results, which is understandable in a target-rich environment like medication management. They're signaling that there are meaningful solutions to the overtreatment and unnecessary drug costs that plague the drug industry and healthcare generally. Further, this progress illustrates the power of embracing innovative techniques, rather than archaic and opaque methods associated with prescription medication and reimbursement.
In sum, the OIG's findings are hardly surprising, and they're a tiny symptom of a massively complex problem. As value-based capabilities and arrangements get more market traction, drug prescribing will be increasingly based on a more holistic view of a person and on the likelihood that a particular drug and dose can solve a specific condition(s). To get there, though, the agencies that oversee and regulate U.S. healthcare, and the firms that orchestrate and deliver the components of care, must be capable of rationalizing the current system's excesses. Most importantly, employers and other healthcare purchasers must, through their health plans, empower these new risk management vendors to hold the pharmaceutical and pharmacy benefit management industries to account or, alternatively, be fearless in navigating these decisions independently to seize direct contracting opportunities.