Price Reductions for Diabetes Care Supplies


The New York Times

June 20, 2013


Starting next month, changes are afoot for Medicare beneficiaries who order diabetes supplies — testing strips and lancets — by mail. About 50 percent to 60 percent of diabetics on Medicare prefer to receive supplies in their mailboxes, a cheaper and often more convenient alternative to local pharmacies and storefronts.

Yet mail-order diabetes supplies have caused Medicare headaches for years. A Department of Health and Human Services inspector general’s report last year, for instance, reported that 20 percent of suppliers sent beneficiaries strips by mail, which costs less, but billed Medicare at the more expensive retail rate.

“It’s been an area where there’s been a lot of fraud, a lot of overutilization and a lot of studies saying Medicare pays too much, the taxpayer pays too much and beneficiaries with a 20 percent co-pay pay too much, too,” Laurence Wilson, director of Medicare’s chronic care policy group, said in an interview.

Now, after a successful experiment in nine metropolitan areas, Medicare has instituted competitive bidding for mail-order firms that want to sell strips; it has signed contracts with just 18 carefully vetted companies nationwide. That’s a big shift from the hundreds of suppliers who used to sell strips to Medicare recipients.

The process has cut prices sharply. Medicare previously paid $77.90 for 100 mail-ordered strips; now it will pay $22.47. That means co-payments plummet, too, from $15.58 to $4.49.

“The large mail-order suppliers recognized this was a huge market and they could afford to accept a lower price to reach that volume of customers,” Mr. Wilson said. “The taxpayer wins.” (This, you may recall, was the argument for allowing Medicare to negotiate with drug companies to lower prices when Part D was introduced, an argument the Bush administration successfully resisted.)

Another piece of good news: The tax relief bill that Congress passed last year mandated that Medicare pay retailers the same amount as mail-order companies. So 100 strips will cost $22.47 this year, wherever you buy them, so long as your pharmacy accepts Medicare’s reimbursement as full payment. Don’t say Congress never did anything for you (or for your secondary Medigap insurer, if that’s who picks up your co-pays).

The downside, though, is that unless the mail-order company you already use made the cut and has become one of the 18 suppliers that won contracts, you’ll have to change suppliers. (If you skip mail order and buy supplies locally, you don’t have to do anything.)

Medicare has worked to alert beneficiaries, state health departments, physicians, hospital discharge planners and state health insurance assistance programs to this change, which takes effect July 1. You can find a supplier online (go to and enter your ZIP code), call 1-800-MEDICARE, or ask your doctors for a referral.

The folks at the American Diabetes Association are understandably concerned about this process. Last year, 2.3 million Medicare beneficiaries filed claims for mail-order diabetes supplies. That means hundreds of thousands of people, at least, probably have to switch to new suppliers.

Some have poor vision or impaired cognition or can’t use computers. They may have trouble reading the materials Medicare sent, or understanding them, or remembering what’s required. The transition could be bumpy.

“This could look to consumers like Medicare isn’t covering things,” said Krista Maier, the association’s director of public policy. Moreover, “we have heard, anecdotally, that some beneficiaries had trouble finding a mail-order supplier that sold their brand of strips.”

(Other Medicare beneficiaries will feel the effects of the competitive bidding process, too, by the way. In 91 metropolitan areas, those who use certain categories of durable medical equipment — including wheelchairs and walkers, oxygen, hospital beds and CPAP devices for sleep apnea — may also have to switch suppliers after July 1.)

On the whole, diabetics should fare well under the new system. They will pay less and gain new protections against fraud. And Medicare’s monitoring of the first nine test markets shows no negative impact on health.

“The bottom line is, were there any adverse patient outcomes? No,” Mr. Wilson said. “We didn’t see people go to doctors or hospitals more or to emergency rooms. We didn’t see more mortality.”

But if an elderly friend or relative gets strips by mail, it makes sense to check in and see whether he or she needs to select a new supplier, and to help make that happen.

AMA Declares Obesity a Disease

Obesity, Hypertension Prevalent in Growing Number of Children


US Children Consume Fewer Calories, But Too Much Saturated Fat, June 20, 2013, by Marcia Frellick, CHICAGO — Physicians voted overwhelmingly to label obesity as a disease that requires a range of interventions to advance treatment and prevention.

However, there was impassioned debate in the hours before the vote here at the American Medical Association (AMA) 2013 Annual Meeting.

Although policies adopted by the House of Delegates have no legal standing, decisions are often referenced in influencing governmental bodies. This decision could have implications for provider reimbursement, public policy, patient stigma, and International Classification of Diseases coding.

“Obesity is a pathophysiologic disease. There is a treatment for this disease; it involves behavioral modifications, medications, and surgeons. Obesity affects minorities disproportionately,” said Jonathan Leffert, MD, alternate delegate for Endocrinology, Diabetes, and Metabolism. “The scientific evidence is overwhelming.”

Melvyn Sterling, MD, said this brings to mind to the debate over whether hypertension is a disease.

“I’m a general internist, among other things, and I treat the complications of this disease. It’s interesting to look back in history at a time when hypertension was not thought to be a disease,” said Dr. Sterling, who is from the AMA Organized Medical Staff Section, but was speaking for himself. “Obesity is a disease. It’s very, very, very clear that even though not every hypertensive gets a stroke and not every obese person suffers the complications, that does not change the fact that this is a disease.”

Some Not Convinced

Others testified that the measure for determining obesity is imperfect and although it is an epidemic, obesity does not meet the criteria for disease.

Russell Kridel, MD, incoming chair of the AMA Council on Science and Public Health (CSPH), told Medscape Medical News that there is no debate about the importance and urgency of addressing the problem, but he doesn’t believe it qualifies as a disease.

“It’s more like smoking. Smoking isn’t a disease. Smoking can cause disease such as lung cancer and emphysema in the same way that obesity can lead to diabetes and hypertension,” he explained. “We’re really talking nomenclature here, not philosophy.”

He noted that behavior and dietary choices play a part in obesity. “Thirty years ago, we did not have the obesity problem we have now. If you look scientifically at what has changed, our diet has changed. There’s been no change in our genetic structure in the past 30 years.”

Dr. Kridel said he would like to see more attention focused on prevention and personal responsibility. The CSPH issued a 14-page report opposing the classification of obesity as a disease.

“We did not think the evidence rose to the level where obesity could be recognized as its own distinct medical disease state. Obesity is a very serious condition. It’s a scourge on our nation. It’s an epidemic. It’s a significant risk factor for many other diseases,” said Robert Gilchick, MD, speaking on behalf of the CSPH. “But that does not alone make it a distinct medical disease state.”

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He explained that because body mass index, an imperfect measure, is used to determine obesity, people who are otherwise healthy are being diagnosed as obese.

“Why should one third of Americans be diagnosed as having a disease if they aren’t necessarily sick?” he asked.

One Third of Americans

According to the Centers for Disease Control and Prevention, 35.7% of Americans are obese. Obesity-related conditions, including heart disease, stroke, type 2 diabetes, and certain cancers, are some of the leading causes of preventable death.

In other AMA actions, a policy that supports banning the marketing and sale of high-energy drinks to anyone younger than 18 years was adopted.

Also accepted was a policy that supports letting students have sunscreen at school without restrictions. Currently, most states don’t allow students to possess over-the-counter medications in school without a note from a physician. Sunscreen is considered an over-the-counter medication because it is regulated by the US Food and Drug Administration.



New Obesity Drug, Belviq, in US Pharmacies Next Week

Arena Withdraws Lorcaserin Diet Drug Application in Europe, June 20, 2013, by Lisa Nainggolan  —   The new obesity drug lorcaserin (Belviq, Eisai/Arena Pharmaceuticals) will finally be available for prescription in the United States next week, the manufacturers have announced. The news comes as the European regulatory agency provides more details about why it rejected the product.

Lorcaserin, which was cleared for marketing in the United States almost a year ago in its second attempt, is indicated for chronic weight management, along with a calorie-controlled diet and increased physical activity, in adults with a body mass index (BMI) of 30 kg/mmore or in those with a BMI of 27 kg/mor more who have at least 1 weight-related medical condition, such as type 2 diabetes or high blood pressure.

Lorcaserin is a 5HT2c-receptor agonist, which is believed to imitate the effects of serotonin on these receptors, resulting in an increased sense of fullness after a meal and reduced hunger before meals, thereby reducing food consumption.

It will be the second obesity drug to appear on the US market in recent times; Qsymia (phentermine/topiramate; Vivus) was the first new obesity medication in 13 years when it was launched last September. Sales of Qsymia have been slow, however, and it will be interesting to see how lorcaserin is received.

The delay in launching lorcaserin in the United States was due to the companies waiting for regulatory classification to determine the risk of abuse; this came recently when the Drug Enforcement Agency deemed it was a schedule IV drug — the second-least-restrictive designation on a 5-step scale.

EMA Says Benefits Do Not Outweigh Risks for Lorcaserin

The European Medicines Agency (EMA), however, has not seen fit to give the thumbs up to lorcaserin; Arena Pharmaceuticals withdrew its application for European Union approval for the product last month.

The EMA has since revealed that it was concerned about thepotential risk for tumors, particularly with long-term use, based on the results of laboratory tests. It also had other safety concerns, including the potential risk of psychiatric disorders (such as depression) and valvulopathy, which were seen in some patients during clinical trials.

The cancer risk in animal studies was one of the concerns of the Food and Drug Administration (FDA) when it rejected lorcaserin the first time around.

The EMA says it is still “of the opinion that the benefits of Belviq did not outweigh its risks.”

Arena decided to withdraw the EU application because it could not resolve the European agency’s “major objections related to the results of nonclinical studies within the regulatory timeframe.” The future development strategy for lorcaserin in Europe “is under evaluation,” the company says.


Slow and Steady Can Win the Diet Drug Race, By Esha Dey and Zeba Siddiqui

(Reuters) – Vivus Inc, vying to create the world’s first billion-dollar weight-loss pill, is taking a cautious approach to marketing in an attempt to overcome the skepticism, safety concerns and lawsuits that have dogged the diet drug industry.

The company has lost nearly half of its market value since lackluster sales tarnished the September launch of the first new weight-loss pill in the United States for 13 years. Two of its largest shareholders have questioned the company’s strategy.

But Vivus, which sent out only 150 sales representatives to a target market of 25,000 doctors, is betting on slow, steady marketing of the drug called Qsymia (phentermine/topiramate) to win over customers. Its model, say analysts, could become the blueprint for diet drug makers.

“A slower launch that allows people some time to try and use the drug, and make sure the effects they are seeing are good and any risks are more modest, makes more sense both in the medical and financial sense,” said Kurt Kessler of ZS Associates, which consults on pharmaceutical marketing.

Thomson Reuters Pharma estimates sales of Qsymia will reach $1.2 billion by 2017, up from $128 million in 2013, making it the largest weight-loss pill on the market. That potential goldmine has analysts rating the stock of Mountain View, California-based Vivus highly.

More than one-third of Americans are obese, a condition that can lead to problems such as heart disease and diabetes. A September 2012 report by lobby group Trust for America’s Health estimated the annual burden on the U.S. healthcare system from obesity at between $147 billion and $210 billion.

The epidemic has inspired initiatives such as a ban on large sugary drinks in New York, calorie limits on school lunches and U.S. First Lady Michelle Obama’s childhood anti-obesity campaign, “Let’s Move”.

Demand for weight-loss pills is also high, which is why some investors were disappointed when Vivus earned just $41,000 from the first two weeks of sales of Qsymia. Analysts had expected it to earn nearly eight times as much.


Vivus Chief Commercial Officer Michael Miller said the Qsymia launch was “focused and very educationally based.”

Weight-loss pills, which typically work by suppressing appetite, are based on brain chemistry that is still not fully understood by science.

A slow rollout will allow time for post-marketing studies requested by the U.S. Food and Drug Administration (FDA) to test for increased risk of heart attack or stroke.

Dr. Leonid Poretsky, a physician with the Albert Einstein College of Medicine in New York City, sees about 100 patients a week who need to lose weight. He says he is yet to meet “that ideal Qsymia patient.”

“The drug combination (in Qsymia) is new, but the medications are not,” he told Reuters. “The point is to learn a lot about it, and then try it on one or two patients who are appropriate for it.”

Qsymia, the first pill to promise users 10% weight loss within a year, contains two previously approved medications that have encountered safety issues: the appetite suppressant phentermine and the anti-epilepsy drug topiramate.

Phentermine was part of the “fen-phen” drug combination, a diet medication pulled from the market in 1997 after causing severe heart problems. Its maker, Wyeth, now part of Pfizer Inc, paid out billions of dollars in damages to patients.

Topiramate, marketed as Topamax by Johnson & Johnson, has been shown to increase the risk of cleft lips in infants when taken by their mothers during pregnancy.

Women aged between 18 and 45 will be required to take a pregnancy test before being prescribed Qsymia. Neither is Belviq (lorcaserin), a rival pill developed by Arena Pharmaceuticals Inc and due to hit market soon, advised during pregnancy.

There are also reputational risks to failure.

John Singer, a marketing consultant involved in the 1999 launch of Roche’s Xenical (Orlistat) – the last diet pill to be launched before Qsymia – said part of the challenge faced by the drug industry today was to manage public perception.

Many patients, he said, shunned Xenical because of one embarrassing side-effect in particular: diarrhea.

“Xenical became a butt of jokes on late-night talk shows – Jay Leno, David Letterman, that kind of stuff. Very quickly, the side-effects profile of Xenical became front and center of the story of the drug,” Singer said.


Kessler of ZS Associates said drug manufacturers could arrange for patients and physicians to share their experiences with the new weight-loss pills in public forums.

“There is pretty high patient engagement in obesity,” he said. “It’s likely the drugs will get positive word-of-mouth.”

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Arena is awaiting regulatory classification for Belviq to determine the risk of abuse before it can launch its new pill, giving the company time to fine-tune its own sales strategy.

“Arena might sell (Belviq) at a lower price or do something clever with the pricing that would be an advantage,” said Robin Davidson, an analyst with Edison Investment Research. A month’s supply of Qsymia currently costs about $160.

Mindy Nichols, a Seattle-based dietician, said Belviq could also benefit from Qsymia’s relatively higher risk profile.

“Even though Belviq’s effectiveness is maybe three-quarters that of Qsymia, it could be prescribed more often,” she said, adding that clinical trials have shown Belviq to have the additional benefit of fighting smoking addiction.

With health insurer Aetna Inc having announced it would provide coverage both for Qsymia and Belviq, the prospects for the adoption of both pills are good.

Referring to Qsymia, Vivus President Peter Tam said: “Once patients and physicians become aware and gain the experience of using the medication … it will be a multi-billion dollar drug pretty quickly.”