December 18

NAMI & Eli Lilly partners in bankrupting state Medicaid budgets – NYT

NAMI & Eli Lilly partners in bankrupting state Medicaid budgets – NYT

Sat, 20 Dec 2003

The New York Times reports that Medicaid expenditure for prescription drugs has escalated to $27.5 billion. These costs are up 19% from last year. Antipsychotic drugs, such as Eli Lilly’s Zyprexa, eat up more of state Medicaid budgets than any other drugs. Kentucky has done something about it, NY State has not. NY spends $4 billion a year–of which the largest chunk in the first 10 months of 2003 went to Eli Lilly–$205 million for Zyprexa.

Although Zyprexa is anything but a “wonder drug” its sales have made it Lilly’s most profitable product, thanks largely to aggressive marketing and the lobbying efforts of The National Alliance for the Mentally Ill (NAMI) and its chapters. As NY Times business reporter, Gardiner Harris shows, the combined efforts of Lilly and NAMI have made antipsychotics “the third rail of Medicaid politics.”

Scientific evidence consistently shows that Zyprexa’s benefits (for those who benefit) are no greater than its cheaper competitors for the treatment of schizophrenia. Nor is there evidence of an appreciable benefit (such as exists for some patients) over the older, non-patented, cheaper neuroleptic drugs–when these are used in small doses with the addition of prophylactic benztropine, to minimize side-effects. See: Robert Rosenheck, et al, “Effectiveness and cost of olanzapine and haloperidol in the treatment of schizophrenia: a randomized controlled trial, published in the Journal of the American Medical Association, Nov 26, 2003; 290:2693-2702. This multi-site study conducted at 17 Veterans Affairs hospitals found that neither drug to offer superior benefit. See:

As this front page Times report shows, NAMI families continue to be duped into lobbying on behalf of pharmaceutical companies and organized psychiatry–industry’s partners in deception. Although psychotropic drugs have not proven to be effective for recovery, nor do they lead to quality of life improvements for patients, NAMI channels its energies (with funding from Eli Lilly) into preventing states from applying a rational cost/ benefit analysis to determine what psychotropic drugs taxpayers should pay for. Neither Lilly nor NAMI care about depleting state Medicaid funds and thereby denying poor people proven life-saving treatments.

In my 1995 letter of resignation from NAMI New York State, I wrote: “NAMI-NYS has lost sight of its mission to consumers and families: Instead of offering support and guidance for navigating the hostile and fragmented mental health system, NAMI_NYS has become a lobbying agent for self-serving providers, bureaucrats & professionals who profit from the state system (e.g., lobbyists for Sandoz Pharmaceuticals and the NYS Office or Mental Health.”

In 1998, AHRP board member, Dr. Loren Mosher, resigned from the American Psychiatric Association, citing in his letter of resignation the APA’s unholy alliance with NAMI and the pharmaceutical industry. Dr. Mosher called it “a marriage of convenience.” NAMI families who sought to shed the cruel shackles of guilt that psychiatrists had loaded on them, embraced psychiatry’s latest unsubstantiated myth: mental and emotional illnesses were deemed “biologically based brain diseases” for which psychotropic drugs are the only treatment. See:

Sadly, as the Times report shows, the influence of the pharmaceutical industry and psychiatrists who serve as industry consultants is even more entrenched at NAMI, thus NAMIs uncritical endorsement of the drug based treatment mantra–even as mounting evidence shows that these drugs are hazardous, producing chronic, debilitating illnesses such as diabetes, and that patients on the atypical neuroleptics are dying younger. Zyprexa causes serious weight-gain, has been shown to produce diabetes, liver damage, cardiac abnormalities. Most recently, a report in The British Medical Journal found a possible link between Zyprexa and the development of pulmonary embolism See: British Medical Journal, 2003; 327: 1384.

The rift between NAMI and patient self-help advocacy groups is grounded in NAMI’s steadfast promotion and lobbying efforts for the bio-medical model in which neuroleptic drugs predominate and NAMI’s efforts to ease commitment laws to force drugs on those who refuse. These two positions can be traced directly to NAMI’s funding sources–the drug industry and government mental health agencies.

How sad that NAMI families should be so utterly blind to the evidence, disregarding as they do, the drugs’ debilitating effects. How sad that families are so seduced by the empty promises of “hope” that they blindly side with corporate drug interests, unwittingly undermining rather than promoting the recovery prospects of their “loved ones.” How can NAMI families fail to notice that those who feed them “hope” and push each latest drug are making a fortune for themselves?
New York Times
December 18, 2003
States Try to Limit Drugs in Medicaid, but Makers Resist
Front page

Kentucky’s Medicaid program was $230 million in the red last year, and drastic cuts were on the table. A state panel proposed excluding Zyprexa, an antipsychotic medication that is the state’s single biggest drug expense, from the Medicaid list of preferred medications.

That was when the National Alliance for the Mentally Ill and the Kentucky Consumer Advocate Network swung into action.

The two groups, which are nonprofit, bused scores of protesters to a hearing in Frankfort, the state capital; placed full-page ads in Kentucky newspapers attacking the proposal; and sent angry faxes to state officials. What the advocacy groups did not say at the time was that the buses, ads and faxes were paid for by Eli Lilly & Company, Zyprexa’s manufacturer.

Zyprexa produced $3.69 billion in revenue last year, making it Lilly’s top seller and the sixth-largest-selling drug in the world. In the United States, 70 percent of Zyprexa sales are to government agencies, mostly to Medicaid. If just a handful of large states were to limit Zyprexa sales, Lilly’s profit and share price would be likely to suffer significantly, analysts say.

So Lilly and other drug makers — whose influence in Washington was most recently on display in the debate over a Medicare drug benefit — are flexing their muscles in state capitals. In state after state, the companies are fighting proposals to create or toughen government programs that use preferred-drug lists to try to cut costs.

Drug makers argue that the lists are unfair to the poor, depriving them of medicine available to others. And the lists, the companies say, tie the hands of doctors who should be making decisions about appropriate care — especially when it comes to finding the right medication for someone with mental illness. State officials respond that limiting access to some high-price drugs is one way, in tight times, to continue providing care to as many of the poor as possible — particularly in cases where there is little evidence that the costlier drugs are more effective.

Lilly lost the battle in Kentucky. The state decided to take Zyprexa off its list of preferred drugs, which means that patients must try and fail on a similar, cheaper drug before it will pay for Zyprexa. But it was a rare defeat.

After intense lobbying by patient groups and drug makers, the New York State Legislature in May overrode a veto by Gov. George E. Pataki and enacted a law preventing state Medicaid officials from establishing a preferred-drug list. New York’s $4-billion-a-year bill for Medicaid drugs is the biggest in the nation; in just the first 10 months of this year, the state spent $205 million on Zyprexa, more by far than for any other drug.

Oregon’s Legislature dropped thousands of patients from its Medicaid program in August rather than restrict choices for the others by tightly policing the state’s preferred-drug list. The drug makers see little room to compromise. They are reluctant to negotiate prices, for example, because under federal Medicaid law, a discount to one state must be offered to all. And preferred-drug lists for Medicaid can influence doctors’ prescribing practices for patients they see outside the Medicaid program, blunting the effect of the drug companies’ expensive marketing efforts.

Because of their close ties to the National Alliance for the Mentally Ill and other advocacy groups, drug makers have been particularly successful in arguing that states should exempt antipsychotic medications like Zyprexa from preferred lists. Twenty-eight states specifically exempt drugs for treating emotional disorders from cost controls, a Lilly spokeswoman, Anne Griffin, said.

“Antipsychotics are the third rail of Medicaid politics,” said David Parella, director of Connecticut’s Medicaid program. “If you try to confront this issue, you get hit with these strange bedfellows of the Trotskyite lawyers for patient advocacy groups being allied with the plutocratic lawyers for drug companies.”

Dr. Paul Jeffrey, director of the Massachusetts Medicaid program, said that he had not proposed limits on antipsychotic medications for fear that the fight could lead state legislators to support wider limits on the preferred-drug list. “The battle would have been too bloody,” he said.

With the enactment of the federal Medicare drug benefit, these debates may soon move to Congress, because the new law provides that the government begin in 2006 to pay the drug bill for patients who are eligible for both Medicaid and Medicare. So-called dual eligibles — in essence, the elderly poor — account for 58 percent of Medicaid drug spending now. Until then, state Medicaid directors say they have no choice but to continue cutting costs.

Medicaid spending grew nearly 13 percent last year while state revenue fell 6 percent, according to the Kaiser Commission on Medicaid and the Uninsured. Medicaid now takes 15 cents of every state dollar, more than any other program except education. The fastest-growing portion is prescription drug costs, up 19 percent last year. In all, Medicaid programs spent $27.5 billion last year on drugs.

Kentucky’s Medicaid program is in such fiscal distress that the state tightened rules for nursing home care, cutting off payments to many elderly people. To begin reducing its prescription drug costs, Kentucky in 2001 formed a panel of experts to develop a preferred-drug list.

The panel decided to tackle antipsychotics “because there was a huge opportunity for savings without impacting the quality of care,” said Dr. Robert Hughes, a family-practice physician from Murray, Ky., who is chairman of the state’s Medicaid pharmacy committee.

Kentucky spent $80 million on antipsychotics last year, more than on any other class of drugs. That included $36 million for Zyprexa. Though Zyprexa costs almost twice as much as similar drugs — about $10 a day — Lilly contends that the drug has earned its best-seller status because doctors find it works significantly better than its competitors.

The committee circulated a proposal that would have eliminated Zyprexa from the state’s preferred-drug list. Patients who were already taking Zyprexa would be allowed to continue getting it indefinitely. But new patients would first have to try an alternative — including drugs like Risperdal from Johnson & Johnson, Seroquel from AstraZeneca or Geodon from Pfizer. All these drugs are known as atypical antipsychotics, to distinguish them from an earlier class of antipsychotic medications that can cause tics and sometimes even disfigurement.

Committee members knew the plan would be controversial, but they were surprised by how intense the battle quickly became, Dr. Hughes said.

In the days leading up to the September 2002 hearing in Frankfort, Dr. Hughes and others on the state panel received hundreds of faxes denouncing the proposals, “some of which were quite threatening,” he said.

Two days before the hearing, full-page advertisements appeared in large newspapers reading, “Don’t let the state balance the budget on the backs of those suffering from mental illness.” The ads said they had been paid for by the alliance for the mentally ill’s Kentucky group and the Kentucky Consumer Advocate Network.

Ms. Griffin, the Lilly spokeswoman, said the company provided grants to pay for both the ads and the fax campaign.

On the day of the hearing, an opinion article denouncing the proposal appeared under the byline of Harry Mills, the alliance’s Kentucky executive director, in the state’s largest newspaper, The Courier-Journal. The plan, it said, would require that patients try older medications with dangerous side effects before being given more modern drugs.

“Why should Kentucky try to turn back the clock?” the article asked.

In an interview, Mr. Mills said that Lilly, not he, had written the article; Ms. Griffin said that the company worked closely with him, “and he approved the final version.”

In any event, Lilly’s experts testified at the hearing that the side effects of the atypical antipsychotic drugs the panel proposed leaving on Kentucky’s preferred list were about the same as Zyprexa’s. And some of the drugs were newer.

Buses — paid for by a Lilly grant, Ms. Griffin acknowledged — carried scores of people to the hearing. State officials were so concerned about security that two Capitol police officers were prominently stationed at the front of the hearing room, Dr. Hughes said.

Dr. Don Grondin, a pharmacist hired by the committee to review the publicly available research on atypical antipsychotic drugs, was the first witness. He said that all the drugs in the class work similarly and none have proved better than the others. Doctors, he added, have no way of predicting which drug will work best in a new patient.

These were crucial statements. Under federal law and court rulings, they gave Kentucky grounds to use a preferred list as a way of pressing doctors and patients to turn to cheaper drugs first. The Pharmaceutical Research and Manufacturers of America, the drug industry’s trade group, continues to fight the practice, arguing that data rarely makes clear whether drugs are truly equivalent.

As the hearing continued, three experts from Lilly testified that schizophrenia, a disabling form of psychosis, is complex and that the drugs to treat it are each unique. “And most of us who have practiced,” said Dr. Robert Baker, a Lilly psychiatrist, “find that a big part of our job is matching the specific efficacy and safety and tolerability profiles of the medication to the specific needs and sensitivity to side effects for a given patient.”

Dr. Hughes asked the Lilly representatives why Zyprexa was so expensive. A month of Zyprexa therapy costs Kentucky $284 on average, compared with $167 for Risperdal. Jerry Clewell, a Lilly health economist, said that he and his colleagues had nothing to do with pricing decisions. “So this panel would really not be the appropriate people to ask that question of,” Mr. Clewell said.

Ms. Griffin, the Lilly spokeswoman, said, “Our pricing takes into account the value to the patient, cost to manufacture the product, marketplace conditions and recovery of research costs.”

Several people with mental illness testified against the committee’s proposals. So did four psychiatrists, three of whom said, in response to questions, that they were part-time consultants for Lilly. Some predicted that the state’s decision could lead to deaths.

After a six-hour hearing, the committee voted 7 to 1 to drop Zyprexa from the preferred-drug list. The room was surprisingly quiet after the vote, Dr. Hughes said, adding, “Everybody had had their say.”

A year later, mental health advocates say they can trace no ill effects to Kentucky’s decision. “I have not heard anything negative in terms of patients being denied treatment,” said Jim Dailey, advocacy director for the Kentucky group of the National Alliance for the Mentally Ill.

Zyprexa’s share of the state’s market for antipsychotic drugs has dropped in a year to 28 percent from 41 percent. But unexpectedly, Kentucky’s costs have jumped 19 percent, because prescriptions for other antipsychotics have increased. One reason, according to Dr. Hughes, is that doctors are prescribing these drugs to treat depression and pain, though the Food and Drug Administration has not approved them for either condition.

Over all, the state still hopes through drug restrictions to save $46 million this year, about 6 percent of the $749 million it expects to spend this year on Medicaid drugs.

Since Kentucky’s decision, West Virginia and Maine have also excluded Zyprexa from their Medicaid drug lists. But in a conference call in July, John Lechleiter, a Lilly executive vice president, assured investment analysts that the three states make up a very small part of the Zyprexa market.

“In fact, nearly half the states now have some kind of a provision really limiting restriction of access to mental health drugs in general,” he said. “So we continue, I think, to do very well in terms of making sure that Medicaid patients, for example, have access to the very best treatment.”

Copyright 2003 The New York Times Company

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