Amid the public fury over the escalating costs of brand-name medications, the prices of generic drugs have been falling, raising fears about the profitability of major generic manufacturers.

This article first appeared August 08, 2017 on ProPublica.

by Charles Ornstein, ProPublica, and Katie Thomas, The New York Times

Not all drug prices are going up.

Amid the public fury over the escalating costs of brand-name medications, the prices of generic drugs have been falling, raising fears about the profitability of major generic manufacturers. Last week, Teva Pharmaceuticals reported that it had missed analysts' earnings estimates in the second quarter and planned to lay off 7,000 workers. Its share price plummeted 24 percent in one day as investors worried there was no end in sight.

Share prices of other generic drugmakers also declined, as did those of wholesalers, which profit from the sales of generic drugs and have said they expect prices to continue declining.

Mylan, another large generic drugmaker, will report its second-quarter earnings on Wednesday. Mylan also sells the EpiPen, the brand-name allergy treatment whose price increases have stoked outrage over the past year, but the company's primary business is as a seller of generic drugs.

This may seem like good news for consumers, but it's unclear how much they will save.

Why are generic prices falling?

Generic drugs are copycat versions of brand-name products and - to a point - their prices are expected to drop over time. When a brand-name drug first loses its patent protection, prices fall slowly. Over the next couple of years, as more competitors enter the market, the prices drop even more, until the pills become commodities and sell for pennies. Blockbuster drugs that have recently taken this path include Lipitor and Plavix, the cholesterol-lowering and blood-thinning pills that now cost as little as $10 for a monthly prescription.

Generic drug prices have been declining in the United States since at least 2010, according to a August 2016 report by the Government Accountability Office.

They have fallen even in the face of high-profile exceptions: Dozens of old generic drugs have risen in price in recent years, for reasons that include supply disruptions and competitors' leaving the market.

For example, the price that pharmacies paid for the antibiotic doxycycline hyclate increased to $3.65 a pill in 2013 from 5.6 cents in 2012, according to an analysis of pricing data by Adam J. Fein, president of Pembroke Consulting, who researches the drug-distribution industry. The spike in prices of doxycycline and other generic drugs led to a congressional investigation as well as state and federal inquiries into price-fixing that are still underway. A coalition of state attorneys general have accused a number of companies of colluding to keep prices high.

Fein said the price of doxycycline has since declined to 60 cents a pill. "That's a big switch," he said.

Despite these cases, the trend toward deflating generic prices appears to have accelerated as companies have more aggressively undercut each other's prices.

Making matters worse for the generics companies, they are missing out on peak profit potential because not as many brand-name products are losing patent protection. The six-month period after a drug goes generic is typically the most lucrative time for the first company to market. And the Food and Drug Administration has been clearing out a backlog of generic-drug approvals, meaning more competitors are now entering markets for certain drugs.

In a recent call with Wall Street analysts, George S. Barrett, the chairman and chief executive of Cardinal Health, a major drug distributor that reported declining profits last week, said generic deflation was not new, but that the company historically had been able to anticipate it. "It just looked a little different than we had seen," he said.

In recent years, generic companies have gone on acquisition sprees in an effort to head off some of these challenges. But they have been outmaneuvered by those who buy their products, a trend that has been intensifying. Major pharmacy chains, drug wholesalers and pharmacy benefit managers (which operate drug plans for insurers) have united into colossal buying groups. For example, Express Scripts, a large pharmacy benefit manager that runs its own mail-order pharmacy, teamed up with Walgreens Boots Alliance in May to purchase generics.

"What we're seeing is incredible competition - and we're causing it," said Dr. Steve Miller, the chief medical officer for Express Scripts.

So are consumers saving any money?

The declining prices are broadly beneficial to the health care system, and may put some slight brake on rising premiums.

But most of those with health insurance pay a fixed co-payment - $10, for example - for each generic prescription, and therefore don't pay more or less, regardless of any fluctuation in the actual price. And even those who do pay cash for generics may not notice a drop in price because many generics are already cheap.

Retail drug prices dropped 2.4 percent over the last year, based on a weighted average of 92 generics that have been on the market for at least a year, according to an analysis conducted for The New York Times and ProPublica by GoodRx, a site that tracks prices that consumers pay at the pharmacy. (Weighted averages account for how often each drug is prescribed.)

But that figure hides vast variations. The retail price for clopidogrel, the generic for Plavix, dropped 37 percent, to $3.77 from $6.03 a pill, GoodRx found. Conversely, the blood pressure drug metoprolol went up about 70 percent, to 59 cents a pill from 35 cents. But GoodRx noted that consumers can almost always do better than paying the retail price, or sometimes even their co-payments, using websites - like its own - that offer discounts.

Does this mean the problem with high drug costs has eased?

Overall drug spending is still on the rise because of the skyrocketing price of new, brand-name drugs.

For example, a report by QuintilesIMS, an industry research firm, found that in 2016, drug spending increased by nearly 5 percent, after accounting for discounts and rebates paid by manufacturers. Generic drugs accounted for 89 percent of prescriptions dispensed in 2016, but only 26 percent of the costs, according to QuintilesIMS. Each year, generic drugs make up a larger share of the prescriptions filled, while accounting for a smaller portion of drug costs, said Chester Davis Jr., the president of the Association for Accessible Medicines, the generic industry trade group.

New treatments for conditions like cancer and multiple sclerosis often enter the market with annual price tags in the tens of thousands - and sometimes hundreds of thousands - of dollars. Many manufacturers also raise the price once or twice a year, compounding the problem.

"Generic drugs are among the best-value products in health care," said Dr. Aaron S. Kesselheim, an associate professor at Harvard Medical School. But for those who must take a brand-name drugs because there is no other alternative, "they're the ones bearing the burden or the brunt of the drug price increases in recent years."

Is this trend likely to continue?

Generic manufacturers say they expect it will, and are worried that lower prices could put pressure on profits and threaten the viability of the companies. This could lead to a wave of mergers and acquisitions, reducing competition and leading to higher prices.

David Maris, an analyst for Wells Fargo, dismissed the idea that companies would go out of business. "Right now we have a very healthy generic market," he said.

The new commissioner of the Food and Drug Administration, Dr. Scott Gottlieb, has made increased competition in the drug market a key part of his policy platform. He said he wanted to make it easier for generics manufacturers to get clearance for hard-to-copy products like eye drops, topical creams and asthma inhalers. And he wants to reduce barriers to ensure new players can enter the market for existing generic drugs, possibly lowering prices further.

"We're looking to create competition where there isn't competition," he said.

Hospitals and pharmacies are required to toss expired drugs, no matter how expensive or vital. Meanwhile the FDA has long known that many remain safe and potent for years longer.

This article first appeared May 31, 2017 on ProPublica.

by Marshall Allen

The box of prescription drugs had been forgotten in a back closet of a retail pharmacy for so long that some of the pills predated the 1969 moon landing. Most were 30 to 40 years past their expiration dates - possibly toxic, probably worthless.

But to Lee Cantrell, who helps run the California Poison Control System, the cache was an opportunity to answer an enduring question about the actual shelf life of drugs: Could these drugs from the bell-bottom era still be potent?

Related: What Hospitals Waste

Cantrell called Roy Gerona, a University of California, San Francisco, researcher who specializes in analyzing chemicals. Gerona had grown up in the Philippines and had seen people recover from sickness by taking expired drugs with no apparent ill effects.

"This was very cool," Gerona says. "Who gets the chance of analyzing drugs that have been in storage for more than 30 years?"

The age of the drugs might have been bizarre, but the question the researchers wanted to answer wasn't. Pharmacies across the country - in major medical centers and in neighborhood strip malls - routinely toss out tons of scarce and potentially valuable prescription drugs when they hit their expiration dates.

Gerona and Cantrell, a pharmacist and toxicologist, knew that the term "expiration date" was a misnomer. The dates on drug labels are simply the point up to which the Food and Drug Administration and pharmaceutical companies guarantee their effectiveness, typically at two or three years. But the dates don't necessarily mean they're ineffective immediately after they "expire" - just that there's no incentive for drugmakers to study whether they could still be usable.

ProPublica has been researching why the U.S. health care system is the most expensive in the world. One answer, broadly, is waste - some of it buried in practices that the medical establishment and the rest of us take for granted.  We've documented how hospitals often discard pricey new supplies, how nursing homes trash valuable medications after patients pass away or move out, and how drug companies create expensive combinations of cheap drugs. Experts estimate such squandering eats up about $765 billion a year - as much as a quarter of all the country's health care spending.

What if the system is destroying drugs that are technically "expired" but could still be safely used?

Related: Tossing Unused Surgical Supplies Wastes Millions Of Dollars

In his lab, Gerona ran tests on the decades-old drugs, including some now defunct brands such as the diet pills Obocell (once pitched to doctors with a portly figurine called "Mr. Obocell") and Bamadex. Overall, the bottles contained 14 different compounds, including antihistamines, pain relievers and stimulants. All the drugs tested were in their original sealed containers.

The findings surprised both researchers: A dozen of the 14 compounds were still as potent as they were when they were manufactured, some at almost 100 percent of their labeled concentrations.

"Lo and behold," Cantrell says, "The active ingredients are pretty darn stable."

Cantrell and Gerona knew their findings had big implications. Perhaps no area of health care has provoked as much anger in recent years as prescription drugs. The news media is rife with stories of medications priced out of reach or of shortages of crucial drugs, sometimes because producing them is no longer profitable.

Tossing such drugs when they expire is doubly hard. One pharmacist at Newton-Wellesley Hospital outside Boston says the 240-bed facility is able to return some expired drugs for credit, but had to destroy about $200,000 worth last year. A commentary in the journal Mayo Clinic Proceedings cited similar losses at the nearby Tufts Medical Center. Play that out at hospitals across the country and the tab is significant: about $800 million per year. And that doesn't include the costs of expired drugs at long-term care pharmacies, retail pharmacies and in consumer medicine cabinets.

After Cantrell and Gerona published their findings in Archives of Internal Medicine in 2012, some readers accused them of being irresponsible and advising patients that it was OK to take expired drugs. Cantrell says they weren't recommending the use of expired medication, just reviewing the arbitrary way the dates are set.  

"Refining our prescription drug dating process could save billions," he says. 

But after a brief burst of attention, the response to their study faded. That raises an even bigger question: If some drugs remain effective well beyond the date on their labels, why hasn't there been a push to extend their expiration dates?

It turns out that the FDA, the agency that helps set the dates, has long known the shelf life of some drugs can be extended, sometimes by years.

In fact, the federal government has saved a fortune by doing this. 

For decades, the federal government has stockpiled massive stashes of medication, antidotes and vaccines in secure locations throughout the country. The drugs are worth tens of billions of dollars and would provide a first line of defense in case of a large-scale emergency.

Maintaining these stockpiles is expensive. The drugs have to be kept secure and at the proper humidity and temperature so they don't degrade. Luckily, the country has rarely needed to tap into many of the drugs, but this means they often reach their expiration dates. Though the government requires pharmacies to throw away expired drugs, it doesn't always follow these instructions itself. Instead, for more than 30 years, it has pulled some medicines and tested their quality.

The idea that drugs expire on specified dates goes back at least a half-century, when the FDA began requiring manufacturers to add this information to the label. The time limits allow the agency to ensure medications work safely and effectively for patients. To determine a new drug's shelf life, its maker zaps it with intense heat and soaks it with moisture to see how it degrades under stress. It also checks how it breaks down over time. The drug company then proposes an expiration date to the FDA, which reviews the data to ensure it supports the date and approves it. Despite the difference in drugs' makeup, most "expire" after two or three years.

Once a drug is launched, the makers run tests to ensure it continues to be effective up to its labeled expiration date. Since they are not required to check beyond it, most don't, largely because regulations make it expensive and time-consuming for manufacturers to extend expiration dates, says Yan Wu, an analytical chemist who is part of a focus group at the American Association of Pharmaceutical Scientists that looks at the long-term stability of drugs. Most companies, she says, would rather sell new drugs and develop additional products.

Pharmacists and researchers say there is no economic "win" for drug companies to investigate further. They ring up more sales when medications are tossed as "expired" by hospitals, retail pharmacies and consumers despite retaining their safety and effectiveness.

Industry officials say patient safety is their highest priority. Olivia Shopshear, director of science and regulatory advocacy for the drug industry trade group Pharmaceutical Research and Manufacturers of America, or PhRMA, says expiration dates are chosen "based on the period of time when any given lot will maintain its identity, potency and purity, which translates into safety for the patient."

That being said, it's an open secret among medical professionals that many drugs maintain their ability to combat ailments well after their labels say they don't. One pharmacist says he sometimes takes home expired over-the-counter medicine from his pharmacy so he and his family can use it.

The federal agencies that stockpile drugs - including the military, the Centers for Disease Control and Prevention and the Department of Veterans Affairs - have long realized the savings in revisiting expiration dates.

In 1986, the Air Force, hoping to save on replacement costs, asked the FDA if certain drugs' expiration dates could be extended. In response, the FDA and Defense Department created the Shelf Life Extension Program.

Each year, drugs from the stockpiles are selected based on their value and pending expiration and analyzed in batches to determine whether their end dates could be safely extended. For several decades, the program has found that the actual shelf life of many drugs is well beyond the original expiration dates.

A 2006 study of 122 drugs tested by the program showed that two-thirds of the expired medications were stable every time a lot was tested. Each of them had their expiration dates extended, on average, by more than four years, according to research published in the Journal of Pharmaceutical Sciences.

Some that failed to hold their potency include the common asthma inhalant albuterol, the topical rash spray diphenhydramine, and a local anesthetic made from lidocaine and epinephrine, the study said. But neither Cantrell nor Dr. Cathleen Clancy, associate medical director of National Capital Poison Center, a nonprofit organization affiliated with the George Washington University Medical Center, had heard of anyone being harmed by any expired drugs. Cantrell says there has been no recorded instance of such harm in medical literature.

Marc Young, a pharmacist who helped run the extension program from 2006 to 2009, says it has had a "ridiculous" return on investment. Each year the federal government saved $600 million to $800 million because it did not have to replace expired medication, he says.

An official with the Department of Defense, which maintains about $13.6 billion worth of drugs in its stockpile, says that in 2016 it cost $3.1 million to run the extension program, but it saved the department from replacing $2.1 billion in expired drugs. To put the magnitude of that return on investment into everyday terms: It's like spending a dollar to save $677.

"We didn't have any idea that some of the products would be so damn stable - so robustly stable beyond the shelf life," says Ajaz Hussain, one of the scientists who formerly helped oversee the extension program.

Hussain is now president of the National Institute for Pharmaceutical Technology and Education, an organization of 17 universities that's working to reduce the cost of pharmaceutical development. He says the high price of drugs and shortages make it time to reexamine drug expiration dates in the commercial market.

"It's a shame to throw away good drugs," Hussain says.

Some medical providers have pushed for a changed approach to drug expiration dates - with no success. In 2000, the American Medical Association, foretelling the current prescription drug crisis, adopted a resolution urging action. The shelf life of many drugs, it wrote, seems to be "considerably longer" than their expiration dates, leading to "unnecessary waste, higher pharmaceutical costs, and possibly reduced access to necessary drugs for some patients."

Citing the federal government's extension program, the AMA sent letters to the FDA, the U.S. Pharmacopeial Convention, which sets standards for drugs, and PhRMA asking for a re-examination of expiration dates.

No one remembers the details - just that the effort fell flat.

"Nothing happened, but we tried," says rheumatologist Roy Altman, now 80, who helped write the AMA report. "I'm glad the subject is being brought up again. I think there's considerable waste."

At Newton-Wellesley Hospital, outside Boston, pharmacist David Berkowitz yearns for something to change.

On a recent weekday, Berkowitz sorted through bins and boxes of medication in a back hallway of the hospital's pharmacy, peering at expiration dates. As the pharmacy's assistant director, he carefully manages how the facility orders and dispenses drugs to patients. Running a pharmacy is like working in a restaurant because everything is perishable, he says, "but without the free food."

Federal and state laws prohibit pharmacists from dispensing expired drugs and The Joint Commission, which accredits thousands of health care organizations, requires facilities to remove expired medication from their supply. So at Newton-Wellesley, outdated drugs are shunted to shelves in the back of the pharmacy and marked with a sign that says: "Do Not Dispense." The piles grow for weeks until they are hauled away by a third-party company that has them destroyed. And then the bins fill again.

"I question the expiration dates on most of these drugs," Berkowitz says.

One of the plastic boxes is piled with EpiPens - devices that automatically inject epinephrine to treat severe allergic reactions. They run almost $300 each. These are from emergency kits that are rarely used, which means they often expire. Berkowitz counts them, tossing each one with a clatter into a separate container, "… that's 45, 46, 47 …" He finishes at 50. That's almost $15,000 in wasted EpiPens alone.

In May, Cantrell and Gerona published a study that examined 40 EpiPens and EpiPen Jrs., a smaller version, that had been expired for between one and 50 months. The devices had been donated by consumers, which meant they could have been stored in conditions that would cause them to break down, like a car's glove box or a steamy bathroom. The EpiPens also contain liquid medicine, which tends to be less stable than solid medications.

Testing showed 24 of the 40 expired devices contained at least 90 percent of their stated amount of epinephrine, enough to be considered as potent as when they were made. All of them contained at least 80 percent of their labeled concentration of medication. The takeaway? Even EpiPens stored in less than ideal conditions may last longer than their labels say they do, and if there's no other option, an expired EpiPen may be better than nothing, Cantrell says.

At Newton-Wellesley, Berkowitz keeps a spreadsheet of every outdated drug he throws away. The pharmacy sends what it can back for credit, but it doesn't come close to replacing what the hospital paid.

Then there's the added angst of tossing drugs that are in short supply. Berkowitz picks up a box of sodium bicarbonate, which is crucial for heart surgery and to treat certain overdoses. It's being rationed because there's so little available. He holds up a purple box of atropine, which gives patients a boost when they have low heart rates. It's also in short supply. In the federal government's stockpile, the expiration dates of both drugs have been extended, but they have to be thrown away by Berkowitz and other hospital pharmacists.

The 2006 FDA study of the extension program also said it pushed back the expiration date on lots of mannitol, a diuretic, for an average of five years. Berkowitz has to toss his out. Expired naloxone? The drug reverses narcotic overdoses in an emergency and is currently in wide use in the opioid epidemic. The FDA extended its use-by date for the stockpiled drugs, but Berkowitz has to trash it.

On rare occasions, a pharmaceutical company will extend the expiration dates of its own products because of shortages. That's what happened in June, when the FDA posted extended expiration dates from Pfizer for batches of its injectable atropine, dextrose, epinephrine and sodium bicarbonate. The agency notice included the lot numbers of the batches being extended and added six months to a year to their expiration dates.

The news sent Berkowitz running to his expired drugs to see if any could be put back into his supply. His team rescued four boxes of the syringes from destruction, including 75 atropine, 15 dextrose, 164 epinephrine and 22 sodium bicarbonate. Total value: $7,500. In a blink, "expired" drugs that were in the trash heap were put back into the pharmacy supply.

Berkowitz says he appreciated Pfizer's action, but feels it should be standard to make sure drugs that are still effective aren't thrown away.

"The question is: Should the FDA be doing more stability testing?" Berkowitz says. "Could they come up with a safe and systematic way to cut down on the drugs being wasted in hospitals?"

Four scientists who worked on the FDA extension program told ProPublica something like that could work for drugs stored in hospital pharmacies, where conditions are carefully controlled.

Greg Burel, director of the CDC's stockpile, says he worries that if drugmakers were forced to extend their expiration dates it could backfire, making it unprofitable to produce certain drugs and thereby reducing access or increasing prices.

The 2015 commentary in Mayo Clinic Proceedings, called "Extending Shelf Life Just Makes Sense," also suggested that drugmakers could be required to set a preliminary expiration date and then update it after long-term testing. An independent organization could also do testing similar to that done by the FDA extension program, or data from the extension program could be applied to properly stored medications.

ProPublica asked the FDA whether it could expand its extension program, or something like it, to hospital pharmacies, where drugs are stored in stable conditions similar to the national stockpile.

"The Agency does not have a position on the concept you have proposed," an official wrote back in an email.

Whatever the solution, the drug industry will need to be spurred in order to change, says Hussain, the former FDA scientist. "The FDA will have to take the lead for a solution to emerge," he says. "We are throwing away products that are certainly stable, and we need to do something about it."

A number of drug companies have recently entered into outcomes-based contracts. But there is scant evidence this new approach lowers costs.

This article first appeared May 31, 2017 on ProPublica.

by Charles Ornstein, ProPublica and Katie Thomas, The New York Times, July 10, 2017, 11 a.m.

This article was produced in partnership with The New York Times.

More than a decade ago, Italy tried a novel approach to help bring down drug costs: asking pharmaceutical companies to return money to the national health system if some of their medicines failed to work as expected. The effort largely flopped.

The Trump administration is now considering whether to encourage a similar approach. Pharmaceutical executives presented the idea to President Trump at a meeting in January, and the general concept was raised last month in a draft executive order aimed at combating rising drug prices.

A number of drug companies have recently entered into such deals, which they call outcomes-based contracts. Merck has done so for its diabetes drugs Januvia and Janumet, promising to return money if patients' diabetes did not meet goals for control. And Novartis, which makes the heart failure treatment Entresto, is refunding money if too many patients taking the drug are hospitalized. In more typical deals, drugmakers pay rebates to insurers based on the number of drugs sold and to gain easier access for members to their products.

But there is scant evidence this new approach lowers costs. Pharmaceutical companies still set the drug's list price and have to agree to the criteria upon which they will be measured. Some experts say such arrangements are a ploy to deflect attention from substantive changes that could hurt companies' bottom lines, such as allowing Medicare to negotiate drug prices. Moreover, the savings don't always trickle down to consumers.

"Most of them get launched with great fanfare," said Dr. Steve Miller, the chief medical officer at Express Scripts, which manages the drug benefits of more than 80 million Americans. "But then you never hear anything about it after the launch because most of them collapse under their own weight."

In a recent note to investors, David Maris, an analyst at Wells Fargo, described the approach as a "carnival game" and said he did not know of any such arrangements "where a drug company did not consider it a win for them."

Robert Zirkelbach, a spokesman for the Pharmaceutical Research and Manufacturers of America, the industry trade group, said the approach was in keeping with a trend toward paying doctors and hospitals for the quality of care they deliver rather than the number of services they provide.

"We recognize that as science is moving forward, the way we pay for medicines needs to evolve as well," Zirkelbach said. The group has been promoting the idea in an advertising campaign.

To understand how these deals work, consider the one that the drugmaker Amgen made with Harvard Pilgrim Health Care, a nonprofit insurer in Massachusetts and one of the insurers to most aggressively test the concept. It has entered into at least eight such deals over the past two years. This spring, Amgen agreed to pay a full refund to Harvard Pilgrim if patients who took its pricey new cholesterol drug, Repatha, suffered a heart attack or stroke. Repatha is intended for patients with very high cholesterol levels, for which cheaper drugs, known as statins, do not work.

As part of such deals, insurers eased restrictions on which patients could gain access to the drug, said Dr. Joshua J. Ofman, a senior vice president at Amgen. Sales of Repatha and similar drugs have disappointed in part because insurers have been reluctant to pay for them given their price. Repatha can cost up to $16,000 per year.

If Harvard Pilgrim patients taking Repatha have a heart attack or stroke, they share in the refund, getting back all out-of-pocket payments that they have made toward the drug, said Dr. Michael Sherman, chief medical officer at Harvard Pilgrim.

Doctors who prescribe Repatha said the deals do not affect how they treat patients. "We're completely agnostic to it," said Dr. Frederic S. Resnic, chairman of cardiovascular medicine at the Lahey Hospital & Medical Center in Burlington, Massachusetts, who sees patients with Harvard Pilgrim insurance. The drugs are so costly that doctors still only prescribe them when patients really need them, he said.

Dr. Peter B. Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York, is skeptical. He said the pharmaceutical industry is conflating setting drug prices based on the value they bring to patients and the health care system, which he supports, with negotiating givebacks when patients don't respond to drugs, which he sees as too little, too late.

The arrangements, he said, carried "bells and whistles" that made them look good in theory. "But as long as you control all the contract terms, it can be a lot of optics but no substance," he said.

Bach and others say the pharmaceutical industry is using this approach to justify seeking major changes to federal regulations that could benefit them even more - including rolling back a requirement that Medicaid programs for the poor get the lowest drug prices, and another that bars companies from giving kickbacks to health providers. The industry says the changes are needed to allow more flexibility in the type of deals they can offer.

Drug companies and insurers touted these contracts when they were announced, but participants in several deals either declined to comment recently or provided little information about their programs.

At a conference last month in Virginia, a senior director with Prime Therapeutics, a pharmacy benefit manager, offered a blunt assessment of such contracts, saying they were not cost-effective. But in a phone interview, his boss, David Lassen, the chief clinical officer, was a bit more measured, saying that though the deals carry promise, the work to track patient outcomes is expensive and burdensome. "In their current state, where they're falling short is where you look at the return on investment," Lassen said.

Sherman at Harvard Pilgrim said the deals would not work for every drug and that drugmakers typically showed no interest when there were no competing brand-name drugs that worked in a similar way.

Some pharmaceutical executives acknowledge the model should not be seen as a panacea. Leonard S. Schleifer, the chief executive of Regeneron, questioned how such pricing would work for a drug like Dupixent, an eczema drug his company makes that was approved this year.

"Are we going to start calculating the surface area of the rash that's improved?" said Schleifer, whose company has entered into some outcomes-based deals for Praluent, a competitor to Repatha.

Other drugmakers said proof that the concept works can be seen in the interest they are getting from insurers. "No one is going to enter into these contracts if they don't believe the prices they are paying are of good value," Ofman, of Amgen, said.

Italy's experience is instructive.

Beginning in 2006, the Italian National Health System negotiated deals with drugmakers for certain medicines. It required doctors to track whether their patients were meeting certain goals, and if they were not, the pharmaceutical company would reimburse a share of what it was paid.

In 2015, researchers studying Italy's experiment concluded that the amount of money refunded by the companies was "trifling."

"The performance of this system was very, very poor," said Filippo Drago, director of the Department of Biomedical and Biotechnological Sciences at the University of Catania in Italy and an author of the study. He attributed the low savings to the administrative complexity of tracking the results and said drug companies fought efforts to reimburse for bad outcomes.

Italy now asks drug companies to provide some of their products for free - at first. Manufacturers are only paid once results are demonstrated.

"This system is working very well," Drago said.

Correction, July 10, 2017: An earlier version of this article referred incorrectly to deals between drugmakers and health plans for coverage of drugs like Repatha. The deals made it easier for patients to gain access to Repatha through their insurer; they did not ease restrictions on which patients were prescribed the drug.

In a letter from prison, Genene Jones appeared to acknowledge her guilt and asked Texas nursing regulators to forgive her for a crime she allegedly committed when she was not “of sound mind.”

This article first appeared June 29, 2017 on ProPublica.

By Peter Elkind

In a newly obtained letter sent to Texas authorities, Genene Jones- the former nurse suspected of killing more than a dozen infants- apologized "for the damage I did to all because of my crime." This marks the first time that Jones, who has maintained her innocence, seems to acknowledge guilt for her alleged crimes.

In March 2011, Jones authored a letter to the Texas Board of Nursing from prison. "I look back now on what I did and agree with you now that it was heinous, that I was heinous," Jones wrote. The letter came as a surprise to prosecutors, who have brought new charges against Jones to prevent her scheduled March 2018 release from prison. Jones, who was convicted in 1984 of murdering a toddler and injuring a month-old baby, had adamantly maintained her innocence during her criminal trials and in two prison interviews in 1987. She has since left standing instructions with prison officials to decline media requests.

"My only defense is that I was not of sound mind then or any time before 1994," Jones wrote in the letter. "That is not an excuse just a fact. God, in His infinite wisdom and mercy, granted me a sound mind upon receiving Him as Lord of my life."

The case of Genene Jones, now 66 and once dubbed an "Angel of Death with a needle," has dramatically resurfaced. Over the past five weeks, a Bexar County grand jury has indicted her for murder in the early 1980s deaths of four children in the pediatric intensive-care unit at San Antonio's county hospital, where she once worked. (Two new murder charges were handed down today.) The indictments resulted from a fresh investigation into more than a dozen suspicious deaths during that period, led by new District Attorney Nicholas "Nico" LaHood.

After a jury found her guilty in 1984, Jones was sentenced to serve 99 years for the murder of 15-month-old Chelsea McClellan, who died after Jones injected her with a powerful muscle relaxant at a pediatric clinic in Kerrville. Jones had gone to work there after the San Antonio hospital- despite suspicions that she was harming children- sent her off with a good recommendation. Jones later received a second, 60-year sentence, to run concurrently, for nearly killing 1-month-old Rolando Santos with repeated overdoses of the blood thinner heparin in the pediatric ICU.

At the time, the Bexar County DA suspected her of involvement in other murders of children but declined to bring charges, reasoning that the cases would be difficult to prove and that Jones' 99-year sentence guaranteed she'd be spending the rest of her life in prison.

That expectation proved faulty. Thanks to a Texas law aimed at reducing prison overcrowding, Jones is now due to be freed next March, after serving 34 years and eight months.

Responding to a growing public uproar, DA LaHood in late May began bringing new murder charges to prevent her release. Jones will now be transferred to Bexar County Jail ahead of March 2018 and held there until trial unless she is able to post the four $1 million appearance bonds set for the new charges.

In the new murder indictments today, the grand jury accused Jones of killing 8-month-old Ricky Nelson in July 1981 and 4-month-old Patrick Zavala in January 1982 by injecting each of the two babies with "a substance unknown." After learning about Jones' letter on Wednesday, assistant DA Jason Goss, who leads the DA's trial team, said he planned to tell the grand jury about it today in addition to presenting testimony of Zavala's mother.

It is not clear exactly how Jones' newly disclosed 2011 letter- which was received and quietly filed away- will affect her pending cases at trial. Jones has not yet entered a plea, and she does not explicitly discuss the deaths of any specific children in her letter. But it is not likely to help her defense.

"It's a confession," says assistant DA Goss. "That's a big deal. It's an incredibly important piece of evidence. We already knew she was guilty. The fact that she's saying it to this nursing board just strengthens that belief. Just the fact that she's acknowledging that means she's not an innocent person in her own mind."

LaHood, the Bexar DA, said Jones' profession of faith is not relevant to the question of whether she should face additional charges. "Forgiven and exonerated are two different things," said LaHood, who is himself a vocal Christian. "Can she be forgiven? Absolutely. Should she be exonerated? No. I can forgive her and still want her to take her last breath behind bars. It doesn't change what we're going to do."

Petti McClellan, the mother of the murdered Chelsea McClellan, was similarly unmoved. "It almost makes me angry that she did this but she didn't apologize to any of us, not just me, but any of the families in San Antonio," she said in an interview. "She must have thought it was going to benefit her. I don't think there was anything sincere about it."

ProPublica and Texas Monthly obtained a copy of Jones' letter- which was summarized in an order revoking her nursing license- through a Texas public-records request. We first learned about the letter from a Texas registered nurse, who had found the order on the state nursing board's website after becoming "fascinated" with the Jones story. She then mentioned the letter in a Facebook comment on a posting about the latest murder indictment of Jones.

It is, of course, remarkable, that Jones retained her nursing license until 2011. The Board of Vocational Nurse Examiners- which then regulated vocational nurses such as Jones- didn't even suspend her license until January 1986, nearly two years after her murder conviction. ("If you have, as you say, investigated my case, you are already aware of my innocense (sic)," Jones wrote in protest before the decision. ") Jones lost her criminal appeal that August. Yet no further regulatory action followed over the next 25 years.

The Texas prison system also struggled to make sense of Jones' status as a nurse. In August 1984, a state prison official wrote to the Bexar County Hospital District to ask if there was any problem with inmate Jones being assigned to work in the prison hospital's dispensary. After word of the inquiry leaked out, a prison spokesman offered a public assurance that the state would find Jones work that had nothing to do with medicine.

In February 2011, a Huffington Post story about the prospect of Jones' future release prompted the Texas Board of Nursing, which now regulates all state nurses, to revisit the issue and initiate revocation proceedings, says board general counsel James "Dusty" Johnston. The goal, says Johnston, was "just basically putting closure to the matter."

Notice of this proposed action went out on March 18, 2011, to Jones, then in a prison-system medical facility in South Texas, where she was being treated for health issues. In an undated four-paragraph reply the board received on April 1 of that year, Jones expressed "total bafflement" that her nursing license remained an open issue.

"What does the Board have to do with me after almost 28 years of incarceration?" she wrote. "My license was suspended … after my conviction. I have not applied for renewal in almost 30 years." Anyone can search the internet "and find out all they wish to know, though most is untrue." Jones then went on to offer what amounts to an unsolicited confession:

As a response, I will take this opportunity to apologize to the Board and to the nurses it represents for the damage I did to all because of my crime. My only defense is that I was not of sound mind then or any time before 1994. That is not an excuse just a fact. God, in His infinite wisdom and mercy, granted me a sound mind upon receiving Him as Lord of my life. I look back now on what I did and agree with you that it was heinous, that I was heinous. But, God's mercy is new every morning to remind me that I am forgiven by Him. I pray that someday you will forgive me also.

I have no plans to ever renew nursing in my lifetime or a license that I am sure, if your records go back that far, was revoked somewhere down the line of time. If you need anything more of me, please let me know."

Sincerely,

Genene Jones

The board finally revoked Jones' license to practice nursing on June 10, 2011.

Though separated by decades, Jones' letter was entirely at odds with her long-held insistence about her innocence. She pleaded not guilty at both her trials in 1984. In the days after her first conviction, for the McClellan murder, Jones, who had declined to testify, spoke to reporters for hours and happily posed for photographs. "I'm not afraid of jail, because I'm innocent," she declared. "If I had to spend 99 years in solitary, I could live with myself because I didn't do anything."

Prior to the 2011 letter, Jones' most recent public statements came during two conversations I had with her in 1987 at the state prison in Gatesville for a book I wrote about the case.

Furiously combative while working as a nurse and during earlier interviews, Jones had mellowed considerably by then. The four-letter epithets that once salted her conversation were gone. Once quick to rage, Jones now seemed placid and relaxed, even gentle. She attributed the change to a newfound religious faith. "I've been given time to sit down and understand the Lord," she told me. Jones had replaced the cross she wore on a chain around her neck during her murder trial with a Star of David. "I'm leaning toward the Jewish religion," she explained.

Yet Jones, in 1987, remained adamant that she'd been railroaded. "The story of my conviction is about big money," she declared, railing about how much the state had spent to put her behind bars. I finally asked her directly: Did she still believe she bore no personal responsibility- no blame for what had happened?

"That's not a belief," Jones insisted. "That's a definite fact. I know I am responsible in a way for bringing it to the public viewpoint, but as far as being responsible for any death- no, I am not."

So I asked her another way: Did she think she could perhaps be the victim of a disease of the mind that led her to harm children without her conscious knowledge? "No, I don't," she replied immediately. "Not at all. I've had a lot of time to think. I don't have any doubts in my innocence."

Peter Elkind is the author of "The Death Shift: Nurse Genene Jones and the Texas Baby Murders."