Soaring Drug Prices Leave Patients Seeking Relief
by Lora Hines
March 19, 2015
Source: Houston Chronicle
After years of trying different treatments, Julie Wiles of Spring finally found relief from severe fatigue and joint pain caused by rheumatoid arthritis when she began receiving injections of Enbrel, a drug that costs $2,500 a week.
Even with insurance coverage, Wiles could no longer afford the injections after completing a program offered by Enbrel's manufacturer that covered the drug's cost.
Instead, Wiles takes a combination of less expensive drugs and injections that haven't been nearly as effective.
"I've been diagnosed with a disease I have no control over," said Wiles, 55, who sells school furniture. "It becomes very frustrating as a patient. I have to be able to function to maintain my job and my family and live a decent life."
An estimated 57 million Americans rely on tens of billions of dollars worth of specialty drugs to treat their conditions, but the costs are rising at a such a rate that many patients can no longer afford them.
The medications - often biotechnology medicines that have no substitutes - usually run well over $1,000 per month to a variety of serious illnesses, including HIV and cancer. The treatments account for only 1 percent of all U.S. prescriptions, but represented nearly 32 percent of all drug spending last year, according to Express Scripts, the nation's largest pharmacy benefit management company.
"For the past several years, annual drug spending increases have been below the annual rate of overall health care inflation in the U.S.," said Dr. Glen Stettin, Express Scripts' senior vice president of clinical, research and new solutions. "But that paradigm is shifting dramatically as prices for medications increase at an unprecedented and unsustainable rate."
Drug manufacturers and insurers point the finger at each other for the high costs. Pharmaceutical companies say insurers and pharmacy benefit managers negotiate price reductions and rebates for themselves and then mark up prices patients pay.
For example, no one is paying the $84,000 whole sale price for a 12-week round of Sovaldi, a hepatitis C drug, said Holly Campbell, of the Washington D.C. trade group Pharmaceutical Research and Manufacturers of America, better known as PhRMAS.
"We can't say what the prices are," she said. "The list price is not necessarily what patients end up paying. That's not what insurers and (pharmacy benefit managers) pay."
Health care experts and doctors say insurers are implementing cost containment measures to steer patients toward less expensive and sometimes less effective drugs, no matter whether consumers buy coverage or have employer-sponsored insurance. They have established prescription benefits plans that might require a high level of patient cost-sharing for specialty drugs. Insured workers can be required to pay almost 30 percent of the cost of specialty drugs, according to the Kaiser Family Foundation's 2014 Employer Health Benefits Survey.
Insurers, however, say the high costs are the result of the prices set by pharmaceutical companies.
"This isn't about coverage," said Clare Krusing of the Washington D.C. trade group America's Health Insurance Plans, known as AHIP. "Insurance companies end up paying for a vast majority of these drugs."
Some doctors say that insurers often require patients to try less expensive therapies before they cover specialty drugs, even if it's clear the more costly options are the most effective.
"Failure equals patient suffering," said Houston neurologist Dr. Reeta Anchari. "That means patients aren't feeling well."
U.S. spending on prescription drugs in 2012 totaled $263.3 billion, with 25 percent going toward specialty drugs, according to the AHIP. The organization expects specialty drug spending to increase 63 percent by 2016 and total more than $400 billion by 2020, accounting for about half of all prescription drug spending and nearly 10 percent of national health spending.
"The costs will be passed on to patients in the form of higher premiums," Krusing said. "Health plans recognize and know that these drugs are important. But before they go on the market, price needs to be considered first."
Meanwhile, the U.S. Food and Drug Administration is approving more specialty drugs. In 2010, specialty drug approvals exceeded traditional drug approvals for the first time, AHIP found. Of the 28 drugs the agency approved in 2013, 19 were specialty drugs.
"If there is a gold rush in pharmacy, it is specialty drugs," said Devon Herrick, a senior fellow at the National Center for Policy Analysis, a conservative Dallas think tank. "Half of all health care spending will be on these expensive agents. I've talked to drug plans about this. They are very concerned."
Specialty drugs could be worth their costs in the long run by keeping patients healthier, he said. However, many people don't remain in an insurer's risk pool long enough to justify such an investment.
"We're allowing drug companies to make money on (specialty) drugs," Herrick said. "Cost-sharing is an important tool. It is used to offset some of the cost to the health plan. The problem is patient cost-sharing for those drugs can be the equivalent to a car payment or more in some cases."
Patient advocates say insurers' cost containment measures dictate how doctors treat patients.
When a lower-cost treatment isn't effective, patients quality of life diminishes because their manageable conditions are out of control, said Dr. Brian Bruel, a pain management specialist at the University of Texas M.D. Anderson Cancer Center.
"We are prescribing what we think is most appropriate," he said. "I am very cost conscious and try prescribing cheaper drugs first, so I won't have to bother with prior authorization."
Although expensive, specialty drugs could offer long-term cost savings by keeping patients healthier and reducing hospitalizations, doctors and advocates say.
"We would really like to see what data insurers have," said Stephen Marmaras of the Global Healthy Living Foundation, a nonprofit which represents chronically ill patients. "The patient-physician relationship is built on trust. Their cost-savings practices drastically undermine that."