Drug prices keep rising with no end in sight
Recently a tweet from Lauren Sausser, a fine health reporter I know in South Carolina, caught my eye. "Crazy drug prices became personal. My dad will start Keytruda regimen on Friday, $15,000 per infusion, once every three weeks indefinitely."
The high cost of pharmaceuticals had hit home!
Her 61-year-old father, Jim McCallister, who lives in Spartanburg, S.C., had been diagnosed with a melanoma discovered during a routine skin exam a few weeks earlier. It had spread to his lungs. Doctors recommended the drug, which uses the body's immune system to attack cancer cells and has showed promise in treating aggressive melanomas.
McCallister's employer-provided insurance is paying for most of his treatment, and the family is looking into Merck's co-pay program. In the meantime, McCallister faces several thousand dollars of out-of-pocket costs.
McCallister may be lucky cost-wise. But the fact remains: Somebody is paying for the high cost of Keytruda and other new drugs coming on the market. Sausser said her dad asked if insurance would cover the drug. "The doctor told him they would find some way."
That's the nub of the dilemma. For many like McCallister, there may be help, often from the drug companies themselves in the form of patient assistance plans. Remember drug company AstraZeneca's ads for some of its costly drugs: "AstraZeneca may be able to help"?
Sometimes state or local government programs, private charities, nonprofit agencies, or coupon programs help patients pay for their drugs. Patients who can't get help from any of those sources often go without.
None of the assistance programs, however, attack the underlying prices for the drugs, which pharmaceutical makers can set according to what the market will bear. They can pretty much do whatever they want with little pushback from those who end up paying the bills—governments, insurers and patients. The U.S. has no cost controls, and government doesn't negotiate drug prices the way many other countries do.
So the price of commonly prescribed drugs like the EpiPen, a shot that stops life-threatening allergic reactions, has risen to more than $600 for two pens. In 2009 two pens cost $100. The price for Abilify, an antipsychotic, has risen 113 percent between 2007 and 2014, and the cholesterol-lowering drug Crestor has climbed 103 percent over the same time period, according to The Campaign for Sustainable Rx Pricing, a group of employers, insurers, and unions that are trying to raise public awareness of high drug prices.
That helps explain why Medicare recently reported its spending on prescription drugs increased more than 17 percent in 2014 even though the number of claims from the program's 38 million beneficiaries rose only 3 percent.
Medicare's prescription drug law was never meant to pay all a person's drug expenses. This year once a beneficiary and her drug plan have paid $3,310 for medicines, she reaches the coverage gap where she must pay the cost of most of her drugs. If she spends, out of her own pocket, another $4,850 for drugs this calendar year, she qualifies for catastrophic coverage and pays only 5 percent of all her remaining drugs for the year.
The trouble is that with prices so high, it's easy to end up in the coverage gap paying out-of-pocket. Even protection offered by catastrophic coverage may not be enough. That's especially true for people taking high-priced specialty drugs.
In 2013, about 3 million people were in this predicament. "Not a lot of people pay above the threshold, but those who do can pay through the nose," says Tricia Neuman, senior vice president of the Kaiser Family Foundation.
Escalating drug prices affect everyone—even those not taking expensive drugs or not on Medicare. High drug prices affect all insurance premiums sooner or later.
Not long ago I spotted a letter to the editor in USA Today from Heather Block, age 53 who has Stage 4 breast cancer. She was calling for patients to organize and build a network to help craft solutions for the problem of skyrocketing drug prices.
I talked to Block about this. Her zeal and interest in organizing patients reminded me of the early days of the consumer movement in the 1960s when citizens organized to pass legislation to make the marketplace safer and more fair. With drugs, Block says, it's hard to organize people because of drug assistance programs that take the sting out of prices and make patients less willing to work against the companies, the presence of disease advocacy groups funded by the pharmaceutical industry, and a general reluctance to speak up for fear of jeopardizing their own health and survival. She's asking for consumers to share their stories at this email: email@example.com.