Ex­pen­sive new prod­ucts ... po­ten­tial gov­ern­ment reg­u­la­tion … pharma-in­surer talks

Modern Healthcare - - NEWS - By Steven Ross John­son

High prescription drug prices will be a top

tier po­lit­i­cal is­sue in 2016 as the ex­pected in­tro­duc­tion of many ex­pen­sive spe­cialty med­i­ca­tions to treat chronic con­di­tions threat­ens to drive up health­care spend­ing.

“With drugs in de­vel­op­ment for diabetes and hy­per­ten­sion, th­ese are con­di­tions that af­fect a very large num­ber of peo­ple,” said John Rother, CEO of the Na­tional Coali­tion on Health Care. “The fis­cal im­pact could be quite sub­stan­tial on pri­vate health plans, gov­ern­ment and in­di­vid­u­als.”

Con­cerns about how phar­ma­ceu­ti­cal com­pa­nies set prices on new and old drugs ex­ploded into the pub­lic con­scious­ness in 2013 when Gilead Sci­ences in­tro­duced its $84,000 hep­ati­tis C treat­ment So­valdi. Since then, spe­cialty drugs have been in­tro­duced with prices well above $100,000 for a year’s worth of treat­ment, a trend that is ex­pected to ac­cel­er­ate in 2016. In ad­di­tion, drug­mak­ers have jacked up prices for generic drugs that have been around for many years.

“It’s clear gov­ern­ment must play some role be­cause it pays for the ma­jor­ity of drug costs,” Rother said. “But I don’t think it’s clear yet ex­actly what steps will be taken and when.” Whether the fed­eral gov­ern­ment acts to con­trol drug costs, and how it does so, will de­pend heav­ily on who wins the pres­i­den­tial elec­tion in Novem­ber, he added.

Demo­cratic can­di­dates Hil­lary Clin­ton and Bernie San­ders have out­lined plans to have Medi­care ne­go­ti­ate prices with drug­mak­ers, and Clin­ton wants to cap con­sumers’ out-of-pocket costs for drugs. In con­trast, Repub­li­can pres­i­den­tial can­di­dates gen­er­ally fa­vor eas­ing the drug ap­proval process to re­duce drug de­vel­op­ment costs.

There will be dis­cus­sion this year of bas­ing prices on the cost-ef­fec­tive­ness of prod­ucts, said Steve Knievel, an or­ga­nizer for the con­sumer ad­vo­cacy group Pub­lic Cit­i­zen’s Global Ac­cess to Medicines Pro­gram.

Two new choles­terol-low­er­ing drugs, Pralu­ent and Repatha, will promi­nently raise the cost­ef­fec­tive­ness is­sue. Their list price of $11,500 for a year’s worth is pro­jected to sig­nif­i­cantly in­crease drug spend­ing. Crit­ics ques­tion how much of an ad­van­tage they have over ex­ist­ing, much cheaper statin drugs for many pa­tients.

The phar­ma­ceu­ti­cal in­dus­try will be closely watched to see if it shows will­ing­ness to work with other stake­hold­ers on pric­ing. Stephen Ubl, the new CEO of the Phar­ma­ceu­ti­cal Re­search and Man­u­fac­tur­ers of Amer­ica, re­port­edly has met with Mar­i­lyn Taven­ner, head of Amer­ica’s Health In­sur­ance Plans, to dis­cuss pos­si­ble so­lu­tions.

“We’ll have to see whether they de­cide to act more re­spon­si­bly with­out be­ing com­pelled to do so through gov­ern­ment ac­tion,” Knievel said.

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