Verma: Drug ‘innovation doesn’t mean anything’ if the therapy is too costly
Congress is considering legislation that’s intended to lower the cost of prescription drugs, but the details haven’t been fleshed out yet, and it’s not clear whether anything will get done before year-end.
CMS ADMINISTRATOR Seema Verma last week said that the healthcare system should encourage innovation, but “innovation doesn’t mean anything” if people can’t afford and access new drugs and therapies.
During a discussion panel about healthcare costs at the Time 100 Health Summit in New York, Verma said that she’s worried about the cost and access challenges posed by curative therapies. Curative therapies upend the traditional paradigm of managing disease by curing them instead, but the treatments are costly and unavailable to many patients who could benefit.
“We’re seeing price tags now of $1 million, $2 million. That’s completely unsustainable for the system,” she said.
New direct-acting antiviral drugs for hepatitis C are a prime example. The treatments are easy to administer and can cure up to 95% of patients, but they’re notoriously expensive. When Gilead Sciences released its first hepatitis C drug, Sovaldi, it cost $84,000 for a three-month course of treatment— or $1,000 per pill. Harvoni, its first combination pill, was even pricier at $94,500 for a round.
While early curative treatments impacted small patient populations, the costs of these new treatments are going to affect more and more people, which will drive up healthcare spending and hurt access to care unless they’re addressed.
“So how do we deal with that as a society?” said Bernard Tyson, chairman and CEO of Kaiser Permanente, who appeared on the panel with Verma.
Drug costs could be tackled through policy changes that address drugmakers’ market protections, such as patents.
After the U.S. Supreme Court ruled that genes can’t be patented, the price of a BRCA gene test dropped from $5,000 to $70, according to Dr. David Agus, CEO of the Ellison Institute for Transformative Medicine at the University of Southern California. The tests are used to screen for genetic changes that can increase the risk of breast and ovarian cancers.
“Hundreds of thousands of women died (during the litigation) because they couldn’t pay for access to look at their own DNA,” Agus said. “They couldn’t pay the ransom.”
Policymakers and other stakeholders will eventually need to look at the cost of prescription drugs as part of the total cost of care for a patient over their lifetime, especially as more curative treatments become available because managing chronic illness can be expensive too, Tyson said.
But payers and providers don’t have any real incentives to consider the lifetime cost of care right now because they’re rarely responsible for patients throughout their lives.
“When we’re switching health plans every few years, who’s responsible for that big outlay?” Agus asked Verma.
The “government has a role to play” when it comes to high-risk, high-cost populations, Verma responded. She cited Medicare and experimental reinsurance programs as examples of how the federal government can help control healthcare costs. But she didn’t say who would ultimately be responsible for evaluating the lifetime cost of care and deciding whether to deliver and pay for curative treatments.
Congress is considering legislation that’s intended to lower the cost of prescription drugs, but the details haven’t been fleshed out yet, and it’s not clear whether anything will get done by year-end. There seems to be widespread support among providers, payers, policymakers and the public to do something to lower the cost of prescription drugs.
“The advances that we’re making in the medical field are unbelievable. Everybody should be benefiting from that,” Tyson said. ●