What To Do About High-Priced Drugs?

 California Healthline, Thursday, July 30, 2015

Is it possible to put a price tag on good health? How much is too much to pay for feeling good?

These aren’t new questions, but on the cusp of two new eras, they take on new urgency and new meaning.

The two new eras:

  • New drugs — with new, large price tags — are making significant improvements in treatment for several maladies including hepatitis C, cystic fibrosis, cancer, high cholesterol and heart disease; and
  • Health care reform that aims to provide affordable health insurance for every individual is changing the alchemy of who pays for what. With more government-subsidized coverage, taxpayers are being asked to pay for a larger portion of their neighbor’s health coverage.

According to an analysis released last month, California taxpayers could pay as much as $5.1 billion a year to treat hepatitis C patients in state-funded programs.

The report, commissioned by the California Association of Health Plans, estimates the annual cost for hepatitis C medications for patients in Medi-Cal, prisons, state hospitals and other state programs could range from $512 million to $5.1 billion, depending on the number of patients and drug discounts.

Lawmakers and politicians are grappling with the issue.

A bill in the California Legislature asking pharmaceutical manufacturers to explain their prices died this spring in the face of stiff opposition. Thought to be the first legislative attempt of its kind in the country, AB 463 — by Assembly member David Chiu (D-San Francisco) — would have required drug makers to report profits and production expenses for any drug or course of treatment costing $10,000 or more.

On the national front, Congress convened a special investigation on drug pricing and President Obama has proposed that Medicare be allowed to negotiate prices with drug makers, a practice expressly forbidden by current law.

An analysis by Avalere Health estimated that 10 new breakthrough therapies could cost the federal government up to $50 billion over the next decade.

New York Times editorial urges policymakers to do something about “runaway drug prices,” citing several examples of high-priced specialty drugs, such as $311,000 for a year’s supply of a drug to treat cystic fibrosis.

Some experts and stakeholders say current policies dealing with drug purchasing are not sustainable and could eventually bankrupt the system.

What should policymakers do?

We asked consumer advocates, insurers, state health officials and pharmaceutical manufacturers to weigh in. We received responses from:

Source: California Healthline, Thursday, July 30, 2015