These doctors are concerned you won’t be able to afford the medicines they want to prescribe you.
A national group of more than 140,000 physicians on Tuesday joined a coalition dedicated to reversing the growing trend of high-cost specialty drugs, which are being blamed for straining the finances of patients, insurance plans and public health coverage programs.
The move by the American College of Physicians came a day after the Obama administration said it is asking Congress to give it power to negotiate with drugmakers over the prices of costly prescription medication provided to Medicare beneficiaries.
“The pricing of specialty drugs lacks transparency and rationality,” said ACP President David Fleming as he announced that his group of internists, the second-largest physician association in the U.S., was joining the Campaign for Sustainable Rx Pricing.
“We’re seeing the introduction many patent-protected drugs with monopolistic pricing power that fail to demonstrate a relationship between their price and their value to the health-care system,” said Fleming. “Though many of these medications offer great promise, the price tag for health-care clinicians and patients is simply too much to bear.”
Bob Doherty, ACP’s senior vice president of governmental affairs and public policy, said the high price of some prescription drugs is “creating barriers” to patients’ needs for treatment. He cited several examples of members of the group who have seen patients with serious conditions, who are unable to afford the medications that their doctors think would work best for them.
John Rother, president of the National Coalition on Health Care, which leads the Campaign for Sustainable Rx Pricing, said the high prices of a small group of specialty drugs threaten to “bankrupt” the health-care system.
“We need to establish a drug-pricing structure based on value and data-driven evidence and balance between the interests of innovative drug manufacturers and those of society and our health-care system,” he said.
‘Pressure’ for change
Rother also said having the ACP join the campaign would help “bring pressure” to change the current pricing situation.
The campaign said that specialty prescription medicine prices are “skyrocketing,” noting that in 2013 “specialty drugs accounted for less than 1 percent of U.S. prescriptions but for more than 25 percent of prescription spending.” The campaign noted predictions by CVS Health that specialty drugs, by the end of the decade, “will account for roughly 50 percent of the total drug spend” despite being just 2 to 3 percent of all prescriptions.
“There appears to be no end in sight … to the price increase. And even more troubling is there appears to be no justification for the prices drug companies are charging,” Rother said. “Simply put, the prices for these drugs are unsustainable, and every day patients and their doctors are confronting this reality.”
Concern about rising costs of specialty drugs has been gaining increased attention since the 2013 launch of Sovaldi, a highly successful hepatitis C medication manufactured by Gilead that costs an eye-popping $84,000 for a 12-week regimen. Hepatitis C, which is a liver disease, affects more than 3 million Americans.
Drug manufacturers argue that they are entitled to recoup the sky-high costs of developing new treatments as well as to make a profit. But the high prices are counteracting a historic slowdown in health-care spending growth, and putting stress on government-run Medicaid and Medicare programs, which cover the poor and elderly, respectively. Those programs are the largest purchasers of health services in the U.S.
A Robert Wood Johnson Foundation report issued last week found that “most” of the 4.7 percent growth in health-care spending in the first half of 2014, compared to 3.6 percent in the same period of 2013, “was attributable to a jump in spending on prescription drugs—specialty drugs in particular.”
“As for the fourth quarter [of 2014] spending on prescription drugs continued its rapid growth, on average 11 percent higher for October and November as compared to the same months last year,” wrote Katherine Hempstead, the author of that report.
On the same day as that report, data released as part of the Truveris National Drug Index found that the prices of brand-name drugs increased by nearly 15 percent in 2014, while the prices of specialty drugs “jumped 9.7 percent.” After factoring in a 4.9 percent increase in the price of generic drugs, Americans were paying, on average, 10.9 percent more for prescription medication last year compared to 2013.
“Drug costs across all categories are becoming an escalating concern for patients, employers, insurers and lawmakers,” said Bryan Birch, chairman, president and CEO of Truveris, which analyzes drug pricing and benefits. “Looking at macro-industry trends, including consolidation, regulation and formulary pressure, we expect this price inflation to continue to put pressure on American households and employers in 2015.”
But currently, Medicare is barred from negotiating with drugmakers over the prices of medications used by beneficiaries of Medicare Part D, the prescription benefit arm of the program.
President Barack Obama, in his budget released Monday, isn’t asking for the power to haggle over the price of all drugs, just the ones that are high cost.
“We share the president’s deep concern about the rapidly rising cost of high-priced specialty drugs and brand-name medications, and we applaud the proposal in the budget that would reduce wasteful spending on prescription medications,” said Joe Baker, president of the Medicare Rights Center. “We strongly support proposals to allow the federal government to negotiate prices for breakthrough medicines.”
Unclear chances for change
However, it remains far from clear whether Obama has any chance of getting his proposal through Congress.
Dr. Scott Gottlieb, an American Enterprise Institute scholar and practicing physician, said, “I still think there is a strong political consensus for preserving market-based pricing of life-science innovation in the U.S.”
While “sentiment can change quickly in Washington … I don’t see this issue going anywhere for the remainder of the Obama term,” Gottlieb said. “Nothing passes this year, or next.”
But he noted that a continued influx of Republicans with more populist backgrounds could alter the political calculus and make it easier to pass drug-price control legislation.
The pharmacy industry’s trade group blasted Obama’s proposal.
“The president’s budget contains harmful proposals that fundamentally alter the structure of the Medicare Part D program,” said John Castellani, president and CEO of the Pharmaceutical Research and Manufacturers of America. “Medicare is a wildly successful program, keeping costs low for both beneficiaries and taxpayers through plan competition and negotiation, while also helping hold down other health-care costs by improving adherence to needed medications.”
Castellani said Obama’s proposal “could jeopardize that access” seniors have to medicines “by driving up premiums, reducing choice and restricting coverage.”
The conservative Heritage Foundation said “government price controls will not improve” the performance of Medicare Part D, whose “competitive market-based approach has proven successful in reducing costs and expanding access” to prescription drugs.