When it comes to prescription drugs, Moira “Meg” Jackson-Drage, 53, experiments.
The Magna woman was diagnosed years ago with an autoimmune syndrome that includes fibromyalgia, chronic fatigue and chronic pain. She’s been prescribed different drugs over the years to find what helps her most. Sometimes, the choice has been dictated by which drugs her insurance company will help cover. But her experiments have been based on something else entirely.
She’s experimented with taking less medication than is prescribed and with skipping medications that she really needs because she can’t afford them.
She’s experimented with drug discount cards that help control prices, but now that the Social Security Administration agreed that she’s disabled, making Medicare her insurer, she can’t access those to reduce prescription costs if she wants Medicare to help with costs.
Sometimes, she experiments with going to bed extremely early, hoping sleep will blunt the edges of her exhaustion and misery.
Just sweeping the floor can exhaust her and sometimes she finds herself wondering how her life would go — how she would feel — if she could afford all the medication her doctor’s told her she should take. She jokes you could add depression to her list of maladies.
Jackson-Drage is one of a staggering number of people who struggle to afford medication.
David Mitchell, 71, of Bethesda, Maryland, has multiple myeloma and has undergone aggressive treatment for more than a decade. The combined annual cost for his four-drug regimen — he’ll need treatment the rest of his life — tops $900,000, though he doesn’t have to pay all of it.
But out-of-pocket cost for just one of them is $16,000 a year, which he so far has managed. Mitchell, who with his wife, a breast cancer survivor, founded Patients for Affordable Drugs, said he feels lucky in spite of the crushing cost of maintaining fragile control of the cancer, which is incurable. At least he hasn’t had to refinance his house to cover the cost of his drugs or skip them entirely.
That’s a story he hears often from others.
The problem of drug affordability isn’t new. Therese Humphrey Ball of Ogden Dunes, Indiana, was diagnosed with multiple sclerosis in 2003. Back then she was working as a nurse and cleaned out her savings to pay for medicine the doctor prescribed. The insurance she got through her employer had a preexisting condition clause that made her pay all the drug costs for nearly a year before coverage kicked in. So she dug up $1,600 a month.
She’s faced challenges since, with changing prescriptions and which drugs help or don’t and whether insurance covers them. She’s 68 now and on Medicare. The co-payment has again made medicine hard to afford — and her husband takes medicine, too.
“It’s wild. It really is,” she says.
Drug prices are not just challenging for Medicare beneficiaries. Iesha Meza, 30, of Phoenix, Arizona, was diagnosed with Type 1 diabetes three days before her 21st birthday. When she changed jobs and thus insurance, the cost of her insulin doubled. When money was tight, she had periods when she felt she had to ration insulin or even skip it. The proved extraordinarily dangerous and she ended up in intensive care, in a diabetic coma, she said.
They are all among those for whom a national debate about drug affordability feels like life and death. Some, including President Joe Biden, say controlling drug prices is the key to the dilemma. His now-stalled Build Back Better proposal has several provisions to reduce the cost of medication with a focus on Medicare.
Others, like Dr. Kenneth E. Thorpe, a professor at Emory University who chairs the advisory board of the Partnership to Fight Infectious Disease, say the list price of medicine is not the problem.
“I think the overall focus on drug prices has been wrong,” said Thorpe. “That’s important for Medicare perhaps, but to me, the real focus should be on patients and what they pay out of pocket.”
There’s broad agreement, though, that when Americans cannot afford to take their medicine, it’s bad for the nation’s health.
The Rx price tag
Many players dip their hands in the money stream as medicine makes its way to consumers, according to Dan Liljenquist, chief strategy officer of Intermountain Healthcare and chairman of Civica RX, a nonprofit generic drug company built to reduce costs for hospitals and their patients.
“Pharmacy benefit managers, wholesalers, retailers, payers and employers all have their hand a little bit in the supply chain,” he told the Deseret News.
Pharmaceutical companies can set the list price they want for a drug, though competition serves as a bit of a check. It’s a starting point to negotiate with the pharmacy benefit managers who negotiate on behalf of health insurers. It’s a starting point for creating coupons that cut a patient’s cost and rebates that send money back to different players in exchange for putting the drug on an insurance company’s formulary or otherwise seeing that people buy the drug.
Thorpe called the system “inherently inflationary.”
“The list price of drugs is something that only a very few pay,” said Liljenquist. But those who do are often the uninsured and others who can least afford it. Nearly everyone else gets a discounted version.
Senior citizens are among the heaviest consumers of prescription medicine. And Medicare occupies a strange place in the drug price landscape. For help with the cost of drugs administered outside of a facility, Medicare recipients need Part D Medicare or a Medicare Advantage Plan with drug coverage. Otherwise, they pay the cost themselves. If a drug is on Medicare’s formulary, patients typically pay up to 25% of the cost. But Medicare, unlike private insurance companies, doesn’t negotiate discounts with drug companies. And patients can have thousands of dollars in copayments and coinsurance even for medication on Medicare’s formulary.
Drug companies can also raise the price of their products as they wish — and they’ve earned a lot of headlines for doing so in recent years. This year, according to The Wall Street Journal, price increases averaged 6.6%, close to the inflation rate. In 2015 and 2016, drug prices rose about 10%. The Journal said roughly 150 drugmakers raised prices on 866 products in the United States so far this year.
“Many companies say they don’t realize all or any of the benefit from price increases because of the discounts they provide to health insurers and pharmacy-benefit managers, the companies that oversee drug benefits for employers,” the article said.
According to Mitchell, using percentages to describe the price changes may downplay how significant they actually are.
“When you talk about raising prices on a drug that costs $500,000 a year, that 5% increase is a whopping big number,” said Mitchell, the cancer patient. “Wow.”
Meanwhile, pharmacy-benefit managers say they keep prices down for both insurance companies and their members. Others say they’re part of the high-cost problem.
One way drug prices drop is when generic versions are available. But a recent letter from the FDA to the Patent and Trademark Office raised concerns that drug companies are keeping costs high in part by fighting to keep their drugs from becoming generics, which cost consumers less than brand-name drugs. Among “concerning practices” listed were use of the patent-extension process for brand names “to create patent thickets, product hopping and evergreening.” Dr. Janet Woodcock, the acting commissioner of food and drugs, wrote those “unduly extend market monopolies and keep drug prices high without any meaningful benefits for patients.”
Woodcock said she hoped the exchange of ideas with the patent folks would make it easier for the two agencies to enforce a balance between innovation and patient access to their medications.
Drug companies, for their part, say putting price controls on drugs would stifle innovation. They wouldn’t be able to afford to develop new medications to treat conditions.
What Democrats would like to do
The Build Back Better proposal includes significant price reforms for out-of-pocket costs for Medicare. The act would cap out-of-pocket prescription costs at $2,000 a year for a Medicare beneficiary, though critics say asking a couple on a fixed income to potentially pay up to $4,000 is not reasonable.
The act would also require drug companies that raise prices above the inflation rate to pay rebates to the government. It would let Medicare officials negotiate prices on certain high-priced drugs, including some that are the most commonly prescribed for Medicare beneficiaries. The cost for insulin would be capped at $35 a month.
Build Back Better is not the only attempt by the government to rein in drug-related health care costs.
ABC News reported in January that U.S. Health and Human Services Secretary Xavier Becerra told the Centers for Medicare and Medicaid Services to reassess the premium increase it announced this year for Medicare recipients, a $22 a month hike. The cost of a single Alzheimer’s drug called Aduhelm, which has disputed benefits, likely helped drive that cost increase. FDA approval of Aduhelm has been sharply criticized, especially because of its price. Biogen initially was charging $56,000 a year, but has since cut the price nearly in half. The drug is given by infusion in doctors’ offices.
That price cut should result in some savings to Medicare recipients, Becerra suggested. More than 50 million Medicare recipients pay $170.10 a month now for the Part B premium, which covers outpatient care.
Reducing the cost burden
Thorpe doesn’t believe the challenge is really drug prices, though he notes that certainly impacts Medicare’s budget, since Medicare doesn’t negotiate. The bigger problem is the burden placed on patients to buy their medications.
“The easiest way to deal with it is to cap what patients pay out of pocket for drugs. The Biden proposal is a $2,000 cap, but that’s still too high,” he said.
He said the Medicare program is experimenting with allowing plans to charge zero copays for certain diabetes drugs, as well as lipids and medicine for hypertension. “If you think about it, the best way to manage these chronic conditions is the use of medications. And the best way to get adherence is essentially to charge little or no cost-sharing,” said Thorpe.
Patients save the health care system money by taking the medications they are prescribed, according to Thorpe. When they skip doses, illness can get out of hand and people end up in the emergency room, clinic or hospital, as Meza, who skipped her insulin, did.
“Data shows that for every $1 you increase drug prices for a very big population, you increase total spending by $1.80,” said Thorpe.
Years ago, he worked with a care coordination team in Vermont that focused on health education, health literacy and tracking how well people followed their treatment plans. They wanted to see the impact on patient health outcomes and spending control. In virtually all cases where a patient didn’t refill a prescription, the reason was the high cost of out-of-pocket spending, Thorpe said, not the drug price overall.
“I guess my frustration is that we get in this discussion about drug prices and we look at just the list price of a drug. Whether it’s too high or too low, we can debate. But the whole point of trying to reduce the drug expenditures or drug prices is really from a patient standpoint.”
Liljenquist said Intermountain Healthcare came up with Civica RX to ensure that essential, quality medications are available and affordable to everyone, focusing on the generic drug market. Companies had cornered the market and jacked up prices.
“It’s one thing for innovators to create new drugs and have the ability to make those drugs for a protected period of time as they get rewarded for their innovation,” he said. “But once those drugs pass their patented life, they should be in the public domain. Those formulas are really owned by society.”
Civica RX invited other health care systems and hospitals to help create a generics manufacturing company and a third of U.S. hospitals joined that syndicate. Headquartered in Utah, the effort pays for itself as hospitals agree to order at least a certain amount of a medication. Civica RX has a stockpile of its generic drugs to avoid shortages. It’s not trying to make a profit and it owes nothing to anyone as it pays its own way, Liljenquist said.
That’s a model they will soon bring to the retail market, too, he said, through a related effort called CivicaScript.
“What we are trying to create is a health care utility organized for the benefit of the patients that brings market forces to bear to solve inequities in the market,” said Liljenquist.
Among innovations, CivicaScript will charge everyone the same transparent price. No one will negotiate a discount, the price will just be fair, he said. Each drug will have a published suggested maximum price, which should discourage other manufacturers from raising their versions too high for the same type of drug, he added. He likens that to the price printed on a book jacket and said he hopes those efforts will help end the “rebate game.”
Would new price rules limit innovation?
While Mitchell said he’s grateful for the prescription drugs that have held his cancer somewhat in check, he knows that patients need relief. Since he launched his patient-advocacy organization, more than 400,000 people have joined, he told the Deseret News.
“We’re active in every state,” he said. “Last year, our patients testified or were present at every hearing on drug prices held in Congress.”
He refutes the claim that drug companies would stop developing new drugs and innovating if their profits were curbed.
“A Congressional Budget Office study said that over a period of 30 years, 10 fewer new drugs of a projected 1,300 would come to market,” Mitchell said. “And not all new drugs are innovative. Some are just retooled. That’s a teeny-weenie impact. The fact is that much of the science underpinning new drugs we have because of taxpayer investment in basic science. We are an engine of scientific discovery that drug companies take and bring to market.”
He added, “That feeding of the innovation pipeline is not going away.”
Among other reforms, Mitchell said he’d like to see the benefit of drug rebates go to patients through lower premiums and capped out-of-pocket expenses. Insurance companies that get rebates are not obligated to pass those savings on.