By Mona Chitre and Matthew Bartels
SPECIAL TO THE NEWS
The cost of prescription drugs has been a focal point of health care in recent years. In the United States, the average price of brand-name drugs has increased 98.2 percent since 2011, according to Express Scripts, a pharmacy benefit management company that partners with health insurers such as Univera Healthcare.
Many prescription drugs sell for significantly less outside of our country than they do domestically. Unlike other countries, the U.S. permits drugmakers to set their own prices, with few restrictions and little transparency. The result of this hands-off approach, as illustrated in Express Scripts’ exclusive Prescription Price Index, is rapid medication price inflation. One-third of branded products experienced 2015 price increases greater than 20 percent.
Members of Congress and others have raised concerns about the high prices of certain drugs and their impact on the Medicare Part D drug benefit, specifically catastrophic coverage. Part D beneficiaries enter catastrophic coverage when their out-of-pocket costs exceed a certain threshold, after which most pay a 5 percent co-insurance for drugs, while the federal government pays the vast majority of the remaining costs.
A January Department of Health and Human Services report shows that federal payments for Part D catastrophic coverage exceeded $33 billion in 2015, more than triple the amount paid in 2010. Spending for high-priced specialty drugs – including expenditures for a class of medications known as biologics – significantly contributed to this growth.
Biologics are complex molecules that come from a variety of natural sources and are prescribed to treat cancer, rheumatoid arthritis, multiple sclerosis and other conditions. They can range in monthly cost from $1,000 to more than $100,000, and that can add up to more than $1 million per patient per year.
Biologics account for just 2 percent of prescriptions dispensed, but they make up more than 20 percent of all prescription drug spending.
Many biologics have lower-cost counterparts known as biosimilars, so named because they are comparable to an already approved biological product and have the same safety profile and clinical benefit. Biosimilars hadn’t been available in the U.S. until the Affordable Care Act directed the Food and Drug Administration to speed their approval to promote competition and reduce costs. Patients in Europe and Asia long have used them to lower treatment costs by as much as 40 percent.
One study projects that the U.S. could save $250 billion over 10 years if just 11 biosimilars were to enter the market. With more than 13,000 upstate New Yorkers suffering from multiple sclerosis, interest here in biosimilars is high.
While biosimilars and generics offer a way to reduce drug spending, drug companies have developed strategies to prevent or delay their arrival to market.
“Pay to delay” is when brand-name drugmakers pay generic drugmakers to delay selling their lower-cost versions. Provigil is used to treat excessive sleepiness caused by narcolepsy and sleep apnea. Its annual sales exceed $800 million. The Federal Trade Commission alleges that drugmaker Cephalon paid $200 million to four generic drugmakers to not sell their versions for six years after Provigil’s patent expired. Cephalon made an additional $4 billion in sales, and the generic drugmakers earned more money than they would have from selling their versions.
“Picking the discount rack” is when drugmakers buy the rights to old, cheap medicines, which are the only treatments for serious diseases, and then hike the prices. An example of this is Daraprim, which is used to treat a parasitic infection that mainly threatens individuals who have weak immune systems. Turing Pharmaceuticals bought the U.S. rights to Daraprim and immediately raised the price from $13.50 to $750 per tablet. There are 25 million Daraprim users in the United States.
Daraprim’s patent expired decades ago, yet there’s no generic version available. New York State Attorney General Eric Schneiderman is investigating whether Turing limited distribution of Daraprim to a small number of specialty pharmacies to prevent generic drugmakers from obtaining samples to use to create their own versions.
“New and improved” is when brand-name drugmakers limit access to a drug or pull it from the market just before its patent expires and replace it with a slightly modified version. An example of this is Namenda, which is used to treat Alzheimer’s disease. This is drugmaker Actavis’ top-selling drug, with annual sales of $1.5 billion. The attorney general alleges that with its patent about to expire, Actavis limited distribution of Namenda to a single mail-order pharmacy and required doctors to submit a note stating that the drug was “medically necessary.” The drugmaker then promoted its new extended-release version, called Namenda XR, which has patent protection until 2029.
Generics are essential
In 2005, 53 percent of prescriptions filled in upstate New York were filled with a generic drug. Recognizing an opportunity for savings, Univera launched a campaign to encourage people to talk to their doctors or pharmacists about lower-cost options.
Today, 85 percent of prescriptions filled in upstate are filled with a generic drug. Since our education effort began in 2005, upstate New Yorkers have saved more than $1 billion by opting for generic versions of the brand-name drugs they’ve been prescribed.
Unfortunately, there is not always a generic version available, as is the case with insulin, an injectable drug for people who have diabetes.
Univera recently reported that diabetes medications increased in cost by an average of 42.6 percent from 2012 to 2015. By the end of 2016, the price increased again by an additional 18 percent.
It’s no wonder that 50 percent of people with chronic conditions such as diabetes discontinue their medications within six months, according to the National Institutes of Health.
High costs deter patients
Medication adherence is the term used to describe the pill bottle label that instructs patients to take their medication as directed. The American Heart Association says that poor adherence annually takes the lives of 125,000 Americans and costs the health care system nearly $300 billion a year in additional doctor visits, emergency department visits and hospitalizations.
People skip their medications for many reasons. For some, the barrier is cost. For others, getting to the pharmacy is the issue.
One study in the Journal of Managed Care and Specialty Pharmacy shows that Medicare Part D beneficiaries who receive medications for diabetes, hypertension or high blood pressure from a home delivery pharmacy are more likely to take their medication as directed than those who pick up their prescriptions from a retail pharmacy.
Educating the community
The World Health Organization notes that getting more patients to take their medications as directed may have a far greater impact on the health of the population than any improvement in specific medical treatments.
In 2014, Univera launched a community awareness effort to improve medication adherence. The centerpiece of the campaign is a stylized prescription pill bottle named TAD (Take As Directed). It appears as a superhero in ads, billboards and posters that convey simple messages about the importance of medication adherence.
What can be done?
Recently, the Centers for Medicare and Medicaid Services published information about certain drugs that have had substantial price increases. It also asked the pharmaceutical industry to partner with the agency to find solutions that allow for both innovation and affordability. Moving forward, CMS will likely need to develop additional strategies, such as revising the law to allow the federal government to negotiate prices for certain drugs, to address the drug cost issue.
All health care stakeholders, insurers, pharmacists and providers bear a responsibility to assure that the medications patients need are readily available and easily affordable. Working together, caregivers can help those patients to become savvy health care consumers by encouraging them to:
• Shop around, because prices vary by pharmacy.
• Always ask whether a generic or lower-cost alternative is available.
• Use the cost-saving tools their insurer offers online.
• Consider subscribing to home delivery or obtaining a 90-day supply at retail for long-term medications used to treat chronic conditions.
• Review their health insurance company’s drug formulary to become familiar with the various pricing tiers available.
Mona Chitre, Pharm.D., is chief pharmacy officer and vice president of medical operations and health innovations at Univera Healthcare. Matthew Bartels, M.D., is chief medical officer of health care improvement at Univera.