Administration Is Seeking Ways to Keep Prescription Drugs Affordable

November 24, 2015

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Source: The New York Times

The Obama administration began building a political case Friday for government actions to protect people against high pharmaceutical costs, saying millions of Americans were unable to afford lifesaving prescription drugs.

“As costs go up, so does everyone’s anxiety about their continued access to their prescription medicine,” said Andrew M. Slavitt, the acting administrator of the federal Centers for Medicare and Medicaid Services. He spoke at a daylong forum the administration held to solicit ideas from consumer advocates, doctors, drugmakers, insurers and employers.

“Consumers’ access is already under threat,” Mr. Slavitt said, and “this trend of diminishing access will continue if we do not work together to find solutions.”

News about soaring drug costs, such as the decision by Turing Pharmaceuticals to raise the price of a 62-year-old treatment for parasitic infection to $750 a pill from $13.50 overnight, has focused public attention and anger on pharmaceutical costs. At the same time, the nation is at a paradoxical moment: Researchers are developing remarkable cures, but they might be out of reach for people who need them most.

“Medical innovation is meaningless if nobody can afford it,” said Debra Whitman, chief public policy officer at AARP, the lobby for older Americans. She expressed concern about so-called specialty drugs, many of them biotechnology products, that cost tens of thousands of dollars a year.

Retail sales of prescription drugs totaled $305 billion last year, accounting for 9.9 percent of all health spending, similar to the proportion in recent years, according to the Department of Health and Human Services. But the government projects that retail drug sales will rise to $564 billion, or 10.4 percent of all health spending, by 2024.

And the experiences of patients struggling with drug costs can be dire.

“It’s time for national regulation or legislation” to make drugs more affordable, said Heather Block, a consumer advocate who takes drugs to treat breast cancer that has spread to her liver and lungs. She said the drugs cost $9,800 a month.

“Why must I worry about insolvency as much as I worry about cancer?” she asked.

Christi Shaw, the president of Novartis Pharmaceuticals, said that widespread alarm about the high cost of many specialty drugs was unfounded. Most insurers and consumers get rebates and discounts that bring their costs substantially below the list prices, she said. But the details of such discounts are often secret.

Obama administration officials and consumer advocates called for the disclosure of more information about drug prices.

“Pharmaceutical companies need to be more transparent about how they price their drugs,” Ms. Whitman said. “We cannot and should not continue to simply accept what the market will bear.”

Opinion polls show that a majority of Americans of both political parties support government action to hold down drug costs. Those costs have become an issue in the presidential campaign, as Democrats accuse drug companies of what they call price gouging and Republicans take note of consumers’ concerns.

Speakers at the forum pressed for some proposals that have languished in Washington for years, such as allowing the government to negotiate with drug companies to obtain lower prices on medications for Medicare. Several speakers said the government should speed the approval of new drugs that can compete with high-price drugs already on the market. Such competition could help drive down prices.

Others urged reconfiguring health insurance policies so they pay drugmakers more for medicines that are highly effective.

Dr. Mark B. McClellan, a former head of the Medicare agency, said insurers could devise plans to encourage the use of drugs that produce the best results at the lowest cost. Patients might not have any co-payments for “the highest-value drugs,” he suggested, but would face higher co-payments for drugs with fewer proven benefits.

Dr. Steve Miller, a senior vice president and the chief medical officer of Express Scripts, a pharmacy benefits manager, gave another example: A health plan could pay more for a drug that extends the life of a lung cancer patient by five months, but less for the same drug used to treat people withpancreatic cancer, for whom the drug extends life by less than a month.

No one expressed the views of the many Republicans in Congress, who oppose any increase in the federal role in setting, regulating or negotiating prices.

While Congress is unlikely to act on the issue in the coming year, federal officials could take administrative actions to help slow the growth of drug spending in federal health programs.

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