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Prescription-Drug Price Battles Show No Signs of Letting Up

New heart medications expected to cost $7,000 to $12,000 per year

The recent decision by FDA advisory committees to endorse a pair of medications aimed at combating heart disease have brought on the latest round of hand-wringing over prescription drug costs, according to an article in the St. Louis Post-Dispatch.

The drugs, which work to reduce cholesterol, are projected to cost from $7,000 to $12,000 annually once on the market. Patients will bear some of that cost, but the bulk will be paid by private insurance companies or by the government through Medicare and Medicaid.

The endorsement of alirocumab and evolocumab by the FDA panels has renewed concerns about the affordability of new specialty drugs, the article says.

It’s a familiar story. As science and technology advance, drug companies are able to create therapies that are more effective than ever –– but the cost of these treatments has skyrocketed and put a strain on the entire health care sector, according to the article.

For instance, when a new line of hepatitis C drugs was approved starting in 2013, attention immediately focused on the price. The initial treatment, Sovaldi (sofosbuvir, Gilead), was dubbed a “miracle” because it could cure chronic hepatitis C with a single course of treatment. But its staggering cost of $1,000 per pill –– $84,000 for a standard 12-week course –– immediately raised concerns. The government, health insurers, and pharmacies, fearing rising costs, rushed to drive down the price through market pressure and restrictions on who could receive the drug.

A recent analysis by Avalere Health details how the pricing debate will continue over the next decade as new, potentially expensive drugs to treat a variety of diseases, from cancer to cystic fibrosis, come to market. The analysis found that 10 drugs designated by the FDA as “breakthrough therapies” could cost state and federal governments $50 billion over the next decade. Medicare would carry the heaviest burden, estimated at $31 billion, the study said.

Private insurance companies could be on the hook for similar amounts as their clients demand access to the newest, best therapies.

The pharmaceutical industry disputed the study’s findings and pointed out that overall prescription drug costs are projected to remain relatively stable at 13% of total U.S. health spending over the next decade. It also criticized the study for selecting only certain drugs and for not considering other factors, such as increased market competition, that could bring prices down.

Although drug spending is projected to remain level relative to its share of overall health care costs, evidence suggests that patients are shouldering more of the burden. A recent report by Express Scripts, the St. Louis-based pharmacy benefit manager, found that 140,000 Americans had drug bills of more than $100,000 last year –– a 63% increase from 2013.

Express Scripts has been a key player in pricing for the new specialty drugs. The company used its market clout to drive down the price of Sovaldi, and it is poised to continue as more specialty drugs hit the market.

Source: Medical Xpress; June 15, 2015.

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