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MS Patients Stressed Out by Soaring Drug Costs

Prices climb 30% per year for two decades

American medicine is heading into new terrain, a place where a year’s supply of drugs can come with a price tag that exceeds what an average family earns, according to a report on the National Public Radio (NPR) website.

Oregon State University and the Oregon Health and Science University have found that the cost for multiple sclerosis (MS) drugs averages $60,000 a year, compared with $8,000 to $11,000 a year in the 1990s. Moreover, a report in Neurology noted that the price for some drugs climbed by an average of 30% per year for two decades. For example, between 1996 and 2013 the annual price tag for Avonex (interferon beta-1a, Biogen) increased 382%, from its initial cost of $12,951 to $62,394. Similarly, the annual cost of Copaxone (glatiramer acetate, Teva) increased 381%, from its initial price of $12,312 to $59,158, during the same period.

Every time a new drug came onto the market, the price of all the drugs jumped, too, co-investigator Daniel Hartung, a pharmacist and associate professor, told NPR.

“Despite more choices, prices just continue to rise, contrary to what you think would happen,” Hartung said. “We pay more, substantially more, than what is paid in Canada, Australia, and the U.K., often two to three times more than what those countries are able to negotiate directly.”

Drug companies are acting much like a cartel, such as OPEC, added Stephen Schonelmeyer, a pharmaceutical economist at the University of Minnesota. He told NPR that the companies must figure “if we all keep moving [our prices] up and nobody moves down, we can get away with raising the price, because if a person has multiple sclerosis, what other choice do they have?”

Last year, new drugs to treat hepatitis C at a cost of $80,000 or more also sparked a discussion about high drug prices. At least those treatments cure the disease, and by so doing reduce future health care costs. But that’s not true for MS drugs, NPR observes.

“When the price of a drug doubles, does the patient get twice as much outcome?” Schondelmeyer asked. “No, it’s the same drug.”

Expensive new drugs are becoming increasingly common, not just for neurological diseases but for cancer as well, NPR says. The Centers for Medicare & Medicaid Services has estimated that drug costs in the U.S. will increase from $272 billion in 2013 to $406 billion at the end of this decade, driven in part by higher-priced specialty drugs, such as the MS medications.

“Sometimes the drug companies talk about a death spiral down if they compete on prices,” Schondelmeyer said. “I think we’ve entered the period of the death spiral upward.”

The trade group Pharmaceutical Research and Manufacturers of America disputes that. Lori Reilly, executive vice president for policy and research, told NPR that inflation for drugs has been about the same as medical inflation overall.

While new high-priced drugs are driving up expenses for some conditions, there are savings elsewhere, Reilly said, as consumers switch from brand-name drugs to generics.

Reilly also said that the figures cited in the Neurology paper weren’t a true reflection of the price of drugs because they are list prices. “When you’re only looking at the list price and you’re not looking at the significant rebates and discounts that go on, it’s really not an apples-to-apples comparison,” she remarked.

Patients don’t often pay hefty sticker prices, according to NPR. In fact, for drugs with extreme price tags, drug companies may also let them off the hook for co-pays, which could easily run into thousands of dollars.

Instead, the price of high-cost drugs is typically shouldered by the other people who are in a patient’s health-insurance plan. Thus, premiums go up for everyone, NPR says. Moreover, for patients getting high-cost drugs through government-sponsored health care plans, taxpayers pick up a lot of the tab.

Source: NPR; May 25, 2015.

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