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Will Federal Lawmakers Intervene on Prescription Drug Prices?
As the public started paying more attention to expensive prescription drug prices, federal lawmakers began proposing reforms to rein in price spikes. Some experts are concerned with the unintended consequences of these proposals, while others are not completely convinced that public attention is enough to force the government to take action.
Although drug prices have been rising for roughly the past decade, the public really took notice only after the introduction of Gilead Sciences' $84,000 hepatitis C virus treatment sofosbuvir (Sovaldi), John Rother, CEO of the National Coalition on Health Care, told Modern Healthcare. In recent years, Rother has headed a campaign to lower drug prices.
Rother said the sticker shock felt over Sovaldi and the dozen or so high-cost medications that followed has helped to bring public attention to the issue of high drug costs, and this has caused a number of politicians to take notice. A Health Affairs article published in August cited figures from the Centers for Medicare and Medicaid Services that estimated drug costs had increased 12.6% in 2014, far outpacing other medical expenses.
Federation of American Hospitals CEO Chip Kahn was not as confident that the current climate would necessarily bring about action. He cautioned against government interventions such as price controls, which could give rise to unforeseen problems.
Several leading presidential candidates, including Democratic contenders Hillary Rodham Clinton and Vermont Senator Bernie Sanders as well as Republican candidate Senator Marco Rubio of Florida, have blasted drug companies. Sanders and Clinton have outlined plans that would allow Medicare to negotiate prices for drugs and let patients purchase cheaper drugs from foreign merchants. The stakes are high for the industry. Providers, insurers, and patients are making difficult budgetary decisions on care based partly on their ability to afford treatments.
The overall prices of prescription drugs have risen steadily over the past few years, experiencing an annualized percentage increase of 4.7% in 2015, compared with a 1% rise in hospital-care expenses and a 1% drop in physician and clinical services, according to an October Altarum Institute Center for Sustainable Health Spending report.
Like Rother, Independent Health's director of pharmacy services, Sheila Arquette, felt that lawmakers more clearly understand the impact drug prices are having on health costs, and that the current path is unsustainable. She advocated for drug makers and insurers to collaborate on solutions, and said pharmaceutical companies should become more transparent about the costs of research needed to develop drugs — details some drug makers have held close to their chests.
Source: Modern Healthcare, October 24, 2015.