Cleaveland: Controlling runaway health costs

Cleaveland: Controlling runaway health costs

October 3rd, 2017 by Dr. Clif Cleaveland in Life Entertainment

Health-care reform faces three huge challenges: extend access to more people, improve efficiency, control costs. Until the third of these is achieved, there is little prospect for advancing the other two goals.

The Affordable Care Act of 2010 succeeded in broadening access and introduced pilot programs that could make care more effective. The ACA largely failed in cost containment. Proposals advanced by Republican leaders in the current Congress sought to contain costs by imposing limits on Medicaid spending and abolishing federal subsidies for some individuals purchasing health insurance in state exchanges. Control of medical costs was not addressed.

Cost of medication is a prime example of the difficulty in controlling expenditures for health care. The price tags of most prescription drugs, including generics, have risen sharply in recent years, far exceeding the rate of inflation.

Dr. Clif Cleaveland

Dr. Clif Cleaveland

Photo by Contributed Photo /Times Free Press.

Most astonishing of these increases is the drug Daraprim, which is used to treat toxoplasmosis, a parasitic infection. Toxoplasmosis poses a significant threat to people with HIV/AIDS who may have to take Daraprim throughout their lives. Daraprim, patented more than 60 years ago, cost $13 per tablet until its parent company was purchased by a hedge fund in August 2015. The new owner immediately raised the price to $750 per tablet, which is its cost today. A monthlong course for an acute infection costs more than $44,000. The annual cost for a person with a weakened immune system exceeds $538,000.

Sharp increases in the cost of inhalers for treating asthma, insulin for diabetes, epinephrine (Epipen) for severe allergic reactions and chemotherapies for malignant diseases are almost routine. The costs of many generic medications have quietly risen as well.

Manufacturers of costly drugs may advertise programs whereby patients with limited incomes can obtain their medications at no cost. The process of qualification for each drug is time-consuming and laborious for patients and caregivers.

Given the influence of the pharmaceutical industry, cost containment is unlikely. The Pharmaceutical Research and Manufacturers Association is one of the most powerful lobbies in Washington. The Center for Responsive Politics estimates that the organization spent $145 million on lobbying activities during the first half of this year in addition to hefty contributions to the campaigns of congressmen of both parties.

Professional societies that stage national conferences are beholden to drug companies, which pay large fees for space in convention halls from which they promote their products. Professional journals rely on revenue from drug companies to support publication. Medical schools and centers depend on support from drug companies to fund some of their research projects. They dare not criticize the hands that feed them.

In his farewell address on Jan. 17, 1961, President Dwight D. Eisenhower warned of the danger of a growing military-industrial complex that could dominate congressional budgetary processes. "We must guard against the acquisition of unwarranted influence," he emphasized. In 1980, distinguished physician and medical editor Arnold Relman spoke in similar terms of a medical-industrial complex that could undermine health care as profits interfered with clinical care.

What can be done to contain the pharmaceutical component of this powerful complex?

Congress could enact legislation that facilitates purchase of drugs from other countries where they are significantly less costly. This would assist patients who required an expensive drug continuously. Assurance of quality by the foreign manufacturer would be essential.

Formularies based on competitive bidding would lower costs.

Cost-effectiveness studies should be supported to determine if older, cheaper drugs are as effective as newer ones. The newest drug is not necessarily the best. I know of one patient who was able to substitute a medication costing less than $6 co-payment monthly for a chemotherapy whose co-payment exceeded $500 monthly.

A ban on advertising medications on television would decrease pressure upon providers to prescribe the latest, more expensive drug.

Congress could establish a regulatory process to set retail prices for prescription drugs. The price would take into account the cost of development as well as a reasonable profit. Price hikes for established drugs would require approval.

Given the power of the pharmaceutical industry, the likelihood of cost controls is slight. A president who cared about the issue could command attendance by drug company executives at a White House conference at which they were given a "control prices or else" ultimatum.

In the meantime, we can regularly inform our elected representatives about our personal drug expenditures. Eventually, this might prompt action on their part.

Contact Clif Cleaveland at ccleaveland@timesfreepress.com.

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