Clif CleavelandCosts of prescription drugs can quickly punch a hole in a family’s budget. Both newly discovered medications as well as generic equivalents of long-established drugs are much more costly now than a few years ago.
Health insurance plans and federal and state governments confront challenges of paying for new drugs. Medicare, for example, spent more than $4.5 billion on medications for a single disease, hepatitis C, in 2014.
The most dramatic example is Daraprim, a unique medication used in combination with a sulfa drug for treatment of the parasitic disease toxoplasmosis. The parasite attacks persons with impaired immune systems that occur in HIV infection and as a consequence of some malignancies and their therapies. Approximately 2,000 people yearly require treatment for toxoplasmosis.
Daraprim was discovered 62 years ago and, until earlier this year, a 25-milligram tablet of Daraprim cost $13.50. A typical course of therapy consisted of two or three tablets daily for six to twelve weeks.
Turing Pharmaceuticals bought the rights to Daraprim in August and raised the price to $750 dollars per tablet. This led to immediate, widespread condemnation of the price hike. Critics included the Pharmaceutical Research and Manufacturers of America, the trade group for the industry.
The CEO for Turing countered that the price increase was necessary to fund research and development of alternatives to Daraprim. Although the company promised a substantial price reduction, the online price on Oct. 20 was unchanged.
The costs of other prescription drugs have risen, though less dramatically, since 2007. Various forms of insulin have increased sharply for the millions of diabetic patients who are insulin-dependent. The cost of Gleevac (imatinib), a vital therapy for certain forms of leukemia, has increased by 50 percent. The drug will cost an individual more than $100,000 annually. The recent availability of generic imatinib will lessen the cost of this therapy.
Long-established generic forms of some prescription medications also have increased sharply. The price of generic antibiotic doxycycline has increased more than tenfold in recent years.
Health insurance benefits usually include prescription medications. Coverage for drugs varies widely from one insurance plan to another. The consumer will be directed to generic or preferred medications to realize the lowest cost. A copayment of deductible for a very expensive medication can present financial challenges for the consumer.
Medicare Part D is a complex, optional plan of support for prescription medications (go to www.Medicare.gov for details). Plans vary depending upon the sponsoring company. Enrollees in Part D pay a yearly premium; copayments will depend upon which medications are chosen. The lowest copayments are linked with generic and other preferred drugs. Beyond a certain point in annual expenditures for drugs the insured person pays a substantially higher percentage of drug costs until another financial milestone is reached. At this point, the plan typically covers all costs for the remainder to that year.
Escalating drug costs pose a difficult challenge for state Medicaid programs and federal and state prison systems. No governmental agency has the power to regulate the costs of prescription drugs. The U.S. Food and Drug Administration oversees testing, licensing and manufacturing standards for drugs as well as post-marketing surveillance.
When the patent for a prescription drug expires, the availability of generic equivalents will usually drive the cost of the parent drug downward. Otherwise, the manufacturer of a drug still within patent protection can set the cost at will.
A new drug may cost up to $2 billion from inception through testing to market. Given the costs of research and development, a manufacturer expects a certain return on investment.
Americans usually pay twice as much for prescription drugs as consumers in Canada and Europe. Do higher prices in the U.S. subsidize lower costs abroad? Are higher costs in the U.S. necessary to finance innovative research? Is profiteering an ethical issue for our drug industry?
We regulate charges made by public utilities. Are we at a point where prescription medications should be considered a public utility? In a political season where government regulation is viewed with suspicion, is there a role for a federal panel that would review, publicize and possibly regulate the costs to the consumer of necessary prescription medications?
Something must change. The status quo is placing unsustainable pressures on individual and government pocketbooks.