OPINION -- I attended the Oregon Health Forum, an educational arm of The Lund Report. The forum provides a place where healthcare leaders can discuss pivotal issues and interact with their colleagues. I was enlightened by the information shared by five all-star panelists with a varied perspective based on their roles in the health care industry.
There is a common theme among the panelists, and I was happy to hear about the collaboration to help find answers to the following:
- How do we best manage drug costs without limiting innovation?
- How do you put a price on risk vs. reward?
- Why do drugs cost less in other countries?
- Why are generic drugs as costly as brand drugs?
- How do you help patients gain access to drugs?
Each of the five panelists has a different mission, but all have similar challenges:
Ryan Dunlap — Senior Vice President & Chief Financial Officer at MolecularMD, Chair of the Oregon Bioscience Association
Ryan set the stage that he doesn’t know what the answer is for the skyrocketing cost of drugs and shared his perspective. There is great risk and great reward for the time and research that goes into innovation and that risk/reward drives the flow of capital. He shed light that we cannot have a blanket arbitrary decision to cap the drug costs because we don’t want to limit the reward for those that take great risk.
There is concern that it would take away from the innovation and development of new drugs. If there are state regulations on drug costs, it would limit patient access and patients would leave the state. Blanket policy decimates research and development.
Robert Judge — Director of Pharmacy Services at Moda Health
Robert shared the three areas that affect the high cost of drugs 1) utilization 2) the mix of brand and generic and 3) inflation. There has been a 260 percent increase in high cost specialty drugs and that is not sustainable. In the past, 13 percent of the overall budget was for pharmaceuticals.
In 2018, the pace is set to exceed 50 percent of the budget and that cost serves 2 percent of the overall member population.
The risk is that at some point you squeeze out health care delivery. The FDA does not approve price when the drug is approved. The government is prohibited from negotiating drug pricing. Most commodities go down in price over time but these products go up in price every year and this trend is very disturbing to patients. He coined the phrase “bizarro” on how drugs are priced. He discussed the need to provide consumer protection to make it affordable and we have no facility for that today — no solution.
Deborah Michaelson, MS,RPh — Vice President of Operations at Ardon Health
Deborah is a pharmacist and oversees all aspects of specialty pharmacy operations at Ardon Health. Her North Star is the patient and the cost of drugs has always been on her mind. The last seven years, the costs have been very high. As a pharmacist, she follows the prescriptive path for the patient so other health care costs can be mitigated. That is not possible if the members cannot afford the maintenance medications — it’s the opposite. Other areas of health care will be taxed and overall health care costs will rise.
Annaliese Dolph — Senior Director, West Region Advocacy at the National Multiple Sclerosis Society
Annaliese shared that 8,000 Oregonians have multiple sclerosis and they are not sure why we have the highest rates in the world. There is no cure for the disease, and there are 12 disease-modifying therapies to help manage it. Early and ongoing treatment of drugs is the key to managing the disease and no agreeable pathway has been identified.
Because each person is unique, the drugs that were $8,000–$11,000 are now over $60,000 and about $63,000 for generics. There is a rise in out-of-pocket costs on health plans today because there is a notion that patients should have “skin in the game.” There is a greater cost to society if a patient doesn’t have access to these drugs. It’s critical they adhere to a program and if they don’t, they’ll be sick. The process to get drugs should be 1) affordable 2) simple and 3) transparent.
Rob Nosse — State Representative of District 42
Rob devoted his career to standing up for working people and helping to raise the bar for middle class families. He reminded us that we are lucky to live in a place where we disagree on a lot of policy but we find a way for a peaceful transition. He shared the difficulty that he can’t shove a solution down people’s throats because just as Ryan discussed, there is a great concern that it will wreck research and development.
He, like all the panelists, agrees that we are on an unsustainable trajectory. For patients that need a “disease modifying therapy,” they will be on a drug for a very long time. He suggested review of caps on copays or mandatory rebates back to carriers after a period of time. He wants to challenge pharmaceutical companies on why the costs are rising and to be more transparent
about those increases. For example, is it a supply issue or are there higher material costs? It would also be more helpful if members had more transparency in the plans they were purchasing.
Other Pressing Topics
Price transparency — all the pannelists agree that there has to be more transparency. Ryan discussed the challenge due to lack of knowledge about what goes into developing a new life-saving/life-changing drug. Rob suggested starting with drugs that have been on the market for a long time with no modification to the drug whereas the price increased, in some cases, tenfold. Similar to the EpiPen and some AIDS drugs, there has been no accountability to help health care costs overall.
Insulins have increased 325 percent with no modification. Some people get coupons while others do not, and there is a big question as to what makes the drug so expensive after it goes to market. Deborah mentioned about 87 percent of patients receive assistance. Generic drug prices have notoriously been less than brand drugs due to top selling drugs going off patent, but now that’s not always the case. Prices are increasing due to less competition so patients are not getting relief as they have in the past.
Risk and Reward — They also all agree there is great risk that goes into research and development of a new drug and none of them want to hinder innovation. Annaliese shared how National Institutes of Health and government help pay for research and we need to increase the funding for more research.
With the collaboration of industry leaders all bringing these challenges to the forefront, solutions are in the making.
Tracy Vicario is the director of client development for the BCI Group.
