Congress is getting an earful about the high and rising cost of prescription drugs, and it’s only going to get worse.
Sales are up nearly 40 percent since 2006, but prices for the most expensive drugs spiked 12 percent last year, the largest such increase in a decade.
Physicians and others complain Harvoni and Solvadi – miracle drugs that appear to cure Hepatitis C in most cases – can cost up to $90,000 for a full cycle of treatment.
They say oncology drugs, which account for $80 billion per year in sales – no others reach even $50 billion – have gone up five-fold to 10-fold in the last 15 years. And some of the newest therapies run to $150,000 per year and could double in cost in coming years.
It’s time to rein them in, say some Democrats in Congress, along with Sen. John McCainJohn Sidney McCainBiden falters in pledge to strengthen US alliances 20 years after 9/11, US foreign policy still struggles for balance What the chaos in Afghanistan can remind us about the importance of protecting democracy at home MORE (R-Ariz.), of course.
Sen. Bernie SandersBernie SandersManchin suggests pausing talks on .5 trillion package until 2022: report Yarmuth and Clyburn suggest .5T package may be slimmed Sanders calls deadly Afghan drone strike 'unacceptable' MORE (I-Vt.) says the Department of Veterans Affairs should simply break the patents on some key drugs to make them available to patients.
Others say government should monitor agreements between developers and manufacturers of drugs, allow imports from Canada and even force companies to reveal more about their research and development and other information on how they derive their prices.
A group of 118 physicians published an op-ed recently decrying the problem and calling for all these solutions, plus that reliable old chestnut – letting government negotiate directly with drug companies, which it was prohibited from doing in the 2003 legislation that created the Medicare Part D prescription drug benefit.
“What we’re fighting is the greed,” said Ayalew Tefferi, a hematologist at the Mayo Clinic in Rochester, Minn., and a cosigner of the op-ed. “The greed and the additional maneuvering that is being exercised after you’ve already recoupled what you’ve invested. There is no control, no regulation.”
Nobody disputes these drugs are expensive or that they can drain savings accounts and insurance maximums in short order.
But pharmaceutical manufacturers are selling more drugs because their product continues to improve. Cancer drugs, increasingly individualized for each patient, are producing lower death rates, higher survival rates and better quality of life.
The Hepatitis C drugs are expensive, but they are curing a disease that was an absolute death sentence 20 years ago.
And what will happen to those $90,000 treatments if government starts negotiating drug prices? Those most in need get the treatments now – government providers are reluctant to spare any costs that would save a life. But what about government drug negotiators, whose entire professional purpose is improving the bottom line?
Will they see the wisdom in keeping those treatments moving toward patients, many of whom are there because of their own reckless behavior? Will it matter to them that foregoing the drugs means a liver transplant and ancillary treatment that can run to $500,000 per patient?
If the doctors want to go after the greed that comes with side deals, they can find plenty without blaming the drug companies.
For instance, the doctors who wrote the op-ed typically work in hospitals that offer expensive cancer treatments, and hospitals are swallowing whole the cancer treatment industry with disastrous impact on costs. In the past eight years, 313 cancer treatment facilities have closed and 544 community center practices have been acquired by or affiliated with hospitals. This represents an 82 percent increase in cancer clinic closings and a 143 percent increase in consolidations just since 2007.
As a result, the percentage of chemotherapy administered in community cancer clinics has fallen from 87 to 67 in 10 years, and the business has moved to hospitals, where costs are $6,500-per-patient higher, according to a 2013 study.
Community oncologists have pleaded for years for site payment parity – the notion doctors should get the same for cancer treatments whether in a hospital or clinic – but doctors, such as those who signed the letter expressing their concern about the need to stop uncontrolled greed, will have none of it.
And that’s not all that could be done. They could follow the lead of some payers, who are pushing back against the drug providers, demanding discounts and additional proof of drugs’ effectiveness and steering patients and doctors to less-expensive alternatives by setting lower copayments for cost-effective drugs.
And that’s not to mention the $50 billion in annual Medicare fraud and other factors that make hospitals so much more expensive than clinics for outpatient services.
It’s easy to blame the greed of the drug companies, but Americans are getting healthier, and their healthcare system is thriving thanks to their advances. Today’s high-cost designer treatments will be tomorrow’s $4 generics at Walmart, but only if Congress will lay off and let drug companies make the money now to invest in other new drugs then.
McNicoll is a conservative columnist and freelance writer based in Alexandria, Va. He is a former senior writer for The Heritage Foundation and former director of communications for the House Committee on Oversight and Government Reform.