I recently read an article in the Washington Post, “How new drugs helping millions of Americans live longer are also making them go broke.” It tells a story about Kristin Agar, a 63-year-old social worker from Little Rock, Arkansas who was diagnosed with lupus, a disease in which the body’s immune system mistakes its own tissues (skin, muscles, joints, kidneys, lungs, or heart) as foreign invaders and attacks them. Agar’s doctor prescribed Benlysta, the only treatment on the market specifically for lupus.
As you’ve probably already guessed, this medication is very expensive. And even though her insurance pays 80 percent of its cost, Kristin’s portion is a whopping $450 once or twice a month.
Even though she admits to making decent money, it’s easy to see why Agar says she cannot afford her treatment, especially when you take into consideration her $770 per month insurance premium and her other medical costs.
“I make too much to qualify for assistance, but I don’t make enough to pay the bills,” she says.
Escalating cost-sharing has been touted as a way to reduce health care costs. The battle cry: with ‘skin in the game’ people will ‘shop’ their healthcare. That’s hard to do when you don’t have many choices in medications or when affordable health plans have narrowing networks that don’t allow for much price ‘shopping.’
Who’s responsible for the high cost of these medications? Insurers are pointing their fingers at the pharmaceutical companies and the drug companies are pointing their fingers right back.
Robert Zirkelbach, a senior VP of Communications at PhRMA, a trade group that represents the drug industry says, “What we’re seeing in the marketplace is that insurers are requiring patients to pay an ever-growing share of the medicine costs. In fact, patients are being asked to pay a far greater percentage of the price of medicine than they’re required to pay for physicians or other medical services that my cost significantly more,”
The Washington Post article goes on to say that there are a lot of people in the United States like Kristin Agar—people with good jobs and good insurance—that have diseases like HIV, cancer, lupus, hepatitis C, or other serious conditions that are paying huge out-of-pocket amounts for necessary medications.
A survey done earlier this year by the Kaiser Family Foundation found 76 percent of those polled thought the top priority for the president and Congress was to make sure those needing high-cost drugs for chronic conditions could afford them.
The Washington Post article also talked about how 90 percent of the 500,000 Americans who used at least $50,000 in prescription drugs last year were taking what the medical industry calls “specialty medications” for chronic complex diseases like the ones mentioned earlier.
According to the 2014 Express Scripts Drug Trend Report, U.S. prescription drug spending increased almost 14 percent. It was the largest annual increase since 2003—mostly due to the unprecedented 31 percent increase in spending on specialty medications.
I know a lot of the increase in prescription drug spending is due to the specialty medications used to treat diseases like HIV, cancer, lupus, or hepatitis C, but what about the cost of medications for more common diseases?
According to the Center for Disease Control (CDC) there are over 29 million people in the United States with diabetes (one out of 11 people nationwide) and an additional 86 million—more than one out of three adults—who have prediabetes. And for the fourth year in a row, the Express Scripts Drug Trend Report found that medications used to treat diabetes were the most expensive traditional therapy class.
We all know that the use of generic medications is a great way to control medication costs. It makes you wonder than why insulin, a prominent treatment for millions of diabetics that has been around for decades and decades still doesn’t come in a generic form.
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