The Persistent Problem of Pricey Prescriptions

The Persistent Problem of Pricey Prescriptions

June 18, 2015

According to a poll last month, 75 percent of Americans believe they are paying too much for their medications and no one disagrees.

Data show that Americans pay two to three times what patients in Canada and Europe pay for the same drugs.


While New York has a robust system of nonprofit organizations that help distribute medications to those who cant afford them, and state lawmakers have been active in trying to regulate unfair practices by the insurance industry and even introduce sweeping reforms, many nonprofit workers and medical experts say the problem of unaffordable medications has continued to worsen in the state.


Dr. Peter Bach, a physician and director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center, wrote in a New York Times op-ed earlier this year that drug manufacturers “are taking advantage of a mix of laws that force insurers to include essentially all expensive drugs in their policies, and a philosophy that demands that every new health care product be available to everyone, no matter how little it helps or how much it costs.”


Priscilla VanderVeer, spokesperson for the Pharmaceutical Research and Manufacturers of America, acknowledged that the high cost of medications is a problem, but said expensive medications are not a result of predatory practices by her constituents.


“Its really easy to villainize each other in that world,”VanderVeer said. “I would think that what patients are looking for is solutions, not pointing fingers.”


When asked who was responsible for the steady climb in the price of pharmaceuticals, PhRMA repeatedly pointed toward unfair pricing by insurance providers in the affordable health care marketplace.


“One of the challenges of the Affordable Care Act—while great in that people cant be denied care because they have a pre-existing condition—what were seeing is insurance companies are using other tools to increase cost sharing,”VanderVeer said.


Maria Alvarez, of the New York Statewide Senior Action Council, agrees on this point.


The ACA had all these great intentions, (but) the problem is the plans are increasing their prices,”Alvarez said. “I think they had the best of intentions, but the way its played out, seniors are paying more out of pocket for medicine and care.”


And it’s not just seniors who are taking the hit.


“I think theres a number of young people who are out of college or graduate school, and they may not be able to get insurance from their parents and theyre really stuck,”said Dr. Mary O’Brien, a physician at Columbia Health Services who treats members of the Columbia University community.


Students at the university have a good health care plan while they are enrolled. After they graduate, they may find themselves stuck with a subpar plan that hits them with a high copay and deductibles if they don’t land a job with a quality plan. But O’Brien says pharmaceutical companies are to blame.


“Theyve increased the prices on a lot of medications,”she said, citing the cost of treating common conditions like asthma, a chronic respiratory illness that affects by 26 million Americans. “Now the prices are $100 for some (medications) that control asthma, or $200 or $300 a month.”


Its terrible because its a life-threatening illness,”she said. “So the health care system ends up paying much more money for it because these patients just end up in the emergency room.”


Alvarez agrees. Were not doing ourselves any favors by denying care or making it very hard to get to, because if someone doesnt have readily accessible health care …what will end up happening is they get sicker.”


PhRMA argues that part of the problem is that unlike medical or hospital care, patients have to pay for their medications before they can receive them. And PhRMA agrees that the cost of asthma medications is too high.


But again, the trade group blames the insurance companies. A PhRMA report notes that insurance plans on the health exchange only cover 68 percent of name-brand asthma medications and that patients with high deductibles may simply end up paying the full cost for their asthma medicine out of pocket each year.


Although PhRMA acknowledges that drugs are more expensive in America, it says that’s the price we pay to have the most innovative new medicine. “Were leading the pack,”VanderVeer said. “We’re curing hepatitis C. That’s expensive. That research is expensive.While Europe is a major contributor to research and development, the competitive marketplace in the United States is what puts the U.S. out front, VanderVeer said: “We are the powerhouse of R&D.”


The U.S. pharmaceutical industry invests more heavily in drug development than any other country in the world. But that does not explain why prices for some generic drugs has increased, critics say. There have not been significant breakthroughs in asthma drugs in recent years, the way there has been with high-priced cancer drugs or hepatitis C medications like Sovaldi. Yet O’Brien says she has watched the cost of asthma treatments rise sharply over the last decade.


All the medications for asthma, most of them have been around for decades and were very inexpensive for years,”O’Brien said. But when drug companies were obliged to repackage their aerosol-delivered medicines for inhalers to meet new environmental regulations, drug companies took the opportunity to put those same generic medications back on the shelves at a higher price, O’Brien explained. “It’s the same medication now, but it’s all under brand names,”she said.


VanderVeer said she could not discuss why some companies charge more for specific drugs. She acknowledged that the number of people who have asthma that cant access their medicines is pretty high”but said “it is also one of the drugs that our companies are highly willing and able to provide to patients through their assistance programs.”


To relieve many of the issues related to the high cost of medications, both O’Brien and Alvarez advocate for a fundamental shift in the health care system, to a universal single-payer system. Short of that, neither is optimistic about major improvements in the cost of medications.


Unless we go in a different way,”Alvarez said, “I dont see this getting any better.”


Assemblyman Richard Gottfried recently introduced the New York Health Act, which aims to create a universal single-payer health care system in the state. While it managed to pass the state Assembly with a vote of 89-47 in late May, it lacked the backing in the GOP-dominated state Senate to become law. A single-payer health care system has been introduced in one form or another since 1999, without success.


And while doctors and patients wait for a solution, recent history suggests that the prices for next year’s prescriptions will continue to climb.


Frank Runyeon
Frank G. Runyeon
is City & State’s senior reporter. He covers state politics and investigations.