We’re not powerless against drug company price hikes – if we act
Commentary by HealthPartners Health Plan Medical Directors
This commentary was originally published in the Minneapolis Star Tribune on Wednesday, September 21, 2016.
By Thomas Kottke, MD, and Charlie Fazio, MD, HealthPartners Health Plan Medical Directors
It seems like it’s happening every week: a drug company executive is hauled before a hearing to answer for outrageous price increases. And eyes are on Washington again this morning, as makers of the cheaply produced and lifesaving EpiPen are set to appear before a Congressional committee to explain the drug’s 500 percent price increase in recent years.
Other examples are sadly plentiful. It’s mostly why drug costs are now the fastest-growing driver of health care costs, growing at a double-digit clip annually. Today, many drug companies act as unregulated monopolies, unwilling to self-regulate and immune to shaming from a justifiably outraged public.
We all agree that medications are an important social good, and that a healthily functioning pharmaceutical market is good for everyone. Drug companies should get fair payment so they can continue to thrive and innovate. Everyone in our community should be able to benefit from what they provide, at a cost they can afford.
But none of this can happen if extortionate drug price hikes continue unchecked.
So what can we do? First, we need to accept that everyone shares a role in working toward drug affordability. Health care organizations like ours, for example, need to help patients and health plan members get the most value from their medications, especially as drugs become more complex and specialized. Our pharmacists in particular can play a broader role as one-to-one medication navigators, helping patients to get the most from their drug therapies, find lower-cost options, and reduce waste.
But that can’t and won’t be enough. And although news coverage of drug company abuses often paints the public as powerless, we are not. There are many steps policymakers could take to put real and needed protection on the side of consumers now. Here are five:
- Bring real drug costs and profits into the daylight. Cost transparency is a welcome trend in American health care, but drug companies are getting a pass. We know little about what it costs to develop, produce and market drugs, or how drug companies profit from them. This cost information should be public, and lawmakers should compel it.
- Make cost a factor in getting approval for drugs. Regulators now look at safety and effectiveness to determine the value of a drug to the community, ignoring cost. Drug cost should be evaluated as part of regulatory approval. This will require some exploration, and perhaps an expanded role for the FDA, but it could allow for needed limits -- such as the maximum price a public or private payer would pay for a certain drug.
- Unshackle government negotiating power for Medicare. As the largest buyer of health care in the nation, the federal government has tremendous buying clout. But much of this power is left on the table because law prohibits Medicare from negotiating with drug companies on pricing. This gives drug companies an unwarranted advantage with cost ramifications throughout the entire health care system. It’s time to lift these restrictions and in a way that doesn’t simply shift costs elsewhere.
- End drug company loopholes and abuses. There are many reforms needed to address unfair and abusive market practices by drug companies. For example, we see drug manufacturers gaming the patent process, which can make it harder for effective but cheaper options to make it to consumers. This should stop.
- Turn off the expensive hype. High-priced medications are often supported by expensive marketing campaigns that add cost and drive excessive use. We should support restrictions on costly direct-to-consumer advertising, similar to those enacted with success in other countries.
Minnesota has a well-earned, national reputation for the partnerships we have between different parts of our health care system. We’re not used to seeing one part of the system operate with reckless and callous disregard for the rest. It seems foreign to urge serious steps to rein an outlier back in.
But in this case we haven’t a choice, and no one of us can mount the effort alone. Drug companies are threatening the health and financial security of millions of people, especially the elderly, vulnerable and chronically ill who rely on medications most. They’ve have shown repeatedly that they’re not about to right themselves. So we – through our leaders and our own efforts – must do it for them.
And if we act, we can.