Politico recently explored the relationship between the biopharmaceutical industry and the Affordable Care Act (ACA).
The article laments the supposed high cost of drugs and implicitly endorses policies that would not only do little for patients in need of medications, but also stifle innovation through research and development.
The implication that the “structural reforms” the story talks about would fundamentally change drug costs in this country is myopic and misinformed. Those so-called “reforms” like top-down, government price controls or changing the Medicare payment structure would have long-term impacts both on patients and on the next generation of lifesaving medicines.
Though unintended—the consequences of such actions would be severe. Patients would find it harder to access the medications and therapies they need. The biopharmaceutical industry would also struggle to maintain its rigorous R&D that leads to innovations.
Taking a step back, it’s also important to address the cost of these lifesaving drugs and therapies. Even according to the insurance companies’ own data, prescription drugs are not causing most of the insurance premium growth. In fact, three-quarters of the growth in 2016 comes from hospitals and doctors—not prescription drugs. As a recent study from PwC said, “drug spending is still a relatively small portion of overall health spending, and, as such, concerns of ever-increasing cost growth from new cures may trigger false alarms.” That’s why, according to CMS, prescription drugs account for just over 13 percent of overall healthcare spending. That statistic has been remarkably stable for decades and is projected to remain that way.
Second, Politico lists prices for drugs that cure disease without any broader context. For example, innovative therapies that now cure Hepatitis C can save patients hundreds of thousands of dollars in hospital costs or liver transplants over the course of their lives. They also have much less adverse side effects than previous treatments. Simply listing a price without context pays no mind to the true necessity of this innovation and what it does to improve a patient’s way of life—or even the substantial discounts and rebates achieved through rigorous negotiations with payors and plans.
Our organization has always sought a way to bring all stakeholders together to fix our broken healthcare system and give patients’ access to the medications they need. And we’ll continue to do so.
But it’s important that we continue to correct the record so that the public can make informed decisions about our health care sector and what is needed to ensure that patients have access to the best medicines for their families and loved ones.