This week, America’s Health Insurance Plans, or AHIP, is hosting its annual health policy conference. Included in the two-day event is a discussion entitled, “Industry Perspectives on Where We Go from Here on Drug Pricing.” Judging from the panelists, it seems the only perspective AHIP is willing to consider is one that aligns with its own views on this important topic.
Since the insurance industry neglected to invite other viewpoints—including from those who actually discover and deliver prescription medicines to patients—it might be helpful to share a few thoughts on where we can “go from here on drug pricing.”
First, we need more facts and less misinformation in the drug cost debate. The Centers for Medicare & Medicaid Services reports that spending on prescription drugs increased just 1.3 percent in 2016—which was significantly slower than the growth in spending for both hospital and physician services. The Kaiser Family Foundation has noted that “growth in prescription spending has slowed again in 2016.”
Meanwhile, leading pharmacy benefits managers—who work on behalf of insurers—report a similar trend for 2017. Yet all of this good news hasn’t stopped insurance companies from blaming prescription drugs for skyrocketing insurance premiums, even when their own data reveal a different story. Patients, policymakers and the public deserve the facts, and the fact is the trend for prescription drug costs is heading in the right direction.
Second, patients’ out-of-pocket costs are too high. Biopharmaceutical innovation and the new cures and treatments it delivers saves lives and saves money within our health care system. But this reality hasn’t stopped insurance companies from forcing patients to pay more for prescription drugs, whether through higher copays, deductibles or both. And as Politico Pro reports, those out-of-pocket costs “may surge” thanks to an “arcane change” in how insurers treat certain assistance programs drugmakers offer to patients.
If you follow the pill from the manufacturer to the pharmacy counter you learn that drugmakers set the list price for medicines, while insurance companies largely determine how much patients pay at the pharmacy counter. Just this week, one insurance company announced it will finally pass along to some consumers the substantial rebates it receives from drugmakers. While this is an encouraging step, it’s only one step the insurance industry should take to ensure patients face reasonable out-of-pocket costs for their prescription drugs.
Third, let’s remove insurance barriers that restrict access to medicines. Press reports highlight time and again stories of insurance companies that refuse to cover the cost of medications. Insurers have also been known to discriminate against patients with costly pre-existing conditions.
For example, Harvard University’s Center for Health Law and Policy Innovation has uncovered discrimination against patients with HIV/AIDS, and a separate study revealed patients in certain health plans had to pay on average $3,000 more out-of-pocket for medications compared to other plans.
To control health care costs, we should look for ways to keep patients out of the hospital and reduce the need for costly medical procedures. Removing unnecessary insurance barriers to the medicines patients need would be a smart step in the right direction, and it’s the right thing to do.
Fourth, it’s time to work together on real solutions that help patients. Even though the trend on prescription drug spending is promising, we must continue our efforts to provide patients access to the medicines they need at a cost they can afford. Unfortunately, many of the so-called solutions being discussed are fatally flawed and would lead to a host of harmful consequences, such as weaker safety protections, restricted access to medicines and less innovation.
Fortunately, there are responsible steps policymakers can take. The Council for Affordable Health Coverage has offered an approach that reflects consensus across the health care industry and it includes a number of commonsense solutions, such as accelerating the approval of generic drugs, empowering patients and expanding the use of value-based pricing agreements.
The council’s positive reforms have been endorsed by BIO and the innovators we represent, along with a few insurance companies. Unfortunately for patients, AHIP has refused to join us, perhaps further proof that they’d prefer a one-sided conversation about the problem, instead of an honest dialogue about solutions.