CMS BLOG
November 5, 2015
By Andy Slavitt, Acting
Administrator, Centers for Medicare & Medicaid Services
Prescription
Drugs: Advancing Ideas to Improve Access, Affordability, and Innovation
Recently, prescription drugs have
been in the news a lot, particularly with respect to their cost. Millions
of Americans rely on prescription medications to manage chronic illnesses or
treat acute conditions, and drug innovation has resulted in better health
outcomes for people across our nation. Because of this, finding ways to improve
affordability and access for patients, supporting and increasing innovation in
the industry, and – most importantly – making people healthier has become an
area of significant interest to many.
As medicines become more precise
and targeted, there is the potential to develop new generations of therapies
that enable interventions to be better tailored to groups of people and even
individuals. Medications in the future can improve health outcomes for many
diseases such as cancer and Alzheimer's, and help us better manage our chronic
conditions like diabetes, heart disease and depression, providing significant
benefits to patients across the country.
In order to have the maximum
impact, medications must also be affordable and accessible. This is an
important issue for Americans and for patients, businesses, and governments.
Surveys suggest that as many as 25 percent of Americans cannot afford and, therefore,
do not fill the prescriptions on which they depend. And, spending on medicines
increased 13 percent in 2014, compared to 5 percent for health care spending
growth overall, the highest rate of drug spending growth since 2001. An
important element of this increase in costs is due to new specialty drugs --
drugs that account for nearly a third of overall costs, but represent less than
1 percent of prescriptions.
Cost concerns aren’t only limited
to brand-name medicines. In some instances, the prices of generics
available for years have increased substantially without any additional health
benefits for patients. This is a concern across the country, but particularly
for consumers on fixed incomes. The Bipartisan Budget Act, just signed into law
by President Obama, provides Medicaid with additional rebates if generic drug
prices grow faster than inflation, which will discourage manufacturers from
increasing prices for generic drugs.
The rhetoric around health care
costs can become heated, particularly around the cost of prescription drugs. At
times, it can appear as if some of those who produce the pharmaceuticals and
those whose lives often depend on them have unaligned interests. But we will
not make progress by polarizing this debate. Development of ground-breaking
therapies requires significant investment and resources, and we all need to
support that important work. We believe patients, manufacturers, providers,
insurers and government all share a common goal to foster a health care system
that leads in innovation, delivers affordable, high quality medicines, and
results in healthier people with access to the care they need. We shouldn't
accept the notion that we as a society must choose between innovation and
affordability. We deserve both.
A recent example of a much
discussed, highly-effective drug is a therapy used by Hepatitis C patients.
Hepatitis C, a debilitating and life threatening infection that leads to
chronic conditions of the liver, has undergone a revolutionary improvement in
cure rates with innovative new medicines. These medicines are changing the
lives of many individuals, but they are also expensive, costing tens of
thousands of dollars, sometimes even more than one hundred thousand dollars,
per patient. These costs have strained personal as well as public budgets,
particularly state health care budgets. Because state budgets generally need to
be balanced every year, new drug treatments can surprise states with tens or
hundreds of millions of dollars in new spending. As these costs often
necessarily compete with other state programs like K-12 education,
transportation, law enforcement, and public health programs, some states have
made tough choices, including limiting access to these therapies.
Recognizing that we need both access
and affordability, today we issued a notice to all 50 state Medicaid directors
and sent letters
to the CEOs of several drug manufacturers about providing access to therapy for
Hepatitis C patients. Our notice to state Medicaid directors reminds states of
their obligation to provide access to these promising therapies (consistent
with section 1927 of the Social Security Act) based on the medical evidence,
and that they have tools available to manage their costs. Our letter to
manufacturers asks them to provide us with information on pricing arrangements
and asks them for ideas to support the provision of these lifesaving
medications to Medicaid programs at sustainable prices.
There are no easy answers to these
multifaceted challenges, but there is a significant benefit - to all of us – of
working together to find a solution. Earlier this week, Secretary of Health
& Human Services Sylvia Burwell invited leaders in innovation, policy, care
delivery, academia, manufacturing, purchasing, and patient advocacy to share
information at a public meeting on how to achieve our common goals.
These are complex issues, and we
recognize that the public is relying on our leadership. We will work to
ensure that all viewpoints are considered as we strive for solutions. In
the end, we share a common goal of supporting innovation and improving
affordable access to medications that improve health outcomes for patients.
Link to notice to all 50 state
Medicaid directors and sent letters to the CEOs of several drug manufacturer
can be found here: http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Benefits/Prescription-Drugs/HCV-Communication.html
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