Reprinted from HEALTH PLAN WEEK, the most reliable source of objective business, financial and regulatory news of the health insurance industry.
September 28, 2015 Volume 25 Issue 34
With unintended, yet excellent timing, Albany, N.Y.-based nonprofit health plan CDPHP on Sept. 22 rolled out a new education and advocacy initiative aimed at consumers and legislators that is focused on prescription drug price inflation. This new effort got underway during a week in which national media attention spotlighted perceived price gouging by Turing Pharmaceuticals for its Daraprim drug to treat parasitic infection and Democratic presidential candidate Hillary Clinton’s proposal to enact laws to cap prescription drug costs for consumers.
Turing recently acquired the rights to market Daraprim in the U.S. and quickly raised the price 5,000% for the 62-year-old drug from $13.50 to $750 per tablet. After a public media beating of its CEO Martin Shkreli, Turing on Sept. 22 rescinded the price increase, although no new price was announced.
For CDPHP, the publicity over the Turing move and the seeming indifference displayed by Shkreli play into its new educational campaign, but do not get to the meat of the matter. Titled “Inside Look: A Call for Rx Transparency” (www.cdphp.com/RxCosts), the insurer wants to shed light on all pharma pricing, not just specialty drugs. On the website, people can show their support for the campaign and sign up to receive information on drug price trends, as well as legislative efforts to control costs.
John Bennett, M.D., president and CEO, CDPHP, in an exclusive talk with HPW, says rising pharmaceutical costs are a major threat to access to health care. “We think that this has reached an almost crisis stage in that people can’t afford their medicines. And insurers have been and are required to pass along premium increases that we don’t want to pass along on the basis of these increases,” he explains.
For example, CDPHP experienced a $3 million increase in cost for just one asthma medication, Bennett says. “The price of an Albuterol inhaler jumped from $11 per inhaler to $434 per inhaler. It is those kind of things that are just going to bankrupt our entire system,” he continues. “We all know about the issue of [new hepatitis C drug] Sovaldi and some of these drugs for some very serious diseases, but one of the things we want to educate people about is the fact that this is occurring across a broad swath of drugs. It is not only the Sovaldis and this drug that was in the press last the two days. This is insulin. Insulin. Insulin has gone up suddenly from about $120 per vial to $270 per vile.”
CDPHP, like other insurers, has tried to address the rising costs with benefit designs that include increased cost sharing and high-deductible health plans. “Once you go on a percentage of price, members are hit with big bills. You know as the price of the drug increases their cost sharing increases. Pharma likes to say, ‘we will just cap the out-of-pocket expenses.’ Well, OK, you can do that, that is good. I would like to prevent patients from having to bear that expense, but at the end of the day the patient is going to be paying it in their premium,” Bennett says.
One of the things CDPHP is looking at is legislation in other states, notably an effort in Massachusetts to offer a first-of-its-kind price cap on some drugs. Under a proposal (S. 1048) in the state legislature, pharma companies would have to justify their prices by revealing how much they spend on research, production and marketing, along with the prices they charge for the same drug overseas. Some expensive drugs would then be assigned price caps, if deemed necessary.
As for Hillary Clinton’s plan and others that would cap cost sharing for patients, Bennett says that will be a big win for drug manufacturers because it does not get at the heart of the issue. “They will be high fiving all the way to the bank with that,” since the price for the drug will be paid on the back end via premiums, setting up insurers to take the blame.
https://aishealth.com/archive/nhpw092815-04?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=83063665
Turing recently acquired the rights to market Daraprim in the U.S. and quickly raised the price 5,000% for the 62-year-old drug from $13.50 to $750 per tablet. After a public media beating of its CEO Martin Shkreli, Turing on Sept. 22 rescinded the price increase, although no new price was announced.
For CDPHP, the publicity over the Turing move and the seeming indifference displayed by Shkreli play into its new educational campaign, but do not get to the meat of the matter. Titled “Inside Look: A Call for Rx Transparency” (www.cdphp.com/RxCosts), the insurer wants to shed light on all pharma pricing, not just specialty drugs. On the website, people can show their support for the campaign and sign up to receive information on drug price trends, as well as legislative efforts to control costs.
John Bennett, M.D., president and CEO, CDPHP, in an exclusive talk with HPW, says rising pharmaceutical costs are a major threat to access to health care. “We think that this has reached an almost crisis stage in that people can’t afford their medicines. And insurers have been and are required to pass along premium increases that we don’t want to pass along on the basis of these increases,” he explains.
For example, CDPHP experienced a $3 million increase in cost for just one asthma medication, Bennett says. “The price of an Albuterol inhaler jumped from $11 per inhaler to $434 per inhaler. It is those kind of things that are just going to bankrupt our entire system,” he continues. “We all know about the issue of [new hepatitis C drug] Sovaldi and some of these drugs for some very serious diseases, but one of the things we want to educate people about is the fact that this is occurring across a broad swath of drugs. It is not only the Sovaldis and this drug that was in the press last the two days. This is insulin. Insulin. Insulin has gone up suddenly from about $120 per vial to $270 per vile.”
CDPHP, like other insurers, has tried to address the rising costs with benefit designs that include increased cost sharing and high-deductible health plans. “Once you go on a percentage of price, members are hit with big bills. You know as the price of the drug increases their cost sharing increases. Pharma likes to say, ‘we will just cap the out-of-pocket expenses.’ Well, OK, you can do that, that is good. I would like to prevent patients from having to bear that expense, but at the end of the day the patient is going to be paying it in their premium,” Bennett says.
One of the things CDPHP is looking at is legislation in other states, notably an effort in Massachusetts to offer a first-of-its-kind price cap on some drugs. Under a proposal (S. 1048) in the state legislature, pharma companies would have to justify their prices by revealing how much they spend on research, production and marketing, along with the prices they charge for the same drug overseas. Some expensive drugs would then be assigned price caps, if deemed necessary.
As for Hillary Clinton’s plan and others that would cap cost sharing for patients, Bennett says that will be a big win for drug manufacturers because it does not get at the heart of the issue. “They will be high fiving all the way to the bank with that,” since the price for the drug will be paid on the back end via premiums, setting up insurers to take the blame.
https://aishealth.com/archive/nhpw092815-04?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=83063665
