WASHINGTON – Staggering price tags for new drugs that treat a small number of patients could threaten the affordability of all prescription medicine, a major patient advocacy group said Thursday.
“Prices are way too high, much higher than they need to be,” said Peter Bach, director of Memorial Sloan Kettering’s Center of Health Policy and Outcomes.
“Prices are so high that [pharmaceutical companies] are coming like a wave of contractors after a hurricane into the space because they’re being paid premium prices to rush there.”
Several so-called specialty drugs have hit the marketplace recently promising remarkable cures but with hefty prices paid to the pharmaceutical companies that developed them.
The medications require meticulous administration or monitoring and often are designed to treat a relatively small patient population albeit with chronic and complex conditions such as multiple sclerosis, hemophilia and hepatitis C.
“We are all for cures” but “the impacts of the costs” also must be kept in mind, said Matt Salo, executive director of the National Association of Medicaid Directors, one of dozens of patient care activist groups that held a briefing on Capitol Hill to express concern about escalating drug costs.
The $1000 per pill or $84,000 per treatment for Gilead’s Hepatitis C (HCV) drug Sovaldi is cited most often as reflecting the trend.
Some 3 million people in the U.S. are diagnosed with Hepatitis C.
But private and public insurance purchases of Sovaldi and another expensive new HCV drugs were major contributors to the $73 billion spent on specialty drugs in 2013, according to the IMS Institute for Healthcare Informatics.
That was up more than 11 percent from the prior year.
And about 70 percent of spending on new drugs approved by the U.S. Food and Drug Administration went for specialty brands, according to a report by IMS Health.
“Medical advances are meaningless if no one can afford them,” said Leigh Purvis, director of health services research at the American Association of Retired Persons (AARP) Public Policy Institute.
Advocates worry that rising costs could threaten public health programs such as Medicaid, which provides health care to low-income people.
“Medicaid and its sustainability depends on competition in the marketplace to keep costs down,” Salo said. More innovation is needed to inspire competition, which would put pressure on prices, he added.
But competition for the pricey specialty drugs has been slow to come.
AbbVie Inc., a North Chicago-based biopharmaceutical company, introduced a new Hepatitis C drug earlier this year to compete with Gilead’s Harvoni at a lower cost.
Such examples are rare so far but analysts say some of the high costs of flagship HCV drugs Harvoni and Sovaldi may be limited by the small number of patients needing treatment and whether they all will seek it.
“The effects of severe pricing pressure, along with an uncertain number of U.S. HCV patients under the care of a physician, could cause slowing HCV sales sooner than expected,” said Thomas Wei, a Jefferies LLC analyst in his latest note.
The patient groups said they may propose legislation to encourage competition as well as seek partnerships with the pharmaceutical industry as a way to control costs.
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