Wednesday, April 3, 2013

Put some cost pressure on the providers

Finally I think some pressure is being put on drug manufacturers to manage costs. There was a recent report out of the UK saying that the cost benefit analysis of everolimus, a new advanced breast cancer drug, led to the decision by the National Institute of Health and Clinical Excellence (NICE) to not recommend its use. 

Then another study in the US shows that the cost of drugs for Hepatitis C and Rheumatoid Arthritis account for more than 50% of the costs to treat those patients.

"In the first study, researchers found that despite the overall decrease in Hep C specialty drug use from 2008 to 2011 (17.2 percent vs. 14.1 percent), the Hep C specialty pharmacy total cost of care compound annual growth rate (CAGR) was 15 percent from 2008 to 2011. Specialty drug costs accounted for 35 percent ($13,332 of $38,055) of the total cost of Hep C care in 2008 and was substantially higher at 52.6 percent in 2011 ($30,415 of $57,799), with a CAGR of 31.8 percent. 

In the second study, researchers found that although RA drug use remained steady from 2008 to 2010 (34.6 percent vs. 35.4 percent), the total cost of care CAGR was 7.3 percent from 2008 to 2010. All other medical costs were $11,252 in 2008 and increased to $13,710 in 2010, with a CAGR of 10.4 percent. Combined RA medical and specialty drug costs accounted for $16,218 (54.7 percent) of $29,652 total cost of care in 2008. In 2010, total cost of care was slightly lower at 53.0 percent ($18,098 of $34,163), with a CAGR of 5.6 percent."

'"As the pipeline of expensive specialty drugs continues to grow, we need to stay alert to cost of care trends to make sure patients and plan sponsors receive the best value and can manage the increasing cost burden these treatments bring,"...'

We can't expect insurance companies to pick up the costs of these expensive drugs. Everolimus was priced at twice the amount of Herceptin. Nor can we expect patients to pick up increasing portions of the price. One of my drugs is $95/month co-pay.

This is an issue which warrants more investigation and pressure. Drug manufacturers have blamed research costs for their increasing product pricing. But has pressure been put back on them to reduce their costs in production of drugs. Perhaps they need to take a long hard look at their business practices. As more studies reveal the cost benefit discrepancies, somethings need to change. And it should not be at the expense of quality of life or of the lives of patients.

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