January 23, 2015 at 5:00 am ET
“In most of the cases we analyzed, technological innovations in medicine are on net positive.” David Cutler and Mark McClellan
Can you imagine an America without a vaccine that saves your child from life threatening whooping cough, or an America without a cancer therapy to stave off breast cancer recurrence or even an over-the-counter aspirin that helps you deal with your daily aches and pains? No, of course you can’t and that is why supporting public policies that help companies develop new medicines and vaccines that are faster, better and more tailored to meet each particular need is an important endeavor, one that impacts millions of lives every day. In 2015, Congress will debate an important piece of legislation – 21st Century Cures. There are three broad policy pillars that make up the 21st Century Cures initiative: Discovery, Development and Delivery. These segments each have micro policy issues that require modernization, modification or implementation. The delivery pillar- getting innovative therapies into the hands of patients who need them – is one area that requires implementation of new policies so that innovative biopharmaceuticals end up not only on the shelves of the pharmacy but also on the patients’ night stand.
One important hindrance to the delivery system today is the inordinately high out-of-pocket costs patients must pay, even though they have insurance, for biopharmaceuticals to treat debilitating and life threatening diseases such as cancer. Although CMS data concludes that consumers now pay less out-of-pocket for pharmaceuticals than at any time in the past 40 years primarily due to expanded access to insurance and the proliferation of generic drug prescribing; the news is not so good for patients who suffer from rare diseases or cancers or immunologic disorders. For example, according to the National Business Group on Health, employers are implementing increased cost sharing for medicines that treat cancers without truly understanding that these policies may have unintended consequences such as increased abandonment of treatment, effectively making the lifesaving cancer therapies inaccessible. These decisions are short-sighted given that CVS Health in their most recent analysis concluded that specialty medicines make up only 8% of the overall healthcare costs of managing patients with such devastating ailments; a small fraction of the total cost of caring for patients suffering from rare and complex diseases. Furthermore, according to a systematic review published in the American Journal of Managed Care recently, in many cases these new specialty medicines are more clinically and cost effective than the treatments that were previously available. These treatments are the right investment for patients and for the healthcare system’s finances.
Consequently, because of a broken insurance model, the truly sick patients end up paying a greater percentage of the costs out of pocket for medicines than they do for a visit to an emergency room or a hospitalization, leading them to possibly choose to skip the most cost-beneficial intervention in healthcare – biopharmaceuticals. This has real consequences. According to a recent public opinion survey sponsored by the advocacy organization Cancer and Careers and Pfizer, 75% of women suffering from breast cancer believe that working aids their recovery. However, instead of having patients living independent and highly productive lives, women who can’t afford to pay their out-of-pocket costs may be hospitalized, stop working or go through many hurdles in an effort to access the medicine their physician prescribed for them.
There are several ways to address the out-of-pocket affordability conundrum. One option is through private sector efforts such as the one endorsed by the National Business Group on Health recommending, in the Cancer Continuum of Care report, that pharmacy benefit cost-sharing structure should not be greater than $100 per prescription fill and/or an aggregate of $200 out-of-pocket maximum per month, and that one out-of-pocket maximum must apply to combined medical and pharmacy expenditures. Another is to follow in the footsteps of Monica Lindeen, President of the National Association of Insurance Commissioners and the Insurance Commissioner for the State of Montana, who in 2014, required her state’s four largest health insurance companies to cover all prescription drugs equally, ending what she alleged was discriminatory practices in her state.
Furthermore, Congress could require Medicare to develop a policy and processes for enrollees to petition for reduced cost-sharing for a covered drug on a high cost-sharing tier if the covered drugs on a lower formulary tier would not be as effective or would have adverse effects on the enrollee. In addition, Congress can amend Title XXVII of the Public Health Service Act to limit the amount patients have to pay for prescription drugs in a specialty tier. There are several pieces of legislation that have been introduced that are well supported by patients that could make treatment more affordable, such as prohibiting cost-sharing requirements for drugs in a specialty tier from exceeding the cost-sharing requirements for prescription drugs in a non-preferred brand drug tier as in H.R. 460, Patient’s Access to Treatment Act of 2013.
Congress has identified biopharmaceutical innovation as one of the most important issues to address in 2015 through the 21st Century Cures initiative. They have boldly ventured into the arena of policy issues that go beyond reform of regulatory bodies and additional governmental funding for research. They collaborated in a bipartisan manner in identifying delivery as a key area for policy reform and focus. It is that pillar, including ending the practice of imposing unaffordable out-of-pocket costs on patients, that will ensure the advances resulting from modernized biopharmaceutical innovation get into the hands of those who need them most and extend and improve lives.
Robert Popovian, Pharm.D., MS is the Senior Director of Pfizer US Government Relations