For more than a decade, prescription drug prices have risen every year, a trend most Americans have resignedly taken in their stride, at least until 2015. Last year, however, a handful of relatively small pharmaceutical companies may have gone a bit too far, jacking up prices of life-saving medications to unconscionably high levels.
Finally, it seems that Americans — including doctors, hospitals, and even some presidential candidates — are beginning to sit up and take notice of this continuing upsurge in the prices of prescription medications. The growing outrage over soaring drug prices has brought increased pressure on pharmaceutical companies to act more responsibly in pricing the medications they sell.
Internists’ Group Takes Action
Earlier this year, the American College of Physicians, a professional organization of internal medicine specialists and sub-specialists, joined a national coalition dedicated to bringing the cost of specialty medications within the means of the patients who desperately need them. In explaining the group’s decision to join the Campaign for Sustainable Rx Pricing, ACP President David Fleming noted that “the pricing of specialty drugs lacks transparency and rationality.”
ACP’s decision to join the coalition came only a day after the Obama administration announced that it was asking Congress to give it the authority to negotiate with pharmaceutical companies over the prices of expensive prescription medications used by Medicare beneficiaries.
Case Study Cited
For those a bit skeptical that doctors, hospitals, and other medical institutions can effectively pressure drugmakers to keep their prices affordable, a case study from a few years back may be convincing.
In a blog posting for Yahoo! Finance, Justine Underhill recounts how doctors at Memorial Sloan Kettering’s Center for Health Policy and Outcomes decided to stop using the cancer drug Zaltrap, instead switching to a similar drug called Avastin. This was done when the price for Zaltrap reached roughly $11,000 a month, more than twice the asking price for Avastin.
Peter Bach, M.D., director of the Center for Health Policy and Outcomes, conferred with his colleagues at Memorial Sloan Kettering and decided that there was no justification for Zaltrap’s higher price. They decided collectively to stop using Zaltrap, switching entirely to Avastin. More importantly, they made their decision public, explaining their reasoning in an op-ed published in The New York Times.
Sanafi Bows to Pressure
Although Dr. Bach says he and his colleagues weren’t really expecting a positive response from their op-ed, Sanafi, Zaltrap’s manufacturer, shortly thereafter halved the price of the drug. The drugmaker realized that other cancer doctors and cancer centers might well follow Memorial Sloan Kettering’s lead and stop using Zaltrap in favor of Avastin. Sanafi cited “market resistance” as its primary reason for lowering Zaltrap’s price. Sanafi has since trimmed its price for Zaltrap even further, bringing it to a level below that of Avastin.
In explaining why he and his colleagues decided to stop using Zaltrap, Dr. Bach said, “We had to do it because nobody else can.” He points out that the Food and Drug Administration doesn’t look at prices and Medicare is prohibited by law from looking at prices. He also notes that current law requires commercial insurers to cover the costs of cancer drugs. “There was nobody else to do it, so we did it,” he says.
Oncologists Speak Out
In yet another initiative by doctors to bring down the astronomical cost of certain prescription drugs, a coalition of 118 prominent cancer specialists in late July 2015 published an editorial in “Mayo Clinic Proceedings.” In the editorial, the oncologists point out that up to 20 percent of U.S. cancer patients fail to adhere to their recommended treatment regimen because they simply can’t afford the drugs they’ve been prescribed.
Ayelew Tefferi, M.D., an oncology researcher at the Mayo Clinic and lead author of the editorial, argues that “it’s time for patients and their physicians to call for change. Among the changes called for by Dr. Tefferi and his colleagues, perhaps the most innovative is their proposal to establish a new regulatory agency to help set prices for new drugs that have just been approved for market. The oncologists also urged that steps be taken to facilitate the importation of cheaper drugs from other countries, including Canada.
Rx Price Bargaining Backed
The oncologists’ editorial appeared only days after the release of a Kaiser Family Foundation poll that showed most Americans agree that Medicare should be allowed to negotiate lower prices on certain drugs. Although others have long called for such a reform, concerns about government interference in the private marketplace have kept such proposals from gaining traction in Washington, D.C.
Of the Kaiser poll’s findings, Mollyann Brodie, executive director of public opinion and survey research at the foundation, said, “People don’t understand why these drugs cost so much, and they don’t understand why, in America, you can’t negotiate for a better price.”
In a December 2015 article in the Wall Street Journal, health and science writer Jeanne Whalen reported on the findings from an investigation by the financial newspaper into the disparity between U.S. prescription drug prices and those in other developed countries. Among other things, it found that prescription drugs are far less expensive in Norway, an oil-rich country with a very high GDP per capita, than they are in the United States. In fact, it found that U.S. prices were higher for 93 percent of 40 brand-name drugs that were available in both markets during the third quarter of 2015.
Among the examples cited in Whalen’s article were the gap in prices for a vial of the cancer drug Rituxan. Medicare pays $3,678 for a vial of the drug, which costs Norway’s taxpayer-funded health system only $1,527. In another example, an injection of the asthma drug Xolair cost Medicare about $676, 46 percent more than the drug’s price in Norway.
Whalen points out that the state-run health systems in Norway and other developed countries, including Canada and the United Kingdom, “drive hard bargains with drug companies.” Among other things, Norwegian health system officials put caps on prices, demand proof that new drugs’ higher prices are justified by measurable improvements over existing drugs, and sometimes refuse to cover medicines that they believe are not worth the cost. By contrast, Medicare is prohibited by law from negotiating drug prices.
Desperate Measures
A Consumer Reports poll, published in August 2015, shows that the continuing upsurge in prescription prices is pushing some Americans to take desperate measures in order to cope. Twenty-four of the poll’s respondents who had experienced a prescription drug hike in the previous 12 months said that they sometimes skipped filling a prescription because of the high cost. Other measures included taking an expired prescription drug, sharing a prescription with someone else, cutting pills in half, and skipping scheduled doses, all done without permission from their doctors or pharmacists.
If you’d like to read additional articles about soaring prescription drug prices, as well as related health topics, we invite you to click on this link to related content on our blog.
Photo credits: Drew Makepeace, Robert Vincent
Don Amerman is a freelance author who writes extensively about a wide array of nutrition and health-related topics.
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