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Drug Pricing Debate Once Again Ignited

Earnings-on-drugs-1362499408_53A few weeks ago, news broke that the founder of Turing Pharmaceuticals, Martin Shkreli, bought the 62-year-old drug daraprim, only to turn around and up the cost by 5,000 percent. The move by Shkreli, who said the revenue would fund research to develop better treatments for toxoplasmosis, the parasitic infection daraprim treats, was met with severe objections and backlash.

Twitter exploded, the media jumped, and it became a hot issue on the presidential campaign trail: “Price gouging like this in the specialty drug market is outrageous,” tweeted Hillary Clinton, who also called for a cap to out-of-pocket drugs costs for patients. Donald Trump called the move “absolutely ridiculous.” It also the prompted the Infectious Diseases Society of America and the HIV Medicine Association to send a letter to Turing, calling the increase “unjustifiable for the medically vulnerable patient population” and “unsustainable for the health care system,” the New York Times reported.

The roars had Shkreli backpedaling (“I think that it makes sense to lower the price in response to the anger that was felt by people,” he told, but it was too late. It reignited a long-standing debate about drug costs, and reminded people about a reality: Hikes like this may ultimately end up falling back onto patients, even those with the most comprehensive insurance coverage.

This isn’t the first time already-approved drugs have been placed out of patients’ reach. In fact, drug prices have steadily increased and outpaced inflation for years now, according to an AARP Public Policy Institute report.  

 “This is becoming a huge problem,” said Richard Demers, director of Pharmacy at the Hospital of the University of Pennsylvania. “Companies are buying drugs and turning around and increasing the price by a lot – it’s a profit grab. There’s a dozen approved drugs out there today that have been hiked up.”  And it’s costing both patients and hospitals, during a time when reimbursements from the Centers for Medicare and Medicaid Services have already been cut.

The issue is also relevant for newly developed drugs, particularly ones for cancer, which now frequently cost well over $100,000 a year.  New biologic agents can do wonders for managing patients’ conditions, but improvements come with significant financial costs. Research endeavors and costly manufacturing justify the high price tags, pharmaceutical companies argue, but pricing is ultimately guided by what the market can bear, Demers said.

There are ways to help pay for out-of-pocket medical expenses—savings, loans, or financial assistance programs—but sometimes it’s not enough. This year, bankruptcies from unpaid medical bills will affect two million Americans, and continue to be the number one reason people file for bankruptcy in this country.

Every day at Penn Medicine, physicians, pharmacists, and financial counselors are working behind the scenes to ensure patients can afford their lifesaving medical care. Specialists coordinate and communicate with insurance companies on patients’ behalf, seek out sponsorships from pharmaceutical companies and work with foundations that help subsidize medical bills for those in need.

“To help solve this problem, we all need to take step back and work together to figure this out, so the person who is sick doesn’t have to go through these gyrations to get something that could save their lives,” Demers said. Last year, Penn worked with hundreds of patients on their medical bills, helping to alleviate some of the burden and keeping them on track for care.

Beyond hurting their bank accounts, it affects people’s health too.

Treatments may be delayed or stopped altogether, and patient quality of life can plummet during times of financial strain. The problem is pervasive enough that a relatively new term has been coined: “financial toxicity.” It’s described as the financial burden related to healthcare— and seems to impact even wealthy patients and those with insurance. Like a more traditional side-effect, treatment-related financial toxicity may adversely impact patient wellbeing.

A study of multiple myeloma patients from researchers at Penn’s Abramson Cancer Center (ACC) attests to that. 

Edward Stadtmauer, MD, chief of Hematologic Malignancies and a professor of Hematology/Oncology at the ACC, and his colleagues found that even patients with health insurance who have multiple myeloma may be vulnerable to financial toxicity – including those who make over $100,000 a year.

Costs of newly approved blood cancer therapeutics have increased 10 fold during the past 15 years, with many agents priced at $10,000 or more a month. And patients can be on them for months, even years.

Nearly half of the 100 patients surveyed tapped into their savings to pay for their care, and 17 percent reported delays in treatment due to costs. One in five borrowed money, and 10 stopped treatment altogether, the team reported in the journal Lancet Haematology. Surprisingly, the study included patients with demographic characteristics likely to protect against financial burden. All participants were insured and all patients with Medicare fee-for-service coverage had additional supplemental insurance to assist with some out-of-pocket costs. They also had a median household income and education level above the national average. 

“We are entering a very exciting time in oncology, and I certainly share the enthusiasm with other clinicians surrounding modern advancements with therapies. The treatments and clinical outcomes for our patients are really poised to change for the better,” said the study’s co-author, Scott Huntington, MD, a former oncologist in the Abramson Cancer Center who is now a faculty member at Yale University, on a Lancet podcast. “However, I also acknowledge that we must recognize the untenable rise in costs of new cancer treatments.

“Patients with cancer are already at risk for financial burden related to lost wages or extraneous expenses that we can’t really control as health care providers,” he added. “This really makes it that much more important for us as oncologists to confront these rising treatment costs in part to try to decrease this treatment-related financial toxicity. And if we don’t, then I’m really quite concerned wide spread access to promising cancer treatments may be in jeopardy.”

Indeed, the issue stems beyond blood cancers. A recent study found that the cost of cancer drugs increased by an average of $8,500 a year between 1995 and 2013, a spike that has many physicians speaking out more loudly.  

Last month, 100 oncologists laid out some daunting stats in a Mayo Clinic Proceedings commentary: out-of-pocket costs now make up about 20 percent to 30 percent of the total cost of cancer treatment, they wrote. That means for a patient with cancer who needs one cancer drug that costs $120,000 per year (the going rate for newly approved drugs) out-of-pocket expenses could be as high as $25,000 to $30,000.

That’s more than half the average household income and possibly more than the median take-home pay for a year. 

“This increase is causing harm to patients with cancer and their families...and the current pricing system is unsustainable,” the author wrote.

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