The costs of some disease-modifying therapies outpace prescription drug inflation, saddling insured patients with thousands of dollars in out-of-pocket payments and delayed or denied coverage, two new studies have shown.
Disease-modifying therapies for multiple sclerosis are rising in cost five to seven times faster than inflation and cost more in the United States than in foreign markets, according to a study by Dr. Daniel Hartung and colleagues at Oregon Health and Science University in Portland, published online April 24 in Neurology.
And Medicare patients with Part D drug coverage pay an average of more than $2700 before taking on 5% copays for biologic drugs that treat rheumatoid arthritis, according to a study by Dr. Jinoos Yazdany and colleagues at the University of California, San Francisco, published April 21 in Arthritis & Rheumatology.
The separate findings suggest a single solution, that Medicare should be allowed to negotiate drug prices with pharmaceutical manufacturers, experts say.
“Costs of drugs for arthritis are escalating for the same reason drugs for MS are going up and up in Medicare, both resulting from the ridiculous legislation that prevents Medicare negotiating with the pharmaceutical industry on costs of drugs,” Dr. Jock Murray, professor emeritus at Dalhousie University in Nova Scotia, Canada, who cowrote an editorial that accompanies the MS paper in Neurology, told Reuters Health by email.
“When they can’t negotiate, the pharmaceutical industry can, without justification, increase costs as high as they like. And they like high costs,” Dr. Murray says.
Nearly all Medicare Part D drug-coverage plans require prior authorization and a coinsurance payment that amounts to an average of nearly 30% of the cost of biologic RA drugs, according to Dr. Yazdany’s analysis of more than 2700 formularies in all 50 states and Washington, D.C. That burdens patients with an average out-of-pocket payment of $2700 before hitting a cap. Then patients pay 5% of the drug costs.
By comparison, six out of nine non-biologic RA drugs studied were covered without prior authorization at fixed copayments averaging $10 or less per month.
First-generation MS biologics cost $8000 to $11,000 per year when they were released in the 1990s, and now they cost about $60,000 per year, Dr. Hartung has found. Next-generation biologics cost even more, typically by as much as 25-60%.
First-generation drug prices have risen even as next-generation drugs have entered the market as competition. Competition usually lowers prices, however. And these drugs actually do cost less in foreign countries, implying that the manufacturers have inflated the prices in the United States, the researchers write.