Panelists present bleak outlook for future of drug prices

Mark Lebwohl, MD: “Rheumatologists, and especially dermatologists, are denied frequently, and then denied again on appeal."

Mark Lebwohl, MD: “Rheumatologists, and especially dermatologists, are denied frequently, and then denied again on appeal.”

The worst kept secret in dermatology is that drug prices have skyrocketed, affecting treatment because patients cannot afford treatments that have minimal or no insurance reimbursement.

Four panelists — from an insurance group, a patient advocacy group, a pharmacy group, and a manufacturer group — joined AAD President Mark Lebwohl, MD, August 21 in discussing causes of those high prices and their future path during “Dialogues on Drug Pricing and Transparency.”

“The reason dermatologists are uniquely affected by high drug prices is that insurers have found it easy to deny approval for expensive dermatologic drugs,” Dr. Lebwohl said in a separate interview about why insurers deny payment for drugs to treat autoimmune disease like psoriasis. “Rheumatologists, and especially dermatologists, are denied frequently, and then denied again on appeal. I think insurance companies have figured out a lot of our patients won’t die from these conditions, although they will have terrible lives.”

But beyond groundbreaking biologic treatments, even the cost of established drugs and generics is rising. Dermatologists are increasingly placed in an insurance classification where their patients face reduced coverage, insurance companies require preauthorization for prescriptions, or prescriptions are denied.

One panelist, Leah McCormick Howard, JD, vice president of government relations and advocacy for the National Psoriasis Foundation, reported that half of psoriasis patients say cost is a significant barrier to following treatments.

“Finding help is challenging,” she said. “First they have to find care. It can be hard to find a specialist, especially one who is on their insurance panel. Then they have to get treatment, and they have to be able to afford both of those.

“Even educated patients have a hard time finding information about whether insurance plans provide coverage for a particular treatment, making it hard for patients who know they need biologic treatment to shop for the right plan.”

Another panelist, Matt Eyles, executive vice president of policy and regulatory affairs for America’s Health Insurance Plans, reported on the sticker shock of drug prices. The median revenue per patient using one of the top 100 drugs in 2010 was $1,260. In 2014, it exceeded $9,000.

“Drug prices are now ahead of Obamacare as the biggest concern of Republican voters,” according to a Kaiser Health Tracking Poll, Eyles said. But he noted that the ACA has created out-of-pocket maximums below $7,000, so patients will not be responsible for much of the price of a drug that costs $100,000 per year, which leaves insurance companies responsible for the difference. “We’re concerned about how sustainable this will be in the long run,” Eyles said.

Everett Neville, a panelist and senior vice president of supply chain for Express Scripts, said that pharmacy benefit managers continue to develop systems to improve efficiency in the approval of prescriptions. He added that he expects costs to continue to climb.

“This looks tame compared to what I would expect in the future,” Neville said of a 13 percent increase in pharmacy costs in the last decade, including a 30 percent hike in the cost of specialty drugs. “How can we all (as a society) pay for $50,000 and $60,000 drugs as they become more common?”

Panelist Lori Reilly, executive vice president of policy and research for the Pharmaceutical Research and Manufacturers of America, defended the cost of drugs, adding that groundbreaking drugs reduce other health care costs. For example, the treatment of hepatitis C was $30 billion annually before treatments were developed.

“But now we can cure it, and the $84,000 figure that created such sticker shock is without the rebates that payers are demanding from manufacturers — 40-65 percent,” she said. “We may be spending more on medicine, but we are spending less on treating people in institutions as a result of those medicines.

“Ninety percent of what we do fails. The average cost to bring a drug to market is $2.6 billion. That represents many medicines that never make it to market, and only two in 10 drugs that reach the market are commercially successful enough to earn back their R&D costs.”

Dr. Lebwohl said the goal of bringing together the diverse group of speakers was to move the discussion of drug prices from concern to developing a solution.

“We brought the stakeholders together to see how we can solve this,” he said. “The Academy is partnering with many organizations to bring attention to the problem of access to treatment.” Look for details on the Academy’s efforts in upcoming AAD publications and on AAD.org.

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