Blog | Monday, April 17, 2017

Why are drug prices so high?


Why are the costs of prescription drugs so high? While I have prescribed thousands of them, I can't offer an intelligent answer to this inquiry. Of course, all the players in this game, the pharmaceutical companies, pharmacy benefit managers, insurance companies, consumer activists and the government, offer their respective bromides, where does the truth lie?

While I don't fully understand it, and I don't know how to fix it, we all know that the system is broken. More than ever before in my career, I am seeing patients who cannot afford the medicines I prescribe for them. In the last few weeks of this writing, 3 patients with colitis, a condition where the large bowel is inflamed, called me to complain about the cost of their new medicine. The annual cost was in the $2,500 to $3,000 range, which is way out of range for normal folks. While I was only focused on the colitis drug, many of these patients face prohibitive costs over multiple medicines. All of these patients had medical insurance, thought it didn't feel like it to them.

Should sick patients be given the added burden of price gouging?

I'm not an attack dog against PhRMA. I've expressed sympathy on this blog and elsewhere that it costs pharmaceutical companies a fortune to design, test and market new medicine. Research and development is not cheap. If we want this industry to take risks developing tomorrow's drugs, then they deserve a profit high enough to justify the investment. Nevertheless, from the prescribers' and the consumers' points of view, the system is out of balance and needs to be recalibrated.

I reviewed my colitis patients' formularies, which is the list of medicines that patients' insurance companies cover. If a drug is labeled as a ‘Tier 1’ drug, then the cost to the patient is the lowest. The higher the Tier #, the more the patient will pay. This is how the insurance company “guides” physicians to prescribe cheap drugs. Of course, the insurance company will never say that the patient can't receive an expensive drug. That's a decision, they claim with a straight face, that's between a patient and the doctor. Give me a break. Ordinary folks, especially retired people on fixed incomes, are confined to lower tier medicines.

I have no issue with the tier system as long as there is at least one Tier 1 drug that can do the job. If there are half a dozen heartburn medicines that are equally effective, I understand if an insurance company makes one of them Tier 1, their preferred choice. This happens when the insurance company gets a special discount on this particular medicine.

With regard to my three colitis patients, the only Tier 1 drug was one that came on the scene decades before I was born. The standard colitis medicines that every gastroenterologist would have prescribed were all upper Tier. My patients had no choice but to accept an inferior drug.

If any reader can explain why our drug prices are the highest in the world, can you also explain why insurance companies are not practicing medicine?

This post by Michael Kirsch, MD, FACP, appeared at MD Whistleblower. Dr. Kirsch is a full time practicing physician and writer who addresses the joys and challenges of medical practice, including controversies in the doctor-patient relationship, medical ethics and measuring medical quality. When he's not writing, he's performing colonoscopies.