A NEW STATE report on health care spending in Massachusetts reaffirms what anyone who buys prescription drugs knows — they are getting ever more expensive, and at an alarming rate. It’s more fuel for the ongoing debate about how much drugs should cost — and whether restricting access to them is an effective and ethical form of price control.
The report, from the Center for Health Information and Analysis, said total medical costs statewide hit $54 billion in 2014, a 4.8 percent increase from the previous year. But spending on drugs rose more sharply, by 13 percent, to about $7 billion.
A significant portion of that drug spending came from a new wave of speciality medicines that extend and save lives, including Sovaldi, a breakthrough treatment for hepatitis C. Sovaldi can eradicate the liver-damaging virus, which affects more than 3 million people in the United States. But the list price — $1,000 a pill, or $84,000 for a full treatment regimen — caused some insurance companies to limit its availability to the sickest patients. Gilead Sciences Inc., which makes Sovaldi, said the drug generated $12.4 billion in sales last year. Massachusetts Medicaid health plans alone paid out about $65 million in Sovaldi-related claims, according to the Massachusetts Association of Health Plans.
Even with their steep upfront costs, however, the longterm math for medications like Sovaldi seems to make sense — a draft report from panel of 32 medical specialists earlier this summer said the pills are cost-effective. That’s because Sovaldi and similar hepatitis C treatments are taken for only a few months and cure patients of a lifelong condition that can otherwise eventually lead to hundreds of thousands of dollars in medical bills.
Gauging the price-versus-value of other novel treatments on the market or in development usually won’t be as obvious, and will force hard choices on the part of payers, providers, and consumers. No matter what pressures are used to tamp down prices — and various measures are under consideration, including greater transparency requirements and even price caps — they won’t by themselves be enough to make some medicines truly “affordable.” Many drugs target large populations of patients who have to take them for years or decades. By comparison, the cumulative cost of hepatitis C drugs looks modest. Inevitably, determinations about who should get certain treatments will become the norm.
That’s already happening with Praluent, approved in July by the US Food and Drug Administration as the first in a new type of drug that can drastically lower cholesterol levels. Praluent could potentially benefit 10 million people, but its $14,600 a year cost has prompted insurance companies to say they will carefully monitor who gets it. Ideally, decisions about who should receive Praluent or any other medication should be based on discussions between doctors and patients that weigh the benefits and risks of medications against costs.
Stuart Altman, chairman of the Massachusetts Health Policy Commission, worries that the relationship between increased use of drugs and decreased use of health services often isn’t clear, further complicating an objective assessment of their value.
“In the short-term, it’s unlikely that we’re going to see a drug [that works] as dramatically as Sovaldi,” Altman said.
The nation’s rising collective bill for drugs demands unrelenting scrutiny, but equal attention also must be given to what all that money is really doing for patients.