AHIP CEO: Industry Must Address Rising Rx Drug Costs

Health care industry stakeholders should "begin talking" about addressing rising prescription drug costs before the federal government is forced to step in, according to America's Health Insurance Plans President and CEO Karen Ignagni, The Hill reports (Al-Faruque, The Hill, 5/21).

Ignagni made the comment Wednesday during a forum on the future of medicine, which was organized by Atlantic Magazine and included several health care industry officials (Demko, Modern Healthcare, 5/21).

According to Modern Healthcare, the conversation was "dominated" by the high cost of Sovaldi, a new hepatitis C drug that is considered to be "remarkably effective" but costs about $84,000 for a full 12-week course of treatment. The drug's high cost has spurred a debate about whether the government should be more involved in regulating the pricing of specialty life-saving medications.

Discussion

Ignagni said, "The Sovaldi example has brought us to a crossroads" on the issue of high-cost drugs and added, "We cannot sustain six-figure therapies, and we're at the beginning of a trend." She argued that drugmakers "are charging whatever they can get away with," which is an unsustainable model that "will go back to blowing up family budgets and blowing up [Medicare] Part D and blowing up the federal government."

Sharon Levine, associate executive medical director of the Permanente Medical Group, echoed Ignagni's concerns, adding that the increasing cost of specialty drugs extends beyond the example of Sovaldi. She noted, "This isn't an attack on [Sovaldi's manufacturer] Gilead," adding, "Gilead is just the dead canary in the coal mine at this point" (Modern Healthcare, 5/21).

Meanwhile, Pharmaceutical Research and Manufacturers of America President John Castellani said that it takes about $1 billion to get a drug to market and that drugmakers have set their prices in order to recoup their investment (The Hill, 5/21). He added that the market approval process has been largely unchanged for 40 years, noting, "We have to modernize the discovery process" since manufacturers "can only be as innovative as [the] regulator" (Modern Healthcare, 5/21).

Castellani also questioned "whether or not the insurance model is a correct one," and whether it is "sending the right signals out to patients and providers" (Smith, MedPage Today, 5/21). He said that the current insurance model is structured so that drug co-payments tend to be much higher than other insurance co-payments.

Meanwhile, Express Scripts Senior Vice President Steve Miller said that advances in science and new regulations have facilitated the drug approval process, but that those efficiencies have not yet been incorporated into lower prices. "We need efficiencies to actually result in lower prices," he said (The Hill, 5/21).