Tug-of-War: Driving Fair Drug Prices

Record-high drug prices, which are out of reach for many patients and unsustainable for payers, threaten to break the health care system. Pharmaceutical companies have more than 7000 drugs in the development pipeline—many of them aimed at large patient populations—that could keep this drug trend growing by double-digits each year.

During a session at the PBMI conference, Steve Miller, MD, chief medical officer, Express Scripts, discussed how exorbitant drug pricing threatens the pharmacy benefit and some of the challenges that will continue to emerge for stakeholders.

Pharmacy spend growth continues, he said noting that it is all about specialty drugs, which is expected to increase to 50% in 2018. The growth of specialty drugs has continued to increase since 2008 and is outpacing traditional drugs based on the number of FDA approvals. A recent Express Scripts report found that specialty drugs to treat rare conditions and complex diseases have accounted for the largest segment of FDA approvals for the past 5 years, as drug manufacturers focus more time and money on developing these treatments. In 2015, the FDA set a new record for the number of drug approvals with 56 drugs getting clearance from the agency. Specialty drugs comprised a majority of the drugs approved last year, with 33 therapies getting the green light from the agency, according to the Express Scripts analysis.

Why is the trend increasing? Dr Miller attributed it to price inflation and higher utilization. “Never before have we seen such high prices on medications that are used by so many,” he said. There are more than 7000 potential drugs in development, with most aimed at treating the high use categories of oncology, neurologic disorders, and infectious diseases (Table). High-cost therapies for non-orphan conditions, particularly for cancer, high cholesterol, and Alzheimer’s disease, will continue to increase the population of patients with high annual drug expenditures.

Specifically focusing on cancer, Dr Miller said the cost of care will continue to increase, representing a significant challenge to patients and the overall health care system. Because cancer is becoming a chronic disease, it could require more complex, costly, and long-term treatment. The average annual cost of cancer treatment for the estimated 14 million living with cancer is more than $100,000, he said.

Dr Miller said, “We need innovative approaches to keep medicine within reach of patients and payers.” For instance, pharmaceutical companies need to show better judgment in pricing, support biosimilars, reform the patent system, and reduce international price disparities. The federal government needs to boost National Institutes of Health research, better fund the FDA, adjust malpractice laws, and bring cost into the care equation. Payers need to accept payment reform, advocate for policy changes, and work together for the common cause.

“All stakeholders must be involved to a create a sustainable path forward,” he said. —Eileen Koutnik-Fotopoulos