Many Americans have begun to realize they’re paying too much for prescription drugs. And maybe---just maybe---a national conversation on the topic has begun, sparked by the introduction last year of Sovaldi, touted as the most effective way to treat patients with hepatitis C
The problem is Sovaldi’s hefty price tag---$84,000 for a three-month regimen---and the fact that insurers have begun factoring the price they are paying for the drug into the premiums all of us will pay for health insurance in the next few years. UnitedHealth Group announced it had already paid $100 million to cover Sovaldi for its policyholders in the first three months of this year.
To get an idea how Sovaldi could crowd out spending for other healthcare needs, let’s look at Oregon. One of the state’s Medicaid managed care organizations noted that if 30 percent, or 814 members out of a total of 2,466 with hepatitis C, got the drug, the cost would be about $68 million. Compare this to the $72 million the health plan spent for all its pharmaceuticals last year, and you get the point.
I have written about Sovaldi before in a “Thinking About Health” column. Since then a Washington-based group called the National Coalition on Health Care, which counts insurers, employers, unions, providers, and faith-based organizations among its members, has launched the Campaign for Sustainable Rx Pricing. CEO John Rother says it’s an effort to discuss possible solutions for rapidly escalating drug prices. Rother, who is the former chief lobbyist for AARP, and helped pass the Medicare prescription drug law a decade ago, knows a thing or two about drugs.
He told me that since the drug law passed, price increases have been held in check largely because of the greater use of generic substitutes. Not so any more with the debut of Sovaldi and with some 200 specialty drugs in the pipeline, which may be priced as high as Sovaldi. The country, he says, is headed down an unsustainable path when it comes to paying for medicines.