The chances of some variety of health insurance reform passing are looking more likely and big pharma is getting ready.
By raising branded drug prices nine percent (so far) this year., and this at a time when the Consumer Price Index fell by 1.3%.
You may recall the big press event when pharma and the White House announced their ‘agreement’ whereby pharma would agree to not fight reform in exchange for reductions of about $8 billion a year in pharma costs. That deal is either off the table, or it wasn’t carefully enough crafted on the front end, because drug companies have been steadily raising prices for brand drugs this year, evidently in anticipation of big changes in the future. In fact, it looks like the increase so far this year more than compensates for the agreed-upon ‘cuts’ announced earlier.
Readers will remember the last time drug prices jumped significantly was just after the Medicare Part D program went into effect, when the largest quarterly increase in years just happened to coincide with the beginning of the program.
There are political as well as practical implications of these price increases. From a political perspective, pharma may be doing to itself exactly what healthplans did with the disastrous release of the PwC ‘report’. Health plans thought they had a deal with the Administration, only to infuriate the White House and Congressional Democrats with the flawed and incomplete ‘analysis’ (even though the concept was right and conclusions accurate, the presentation killed any chance of objective consideration).
With the release of this analysis, Congressional Democrats have yet more evidence of the profit-driven mentality that many believe is directly responsible for our dysfunctional health care system. Do not be surprised if the reaction from Congress is loud, fast and brutal.
What does this mean for you?
This is more of an issue for group and Medicare/caid operations than for workers comp, as comp has a greater percentage of generic fills. But there’s no doubt all payers’ drug costs are going up significantly this year.
If you’re a PBM, get ready to explain higher drug prices.
Nov
16
It will be interesting to see how far refusing to pay for physician-dispensed drugs goes – this is a legal practice, and as some docs have pointed out, they’re not all abusing it (although most are). What may happen is that some poor overworked family practice doc who’s only marking up 10 or 15% will be put forward by the industry as a test case, and the outraged judges of CA (or LA) will once again self-righteously decry the evils of the insurance industry. But I could be, and often am, wrong.
I’m really quite alarmed by the potential for abuse in medical foods and nutriceuticals. This overlaps with PDD, but only in part, and is also, for the most part a legal practice, albeit mostly unsupported by data that it improves outcomes. What will likely be needed is a regulatory approach to this on a state-by-state level, and since we’re talkin’ Ragin’ Cajuns here (what state did Billy Tauzin represent, again, class?) I won’t be expecting much. This is also an issue that gets the Tom Harken crowd really exercised. The “we don’t pay them” approach will work a little better here, but only the lawyers will really get rich, as usual.
Great, this will lead to more non-compliant patients for prescribed treatment; which in the end will lead to higher healthcare costs. While big pharma wins, ailing patients suffer… what a shame.
One area that Americans need to explore is education regarding taking responsibility for choosing a healthy lifestyle. Making better choices on a daily basis can lower your risk of disease, which can lower your health costs overall (short term and definitely long term). Healthy Americans don’t need MEDS!