Transcript Leigh Purvis - healthcareroundtable.org

Title text here
Consumer Perspective on Containing Drug
Costs
Leigh Purvis, Director, Health Services Research
Overview
• Why do prescription drug issues matter to
AARP?
•
AARP perspective on specific issues
•
Outlook for the future
AARP
2
Older adults use a lot of
prescription drugs
• Older adults use more prescription drugs than any other segment of the
population
Percent of population
37%
27%
20%
17%
11%
7%
9%
12% 12%
8%
5%
1%
Age 12-19 years
Age 20-59 years
1 drug
2 drugs
3-4 drugs
Age 60 and over
5+ drugs
• Chronic conditions are highly prevalent among older populations
AARP
3
Treatment costs
can be extraordinarily high
• Many new products are entering the market with extremely high prices
(e.g., Sovaldi)
o Annual costs can range from $25,000 to $400,000
o Increased focus on biologics, orphan drugs, personalized medicine
• Patient population sizes are growing
o New cholesterol medication for ~10 million patients
 Expected cost: $10,000 per year
AARP
4
Medicare can lead to
high cost-sharing
• Part B beneficiaries are responsible for 20% of their prescription drug costs
o
Part B does not cap out-of-pocket spending
• Part D plans are increasingly using coinsurance
o Cost-sharing is considerably higher than employer-sponsored plans
o Out-of-pocket spending is limited by catastrophic cap
 However, still responsible for some cost-sharing in catastrophic
(e.g., Humira is still over $100/month)
AARP
5
Private insurance is
following Part D’s lead
• An increasing number of employer-sponsored plans have created a fourth or
even higher tier of drug cost sharing
o The average copayment for a fourth-tier drug is $83 and the average
coinsurance is 29%
• Most exchange plans rely on coinsurance for drugs on Tier 3 and 4, which
can result in extremely high cost-sharing
o Average coinsurance for Silver and Bronze plans is 40%, some as high
as 60%
• The “relatively low” cost-sharing for expensive specialty drugs is threatening
to increase cost-sharing for non-specialty drugs
AARP
6
Patient assistance
programs are not a
cure-all
• While helpful, programs can be less than generous
• Patient assistance programs typically do not help insured patients
and have very low income thresholds
o Some also require beneficiaries to spend a certain amount of their
income before they can participate
• Each pharmaceutical company has its own qualifications, forms,
processes for refills, and rules for re-qualifying
o Companies can have a different program for every drug they
manufacture with different eligibility requirements for each drug
AARP
7
Overview
•
Why do prescription drug issues matter to AARP?
• AARP perspective on specific issues
•
Outlook for the future
AARP
8
AARP’s long-standing
areas of interest
• Tracking drug price trends
• Increasing generic utilization
• Secretarial negotiation
• Rebates for Medicare Part D low-income subsidy beneficiaries
• Pay for delay
AARP
9
AARP perspective
on biologics and biosimilars
• AARP strongly opposes providing brand-name biologic manufacturers with
12 years of data or market exclusivity
• AARP also believes that evergreening should be prohibited
o Manufacturers should have to demonstrate a clear, significant clinical
advantage over the reference product in order to receive an additional
period of exclusivity
• Different INNs could lead to prescriber and patient confusion and possibly
impact patient safety
• State legislation: If FDA deems interchangeability between products, the
process for biosimilar substitution should be the same as the process for
traditional generic products
AARP
10
AARP perspective on
efforts to limit costsharing
• Complicated issue since we focus on beneficiaries and government
programs
o Long-term/broader implications are often pushed aside
• Very little evidence higher-cost drugs are better than less expensive
existing alternatives
• If effectively tie plans’ hands, they will find another way to limit access
o Growing concerns about access/discrimination due to formulary
design
AARP
11
AARP perspective on
efforts to increase
innovation
• Incentives for innovation need to be appropriately balanced with ensuring
that new treatments are safe, effective, and affordable to consumers
• FDA’s approval times are consistently faster than its regulatory counterparts
in other countries
• Concerns about safety of products approved under some form of priority
review
• As long as drug manufacturers continue to charge excessively high prices,
Congress should ensure that measures to extend drug manufacturers’
monopolies and increase the financial burden on taxpayers and government
programs are extremely limited
AARP
12
Overview
•
Why does do prescription drug issues matter to AARP?
•
AARP perspective on specific issues
• Outlook for the future
AARP
13
Key word: unsustainable
• The costs associated with prescription drugs are not sustainable
for patients or payers
• Efforts to reduce costs could save taxpayer-funded programs
like Medicare and Medicaid billions of dollars
• Many patients will be unable to afford their prescription drugs if
competition does not provide some level of price relief
• Medical advances are meaningless if no one can afford to use
them
AARP
14
Leigh Purvis
Director, Health Services Research
[email protected]
AARP Public Policy Institute
www.aarp.org/ppi
Twitter:@aarpdrugwonk
www.Facebook.com/AARPpolicy
Blog: www.aarp.org/policyblog
AARP
15