But there might be other ways to address rising drug costs.
In fact, several options are already being used by hospitals, counties and even other countries. Each has the potential to help reduce the overall cost of care in a novel way that doesn’t depend on the pharmaceutical industry to police itself on pricing.
How can we make prescription drugs more affordable in the U.S.? It takes creativity.
Via Wikimedia Commons
Civica Rx is a new nonprofit generic drug company formed by a consortium of philanthropies and health care systems to provide access to essential medications that are frequently in short supply in hospitals, leading to serious delays in care for patients nationwide.
The current plan is to either manufacture or contract with trusted partners for 14 hospital-administered generic drugs to ensure that there will be an adequate supply at a reasonable cost. More than 750 hospitals have joined the venture, with the hopes of stabilizing the generic market for these particular needed medicines, and providing a lower-cost, long-term solution to the chronic shortages that directly impact patient care.
Major centers, including the Mayo Clinic, Intermountain Healthcare and Trinity Health have pledged to participate in these efforts, with the first product expected sometime later this year.
Importing medications from Canada is another chosen option for some American cities and counties. The company CanaRx has been a provider of medications for 500 cities and counties that are actively participating in efforts to cut the costs of prescription drugs by having medications sent from other countries, including Canada, England, New Zealand and Australia.
Although this violates the current rules that ban importation of prescription medication, the cost savings are enormous for patients, and in some cases the practice has been going on for 15 years.
Our entire health care system depends on finding a way to continue the needed discovery of new medications while not relying on higher prices in the U.S.
The Food and Drug Administration recently sent a letter to warn users of the potential harm of foreign drugs, but to date, consumers have not been prosecuted for importing medications for personal use. In addition, there have not been any reports of people who were harmed by medications provided by mail through CanaRx.
Australia has also addressed the high cost of medications with a different model of purchasing that guarantees revenue directly to the company for an unlimited supply of medication for a specific health condition. Four years ago, the Australian government signed agreements with several big pharmaceutical companies, providing a set financial payment for an unlimited amount of hepatitis C medication for anyone who is diagnosed with the condition who needs to be treated for the five-year term of the contract.
The New England Journal of Medicine reported this approach provided a potential cost savings of more than 90 percent compared to what patients in the U.S. would pay for the same course of medication. ($7,352 per course versus $72,765 before rebates in the U.S.).
The goal was to provide access to the medication for all those that need it, while also giving enough incentive to the company to make a profit acceptable to cover the cost of the research, development and manufacturing of the product. This novel arrangement is being considered by Louisiana as well.
Many Medicaid patients with hepatitis C require state funding for their medication. The estimated cost to treat every potential patient is not sustainable in many states due to the high cost for a course of treatment.
Having access to the medication for a set fee might make it more accessible to anyone with the infection to be treated, which reduces the chance of additional infections by curing those who might otherwise transmit the virus to others. In a survey done last year, 97 percent of prison inmates were not being offered the medication due to cost concerns.
Given the complexity of the current reimbursement structure for pharmaceuticals, and the lack of any cohesive government plan to negotiate lower costs for commonly used medicines, these different approaches have each found a way to address the issue.
No matter what political party is in charge, the ever-increasing cost of pharmaceutical drugs is a problem that crosses the aisle and needs to be addressed.
Our entire health care system depends on finding a way to continue the needed discovery of new medications while not relying on higher prices in the U.S. to support the majority of the industry costs.
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Kathleen Kozak, M.D., is an internal medicine physician at Straub Clinic and Hospital. She is also a part-time medical director for UHA Health Insurance and is the host of “The Body Show” on Hawaii Public Radio.