Posts Tagged: prescriptions

Medication Affordability Impacted by COVID-19 Says New Survey

Posted March 24, 2021 by Beth Osborne & filed under Pharmacy.

COVID-19’s impact on healthcare, the economy, and everyday life will stay with us for some time. One consequence of the pandemic is the ability of patients to afford their medications. GoodRx published a recent survey on mediation affordability, with some important takeaways for pharmacy and medical leaders.

In this post, we’ll dive into the data and what it means for the healthcare ecosystem.

Almost 40% of Americans Struggled with Medication Affordability

Image: GoodRx

The survey’s biggest takeaway is that a large portion had difficulty affording their prescriptions last year. The survey received answers from over 1,000 individuals that take regular drugs for chronic conditions. Almost 30% said that out-of-pocket costs for their medications went up.

In the last year, many have lost their jobs and access to health insurance. Some individuals even said increased prescriptions affected their ability to afford necessities. Choosing between food, shelter, and medication shouldn’t be a battle, but it is. That was the reality for many before the pandemic. Now more are vulnerable.

Patients Incur Debt to Pay for Meds

The survey also asked how people were paying for their prescriptions. Many tapped into their savings if they had any. Over 20% of those surveyed said they took on debt or filed bankruptcy to afford their medications.

Medication Affordability Increased Medication Nonadherence

Medication nonadherence was already a problem that costs the healthcare system substantially, with expensive hospitalization and deaths. Per the data, patients delayed getting refills, rationed, stopped taking them, and other behaviors.

Image: GoodRx

That’s dangerous and risky for patients and overburdens already maxed out hospitals. Undeniably, the pandemic made healthcare even less affordable. Nearly 24% of respondents said COVID-19 affected their ability to afford insurance.

What’s the Solution for Medication Affordability?

It’s a complex problem with lots of stakeholders. Pharma, payors, providers, pharmacies, regulators, and consumers are all at the table, having different expectations and motivations. However, people shouldn’t die or become sicker because they can’t afford their prescriptions.

Some resources are available to supplement patients. Payment assistance programs operate independently but receive funding from pharma. It can be hard to qualify for these. Medicare and Medicaid take care of many of the most vulnerable, but prescriptions can still be very costly to seniors.

There is perhaps some competition in the workings to deliver affordable medication for all. Mark Cuban is getting tin the drug business. He’s working with Cost Plus Drug Company to offer “radical transparency” to drug pricing. The company will manufacture, distribute, and market all generic drugs with a flat 15% margin. They are working to have 100 drugs available in 2021. That could reduce costs across the board and be good for pharmacies and patients.

Other opportunities for prescription affordability are discount programs like GoodRx. Their platform aggregates current prices and discounts for prescriptions by pharmacy. It lets you know which one has the best pricing and offers coupons.

Is Transparency Becoming Industry-Wide?

In these scenarios, transparency is a driving factor. Regulators are attempting to receive that same transparency from pharma and payors. The Transparency in Coverage final rule requires payers and health plans to disclose and post negotiated during prices.

For pharma, there isn’t a federal statute yet. However, multiple states have their own laws that require life sciences organizations to report their WAC (wholesale acquisition cost). Most of these programs are new, so there’s no definitive data on if disclosure will actually reduce drug prices.

Prescription Drug Costs Are Big Piece of Industry Pie

There are many drivers of increased costs in healthcare in the U.S. Prescription drugs continue to take up a large piece of the pie. A new report found U.S. drug prices are 2.56 times higher than other nations. It’s a spotlight issue that affects millions of Americans. Medication affordability was always a problem; the pandemic just expanded the impact.

New Report: U.S. Drug Prices Are 2.56 Times Higher Than Other Nations

Posted February 23, 2021 by Beth Osborne & filed under Healthcare.

RAND Corporation, a research organization, published a new report on U.S. Drug Prices. The report, International Prescription Drug Price Comparisons: Current Empirical Estimates and Comparison with Previous Studies, offers some interesting analysis. According to the study, U.S. drug prices are 2.56 times higher than other nations. The Office of the Assistant Secretary for Planning and Evaluation in the U.S. Department of Health and Human Services (HHS) sponsored the research to discern how much higher prices are in America.

The sponsors were already aware of the fact that the U.S. spends more on prescriptions per capita than any other. The question was how much, and now we know.

About the Study

This study on drug prices is unique because it focuses on differences in costs without considering volume or mixes of medications. They did this by looking at price indexes. The calculations in the report come from 2018 data. The comparison was between the U.S. and 32 other countries.

The pricing model used was manufacturer pricing. Net pricing wasn’t available, which would take into account rebates and discounts. The reason for this is because they aren’t available across the board.

The researchers made comparisons regarding overall pricing as well as brand-name and generic prescriptions.

Key Findings

Overall pricing revealed that the U.S. prices are 2.56 times greater than those of the other countries.
With brand-name drugs, the gap was even greater at 3.44 times. Those that were the most expensive in this category included treatments for cancers or hepatitis C. They can cost thousands of dollars per dose.
Generic drugs are slightly lower in the U.S. than others; however, that group represents only 12% of U.S. spending. Although generics make up 84% of prescriptions sold in the country.
Of the 32 countries, looking specifically at the G7, the United Kingdom, France, and Italy generally have the lowest prescription prices. Canada, Germany, and Japan tend to have higher prices.

Thus, the conclusion is that brand-name drugs are the key component in that overall, 2.56 number. No matter the methodology, brand-name drugs were the high price driver. Even when adjusting U.S. pricing for known discounts, the U.S. remained substantially higher than its peers.

The authors assert that competition among the highest-priced medications could steer costs down. However, these are specialized drugs, so it’s not likely this will happen soon.

Prescriptions Percentage of All Healthcare Costs

The study notes that estimates state that prescription drug spending accounts for around 10% of all healthcare costs. Drug spending in the U.S. rose by 76% between 2000 and 2017. Further, this area is forecasted to increase faster than any other segment.

What’s the Future of Drug Prices?

Currently, the healthcare system has a target focus on the pandemic. Drug companies have put most of their time and effort into a vaccine. Much of the healthcare system is up in the air as to what comes next. New legislation, innovation, and more could all impact the future.

Drug Shortages: FDA Report Identifies Root Causes and Potential Solutions

Posted October 31, 2019 by Beth Osborne & filed under Pharmacy.

An FDA Drug Shortage Task Force recently published Drug Shortages: Root Causes and Potential Solutions. This report examines the root causes of and potential solutions for drug shortages. The report gathered information from stakeholders, research, and an economic analysis of the market conditions impacting the issue.

Root Causes Identified

The report concludes there are three root causes causing drug shortages:

Lack of incentives for manufacturers to produce less profitable drugs

When manufacturers have limited profitability opportunities, they are less likely to invest in older drugs and expanding capacity. Older generic drug manufacturers face intense price competition and smaller margins. If it’s not profitable, then pharmaceutical companies have no incentive to make more, even if there is demand.

Absence of recognition and reward for manufacturers for “mature quality systems,” which focus on continuous improvement and early detection of supply chain issues

Manufacturers must meet Current Good Manufacturing Practices (CGMPs). Mature quality management conforms to CGMPs while also including a performance and patient focus. Technology, process control, and planning support this focus. The problem here lies in the limitation of information. Purchasers have little information related to quality management.

Therefore, the market doesn’t reward manufacturers with price premiums for those that engage with modernization. Nor does it penalize those that do not. Again, there’s no incentive here for manufacturers to invest in manufacturing quality. This leads to quality problems, resulting in shortages.

Difficulty related to the recovery of the market due to disruptions caused by logistical and regulatory challenges

Drug supply chains are more complex than ever before. More production has gone abroad along with the use of contract manufacturers, adding to the intricacy. Most markets respond to shortages by increasing production. With logistical and regulatory red tape, it’s rather difficult to expand production to meet demand.

Drug Shortages Have Real-World Impacts

When drug shortages occur, patient health can worsen. It impacts the ability to treat a disease. Often substitutes don’t have the same effectiveness. A recent study found that 56% of hospitals reported having to change patient care due to shortages.

These shortages often impact the most vulnerable patients. One such example is children with T-cell acute lymphoblastic (ALL). This is a highly treatable cancer. However, the drugs used to treat them are older and more likely to be susceptible to shortage. As recent as 2019, nine of the 11 drugs used to treat ALL were hard to keep in stock.

Another example is the shortage of norepinephrine, a treatment for septic shock. In 2011, it was in shorty supply. Other drugs were used in its place, resulting in more deaths.

Information on current drug shortages can be found on the American Society of Health-System Pharmacists (ASHP) website.

Solving the Drug Shortage Problem

The report also identified possible solutions to the problem with three recommendations:

Create a shared understanding of the impact of drug shortages and the contracting practices that may contribute to them

Even though drug shortages are a well-known problem, little data has been collected and analyzed. The FDA cites three areas that need to be addressed:

Quantification of the harm that drug shortages do to patients
Characterization of shortages
Transparency in private sector contracting practices

Develop a rating system to incentivize drug makers to invest in achieving quality management system maturity

Manufacturers still need to meet CGMP guidelines. But they need to be encouraged with incentives to do more. To accomplish this, a rating system is a good step. It could inform purchasers and even consumers about the quality of the product.

Promote sustainable private sector contracts

With more information about contracting practices and greater transparency could provide a new approach to contracting. With this, the supply of drugs could be more reliable. These contracts could address the root causes by providing financial incentives and rewarding manufacturers for mature quality management.

Additionally, there are currently legislative proposals and FDA initiatives that could help with the drug shortage problem. Those include:

Better and improved guidance on data sharing
Requirements of risk management plans and guidance on how to develop them
Longer expiration dates
Improved pharmaceutical product lifecycle management

There is no simple or sole solution to addressing the problem of drug shortages. Like much of healthcare, there are many stakeholders, each with their own agendas. However, this an issue that cannot be ignored, as it’s impacting patient care. It’s time for all parties to work together to find a clear path to managing what could turn into an epidemic.