How life-saving drugs can cost $1,000 per pill

Written by Ben Allen, General Assignment Reporter | Jan 29, 2015 4:00 AM

(Harrisburg) -- Sometimes, when talking about prescription drugs, the discussion shifts to whether they are used as the only solution to a complex problem. But in the case of what are known as specialty drugs, they are often the only option for treatment life-threatening diseases. And yet, these drugs can regularly cost patients as much as $3,000 a month.

Specialty drugs are used to treat serious conditions like hemophilia, multiple sclerosis and hepatitis C.

"We know from the analysis that we did, that the most common drugs would be unaffordable to many, many average families in Pennsylvania," says Maryann Nardone, a project manager with the Pennsylvania Legislative Budget and Finance Committee.

Drugs placed on the specialty tier cost more than others, plain and simple. Insurance companies often increase the cost sharing for the drugs. But these tiers really only started popping up eight years ago, after Congress and President George W. Bush created Medicare’s Part D prescription drug coverage. At first, about two thirds of the Medicare D plans had such a tier, but now nearly every one does.

For those with hepatitis C, Sovaldi is one of the most successful treatments, but it’s also one of those most expensive – at $1,000 per pill.


Photo by Ben Allen/witf

At this Legislative and Budget Finance Committee hearing in September 2014, members heard how more than 40 percent of survey respondents delayed filling a prescription.

"That drug has shown to have a 90-something percent cure rate, so that’s a real change in treatment. That type of drug for somebody who would qualify and it certainly would be available in a way that’s affordable, and that’s life-saving," says Nardone.

Health insurers and drug manufacturers often deflect blame for the high costs.

Insurers say they can’t absorb all the cost and have to ask patients to share in the burden.

Drug companies say they’re charging what it costs to develop drugs – but some health researchers are skeptical of that claim.

Nardone says there aren’t many solutions at the state level because in the tangled web that is health insurance regulations, the state has little say.


"The underlying causes, the real solutions to some of these problems, really require federal involvement. The state doesn’t work, it isn’t an FDA. It can’t replicate an FDA. The state of Pennsylvania unfortunately, doesn’t have too much input, if any, into the Medicare Part D program’s design. Real solutions to these problems will require federal involvement, which is one of the reasons why we called for state organizations to do advocacy at the federal level," she adds.

Despite the obvious limitations on impact, Maryland and Delaware have instituted out of pocket maximums for some specialty drugs to start to take on the problem.

"The reality is that the impact of that kind of measure might not be as large as one might think. The other issue is unfortunately, it does nothing to make drug pricing reasonable and rational, and those kinds of issues really do need to be addressed, especially with all of the changes in pharmaceuticals that are now coming about," says Nardone.

To be fair, these specialty drugs have a limited market – between one and two percent of those on health insurance plans.

So I asked Maryann Nardone why, with so many problems in the health care system, this is worth moving up the priority list.

"Because you could be in the one percent. Today you may not need a drug for cancer treatment, but 5 years, 10 years form now, you may. It’s really that simple. It’s what insurance is supposed to be about."

No bill capping out of pocket costs for specialty prescription drugs, as seen in Maryland and Delaware, has been proposed in the Pennsylvania Legislature so far this session.

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