The Best Treatments Cost Too Much?

Addressing Out-Of-Pocket Specialty Drug Costs In Medicare Part D: The Good, The Bad, The Ugly, And The Ignored

As with most things, it’s more complex than that. The article through the above link covers many of the issues of cost and how they impact individuals. But there is also a system issue that I want to emphasize, a system issue that will become more common as these kinds of disease-specific and condition-specific treatments also become more common. Our existing approach to funding the costs of pharmaceutical treatments, especially for all of us who can’t pay for these treatments out of pocket, will increasingly degrade our ability to benefit from them.

If you watch TV or use the internet, you have seen many drug company ads in recent years for drugs called biologics and another specialty drug treatments. These are drugs that are complicated to make and they reduce inflammation in auto-immune disorders like rheumatoid arthritis, irritable bowel syndrome, psoriasis, or they have highly specific effects on a disease or even a disease in a specific person. They can and do produce remission of the symptoms of autoimmune disorders, cancer, and an expanding range of conditions, something that a few years ago was viewed as impossible,

But, they are very expensive. They are expensive because the research, design, production, and distribution are very expensive. And of course, because the drug companies have us all over a barrel and they have no compunction about exploiting that.

Since Medicare (and Medicaid) pay for medications, and since so many in the disability and aging communities depend on them for their lives, the way Part D (Medicare) and Medicaid approach this cost issue has real implications for whether and how long many of our community members survive.

The clearest example of these system flaws is the use of recently developed antiviral drugs to cure Hepatitis C.

Hep C has been around for a long time and causes a wide variety of medical and health problems. People with Hep C have had it for a lifetime, so the problems it caused, including liver failure and the need for a liver transplant, were simply a future risk for everyone with the virus.

The drugs that cure Hepatitis C eliminate these health problems and their costs in those persons who respond well to the drugs (about 99%). The treatment is successful over about 3 months. But, it has been very expensive (though the price is dropping from the universe level to galactic levels), and Hep C is common enough that state governments have struggled to come up with ways to cover the costs of these treatments in their Medicaid programs.

Treating everybody with Hep C would dramatically reduce the future medical costs that arise from the ongoing treatment of Hep C, as well as dramatically reducing the number of very expensive liver transplants (a reduction of >90%).

But the model that the Federal government and the states use in managing medical costs is a rolling annual budget. So, if they treat everyone with Hep C who would benefit, it will bankrupt this year’s budget. There is no way to, say, prorate the short-term expense over the 10-20 years that Medicaid will be forced to treat the health consequences of Hep C.

So, states are rationing the treatment to those who are sickest now, and simply accepting the reality of the ongoing medical management of people with Hep C with the additional cost plus the eventual costs of actually curing the Hep C.

This is the first, but far from the last, issue that will face Medicaid and Medicare as more and more treatments become genuinely curative and customizable to a specific person and specific disorders.


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