The Necessity of Addressing Cost Burden on Patients

Drug prices may not be sustainable, but what really matters is not the price of the drug, but what the cost is to patients, said Ted Okon, executive director of the Community Oncology Alliance, and Daniel Klein, president and executive director of the Patient Access Network (PAN) Foundation, during a panel at the University of Michigan Center for Value-Based Insurance Design (V-BID), V-BID Summit, held March 13 in Ann Arbor, Michigan.

More and more, patients are paying off the list price, which is much higher than the net price. The new products coming out are more expensive than treatments in the past, but they are better, too.

“We have a lot of good things going on right now,” Okon said. “What’s the bad news? How do we pay for it?”

Klein noted that PAN Foundation is concerned about the new products coming through the pipeline and their cost and what these new treatments mean for the sustainability of PAN, which provides financial assistance to patients who are underinsured.

Access to these novel therapies is really tied to the out-of-pocket (OOP) costs for patients, he explained. Data has shown that $50 is about what patients will pay before they start to become nonadherent, and when more and more people are faced with high-deductible health plans that requires they spend between $2500 and $3000. So, all that cost is hitting at the beginning of the benefit year.

Klein used the hepatitis C drugs as an example. The Institute for Clinical and Economic Review has said that these drugs are a bargain and a great value for most health systems priced at $40,000 a year, but that comes out to a $5000 OOP cost for patients under Medicare Part D. PAN Foundation has found that 4 in 10 patients they help are skipping or cutting doses before they get a grant and for those with incomes under $25,000, half are skipping or cutting doses. In comparison, more than 90% of patients who get a grant from PAN Foundation are adherent to their medications.

This data, according to Klein has shown that OOP costs are more directly important to patients than the over price of a drug.

“Drug prices are clearly important, but from our perspective as a safety net provider, we are faced, day to day, with patients calling us who can’t afford to start their treatment or to stay on their treatment,” Klein said.

Okon highlighted that in cancer there is a growing disparity between the list price of the drug and the real net price of the drug. He explained that with middlemen, such as pharmacy benefit managers (PBMs), the rebates may get passed along to employers or the health plan, but “I don’t care because they don’t get passed onto the patient,” he said.

Attention to PBMs and rebates has increased recently. HHS has proposed to end drug rebates in Medicare Part D and in Medicaid managed care plans, and the Senate Committee on Finance is following up its hearing on drug prices with 7 executives from pharmaceutical companies with a hearing with the top PBMs.

Okon predicted that a lot of the focus during the hearing will be on what happens to these rebates and to patients who cannot afford their medication.

The cancer space, he added, has a good indication of what is high value and what is not, but the challenge remains about how to finance that value. If there is a $1000 drug and there is a $10,000 drug, the cost to the patient is going to be more for 1 product over the other.

“It doesn’t mean that price is everything…,” Okon said. “It means, it’s affordability, and it means…it’s cost to patient.

Not only is PAN Foundation getting more calls from patients who cannot afford their treatment, but providers are spending more time finding companies who can provide financial assistance, he added.

“Patients are struggling more to pay for their products,” Okon said. “So, the realism of this is that providers have to do more to help the patients. Patients are lost more.”

Klein thinks that in the near future, there will be a cap on Medicare Part D, which would help a large number of beneficiaries. He’s also hopeful that PBM rebates get replaced with a point-of-sale discount that actually lowers the cost for patients in a meaningful way.

Okon is a little more skeptical that anything can be done in the near term, and he especially does not think anything will get done until after 2020 and it will depend on who is in the White House and what control of Congress looks like. But there is one area where he is more hopeful. Employers, he said, are getting fed up with the system and the status quo and he is liking some of the innovation he is seeing from employers.

“I’m hoping they drive [change] and they basically drive the Congress as opposed to Congress driving the other side,” Okon said.