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More than 25 million Americans are on statin drugs to lower their cholesterol. Statins have been around for nearly three decades, are safe and effective for most patients, and retail for as little as $48 a year if you get generics. 

A new class of drugs that cleared a regulatory hurdle last week also lowers cholesterol. If the Food and Drug Administration gives a final approval as expected, two new drugs will enter the market. The cost? Anywhere from $7,000 to $12,000 a year.

That stark price difference between the old cholesterol drugs and the new ones is generating hand-wringing in health care. And that’s before the new drugs even hit the market.

New pharmaceuticals, particularly the specialty drugs that treat serious and chronic conditions, are driving medical costs higher. They’re forcing everyone in health care to take a hard look at the value of specialty drugs and whether the cost increases can be sustained.

“Of all the things we spend money on in health care, specialty drugs are the fastest-growing,” says Brian Caveney, MD, vice president and medical director at BCBSNC. “Some are truly life-saving and revolutionary, but they come at a steep cost.”

 

Not for Everybody

Brian Caveney

Dr. Brian Caveney

Last year it was the price of Sovaldi — $84,000 for a full course of treatment — for hepatitis C that captured headlines. This year’s story is the cost of the new cholesterol drugs, known as PCSK9 inhibitors. The drugs will require injection. They work by making it easier for the liver to get rid of so-called bad cholesterol, or LDL.

Caveney says the two new cholesterol drugs stand to make a big difference for patients with a rare genetic condition who can’t take a statin drug and others for whom statins are ineffective. But he worries about the cost impact if doctors prescribe the PCSK9 inhibitors for a broader range of patients.

“We’ll all be seeing lots of drug company ads about these new medicines this summer and beyond. Doctors are going to get excited about trying to prescribe them to their patients.

“They’re the best choice for a small percentage of patients,” he adds. “But for most people, the drugs already in use are very effective and have a long track record. And they’re certainly much more affordable.”

Last week, an FDA advisory panel recommended approval of the two drugs for limited use. Of course, the FDA could expand the use to more types of patients, and physicians could ultimately prescribe more frequently if they determine more patients could benefit. (The brand names of the two are Praluent, marketed by Sanofi and Regeneron Pharmaceuticals, and Repatha, marketed by Amgen.)

Prime Therapeutics, the pharmacy benefits manager for BCBSNC, has done some initial projections on cost and usage. Prime forecasts as many as 2.3 million people in the United States could go on one of the two new medications. The total cost to the health care system would be $23.3 billion a year. For perspective, that’s about what the entire nation of Finland spent on all health care in 2013 — $24 billion, according to the World Health Organization.

 

Complexity = Cost

The use of specialty drugs like the new cholesterol medications and hepatitis C treatments is complicated. Many are substantially more expensive to produce than regular pills. Sometimes these drugs have to be administered by a medical professional, such as the multiple sclerosis drug that requires the patient to be monitored for six hours after the first dosage.

This kind of complexity contributes to the rapid rise of spending on specialty drugs. As a proportion of all prescription drug spending, specialty pharmaceuticals are expected to hit 50 percent by 2018, Prime Therapeutics projects. That’s up from 30 percent just last year.

Then too, pharmaceutical company pricing for specialty drugs plays a role. Sovaldi’s maker, Gilead Sciences Inc., faced a backlash when it put the drug on the market at $1,000 a day. Insurers and pharmacy benefits managers negotiated discounts to make the medication available to patients at lower prices.

Consumers blame drug companies for high prices, according to a Kaiser Family Foundation survey released this week. Nearly three-quarters of Americans call prescription drug prices “unreasonable,” the poll of 1,200 adults found.

Image: Kaiser Health News

Image: Kaiser Family Foundation

Specialty drugs fall into several categories, Caveney says: Some are life-saving, others are important for certain patients, and still others leave a question mark.

Which means it’s imperative for drug companies, physicians and health plans to stay on top of the clinical evidence to see who benefits — and who doesn’t — from each specialty drug. Such evidence can help prevent wasted health care dollars.

“We have to be deliberate about it,” he says. “If you get a $10,000 prescription, you can’t turn it back in if it doesn’t work. And you can’t get your money back if a much more affordable option would have been better.”

[Top image: Shutterstock]

About Kyle Marshall

Kyle Marshall, a senior communications specialist at Blue Cross and Blue Shield of North Carolina, writes about the health care industry and provides communications counsel and support to the company's executive team.

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