If you’re reading this – if you’ve been conscious and alert for the past several decades – you already know that health care costs are out of control. You feel it every time you see a doctor. Every time you pick up a prescription. Every time you interact with our nation’s health care system.
It seems like everyone has ideas on how to address those costs: insurers and health care providers are collaborating on quality incentives and cost controls, consumers are taking a more active role in their health care decisions and lawmakers are drawing up new rules intended to shield consumers from high costs.
But not all of these solutions are helping. In fact, a proposed law in our state would actually cause drug prices to rise.
Drug Prices: Out of Sight
North Carolina’s HB 206/SB 152 is a bill that would cap out-of-pocket costs for specialty drugs like oral chemotherapy medications. On the surface, that sounds like a great idea. But a great idea – even a well-intentioned one – isn’t always what it seems.
HB 206/SB 152 does nothing to address actual costs of specialty drugs. In fact, it hides price tags from consumers, shielding them from knowing the true cost of what they’re buying.
In effect, HB 206/SB 152 would provide an invisibility cloak for drug companies to hide price hikes.
To influence prices, consumers have to be able to exert pressure on prices. They have to be able to do comparison shopping to decide which product offers the best value. But when consumers don’t see price tags, they can’t make informed decisions about what’s right for them. The most expensive treatment option might not be the most effective.
Same Pills, Different Prices
While there are many medicines that have gotten more expensive in recent years, oral chemotherapy drugs are on a whole other planet from other price hikes. Since 2000, the cost of oral chemo drugs has climbed by more than 500 percent. For some perspective, consider that the average cost of a gallon of milk was $2.78 in 2000. If the price of milk had risen 500 percent in the last 17 years, a gallon of milk would cost nearly $17 today.
To be more specific, chemo pill Pomalyst was brought to market in 2014 and the cost has already increased by 21 percent, to a total of $171,552 for a year’s worth of medicine. And these crazy prices are even crazier in the US. A course of treatment with a pill called Xtandi costs $39,000 in Japan – but the price is $129,000 here in North Carolina. That’s for identical pills.
Just Say No to Drug Price Hikes
North Carolinians can’t afford this. And HB 206/SB 152 will only make things worse by limiting insurers’ ability to negotiate prices with drug companies. This is one of the most important tools insurers use to protect consumers from unreasonable costs. Without negotiation, the makers of life-saving medicines will simply be able to charge whatever they wish.
Raise your hand if you’re in favor of that. Anyone?
Here’s what you need to know:
HB 206/SB 152 doesn’t help North Carolinians. It doesn’t lower the cost of drugs – and research suggests that capping copays would likely result in higher prices. It doesn’t increase transparency by drug companies. It doesn’t lower insurance premiums.
On the other hand, HB 206/SB 152 would succeed on several fronts:
It would allow drug companies to hide price increases. It would cause North Carolinians to pay more for health care. It would allow the price of oral chemotherapy treatments to continue climbing. And it would cause health insurers to stop covering certain medicines.