The Cost of Pharmaceuticals

JULY 08, 2015
Fred M. Eckel, RPh, MS, ScD (Hon), Pharmacy Times Editor-in-Chief
There appears to be a growing uproar in both the lay press and professional literature about the high cost of many pharmaceuticals. Is such an uproar justified? What should be done about it, if anything? Perhaps this is a topic best left to someone else. It needs to be addressed, however, so I will at least weigh in with my observations.

Ed Silverman’s Pharmalot column headline in the May 13, 2015, Wall Street Journal read, “Prescription Drug Costs Rose Faster Than Ever for Many Americans.” This column was based on the results of an Express Scripts report that suggest that the prices for new hepatitis C and cancer treatments are driving the costs of prescription drugs to new highs for more Americans. Throughout my practice, brand name drugs have always had higher costs, the argument being that the higher price was justified because it was expensive to get a new drug to market.

Although the research process is expensive, only a small percentage of drugs that begin that process make it to market. In the United States, these costs are covered by being included in the price charged for a new drug. This policy has resulted in payers in the United States supporting much worldwide pharmaceutical research. Although efforts over the years have tried to change this policy, it persists, in part, because when a generic version of a brand name drug hits the market, the drug price drops dramatically. However, that is changing, too, as certain older non–patent- protected drugs become more expensive.

The rapid price escalation of these agents has hit most community pharmacies because the reimbursement level is not always increased by pharmaceutical benefit managers as quickly as the price escalates. Pharmacists frequently complain that their purchase price for a generic drug is more than the total reimbursement they receive for dispensing the product. There may be a lot of reasons for this generic price inflation, but many in pharmacy believe the consolidation of drug manufacturers plays a role.

Quickly becoming apparent to many pharmacists is that these high prices are often not related to the safety, efficacy, or comparative effectiveness of the generic drug. Some have even begun to question the behavior of drug company policies, feeling they are trying to unfairly take advantage of payers. I am still Pollyanna-like enough to believe this is the exception and that this problem will best be addressed when all parties begin to collaborate. We see signs of this occurring now. Because of the Sovaldi effect, some drug makers are now talking to payers about potential costs long before drugs hit the market. They are also undertaking drug trials to demonstrate a drug’s cost effectiveness, as well as show its safety in particular groups of patients. These efforts hope to reduce sticker shock when the drug hits the market, but should also ensure that the product is only used with appropriate patients. A recent article suggested that a pharmacy benefits manager was seeking deals with pharmaceutical companies that would set pricing for some cancer drugs based on how well they work. Both of these examples show the value of collaboration. These efforts may eventually bring more transparent costs for prescription drugs.

Today, community pharmacists are often the ones to deal with a patient’s reaction to the cost of a drug. They can choose to blame everything on the manufacturer or they can try to educate the customer about the pricing structure of the pharmaceutical industry— which is not an easy task. Another suggestion might be to work collaboratively with the patient’s physician(s) to develop a more cost-effective drug regimen. This has always been an important role of pharmacists because they can deliver more efficient, effective, and personalized drug therapy.

Pharmacists can also promote adherence so that the best outcome is achieved from the prescribed drug therapy. The rising concern about high drug costs is now transforming this longstanding role of the pharmacist into the newest opportunity to be a valuable health care team member.

Mr. Eckel is professor emeritus at the Eshelman School of Pharmacy, University of North Carolina at Chapel Hill. He is also emeritus executive director of the North Carolina Association of Pharmacists. A lifelong advocate for the profession of pharmacy, Mr. Eckel has lectured on pharmacy issues and trends in all 50 states and has traveled to 6 continents to promote and educate audiences on the role of the pharmacist.

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