As the public focus on new, innovative diabetes and anti-obesity medicines has increased, so have attempts by insurers and others to distort the facts about the potential costs to the health care system.
We shouldn’t be surprised.
Every time new groundbreaking medicines are approved insurance companies claim these life-changing innovations will bankrupt the health care system.
Here’s what it looks like: overestimate the potential costs of providing access to new transformational medicines, ignore that payers leverage competition to extract significant discounts that lower the costs of brand medicines, undervalue the savings from treatment and prevention, and overlook that medicines are the only part of the health care system where prices go down over time.
Insurers use these scare tactics as an excuse to put in place unnecessary and burdensome restrictions or to deny coverage altogether. Their answer to health care is to simply not pay for it.
Yet, as we’ve seen with life-changing treatments and cures for high cholesterol, Hepatitis C, and others, claims about the financial havoc to come have turned out to be false. In fact, we saw just the opposite because we have a competitive market that results in significant rebates and discounts, and eventually low-cost generics and biosimilars.
What was said about innovative cholesterol-lowering medicines, called PCSK9 inhibitors:
- CLAIM: ICER predicted the one-year budget impact of these medicines to reach $7.2B.
- REALITY: Data shows annual spending on these medicines was just 2.7% of ICER’s prediction.
- CLAIM: Express Scripts argued in 2015, “It is clear that PCSK9 inhibitors are on a path to become the costliest therapy class this country has ever seen.”
- REALITY: A few months later, Express Scripts stated, “We feel very confident we can manage this, and this won’t mess up our clients’ budgets in 2016.”
- CLAIM: A 2015 study in the New England Journal of Medicine argued that annual premiums for every American would increase by $124 from the uptake of PCSK9 inhibitors alone.
- REALITY: 2016 Avalere data showed increases for monthly premiums attributed to ALL prescription drugs was only $3.29.
What was said about groundbreaking new Hepatitis C cures:
- CLAIM: PricewaterhouseCoopers predicted sales for one Hepatitis C treatment would hit $2.9 billion in year one.
- REALITY: The actual first-year sales were only 28% of that prediction.
- CLAIM: Express Scripts predicted in July of 2014, “…this particular drug will break the country… It will make pharmacy benefits no longer sustainable. Companies just aren’t going to be able to handle paying for this drug.”
- REALITY: Express Scripts said six months later: “The price is sufficiently low that we can go to our clients and say that they can treat every patient with hepatitis C.” The company went on to say later, “Our clients will save more than $1 billion this year on hepatitis C medications…”
- CLAIM: In 2014, AHIP claimed, these treatments would have, “…a tsunami effect across our entire health care system.”
- REALITY: In 2015, the NYT Editorial board wrote, “Competitive market forces and hard-nosed bargaining” make ‘tremendously effective’ new hepatitis C medicines not just more accessible to ailing patients — but also offer good value to the U.S. health care system.”
These are just a few examples, but looking back, we consistently see this story repeat. A study from the Partnership for Health Analytics (PHAR) looking at 25 predictions of the cost of new medicines over a five-year window showed almost half of those predictions were off by more than $1 billion.
This rhetoric isn’t just misleading; it leads to real access barriers and restrictions for patients who rely on medicines.
In the case of anti-obesity medicines, data shows discounts and rebates already lower the net costs of treatments by as much as 79%. A recent analysis that looks at net spending shows spending is far less than recent reports that overlook these substantial negotiations.
We shouldn't give insurance companies another free pass to find more reasons to discriminate against people who need medicines. Instead, our focus should be on incentivizing the development of and expanding access to new innovative medicines that treat and prevent diseases.
Alex Schriver
Alex Schriver currently serves as Senior Vice President of Public Affairs at the Pharmaceutical Research and Manufacturers of America (PhRMA). Schriver leads the communications team responsible for earned, paid, digital and social media, as well as executive visibility. Schriver has extensive experience in communications, campaigns, and crisis management. He has advised global corporations, government leaders, and corporate executives throughout his career.
Alex Schriver
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"Critics repeat same, misleading narrative on potential “costs” of new medicines"
Obesity
Drug Cost
Health Insurance
Critics repeat same, misleading narrative on potential “costs” of new medicines
"Critics repeat same, misleading narrative on potential “costs” of new medicines"