Groundbreaking treatments for pervasive diseases such as hepatitis C could cure millions of Americans, but staggering prices eclipse this potential. California has made significant gains in increasing access to health care, but to sustain this progress, we must address affordability.
While the pharmaceutical industry spotlights the life-changing potential of specialty drugs (“Insurance practices bar access to care,” Viewpoints, March 29), answers to basic questions are elusive. What justifies an $84,000 price tag for a hepatitis C drug that costs just $1,000 elsewhere? When a life-saving medication costs 80 times more here than in other countries, it’s fair to ask why.
Assembly Bill 463, which goes before the Assembly Health Committee on Tuesday, is a reasonable step toward understanding how drugs are priced. The bill requires pharmaceutical companies to report select information about drugs priced at more than $10,000 per year. Policymakers and consumers need this information to engage in real discussions about how to achieve more sustainable pricing.
Just last year, as spending slowed in other health care sectors, spending on prescription drugs grew more than three times faster than the prior year and faster than it has in more than a decade. These skyrocketing prices are not just impacting individuals and employers through their rising health care premiums. Federal and state budgets are reeling from explosive increases in pharmaceutical prices.
With the state paying the health care tab for one-third of Californians through Medi-Cal, CalPERS, the AIDS Drug Assistance Program, state hospitals and prisons, the taxpayer liability for increased drug costs is significant. The governor is setting aside a whopping $300 million to supplement existing state funding for these hepatitis C drugs. This is $300 million that could be used for other vital state programs.
Almost half of the top 100 drugs sold in the United States cost more than $10,000, and there is no sign that these prices are slowing. Six-figure oncology drugs are becoming commonplace, and new cholesterol medications are expected to cost as much as $10,000.
The Affordable Care Act brought transparency to nearly every corner of our health care system, with the exception of drug costs. Consumers, governments and employers have more information tools than ever before. Health plans, hospitals and physicians all submit cost- and quality-related data to regulators. Considering the rapid growth in drug prices, consumers and policymakers will benefit from increased transparency from pharmaceutical companies.
Charles Bacchi is president and CEO of the California Association of Health Plans.