Every day advances in medical innovation saves lives. Patients who just a few years ago might have died from cancer, heart disease or HIV/AIDS can turn the page and continue productive lives. For those who have returned from the brink, these extra years are nothing short of a miracle.
This is especially true of HIV/AIDS. In the early 1990s, AIDS was a death sentence. However, innovative new medicines – highly active antiretroviral therapies known as HAART – changed the landscape, transforming a deadly disease into a chronic, highly manageable condition. The transformation was stunning. In 1990, HIV/AIDS was the seventh leading cause of death in the United States. By 2010, it had fallen to 23rd. In 1995, the death rate was 16.2 per 100,000; by 2010 it was 2.6.
If HAART had simply extended life, that alone would have been a tremendous public health success. Criticized at the time for their costs, these therapies have had a far-reaching impact on health care and the entire economy. Better drugs meant fewer and shorter hospital stays, improved quality of life and reduced health care costs.
These ripples boosted the economy. By helping the nation avoid 862,000 premature deaths, patient survivors earned $857 billion in cumulative wages, far outpacing the costs associated with these medicines and related health care expenses and generating $615 billion in net economic value in the United States.
While these gains are impressive, unfortunately they can also be reversed. In recent years, insurers have dramatically increased out-of-pocket expenses for so-called specialty drugs, creating new barriers to life-saving medications. For example, many insurance companies are imposing “specialty tiers” and co-insurance models that dramatically increase patients’ costs beyond what they are already paying in monthly premiums.
Patient advocates are taking notice. Recently, a consumer group sued Aetna in San Diego federal court for restricting patients to the company’s own mail order pharmacy and raising out-of-pocket costs, potentially doubling the costs of some medications. In Florida, patient groups filed a federal discrimination complaint against insurers, alleging that HIV patients were being required to pay up to 50 percent of the cost of their medications.
To put it in perspective, 57 million Americans rely on specialty drugs for HIV/AIDS, cancer, hepatitis C and other life-threatening conditions. These are the nation’s most vulnerable patients, whose lives depend upon prompt access to the best medicines.
Even more troubling, these cost-shifting strategies disrupt care. As co-pays increase, patient compliance goes down, leading to increased hospitalizations and other medical costs. Ironically, many of these expenses will be borne by insurers and ultimately drive up health care costs for everyone. Patients will get sicker and the medicines that could restore their health will lie unused on pharmacy shelves.
Singling out specialty drugs undermines the very purpose of insurance. Patients and their families should not be overwhelmed by sticker shock when they need the most help. It’s also unnecessary, as drugs constitute only 9 to 13 percent of annual health care spending, a figure that has remained constant for more than 50 years. These medications are the most efficient path to better care, restoring health while reducing other health care spending. Medicare saves $2.06 for every dollar it spends on new drugs.
This is an unfolding tragedy with long-term implications. Consider the challenge of Alzheimer’s disease. The number of Americans with the condition will increase to about 13.5 million in 2050. By then, the cost of Alzheimer’s care will exceed $1.1 trillion. According to a new study by the Alzheimer’s Association, a new medicine to delay Alzheimer’s onset by five years – again sure to be costly to develop and bring to patients – could reduce that to $734 billion, saving $367 billion.
Indeed, researchers in California and around the world are working to develop such new medicines. But unless we develop a more patient-centered cost structure, this could all be wasted effort. It’s not enough to invent the drugs and ensure people have health insurance – patients must have timely and affordable access to these treatments.
We call on insurers, biopharmaceutical companies, patient advocates, their doctors and policymakers to come together and protect access to life-saving medications. Passing costs on to patients is not the right approach – clinically or economically. Specialty tiers and other practices are undermining effective health care and are potentially discriminatory. Medical innovation is a pipeline for miracles that we must work to preserve – and provide for all – together.
Sara Radcliffe is president & CEO of California Healthcare Institute, a nonprofit organization that represents the state's biomedical companies and research institutions.