[Ip-health] John-Manuel Andriote in the Atlantic on the high cost of medicines for chronic illnesses: Breaking the Cycle of Prescription Drug Costs

Jamie Love james.love at keionline.org
Wed Oct 10 15:52:09 PDT 2012

This article available online at:


by The Atlantic Monthly Group.

Breaking the Cycle of Prescription Drug Costs
By John-Manuel Andriote

Profits from monopolies finance lobbying, which supports more monopolies.
Examining the roots of the dysfunction, and how we can change it without
passing on exorbitant medication costs to the sickest among us


"Until you have a chronic illness, or illnesses in my case," said Taffe,
"you don't really embrace the fact that this isn't just a little problem,
but a life-altering event, not only on the medical side but the financial
side. Then you go, 'Oh my God!' All those years you worked, your savings,
and now it's going to go into this amorphous hole. To what end? I can't
believe we're not smarter than that."


After years of advocating for such rational approaches to public policy as
a health care system that isn't priced out of reach for those who most need
it, economist Jamie Love, director of Knowledge Ecology International, a
non-profit advocacy group that focuses on intellectual property issues
affecting access to medications, now has a very personal reason for his
work. His wife, diagnosed with cancer, needs a medication that costs
$100,000 per year. She will die without it.


Earlier this year, Congressman David B. McKinley, a Republican from West
Virginia, introduced legislation that would give patients with similarly
chronic, disabling, and life-threatening conditions access to drugs that
can mean life or death. The Patients' Access to Critical Treatments Act of
2012 (PACTA) would allow millions of insured Americans to pay the same
fixed co-pays for certain vital medications that they already pay for other
classes of drugs. The bill would halt the insurance industry's practice of
shifting these medications into a fourth 'specialty' tier that requires
patients to cover a percentage of their cost rather than the usual fixed

Insurers traditionally have charged fixed co-pays for three different tiers
of medication: Tier 1, generics; Tier 2, name brands; and Tier 3,
off-formulary "non-preferred" brand medications. A new fourth tier,
consisting mostly of biologics that are often customized to each patient
and don't have generic or inexpensive alternatives, typically requires that
patients pay 25 to 33 percent of the medication's cost.

Twenty-five percent of the cost of Michael Taffe's biologic Remicade is
upwards of $3,000 per month. Remember, it's only one of the drugs he needs.


"Most people can't afford to have a house payment every month for one of
their medications," said James O'Dell . . . "If you have insurance, and you
happen to get a disease like rheumatoid arthritis, suddenly you have a
$1,500-per-month drug, which is one of many you have to take. You
essentially don't have insurance for that drug."


Of course most people buying a health insurance policy aren't anticipating
catastrophic medical diagnoses. They may be more concerned about affordable
monthly premiums and deductibles than about tiered prescription pricing and
co-pays. When a fairly inexpensive prescription decongestant for seasonal
allergies is the only medication you need, you probably aren't thinking
about the potential ramifications of an insurance policy's prescription cap.

Ask me how I know.

For $225 per month, starting in 2004, I carried an individual BlueCross
policy that had reasonable deductibles and covered 80 percent of my
in-network medical visits. The doctor I'd been seeing for years was in the
preferred provider network. For a healthy 47-year-old, all was well.

But the fine print about the $1,500 annual prescription suddenly morphed
into screaming headlines after a phone call from my doctor in 2005, to
report the results of the blood tests from my routine annual checkup. "I
have bad news on the HIV test," he said.

It was hard enough to manage the anxiety and fear I felt. I'd been around
this particular killer for a long time, and the images of dying friends
haunting my mind made it hard to think straight. But I really panicked when
I realized that, not only did I need to begin right away to take highly
toxic medication, but it was going to cost far more each month than my
insurance policy's total annual prescription allowance.

Fortunately, I was able to get into a clinical trial which provided my
medications and lab work, free, for 96 weeks. After that? Now that I was
branded with a huge pre-existing condition, I was locked into the BlueCross
policy. Other insurance companies wanted nothing to do with me.

As it turned out, the clinical trial was ending just after I moved away
from my longtime home in Washington, D.C., returning to my home state of
Connecticut -- and just as the Great Recession was beginning to unfold. My
income went south for an extended stay.

I became a client -- a polite way of saying a "charity case" -- of the
local AIDS service organization. My health insurance premiums and
medications were paid for with federal Ryan White CARE Act funds -- and,
now Medicaid, since Connecticut in 2011 got a head start on the Affordable
Care Act's mandated expanded Medicaid program.


And like every other American with a chronic, but manageable, medical
condition who has struggled financially and emotionally over their medical
care, I curse the insanity of this country's health care system that
considers insurance and pharmaceutical company profits more important than
life itself.


U.S. Senator Bernie Sanders, Independent of Vermont, was explaining to me
in a phone interview why he has proposed a $3 billion fund to award large
cash prizes to drug companies for developing innovative new HIV drugs in
lieu of the long-term (usually 20-year) monopoly patents the government now
awards them.


Although the Pharmaceutical Research and Manufacturers Association (PhRMA)
failed to respond to my queries, they surprised no one by dismissing Sen.
Sanders' prize bill when he introduced it.


The senator said that while his bill focuses on HIV medications, a similar
system of awarding generous financial prizes -- we're talking hundreds of
millions of dollars, not exactly peanuts -- in lieu of monopoly patents,
offers a "new paradigm" for developing life-saving medications.

Love said Sen. Sanders' prize fund would be "transformative," and that a
similar approach would make sense not only to lower the prices of HIV
drugs, but other now-expensive medications for chronic diseases, too.


Buying FDA-approved generic versions of expensive American-made drugs is
one way the President's Emergency Plan for AIDS Relief (PEPFAR) is able to
provide antiretroviral treatment for some four million people living with
HIV/AIDS in 30 hard-hit developing countries. The irony, of course, is that
PEPFAR can provide the generic version of Atripla for $200 in Africa, while
other taxpayer-funded programs here at home pay more than $25,000 for the
exact same drug.

Gilead Sciences, the pharmaceutical giant that makes Atripla, touts its
"co-pay coupon" and patient assistance program to help people with HIV
afford its latest highest-ever-price combination drug, Stribild, introduced
at $28,500 for a year's supply. Company spokesperson Erin Rau told me in an
e-mail the price "reflects a reasonable return" on its product development

AIDS advocates have heard that one before.

Michael Weinstein, president of the Los Angeles-based AIDS Healthcare
Foundation, told Business Wire, "Drug pricing today is an elaborate shell
game: a company like Gilead brings a drug to market, prices it at a
ridiculously high price, but then quickly offers price cuts, rebates and
reductions on a case-by-case basis to insurers, federal and state
government health officials and others--all under a cloak of secrecy from
the public."

But secrecy isn't the only problem. Silence--specifically the silence of
advocacy organizations concerned about their own viability and
uninterrupted paychecks for their employees--is doing no good for the
clients the groups claim to represent. Michael Weinstein told me in an
interview, "Now you have a kind of 'AIDS, Inc.', a permanent bureaucracy,
and it's being supported by these [pharmaceutical] companies."

What happens when they speak out, challenging the 'benevolent' image of
themselves the drug companies wish for themselves? Weinstein recalled AHF's
own experience. "We had a grant from Gilead for $2 million a year going
back to 2005. As a result of our advocacy it was canceled this year. The
money they are sprinkling around can be withdrawn."

Speaking out, however, is what advocates must do. As Senator Sanders told
me, change won't come about until there is enough grassroots pressure on
Congress to make change. "One of the goals of grassroots efforts is to take
on Pharma," he said.


when Phil Michelson in TV commercials lauds the way Enbrel helps manage his
psoriatic arthritis, the professional golfer, with an estimated net worth
of $150 million, doesn't mention co-pays on the $100,000-plus per-year
drug. After all, he can simply have his accountant pay them out of petty
cash. Most Americans don't have that luxury.

James Love.  Knowledge Ecology International
http://www.keionline.org, +1.202.332.2670, US Mobile: +1.202.361.3040,
Geneva Mobile: +41.76.413.6584, efax: +1.888.245.3140.

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