Faced with growing anger from the public and Congress, the pharmaceutical industry is putting the blame for high drug prices on another powerful player in the healthcare industry: insurers.
High-deductible plans that force consumers to shoulder more of their healthcare costs are a reason they are seeing higher prices, according to the pharmaceutical industry’s main lobbying group. The claim is a new defense for the industry, which is seeing more congressional scrutiny for its pricing practices.
“The health system is changing and pushing more costs onto the consumer,” said Lori Reilly, executive vice president of policy and research for the Pharmaceutical Manufacturers and Researchers of America.
Related Story: http://www.washingtonexaminer.com/article/2575923
The insurance industry shot back that prices for brand and generic products have been steadily rising and insurers need to adopt such measures to maintain access for their policyholders.
PhRMA, the brand name drug industry’s main lobbying group, has taken the lead in the fight over the perception surrounding high drug prices. PhRMA has continually said that any attempts to control drug prices would chill innovation.
It also has tried to distance itself from the companies causing much of the controversy. The generic drug companies Turing Pharmaceuticals and Valeant have been heavily criticized in the past several months for raising prices for decades-old generic drugs.
But the talking points haven’t had much effect. Democratic presidential candidates Hillary Clinton and Bernie Sanders are slamming the pharmaceutical industry, with Sanders and Rep. Elijah Cummings, D-Md., pushing legislation on the issue.
A bipartisan Senate probe began last week, with Sens. Claire McCaskill, D-Mo., and Susan Collins, R-Maine, intending to bring in drugmakers for hearings on why prices for brand and generic products are so high.
The two-year congressional budget deal that raised the debt limit even included a provision that forces generic drugmakers to pay higher rebates for pricey Medicaid drugs.
The scrutiny isn’t just from the high-profile cases at Valeant and Turing. Average pricing for brand drugs rose from 2008 to 2014 by 127 percent, while average generic prices declined 62 percent, according to data from Express Scripts, a pharmacy benefits manager that oversees drug benefits for insurance plans.
The data comes as several expensive medications to cure hepatitis and treat cancer hit the market.
Faced with the mounting criticism and the prospect of congressional inquiries, PhRMA has rolled out a new defense.
Reilly pointed to the proliferation of high-deductible plans, which force consumers to cover their own costs before reaching a certain limit. After that limit, or deductible, is reached, the plan pays for the healthcare costs.
People with low healthcare costs traditionally have chosen high-deductible plans, but since the passage of Obamacare, more employers have begun using the plans to keep premiums down.
The deductible limit varies, but the Affordable Care Act requires that it not be more than $6,500 a year for an individual and $13,200 for a family.
A May survey from the pro-Obamacare group Families USA found that nearly one in four adults who bought Obamacare plans have a deductible of $3,000 or more.
PhRMA also pointed to other cost-saving insurance measures such as step therapy, which forces a patient to take less expensive medication before moving up to the pricier version.
Related Story: http://www.washingtonexaminer.com/article/2575923
The insurance industry said it was ludicrous to blame it for the high prices.
“Rather than owning the fact that their prices are pushing consumers’ premiums higher and higher, drug companies respond by imposing price controls on health plans so they can charge whatever they want,” said Clare Kusing, a spokeswoman for America’s Health Insurance Plans, in a blog post.
Kusing told the Washington Examiner that the high prices of brand and generic drugs have forced insurance plans to adopt such cost-sharing measures.
She also hinted that it might be the drug companies’ turn to get some regulatory scrutiny.
The Affordable Care Act required insurance plans to cover prescription drugs and a slew of preventive services as well.
“We are at this inflection point where there isn’t a focus on insurance reform,” Kusing said. “It is squarely where the Affordable Care Act left off and … addressing underlying healthcare costs that drive up premiums.”
