When it comes to improving human health, I believe that Americans agree on three fundamental principles:
- Vigorous pursuit of innovation and breakthroughs will improve health and benefit patients, the health care system, and our society.
- New and better medicines can transform the treatment of devastating diseases and increase competition among innovators, ultimately leading to better patient outcomes and lower health care costs.
- All Americans should have access to affordable and effective treatments.
As a nation, we are making great progress on the first two principles. My company, Celgene (CELG), is one of many biopharmaceutical companies that are pushing the boundaries of science and working to bring patients new medicines that can better treat challenging diseases. Currently, biopharmaceutical companies are conducting research and clinical trials on more than 7,000 potential new medications, up to 70 percent of which could be first-in-class therapies for cancer, cardiovascular diseases, inflammatory conditions, and many other unmet medical needs.
It is the third principle — that patients should have affordable access to the most innovative, disease-altering therapies — that requires substantial improvement. Many Americans with the most serious illnesses now face high deductibles and coinsurance requirements that put out of their reach the latest, safest, and most effective treatments. Deductibles for individuals enrolled in the lowest-priced Affordable Care Act plans will average more than $6,000 in 2017. Rather than having fixed copays, up to 25 percent of workers now pay percentage-based coinsurance for innovative drugs, which can be 30 to 50 percent of the drug’s total cost. No health plan would consider forcing patients to pay one-third or more of the cost of hospitalization and surgery. Yet an increasing number of health plans impose that level of cost sharing on medicines that may prevent hospitalization or surgery, or that represent the only way to effectively treat serious diseases.
The consequence of this disparity is immediate and disturbing. Today, 20 to 30 percent of all prescriptions written are not filled and up to 50 percent of therapies that treat chronic diseases are not taken as prescribed, due largely to prohibitive cost sharing that has been forced onto patients. This was documented in a study in the Journal of Oncology Practice. It found that individuals who faced out-of-pocket costs greater than $200 for their cancer medications were at least three times more likely to not fill their prescriptions than if the cost sharing was $100 or less. Not filling needed prescriptions causes patients to get sicker, need more physician care, and end up in the hospital, which adds between $100 billion and $290 billion annually in expenditures to the U.S. health care system.
The impact is greatest for patients with serious or rare diseases taking targeted therapies called specialty drugs. These medicines offer the most effective — and in some cases, the only — treatment for complex and challenging diseases that historically had few treatment options, such as cancer, rheumatoid arthritis, growth hormone deficiency, and multiple sclerosis. Yet getting access to these medicines can be burdensome.
Most health plans organize drugs in a formulary with “tiers” based on price. Insurers often place specialty drugs in the highest tier. So instead of being charged a fixed copayment for these medicines, patients are required to pay a percentage of the drug’s cost, which can translate into out-of-pocket costs of hundreds of dollars or more each time the prescription is refilled.
Innovative specialty medicines are costly, but they represent major advances in treating serious or life-threatening conditions and they account for less than 4 percent of total health expenditures. These therapies are medically necessary and extend and improve lives. They should be available with reasonable cost sharing so patients already living with challenging diseases can receive the most effective treatment.
I offer three commonsense policy proposals to improve patients’ affordable access to the most effective treatments:
Remove the regulatory barriers to value-based contracting. Value-based contracts are innovative approaches that allow payers and medical innovators to more precisely define the value of a medication for specific patient populations. These types of arrangements can provide greater flexibility in providing access for patients, predictability for payers, and incentives for continued innovation for biopharmaceutical companies.
Pass a federal “oral parity” law. Because oral anticancer medications are self-administered and obtained through a pharmacy, Medicare and private insurers cover these drugs differently than injectable therapies administered in a physician’s office or hospital. This has meant that patients are often burdened with far greater out-of-pocket costs for oral cancer drugs. To date, 43 states and the District of Columbia have enacted laws that require health plans to cover oral and injectable therapies equitably. Passing the bipartisan Cancer Drug Coverage Parity Act at the federal level, as proposed by Representatives Leonard Lance (R-N.J.) and Brian Higgins (D-N.Y.), will ensure that patients aren’t burdened with far greater cost sharing just because they take their medication in the form of a pill or capsule.
Ensure patient protections in the use of step therapy. An insurance practice known as step therapy requires patients to try one or more less-expensive drugs first and “fail” on them before the medicine their doctor prescribed is covered. Representatives Brad Wenstrup (R-Ohio) and Raul Ruiz (D-Calif.) recently introduced Restoring the Patient’s Voice Act to require employer-sponsored health plans that use step therapy to create a clear process for requesting an exemption.
These proposals build on a shared commitment to put patients first and form part of the bipartisan common ground to help ensure that our health care system delivers highly effective and affordable care to all Americans.
Mark J. Alles is the chief executive officer of Celgene, a global biopharmaceutical company and innovator of oral cancer therapies based in Summit, New Jersey.