Societal effects of speciality drug classes in co-pays

[ahamner]

Co-Payments for Expensive Drugs Soar - New York Times
By GINA KOLATA
Published:  April 14, 2008

Health insurance companies are rapidly adopting a new pricing system for very expensive drugs, asking patients to pay hundreds and even thousands of dollars  for  prescriptions for medications that may save their lives or slow the progress of  serious  diseases.

With the new pricing system,  insurers  abandoned the traditional  arrangement .  That has patients pay a fixed amount, like $10, $20 or $30 for a prescription,   no matter what the drug’s actual cost. Instead, they are charging patients a percentage of the cost of certain high-priced drugs, usually 20 to 33 percent, which can amount to thousands of dollars a month.

The system means that the burden of expensive health care can now affect insured people, too.
 
No one knows how many patients are affected, but hundreds of drugs are priced this new way. They are used to treat diseases that may be fairly common,  including multiple sclerosis, rheumatoid arthritis, hemophilia, hepatitis C and some cancers. There are no cheaper equivalents for these drugs, so patients are forced to pay the price or do without.

Insurers say the new system keeps everyone’s premiums down at a time when some of the most innovative and promising new treatments for conditions like cancer and rheumatoid arthritis and multiple sclerosis can cost $100,000 and more a year. But the result is that patients may have to spend more for a drug than they pay for their mortgages, more, in some cases, than their monthly incomes.
 
When people who need the expensive drugs pay more for them, other subscribers in the plan pay less for their coverage.  But the new system sticks seriously ill people with huge bills, said James Robinson, a health economist at the University of California, Berkeley. “It is a very unfortunate social policy,” Dr. Robinson said.

“The more the sick person pays, the less the healthy person pays.”  Traditionally, the idea of insurance was to spread the costs of paying for the sick. “This is an erosion of the traditional concept of insurance,”  “Those beneficiaries who bear the burden of illness are also bearing the burden of cost.”
And often, patients say, they had no idea that they would be faced with such a situation.  It happened to Robin  Steinwand, 53, who has multiple sclerosis.  In January, shortly after Ms. Steinwand renewed her insurance policy with Kaiser Permanente, she went to refill her prescription for Copaxone.   She had been insured with Kaiser for 17 years through her husband, a federal employee, and had had no complaints about the coverage.  She had been taking Copaxone since multiple sclerosis was diagnosed in 2000, buying a 30 days’ supply at a time. And even though the drug costs $1,900 a month, Kaiser required only a $20 co-payment.

Not this time. When Ms. Steinwand went to pick up her prescription at a pharmacy near her home in Silver Spring, Md., the pharmacist handed her a bill for $325. There must be a mistake, Ms. Steinwand said. So the pharmacist checked with her supervisor. The new price was correct. Kaiser’s policy had changed. Now Kaiser was charging 25 percent of the cost of the drug up to a maximum of $325 per prescription.   Her annual cost would be $3,900 and unless her insurance changed or the drug dropped in price, it would go on for the rest of her life.

“I charged it, then got into my car and burst into tears,” Ms. Steinwand said.  She needed the drug, she said, because it can slow the course of her disease.  And she knew she would just have to pay for it, but it would not be easy. 

But Ms. Steinwand was not so sanguine. She immediately asked Kaiser why it had changed its plan. The answer came in a letter from the federal Office of Personnel Management, which negotiates with health insurers in the plan her husband has as a federal employee. Kaiser classifies drugs like Copaxone as specialty drugs. They, the letter said, “are high-cost drugs used to treat relatively few people suffering from complex conditions like anemia, cancer, hemophilia, multiple sclerosis, rheumatoid arthritis and human growth hormone deficiency.” And Kaiser, the agency added, had made a convincing argument that charging a percentage of the cost of these drugs “helped lower the rates for federal employees.”

Ms. Steinwand  won’t have to worry, at least for the rest of this year.   A Kaiser spokeswoman, Sandra R. Gregg, said on Friday that Kaiser had decided to suspend the change for the program involving federal employees in the mid-Atlantic region while it reviewed the new policy. The suspension will last for the rest of the year, she said. Ms. Steinwand and others who paid the new price for their drugs will be repaid the difference between the new price and the old co-payment.

Ms. Gregg explained that Kaiser had been discussing the new pricing plan with the Office of Personnel Management over the previous few days because patients had been raising questions about it. That led to the decision to suspend the changed pricing system.

[stauffenberg]

When will Americans start to notice that no other developed country on earth does things this way?  Other countries tell the drug companies what they are allowed to charge for drugs, and then either provide the drugs completely free to patients or charge them a fixed and small co-pay per prescription.  When I first lived in England in 1978, as a person with a medical condition requiring repeat prescriptions, I paid only 50 cents per refill, no matter how expensive the drug.

I have to laugh when America indulges in its usual routine of criticizing the human rights records of other countries, since it seems incapable of understanding how it is itself the developed world's worst human rights violator, given the way it deals with healthcare.

[KT0930]

Maybe it's because it's late and it's been a long week, but I can't help but think of societies that have tried in the past to get rid of "weaker" members of their groups...is this really any different? If you're sick, you can either make yourself useful to society by making enough money to pay for your medication or you can die and not be a burden anymore. 

[stauffenberg]

It is interesting that when America was founded it was the most liberal and humane nation on earth.  It was among the very few to forbid torture and to permit people to vote.  It was the only state in existence with constitutionally entrenched human rights.  When every other state was militaristic, the new Republic in America was extremely pacifistic, and had constitutional rules against standing armies and quartering troops in people's homes.  Now it has a reputation in Europe, in large part because of its uniquely cruel healthcare system, of being the most barbaric nation on earth.  What happened to us?

[ahamner]

I posted this article because I have been affected by this type of change in copays beginning this year.  I received a kidney transplant in late 2006 and I must take immune suppression medications for the rest of the life of my new kidney.  Because they are expensive, these drugs (Cellcept & Prograf) are now included in the "speciality" drug class of my employer group health insurance plan and thus require exorbitant monthly copays. Previously they were considered maintenance drugs because you have to take them continuously.

I have been working for the same employer for 38 years and have paid insurance premiums in the group insurance plan for all those years with hardly any claims for my health expenses.  Over that time I saw many of my coworkers become ill and require expensive treatments which were covered by the insurance plan.  This is the way it is supposed to work.  The risks of becoming ill applies to everyone and insurance is supposed to provide protection for all in the group.  If you remain healthy great, but if you become ill, at least the costs should be covered by insurance if you pay the premium.

This concept seems to have been lost now.  Instead of providing health insurance as a protection to those who may become ill, now the thought is to reduce insurance premium costs by reducing coverage to people who become ill by shifting the costs directly to them.  So if you remain healthy everything is okay.  But get sick and you will be required to pay the extra costs yourself at a time when you probably can least afford it. 

Health insurance in this scenario does not provide protection for the healthy against the costs of expensive required treatments if they become ill.  What then are your options?  Try buying insurance to cover these costs if you are already sick. It ain't gonna happen.
 

[stauffenberg]

But consider further the plight of people who are born with medical conditions which render them forever inelligible for any medical coverage, or who develop these conditions when they are still children and so cannot been expected to have insured themselves before becoming ill?  What is to be done with them?  When I became forever uninsurable because of developing type 1 diabetes in 1966, the only money I had had before that time was my allowance, which was 25 cents a week -- not enough to buy health insurance!  In any case, you cannot acquire lifelong health insurance while still a child.

The general point is that medical care should be provided free to all as a human right, since capitalism will never address the many social justice issues involved.