posted by AHIP
on March 21, 2018
We know health care in the United States is some of the most expensive in the world. Innovations in care delivery save as well as improve the lives of patients, while also reduce the cost of care. Yet we find ourselves in a pharmaceutical cost crisis. Out-of-control drug prices are a burden on hospitals, providers and result in higher health coverage premiums for patients—yet often don’t result in better outcomes for patients.
Big Pharma is rightfully proud of the work it does to create new and better medicines that help patients survive and thrive. Its products and partnership are invaluable to the health care system. However, the problem is the price. Thanks to excessive prices, spending on drugs will grow faster than any other major medical good or service over the next 10 years.
Patients are making tough choices—skipping doses to make their medicine last until the next paycheck or holding online fundraisers to pay for the drugs they need to stay alive. A recent Consumer Reports study demonstrated quality of life goes down as drug prices rise.
Yes, drug innovation is expensive. Big Pharma takes costly risks every day on drugs that don’t make it to market, but innovation alone does not account for the current state of out-of-control drug pricing.
We know that by focusing on health care quality and choice, we can actually bring down costs while improving patient outcomes. Health care providers and health insurance providers are working together today to build new value-based care models to treat and prevent disease. We’ve proven that providers of health care and coverage can work together to create better patient outcomes. But the pharmaceutical industry has lagged behind in addressing the high and ever-rising price of prescription drugs.
Pharmaceutical companies spend millions of dollars on ad campaigns to justify high drug prices. And down the line, patients end up paying that advertising bill. Health insurance providers can negotiate lower prices for many drugs, passing the savings on to our members. But for therapies that have no real therapeutic alternatives, there is little incentive for drug companies to negotiate. Changes in health coverage in recent years mean more patients can make use of prescription drug benefits. While their out-of-pocket costs are capped, health insurance providers make up the difference when drug prices skyrocket.
The responsibility lies with all of us—patients, providers, health plans, and drug companies—to build a sustainable model that supports healthy outcomes—both physically and financially. We need to find new ways to balance patient outcomes, transparency, and affordable access while we encourage innovation—both in the lab and in the marketplace.