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A move to apply rebates to combination drugs and discount cards to deductibles can have significant cost implications for states and members.
President Trump has long promised to lower prescription drug prices. Unfortunately, two of his administration’s newest proposals would actually raise out-of-pocket costs and reduce access to medicines.
They must be scrapped before they do real harm.
Both proposals impact Medicaid, the joint federal-and-state program more than 60 million low-income Americans depend on for access to health care. Trump’s proposals would place a new and substantial burden on a group of Americans who least need added challenges: low-income individuals suffering from chronic diseases. Their access to the care they need is in serious jeopardy.
The first proposal involves a reclassification of combination drugs — those created by binding multiple drugs into one medication. Currently classified as new medications, they enter the market as a name brand with no generic competition. The proposed reclassification would deem them an alteration of an existing treatment — and Medicaid would accordingly demand that manufacturers provide the program the bigger rebates associated with that group of medications.
Patented new combination drugs are often made from two or more readily available generics. So cost-cutters naively say: why not just take the cheap generics separately if the clinical effect is the same? Therefore, the combination should cost no more. What they overlook is the complicated research questions underlying the creation of new combination medicines: which drugs can be effectively combined to treat which conditions at which dosages.
Once you know, for example, that combining generic Prilosec with baking soda can yield better results treating acid reflux in some patients, of course, it’s cheaper to take the two separately. But you never would have known about it were it not for extensive research and testing.
This proposed reclassification is the government trying to get away with paying less for costly innovation. It won’t work. Instead, it will hamper pharmaceutical research and development efforts. After all, companies won’t continue to pour millions of dollars into developing new and improved combination drugs if they have no reasonable financial incentive to do so. Combination therapies also make it much easier for patients to stick to their prescription regimens.
That can be a matter of life and death.
Combination treatments have done wonders extending the lives of patients with HIV and hepatitis. Instead of taking several different pills per day, with the risk of error that entails, a combination HIV or hepatitis medication allows patients to take just one pill to keep the disease at bay.
The second ill-considered Medicaid proposal could lead to new financial burdens for many low-income people. It would change the Medicaid rules on how co-pays and deductibles work.Medicaid enrollees typically have to meet a deductible each month — or other specified period, which varies by state — before the program starts paying for their medical care.
Meanwhile, pharmaceutical companies often issue discount coupons patients can use to meet part of or all of the costs of their medications. In Medicaid’s current structure, such coupons count toward meeting an enrollee’s deductible. Under the proposed change, the value of the coupons could be excluded from the deductible. If this change takes effect, enrollees will have a higher hurdle to jump before they begin to receive their benefits. That would pose major concerns for the many low-income Americans living with chronic conditions.
Right now, patients with a chronic disease already spend twice as much out-of-pocket on medications than patients without one. Those suffering from two chronic diseases are sometimes on the hook for nearly five times more. And conditions such as diabetes, obesity and high blood pressure are much more common at the lower income levels associated with Medicaid.
If this rule change goes forward, managing a chronic condition could soon become untenable. Indeed, cost is one of the primary reasons that half of all chronic disease medications aren’t taken as prescribed. When chronically ill people can’t afford their medicines, their conditions often drastically worsen. Stabilizing and treating them at that point can wind up costing much more.
Indeed, medication non-adherence leads to one in 10 U.S. hospitalizations and adds as much as $289 billion to national healthcare spending annually.These proposals for Medicaid will only make matters worse. The Trump administration should drop them.
Kenneth E. Thorpe is a professor of health policy at Emory University and chairman of the Partnership to Fight Chronic Disease.