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On Sunday, The New York Times published a front page article lambasting the high co-pay costs of prescription asthma inhalers and related medications. The Soaring Cost of a Simple Breath catalogues many factors that make up the high co-payment costs in the U.S. and highlights how difficult those costs are for most middle-income American families to bear.  Chief among the contributing factors, according to the article, are existing patents and the steps pharmaceutical companies take to tweak their patents in order to keep generic manufacturers at bay. Compounding those efforts are the high standards the FDA sets for generic makers, inefficiencies of the USPTO, the lobbying power of the pharmaceutical industry, and even congressional budget cuts. In total, the article argues, these various factors are the reason why people inside the U.S. are paying significantly more for their asthma medications than people elsewhere.

While well written and chock full of important points about the current state of the healthcare industry in this country, the article manages to miss the mark on one overriding factor.

Well, maybe ‘miss the mark’ is an overstatement. It actually grazes the mark and then moves right along. Early in the article, the author points out the high cost of asthma, “….more than $56 billion, including millions of potentially avoidable hospital visits and more than 3,300 deaths, many involving patients who skimped on medicines or did without.”

To me, this is the key issue in the whole article. We can see the systemic cost on the healthcare system and we fail to address it.

At AdverseEvents, Inc., we see this issue arise time-and-again when dealing with managed care organizations. For years they have fixated on the product cost (how much it cost to buy a pill from the manufacturer) and how to both lower that cost and balance it against co-payments and deductibles. But they are largely blinded to the medical cost associated with those prescription drugs (the long term costs associated with prescribing certain medications).

In class-wide cost reviews we’ve conducted, asthma and COPD medications consistently show to be among the lowest in causing downstream medical costs from adverse events. What that means is that they are relatively safer than most classes of medications, result in fewer serious outcomes from side effects, and when prescribed and taken as instructed have a very low medical cost load on the healthcare system.  You can see the results of our review below:

specialties_asthma_highlighted

When compared with the high cost of non-treatment cited in this article, it seems evident that the economic ROI for the insurance companies lies in ensuring that as many patients as possible have access to asthma inhalers, regardless of the product cost that they may have to absorb in the process.  Don't forget - it is those same insurance companies who have to largely cover the cost of the hospital admissions and other serious outcomes, whether from non-adherence, lack of access to medication, or side effects from the medications.

The total cost of care does not start and end when medication is prescribed and dispensed.  Drugs can cause all sorts of serious side effects that can lead to systemic medical costs that far exceed the underlying product costs. Improving patient safety and ensuring ROI should be top of mind for insurers and large health systems. But until they look at the full picture – and not just the myopic product cost – they will continue to fail on both counts.

We note that this article is part of a New York Times series. We hope the author will begin to examine these downstream costs in future articles.

 

 

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Brian Overstreet

Brian Overstreet

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Topics: FDA, Drug / Indication Information, Drug Pricing

Brian Overstreet

Written by Brian Overstreet