Cancer Patients Assail Insurer Policies on Costly Drugs

Five patient advocacy groups for diseases including cancer and AIDS urged the U.S. to force Obamacare insurers to lower co-payments on costly drugs, saying some plans discriminate against people with serious illness.

Representatives of the groups, which acknowledged receiving funding from pharmaceutical companies, spoke today at an event organized by the industry’s Washington-based lobbyists. That group released a study showing that 60 percent of mid-level plans on the new health exchanges placed multiple sclerosis and cancer drugs on tiers with the highest level of co-payments, in many cases requiring 30 percent of the price or more.

The insurers may be trying to discourage sick people from enrolling in their plans, the patient groups said, citing the study by Avalere Health, a Washington-based consultant, for the Pharmaceutical Research and Manufacturers of America. The insurance lobby, America’s Health Insurance Plans, has criticized drugmakers for spiraling medicine prices.

“Shifting the cost of medications to patients, by some plans, is not only blatant discrimination but it can lead to poorer health outcomes since beneficiaries will not be able to afford and access their life-saving medications,” said Carl Schmid, deputy executive director of the Tampa-based AIDS Institute.

The patient advocacy groups said they are powerless to influence drug prices. They called on the Obama administration to regulate co-payments, coinsurance and other cost-sharing required by insurers participating in exchanges created under the Patient Protection and Affordable Care Act known as Obamacare.

‘Shifting Blame’

“Whenever the high price of pharmaceuticals is in the news, drugmakers try desperately to change the subject and distract from the issue,” said Brendan Buck, a spokesman for the insurer lobby, known as AHIP, in an e-mail.

The Pharmaceutical Research and Manufacturers of America, or PhRMA, is engaged in an unusually public battle with AHIP over rising drug costs.

Since 2007, prices have doubled, tripled or more for dozens of established brand-name medicines to treat diseases including multiple sclerosis and cancer, according to an analysis performed for Bloomberg News by DRX, a Los Angeles-based provider of comparison software for health plans.

Fifteen cancer drugs introduced in the last five years cost more than $10,000 a month, that report showed.

None of the patient advocacy groups at the conference, including organizations representing sufferers of colon cancer and auto-immune diseases, would criticize drug pricing, and none offered examples of policies they have advocated to lower prices.

‘Other Countries’

“The cost of medication in the United States might be higher than in other countries where there’s negotiated prices and trade agreements,” said Virginia Ladd, executive director of the American Autoimmune-Related Diseases Association. “We’re not strong enough to do something about that.”

John Castellani, PhRMA’s president and CEO, said insurers on average ask patients to shoulder 22 percent of the cost of drugs while requiring them to pay just 4 percent of the cost of hospital admissions, even though hospital care is a much larger part of total health-care spending.

“We’re sending an artificial signal to the patient community that drugs are the most expensive part of the health-care system and acute care is the cheapest part,” Castellani said. “But in fact it’s the opposite.”

Silver plans, the most popular level of coverage among the 8 million people who have enrolled through Affordable Care Act exchanges, generally carry the second-lowest premiums after “bronze” plans. Customers can usually get lower out-of-pocket spending for drugs and other services if they buy “gold” or “platinum” plans with higher premiums, AHIP’s Buck said.

The Avalere study examined formularies from silver-level plans offered in the largest city in each state, the firm said. The study covered 123 formularies “representing most major issuers,” according to Avalere. The firm examined cost-sharing for drugs to treat HIV and AIDS, mental illness, cancer, diabetes, arthritis, multiple sclerosis and asthma.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net Andrew Pollack

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