AHIP Drug Price Idiocy

  • by: |
  • 06/11/2014
Brendan Buck, AHIP's new VP of Communications (formerly press secretary for John Boehner) has produced this whiny mess about outrageous drug prices


The "FACTS" excreted by AHIP are in bold.  The reality is in italics.

FACT: Astronomical prices for specialty drugs will blow up Medicare Part D budgets and force higher premiums for seniors

An analysis in Health Affairs last week found that the price of the important hepatitis C drug Sovaldi could increase the cost of Medicare Part D and premiums for seniors by 8%. From this one drug alone, seniors on Part D could see an 8% premium hike.

IN FACT  the CBO and several economists have shown that $1 of new drug spending saves $7 in other costs.  As for Solvadi,  the $84000 (not $100K) treatment is a cure that saves 1 million lives and will reduce spending on liver transplants, hospital stays as well as reduce disability.  National Viral Hepatitis Roundtable estimates that without any major changes in current testing practices, the cost of HCV care and treatment to Medicare will increase five-fold over the next 20 years, from $5 billion to $30 billion.

This one-time test, in combination with other targeted treatments, would result in identifying more than 800,000 cases and avoiding as many as 121,000 deaths
Assuming $100,000 value for each additional life per year, that's worth $1.5 million for every individual, meaning every healthcare dollar spent curing Hep C generates $17 of value to each patient, the cost is outweighed by the value of reducing the impact of this disease.

FACT: Astronomical prices for specialty drugs will devastate state Medicaid budgets and displace important priorities like education and infrastructure

One recent analysis highlighted on Vox illustrated that, because Sovaldi is so expensive, California could potentially spend more administering the drug for people on Medicaid than it does for K-12 and secondary education combined. Yes, you read that correctly.

In FACT : California spends $110 BILLION per year on K-12 and secondary education.  There are 530,000 people living with hepatitis C in California.  Even if all of these people received Solvadi (at a Medicaid discounted price of $60K) that would be a little over $3 billion.  

FACT: Astronomical prices for specialty drugs put upward pressure on premiums for all consumers

At its core, the cost of health insurance is a reflection of the cost of health care. The skyrocketing prices that drugmakers are charging has a ripple effect throughout the system, raising premiums and increasing health care costs for individuals, families, and employers.

IN FACT:  According to a Milliman study,  stopping the shift of up to half the cost of new drugs for cancer, RA, MS, etc would cost AHIP companies a whopping 50 cents per member per month.   http://publications.milliman.com/research/health-rr/pdfs/parity-oral-intravenous-injected.pdf

FACT: Health plans offer consumers a range of coverage options, including policies with lower cost-sharing

To distract from their unjustifiable pricing, drugmakers have latched onto distorted coverage comparisons that ignore the range of cost-sharing options consumers can choose from. Hey, anything beats talking about the actual price.

IN FACT.. See above.   And if you don't believe me, read the lawsuit AIDS patients and the Naational Health Law Program filed against 4 of the largest AHIP insurers.  


FACT: Consumers have out-of-pocket limits that mean health plans and state and federal governments rather than patients are paying the vast majority of the cost of these stratospherically priced drugs

Pharmaceutical companies know that consumers’ out-of-pocket costs are capped under the Affordable Care Act, allowing them to ask for what amounts to a blank check from insurers and government programs. Not surprisingly, drugmakers are making the law work for them.

IN FACT:   Many drugs once covered by AHIP plans are not covered under Obamacare if they are prescribed by out of network doctors.  Also,  many drugs are now  NOT covered which means consumers -- the sickest consumers -- have to pay full freight.  Yet AHIP could solve the problem with 50 cents per person. 

BONUS FACT: Drugmakers have no straight-face explanation to justify the increasingly astronomical prices they have been charging for their medications

BONUS RESPONSE TO LIE:   IMS data shows that new drug costs have risen about 5 percent a year.  Co-pays and co-insurance costs for consumers have climbed to 40 percent in over half of Obamacare plans according to an Avalere Study.  


AHIP is hysterical over the fact that 35 states have required their members to cover new drugs at the same level they do old drugs.  And now states are limiting the ability of AHIP plans to force patients to fail first on old medicines (translation: get sicker before we treat you and then talk about hospice instead) instead of using precise, personailzed treatments that work best the first time.  

AHIP's pursuit of short term profits is understandable.  It has tried to shift the cost on to consumers and blame onto drug companies.  Why is AHIP trying to avoid paying for new medicines that save lives, reduce cost and increases productivity?  Because it can save money short term by 'redlining' chronically ill patients and avoid having to take on such consumers altogether.  

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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