Today’s Managing Health Care Costs Number is $10.3 billion
Headlines from the Wall Street Journal on Friday illustrate just how hard it is to manage health care costs. McKesson, one of the largest drug wholesalers, warned that competition was heating up, and that there were not a lot of future blockbuster drugs about to hit the market.
Those of us who care about the cost of health care would have looked at this information and said “hallelujah.”
The Wall Street Journal wrote:
There are early warning signs that the steady march upward of drug prices is slowing. That is bad news for drug makers and for all of the health-care companies that have profited from consistently higher prices.
But all health care costs are someone’s health care revenue! The prospect of more competition and a lower rate of pharmaceutical inflation led to big declines in the share prices of the top three drug wholesalers –which together lost over $10 billion in market value in just a day. Below is the Google Finance 5 day share price tracker.
There’s a similar story in today’s Stat. Two new drugs to treat cholesterol, PCSK9 inhibitors, are priced at about $14,000 a year. They require self-injections, and replace generic statins which can cost as little as $60-$200 per year. This new class of drug is very effective at lowering LDL cholesterol, but we don’t yet know whether it will lower the risk of heart attack or stroke. The PCSK9 inhibitors were expected to take in $3 billion in revenue annually- together they have grossed only $150 million.
This is an example where prior authorization has worked:
Payers have denied more than 88 percent of first-time prescriptions for patients with commercial insurance in the past year, according to Symphony Health Solutions. For those on Medicare, the first-time rejection rate was about 77 percent.
And even after an average of five appeals, more than two-thirds of prescriptions still aren’t getting covered, according to Amgen.
If I were writing this article I’d say“we managed to avoid massive overuse of these expensive new drugs not yet proven to lower the risk of heart attack.” Stat’s article concluded that “the fear among biotech insiders is that the commercial disappointment of PCSK9 therapies will imperil new cardiovascular therapies.”
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(Note the headline is a play on "One man's ceiling is another man's floor." Cost of care is a gender-neutral public policy challenge)
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