Maryland Attorney General Brian E. Frosh
recently called attention to the unreasonable price increases for
life-sustaining prescription drugs and the need for federal action to
prevent price gouging for such medications ("A cure for the $750 pill," Oct. 30). I share the attorney general's concern.
The National Center for Health Statistics reported that prescription drugs comprised 9.3 percent of all national health care expenditures in 2013, up 5 percent from 1990.
More people, especially older adults with chronic health conditions like diabetes and hypertension, are using more drugs. But while the shift to cheaper generic drugs restrained the overall cost of prescription drugs for several years, the cost trend is once again heading upward.
Prescription drug costs climbed by 12.6 percent, to $305.1 billion, in 2014. Driving the rise are new specialty drugs designed to treat conditions such as hepatitis C, coupled with increased prescription drug use among newly insured people under the Affordable Care Act.
The national cost trends are mirrored at the state level. The Department of Legislative Services reports that from fiscal 2004 to fiscal 2015, benefit costs for Maryland's State employees rose from 22.6 percent to 30 percent as a share of the total compensation. And while salary costs rose by a modest 1.9 percent per year, health insurance costs grew by 4.9 percent — even though the state raised employee cost sharing.
Health insurers have tried various strategies to mitigate rising prescription drug costs. Their strategies include using prescription drug formularies, prior authorization, step therapy, limited pharmacy networks, and higher cost sharing for consumers.
One strategy that has created concern is the use of a specialty drug tier in the prescription drug formulary. These specialty drug tiers have higher — sometimes much higher — cost sharing than the generic drug or brand-name drug tiers.
Alarmed by stories of consumers having to pay hundreds of dollars in co-pays for a 30-day supply of a drug covered by their health insurance, the Maryland General Assembly took action. Legislation that will take effect in January 2016 limits the cost that insurance carriers can pass on to consumers for specialty drugs.
Under the law, insurance carriers may not charge consumers more than $150 for a 30-day supply of a covered specialty drug. Another insurance law already on the books requires parity in cost sharing for cancer drugs, whether provided intravenously, orally or by injection.
While these laws help to shield consumers from the high cost of prescription drugs, they don't address the real problem: prices set by the drug manufacturers. Not only are the prices not regulated, they are not transparent. The manufacturer may charge one price to one buyer and another price to a different buyer. And prices can skyrocket from one year to the next.
Individual states have little leverage with the drug manufacturers when this happens. High drug prices are a serious problem and the federal government needs to step in to solve it.
Peter A. Hammen, Baltimore
The writer, a Democrat, represents Baltimore City's 46th Legislative District in the Maryland House of Delegates and chairs the Health and Government Operations Committee.
The National Center for Health Statistics reported that prescription drugs comprised 9.3 percent of all national health care expenditures in 2013, up 5 percent from 1990.
More people, especially older adults with chronic health conditions like diabetes and hypertension, are using more drugs. But while the shift to cheaper generic drugs restrained the overall cost of prescription drugs for several years, the cost trend is once again heading upward.
Prescription drug costs climbed by 12.6 percent, to $305.1 billion, in 2014. Driving the rise are new specialty drugs designed to treat conditions such as hepatitis C, coupled with increased prescription drug use among newly insured people under the Affordable Care Act.
The national cost trends are mirrored at the state level. The Department of Legislative Services reports that from fiscal 2004 to fiscal 2015, benefit costs for Maryland's State employees rose from 22.6 percent to 30 percent as a share of the total compensation. And while salary costs rose by a modest 1.9 percent per year, health insurance costs grew by 4.9 percent — even though the state raised employee cost sharing.
Health insurers have tried various strategies to mitigate rising prescription drug costs. Their strategies include using prescription drug formularies, prior authorization, step therapy, limited pharmacy networks, and higher cost sharing for consumers.
One strategy that has created concern is the use of a specialty drug tier in the prescription drug formulary. These specialty drug tiers have higher — sometimes much higher — cost sharing than the generic drug or brand-name drug tiers.
Alarmed by stories of consumers having to pay hundreds of dollars in co-pays for a 30-day supply of a drug covered by their health insurance, the Maryland General Assembly took action. Legislation that will take effect in January 2016 limits the cost that insurance carriers can pass on to consumers for specialty drugs.
Under the law, insurance carriers may not charge consumers more than $150 for a 30-day supply of a covered specialty drug. Another insurance law already on the books requires parity in cost sharing for cancer drugs, whether provided intravenously, orally or by injection.
While these laws help to shield consumers from the high cost of prescription drugs, they don't address the real problem: prices set by the drug manufacturers. Not only are the prices not regulated, they are not transparent. The manufacturer may charge one price to one buyer and another price to a different buyer. And prices can skyrocket from one year to the next.
Individual states have little leverage with the drug manufacturers when this happens. High drug prices are a serious problem and the federal government needs to step in to solve it.
Peter A. Hammen, Baltimore
The writer, a Democrat, represents Baltimore City's 46th Legislative District in the Maryland House of Delegates and chairs the Health and Government Operations Committee.
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