According to The Lund Report, one Oregon man needed a life-saving medication after learning a rare genetic mutation was killing him. The catch: the medicine was going to cost him $4,000 a month, and the following year: $10,000 a month. Even after liquidating the family’s assets, the man’s daughter claims the only way they can still afford the drug is by purchasing it in Holland, where it is only $300 a month, and transporting it to the U.S.
Although this scenario may seem jarring, there are new expensive drugs in the state that make $10,000 look like pocket change.
Oregon’s Prescription Drug Price Transparency Program, created by Legislature in 2018 to bring light to drug costs, held its third annual hearing virtually on Dec. 8 in which a new state report was discussed that revealed the shocking price tags on the state’s most costly medications.
The Most Expensive Drugs
The report — a collection of data from October 2020 to the present — revealed that genetic drugs from Bristol-Meyers Squibb, a biopharmaceutical corporation, are the most staggering in cost.
Abecma, a therapy drug derived from the patient’s immune cells, tops the charts at $419,500 per infusion. Breyanzi, a one-time medication, came in second at $410,300. Both of these medications are designed to fight certain kinds of cancer, and are called CAR-T, or chimeric antigen receptor T-cell drugs.
In 2020, the highest-cost drug was a one-time treatment for mantle cell lymphoma from Kite Pharma named Tecartus. Its cost was $373,000.
Humira, a drug used to treat autoimmune conditions such as ulcerative colitis and rheumatoid arthritis, were also on the list for a third consecutive year. According to the 10 insurance companies that report to the transparency program, the life-saving drug cost $93.5 million for over 19,000 prescriptions — a 7.4 % uptick from earlier in 2021. This increase in cost had the U.S. spending nearly $1.5 billion more.
The Transparency Program
Oregon’s Department of Consumer and Business Services oversees the transparency program and requires that pharmaceutical companies report price increases of over $100 per month or 10% for the year, and new drugs that cost over $670 a month — $670 is the cusp of Medicare Part D, which covers the cost of medications.
According to the report, 193 high-cost medications have been reported so far in 2021. 63% of those are generic drugs and 41 are cancer treatment drugs.
“This is continuing the trend that most of the highest cost drugs that we see tend to be for cancer, or for other sort of difficult to treat disease states that don’t have a lot of treatments out there for them already,” said Numi Lee Griffith, senior policy advisor for the Division of Financial Regulation. “And they tend to be biologics.”
Why Biologics Cost So Much
According to Griffith, biologics vary from other drugs in that they are large, instead of small, molecule drugs, and are created inside the patient’s cells versus inside a laboratory. The Food and Drug Administration claimed that Abecma is the first approved drug of its kind which is designed to fight multiple myeloma cancer.
“Each dose of Abecma is a customized treatment created by using a patient’s own T-cells, which are a type of white blood cell, to help fight the myeloma,” the FDA said in a release. “The patient’s T-cells are collected and genetically modified to include a new gene that facilitates targeting and killing myeloma cells. Once the cells are modified, they are infused back into the patient.”
Generic Drug Costs
According to the transparency program, the average price increase for generic drugs was 27%, with the highest being an astonishing 778%. For brand-name drugs, the average increase was 13%.
At the hearing, the program was praised by groups such as the American Association of Retired People Oregon and the Oregon Student Public Interest Research Group, but also concluded that there is still work to be done in reducing costs. Griffith added that, although price upticks are decreasing, the average cost of new drugs continues to rise.
“What this really suggests is a change in behavior from manufacturers, that rather than increasing prices throughout [the] lifespan of a drug,” said Griffith, “they’re building… all their profit pulls into the beginning of the life cycle. This way they have fewer and smaller price increases later on, which allows them to not send reports to programs like ours,” she said.
The State’s Responsibility
Currently, 15 states have drug cost transparency programs like Oregon’s. However, as Griffith added, the Oregon Health Plan Drug Rebate Policy carries incentives for companies to launch with high prices from the get-go.
“When a drug is purchased through Medicaid,” she said, “the manufacturer is required to give an automatic rebate that basically locks the price to the rate of inflation. That kind of gives an incentive for drug companies to just price real high and avoid those price increases, because they won’t be able to reap profits through Medicaid for price increases because of the rebate program.”
According to The Lund Report, the transparency program has been less effective due to staffing issues and the large number of reports they receive.
One of the program’s research analysts, Antonio Vargas, claimed employees have been working hard to enter more information from the reports into the database. Vargas explained in an example drug report that even though the marketing data was deemed a “trade secret” and that some details were redacted, that data was made available.
Marketing, safety and effectiveness research, distribution, and manufacturing are four topics from which the program gathers financial data. Manufacturing has been deemed the most costly for both generic and brand name drugs, while marketing makes up 20% of costs.
Does Transparency Work
The jury is still out on whether drug transparency programs actually work, despite drug price decreases. Griffith explained that public pressure and Medicaid rebate programs could easily be responsible for the decrease.
“So you can’t say that transparency was the cause of that particular change in behavior,” she said at the hearing.
Rep. Rachel Prusak-D-Tualatin, family nurse practitioner and chair of House Interim Committee on Health Care, piggybacked off Griffith’s statement, claiming a patient’s worried loved one had just reached out to her, explaining that their diabetes medication, Victoza, carries a price tag of $3,300 and a $600 co-pay.
“What Rep. Prusak just said really underlines what I’m hoping to highlight,” said Bandana Shrestha of AARP Oregon. “Our members, and I would say all Oregonians, are really sick and tired of paying [the] highest drug prices in the world for critically needed medication. We pay three times what other countries pay for brand-name drugs.”
She then described a popular drug used with chemotherapy.
“In 2018, there were 393,000 Oregonians that were diagnosed with cancer, and Revlimid is a cancer drug that may be really helpful for a lot of folks,” she said. “Between 2015 and 2020, the price of this drug went from $187,000 to $267,000 per year. And this year, the price has gone up to about $280,000 — I mean, I can’t imagine who would be able to pay for that.”
By: Rebekah Harcrow
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