How do we combat rising drug prices?

Soaring costs threaten patients and the specialty

The soaring cost of prescription drugs has generated outrage among physicians and patients. Some drugs—even generics—carry eye-popping costs, and health plans are increasingly asking people to shoulder a greater share of the cost. In July, JAAD published an article by the AAD Drug Pricing and Transparency Task Force, “The state and consequences of dermatology drugs prices in the United States,” which explores the impact of rising costs on patients and the specialty. Member to Member recently discussed the issue with Mark Lebwohl, MD, one of the JAAD article’s authors.

MTM: How is drug pricing affecting the specialty?

lebwohl-mark.jpgDr. Lebwohl:  Drug pricing is skyrocketing and it is affecting dermatology more than any other specialty. Many of the drugs that we prescribe are very expensive, and insurers have found that if they create hurdles to us writing those prescriptions, we’ll use less costly, but oftentimes less effective, medications.

Some dermatologists are going to jump over the hurdles and get the correct medications for their patients. But others are going to simply throw up their hands and give up. You really can't blame them because insurance companies make it so hard to obtain medications.

Insurers play a game called prior authorization. They'll say to you that you haven't documented adequately that a patient qualifies for the drug. You may show them the chart and it says specifically that the patient does indeed qualify, but they deny it anyway just to create an extra hurdle for you.

So there are different ways in which people will react to that. Some are going to fight it, but others aren’t. You can understand that because it's so time consuming. It's difficult to practice medicine in an era where every single medication you prescribe for a patient has to be appealed.

And that doesn’t just apply to biologics, which can cost tens of thousands of dollars a year. It applies to creams and ointments. Some of them are generic ointments that use to cost $5 or $6 that now suddenly cost $400 or $500. What is going on in the world of pharmaceuticals is unconscionable.

  Drug pricing table
The Academy's drug pricing and availability resource center provides information on fluctuations in drug prices. Download a PDF of the drug pricing table.  
The knee jerk reaction is to blame the pharmaceutical companies. They certainly have their fair share of blame to accept. They are responsible for some of the problem. But another part of the problem are the pharmacy benefit managers (PBM’s).

These are companies that have a monopoly on distribution. And they say to the pharmaceutical companies you have to pay us huge amount of dollars if you want us to distribute your drugs. And what do they do for drug development? Nothing. What do they do to help patients? Not much. All they do is they get the medication from the manufacturer to the patient.

Some of this data is published online. You’ll find that 25-50% or more of the US sales of many drugs went to what are called rebates or discounts. Patients don’t get discounts. Those rebates and discounts are dollars that the pharmacy benefit managers are putting in their pockets.

This practice doesn’t benefit the patients at all. In fact, it creates a hurdle whereby the cost of the drug is increased so much that patients don’t have access to those medications.

Dermatologists are paying for office personnel or utilizing their own time to get access to the medicines by completing the prior authorizations, which can be very time consuming.

The bottom line is that it’s become harder and harder for our patients to get medications. Medications are overpriced in part because pharmaceutical companies are making substantial profits, only a portion of which correctly can be attributed to the cost of pharmaceutical development.

And the PBM’s add  huge expenses which they call discounts onto the costs of drugs, but unlike the pharmaceutical companies which assume large risks and drug development costs, PBM’s don’t do anything to develop therapies. Ultimately, the cost of many drugs ends up being unaffordable for many patients.

MTM: What is the Academy doing to help address this issue?

Dr. Lebwohl: The Academy is doing quite a lot. Our Advocacy team has joined with a group called the State Access to Innovative Medicines Coalition. That group has two purposes: one is to promote step therapy legislation around the country; and the second is to reduce out of pocket costs for patients. The Academy has written the legislation that has gone into many of the  step therapy bills being passed around the country.

Now, these bills don’t eliminate step therapy. What they do is create rules that set circumstances where an Express Scripts or Caremark or Walgreens can still say it’s not going to approve a prescribed medicine until the patient first fails medicine X. But in states that have enacted step therapy legislation, the physician can then appeal it, and explain that the patient shouldn’t be on medicine X because it has a number of drawbacks for the patient.

This practice doesn’t benefit the patients at all. In fact, it creates a hurdle whereby the cost of the drug is increased so much that patients don’t have access to those medications.


There are a number of specific scenarios outlining these step therapy pieces of legislation that our Academy advocacy staff in Washington, D.C., were responsible for writing.  For example, if a physician gets a denial based on step therapy legislation, they can then appeal that denial. And if the pharmacy benefits manager or the insurer still refuses to pay for the drug, then we have grounds on which to lodge a complaint with the attorney general of that state.

In 2015, the Academy convened a Task Force on Drug Pricing and Transparency. This group seeks to increase drug-pricing transparency and help patients access the treatments they need. Earlier this year, the task force developed a comprehensive position statement on patient access to prescription drugs, and created a state society tool kit that contains sample resolutions on drug pricing and transparency, talking points, and background materials to support state efforts on step therapy.

From the congressional perspective, the Academy has been working with the Coalition for Accessible Treatments to advocate for the enactment of the Patients’ Access to Treatments Act that would limit cost-sharing requirements for specialty drugs. Tiered cost sharing is how insurers claim patients have access to medications. However, if a drug costs $58,000 and the patient is responsible for 50 percent, how is that considered affordable? This bill would limit that cost-sharing scheme for drugs listed in a “specialty tier” classification to the co-pay amount listed for drugs in a lower, non-preferred brand tier.

At the more local level, the Academy is working closely with patient groups, providers, and industry groups. In addition, the Academy is investigating ways to help its members appeal denials.

I encourage all members to take advantage of the resources provided by the Academy on this important issue and to participate in advocacy efforts to help protect our patients and the specialty.

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