Co-Payments Go Way Up for Drugs With High Prices

By GINA KOLATA - Published: April 14, 2008 - The New York Times

Health insurance companies are rapidly adopting a new pricing system for very expensive drugs, asking patients to pay hundreds and even thousands of dollars for prescriptions for medications that may save their lives or slow the progress of serious diseases.

With the new pricing system, insurers abandoned the traditional arrangement that has patients pay a fixed amount, like $10, $20 or $30 for a prescription, no matter what the drug’s actual cost. Instead, they are charging patients a percentage of the cost of certain high-priced drugs, usually 20 to 33 percent, which can amount to thousands of dollars a month.

No one knows how many patients are affected, but hundreds of drugs are priced this new way. They are used to treat diseases that may be fairly common, including multiple sclerosis, rheumatoid arthritis, hemophilia, hepatitis C and some cancers. There are no cheaper equivalents for these drugs, so patients are forced to pay the price or do without.

http://www.nytimes.com/2008/04/14/us...pagewanted=all

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Oh dear. That sounds like it's going to hurt some people really badly.

I'm sorry to hear about this. It's as if the powers of be just don't want to see anyone with a chronic illness still manage to pay for their medications, pay their mortgages and eat as well!

How long before one of these three things have to go because people simply can no longer afford them?

It's just not fair!

you're absolutely right, Koala.

it's totally not fair, because the very PRINCIPLE of health insurance is to SPREAD the risk around!

this part of the article really broke my heart:

It happened to Robin Steinwand, 53, who has multiple sclerosis. In January, shortly after Ms. Steinwand renewed her insurance policy with Kaiser Permanente, she went to refill her prescription for Copaxone. She had been insured with Kaiser for 17 years through her husband, a federal employee, and had had no complaints about the coverage.

She had been taking Copaxone since multiple sclerosis was diagnosed in 2000, buying 30 days’ worth of the pills at a time. And even though the drug costs $1,900 a month, Kaiser required only a $20 co-payment. Not this time. When Ms. Steinwand went to pick up her prescription at a pharmacy near her home in Silver Spring, Md., the pharmacist handed her a bill for $325.

There must be a mistake, Ms. Steinwand said. So the pharmacist checked with her supervisor. The new price was correct. Kaiser’s policy had changed. Now Kaiser was charging 25 percent of the cost of the drug up to a maximum of $325 per prescription. Her annual cost would be $3,900 and unless her insurance changed or the drug dropped in price, it would go on for the rest of her life. “I charged it, then got into my car and burst into tears,” Ms. Steinwand said.

from 20 bucks, to $325 !!

that's horrendous !!!!!

except for one small thing!

the NYT needs to PROOF-read their stuff, or fact-check it, or something.

Copaxone is not "pills"

that's a majorly stupid error, methinks.

I saw that too, Kayo, it's pretty tragic when the insurers' greed becomes the measure of our national healthcare.

I used to manage the budgets for employee benefits at a large firm, and having an employee on the payroll that incurs a $100,000 a yr in drug/treatment cost will substantially effect the employer (or employee, depending on who pays) premiums for that benefit. This premium goes straight to the bottom line, i.e the premium charged is based on individual company averages, not the average of all people (across the state or country) who use that insurance agent.

So . . . either ALL employees will end up sharing increased costs, by paying a larger % of their salary towards these costs, or the employer loses a % of income they would otherwise have (if they are paying the premium for the employees).

These costs have never been absorbed by the insurance companies as they are there to MAKE MONEY (just like our employers and the pharma companies that charge UNNECESSARILY high costs for these drugs!). If the insurance company starts paying out more for prescriptions (this new annual cost/premium is re-calculated annually), it is reflected in the new premiums for the employers (which may or may not be charged back to employees).

For instance, if the payroll costs for a company are $500,000 per year, and the prescription costs for the insurance agent has been $50,000 per year, the % of direct costs are:

$ 50,000
$500,000 = 10% of every dollar paid out in wages goes to paying for prescriptions.

= Total cost for employees, if paid by employer: $550,000.

Now if someone who takes, say Tysabri @ $100,000 a yr, is suddenly incurring that cost in the plan:

$150,000
$500,000 = 30% of every dollar paid out in wages goes to paying for prescriptions (or a 200% increase in premiums)

= Total cost for employees, if paid by employer: $650,000.
OR
= If the premium costs are passed on to employees: 30% of their salary is now deducted to pay for the prescription costs/increased premiums of everyone in the plan.

My question is . . . who SHOULD pay this cost?

Cherie

They did reverse this decision for the time being and return the money people paid when it was first changed.

BUT...it does NOT bode well for any of us, whether we have private insurance or public assistance insurance.

I work for a small nonprofit that is dealing with major budget cuts right now. Our state has decided that their most vulnerable citizens are the first, best place to start with the 200 million dollar budget shortfall. This includes disabled people on Medicare/Medicaid, MH and MR patients, the elderly and uninsured children.

Something's gotta give. There's got to be a better way.

Can you explain what you mean, Riverwild? What do mean by "reversed the decision" and 'how' they are going to reduce budgets off the back of the disabled on Medicare, etc.?



Well, if you can't trust your government to look after the people, who can you trust? What a horrible predicament.

The only way something is going to change is if Americans all band together and demand equal health care for all your citizens. Of course this costs money (increased taxes) and will likely have to result in lower expectations . . but it ensures that everyoine is taken care of.

On American Idol last week, they said that 50 million people in the US are under-insured now. That's a lot of people that need a lot of help . . . and doesn't even include the one's that might be adversely affected by reductions to co-pays, etc. that might happen.

Cherie

I have posted on a number of occasions just how much people who are on Medicare with a Medigap and RX coverage are expected to pay for these drugs - Copaxone would run about $7000 yearly with BSBC - that's ridiculous - and no one really knows if these drugs work - I read these posts and many of you who are on one of them still have flares - so -what to do - it's a very expensive lottery !! And one that a lot of people can't afford and it won't get any better with the government hopping in with their idea of affordable health care - look to Maine and read about Dirigo -

I just did a rough calculation . . .

If there are currently 25,000 people on Tysabri (6% of PwMS in the US), at an average cost of $75,000 per patient, the health care costs for that new drug alone are astronomical:

25,000
$75,000
$1,875,000,000 per YEAR

That doesn't include steroid treatments, twice per year MRI's, several phone calls and visits to doctors and neurologists, etc.

We have a ridiculously expensive disease to treat, and once the R&D is paid, the pharma's are making HUGE profits off us. Perhaps this is where the anger should be directed!?

If we want to reduce costs, this can be partially in our control too by not incurring unnecessary costs. For example, do we really need to know if we have one more lesion every 6 months (new MRI)? Do we need to get back to work one week earlier by using steroids every time? Do we need to reduce our average of 1.5 relapses every two years by 68% (instead of 30% with the CRABs) vs. 0% with no drugs . . .?

Part of the philosophy behind a "user pays/co-pay" approach is to put some amount of onus on the "user" to make reasonably cost-effective decisions . . . or PAY.

(Not saying this is my opinion, as I sit in my ivory tower not having to pay any costs for anything . . . I'm just saying that's how it works in a capitalist economy).

Cherie