Drug research continues to produce new advances, some of which are potential cures. But even though more than $800 billion is spent on pharmaceuticals each year, many Americans either don’t get the medications they need or, for a variety of reasons, can’t.
“A quarter to a third of adults skip or ration their medications because of the cost of medications, which we find unacceptable,” said Jay Rughani, partner at Andreesen Horowitz. “And that puts more and more pricing pressures on the demand side, on the employer side, on the payer side and on the government side in terms of how we think about making these drugs affordable. »
Rughani’s comments came as moderator of a panel on drug costs at MedCity News’ Bullseye conference in Chicago on Thursday. The panelists were Tanvi Patel, vice president and general manager of Amazon Pharmacy, AJ Loiacono, CEO of Judi Health, and Annie Collins, chief commercial officer of Aradigm Health.
There are many friction points that make medications less accessible, Patel said. In Amazon’s hometown of Seattle, downtown is considered a drugstore desert. A consumer may have to travel 10 miles and allow an hour just to pick up a prescription. This inconvenience leads many people to not take their medications, Patel said. Another sticking point is the lack of price transparency. Consumers do not know how much they will have to pay before arriving at the pharmacy.
The lack of price transparency is intentional, Loiacono said. When people don’t understand the appropriate price, they overpay. He described the complexity of drug pricing as a game of tug-of-war between drugmakers and payers. Loiacono pointed out that the biggest payer is the U.S. government, which charges different rates depending on the 340B program, Medicare and Medicaid, the Department of Defense and the Veterans Administration.
“If the federal government can’t get a single price for a drug, what chance does the average employer have, what chance does a small employer have, like Doug’s Towing or Patty’s Plumbing,” Loiacono said. “They don’t have a chance, and they are often the ones who are completely mistreated in this system. And to take this further, the people who suffer the most are the elderly and the poor in this model.”
Just as Amazon seeks to increase price transparency for retail products, the company is also trying to improve transparency for drug prices, Patel said. If there is a choice, companies are then incentivized to offer a better offer and a better experience to attract consumers. For some prescription medications, patients benefit from a level of choice and transparency through new direct-to-patient sales channels, such as Eli Lilly’s LillyDirect. Amazon powers some of these platforms by becoming a dispensing pharmacy option.
Amazon is also part of TrumpRx, a website created by the Trump administration that lists prices for some generic products and a limited number of brand-name drugs. But Patel noted that TrumpRx displays cash prices for products and that fewer than 10% of Americans pay cash for their medications.
Collins said there is complexity in every part of the system, including in some of the most expensive drugs available. Aradigm operates a benefit platform for cell and gene therapies, treatments that offer curative potential. Price transparency and choice are not considerations for many of these treatments, Collins said. Cell and gene therapies are covered by medical rather than pharmaceutical benefits.
“These are medications that are administered by physicians and, for the most part, purchased by physicians as well, and you don’t go to a pharmacy to pick up your medical medications,” Collins said. “So yes, you can choose your doctor, but from there it’s mostly providers and payers fighting in the background.”
In some cases, the doctor’s choice of treatment may be surprising. As an example, Collins pointed out Casgevy, a gene therapy from Vertex Pharmaceuticals against sickle cell disease. Casgevy competes with Lyfgenia from Gentix Biotherapeutics. Although Casvey’s clinical data shows better results and this product costs $900,000 less, many doctors choose Lyfgenia. Collins said that in cell and gene therapy, doctors choose what they were accustomed to administering when they were investigators in a therapy’s clinical trials.
“Science is making incredible leaps and bounds in terms of what we can offer patients, but when it comes to actually paying for these things and supporting patients in the ways they need to get these therapies, that’s where we have the biggest gap today,” Collins said.
Collins said there are about 2,000 cell and gene therapies in development today. Many targeted diseases currently have no other treatments available. But Collins questioned the sustainability of list prices in the millions of dollars. She said pharmaceutical companies need to come to the table to discuss pricing before these drugs launch, not after.
Photo: grTreize, Getty Images
