nos-trum. pronunciation: \nos'-trum\. noun. Etymology: Latin, neuter of noster our, ours.
1. a medicine of secret composition recommended by its preparer but usually without scientific proof of its effectiveness.
2. a usually questionable remedy or scheme.
See here for more discussion.

Tuesday, April 27, 2010

Terminally Stupid Drug Coverage Rules: IV Drugs Yes, Pills No

Researchers and policy makers are looking at so-called "chemo parity" initiatives.  See here in the WSJ Health Blog (Apr 27).

The way insurance plans (both government and private) are organized, medical "treatments" are covered, but drugs are considered separately.  So, if you're a cancer patient and there's an expensive drug that you require, but which can be taken either intravenously (through a vein) or orally (swallow a pill), your plan covers the surgical procedure to put in an IV portal and covers the drug that goes in it, but that same plan doesn't cover (to the same extent) taking the same drug by mouth--most drug plans are capped.  The cost of the drug itself is about the same whether given IV or by mouth.

Note that we're talking about drugs that cost in the range of $1,000-$5,000 a month. 

Follow me here:
1.  Most patients can't afford to pay for the pill (limited coverage).
2.  The IV treatment involves pain and inconvenience of a portal strapped to you and having to go somewhere every time a treatment is needed.
3.  Dumbest of all, in the final analysis the total cost is more to have the treatment done IV than it would to complete the therapy with just the pills.
4.  Lastly, the icing on the cake, primary drug treatment for some cancers exists only in pill form--still not covered even when there's no IV alternative.

There are good reasons for health care reform.  This has been one of them (Dragnet theme in the background).

But here's where I differ.  In a WaPo article (Apr 27),
Insurance industry officials say that the high cost of oral drugs, not paltry reimbursement rates, are the primary obstacle. "If you look at a drug that costs $60,000 a year, the real question is, 'Why does it cost $60,000 a year?' not 'Why doesn't a plan cover it?,' " said Susan Pisano, a spokeswoman for America's Health Insurance Plans, the industry trade association. "Our member companies are trying to do everything they can, but I would say this is a real hardship for people."

Really?  This is the same finger-pointing we've seen for the last year.  It's the doctors, no it's the insurance companies, no it's the drug companies, no it's Congress, etc, ad nauseum.  It's a coverage issue for the plans, not a cost issue for the drug companies.  And it's a problem that needs fixing with "chemo parity" rules, but don't try to shift the blame.

Why does the drug cost $60K?  Because it costs about $1-2 billion dollars in research, development and testing, followed b the drugy 7-10 years of trials before a company gets the drug approved.  And, the drug is for a not-common illness so there won't be any high-volume sales to bring the price down.

If you ran a drug company and you told your employees and investors, "Hey, we went $2B in the whole, but I decided to sell the product cheaply, so sales will only cover a small fraction of what we spent; that's OK with you, right?"

Get in line for your unemployment application ->


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