[Marxism] Patients Struggle With High Drug Prices

Louis Proyect lnp3 at panix.com
Thu Dec 31 06:58:05 MST 2015

Patients Struggle With High Drug Prices
Out-of-pocket costs for pricey new drugs leave even some insured and 
relatively affluent patients with hard choices on how to afford them
By Joseph Walker

BELLEVILLE, Ill.— Jacqueline Racener ’s doctor prescribed a new leukemia 
drug for her last winter that promised to roll back the cancer in her 
blood with only moderate side effects.

Then she found out how much it would cost her: nearly $8,000 for a full 
year, even after Medicare picked up most of the tab.

“There’s no way I could do that,” Ms. Racener says. “It was just 
prohibitive.” Worried about depleting her limited savings, Ms. Racener, 
a 76-year-old legal secretary, decided to take the risk and not fill her 

The pharmaceutical industry, after a long drought, has begun to produce 
more innovative treatments for serious diseases that can extend life and 
often have fewer side effects than older treatments. Last year, the Food 
and Drug Administration approved 41 new drugs, the most in nearly two 

The catch is their cost. Recent treatments for hepatitis C, cancer and 
multiple sclerosis that cost from $50,000 annually to well over $100,000 
helped drive up total U.S. prescription-drug spending 12.2% in 2014, 
five times the prior year’s growth rate, according to the Centers for 
Medicare and Medicaid Services. High drug prices can translate to 
patient costs of thousands of dollars a year. Out-of-pocket 
prescription-drug costs rose 2.7% in 2014, according to CMS.

For many of the poorest Americans, medicines are covered by government 
programs or financial-assistance funds paid for by drug companies.

For those in the middle class, it is a different story. Though many 
patients can get their out-of-pocket costs paid by drug companies or 
drug-company-funded foundations, some patients make too much money to 
qualify for assistance. Others are unaware the programs exist. Medicare 
patients, who represent nearly a third of U.S. retail drug spending, 
can’t receive direct aid from drug companies.

The upshot is even patients with insurance and comfortable incomes are 
sometimes forced to make hard choices—tapping savings, taking on new 
debt or even forgoing treatment.

“Drugs are so expensive that once they flow through our ragtag insurance 
system, we have patients who can’t afford them, or they can barely 
afford them, so they’re not getting therapies,” said Peter Bach, a 
physician and health-policy researcher at Memorial Sloan Kettering 
Cancer Center in New York.

A quarter of U.S. prescription-drug users said it was difficult to 
afford them, in an August survey by the Kaiser Family Foundation. In 
another survey, published in the journal Lancet Haematology in 
September, 10% of insured U.S. patients with the blood cancer multiple 
myeloma said they had stopped taking a cancer drug because of its cost.

A look at how patients are coping with the cost of the medicine 
prescribed for Ms. Racener, called Imbruvica, illustrates the issues.

The drug blocks proteins that cause malignant cells to multiply and stay 
alive. Approved in 2013 for a rare illness called mantle-cell lymphoma, 
the medication, which is known generically as ibrutinib, was later 
approved to treat some patients with chronic lymphocytic leukemia, the 
condition Ms. Racener has.

Jacqueline Racener’s doctor recommended a drug called Imbruvica to treat 
her leukemia. The catch: Her annual income at the time disqualified her 
for copay-assistance programs for the costly treatment. Photo: Whitney 
Curtis for The Wall Street Journal
“People who had one foot in the grave after failing multiple prior 
chemotherapies, when given ibrutinib, had dramatic responses,” said 
Kanti R. Rai, a leukemia expert at North Shore-LIJ Cancer Institute in 
Lake Success, N.Y.

The drug’s wholesale list price is $116,600 a year for leukemia 
patients. For the higher dose needed for lymphoma, it is about $155,400. 
Producers gave insurers discounts averaging 11% in 2014, financial 
statements show.

For patients on Medicare—more than half of Imbruvica users—the federal 
insurance picks up the bulk of the cost under the Part D 
prescription-drug plan. But most Medicare patients still faced 
out-of-pocket costs of $7,000 or more a year.

For patients with insurance purchased privately or provided by an 
employer, out-of-pocket costs vary widely, from a small copay to 
thousands of dollars. The Affordable Care Act capped commercially 
insured patients’ out-of-pocket costs for all care, including drugs. The 
2016 cap is $6,850.

Drug companies, aware that costs borne by insured patients can limit 
sales, have stepped up their spending on programs to defray them, such 
as copay coupons.

The aid programs can come with income limits and other restrictions. In 
the case of Ms. Racener in Belleville, a suburb of St. Louis, a hospital 
social worker looked into help from nonprofit foundations funded by drug 
companies. Her income was too high to qualify.

She earned about $80,000 between her job and Social Security. Her car 
payments, credit-card debt and a $600 monthly mortgage on her ranch 
house made the drug prescribed for her leukemia in February unaffordable.

Ms. Racener’s adult children offered to take out loans to help. “We’re 
middle-class, we don’t have that type of money in the bank,” said her 
oldest daughter, Rebecca Brawley.

Ms. Racener didn’t want to burden them. She decided to skip the drug 
and, if her symptoms got worse, to try chemotherapy, a therapy that 
would be covered by her insurance with minimal personal expense, but one 
she dreaded.

Then some good news came along—riding on bad news. In August, Ms. 
Racener’s work hours were cut back, and her pay fell by 40%. She applied 
for aid to a drug-maker-funded nonprofit called the Patient Access 
Network Foundation, and, with her much-reduced income, she qualified.

In October, eight months after Imbruvica was prescribed for Ms. Racener, 
she filled the prescription and began taking it. Her disease causes a 
proliferation of white blood cells. Their number has come down 
significantly, her doctor says.

“Thank you, Lord,” Ms. Racener remembers thinking. “Thank you that I’m 
going to be able to get this, and it’s not going to cost my family 
beaucoup bucks.”

Ms. Racener’s doctor, John DiPersio, chief of oncology at Washington 
University School of Medicine, says the expense of new cancer drugs is 
burdensome for growing numbers of patients whose insurance entails 
substantial copays. “The financial destitution that modern therapies 
bring on patients and their families is enormous,” he says.

Imbruvica was developed by Johnson & Johnson and Pharmacyclics LLC, a 
company AbbVie Inc. acquired in May. AbbVie has pegged global sales of 
the drug at $1 billion this year and $5 billion in 2020.

AbbVie declined to comment on the drug’s price. Pharmacyclics’ former 
CEO, Robert Duggan, said in a June interview the price represents its 
value in the marketplace. After patents expire in about 15 years, a 
generic version will be much cheaper, he said, adding: “That’s where 
society wins. People look at it in the very short term.”

The other producer of Imbruvica, Johnson & Johnson, says new drugs are 
helping turn some cancers from life-threatening to manageable, but “more 
costs are being shifted to patients, making it hard for some to get the 
medicines they need.”

Health insurers say patients pay more for their care because costs 
continue to climb. Drug prices are one of the main drivers of 
insurance-premium increases, says Clare Krusing, a spokeswoman for 
America’s Health Insurance Plans, an industry group. Lowering patients’ 
share of expensive drugs’ cost would mean even higher premiums, she says.

Drug companies point to aid they provide. J&J says it helps patients 
manage costs both through its own programs and by donating to charities.

Pharmaceutical companies can’t provide copay aid directly to Medicare 
recipients. Doing so could be construed as a violation of the U.S. 
anti-kickback statute, which prohibits companies from using financial 
incentives to encourage the sale of their products to federal 
health-care programs. Companies can, however, point the patients to 
nonprofit organizations they finance, which cover copays for patients 
who meet income tests.

For commercially insured patients, drugmakers can directly provide copay 
aid, and frequently do. The makers of Imbruvica will cover all but $10 
of such patients’ monthly copays, regardless of income.

More broadly, about 44% of commercially insured patients’ prescriptions 
for so-called specialty drugs—costly medicines for serious diseases that 
sometimes need special handling or storage—involved copay coupons in 
2013, said a study in the journal Health Affairs.

Patient's Share

Medicare patients who take expensive drugs can be on the hook for 
thousands of dollars in out-of-pocket spending each year, even after 
their insurance pays the bulk of the drug's cost. Below are projected 
2016 costs for a dozen commonly used specialty medications.

For cancer
$11,538 out of pocket a year
For hepatitis C
Viekira Pak
For multiple sclerosis
For rheumatoid arthritis

Note: Total cost is based on drugs' retail pharmacy prices. Prices are 
based on default dose and quantity. Analysis includes 20 national and 
near-national prescription-drug plans.

Source: Georgetown/Kaiser Family Foundation analysis of data from 
Centers for Medicare and Medicaid Services
Copay assistance is only relevant, of course, if insurance is covering 
the bulk of the drug’s cost. That isn’t the case for Brien Johnson of 
Sterling, Va.

Mr. Johnson never expected to be unable to afford medicine he needed. He 
and his wife own a legal-advertising company that has provided a good 

A few years ago, after his doctor noticed swollen lymph nodes, Mr. 
Johnson was diagnosed with mantle-cell lymphoma. Treatment with 
chemotherapy was ineffective. He began taking Imbruvica around December 
2013. In about a month, he says, his disease went into remission.

His health insurance paid for it for about a year. Early in 2015, 
according to Mr. Johnson, the insurer said it wouldn’t continue paying 
for the drug under the medical portion of his policy, which covers 
services provided in doctors’ offices. Instead, Imbruvica—an oral drug 
taken at home—would fall under the policy’s prescription-drug benefit, 
and that has a maximum yearly payment of $5,000, or only about 4% of 
Imbruvica’s annual price at the time. The Affordable Care Act banned 
such limits except for existing health plans for individuals.

Though the Johnsons earned nearly $200,000 a year, the cost would be too 
much. “If the drug was a couple thousand a month, I could’ve worked it 
out,” Mr. Johnson says. “But at $12,000 a month, it would have wiped us 
out in a year.”

His insurance is a Blue Cross Blue Shield policy from Anthem Inc. A 
spokeswoman for Anthem said the insurer notified Mr. Johnson he could 
change policies to one that included full prescription-drug coverage, 
but he chose not to. Anthem agreed to pay for his Imbruvica in 2014 but 
“clearly communicated that these additional benefits” wouldn’t extend 
into 2015, said the spokeswoman, Jill Becher.

She said Anthem recognizes the cost of cancer drugs has risen 
substantially and is “committed to working with our members to ensure 
that they are able to access the most effective therapy.”

Mr. Johnson says he considered switching his coverage but decided not to 
because other plans had higher deductibles and he feared his current 
doctors wouldn’t be available in them.

He got one free month’s supply of Imbruvica from its manufacturers, he 
says, but was ineligible for continued aid because of his income.

When the drug ran out, his “cancer kicked into a more aggressive level,” 
he says. He has lost 80 pounds, and his lymph nodes have swollen again.

He made plans for a stem-cell transplant, which his insurance covers, 
but which carries risks of serious side effects. In mid-December Mr. 
Johnson, 56, began intensive chemotherapy aimed at putting his disease 
in remission so he can have the transplant.

“I don’t know how much longer I have to live, and I don’t want to spend 
my last days fighting Blue Cross Blue Shield over Imbruvica,” Mr. 
Johnson says.

Patients on Medicare are starting to feel some relief from out-of-pocket 
expenses through a provision in the Affordable Care Act that requires a 
gradual lowering of patient contributions. When the reduction is 
complete in 2020, the median out-of-pocket cost for Medicare patients 
taking oral cancer drugs will be $5,660 a year, according to a study in 
the Journal of Clinical Oncology. Even that is more than the average 
beneficiary’s household spends on food in a year, the study said.

Leukemia patient Michele Steele ’s doctor prescribed Imbruvica last year 
after she finished her fourth round of chemotherapy. Though shocked at 
the nearly $8,000 out-of-pocket expense for the year, she and her 
husband, Bill, who are retired and live in Laguna Niguel, Calif., 
decided to put the cost on their credit card and find a way to sort it 
out later.

“How are we going to do this?” Ms. Steele, 68, remembers thinking. “I 
was just really scared.”

They cut back on nonessentials such as movies and restaurants. “There’s 
nothing else to cut back on,” Ms. Steele says. “We’ve always lived very 

In August, they found a way out. They read in an online newsletter for 
leukemia patients about the Patient Access Network Foundation’s copay 
grants. After striking out on aid requests in the past, Mr. Steele says, 
“I just didn’t want to get my hopes up.” But it turned out the couple’s 
combined income of around $82,000 was just below the cutoff point.

Ms. Steele’s reaction? “Relief, huge relief,” she says.

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