WhiteCoat

More On Tier 4 Medications

I was going to put several responses to my previous Tier 4 pricing post within the comments section, but they were getting unwieldy. I also think that the issue is important enough that the discussion should be more prominent. Hence, this follow up post. I’d really like everyone’s input on this topic.

In short, I disagree with the decision by CMS and several insurers to institute Tier 4 pricing schemes on selected medications that are usually used by patients with chronic health problems. I think the decision amounts to discrimination against the members of society who are the sickest.

Several commenters raised valid points and I wanted to respond to them and seek further comments.

Peter stated that if insurers are not allowed to set risk adjusted premiums, those who use more than their “fair share” will use up the finite amount of insurance assets – to the detriment of those who utilize less than their fair share.
My response to this logic is that it is similar to creating car insurance that pays for flat tires and lock outs, but does not pay for major accidents.
It is entirely appropriate to charge higher premiums to higher risk individuals. If you smoke, you should pay more. If your BMI is more than 1 standard deviation above the national average, you should pay more. If you don’t control your blood pressure, you should pay more. Make it well known that people with these risk factors will be charged more for coverage. That incentivizes people to stop those behaviors. We have to learn that there are consequences to our unhealthy actions. If we sit on our lard butts eating Bacon McBypass burgers with extra cheese, shooting up drugs and chain smoking while watching the latest reruns of Desperate Housewives and we can’t afford insurance premiums based on those risk taking behaviors, we deserve what’s coming to us. Once insureds control these and similar “risk factors,” then their premiums should be reduced to roughly the same level as the general population.
Think of life insurance – they can’t just raise your premiums because more people died during a given time period than their actuarial data suggested.
By insinuating that insurers should only pay for those who use less than their “fair share” of resources, the assumption is that only healthy or minimally ill patients are worthy of coverage. I pay into the program all my life and use little if any resources then when I develop cancer 20 years from now, suddenly I get discriminated against because I have become an “overutilizer.” That’s a bunch of horsepuckey.

Scalpel noted that Medicare needs to cut costs and that Tier 4 pricing is one in a series of steps to do so. He also hinted that rationing dialysis and limiting end of life care could be next.

I agree that Medicare has to cut costs, but think that it needs to do so in an equitable manner. Here are just a few ideas:

  1. Stop reimbursing antibiotic prescriptions unless there is a documented bacterial infection. Those prescriptions provide no benefit to anyone and substantial harm to society as a whole.
  2. If there is not a demonstrable benefit of one medication over a generic alternative, reimburse the “designer” medication at $4/month which is what it would cost to purchase the generic alternative at WalMart.
  3. Have a national repository of patient information that can be accessed by healthcare providers so that we don’t perform repeat testing or write repeat prescriptions for the same patient.
  4. Set prices that Medicare will pay to pharmaceutical companies for their medications. Either the companies meet the price or they don’t sell their medications to any of the Medicare participants. Sound extreme? That’s what’s been happening to doctors and hospitals for years now. They’re going to cut prices by 10% in a few months. What’s good for us should also be good for the pharmaceutical industry. Single payer, baby. Look out.

Taking medications with no alternative and a substantial benefit to patients and making them unaffordable to most patients is the wrong way to go about things.

If we start rationing dialysis, we will exponentially increase the number of emergency visits for hyperkalemia. That is an experiment that will horribly backfire. Have to treat emergencies. Hyperkalemia is an emergency. Not every hospital has a dialysis unit. Paying for all the emergency transfers to dialysis centers and middle of the night dialysis sessions in addition to lab tests, helicopter flights, repeat lab tests, continuing care – this will all add up to way more than the cost of dialysis sessions. Thus goes the law of unintended consequences when dealing with the little statute called EMTALA.
On the other hand, I think futile care should be rationed. Once a patient’s condition has been labeled as “futile” by two or more physicians (or an ethics panel), then the patient/family should be given adequate time to either arrange for transport to another facility or to make payment arrangements for continuing care. After the time has come and gone, only comfort measures should be taken.
End of life care in this country is woefully inadequate. We spend billions of health care dollars “rearranging the deck chairs on the Titanic,” while causing more pain and suffering and only delaying the inevitable. We can’t sustain a system of “the best medical care someone else can pay for.”

Finally, LindaTC suggested that institution of Tier 4 pricing may cause drug companies to stop developing new treatments for disease.
The pharmaceutical industry has used this response before and I don’t think it holds much water.
If the costs of medications are brought down to a level where everyone can afford them, drug companies won’t just fold up their multibillion dollar development centers and go home. If more people can afford them, guess what … more people will purchase the medications. There will always be a financial incentive to find more medications to patent, not to sit back and continue pumping out hoards of generic medications hoping to eek out a profit every year.
If anything, a decrease in pricing (or payments) for medications will encourage the same types of economic innovations that clinicians have had to come up with for years when faced with declining reimbursements.

The World Trade Organization has a mechanism by which countries can break a drug company’s patent on a medication if drug companies engage in “abusive pricing.” Brazil broke a patent on one of Merck’s HIV drugs for this reason last year.

Why should our own citizens suffer from abusive pricing?

17 Responses to “More On Tier 4 Medications”

  1. Peter says:

    From my response to WhiteCoat here:

    Beginning with his car insurance analogy: car insurance indeed should cover catastrophic accidents in which the insured is involved. How do car insurance companies discriminate higher-risk individuals from lower-risk individuals in regards to monthly premiums? They look at the “genetics” of the individual: 16-21 year olds are higher risk than 35-50 year olds, singles are higher risk than marrieds, red-car owners are higher risk than green-car owners, 2-door car owners are higher risk than 4-door minivan owners, child-less marrieds are higher risk than married parents, individuals who have already caused accidents are higher risk than the accident-less individuals, et cetera.

    When the car insurance companies create their risk pools, the premiums have been adjusted so that when accidents do occur in a time frame, they are in proper proportion to the the risk-adjusted premiums. In other words, the company’s predictions of the risk of individual policy-holders are accurate enough to allow the company to be profitable when catastrophic accidents occur. Individuals get what they individually pay for when the need arises (they get their “fair share”).

    How this relates to health insurance: In terms of risk, health insurance companies do not and are not allowed by the government to discriminate fully between higher-risk and lower-risk individuals. Whereas car insurance companies are able to charge a higher risk-adjusted premium to an 18 year-old unmarried male who drives a red sports car, health insurance companies are unable to charge a higher risk-adjusted premium to an individual who is genetically predisposed to cardiovascular disease, diabetes, obesity, multiple sclerosis, or cancer. Ethical or not, car insurance companies already use “genetics” to risk-adjust premiums. Why is it frowned upon when health insurance companies use an individual’s family history (parents both had lung cancer) or social history (individual has already smoked 80 pack-years) to charge a higher monthly premium?

    If insurance companies are not allowed to increase premiums based on smoking history then why does every insurance application that I have ever completed ask if I smoke or have ever smoked?
    The great equalizer for health insurers is their ability to “risk-adjust” by putting waivers on any issues whatsoever with your health or by excluding you from the risk pool altogether. You had a knee injury 20 years ago? You get a rider on your knee – nothing related to it is covered ever. History of skin cancer? Good luck getting insurance. Want individual insurance and have diabetes? Surely you jest.
    Then, 20 years from now if I get cancer, they send out the bloodhounds and come up with “Gee, in your application you forgot to tell us that your third cousin’s second wife smoked cigarettes and breathed in your face during a dinner party. According to the fine print in your policy, you didn’t disclose that risk factor for your lung cancer, so we are going to deny coverage. So sorry. Thanks for your premiums. Have a nice life (whatever is left of it).”
    ToMAto or ToMAHto – every part of the insurance industry can control the risk pool.

    If an insurance company were able to risk-adjust the premiums of all individuals in its risk pool, then the insurance company would never need to institute a Tier 4 coinsurance rate of 80%/20%. Higher-risk individuals would already be paying more money into the risk pool, and when they need to get the benefits from the company, they would be getting their “fair share” (as happens already with car insurance). As it is currently in healthcare, insurance companies are not allowed to risk-adjust premiums; instead, either they are forced to charge every policy-holder a very high risk-unadjusted premium and begin using coinsurance, or they are forced to go bankrupt because they run out of resources paying for 1000 policy holders who need drugs costing $100,000 per month.

    Disagree. Insurance companies already do risk-adjust by excluding high-risk individuals from the pool. Regarding group insurance, I have seen more than one occasion where an employee that is “overutilizing” health insurance dollars has been terminated because insurance companies put pressure on the employer. Don’t try to tell me that this doesn’t happen, either.

    WhiteCoat’s comment, “I pay into the program all my life and use little if any resources then when I develop cancer 20 years from now, suddenly I get discriminated against because I have become an “overutilizer.” That’s a bunch of horsepuckey,” misses the point. WhiteCoat, if you were properly risk-adjusted as I mentioned previously, you would be paying considerably more in health insurance premiums per month; when cancer finally does happen and you need $100,000 per month in drugs, you sure as hell ought to be getting what you paid into the system (getting your “fair share”), and you sure as hell ought not to be discriminated against when that happens. The question is, how would you feel about being risk-adjusted in the mean time, just as you are with car insurance, and end up paying $5000 per month for 20 years in health insurance premiums?

    Sure if I pay into the system all my life I “ought not” be discriminated against, but how do you correlate your moral directives with what is happening to patients in the Tier 4 pricing scheme right now? Are you telling me that insurers didn’t have the foresight to see that a certain number of insureds would develop MS or cancer or renal failure down the road and are now trying to play “catch up”? How many people who have paid into the system all their lives and are now living on fixed income that “ought not be discriminated against” are now getting priced out of lifesaving treatment by the Tier 4 scheme?

    On the one hand it is easy for you to say that all those smokers and morbidly obese people deserve to pay more in premiums because they will cost more in the future, yet when you personally have a predisposition to cancer, you don’t deserve to pay more in premiums for your future health costs. In your situation, you would gladly let the other 99,999 policy holders in your insurance pool pay for your high-cost treatment. I do not think that is fair.

    You seem to have an issue with insurers being forced to pay for high-cost treatment. Isn’t that why we have insurance – to spread risk?
    If insurers are unable to spread risk effectively, then my question to you becomes “Why have insurance?”
    I bet insurers would save much more money by increasing copays to $100/month on non-generic BP medications while fully covering $4 generic BP meds. That will never happen, though.
    It’s OK to cover outrageously expensive BP meds because so many people have hypertension and pay more into the system than they take out. I pay $500/month in insurance but only receive a $200 discount for outrageously high BP meds and twice yearly doctor visits at reimbursement of $150/pop, the insurer is still ahead $200+/month. Once the insurers start seeing red numbers pop up on the screen from any given patient, then out pop creative ways to get rid of those patients.
    If we removed the billions of dollars of profits from the insurers and put that money back into the pockets of the patients, maybe there wouldn’t be these problems.

  2. eric says:

    But that’s the difference between “insurance” and “healthcare brokerage”. I don’t really need a broker for primary care and the cheap and easy stuff. I spend more on cable and TiVo than two mid-complexity visits a year and a supply of both brand and generic topicals and an inhaler. I *insure* to make sure that when something awful hits, I can get better and not end up 100K in debt. Insurance should be designed and priced to make sure that genuine catastrophes don’t leave you impoverished. Thin-slicing risk with different models between insurers creates churn as people who are thin-sliced out by one insurer figure out that some other carrier slices the risk up differently and doesn’t think they’re the walking undead, so they can save a few bucks…

    But when I’m in need of Nexavar or Tsybari or whatever exotic new pharma, I want my catastrophic medication costs covered like the rest of the other things I could need (faintzy surgery, extended rehabilitation, etc). In our plan design, if I get it in a doctor’s office or inpatient, it’s covered under my major medical.

    It’s only the oral and IM agents that I can self-administer that get into the realm of “punishing copay”.

    When I’m sick enough to need chemo or targeted therapy, my life is already turned upside down. Why create an artificial distinction between “things we cover, but are incredibly inconvenient”, and “things that might improve your QOL, but we won’t pay for because you take them yourself”?

    Tier 4 just moves the cost from the PBM back to the insurer. In a few years, the insurers will see the patterns of claims and realize that they’re shooting themselves in the foot.

    E

  3. doc99 says:

    If those chronically ill can’t afford tier 4 drugs, then they’d better get on with dying and decrease the surplus population. – E Scrooge

  4. scalpel says:

    “If we start rationing dialysis, we will exponentially increase the number of emergency visits for hyperkalemia.”

    By rationing dialysis, I meant simply not covering dialysis services for certain members of the population rather than decreasing the frequency of dialysis visits for everyone across the board. That will be a slightly more bitter pill to swallow than excluding expensive and questionably beneficial medications for other chronic conditions like multiple sclerosis or rheumatoid arthritis. But I wouldn’t be surprised if it happens during my lifetime.

    Still, by not covering dialysis services for all patients, the patients can still access the services simply by going to the ED. Suppose we say that no reimbursement is made for patients older than 65. All that a patient who is 66 and needs dialysis has to do is wait until he develops symptoms of uremia and then go to the ED. Under EMTALA, the ED is forced to provide stabilizing treatment which means … dialyzing the patient. All such a policy would do is cost-shift. The big losers would be the government that has to pay for testing/medications/transfers and the facilities providing dialysis services that have to absorb the cost of providing stabilizing care.

    Then again, maybe someone will come up with a more convenient and probably more expensive alternative to dialysis someday that we can then ration instead.

    The fundamental problem I have with this whole discussion is that not everyone is entitled to the best and most expensive treatment available simply because they have a pulse. If society is paying for your medical care, that care isn’t always going to be as convenient or effective as that which can be purchased at greater expense on the open market. Nor should it be.

    Exactly. We’re heading toward a two-tiered system. “Have-nots” get basic health care provided at centralized (i.e. “county” ) hospitals, while the “haves” get wooed by posh facilities that provide the timeliest and most luxurious care.
    So do you want to start a discussion about this one or you want me to do it? ;-)

  5. mottsapplesauce says:

    WhiteCoat,

    I totally agree with your feelings on Tier 4 pricing. I’ve had Crohn’s disease since 1987, & have faced death more times than I care to remember. After much trial with common oral meds (azulfadine, 6MP, prednisone, etc) along comes Remicade, which has allowed me to lead a somewhat normal life & go back to being a contributing member of society. If my health insurance carrier adopts this tier policy, I only hope I can continue to afford it, even if I have to change my lifestyle a little to do so.

  6. Ladyk73 says:

    I am bipolar and a contributing member of society and paying for cobra insurance while in grad school. I also have asthma. I take Seroquel and Lamitcal and they are second tiered at $25 each. My Advair and Effexor costs me $40 each. To make my blood boil, they just declared that I need to get special authorization to keep getting Effexor and Seroquel or I will SOL.
    It is maddening. Untiel recently, Lamicital was $40 too. It just makes me so mad. These meds are probably keeping from a hospitalization. I know these meds are not cheap, but cheaper than being in a hospital.

  7. Peter says:

    If insurance companies are not allowed to increase premiums based on smoking history then why does every insurance application that I have ever completed ask if I smoke or have ever smoked?
    The great equalizer for health insurers is their ability to “risk-adjust” by putting waivers on any issues whatsoever with your health or by excluding you from the risk pool altogether. You had a knee injury 20 years ago? You get a rider on your knee – nothing related to it is covered ever. History of skin cancer? Good luck getting insurance. Want individual insurance and have diabetes? Surely you jest.
    Then, 20 years from now if I get cancer, they send out the bloodhounds and come up with “Gee, in your application you forgot to tell us that your third cousin’s second wife smoked cigarettes and breathed in your face during a dinner party. According to the fine print in your policy, you didn’t disclose that risk factor for your lung cancer, so we are going to deny coverage. So sorry. Thanks for your premiums. Have a nice life (whatever is left of it).”
    ToMAto or ToMAHto – every part of the insurance industry can control the risk pool. Insurance companies already do risk-adjust by excluding high-risk individuals from the pool. Regarding group insurance, I have seen more than one occasion where an employee that is “overutilizing” health insurance dollars has been terminated because insurance companies put pressure on the employer. Don’t try to tell me that this doesn’t happen, either.

    What about a genomic-based test where predispositions to dozens of common diseases can be predicted? 23andMe and deCODE genetics already have reliable and accurate products available costing around $1000 which will show the risk for cancer, heart disease, Alzheimer’s disease, et cetera, based on SNPs. Do you think the government or The People would allow insurance companies to get a hold of the results of those tests? Should insurance companies get access to all of your past medical records? Why is there a strong tendency for individuals to falsify insurance applications by excluding preexisting conditions? Why is there outcry when insurance companies drop coverage after investigating falsified applications? Can you imagine the outcry when genomic tests become a requirement in applying for health insurance? More “invasive” ways of estimating risk need to be used; asking about smoking habits or drinking habits or the vague family history just doesn’t cut it anymore.

    And I do agree that insurance companies are dropping high-cost individuals from coverage all the time and it really is terrible.

    If insurers begin requiring these tests, then I foresee that they will be unhappy with the results.
    If I were someone who learned that I did not have any genetic predisposition toward disease I would probably decide to “take my chances” and go without insurance. I’d rather pocket $12,000 per year and put it into an interest bearing account, and negotiate directly with healthcare providers if I need the care.
    The only ones that will want insurance are the ones who are too undesirable to insure.
    Then what?

    Sure if I pay into the system all my life I “ought not” be discriminated against, but how do you correlate your moral directives with what is happening to patients in the Tier 4 pricing scheme right now? Are you telling me that insurers didn’t have the foresight to see that a certain number of insureds would develop MS or cancer or renal failure down the road and are now trying to play “catch up”? How many people who have paid into the system all their lives and are now living on fixed income that “ought not be discriminated against” are now getting priced out of lifesaving treatment by the Tier 4 scheme?

    It is a cascade of events which has precipitated the Tier 4 scheme. Insurance companies have had insufficient patient information to know their risk pool’s rates of disease, due to insufficient reporting and unavailable genetic testing. Also, many years ago, nobody had any idea of what kinds of drugs would be developed to treat conditions which previously had no definitive treatment. The specificity of drugs and the range of common diseases treatable have increased. Costs of treating the insured have exploded. I do not think that insurance companies had the foresight to know that the cost of treatment would increase (to $100,000 per month for instance) as well as the increase in the number of treatments available for relatively common diseases (cancer, heart disease, etc). This is confirmed by taking a look at financial performance of health insurance companies, such as in this instance:

    From the WSJ: Humana Inc. shares fell sharply after a flawed drug-cost projection led it to slash first-quarter and full-year earnings outlooks, adding to broader worries that accelerating health-care costs could erode health insurers’ profits…

    We can attribute the awful discrimination of high-risk patients we see right now to improper (or rather, inadequate) risk-adjustment. The premiums which high-risk patients paid were not adequate to cover their progressively increasing treatment costs. If you also want to include the responsibility of low-risk insured to pay for the treatment of high-risk insured, then their premiums were also far too low. Insurers are having a hard time to stay afloat paying for treatments because their inputs from premiums have been coming up short.

    In other words, the underwriters were woefully inadequate in performing their jobs and now the insurers are making the high-risk population pay for the underwriters’ mistakes instead of spreading the risk throughout all insured patients. Sounds like bad faith to me.

    High-risk patients have been paying health insurance premiums just like everyone else, but their payments have come up short to pay for their future treatment due to unforeseen increasing treatment costs across the board. Insurance companies would not be able to afford treatment from the insufficient premiums and are forced to cut the individuals from the insurance plan once costs have gotten out of control. I do not defend insurance company greed and I agree that it is truly very sad what is happening and it rightly angers everyone involved. But, it makes sense in light of the economics right now, and it is not simply profits that are driving these cost-cutting measures.

    You seem to have an issue with insurers being forced to pay for high-cost treatment. Isn’t that why we have insurance – to spread risk?
    If insurers are unable to spread risk effectively, then my question to you becomes “Why have insurance?”
    I bet insurers would save much more money by increasing copays to $100/month on non-generic BP medications while fully covering $4 generic BP meds. That will never happen, though.
    It’s OK to cover outrageously expensive BP meds because so many people have hypertension and pay more into the system than they take out. I pay $500/month in insurance but only receive a $200 discount for outrageously high BP meds and twice yearly doctor visits at reimbursement of $150/pop, the insurer is still ahead $200+/month. Once the insurers start seeing red numbers pop up on the screen from any given patient, then out pop creative ways to get rid of those patients.
    If we removed the billions of dollars of profits from the insurers and put that money back into the pockets of the patients, maybe there wouldn’t be these problems.

    No, I do not have any issue whatsoever with insurers paying for high-cost treatment. When properly paid for, insurance works for high-cost and low-cost obligations. In the event that an individual is injured or has a newly diagnosed illness, he or she ought to have the full benefits provided by the insurance company. The problem is that insurance has not been working for a very long time. This is why taking a look at how insurance companies are not getting adequate inputs to pay for outputs is critical to understanding why these outrageous policies of cutting patients and cutting benefits are instituted.

    If the goal is to cover expensive treatments adequately, insurance companies will need to increase premium rates across the board, irrespective of risk. On top of that, premiums for high-risk individuals need to be increased explosively to match the explosive growth of treatment costs in the high-end. Also, other ways of adjusting risk need to be accepted, namely, the use of genomic tests to evaluate the predisposition to a wide range of future diseases. It is difficult to spread risk when risk is not estimated well and the premiums are insufficient to pay for benefits as risk becomes reality.

    “Not estimated well” = bad underwriting.

    I do not know which is more palatable for the public: significantly higher premiums and more “invasive” ways of evaluating risk, or cutting high-risk and high-cost individuals from coverage. You seem to be in favor of higher premiums and invasive risk evaluation; however, when individuals and employers will need to pay $5000 per month in premiums per person as well as submit to mandatory genetic testing, there will be quite a few angry people.

    I absolutely favor higher premiums and increased risk evaluation. If the underwriting is as bad as you claim, then look out world because the industry is going to undergo a quick implosion and transformation.
    A $5000 per month premium would be a good thing. Finally it will make people gauge their own risk. Do I want to pay $60,000 per year to an insurance company and hope that they don’t stab me in the back like they did with those Tier 4 drug prices in 2008 or do I want to invest that money and negotiate directly with the health care providers when I need health care? Maybe Uncle Sam requires mandatory major medical insurance at a small premium. Great. Then the risk is spread all over the US.
    Healthy patients won’t feel a need to purchase insurance at all and insurers won’t want to cover “high risk” patients. Who will be left? Those healthy people with a propensity toward disease that you speak about. Maybe they’ll decide to take their chances, too. It’s like the last few kids getting picked for the kickball team. But is it the insurers picking the patients or the patients picking the insurers?
    If insurers aren’t very careful about their policies, they will cut themselves completely out of the picture.
    I don’t think that would be such a bad thing.

  8. DocBot says:

    Will someone please remind me why exactly this system is better than single-payer? I keep forgetting.

    I haven’t really digested the differences and benefits of single payer versus universal coverage versus free market. Regarding single-payer, my initial thoughts are this:
    When is the last time you visited a VA hospital or a state-run facility? If you haven’t lately, walk through one some time. Then ask yourself if that is what you’d want for yourself and your family.
    I am very afraid of the “Golden Rule” when it comes to health care funding –> Sorry, we’re not paying for “never events.” We’re not paying for your medications. We’re not paying for your cancer treatments.
    I just foresee the Medicare fiasco playing out ad infinitum.

  9. Elizabeth says:

    There seems to be an assumption in some of the above posts that all of the patients currently paying ridiculous sums for Tier 4 drugs were high risk (e.g., “The premiums which high-risk patients paid were not adequate to cover their progressively increasing treatment costs.”). But these diseases show up in patients without any risk factors on occasion, too.

    Oh, and whoever mentioned “excluding expensive and questionably beneficial medications for other chronic conditions like multiple sclerosis or rheumatoid arthritis,” I hope you never have to live through an MS flare or the pain of RA. I have the one and my mother and father-in-law have the other, and all of us have been helped immeasurably by these expensive drugs. If we didn’t have them, we might all well just get on with committing suicide and taking our expensive care off your hands.

  10. scalpel says:

    “So do you want to start a discussion about this one or you want me to do it?”

    I already submitted my proposal about a two-tiered healthcare system, so knock yourself out. I think you already blogged about it too though.

    Going to the ER and getting admitted will take care of some of these tier 4 problems just as they would throw a wrench in the (unlikely) dialysis-rationing experiment. If someone is admitted for neutropenic fever, then they’ll get their Neupogen as an inpatient instead of prophylactically. A similar situation might occur with Epogen or even the RA/MS drugs. Those drugs would still be somewhat effectively rationed, because they would likely get used by those who couldn’t afford them only in the most severe circumstances.

    I think pharma companies should be allowed to reap the rewards of their research; if you take away the incentive to create new and improved products, then there won’t BE any new and improved products. If patients were forced to settle for methotrexate instead of Remicade and get repeated transfusions instead of Epogen, life would still go on.

    Would it be a better life than what we have now? No.

  11. eric says:

    Great. Repeated transfusions. Want some Exjade with that?

    You’re saying cancer patients should take six hours to get two units of pooled donor PRBCs, which must be done inpatient for risk issues, rather than a quick stick with EPO? A vial of Aranesp is about $600, containing a 150 ug dose. Blood is almost *always* more expensive than EPO.

    Last I heard, there was still very real risk from transfusion, especially for the immunocompromised. Why is it so wrong to use EPO and save the blood supply for the people who have no other option?

    Most people who are affected by Tier 4 pricing were neither reckless and stupid in developing whatever disease needs treatment, and didn’t negotiate their own pharma coverage structure with their insurer. They were either extremely unlucky in the genetic lotto (Gaucher’s patients with Cerezyme) or happened to get their dread disease when there was something to be done about it as oppossed to a decade earlier when palliation was the only option. They didn’t know that there were drugs out there that, ounce for ounce, are 10, 100, 1000 and even 10,000,000 times as expensive as platinum. All they did was work hard and pay into a system that eventually snuck in a change and turned on them. My mom didn’t *demand* EPO from seeing an ad on the evening news. She was prescribed it by a doctor who had her best medical interests at heart. When you’re sick, and facing the reality of what this is all costing, and someone says “hey, your share of this is going to be $5000 over the next couple of months”, and you’re already not sure this is worth it, there’s nothing like four or five or six digits of unexpected copay to tip the balance in favor of just rolling over and giving up.

    That’s not “life going on”. That’s people feeling cornered into making a decision to stop spending money even when there’s a good chance of recovery.

    E

  12. scalpel says:

    Recovery?

    I believe that most Epogen is given to dialysis patients, most of whom will never recover. They can be transfused very easily and cost-effectively during dialysis. Regarding its use in cancer patients, you might want to read this:

    “EPOGEN® use has not been demonstrated in controlled clinical trials to improve symptoms of anemia, quality of life, fatigue, or patient well-being.”

    The cost-benefit ratio for these medications is debatable. In certain cases, the benefit clearly outweighs the cost. In others, it obviously doesn’t. The fact that patients are unfortunate in one way or another should not enter into the decision whether society should pay for their cutting edge, questionably beneficial, outlandishly expensive medical care.

    If the medication is more cost-effective than the alternative, then it will be covered. Otherwise, it won’t be.

  13. eric says:

    The basic contract that people believe they have with their insurers, especially at the catastrophic end of the spectrum can be summed up as “so long as the premiums are paid, if I get sick, you will pay for my care”. Tier 4/5 plan constructs don’t enter in to people’s minds, and in *many* cases, have been slipped into plans with as little fanfare as allowed by law. They also *never* provide examples of what these agents can cost.

    Most importantly, tier-4/5 copays are largely exempt from the stop-loss provisions that exist in most plans. Whereas my contribution for professional services and inpatient is capped at a reasonable (to me) percentage of my income for the year, tier 4/5 copays are limitless. I have nothing keeping me from financial ruin other than avoiding that therapy, and it’s not like my plan design is uncommon.

    Yes, we have to control healthcare costs, but the sneaky back-door way of doing it by offloading catastrophic events to the victims is what I find so tacky. Let’s deal with the real money wasters (practice of defensive medicine, anyone?, end-of-life ICU stays on the public dime for people with terminal diagnoses?) before we take it out on people who are genuinely sick.

    (FWIW, Aranesp, an epo analogue, is specifically FDA approved for treatment of chemotherapy-induced anemia, and has been for the last six years).

    E

  14. scalpel says:

    Aranesp® use has not been demonstrated in controlled clinical trials to improve symptoms of anemia, quality of life, fatigue, or patient well-being” (either).

    Its only benefit is to reduce the need for transfusions. And these medications do not appear to be cost-effective in typical situations.

  15. Dave the Flea says:

    No Abx Rx without confirmed cultures? So Medicare will not pay for antibiotics in COPD exacerbations? An identifiable microbe is almost never identified, but treatment with antibiotics is standard of care. I do not think it would too hard to think of other examples.

    Disagree.
    Antibiotic use is NOT the standard of care in COPD exacerbations and is considered controversial at best.
    Given the rise in MRSA, I think the risk of using antibiotics in this population outweighs any marginal benefit.

    In regards to what Peter said above, seeing as the median per capita income is around $50,000 annually, how are is the average person supposed to invest $60,000 annually? Remeber half the incomes are less than $50,000 annually. The average internist makes something around $140,000 per year. After taxes that is what, $90 or $95,000 per year subtract $60,000 and that leaves $35,000 a year to pay off student loans, invest in retirement, save for children’s college. By the way $140,000 is just shy of top 5% median income in the US for an individual. So what is the person getting by on $35,000 a year supposed to do?

    That’s the point. If insurance rates are become that high, almost no one will be able to afford them. Then insurance companies will have two choices – cater to the top 5% of the population or bow to market pressure and significantly drop their premiums in order to appeal to the average citizen.
    If I could afford $60,000 per year insurance premiums, I’d probably forego insurance and would negotiate with the health care providers directly. If the ultra-rich don’t believe the cost is worth the benefit, then who will pay premiums?
    If insurers don’t offer a benefit for the premiums they charge, then insurers will cease to exist.
    What would we be left with?
    Free market. Competitive pricing. Transparency.
    Imagine that.

  16. Dan says:

    Costly Innovation With Questionable Patient Benefit

    Recently, you may have heard or read in mass media sources about the issue of pharmacy benefit managers who have clients that are prescribed biologic medications. These patients are required to pay a great deal of money for such meds due to the placement of these types of medications on their PBMs. This is due to the status on the PBM of biopharmaceutical medications, which is known as Tier 4 status, which requires patients to pay higher co-pays for these meds. Tier 4, which also includes lifestyle meds, is determined by the PBM based on variables such as rebates and discounts from the manufacturer, which are intended to be passed on to the PBM clients, and is as similar to PBMs requiring prior approval before reimbursement. However, in some cases, the PBMs fail to do this, and have been penalized for their self interest above patient interest as required when this activity is discovered. Regardless, because of the tier 4 status of biopharmaceuticals, very sick patients have to pay a great deal of money for these meds. PBMs, by the way, are pharmacy benefit managers created for the pharmaceutical needs of employees normally, and is a benefit along with their insurance through their employer. Typically, PBMs are an element of managed health care plans, yet determined by employers as far as what is paid through negotiations with PBMs, typically.
    First of all, biopharmaceutical meds are specialty meds created differently than other typical meds, and therefore are have a unique molecular complexity that are designed for serious illnesses such as anemia or multiple sclerosis. Because of their uniqueness and exclusivity, they are very expensive- costing thousands a month for the payers. In addition, generics are not authorized to be produced as of yet for these types of meds. The cost of these biological meds is due more to the complex process of their creation, as the material costs are typically less expensive than traditional molecular medications, it is believed.
    Biologic medications began to be used primarily in the 1980s and now presently make over 60 billion a year, with about 20 percent growth in this market annually. With anemia patients, oncology and dialysis clinics are targets for such meds in this category, as anemia is associated with their treatment and conditions for such diseases.
    Yet, some claim that biopharmaceutical meds benefit patients to only a certain degree, as they do in fact extend the life of such patients, such as those on chemotherapy or dialysis, but by only a few months. So the high cost of these meds is questionable and has been analyzed by others, yet no substitutes exist for biopharmaceuticals, which is probably why the producers of these drugs can charge so much for these products. Efficacy of these biologic meds have also been questioned as well in other treatment aspects aside from life extension.
    Then there is the issue of fraud with kickbacks and overuse of some of the biopharmaceutical meds used to treat anemia in dialysis clinics in particular. On a few occasions, doctors and clinics have been penalized for overusing the meds and for kickbacks in the form of discounts of the manufacturers. Ironically, the dialysis process was never patented, yet the many centers that exist have proven to be very profitable, more for some than others. An example is the situations where dialysis doctors, called nephrologists, have been accused of over-dosing patients with biologic meds to increase their income through their discount arrangement through the manufacturer of such meds, such as those biologics for anemia, and this arrangement is being investigated by regulators and encouraged by the representatives of such meds.
    Presently, there are many that approach the FDA to aggressively insist that generic biologics be allowed into the market for the benefit of these critically ill patients, and this would be of great benefit for such patients, and this can be done, as far as the generic creation of these types of medications. And their efforts have been somewhat successful, as generic equivalents of biopharmaceuticals, called biosimilars, could be manufactured and available within the next few years. However, this situation of delays illustrates one of many flaws in the U.S. Health Care System- when the sickest have to complicate their illnesses by possible financial stress, such as the case with biologic meds. Relief is needed, and should be demanded by the public. After all, why be so sick, and then be financially burdened? One solution or suggestion is to either lower the cost of these types of drugs, or allow generic forms to enter the market faster than what the situation is presently.
    “A little learning is a dangerous thing.” —- Alexander Pope
    Dan Abshear

  17. You have to seriously deal with professional pharmacies that have a qualified dispensing pharmacist on board..:)

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