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Caterpillar Turns Drug Price Concerns Into a Butterfly

Caterpillar Turns Drug Price Concerns Into a Butterfly
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Published on September 14, 2017

Henry Kaiser once said, "Problems are only opportunities in work clothes."

I saw that quote in a commentary in THE HILL by B. Douglas Hoey, CEO of the National Community Pharmacists Association.  It reminds me of something Esther often says when we’re discussing issues such as pricing and access to essential medications: “What’s the positive approach?” she asks. “What is our opportunity to do what’s right for patients?”

That’s especially relevant as we scroll through the news and see headlines such as, “By the Numbers: Specialty Drug Costs Snowball,” or “The Price Isn’t Right: States’ Drug Pricing Transparency Laws.”

Contrast that with last week’s Power Perspective when we talked about the huge investment and small market for a breakthrough cancer cure.  Is this really where we want to start cutting spending? Especially when this week the Washington Post reported, the new CAR-T gene therapy “could be ‘an inflection point in our ability to treat and even cure many intractable illnesses,’ FDA Commissioner Scott Gottlieb said.”

On the other hand, what good are new drugs if we can’t afford them? We’re here to report there is another way.

That commentary in The Hill we opened with tells the story of Caterpillar. Not the crawling insect, but the world's leader in manufacturing construction and mining equipment. The company’s prescription drug costs, as with many companies, were climbing 14 percent each year. So in 2004, they cut out the middlemen, created their own pharmacy agreements and voila! Within five years, their prescription costs were down nearly 7 percent, and the annual cost for members in the company’s health plan were down nearly 14 percent.

According to this commentary, everyone saved money without curtailing access to essential meds. That’s the kind of innovation in healthcare policies we need so that costs are contained, and yet people get the care they need and deserve.

The author, a licensed pharmacist writes, “More than 40 major corporations, from American Express to Verizon, have formed the Health Transformation Alliance (HTA). HTA is dedicated to reducing the more than 30 percent of waste that bloats health care spending.”

A 30 percent reduction without threatening our health or stifling incentive for innovation by responsible developers of new therapies.

So the first call to action is not for us, but for more companies where some of us may be employed or covered as dependents to follow suit and join the HTA or follow a similar path on their own. The call to action for us as patients and caregivers is to encourage this, and look for legislation that requires transparency from the middlemen.

But wait, there’s more that can be done to lower drug prices: What if we rebuild the entire drug development and approval process to make it better, stronger, faster?

Peter Pitts, President and co-founder of the Center for Medicine in the Public Interest, and former FDA Associate Commissioner, writes that could get breakthrough medicines to patients sooner and at a lower price.

He quotes FDA Commissioner Scott Gottlieb who says, "We're on an unsustainable path, where the cost of drug development is growing enormously, as well as the costs of the new medicines. We need to do something now, to make the entire process less costly and more efficient.”

There’s even talk of revamping the time-honored, three-phase approval process. Let’s test drugs on several cancers at a single time (as you know sometimes patients with different cancers share the same cancer gene types and where the same medicine might work). And let’s make greater use of computer modeling to help select the optimal dose. We can do better than our 1960s-era system. But it requires using big data and smart thinking to accelerate development of medicines.

Pitts says Commissioner Gottlieb, “called for savings in development costs to be passed along to consumers.” We are all for that and will be watching to make sure it happens!

How exactly those savings will be passed along is not certain. So call to action number three is to watch these developments from the FDA, and encourage legislators to support them.

The point of both these reports that I spotted is that there ARE ways to slow the growth in prices we pay as patients and families, without jeopardizing the benefits we get from advances in science.  Patient Power will be following these developments closely and will report back as these ideas take shape.  As always, I welcome your comments, positive or negative, so that we can work together to fight for the affordable access to the best medicines that we need and deserve.

~Andrew Schorr

Please remember the opinions expressed on Patient Power are not necessarily the views of our sponsors, contributors, partners or Patient Power. Our discussions are not a substitute for seeking medical advice or care from your own doctor. That’s how you’ll get care that’s most appropriate for you.


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