Wednesday, March 15, 2006

What Price Cancer?

Here is your medicine. That will be $8,000 please . . .

The cost of living just went up. For some, it increased to a level that defies comprehension.

I understand that companies, all companies, need to make a profit in order to stay in business. Only the government can continually operate year after year at a loss and keep going without missing a beat.

Pharmaceutical companies get a lot of grief. Some of it is even deserved. But the latest saga in pricing almost defies comprehension.

Medicine that last month cost $77 to fill is $548 this month. Why? It is a low volume drug so the wholesale price must be inflated to cover the cost of producing the drug and getting it to market.

Other meds that have been used successfully for one illness are now showing promise when used off-label. This means their market is expanding so pricing can increase to meet demand.

This paradox is what is confusing, even to those who seemingly understand the yin and yang of health care.

One has low demand, so the price is inflated.

The other has high demand, so the price is inflated.

OK, so what am I missing here?

But that is not the real issue here. Pricing is something that is not controlled by outside forces.

What you pay for the drugs is another issue.

More importantly is what your health insurance plan will pay.

To an extent the carriers are caught in a squeeze. For situations like Joyce Elkins faced, her “old” drug (Mustargen) is most likely a formulary drug. This means a typical copay of $35 or less.

Not a big deal to her, but it is something that will impact health insurance rates if this recycling of older meds with new, higher pricing, becomes prevalent.

The off-label usage of newer drugs creates a problem for carriers and insured’s alike.

In the case of Avastin where the price has zoomed to $8,000 per month everyone is squeezed. This is bad news for those who rely on this med for treating colon cancer.

Worse news for those who have breast or lung cancer.

When a med such as Avastin is prescribed for an “approved” disease the cost is high, but mostly absorbed by the carrier. When it is prescribed off-label, then it becomes a non-covered medicine and the full cost must be borne by the patient.

That’s a real bummer.

So how does a patient cover the high cost of cancer fighting meds? One way is to find a plan that does not put a cap on Rx benefits. Another is to limit your total out of pocket with a HDHP (high deductible health plan). Still another is to supplement your major medical with a lump sum critical illness plan.

And the beat goes on.
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