Prescription Drug Pricing: The Experts Weigh In

'It's a simple truth: patients lose access when they can't afford their medications,' explained CVS Health Chief Health Strategy Officer and General Counsel Tom Moriarty in his opening remarks at the November 2016 POLITICO Pro Healthcare Briefing. Moriarty noted that prices of new and existing drugs are rising at rates that exceed inflation, and posed the following questions:

• How do we ensure patients have access to the right medication?

• How can we be sure that the health care system is not bearing unnecessary price increases?

• How do we create a framework to re-accelerate bringing innovations to the prescription drug market?

These questions set the tone for the subsequent 'Politics and Prices: What's Next for Drug Costs?' panel discussion. Sponsored by CVS Health and convened by POLITICO in Washington, D.C., the event featured four experts who gathered to talk about the current state of prescription drug costs in the United States, and how the results of the 2016 election may affect policies and pricing going forward.

Drug Pricing Discussions Will Continue in Washington and the States

The panelists agreed that while prescription drug pricing will remain a concern for the new administration, it is likely to be overshadowed, at least initially, by discussions about the future of the Affordable Care Act. Some panelists stated that the expected reauthorization of the Prescription Drug User Fee Act, and other related laws, could serve as a vehicle for some drug pricing provisions to make their way through the Capitol Hill. And with drug costs straining state budgets, panelists suggested that the potential for action around drug pricing at the state level will remain high.

Value is Personal

As 'values-based' reimbursement gains traction and more payors opt to offer high-deductible health plans, patients are bearing an increasing share of the cost of prescription drugs. But when discussing 'value,' the experts cautioned, it's important to remember that perceived value is highly personal. Will this drug extend a cancer patient's life by one year or one month? What are the side effects and corresponding quality of life related to a particular treatment? A further complication is that not all patients receive the same benefit from the same drug. Patients and prescribers need comprehensive information to weigh the financial burden against a treatment's potential benefits.

Price Transparency Can Help

The experts stressed that it's important for providers, insurers and patients to understand how drugs are priced relative to their effectiveness. For example, tools that give doctors cost information at the point of prescribing can facilitate a conversation that helps patients decide whether a particular therapy is right for them. In this scenario, a patient who cannot afford the physician's suggested medication might opt for a less-expensive alternative, rather than being faced with sticker shock at the pharmacy and leaving with nothing. The panelists also called for additional focus on manufacturers' claims regarding research and development and marketing costs to understand the true cost of developing and advertising a drug.

For more information about the issues related to prescription medication costs, visit our Rising Drug Prices Information Center.