I have posted a number of previous notes about our high drug prices and possible remedies to better align them with other healthcare costs (see: Researching the Cost of Stellara, a Drug Used to Treat Plaque Psoriasis; A Solution for High Drug Prices: Drug Lists with Maximum Allowable Prices; Pharma Money Flows into California Opposing Proposition 61). A recent article on this topic caught my attention because it was brief and to the point (see: The High Cost of Prescription Drugs in the United States: Origins and Prospects for Reform). Below is an excerpt from it:
Per capita prescription drug spending in the United States exceeds that in all other countries, largely driven by brand-name drug prices that have been increasing in recent years at rates far beyond the consumer price index. In 2013, per capita spending on prescription drugs was $858 compared with an average of $400 for 19 other industrialized nations. In the United States, prescription medications now comprise an estimated 17% of overall personal health care services. The most important factor that allows manufacturers to set high drug prices is market exclusivity, protected by monopoly rights awarded upon Food and Drug Administration approval and by patents. The availability of generic drugs after this exclusivity period is the main means of reducing prices in the United States, but access to them may be delayed by numerous business and legal strategies. The primary counterweight against excessive pricing during market exclusivity is the negotiating power of the payer, which is currently constrained by several factors, including the requirement that most government drug payment plans cover nearly all products. Another key contributor to drug spending is physician prescribing choices when comparable alternatives are available at different costs. Although prices are often justified by the high cost of drug development, there is no evidence of an association between research and development costs and prices; rather, prescription drugs are priced in the United States primarily on the basis of what the market will bear....The most realistic short-term strategies to address high prices include enforcing more stringent requirements for the award and extension of exclusivity rights; enhancing competition by ensuring timely generic drug availability; providing greater opportunities for meaningful price negotiation by governmental payers; generating more evidence about comparative cost-effectiveness of therapeutic alternatives; and more effectively educating patients, prescribers, payers, and policy makers about these choices.
One of the major problems in healthcare is noncompliance by patients with their prescribed drugs (see: Why Are So Many Patients Noncompliant?). One major reason for noncompliance is that patients may not be able to afford the cost of the drugs. This point was raised in a recent article with the idea that part of the solution is greater use of generics (see: Doctors should prescribe generic medications whenever possible rather than more expensive brand name drugs). Below is an excerpt from the article:
A study of Medicare beneficiaries with diabetes found that the use of brand name drugs for which identical generics are available accounted for 23% to 45% of prescriptions, depending on the class. The study authors estimated that Medicare could save $1.4 billion for patients with diabetes alone by combing generic substitution and therapeutic interchange (dispensing medications that are chemically different but therapeutically similar).The greater use of generic drugs could motivate better long-term adherence to essential therapies. Higher out-of-pocket costs for patients have consistently been associated with lower rates of long-term medication adherence. Prescriptions for branded drugs are almost twice as likely to be "abandoned" (i.e., never picked up after being filled) than generics. The vast majority of the peer-reviewed evidence has found that generic drugs are as effective as their branded counterparts regarding clinical outcomes. In contrast to the data for other therapeutic classes, some evidence suggests a lack of equivalence of brand and generic ophthalmic agents.
One way to provide incentives for physician to prescribe generic drugs more frequently is the broader adoption of academic detailing programs (see: Recommendations to increase prescribing of generic medications). Below is a definition of academic detailing (see: Academic detailing):
Academic detailing is “university [based] or non-commercial-based educational outreach.” The process involves face-to-face education of prescribers by trained health care professionals, typically pharmacists, physicians, or nurses. The goal of academic detailing is to improve prescribing of targeted drugs to be consistent with medical evidence from randomized controlled trials, which ultimately improves patient care and can reduce health care costs.
What would be the incentives for hospitals to invest in an academic detailing program for their staff physicians (see: Prescription Drugs: Academic Detailing)? The answer is obviously higher quality, lower cost care and better patient compliance of prescribed drugs. It seems to me that part of the solution to this problem is in the hands of hospitals executives, given that they are now the dominant employer of physicians (see: Dissent Roils the AMA; Some Possible Reasons for the Problems).