The costs of popular drugs-even generics-in dermatology are soaring, leaving patients scrambling for coverage or financial assistance and dermatologists spending precious hours on prior authorizations, drug appeals and reviews. In this first of a five-part series, experts and patients help define the problem.
The costs of popular drugs-even generics-in dermatology are soaring, leaving patients scrambling for coverage or financial assistance and dermatologists spending precious hours on prior authorizations, drug appeals and reviews.
Dr. BordoneLindsey Bordone, M.D., dermatologist at Columbia Doctors and assistant professor in dermatology at Columbia University Medical Center, says she and her staff and patients are feeling the brunt of higher medication costs, rising requirements for preauthorization and increasing denials.
“Even things that used to be really cheap, like generic topical steroids, are now really expensive,” Dr. Bordone says. “if someone has a high deductible or even what’s considered a low deductible (a $1,000 deductible is not considered high at all in the current market), you might still have to pay $130 for a cream.”
The percent increases for frequently prescribed medications in dermatology “greatly outpaced inflation, national health expenditure growth and increases in reimbursements for physician services,” according to a study published February 2016 in JAMA Dermatology.1
Of the 19 brand-name drugs researchers in the study analyzed, seven more than quadrupled in retail price from 2009 to 2015. The biggest cost offenders were topical antineoplastic drugs, for which the mean absolute increase was $10,926.58 and percentage increase was 1240%. Anti-infective medications had the smallest mean absolute increase of $333.99, while psoriasis drugs had the smallest mean percentage increase, at 180%.
Some of the medications that dermatologists most prescribe, including acne and rosacea medications saw mean price increases of 195%, while the cost of topical corticosteroids increased a mean of 290%, according to the study.
Mr. Schneider“Drugs produced by Canadian drug firm Valeant Pharmaceuticals International saw the most significant increase in cost. While we cannot accuse Valeant of being the culprit behind rising costs, there is a strong correlation between one pharmaceutical company increasing [its] prices (or charging more for a new drug) and competing pharmaceutical companies following suit. With only a select number of drug manufacturers, a company can theoretically charge a higher price. It becomes a supply and demand game where the patient always loses,” says Travis Schneider, a medical practice consultant and the co-founder of the practice growth platform patientpop.com.
Spencer Malkin, D.C., CEO of Prescriber's Choice, says pharmaceutical companies pharmaceutical companies essentially get to charge what they want for their drugs.
“This represents a pretty big problem because there are few checks and balances,” Dr. Malkin says. “In the payer world, PBMs (Pharmacy Benefit Managers) are those who assist and represent the carriers in coverage determinations and paying for medications. They look at dermatological conditions as non-life-threatening and, therefore, they feel justified in either increasing the copays significantly or not covering the medications at all.”
Dermatologists’ use of sample medications might also be fueling the financial fire, according to Schneider.
“Dermatologists will often give samples of medications (most common with acne medications) when recommending a certain prescription. For some physicians, it gives them the chance to see if a new drug works better than an older one. Samples have also been given to uninsured or poor patients who otherwise could not afford the prescription. As a result, patients who can afford the medication end up also taking on an additional portion of the cost for samples doctors provide,” he says.
Researchers have found that dermatologists are increasingly providing samples and this correlates with their use of the branded generic drugs represented by the samples. Free drug samples have the power of altering physicians’ prescribing habits away from less expensive generic medications, according to the study.2
Other factors contributing to increasing drug costs, according to Schneider, are rising insurance deductibles and decreases in what insurance providers are willing to cover. “Insurance companies review the cost effectiveness of medications and will often choose to not cover an expensive medication if there is a less costly option available that would theoretically do the same thing,” he says.
Ms. GraffDr. Bordone’s patient, Talia Graff, 27, a California resident and UCLA student who is in New York City doing dissertation research, was diagnosed with psoriasis at age 26.
“At first, I was doing phototherapy twice a week. That wasn’t enough to keep it under control. So, Dr. Bordone and I discussed other options and decided that Stelara [ustekinumab, Janssen] would probably be the best medication for me,” Graff says. “Dr. Bordone sent in a request for insurance, but the prior authorization was denied. The reason was that they approved a different biologic, Humira [adalimumab, Abbvie]. But because of family history with Humira, Dr. Bordone and I decided it was not a good idea for me to go on it. A family member had a severe reaction to it, and Dr. Bordone was concerned that I would have the same reaction. But they kept denying the request.”
Dr. Bordone says it’s not only psoriasis drugs that are on the hatchet list for approvals. The dermatologist says she’s also getting a lot of denials for acne medications and certain steroid creams.
“There are very basic generic steroid creams that [insurance companies will] cover, but they might not cover even other generic forms. You have to use one of the generics that they specifically have in their negotiated rates. In acne, denials are more for topicals,” Dr. Bordone says. “For people who are pregnant and can’t use certain topicals, getting alternatives covered for that is very challenging. And if someone fails something like generic clindamycin, other options like Aczone (dapsone gel, Allergan), are very difficult to get covered.”
Selected generic drugs surveyed in 2011 and 2014 also increased a mean of 279% during the three-year period, according to a study published February 2016 in JAMA Dermatology.
“Patients call us all the time for generic alternatives, and we’ve already prescribed the generics,” Dr. Bordone says. “They think the cost is so high … so, they’re really upset, and we have to explain to them that’s the cheapest form available.”
Dr. BaldwinHilary Baldwin, M.D., medical director of the Acne Treatment and Research Center in Morristown, N.J., says the higher prices among branded drugs isn’t surprising and might even be justified.
“Much of the profits from of a branded prescription are returned to research and development into important and, perhaps, life-saving drugs. As the cost of everything has gone up, so has the price of bringing a new drug to market,” Dr. Baldwin says. “A recent study concluded that the cost is around 2.6 [billion] in 2014, up 145% since 2003. The sharp rise is attributed mostly to the increased complexities of clinical trials. After this kind of expenditure, only 8% will make it to market. The company then has a limited amount of time on their patent to recoup their losses before generics enter the market, hence the high prices which are almost excusable.”
But the fact that generics are suddenly increasing in price doesn’t make sense. Generic houses do no research and development and generally have minimal research expenditure before launch, according to Dr. Baldwin. “This is a new situation for us. Drugs that were our go-to workhorses-drugs that anyone could get anywhere, without coupons and without hassle, were suddenly more expensive than the branded products. Doxycycline hyclate 100 mg increased from 6.3 cents to $3.36 per pill between November 2012 and 2013,” Dr. Baldwin says.
The main cause for generic drug price hikes, she says, appears to be a reduction in competition, which is attributed to drug shortages, supply disruptions and consolidations within the generic drug industry.
Patents for the broad-spectrum antiparasitic drug albendazole expired long ago, but no manufacturers have approached the FDA for approval for a generic version, according to according to a November 13, 2014 Perspective in the New England Journal of Medicine.3
The authors write that the average wholesale price for albendazole was $5.92 per typical daily dose in the U.S. in late 2010. By 2013, the average wholesale price listed for albendazole rose to $119.58 per typical daily dose. Medicaid data shows spending on albendazole went from less than $100,000 a year in 2008 to more than $7.5 million in 2013, according to the study.
Manufactures that end up legally monopolizing drugs like albendazole are free to raise the prices of those medications, the study authors note, and the Federal Trade Commission will not intervene without evidence of a conspiracy among competitors or other anticompetitive actions that keep up the increased cost.
Albendazole’s freedom to remain at a high cost despite its generic status is not isolated. “For example, digoxin manufacturers dropped from eight to three between 2002 and 2013 and the price increased by 637%. The increase in doxycycline price was attributed to a national shortage in 2013, which was the result of fewer generic manufacturers,” Dr. Baldwin says. “So bottom line is greed. They could increase the prices and get away with it, so they did.”
Next: No heroes, no villains
Melissa Withem Voss, from Waukegan, Ill., is 42 years old. A widow with three children, Voss was diagnosed at age 22 and has psoriasis and psoriatic arthritis. She’s on Medicaid.
This is her story.
“Several years ago I was trying to obtain any biologic and was told that I would have to use step therapy.
I have been given several creams and ointments, but I have moderate to severe coverage, so one tube usually doesn't help. I have found that in some medications the pharmacy can only dispense a small amount because there would be additional payments needed in order to cover the full medication that I need.
At my physical worst, 97% of my body [was affected]. It took having that severe of coverage for the state to agree. I was placed on Cyclosporine in the hospital. I later had to go into a drug trial offered by my amazing doctor, Stephanie Mehlis. She tries to help as many psoriasis patients as she can by pairing them to trials.
It is amazingly stressful to know what your doctor and you agree on as a medication choice and not be able to take it. Getting help from the government is a huge hassle in triplicate! There so many forms and authorizations for the doctors to file and sometimes for the patient. It is a long waiting game to approve something that you and your physician feel are necessary.
The horrible part is having the patience to wait. You are frustrated, in pain and itchy. The doctor wants to help you but her hands are literally tied by the government. Your physician will often prescribe other medications in the meantime. Sometimes they come with copays that you can't afford. Then your physician gets upset because you are not following their suggestions. It's not that you don't want to-it's that sometimes it's a choice between groceries, school supplies or your medicine.
Another thing that is very worrisome is if you can't take the medication due to costs [other than money]. What harm is this going to cause your body in the long run? What I mean is, are you going to become easily dehydrated or sick from the over active immune system? What about co-morbidities?
Look for Voss’s advice, solutions and thoughts about her experience in future articles in the series.
The problem is significant and the reasons behind it are complex. The next article in the series looks at forces behind drug prices and the roles that insurance companies, big pharma and even dermatologists play in rising costs.
Disclosures: Dr. Bordone and Dr. Baldwin report no relevant disclosures.
1. Rosenberg ME, Rosenberg SP. Changes in Retail Prices of Prescription Dermatologic Drugs From 2009 to 2015. JAMA Dermatol. 2016;152(2):158-63.