As drug prices grow, payers dig into patients' wallets

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Who's going to foot the bill for specialty drugs? That's a growing worry for everyone from patients to drugmakers. And then there are the employers and insurers in the middle, who are trying to control healthcare costs any way they can.

The hefty price tags on meds like the widely used Humira from Abbott Laboratories ($ABT) and Amgen's ($AMGN) Enbrel--or the newly minted cancer drugs from Bristol-Myers Squibb ($BMY) and Seattle Genetics ($SGEN)--have payers using strategies such as tiered pricing, to shift more of the cost onto patients. But the bigger the co-pay, the more likely it is for patients just to walk away; some 10% of expensive cancer prescriptions never get filled.

Insurers blame drugmakers for setting prices so high. "Why do these specialty drugs cost several hundred thousand dollars for a few years' treatment?" America's Health Insurance Plans spokesman told Kaiser Health News. But drugmakers cite the cost of development--not to mention the time involved in moving a drug to market. Seattle Genetics took decades on Adcetris, for instance. They say specialty-drug tiers restricts access to needed meds. Patient advocacy groups are alarmed by the growing number of meds on those specialty tiers. "[T]he cost to cancer patients is going to grow accordingly," one cancer patient advocate told Kaiser.

What's next? Well, the U.S. government will have to wrangle with the issue as it develops guidelines for coverage required by healthcare reform legislation. Those are due in 2014. In the meantime, some state legislatures are taking it up. As Kaiser notes, New York has barred insurers from charging patients a percentage of a drug's cost, while proposals to bar or restrict specialty tiers are pending in California, Maryland, Massachusetts and several other states, Kaiser says.

- read the story from Kaiser Health News

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