Asthma Meds Are the Poster Drugs for Pricing Lunacy

Asthma is the most common chronic disorder among Americans-approximately 40 million people suffer from it. Usually, it’s manageable with drugs, but as a recent story in the New York Times notes, the medicine is expensive and the reasons why are less than honorable.

That’s a common scenario in the land of prescription drugs.

The range of costs seems arbitrary and capricious. One steroid inhaler, Pulmicort, sells in the U.S. for an average $175, but in Britain, pharmacists buy it for $20 and dispense it free to their patients. Ten years ago, an inhaler of Albuterol cost less than $15, but after it was repatented, the cost rose as high as $100. The prescription nasal spray Rhinocort Aqua sold for more than $250 last year, but was $7 in Europe, where it is available over the counter.

What’s responsible for this lunacy? Greed? Political back-scratching? Mercury in retrograde?

The Centers for Disease Control and Prevention (CDC) estimates the annual cost of asthma in the U.S. to be more than $56 billion. That’s not just drugs, but also the costs of hospital visits by people who didn’t get their medicine, or at least enough of it. More than 3,300 died.

The U.S. spends far more per capita on medicines than other developed countries. According to one of The Times’ sources, drugs account for 10% of the country’s $2.7 trillion annual health-care costs, despite the fact that the average American takes fewer prescription medicines than people in France or Canada.

We also use more generic medications than patients in any other developed country. That offers a huge break for many patients, but even generics can be expensive. The generic version of the antibiotic Augmentin retails for $80 to $120 for a 10-day prescription ($400 for the brand-name version). Generic Concerta, which treats attention deficit disorder, goes for $75 to $150 per month.

In 2012, the cost of generics increased by an average of 5.3%, and brand-name medicines by more than 25%. And for some conditions, including asthma, generic drug availability is limited.

With the advent of widespread insurance coverage under the Affordable Care Act (ACA), drug spending is expected to rise.

In other countries, wholesale prices are set for each drug, but in the U.S. prices sway to free-market rhythms. As The Times’ story notes, “competition is often a mirage in today’s health care arena – a surprising number of lifesaving drugs are made by only one manufacturer – and businesses often successfully blunt market forces.”

Did someone mention greed?

Asthma inhalers are protected by different patents for their pumps, delivery systems and production processes. That makes it harder to make generic versions, even when the medicines they contain aren’t new. And most aren’t.

Repatenting older drugs renews patent protection, so some medicines that once were inexpensive can jump in price. (See our blog, “Researchers Say Abbott Stymied Drug Competition for its TriCor.”)

And if a drug company can make its medicine available by prescription instead of over-the-counter, it certainly will because insurers will pay more than Joe Consumer. And let’s not forget that pharmaceutical companies have paid generic manufacturers to withhold products, a scheme called pay for delay. (See our blog, “The Cost to Consumers When Drug Companies Sue Each Other.”)

Manufacturers of drugs and other health products spent $250 million last year lobbying lawmakers, The Times story says. Congress has forbidden Medicare, the largest government purchaser of health care, to negotiate drug prices. Could those facts possibly be related?

Unlike elsewhere in the world, the U.S. Patient-Centered Outcomes Research Institute, (PCORI) which evaluates treatments for coverage by federal programs, is not allowed to consider cost comparisons or cost-effectiveness in its recommendations.

“Our regulatory and approval system seems constructed to achieve high-priced outcomes,” Dr. Peter Bach, the director of the Center for Health Policy and Outcomes at Memorial Sloan-Kettering Cancer Center, told The Times. “We don’t give any reason for drug makers to charge less.”

Asthma drugs are a case in point. Bronchodilators relax the muscles surrounding small airways to open them. Frequent users often use them with an inhaled steroid as a maintenance drug to prevent inflammation and prevent attacks. The two medicines often are delivered to adults via a single inhaler, and they’re expensive. Many children take pills as well as nasal sprays that calm allergies that prompt an asthma attack.

Unlike treatment for something like acne, which a patient might decline if it gets too expensive, asthma drugs aren’t optional; patients need their drugs.

And pharmaceutical companies couldn’t be happier. The two best-selling combination inhalers, Advair and Symbicort, The Times reports, sold $8 billion and $3 billion worth, respectively, last year. Each inhaler, which lasts about a month, sells for $250 to $350 in the U.S.

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