Lawmakers examine insurers' effort to control drug prices

Posted December 14, 2015

— A new state House committee on Monday began considering whether North Carolina should regulate how insurance companies restrict the use of expensive drugs to save money.

Step therapy, also known as fail first, requires that patients start with cheaper drugs, even if their doctors prescribe something else. The insurance company won't approve more expensive drugs until cheaper ones have been proven not to work.

Insurers say the practice keeps drug prices under control, but patients with severe chronic illnesses say it causes health problems by delaying needed treatment.

Twelve-year-old Logan Govan has polyarticular juvenile idiopathic arthritis and waited a painful three years while his condition spread to different joints to get approval for the drug he needed. Meanwhile, the drugs he was required to try first had dangerous side-effects, said his mother, Mindy Govan.

"Why am I having to keep my son on this very potentially risky medication just to get to the right one?" Misty Govan asked lawmakers.

Michele McArthur, who has rheumatoid arthritis, is still waiting for insurance approval for the drug her doctor wants her to take.

"I'm on my fourth drug trying to get to the original treatment he wanted to give me two-and-a-half years ago," McArthur said.

Doris Ann Price, who pushed lawmakers earlier to limit the use of step therapy in North Carolina, had to send a letter to the House Select Committee on Step Therapy because she had to move to Boston in recent months to participate in a drug trial that she said she needed because here insurance company denied the treatments her oncologists sought for her metastatic breast cancer.

"Please stand alongside me today in the fight for my life," Price wrote in the letter, which was read by Donna Kaufman of the National Patient Advocate Foundation.

State Rep. Greg Murphy, R-Pitt, said he sees the problem of step therapy every day as a surgeon – and as a parent.

"My son developed epilepsy at age 14, and we went through five drugs in seven months of him seizing before we'd use the drug that we should have used originally," Murphy told his colleagues.

Murphy criticized the insurance industry's use of a panel of doctors and pharmacists to write formularies for cancer specialists.

"These fellows, this is what they do for a living, and having a family practitioner tell them which drug that they can use for oncology is, in my opinion, ludicrous," he said.

Insurers said they have processes in place for doctors to seek exceptions for certain patients, but the patients said those processes are not working.

Lu-Ann Perryman, a lobbyist for America's Health Insurance Plans, said changes could mean higher premiums for everyone.
"Limiting the ability of health plans to utilize step therapy only encourages the unsustainable increases in pharmaceutical costs and has a serious potential to harm patients," Perryman told lawmakers.

Step therapy works fine 90 percent of the time, said Ben Twilley of Express Scripts, who noted that his company only requires one step, not four or more.

"Ten percent is a decent number," Murphy said of the cases where step therapy doesn't work. "When it’s you, it’s 100 percent. So, there is work to do in that regard."

Rep. Pat McElraft, R-Carteret, echoed Murphy's concerns.

"I’m actually appalled at the other 10 percent and what they’re having to go through," McElraft said.

Gregg Thompson, state director of the National Federation of Independent Businesses, said employers need the ability to control drug costs as part of their health insurance plans, and step therapy is part of that strategy.

"The last thing they need is a new mandate to be passed that limits their ability to control costs," Thompson said.


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  • Russ Bullock Dec 15, 2015
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    The reason drugs can cost so much in the country is that the drug companies have too many doctors in their pocket. The kickbacks are there, just better hidden now than they used to be. I doubt that half the doctors out there are really prescribing what is best for their patients. Because of advertising, patients are now asking for drugs that are not the best either. Stop all the drug adds and prices will come down from that alone.

  • Maurice Pentico Jr. Dec 15, 2015
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    Forbes did analysis and determined the average cost to bring a new drug to the public is $5 BILLION dollars. If those costs are not recouped... the company either ceases to develop new drugs and sticks to producing only drugs already approved... or they go bankrupt and dont make drugs at all. And since most drug manufacturers lack that kind of capital they have investors (your 401K) that expect a return on an investment. That is the reality of drug costs.

  • William Ellis Dec 14, 2015
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    (Continued from above) ...dialogue with the patient regarding treatment options and the risks and benefits of treatment(s); (iii) as appropriate, follow up with the patient to assess the therapeutic outcome; (iv) maintain a contemporaneous medical record that is readily available to the patient and, subject to the patient’s consent, to his or her other health care professionals; and (v) include the prescription information as part of the patient medical record."

    So how do they get away with it? By standing behind the lie that they aren't telling your doctor what to prescribe, just what they will and won't pay for. Which basically has the same effect as telling your doctor what to prescribe by controlling the money.

  • William Ellis Dec 14, 2015
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    What is most appalling is that a doctor or group of doctors I don't know and I have never seen and has never treated me and is probably not even a specialist in my condition, is telling the doctor who I have chosen to treat me and knows everything about me and my condition, what drugs to use to treat me. And that doctor or group of doctors can't be held responsible for violating the part of the Hippocratic Oath to "first do no harm" or for violating American Medical Association (AMA) protocols: "Under AMA policy guidelines, a patient-physician relationship must generally be established before medication can be prescribed through a telemedicine contact. As part of this relationship, the physician must (i) obtain a reliable medical history and perform a physical examination of the patient, adequate to establish the diagnosis for which the drug is being prescribed and to identify underlying conditions and/or contraindications to the treatment recommended/provided; (ii) have... (continued)

  • Lewis Smeltzer Dec 14, 2015
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    The way to control costs is to recover the 30% the insurance costs us.