The increasing costs of cutting-edge drugs calls for conversations regarding health insurance. Drugs, especially those targeted at correcting malfunctions at the molecular level cost a lot of money. Most people are aware that rates of manufacturer drugs are higher in the United States compared to places like Canada, Great Britain, India as well as other countries that have cost control laws. The significant cost of drugs are inspiring conversations on whether insurance companies will be willing or able to pay for these drugs.
One reason drug prices are higher in the USA is that the U.S. lacks a medical system that negotiates with pharmaceutical companies. Instead, most of these negotiations happen between the Rx companies and individual insurers. The CDC claims, In 1960, pharmaceuticals accounted for 11.5% of United States healthcare spending, falling to 5.5% in the 80’s, before going back to 10.4% in 2000.
Currently, there are no specific rules dictating whether the payments should be made by insurance companies or whether the cost of these drugs should be covered by out-of-pocket expenses. The decision on whether insurance covers should include the cost of particularly costly drugs is based on certain factors as well as the possible implication of decisions made.
Last year, prescription expenses were 10 percent of the 2.6 trillion dollars of the healthcare cost in the states and was the third largest expenditure after doctor & hospital spending. Zolgensma, a drug that costs about $2 million was recently approved by the FDA in May 2019. This drug serves as a one-time treatment for a condition caused by a mutation in the survival motor neuron gene. The condition is known as spinal muscular dystrophy and Zolgensma will correct this condition in children under the age of 2. Spinal muscular dystrophy particularly reduces the quality of life of affected persons as they find it difficult to carry out regular activities such as swallowing as well as breathing and holding up their head. The condition could also be fatal. Although Zolgensma is currently known as the most expensive drug in the nation, with such a pharmaceutical breakthrough, similar breakthroughs are not far behind. Thus, the conversation on if insurance companies will cover the cost of expensive drugs is a necessary one.
It is noteworthy that the particularly expensive drugs are those that correct rare conditions. Spinal muscular atrophy, for example, is a rare condition that affects motor neurons. Since conditions that are managed by expensive drugs are rare, the implementation of general measures as regards health insurance covers and these drugs may be inappropriate.
If widespread measures are implemented, there is bound to be a significant increase in the premium of health insurance which will have the effect of making health insurance coverage largely inaccessible over time. Healthcare debt is currently a significant burden for a significant number of persons and measures to increase the cost of accessing healthcare services will be met with a lot of resistance.
Health insurance providers would also be wrong to allow the full cost of such expensive drugs to be borne by the patient. There is thus a need to establish a suitable balance, guided by research, to ensure that health insurance covers still provide a form of shock absorber against the cost of rare diseases. Measures such as the inclusion of clauses that address expensive drugs would be more appropriate.
Although currently, health insurance providers have not fully confirmed their commitment to the extra cost of expensive drugs for managing rare conditions, there is a need to establish measures that focus on accessibility of healthcare services. It is also particularly important for the established measures to reflect proper consideration of the different applicable factors. One thing is certain, all parties need to come together to find a solution to this problem now.