Public Health

Drug pricing needs transparency, physicians say

Troy Parks , News Writer

The issue of rising prescription drug prices was one of 2016’s biggest health care headlines, and will likely make news again this year. A group of physicians recently voiced their concerns and one theme carried through all of their statements: the need for more transparency in how prescription drugs are priced.

From 2013 to 2015, out-of-pocket costs for prescription drugs rose 20 percent. And the recent 400-percent price increase for lifesaving EpiPens that came without any justification has caught Congressional attention from both sides of the aisle.

During a session on the state of drug pricing nationwide at the 2017 AMA State Legislative Strategy Conference, physicians forcefully spoke up about how they and their patients have been affected by rising prescription drug costs and drugmakers’ lack of transparency about those price increases.

Offering a real-world example, AMA President Andrew W. Gurman, MD, a hand surgeon from Altoona, Pa., explained how one common generic drug, metformin, is priced wholesale for his local pharmacy. The same drug that costs the pharmacy less than 7 cents per 500 mg tablet costs more than $8 per 1,000 mg tablet.

“That’s what’s going on in the real world,” Dr. Gurman said. “Your doctor writes that you need 1,000 mg of metformin, but she doesn’t know that that’s 100 times more expensive than writing two times 500 mg. We’ve got to fix this and docs can’t be the sole answer. They can’t be responsible for knowing all of the prices for all of the drugs in all of their possible combinations.”

Jack Resneck Jr., MD, a dermatologist from California and an AMA trustee, spoke to the same concern. “We use a lot of topical generics in dermatology,” he said. “Many of them, literally in the span of a year, went up over 1,000 percent in price. What we experience trying to get these drugs for our patients every day is an enormous administrative burden. Generic drugs that have been around since the 1960s with no recent R&D now suddenly require prior authorizations, and our patients call us, furious, ‘Why would you prescribe me an $800 cream?’ When we didn’t even know, week to week, [that] we were doing that.”

“I think we are all thirsting for transparency so at the point of care we actually can be responsible stewards and know what we’re spending,” Dr. Resneck added. “It’d be really nice if, when I, on my [electronic health record], typed in a prescription for a patient and it popped up [to show] what the health plan is actually going to spend, what the patient will have to pay, and here are the choices.”

Pharmaceutical companies have not offered the transparency that allows physicians or their patients to get to the reasoning behind these price hikes, and neither have they explained the increases. If a physician cannot see the difference in price before choosing which medication to prescribe to a patient, frustration abounds. The patient pays too much or cannot afford the medication and the physician does not know the price of that medication increased.

Barbara L. McAneny, MD, a medical oncologist and AMA trustee from New Mexico, offered her perspective on the pharmaceutical silence. “There’s a very nontransparent process between the pharmaceutical company and the group purchasing organization where money flows back and forth for data collection—what am I prescribing and how often I’m doing it,” she said. “That really is going to add to the expense and needs to be directly addressed.”

Dr. McAneny expressed a need to cut out all of the costs that, in her view, “add no value, just a bunch of people in the middle that are taking money out of the health care system to put in their own pockets.”

At the 2016 AMA Interim Meeting, the AMA House of Delegates adopted new guiding principles to support value-based prescription drug pricing.