Ethics Toolbox – Specialty Pharmaceuticals: Tip of the Ethical Iceberg
May / June 2006
Ethics Toolbox
Specialty Pharmaceuticals: Tip of the Ethical Iceberg
The number of specialty pharmaceuticals available for treating a wide range of chronic and degenerative diseases is growing rapidly. Administering and monitoring these injectables, infusions, and aerosol products and the need to be cognizant of their high incidence of side effects is time consuming. Physicians must take pains to ensure compliance. The purchase price of these products exceeds conventional pharmaceutical costs, potentially creating overwhelming economic burden on the purchaser and patient. The very instability of many specialty pharmaceuticals and their limited shelf life, exacerbated by special handling requirements such as refrigeration and overnight delivery, pose a range of challenges.
Perhaps the most dramatic challenge stems from the very success and promise of these therapeutics. Their explosive growth represents twice the annual cost of traditional ambulatory drug products. Moreover, we can expect expenditures for these drugs to almost triple by the end of this decade. At least 100 bio-pharmaceuticals from more than 70 manufacturers were in phase II or higher development, representing in excess of 40 disease categories and more than 165 indications.
Approximately 95% of these agents are administered via injection or infusion, with approximately 70% requiring administration by a healthcare professional. The average monthly cost of these agents is greater than $1,000. Consider the dramatic impact of almost 80 agents representing more than 130 indications that are expected to come to market by the end of this decade. While these products provide value, the challenge lies in how to best manage the use of these drugs to ensure appropriate access, fairness, and affordability.
Can patients afford to avail themselves of these pharmatherapeutic options? Can they afford not to? With the number of specialty pharmaceuticals and indications increasing, purchasers are witnessing a dramatic increase in costs, which threatens access to these agents. With the move toward tighter utilization management and cost share programs, payers are creating significant burdens on patients. The old standard of relying on skillful navigation through the complexities of the system will no longer be sufficient.
We are already witnessing rationing of specialty pharmaceuticals by default, in terms of economic access. The mixed message of the promise and hope these biologics afford, and the exigencies of cost control, create a thicket of challenges. Healthcare professionals and patients are being asked to balance promise and innovation with cost. Left unchecked, this leads to complicated ethical healthcare policy issues. How we balance the tradeoffs between value, cost, quality, and innovation will define how we deal with healthcare innovation in the coming years.
The short-term focus on costs frequently neglects a long-term focus on outcomes. The new focus on cost sharing, disguised as consumer-directed healthcare, raises a number of unresolved ethical questions. Purchasers and payers need to recognize that specialty pharmaceutical agents are part of the landscape of healthcare costs, not a silo. While a 20% co-insurance on a drug costing $30,000 per year may work actuarially, patient non-adherence could paradoxically lead to increased medical, laboratory, and facility costs with the potential for poor clinical outcomes.
The increasing promise of biopharmaceuticals as breakthrough medical therapies, and the need to render those therapies accessible to patients without financially overburdening our healthcare system, is at the heart of the healthcare debate. Our system is in tatters. How we address these issues and create solutions will define whether the system flourishes or collapses by the time the reader is eligible for Medicare.
Dennis Robbins is president of Integrated Decisions, Ethics, Alternatives, and Solutions (IDEAS). Robbins holds a PhD in philosophy from Boston College and a postdoctoral master’s degree in public health from Harvard. He is a member of the Editorial Advisory Board for Patient Safety and Quality Healthcare and member of several technical and scientific advisory boards. Robbins is also an adjunct professor at the W.P. Carey School of Business at Arizona State University. He may be contacted at Dennis.Robbins@cox.net.
Joel Brill is chief medical officer of Predictive Health, LLC. In 2005, he served as the co-chair of the Part D medication measures Technical Expert Panel for CMS. He is the American Gastroenterological Association advisor on practice management and reimbursement issues, and representative to the American Medical Association (AMA) RBRVS Update Committee (RUC), the CPT Editorial Panel, the Practice Expense Review Committee (PERC), and the AMA Physician Consortium for Performance Improvement. Brill may be contacted at Joel.Brill@verizon.net.
References
Council on Medical Service. (2005, November). Health insurance coverage of specialty pharmaceuticals. Accessed March 27, 2005, at www.ama-assn.org/ama1/pub/upload/mm/372/i-05cmsreport2.pdf
Nagle, P. (2005). The biopharmaceutical pipeline and a look at the future management of specialty drugs. Presentation to the PCMA Specialty Pharmacy Symposium, June 14, 2005. Accessed March 27, 2005, at www.pcmanet.org/events/presentation/ny_06/Paul%20Nagle%20Presentation.pdf