Rx drug prices are causing ‘financial toxicity.’ Here's how to address it.

Topics: Finance, Costs and Prices, Industry, Prescription Drugs, Providers

By Heather Bell, managing editor

Amid increased scrutiny from lawmakers and media outlets, prescription drug prices have continued to soar in recent years.

The Wall Street Journal's Joseph Walker cites Bureau of Labor Statistics data that show prices received by manufacturers for U.S.-made prescription drugs increased 9.8 percent from May 2015 to May 2016. And research suggests a large swath of the public is affected by those price hikes: A 2016 Consumer Reports survey found that about 32 million Americans reported experiencing a drug price increase within the past year. On average, the survey found, prices went up by $63 dollars for drugs consumers said they took regularly—but some patients reported increases exceeding $500.

Consumer Reports found the increases were not limited to breakthrough treatments such as those for hepatitis C that have drawn public scrutiny in recent years, but also extended to generics commonly used to treat conditions such as diabetes, high blood pressure, and cholesterol.

Those price increases affect patients' pocketbooks—and they can affect their health, too. Affordability plays a key role in medication adherence and when prices get too high, research shows patients are more likely to skip needed care.

Congress has reacted to prescription drug price increases by launching investigations, but has not addressed the issue by passing any new legislation in 2017. Officials at FDA have taken some tangible steps to address the issue, such as by prioritizing the review of generic drug applications to boost competition in the prescription drug market.

3 ways providers can ease patients' financial burden

No matter what happens in Washington, D.C., experts say there are three steps providers can take now to help patients cover the costs of their drugs.

1. Help uninsured patients obtain coverage. Advisory Board's Lindsay Conway said the first step is to educate uninsured patients about their coverage options and help them get insurance. The Advisory Board publishes American Health Line. Several studies have shown patients who are insured are more likely than uninsured individuals to have access to health care and be financially secure.

2. Leverage external sources of financial assistance. There are numerous pharmaceutical reimbursement programs for generic and brand name drugs, as well as drug manufacturing replacement programs, where manufacturers replace the provided drug at no cost. But these programs typically are not standardized and it can be challenging for providers to determine which ones could help which patients, Conway said.

Some hospitals are using tools to streamline that search process. For instance, Randolph Hospital in Asheboro, North Carolina, adopted software that uses patients' information—such as household size, annual income, and treatment—to automatically determine their eligibility for more than 1,500 programs and assist patients through completing applications. The hospital estimates that every month the tool costs about $400, but also recovers about $100,000 in patient assistance and saves workers 28 hours of time.

3. Educate insured patients about their coverage benefits. The health insurance industry can be complex and cumbersome to navigate alone. Therefore, Conway said hospitals should have a financial counsellor or someone on staff who can work with patients to better understand their coverage. "Financial counselors are pretty common at inpatient facilities and are becoming increasingly common at outpatient facilities where drug costs can really run up," Conway said.

In a Medscape article, experts from the University of California-San Francisco's School of Pharmacy also touted the benefits of discussing out-of-pocket costs with patients. They recommended asking patients which types of drugs they have difficulty affording and working to identify ways to purchase those drugs at lower prices, either through a generic or brand name drug discount program or by helping patients understand their drug formulary to see if their plan covers alterative medications.