Michael Costanzo, a Colorado farmer diagnosed with multiple sclerosis in 2016, has a well-honed ritual: Every six months, he takes an IV infusion of a medicine, Rituxan, to manage his disease, which has no cure. Then he figures out how to manage the bill, which costs thousands of dollars.
For a time, the routine held steady: The price billed to his health insurance for one infusion would cost $6,201 to $6,841. Costanzo’s health insurance covered most of it, and he paid the rest out-of-pocket.
But last fall the cost for the same 20-year-old drug and dosage jumped to $10,320, even though he was covered by the same insurance.
“Why does it have to increase in price all of a sudden?” wondered Costanzo, who lives in a small town about 50 miles north of Denver.
“I think greed is a huge problem,” he said.
As drug prices spiral upward, politicians in Washington, D.C., and in state governments across the country have sought to address the problem in limited ways, focusing mostly on one drug: insulin, a drug more than 7 million Americans rely on to manage diabetes and whose price tag more than doubled from 2012 to 2017.
With comprehensive drug price legislation stalled in Washington during the COVID-19 state of emergency, seven states in the midst of the pandemic enacted insulin payment caps of less than $100 per month, bringing the total to eight; five more have proposed legislation. In March, President Donald Trump’s health officials announced a Medicare test project limiting seniors’ monthly out-of-pocket costs to $35. In July, he signed four executive actions targeting insulin and a handful of other medications, boasting, “It’s going to have an incredible impact.”
Insulin took center stage last year, after moving demonstrations by mothers who caravanned to Canada to buy lifesaving medicine for their children at a tenth of the U.S. price; they swarmed the halls of Congress.
The measures that have resulted so far have not solved a far more widespread problem: escalating drug prices across the board — a problem that voters, left and right, say Congress must fix.
Underlying the problem is that lawmakers spent much of last year at loggerheads about whether the federal government should have the power to set prices or limit price increases. Prospects of comprehensive legislation already in the works slipped away this spring as Congress turned its focus to the COVID-19 pandemic that has killed more than 150,000 Americans and tanked the country’s economy.
So state lawmakers played whack-a-mole, targeting the drug with the most notoriety, and tackled insulin’s cost to patients. But patients like Costanzo — among the millions who rely on other vital drugs — struggle evermore to afford unchecked price increases for everything from HIV/AIDS and depression to asthma, autoimmune disorders and Type 2 diabetes.
A 2019 survey from the Scripps Research Translational Institute published in the Journal of the American Medical Association found that the costs of 17 top-selling brand-name drugs more than doubled from 2012 to 2017. Many of the drugs that made the list are household names: Lipitor and Zetia for high cholesterol, Advair and Symbicort for asthma, Lyrica for pain and Chantix for smoking cessation.
“The general public doesn’t realize this is happening with all sorts of drugs,” Costanzo said. “We’re all suffering from increased prices.”
Insulin was a natural poster child for pharmaceutical greed, encapsulating America’s problem with high drug prices in a neat package that few, if any, other medications do as effectively.
“You have an illustration of the problem — politics gone awry and capitalism gone awry,” said Celinda Lake, a veteran Democratic pollster. “They think of it as being emblematic of everything that’s going on with the system.”
Three pharmaceutical companies dominate the market for the diabetes treatment that has essentially the same formula as when it was introduced in the 1920s. Not taking insulin can quickly turn fatal. In 2017, Minnesota resident Alec Smith died at age 26 after rationing his insulin because he couldn’t afford it.
People dying “is what it takes for Congress to actually commit money and act, and then we solve these problems eventually,” said Andy Slavitt, who was acting head of the U.S. Centers for Medicare & Medicaid Services in the Obama administration.
Yet proponents of lowering drug costs say an effort centered on a single drug could backfire, and it did when COVID captured center stage.
“Everywhere in this country people are angry about their drug prices,” said David Mitchell, founder of Patients for Affordable Drugs Now, a Washington, D.C.-based group that lobbies Congress and runs campaign ads in support of lower prices. “The people with cancer, the people with autoimmune problems, the people with multiple sclerosis, the people who are taking a variety of drugs that are wildly overpriced, are going to say, ‘Now, wait a minute, what about me?’”
In early March, University of Pittsburgh researchers published research finding that, without discounts, list prices of brand-name drugs were rising about 9% a year. Late last year, House Democrats passed a bill that would let the federal government set prices for hundreds of drugs and cap seniors’ out-of-pocket costs for medication at $2,000. Trump opposed the bill, calling on Congress to send him a drug pricing bill that has bipartisan support.
“Let’s be clear — these price hikes aren’t because the medicines got better or there was a significant increase in research and development,” said Sen. Chuck Grassley (R-Iowa) in a March 5 floor speech. The chairman of the Senate’s powerful Finance Committee spearheaded a bipartisan drug pricing bill with Oregon Sen. Ron Wyden, a Democrat. “No, this was because the pharmaceutical companies could do it and get away with it.”
While Congress dithers and the topic periodically becomes the subject of a presidential tweet, patients continue to fend for themselves.
Tara Terminiello has seen the total underlying cost of her son’s anti-seizure medication, Topamax, skyrocket to about $1,300 a month, hundreds more than when he started taking it over a decade ago.
In Texas, Joseph Fabian, a public school teacher in San Antonio with health insurance through his job, has relied on inhalers since childhood to manage his allergy-induced asthma. In February 2019, he paid $330.98 for a three-pack of Symbicort inhalers, which he typically uses twice a day but more frequently during allergy season.
A year later and after a change in his health insurance plan, Fabian’s costs tripled, to $348.95 for a single inhaler, he said in an interview. According to the Scripps’ drug pricing study, the median cost of Symbicort rose from $225 in January 2012 to $308 in December 2017.
“There’s no way I can keep working out $350 every month and a half,” Fabian said.
Chances that Congress will pass comprehensive drug pricing legislation before the 2020 election have slipped away as lawmakers focus on additional COVID-19 relief. Moreover, the Trump administration, Congress and the public are now hoping for pandemic deliverance by the very same drug companies that have been raising prices as they develop potential virus treatments and vaccines. PhRMA, the powerful industry trade group, has seized the moment with ad campaigns emphasizing the sector’s enormous value.
The stalemate provides little solace for patients like Costanzo, whose medicine, Rituxan, made by Genentech, was first approved by the Food and Drug Administration in 1997 to treat lymphoma and can be used off-label for MS. It is one of seven medications with price increases unsupported by new clinical evidence, according to a report from the Institute for Clinical and Economic Review. ICER noted that over 24 months, the net price — the price after any discounts from drug companies are factored in — “increased by almost 14%, which results in an estimated increase in drug spending of approximately $549 million.”
In a statement, Genentech spokesperson Priscilla White said ICER’s analysis was “significantly limited” because it didn’t account for “meaningful, high-quality, and peer-reviewed evidence supporting the clinical and economic benefits of Rituxan.” White said the company did not increase Rituxan’s price during the period in which Costanzo’s bill rose and wouldn’t speculate on the change without knowing “other factors” that may have contributed.
“We take decisions related to the prices of our medicines very seriously, taking into consideration their value to patients and society, the investments required to continue discovering new treatments, and the need for broad access,” she said.
Costanzo was prescribed the drug by two neurologists and hasn’t had any acute relapses since he started the infusions. He eventually did get a financial reprieve, not thanks to Washington, but by enrolling in a patient discount program operated by the very drug company that sets Rituxan’s price, a program he said was an “absolute lifesaver” financially.
Genentech said its patient foundation provides free medicine to more than 50,000 patients each year. Costanzo got his first free dose in July.