Will drug price list bring clarity or just transparency?
James M. Berklan
So Centers for Medicare & Medicaid Services Administrator Seema Verma announced Tuesday that her agency will be publishing "Drug Dashboards" to show the public how much drug prices covered by her agency are rising.
We're talking major purchases via Medicare parts B and D and Medicaid programs.
My first reaction was a snort of skepticism and a shrug of the shoulders, as in, "This is really going to help?"
The goal is laudable: Regulators hope to shine a bright light on rising prices in an effort to humble manufacturers and distributors into more modest price increases. The share of Medicare's spending on drugs leaped 60% over a five-year period ending in 2016, so there's a need for some sort of cost containment strategy. Granted, the number of people served and the quantities of meds dispensed have risen to affect the total cost, but that's not the entire picture.
There's one big flaw in the government's plan to hold a mirror up to drug manufacturers' practices: The leaders in this sector have no shame.
Granted, they aren't all a bunch of Martin Shkrelis, the cretin who raised the price of the 62-year-old drug Daraprim from $13.50 to $750 overnight a few years ago. But they don't have to be. There are plenty of others attempting huge double-digit, or even triple-digit, price hikes year after year.
This is one industry that seems to want to wring as much as possible out of the consumer and/or his health plan. Just like hospitals do with their pin-the-tail-on-the-specialist bills. Those charges are usually a mystery to the consumer until they arrive in some eye-popping monster bill in the mail. It's a fairy tale from the start, but since everyone "knows" the charges will be knocked down by insurance coverage, they seem to get lulled into forgetting that deductibles or other remaining charges might still be out of line.
Back to the government's drug-price shaming lists. They're here, and they are admittedly interesting.
It's just very iffy whether physicians and their patients will be able to do much about offensive price hikes. In many cases, it's not as if they can simply go down the block and shop elsewhere for another drug that does the same trick, only cheaper. (In some cases, yes, there are substitutes, but not often enough.) Some observers feel there are other, more significant steps the government can take to combat price gouging. It's clear that the drug industry hasn't been cowed by the administration's get-tough drug-pricing announcements so far. On the contrary.
Part of this puzzle also lies with the head of the Department of Health and Human Services. A former drug company exec known for aggressively seeking profit, Alex Azar is definitely worth keeping an eye on. Has he seen the light? Or is he just a shark in sheep's clothing? The administration could open its own breakfast restaurant, given the amount of waffling its done on this issue: public tough talk before less than robust follow-through.
If history has taught us anything, it's to proceed cautiously. Go ahead, check out these prices with a few mouse clicks and see what comes of it.
In the long run, it might not be much.
Follow Editor James M. Berklan @JimBerklan.