A physician’s tale of irrational drug prices

Editor's Note: Welcome to Medical Economics' blog section which features contributions from members of the medical community. These blogs are an opportunity for bloggers to engage with readers about a topic that is top of mind, whether it is practice management, experiences with patients, the industry, medicine in general, or healthcare reform. The series continues with this blog by Stephen C. Schimpff, MD, a quasi-retired internist, professor of medicine and public policy, former CEO of the University of Maryland Medical Center, and author. The views expressed in these blogs are those of their respective contributors and do not represent the views of Medical Economics or UBM Medica.

We've all heard the outrage over the sudden rise in the price of the EpiPen. What we hear far less often is how common the sudden and dramatic rise in many other pharmaceutical prices has become in recent years. It can be easy to forget issues like this until they affect us personally. My own minor encounter with irrational drug price increases was a good reminder of how pervasive this problem is today. Here's my story.

I have rosacea, a skin condition that affects about 16 million Americans’ noses and surrounding skin with redness from dilated small blood vessels. For many, it can be debilitating and of real concern with no clearly known cause or consistently effective treatment. While generally not too annoying for me, every six weeks or so it flares up. Years ago, a dermatologist prescribed tetracycline, an inexpensive generic that worked with no appreciable side effects. About a decade ago, doxycycline was prescribed in its place, another generic off-patent medication. Initially, it was also inexpensive, but over the years the price has consistently risen much faster than inflation. The last refill cost $68 for 30 pills.

About that same time, my doctor recommended trying metronidazole topical gel, another long-time generic. Although some people have good results, it did not work for me; however, to learn that it was not effective, I spent over $100 for a small tube.

About five years ago, the dermatologist recommended a lower dose of doxycycline, and gave me a sample of a new version of this drug that combined fast and slow release. That seemed like progress until I learned the price-$10 per capsule ($300 a month and $3,600 per year). No surprise-my Medicare Part D drug insurance did not cover it. I stuck with the regular doxycycline.

Recently, I learned that there is a new compound recommended for rosacea that acts on the theory that rosacea might be caused by mites-1% ivermectin cream. As a topical agent, it would have the potential benefit of not harming the GI tract bacteria like doxycycline. Ivermectin has been on the market in pill form for many decades and costs less than 25 cents per treatment course in developing countries. The World Health Organization classifies it as one of the essential medications-used especially in developing tropical countries for diseases like river blindness.

Next: 'Clearly, something is broken in our current system'

I imagine it was not that difficult for the pharmaceutical firm to figure out how to manufacture it as a cream. Of course, to obtain FDA approval, they had to conduct a clinical trial to demonstrate efficacy and safety. While such trials can be expensive, it would not have been exorbitant. So, imagine my surprise when I learned that the cost for a tube about the size of a medium tube of toothpaste was $358. And, no surprise, my insurance did not cover it.

Of course, I don't even know if this cream will work. The metronidazole did not. Trying it would be an expensive experiment. I decided to skip the experiment and the cost of the drug and stick with the less expensive but still pricy doxycycline. But wait, the pharmacist checked his computer and found a manufacturer’s coupon that would lower the cost of my first purchase of ivermectin cream to $75 instead of $358. That is still a lot of money for what is essentially a cosmetic issue, and it will be a $75 experiment to see if it works or not for me. Incidentally, while researching prices, I found on the internet that an ivermectin paste for horses costs $1.69.

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As a believer in capitalism, I think that drug companies should be able to earn a fair profit and recoup their research and development expenses not only for a specific drug but for the many drugs that never make it to market. Without such a return, there would be no incentive for innovation. But over $100 for a tube of metronidazole, $300 per month for sustained release doxycycline and $358 per tube for ivermectin cream are all well beyond reasonable-as is the current price of standard doxycycline. It strains credulity to think that these prices are reasonable. These are drugs that have been off-patent for many years, readily available, easy to manufacture and should be inexpensive or at least not exorbitant.

Fortunately for me, my rosacea is relatively minor and I have options. Those with significant, sometimes cosmetically inhibiting and sometimes quite disabling rosacea, however, face the issue of irrationally high drug prices when they have few options. Clearly, something is broken in our current system. Drug prices are currently responsible for the highest growth trajectory in our pricey healthcare system. Medicare has no ability to negotiate with drug manufacturers to lower drug prices.

Next: 'Price controls do not work and should not be considered'

The reasons why fundamentally inexpensive-to-manufacture drugs are sold for outrageous prices is a lack of transparency, a lack of competition and an insurance model that accepts these prices for many patients.

Price controls do not work and should not be considered. Public shame has some value, but with so many overpriced drugs, its value will be diluted. Some element of transparency would be afforded with internet-based public directories of all drug wholesale and average retail prices. Medicare should be allowed to negotiate prices. And the federal government should refuse to purchase for any government funded healthcare program (Medicare, Medicaid, Veterans and military) at a price well above that charged in other developed countries where prices are usually substantially lower than in the United States. These actions will rein in inappropriate drug pricing, leaving intact the costs of innovation and a reasonable profit.

Stephen C Schimpff, MD is a quasi-retired internist, professor of medicine and public policy, former CEO of the University of Maryland Medical Center, senior advisor to Sage Growth Partners and to Sanovas Inc. and is the author of Fixing the Primary Care Crisis: Reclaiming Relationship Medicine and Returning Healthcare Decisions To You And Your Doctor