Improved Drug Pricing Needed for Children with Serious Chronic Illness

Pharmacy expenditures account for 20% of total care costs for children with hemophilia.

Improved pricing is needed for high cost, effective medications that treat children with serious chronic illness, a recent study found.

The study, published in JAMA, examined outpatient pharmacy product expenses for publicly insured children with serious chronic illness in California. The results showed that hemophilia treatment comprised approximately 40% of expenditures, but included just 0.4% of the group studied.

"Our study underscores the potential effect of new, expensive but efficacious pharmaceuticals on public insurance programs for children with chronic illness,” the authors wrote. “These findings may inform efforts to enhance value in these programs, particularly as new insurance frameworks, such as accountable care organizations, are considered."

Demands for health care delivery have increased as a result of improved survival among children with serious chronic conditions, with medication a significant driver of care costs, the study found. The researchers noted that the high cost of drugs have left cost-containment efforts in peril.

The researchers evaluated paid claims for 34,330 children up to 21 years of age through the California Children's Services (CCS) data set from 2010-2012. The analysis found outpatient pharmacy expenses totaled $475,718,130, which was 20% of total health care expenditures.

This amounted to a per-child pharmacy expenditure ranging from $0.16 to $56,849,034, with the average and median per-child expenditures at $13,857 and $791, respectively.

The blood formation, coagulation, and thrombosis agent drug class represented the greatest share of outpatient pharmacy expenditures at 42%. Meanwhile, antihemophilic factor represented 98% of the hemophilia class expenditures and 41% of total pharmacy expenditures.

The average per-child expenditure for antihemophilic factor was $1,343,262. In children with antihemophilic factor claims who were enrolled for all 3 years, the average and median per-child annual expenditures were $634,054 and $152,280, respectively.

The next largest percentage of total pharmacy expenditures was for central nervous system agents at 9.2% for an average expenditure of $1,869 per child.

"Antihemophilic factor is highly efficacious and essential in caring for children with hemophilia, putting pressure on public programs to seek improved pricing mechanisms for antihemophilic factor and other highly efficacious, high-cost medications," the authors noted.