Rising Drug Costs: What Are the Contributing Factors?

The growing cost of prescription medications continues to be a source of concern for lawmakers, patients, and providers, yet pharmacists can play a crucial role in ensuring that patients have access to the treatment they need.

Congressional Democrats, Republicans, and the Trump administration are all taking aim at the rising cost of medications, but solving the issue of high drug prices first requires an understanding of why costs are rising, according to Kathy Chase, the director of drug cost control services for Cardinal Health.

“There are many reasons for rising drug costs,” she said in an interview.

“A couple of the key ones we see are the development and release of a lot of the newer specialty biologicals that focused on cancer care or rheumatoid disease. In addition, as the availability of certain drugs decreases, the costs of these drugs go up exponentially," Chase said.

John Kilgour, the vice president of acute and alternate care sales for specialty pharmaceutical distribution at Cardinal Health, added that the costs tend to be higher for the increasing number of drugs aimed at treating smaller disease states.

“I think that what we all see today in health care is that there are rising numbers of small disease state patient bases and for each of those different and smaller entities there are unique drugs being made all the time to address those very specific things,” her said. “The cost associated with introducing those are very pronounced, and being able to get your hands on a particular product when you need it for that patient is just critical today.”

A final factor in rising drug costs cited by Chase is the growing use of personalized medicine, which can come with a hefty price tag.

In 2018 alone, there were a record number of 25 personalized medicines approved, accounting for 42% of all 2018 drug approvals, according to the recently published report from the Personalized Medicine Coalition, the "Personalized Medicine at FDA: A Progress & Outlook Report."

“The last thing I would add is that we also see a lot of more personalized medicine that you didn’t see even 5 years ago. We can take your cancer and look at the gene profile for that type of cancer and have a very customized drug therapy,” Chase said.

“Those custom, specialized drugs are what really become expensive," she said.

When asked about the implications of rising drug costs, Chase expressed concern about how high prices affect patient access and adherence.

“Access of the drugs for the patient can certainly be affected by prices,” she said.

“The drugs can be expensive; do these patients have insurance? Can they afford to pay for them? Are they available to their doctor or their community hospital?" Chase asked.

"So, the biggest impact to the patient becomes whether they can get a hold of those particular drugs," she said.

Both Chase and Kilgour noted that pharmacists can play a key role in facilitating patient access to expensive medications.

In addition to making sure that the patient has access to programs that may help supplement payments for their more expensive medications, "pharmacists can always look at what’s going on, look at their data, and remain aware of what they’re buying and what the trends are,” Chase said.

“Keeping the patient first in mind is key, it’s why we all do this, ​​​​​but getting back to the basics, running the operation, and making sure you manage against obsolescence are all important. ” Kilgour said.

"Some of those drugs in the specialty segment are very expensive. You can’t afford to have those drugs go out of date," Kilgour said.

“I think that’s where we worked with hospitals to bring tools that can help hospitals manage their inventories, as well as tools to help them identify the diseases that someone might want to use a drug for,” Chase said.

“All of the data you have available to help you make those decisions is crucial," she said. "So, for pharmacists, partnering with physicians and other providers can help to manage costs.”

Ultimately, as health care evolves and technology advances, innovation will prove essential for tackling complex problems, such as drug pricing, Kilgour said.

“You have to be very mindful of your pharmacy operations, make sure that you’re optimizing the inventory you have on hand, and look at technology to see if there are things that you can do creatively and innovatively that maybe haven’t been done before," he said.