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For Everyday Americans, This Is What It Looks Like When Drug Companies Jack Up Prices

Greg and Suzanne Weiner CREDIT: COURTESY PHOTO
Greg and Suzanne Weiner CREDIT: COURTESY PHOTO

For more than six years, Gary and Suzanne Weiner have struggled to maintain a comfortable standard of living under the pressure of rising medical costs. Gary — a type 2 Diabetic with congestive heart failure — and Suzanne — who has rheumatoid arthritis and fibromyalgia — say their medical expenses account for nearly 30 percent of their monthly income, most of which comes from Social Security and disability assistance.

Even with Medicare coverage, the New Jersey couple often finds it difficult to purchase and refill their 20 different prescription medications. In recent years, they’ve explored alternatives, including looking for medicine in Canada. They also forwent three-month packages for cheaper monthly refills. At one point, Gary skipped out on his heart medication for three months, a decision he said landed him in the emergency room last year when his chest filled up with excess liquid.

As the Weiners inch closer to falling within the Medicare “donut hole” — a threshold when out-of-pocket costs dramatically increase — questions remain as to how they will finish out the year in good health with an annual tab that’s at $5,000.

“The medication just seems to be getting more expensive. Our dosages and medicines have changed over the years so it’s been a constant battle to measure cost,” Gary Weiner told ThinkProgress. “We know doctor bills will be high so we limit eating out, going to the movies, and other expenses. This dilemma also makes us constantly shop around for auto insurance. We’re always looking for things that will help lessen the costs of everything else.”

Our dosages and medicines have changed over the years so it’s been a constant battle.

The Weiners aren’t the only people struggling with this. Prescription drug costs increased by 13 percent last year, reaching $374 billion, according to a report recently compiled by the Center for American Progress. Generics have even suffered under this model, with their prices increasing by more than 1,000 percent during the same year.

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Advocates and lawmakers — including Democratic presidential candidates Hillary Clinton and Sen. Bernie Sanders (I-VT) — place the blame on drug companies hungry to make a profit. Indeed, this issue has been a prominent topic of discussion this week, thanks to controversy swirling around hedge fund owner and pharmaceutical CEO Martin Shkreli, who has been called “the most hated man in America” after his controversial decision to charge $750 per pill for a drug that treats severe infections in AIDS patients, pregnant women, and infants.

Drug costs count as just one part of the puzzle in our country’s labyrinth of a financially burdensome medical system, even with tenets of the Affordable Care Act (ACA) in place. A survey conducted by consumer assistance agency NerdWallet Health showed that nearly 60 percent of American patients accumulated medical expenses that surpassed their expectations in 2012, and families doled out $21 billion in payments to third-party collection agencies. The majority of those costs were related to prescription medication and medical procedures.

Desperate to avoid paying out of pocket for a medical procedure, Gary said he changed his diet and starting exercising for the past year. Through the dietary changes, his doctor said he no longer had to go under the knife. Not many people, however, are so fortunate. This year, hospitals are expected to carry out $50 billion worth of care that patients won’t be able to pay.

However, the unpredictability of drug costs has thwarted the Weiners’ efforts to spend smartly.

I never know how much my medication will cost until I pay for it.

Suzanne said it’s difficult to find out the cost of her medicine at the pharmacy each time, especially when it comes to specialty medication. Right now, her prescription regimen includes Actemra, an injectable specialty rheumatoid arthritis treatment. Before, she tried taking other specialty and generic non-specialty brands, none of which she said worked. Although Medicare couldn’t reimburse her purchase of the medicine, Suzanne has been able to refill her prescription free of charge through a pharmceutical manufacturer assistance program. Without it, she would have to shell out $800 per week for pain relief.

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“I’m in the donut hole with 11 other prescriptions that I have to refill,” Suzanne told ThinkProgress. “When your out-of-pocket costs reach a certain amount, Medicare reduces the coverage and that makes it hard to plan. I never know how much my medication will cost until I pay for it.”

High prices for specialty medications have received the most national attention, in part because of insurers’ strategy of placing those drugs in a different category that allows them to circumvent rules outlined in the ACA. That way, patients may be responsible for shouldering as much as 50 percent of the out-of-pocket cost of the drug. This has been the case for HIV and Hepatitis C medications — some of which now cost as much as $1,000 per pill.

Pharmaceutical companies have also taken advantage of the demand for specialty drugs by purchasing the rights for niche medications and significantly raising their price tags. That’s why, under Shkreli, the drug treatment in question jumped from $13.50 per pill to $750 per pill practically overnight. Similarly, the Purdue Research Foundation reversed a deal with Rodelis Therapeutics under which the latter would’ve increased the price of Cycloserine, a tuberculosis medication, more than 20-fold. Public health officers said the price hike would burden Medicaid agencies that would pay more than $780,000 in a two-year span.

It feels like these companies are punishing you for taking medications.

In response to his critics, Shrekli said the change would cover research and development costs, an explanation commonly used by pharmaceutical companies. That reasoning, however, hasn’t pacified patient advocacy organizations and lawmakers. Rep. Elijah Cummings (D-MD), the ranking member of the House Committee On Oversight And Government Reform, has called Shrekli’s actions “criminal” and suggested he should testify before Congress.

Presidential candidates have also chimed in. Earlier this month, Sanders introduced a bill that would allow patients to import cheaper drugs from Canada. Medicare could also negotiate with companies on drug costs and pharmaceutical companies would also have to reveal research and development costs.

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On Tuesday, Clinton revealed a plan of her own that would cap monthly out-of-pocket costs at $250 and lower the monopoly marketing period for biologics, a costly new class of drugs, from 12 to seven years. Another portion of Clinton’s plan aligns with part of a proposal the Center for American Progress unveiled last week that would require companies benefitting from federally funded research to cap their research and development costs.

While it remains to see if these changes would come to fruition, the Weiners said some of those policies could alleviate some of their financial burden for an expense they said has become essential to their livelihood. “It feels like these companies are punishing you for taking medications,” Suzanne Weiner told ThinkProgress. “My doctors want me to be on this medication so I can manage my rheumatoid arthritis and other conditions. It’s important to have it so I can function.”