State Comptroller Kevin Lembo, who oversees healthcare purchasing for 200,000 state employees and retirees, wants the federal government to investigate and address the causes of rising drug prices.
Lembo said in a letter to Connecticut’s federal delegation Wednesday that market consolidation, new pricing models, delays in approvals for generic drugs, and “outright profiteering” are to blame for rising drug costs.
The letter comes a week after Lembo expressed doubt during a Connecticut Health Council forum about the potential for slowing cost increases without government action.
That forum followed a steep price spike in the infection drug Daraprim, which was recently acquired by Turing Pharmaceuticals.
“The headline rightfully grabbed significant attention – but the issues raised are not isolated or unique,” Lembo said in a statement. “They signal a more pervasive and intensifying trend in the pharmaceutical marketplace.”
Lembo said he has no problem with capitalism, but said excessive profits are pushing treatments out of reach for some.
Daraprim is an extreme example, Lembo said, but not the only one. The state has also seen a nearly 17 percent price increase in non-specialty drugs, including generics.
Lembo urged the state’s Congressional delegation to limit consolidation in the pharmaceutical industry through stricter anti-trust laws and to reduce the U.S. Food & Drug Administration’s backlog of generic-drug applications.
He also wants exclusivity provisions for biologic drugs to be nearly cut in half — to seven years — and to permit Medicare to negotiate drug prices with manufacturers.
A delay in a generic version of heartburn medication Nexium forced the state to spend more than $8 million on the drug last fiscal year, when a generic would have cost less, Lembo said.
Lembo drew a distinction between price increases for generic and brand drugs compared to increases for specialty drugs. The latter, he contended, often improve on previously available treatments and “are adding real value to the medical system.”
Still, he said, specialty drugs are being introduced at higher price points than they were several years ago, which has burdened the state’s health plan. Those drugs were barely more than 1 percent of the state’s pharmacy spending last year, but represented nearly 26 percent of pharmacy costs.
If the trend continues, Lembo expects specialty drugs to represent half of the state’s pharmacy spend in several years.
Connecticut is home to one of the world’s most expensive specialty pharmaceuticals — Alexion’s blood disease drug Soliris — which costs approximately $537,000 per year in the U.S., according to The Motley Fool.
