Exciting new drugs for arthritis are coming down the pipeline. Unfortunately, their prices mean some of the people who need them most can’t afford them. Here, we explore the issue and see where this pricey predicament might lead us.

The reviews sound like raves for a Broadway play: "Extraordinary!" "Remarkably effective!" "A godsend!" Dramatic though it is, we’re not talking theater here. The object of all this excitement is a new – but pricey – drug called Enbrel. At $12,000 per year, this breakthrough drug, which patients with difficult-to-treat rheumatoid arthritis give by self-administered injection, heralds revolutions on two fronts.

As the first of a new class of drug called biologic response modifiers approved for rheumatoid arthritis (RA), Enbrel is the front-runner in a race to make use of the ever-increasing knowledge researchers are gathering on the molecular basis of the disease. "This is an exciting time for rheumatology and for people with arthritis," says Steve Abramson, MD, a rheumatologist at the Hospital for Joint Diseases in New York and chair of the Arthritis Advisory Committee at the FDA’s Center for Drug Evaluation.

But as the revolution on the treatment front speeds along, another, less desirable one gathers steam: reduced access to medications due to the increasing cost of drugs to individuals, insurers and other payors.

Drug costs are skyrocketing – both on an individual patient basis, as is the case with Enbrel, and on a cumulative basis, as is the case with Celebrex, one of a new type of anti-inflammatory medications. While the estimated individual annual cost of Celebrex is what some would call reasonable (a little more than $1,000), the catch comes in its popularity. Within little more than two months of its launch in December 1998, more than 279,000 prescriptions were filled, a launch rivaled only by Viagra, the $10 pill for erectile dysfunction that made pharmaceutical sales history when it was approved in spring of 1998. A frequently prescribed but inexpensive drug can cost insurers as much or more than an expensive drug that is infrequently prescribed.

Eye popping price tags are not exclusive to arthritis medications. The phenomenon and the repercussions are found across the board. Still, people with arthritis – for whom pharmaceutical treatment can be critical – and advocates for them are rightly concerned that the mushrooming costs of medications will mean that those who need drugs won’t be able to get them. That’s a real threat to many and is, in fact, already a reality for some. (See "Case Study: Who Gets the Drug and Who Doesn’t".)

At a glance, the simplest answers are the most seductive. "It’s so easy to say, ‘Well, if the drug companies just didn’t gouge on prices’ … or ‘if the insurance companies would just pay’ … or ‘if the patients didn’t come in and demand specific drugs after watching their commercials on TV, we wouldn’t have this problem,’ " says Bob Meenan, MD, dean and professor of health services at Boston University School of Public Health. "That’s just not true. People [and institutions] are working and behaving in ways that are understandable, given the incentives and arrangements of the system. So we just have to get past that and realize we’re all in this boat together."

Those in the "boat" – patients, physicians, legislators, the pharmaceutical industry, private insurers, employers and others – are already feeling the "incentives and arrangements of the system" changing and are trying to influence the outcome of the sure-to-be-sizable changes to come.

In an attempt to sort out this tangled problem, the Arthritis Foundation recently convened experts from various fields to examine the issues and what’s at stake. (See "Moving and Shaking.) Here are some of the highlights from the discussion, along with a look at the temporary fixes and proposed solutions that came to light that day.

Pertinent Points

• Some say pharmaceutical companies are sitting pretty right now, raking in the money while charging ever-increasing prices for their newly approved drugs. Admittedly, there’s no simple answer to that accusation. But a few facts are relevant. U.S. companies spent more than $21 billion on research and development in 1997 (that’s $620 million per company), in contrast to the $6.5 billion they spent 10 years ago. And while the top 20 companies have delivered total shareholder returns topping 20 percent a year over the past five years –one company, Pfizer, leads the pack with a 40 percent annual return – that won’t last long, according to PricewaterhouseCoopers, a pharmaceutical industry advisor. Reportedly, to deliver a 7 percent annual return over the next few years, these companies will have to dramatically improve their research and development productivity or ensure that every drug they produce is a blockbuster.

And not every company is on easy street. Immunex, the company that developed Enbrel, has spent $250 million to date to develop the drug for RA. Sales of Enbrel have allowed the company to turn its first profit from a new product in 18 years ($245,000 in the first quarter after Enbrel’s launch), according to a company spokesperson.

• When insurers balk at paying for a prescription, it’s not necessarily the drug itself that’s the problem. Sometimes the problem is how frequently – and some would say unnecessarily – some doctors prescribe certain drugs. For example, Celebrex, a new anti-inflammatory, has raised red flags for some insurers for just that reason.

Although its chief benefit over other, less expensive nonsteroidal anti-inflammatories (NSAIDs) is the lack of gastrointestinal (GI) side effects, the vast majority of the 13 million or so people who take NSAIDs don’t have such problems. Fifteen percent have mild symptoms (nausea, heartburn) and only 2 to 4 percent have severe gastric effects (ulcer pain with possible bleeding). But because so many take use NSAIDs, the number of those who have such severe problems is surprising: There are 41,000 hospitalizations and 3,300 deaths each year for NSAID-related reasons.

Because of this, many insurers review and sometimes reject requests for the new drug. For example, Blue Cross of California reports that only three-quarters of prescription requests for Celebrex have been qualified for approval.

• Yet another aspect of the problem can be seen from a global perspective. Governments in other countries negotiate lower prices or set limits, so citizens there tend to get their drugs for less than people in the United States do. One example: 100 500-mg tablets of Relafen, an NSAID, costs $120.27 in Vermont, but only $59.55 in Canada and $49.26 in Mexico, according to the office of U.S. Rep. Bernie Sanders. Critics call this cost shifting, and say the pharmaceutical companies charge more in this country to subsidize enforced lower prices in other countries.

The newer drugs coming down the pipeline may do more than help individual patients. Because arthritis is the leading cause of disability in this country, it’s not farfetched to think that upcoming treatment breakthroughs could make a significant impact on our society, increasing workplace productivity and lowering overall medical costs.

• Insurers’ decisions to pay or not pay for some drugs often end up being arbitrary. Long-term cost/benefit, safety and efficacy studies have not been done for many drugs and so insurers are left wondering what patients have to gain by taking the more expensive drug.
• Those without pharmacy benefits in their private insurance plan and the elderly who have traditional Medicare but no supplemental pharmacy coverage pay the most for drugs. These people don’t get the sometimes deep discounts given to bulk buyers like managed care and other pharmacy benefit payors.
• Biologic – as opposed to the traditional chemical – drugs cost a lot to produce and distribute, which may explain in part why Enbrel and the few other biologic drugs that are available for other diseases are so expensive. Biologic drugs are made of live protein molecules and so cannot easily be mass produced the way synthetic chemical drugs can.

Tim Warner, director of corporate communications for Immunex, says Enbrel has become sort of a "poster child" for the high cost of drugs. He admits $12,000 a year is a lot of money, but says his company takes a lot of pride in having kept the cost at that level, given the tough challenges that were overcome in development and in the production process. He does not expect to be congratulated, he says, but once you succeed, people tend to take it for granted.

Real Repercussions

• The inability to access the best available medications in a timely manner can cause irreversible damage for some patients. By prohibiting (i.e., not paying for) certain medications, payors are at times forcing the use of potentially less effective drugs. With an estimated one- to two-year window of opportunity to arrest the inflammation that causes joint destruction, some doctors are understandably alarmed when insurance companies throw up obstacles to their attempts to take quick, definitive action against progressive diseases, like the autoimmune forms of arthritis.
• Doctors’ offices are feeling the burden. One physician, Richard Lautzenheiser, MD, an Indianapolis-based rheumatologist, described the amount of time physicians spend getting patients the drugs they need. He said they have to answer to insurance companies by justifying brand name choices, the cost of the medications, and the use of specific drugs; they have to document the patients’ case histories; and they have to get prior authorizations to prescribe certain medications.
• When denied coverage for certain drugs, patients often make attempts to appeal a decision or to apply for financial assistance through the pharmaceutical manufacturers’ indigent programs. But Dr. Lautzenheiser reports that many give up, thwarted by the multiple hoops they have to jump through.
• Employers – who, as the purchasers of insurance plans, are really the ones calling the shots – are finding themselves with hard choices to make. Rob Epstein, MD, chief medical officer at Merck-Medco Managed Care, has talked with employers who are considering dropping pharmacy benefits from their employee plans. He says one large employer told him there was a choice to make between drug benefits and wage increases this year.
• Most managed care companies already have formularies, lists of drugs for which they will pay. Companies are revisiting their formularies and taking more drugs off the list – or refusing to put them on in the first place – and creating more restrictions, meaning they will only pay if certain conditions are met.
• As part of their formulary restrictions, certain insurers are deciding who can get certain drugs on a case by case basis. Doctors and patients then have to meet criteria before approval is given. Such criteria might include documentation that the patient has failed to get better on one or more other medications; a doctor’s letter of medical necessity; or proof that patient’s disease is severe enough to warrant approval.
• As insurers get squeezed hard enough, they are increasingly turning to the policy purchaser – the individual and/or the employer – for higher premiums.
• Right now, most policies offer generics as an option, but that may change as insurers decide to mandate generic use to avoid more expensive brand name drugs whenever possible.
• The typical $5, $10 or $15 co-pay may soon be history. Some plans have already raised co-pays to $20 or more for branded drugs, or for drugs on a specific list.
• Some plans are instituting deductibles for prescription drugs, so that beneficiaries must pay $200 or more each year before the benefit kicks in.
• Some people now have caps on the total dollar amount they can spend each year on drugs. Certain plans, for example, have capped drug benefits as low as $500.
• Before approving a prescription for certain drugs, some plans require that the patient go through a specified number of other (less expensive) drugs for a certain amount of time without success.

Proposed Solutions

• More research. Some argue that if there were more data on the cost/benefit and safety and efficacy of certain medications, a more convincing argument could be made for prescribing them. The downside: Such research takes years and lots of money to do properly. Who’s going to pay? Some have suggested a special tax on prescription purchases to cover the costs of ongoing research; others have suggested the government or the manufacturers pay.
• Add a Medicare pharmacy benefit. Right now, people covered only by traditional fee-for-service Medicare, without supplemental insurance, get no help with prescription costs. President Clinton and some legislators have recently proposed adding such a benefit.

Growing Pains

All this adds up to what is sure to be a long and heated debate in Congress, in corporate meeting rooms, in doctors’ offices, in newspaper editorials and in living rooms. The discussions will center overwhelmingly on money, because, after all, deciding that people should have the drugs they need is easy; what’s harder is deciding who will pay the bill.

Although money is the practical matter to be worked out, the real issue is not so tangible. Access to medications ensures less pain and greater mobility for people with arthritis, which means better quality of life, improved health, increased self-reliance, greater workplace productivity and, most important, happier, more fulfilling lives for each of the 70 million people with some form of arthritis and chronic joint symptoms.

So the question becomes not what does it cost to take this drug; what does it cost not to?

Marcy O’Koon is the executive editor for Arthritis Today. She’s been writing about health and health issues for 15 years.

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Case Study: Who Gets the Drug and Who Doesn't

Case #1: Insurance Pays All

Leslie Fortner, 49, has been struggling to find an effective drug to keep her RA in check since she was diagnosed in 1992. "I’ve been on everything," she says from her home in Lake View Terrace, Calif., as she reels off a laundry list of drugs. Methotrexate looked promising until she developed asthma and had to cut back on the drug. "I just couldn’t take a high enough dose to help. Life came to a grinding halt."

One day last November, Fortner’s rheumatologist called from a conference she was attending and said, "You’ve got it!" Her doctor was referring to Enbrel, a new type of drug for RA that was just approved that day. Within 48 hours she had had her first injection. "Now, I’m a new person," she says. "I can outwalk my boys."

At first, Blue Cross of California wouldn’t approve the prescription, but after a strongly worded letter from Fortner’s doctor, the drug was supplied at no cost. Fortner still pays a $15 co-pay for each of the other four drugs she takes. Enbrel has been so effective for Fortner, though, her doctor has dramatically cut back her dosages of the other drugs, hoping to eventually take her off of some altogether.

"For me, Enbrel’s been a miracle drug," says Fortner. "If my insurance wouldn’t pay, I’d find some way to get it – by hook or crook."

Case #2: Has Insurance But Still Can’t Afford the Drug

Tessa Gilbertson, now 34, has had RA since she was 18 years old. A full-time nurse in LaBolt, S.D., she has what she calls "pretty good" insurance. She currently takes methotrexate and prednisone and pays less than $50 per month for both.

The methotrexate seems to be helping, but Gilbertson’s doctor says the current side effects and long-term damage that may occur are worrisome because she takes such high doses of the drug. So he proposed switching to Enbrel.

But that’s not going to happen. Gilbertson’s prescription plan, by Great-West Merck Medco, doesn’t approve injectibles. (Enbrel is given by self-administered injection.) If the drug were approved, she would pay 10 percent of the cost or a maximum of $50 per month. Because it’s not approved, she has the fall-back option within her plan to meet a $250 annual deductible, then pay a 20 percent co-pay for the drug, which would take a $100-bite out of each month’s budget – a cost she cannot afford.

"My husband recently lost his job and I’ve got a 2-year-old at home," she says. Gilbertson has searched for some sort of financial assistance to help her get this drug, but has had no luck so far. She figures that after the drug has been out a while, the cost will come down and she will finally get her chance to take it.

Case #3: On Medicare With No Pharmacy Benefits

Donna Thibeau is distraught for her mother, Loretta Thibeau, 65. Loretta, who weighs only 70 pounds now, has had RA for 39 years and has been bedridden in Taylor, S.C., for the last two. "We sometimes put her in a wheelchair, but not that often," says Donna. "It hurts her to stand and she can hardly use her hands."

Right now Loretta takes Darvocet, but that’s it. "She just can’t tolerate any other drugs," says Donna. When Loretta’s rheumatologist told them about Enbrel, a new drug that should have very few side effects, both mother and daughter were excited. "But then he told us the price," says Donna.

Because traditional Medicare doesn’t pay for outpatient medications and Loretta can’t afford supplemental insurance that does, Donna helps her parents pay for their medications. Loretta’s medication runs about $250 per month, but her husband’s medications up the total monthly cost to somewhere between $350 and $400. So Enbrel, at an estimated $1,000 to $1,250 per month, is out of the question.

Loretta Thibeau and her husband rely on Social Security income – only about $1,400 each month – to pay for their rent, utilities, medications, food and other expenses. At press time, the Thibeaus had just received word that the makers and marketers of Enbrel, Immunex and Wyeth-Ayerst, would agree to supply Loretta with the drug through its Rheumatoid Arthritis Assistance Foundation for up to one year at no cost. (For more information on applying for no- or low-cost access to Enbrel, call the company’s hot line at 888/4ENBREL.)

Moving and Shaking

The Arthritis Foundation has a plan. Its recent Think Tank on Cost of and Access to Medications highlighted some of the avenues the organization will take to help people with arthritis get the medications they need.

First on the list is making clear to Congress the organization’s support for adding a Medicare pharmacy benefit to the government-run program. The Foundation will also work with managed care and other private insurers to educate them about the need for including new arthritis medications on their formularies.

The Foundation will advocate for and even consider the feasibility of investing in long-term cost/benefit, safety and efficacy studies of arthritis drugs. Such research will generate the data that pharmacy benefit managers – and doctors – need to decide which drugs are useful for which patients.

Volunteer leaders are also pursuing ways to increase the funds pharmaceutical companies make available to help people who can’t afford the medicines they need.

Because this issue involves people with all sorts of health concerns – not just those with arthritis – the Arthritis Foundation hopes to partner with other national voluntary health agencies to advocate for access to medications. As a leader in this movement, the Foundation wants to spur others to work together for changes that will help us all.