Pegaspargase – an example of how we don’t control drug costs

Under Medicare Part B, America’s seniors are entitled to drugs administered in the hospital, but they are responsible for 20% of the cost. That sounds reasonable, and Medicare officials say they carefully scrutinize drugs before approval.

But I have yet to discover a list of unapproved drugs. It appears that if the FDA says it can be sold, Medicare pays for it at list price. For a $50 drug, this seems reasonable. You would pay $10, and Medicare would pay $40 if administered in a hospital..

Not all drugs are priced equally, and paying for some – even at 20% – could be a financial disaster.

For example, Pegaspargase is a biologic that treats leukemia. It’s on the World Health Organization’s List of Essential Medicines. The course of recommended treatment is two vials every 14 days for up to six months.

Each vial costs Medicare $17,566. Since negotiation of drug prices is not allowed, the 26 vials needed for six months cost Medicare $228,358. That’s also the price for an uninsured senior or younger patient. (Medicare B and D are optional, extra-cost additions to original Medicare.)

Your co-pay under Medicare B for Pegaspargase would be $45,671. And that’s not all, because other drugs – anthracycline, vincristine, and prednisone – are often prescribed at the same time.

The Medicare Payment Advisory Commission said that physician-administered biologics accounted for two-thirds of spending and all 10 of the highest-expenditure drugs in Medicare Part B in 2017.

Biologic exclusivity in the United States is currently 12 years, and nations we are negotiating with are far less generous – eight years for China and Canada, and five years in Mexico. Recently, the GOP pushed for 10 years in current trade deals for foreign countries, but backed down to gain Democrat support to pass recent budget deal. The U.S. continues to guarantee 12 years.

If you don’t have $45,671 to co-pay for this required drug, a trip to India might be in order. Total price of 26 vials there is $5,460 –  a savings of some $40,000, and that’s not just co-pay, it’s the total price..

While India’s $210 a vial (versus $17,566 here) is the cheapest in the world, Great Britain’s National Health Service pays only $980 a vial, a savings of $16,500 vs. their liberated colony.

While elites of both political parties here have complained that Medicare is too generous to seniors – an insane accusation – they have done nothing to curb payments, including this example of $228,358 for one drug for one patient.

Drug lobbies have lawmakers addicted to campaign contributions, exotic trips, campaign funding and perhaps, even briefcases stuffed with cash, or offshore accounts. Big money is behind Big Pharma, and that includes the hedge funds, who finance drug development and mergers, as well as our willfully blind media, grown fat and complicit from billions of dollars in drug ads.