Health insurers deserve blame for higher drug costs

Seth Ginsberg

Blaming pharmaceutical companies for high drug prices is a bipartisan affair. If lawmakers like Sen. Chuck Grassley want to hold the responsible culprits accountable, they need to look at all sectors of the health care industry, including the insurance companies.

The Affordable Care Act should curb an insurer’s profit maximization strategy, which hurts patients. But that hasn’t happened.

Insurers are shifting costs to customers, including higher out-of-pocket prescription costs, higher copays, and skyrocketing premiums and deductibles. As a result, many Americans have seen their health care costs increase in the past year. Small organizations, like our 11 employee operation, are faced with a 17 percent premium hike next year, raising our already high premium to more than $700 per month for a single employee and almost $1,300 for a family.

Lawmakers are now looking for someone to blame, which is why insurance companies are working behind the scenes to deflect criticism and shape industry-friendly policies.

For example, the industry’s biggest trade group, AHIP, quietly funded a recent campaign led by the National Coalition on Health Care, which claims to be a “nonpartisan educational resource” for health care policymakers to scapegoat drug makers for rising costs.

Now, insurance companies are covertly driving an initiative to revamp how Medicare pays for certain medications and encourage the use of cheaper options regardless of whether they work. To do this, Medicare is using recommendations from the Institute for Clinical and Economic Review.

ICER routinely issues reports that blame drug makers for high drug prices and allows insurance companies to use its findings to justify refusing coverage for necessary medications.

But while ICER bills itself as an independent researcher, it is deeply rooted in the health insurance industry and its methodology for evaluating drug value is deeply flawed, to say the least.

ICER’s CEO is a former AHIP official, and the group’s 2013 tax return, its only publicly available return that lists donors, revealed that 77 percent of its contributions came from insurance companies. In fact, ICER was launched with $430,000 of insurance company money, and eight of the nine directors listed on its 2014 tax filing previously worked in the insurance industry.

While our organization has a 17-year history of partial funding from the pharmaceutical industry, we offer programming free-of-charge to patients and caregivers. We don’t promote drugs the way ICER promotes insurance companies. We have one board member from the pharmaceutical industry, and the rest are researchers, patients and professionals.

Nevertheless, insurers are increasingly using ICER’s recommendations to justify measures that restrict access to life-saving treatments, such as “fail-first” policies that require patients to “fail” on one medication before getting the treatment their doctor prescribed.

This lack of access is at the heart of the criticism over the Medicare drug-pricing proposal. Dozens of health organizations and hundreds of members of Congress from both parties have cried foul over the plan’s potential to restrict patient access to needed medicines.

But unless lawmakers expose the link between insurance companies and ICER and minimize its role in shaping health policy, these problems will only grow worse for patients and community physicians as major health care companies continue to rely on ICER’s recommendations.

For instance, Blue Shield of California, whose foundation provided ICER’s seed money, and Express Scripts, the nation’s largest manager of prescription drugs plans, said they would use ICER research to justify drug coverage decisions.

In Iowa, residents have a long-time champion in Grassley, who has built a storied career of investigating abuse by powerful entities and standing up for consumers. As the debate over Medicare heats up, Grassley needs to lead the charge in investigating ICER and curbing its influence.

The public needs to know when special interests are sneaking into a policy-making process that will affect millions of Americans. Lawmakers can start by exposing how the insurance industry is manipulating drug prices and coverage.

SETH GINSBERG is co-founder and president of the Global Healthy Living Foundation.

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