- Associated Press - Sunday, October 11, 2015

BISMARCK, N.D. (AP) - Prescription drugs account for 21 percent of North Dakota’s largest insurance provider’s health care spending. Following the national trend, 15 percent of that drug spending is experiencing a high inflation rate, increasing already high health care costs.

“When the cost of prescription drugs increases, those costs shift to consumers in the form of health care premiums, cost-sharing dues and deductibles,” according to Blue Cross Blue Shield of North Dakota.

The increase is due to a subcategory known as specialty drugs, The Bismarck Tribune reported (http://bit.ly/1MeCRim ).

In 2014, U.S. spending on prescription drugs totaled nearly $379 billion, a 13 percent increase from 2013 and the largest increase in more than a decade, according to BCBSND. Spending on specialty drugs represents an increasing share of that, “growing at a rapid and unsustainable rate,” according to a statement from the insurer.

“As part of Blue Cross Blue Shield of North Dakota’s ongoing commitment to affordability and stewardship, BCBSND is concerned about the rising cost of specialty drugs,” the company said. “These escalating costs have had a direct and significant impact on health care costs and premiums.”

On average, specialty drugs cost $4,500 per claim. However, their costs can vary from $100 to 1,000 per dose, BCBSND said. For example, one treatment for cystic fibrosis comes with a $400,000 per year price tag and is used potentially over a long period of time.

Drug-related spending was more than $50 per BCBSND member per month during the first half of 2015.

“Specialty pharmacy is a unique subset of these costs,” said Tom Christensen, manager of pharmacy management.

Christensen defined specialty pharmacy as medications that are used to treat, generally, chronic, complex and often rare diseases. In many instances, they are often novel treatments in a specific area.

One example is multiple sclerosis, which is more common in the upper Midwest because of the settlement of those with northern European ancestry that have a higher susceptibility for the disease. Hepatitis C, is another, but one that is more common along the East Coast and South.

“There is probably a lack of understanding about why these drugs are all of a sudden so expensive,” he said. “Although we’re talking about medications, we’re really talking about scientific advancement and the cost associated with that.”

Drug manufacturers take advantage of these advances but have a narrow market for these products.

“Their position is they need to recoup research and development costs, often over a much smaller population,” said Brent Solseng, pharmacy manager and marketing.

For example, one treatment for multiple sclerosis works only for individuals with a specific identified genetic mutation, meaning there are only hundreds or thousands of people who may benefit.

“It creates quite a challenge to keep up with the increased costs of these drugs and maintain reasonable premiums,” Solseng said.

What BCBSND does is review prescription uses to make sure it meets scientifically backed uses.

“Generally, all or most of these medications require prior approval,” Christensen said.

For certain classes in which there are multiple drugs for a disease, BCBSND works with drug manufacturers to identify a preferred product and tries to get a lower unit price for that drug.

There are also specialty pharmacies that focus their practice on the delivery of these specialty medications. These pharmacies, many of which are attached to hospital systems, have developed over 20 years and established their own standards of care. That area of practice has developed to the point they’re now accrediting pharmacies based on these standards, Christensen said.

“That assures a health plan that they are receiving their drugs from that type of pharmacy where there is a watchdog to make sure they’re meeting high standards of care,” he said, which leads to other soft savings in the long run because the care is superior.

Solseng said these types of actions are emerging trends in the insurance industry.

“Everybody is trying to figure this out and control this cost, and these are the types of things we can do,” he said.

Still the discount of these measures is not that great.

“The overriding thing is that this is a complex area,” Solseng said. “And the high price tags reflect that.”

Specialty drugs are often manufactured with what are called biologics, genetically engineered products made from a variety of natural sources, whether that be human, animal or microorganism, according to the U.S. Food and Drug Administration.

“The issues around development of these prevents the most powerful thing in reducing cost and that’s generic drugs,” Solseng said.

An FDA approval process is still in its infancy, having approved only one or two of these drugs to date, Christensen said. And that only drops the price 10 or 15 percent, compared with 70 percent for more common generic drugs.

“Even if generic was allowed, the manufacturing process itself is often more expensive than older drugs that are cheap to produce,” Solseng said, and the FDA process requires companies to act more as biotech companies rather than traditional drug manufacturers.

“There isn’t that light at the end of the tunnel that these medications are going to drop,” Solseng said. “It isn’t an insurance company by itself that will be able to be end it all. It’s a public policy issue in many ways.”

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Information from: Bismarck Tribune, http://www.bismarcktribune.com

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