Costs of widely prescribed drugs jump

WAUNAKEE - Jess Franz-Christensen did not realize how serious her son's Type 1 diabetes diagnosis until staff in the doctor's office offered to call an ambulance to take him to the hospital.

Her next shock - the cost of Jack's medicines.

The drugs, administered through an insulin pump, cost $1,200 a month.

"We're really fortunate. We're able to pay for stuff," said Franz-Christensen, whose husband, Scott, is a physicist, while she stays home to care for Jack, 8, and their daughter, Kendall, 11.

"But there are people who are making decisions whether to feed their kid or get test strips - whether to pay rent or get a vial of insulin. It's heart-breaking."

Prices for insulin products have nearly doubled in recent years, including Lantus SoloSTAR - one of the drugs Medicaid and Medicare spent the most on in 2015. Its price increased by 81.5 percent between 2011 and 2014, according to U.S. commercial drug pricing information data provided by California-based First Databank and analyzed by the Wisconsin Center for Investigative Journalism.

The costs of seven widely prescribed antibiotics, cancer drugs, arthritis medications and other prescriptions have escalated between 29 percent and 5,241 percent in recent years, according to a joint investigation by the Wisconsin Center for Investigative Journalism, Wisconsin Health News and Wisconsin Public Radio.

The investigation examined the impact and reasons behind the overall rise in prescription costs, including drug price increases since 2011, using proprietary First Databank data.

Overall, the price of insulin nearly tripled between 2002 and 2013, prompting calls this month for a federal investigation by former Democratic presidential candidate Sen. Bernie Sanders from Vermont.

"They (drug companies) are making billions and billions of dollars on people who literally can't afford it," said Franz-Christensen, who joined #MyLifeIsNotForProfit, a national grassroots parent movement.

Recent nationwide news coverage has focused on the rising cost of EpiPens, which counteract potentially fatal allergic reactions to peanuts, bee stings and other triggers. But the $600 cost for a two-pack of that medicine is just one example of lifesaving drugs with skyrocketing prices.

Synthroid, used to treat hypothyroidism, is the most commonly prescribed medication in the United States and has been on the market for more than 60 years. In just the past six years, it has nearly doubled in price, according to the center's analysis. The generic version of Synthroid, levothyroxine, has gone from 14 cents to 46 cents per pill, an increase of 231 percent between 2011 and 2016, the analysis shows.

A single two-week dose for Humira, a medication that treats conditions including rheumatoid arthritis, has increased 129 percent since 2011, to $2,000, according to the data.

The price increases, which continue to mount, place economic and emotional pressure on patients and their families, squeeze budgets of health care providers, and raise costs for taxpayers in Wisconsin and nationwide, the joint investigation found.

Lack of competition raises costs

Spending on medications is rising for a variety of reasons.

Some pharmaceutical companies have taken action to extend patent protections on their products, blocking cheaper generic versions from being developed.

As some companies stop making certain low-cost drugs, other companies gain monopolies over the market.

Companies are introducing more high-cost "speciality" drugs that treat lifelong conditions.

As the nation's population ages, the demand for prescription drugs increases; more than half of Americans now use them.

In one practice known as "product hopping," a company makes changes to a drug to extend patent protections, keeping others from entering the market with cheaper alternatives.

Wisconsin Attorney General Brad Schimel filed an antitrust lawsuit in September alleging the makers of Suboxone, a drug used to treat opiate addiction, changed the product from a tablet to a film that dissolves in the mouth to block alternatives and "maintain monopoly profits."

Drug maker Indivior said it takes "these allegations seriously" and "intends to defend this and other related actions."

"As long as drugs are on patent protection, manufacturers at that point have monopoly pricing ability, and they can price their products at levels that the market will bear," said Chuck Shih, who leads Pew Charitable Trusts' specialty drugs research initiative.

In addition, as competitors drop out of the market, the remaining companies are "raising prices significantly and earning substantial profits," said Larry Levitt, senior vice president for special initiatives at the California-based Kaiser Family Foundation.

The price jumps have caught the attention of Congress, which held hearings after Turing Pharmaceuticals increased the price of a drug that treats toxoplasmosis - an illness that can cause brain damage, blindness, miscarriage or birth defects - by 5,000 percent shortly after acquiring it.

The increase in the price of EpiPens has also drawn congressional scrutiny. Between 2010 and 2016, the price has more than quadrupled, according to data from First Databank.

Seventeen senators, including U.S. Sen. Tammy Baldwin, D-Wis., sent a letter to EpiPen maker Mylan in early November asking for pricing information. The senators said the skyrocketing prices were raising costs for taxpayers and jacking up insurance premiums.

Lawmakers on the state and federal level are calling for new regulations to rein in drug prices. A dozen states have enacted laws requiring greater transparency in drug pricing and other measures, but no state has enacted price controls.

California voters rejected a proposal in November to implement their own price control system, which would require state agencies to pay the same rates negotiated by the U.S. Department of Veterans Affairs. The two sides poured more than $100 million into the effort, most from pharmaceutical companies opposing the measure.

Holly Campbell, spokeswoman for the Pharmaceutical Research and Manufacturers of America, attributed the increase in EpiPen prices to a U.S. Food and Drug Administration backlog in approving new generics and a "lack of competition" in the market.

Working poor hit hard

Those without insurance or who cannot afford their share, the rising cost of medications has left them facing hard choices.

Kathryn Drexler, a registered nurse and certified diabetic educator at the free Living Healthy Community Clinic in Oshkosh, said some patients ration their insulin. So many are asking the clinic for medication help "that it's draining our budget," she said.

"I think it's hitting the working poor the hardest," Drexler said. "They can't afford their co-pays, and they can't afford insulin out of pocket."

Free clinics provide care and drugs to the roughly 323,000 people, or 5.7 percent of state residents who lack insurance, as well as people who are underinsured. And while drug companies offer free prescriptions to certain low-income people with no insurance, generic medications, which comprise 8-in10 prescriptions - do not qualify.

University of Wisconsin pediatric endocrinologist Dr. Ellen Connor said the price increases have thrown some of her patients into despair.

"Families - this is what they agonize over," Connor said. "They lose sleep over it. I have parents sobbing in the office over this. They feel like failures because they had lost jobs and couldn't afford $500 of medications a month. It breaks your heart."

For the insured, drug price hikes have contributed to higher deductibles and co-pays, said Dr. Tim Bartholow, chief medical officer for the not-for-profit insurer WEA Trust in Madison.

The price increases are hitting hospitals too, costing University of Wisconsin Hospitals and Clinics an additional $14 million in the past year, said Steve Rough, pharmacy director, noting large increases among generic drugs with no competitors.

"I call it generic price-jacking, where companies purchase the rights to a low-cost generic drug that is routinely used in the care of many patients, just for the sole purpose of raising the price to make money, because they can," he said.

Taxpayers left with hefty tab

Prescription drugs are a growing portion of health care spending nationwide, accounting for 16.7 percent or $457 billion of total U.S. health care spending in 2015 - about double the percentage from the 1990s, according to a report released in March.

The U.S. Department of Health and Human Services report found the number of prescriptions is rising, but most of the spending growth is due to rising prices and a shift toward more expensive medications.

The state's Medicaid program, which receives both federal and state funding, spent $329.4 million in the fiscal year between July 2011 and June 2012 on prescription drugs, according to the Legislative Fiscal Bureau. By July 1 of this year, annual spending had grown to $427.7 million, a 30 percent increase. The amount can vary year to year because of rebates the program receives from drug manufacturers.

Elizabeth Goodsitt, Wisconsin Department of Health Services spokeswoman, said the program has taken numerous steps to address growing costs, such as requiring patients to get prior approval before receiving expensive medications.

Meanwhile, a September poll from the Kaiser Family Foundation found 55 percent of Americans nationwide reported taking prescription drugs. About 26 percent - or 14 percent of the U.S. population - found it somewhat or very difficult to pay the cost of their prescription medication.

Even generics now too expensive

Paul Hoffmann, manager of the Bread of Healing Clinic in Milwaukee, said his free clinic no longer can afford to provide some generic medications.

"I've been a pharmacist for 35 years, and this is a phenomenon that we never saw," Hoffmann said. "All these long-standing generics that have been generic for some 20, 30 years are going up in astronomical prices."

He cited doxycycline, used to treat infections. First Databank figures show the price skyrocketed by 12,024 percent from 2011 to early 2013 because of drug shortages. The price has dropped, but the antibiotic is still 5,240 percent higher - more than 50 times more expensive - than in 2011.

Lawmakers eye transparency initiatives

Some state lawmakers are looking for ways to curb drug prices. Rep. Debra Kolste, D-Janesville, plans to introduce legislation next year requiring the Office of the Commissioner of Insurance to collect information about the cost of drugs to public health care programs and develop a strategy to reduce prices.

Meanwhile, Baldwin has co-authored a bill at the federal level requiring pharmaceutical companies to submit a report to the federal government a month before increasing a product's price by 10 percent or more.

Campbell called the proposal "a thinly veiled attempt to build a case for government price setting."

But observers say the conversation around drug pricing has changed.

"You have these very high profile, seemingly outrageous price hikes that have focused the attention of policymakers in a way that I haven't seen before," Levitt said.

Franz-Christensen hopes Congress will fix the problem.

"The people that can't afford it, they're so overwhelmed," she said. "They can't fight. ... If it's hard for us, people who have everything, imagine the people who don't."

Cara Lombardo and Andrew Hahn of the Wisconsin Center for Investigative Journalism contributed to this report. Sean Kirkby reports for Wisconsin Health News. Dee J. Hall is managing editor of the Wisconsin Center for Investigative Journalism. Bridgit Bowden is a reporter for Wisconsin Public Radio. The nonprofit center, www.WisconsinWatch.org , collaborates with WPR, Wisconsin Public Television, other news media and the University of Wisconsin-Madison journalism school.