bucket of money, sticker shock

The cost of brand name medicines in the United States is notoriously out of control. Some drug companies have raised prices dramatically, even for old medications that have been available for decades. The undeniable result is sticker shock.

Sticker Shock for Expectant Mothers:

An example comes from a study just published in JAMA Internal Medicine. The medicine in question is 17-alpha hydroxyprogesterone caproate. It is a synthetic progestin hormone that is used to prevent preterm birth. This drug was previously available from compounding pharmacies, but in 2011 the FDA approved a brand-name version called Makena.

The Study:

Harvard researchers reviewed insurance claims from 2008 through 2015. They discovered that both the brand-name and compounded forms of 17P, as it’s known, were associated with similar rates of preterm birth.

But there was a big difference in the price tag. The cost for the compounded version averaged $206 for the entire pregnancy, while Makena averaged almost $11,000 per pregnancy.

If all women at risk of preterm birth took the brand-name drug, insurers would have to shell out more than $1.4 billion. That is some sticker shock! In comparison, filling all those prescriptions with compounded 17P would cost approximately $27.5 million.

The investigators note that this is just one example of a major problem in American health care:

“there is no transparent and systematic link between the price, or cost, of a drug and its actual value or impact in terms of health and disease.”

Fried et al, JAMA Internal Medicine, Oct. 2, 2017

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