Frank Lalli, in the NYTimes, on “A Health Insurance Mystery“:
I’ve had a long career as a business journalist, beginning at Forbes and including eight years as the editor of Money, a personal finance magazine. But I’ve never faced a more confounding reporting challenge than the one I’m engaged in now: What will I pay next year for the pill that controls my blood cancer?
After making more than 70 phone calls to 16 organizations over the past few weeks, I’m still not totally sure what I will owe for my Revlimid, a derivative of thalidomide that is keeping my multiple myeloma in check. The drug is extremely expensive — about $11,000 retail for a four-week supply, $132,000 a year, $524 a pill. Time Warner, my former employer, has covered me for years under its Supplementary Medicare Program, a plan for retirees that included a special Writers Guild benefit capping my out-of-pocket prescription costs at $1,000 a year. That out-of-pocket limit is scheduled to expire on Jan. 1. So what will my Revlimid cost me next year?
The answers I got ranged from $20 a month to $17,000 a year. One of the first people I phoned said that no matter what I heard, I wouldn’t know the cost until I filed a claim in January. Seventy phone calls later, that may still be the most reliable thing anyone has told me.
Like around 47 million other Medicare beneficiaries, I have until this Friday, Dec. 7, when open enrollment ends, to choose my 2013 Medicare coverage, either through traditional Medicare or a private insurer, as well as my drug coverage — or I will risk all sorts of complications and potential late penalties.
But if a seasoned personal-finance journalist can’t get a straight answer to a simple question, what chance do most people have of picking the right health insurance option?…
Yes, of course, not that many people need quite such a ’boutique’ drug for their less-than-common medical condition(s). But let me assure you young people: If you’re not already taking at least one prescription drug on a regular basis, the odds are that you will be by the time you’re old enough to get AARP solicitations in the mail. Assuming you live that long.
AT
If he was a real patriot he would just stop taking the medicine and go quietly, he’s just a parasite on society now mooching up Medicare. Now feed me the blood of young virgins so I can live for ever
/your friendly billionaire
ArchTeryx
Least he had it better (and that’s a VERY relative term) then I had in graduate school.
My total drug benefit was $1500 a year – retail. Once you went past that, you paid 100% of all drug costs. That very fact forced me into surgery in the late stages of my ulcerative colitis, as the only drug available at that point (Remicade) priced somewhere around $5000 a dose…and once you started taking it, if you ever stopped, you could never restart it.
Needless to say I chose the surgical alternative. That, at least, was covered. They basically wanted to drive chronically ill students away – either to their parents’ insurance plan (in the case of undergrads) or simply out of the university (in the case of grad students like myself).
cathyx
I heard a story on NPR interviewing a professor who took on the farm bill. She actually read it and tried to make out the terms. She said that it made no sense and there were parts that contradicted other parts. That’s what happens when you have lobbyists writing legislation.
Punchy
$524 a pill. Thats a hell of a way to think of it.
? Martin
If government would get out of the business of making drugs and leave that to the free market, consumer choice and competition would resolve this problem and make the drugs affordable.
Culture of Truth
$524 a pill. Thats a hell of a way to think of it.
Bring that up in the State of the Union address. “This little pill is over $500! Who can afford that? Will more tax cuts for billionaires help people pay for it?”
Persia
My father has a very rare heart condition that is treated by a drug popular for a more recreational use – let’s just say I can’t say its name on this blog. Normally the VA pays for it, but there was a horrible period last summer where the VA hadn’t gotten it to him in time and I had to get it at one of the local pharmacies. It was, IIRC, over $200 for a week of medication.
I don’t know what would happen if my dad didn’t have the VA coverage. He probably would’ve been dead years ago, honestly.
Bago
For people that claim to hate government beuracracy, they do love some middle management.
WereBear
Part D was brought to you by the Bush administration.
I admit it did help us with our terrible drug costs for Mr WereBear’s illness. But choosing a plan was enough to drive you crazy.
Our local pharmacist was such a help; and some of the plans were only through big chain pharmacies. And I couldn’t do that.
Roger Moore
@Punchy:
I’ve had drugs in that price range. Part of the conditioning regimen for my stem cell donation was injections of Neupogen/fligrastim/G-CSF, which wound up costing about $1000/day for the 5 day treatment, fortunately against the recipient’s insurance. Recombinant protein drugs are damned expensive.
Calouste
No wonder the guy can’t work out how much it is going to cost if he thinks there are 21 days (11,000/524) in a 4 week period, and 12 (132,000/11,000) 4-week periods in a 52 week year.
This is so disastrously bad from a business journalist that I can’t even come up with a snarky comment about it.
Mnemosyne
@? Martin:
Dare I mention that there’s actually a huge supply problem right now with generics and other low-cost drugs because they’re only marginally profitable to manufacture? G is constantly complaining about drug shortages at his company because only one or two manufacturers make the antibiotics and other common drugs that their patients get, so a manufacturing problem at one company’s plant brings the supply line grinding to a halt for 6 months or more.
Making the FDA responsible for manufacturing unprofitable drugs is sounding better and better to him right now.
RSA
@WereBear:
I love our local pharmacist (one of the most trusted professions in the U.S., according to Gallup). Good advice about prescriptions and willing to go the extra mile.
Of course, insurance is a nightmare. Lalli won’t know the cost of his prescriptions until he files a claim–best of luck to him–but that’s true for almost every non-elective medical treatment or procedure. Even if you think you know the retail cost, you practically need to be a lawyer to figure out all the possible ways that the insurance company can try to avoid paying for something, even down to the not-uncommon event of miscoding treatments, moving them outside coverage.
karl
@Calouste: I’d imagine that his numbers reflect slightly reduced payments for bulk (weekly, monthly, or bimonthly) orders.
Have you ever purchased legal pharmaceuticals?
bemused
The Medicare Part D bill is well worth revisiting. I remember when it happened and it was ugly with pharma lobbyist Billy Tauzin in the thick of it. The Republicans started voting on the bill in the middle of night when cspan and the public wasn’t watching, voting at 3 am with a lot of severe arm twisting. This is why Medicare can’t negotiate on drug pricing like the VA.
I didn’t realize Tauzin lost his job in pharma because the pharma corps felt he was giving away too much of their profits negotiating for them on Obama’s health care overhaul in 2010.
cathyx
If you need prescription drugs and you can’t afford them, then you are the weakest link. Goodbye.
Roger Moore
@Mnemosyne:
Count me as suspicious of these claims. You never hear or see similar shortages of OTC generics, which if anything should have an even lower profit margin. I have a sneaky suspicion that the underlying problem is that those “marginally profitable” generics suddenly become much more profitable if there’s a temporary shortage, so the drug companies manage to collude to produce temporary shortages often enough to boost their bottom lines.
yopd1
One of my drugs just went generic, so they sent that to me, but because the plan has not approved the drug for generic pricing, they charged me the full formulary rate ($150 more at for three months supplies). I love our healthcare system.
Mnemosyne
@Roger Moore:
Not necessarily — any schmoe can pick a bottle of generic ibuprofen off the shelf any time they want, but the drugs they use for home infusion are prescription-only, so by definition there’s a smaller market for them. As I said, the real problem is that only a couple of companies (and in some cases, only one company) manufacture them, so if a contamination problem is found and the factory has to shut down until it gets re-approved by the FDA, any patients who need those drugs are SOL.
I’m at work so I can’t ask G for the names of any of the specific ones they’re having trouble with right now, but I’ll post a couple of examples when I get home.
Linnaeus
Couldn’t help but notice this:
(emphasis added)
But of course, unions suck, gold-plated benefits, how come he gets that and I don’t, blah, blah, blah…
different-church-lady
Are we sure the title of the previous post wasn’t supposed to be for this one?
Honestly, it’s gotta be for two reasons:
a) Nobody in the medical industry wants you to know what the price is, because then they can charge you whatever they want.
b) There’s something about medical administration that attracts horribly incompetent people. That’s the only conclusion I can draw from the constant barrage of simple billing mistakes I am subjected to EVERY time I use a doctor. The cable company doesn’t have this problem. The supermarket doesn’t have this problem. The auto repair guy doesn’t have this problem. Why does the most critical service you’ll interact with in your life specialize in having this problem?
WereBear
It’s ridiculous that drug costs are rarely or barely covered, when they can be such a huge chunk of the expenses of being sick.
different-church-lady
@Punchy:
But you’re not supposed to think of it that way. You’re supposed to think of it as, “Do you want to be better or don’t you?”
It’s very important you think of it that way. Because if you do, then money’s no object, and who cares what we charge you?
hitchhiker
Our older daughter was born with a genetic condition called Turner’s Syndrome, which means, among other things, that she had to have artificial growth hormone in order to reach the low end of normal adult height. Without it, she’d probably be about 4’6″ tall.
That was one of the reasons we were very, very careful to be sure we had a family policy — so that her meds would be covered. Growth hormone was about $20k per year back then, if I remember it right. And my husband wanted to freelance so he’d have time to make art . . . we chose a policy, made one payment on it, and then he broke his neck.
Boom, the insurance company was in for about $500k, and it still didn’t cover about another $100k of his costs.
Is this good luck, terrible luck, or just a very effed up system?
Mark
Non sequitur. What do young people – who voted for Obama – have to do with how stupid Medicare drug coverage is?
Warren Terra
@Roger Moore:
I can totally see this. There are production and quality control costs with recombinant proteins (removing contaminants and avoiding viral contamination, especially) that are unavoidable and nobody’s fault.
But Revlimid (Lenalidomide) is a small molecule – a dozen carbons only. I’m not a chemist (and the only synthetic chemist I know well is out of town at the moment). Maybe there’s some reason this particular molecule is a real bear to make and purify, at enormous expense.
Googling (FWIW) suggests it is available as a generic, and still at enormous expense. So, maybe the price is inflated for justifiable reasons. But it sure seems stratospheric …
Warren Terra
@yopd1:
This American Life had a very good segment on how weird incentives are used to skew the playing field against generics a few years ago; I suspect it’s this one. Not necessarily directly analogous to your situation, but probably thematically related.
Warren Terra
@Roger Moore:
Oh, and as I sort of skipped over that part in my earlier response to your comment: Kudos to you for making a stem cell donation.
Signing up to the bone marrow registry (and maintaining my contact information and the occasional tiny donation) must be one of the better things I’ve ever done in terms the ratio of effort on my part for the amount of self worth the act conferred on me. Of course, I’ve never been called upon to step up and get that big needle in me, as you have. Good on you.
Roger Moore
@different-church-lady:
I know somebody who keeps getting price adjustments for a procedure more than a year after it was performed. Maybe the reason the hospital can’t tell you how much a procedure will cost is because the don’t know. It does make it ridiculous to suggest that the solution to outrageous prices is for people to shop around, though.
opie jeanne
@Roger Moore: I was diagnosed with Hepatitis C in 2005. Thank Cod I had Kaiser, because I saw the actual wholesale price of Interferon injections and Ribavirin pills on my receipts. Normally our copay for prescriptions was $5, and for these I paid $20 and $35.
The wholesale price was over $3000 per month when I started the protocol, but by the end the price had fallen to about $1800.
Nina-the-first
@Calouste: A med like Revlimid is usually taken with a break of one week, so 21 days each month. Very costly med!
Roger Moore
@Warren Terra:
Hmm. I’m well out of practice as a synthetic chemist, but that doesn’t look particularly hard to make. The only thing I can think of is that it’s a low volume product, so all the QA/QC and regulatory crap makes it more expensive. Or it’s another case of a drug with little competition so the manufacturer is charging whatever they think they can get away with.
Keith G
As the years pass, I assume that our society will be able engineer the technologies to develop more and more treatments that mitigate or completely cure many of the most devastating pathologies that plague humans.
As in Mr. Lalli’s case, the treatments will be enormously expensive. What will be the methodology that we employ to prescribe and then pay for these treatments?
Will private companies be mandated to cover even the most expensive treatments once they are shown to be effective?
What will we have to do to be able to give seniors (or others on public plans) access to life extending treatments that can cost $3,000 – $6,000 per month (and more) that combat only one of many ailments?
There are a lot of important discussions that we should be having really soon.
Roger Moore
@Warren Terra:
They also serve who only stand and wait, even though they’re a lot less likely to get shiny medals and public adulation. I figure the big difference between a donor and somebody who registers and never gets called is blind luck. I’m actually doing an informational/subtle registration drive event at work (a major cancer hospital and, by NMDP stats, the best place in the country to get an unmatched donor transplant) tomorrow.
Mnemosyne
@different-church-lady:
Fix’d. At least in the case of the article referenced above, it really is a choice between life and death — without the treatment, his cancer will recur and he will die. And that’s the hard part — now that we have all of these new treatments and drugs, how do you tell someone that they should resign themselves to dying because they can’t afford the treatment? And is it ethical to restrict life-saving or life-extending treatments to people who can pay out of pocket for them?
Just Some Fuckhead
And to think, we coulda had Medicare-For-All coverage. :)
gelfling545
The situation described is all too common. I listened to a co-worker trying to get a straight answer regarding her father’s cancer treatment which they told her would be billed as an infusion even though it’s a tablet that he takes orally and that it would cost him about $1000 co-pay out of his $1800 @month income with BC/BS. Or else it would be some price higher or lower with some other company but no one who would put anything in writing; but decide by 12/7 or you’re out of luck anyway. This man is over 80 & is being treated for stomach cancer. What would someone in his position do if he had no family member (and he has only the one) to make these calls? This is a scandalous way to treat sick people. Why not just send them a notice saying “Drop dead. Yours Truly, your Insurance Co.”
The Fat Kate Middleton
@Roger Moore:
Boston? Cincinnati?
Gus
My dad took Revlimid for the multiple myeloma that eventually killed him. I don’t remember it being that expensive, but it doesn’t surprise me. My wife’s MS medication would be $35k a year without insurance.
aimai
@different-church-lady:
I used a TENS unit ( an electric charge across your back) to relieve pain during the birth of my first child. My doctor didn’t want me to use it becuase she was a stick in the mud. I ended up fighting with the insurance company over whether they would pay for it after the fact. I cried on the phone to the insurance lady about how much I hated my doctor and how horrific the birth was and she just basically said “I hate doctors too. I’m not going to charge you for that TENS unit! We’ll cover it!”
aimai
rikyrah
we need posts like this….to keep on reminding us of the insanity that is the American Healthcare industry
Chemist
@Warren Terra:
I’m a synthetic chemist and the molecule in question is not complicated to make on a large scale. Certainly no more complex than Claritin or that one v drug for adult problems.
jl
No wonder we pay too much for medical care, those lazy entitled US consumers don’t have any ‘skin in the game’. If they had ‘skin in the game’ they would be more careful, wouldn’t they?
So, how did this person end up having to make 70 calls to find out how much the medicine would cost? Didn’t look ahead, is all. Lazy.
Don’t ask how much skin you have in the game. You know already.
All of it. You just don’t know when you will get skinned for good.
/snark
mtraven
Could be the high cost is related to liability. From the drug companies perspective, you would have to charge an awful lot of money to balance the risk of causing a thalidomide-like birth defect outbreak.
Mnemosyne
@mtraven:
Honestly, though, the reason someone would get a huge settlement in a case like that is not solely for pain and suffering — it’s to pay lifetime medical bills. Which circles us back around to the problem being our for-profit healthcare system. If we had a universal system like a civilized country, you wouldn’t have billion-dollar tort awards because they would no longer have to take future medical costs into consideration.
IMO, pretty much every problem with our medical system traces back to the fact that everyone involved expects to make a profit — doctors, hospitals, pharma companies, everyone. And that profit has to be built into every procedure done and every drug administered to every patient in this country to get medical care delivered to anyone at all. It’s fucked up.
(Fun fact: thalidomide was never approved by the FDA for use by pregnant women, though some women in the US obtained it from Europe before the side effects were known. President Kennedy gave the head of the FDA an award for blocking its approval and preventing a major public health disaster.)
Nutella
Not to worry. Paul Ryan will send him a coupon and all will be well! /snark
Triassic Sands
Obviously, Mr. Lalli should pay at least $125,000 for his medicine. After all, unless he has some “skin in the game” we’ll never be able to keep health care costs down.
One of the dumbest notions around is the idea that we always need lots of choices to maximize our economic well-being. Having many choices is nice for some things, annoying for others, and just plain wasteful and even harmful for something like Part B prescription drug plans for Medicare.
In order to figure out which plan is best for you, you have to wade through the details and formularies of at least a dozen and possibly many more plans. In the end, it’s been shown that a significant percentage of Medicare recipients end up choosing the wrong plan. For most, if they discover they’ve made an error, they can change to another plan — the following year. They have to spend the rest of that year in the wrong plan.
But why do we need more than one choice? What if the government used its huge buying power to negotiate the lowest possible prices in a single plan that simply offers every drug? It’s hard to believe that a) every consumer wouldn’t be better off with lower prices and b) no one would have to worry about having chosen the wrong plan. Someone, like Lalli, who is struggling against a potentially terminal illness, shouldn’t have to worry about choosing the wrong plan, especially since he isn’t necessarily free to switch to a better plan if and when he discovers his mistake.
The reason we can’t have such a plan can be expressed in one word — Republicans. (Although, in fairness, it’s not clear Obama would go for that either. Still, if the political issues were set aside, I doubt he’d oppose it.)
ruemara
I can’t even get through it. Considering that I’m trying to get some peace in accepting a possible lifetime of pill cocktails and their after effects and paying for them, I just can’t read this. It’s too damn infuriating.
The Very Reverend Battleaxe of Knowledge
The liability idea for the high cost of this drug is an interesting one, if it really is a thalidomide derivative. No problems with thalidomide were spotted during the trials, because in an experimental situation the drugs are going to be completely fresh.
Later, it turned out that the opposite stereoisomer of thalidomide (i.e. left or right-handed, whichever the intended form was—can’t be arsed and all that) caused birth defects. After sitting around for a while, the drug would spontaneously racemize—that is, some of the molecules would spontaneously flip to the opposite handedness. (Ain’t Quantum Mechanics wonderful?)
If the problem is that this drug has to be used immediately after manufacture, and you can’t maintain an inventory, maybe that’s why it’s so expensive.
There should be a “The Hell with it” version for people who are never going to get pregnant, though, so maybe I’m an idiot.
pseudonymous in nc
@Mnemosyne:
Chiral chemistry has come on a long way since the 1960s, and the thalidomide scandal was a major motivator in advancing it.
@different-church-lady:
Bistromaths. The normal laws of mathematics do not apply when written on medical bills and insurance statements.
The situation in the developing world may make life very interesting — India, in particular, has asserted its willingness to wipe its backside with pharma patents in order to make generics of drugs that it considers essential to improving the nation’s health, and this willingness has in turn made it possible to strike pretty sweet deals with Big Pharma. China may do the same.
I’ll note, again, that beyond the domain of cold remedies and antihistamines, medicine is simply not priced for consumer purchase, and the obvious response by countries to items that are priced in the tens of thousands is to bargain those prices right down, then distribute the remaining cost, because that’s the only fucking way to pay it.
The US, instead, forces patients to go cap-in-hand to Big Pharma or sell cupcakes to friends. This is absurd. There are entities that are more powerful than pharmaceutical companies, and those entities are nation states.
Jason
BTW: This is the system Barack Obama’s Republican-inspired health care exchanges system is designed to protect. This story is about how health care roulette isn’t going to get any better under Obamacare, Obots.
greenergood
The other night, in the course of three phone calls to the same company, my mom was quoted $32, $400 and $2700 for her breast cancer monthly prescription.
Mjaum
So, in the US it is legal to sell something to someone without stating what the price actually is?
Freedom!
ruemara
@Jason: Go fuck yourself.
kerFuFFler
@Keith G: Keith G Says:
I share your concern about our future ability to pay for all the new treatments and life extending technologies that will be developed. (My only disagreement is that you are seriously low-balling the likely costs!) We all die of something, and when there is a treatment for “everything” how can we possibly afford to pay for every treatment for every person when they often seem to cost more than typical people ever make in their entire lifetimes?
People do not like to confront this issue because it forces us to abandon the comfortable moral notion that it is never acceptable to put a price on a life. I think we all need to decide just how much of our livelihoods we wish to allocate to healthcare and how much we would like to be able to spend on lives richly lived—-music lessons, family vacations, activities with friends… This will be an especially important discussion as we inevitably move towards a national plan beyond current Medicare and Medicaid. Can we allow a rigid religious perspective to dictate that all bodies must be kept “alive” as long as possible?
Phoenician in a time of Romans
@hitchhiker:
That was one of the reasons we were very, very careful to be sure we had a family policy—so that her meds would be covered. Growth hormone was about $20k per year back then, if I remember it right. And my husband wanted to freelance so he’d have time to make art . . . we chose a policy, made one payment on it, and then he broke his neck.
But remember – you can’t have socia1ist medicine or people will be deliberately breaking their necks to cash in on the free ride.
SOCIAL1SM!!! BOOGA BOOGA BOOGA!!!
Original Lee
@Warren Terra: I’m kinda rusty on my synthetic organic chemistry, but I suspect the reason it’s so expensive is that they have to go through a lot of steps to keep it from polymerizing, while at the same time getting only one each of the piperidonediol and the isoindole to connect. Or one of the critical steps might require an expensive catalyst, such as an osmium compound (which is really nasty in a work environment, because, IIRC, the place it likes to collect in the body is the retinas).
Every reaction step reduces the amount of product you get at the end, so even if you start with, say, a kilo of the main, fairly cheap starting ingredient, after fifty steps or so, you might end up with less than a milligram of usable product.
StringOnAStick
I want to thank all the chemists for their insights on these issues; the commentor’s here are one well-educated bunch!
Diana Vernon
@cathyx: Doesn’t this stun the mind?
If any single bill has key internal contradictions, there can be no doubt that the vast corpus of laws, regulations, and court rulings that constitute “the law” contain many millions of contradictions, omissions, and errors.
And that’s all well before we get to the matrix of vice, graft, and corruption which allows the powerful and well-connected to dispense with “the law” entirely.