Despite advances in healthcare, high out-of-pocket expenses are still causing struggles for some patients

Exciting innovation and advancements in healthcare are profound and massive financial elements inside the system are shifting, but Scott LaGanga worries that one group is struggling: patients.

Speaking recently in Salt Lake City, LaGanga, senior vice president of state advocacy for PhRMA, an association for pharmaceutical research and biotechnology companies, said that despite the growth and expansion in the healthcare system, patients still face high out-of-pocket costs at the pharmacy counter. Some, unable to afford the medications they need, simply walk away.

“All of this is important,” he said of scientific advancements and innovations, “but it only matters if patients can actually afford the products and services that this is all about and have insurance that really actually covers the services that they need.”

That results in a big-guys-versus-little-guys mentality, LaGanga said at the Utah Life Sciences Summit, presented by BioUtah.

Crowds at the recent Utah Life Sciences Summit check out the event's exhibit booths. Several hundred people attended the annual event in Salt Lake City.

“There is a feeling out there that large corporations, big players, big entities have fundamentally benefited while others in the system and the everyday person has not,” he said. “Just pointing fingers at others doesn’t solve the fundamental challenge of what people are dealing with in terms of their out-of-pocket costs and what they and their families are struggling with on a day-to-day basis.”

That friction is happening during tremendous health and economic progress in the industry, which is in the midst of a new era of medicine that is transforming patient care, when HIV and cancer death rates are down, and when the industry has 4.7 million jobs that pay twice the national average.

However, for patients, deductible amounts have increased 300 percent since 2006, and survey results indicate that the cost of health insurance premiums, deductibles and co-pays are the issues most important to patients, followed by the cost of prescription drugs.

Surveys also show that people are willing to pay more through their premiums if it would translate into lower out-of-pocket costs at the pharmacy counter.

The past few years also have featured huge growth in the amount of rebates — the result of agreements between biopharmaceutical companies and health plans. They totaled $106.4 billion in 2015, and LaGanga said the rebate totals have doubled in the past six years.

However, those rebates pouring into the healthcare system do not settle down to the patient level, he said.

“That is now actually all swirling in the system but never reaching the pharmacy counter for the patient,” LaGanga said. “The patient is paying a percentage off the list price, where the negotiated price by the insurer with the manufacturer and others is getting the discount.” That leaves the insurer with the benefits of those discounts, while “the patients are being left at the pharmacy counter with no relief.”

So, what to do? LaGanga said many states have turned to “easy, time-tested” attempts at solutions, such as importation, improved transparency and price-setting commissions, but they may satisfy political needs but do not help patients.

“The real ideas, the ones that actually will benefit patients, are complex,” he said.

Among the issues with importation are safety concerns, costs and systems that take years to establish. Likewise, transparency attempts do not save patients money. “At the end of the day, if you do a lot of those bad ideas … you are still not solving that problem for patients of what they can and cannot afford,” he said.

LaGanga prefers to target rebates already in the system, to find a way to increase their benefits to patients. Sharing of rebates could save patients an average of more than $800 per year, while their premiums would increase only 1 percent, or less.

“That is the best and easiest [solution], even though it’s complex. It’s the easiest and most simplistic idea that policymakers can get their head around,” he said.

LaGanga said industry can play a strong role in solving the problem, in concert with policymakers. The industry has actionable ideas that will help patients pay less, he said.

“This is the most forward-leaning this industry has ever been. … We want to solve this issue and work with them on it.”