Jim Kenyon: Canaan man’s prescription-price conundrum runs deeper, not cheaper

  • Jim Kenyon. Copyright (c) Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Valley News Columnist
Published: 2/29/2020 10:26:34 PM
Modified: 2/29/2020 10:26:32 PM

Last month, I told the story of Art Pistey, a longtime Upper Valley chiropractor who takes a cutting-edge — and pricey — prescription drug to help keep his multiple sclerosis in check.

Pistey is among roughly 90,000 MS patients in the U.S. who have been prescribed Ocrevus, which the Food and Drug Administration approved in 2017.

Every six months, Pistey, who lives in Canaan, goes to a hospital for an intravenous infusion that takes about six hours.

For an infusion that Pistey received at Alice Peck Day Memorial Hospital in June 2018, his insurance company, Blue Cross Blue Shield of Vermont, paid the hospital about $22,500. Pistey paid an additional $3,700 in out-of-pocket costs, bringing the total tab for the drug to more than $26,000.

Shortly thereafter, Pistey turned 65, making him eligible for Medicare, the federal government’s health insurance program for older Americans.

In July 2019, Pistey received another infusion at APD. The hospital billed a whopping $178,750 for the one dose of Ocrevus, but Medicare capped payment at only $117,000. After Medicare paid $80,581, Pistey was left with a balance of more than $35,000.

Fortunately, Pistey, who is self-employed, can afford private supplemental insurance to help pay portions of bills not covered under Medicare. In this instance, his private insurer kicked in the balance.

How can the amount APD receives for a dose of Ocrevus go from roughly $26,000 to $117,000 — a $91,000 increase — in one year?

As I wrote last month, APD told me that it had made an error when billing for the 2018 infusion. Pistey was charged less than one-half the amount he should have been, a hospital spokesman said.

So why am I revisiting Pistey’s case now?

With the 2020 presidential race heating up, the amount that Americans pay for many prescription drugs is a kitchen-table issue. It’s a problem that Democrats and Republicans seem to agree needs fixing. How rare is that?

U.S. Sen. Bill Cassidy, R-La., a gastroenterologist before entering Congress, told The Wall Street Journal, “If I go to church and there is a Bernie Sanders supporter and a Donald Trump supporter pulling my lapels, it’s probably about drug prices.”

Pharmaceutical companies have become a poster child for corporate greed. Insurance companies, and their executives’ lavish salaries, are under fire too.

But Elisabeth Rosenthal, a physician and contributing opinion writer at The New York Times, has pointed out that another major component of America’s $3.5 trillion health care system deserves more public scrutiny.

In September, Rosenthal wrote that politicians on “both the left and right let hospitals off scot-free.”

She argues “it’s easy to get voters riled up about a drug maker in Silicon Valley or an insurer in Hartford (Conn.). It’s much riskier to try to direct their venom at the place where their children were born; that employed their parents as nurses, doctors and orderlies; that sponsored local Little League teams; that was associated with their Catholic Church.”

Maybe that’s why hospitals can get away with charging $15 for an aspirin. Or $178,750 for a drug to treat MS, an incurable central nervous system disease that affects up to one million people in the U.S. (I gave an outdated lower figure in last month’s column.)

Ocrevus’ list price — $32,500 per dose, or $65,000 annually — hasn’t changed since the FDA approved its use three years ago, a spokesman for Genentech, the California biotech company that developed Ocrevus, told me.

“However, hospital systems have the ability to mark up the cost of intravenous treatments and other medicines,” Genentech’s Justin Hurdle wrote in an email. “Markups are driving higher cost sharing and increasing insurance premiums across the country.”

APD’s response? “It’s important to remember payers” — in other words, both public and private insurers — “establish the rate for what they will pay the hospital for total treatment,” Peter Glenshaw, APD’s vice president of external affairs, wrote in an email. Total treatment includes not only drug costs, but other expenses such as administering the drug, he said. The hospital’s fixed costs, such as electric and heating bills, also figure into what patients are charged, he added.

In last month’s column, I wrote that it was likely Blue Cross, or a pharmacy benefit management company working on its behalf, had negotiated a discount below the drug’s list price. Hurdle said that wasn’t the case.

“Genentech does not offer rebates or discounts to insurance companies for Ocrevus, as we do not see that to be an effective way to reduce costs for MS patients,” he wrote.

For Pistey, Ocrevus has been a life-changer. He can work and remain physically active without the side effects that came with the MS drug he took before his neurologist prescribed Ocrevus.

In the campaign to reduce prescription drug prices, much is being made — and for good reason — of the billions the pharmaceutical industry spends on marketing to consumers and doctors.

Many hospitals play the marketing game as well. Take Dartmouth-Hitchcock, the mega health care organization that has brought APD and three other community hospitals under its umbrella in recent years. D-H employs a small in-house army to market its “brand” and spin hospital news to its liking.

D-H’s website boasts of a communications and marketing department with a vice president, a senior director and seven directors.

Before Pistey’s most recent Ocrevus infusion in January, he was told to go to Dartmouth-Hitchcock Medical Center, the crown jewel in the D-H system. APD no longer provides the service.

Last week I stopped by Pistey’s office in White River Junction. He hasn’t received a bill from DHMC for his January visit.

I wait with bated breath.

Jim Kenyon can be reached at jkenyon@vnews.com.




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