Why Insurers Need Regulation–Because of the Money!

An example of the problems with “free” markets in health care–lack of coverage for expensive oral medications used in cancer care. For a number of years, oral medications have been increasingly used in cancer treatment . From Xeloda (oral 5 FU) to Gleevac (imitinab) expensive oral agents have become an integrated into treatment.

Gleevac (imitinab) one of the early targeted drugs (tyrosine kinase inhibitor in Chronic Myelogenous Leukemia) costs anywhere from $40,000/year to $90,000/year depending on dose and indication. Over a lifetime this drug becomes more expensive than most homes. Average families (Median U.S. income about $50,000/year) cannot afford such expense unless insurance provides coverage or they receive free drugs from the company.

Medicare took care of this problem with it’s Part D drug coverage. The issue with Medicare is the donut hole in coverage which requires a yearly $3,000 payment and the 5% copay after the donut payment is completed. In some cases this 5% payment can be considerable as noted in the article.

Most private insurers have lagged in providing this coverage. Oregon has now required insurers to provide equal coverage for IV and oral chemotherapy medication. The rest need more adult supervision.

Another issue is the price demanded by pharmaceutical companies. You and I grant these companies monopoly status for a generation (a patent). This is an industry/government sanctioned imfringement on free “markets”This restraint on open competition is granted theoretically to “encourage development of innovative agents.”

However, drugs priced at more than the yearly income of citizens have become simply unaffordable–by individuals as well as insurers. In other industrialized nations these same medications are priced significantly less. These countries negotiate and otherwise review new drugs and require more appropriate pricing. We need patent reform here as well.

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