Hospices, Lawmakers Target Medication Cost Reductions

Medication costs are among hospice providers’ biggest expenses, and some are asking policymakers to take action on prices.

High prices on drugs, as well as shortages, are problems that permeate the entire health care system. While recent industry-wide data are scarce on drug costs for hospice patients, providers often identify these as their second-highest expense, behind wages, salaries and employee benefits.

Addressing this issue could not only lighten the financial load for hospice providers contending with rising labor costs, inflation and lingering COVID-19 headwinds, but also save money for the Medicare program overall, according to Daniel Morrow, a pharmacist and clinical manager for Enclara Pharmacia.

“Hospice medications and pharmacy costs are the number two cost for hospices. I think that’s one message that hasn’t really been conveyed to lawmakers,” Morrow told Hospice News. “And hospice is a big bill for the government. So how can we start to reduce the cost within the government itself, but also help hospices maintain their business while providing the best care for patients?”

How can we start to reduce the cost within the government itself, but also help hospices maintain their business while providing the best care for patients?

-Daniel Morrow, clinical manager, Enclara Pharmacia

Morrow recently met with lawmakers on Capitol Hill as part of Hospice Action Week, a lobbying event held by the National Hospice and Palliative Care Organization (NHPCO) and the Hospice Action Network.

Some members of Congress have cited reducing medication costs as a priority for the Medicare program.

“It’s being able to try and make sure that Medicare, which is the largest provider of prescription drugs, has the opportunity to be able to model best practices,” Rep. Earl Blumenauer (D-Ore.) told Hospice News. “For instance, the Veterans Administration gets better outcomes [on drug costs] than Medicare. So there are opportunities even from other government programs to be able to do a better job of serving the public and getting more value for taxpayers.”

The insulin conundrum

Among the topics of discussion on the Hill was the cost of insulin, which has skyrocketed in recent years.

Diabetes is among the most prevalent chronic illnesses in the United States, affecting more than 30 million people according to the RAND Corporation. While some question whether insulin should be considered “related” or “unrelated” to a patient’s terminal diagnosis, many hospices do cover the drug for at least part of their stay.

Insulin expenses have become a virtual symbol of America’s rising health care costs, according to the U.S. Centers for Medicare & Medicaid Services. The out-of-pocket price for one vial reached more than $98 in 2018, compared to the equivalent of $14 in Japan, $12 in Canada and nearly $7 in Australia, RAND reported.

A bipartisan concern

The problem has become a hot topic in the halls of government as well. Both the Biden and Trump Administrations took steps to address drug costs, including insulin.

“Too many Americans face challenges paying for prescription drugs. On average, Americans pay two to three times as much as people in other countries for prescription drugs, and one in four Americans who take prescription drugs struggle to afford their medications,” Biden indicated in an executive order. “Nearly 3 in 10 American adults who take prescription drugs say that they have skipped doses, cut pills in half, or not filled prescriptions due to cost.”

On average, Americans pay two to three times as much as people in other countries for prescription drugs, and one in four Americans who take prescription drugs struggle to afford their medications.

-President Joe Biden, in an executive order

Trump signed executive orders to establish a “most favored nations” policy designed to ensure that U.S. patients would not pay more for medications than those in other countries. A second order, issued in November 2020, would have eliminated certain rebates between drug companies and pharmacy benefit managers and some health plan sponsors.

However, federal courts later blocked these actions.

Last August, Congress approved the Inflation Reduction Act, which placed a $35 monthly cap on monthly insulin for Medicare Part D beneficiaries, among other provisions.

While these actions focus on the costs for patients, these prices have an impact on health care providers as well, including hospices, Morrow indicated.

“We need to manage this. One of the things that I often acknowledge is the insulin costs, capping at $35,” Morrow said. “There must be a way to get insulin to cost that for hospice patients, instead of just the general population.”