[A]n update on budget changes within the Agency of Human Services turned into a discussion on whether the state should challenge pharmaceutical companies over high prices.
Members of the House Appropriations Committee questioned the price of a life-saving drug for cystic fibrosis called Orkambi. The new medication helps people with cystic fibrosis live longer and breathe more easily.
The Department of Vermont Health Access, which oversees Medicaid, would pay for the drug as the insurer of low-income and disabled Vermonters who use Medicaid programs. The sticker price in fiscal year 2016 for the one drug is $3,036,458.
That’s out of a total proposed department budget adjustment of $80,214,834, which the federal government will pay most of the bill for. The state would pay $35,350,414 through rearranging funds.
The largest single driver of Medicaid costs, according to the Shumlin administration’s numbers, is an increase in the number of Vermonters now on using the subsidized medical program. One-third of the state’s residents rely on Medicaid for health care treatment.
For Orkambi, the cystic fibrosis medication, the state would only pay $1,365,495, but lawmakers still think the cost is exorbitant. The drug costs more than $250,000 per year for one patient, according to the Department of Vermont Health Access, or $710 per day, according to the Associated Press.
The U.S. Food and Drug Administration approved the drug this summer as treatment for cystic fibrosis. The manufacturer of Orkambi is a pharmaceutical company called Vertex, and according to the Wall Street Journal, the company’s revenue is soaring.
“I am worried about the pathway of these drugs,” said Steven Costantino, the commissioner of the Department of Vermont Health Access. “I don’t know how many of these are in the pipeline, but their costs are really astronomical in terms of what they’re doing.”
“We’re trying to get Congress to do something, but I’m not sure if that’s going to work,” Costantino said. He said members of Congress have asked Vermont to negotiate rebates with drug companies, but now he wants the U.S. Centers for Medicare and Medicaid Services to take on the issue.
“You generally can’t say no to a drug (at the state level) if it’s approved by the FDA and (the federal government) pays for it,” Costantino said. He said specialty drugs like Orkambi are the most expensive, but generic drug prices have also been going up.
Rep. Kathleen Keenan, D-St. Albans, said she once traveled on a bus with Sen. Bernie Sanders to get inexpensive prescription drugs in Canada. She said states across the country should join together in a class-action lawsuit against drug companies.
“I just don’t understand why that’s not happening,” Keenan said. “I think it’s pretty clear that more money is spent on pharmaceutical marketing than research and development.” She pointed to magazines that have four-page advertisements for some drugs.
Rep. Kitty Toll, D-Danville, said that Vermont has a reputation for taking on national issues like the labeling of genetically engineered foods. She suggested Vermont pose some sort of challenge to the drug price in order to bring attention the lawmakers’ concerns.
Costantino said Orkambi is driving state budgets up across the country. He said other countries pay low prices for drugs, and referenced another high-priced specialty drug that costs $800 a year in Egypt. In the U.S., he said prices are higher than the rest of the world because the research and development happens here.
Rep. Peter Fagan, R-Rutland City, said cystic fibrosis has historically been a “death sentence,” and drugs are helping people live into their early 30s. “How do you deny someone access to a life-saving drug?” he said in an interview.
Rep. Bob Helm, R-Fair Haven, said, “This may sound a little ridiculous, but why don’t you just go to Egypt to get it?”
Correction: A previous version of this article said Orkambi costs $800 in Egypt. Costantino was talking about another drug used to treat Hepatitis C.
