A recent headline in Politico Pulse pointed to a drug price transparency report from the state of Vermont that identified 10 prescription drugs that are “eating up state spending.” The top three drugs, Abilify, Lantus, and Humira, saw growth in wholesale acquisition costs over five years of 55%, 90%, and 114% respectively.

The report noted that while percentage increases in the price of generic drugs were higher, the actual dollar amounts were higher for name-brand drugs.

The top 10 drugs identified in the Vermont report are as follows:

  1. Abilify – an antipsychotic, for depression, bipolar disorder, and other conditions
  2. Lantus – name-brand insulin for treating diabetes
  3. Humira – an immunosuppressant for treating arthritis and Crohn’s Disease
  4. Enbrel – acts as TNF inhibitor to treat rheumatoid arthritis, among other diseases
  5. Crestor – a statin for treating high cholesterol
  6. Epipen – epinephrine for allergic attacks and asthma
  7. Latuda – an antipsychotic for treating schizophrenia
  8. Prevacid – a proton-pump inhibitor for treating acid reflux and heartburn
  9. Doxycycline Hyclate – an antibiotic for treating infections such as acne and gonorrhea
  10. Permethrin – an anti-parasite drug for treating lice and scabies

Among these, the Epipen has been in the headlines most recently for price hikes and a subsequent backlash against Epipen maker Mylan.

As health care costs–and especially pharma costs–continue to rise, awareness of which drugs are experiencing the largest price increases and which are most expensive is key to managing cost. Vermont’s experience with prescription drugs provides visibility into what is going on in other states and with health insurers and employers offering health insurance.

The issue is clearly on employers’ minds. According to Willis Towers Watson’s 21st annual Best Practices in Health Care Employer Survey, 88% of large employers identified managing pharmacy spending as a top priority in the next three years.

In June of 2016, Vermont became the first state to pass a drug price transparency law, Act 165, which mandates this report.

To read the entire report, click here.

Some of the fastest-growing Medicare costs stem from doctors using new medical devices for testing and treatment in their offices, recent data shows.

According to a Wall Street Journal analysis, four of the top 10 fastest-growing Medicare services from 2012 to 2014 involved new medical devices being used by doctors in their offices, instead of in care settings where they might typically be used.

The appeal to doctors of using these new devices is clear: because of the way Medicare payments are structured, their use can be very lucrative. There is also the convenience factor for both doctors and patients. And in an era when technology offers sophisticated medical innovations small enough for use in doctors’ offices, it’s easy to see how doctors are tempted to use cool new devices.

But the consequences of doctors using more medical devices in their offices is an uptick in Medicare spending, to the tune of $135 million, according to Medicare billing records. While that amount of money is a drop in the bucket of total Medicare spending, if the trend continues, it could result in meaningful increases.

So while in-office testing and treatment has its advantages, it’s a trend that bears watching from a cost-benefit point of view.

To read the article in the Wall Street Journal, click here.

In a recent article in Employee Benefit News (EBN) on the topic of health care transparency tools, writer Bruch Shutan cautions that “whittling down cost and quality measures for a more consumer-friendly presentation may improve employee uptake of such tools, but one industry expert with a medical background cautions that it could come at the expense of other important issues.“

Jeff Levin-Scherz, an M.D. and the national leader of Towers Watson’s health management practice, noted that a balance must be struck between simplifying the tools and keeping the valuable metrics and data they provide. Levin-Scherz favors including many meaningful metrics “because it probably drives quality improvement over a wider array of services.”

As a physician, Levin-Scherz is optimistic about efforts to increase transparency generally while reserving a “key role” for physicians in communicating valuable information to patients. One area that could benefit from better transparency tools and that has been prone to lack of transparency in the past is specialty pharmacy.

“If it’s for a specialty drug where there’s only one of that drug and there’s really no choice, it’s purely about contracts,” Levin-Scherz said. “But in instances like for hepatitis C, where there are multiple very highly efficacious medications, having a product design that steers people toward one or toward another can actually lead to substantially lower prices.”

As health care transparency tools and employee education increase, so do opportunities to control the high cost of health care for both employers and employees.

To read the complete article in EBN, click here.

Numerous news reports on the high cost of medical services and variations in price from region to region are bringing price transparency to the forefront – especially with more consumers empowered to select their own health plans – both on public exchanges and for employee-consumers via private exchanges. Savvy health care consumers are increasingly leery of trusting the first price they’re offered for a treatment or procedure – and they should be.

A recent article by KQED, a public radio station for Northern California, explains a new program that it has organized to bring clarity to the often-cloudy world of health care pricing by crowdsourcing pricing data. Listeners are invited to submit prices they paid for various procedures to an online tool called PriceCheck and compare those prices against those submitted by other listeners to get a sense of how much price variation to expect in the area.

PriceCheck data indicates the procedures that appear to be the worst offenders in price variation are:

  • Mammograms, reported to cost between $134 and $1,200
  • Back MRIs, which ranged from $255 to $3,700

PriceCheck is a voluntary, opt-in tool, so it doesn’t give comprehensive price comparisons. However, since such a tool does not yet exist for San Francisco Bay Area residents, the KQED PriceCheck tool is a helpful resource.

Consumers are increasingly advocating for price transparency nationwide, in some cases, sparking bidding wars for certain procedures. While PriceCheck prices are representative of cost differences only in the San Francisco Bay Area, such a tool could be useful in many local markets, since there are price variations everywhere.