In 2015, a mystery blood disorder put Lisa near death as multiple organs began failing throughout her body.
“They didn’t know what was wrong with her,” said Don recently, recalling his wife’s month-long hospital stay. “The doctor pretty much said get your house in order. We don’t know how this is going to go.”
Lisa Gose needed a miracle and her physicians found a drug that would deliver one: Soliris. After doctors at Atrium Medical Center began administering the drug, she made a quick recovery.
“Without question it saved her life,” Don says.
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But Soliris, which keeps red blood cells from being destroyed, is not a one-time cure. And at $6,000 per vial, Don and Lisa Gose are forced to deal with the reality of having one of the most expensive medicines on the planet pumped into her veins every two weeks.
Soliris carries an annual cost per patient of anywhere from $300,000 to $700,000, but the Goses are paying more because Lisa goes to the hospital every two weeks for her treatment.
Lisa Gose’s condition may be rare, but her story is similar to many Americans being asked to pay an increasing portion of their health care costs, including inexplicably high-priced prescription drugs. Most people have no idea why the prices being billed are so high.
This news organization has been examining the secret world of prescription drug pricing and the ways in which everyone is footing the bill for those prices through higher health care premiums, deductibles and copays.
Some lawmakers are calling for reforms designed to hold prices down, which could help people like the Goses. But when they hear President Donald Trump and members of Congress talk about repealing the Affordable Care Act, the health care law known as Obamacare, it leaves them uneasy. After all, they receive their health care coverage through Obamacare.
Currently, a non-profit helps the couple cover their out-of-pocket costs for Soliris, which are about $7,000 a year. But the Goses fear that will rise dramatically if wholesale changes are made to the health care law that pays for Lisa’s stratospheric medical bills.
“We’ve got such mixed emotions about this, because it saved her life,” Don Gose said of the drug his wife will take for the rest of her life. “But how do you justify this? What happens if this insurance goes away?”
‘I wouldn’t be here’
Like many in Ohio and throughout the country, the Goses don’t pay much out-of-pocket after insurance. But they know someone is paying the seven-figure totals that appear on their bills.
As health care costs rise, employees are paying a bigger share, something Don Gose witnessed during his 25 years with the Duncan Oil Company in Beavercreek, where he retired as Vice President of Operations.
“The costs kept going up,” he said, explaining why the company first asked employees to pick up 10 percent of their health insurance premiums, and then 20 percent along with higher deductibles.
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The Goses’ story also reveals an oddity in the drug pricing system in which provider-administered drugs like Soliris — which needs to be taken intravenously with the help of a nurse — are more expensive when administered at hospital-owned outpatient facilities than in other settings.
Health plans report markups as much as 50 to 60 percent when the drugs are administered at a hospital compared to a doctor’s office or in a patient’s home.
Soliris is sold by manufacturer Alexion for $6,000 per vial, according to what the Goses were told by their case rep. It would be $24,000 per treatment if they ordered it directly to their home at that price. But Atrium Medical Center charges their health plan $89,000 per treatment for the same four vials.
That means their health plan, administered by Premier Health, is picking up a total tab of more than $1.4 million annually.
It’s that number on their explanation of benefits that makes the Goses so thankful for their health coverage, obtained through the Affordable Care Act exchange.
“If we wouldn’t have had insurance, I would have died.” Lisa said. “I wouldn’t be here.”
The couple had trouble getting insurance once before. Don is a Type II diabetic and Lisa had a chronic pain condition prior to learning of the blood disease. When Don retired, they were shocked to find out they couldn’t get insurance.
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“If you’ve got that pre-existing tag it’s tough,” Don said. The ACA has its share of critics, but for the Goses it meant a lifeline. Some of the reforms being discussed terrify them.
“I’m really concerned about the life-time maximums that they might put on these policies if the Affordable Care Act is repealed,” said Don. Lisa’s Soliris prescription would surpass many health plan lifetime maximums in just one year.
The ACA has been beneficial for people in the Goses’ situation, said John Bowblis, professor of economics at Miami University who specializes in health care.
“It allowed people to who wanted to retire early to do so before they are eligible for Medicare,” he said. “If those plans are not available (due to repeal) they may not be able to qualify for another health plan.”
Bowblis said patients on high-cost prescription drugs are part of the reason Obamacare is seen as a failure. Not enough young, relatively healthy people have signed up to subsidize the cost of patients whose care is very expensive, he said.
‘It’s just greed’
Health plans report they are increasingly seeing inflated charges when patients have drugs like Soliris administered in hospitals, often double what is charged for the same drugs in a physician’s office, according to the 2015 Medical Pharmacy Trend Report conducted by Magellan Rx Management.
The average cost per claim for Soliris administered at a doctor’s office in 2014 was $21,436. At a hospital facility it was $34,265 — a 59 percent increase. The skin cancer treatment Yervoy had a 65 percent markup at hospitals to more than $60,000 per claim, according to the survey of health plans.
“Somewhere in the realm of 85 percent of these infusion drugs can be administered at home,” said Kevin Schlotman, vice president at Cincinnati-based Benovation, a health plan administration firm. But Benovation customers have seen drugs that normally cost $4,000 to $6,000 charged to their plans at $14,000 to $16,000 by hospitals, Schlotman said.
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Some patients can’t have at-home treatment because the risk of side effects and complications is too high, so doctors’ offices are another option.
The main reason for the difference in costs is the way the drugs are billed. Most hospitals and outpatient clinics get reimbursed based on a percentage of a “charge.” Critics of this system say that “charge” is an arbitrary price often much higher than what the manufacturer bills for the drug.
"Basically, a hospital marks up a drug to create a highly inflated 'charge.' It then discounts the charge to the level of the merely outrageous," said Adam Fein, CEO of Drug Channels Institute in a blog post last year.
The majority of physician’s offices and specialty pharmacies that supply drugs for at-home infusions get reimbursed at the drug’s average sales price plus a small markup.
“Commercial payers’ different reimbursement approaches allow a hospital to get paid much more than a physician office,” Fein said.
To save money health plans are trying to guide members away from hospital outpatient facilities for drug infusions, either by requiring prior authorization to use a hospital clinic or by varying out-of-pocket charges depending on the site.
What makes the potential profits even higher for some hospitals is the fact that they may qualify to buy drugs cheaply through the government's 340B Drug Discount Program.
“There could be drugs with a list price of $5,000 for which the manufacturer receives $0.01 but the hospital receives (and a health plan pays) $15,000,” Fein said.
Hospitals say the costs associated with keeping their doors open are what may be built into the charge billed to a health plan for a drug.
“Prices vary based on each institution because of their different costs, staffing, their labor expenses, their administrative expenses, especially when it comes to certain medications with the handling and treatment and processing,” said John Palmer, spokesman for the Ohio Hospital Association.
Schlotman acknowledged hospitals need to cover expenses, but he argues there should be little difference in cost between a health plan purchasing and shipping a drug to a provider and a provider having it shipped directly. Claims data shows there is. “All this is is profit,” he said.
There’s no one in the industry who doesn’t want hospitals to make reasonable profits to invest in infrastructure, he said, “but at some point it’s just too much. At some point it’s just greed.”
“And I think people are afraid to call hospitals, which save people’s lives, to the carpet,” Schlotman said.
Atrium Medical Center, where Lisa Gose gets her treatment, said prices paid by health plans are negotiated as part of contractual agreements.
“Chemotherapy and biotherapy medicines are more expensive for staff to handle because they’re considered hazardous and require special equipment and supplies to prevent staff from being exposed to the drug,” a statement from the hospital said. “Additionally, hospitals can be held to more stringent regulatory standards than other health care settings where medicines might be administered.”
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‘Liquid gold’
Don Gose calls Soliris, the drug that saved his wife, “liquid gold.” It’s an apt description, not only of because its effectiveness but because of its price.
“This drug is never going to be mainstream,” Lisa Gose says. “It’s always going to cost a lot of money.”
Lisa's condition — atypical hemolytic-uremic syndrome (aHUS for short) — affects two in a million people, or about 600 patients in the United States. Before the Food and Drug Administration approved Soliris for aHUS in 2011, their prognosis was grim.
The syndrome causes the destruction of red blood cells, low levels of platelets and kidney failure. Because it can also cause tiny blood clots, other organs can begin to fail. Historically, two-thirds of patients with this condition either died from it or had permanent kidney failure requiring lifelong dialysis.
Soliris binds to the proteins that destroy red blood cells, allowing patients to lead normal lives.
Soliris has orphan drug status to treat aHUS, which means manufacturer Alexion has a seven-year exclusivity from the FDA, ending in September 2018.
The orphan drug program was created to provide an incentive for companies to invest in the development of medications to treat rare diseases. Some in the industry argue that without exclusivity agreements drug companies couldn’t undertake the huge costs needed to develop and get a drug to market if it is needed by a relatively small number of people.
Alexion told International Business Times it invested more than $1 billion over 15 years to develop Soliris.
Exclusivity agreements have been criticized, however, as a means for companies to drive out competition, raise prices and expand the number of diseases treated by the government-protected orphan drugs.
Orphan drugs can be profitable for drug makers. Alexion on Thursday released its 2016 financial results, reporting total revenues of $3.1 billion, or an 18 percent increase over 2015.
The company’s net sales of Soliris were $2.8 billion, up 10 percent from the year before.
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