When Avigail Ruben* was born, her parents felt blessed, grateful, and had big dreams for their baby. But as Avigail started getting older they sensed that there was a problem. Unfortunately, after consulting with doctors, they learned that their concerns were justified.
Avigail was diagnosed with SMA type 2, a very rare genetic disease. She had been born without a vital gene, the one that would ensure she would be able to breathe, eat, walk, and sit up on her own.
Although distressed at the diagnosis, the Rubens had reason to be optimistic. Doctors told them a new medication called Zolgensma could create this missing gene in an SMA type 2 patient. While hopeful this medication would live up to its promise, there was an issue the Rubens had to deal with immediately: the exceptionally high cost of this drug.
With a price tag of $2.2 million for a single dose, Zolgensma is believed to be the most expensive drug in the world. The Rubens were not even close to being able to pay for this remedy. And their insurance company was of only limited help because while agreeing to pay for the cost of the procedure and the doctor, they declined paying for the cost of this new drug.
A related issue needed to be resolved as well – and quickly! In May 2019, the FDA approved this “miracle drug” but only for children up to the age of two – exactly two, and not even a day older. This meant the Rubens had to find a way to pay for this drug quickly, because Avigail was just five days short of her second birthday.
At that point help came out of nowhere. The Chesed Fund had raised tens of millions of dollars for all kinds of emergency and charitable situations in the past. Now they were called upon to raise this very hefty sum and do so very quickly
The Rubens experienced a miracle, as more than $2.2 million was raised through the Chesed Fund in just five days from the contributions of more than 2,300 donors.
“We witnessed an unbelievable, unprecedented reaction from all four corners of the world,” said Rabbi Matz of the Agudath Israel of Florida, who played a role in the decision to contact The Chesed Fund. “The way we pulled this off in such a short amount of time is breathtaking.”
Helpful, Yet Sickening?
A surprisingly high percentage of Americans are living from paycheck to paycheck. As a result, when high-priced medications are prescribed, they run into a serious obstacle. “Many patients are foregoing prescribed doses and medications due to the rising costs and lack of affordability,” USNews reports.
A typical American spends about $1,200 on prescription drugs a year, according to the Organization for Economic Cooperation and Development. CNBC notes this is more than people pay in any other country.
So why are so many pharmaceuticals so expensive? And why does the price of purchasing them keep rising?
Pharmaceutical companies point to the high cost of innovation. Presumably, this is one of the reasons Zolgensma, the drug used to create the missing gene in Avigail Ruben, is so expensive.
But a study recently published in the medical publication Health Affairs refutes this claim. “Rising prices were driven by manufacturers increasing prices of medications that are already on the market rather than [by] the entry of new products,” lead author Inmaculada Hernandez, an assistant professor at the University of Pittsburgh School of Pharmacy, told CNBC Make It.”
Looking at wholesale data for around 27,000 prescription drugs, Hernandez found that between 2008 and 2016, brand-name oral prescription drugs rose 9% annually, while injectable drugs increased 15% per year.
Some of these are geared to very severe diseases, while others are more commonly used. For example, several years ago the price of a two-pack device that delivers epinephrine, a drug that can prevent a dangerous allergic reaction, was raised from $100 to more than $600; insulin costs per patient nearly doubled between 2012-2016. The price of some other medications increased much more. Meanwhile, during this time, inflation was running ahead by only about 2%.
Starting From A High Point
Pharmaceutical companies started 2019 by implementing significant price hikes. Dozens of drug makers raised the list prices of hundreds of medications by an average of 6.3% on Jan. 1, 2019, according to an analysis from the health software company Rx Savings Solution.
“These increases are examples of what we mean by year-over-year inflation in existing products,” Hernandez said.
Gerard Anderson, professor of Health Policy and Management at Johns Hopkins University, told NPR that raising the cost of existing drugs benefits drug makers and insurers. However, it doesn’t provide any help to patients.
“Research and development is only about 17% of total spending in most large drug companies,” he explained. “Once a drug has been approved by the FDA there are minimal additional research and development costs, so drug companies cannot justify price increases by claiming (higher) costs.”
Researchers say a lack of competition and the regulatory environment in the U.S. allow “for price increases much higher than in other countries,” according to Anderson.
From time to time the subject of rapidly increasing pharmaceuticals has been raised during various political campaigns. While most people agree that the costs of some drugs are out of hand and becoming even more so, that’s where the issue begins and ends. There is no ongoing effort to freeze prices and certainly not to roll any back, although occasionally companies do that.
So when will these spiraling costs reach their peak? No one knows. Meanwhile, nothing tangible has been or is being done now that will correct this problem.
The events described at the beginning of this article are true. The names of the family and the child were changed to respect and protect their privacy.
By Gerald Harris