More Americans rely on handouts for affordable medication

Patient assistance programmes may even end up adding to the cost of healthcare
Out of pocket costs have shot up for Americans who rely on medication © Bloomberg

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For Americans unable to afford prescription medicines, patient assistance programmes — run by charities and drug companies to provide free or low-cost medication to poor or uninsured patients — offer a lifeline. 

But while they provide immediate relief, healthcare executives argue that more sustainable solutions are needed to improve affordability.

Patient assistance programmes (PAPs) operate in two ways. In those run by drugmakers, companies provide patients with medicines free of charge or help them pay for out-of-pocket costs. 

Meanwhile, in PAPs operated by charitable foundations, eligible patients usually receive assistance in the form of a grant. In these programmes, charities are required to provide assistance for all drugs for a given disease, not just those made by the manufacturers that donate to the charities.

“The drugs companies basically have to throw their donations over a Chinese wall to the charities,” says Dan Klein, president and chief executive of the Patient Access Network Foundation (PAN), which helps underinsured patients gain access to medications and treatments.

Since 2004, PAN has provided more than $2.5bn in financial assistance to cover out-of-pocket expenses for prescribed treatments and Mr Klein expects demand to grow. 

Several factors are behind the increased US demand for PAPs. Drug prices are rising rapidly while Americans are living longer with an increasingly complex range of conditions that require medication. 

Proposed policy changes may even further increase demand for handouts. For example, the latest version of Republican healthcare reform will, it is estimated, leave 23m more people without insurance.

While many generic drugs can be obtained relatively cheaply, some conditions require far costlier drugs to be taken over long periods of time. 

“The problems are more when you have specialty medications that are very expensive,” says Katherine Hempstead, who leads the Robert Wood Johnson Foundation’s work on health insurance coverage. “In many cases, people who have long-term need for medication for something like multiple sclerosis are going to exhaust their resources.”

Another reason for the increased demand for PAPs is changes to insurance provision. As insurers have sought ways to keep premiums low, some have increased the costs that policyholders have to pay themselves. “You’re robbing Peter to pay Paul,” says Mr Klein. “You keep the premium low so people will buy health insurance. But you’re asking them to share a lot of the costs, which means they may not be able to afford to use their insurance.”

But while demand for PAPs is likely to rise, the programmes are not without their critics. Some, for example, argue that they deter doctors and patients from seeking lower-cost options, such as generic drugs.

Others believe PAPs contribute to higher costs. Writing in the New England Journal of Medicine, David Howard, a health policy and management professor at Emory University’s Rollins School of Public Health, argued that as patients become less sensitive to costs, manufacturers of patented drugs push up prices.

PAPs distract attention from finding a long-term solution to the problem of affordable drugs, says Martin Parkinson, life sciences expert at PA Consulting Group. “They can create the illusion that affordability is not a problem because there is a mechanism through which all patients can access medicines irrespective of their income,” he says.

Mr Klein agrees: “Ultimately charitable foundations like PAN are a short-term and perhaps not even sustainable solution.” He sees one answer in limiting out -of-pocket costs.

Mr Parkinson argues that healthcare pricing demands broader attention from industry, policymakers and others. 

“We need to look more comprehensively at the issue of affordability for patients, healthcare systems and the life sciences industry,” he says. “There have been many solutions suggested by all stakeholders but we still find ourselves applying band aids to the problems.” 

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