In response to ever-rising costs for pharmaceuticals, many states are considering laws that would impose price caps on certain drugs. But the caps won't solve the problem of rising healthcare costs, according to an opinion piece for the Philadelphia Inquirer.
Kenneth Thorpe, chairman of the health policy and management at Emory University in Atlanta, wrote in the piece that lawmakers in Massachusetts, Pennsylvania and New York are currently mulling price caps on some drugs. Some surveys suggest that the cost of specialty drugs could rise by more than 20 percent in 2016.
In Massachusetts, healthcare costs rose nearly 5 percent last year--far higher than projections--prompting enough concern to try and put some checks into place. A proposed cap on drug prices are among the proposals. However, Thorpe questioned that such an action would work, arguing that drug prices are not the main driver for rising healthcare costs.
Although the U.S. would spend $328 billion on drugs this year, its percentage of total healthcare spending was only about 10.1 percent, according to Thorpe. It's a proportion that has not really changed since 1960. "Of course, prescription prices have increased. But so have prices for almost all other medical services," Thorpe said.
Instead, he blamed increases on hospital spending for much of the recent cost increases. Expenditures on hospital services accounted for a third of the increase in healthcare spending between 2014 and 2015. By contrast, drug spending comprised 14 percent of the increase. But patients are much more likely to experience "sticker shock" when drug prices go up.
As an alternative, Thorpe suggested that states focus more on suppressing rates of chronic diseases in order to control costs.
- read the opinion piece