Million-dollar health care is on the rise — and expensive drugs are playing an important role.
The number of patients whose medical care cost at least a million dollars over the course of a year rose by nearly 90% between 2014 and 2017, according to a new report conducted by Sun Life. (Because the report was about Sun Life clients, it focuses on the highest-cost medical bills of individuals with health insurance through their jobs, often at large companies.)
Expensive injectable drugs, especially for rare diseases, are one factor that’s fueling the rise, according to the report.
In 2016, for example, total treatment costs for a patient with a severe swelling disorder were $6.7 million, the highest in a single year, according to Sun Life. Last year, total medical costs for an individual with a blood disorder came to $5 million.
“We’re seeing drug claims that can be in the millions of dollars,” Dan Fishbein, president of Sun Life Financial U.S. SLF, -0.88% told MarketWatch. “Most people don’t imagine getting an $80,000 prescription, but that’s relatively common now.”
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Expensive injectable drugs — including those administered intravenously and self-administered — made up 6.6% of aggregate claims for patients with million-dollar plus health care costs, or $61.5 million of $935.3 million total, the report found. Among the top 20 drugs prescribed to patients with million-dollar or more health costs, the largest share was for blood disorders, followed by cancer drugs, the report found.
Beyond the million-dollar claims, expensive injectables made up a large share of overall spending on such drugs last year, according to the report: Four of the five most pricey products accounted for 24%, or about $45 million, of $186 million in total spending.
Consumer protections in the Affordable Care Act are one likely factor explaining this spike in expensive care, the report said. Other, earlier changes in U.S. health policy have also made it more lucrative for drugmakers to develop and sell high-cost drugs.
Efforts to develop lower-cost versions of these drugs, though, have so far been stymied. And critics charge that this rampant profit-taking is taking a toll on patients — as well as the U.S. health system.
See more: This is the most expensive drug in America
The trend of high-cost drugs, not going away anytime soon, leads to an inevitable question, Fishbein said.
“What is the level of expense that we think is appropriate to pay for breakthrough drugs?” he asked. “We will have to get to a point where we ask, ‘Is a $23 million drug something we want to pay for as a society?’”
It’s a question that some in the health care world, including health insurers and drug pricing watchdogs like the Institute for Clinical and Economic Review — a non-profit that receives health insurer funding — are already trying to answer.
Related: When it comes to high drug prices, Big Pharma blames someone else
The new findings come from a Sun Life report, which provides a look at some of the highest expenses in the U.S. health care system — though through a very specific lens.
The conclusions pertain specifically to employers who self-fund health plans, meaning that instead of having a health insurer take on the financial risk of health insurance for all their employees, they pay for it themselves.
There’s a good chance you’re in a self-funded plan without even knowing it, especially if you work at a large company; about 60% of covered workers are in a self-funded plan, according to the respected non-profit Kaiser Family Foundation.
But medical bills are unpredictable, so many employers that self-fund their health plans buy stop-loss insurance from a firm like Sun Life, which is the largest independent stop-loss provider in the U.S., to limit their financial risk. The report looks at those high-cost stop-loss claims, which belong to Sun Life’s policyholders.
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