Aon pharmacy VP DeWitt discusses rising costs of specialty and genetic drugs

The City of San Francisco is taking significant steps to address the rising costs of high-cost drugs, particularly in the realms of genetics and specialty medications. During a recent government meeting, Almaz DeWitt, Vice President of Pharmacy Services with Aon, presented a comprehensive overview of the current landscape of drug approvals and their financial implications for the community.

DeWitt highlighted that the FDA has approved 16 new drugs in 2022, with a staggering seven of these targeting rare diseases, which are often associated with exorbitant costs—averaging over $1,000 per month. The discussion underscored the complexity of drug manufacturing and approval processes, emphasizing that new treatments can lead to increased spending as they expand their indications or introduce new delivery methods.

The meeting also addressed the anticipated influx of new therapies, with approximately 45 agents expected to enter the market by 2023, 26% of which are aimed at treating rare diseases. These orphan drugs can be up to 25 times more expensive than standard medications, prompting the need for innovative solutions to manage costs effectively.

Among the proposed strategies to mitigate these expenses are value-based contracting, where payment is contingent on the drug's effectiveness, and installment payment plans to ease the financial burden on patients. Additionally, the introduction of biosimilars—biologically similar drugs that can provide more affordable alternatives to brand-name medications—was discussed as a promising avenue for reducing overall drug spending.

DeWitt also touched on legislative efforts aimed at controlling drug prices, including a recent Senate provision that allows Medicare to negotiate prices for certain high-cost drugs. While this initiative currently focuses on Medicare, there are concerns about potential shifts in costs to private payers.

The meeting concluded with a call for ongoing dialogue and collaboration among stakeholders to navigate the complexities of drug pricing and ensure that patients have access to necessary treatments without facing prohibitive costs. As San Francisco moves forward, the implications of these discussions will be crucial in shaping the future of healthcare affordability in the city.