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Insider Q&A: A front-row seat for the drug pricing battle


Dr. Steve Miller, the chief medical officer of Express Scripts, sits at the center of the storm over rising drug prices.

His company runs prescription plans for employers and insurers that cover around 85 million people. It buys enough drugs to fill more than 1 billion prescriptions a year.

Miller has watched super-sized drug prices infuriate patients and strain the health care system with growing frequency, starting when a new hepatitis C drug hit the market at $84,000 for a course of treatment and continuing through the recent revelation that the price of Mylan's EpiPen rose more than 500 percent since 2007.

The company uses its buying power to push drugmakers for discounts, and Miller frequently criticizes both the amounts drugmakers charge and the patient assistance programs they offer.

Drugmakers, on the other hand, say these pharmacy benefits managers, or PBMs, are among the layers of middlemen inflating costs.

Miller spoke recently with The Associated Press. His comments have been edited for clarity and length.

Q: Why do you oppose the coupons that Mylan and others offer to customers?

A: The patient pays only a small part of the drug cost. It's their employer or their insurance company that pays the vast majority. So giving that co-pay assistance does nothing to lower the price for the U.S. health care system, and every patient pays for it in the form of their (insurance) premium.

Q: Employers and insurers pay you to process prescriptions. Isn't your company part of the pricing problem?

A: We are part of the pricing solution. If you did not have PBMs you'd invent a PBM, because what we do is we aggregate a huge number of patients, and we can drive enormous discounts.

Q: What ultimately stops this pattern of steep price hikes for prescription drugs?

A: Historically, providers of health care never took advantage of the times they had their monopolies. Over the last decade or two, we've seen the tattering of that social contract.

We have really been encouraging the leaders of the pharmaceutical industry to adhere to that social contract, and we're seeing some progress.

Q: Will profit-hungry investors buy into that contract?

A: If a pharmaceutical manufacturer demonstrates scientific innovation, brings new products to the market, we're going to work with them to make sure patients have access to the products. They're going to be successful, patients are going to healthier and society's going to be better for it.

Q: These price hikes seem to be popping up all the time now. What are the chances the average consumer's going to run into sticker shock at the pharmacy counter?

A: The advent of health plans with high deductibles is making it more common. In the past, people had flat (co-payments), which means that you paid either $10 or something similar. Now these plans have gone to percent co-pays. Even if your percent is low, if you have a $10,000 drug, that means a high co-pay.

We're seeing high drug prices, and we're seeing more and more patients with high-deductible health plans.

Q: What is the next area of treatment where we may see some soaring drug prices?

A: Consider how devastating Alzheimer's is, anyone who comes to the market with a treatment would have unlimited pricing power. How much would you be willing to pay for your spouse who is suffering with Alzheimer's? Anything.

Associated Press
