COVID-19 Vaccine and Drug Costs Place a Heavy Burden on the Healthcare Industry

Health insurers are urging regulators to impose a price ceiling on COVID-19 vaccines and therapeutics, warning that without them, costs will skyrocket.

Once federal stockpiles of coronavirus vaccines and drugs run out, health insurers, employers, and pharmacy benefit managers should strike deals with pharmaceutical companies on prices for Moderna, Pfizer-BioNTech, Johnson & Johnson, and Novavax vaccines and treatments, such as Paxlovid and Pfizer. Evusheld of AstraZeneca. The federal government expects the procurement and distribution of vaccines and drugs to move to the private sector as early as January.

For much of the pandemic, federal programs have protected patients, health care providers, and health insurers from the real costs of COVID-19 vaccines and drugs. But one after another, government initiatives are being phased out, leaving the health care industry and the public with an ever-increasing burden, even as the number of COVID-19 cases continues to rise.

“This should not have been an eternal problem when taxpayer funds were being used for COVID vaccines,” said Dr. Amesh Adalya, senior scientist at the Johns Hopkins Center for Health Security. “There always had to be a transition point out of the emergency, allowing the commercial market to work the same as for other vaccines.”

Influence of the insurer

Insurers and employers are concerned that the cost of COVID-19 vaccines and therapeutics will skyrocket when the government ceases to act as a buyer.

Prices for lab services jumped in the midst of the pandemic, which could provide a glimpse of what will happen in the vaccine and drug markets in the absence of further action from the federal government, said Michael Bagel, director of public policy for Alliance of Community Health Plans, a trade association for nonprofits. insurers. Some labs pulled out of the insurance network during the pandemic, and commercial rates for COVID-19 tests nearly doubled, according to a study released last year by health insurance trade group AHIP.

While large health insurers and self-insured employers should be able to bear the costs, start-up insurers and small businesses are likely to struggle financially as they are held responsible for paying for COVID-19 vaccines and medicines. Last week, the Department of Health and Human Services held a meeting on this issue with representatives from the insurance industry, the healthcare provider community, and the pharmaceutical industry, as well as state and local officials and patient advocates.

Without price guarantees, smaller insurance companies and employers will face a Hunger Games scenario as they fight vaccine and drug makers over prices and supplies, Beigel said. Moderna, Pfizer and AstraZeneca did not respond to interview requests. Trade group Pharmaceutical Research and Manufacturers of America declined to comment.

Health insurance companies haven’t accounted for these costs when calculating next year’s premiums, Bagel said, and they’ll face other costs when the federal public health emergency expires. For example, insurers will eventually have to negotiate prices for home coronavirus tests, for which they currently pay $12 each. The federal government suspended its free home testing program for COVID-19 last week after funding dried up.

“Insurers will end up paying a little more than what the federal government pays,” said Matthew Fidler, a senior fellow at the USC Brookings Schaeffer Initiative for Health Policy. As a consequence, they are likely to increase insurance premiums, he said.

Insurers with fewer participants will see more volatility in their earnings when they have to pay for COVID-19 vaccines and therapeutics, said Brad Ellis, senior director at Fitch Ratings. This could push insurers like Oscar Health and Bright Health Group to increase their use of reinsurance, he said.

“It is too early to know exactly what impact this requirement will have on many health insurers,” a Bright Health Group spokesperson wrote in an email. Oscar Health did not respond to a request for an interview.

Insurers will still have to pay for COVID-19 vaccines without cost sharing because the Affordable Care Act requires free coverage of vaccines recommended by the Centers for Disease Control and Prevention’s Immunization Practices Advisory Panel.

In fact, health insurance companies are not required to cover drugs that treat COVID-19. As the government backs down, questions are being raised about which insurers will cover which products and how much members will have to contribute. In addition, Medicare Part D can usually only cover products that are fully approved by the Food and Drug Administration. Many vaccines and treatments for COVID-19, including Paxlovid and Evusheld, are currently being sold under emergency use permits.

“It’s possible that the CMS has some tricks on how they’re going to organize coverage for these things, but at least on the face of it, there are some issues that need to be addressed and I think it’s possible. . there are issues that will require legislation to address,” Fidler said.

Provider Influence

Bringing COVID-19 vaccines and treatments to the commercial market will be a bigger shift for payers than for providers. But health care systems that provide a disproportionate amount of care to uninsured patients are concerned about higher unreimbursed care costs, said Chip Kahn, president and CEO of the Federation of American Hospitals, which represents investor-owned health systems.

The federal government has stopped reimbursing service providers for COVID-19 vaccines, tests and treatment for the uninsured and is unlikely to resume those programs, Fidler said, but some states may take action.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button