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American Association for Physician Leadership
American Association for Physician Leadership

Analysis:  Physicians Can Lead on Drug Price Reform

by Heather Boerner

October 31, 2017

Analysis:  Physicians Can Lead on Drug Price Reform - Banner Image


With federal efforts going nowhere, some physicians are taking steps on their own — at the state level and in their practices — to keep the price of prescription drugs in check. But they say it isn’t easy.

With federal efforts going nowhere, some physicians are taking steps on their own — at the state level and in their practices — to keep the price of prescription drugs in check. But they say it isn’t easy.

Stephen Rockower, MD, is an orthopedic surgeon, so he doesn’t write many prescriptions. Still, in 2015, when Turing Pharmaceuticals, under the leadership of Martin Shkreli, increased the cost of a life-saving drug 5,000 percent, something changed for Rockower. He realized how drug prices have gone out of control.

It’s incredible, he says, that “if [Shkreli had] only increased the cost of the drug 200 percent, it would have flown under the radar.” That’s how crazy the market has become, he says.

But Rockower didn’t shake his head and return to practice. He had been involved in politics for years, and he was deeply involved with the Maryland State Medical Association, so he headed to Annapolis. He was involved in the passage of what he calls Maryland’s “price-gouging law.” Because the law is aimed at Medicaid, it allows the state attorney general to get involved if a drug company raises the price of a drug by more than 50 percent in a year.

“Fifty percent in a year is still exorbitant,” he says. “But it’s almost a reasonable number” given the current environment.

As federal action on drug prices stalls, states have taken up the slack. While most Americans say pharmaceutical costs are among the most pressing issues in America, more than 80 bills to curtail drug prices have bubbled up in state legislatures in 2017. Maryland’s is one of eight that have gone into effect in recent years. It’s unclear how effective the laws will be and whether they will go into effect at all. This leaves physicians to lead in their own offices, medical systems and state legislatures.


One of the most recent federal bills limiting the cost of drugs for patients that did pass was the Patient Protection and Affordable Care Act in 2010, which required insurers to cover prescription benefits in all plans, eliminated limits on prescription coverage, and limited patients’ annual out-of-pocket payments for medications and other services.

There also was talk a few years ago of allowing the Centers for Medicare and Medicaid Services to negotiate drug prices with manufacturers. But that idea didn’t go anywhere.

The problem isn’t that CMS can’t negotiate. It can, says Peter Bach, MD, director of the Center for Health Policy and Outcomes for Memorial Sloan Kettering. But it’s hamstrung by a requirement to include in its formulary every drug approved by the U.S. Food and Drug Administration. And that means that CMS loses the powerful negotiating tool of refusing to cover a drug at all if the price is too high.

“What we’ve done in pharma,” he says, “is we’ve guaran-teed that we will pay anything companies want to charge.”


Perhaps as a result of stalled progress on the federal level, states have begun trying to address the issue. The laws vary, but most create caps on out-of-pocket prescription costs — from about $108 a month in Vermont to $150 a month in Delaware, Louisiana and Maryland, to $250 a month in California. California’s law also sets out-of-pocket costs at $500 for so-called “bronze plans”— which have lower monthly premiums but higher costs for services than other plans — sold on the health insurance marketplaces established by the ACA, that limit prescription deductibles.

In addition, some of these laws, like Delaware’s price-control law, prohibit insurers from placing all medications for a certain high-cost condition in their highest tier, commonly called the specialty tier, on their drug formulary. New York’s law also prohibits specialty tiers at all in the plans sold in its state marketplace.

The laws, according to a recent report by the Urban Institute, an economic and social policy think tank, were designed to prohibit insurers from discriminating against people with certain high-priced medical conditions, such as HIV/AIDS or cancer.

“Ultimately, these states have developed policies that relieve high-risk patients from extremely high drug costs by spreading those costs across a broader risk pool including healthy and sick people,” the Urban Institute report states. “For many patients in need of specialty drugs, that kind of risk-spreading means they no longer have to forgo those drugs or experience financial hardship to obtain treatment.”

Since some ACA replacement plans would repeal the law’s prescription-drug price regulations, the study concluded, “with emerging federal policies that could lead to higher cost-sharing for many health plan enrollees, more states may adopt insurance standards to protect vulnerable consumers who need high-cost medications.”

However, the laws have not gone unchallenged. Indeed, the Pharmaceutical Research and Manufacturers of America and the Biotechnology Innovation Organization have filed suit in Maryland, claiming the laws are unconstitutional and risk exposing “trade secrets,” namely drug cost breakdowns. They’ve also sued the state of Nevada over its drug price transparency law around insulin.


The laws are in their infancies, says Richard Baron, MD, president of the American Board of Internal Medicine and its foundation, so it’s hard to tell whether they will have an effect — and what it will be.

“I looked at the California law, and what became clear is that whatever the law is trying to do, it will create winners and losers that weren’t necessarily the intent of the bill,” he says. “It’s a complex area to get into.”

Meanwhile, physicians still have an opportunity to lead, even if they aren’t lobbying their statehouse.

Take Jodie Bryk, MD, for example. She sees a lot of patients at her internal medicine practice at the University of Pittsburgh Medical Center. And a lot of those patients — almost all — have a lot of prescriptions. As part of UPMC’s Enhanced Care Program, they are “super-utilizers” with multiple chronic conditions and an average of eight or nine prescriptions each.

On top of managing potential drug interaction risks inherent to that kind of polypharmacy, Bryk is also trying to manage financial risk for her patients. The pharmacy she works with is willing to help her office find the cheapest effective alternatives for her patients. She has done a full chart review of her patients’ medications, checking for both drug interactions and best value for medications. And, when necessary, she gets a social worker involved to help find a way for, say, a person with diabetes to afford the $40 a month for their diabetes medication. As medical director for the Enhanced Care program, she urges her team to do the same.

Even with all the research she’s done, she often has no idea what drugs cost when she prescribes them. She was shocked, she remembered, when she sat down and looked at the cost of a lidocaine gel. A 5 percent gel cost $90 a bottle, but the 4.5 percent gel was $3.

“I had no idea,” she says. “I try to tell others who are interested that they can look these things up and learn at least some things about the cost of medications.”

She’d love to see an algorithm built into her electronic medical record that would automatically tell her the cost of the drug she’s thinking of prescribing. And, luckily for her, there is a physician working on this. In concert with the ABIM Foundation, Ed Fotsch, MD, is attempting to build just such a system.

Baron says the approach makes sense. But like almost everything else in medicine, the siloed system requires a complex solution.

“If you think about it, when a patient walks into a pharmacy with a prescription and hands it to a pharmacist, the pharmacist has access to an information system that says that it’s going to cost that person that amount,” he says. “Why can’t that same information system be integrated into the EHR, so that the prescriber sees that price at the time they’re prescribing, and is able to know for a particular patient what they’re going to pay?”

He doesn’t “expect doctors to be really as active as they could be in this space without giving them tools to be successful.”


But beyond that, there’s another simple-but-not-easy approach physician leaders can take to indirectly affect the prices of their patients’ drugs, Baron says: Stop taking pharmaceutical company money.

A recent analysis by the nonprofit news organization Pro-Publica found that physicians who accept $5,000 or more from drug companies were likely to prescribe brand-name drugs 30 percent of the time, compared to physicians who don't, who prescribe brand-name drugs only 20 percent of the time.

Ultimately, says Memorial Sloan Kettering’s Bach, the obligation can’t fall to individual prescribers to sort through the cost of drugs.

“I think it’s appropriate for physicians to become financial planners” he says. “But they do have an obligation to be honest brokers as best they can about when drugs in the areas of their expertise are importantly better - and when they really aren’t. There’s a lot of this, pills of a different color, marginally better and costing an enormous amount more.”

YOUR TURN: What are you doing to help your patients deal with the rising price of prescription drugs? Is it even your responsibility? Tell us — and your fellow physician leaders — your best ideas and your most salient thoughts. Send your thoughts to to be considered for publication.

Heather Boerner is a freelance health care writer based in Pennsylvania.

Heather Boerner

Heather Boerner is a freelance healthcare writer based in Pennsylvania.

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