Covid-19 Drugs Aren’t Free, But Here Is How They Could Be

Medical staff shows on February 26, 2020 at the IHU Mediterranee Infection Institute in Marseille, packets of a Nivaquine, tablets containing chloroquine and Plaqueril, tablets containing hydroxychloroquine, drugs that has shown signs of effectiveness against coronavirus. - The Mediterranee infection Institute in Marseille based in La Timone Hospital is at the forefront of the prevention against coronavirus in France. (Photo by GERARD JULIEN / AFP) (Photo by GERARD JULIEN/AFP via Getty Images)

There’s no such thing as a free drug, despite what Donald Trump says. 

In an appearance Friday on the Rush Limbaugh Show, Donald Trump doubled down on his earlier claim that an experimental treatment had cured him of Covid-19. Though Trump has reported feeling well, experts caution that the president may not be out of the woods yet.

The treatment Trump has enthusiastically endorsed—monoclonal antibodies—has shown promise but has yet to be vetted in large-scale clinical trials. Still, Trump promised that it will be free for everyone even though the average yearly cost of this type of drug is $96,731.

Companies like Regeneron Pharmaceuticals—whose stock Trump previously disclosed owning—and Eli Lilly who are developing these therapeutics recently requested emergency-use authorization. If they get FDA approval to bring their products to market, these companies will expect to recoup their investment. 

“If we didn’t pay for drugs that were successful, then nobody would invest in making those drugs,” explained Kirsten Axelsen, Visiting Fellow at the American Enterprise Institute. 

The average cost to bring a drug to market is up for debate, with estimates reaching $2.6 billion or more. Drug manufacturers, venture capitalists and universities who invest in research will spend that money if they believe in the chance of a payoff. Many drugs never reach $2.6 billion in sales, but the promise of a potential blockbuster—for at least some drugs—fuels their continued investment. 

Overall, the U.S. spends more than $1.2 billion on pharmaceuticals each year, nearly 12% of overall health spending. 

With all pharmaceuticals, Axelsen said, “Somebody is paying for it.” 

Most Americans pay a portion of their prescription costs. Medicare enrollees typically pay 20% of the cost for approved drugs administered by injection or infusion, like the antibodies Trump received. People with employer-sponsored health insurance are subject to prescription copayments ranging from $11 to $123 per prescription, depending on the tier of drug. 

For a drug to be “free”—or free to consumers—the government can mandate that certain types of insurers cover it without charging consumers. Certain vaccines which are free to consumers with insurance are free because of insurance coverage requirements.

If the Trump administration wanted to make monoclonal antibodies free to consumers with COVID-19, they could take this approach and require insurers not to charge copayments, particularly in government-funded insurance programs. To offset the drugs’ costs without consumer copayments, insurers could then raise premiums for everyone. 

“The upside of the coverage mandate is it’s free,” said Axelsen. “The downside is it goes into the premiums. But, that can be the right thing for society in the case of a vaccine where you want to make it as easy as possible for people to use it and eliminate cost as a barrier.”

If the monoclonal antibodies were to be covered with no copayments and the number of people using them was relatively small, insurers might only need to increase premiums by a few cents, according to Axelsen.

If these drugs work as well as Trump believes, they could help curb the coronavirus—but only if people can afford them. 

In April, 14% of U.S. adults reported they would avoid seeking Covid-19 treatment because of cost. More generally, a National Center for Health Statistics study found that 11% of Americans do not take medicines as they are prescribed because of cost, and one in four people report struggling to afford their medication.

Making Covid-19 drugs free to consumers increases the chance that individuals will benefit from potentially life-saving therapy; it also means the virus will have less opportunity to spread. 

“Providing free drugs to the poorest and most needy, those disproportionately impacted by the coronavirus, would be a great legacy for the president to leave,” said Kevin McDevitt, Director of Social Determinants of Health at Spring Street Exchange and a former manager at the Massachusetts Health Connector. 

Absent a government mandate, free-market forces will likely prevail.



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