The Pandemic Is Coming for Your Pocketbook
The forthcoming “commercialization” of COVID-19 treatment will create major challenges.
The U.S. is on the verge of taking a significant step backwards in fighting the COVID-19 pandemic. Amid the rollout of the new bivalent boosters this winter, the government is due to run out of funds for vaccines and therapeutics. President Joe Biden’s administration has been shuffling money from other pockets to pay for the new shots after Congress failed to pass a pandemic budget request earlier this summer. The government will soon run out of options. This will result in a significant shift in how we fight the pandemic—what is being referred to as “commercialization.” The public has yet to wrap their minds around the implications, and while it seems unlikely that we’ll avoid this fate, there are strategies to lessen the worst potential impacts.
Commercialization is a rather bland-sounding term that means that COVID treatments and vaccines would be handled just like everything else in our health-care system. Instead of no-cost access to vaccines and therapies, drug companies and insurers will decide how much to charge for products such as Paxlovid. Americans who are insured could begin to see co-payments and deductibles, and may even need prior approvals from insurance companies to get access to highly effective drugs that combat the effects of COVID-19. For those without insurance, many of whom are in jobs where they are most exposed to the virus, access would likely be much more strained and could disappear entirely.
Some might ask, What’s the worry? This is, after all, how the rest of the U.S. health-care system functions. Many Americans would take issue with the assertion that the system serves them well, but setting that aside, commercialization is an even bigger challenge with COVID-19. It is a still unpredictable and mutating infectious disease with already low vaccination rates, so the effects of this change could prolong the length and severity of the pandemic.
The one sure way to fix this—Congress acting on the Biden administration’s $22.5 billion budget request to fight the pandemic—seems more and more remote. Democrats couldn’t get it done with a bare majority in Congress, and Congress is likely to get less Democratic, not more, after the midterms. The administration must formulate a Plan B.
Much of Plan B falls right on two groups that the public has an equal or even lower trust in than Congress—pharmaceutical companies and insurance companies, as well as state governments, several with a notably spotty record of supporting people during the pandemic.
The public is right to be wary. Historically, when the pharmaceutical industry has complete pricing power and limited competition, companies haven’t been afraid to charge maximally for their medicine. These products can run into the thousands of dollars per treatment. Those costs are likely to go even higher when your local insurance provider, not the U.S. government, is negotiating the deal. Should that happen, insurers are likely to respond by taking steps to limit utilization, often by “tiering” the drug on their formulary as one with a high patient co-pay, or by employing other mechanisms to defray their costs or discourage use. And if you are uninsured or can’t afford your medication, there are some programs to help you, but unequal access mostly means that if you can’t afford it, you don’t get it.
And the threshold is low. Studies have shown that even a $10 co-payment is enough to discourage large numbers of people from receiving their medicine. The COVID-19 pandemic has demonstrated that even if a vaccine is free, if it’s not easily accessible where people live or work, vaccination rates drop off significantly. This can lead to a spike in cases and severe illness—particularly among uninsured, undocumented, and low-income people. And this affects everyone. Wherever SARS-CoV-2 can find pockets to grow, it will, and the more it spreads, the more likely it is to mutate.
Commercialization causes other problems. Today the U.S. has been competing globally for allocation of drugs and vaccines. Acting as a nation has allowed U.S. citizens access to new vaccines and therapies as soon as they come on the market. Commercialization would yield dozens of small entities competing with one another and the rest of the world for access to new vaccines or treatments. Let’s say we face a situation where the virus evolves to evade our current technology (as happened when new variants rendered several of our monoclonal-antibody therapies ineffective). In the time it takes to scale up a new drug or a needed innovation such as a universal or nasal vaccine, the U.S. would be less able to compete for supply with other countries—all of whom buy on behalf of their entire country. The difference between being able to access the vaccine when it first comes to market versus waiting for production to fully ramp up could mean hundreds of thousands of lives. Once again, the poor will suffer most during these shortages as the rich turn to hoarding and black markets.
A New Plan B
To avoid these outcomes, the Biden administration should propose that drug companies and insurers enter into a four-part grand bargain—one that serves the public, accounts for the inequities inherent in commercialization, and keeps the country on advantageous footing with the rest of the world. They can do this even while continuing to profit from their investment in vaccines and therapies.
No barriers to access. Insurers must agree to make vaccines and treatments available with $0 cost sharing and no utilization review to get access to a drug. Therapies such as Paxlovid generally need to be given within five days of onset, so a prescription from a doctor should be all that is needed to qualify. This is helped out to some degree by provisions in the Affordable Care Act that require vaccines to be provided to anyone with private insurance without co-payments or coinsurance. Therapies are covered very differently. Consumers with private insurance face tiered benefits, which tend to increase payments with the expense of the drug. Medicare has a different set of rules that vary depending on whether the drug is administered in an office (as is a monoclonal antibody) or bought in a pharmacy (as Paxlovid is). Insurers should agree to treat therapies the same way vaccines are treated: covered without out-of-pocket costs that could discourage people from getting the care they need to prevent serious illness or an expensive hospitalization.
No price gouging. Pharmaceutical companies should agree to sell COVID-19 treatments to states, territories, tribes, localities, insurance companies, and employers at the same price they provide them to the U.S. government today. Why would they do that? Because with this agreement for all insurers to keep supplying these biopharmaceuticals and keep cost sharing at zero, the manufacturers can be assured of as large a market as they have today. Insurance companies will point out that paying for these vaccines and therapies will increase premiums for everybody, so any price gouging will fall back on the public.
The uninsured should be treated the same as the insured. The current vaccination strategy doesn’t require proof of insurance or proof of documentation (undocumented immigrants are five times more likely to be uninsured). But once commercialization goes into effect, who looks out for the uninsured? We do have mechanisms to reimburse for some uninsured care. They are a hodgepodge of antiquated approaches, but we need to pull them all out. Pharmaceutical companies should agree to provide free vaccines to anyone who visits a pharmacy and who qualifies financially; many pharmaceutical companies have programs like this already, but they aren’t as easily available. Federally Qualified Health Centers, a community hub of care for low-income and uninsured people, and other community-safety-net providers should be able to purchase COVID-19 treatments and therapies at a reduced cost through the 340B program or at the lower price that low- and middle-income countries pay for their therapies and vaccines, and provide them to the uninsured without cost sharing. No one should be turned away from getting a vaccine or treatment.
Secure access to future innovation. The last big piece of the puzzle is to lock in a strategy for securing access to continued global supply of the next generation of vaccines and therapies. This requires the U.S. government to act, in effect, as a global purchasing agent for the country to negotiate an overall price and allocation on behalf of everyone, no matter their insurance status or who ultimately provides them their vaccines or treatments.
Congress could still act during the lame-duck session. But if they don’t, the four measures outlined here are broadly consistent with how Americans want their health-care system to work, according to research by United States of Care. Such an agreement would still leave plenty to be desired. People will fall through the cracks. The Biden administration has been able to orchestrate an orderly allocation process to pharmacies, federal sites, clinician offices, tribal nations, and territories. That would be replaced by a free-for-all with very uneven outcomes based on a series of closed-door, private-market relationships. But we cannot let perfect be the enemy of good.
Americans may look back on their brief experience with health care that more closely resembles a system much of the rest of the world enjoys—one where the federal government steps in so that everyone pays less, and where access is shared as equitably as possible—and demand bigger changes, such as true universal health care. Congress’s inaction now just may provide that spark.