“I cannot afford to live.” – Patients are screaming at the outrageous prescription drug costs.
The U.S. spends three times more on prescription drugs than any high-income country. The cost of prescription drugs directly affects health. Whether you are uninsured, have employer-sponsored insurance, or have Medicare, you will likely incur inflated prescription costs. These expenses may be co-pays, high-premiums, and deductibles.
According to The Commonwealth Fund, 14% of adults with insurance reported skipping or not filling their prescriptions due to the inability to pay for them out-of-pocket, and rates are twice as high for uninsured patients. Moreover, if the population and the government are incurring high prescription medication costs, then who is to blame? Who is benefiting?
The problem begins with the need for more government oversight and control of prescription drug pricing. Unlike other high-income countries like Germany, Canada, and the United Kingdom, the U.S. does not negotiate the price of prescription drugs. Initially, I assumed Big Pharma alone was to blame for the high prescription costs. However, other hands are in the cookie jar, such as pharmacy benefit managers (PBMs) and insurance companies.
I was unaware of PBMs, and I assume that most people are. PBMs manage your prescription program as the middleman between your insurance, pharmacy, and drug makers. PBM’s purpose is to negotiate prices, rebates, and discounts. Allegedly, PBMs share these drug savings with insurance companies and patients. Regrettably, the Federal government is unaware of the actual cost of drugs, the amounts of these rebates, or whether PBMs or insurance companies keep them. Consequently, patients have not seen prescription cost reduction.
Congress needs to act now. The Pharmacy Benefit Manager Transparency Act of 2022, introduced in the Senate last May, must go forward to protect the financial health of patients and our country. The Act prohibits PBMs from charging health plans a different price than what they reimburse pharmacies.
To be exempt from these prohibitions, PBMs must pass along 100% of discounts to insurance companies and disclose any discounts, markups, reimbursement, and fees. In addition, PBMs must provide a financial report to Federal Trade Commission (FTC) every year.
The Pharmacy Benefit Manager Transparency Act has been in Congress for almost a year. Patients need action now. We cannot move forward without financial protection from these inflated prescription costs. Subsidies or bailouts are not the answer. Patients need regulation and control of these outrageous costs.
We have a real-life experiment demonstrating how a prescription program without PBMs would work for the financial welfare of patients. Mark Cuban CostPlus Drug Company blew my mind when I looked at the cost savings for prescription drugs. Mark Cuban CostPlus Drug Company does not use pharmacy benefit managers or PBMs, saving patients hundreds to thousands of dollars. For instance, the cancer medication Imatinib (generic for Gleevec) costs 12 dollars from CostPlus Drug Company – a $2400 savings compared to a pharmacy with a traditional PBM system. I am not promoting Mark Cuban’s new endeavor; just tired of seeing patients suffer the brunt of healthcare costs, losing their homes, life savings, and more to stay alive.
President Biden enacted the Inflation Reduction Act of 2020 (IRA), which promises to regulate prescription drug costs for Medicare patients. Because of the Inflation Reduction Act, 4 million Medicare beneficiaries had their insulin prescription capped at $35 per month this January. Before the IRA, Medicare beneficiaries were paying hundreds of dollars per month for insulin; some patients were ordering insulin from Canada and Mexico to afford this life-saving medication. Biden has been calling on Congress and pharmaceutical companies to lower insulin prices for all. Eli Lilly pharmaceutical announced on March 1 its initiative to reduce insulin prices by 70% and cap monthly costs at $35 for individuals with private insurance. Eli Lilly, Novo Nordisk, and Sanofi are among the largest insulin manufacturers. Eli Lilly’s decision will impact patients significantly as Diabetes is one of the leading causes of death and disability in the US.
CALL TO ACTION. Contact your U.S. senator and house representative by phone, email, or social media. Ask them to move The Pharmacy Benefit Manager Transparency Act of 2022 forward. here.
About the Author: Karina Nieves of New Haven is a Registered Nurse/UConn Graduate Student.