Sticker Shock within the Pharmacy

Sticker Shock in the Pharmacy

Insulin has become the flagship of unaffordable prescription drugs. From 2002 to 2013, prices for some brands tripled, and as a result, one in four patients reported having rationed their insulin.

Insulin isn't the only example, however. Since 2007, spending on prescription drugs has increased by around 40 percent from $ 236 billion to $ 335 billion in 2018. A study from last year showed that these increased expenses are not due to the fact that new, better drugs are coming onto the market – but that existing branded and generic drugs are becoming more and more expensive.

“Why are pharmaceutical companies asking so much? Because they can, ”said David Mitchell, cancer patient and founder of Patients for Affordable Drugs, a nonprofit advocacy group. "We leave them." While most other developed countries allow the government to negotiate lower prices with drug manufacturers on behalf of their citizens, the United States does not.

President Trump recently enacted an executive order to eradicate this inequality after a separate deal that proposed cutting drug costs by $ 150 billion fell apart. The arrangement would allow Medicare to pay the same price for prescription drugs as those sold in other countries. However, experts questioned whether the White House has the authority to enforce them.

Dr. Elizabeth Seeley, an associate professor at the Harvard School of Public Health whose research focuses on drug pricing and policies, said that while that order or an international price reference "would certainly reduce the cost of many patented branded drugs," it is unclear what impact this would have on the market.

In the current system, Pharmacy Benefit Managers [P.B.M.s] act as intermediaries between drug manufacturers and insurance companies, negotiating the receipt of discounts in exchange for listing a manufacturer's drugs as the preferred brand in their insurance formula. Assuming they are insured, patients blindly pay the co-payment or co-insurance set out in their health insurance plan's policy for the actual cost of the drug.

"They tell you the value of the rebate is passed on to the patient in the form of lower prices, lower expenses and lower premiums," said Mitchell, who has terminal blood cancer and spends more than $ 15,000 on just one of the drugs that he takes to handle it. However, all of these deals are not publicly known. "Even members of Congress cannot find out what discounts are being paid as this is all considered a trade secret."


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