Absurd Prescription Drug Costs!

Absurd prescription drug costs! It is hard to believe that prices for a month’s supply of dozens of prescription medicines can differ by thousands of dollars, depending on where you buy them and what insurance plan (if any) you may use. Just last month The Journal of the American Medical Association published “Strategies to Help Patients Navigate High Prescription Drug Costs (Nov 26, 2024),” an attempt to inform physicians how to help their patients who struggle to afford necessary medications.

Here’s a telling sentence from the JAMA article: “The patchwork of prescription drug affordability strategies outlined in this review illustrates the complex, fragmented, and inefficient prescription drug delivery and reimbursement system in the US.”

In this post I’ll take a brief look at how ridiculous the prescription drug scene has become, and I’ll end by summarizing tips from the above JAMA article, some of which may help you reduce your own absurd prescription drug costs.

A broken system:

Our broken pharmaceutical system is so complex that it would take a thick booklet to fully explain what a botched mess it is. Here I’ll give a few facts to demonstrate how zany our drug prices have become. If you would like to learn more about this tangled system, a good source would be the 46brooklyn website (click 1). This feisty organization seems determined to make drug prices more affordable.

Here are numbers from a recent study of Medicare data, these regarding patients using generic versions of the prostate cancer drug Zytiga. Believe it or not, these specific patients may be charged any of more than 2,200 prices for their drug, depending on where they live, and what drug plan they have. For example, a monthly supply of  a generic of the drug in northern Michigan costs about $815, roughly half the cost in suburban Detroit, but it zooms up to $3,356 in a county along Lake Michigan. (See 2 for details)

Drug prices
Prices vary widely

Do those differences make sense to you? How can drug prices vary so widely, even in a limited area such as the single state of Michigan? What happened to the principles of supply and demand that normally keep prices closer together? (The effect of supply and demand on prices is one of the basic tenets I learned while studying economics. I majored in that dismal science for my undergraduate degree at the University of Wisconsin.)

Apparently, Washington’s jerry-rigged drug-reimbursement system is the culprit that toppled old Supply and Demand. Both Medicare Part D and commercial insurance plans, which many of us have, employ middlemen (known as pharmacy-benefit managers or PBMs) to negotiate the price ultimately paid for prescription drugs. From there it gets really confusing. Medicare divides coverage into 34 regions around the U.S. and health plans must submit separate bids for each region. This seemingly was the match that ignited the explosion of absurd prescription drug costs.

Even more absurd examples

According to one study, some 61 drugs had monthly prices that diverged by at least $30,000! Yes, you calculated correctly, a difference of $30,000 per month comes to an annual difference of $360,000, right up there between a quarter and a half million dollars a year, not exactly chicken feed, as the old saying goes. The most egregious difference of all was the $223,037 range for nitisinone (brand name Orfadin), a drug used to treat a rare metabolic disorder (Type 1 Tyrosinemia). This inherited disorder is characterized by a deficiency of a critical enzyme, and it requires a restricted diet and lifelong treatment with an extremely expensive drug to survive. How in the world could there be such an unbelievable range in monthly costs of Orfadin? Or for the astonishing range of more than $30,000 per month for many other drugs?

The answer seems to be traced to our federal government and the ridiculous rules it set up to run Medicare Part D. In the past, I’ve blamed Washington for our unacceptable surge in college tuition costs (See here), and for dismantling (while institutionalizing) our medical care, where costs also have become absurd (See here). How can we reduce the flood of inanities coming from our nation’s Capitol? They have to stop. Could we induce our politicians to take a closer look of the Preamble of our Constitution and make them realize that much of their legislation rips up our domestic tranquility and erodes our general welfare. That’s not what our Constitution was set out to do. Here’s a reminder for our lawmakers.

Preamble to US Constitution

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

Other opinions on our present situation

“The inconsistent and disconnected way that PBMs arrive at drug prices makes Medicare look less like a trustworthy marketplace intended to yield low, sober prices and more like a casino,” said 46brooklyn Chief Executive Antonio Ciaccia. (2)

“It’s a broken system. It’s really confusing for seniors. It’s really confusing for providers,” said Dared Price, owner of eight pharmacies in the Wichita, Kan., area, and he complains the stores are underpaid. “It’s costing the government way too much.” (2)

Who are these PBMs?

Critics, including 46brooklyn mentioned above, argue that the PBMs are making huge profits as middlemen. the largest PBMs are UnitedHealth Group’s Optum Rx, Cigna’s Express Scripts, and CVS Health’s Caremark. These companies manage about 80% of prescriptions in the U.S. I haven’t studied this group, but I assume they prefer to project a different image than the ones painted by the above quotations. Some PBMs have made efforts to protect their turf. Express Scripts has run a series of full page ads in The Wall Street Journal, attempting to portray a different sort of company. The top half of a number of these full-page ads contained the following, printed in bold type:

                                                                                                  WE’RE PHARMACISTS.

                                                                                                  WE’RE CLINICIANS.

                                                                                                  WE’RE RESEARCHERS.

                                                                                                  WE’RE NEGOTIATORS.

                                                                                                  WE’RE CAREGIVERS.

                                                                                                  THAT’S NOT

                                                                                                  A MIDDLEMAN.

                                                                                                  THAT’S AN

                                                                                                  ADVOCATE.

I think important questions remain. Will an increasing awareness of these absurd prescription drug costs build pressure to dismantle this administrative nightmare? Will supply and demand once again determine the price and distribution of our prescription drugs?  Will the newly named D.O.G.E. Commission (Department of Government Efficiency) look into this issue? I certainly hope so. If that happens, I wish Elon Musk and Vivek Ramaswamy and their advisory commission the best of  luck.

Money saving tips from JAMA (Information condensed from the November 26, 2024 article). There are some real money savers here.

Co-payment Cards: Manufacturers of brand-name drugs frequently offer co-payment cards to off-set costs of prescription drugs. These cards lower out-of-pocket costs depending on the drug used and the patient’s prescription drug benefits, potentially to $30 per month or less. For example, manufacturer co-payment cards for the anticoagulant Eliquis can lower out-of-pocket costs to $10 per month with a maximum annual benefit of $6,400. But these co-payment cards, which are available from manufacturer websites, CAN BE USED ONLY by patients with private health insurance. (With my Medicare Part D insurance, I pay much more that $10 for my monthly supply of Eliquis.)

Patient Assistance Programs: Some brand-name drug manufacturers offer patient assistance programs to offset the out-of-pocket costs of expensive brand-name drugs for uninsured or under-insured individuals. Patient assistance programs also are offered by independent nonprofit organizations, including private foundations, which are frequently financially supported by brand-name pharmaceutical manufacturers. These programs are typically restricted to patients who meet specific needs-based eligibility criteria, such as a low family income. To be eligible for these programs, patients must submit documentation verifying financial hardship, and prescribers must certify clinical necessity of the prescription drug. Such programs are available across public and private insurance, but options for uninsured patients may be more limited.

Pharmacy cartoon
Savings at Pharmacy

Pharmacy Coupons: When insurance plans charge substantial out-of-pocket costs, or do not include particular medications on their formularies, some patients may benefit from purchasing the prescription drug directly from pharmacies without insurance. Ordinarily, retail pharmacies charge high prices for cash-paying customers, but several organizations (eg, GoodRx, SingleCare, WellRx, NeedyMeds) offer coupons through which patients can access discounted prices negotiated by pharmacy benefit managers on behalf of insurers. These coupons are available to all patients regardless of insurance status. They can be particularly helpful for uninsured patients and those with high-deductible health plans who take generic medications. (Even though I have Medicare Part D drug insurance, I have used GoodRx and in one case paid almost $100 per month less for a medication than I would have paid as a co-pay on my insurance.) These coupons are typically are available online or through smartphone applications. They also can be useful for drugs that are frequently subject to coverage restrictions, such as generic medications for erectile dysfunction (eg, sildenafil, tadalafil), hair loss (eg, low-dose finasteride), and weight loss (eg, topiramate, phentermine).

Direct-to-Consumer Pharmacies: These pharmacies sell a selection of drugs at transparent prices if patients purchase them without insurance. These pharmacies are new entrants in the US prescription drug market, and they provide patients with the option to purchase a range of commonly used generic drugs at prices that may be lower than their insurance-required out-of-pocket costs. Some big-box chain retailers (eg, Walmart, Costco) have direct-to-consumer pharmacy programs with in-person pickup and mail-order options. Other direct-to-consumer pharmacies (eg, Amazon Pharmacy, Health Warehouse) are exclusively online. The Mark Cuban Cost Plus Drug Company primarily sells medications online but also partners with independent grocery store pharmacies for in-person pickup. In 2023, Amazon introduced a pharmacy program (RxPass) that offers unlimited access to several dozen commonly used generics for a $5-per-month subscription; this program is only available to those who subscribe to Amazon Prime.

Two more ways to save on drug costs:

Public Assistance Program: Several federal, state, and local programs help patients afford prescription drugs. The largest such program is Medicaid, which provided prescription drug coverage to more than 75 million individuals in the US as of March 2024. Medicaid drug coverage is generous, with 2013 federal regulations allowing co-payments of up to $4 for preferred drugs and $8 for non-preferred drugs for individuals earning less than 150% of the federal poverty level; these costs are even lower in many states. For patients who qualify, enrolling in Medicaid is one of the most effective ways to affordably access prescription drugs.

International Online Pharmacies: Prices for brand-name drugs in the US are 2 to 3 times higher than prices for the same drugs in other countries, leading some patients in the US to try to import these drugs. While drugs obtained from international pharmacies can be made in the same factories as those prescribed in the US and most high-income countries have regulatory agencies to oversee marketed prescription drugs, patients should be aware that these pharmacies fall outside of the authority of the US Food and Drug Administration (FDA). It is illegal to import a drug that is unapproved in the US, but the FDA permits patients to purchase FDA-approved drugs internationally as long as they are for personal use, for treatment of a serious condition, and the quantity does not exceed a 3-month supply. If patients choose to individually import drugs, they should choose a reputable pharmacy in a country with adequate drug regulation; pharmacies in low- and middle-income countries may be subject to lower quality standards, and rates of counterfeit drugs range from 9% to 41% compared with less than 1% in high-income countries. PharmacyChecker is an independent organization that verifies international online pharmacies and allows patients to compare prices across pharmacies, and possibly avoid the worst of our absurd prescription drug costs.

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