Market Based Medication Pricing
Interacting with the healthcare system does nothing for my health and renewing a prescription is yet another painful experience. What about you?
What stands in the way of a positive health experience
- Getting a prescription from the gatekeeper – your overworked primary care physician
- Insurance who impose arbitrary rules limiting how much of something you can obtain
- Insurance deals that artificially inflate the price of a drug with multiple hidden intermediaries, all adding additional cost
- Pharmacies that might be in or out of the network of intermediaries also adding cost
Let’s be clear there is no clinical reason to limit access to a drug to 90 days where that drug is safe, widely used and prescribed as maintenance or ongoing medical therapy to manage a condition. Even if the drug needs monitoring there is no need to hold patients and clinicians to ransom on supplies. That principal would be the end of CostCo and BJ’s that are in part founded on bulk purchases to save money and reduce waste (packaging)
Buying from Amazon – Drug Price Style
Imagine ordering your favorite Instant Pot Duo 7-in-1 Electric Pressure Cooker from Amazon but instead of seeing a price you are told the price will be decided later
What might you pay? Well based on a recent experience with a drug that went generic in 2012 and is subject to competition a years supply (in the United Kingdom at least) would be around $12
Here in the United States of America 3 months supply at CVS comes in at an eye watering ~$130
With an insurance “discount” it came down to $77.28
That’s for a 90 day supply so for the year $309.12
Put into Amazon terms taking the 8qt pot and rounding up to $100 price as listed
Yours for only $2,583
Making Sense of Drug Pricing
How is it possible that there is such a big discrepancy in pricing
Even the amount discounted varies by as much as factor of 28.
The background to how we got here and why was covered in the recent episode on Healthcare Upside/Down: Disrupting the Pharmacy Supply Chain with AJ Loiacono, CEO of CapitalRx, an organization dedicated to disrupting the pharmacy benefit manager (PBM) marketplace. As he described there were 3 key factors:
- We (the United States 🇺🇸) always paid the most for drugs to subsidize research and development of future drugs
- Drug costs have gone from 5-7% of total healthcare to 20%, 30% or even as high as 50% especially with high-cost specialty medication, and
- Opaque and complex supply chain that baffles everyone involved
These problems that affect individuals is affecting the US government as well who despite the resources and talent available doesn’t know what drugs truly cost.
As AJ put it
“If you have a $1,000 drug, Medicare might pay $500, the Department of Defense might pay $75, the VA might pay $400,”
Hmmm – that sounds familiar!
The Good News
Despite my local poor experience talking to people like AJ who views this as a solvable problem and one he and many others are focusing on fills me with hope. Technology is bringing efficiency. Case in point for the individual – my pocket computer loaded with applications and connected with the internet gives me access to information
Your Incremental Step
At a minimum equip yourself with the GoodRx app on your phone so that when faced with a price that seems out of touch with the reality of cost, you can at least find alternatives and get comparable and competitive pricing. This will empower you with information and allow you to engage
It comes with a requirement – don’t accept the status quo and especially not the price of the drugs you are paying for
It requires telling the pharmacy you will not be taking the drug and the reason why. They may not be empowered to help but in some cases they are and most want to help if they can
This is not someone else’s job – its our health system and we all need to be part of the solution
Fixing Healthcare is Everyone’s Job
