Time to share savings on prescription drug costs – The Interior Journal

Time to share savings on prescription drug costs

Posted 10:17 a.m. on Tuesday, November 15, 2022

GEORGE HUNTLEY AND STEVE PERRY

American healthcare innovation has saved countless lives. Whether it’s a new vaccine to prevent a serious illness or a breakthrough treatment to help someone manage a previously debilitating chronic disease, we owe a lot to these researchers and scientists in white coats.

But what if they were hard at work in the lab making this new drug and no one could access it or afford it? What if the reason was because an unknown middleman dictated the cost and skimmed off huge sums of money to inflate their bottom line?

Although we would like to think that no one would tolerate such a thing, it is unfortunately what happens every day in our modern healthcare system.

It should be much simpler. Scientists develop a drug, doctors determine when to prescribe it, pharmacists dispense it, and a patient takes it to manage their health. But somehow it’s become commonplace for an insurance company to dictate what drugs a patient can take — and for a Pharmacy Benefits Manager, or PBM, to determine how much they pay for it. . And we’re supposed to believe they do this to help businesses and individuals save money.

These unfair practices have tens of millions of Americans struggling at the pharmacy counter. And with inflation worsening on all the other necessities of life, this situation is only getting worse. In fact, the Kaiser Family Foundation found that 30% of patients do not take their prescriptions as prescribed due to cost and instead choose to cut pills, skip doses, or not fill prescriptions at all.

If you’re still not convinced, consider this: In recent years, net drug prices — the list price, less discounts and other rebates and discounts — have come down. This should translate into lower costs for patients, but we are seeing the opposite. Patients are spending more on prescription drugs, even though PBMs and insurers are saving more.

Unsurprisingly, PBMs and insurers are working hard to protect the complex web they’ve created to trap as much money as possible and increase their profits. But state and federal legislators continue to fight on behalf of patients, and through their efforts, we are moving in the right direction.

In 2020, the Kentucky General Assembly passed groundbreaking legislation to curb the involvement of PBMs in the state’s Medicaid program by creating a single drug formulary, managed by a PBM. Removing several unnecessary PBMs is expected to save taxpayers hundreds of millions of dollars a year, while ensuring patients have easier access to the drugs they need to manage their health.

Of course, more work remains to ensure that patients do not bear the brunt of unfair PBM practices. That’s why a large and growing group of patient advocates and healthcare providers are encouraging lawmakers to focus on patients rather than the benefits of PBM – and calling for legislation that would force intermediaries to share manufacturers’ discounts directly with patients at the point of sale.

PBMs and insurers negotiate with drug manufacturers to get lower prices on prescription drugs. In theory, these savings should be passed on to patients to reduce their out-of-pocket expenses. In effect, the system allows PBMs and insurers — massive billion-dollar corporations — to keep the discounts, while continuing to charge patients higher prices for their drugs.

A “sharing savings” law would end this unfair practice and could save chronically ill Americans hundreds or even thousands of dollars a year. That’s more money in the pockets of Kentuckians, where it belongs.

PBMs and insurers defending the status quo argue that premiums will rise sharply if these discounts are shared with patients. And they also falsely claim that it will also increase costs for our businesses. But actuarial studies show that’s not true, including a 2022 study by Milliman that predicted premium increases of less than 1% – and that’s not even counting the savings from reduced hospitalizations that would result from the that patients take their medications as prescribed.

The truth is, patients can’t afford not to share these discounts. And that’s why it’s time for PBMs to start sharing the savings.

George Huntley of Indianapolis is CEO of the Diabetes Leadership Council and the Diabetes Patient Advocacy Coalition. He has lived with type 1 diabetes for 39 years. Lexington insurance agent Stewart Perry is a lifelong advocate for type 2 diabetes patients and a founding member of the Diabetes Leadership Council.

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