When it comes to Medicare Part D prescription drug coverage, one thing’s for sure: Medicare Part D coverage stunts will continue without an overhaul. Insurers have way too much room to drive up drug costs for enrollees in order to profit handsomely. Cheryl Clark reports for MedPage Today that Medicare Payment Advisory Commission (MedPac) Commissioners are surprised by the huge variation in generic drug prices and availability among different Part D drug plans. It’s no surprise, it’s the “free market” run amok.
Commissioners considered why one generic drug can cost someone with Part D coverage $1.06 at one pharmacy and $102 at a different pharmacy, sometimes even the same pharmacy chain. What goes into generic drug pricing? Lots of unknown factors in addition to the cost of manufacturing and dispensing the drug and the pharmacy’s costs. (But, you can be sure it’s all about insurer profits.)
About 20 percent of Medicare spending on prescription drugs is for generics, and generics represent about 90 percent of the drugs that Part D plans fill. Generics are costing more and more.
Some basic generic drugs, including cardiovascular drugs, are just plain “out of stock.” The big PBMs can’t even say when they will have these drugs in stock. Is it a supply chain issue? (Editor’s note: A David Dayen story in TAP reveals that 323 drugs are in short supply, many more than in the past, endangering people’s health and lives.)
MedPac Commissioners want to know more about Medicare Part D, as if we need to know more to fix a multi-headed drug cost problem. The biggest players have so much power that they can keep drugs off the market if that helps them financially. A while back, I reported on a story about CVS not selling certain generic drugs because they profited more from only making the brand-name alternatives available.
“Tying arrangements” are another cog in the pharmaceutical supply and price wheel. These agreements allow drug wholesalers and pharmacies to set the amount of a brand-name drug discount to the amount of generic drugs a pharmacy buys and the price it pays. Wholesalers can then charge more for generic drugs and give bigger discounts on brand-name drugs.
In addition, bigger pharmacy chains can bargain for lower costs than independent pharmacies. They can also pay less for the same drug from wholesalers. The manufacturers might be charging the same price for a drug, but the wholesalers do not.
And, the Part D the insurers don’t help matters, designing formularies that benefit their bottom lines and often cost their enrollees more. For more on the challenges of getting your drugs covered through Part D, check out this post from last week.
Bottom line: You cannot assume that you are getting your drugs at the lowest cost through your Part D drug plan. You need to shop around. Too often you can pay a lot less without using your insurance. One MedPac Commissioner explained that with “irrational drug prices … beneficiaries in the know have to strategize multiple means to access their meds. GoodRx over here and a mail order for Mark Cuban over there, a patient assistance program over there, and the many other methods that … bypass the local pharmacist.” Of course, those not in the know, often the most vulnerable, pay more than they should.
The Commissioner expounds on the problem: “It’s bad enough that the plans can dramatically change what medicines they cover and what costs for each year with different utilization management tools. But then to have multiple sources of the least expensive drug is just too much for older adults and adults with disabilities.” What’s worse, as I understand it, Part D plans can change the medicines they cover and their costs throughout the year.
Michael Chernew, MedPac Chair, appeared not to be aware of this longstanding issue with Medicare Part D drugs, both generic and brand-name. He suggested that it was challenging to determine a way to fix the problem, even though every other wealthy nation has done so through negotiated drug prices.
Here’s more from Just Care:
