JustCare

Tag: Pharmacy Benefit Managers

  • Before paying drug copay, ask cash price

    Before paying drug copay, ask cash price

    A new JAMA research letter reports that people are paying drug copays that are higher than the drug’s cash price more than 20 percent of the time. So, before paying the drug copay, ask the drug’s cash price. You may save yourself some money.

    While copays should represent a portion of a drug’s costs, there is nothing in the law that requires pharmacy benefit managers or insurers to set the copay below the drug’s cost. So, they are requiring people to pay copays that can far exceed a drug’s cost. And, they are literally gagging the pharmacist from disclosing to you that you can save money on the drug if you do not use your insurance.

    The solution is simple. Congress should step in and require insurers to charge copays that are no higher than the drug’s cash price. Moreover, Congress should require that pharmacists disclose to patients whenever a drug costs less than a copay. And, finally, Congress should require that insurers include members’ out-of-pocket cost for any drug purchased on formulary in the members’ total out-of-pocket costs, if the payment is for less than the copay amount.

    There should be a way for people to expose insurers that are charging them copays that are more than the cost of the drug. And, anyone in one of these insurers’ plans should have the right to leave their health plan and transfer to a different insurer.

    The research reveals that in 2013, overall, people overpaid for their drugs 23 percent of the time; 28 percent of the time for generic drugs specifically. People’s overpayments tended to be for generic drugs. And the overpayments averaged $7.69. While overpayments are less common for brand-name drugs, the amount of the overpayments tends to be larger, averaging $13.46.

    Not surprisingly, 12 of the 20 most commonly prescribed drugs involved overpayments one-third of the time. The researchers question whether higher costs affect medication adherence and have a negative effect on health outcomes for people who cannot afford them.

    Note that the researchers were not able to analyze more recent data. Shockingly, it is proprietary. You have to wonder what else the insurers and pharmacy benefit managers are hiding. You also have to wonder why Congress does not require the full disclosure of this information for the public good. After all, taxpayers and Medicare are paying these bills.

    You should always ask the pharmacist about your drug’s cash price before paying the copay. The pharmacist must tell you if asked, and you could save a lot of money. If you have Medicare, you should know that if you go to an in-network pharmacy and pay a cash price lower than the copay, you can still submit the charge to your health plan. It will be counted towards your out-of-pocket expenses that put you in or get you out of the Part D donut hole.

    If you are struggling to pay for your drugs, you might consider buying your drugs online or abroad, as millions of Americans are now doing.

    And, if you want Congress to rein in drug prices, please sign this petition.

    Here’s more from Just Care:

  • GAO: Drug prices continue to skyrocket

    GAO: Drug prices continue to skyrocket

    At the request of Senator Bernie Sanders and Congressman Elijah Cummings, the Government Accountability Office recently issued a report on pharmaceutical company profits and drug prices. The GAO found that drug spending has nearly doubled since the 1990s mostly because drug prices continue to skyrocket and because of increased use of costly drugs. It shows that research and development costs do not explain or justify high drug prices.

    Why are drug prices so high? Drug patents are responsible in significant part for high drug prices, affording drug companies monopoly pricing power. Consolidation in the drug industry and lack of adequate competition in the generic drug market are also to blame.

    The GAO analyzed pharmaceutical company revenue, profit margins, and merger and acquisition deals worldwide between 2006 and 2015. It found a 45 percent increase in drug and biotech sales revenue in that period, from $534 billion to $775 billion in 2015 dollars.

    Two out of three drug companies also increased their annual average profit margins, with the largest 25 companies, seeing annual profits of between 15 and 20 percent. These margins are two to five times higher than the annual average profit margin of the largest 500 non-drug companies, which was between 4 and 9 percent.

    There is concerning industry consolidation. Ten pharmaceutical companies generated 38 percent of sales. But, within certain therapeutic classes, fewer companies controlled even more of the market. And, market pressure is leading large drug companies to acquire smaller ones to drive greater profits. Lack of competition in the drug industry, particularly for generics, fueled higher drug prices. Based on the data, the GAO also found a link between industry mergers and lack of innovation.

    While drug company profits have increased dramatically, research and development spending has not, rising just over eight percent to $89 billion from $82 billion between 2008 and 2014. The U.S. government spends about $28 billion a year on research. Tax benefits to drug companies for research and development of orphan drugs helped foster their investments.

    The FDA approved between 179 and 263 drugs each year. Between 23 and 35 of these drugs were treatments for unmet medical needs or to “help advance patient care.” The GAO does not explain this term, which may mean simply new ways of dispensing old drugs and nothing innovative from a treatment perspective.

    The GAO explains that insured consumers are often less price conscious with prescription drugs than they are with products for which they have to pay in full and that can promote price inflation and drive up spending. In addition, doctors may not be aware of low-cost alternatives they could prescribe or they simply may be inclined to prescribe the most expensive drug, which can further drive up spending. And, Medicare is often required to pay for even the expensive drugs that may offer no added value, which drives up spending further still.

    The GAO does not discuss incentives of health insurers and pharmacy benefit managers to promote high-priced drugs over lower-cost alternatives. But, there’s every reason to believe that fees to PBMs to promote high-priced drugs on insurer formularies over lower-cost alternatives are also in some way responsible for driving up drug spending.  Insurers are likely benefiting from this arrangement or they would be doing something to stop that practice.

    Senator Sanders and Congressman Cummings sent a letter to President Trump alerting him to the GAO report and urging him to make good on his promise to the American people to address skyrocketing prescription drug costs.

    If you want Congress to rein in drug prices, please sign this petition.

    Here’s more from Just Care:

     

  • CVS plans to buy Aetna: Will consumers pay more?

    CVS plans to buy Aetna: Will consumers pay more?

    CVS Health, a chain of retail pharmacies, plans to buy Aetna for $69 billion in an effort to compete against Amazon in the health care space. CVS further plans to build a network of medical clinics providing a range of primary care health care services inside its pharmacies.

    According to NPR, with the purchase of Aetna, CVS wants to transform itself from a pharmacy chain to a health care company. Today, CVS provides drug benefits to 90 million people in the US, and it has MinuteClinics in 1,100 CVS and Target stores. As it expands further into providing health care, CVS pharmacists and nurse practitioners will assist people with diabetes, high blood pressure and asthma at these clinics and monitor them remotely in some instances.

    CVS hopes that people will be attracted to these health hubs because of their convenience. Without a doubt, it looks forward to greater profits as a result of the merger. As a general rule, these large mergers of health care companies give them more market power, reduce competition and drive up health care costs, with little if any public benefit.

    As CVS builds its market share, experts believe it will have more power to increase prices with little fear of losing business. Aetna can create incentives for its members to use CVS pharmacies and clinics. Patients who choose not to use the CVS clinics could be left paying more for medical care at the doctor’s office.

    CVS’ ownership of Caremark, a pharmacy benefit manager (PBM), is likely already driving up your drug costs. Caremark gets rebates from pharmaceutical companies to put their drugs on insurers’ formularies. They are not required to disclose the amount of these rebates. They are pocketing a lot of this money rather than passing along the lower prices to patients needing prescriptions. And, in some cases, PBMs are responsible for copays on your drugs that are higher than the drugs’ price if you bought them without your insurance. It’s no wonder that, to save money, millions of people are buying drugs online from certified international pharmacies through Pharmacy Checker, or buying their drugs while they are abroad.

    Here’s more from Just Care:

  • Amazon likely gearing up to sell prescription drugs

    Amazon likely gearing up to sell prescription drugs

    Gizmodo reports that Amazon may be gearing up to sell prescription drugs online. The mega-retailer has sought and received approval for a wholesale pharmacy license in 12 states and has at least one additional application pending. If Amazon does indeed decide to sell drugs online, will Amazon drive down drug prices?

    To be clear, as of now, Amazon’s interest in selling prescription drugs remains speculation. Amazon has not confirmed its intent to sell prescription drugs. But, it has a license to do so in Nevada, Arizona, North Dakota, Louisiana, Alabama, New Jersey, Michigan, Connecticut, Idaho, New Hampshire, Oregon and Tennessee. And, its license application is pending in Maine.

    Amazon  could use these licenses in a number of ways. It needs the licenses to sell medical devices. And, some think it may want to sell prescription drugs in its Whole Foods stores. If it goes into the business of selling prescription drugs, it will shake up the market considerably.

    Currently, the big chain pharmacies have some influence over the price of drugs, and they have used that influence largely to drive up prices for brand-name drugs. CVS, for example, receives rebates from manufacturers for the drugs it sells through the pharmacy benefit manager business it owns. Yet, it does not appear to be passing on these rebates to consumers to lower their costs. Amazon is likely to receive rebates as well and, in order to compete in the marketplace, may decide to pass them on.

    Whatever savings Amazon is able to deliver, it will never get the deep discounts on brand-name drugs that are needed to keep drugs affordable. For that, we need the power of the federal government. If you want Congress to rein in drug prices, please sign this petition.

    Here’s more from Just Care:

  • Why won’t insurers cover some generic drugs?

    Why won’t insurers cover some generic drugs?

    Some people are finding that they cannot fill their prescriptions for generic drugs at the pharmacy; their insurers will only cover the brand-name versions. Why won’t health insurance companies cover some generic drugs? It appears that insurers and the pharmacy benefit managers (PBMs), who set up their list of approved drugs, can benefit financially when they require their members to take brand-name drugs rather than generics.

    We all know that in almost every case, generics are the equivalent of the brand-name drugs. They must have the same active ingredients and must be the “bioequivalent” of the brand name drug, delivering the same strength ingredients at the same time. They must have the same purity and stability and come in the same form—e.g., tablet, liquid—as brand name drugs. And, they must have the same therapeutic effect as brand name drugs with the same risks and benefits.

    But, the New York Times and Pro Publica report that the insurer practice of requiring people in some cases to use brand-name drugs has been around for some time and is becoming increasingly common. Since forcing people to take the brand-name drug does not lower costs for consumers and can increase their out-of-pocket costs, it stands to reason that PBMs and their insurer clients make more money by requiring people to use brand-name drugs. PBMs are responsible for designing the list of approved drugs or “formulary” for insurers.

    Humana is one of the insurers that, in some cases, only covers brand-name drugs when a generic is also available.

    To be clear, pharmaceutical companies are also responsible for this bizarre state of affairs. They are handing over a lot of money to the PBMs and the health insurers to keep their brand-name drugs on their formularies and to steer their members to their higher-cost drugs.

    Of course, everyone ends up spending more as a result–taxpayers in the form of higher Medicare expenditures, consumers in the form of higher insurance premiums overall, and patients who need these drugs, when they are forced to pay out of pocket for them to meet their deductibles.

    If you find yourself being required to buy a brand-name drug instead of the generic, at a greater out-of-pocket cost, appeal to your health plan and report it to your local legislators. There is no justification for this practice, only greed.

    If you want Congress to rein in drug prices, please sign this petition.

    Here’s more from Just Care:

  • Pharmacy benefit managers can drive up your drug costs

    Pharmacy benefit managers can drive up your drug costs

    Pharmacy benefit managers (PBMs) are multi-million dollar businesses established to help insurers manage their pharmacy claims, Kaiser Health News explains. PBMs also decide which drugs will go on a health insurer’s formulary (list of approved drugs) and at what price. But, in the process, they can drive up your drug costs.

    PBMs are supposed to generate discounts on drugs for health insurers through bulk purchases. But, there’s a lot we don’t know about where those discounts go and whether they end up saving any money for consumers. PBMs are in the business of deciding which drug companies’ drugs an insurer will cover. They have a powerful incentive to establish formularies that allow them as well as their health insurer and/or pharmacy clients to maximize their profits.

    Three PBMs own 80 percent of the market, Caremark/CVS (owned by a pharmacy chain), Optum UnitedHealth (owned by a health insurer) and Express Scripts. They have leverage to bring down drug prices. Because drug companies want their business, the drug companies offer them discounts and rebates. But, who benefits in the process?

    PBMs pass on their negotiated prices to health insurers, taking a cut for themselves in the process. But, PBMs also generally receive a rebate for each drug they purchase from pharmaceutical companies, which PBMs may pocket in full or part for themselves. In essence, the drug companies will give PBMs an additional discount–a kickback of sorts–for agreeing to put a particular drug on an insurer’s formulary. No one knows how much that discount is or whether the consumer benefits at all from that rebate.

    It seems fair to believe that PBMs may choose to put drugs for which they get the biggest rebates on insurers’ formularies rather than drugs that are equally effective and less costly but for which PBMs get low or no rebates. That means that if the PBM is choosing between two equally effective drugs, it might choose the costlier drug, if the rebate is better on that drug, to the detriment of consumers.

    Do insured Americans benefit from PBMs? It’s not clear that they do. In fact, we know that some PBMs set the drug copays at prices higher than the actual cost of the drug and then split the extra money they make from the copay overcharge with insurers and/or pharmacies. And, PBMs impose a gag order on the pharmacists, forbidding them from letting their customers know that the actual price for the drug is lower than their copay.

    Why exactly is Congress not stepping in to regulate prices and protect consumers? If you want Congress to rein in drug prices, please sign this petition.

    Watch this video from Kaiser Health News to learn more about PBMs.

    Here’s more from Just Care:

  • Warning: Your drug copay may be higher than the drug’s cash price

    Warning: Your drug copay may be higher than the drug’s cash price

    It’s bad enough that lack of competition empowers drug companies to set prices sky high for so many important drugs. And, not surprisingly, one in four people in the U.S. say that they struggle to pay for the drugs they need. It turns out that, if you have drug coverage, your drug copay may be higher than the drug’s cash price, and your pharmacist won’t tell you.

    Bloomberg news reports that pharmacy benefit managers PBMs, which contract with pharmacies to pay for drugs on behalf of your health plan, force pharmacists to charge you the insurer’s copay, even when the pharmacy sells the drug for less.  These PBMs or at least Optum Rx and Catamaran, owned by UnitedHealth Group and Humana’s subsidiary PBM, forbid pharmacists from telling you that you’ll save money if you don’t use your insurance to get the drug.

    How does the deal between the PBM and the pharmacy work exactly? The pharmacy turns over the difference between the copay and the actual cost to the PBM. And, according to KARE11, the PBM shares in the profits with the health plan.

    For example, KARE11 found at pharmacy:

    • Doxycycline copay: $46.14 v. cash price $26.95.
    • Venlafaxine copay: $67.13 v. cash price: $24.99

    The extent to which the health plan benefits from these PBM “clawback” contracts is not clear.  But, we’re talking real money. Because of these deals between PBMs and pharmacists, consumers are handing over hundreds of millions of dollars to the PBMs. Not surprisingly, there are more than a dozen lawsuits against insurers contracting with PBMs that are leading people to pay more for their drugs than they should.

    If you are struggling to pay for your drugs, you might consider buying your drugs online or abroad, as millions of Americans are now doing.

    And, if you want Congress to rein in drug prices, please sign this petition.

    Here’s more from Just Care: