JustCare

Tag: Prescription drugs

  • Merck sues Medicare over negotiated drug prices

    Merck sues Medicare over negotiated drug prices

    Merck just filed a lawsuit challenging the legality of the Inflation Reduction Act‘s provision allowing Medicare to negotiate some drug prices with pharmaceutical companies. The administration is holding firm to doing so, notwithstanding. The law is intended to lower drug prices in Medicare.

    Merck claims that if negotiated drug prices take effect, it will keep drug manufacturers from innovating new drugs. It wants a court to say that it does not have to take part in drug price negotiations with the federal government. If the issue is innovation, the question becomes how much profit do the pharmaceutical companies need to generate to ensure they innovate and innovate for drugs that we need. Last year, Merck profited $14.5 billion.

    In response to the lawsuit, Secretary of Health and Human Services Xavier Becerra said, “We’ll vigorously defend the President’s drug price negotiation law, which is already lowering health care costs for seniors and people with disabilities. The law is on our side.”

    The IRA drug price negotiation provision is not set to take effect for another two and a half years. And, in its first year, only 10 drugs that have been on the market for several years without competition will have lower negotiated prices.

    Merck is claiming the drug price negotiation law is unconstitutional because it is taking of property for the public without fair compensation. In this country at this time, Merck could win. But, the law is not on Merck’s side.

    The IRA drug price negotiation provision is designed to withstand constitutional challenges. It allows Merck to turn down Medicare’s final negotiated price. Merck would then be subject to a tax. But, the tax could end up being hundreds of millions of dollars a day over time, according to Merck’s complaint.

    We still don’t know which drugs are included among the 10 the government intends to negotiate prices for in 2026. But, one of Merck’s drugs, Januvia, which some diabetes patients use, could be among them. And, in future years, another Merck drug, Keytruda, which some cancer patients use, could be another.

    Public Citizen President Robert Weissman issued the following statement:

    “Merck is claiming the U.S. constitution requires the U.S. government and people to be suckers. That’s not true.”

    “There’s no Sucker Clause in the 1st Amendment, 5th Amendment, or anywhere else in the Constitution.”

    “This lawsuit is a desperate attempt by the industry to beat back popular legislation that would curtail Big Pharma’s ability to price gouge Medicare and secure monopoly profits. Full stop.”

    “While Big Pharma’s litigation gambit plays out, it is critical that the federal government continue its preparation for price negotiations. Delay in the commencement of long overdue negotiations will result in billions of dollars in excess costs for taxpayers and consumers.”

    Touche!

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  • FDA is confiscating some imported life-saving prescription drugs

    FDA is confiscating some imported life-saving prescription drugs

    NBC News reports on the Food and Drug Administration’s efforts to block importation of prescription drugs. The FDA is helping the pharmaceutical industry and harming Americans who can’t afford to buy the life-saving drugs they need in the US. Allegedly the FDA is trying to keep fentanyl and opioids from being shipped into the US. Really? The FDA found just 33 packages of these controlled substances out of 53,000 it intercepted in 2022.

    The quickest way to ensure drug prices in the US are fair and not two to four times higher than what people in other wealthy nations pay is to open our borders to drug imports from verified pharmacies abroad.  The pharmaceutical industry uses its considerable influence to prevent drug importation, claiming safety risks.

    There are always risks to importing prescription drugs from abroad, just as there are risks to importing food from abroad. But, on a risk benefit analysis, the danger of being harmed from a drug imported abroad–for which there are no reported cases–is far outweighed by the danger of preventing people from getting the drugs they need because they cannot afford them.

    If the FDA’s goal is keeping opioids from entering the US, its current strategy of seizing packages with drugs from abroad is misplaced. The data show that few opioids are in the shipments the FDA intercepts. Almost all of the drugs in these seized shipments were prescription drugs people had ordered from abroad for personal use. The FDA confiscated mostly drugs to treat asthma, diabetes, cancer and HIV, as well as a lot of drugs that treat erectile dysfunction.

    Still, the FDA continues its efforts, at a huge cost to the health and well-being to the Americans who need the drugs they import. The FDA has the right to confiscate drugs without US labeling or packaging.

    While it is technically not legal to import prescription drugs from abroad, millions of Americans do so every year. No one has ever been prosecuted for doing so.  What’s particularly interesting is that both Republican and Democratic governors in Florida, Colorado, New Hampshire and New Mexico want to allow drug importation.

    The Biden administration has not yet approved state applications to import drugs. It’s unclear why not. Pharma has tried through a lawsuit, and failed, to block this Trump administration initiative.

    Why is Congress giving the FDA $10 million to intercept controlled substances from abroad, when the vast majority of the drugs it intercepts are for personal use, to keep people alive? “The nation’s fentanyl import crisis should not be conflated with safe personal drug importation,” argues Gabe Levitt of PharmacyChecker.com. PharmacyChecker.com reports prices from verified pharmacies in dozens of countries for a wide range of drugs.

    In December, Congress told the FDA that it should focus on intercepting controlled and counterfeit drugs from abroad and drugs that pose “a significant threat to public health.” That alone is not likely to stop the FDA from confiscating drugs that Americans are importing to treat their cancer, asthma and heart drugs. As Koontz of the FDA said, “Importing drugs from abroad simply for cost savings is not a good enough reason to expose yourself to the additional risks,” he said. “The drug may be fine, but we don’t know, so we assume it is not.”

    The FDA claims, based on Pharma-supported congressional testimony, that imported drugs have an eight to ten percent chance of being counterfeit. It’s not at all clear this is accurate. And, based on the evidence, it is not at all accurate when it comes to drugs bought from verified pharmacies around the world. The  U.S. Customs and Border Protection data show that it found just 365 counterfeits out of  more than 30,000 drugs it inspected in 2022.

    So, is it safe to import drugs from verified pharmacies abroad? If you hear ads from the Partnership for Safe Medicines about the dangers of drug importation, ignore them. The Partnership for Safe Medicines is a pharmaceutical industry front group. The ads are paid for by Pharma, whose profits depend on keeping drug importation illegal.

    “We have never seen a rash of deaths or harm from prescription drugs that people bring across the border from verified pharmacies, because these are the same drugs that people buy in American pharmacies,” said Alex Lawson, executive director of Social Security Works. “The pharmaceutical industry is using the FDA to protect their price monopoly to keep their prices high.”

    Here’s more from Just Care:

  • Pharmacy Benefits Managers continue to drive up costs

    Pharmacy Benefits Managers continue to drive up costs

    Most people likely do not even know what a Pharmacy Benefit Manager (PBM) is. PBMs allegedly add value to your prescription drug benefit through negotiating drug discounts with pharmaceutical companies on behalf of health insurance companies. However, based on everything we know, PBMs pocket a lot of those savings or share them with the health insurance companies covering your prescription drugs and drive up your prescription drug costs.

    Last week, the Senate Commerce Committee held a hearing in which members expressed tremendous frustration over potentially “anticompetitive” PBM activities that drive up costs for people.  In Senator John Tester’s words: “I gotta be honest with you, the way I see the situation on PBMs I don’t know why the hell they even exist.”

    The Committee is considering the Pharmacy Benefit Manager Transparency Act of 2023. The bill is designed to ensure better state and federal oversight of PBMs. Instead of bringing down drug prices for people, PBMs are putting neighboring pharmacies out of business and running away with enormous profits.

    The Senators on the committee want “better transparency” as to what is going on with PBMs. That would be fine, but that won’t stop the PBMs from keeping the discounts they secure from manufacturers for themselves and not passing them along to patients.

    The lack of transparency in PBMs helps them to profit. They used to work independently of health insurers, designing formularies with lower-cost drugs, steering people to generics and mail-order options. But, that all has changed dramatically.

    Today there are three PBMs, all owned by insurance companies, which control 80 percent of the prescription drug market. CVS Health alone controls one third of the market. Cigna controls more than a quarter of the market (26 percent). And UnitedHealthcare controls more than a fifth of the market (21 percent).

    Senator Grassley pointed out that PBMs can move people to buy more expensive drugs in order to increase their profits. We have seen this with CVS Health, which has been found not to include some generic drugs in their formularies or in their drugstores as a way to get people to buy more costly brand-name drugs.

    Here’s an example of how PBMs drive up costs to people. Ro­su­vas­tatin is a low-cost gener­ic drug to lower cho­les­terol. It costs a phar­ma­cy around $10 for a 90-day sup­ply. Somehow, the PBMs make the av­er­age whole­sale price for rosuvastatin $805.40 for a 90-day sup­ply.

    Rosuvastatin had been in the lowest copay tier in Medicare Part D. But in 2021, the PBMs moved the drug to a Tier 3 drug from a Tier 1 drug, driving up the copay to $141 from $15. Insanity.

    Part D prescription drug insurers appear to engage in these practices as much as any other insurer. In fact, at times, you can  save money on your drugs by not using your Part D insurance coverage and paying for your drugs out of pocket.

    One big step Congress and the Centers for Medicare and Medicaid Services could take to help people with Medicare would be to require Medicarea Part D plans to tell their members that when they can purchase their drugs out of pocket at less cost, they will reimburse their members for the cost of those drugs. Better still, Congress should require Part D insurers to include on their formularies the lowest-priced version of the drugs they cover.

    Here’s more from Just Care:

  • Bernie Sanders’ HELP committee priorities

    Bernie Sanders’ HELP committee priorities

    Jonathan Cohn reports for the Huffington Post on Bernie Sanders’ move to chair the Senate Health, Education, Labor and Pensions (HELP) committee. Under Sanders’ leadership, the HELP Committee will have several new priorities.

    Sanders has been a senator from Vermont for 17 years. Before that, he served as a Congressman in the House of Representatives for 13 years. And, he started his political career as the mayor of Burlington, Vermont.

    Sanders was able to focus significant attention on the need for Medicare for all in the US beginning with his run for president in 2016. As of now, Sanders does not intend to make Medicare for all a top priority for the HELP Committee because most Senators do not yet support it.

    Committing additional funding to Federally Qualified Health Centers (FQHCs) or “community health centers” is one Sanders priority for the HELP committee. FQHCs provide primary care at low cost throughout the nation to some 30 million people. They are  run by the government and physicians employed by the government.

    FQHCs serve primarily lower-income individuals, although they must take all comers. Almost 50 percent of them are located in rural areas. They serve about 20 percent of rural Americans.

    You can find out the closest FQHC to you by clicking here. You might be able to get low-cost dental care and prescription drugs at your FQHC. Some also offer wellness classes.

    Republicans have traditionally supported FQHCs because they offer direct medical services. The government is not funding insurance coverage. And, there is recent precedent for bipartisan health care legislation–a mental health care bill sponsored by Senators Stabenow and Blunt.

    Senator Sanders will also make the cost of prescription drugs a top priority. He would like prices in the US linked to prices in other wealthy nations. He plans to hold hearings that expose the high profits, high prices and bad acts of the pharmaceutical industry.

    Here’s more from Just Care:

  • Case study: Costco saves one couple hundreds of dollars over Medicare Part D

    Case study: Costco saves one couple hundreds of dollars over Medicare Part D

    If you ask me, often the smartest way to save money on prescription drugs is to import them from abroad. But, though no one has ever reported a safety issue from importing drugs from verified pharmacies abroad, importation is still not legal, even for personal use. One Just Care reader, D Busa, wrote in to explain how he saves money on prescription drugs without relying on importation and, with his permission, I am sharing Busa’s story.

    Busa takes a good bit of time to check out all his options under Medicare Part D, which provides prescription drug coverage, each year. Most people with Medicare don’t take that time, even though it’s super important. Whether you’re in Traditional Medicare or in a Medicare Advantage plan, the Part D plan or Medicare Advantage plan offering Part D coverage that met your needs one year, can cost you a lot more than expected the following year.

    Unfortunately, with Part D, your prescription drug costs can change at any time. And, if you need new drugs, the plan you chose because of its lower cost for the drugs you had been taking could end up costing you more than other Part D plans because of new drugs your doctor prescribes. Curiously, even when you are a careful shopper of Part D plans, you can sometimes save a lot of money getting your drugs without relying on Part D coverage.The system is INSANE. It works very well for the insurers at the expense of people with Medicare.

    Busa saw his prescription drug costs rising in Medicare Part D even though he shopped around for the best possible Part D plan. So, he looked to see whether he could get the single prescription drug he takes for less without using his Part D coverage. He found that by using Costco mail order, he could reduce his annual out-of-pocket costs by $459,  $275 through Part D premium savings and $244 for drugs through Costco minus the $60 for annual Costco membership.

    Again, the only word to describe Busa’s discovery that his Medicare Part D plan was effectively ripping him and Medicare off is INSANITY. How in god’s name does Medicare agree to pay its share of the cost of a Part D drug or say it is providing Medicare coverage for a drug that costs so much less at Costco without prescription drug coverage?

    Busa found that his wife was also better off getting two of her drugs through Costco. On Part D, she paid $280 for the drugs. At Costco, she paid $57, saving $223 over three months.

    Busa explains that sometimes Part D is less expensive than Costco. Two other drugs his wife takes cost her $6 through her Part D plan and $14 at Costco.

    Busa’s strategy is to pick the Part D plan with the lowest premium. By doing so, he says, “overall I save $550 on Part D premiums and $1,684 on drugs or $2,234 annually.” INSANITY.

    Here’s more from Just Care:

  • Get ready for more prescription drug price hikes

    Get ready for more prescription drug price hikes

    We know pharmaceutical companies are greedy. Most, if not all, companies are greedy and will do what they can to maximize profits. But, Congress continues to allow that greed. As long as it does, we will pay increasing amounts for our prescription drugs.

    It’s no surprise that Accountable.us, a government watchdog group reports that the big Pharma companies are prepared to raise prices significantly on more than 350 drugs. However many billions the pharmaceutical companies earned in 2022 is irrelevant if they can make more in 2023.

    For example, Pfizer is raising prices on more than 90 drugs.  Ibrance and Xalkori, cancer drugs, will see 7.9 percent price increases. Why would Pfizer want to put an end to soaring profits in 2021 and 2022 if it does not have to?

    Higher drug prices allow the pharmaceutical companies to say that they can invest more money for research. The truth is that these companies put more money into stock buybacks and dividends than on research. And, when they conduct research, the research generally focuses on drugs that are similar to what’s already on the market, where they know they can find huge demand, rather than drugs for rare conditions that have no treatments available.

    The Republican-controlled House of Representatives is unlikely to pick up where their predecessors left off on drug price negotiation, in the Inflation Reduction Act. Pharma gives oodles of money to them to make sure. So, for now, we have simply the possibility of Medicare negotiating drug prices for 60 drugs over the next several years–if Pharma does not succeed at blocking those negotiations.

    One reform, with some bi-partisan support, that Congress has a small chance of enacting, would allow Americans to import drugs from around the world from verified pharmacies. Ideally, the proposal would also require insurers to cover those drugs, as they would cost a lot less than the same drugs in the US.

    Today, millions of Americans import drugs from abroad for personal use, with no reported safety concerns, although it is not legal for them to do so. At the same time, tens of millions of other Americans can’t afford the drugs they need in the US, compromising their health.

    Here’s more from Just Care:

  • Six reasons you need a primary care doctor in this age of specialization

    Six reasons you need a primary care doctor in this age of specialization

    As we age, most of us develop health issues. Along the way we may visit a specialist to handle each of these issues: for example, a cardiologist to treat hypertension and a gastroenterologist to treat acid reflux. However, it has become increasingly clear that in today’s era of specialization, you need a primary care doctor more than ever to coordinate your care, give you treatment appropriate for your age and gender, and prevent future health problems for the fullest quality of life.

    You may be surprised at how much of your treatment a primary care doctor can provide. Primary care doctors know your whole story, while specialists may not be in communication with each other or understand the range of your health care needs. Medicine has become increasingly specialized, and specialists can provide much needed targeted treatments for specific ailments or organ dysfunctions. But fragmented, uncoordinated care is the handmaiden of specialization.

    What is a primary care doctor?

    This term is generally restricted to internists (who have completed a 3 year residency in internal medicine, and treat adults) and family physicians (who have completed a 3 year residency and treat patients of all ages). Geriatricians are internists or family physicians with additional training in caring for the elderly, often in primary care. Within the healthcare system, these types of physicians are often called “PMDs”, for primary medical doctor or “PCP” for primary care provider.

    The word ‘primary’ care may imply simple or elementary medicine, but primary care is a highly complex practice. PMDs are prepared to diagnose and treat all common diseases, and many, if not most, of the less common ones too. Additionally, they are uniquely qualified to provide comprehensive and holistic care to patients with multiple simultaneous diseases. PMDs also try to prevent future health problems-– they don’t just treat what you have. PMDs keep up to date on the frequently changing recommendations on preventive medicine (e.g., vaccines, mammograms, colonoscopies). In all of their functions, PMDs strive to give care tailored specifically to each patient.

    Why do you need a primary care doctor?

    Above all, primary care is good for your health and will help you live longer. Multiple studies have demonstrated this. Here are six important reasons you need a primary care doctor now more than ever:

    1. A PMD can coordinate and oversee your care. The more complex and varied your health conditions are, the more important a PMD becomes. A PMD will give you guidance on how to integrate varied, complex, and sometimes contradictory recommendations that you may receive from multiple specialists.
    2. A PMD can save you from unnecessary or harmful treatments by taking the time to understand you as a person and know your history. The PMD has a 30,000-foot view of all your health problems. The PMD considers your age, gender and other factors to ask “is this really the right treatment for you?”
    3. A PMD can ensure that your medications are not hurting you. Some medications can be dangerous in older patients. A PMD might replace or stop medications that may do you more harm than good and detect drug interactions. It has been estimated that 265,000 adults (age 65 and older) each year go to the emergency room or are hospitalized because of an adverse drug effect. A PMD also can almost always shorten your medication list if it is too long for you; so, the PMD can end up saving you money.
    4. A PMD can offer a second opinion on whether a treatment recommended by another doctor is likely to be beneficial. For example, many treatments have been proven effective only in patients under 65 years old, and older patients may not derive the same benefit from them.
    5. A PMD works to prevent possible problems by offering vaccinations, screening tests and discussing lifestyle changes like weight loss, exercise and quitting smoking.
    6. A PMD can help you realize you’re developing health problems you hadn’t noticed yet. Problems with vision, strength and fall risk, urinary incontinence, depression or anxiety, and memory can sneak up on you over time without detection—even by doctors who don’t ask. These are things that you may not report, but PMDs are trained to look for.

    Click on the link to read the follow-up post: How can you know if your primary care doctor meets your needs?

    [N.B. This post was originally published on June 17, 2019.}

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  • Sen. Bernie Sanders will focus on high health care costs as head of the HELP committee

    Sen. Bernie Sanders will focus on high health care costs as head of the HELP committee

    Next month, Senator Bernie Sanders will become chair of the Senate Health Education Labor and Pensions (HELP) committee. HealthcareDive reports that, in that role, among other things, Sanders will focus on high health care and prescription drug costs as well as elder care.

    In a recent video, Senator Sanders spoke of the huge profits in the pharmaceutical industry at the same time that Americans are going without critical drugs because they are unaffordable; many are dying. The Inflation Reduction Act is a first step towards reining in high drug costs for people with Medicare. It gives the government some power to negotiate drug prices for the 60 most expensive drugs over the next several years, beginning in 2026.

    But, Senator Sanders points out that the government’s prescription drug negotiating power is quite weak and explains that Congress has a lot more to do to rein in drug prices. As I see it, Congress should immediately open its borders to drug importation from verified pharmacies around the world and require insurers to cover imported drugs prescribed by treating physicians.  That is not a long-term solution to high drug prices, but it is a likely way to put downward pressure on drug prices quickly and help ensure that Americans can afford their medicines. Americans usually pay many times what residents of other wealthy countries pay for prescription medicines.

    The Inflation Reduction Act also caps annual out-of-pocket drug costs for people with Medicare at $2,000 beginning in 2025.

    Senator Sanders said the HELP committee would hold many hearings with health care and pharmaceutical company executives. Senator Wyden, as chair of the Finance Committee, has focused on the pharmaceutical industries’ failure to pay corporate taxes through international tax law shenanigans.

    Here’s more from Just Care:

  • Six tips for keeping your drug costs down if you have Medicare

    Six tips for keeping your drug costs down if you have Medicare

    Many people with Medicare find that they are paying a hefty amount for their drugs, even with prescription drug coverage. Drug companies have considerable power to set high prices for many drugs; insurers have little power to rein them in. Instead, insurers shift costs onto members who need high-cost drugs. That helps explain why government drug price negotiation remains a top policy issue in polls of likely voters. For now, there are ways to keep your drug costs down.

    Whether you are enrolled in a Medicare Part D prescription drug plan or a Medicare HMO or other private Medicare plan, copays or coinsurance for some drugs can be extremely high. Here are some options to save you money.

    1. Review the drugs you are taking with your doctor:  Your primary care doctor might be able to shorten the list of drugs you’re taking and, in the process, save you money. If you’re taking high-cost brand-name drugs, your primary care doctor might also be able to prescribe you lower-cost generic drugs. Generics must have the same active ingredients, same strength and purity and same effect.
    2. Ask your Part D drug plan or private Medicare plan about reducing your copay: If your drug is in the highest tier—requiring a very high copay–the plan might reduce the copay if your doctor can demonstrate that you have no other drug alternative for your condition that safely meets your needs.
    3. Extra Help: If you qualify for Extra Help, a program administered by Medicaid, it will pay for some or all of the cost of your drug coverage. The amount of help with cost-sharing depends on the level of your income and assets. In 2023, you may qualify if you have up to $20,385 in yearly income ($27,465 for a married couple) and up to $16,660 in assets  ($33,240 for a married couple). With Extra Help your drug costs are no more than $4.15 for each generic/$10.35 for each brand-name covered drug. You pay nothing after your total drug costs exceed $7,400. And, depending upon your income, you may pay only part of your Medicare drug plan premiums and deductibles. You get Extra Help automatically if you have Medicaid or a Medicare Savings Program. You can apply for Extra Help online here.
    4. Find out if you qualify for a State Pharmaceutical Assistance Program: In some states, state pharmaceutical assistance programs provide help with the cost of drugs. Visit Medicare.gov or contact your State Health Insurance Program to find out about drug benefits your state provides. You can also call 1-800-677-1116 or visit www.eldercare.gov.
    5. Drug company assistance programs: Some drug companies offer eligible individuals reduced prices for their drugs. Contact the Partnership for Prescription Assistance or NeedyMeds to find out if you qualify for help with your drug costs.
    6. Online pharmacies: You can often find significantly lower-priced drugs through online pharmacies. And, increasingly, people are using international online pharmacies to keep their costs down. Kaiser Health News reports that 19 million people in the U.S.–eight percent of Americans–now buy their drugs outside the US to afford them. But, you must be careful you are using a legitimate pharmacy and not an outfit selling counterfeit or expired drugs. Also, it is technically illegal to import drugs from abroad, although it appears that no one has been prosecuted for doing so for personal use. Here’s what to consider.

    Keep in mind: If you are a Vet, you likely can get low-cost drugs through the Veterans’ Administration.

    N.B. This post was originally published on November 18, 2019 and has been updated.

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  • Germans force competition among drug companies; should the US follow suit?

    Germans force competition among drug companies; should the US follow suit?

    In an article for Health Affairs, James C. Robinson argues that the US should take a page from Germany to drive competition among pharmaceutical companies and to lower drug costs for individuals. Medicare and other insurers should pay a fixed fee for drugs with the same clinical benefits, regardless of their cost, and leave it to individuals to decide which drug to get. Ideally, drug manufacturers with costlier drugs would be forced to bring down their prices in order to compete effectively.

    It seems insane that drug manufacturers can charge very different prices for drugs that are similar in effect, and that Medicare and other insurers will pay more for drugs that are no more efficacious than less expensive drugs.

    In Germany, when there are three or more drugs that are equally effective, they are treated as if they are in the same therapeutic class. They might be brand name or generic or both. The insurer then pays no more than a particular price for all these drugs, which the insurers collectively set.

    Patients have a powerful financial incentive to choose the lowest-priced drugs when they offer similar clinical benefits as the higher-priced drugs. Patients must pay whatever the difference in cost for the higher-priced drugs. Generally, this leads the manufacturers of the higher-priced drugs to reduce their prices.

    Insurers in Germany are generally able to negotiate additional discounts on a single drug in that class through a confidential rebate system with the manufacturer of that drug. The manufacturer wins with more business; consumers win with lower prices.

    For the German reference pricing system to work best, there need to be several drugs in a class. So, the German government broadened therapeutic classes for biologics and biosimilars, where there are otherwise too few drugs to promote competition.

    The system in the US does not begin to work as well for several reasons. The authors focus on the fact that all drugs in a therapeutic class tend to cost consumers around the same coinsurance amount, so pharmaceutical companies don’t benefit from bringing down their prices. Moreover, the coinsurance amount can be so high that patients are forced to skip filling their prescriptions.

    The US drug pricing system is inequitable, discriminating against people with lower incomes. People pay too much for drugs that are fairly priced and not enough for drugs that are overpriced.

    Why shouldn’t drugs be priced in keeping with their value so that manufacturers set fairer prices and patient’s can more easily afford them. Higher out-of-pocket costs should accompany drugs that are priced above their clinical value. Drugs should be easily affordable to people when they are priced at their clinical value.

    Insurers in the US have not used reference pricing for drugs for two principal reasons. Pharmacy Benefit Managers, the middlemen who buy drugs from pharmaceutical companies and design and administer insurer formularies don’t like it. Reference pricing would eat into the enormous profits they make from rebates they get from manufacturers to list their high-priced drugs on a formulary at a low out-of-pocket cost. And purchasers worry that they take a risk with reference pricing that they don’t want to take.

    But, insurers should test reference pricing on biologics and biosimilars with the same clinical value. Patients would then pay less for lower-priced drugs and more for high-priced drugs that are not superior. The result could yield significant savings and help ensure people can afford their drugs.

    Here’s more from Just Care: