Will You Finally Share in the Rebates for Your Medicine?
There’s been much discussion about the rising cost of health care and, deserved or not, much of the focus has been on prescription drug prices. A component of the prescription drug business, known as the Pharmacy Benefit Managers (PBMs), has grown substantially in the last 10 years, become costly, secretive and a hindrance to access in the prescription drug supply line. While both Democrats and Republicans have decried the rise in costs there has been no real hope of any solutions… until now. CMS (the Center for Medicare and Medicaid Services) has finally recognized this problem in its latest proposed rule. They have requested comments and suggestions on how the profits and rebates attained by PBMs can be funneled to the very people that have been left out of these price cuts and rebates. . . you, the patient.
While there are other places that need to be explored to help lower drug prices, this part of the business process has been broke for years and needs to be fixed. It is something that can be done now and the resulting increased transparency will illuminate information that will be helpful as we search for additional solutions to rising drug prices.
The business of supplying prescription drugs to patients is complicated. Hang with me as I try to explain and simplify this complicated business.
- Insurance companies want to pay the least amount they can for drugs to keep premium prices down so they can stay competitive and profitable.
- The doctors want access to any and all drugs available to better treat their patients.
- Drug manufacturers want their drugs to be available to doctors and patients and also make a profit.
- Patients want broad access to drugs but want to pay the lowest out of pocket price possible and have low premiums.
This type of market place promotes a decent level of balance as insurance companies would negotiate with drug manufacturers to get the lowest prices but would also compete with other insurance companies for patients.
Enter the Pharmacy Benefit Managers (PBMs). PBMs first came into existence as a third-party vendor to pharmacies and insurance companies, helping them to process their insurance claims. However, the PBMs quickly grew in power and influence. They began not only processing claims, but also handling the negotiations with drug companies, contracting with and acquiring their own pharmacies and representing an ever-larger number of insurance companies. Their power grew unchecked and today there are three PBMs that represent almost 80% of insured patients in America. PBMs have no requirement to be transparent to anyone and yet their sheer size allows them to dictate drug prices to their advantage. They have become an entity unto themselves, they don’t completely benefit insurance companies, they don’t benefit the access to medicines that the doctor needs, they don’t benefit the drug manufacturers with their unchecked leverage and they certainly don’t benefit patients.
The amount of money a patient pays out of their pocket for medicine, in the form of co-pays and co-insurance, has skyrocketed. You, the patient, are the ones that have felt the pain of the rise in the amount you pay for medicine. The PBMs, when they negotiate lower prices have no incentive to pass those savings on to the patient, their incentive is to keep the profits or to lower insurance premiums to be more competitive in the market place. While lower premiums are good, it doesn’t help the patients who finds themselves paying hundreds or even thousands of dollars a month for their medicine. There are more and more instances of patients finding that they can go to Costco or Walmart and pay less when they buy their prescriptions outright rather than paying their co-pay through their insurance. This is an indication that something is broke, and it needs to be fixed.
It is encouraging, that after years of us and other patient groups yelling and screaming about this problem, the CMS (Center for Medicare and Medicaid Services) is recognizing the seriousness of the situation and want it fixed. They are asking for suggestions on how to get the savings that are negotiated with the drug manufacturers back to the patient.
RetireSafe will be sending the CMS suggestions and we would like your help. Here is what you can do…
If the cost you pay for your prescription medicines has skyrocketed and/or you have found that you can buy your medicine outright for less money than you pay through your insurance company, we would like to know.
Just tell us your story below and hit submit. Tell us what has happened in your situation. These personal stories will help us humanize the problem and will be a powerful tool as we respond to the CMS request for solutions.
We appreciate your willingness to help, together we can have an impact on the cost of your medicines.