#PrescriptionDrugPrices #DrugPrices #PrescriptionPrices
Stephanie Garman picked up her prescription at CVS one day.
This time, she took a look at the receipt.
Retail price: $355.99
Her amount due: $3.47
In other words, she paid a1 percent co-pay for her relatively expensive drug.
David Lazarus took on this subject in an article for the Los Angeles Times. It was also published Oct. 8, 2018, in The Atlanta Journal-Constitution.
“Someone is obviously benefiting from this, but I don’t know who,” Lazarus quotes Garman.
Garman obviously had good insurance. “The purpose of insurance is to protect patients from the full cost of medical care at the point they need it,” Lazarus quotes Patricia M. Danzon, a professor of health care management at the University of Pennsylvania’s Wharton School. “An insured patient never faces full price,” Danzon is quoted as saying.
Lazarus also quotes Amy Davidoff, a senior research scientist at the Yale School of Public Health, calling drug pricing “a black-box negotiation process” between drug makers, insurers, and middlemen – called pharmacy benefit managers – who haggle behind closed doors over how money changes hands.
Patients who have good insurance can purchase drugs blissfully ignorant of how much drugs cost. Patients without insurance get billed the full rate. If they can’t afford the medication, drug makers often have programs for such people to get their medications at costs they can afford.
We won’t get into the complications of pricing drugs, other than to say that drug makers want to get back the cost of developing the drug, which can take years or even decades, and the cost of getting the necessary regulatory approval, marketing the drug to prescribers etc. – as well as make a profit.
They will hire the benefit managers to negotiate the prices with various prescriber networks, and to supply those networks.
Not everyone is charged the same price. It can depend on volume, which network you are in etc.
Bear in mind, too, that largely happens only in the United States. Other countries with single-payer health systems tell the drug makers what THEY will pay for medications.
Since drug makers make their largest profit in the U.S., they don’t want this system to go away. They know that those who really need their drugs will do whatever they must to get them, even if it means going broke.
This is a tough problem to solve. We want to keep the drug makers actively doing research to find new therapies for various diseases. We want to make drugs as affordable as possible. At the same time, we want to make health insurance as affordable as possible.
One thing the average person can do: look for different ways to make money so that if a big illness requiring expensive treatment hits you or your family, the cost will be less painful. There are several vehicles out there for putting a good bit of extra money in the pockets of those willing to explore them. To check out one of the best, message me.
Meanwhile, we need to continue to look for ways for people to get well without having to liquidate their retirement savings, sell their homes or sell valuable family heirlooms at pennies on the dollar, just to pay medical bills.
With all the ingenuity we have in the U.S., someone certainly can find a way to do that, whi8le satisfying all concerned.
Peter