Insurers dropping expensive drugs

(CBS News)Employers are using a new strategy to deal with the high cost of drugs prescribed to treat conditions such as arthritis, psoriasis, cancer, and hemophilia. They are tapping into dollars provided through programs they have previously criticized: patient financial assistance initiatives set up by drugmakers, which some benefit managers have complained encourage patients to stay on expensive brand-name drugs when less expensive options might be available. Patients are, of course, caught in the middle.

Employers and insurers are trying to offset the costs of high-priced branded medications. Drugmakers say the money was intended primarily for patients. It’s the latest twist in a long-running dispute between the drug industry and insurers over which group is more to blame for rising patient costs. And patients are, again, caught in the middle.

Insurers and employers continue to cover the cost of most drugs but designate them as “nonessential,” which allows the health plans to bypass annual limits set by the Affordable Care Act on how much patients can pay in out-of-pocket costs for drugs. The employer then raises the copay required of the worker, often sharply, but offers to substantially cut or eliminate that copay if the patient participates in a new effort.

Workers who agree to enroll in drugmaker financial assistance programs meant to cover the drug copays and the vendor monitoring the effort aims to capture the maximum amount the drugmaker provides annually. The employer must still cover part of the cost of the drug, but the amount is reduced by the amount of copay assistance that is accessed. That assistance can vary widely and be as much as $20,000 a year for some drugs.

In the other approach, employers don’t bother naming drugs nonessential; they drop coverage for specific drugs or classes. Then, the outside vendor helps patients provide the financial and other information needed to apply for free medication from drugmakers through charity programs for uninsured patients.

Once patients enroll, the money from the drugmaker goes to the insurer or employer plan, with SaveOnSP retaining 25%, according to the lawsuit. It claims J&J has lost $100 million to these efforts.

In a statement, SaveOnSP said that employers object to drug companies’ “using their employees’ ongoing need for these drugs as an excuse to keep hiking the drugs’ prices” and that the firm “advises these employers on how to fight back against rising prices while getting employees the drugs they need at no cost to the employees.”

It was easy to see this coming. Employers are seeing an increase in employee health plans while insurers are making a lot of money. The drug industry has added fuel to the fire by increasing the price of drugs every year, sometimes by as much as double digits.

Where does this leave employees? They will see raises nullified by increases in their company health insurance, and many will be forced to switch to less expensive drugs they may not like.

Once again, healthcare proves it’s about profits, not people.