A federal appeals court rejected Pfizer’s challenge to a U.S. anti-kickback law that the drugmaker said prevented it from helping heart failure patients, many with low incomes, afford the medicine that costs $225,000 annually. For many, these coupons represent the difference between filling a prescription and going without lifesaving care, but there is a lot more here than just a co-pay coupon.

The drug industry deserves its share of the blame for the high prices of medications, but the truth is that prescription medications are so profitable that many others want their share of the money.

Health insurers have started effectively stealing co-pay coupons, leaving patients on the hook for far higher expenses. Huge Insurance companies continue shifting costs onto patients, with disastrous consequences for individuals’ health and society. It’s gotten so bad that many are asking Congress to step in and do something about it.

Let’s take a step back for a minute. Pharma companies have very little control over patients’ prices for their Rxs. A drug’s out-of-pocket cost is primarily the result of decisions made by insurance companies and pharmacy benefit managers (PBMs). In 2021 pharma provided a staggering $204 billion in price concessions for brand-name medicines to PBMs.

The problem is that PBMs are out for themselves and shareholders, not patients. Pharmacy benefit managers are seeking to maximize their profits and the profits of their insurer clients. PBMs skim off a substantial share of the negotiated savings for themselves and pass the rest to insurers. Those health insurers, in turn, use the discounts to offer more competitive premiums in a bid to attract enrollees

Insurers base the patient cost-sharing of medications on the undiscounted–and undisclosed–list price rather than the discounted rate that PBMs actually negotiated. This causes patients to overpay for drugs vastly, but that’s not enough for them. Insurers have started coming after the co-pay coupons that many drug companies issue directly to patients. In 2020, the value of these coupons totaled $14 billion.

Insurers and PBMs have even devised schemes to overcharge patients for generic drugs. Although generics are still significantly cheaper than drugs under patent protection, a new paper from the University of Southern California finds that PBMs’ “opaque and arcane pricing practices” inflate patients’ spending on those medicines by up to 20%.

These pricing scams hurt patients as well. When folks can’t afford their out-of-pocket prescription costs, many skip doses–and get sicker. Drug non-adherence cost the country at least $495 billion and contributed to over 275,000 premature deaths in 2016, according to a 2018 study in The Annals of Pharmacotherapy.

Will lawmakers come after PBMs for causing patients to pay more for their medications? It isn’t very likely. The money from the industry is flowing into politicians’ pockets at an alarming rate. It’s just another sample of an industry where everyone wants a piece of the action.

Source: It’s time to expose the secret drug scam at the heart of American health care, Fortune Magazine.