Prescription drug pricing is out of control

  • The cost of insulin more than tripled — from $231 to $736 a year per patient — between 2002 and 2013.
  • A new marijuana-based epilepsy treatment is going to cost $32,500 a year.
  • “The goal is to keep the price of the drug on par with other epilepsy medications”.
  • PBM’s are driving hard bargains with the manufacturer and they are increasingly finding ways to expand their profitability at the expense of employers and patients.

The joke within pharma is an old one.  “Why do drug companies charge so much for drugs? Because they can”

We are in a crisis situation with drug pricing.  Some doctors say diabetic patients, who are typically 60 years old or more, have difficulty paying for drugs, especially those who have trouble once they hit the donut hole in the Medicare Part D program and have to cover the costs themselves.

Pharmaceutical Research and Manufacturers of America (PhRMA) argues that focusing on list prices “misrepresents” reality. The industry trade group maintained that wholesale prices generally do not correspond to net prices — what companies, unions, and government agencies pay — because drug makers offer rebates. [inlinetweet prefix=”” tweeter=”” suffix=””]This is pure corporation spin bullshit.[/inlinetweet]

The sad reality is that families are hurting because of the high cost of insulin but diabetics are not alone.  A new marijuana-based epilepsy treatment is going to cost $32,500 a year became “it’s in line with other therapy costs”?

PBM’s are wielding their power

According to Market Watch ” a generic drug manufacturer surveyed what prices its employee health plan paid for its own drugs after they entered the supply chain. The final price was on average 5.8 times what the manufacturer received. You would expect some kind of multiple as the drug goes from maker to retail, but almost six times?”

The large PBMs often portray themselves as fighting the “good fight” on behalf of employers and employees. They say they are simply behind-the-scenes, low-margin middlemen negotiating with greedy manufacturers to constrain drug prices. In reality, they are highly profitable intermediaries that typically do not take possession of the drug, bear little to no risk, and minimally innovate.  Express Scripts for example, one of the largest PBMs, reported gross profits of $8.76 billion in 2017.

The bottom line is that patients are having a hell of a time paying for their medications and most pharma companies don’t seem to give a damn.  There is nothing worse than receiving silence when you’re angry and patients are likely to vent their frustration at the voting booth with politicians who promise to bring down drug pricing.

As I have said before change is coming to the pharma industry which is enjoying record profits.   The drug industry and PBM’s share the problem with high drug pricing.  We can’t wait for a savior, via Amazon or a startup, to help us.  Change has to be forced on an industry that is not listening to its customers.