This content is sponsored by PhRMA.
Two of every three Americans take prescription drugs, and many are frustrated about rising costs, as well as barriers to getting medicine recommended by their doctors.
Advances in new medications have helped save lives and improved the quality of life for many Americans, with the pharmaceutical industry investing more than $100 billion a year to bring new treatments to patients.
But Lori Reilly, chief operating officer for the Pharmaceutical Research and Manufacturers of America (PhRMA), said a lot of patients are frustrated by the health care system.
An annual patient engagement survey turned up two key issues, shared Reilly during WTOP’s The Health Care Agenda: Real Policies for Real People:
- About four in 10 patients report facing some sort of access barrier to getting the medicine they need.
“Their doctor prescribes the medicine, but unfortunately, when they go to the pharmacy counter, they find out: ‘Oh no, you’re not going to get that medicine,’ ” she said. “ ‘Your insurance company wants you to start on a different medicine. You need to fail on this one first.’ ”
- Another issue cited by patients? The out-of-pocket costs. “More of the burden falls on patients as it relates to pharmaceuticals than any other type of health care,” she said.
Why are patients being asked to pay more?
At the same time, the net payments that manufacturers receive are nearly flat, Reilly said.
She pointed out that a growing number of patients have a deductible and that can mean spending thousands of dollars before insurance kicks in. But she said the price you pay before you reach your deductible is not the price that’s been negotiated between the manufacturer and the insurance company.
“It’s what’s known as the list price,” Reilly said.
She made the analogy to way prices work when buying cars: “If you think about a car, it’s like the sticker price. It’s the starting point for negotiation. So in that period, patients are often paying well in excess of what their insurance company paid for the same medicine.”
Understandably, Reilly said, people are frustrated.
“We think that needs to change,” she said.
Drug prices and ‘middlemen’ — PBMs
Rep. Neal Dunn (R-FL) is a physician who has pressed for lowering prescription drug prices for many years.
He is a critic of pharmacy benefit managers (PBMs), which have been a target for reform by lawmakers.
Defenders of PBMs say they can help to bring drug prices down. Dunn acknowledged that when they first started, there was merit to that idea.
Originally known as formulary managers, PBMs could help obtain generic drugs, get better pricing and make sure there was an adequate supply, he said.
“Now, they have morphed into something else,” Dunn said.
He believes that caps on insurance company profits imposed under the Affordable Care Act, helped lead insurance companies to consider, “What do we do to get more profit?”
He said PBMs are now part of a system that doesn’t work for the patient.
He is critical of PBMs getting rebates — or, as he calls them, kickbacks — to provide discounts, but then charging insurance companies more and helping drive up premiums.
“I mean, it does not make it cheaper for Americans,” Dunn said, adding that he has seen prices through insurance for some medications up to 10 times higher than if the same medications were purchased from online retail outlets.
“That’s obscene. It’s not a crime, but … it ought to be,” he said.
Reilly agrees that the system isn’t working for the patient.
“Now, we have a situation where the Federal Trade Commission, bipartisan members of Congress, bipartisan state legislators, state attorneys general, patient groups, provider groups, are all saying to Capitol Hill and to folks at the state house, something needs to change, so that patients benefit more from the deep discounts that are in the system but today are being absorbed by the middleman.”
What can Congress do?
Both Reilly and Dunn say the system is currently too “opaque,” hiding costs.
“It starts with transparency,” Reilly said.
Dunn agreed. “Transparency, transparency.”
Reilly said, “The other area we’ve been focused on is ensuring that the discount, oftentimes in excess of 50% off of that list price or sticker price, make its way back to the patient when they show up at the pharmacy counter.”
Dunn said there is bipartisan support for reforms. “And that’s why it’s so frustrating that we haven’t dragged this across the finish line,” he said. “Because there’s clearly votes there for it, but the deep understanding isn’t there.”
Among the bills before Congress that Dunn is backing is the Protecting Patients Against PBM Abuses Act. Dunn has also introduced a bill that would increase patient access to lower-cost treatments.
The Increasing Transparency in Generic Drug Applications Act would expedite the review process for generic medications by the Food and Drug Administration.
“One of the things we’d like to do is make the country solvent,” Dunn said, noting that reforms related to generic drugs could potentially provide major savings.
Reilly hopes legislative reform will get addressed during the lame duck session. “If it doesn’t, of course, we’ll want the new Congress and President Trump to look at these issues as well.”
Discover more articles and videos now on WTOP’s The Health Care Agenda: Real Policies for Real People event page.
