Drugs are real expensive.
Maybe there are ways for Americans to reduce their costs.
At one point last year, I had to pick up a box of my mother’s medication from the pharmacy. It was Lenvima, an anti-cancer drug that costs $10,000 for a month’s supply. It actually made me nervous, driving around with $10,000 worth of drugs. And it was just a box of 60 pills! I was taking them to the hospital where she had been admitted, because the insurance company wouldn’t cover them for an inpatient. It seemed like a strange gap, but then we also had to worry about what would happen if they got lost in the shuffle at the hospital.
Every encounter I have with the US health care system leaves me marvelling. Why do we put up with this?
I recently heard a talk by Professor Amanda Starc of Northwestern University, an economist whose area of specialty is the US pharmaceutical market. She discussed the issue of costs. The bad news: the financial relationships within the system make it very difficult to change the cost structure, especially given the development of so many new drugs.
She said that, from a drug company’s perspective, a “good” new drug has four characteristics:
It has therapeutic value,
for a large number of patients,
who have good insurance,
and who will need to take the drug for a long period of time.
These characteristics make perfect sense from a market perspective, but they leave major gaps. Antibiotics and malarial treatments don’t meet these standards. Weight loss and diabetes drugs certainly do.
She also discussed the problem of insurance coverage. The reality is that insurance companies don’t have good coverage for certain types of drugs because they don’t want to attract patients who need those drugs. An insurer that made it easy for people with cancer to get the latest medications at a low price would be swamped with cancer patients. The way around this is to limit coverage, leaving very sick people with very high bills. “Everyone sucks,” Professor Starc said.
The generic market shows other problems. Reimbursement for some injectible drugs became so low that many companies went bankrupt, creating shortages for those drugs. That’s not good. To prevent a race to the bottom in oral generics, several companies formed a cartel, and that’s not good, either.
She said that drugs are cheaper in other countries because their governments are willing to negotiate drug prices, including by limiting access to certain drugs. We could do that here, but we would have to accept some tradeoffs. Importing drugs from Canada, a solution that many people like, won’t work because it will just raise drug prices for Canadians. Canada is just too small of a market, and it will be dwarfed by US purchases.
Professor Starc did think that transparency could help. She is hopeful about a Federal Trade Commission study on pharmacy benefits managers will bring forth a lot of good data, because the Feds have subpoena power and she doesn’t.
You can see the whole presentation if you like.
In the meantime, what can you do?
For run-of-the-mill prescriptions, shop around. GoodRx compiles prices for different drugs at different pharmacies, and the company offers coupons—some to anyone, others for those who pay for a membership. The AARP has a similar program that does not require an AARP membership, although members get bigger discounts. You can use these at walk-in pharmacies or through a mail-order service.
Some of the pharmacy chains, like Walgreen’s and CVS, have paid membership programs that give you good discounts.
Your pharmacist may know of other discount programs, so ask. Your insurance plan may have a minimum copay of $20, but the drug may available for $5. Why pay the extra $15? If you have trouble paying for a prescription drug, talk to the pharmacist about alternatives. Pharmacists know more about drugs than doctors because that’s all they do, and they work with a lot of doctors. They know what’s out there, and they may be able to work with you and your doctor to find a less-expensive treatment.
There are situations where you won’t be able to get a discount, and you or a family member need to take the drug. I have no advice for that.
Do you know of any other cost savings tips? Share in the comments.
My son recommended Mark Cuban's Cost Plus Pharmacy
https://costplusdrugs.com/
Not at the $10,000 level, but they had my mother on an expensive drug. Got paid when she was in the hospital but not when back in the home. Still battling this. Sigh.