Want to Solve the Rx Transparency and Cost Crisis? Ditch the Middlemen

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As the Trump Administration rolls out more actions to help improve price transparency for prescription drugs, GoodRx is out with an article diving into the convoluted schemes that drive the final prices patients pay at the pharmacy counter, and what consumers can do to get the best deal.

“Everyone agrees that more transparency on drug prices is a good idea. Who’d argue against letting the public know what a drug costs? But nothing is simple when it comes to prescription medication prices, starting with the most basic question: What, exactly, is a drug’s price?”

And remember, transparency and lower costs are not just about saving money but ultimately about patient health. In the current system where high prices and opaque pricing are too often the default, “nearly half of consumers have abandoned a prescription at the pharmacy because it was too expensive, finds a new study by DrFirst. While “75 percent of consumers would change pharmacies to save money,” most cannot figure out where they will get the best price.

But what’s in a drug price? GoodRx has put together a helpful chart:

And the frightening truth is, it is even more complicated than the above graphic portrays due to the nearly ubiquitous involvement of Pharmacy Benefits Managers in the provision of prescription drugs. “The top 3 PBMs within the country manage the drug benefits for approximately 95% of the US population or 253 million American lives,” reveals Brittney Hoffman Eubanks writing for Pharmacy Times.

What happens when you strip out the PBM and their accomplice, the insurance company? Well it turns out that savvy patients who strip out the middlemen, and pay ask for the cash price, can frequently get the best deal, especially when it comes to common generic drugs. Good Rx shows some examples:

Here’s another shocking example of PBMs and insurers driving up the price of a prescription drastically above the cash price, reported by Megan Thompson of PBS:

Want an even better deal? Look for a Direct Primary Care practice in your area that dispenses low-cost prescriptions and you can save even more than the cash price at the chain pharmacy.

Consumer Reports reveals that a 1-month supply of 5 common generics would set you back $928 at CVS vs. $105 at Costco.  At a typical DPC practice the same drugs would cost merely $29. (prices courtesy of Green Hill Direct Family Care).

Savings from bypassing the middlemen can be so significant that the PBMs and insurers even try to stop pharmacies from letting customers know when cash is cheaper. However in October 2018, President Trump signed two bills into law to prohibit the gag clauses that were blocking patients ability to know the best price.

And a number of states are also stepping up to pass legislation to increase prescription price transparency.

But more is needed and hopefully on the way.  The Trump Administration is reviewing a proposed regulatory change to end kickbacks that add as much as $100 Billion per year to prescription costs. And a brave Member of Congress needs to step up and introduce language to repeal flawed statute being used to protect harmful kickbacks in both the pharmacy and hospital supply chains.

It is past time to excise the middlemen who are stealing from patients and make American Medicine affordable once again.