Monday, November 01, 2021

How We Wrested Control of Our Rx Drug Spending. Maybe You Can, too.

This week, we've heard reporting that the big Congressional bill which was supposed to include a provision for Medicare, which is the taxpayer-funded senior insurance plan to actually negotiate prices on prescription drugs (just as most other countries, as well as the Veteran's Administration [VA] already do right now) was going to be omitted because of a handful of PhRMA-bankrolled lawmakers pushed to kill it. 

That said, it isn't over until its over. 

Although we don't know what she might or might not do, House Majority Leader Nancy Pelosi still has some tricks in her own playbook if it doesn't happen and she decides to play tough. In 2018, Nancy Pelosi marched into PhRMA's Washington, DC offices and told them in detailed terms of a federal statute (which is already law today) that allows the U.S. government to effectively strip drug companies of exclusive licenses to some blockbuster medicines (see HERE). That provides a path of action if lawmakers choose to do so.

I'm referring to "march-in" rights. March-in rights were created back in 1980, as part of the Bayh-Dole Act. That was signed into law by former President Jimmy Carter. March-in rights were introduced as part of a 1980 federal law aimed at promoting access to generic drugs, and it gives government agencies the authority to require private companies to license patents to third-parties, should the patent-holders happen to receive public funding. So far, to the best of my knowledge, I don't think the federal government has ever used march-in rights (in the 41 years they've had the ability to).

Prior to that statute, the U.S. government retained all patent rights resulting from research it had paid for. Pharma companies, their countless lobbyists and nearly all Republicans have long argued that use of march-in rights could squash biopharma innovation by controlling prices for certain drugs partially developed by government dollars and scientists, and therefore make the industry less willing to work with government agencies like the NIH. However, they offer no evidence to prove that innovation would be harmed, and a number of peer-reviewed studies conducted in academia have proven that to be a hyperbolic falsehood (see more HERE for more research published in the Journal of the American Medical Association conducted by a professor at Bentley University who's a MD and works in the University's Center for Integration of Science and Industry). There are others, of course, but even conservative health policy experts like Avik Roy admit that unprofitable drug and biotech startups can succeed under a wide range of pricing systems. In reality, use of march-in rights would merely make it less-easy to generate massive profits off the backs of American people and it might make pharma a little less presumptuous that they are protected no matter what. 

While the U.S. government has consistently refused to exercise its legal march-in rights in order to lower drug prices...theoretically it can, although if it fails to act judiciously, there is a risk of a lawsuit ending up before a conservative-dominated U.S. Supreme Court.

Still, yes, Nancy Pelosi went to PhRMA's offices and threatened that she could potentially use "march-in" rights which have been law since 1980. Although Congress has never done it before, she threatened the drug industry trade group that she might be forced to do something already within her power to do if the industry decides not to play nice. So far, the industry has refused to play nice, as if daring lawmakers to challenge them. For example, PhRMA has bankrolled a few Senators to try and kill Medicare's ability to negotiate drug prices, and those lawmakers have mostly done PhRMA's bidding. But it doesn't mean Pelosi can't give them the proverbial middle finger to prove she can actually do it, and that prospect terrifies PhRMA. She threatened them face-to-face that she might do it if they continue to make things difficult, which they have done.

One problem is that PhRMA is by no means the only bad seed in an incredibly dysfunctional system filled with players trying to collect money that they haven't earned. Think of corrupt entities like Pharmacy Benefits Managers (PBM's). David Balto, an antitrust litigator and former Policy Director with the U.S. Federal Trade Commission (FTC) described the role of PBM's this way (see the article he was quoted in HERE for details): 

"It's OK to have intermediaries, for example, we have Visa [in the payment cards space]. But these companies [PBM's] make a fabulous amount of money, even though they're not buying the drug, not producing the drug, not putting themselves at risk."

In recent years, I've grown increasingly disgusted by the shenanigans my spouse and I have experienced with prescription drug prices and that's been attributed to Pharmacy Benefits Managers (PBM's) owned by the largest commercial healthcare insurance companies. 

Quite frankly, its sickening. Not only is the drug industry behavior abhorrent, but it is literally making people sick because they can't afford medicines they need for survival.

My spouse and I have healthcare plans with pharmacy benefits which are paid for by employer insurance premiums, and yet each trip to the pharmacy results in our spending more and more. Someone is getting rich, because it sure as heck isn't patients.

I'd finally had enough, so I did what I usually do: I researched the hell out of the situation until I believe I know better than anyone what is really going on. Along the way, I also discovered a way to avoid getting screwed yet again. We recently began enacting our plan, and so far, it has slashed our prescription drug prices by an average of 75% (incidentally, for the statisticians in my audience, the median is also about 75%, which tells you there is not a wide standard deviation between the mean and the median figure, which suggests there's not a lot of variance between the lowest and highest in the statistical sample).

One learning moment occurred a number of years ago, when I was still spending hundreds on a single vial of insulin, and yet whenever I reviewed my deductible, it wasn't being reduced by nearly as much as I was spending on that.

The math simply did not reconcile. 

That's when I figured out that insurance companies were only applying credit in the amount of their own deeply-discounted prescription drug prices towards any deductible covered members must satisfy. The problem was they never disclosed how much they were actually spending on each drug or applying towards the deductible that needed to be satisfied, so the math was always fuzzy. Because patients don't really have access to those financial records, it was difficult to determine exactly how much they are applying for each drug purchase. 

On heavily-rebated Rx drugs like insulin, we later learned with certainty thanks to figures disclosed in Novo Nordisk A/S's quarterly investor presentations in 2021 that insurance company payers are getting rebates amounting to about 74% of the bogus list prices. We also know that list prices tend to increase by about 2% to 3% per quarter, and using simple math, if we deduct that amount plus 26% (which is the difference between the 74% rebates Novo Nordisk is bribing ...I mean paying... PBM's to get their insulins listed as the "preferred" brand on formularies), the numbers should come close to reconciling the amount your deductible is being reduced. The good news is that newer insurance policies tend to adopt IRS rules applied towards diabetes medcines which means more people with diabetes will be getting insulin pre-deductible in the future. But there are other drugs which are also on the IRS list which are curiously overpriced. Maybe the PBM's are bad negotiators? We know that their entire business model is driven by which brand-name drugs pay them the most money in Rx rebates; they may be terrible at negotiating generic drug prices because they don't really care about those as they are low-margin drugs.

Since that time, employers have switched insurance carriers several more times, and each company has their own policies on coverage of generics and IRS-specified pre-deductible drugs. Because our policy was a brand-new insurance policy as of last June, insulin is now covered pre-deductible in accordance with a July 17, 2019 IRS rule-change (I blogged about it HERE) which means I can now buy insulin at least at a predictable co-payment amount. The same seems to apply to CGM sensors and blood glucose test strips in my current plan.

But I was still pissed off about being screwed by my insurance company, only at least I knew what the heck was going on. Still, the unpredictable, fuzzy math behind what's being done with prescription drugs remains an ongoing problem. Insulin isn't the only prescription drug used in my household. And I can see more examples of overt financial gamesmanship going on with many of those, but I've seized control by using PBM's businesses to benefit myself financially. 

Here's how I did it:

First, I took inventory of the major prescriptions both of us were taking. I sorted them from highest expenses to lowest expenses on a monthly basis, and determined if it was a new, branded drug which had very high prices, I also discovered I can frequently find manufacturer coupons for some of those. Usually, the branded drug company has a website with a tab entitled "assistance" or "savings" or something to that effect. The drug company may ask for you to enter personal information which I find annoying, but you can simply enter bogus info except for a legitimate email address. They'll email you back with a link to a real coupon.

But I was more bothered by generic drugs whose prices were stubbornly high. Americans have been taught that generics are supposed to save them money, but we were not saving much on several generic medicines. In fact, prices on several had increased and were approaching the cost of some branded drugs.

Spending on one generic drug, in particular, looked very strange: My spouse uses a generic hypertension drug called eplerenone 50 mg tablets. CVS was charging $48.40 for just 30 tablets (even after satisfying the deductible), which seemed unreasonably high, so the first thing I did was turned to several reputable coupon-generating websites/apps (I check ALL of them, and lowest prices may win our business). Initially, we simply got a $10.00 coupon which reduced the cost at our regular pharmacy to $38.40 for 30 tablets. That was marginally better, but the cost per tablet was still an unreasonable $1.28 for what should be an inexpensive generic drug, so I still wasn't happy. I decided that wasn't cheap enough. It felt like it was still highway robbery, and we acted to avoid that.

Low and behold, I discovered we could buy the exact same generic medicine from Express Scripts Cash-Pay Mail Order Pharmacy using an InsideRx coupon (even though our insurance company uses Caremark as its PBM). The only thing was the doctor had to submit an e-script to Express Scripts; they don't accept paper scripts. So we drafted a letter and mailed it to the doctor asking them to submit an e-script for eplerenone 50 mg tablets to Express Scripts. We then set up an account at Express Scripts Cash-Pay Mail Order Pharmacy and placed and order. 

A few days later, the doctor evidently sent the e-script to Express Scripts. That simple move yielded us a stunning 82% savings, at a cost of just $25.39 for 90 tablets. That means it was 82% cheaper for us to simply bypass the pharmacy benefits of our own insurance company (which an employer is paying premiums to pay for), and buy the drug out-of-pocket (it was, after all, a generic med) and the cost was still a LOT cheaper than using insurance, plus we received 2/3 more tablets for less money. 

We also did the same thing for another generic eye drop used after a corneal transplant a few years ago for which that particular generic was also rather costly pre-deductible. While we will continue buying that at the regular pharmacy until the end of the year at a low co-payment amount, effectively stocking up while it is still being paid for by Caremark. But our aim was to simply not be robbed once the deductible resets on New Year's day.

The prices on that generic drug have remained stubbornly high, and though we were OK since satisfying the deductible, starting Jan. 1, 2022, it will be back to the same pricing nonsense. So we decided to arrange bypassing insurance pharmacy benefits and save (which cost around $15.40/bottle vs. about $28.99/bottle pre-deductible at the pharmacy). That worked out to about 80% savings as well. 

Finally, beyond that, I plan to do the same for rosuvastatin calcium 10 mg tablets. That is a very commonly-prescribed generic statin drug once known as Crestor. 

Our previous insurer provided that as a generic drug at no charge when we bought it via their mail order pharmacy. The good news is I accumulated some excess inventory of that. But our current insurer decided to screw us on that "cheap" generic, charging $33.84 for 90 tablets, which worked out to a cost of $0.38/tablet. 

As noted, I actually created some excess inventory during that time, although I discovered I can simply bypass our own PBM (which is CVS Caremark), and buy that medicine from a rival known as United Healthcare Group's PBM OptumRx using its OptumPerks price comparison and coupon-generating website/app. The cost for bypassing CVS Caremark resulted in the cost on that being reduced to a mere $15.00 for 90 tablets, or just $0.16/tablet (compared to $0.38/tablet). That works out to savings of 56%. We plan to buy generic Crestor tablets from United Healthcare Group's OptumRx PBM unit using their price comparison and coupon-generating website/app known as OptumPerks and will be buying it using Optum Store starting with my next refill. 

Truth be told, we could get it for roughly the same price at several nearby drugstores, but for pills, mail order works fine (I'm less enamored with mail order on items which must be temperature-controlled such as insulin; the PBM known as Caremark sent me spoiled insulin at one point in the past because it was allowed to sit in a 100 degree warehouse and the ice-packs all melted before it was even shipped, plus it took over a week for me to get it, so I do not trust that it will not happen again). One curious difference between Optum Store and rival Express Scripts Cash-Pay Mail Order Pharmacy is that Optum will actually accept paper scripts from your doctor (Express Scripts requires only e-scripts), and those can be mailed to: Optum Store, 6 South Second St. Suite 509, Hamilton, OH 45011, Phone: 855-946-4463, Fax: 650-434-4032. I've already placed my first order. 

It was when I was still covered by United Healthcare a number of years ago that particular insurance company suggested one way I could cut my costs on half on brand-name Crestor (which was still patent protected at the time) was by ordering 20 mg tablets and simply cutting the tablets in half. In fact, United Healthcare even provided me with a free pill-splitter. If I really wanted to reduce my costs, because the price is the same for both 10 mg and 20 mg tablets, I could go back to that method. But I can't be bothered. Cutting pills can be messy, and half of them ended up on my kitchen floor. But if cost-containment is a major issue, it works.

I don't mind some pricing differential, but in these cases, every single time I tried it, I instantly saved more than 56% each and every time, and in some cases, significantly more than that. The entity that was screwed? CVS Health. Not only did their retail pharmacy lose a sale, but their PBM Caremark also lost a sale and a transaction fee. The Aetna business unit is probably unconcerned either way, but the point is that financial gamesmanship CVS Health is taking with prescriptions forced me to abandon them and do business with their rivals. If they don't like it, they can reduce their prices to more sane levels. 

Since this post was originally published, the startup Mark Cuban CostPlus Drug Company has emerged with a model of the actual cost of the drug (the cost to drug wholesalers), PLUS 15%. In addition, it also charges a $3 fee for the pharmacy to distribute the drug, plus a flat fee of $6 to ship the product. It began with a limited number (about 100) of generic drugs which have seen considerable price increases in recent years. Among them is generic rosuvastatin calcium 10mg tablets which I just bought for a cash price of $15 from Optum. Evidently, CostPlus Drug will sell it for $7.50 + $3.00 for distribution + $6.00 for shipping. That was an increase over the $6.50 they were charging just a few weeks ago. In the end, the total cost will be $16.50 for 90 tablets, which is $1.50 MORE than I can buy the same drug for at Optum. So far, no savings. But the transparency is worth monitoring because we'll know where the prices are being increased should I opt to consider CostPlus.

Still, while I know a bit more than the average consumer, I dislike a "system" which enables us to get medicines at 82%, 80% and 56% off instantly ... on three different drugs. And yet, that's the kind of seemingly legalized robbery which routinely happens in the U.S. prescription drug sales thanks to PBM gamesmanship and corruption. Some of this may be illegal (and maybe someday the FTC will seriously investigate PBM "rebate walls"); but PBM's rely on absolute secrecy to keep their scam going.

I think the aforementioned eplerenone robbery could also be part of the illegal price-fixing occurring with generic drugs that Connecticut Attorney General William Tong's two lawsuits (his 2 lawsuits were enjoined by the AG's of all other states, as well as Puerto Rico's AG; how often do all 50 states agree on anything?!) outlined in this Hartford Courant article now being litigated; I'm not certain. We just didn't want to be screwed with each visit to the drugstore once the deductible resets in January, so we shopped around on prices using multiple sights/apps in advance.

Truth be told, we did not bypass the pharmacy on each and every prescription used, although theoretically, we could have done so and likely broken even. But it has become tiresome of the overt profiteering which PBM's routinely put patients through. Keeping track of which prescriptions are purchased from which sources and whether they have refills requires additional work on our part. But the PBM's are "robbing Peter to pay Paul" as the saying goes. The ONLY entities making money are the PBM's, and maybe our employers who receive the benefit of "premium offsets" bankrolled by prescription drug rebate dollars. 

Curiously, this is one area where the pharmaceutical industry and patient groups COULD BE UNITED to advocate for legislation which would benefit both, but aren't currently because pharma sees patients not as partners, but as yet another enemy of the prescription drug industry which must be controlled rather than collaborated with. In reality, PBM's are screwing pharma and patients, and one would think that collaboration could yield mutually beneficial outcomes. But for whatever reason, the PhRMA model has relied on a messaging strategy to try and persuade patients that its the invisible "middlemen" solely responsible for their problems are the pharmacy checkout counter which is a falsehood. PhRMA has tried to manipulate patients to get reforms which benefit the drug industry yet leave patients without any resolution to their own drug pricing issues. Consequentially, PhRMA's selfish campaign has failed.

In the end, however, this kind of PBM behavior is unacceptable. But at least relatively new tools now exist which empower savvy patients to bypass their own pharmacy benefits by using a different PBM (in some cases; using a tool which is not even PBM-powered known as SingleCare and can generate instant discount coupons on certain prescriptions). 

But it should never be this way. In my assessment, the PBM's are robbing both pharma on heavily-rebated brand name drugs, while PBM's are simultaneously screwing patients on cheap generic drugs. None of this should be legal, and it may not be. But it will take a long trial in court to prove any of it. 

In the meantime, my suggestions to do what we did are as follows:

  1. NEVER trust the price you are asked to pay at the pharmacy on prescription drugs. Odds are, that's not the "real" price and unless its only a few dollars, only suckers pay that amount.
  2. Search at least 5 or 6 reputable prescription drug price comparison/coupon-generating websites/apps. Among them should include: SingleCare (currently the only one not powered by a PBM), GoodRx (this is a biggie which is powered by many different PBM's), InsideRx (Cigna's Express Scripts), OptumPerks (United Healthcare Group's OptumRx), ScriptHero (drug wholesaler McKesson) and maybe one other (your choice; the number grows all the time). This will enable you check prices at a variety of different drugstore chains and locations while using different PBM's for the same drugs. One may offer a clearly better price, and that's the one you may wish to use.
  3. Don't be afraid to buy directly from the PBM's mail order pharmacies. Often, they will deliberately sell at prices lower than other pharmacies within their own retail network sell the same drugs for. Beware: using them isn't as easy as buying something on Amazon. If I'm being truthful, it was kind of a pain in the ass to do initially, but the savings justified doing so. To use Express Scripts, we had to set up an account online first, then the doctor must send in an e-script. It took over a week to get everything working. But it DID deliver 82% savings on a generic medicine.
  4. Beware when buying generics. I'm not suggesting there's anything inherently wrong with generic drugs, but PBM price gamesmanship is extremely high on generic drugs. You are likely to find it elsewhere for much less except when its part of a special drugstore list of $4 generic drugs. Others may be corruptly overpriced. Know that you can bypass your own insurance plan's PBM and use a different PBM and get better prices on some generics. Occasionally, use of a discount program which bypasses PBM's (notably SingleCare) can occasionally yield even better savings.
  5. Finally, I suggest that lowest-price should likely win your purchase business. Loyalty really has no place when the prices are never the same for any two customers at the same store. Again, lowest price wins.

So that's been my personal experience with using various tools to slash our prescription drug spending by an average of 75%. In the meantime, we are fine saving 82% on drugs by buying them from a different PBM if it saves us more cash. Until lawmakers fix this fucking mess, that's the way it is. At least we found a practical way around the system.

No comments: