Pharmaceutical manufacturers, insurance companies, and pharmacy benefit managers set prices for the medications that patients rely on every day. But how are they making these decisions? Why does a life-saving drug cost a few dollars per pill one day and then a few hundred dollars the next? Their business models make it hard to know if they are putting profits ahead of patient care, and make it difficult for consumers to hold them accountable.
It’s time for patients to have the full story.
A good first step is calling for increased transparency in determining pharmaceutical costs.
1. For Pharmaceutical Companies that means: Disclosing all costs that contribute to a medication’s price (to include research and development, clinical trials, regulatory approval and compliance, materials and manufacturing, and marketing and advertising) as well as any federal benefits received that would offset some of these costs. Also disclosing the manufacturer’s profit margin for a medication.
2. For Health Insurance Companies that means: Being transparent about formularies and prescription drug tiering and cost-sharing requirements. Telling consumers in advance what medications are included in their formularies and what their out-of-pocket costs will be. Not charging more for or removing covered prescription drugs within the term of the policy purchased and without properly notifying physicians and patients. Posting a formal appeals process.
3. For Pharmacy Benefit Managers that means: Disclosing formulary information to patients and physicians, including whether certain drugs are preferred over others, as well as explaining policy decisions on tiering, prior authorization and step therapy. Requiring disclosure of certain information (e.g., rebates and discounts) to employers, health plans and pharmacies with which they contract to facilitate greater cost savings for patients.
Tell Congress to demand these companies introduce this basic level of transparency to the general public. Americans spend billions of dollars each year for their products, the least they can do is let us know what we’re paying for.