Rx Drug Prices.


I'm wondering if Samantha would be interested in doing a show explaining how Prescription Drug prices in the US got so damn high. I worked for several years at a Pharmaceutical Benefits Manager(PBM) as a software developer and can provide an inside scoop. But the take away is that if you are insured, you pay basically the same prices as Canada. A $100 drug for an insured person will frequently have an $80 rebate from the manufacturer, then you pay $10 and your plan pays $10. Its Medicare, Medicaid, and the uninsured that pay the sticker prices because the letter of the law is they have to pay the sticker price minus and generally applicable discounts. And a rebate technically isn't a discount. PBM's front load rebates and make them act like discounts so we pay the rebate to the pharmacy when you fill your Rx then collect it from Phizer or whoever at the end of the month.

Oh, and hook for the show? You know how places like Hobby Lobby go on and on about how it's infringing on their religious freedom to provide Birth Control for their employees? Well they get the rebated prices by subscribing to a PBM. And when they tell us to deny coverage they aren't just refusing to pay their $10, they are also insisting that we not pass on the $80 rebate to their employee. There is no sane world where the rebate is an infringement on Hobby Lobby's beliefs. That would be like if part of your compensation was a CostCo card but your employer insisted that Cost Co issue you special cards that won't permit you to buy pork products because eating pork is against their religion. It's absurd. And it saves $0 because its an already negotiated rebate while significantly increasing our overhead because we now have to add a separate logic path through the system where patients are sometimes not given their rebates because their bosses frown on their life choices. This increases dev time and testing burden.

It also decreases our volumes which are what we use to negotiate rebates. Since we negotiate by Formulary, not drug by drug (that would take forever) everyone else has to pay a little bit more if we sell less. It's just a little bit, maybe the lower volumes mean we get a 83.3% rebate instead of an 83.6% rebate from that manufacturer. But it adds up. Every other drug on that formulary (His heart meds, her beta blockers, their insulin, etc) is that much more expensive because employers like Hobby Lobby insist we refuse to cover birth control. A high volume maintenance drug.

Sound interesting?

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