Why People Pay $20 for an $8 Prescription

The Unbridled Greed of the the Drug Industry

The NYT has uncovered an ugly situation with prescription drugs, where people are paying far more than they have to to get medicines that will literally keep them from dying.

It turns out that pharmacy benefits managers in many case have agreements that forbid pharmacists from telling customer they could save money by paying for their prescription rather than going through their insurance co-payment system.

WASHINGTON — As consumers face rapidly rising drug costs, states across the country are moving to block “gag clauses” that prohibit pharmacists from telling customers that they could save money by paying cash for prescription drugs rather than using their health insurance.

Many pharmacists have expressed frustration about such provisions in their contracts with the powerful companies that manage drug benefits for insurers and employers. The clauses force the pharmacists to remain silent as, for example, a consumer pays $125 under her insurance plan for an influenza drug that would have cost $100 if purchased with cash.

Much of the difference often goes to the drug benefit managers.

Of course the drug benefit managers are only doing this to protect people, not to gauge them.

In North Dakota, a new law explicitly bans gag orders. It says that a pharmacy or pharmacist may provide information that “may include the cost and clinical efficacy of a more affordable alternative drug if one is available.”

The North Dakota law also says that a pharmacy benefit manager or insurer may not charge a co-payment that exceeds the actual cost of a medication.

The lobby for drug benefit companies, the Pharmaceutical Care Management Association, has filed suit in federal court to block the North Dakota law, saying it imposes “onerous new restrictions on pharmacy benefit managers.”

Some states are taking action, but no one expects a few governments or even the federal government to be able to turn the tide in favor of decency. The money the lobbyists have is just too much.