Ask a Health Professional Each week health professionals give their educated opinions on relatable health questions. We believe that knowledge is power! Paul Farley PharmD Pharmacist & Owner M-F: 9a-6p I Sat: 9a-1p (715) 582-0898 960 Frontage Road I Peshtigo, w Question: Why Do My Medications Cost So Much? Over the course of my career as Another factor in high drug costs is the drug a pharmacist, the question I have manufacturers themselves. Research and e heard most often is Why does it development can be extremely expensive and time cost so much?" The healthcare consuming. Your costs are covering those expenses industry is very complex, but here for getting that drug to market as well as the expenses is an overview of some of the for all the drugs that tailed to make it to market. Some reasons why medications cost as estimates have shown that it costs approximately $2.6 much as they do. The three primary entities driving million dollars over 10 years to get a drug to market, medication costs are pharmacy benelt managers although that number is disputed Another way manufacturers increase costs is by raising the prices of existing medications, often times greatly exceeding the (PBMs), drug manufacturers, and government Pharmacy benefit managers (PEBMs) are 3rd party admnistrators of drug plans. They perlorm functions such as creating a formulary list of approved/covered drugs by your plan), contracting with pharmacies negotiating costs of medications with drug manufacturers, an rale of inflation. A tew various types of insulin and Epipens. The Epipen price increased over 500% from 2007 to 2016 From 2002 to 2013, insulin prices tripled. These drugs were already on market so had little reason to shoot up. Price hikes 2 claims. Most patients think their health plan does these things, but it ke this may lth rebates paid to PEMs almost always the PBM doing these things behind the Finaly, govemment plays a role in the cost ot soenes and with very ittle oversight When PEMs were medications in many direct and indirect ways. There is first developed, their primary function was to process a great deal of regulation by the FDA which increases and pay claims, but they have expanded their role and the cost of production, Much of this is needed to ensure thus their impact on pricing greatly over the years. safety andefficacy, but the regulatoryburdenis higher in There is very little competition in that industry as well. the United States than many other countries. Medicare Part D plans indude a coverage gap known as the Most PBMs claim that their services lower drug costs donut hole which requres pabents to pay full price lor medications after you and your plan have already etlects. Some PBM practices that raise drugs costs are paid for a speafied amount df medication. There spread pricing,clawbacks, gag dauses, andpromotion is a limit to how much you wil pay in the donut hole of expensive brand name drugs on formularies due to before your drug coverage kicks in again. Patent law robates received from manufacturers. Spread pricing in the United States also alows a drug manufacturer to descrbes the practice of charging your health plan have exclusive rights to production df a medication for much more for a medication than i actually costs (and approximately 20 years after the patent is approved A what is actually reimbursed to the pharmacy) The PBM good portion of that time often passes belore the drug pockets that differencs, and the cost of your health makes a to market, but this prevents other companies plan soars to cover those costs Clawbacks occur from making the same medication at a cheaper price when a PBM actualy charges your pharmacy to fil a This is presumably to reward the company that does The top 3 PBMs control 78% of the market. for consumers, but many are seeing just the opposite prescription. They require a larger payment from the the research and development ol the medication patient than the determined worth of the prescription and collect that diflerence from the pharmacy instead of just charging a lower copay. Gag dauses prohibit your pharmacy from teling a patient if the cash price of a medication is cheaper than what your PEM is charging you. Finaly, PBMsreceive large rebates from drug manufacturers on some medications, presumably to ensure placement on your formulary. This is often in place of a cheaper alternative that is just as eflective As you can see, there are many factors that contrbute to high drug prices. The issue is very complex. PBM reform is very important and legislation is currently being discussed in Wisconsin to limit some of the damaging practices of these companies i you have any questions about this issue, feel ree to stop by Hometown Pharmacy in Peshtigo we'd be glad to talk!