Express Scripts, which handles prescription-drug benefits for millions or people nationwide, is dropping coverage for 66 brand-name drugs next month in an effort to keep costs down. Rival
Soaring drug prices remain one of the chief reasons Americans pay more for healthcare than people in any other country. Prescription meds account for about 11% of the roughly $3 trillion in annual U.S. healthcare spending.
Express Scripts and CVS dropping coverage for dozens of popular drugs is just one illustration of how our system works.
The two companies already steer people to lower-cost generics. Now they want to save insurers billions of dollars more by eliminating name-brand choices for patients, which in turn would help lower premiums.
And that's undoubtedly true.
At the same time, however, drug manufacturers, wholesalers and retailers will continue pushing pharmaceutical prices higher in an effort to wring profits from a captive market — the sick.
Until the United States joins nearly all other developed countries in preventing prices for prescription meds from reaching unconscionably stratospheric levels, Americans will have to resign themselves to being routinely fleeced at the drugstore counter.
Or they can take matters into their own hands.
Patricia Amitai's experience shows how this can be done. She told me this week about how she contracted a rare skin disease called pityriasis rubra pilaris, or PRP, which causes severe rashes and inflammation.
It took visits to 10 dermatologists just to figure out what was wrong, the San Diego resident said. And Amitai is no novice when it comes to healthcare. She's a retired hospital pathologist who examined tissue and cell samples from patients' bodies.
Amitai eventually was prescribed a psoriasis drug called acitretin, which didn't come cheap. Without insurance, she discovered, a single pill cost $12. With her Medicare coverage, the cost was $8 a pill.
"It was crazy," Amitai said. "We were spending $500 or $600 a month."
She and her husband decided to look north. They found a Canadian pharmacy online that sold acitretin for $1 a pill.
Same drug, same quality. Big difference in price.
Canada, unlike the United States, says it's against the law to price prescription drugs at unreasonable levels. Hence $1 per pill instead of $12.
"Drug prices here are a rip-off," Amitai said. "It's totally unacceptable."
Here's another example: Over the holiday weekend, I ran out of diabetes test strips, which are used to determine blood sugar levels. A Rite Aid drugstore sells a box of 50 for about $70, or $1.40 a strip. That's nearly twice the uninsured cost charged by my mail-order pharmacy, which had been unable to process my refill in time.
With insurance, it runs me about 25 cents each time I test my blood. But even at 25 cents a strip, I'm being gouged.
"The cost to make these things is like nothing," said David Kliff, publisher of a newsletter called Diabetic Investor. "The manufacturing cost for each test strip is lower than 10 cents."
When it comes to medical markups, few examples are as eye-popping as the new hepatitis C drug Sovaldi. Its manufacturer, California's Gilead Sciences, is charging about $84,000 for the 12-week treatment course, or $1,000 a day.
Sovaldi works — it boasts a roughly 90% cure rate. But seriously? A thousand bucks a pill to treat a virus that infects more than 3 million Americans?
"Never before has a drug been priced this high to treat a patient population this large, and the resulting costs will be unsustainable for our country," Express Scripts' chief medical officer, Steve Miller, said this year.
Gilead says the high price reflects the drug's value.
But the AIDS Healthcare Foundation, for one, says Sovaldi's price is unconscionable. It says its own research into Gilead's manufacturing cost suggests "a retail markup of 279,000%."
What's the upshot to all this? First off, people who complain about rationing of healthcare under so-called single-payer insurance systems in other countries should look at how the likes of Express Scripts and CVS are operating.
By eliminating coverage for numerous meds, these private-sector behemoths are rationing prescription drugs, pure and simple. It's an effective means of controlling costs, even though it also limits your choices.
Beyond that, it's clear that the U.S. drug industry has no sense of morality or compassion — not that such emotions should be expected among entities that exist primarily to make money for shareholders.
Drug companies will charge as much as they can get away with for medications that are necessary to ensure a person's well-being or, in some cases, to keep them alive.
No one would begrudge these companies a reasonable profit. That's how it works in other countries.
Exploiting the sick, however, is sad and shameful and a reflection of deeply screwed-up national values.
We can reduce healthcare costs. But not as long as we regard some of the most vulnerable members of society as profit centers.