In this column, I often lament that fact that there is so little transparency in health care. It is one of the biggest frustrations for consumers. The Prescription Drug cost component of this system is no exception.
PBS and Kaiser Health News recently reported on the alternatives being used by the Utah Public Employee Health Plan as well as many individuals to circumvent the US system of high costs.
With US pharmacy companies charging about $3700 for a 3 month supply of insulin, why not drive to Mexico and get the same for $600, especially if you live in Southern CA? Or you could use a Canadian mail order pharmacy and accomplish similar results. UTAH PEHP has a Pharmacy Tourism Program the will pay for the patient to fly with a companion to San Diego, then drive them to a hospital to pick up a 90 day supply of any of 13 high cost medicines.
Of course, there is some risk. According to the World Health Organization about 10% of drugs in developing countries were either substandard or falsified in 2013. I have several clients who get their Rx in Canada, India and Mexico with no problem and have done so for many years.
The lack of transparency is even more confusing to seniors with the way that Medicare Part D is structured. With Medicare Rx payments representing 30% of the country’s retail spending, it is a big piece of the pie.
The Trump administration is currently attempting to take action to eliminate PBM’s (Pharmacy Benefit Managers) from Medicare plans as one cost saving measure. PBM’s are effectively a “middle man” that negotiate prices and drug formularies for plans. Drug formularies are the lists of approved medications covered by the plans.
The PBM’s negotiate pricing and what particular medicines are included on the lists of covered drugs for a plan. They are successful only when there are multiple manufacturers that sell the same drug. The very costly drugs like cancer medications often have no competition, so there would not be extra savings.
If PBM’s are eliminated, will it truly reduce costs? The administration argues that the discounts negotiated by the PBM’s would then be provided to consumers. A lot will depend on how consumers and insurers respond to the proposed change.
Remember that insurers have completed significant mergers with PBM’s recently: Aetna/CVS, Cigna/Express Scripts and Anthem and United Health have their own in-house pharmacy divisions. These deals are seen as something that will benefit employer sponsored plans, expecting the insurer to pass on at least some of the savings to their insureds.
With self-insured plans we help our clients choose a PBM based on the expected net savings to the plan. I can assure you there are differences and the choice of PBM is unique to the prescription drug usage of the employer’s population.
When advising Seniors on choosing a Part D Rx plan, I always remind them that they may actually be able to buy the medicine outside of the plan at a lower cost. I recommend that they check the site www.goodrx.com to compare pricing at local pharmacies against the pricing under the Rx plan.
The gag order on pharmacists was lifted 1/1/2019, so now you may ask the pharmacist if there is a cheaper way to buy your medicine.
However, if not purchased through the plan, there is not credit toward deductible or other coverage thresholds so it’s important to “do the math”. I have several savvy clients who simply buy the cheapest Medicare Part D plan and get all of their maintenance medicine from Canada. They keep the low cost plan for short term medications like antibiotics or if they need an emergency supply of a drug.
So, while there is little or no transparency, if one is attentive and an engaged consumer there are ways to save money on prescription drug costs. It just depends on how hard you want to work at it.
