The unintended consequences of health insurers' fight to lower drug prices

Insurance companies that use prescription benefit management companies are increasingly cutting coverage of high-ticket brand-name drugs. It's not just adding to the raging drug price wars, but can also alienate members, notes an NPR article on the practice.

The battle between drug companies looking to protect their profits and insurers trying to drive down their costs has had a direct impact on health insurance benefits. More than half of all people with insurance have some medications excluded from their coverage, according to the article. 

Drug benefit management companies like Express Scripts can use their massive purchasing power to help insurers combat high drug prices by fighting for deep discounts from drug companies. In 2013, Express Scripts announced it would no longer pay for 48 high-cost prescription drugs. Others, including Caremark, Optum and Prime Therapeutics, followed suit. 

Insurers, meanwhile, raised co-pays on more expensive drugs, hoping to steer members to less expensive alternatives.

But drug companies fought back against these tactics, offering coupons and discounts directly to consumers that can wipe out the members' co-pay--undermining insurers' efforts to lower drug prices, the article notes.

Amid all this, members who've had good clinical results on a regimen only to find it is no longer covered are unhappy--as are their doctors. And some patients are voting with their feet, willing to switch plans to get their preferred drug brand.

Meanwhile, as FierceHealthPayer has reported, the government has little power to drive down drug prices on a large scale and a deal between drug manufacturers and insurance companies may not be feasible.

To learn more:
- here is the NPR article

Suggested Articles

A judge has dismissed the ongoing case between Oscar Health and Blue Cross Blue Shield of Florida over broker arrangements.

Expanding options for dental care in Medicare is a popular idea, but policymakers could take several avenues toward this goal, a new analysis shows.

Tennessee's proposal for a block grant brings a host of questions