The pharmacist apologizes to Mr. Johnson as she hangs up the phone. “I’m sorry, our acquisition price has increased, which is reflected in the final price that you have to pay”. Mr. Johnson is upset that the generic medication his son Jeremy has been taking for several years to treat his acne has increased in price exponentially. The last time they purchased a 90-day supply of the antibiotic that his son takes twice a day, doxycycline hyclate 100mg tablets, the price was $68 for 180 tablets. Now, three months later, the price has gone up to $1040.97, nearly 15 times higher than the previous prescription. Even though they have prescription drug coverage on their insurance plan, this cost is simply unaffordable.
Pharmacists across the country are running into similar issues with many other generic products. The National Community Pharmacists Association conducted a survey of over 1,000 community pharmacists in the US, and every pharmacist surveyed reported at least one large upswing in generic drug acquisition price. Over 75% of pharmacists surveyed reported more than 25 instances of rapid price increases in the past 6 months. Despite the typical pattern of generic drugs decreasing in price after their release, acquisition prices for some common generic drugs that have been on the market and inexpensive for years are rising rapidly.
Generic Drug Prices on the Rise
Many common generic medications are experiencing rapid price changes, such as pravastatin, a medication used to treat high cholesterol, and benazepril, an agent used to treat high blood pressure. These medications have been generic for quite awhile, and their prices had been affordable until the pharmacy acquisition prices recently spiked. Even older medications that have been used to treat conditions since the beginning of the last century, such as levothyroxine, a generic drug used to treat low thyroid hormone levels, have not been immune to price spikes.
Doxycycline, an antibiotic used to treat conditions including malaria and Lyme disease, kicked off the trend in November 2012, says Vic Curtis, senior vice president for pharmacy at Costco Wholesale. He ticked off nine other medicines whose prices have jumped fourfold or more in the past couple of months, including drugs for enlarged prostates, breast cancer, and heart conditions. “The list just keeps growing, and that’s what is concerning,” he says.
Patients who have been taking these medications are seeing the out of pocket prices they are required to pay to obtain their medication increase exponentially over a very short time period. Some medications experiencing a rapid increase in price are critical medications, such as Digoxin, a medication to treat arrhythmias and heart failure that has been around for over 100 years. The rapid increase in price is terrible news for patient care, as these high medication costs are often correlated with a decrease in medication adherence. Since many of the affected medications are crucial to maintaining chronic medical conditions, many patients are going without proper care since the cost is too high, even if they have insurance. This not only is harmful to patients but increases the costs of healthcare when these patients must see their doctor or be hospitalized to deal with the consequences of not taking their necessary medications.
It can take some time for insurance companies and pharmacy benefit managers to change pricing levels, and when rapid changes of acquisition costs occur, the increased charge is reflected in the copays consumers are required to pay. In other words, when pharmacies must pay more to acquire medications, they have to charge insurance companies for the increased cost to provide the medication to a customer. However, insurance companies often have predetermined reimbursement rates for medications, and when the price increases quickly, the reimbursement rate only reduces the drug cost by the reimbursement rate that was determined before the price increased.
This means if a quantity of 180 tablets of doxycycline hyclate 100mg cost the pharmacy $100 to obtain 3 months ago, the insurance company set a reimbursement rate of $32, resulting in a $68 charge to the patient. But if the cost of doxycycline increased rapidly to $1072.97, and the insurance company has not changed their reimbursement rate of $32, the charge that is deflected to the patient ends up being unaffordable at $1040.97.
Over 90% of pharmacists surveyed reported that it takes at least 2 months for reimbursement rates to be changed to see a reduction in copay costs to the patient. Some plans can take up to 6 months to change their reimbursement rates, and 8% of pharmacists surveyed said that insurance companies never change their reimbursement rates. There are no required timeframes that insurance companies must follow to change their reimbursement rates, so they can decide on their own when it is appropriate to change these rates. Pharmacists are petitioning Congress to pass legislation to prevent these situations from occurring, but since it takes time for laws to be developed and passed, changes to this timeframe are not likely to occur anytime soon.
This is terrible news, especially for Medicare patients who have purchased the prescription plan, Medicare Part D. Higher drug prices push patients closer to the dreaded donut hole at a faster rate. This gap in prescription insurance coverage will occur once seniors and their insurance plans have spent $2850 on covered medications in 2014, though this number varies by year – the donut hole began after spending $2970 in 2013. The donut hole of Medicare Part D is a troubling place for many seniors, as this gap in insurance coverage means that seniors are responsible for the majority of medication costs that are encountered during this period. When a single drug costs $1040.97 for a three month supply, seniors are bring pushed into the donut hole after they have purchased only a few medications, increasing their out of pocket costs rapidly.
Fighting Back Against Rising Generic Drug Prices
When insurance companies don’t improve their reimbursement rates quickly, discount cards such as the Prescription Discount Card from the Discount Drug Network come to the rescue to help patients with high drug costs. Depending on the pharmacy the consumer uses, discounts of 10-85% can be applied to both generic and brand name products. The Prescription Discount Card can be used in place of insurance, and is accepted at over 65,000 pharmacies nationwide.
By using the simple online Drug Pricing tool, consumers can figure out what their costs will be when using the Prescription Discount Card for a specific product at the pharmacy of their choice before they go to the store. This allows users to compare the discounted price to their insurance copays in order to figure out the lowest price available to them, without even leaving the comfort of their own home. Consumers can also compare prices between pharmacies in their area, as prices can vary from pharmacy to pharmacy.
Prices can vary significantly from pharmacy to pharmacy. Using the Drug Pricing tool to evaluate the price of doxycycline hyclate 100mg tablets as an example, 180 tablets of this medication would cost $761.79 using the Prescription Discount Card at a local independent pharmacy, but would cost only $63.14 at a local division of a nationwide chain pharmacy in the Los Angeles area.
Shopping around to find the lowest drug price is necessary, more now than ever before. Since drug prices vary between pharmacies, due to different wholesalers used and contract pricing for specific products, medication prices can vary greatly from pharmacy to pharmacy. It is therefore up to the consumer to seek out pharmacies that offer the lowest prices for the drug products they take on a regular basis, to ensure they are getting the most out of their drug payments. While it may take a little extra work, the savings can be astounding.
Using the Prescription Discount Card is simple and easy. Consumers can sign up to receive discounts on the Discount Drug Network’s website, discountdrugnetwork.com. After signing up, the pharmacy billing information is given to the consumer, which they can print out and take to any local pharmacy. The discount card information can then be given to pharmacy personnel along with a prescription for processing in order to receive the discount.
Some may wonder, who is benefiting from these increased out of pocket prices? Pharmacies have to pay more to acquire drugs, and patients have to pay more to obtain these medications from the pharmacy. Are insurance companies taking advantage of rapid price changes by billing for higher prices and paying less in order to increase their profits? While this question may not be readily answered by insurance companies or those involved in these pricing issues, the lack of transparency in the drug pricing world is something that pharmacists and patients alike are petitioning to change.
When insurance companies are not clear about the reasons for their drug pricing decisions, and simply leave patients on the hook for high drug prices, patients can decide to seek alternative avenues to lower drug prices on their own. The Prescription Discount Card from the Discount Drug Network can help patients save money and get the medications they desperately need at a more affordable rate, allowing patients to continue on with necessary medical treatments.
The Prescription Discount Card is free for everyone, and can be used in place of insurance if the insurance copay is too high, or if the consumer does not carry prescription insurance. Consumers can easily sign up for the card at discountdrugnetwork.com and order a wallet card to carry this discount with them to use when it is needed most.