What can, or should we do to control drug prices?

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Always ask your pharmacist how much your medicine will cost if you pay cash.

Drug prices seem to be like the weather. Everyone complains about them but no one does anything about them. This a very complicated multilayered problem for Americans.  There is no central authority there are conflicting explanations about why things cost what they cost and there are issues involving whether or not one has insurance and what kind of insurance they have.

In addition to the above questions if you have insurance you have to think in terms of the formulary of the pharmacy benefit manager companies and the insurance companies and think in terms of the co-Pay that the individual consumer has to pay.

Finally, you have to think and talk about Medicare and those who are on it and get their medicines through Medicare plan D.

We have looked at a number of reports about these various complications and want to make a few points to help people both understand and to help them make purchasing decisions for their insurance and their medicines.

“The United States spends more than any other high- income country on health care. Prescription drugs account for about 17% of all health care spending: that is more than 370 billion per year, again exceeding all other countries” (Newsweek 3/17/17).

  1. Doctors write more prescriptions in the US
  2. Drugs cost more than in other countries


The drug companies will tell you it is because they deserve a return on their research and development investment. They offer the amount of 2.6 billion R&D cost to bring a new drug to market. Research does not support this number. But there are so many players in the game that it is impossible to find a place to stand to obtain verifiable costs for this. In some cases, the drug research is paid for by the government and then the patent is handed over to a university or drug manufacturer with no restrictions on the cost they can charge. Why is that?

The founder of Nostrum Laboratories justified his firm’s 400% price hike for a single drug on the basis of a “Moral Responsibility” to the shareholders since they work in a capitalist system. The last item of concern is the survivability of the patient or the affordability of the drug, or access to it. This man also attacked the FDA calling it corrupt and incompetent. Why? The FDA supports his ability to charge anything for any drug.

The truth is that drugs often have several prices and almost no one pays the asking price. (only the very poor and unconnected). The manufacturer determines and sets a price. The pharmacy benefits manager company cuts a deal at a discount, the government regulations may also impose a discount, the various insurance companies establish a formulary they will pay for and may or may not include this drug in the formulary. That can change the price. Your insurance company will also set a price for you to pay called your co-pay they will establish tiers of drugs that come at a specific copay. If you want or your doctor wants you to have a drug not in the formulary then there is a negotiation process and or a requirement that you stair step up in intensity and price of the drugs. You may be required to take some drugs that are not what your doctor thinks your need first in order to “qualify” for the drugs they want to give you. Another trick they use is “preauthorization” you cant get the drug your doctor wants you to have unless the insurance decides first that they will provide it for you. Preauthorization is often time consuming and doctors don’t have the time or the incentive to spend their time working for a lower price for their patient.

Finally there are some aftermarket groups like “good rx” that will identify the price charged for a drug at all of the drug stores near you and help you find the cheapest version and location.

Always ask your pharmacist if you pay cash for the drug what will it cost? Many times it will be cheaper than the co-pay your insurance wants you to pay. This is because of what are called “claw backs” between the drug store and the pharmacy benefits manager. Druggists are often not allowed to suggest that you should pay cash to save money but you can ask them, and then they have to answer.

One of the biggest reasons for high drug prices in America is that the biggest consumer group of drugs is the people on Medicare. Congress has expressly forbidden Medicare to use its power of bulk buying to negotiate better prices. When politicians of either party run for election they complain about this and question it but then when elected never manage to change it!

Why is that?  Because Drug companies hold all the cards.  They lobby politicians and pay for their campaigns, then roll that cost into their prices.  They have no basis for their price increases, so they increase their prices as much as possible…which equals unethical increases in cost to the patient so that most patients can’t take all of their drugs but must choose between them.

Congress makes matters worse and protects the American pharma’s by forbidding citizens from buying the same drugs made by the same manufacturers as in the US, to the same standards of purity, that are sold for a fraction of the US price from Mexico and Canada. If citizens could buy drugs from other countries legally then there would be fair competition for the pharmas in the US which would cause them to lower their prices in the US.  The power of the law is against Citizens who pay the salaries of the legislators and the FDA with their tax dollars.

My answer is to make pharmaceutical companies defend their prices for which they actually spend for the development and production of a drug, to determine their prices.  That would allow a drug to fail and the company take the hit for that drug instead of spreading the cost of the failure over the costs of other drugs.  There are no free market rules for the big pharmaceutical companies, as they stack the deck.


Here is my plan:

  • Medicare patients would get their drugs from a national distributor at reasonable prices negotiated by the government. This would do away with multiple part D insurers which would save the money taken by the insurance companies.  Any drug would have one price for all seniors, negotiated by the government.
  • All pharmaceutical companies would be held to a reasonable % of profit, and they could charge no more to pharmacies and then pharmacies could compete with lower prices to the consumer.
  • The FDA would loosen up their control of drugs and only hold back the drugs that were truly dangerous. The drugs they approve of now are often dangerous anyway and are often recalled after they have done damage.  Allowing drugs to be distributed like they are in Europe would increase competition between pharmas which would also decrease cost to the consumer.  Only truly dangerous drugs, when used properly, would be withdrawn from the market.
  • As it stands very good drugs are withdrawn because they have been used in conjunction with other drugs that result in a bad outcome….this is not the fault of the drug but of the two drugs together, eg phenfen
  • FDA should not withdraw drugs like Vioxx which is perfectly safe when used in patients under 70 without heart disease. Instead of allowing the drug to be continued, the FDA stopped production of the drug and left another  “only drug of the same type” to corner the market—called Celebrex, which increased the cost to Celebrex for years before the patent ran out it cost  $350/ month.
  • Pre-certifications should not be necessary, since doctors are trained to order drugs and are more ethical than insurance companies or pharmas. This process should be outlawed.  If I want a drug for a patient, then I want that patient to take that drug…I shouldn’t have to beg a non-doctor to get the right drug for my patients.
  • Doctors and NPs, and PAs should be the only people able to write prescriptions.
  • Drugs like dexadrine, and adderal which are very old drugs and generic, and should be cheap. There is no reason an old generic should be $150-300/month.

My plan would work but would take some legislation and until we find enough honest politicians I suspect nothing will change.

This Health cast was written and presented by Dr. Kathy Maupin, M.D., Bio-identical Hormone Replacement Expert and Author, with Brett Newcomb, MA., LPC., Family Counselor, Presenter and Author.   www.BioBalanceHealth.com.  

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