Prescription Costs

Written by Sarah Provost
Bookmark and Share

The cost of prescription drugs in America is rising by an estimated 17 percent each year. In order to combat the escalation, many employers are now using Pharmacy Benefit Managers, or PBMs. PBMs analyze the effectiveness of prescription drugs, decide which are most cost effective, then draw up lists of approved medications.

PBMs allied with large corporations can also bargain with drug producers. They might, for instance, pledge all their business to one company in return for a favorable price. Another cost-cutting technique is called step therapy. This means that patients are required to try a less expensive drug first. Only if that fails to solve the problem will a more expensive drug be allowed.

Using generic or alternative drugs is a highly effective way of holding down costs. Many, if not most of the drugs on the market today are minor variations of drugs already available. A slight tweaking makes a drug eligible for a new patent. In some cases, there are even over-the-counter medications that are exactly the same as the prescription drug, available at a much lower cost.

Beneficiaries Resist PBM Recommendations

The major problem with using PBMs is consumer resistance. A person accustomed to taking a patented anti-inflammatory drug, which can cost up to $200 a month, may have strong objections when told that over-the-counter ibuprofens are just as good. Patients often feel that they are not getting the best possible treatment because their health program wants to keep costs down. Education consumers to trust and accept lower-cost medications is a huge factor in stabilizing prices for pharmaceuticals.

Bookmark and Share