My dad has autoimmune-caused kidney failure and has thus been on Medicare and a Medicare supplement for several years. When Medicare D came out, he enrolled in that too. At the end of each year, he and my mom sort through the various options available in Colorado for the coming year, weighing premiums and coverage levels for the medications he takes. The catch is that you can only switch plans once a year. My parents made their choice in December for his current Medicare D plan, and got coverage that would leave them with about $1000 in out of pocket drug expenses for this year. But two weeks into 2009, my dad’s nephrologist switched him to a much more expensive phosphate binder, and now my parents will be paying more than $5000 in out of pocket expenses for his medications this year. And they can’t switch to a different Medicare D policy until 2010.
With my perspective coming from that background, I found this article very interesting. Jacob Milbradt is a pharmacist and his perception is that “Big Pharma realizes that most doctors don’t know how much most drugs actually cost. Furthermore, they also realize that most doctors believe that the majority of people only have $30-$50 copays for any brand name prescription.” From my family’s experiences with my dad’s drugs, I think that this is a pretty accurate statement. Doctors are concerned with getting results for their patients (and of course they may be swayed by convincing drug reps, but that’s another story). If a pharmaceutical rep presents a new medication to a doctor, mentions that it’s a whiz-bang drug, and brushes the cost off by saying something like “it’s a brand name drug, but the copays on brand names are usually only about 20 bucks more than generics” the fact that the drug actually costs more per month than most car payments will probably not factor into the doctor’s prescribing decisions. But what about patients without health insurance? Or those with high deductible HSA qualified plans, who have to pay for their own medications until they reach the deductible? And since a good number of the prescriptions written every year are for seniors, we have to consider those with Medicare D and the dreaded “doughnut hole” that leaves people on fixed incomes with a pretty significant out of pocket exposure.
Health insurance companies work hard to encourage the use of generic drugs in an effort to keep health care costs in check. The copays are lower, and the prescrption deductibles that are becoming commonplace on individual health insurance plans in Colorado are often waived in the case of generics. I think that people who have individual health insurance and pay for their own coverage and/or medications tend to be pretty savvy about asking their doctors for generics and pressing for details on the actual cost of medications. But for people who are covered on large group health insurance policies with low or no prescription deductibles, the perceived difference between a generic that costs $20/month and a brand name that costs $400/month may just be a few dollars more for the brand name copay. And although the patients might only pay an extra ten or twenty dollars to get the brand name drug, their health insurance carriers are having to pay significantly more.
There are all sorts of variables that are driving the cost of healthcare and the price of health insurance. The price of prescription drugs is a major factor, and the waters are muddied by the fact that a lot of doctors and patients are blissfully unaware of the actual cost of the drugs. I’m sure the big game this weekend will be complemented by a slew of clever commercials for prescriptions. And those commercials aren’t cheap. So if you see one that piques your interest, do some research to see how much it costs. You may be surprised, especially if your health insurance company typically foots the bill for your prescriptions.