What would make your medicines cheaper?
That’s a question Americans are asking every time they go to the pharmacy and find the price of a maintenance drug they’ve been taking has doubled or tripled, or that a new medicine, like one of the new diabetes drugs, their doctors have prescribed is beyond their means.
Increasingly the answer from the drug industry, which pretty much can charge whatever it wishes, is more patient assistance programs that come in the form of coupons, co-pay cards, or vouchers to help people buy their drugs. People needing help can also apply directly to a pharmaceutical company, and if their income is low enough, the company simply sends a supply of medicine to their home or doctor’s office. How many times have you heard on TV that AstraZeneca can help?
The coupon, co-pay route to helping patients is easiest to understand. The industry calls the coupons “pay-no-more “ cards telling patients they will pay no more than $50 or $100 for a prescription. Discounts vary by the type of drug. Some work like airline loyalty programs: Buy so many drugs and get the next one free.
E-vouchers are more complicated and hardly transparent. A pharmacy sends a prescription to a middleman vendor. The vendor works with the drug company to figure out how much of the patient’s cost sharing that’s required by the insurer it will pay on the patient’s behalf. Rules and amounts patients receive vary depending on the kind of drug.
Andrew Pollpeter, a senior principal with the Amundsen Group, an IMS Health Company, told me the company sets the amount of the voucher, and the patient doesn’t know much about it. But, he said, “they are happier when they see a lower copay.”
All this sounds great for patients, right? It may not be in the long-run.
Recently the Oversight Committee of the House of Representatives held hearings on the high price of pharmaceuticals. It found that one company tried to divert attention from the high price of its drugs by publicizing its patient assistance programs.
Committee member Eleanor Holmes Norton (D-DC) was blunt when she questioned one company executive who was testifying. “In other words, instead of keeping the price so it could be purchased by patients and hospitals, you went to patient assistance programs to try to obscure the price.” Holmes Norton got the point: No matter the kind of assistance program, the underlying price of the drug remains high.
Patient assistance programs are nothing new. Several years ago I sat next to a drug company executive at a dinner and asked him why his company made it so hard for poor people to qualify for assistance. (The requirements can be difficult to meet.) He replied that if the company were more generous, it would hurt the bottom line.
The bottom line is still all-important, but today drug makers have a PR problem. They need to appear more benevolent. There’s genuine public backlash against their companies’ pricing strategies, and Congress is asking questions. By becoming more “patient centric,” a word they use to describe their marketing path, they look like good guys while keeping prices high and profits up.
Drug companies have another problem patient assistance programs aim to solve. Large numbers of patients are not taking their medicines as their doctors ordered, either because they can’t afford them or because the medicines make them sick. No matter the reason, it translates into lost sales.
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