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Supply Chain Complexity and Rx Pricing Games


February 7, 2019 – For any given prescription drug, there are often five companies involved in getting it to the consumer, and that’s the way they like it.


Scripta was founded by doctors, and we’ve spent years studying prescription pricing games. We have hundreds of examples of systemic pricing anomalies that affect healthcare at the most basic level: If patients can’t afford their drugs, they don’t follow doctor’s orders.


High deductible plans were supposed to make employees “smarter consumers,” but without the right tools, how is an employee (or her doctor) supposed to make better choices?


While it’s fashionable to blame the drug companies for rising drug prices, they aren’t the only ones with their hand in the cookie jar. For years, drug makers, drug wholesalers, pharmacies, and pharmacy benefit managers (also known as PBMs) have thrived in a complex system that conceals profiteering.


Just have a look at this superb infographic by Skype Gould for Business Insider:

SYSTEMATIC INEFFICIENCIES ARE DRIVING RX INFLATION


The complexity is the point. It gives cover to profit-taking by any number of companies in the supply chain. And, as Justin Leader of Benefit Design Specialists noted in a tweet, it helps to explain why we can’t point to one villain when it comes to prescription drug price increases.


In the same way that “Employees see a $10 or $20 copay and never think about what you are being charged as a self-funded employer on the back end,” as Justin puts it, payers in turn are forced to rely on and trust in the beneficence of their own PBM (as if that PBM were not also answerable to shareholders).


The Business Insider article does a good job of outlining the state of play noting that, “Lately… some people have come to wonder if PBMs serve much of a purpose at all, other than skimming off profits for themselves. That’s because the PBM have an enviable position in the middle of all this…”


After reading the article, you may feel a sense of unease regarding your pharmacy spend. Give the pharmacy benefit experts at Scripta a call. We know how to win at the games the pharmaceutical giants (and PBMs) play.

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Scripta™ is neither a pharmacy nor a doctor. The benefit service does not tell you what drug to take and does not participate in the drug selection process. Only your physician can determine the medications that are right for you. These alternative medications are options for less costly drugs that physicians may prescribe in place of the medications you are taking now. Scripta has reviewed your current medications only for the purpose of identifying potential cost savings for you to consider with your physician. Scripta has not analyzed the effectiveness or other therapeutic aspects of these medication alternatives. Accordingly, this report and any other forms of communication received from Scripta are not, nor should they be interpreted as, any form of treatment, drug regimen review, or provision of counseling or consultation by a prescriber, pharmacist or pharmacy. Do not stop taking your medication, change your medication, or start taking a new medication without being directed to do so by your physician and filling the prescription under the oversight of a licensed pharmacist. The alternatives set forth above may not be equivalent to your current medication, may interact adversely with your other medications, may not be indicated in light of your other conditions, may cause different or severe side effects, or may be less effective at treating your condition. Medication prices are approximate based on information provided by your pharmacy benefits manager, insurance plans, and/or employer, and may vary from pharmacy to pharmacy. Check with your insurance plan to obtain a full list of pharmacies where your prescriptions can be filled. All information herein is HIPAA protected, treated as highly confidential, and never shared with your employer.

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