Making medicines more affordable: Making insurance work like insurance

Common-sense reforms can help ensure everyone benefits from America’s engine of innovation and receives the care they need and deserve. In this series, we’re taking a closer look at PhRMA’s advocacy efforts to make medicines more affordable, part of our patient-centered agenda, which aims to lower barriers between our industry’s medical innovations and patients who need them.

Medicine out-of-pocket costs continue to cause affordability challenges for the sickest patients despite a dramatic slowdown in medicine price growth and spending. In fact, net prices for brand medicines last year actually declined by 2.9% on average. Yet it doesn’t feel that way for some patients, especially those with medicines subject to deductibles and coinsurance, who often don’t directly benefit from the robust rebates and discounts provided by manufacturers.

Patients with coinsurance and deductibles often pay for their medicine based on its list price rather than the discounted price their insurer may receive. In fact, nearly half of commercially insured patients’ out of-pocket spending for brand medicines is based on the full list price. That’s not right.

We support fixing the health care system so it works better for patients. That’s why we’ve put forward a set of medicine affordability solutions for the commercial market as part of our patient-centered agenda, Building a Better Health Care System. These common-sense ideas can help improve patient access and affordability:

• Cover more medicines from day one. Insurers are increasingly requiring people to pay high deductibles before receiving coverage of their medicines. This can cause patients to ration or never fill their prescriptions, which can result in devastating consequences to their health and higher overall health care costs. Policymakers can immediately help patients by requiring that some medicines, such as those used to treat certain chronic conditions, be covered by insurance from day one – without being subject to a deductible.
  
  
• Make cost sharing more predictable. High and unpredictable cost sharing is a barrier to prescription medicine access, especially for patients with chronic, disabling or life-threatening conditions. Insurers’ increasing use of coinsurance and deductibles can leave patients with sticker shock at the pharmacy counter. One potential solution is to encourage the use of fixed-dollar copays instead of coinsurance. Placing a limit on the maximum amount a patient will be asked to pay for medicines per prescription, per month and/or annually would also help. 
  
  
• Make coupons count. Due to high out-of-pocket costs, patients are increasingly turning to manufacturer cost-sharing assistance to help them afford their medicines. In some cases, health insurance companies do not allow the assistance manufacturers provide to patients to count toward deductibles or their annual out-of-pocket limit, meaning patients could be paying thousands more at the pharmacy than they should be. We need to end this practice so that patients get the full benefit of the programs meant to help them afford their medicines.
  
  
• Share the savings. If insurance companies and middlemen don’t pay the full price for medicines, patients shouldn’t either. The rebates and discounts negotiated on medicines should be directly used to lower patient costs at the pharmacy counter
  
  
• Require Standardized Plans. On the Exchanges, standardized plans often have lower and more predictable cost sharing for critical items and services than non-standardized plans and can make health care more accessible and affordable. They also aid consumer choice by allowing for apples-to-apples comparisons across health plans.

Our top priority is lowering barriers between our medical innovations and patients who need them. Learn more about how we can make insurance work like insurance by visiting www.PhRMA.org/BetterWay.