This is very, very niche, but I couldn’t think of a more suitable place so I’ll give it a go.
In the US, brand name medications are outrageously priced. There are deals between payors (PBM/Medicare) and manufacturers that look like this:
Sticker price $20,000/mo minus negotiated insurance payment of $15,000 theoretically leaves pt on the hook for $5.000/mo, BUT…
Manufacturer graciously offers a “coupon” / discount card, which covers a max of $4,995.00, leaving pt with a net responsibility of $5.00/month.
These are convenient numbers to work with, but closely resemble the pricing and coverage structure of a long-term medication I take.
The coupon never results in zero pt responsibility, always leaving some negligible amount due. Invariably, it’s exactly enough money to be a huge pain in everyone’s ass and to make no meaningful difference to anyone involved in the transaction. $5.00 and $9.00 are amounts I see frequently.
Getting to the actual question, why bother?
Seriously, I wasted a half hour of my life waiting on hold to schedule a refill on a specialty med that can only be filled from a single central pharmacy and shipped, to be told that a) they somehow didn’t charge card on file for the $5.00 last month, and b) can’t schedule next shipment until I pay the all-important five bucks. Didn’t have a card close at hand, had to call back later so they could extract their couple dollars and then schedule the next round.
It literally costs them more in toll free charges, infrastructure fixed costs, and salaries to collect that money than they make from it.
I assume the answer is something along the lines of “personal responsibility” and someone in Congress having a stroke over the idea of someone getting medicine for “free,” but I’ve been unable to substantiate that.
Convinced there is a reason, probably buried in a 10,000 page CMS policy manual, because the mfg coupon literally never brings the price to zero. See, e.g., DTC drug commercials referencing “pay as little as $x a month!”
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Because the manufacturer is trying to extort the insurer. Please bear in mind that everyone in this market is fucking trash but manufacturer coupons should absolutely be illegal. In this case the patient pays nominal out of pocket cost of 5 dollars while the manufacturer is effectively getting 10k/mo, assuming this isn’t an exotic drug all of that money minus mayyyybe five bucks is pure profit.
The nominal charge is likely a requirement by the insurer to make sure that patients don’t overfill medication they don’t need - manufacturer coupons literally let those companies print money.
Look into cost plus drugs maybe. Apparently they are trying to shine a light on all the scummy stuff happening in the industry.
Unfortunately not an option for specialty and niche drugs. Wish it was, I’d rather him get a cut than a certain PBM
Ironically, there are two newer formulations and the older soon to be authorised generic. My PBM in their infinite wisdom doesn’t want to cover the cheaper one. My doc has yet to get a PA approved for anyone for the newest version, so I’m stuck with the version they foisted upon us as soon as original exclusivity expired “because sodium raises BP,” and the newer one is salts with other metals.
Funny how they didn’t figure that out years ago……
I just had the odd experience of using a manufacturer’s discount card to pick up a medication for my wife. The medication is relatively expensive and seldom covered by insurance.
According to the information on the card, if you have private insurance which covers the medication, the discount card covers the co-pay, so you pay nothing. However, if your insurance doesn’t cover the medication, the discount card covers the cost, and you still pay nothing.
Our insurance didn’t cover the cost, and we didn’t pay anything for the medication.
I don’t understand how that works.
My dog is on Clonidine and the vet doesn’t carry it so I’m getting that filled at Costco. I can’t remember how it they said it was but they “used a coupon” to get it down to $10. Why isn’t that just the regular price if its basically transparent to me? I suspect the answer there is some benefit, probably when dealing with medicaire, to having a higher price listed on the drug schedule.
Get as much out of the insurance as possible
I’m mildly curious to see what happens in the next month or two, as I’m about to hit my OOP max. Never ran into that combo of scenarios before.
The one I’m thinking of has a couple months “bridge” program for uninsured/just started new job/etc, but very time limited and an even bigger hassle as they’ll only send out two weeks instead of a month supply with each shipment.
IIRC, if I had insurance and it explicitly excluded the drug, the card would cover it, but it’s been a couple years since I left that job so memory isn’t clear.
I’m on a drug that’s $3k per month and my insurance only pays a few hundred of that, even though my benefits claims it covers 100%. I then applied for a coupon card which when used covers the remaining amount.
It doesn’t make sense because it’s all made up fairytale pricing.
The few hundred my insurance is paying is probably closer to the real cost but even that isn’t trustworthy.
None of is trustworthy. Mine is $$$$, and they know damn well insurance won’t pay it all. Of course, if the FDA didn’t require a single source pharmacy to ship it with all the infrastructure that entails, it would help, but only marginally.
Nightmare of a system even for relatively healthy folks. The older I get, the angrier I get because the people who most need the help are the ones either in enough pain they can’t nav the system, or old enough they don’t know where to start
Because most people won’t go through the effort and will just pay the outrageous amount. It’s a scam created by collusion between big pharma and big insurance to rip off normal people.
Nobody is buying the med I have in mind out of pocket, in any world. Orphan drug, rare condition, and six figures a year.
Not to suggest your scenario doesn’t happen - it absolutely does. But I’m more curious about why I have to deal with a tiny company when they’re already eating a couple of grand a month on it.
Not out of pocket, but it allows them to inflate the perceived value. Like if there’s a pill that realistically should only cost $5, they can claim it costs $1000 but with a $980 “discount”. Suddenly you are paying $20 for a $5 pill.
The reason is because it supposedly creates a moral hazard. This is the logic behind pricing for all sorts of medical resources (such as co-pays and deductibles). If there is a nominal cost involved to obtain the resource, then you will be incentivised not to use more than you need. But if it is free or costs too little, then you (and others) may choose to use a lot of the resource, far more than you actually need.
For example, suppose there is a $50 co-pay (a co-pay is essentially a fee) to see the doctor, and you figure you should go once a year for a check-up. In this case, you will not schedule an excessive number of appointments because you know it is not necessary and it will cost you money each time you do. If scheduling doctor’s appointments were free or costs very little, like $1, you may instead choose to schedule two or three appointments per year, because why not? Or maybe you will go see the doctor for every minor cold or stuffy nose. It’s not like it will cost you a significant amount of money. Or so their thinking goes, anyway.
Remember, the $50 you pay isn’t all that it costs. For every $50 you pay, the insurance company is probably paying the doctor $150.
Similarly, suppose a drug costs $100, but the insurance company pays $90, and you have to pay a $10 co-pay. You buy one vial, which is good for one month. The fear is that if the insurance company pays for all $100, since the drug is now free for you, you might decide to get two vials instead, just in case. After all, they’re free for you, right? This means the insurance company has to pay $200 for two vials of the drug but the benefit to you is actually pretty small. Again, this is how insurance companies think.
Now, whether this logic is sound or not, I leave that part up to you.
You know that when you fill a prescription you can’t just say “Hey throw in a second vial, will ya?”. Usually if you go in person to a pharmacist, you will get a 1 month supply. If you use your insurances mail order pharmacy, they will typically send you a 90 day supply.
Not every drug is filled by prescription
Yes there are OTC medications but that isn’t the issue being discussed. OP is clearly discussing prescription medications. “wasted a half hour … on hold to schedule a refill”.
It’s still the same logic, with some small modifications. The co-pay makes OP consider whether they really need the drugs or whether they can go without them.
Don’t forget, I’m just explaining the thinking of a for-profit insurance company here
There is no co-pay with OTC medication. You grab it off the shelf, take it to the register and pay for it. Insurance companies loved when allergy meds went OTC because they no longer had to pay for them.
The comment you replied to is about prescription drugs
Cmon, you said 'not every drug is filled by prescription". I suggest you think about what you want to say and try again. Because right now you’re going in circles and making no sense.
Could I get more information about the discount card you speak of?
It’s not a physical card always, it behaves like a secondary insurance payor, and if a $5k drug is covered for $2.5k by insurance, the card writes down the difference to $5 (as far as the patient is concerned).
Not unlike goodrx in principle, but specific to a drug.
Okay… Whats it called though?
it’s price washing. they can talk all about how people who can’t afford this $20,000 drug can get it for $5 and make themselves look great, but the process is difficult enough that not enough people do it to cut into their bottom line.
I don’t disagree, just not sure why there’s always a cost associated with it. No one benefits from the $5 net I pay, and it’s just one more (costly) admin step.
