Patients Should Not Be Denied Medicine Because of Rebate Walls or Other Restrictions
Affordable prescription drugs are essential to ensuring that Americans can live long and healthy lives. Unfortunately, rising drug costs are ensuring that many people cannot afford their medications. And health insurance companies, pharmacy benefit managers (PBMs), and drug companies are increasingly restricting access to drugs that doctors are recommending for their patients, with terrible consequences for patient health. In a recent oped, Dr. Kenneth Thorpe criticizes this new trend of denying medicines and points out people need access to affordable prescriptions if we are to improve public health.
The United States leads the world in pharmaceutical innovation, and much of this research is funded by the National Institutes of Health and other federal programs. We have previously written on how despite taxpayer funding for this innovation, consumers often don't reap the benefits. Drug companies buy the rights to various drugs and then engage in price gouging, charging whatever they can get away with. Many Americans also have complex diseases that are hard to diagnose and require specific medicines and procedures. This makes it all the more important for patients to get the drugs and follow the procedures in order to alleviate pain and improve their health.
But health insurance companies, PBMs, and drug companies are now denying people these medicines and treatments. Researchers from Emory University looked at access to medicines for autoimmune conditions on formularies (lists of prescription drugs used by practitioners to identify drugs that offer the greatest overall value). The results? "The vast majority of private health plans and insurance options in the Medicare Part D prescription drug program impose significant to austere restrictions on access to treatments for these autoimmune conditions. In fact, fewer than 3% of plans nationwide offered what we would define as meaningful access to medicines at the pharmacy."
These restrictions mean that patients have to go through increased authorizations before they can get medicines, or pay higher out-of-pocket costs for drugs. Even worse, patients may have to go through step therapy, where "patients are forced to try insurer-preferred medication options first until they have proven to be harmful or ineffective, at which point, they can finally transition to the medications their doctors initially ordered." Step therapy is intended to reduce costs, but it is harmful to patient health, and especially harmful to patients who have serious illnesses!
Yet another problem that patients encounter is the "rebate wall." This is when health insurers, PBMs, and drug companies negotiate large rebates on specific drugs and then direct their patients to use those drugs because greater utilization means more rebate dollars going into their bank accounts. Rebate walls often stifle competition from other drugs and prevent them from coming to market, even if those drugs are less expensive or more effective. For example, Allergan used rebate walls to stifle competition from Shire's drug Xiidra, which is more effective at treating eye disease than Allergan's drug Restasis.
These restrictions on access to prescription drugs are a bad idea, and so are rebate walls. Patients should be able to get the medicines that will best help them, and neither health insurers, nor PBMs, nor drug companies should be able to stop that. The FTC should investigate and dismantle rebate walls in order to promote competition and more affordable medicines, and companies should not block medicines that patients need.