March 17, 2020 at 5:00 am ET
During the past year, leaders in the House and Senate, along with President Donald Trump, have sought to bring down prescription drug prices, and for good reason: Americans pay on average 50 percent more for the same drugs compared to patients in other developed countries.
But lost in the discussion of whether Medicare should be able to negotiate prices, how long a drug can stay on patent, or if we should allow drugs to be imported, is this simple fact: 9 out of 10 prescription drugs in this country are generic. And generics do not cost that much — many are literally pennies.
The quickest way to bring relief to Americans (even by Election Day) is to provide them more ways to purchase generic prescription medication at close-to wholesale prices.
For nearly a decade, I owned and operated an independent pharmacy in Moorpark, Calif., a diverse town of 35,000 people. I saw too many people — despite nearly all of them having insurance — walk away from the counter without their prescription because they couldn’t afford it.
Most of the time, however, it wasn’t for a fancy, complex or new drug. It was for a basic generic medication to treat one of the major disease states in this country like high cholesterol, high blood pressure or diabetes. These medications have been on the market for decades.
My patients in Moorpark weren’t alone. Today, more than 50 million Americans cannot afford their medications. And sadly, that number is expected to grow because so many people now stand between a patient and the pharmacist. Insurers, pharmacy benefit managers (who increasingly have trouble justifying their role) and pharmacy chains have only increased the price of generic drugs, at the cost to the patient.
Now PBMs have as much say as an insurer of which drugs to cover. This is how the system currently works: PBMs buy drugs in bulk. They then set a higher price than they initially paid. They sell the same drug at the new higher price to pharmacies and insurers. The difference becomes PBMs’ profit.
If you don’t have insurance, things are even worse for you. You pay the full, inflated price that the PBMs created.
I saw this when I owned my pharmacy. And I saw how it wasn’t just the PBMs. Insurers made it impossible to help patients, too.
Our contracts with insurance companies prohibited us from telling patients that not using their insurance and purchasing the same medication directly from the pharmacy was significantly cheaper than their co-pay or co-insurance. Take the generic version of Lipitor (Atorvastatin), which wholesale costs about $11 for three months. Using insurance with a $20 co-pay would be $60.
A $20 co-pay (if you have good insurance) may not sound like much if you live in Los Angeles, New York or D.C. But most American families don’t have just one person taking one medication. Many are on two and have another family member in the same situation. That adds up to real money for most families.
This is not to say that there isn’t a role for health insurance or prices that can help fund continued research and development for new drugs, especially for rare and deadly diseases. But right now, many efforts being discussed in Washington simply try to reform the complex system of middlemen that stand between patients and their prescriptions. The hardest reform is actually the simplest: Cut them out.
It’s what I did.
After buyout attempts and being sent cease-and-desist letters for telling patients that they could purchase a prescription cheaper by purchasing it directly from the pharmacy, I sold the independent pharmacy to find a better way. I put the money where my mouth (and heart) was to provide generic prescription drugs at nearly wholesale prices to as many Americans as possible.
Today, thousands of patients have found fairer prices for generic drugs. Hopefully that number will grow.
The journey hasn’t been easy. We still get cease-and-desist letters from chain pharmacies, angry that we are telling patients the truth about prescription prices. The sooner policymakers realize that they are negotiating with players whose only interest is keeping the system as it is, the better.
Like many challenges facing Washington, sometimes a solution comes from outside of the Beltway — and already exists.
Jessica Nouhavandi is a licensed pharmacist and co-founder of Honeybee Health, an online pharmacy that provides generic medication to patients at nearly wholesale prices.
Morning Consult welcomes op-ed submissions on policy, politics and business strategy in our coverage areas. Updated submission guidelines can be found here.