PhRMA ads blame insurers for drug costs

The pharmaceutical industry’s top trade group on Tuesday launched a new series of advertisements as part of its drug pricing campaign aimed at blaming cost increases on insurers and pharmacy benefit managers.

Pharmaceutical Research and Manufacturers of America’s (PhRMA) ads in print, radio, digital and social media highlight drug companies’ use of copay coupons to help people lower their deductibles.

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The “Let’s Talk About Cost” campaign says that, while drug companies set a list price, they negotiate discounts with insurers and pharmacy benefit managers. But PhRMA says the discounts are not shared with patients, who still pay a deductible or coinsurance.

The new ads ask “why are middlemen trying to keep you from reaching your deductible?”

Drug companies will often offer coupons to consumers to help them afford certain drugs. The manufacturers see a sales boost, but studies show patients unnecessarily buy higher-cost drugs when cheaper ones are available. Those costs then trickle down to insurers and help drive up costs for the entire health system.

Insurers and drug pricing advocates say that coupons wouldn’t even be necessary if the underlying cost of the drugs were lower.

The use of coupons is common with private insurance, but Medicare prohibits them, saying coupons are essentially illegal kickbacks.

In recent years, pharmacy benefit managers — the third-party administrators of prescription drug programs for employer-sponsored plans — and insurance companies have taken to using a “copay accumulator” program.

Under these programs, the coupons do not count toward a patient’s deductible or out-of-pocket maximum. So when the full amount of the coupon is used, patients are still on the hook for their whole deductible, leaving them with potentially thousands of dollars of unexpected medical costs.

“Copay accumulator programs are nothing more than an insurance scheme that leave patients financially exposed while benefiting payers’ bottom lines,” said Stephen Ubl, PhRMA president and CEO.

Politicians from both sides of the aisle have seized on the anger people feel over rising drug prices, and it is likely to play a major role in the midterm elections. But drug companies, insurers and supply-side middlemen continue to point fingers at each other for causing the problem.