A new law forcing most insurance plans to begin reporting prescription drug information is set to go into effect on December 27 (2022). Most consumers are not aware of the law because it doesn’t directly affect them. Still, even as insurance plans are scrambling to comply, some consumers can save big on their prescriptions if they know enough to talk to their pharmacists.
Yahoo! News recently reported on a ‘secret’ strategy that consumers can employ to reduce the cost of their prescriptions. The strategy doesn’t work on every prescription, thus the recommendation to speak to a pharmacist. When it does work, consumers can save hundreds per month on their otherwise expensive drugs.
What does this have to do with a new reporting law? If all goes well, health plans reporting their prescription medication data should shed more light on what consumers are actually paying for their prescriptions. Putting the information out in the open could motivate pharmaceutical companies to be a bit more compassionate with their pricing. And if not, that secret strategy is still available.
Keeping Drug Prices High
Pharmaceutical companies are given a 10-year exclusive license to manufacture and sell brand name drugs. The FDA grants the decade of exclusivity in order to help manufactures recover the billions they spend getting new drugs to market. But once the 10-year period expires, other manufacturers can start producing generics.
According to the Yahoo! News report, pharmaceutical companies have a little trick of their own they employ to keep drug prices high. They combine two or more of their name brand drugs to create a new product they can sell at an even higher price. But pharmacists say that these newer, higher priced drugs may not be necessary. They say that many patients can simply take the generic forms of the combined drugs and save money doing so.
One of the examples offered was a diabetes drug known as Advandamet. Foregoing the drug in favor of taking generic Avandia and metformin accomplishes the same thing medically yet saves patients in excess of $350 every month.
Prescription Prices Continue Rising
Yahoo! News says prescription prices on more than 1,200 medications have gone up more than 31% over the last year. The average price increase has been about $250. That’s a big deal for insurance plans, employers, and the consumers who actually purchase prescription drugs, which is why brokerage general agency BenefitMall believes the new reporting law is so important.
BenefitMall says that both self-funded and traditional group insurance plans will have to begin reporting:
- Premiums and life years
- Categorized spending
- Frequently utilized brand drugs
- Most costly drugs utilized
- Medication spending increases
- Rx totals and rebates.
The point of the annual reporting is to allow the government to track prescription medication data more accurately. Hopefully, tracking will lead to legislative initiatives designed to finally combat the ever-escalating prices of prescription drugs.
Level the Playing Field
Looking at both the new reporting rule and the secret strategy to saving money on drugs reveals competing interests. Both pharmaceuticals and consumers want to maximize their financials. Pharmaceutical companies want higher profits; consumers want lower drug prices.
In theory, the new reporting rule is designed to level the playing field by forcing insurance plans to report a ton of information about their prescription plans. Here’s hoping that reporting actually accomplishes something real. In the meantime, consumers struggling to pay for brand name medications should consult with their pharmacists.
It is possible that multiple generics or even over-the-counter drugs can accomplish the same thing at a fraction of the cost. It is a possibility well worth investigating.