About 28% of American adults say it’s difficult to afford their prescription drugs, and the U.S. spends more on drugs than any peer nation, according to KFF.
So who is responsible? According to Merith Basey, executive director of Patients for Affordable Drugs, multiple stakeholders are to blame. Patients for Affordable Drugs is a patient advocacy organization focused on lowering the cost of prescription drugs.
The primary actors are pharmaceutical companies, which abuse the “patent system to maintain monopolies and keep drug prices high,” Basey declared in a recent interview. Pharmaceutical companies incorporate practices like patent thickets, in which there are multiple patents on a single product, she said. They also use pay-for-delay deals, when brand name drugmakers pay potential generic and biosimilar competitors to prevent them from bringing their product to market.
She added that pharmaceutical companies were able to prevent Medicare from negotiating the price of drugs for more than two decades. But this is changing with the Inflation Reduction Act, which allows Medicare to negotiate directly with drug companies on some of the costliest drugs (though several companies are trying to challenge this through a series of lawsuits).
Pharmaceutical Research and Manufacturers of America (PhRMA), meanwhile, pushed back on the idea that pharmaceutical companies are to blame and pointed the finger elsewhere.
“It’s [pharmacy benefit managers] and insurers – not patents – blocking competition and driving up costs,” said Cat Hill, PhRMA spokesperson, in an email. “America’s patent system incentivizes innovation and competition, which is why more than 90% of prescriptions are filled with generics. Unfortunately, middlemen are increasingly denying coverage of low-cost generics and biosimilars because they pocket more profits off higher priced medicines.”
Basey agreed that pharmacy benefit managers (PBMs) are also to blame.
“They really only exist here in the United States and we don’t really know what goes on behind the scenes,” she said. “We need to see more transparency there because while they were set up to support patients and help lower drug prices, the evidence suggests that they are benefiting themselves and insurers, which is increasing prices for patients.”
Basey called out PBMs during a panel discussion at the AHIP 2024 conference while on stage with Adam Kautzner, president of PBM Express Scripts. She noted there are several bills in Congress targeting PBMs and that the Federal Trade Commission is investigating them.
In response to Basey’s comments, Kautzner said on the panel that Express Scripts services “over 100 million Americans today. We have retention rates in the high 90s, as do other large pharmacy benefit service organizations. We sacrificed $30 billion last year. We’re going to continue to do good work on behalf of our clients each and every day, negotiate with drug manufacturers to bring that cost down, negotiate with pharmacies to bring that cost down, and ensure that patients have affordable access to medications each and every day.” He declined to speak on pending litigation.
A recent report from Express Scripts showed that the company lowered out-of-pocket costs for members by about 1% in 2023 compared to the year prior. Members with employer-sponsored drug coverage paid $15.10 out-of-pocket for a 30-day prescription in 2023 on average.
“We use a number of different tools to achieve these savings, including through negotiations with pharmaceutical manufacturers who set the prices of their medications and leveraging our clinical expertise to help people get and stay on the medications they need,” said Jeremy Fredell, vice president of pharma strategy and contracting at Express Scripts by Evernorth, in an email.
Basey noted that one of the problems in the conversation around prescription drug costs is that pharma companies and PBMs tend to point fingers at each other.
“They’re both part of the problem and they both blame the other. And yes, the other is part of the problem, but there’s no accountability,” she told MedCity News.
She added that Congress also has a role in reducing drug costs and that several bills would address these challenges and must be advanced.
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