HEALTH

Plenty of blame to go around on high drug prices

Jan 8, 2020, 6:12 AM | Updated: Jan 9, 2020, 12:09 pm
The rising cost of prescription drugs has some Utah families going to an "underground network" in o...
The rising cost of prescription drugs has some Utah families going to an "underground network" in order to afford their medication. (IMAGE: KSL Newsradio)
(IMAGE: KSL Newsradio)

Listen:

MURRAY, Utah — Nick DeNunzio calls himself a “Utah boy”, as he was born and raised in the state. Like most diabetics in the United States, he spends thousands of dollars a year on his medical care and to buy the two life-saving insulins Toujeo and Novalog.

“The scariest part about being a diabetic is walking into the pharmacy and [thinking] how much is this going to cost me this time? Is my coupon still good? Is the coupon not good? Is this medicine that I’ve been taking for the past two years and costing me $25 a month because of the coupon–all of a sudden now I don’t have any more coupons–and now it calls $400 a month,” DeNunzio says.

DeNunzio has gone to Canada and Mexico to fill his prescriptions before, however, local pharmacists have also helped find him coupons to reduce the cost of his prescriptions.

But what DeNunzio and other Americans pay at the pharmacy counter is only part of the story.

Medicare, one of the largest purchasers of prescriptions in the country, has to pay for certain drugs regardless of price. This, in turn, drives up the cost of these medications for everyone.

There are also companies called Pharmacy Benefit Managers (PBMs). They negotiate prices between manufacturers and pharmacies. But pharmacists have accused them of overcharging pharmacies and pocketing the difference, something the PBMs deny.

Dr. Rena Conti from Boston University says PBMs have helped keep prices for generics low. Brand name or newer drugs, however, are a different story.

“Their business model is predicated in part on buying low and selling high. They don’t necessarily face the strongest incentive to pass off those discounts and rebates that they get to patients at the pharmacy counter,” Conti says.

That’s something John Hansen from Taylorsville found out when a billing company affiliated with a PBM charged his insurance 10 times the normal rate for the medications he needed. Hansen had been hit by a drunk driver and discovered the charges as part of a court case.

The pharmacy he went to was paid about $3 for each medication while the billing company made more than $100 per prescription.

“It was a guaranteed amount that shows how certain companies will insert themselves for maximum profitability not maximum benefit,” Hansen says.

Hospitals, insurance companies, and sometimes pharmacies buy low and sell high as well.

For example, Walgreens had profits of over $4 billion in 2018, mostly from filling prescriptions. In its defense, Walgreens says 97% of prescriptions filled there, “are paid for using some form of insurance coverage or savings program.”

The biggest question for many people is why insulin prices are so high since it’s an off-patent drug with several choices.

Insulin manufacturers have been sued for colluding, as some brands have raised their prices by similar amounts several times since 2008.

Whether that’s true or not, there is another issue. Because of a law passed in 2010, the FDA has until March of this year to approve any new generics for insulin. If they do not, companies will have to reapply to get their medication approved. And it usually takes about a decade for a new drug–even one that’s a low cost, life-saving alternative–to legally come to market.

In 2019 and 2020, the FDA approved a pair of generic Insulins. But they are manufactured by Novo Nordisk and Eli Lilly, some of the companies accused of colluding on prices. Some patients and pharmacies have also been reporting shortages or been taking the companies to task for not promoting the generic forms, something the companies deny.

Today’s Top Stories

Health

WASHINGTON, DC - JANUARY 19:  The U.S. Capitol is shown as a looming government shutdown threatens ...
Manu Raju and Phil Mattingly, CNN

Defense bill likely to include end to military Covid vaccine mandate, source says

A massive bill setting defense policy is likely to end the military Covid vaccine mandate, a source familiar with the negotiations tells CNN.
2 days ago
A burrow is among the items an adopted desert tortoise needs. Photo by Utah Division of Wildlife Re...
Mia Alberti, Lianne Kolirin and Tara Subramaniam, CNN

Jonathan the tortoise, world’s oldest land animal, celebrates his 190th birthday

The South Atlantic island of St. Helena is celebrating the birthday of the world's oldest living land animal -- a Seychelles giant tortoise called Jonathan, who is turning 190.
4 days ago
The US Food and Drug Administration said it is closely working with drug manufacturers to assess a ...
Carma Hassan, CNN

Children’s painkillers in high demand as respiratory illnesses rise

The US Food and Drug Administration said it is closely working with drug manufacturers to assess the situation.
4 days ago
President John F. Kennedy signs the Mental Retardation Facilities and Community Mental Health Cente...
Curt Gresseth

Is forcing the homeless into treatment the answer?

NYC Mayor Eric Adams has announced a program that involuntarily treats homeless people in "psychiatric crisis." A BYU psychologist weighs the New York approach against the ethics of patient autonomy.
5 days ago
Super agers have been identified by researchers as men and women over age 80 that have the cognitiv...
Curt Gresseth

SuperAgers — who are they, are you one, and can you become one?

SuperAgers are men and women older than 80 with the mental faculties of people decades younger.
6 days ago
Gov. Cox mental health...
Mark Jackson

Utah’s Coordinated Action Plan for Water released this week

Utah’s Coordinated Action Plan for Water was released Wednesday by Gov. Spencer Cox and state agencies.
6 days ago

Sponsored Articles

Spicy Homemade Loaded Taters Tots...
Macey's

5 game day snacks for the whole family (with recipes!)

Try these game day snacks to make watching football at home with your family feel like a special occasion. 
Happy joyful smiling casual satisfied woman learning and communicates in sign language online using...
Sorenson

The best tools for Deaf and hard-of-hearing workplace success

Here are some of the best resources to make your workplace work better for Deaf and hard-of-hearing employees.
Team supporters celebrating at a tailgate party...
Macey's

8 Delicious Tailgate Foods That Require Zero Prep Work

In a hurry? These 8 tailgate foods take zero prep work, so you can fuel up and get back to what matters most: getting hyped for your favorite
christmas decorations candles in glass jars with fir on a old wooden table...
Western Nut Company

12 Mason Jar Gift Ideas for the 12 Days of Christmas [with recipes!]

There are so many clever mason jar gift ideas to give something thoughtful to your neighbors or friends. Read our 12 ideas to make your own!
wide shot of Bear Lake with a person on a stand up paddle board...

Pack your bags! Extended stays at Bear Lake await you

Work from here! Read our tips to prepare for your extended stay, whether at Bear Lake or somewhere else nearby.
young boy with hearing aid...
Sorenson

Accommodations for students who are deaf and hard of hearing

These different types of accommodations for students who are deaf and hard of hearing can help them succeed in school.
Plenty of blame to go around on high drug prices