by Peter J. Pitts, a former FDA Associate Commissioner, is president of the Center for Medicine in the Public Interest.
Roughly 125,000 Americans will die this year as a result of not taking their medications. This phenomenon — known as “medication non-adherence” – is the cause of 10 percent of all hospitalizations nationwide. It also costs our health care system up to $289 billion annually.
The reason patients don’t stick to their prescription regimen is simple: They can’t afford to. Right now, nearly 25 percent of Americans taking prescription drugs struggle to afford their medications. And due to high out-of-pocket costs, 30 percent of patients had to forgo taking their medication at some point within the last year.
This is a problem – and one that is easily preventable. Lowering patient out-of-pocket spending on prescription drugs would improve medication adherence, boost patient health outcomes, and generate billions in savings.
Thankfully, there are a number of promising reforms in Washington, DC. Some of those reforms target patient out-of-pocket spending in Medicare’s “Part D” prescription drug benefit. This program currently helps more than 40 million seniors and people with disabilities afford their prescription drugs.
Right now, there is no cap on how much Part D beneficiaries could pay out-of-pocket for their prescriptions. This is a huge problem for beneficiaries battling one or more chronic diseases — many of whom require multiple drugs to live normal, healthy lives.
More than 800,000 Part D beneficiaries spend more than $5,000 per year on prescription medications — less than 2 percent of all enrollees. This 2 percent, however, accounts for 20 percent — roughly $3 billion — of enrollees’ total out-of-pocket drug spending.
One proposal from the Trump administration would create an annual out-of-pocket maximum on prescription drugs. Once a beneficiary has paid $5,100 out-of-pocket at the pharmacy counter, he would no longer be on the hook for paying for his necessary medications for the rest of the year. For those patients who require costly, specialty drugs, those savings could add up quickly.
Another reform, also proposed by the Trump administration, would crack down on the greedy practices of pharmacy benefit managers, or PBMs. PBMs work as middlemen between drug manufacturers and insurers. They negotiate large discounts on prescription drugs — sometimes 30 percent off a drug’s initial list price.
Unfortunately, patients don’t always see these savings. And as a result, industry profits go up while patient cost sharing remains the same.
President Trump’s proposal puts a stop to this malpractice. Under his plan, it would be illegal for PBMs to keep any manufacturer rebates for themselves. These savings would instead flow directly to patients.
Patients would benefit greatly from this proposal. If the discounts negotiated by PBMs were re-directed to Part D beneficiaries at the point of sale, seniors would save up to $28 billion at the pharmacy over the next decade.
The federal government, meanwhile, could save up to $73 billion over the same time period.
The solution is simple: Americans are far more likely to take their medicines when they can afford them. And when patients follow their prescription regimen, they have better health outcomes as a result.
Capping out-of-pocket spending for Part D beneficiaries — and putting a stop to the predatory practices of PBMs — will save lives. Patients and lawmakers alike should fully support these reforms.