My Wall Street Journal op-ed (Don’t Blame Drug Prices on ‘Big Pharma’) has received a lot of attention.
Especially notable was a letter to the editor from American Health Insurance Plans (AHIP). It claims that “the savings that insurance providers negotiate are returned directly to consumers through lower premiums and out-of-pocket costs."
Don’t believe this misleading half-truth. It distorts the primary argument of my WSJ op-ed: Patients often pay full price for drugs that are sold to insurers at deep discounts.
Below, to show you why, I follow the dollar for an expensive, highly rebated brand-name drug used by a consumer with a high-deductible health plan. As you will see, the consumer pays more than twice the true discounted price of the drug. Meanwhile, the health plan pockets a large rebate.
That's the uncomfortable reality of the gross-to-net bubble that AHIP wants to hide. Insurers may not use rebates to lower the out-of-pocket costs for the patient whose prescription generated the rebate. And at the same time, AHIP indignantly blames "the prices drugmakers set." We all deserve better.
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