Author: Cody Olson -  Pharmacy Services Manager

Even with generic drugs, many patients are paying 90% more than they should.

Important Tip: Make sure that your Pharmacy Benefits Manager (PBM) has clinical programs in place to ensure that what is described in this article never happens to you or your members. The article details a study by Johns Hopkins, published in JAMA Network Open which examines prescription drug data and finds a massive form of price-gouging called spread pricing.

Spread Pricing – making generics cost more than brand-name.

This study exposes one of the elephants in the room concerning rising prescription drug costs. The elephant? Spread Pricing. Spread Pricing occurs when a PBM negotiates a drug price with a pharmacy that is much lower than the price they charge the insurance company. The PBM then pockets the difference, making massive profits. This practice is so extreme and widespread among large PBMs that patients could save 90% on their drug costs, simply by switching to a different drug that costs less but is equally effective.

The rub now is that while most consumers have been told that generics are cheaper, and many health plans require members to use generics where available, large PBMs often don’t give their clients access to their negotiated contract prices on a drug-by-drug basis, allowing them to spike generic prices to put profits ahead of the safety and well-being of the public.

Solving the problem.

Here at Scripius and Select Health we noticed this problem several years ago and have removed coverage for or placed significant restrictions on the 45 high-priced generics that were the subject of the Johns Hopkins study. Our team’s quick action has meant that our members and employer clients have avoided the unnecessarily high prescription bills associated with these generics. Our proactive strategy has saved our clients and members thousands of dollars and helped contribute to our lower-than-market cost trend, which allows us to give new clients a first-year savings guarantee.

Additionally, Scripius has staff pharmacists who actively identify high-cost, low-value drugs. Over the past seven years we have removed or placed substantial restrictions on more than 130 high-cost, low-value drugs in order to save our clients and our members money. By way of definition, a high-cost, low-value drug is one that costs way too much, especially when other medications on the market are less expensive and are just as effective at treating a person’s symptoms or curing them from a disease.

We can help.

As a nonprofit PBM, Scripius serves its clients and members, not profits. We love talking prescription drug strategies, so reach out if your health plan or business needs a fresh perspective. We are here to help implement easy solutions that save money for employer and health plan clients while producing optimal healthcare outcomes for their employees and members. Email us at MakeTheSwitch@Scripius.org.