where does the legal drug money go?

Images I was happy to see a health bill care bill passed this past year.  To me, it meant a change in a different direction that was sorely needed.  One bill isn't going to fix the system but at least it is a step towards a new path. 

Personally, we have been lucky in terms of our health.  We all show up for our annual check-ups and bi-yearly dentist appointments with few hiccups.  There has been conversation that we are going to change our health care policy this year to a health care savings account but have yet to pull the trigger.  Regardless, I do use our insurance card for any prescribed drugs we pick up at the pharmacy.  This week I got a small glimpse into the insanity of the health care system. 

Emily takes a particular medication for her skin.  It is prescribed by our dermatologist.  Each time Emily runs out, we repeat the process.  The doctor calls in her prescription to the pharmacy, the pharmacy calls our insurance company (who is Oxford Select) and then they decide not to give Emily the drug.  Then our doctor (her assistant) calls Oxford and goes through the explanation on why they prescribe this drug to Emily. Oxford then gives it the okay by giving the pharmacy a number which allows them to pass on the Oxford savings to us.  The prescription then costs us about $40 and lasts for roughly a month.  Lots of back and forth every single month which is a cost that is not equated into the transaction. 

Last week we went to fill the prescription and the 3-4 day process began again.  By the time Emily got out to the beach, they had not finished the monthly game of tag.  She came without her meds and not that it is life threatening but she needed them. 

I called our dermatologist and asked them to call in another prescription out here.  They did.  I figured that I would just bag the insurance out here because it is always such a hassle and her drugs have already been filled in the city.  Thinking it couldn't cost more than $80 and I'd only do it once without insurance.  I assumed that there is no way that the insurance company would agree to two separate prescriptions for the same 30 days when they make it so difficult just to get the one.  I assumed right. 

I walk into the pharmacy and ask to pick up the meds for Emily Wilson.  She pulls the bag out from the back and that was when I noticed the price.  $567.  At first I thought it must be a typo.  She looks at me and asks me if I have an insurance card.  Standing there speechless, she is just smiling and nodding because she is well aware of the difference.  I tell her I am going to come back with the card.  I am blown away by the cost.

Back with my card, they go through the process of calling in the prescription to the insurance company and the prescription is declined.  The pharmacists calls the NYC pharmacy to try and switch the insurance to here but ends up the prescription had already been picked up by someone in our house.  I told the pharmacist that I was blown away by the price.  I had no idea.  He said two things that stuck.  One is that he isn't making the money on the difference in price (someone is) and two is that this particular drug doesn't have a generic brand.

I understand the high cost of research and development on the pharmaceutical companies part and they are charging high prices to recoup that.  I understand that the insurance company makes a guess of how many people under their umbrella are going to buy the drug Emily uses every year and negotiates a price with the pharmaceutical company based on that.  Hence that is why we pay only $40 with the insurance card.  Yet do they really believe that holding back for four days and making it so difficult to get the drug is the best way to reign in their costs? 

The system is surely broke.  We spend billions of dollars on health-care from hospitals to medications.  We now have the ability to help people live longer and healthier lives yet the actual costs are so high.  The pharmacist isn't making anymore money.  The companies are making more money which in turn pays for lobbyists to keep the whole circle going. 

I certainly don't know the answer on how to fix the system but my tiny observation over the weekend in dealing with the insurance company to get Emily a skin drug which is just a benefit not life saving blew me away.  $566 for 30 pills vs $40 with my card.  All I can say is, wow. 

Comments (Archived):

  1. Mike Hart

    Some insurance companies (United Healthcare for one) are now pushing their weight around with pharmacies, in this case Walgreens. I was recently informed that I could not fill my prescription at Walgreens any longer and receive benefits. UHC owns Medco, a mail order pharmacy, and if I wanted to continue with the same prescription with benefits I could order a 90-day supply through them.

    1. Gotham Gal

      That is interesting. My guess is that we will see more companies do that.Come up with options that are less costly and a smaller financial drain onthe insurance company.

    2. Tereza

      ….And another thing!I’ve been harassed by calls to switch to mail-order from my local, independently-owned pharmacy. It really pisses me off.That’s a case in which I’d definitely rather pay a couple dollars more on the scrip in order to keep a local business in business, and have a human being (pharmacist) who is a friendly face who *knows me* to talk to when I have minor health question. Or can keep a human eye looking out for on contra-indications.I really liked when I picked up my first pre-natal vitamin, Gerry our pharmacist forever bent over and whispered, “Congratulations!”. Or when I went to pick up a painkiller cocktail for my mom when she started going through cancer treatment, the first thing Maddy said was, looking me straight in the eye, “What’s up with Mom?”. That meant a lot.When we talk local businesses, pharmacies are among the local businesses that really matter to me. And I think they have a really big target on their back and these bizarre, irrelevant pricing structures play a role in that setup.Bums me out. A total racket.

      1. Gotham Gal

        A total racket!

  2. rachel

    Totally insane and crazy. We went through the same thing today. The one positive to add is the pharmacists at our local drugstore could not be more helpful and patient and committed to getting patients their meds as quickly as humanly possible (with tremendous hurdles outside their control)…

    1. Gotham Gal

      Huge hurdles outside their control that cost serious amount of time andmoney

  3. Steven Kane

    use mail order pharmacy and/or drugstore.comyour co-payment almost certainly will go downalso, why does your MD only write month supply Rx?my mail order pharmacy (express-scripts.com, owned by blue cross) happily fills 90 day supply Rxditto drugstore.com

    1. Gotham Gal

      Good question. I believe she writes the prescription that way because theinsurance company will only fill it in 30 day intervals.

  4. ipostelnik

    Your copay is not the full price, the insurance pays the difference from your (and others) premiums. I suspect you pay way more than $500 per month in premiums. In general, given your statement of your family’s good health, your premiums subsidize costs for some of the more sick customers. That’s just how insurance works. Also, I suspect that the contracted price paid by insurance is way lower than the “cash” price you saw.The pharmacy makes very little money on filling brand-name drugs. I think they get a filling fee of less than $5 per prescription. They do get better margins on the generic drugs, but not by much. Pharmacies survive much more on selling “front of the store” stuff – OTC items, shampoos, make-up, cleaning supplies, etc… This is why you see fewer and fewer independent pharmacies, and mostly big chains like Walgreens and CVS.And just like others mentioned – ask your insurance about mail order options.

    1. Gotham Gal

      I am definitely looking into mail order options.

  5. ellen

    As I mentioned a long time ago, it is the pharmacy benefit’s management companies that want to make it as difficult as possible for you to get a brand name. Express Scripts, the pharmacy benefit’s management for Blue Cross of Massachusetts, is one of the worst. As it’s stock splits and they make huge profits and buy up smaller companies, the consumer suffers. They were sued in 5 states including New York of fraud. They were sued for 100 million in New York alone in 2004 . They settled for 23 million out of court just so they wouldn’t have to go to court against Empire Blue subscribers and Elliot Spitzer at that time.The pharmacy makes more money on the generics then on the brand name. Generics are made so cheaply there is a better markup. Anyway over $500 was not a real price. The insurance company does not pay that price like when you get billed $3500 for a cat scan and the insurance pays closer to $450.Unfortunetly, I don’t think cheap drugs made in China and India are the answer. The inspection of the factories by our fda is not very good. As more and more drugs are made in China I think we are going to see cheap and poisonous substances substituted for the original formulas, sort of like when lead paint was being used to paint Mattel toys. Originally, better paint was used but the China factories start to substitute cheap alternatives without telling the importer. Hence using melamine for a milk product. also. This is called the FADE.Health care is very BIG business and everyone wants big fat profits so your daughter gets the run around and suffers because of it. Believe me, if we see the alternate payment system that the new ceo of BC/BS wants to institute in Massachusetts, you daughter would not even be allowed to see a specialist in the first place.

    1. Gotham Gal

      The profits are insane and we all suffer. Big business is anunderstatement.Generics are fine as long as they are highly monitored. The drugs Em usesare not generic yet because the patent must not be up. So they can continueto create a fictional price for insurance companies and me.