Monday, November 28, 2016
Speaking of scams . . .
While the new president and his minions are busy selling out the country for personal enrichment, the pharmaceutical companies will not be left behind.
This is a slightly complicated scam, so you might want to read the essay in NEJM by Dafny, et al. For those with short attention spans, I will try to explain. There are lots of medications available to treat most conditions. The FDA has to approve them if they are safe and effective, but they don't have to be superior to existing treatments. Comparative effectiveness research doesn't always get done, but sometimes we know that a less expensive drug works as well as a more expensive one, at least for most people. Also, of course, once marketing exclusivity expires there are often cheaper generic alternatives to brand name drugs.
So, insurance companies put drugs in different "tiers" with consumers facing higher co-pays for medications the insurers want to steer people away from, because they are more expensive or less effective, or both. This helps them make money, sure, but it also helps keep premiums down for all of us. So what do the drug companies do when they want to keep selling their more expensive brand name drugs?
They pretend to be doing you a favor by giving out coupons that cover the co-pay. But they aren't doing you any favor, they're screwing you. Let's say a drug costs the insurance company eight times as much and they give you a coupon for a 20% copay? You use the brand name drug instead of the generic, which might have a much smaller copay but with the coupon the brand name drug is free. But the cost to your insurance company is much higher. The drug company gets their ill-gotten gains and ultimately, it comes out of your wallet anyway in the form of higher premiums.
I wouldn't count on your friends in congress to do anything about this.