Prices set by pharma companies for their drugs are too high, and so are the retail prices for the patients (despite insurance coverage). However, the insurance companies would generally cover drugs that are affordable to the patients and they are capable of covering the costs of it. It makes sense that the patient would prefer a cheaper drug that does the same function as the expensive branded one.
What I don’t understand is that if there are groups like pharmaceutical benefit managers (PBMs) that negotiate these prices with the pharma companies — so that the drug is listed high on the formulary — why are still drug prices so high? Take insulin for example; it will only benefit a company to sell insulin at an affordable rate (compared to the crazy prices of the others). The patients would certainly prefer that drug, the drug would rank higher on the formulary and be preferred by the insurance companies, and thus the pharma company would earn from the volume it would sell. Why then don’t these pharma companies reduce their drug prices?
And if they don’t, how do the PBMs even negotiate with them? (Since buying the cheapest one doesn’t make sense either).
submitted by /u/param005raval
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Prices set by pharma companies for their drugs are too high, and so are the retail prices for the patients (despite insurance coverage). However, the insurance companies would generally cover drugs that are affordable to the patients and they are capable of covering the costs of it. It makes sense that the patient would prefer a cheaper drug that does the same function as the expensive branded one. What I don’t understand is that if there are groups like pharmaceutical benefit managers (PBMs) that negotiate these prices with the pharma companies — so that the drug is listed high on the formulary — why are still drug prices so high? Take insulin for example; it will only benefit a company to sell insulin at an affordable rate (compared to the crazy prices of the others). The patients would certainly prefer that drug, the drug would rank higher on the formulary and be preferred by the insurance companies, and thus the pharma company would earn from the volume it would sell. Why then don’t these pharma companies reduce their drug prices? And if they don’t, how do the PBMs even negotiate with them? (Since buying the cheapest one doesn’t make sense either).
submitted by /u/param005raval [link] [comments]Read Morer/HealthInsurance