Lower Drug Prices Aren’t Helping Patients

First one drug manufacturer, then another, has reported that net prices for their medications dropped last year.  And that’s good news for patients, right?  Well, it all depends.

Sanofi, a French-based drug company, announced last week that its net prices fell more than eight percent last year.  Two months prior, Johnson & Johnson reported that its net prices had dropped by nearly five percent, while Merck & Co. announced a drop of nearly two percent.  Given public and policymakers’ concerns about high drug prices, these trends signal a move in the right direction.

Except one thing: They don’t necessarily mean lower prices for patients at the pharmacy.

Net prices reflect the final amount paid by health plans or their pharmacy benefit managers.  The net price includes rebates and discounts given by the drug’s manufacturer.  Some discounts make their way to patients, but others only boost health plans’ bottom line.

Meanwhile, patients who require a specialty drug, such as a biologic, may get stuck paying out of pocket for a portion of the drug’s list, or pre-discount, price.  That means the patients’ out-of-pocket cost for their medication could actually increase, even as the health plan or pharmacy benefit manager profits from higher and higher rebates.

For patients, the scenario is deeply unfair.  And it brings renewed attention to a complex reality: Drug affordability and patient access depend not just on drug prices but also on health plan policies.  Improving one won’t addressing the other won’t help patients.

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