Press Release

New Data Show More Than Half of Patients’ Out-of-Pocket Spending for Brand Medicines Is Based on List Price

Cost-Sharing for Nearly One in Five Brand Prescriptions Is Based on List Price

PhRMA March 29, 2017

WASHINGTON, D.C. (March 27, 2017) —More than half of commercially-insured patients’ out-of-pocket spending for brand medicines is based on the full list price, according to a new analysis from Amundsen Consulting, a division of QuintilesIMS. The data also show cost -sharing for nearly one in five brand prescriptions is based on the list price.

Robust negotiations between biopharmaceutical companies and payers have resulted in significant rebates and discounts on medicine prices, but unlike care received at an in-network hospital or physician’s office, health plans continue to require patients with high deductibles or coinsurance to pay cost sharing based on the undiscounted list price, rather than the discounted price.

“While biopharmaceutical companies set the list prices for their medicines, it is the health plan that ultimately determines how much a patient pays out-of-pocket,” said Stephen J. Ubl, president and chief executive officer of the Pharmaceutical Research and Manufacturers of America, or PhRMA, the organization that commissioned the analysis. “Even though more than a third of the list price is rebated back to payers and the supply chain, health plans do not pass along these discounts to patients with high deductibles and coinsurance.”

Patients with high deductibles or coinsurance are less likely to take medicines as prescribed, putting them at higher risk for expensive emergency room visits, avoidable hospitalizations and poorer health outcomes. The analysis also found prescriptions subject to a deductible were more than twice as likely to be abandoned at the pharmacy.

Payers have recognized asking patients to pay cost sharing based on undiscounted list prices can be problematic. Recent statements from two of the largest pharmacy benefit managers (PBMs) acknowledged high deductibles for medicines put patients in a “very difficult position” and that passing along discounts and rebates to patients should be considered as a “best practice.”

“In many respects, our current marketplace for medicines works for patients, but we need to ensure patients receive more of the benefit of price negotiations between biopharmaceutical companies and payers,” said Ubl. “Insurance companies should share the discounts they receive with patients in the form of lower out-of-pocket costs, similar to care received at an in-network hospital or physician’s office.”

View the full analysis here.


About PhRMA
The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research companies, which are devoted to discovering and developing medicines that enable patients to live longer, healthier and more productive lives. Since 2000, PhRMA member companies have invested more than half a trillion dollars in the search for new treatments and cures, including an estimated $58.8 billion in 2015 alone.

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