Drug company methods often disguise price

Early in December David, a reader who lives in the foothills west of Denver, sent me an email. “It’s scary when you go into any health care facility and don’t know whether to bring your checkbook, loan application papers, or bankruptcy processing papers,” he said. “Nobody seems to care or be concerned about it.” He wanted to know why we aren’t told all costs up front so we can make informed decisions.

David had a point. When we go in for a procedure, most of the time we don’t know the total price or even what we will pay after insurance covers its share.

I am all for price transparency that sheds light on our high-cost health system, and I want it to spark a serious conversation about why we have the most expensive care in the world and what we as a country can do about it. But don’t count on turning patients into consumers who can force prices down and magically give us cheaper healthcare. That’s a lot harder than something like boycotting the local Ford dealer in favor of the Chevy dealer who offers rock- bottom prices.

The fundamental relationship between patients and their doctors is different from the relationship between buyers and sellers of cars and other consumer goods. Patients have to trust their healthcare providers, since it’s hard to judge the proposed care or treatments unless you have a medical degree. For most other products, the admonition “buyer beware” is at the heart of the relationship. Furthermore, shoppers generally have an idea of what makes a good car and can more easily judge if the seller is giving them one.

If you buy a bad car, you live with it for a while and try not to make the same mistake again. If you pick the wrong imaging center or the wrong doctor, you could die or suffer serious harm. The stakes simply are higher.

In the past couple of weeks I came across another barrier to price shopping — marketing activities by pharmaceutical companies. Those activities are designed to help patients pay for their expensive prescriptions while at the same time keeping the underlying price of the drugs high.

An e-book I found on the website of “Medical Marketing & Media,” a trade publication, advises healthcare sellers on marketing their products. This book, “Pathway to Specialty Access,” offers instructions to drug companies for using coupon programs to sell more drugs — particularly the new, very costly specialty drugs — and how to stop customers from not filling their prescriptions because they are too expensive. That’s apparently a big problem in the drug business.

Those coupons available online or from doctors and pharmacies offer discounts on medicines, especially those with high price tags like the new specialty drugs coming onto the market. One example notes that a patient’s out-of-pocket costs for multiple sclerosis or rheumatoid arthritis drugs could be as little as $5 a prescription thanks to coupons and discounts. It could be hundreds of dollars without them.

Other coupons take the form of e-vouchers. A pharmacist sends a prescription to a vendor. The drug makers and the vendors establish how much they will cover of the costs insurance requires the patient to pay. While the process is going on, the patient “doesn’t know what he will pay,” says Andrew Pollpeter, a senior principal with The Amundsen Group, a pharmaceutical consulting firm.

What’s wrong with this? After all, the patient gets cheap medicine; the drug company gets more sales. The high drug prices, however, are still with us.

“Coupons shield consumers from the true cost of medications, and (consumers) are less likely to make decisions based on the true cost of the drug,” says Troy Filipek, an actuary with the consulting firm Milliman.

And that, of course, means all the advice about price shopping goes out the window. At least when it comes to medicines, lots of middlemen are involved in what drugs you get and how much they cost. There’s nothing transparent about drug pricing, and there’s not likely to be.

Trudy Lieberman, a journalist for more than 40 years, is a contributing editor to the Columbia Journalism Review, where she blogs about health care and retirement at cjr.org. She can be reached at trudy.lieberman@gmail.com. This column was distributed by The Rural Health News Service. Send comments to dr-editorial@ greenfieldreporter.com.