For years, there has been pressure for pricing reform and increased price transparency by legislators, patient advocacy groups, patients, and even pharmaceutical manufacturers. Legislators have taken a stand with the Inflation Reduction Act of 2022 (IRA), and there are several other high-profile initiatives that have launched over the last 2 years. The goal is to save patients money, but do any of the latest reforms or innovative initiatives really help patients?
The IRA has many components, but one of the main goals of the legislation is to reduce drug costs for US patients. Some of the provisions include the ability for the government to “negotiate prices on the costliest prescription drugs, cap costs at $2,000 per year for people on Medicare, limit the monthly cost of insulin to $35 for seniors, and extend subsidies for people buying their own health coverage through the Affordable Care Act.”1 The effects of the IRA will be felt starting in 2025 with the Medicare cost cap and potentially in 2026 with Medicare negotiating drug prices.1 Medicare patients will be the first ones to see the benefits of these changes, but commercially insured patients could also see some savings down the road.1 But it will take time to see if the intent behind the legislation becomes a reality.
Another innovative initiative is Mark Cuban’s Cost Plus Drug Company, which launched in January of 2022.2 The company provides drugs directly to patients “at the lowest possible price”3 and boasts “no middlemen, no price games, [and] huge drug savings.”3 The company is very transparent with how they price the drugs they offer. “Every product we sell is priced exactly the same way: our cost plus 15%, plus the pharmacy fee, if any.”3 Cost Plus added 1,000 drugs to its list in December, bringing the total number of drugs to 2,200,4 but many of these drugs are generics that already garner lower prices than newer, branded options. Cuban has shaken the generics market up significantly, putting pressure on pharmacy benefit managers to make similar price transparency changes.4 It appears that Cost Plus saves its patients money on the generic drugs they offer, but that scope is limited.
CVS recently announced a new model for how their pharmacies get paid. The model, CostVantage, is designed to bring transparency to pharmacy payment by pharmacy benefit managers and payers and “align pharmacy reimbursement to the quality of its services.”5 In addition to CostVantage, CVS has launched TrueCost for its pharmacy benefit manager customers.5 TrueCost will offer pricing that is more in line with the actual cost of the drug as well as transparency of administrative fees.5 Because of its size, “CVS Health promises to scale up the approach to a much larger extent”5 than what Cuban can do with Cost Plus. Time will tell if these changes really do save patients money.
On the manufacturer side, Eli Lilly rolled out an innovative digital healthcare experience for patients with diabetes, obesity, and migraines called LillyDirect.6 “LillyDirect offers disease management resources, including access to independent healthcare providers, tailored support, and direct home delivery of select Lilly medicines through third-party pharmacy dispensing services.”6 Much of the program is aimed at helping patients find healthcare providers to get diagnosed appropriately and home delivery of some Lilly drugs for patient convenience, but there is a part of the program focused on saving patients money. If patients use LillyDirect, financial programs offered by Lilly will automatically be applied to their prescription.6That offering will eliminate the time patients spend on opting into financial assistance programs, but the scope is limited to a few disease areas.
If nothing else, these initiatives are steps toward increasing price transparency throughout the healthcare system and helping patients afford their medications.
1. Inflation Reduction Act Becomes Law: How It Will Affect Your Health Care (nbcnews.com)
2. Mark Cuban on Starting New Online Pharmacy Cost Plus Drugs | TIME
3. Homepage of Mark Cuban Cost Plus Drugs
4. Cost Plus Drug Company Sparks Moves to Change How Rx Drugs Are Priced (forbes.com)
5. CVS Health Takes a Page Out of Mark Cuban’s Drug-Pricing Playbook (mmm-online.com)
6. Lilly Launches End-to-End Digital Healthcare Experience Through LillyDirect™ (prnewswire.com)