Drug Makers and Insurance Companies Working Together Resulting in Higher Costs?

Drug benefit companies are negotiating sweetheart deals with pharmaceutical companies at the expense of consumers, according to a report by USA Today.  Under the complex arrangements, drug companies offer incentives for pharmacy benefit managers (drug benefit plans) to push expensive name-brand medications rather than equally effective and cheaper generic medications.  The extra costs get passed along to consumers.

This practice came to a boil this week when Anthem, the nation’s largest health insurer, filed suit against Express Scripts, a pharmacy benefit manager.

A much larger issue is the availability and efficacy of generic and alternative medications.  Martin Shkreli and Turing Pharmaceuticals prompted outrage earlier this year when the company raised the price of a critical medication of which it was the only manufacturer.  The ensuing media frenzy brought attention to the lack of options for consumers, including generic medications.  Generic drugs have generally been shown to be as safe as their name-brand counterparts, further raising questions about deals that favor dispensing the more expensive versions.