What Can You Do About the High Cost of Pharmaceuticals?

An even more outrageous example of pharmaceutical price hikes, however, is the out and out price gouging of Turing Pharmaceuticals after it was taken over by the famous hedge fund manager turned "Pharma Bro," Martin Shkreli. Turing bought the rights to sell the anti-parasitic medication Daraprim. It's most commonly used by AIDS patients, who are especially susceptible to these kinds of infections. When Shkreli took over the company, the cost a of a single pill of Daraprim was $13.50. Seeing a profit opportunity in a life-or-death situation, Shkreli raised the price of a single pill to $750. 

What isn't as widely publicized is that before Shkreli took over the company that makes Daraprim, he held the reins to a company that makes Thiola, a medication for people who have a rare disease called cysteinuria. Without Thiola, a slow and painful death, usually during childhood, is inevitable. Many users have to take 15 to 30 pills a day. Shkreli raised the price per pill from $1.50 to $30.

Of course, these prices are simply on par with medications for cancer, neurological conditions, and hepatitis C that cost as much as $300,000 per year.

How can this crazy system possibly work? What most people don't know about American pharmaceuticals is:

• Drugstores don't actually buy drugs. They usually are paid a fee for dispensing a drug before they even get it in stock. This is the reason that compassionate pricing at the retail level is no longer possible in most cases.
• Insurance companies don't pay the full retail prices for medications. They negotiate heavy discounts. The pharmacy also negotiates its fees with the insurance companies.
• What you pay at the cash register, however, represents the difference between what the pharmacy is required to pay for the drug and what your insurance company pays the pharmaceutical company. Only if you have no insurance at all do you pay the full price. If you are insured, but you have not met your deductible, you get the same discount that your insurance company does.

• Let your doctor known that you prefer generics. These no-brand drugs usually cost $10 or less. In many states, the pharmacy is legally required to give you the generic drug even if your doctor has written a prescription for a brand-name drug, unless the doctor also marks "no substitutions." 
• Make the most of coupons. If your insurance company requires a high co-pay, ask your pharmacy if there isn't a manufacturer's coupon to cover it. Usually the pharmacy will know about coupons for specific drugs. The coupon itself may be given to you at the doctor's office or at the pharmacy.
• Ask about patient assistance programs. Sometimes drug companies make medications available for free or at very low cost for people who meet income requirements. You may have to fill out an application and wait a week or two to get your drug, but the price may be greatly reduced.

And keep in mind that, as the American saying goes, what goes around comes around. Shortly after Shkreli announced his nearly-700 percent price increase, another manufacturer announced it would create a generic equivalent that sells for $1 a pill. Don't assume there's nothing you can do even if you have to pay one really high pharmacy bill. Where prices are outrageous, there will always be competition.