Drug Pricing Shake-Up

[Jeepers]

I meant to post this the other day but got distracted.

 

I didn't know Mark Cuban (Mavs owner and Shark Tank) had a drug company. Regardless, I thought it was an interesting read about the middle man in the drug company and how drug prices are set. At least one billionaire is concerned, or maybe just notices, about us little people. Hopefully this will be the start of a change. So far, Cuban is buying generic drugs but possibly non-generic drugs in the future too? The struggle is real folks. I know I'm paying a lot more for my meds and waiting longer for my prescriptions to be available.  

CVS is shaking up drug pricing. You can thank Mark Cuban

December 6, 2023 at 6:00 AM

 

The way drug prices are set in the United States is … kind of a mystery.

 

You might assume that when you go to the pharmacy and hand over money for your meds, the price is what the drug itself costs, minus what your insurance covers, plus some fees that keeps the pharmacy staff paid.

 

It’s a sensible idea. But you’d be mistaken. Instead, the process is super complex and largely hidden from public view.

 

The price you pay at the counter is largely determined by middlemen known as pharmacy benefit managers, or PBM’s. Although the PBM’s negotiate discounts between the pharmaceutical industry and insurers, they do so in secret, making them a frequent scapegoat for everything that’s wrong with drug pricing in America, A,K.A. the country that pays the most for prescription drugs, to the tune of about $1,200 a year on average, according to the Organization for Economic Co-operation and Development.

 

On Tuesday, however, a simpler model got a major boost that could upend the way we buy drugs. And you can thank Mark Cuban for that.

 

Here’s the deal: CVS, the largest retail pharmacy chain in the country, is ditching the opaque formulas that currently determine drug prices. Under its new model, CVS pharmacies will be reimbursed by the PBM’s based on the the cost of the drug, plus a set markup and a fee to cover operations.

 

The model bears a striking resemblance to one championed by Mark Cuban, the billionaire entrepreneur, via his online pharmacy (aptly named Mark Cuban Cost Plus Drug Company).

 

Cuban’s company buys generic drugs directly from pharmaceutical companies and sells them to patients. The pitch is that cutting out the middlemen and having a transparent pricing model leads to lower costs for consumers.

 

“I could make a fortune from this,” Cuban says on the company’s website. “But I won’t. I’ve got enough money. I’d rather f**k up the drug industry in every way possible.”

 

He appears to be all-in on the startup, which has ambitions to make its own drugs at a facility that’s now under construction in Dallas. Cuban is selling his majority stake in the NBA’s Dallas Mavericks, and he plans to leave ABC’s “Shark Tank” in 2025, fueling speculation that he may be eyeing a third-party presidential run. But Cuban told reporters last week he has no plans for a White House bid.

 

The bottom line

 

CVS is seeing the writing on the wall. Over the summer, Blue Shield of California dropped CVS Caremark as its PBM in favor of Cuban’s Cost Plus, among others. Meanwhile, Congress is weighing several bills designed to force more transparency.

 

It’s not yet clear which meds will get cheaper, or by how much, though CVS executives told CNN that more drugs should see costs go down than up.

 

“At a minimum, the goal for CVS and others should be to shine a light on the way drugs are priced, any discounts that are negotiated and overhead that comes from a variety of sources,” said Nick Fabrizio, senior lecturer in health policy at Cornell University. “Americans would be surprised at the hidden costs that are passed on to them by a variety of third parties. These extra or hidden costs make prescriptions more expensive.”

 

Cuban’s company, Fabrizio said, is “forcing pharmacies to change their model to remain competitive.”

 

CVS is shaking up drug pricing. You can thank Mark Cuban (aol.com)

[Littlesister]

Glad to see someone is stepping up and stirring the pot. Hopefully he will be very successful in this. We need our RX prices to come down. We have already done enough to make big pharm rich. It's all about the dollar and fattening their pockets. 

[Mother]

Not a lot of billionaires are like that.  If more were we wouldn’t all be so concerned about those who held the wealth.  
 

Thanks for that info, Jeepers.  👍

[Ambergris]

On a related subject, here's part of an article I thought people might find interesting:

 

Opinion: Same hospital, same injury, same child, same day: Why did one ER visit cost thousands more?
Renee Y. Hsia Mon, December 11, 2023 at 6:30 AM GMT-5·5 min read

Two emergency room visits on the same day provided a dramatic example of the arbitrariness of medical billing in the United States. The Kaiser Family Foundation recently reported that the annual cost of family health insurance jumped to nearly $24,000 this year, the greatest increase in a decade. While insurance executives and employers may cite a plethora of reasons, one of the chief culprits is lack of oversight over the Wild West of healthcare prices.

My friend encountered a dramatic example of this last year after her 4-year-old daughter had the misfortune of suffering the same injury twice in the same day. The girl’s parents were getting her ready for school one morning when, as her hand was pulled through a shirt sleeve, she experienced severe pain. They took her to the children’s emergency department down the road from their home in the Bay Area, where she was diagnosed with “nursemaid’s elbow” or, more technically, a “radial head subluxation.” Common in young children, whose ligaments are looser than adults’, the partial dislocation is straightforward to diagnose and treat. A simple maneuver of the elbow put it back in place in seconds.

After coming home from school that afternoon, my friend’s daughter was playing with her babysitter when her elbow got out of place again. They went back to the same emergency department and went through the same steps with another doctor. My friend, who is fortunate enough to have good insurance and the means to pay her share, knew the bills wouldn’t be cheap. What she wasn’t expecting was such a stark illustration of the arbitrary nature of medical billing. While the bill for the first visit was $3,561, the second was $6,056. Same child, same hospital, same insurance, same diagnosis, same procedure, same day — and yet the price was different by not just a few dollars or even a few hundred dollars, but nearly double.

How do we make sense of this? How can a patient be charged such wildly different prices for the same treatment on the same day?

Emergency room billing consists of hospital fees and professional services fees. The hospital fees include a “facility fee” that is part of every emergency room visit and coded at one of five levels. Level 1 is the simplest — someone needing a prescription, for example — while Level 5 is the most complicated, for problems such as heart attacks and strokes that require significant hospital resources. And of course there can be additional hospital fees for X-rays, medications and the like, which weren’t necessary in the case of my friend’s daughter. The professional services fees are for the emergency physician and other providers such as radiologists. In this case, there were no fees for professionals other than the emergency room doctor. But the itemized charges showed the two visits were billed completely differently. The first was charged a Level 1 facility fee and a Level 3 professional fee. And the bill tacked on additional fees, including hospital and professional charges for taking care of the patient’s injured joint. The second visit, meanwhile, was charged a Level 2 facility fee and a Level 4 professional fee, both higher than that morning. But in contrast to the earlier visit, no other charges appeared.

Why was the same injury coded as more complex and expensive to treat the second time than the first? Why did the coding and billing company decide to charge for additional services for the first visit but not the second?

I know both of the physicians who treated my daughter’s friend; they work in the same group, use the same billing and coding company, and charge the same rates. So the different doctors don’t explain the discrepancy. In my practice, even treating physicians have no access to information about how billing for our services is determined.

My friend and I contacted the hospital’s billing department repeatedly, but they proved unable to provide any rational explanation.

Unfortunately, this isn’t new. About a decade ago, I published a series of studies showing how arbitrary medical billing can be. Hospitals charged fees ranging from $10 to $10,169 for a cholesterol test; $1,529 to $182,995 for an appendicitis hospitalization without complications; and $3,296 to $37,227 for a normal vaginal birth.

 

It goes on with more opinions...

Edited December 11, 2023 by Ambergris

[Jeepers]

I had a 'mishap' yesterday and an ambulance was called. I refused to go to the hospital but they did offer to take my vitals. I requested a blood pressure check which they did. But I just now thought that they didn't ask for my insurance info.  Wonder how they will bill that one.? Charge it off to someone else? They have my personal information but that's all. 

[snapshotmiki]

I hope you are better today!  Will you follow up with your doctor?  Please update when you can.

[Littlesister]

Jeepers, if you get a bill from the ambulance services, just call them and give them the insurance info over phone. I had to do that with my DH's bill. Though they did take him to ER, they took his insurance cards with them to ER for the ER and forgot to make a copy for them. They filed the insurance and took care of it. Though since they only took your B/p and you didn't go to ER in ambulance they might not bill you. I wouldn't worry about it at this point. 

 

Ambergris, you friend could call the insurance company and let them check on that ER difference.  They usually can get it straight. Sometimes you have to just let the insurance company take care of it. 

[out_of_the_ordinary]

Jeepers, in PA, ambulance service only can bill someone if they've transported them.   Some of the ambulance services here have closed or are not doing well financially because of this.   Much of this is due to them being called to revive someone who has overdosed.  They revive the person and then the person refuses to be transported to a hospital.  So the EMTs/ambulance service cannot bill anyone.    I don't know the law in Ohio.  

[Jeepers]

Thanks Miki. I updated down in the Blue Couch forum. I was hit in a parking lot but I'm okay now. 

 

Littlesister, the last time I took an ambulance ride they billed me. My insurance is supposed to cover it. I didn't pay it so they must have? I'll bet if I would have paid it I wouldn't have been reimbursed. 

 

OOTO, I'm thinking that must be true here too. All they did was a blood pressure check. They suggested it and I thought it was a good idea too. The times I did go to the ER, the ER took my insurance info and not the ambulance crew.  

 

The last time I came back from Indiana, the toll machines were down. They told me to go on line to pay. I did go on line to pay but they either wanted payment in EZ Pass or cash. How do you pay cash online? I did try twice with the same results. They can either send me a bill or stop me the next time I use the toll road. That will be this month. They probably have a picture of my license plate. They asked for the last four numbers of my phone. Don't know how that will help them. I owe it, I'm willing to pay it. Just work with me people.

[Littlesister]

Jeepers, do you have an EZ pass?  With that you don't stop, just drive through and it reads your plates. I have one for the tunnels around here. 

[Jeepers]

No EZ Pass. Just charge cards. If they want their money they can just bill me. I know I owe it and am willing to pay. I think it's $14.90 or there abouts. I'll even give them $15.00 and let them keep the change. I'm generous that way.    

[euphrasyne]

We have an EZ pass on every vehicle.  MIL does not, and it still bills to this address.  The amount difference is equivalent to 1:5 for us verses her for very pass through the tunnel.  I do not care if they track me that way, but apparently she does and they do it anyway.  She stays broke and unable to afford basic groceries.  That is another difference between us.  I would help her, but she once lived with us and would not communicate basic things other than negative.  So now she lives with her brother and still cannot communicate anything worth knowing her son or granddaughters.    Life lesson:  you reap what you sow.  

Edited December 13, 2023 by euphrasyne

[Jeepers]

So true Euphrasyne. I'll help any one who will help themself but I won't enable them. I helped out a cousin ONCE. I loaned her money and was more than happy to do so. I would have never mentioned it to her again. Until less than a month later she bragged about her and her husband going on vacation. That didn't set well with me so I asked her to repay the money she owed me. She did with no hard feelings but it could have gone south fast. 

 

BTW, up here we don't have tunnels or local toll roads so no one has the EZ Pass. The only time I would use one would be going to and from Indiana and until recently I was only going over once every 3-4 months so having one was not on my radar.  I'll probably only be going over a few more times and will never have a use for one again...I hope!  Oh, and I do go to PA about once every five years. But that won't happen again when I move. It will be too far to drive. Other wise I would have had one too. Normally, there is no place to use one over here. 

[euphrasyne]

I hate toll roads and tunnels.  The first time I ever had a road toll was when I moved up here.   We use them often now and the roads here in VA are no better than the 'free' ones in MS.  I have no idea where the $ goes.  

[Littlesister]

Euphrasyne, you don't want to know where that money goes. It might make you mad. But it doesn't seem to be for road repair. I am over the potholes. That money is supposed to be for upkeep for the roads and such. Not all of it is going for that. 

[Jeepers]

Our roads over here are pretty good. Except in the spring when winter thaw happens and the potholes mysteriously appear. Some are pretty bad. But they are usually all repaired by March or April. I can't really complain about the roads here. They seem to always be working on them in the summer/fall though. Most of the toll road in Ohio is three lanes all the way through. Only two in Indiana. 

[Littlesister]

We have a number to call for pothole patrol when we see potholes. As far as I know that still goes on. Just call the city or whoever, give the location and they are supposed to go fix it. But that doesn't always happen. 

[Necie]

The toll road in Indiana (80/90) is foreign owned thanks to Mitch Daniels (FORMER governor). The only responsibility they have is the upkeep of THAT freeway. The rest is foreign profit. I refuse to use it. US 20 is kept up well... although full of semis, who also refuse to use Indiana 80/90.

[Jeepers]

Good to know about the Indy toll road. But I have to go from Cleveland, Ohio all the way across to the Chesterton, Indiana exit so there is no way I would go through small towns and stop lights to get to where I'm going. It would take me all day to get there. It already takes me close to 6 hours going over there. Locally, I would avoid it too though. 

[Littlesister]

Wonder how many foreign roads there are in this country. If possible, I would avoid all of them. Just wonder how we can find that info out. 

[Midnightmom]

11 hours ago, Littlesister said:

Wonder how many foreign roads there are in this country. If possible, I would avoid all of them. Just wonder how we can find that info out. 

Not quite sure how to find that out, but, ALL Interstate Highways are Federally built and maintained and do not have tolls. It is state maintained roads that seem to still be able to charge: ie - the New Jersey Turnpike, etc.

[Necie]

8 hours ago, Midnightmom said:

Not quite sure how to find that out, but, ALL Interstate Highways are Federally built and maintained and do not have tolls. It is state maintained roads that seem to still be able to charge: ie - the New Jersey Turnpike, etc.

I don’t think that’s exactly right. 80/90 is an interstate highway. I believe there are tolls only through Indiana and Ohio...?? As far as other interstates... (I69 in my area) each state that it runs through maintains it... with federal monies?? I believe if a state wanted to put a toll on it, it could be done. 
My BIL works for the county... they maintain county roads. The state maintains state roads (and interstates). Cities have their own crews. 

[Littlesister]

Wondering about I64 and 664. They are as far as I know state interstate roads. Not the best at keeping up on potholes.  Last time I was on I664 I was dodging potholes like crazy. One of the reasons I won't drive on them if I can help it. So, hoping that has improved over the last time I was on them.

[Jeepers]

I made a mistake. The Ohio toll road is only three lanes half way to Indiana.

 

They didn't seem to notice I haven't paid the toll the last time I went through. Either they don't care or else it hasn't been long enough between the times I went over. You have a month to pay and I'm not sure how long it's been since I went over. Suppose I'll find out next month. 

[Mother]

 Jeepers.  Welcome home!