by Brian L. Grant, MD

As noted in this New York Times article, more health plans are refusing to cover certain drugs unless the companies charge less for them.

Imagine a world in which food, housing, clothing, cars or other items we consume increased in price by 14% or more per year? What keeps this from happening in general is the pressure of the free market, responding to the pain that we feel every time we pull out our wallet to pay for something – motivating us to shop smartly, consider alternatives, and sometimes make a choice that is not what we would select if money were no object. How many of us work in companies where we can raise our prices by double digits annually, or see our pay increase by similar amounts year over year?

Not so in the world of specialty pharmaceuticals. We have been shielded from price by the impact of insurance payments and convinced that nothing but “the best” is good enough for us patients and that the insurance company writing the check (after our employers or government pay for the insurance), has no business exercising its economic power and “interfere” in what doctor thinks is best.

Nonsense! So long as we have abrogated payment to a third party, these third parties, be they government or commercial, have an obligation to introduce competition and create some pain and perhaps friction in the system. The days of patients paying for their own care are not likely to return. Kudos to the creative efforts to weigh cost and benefits, create formularies, and hopefully drive down some of the egregious pricing that appears to be in play.

Some drug companies choose to do end runs around co-pay requirements by giving rebates to patients, while still getting the big dollars from the carriers for the higher priced drugs. The move to escalate the fight by deleting certain drugs from formularies, forcing patients to pay the entire cost if they or their doctor refuse the alternatives, is a rational and needed escalation.