Discounts on drugs for insurers linked to higher costs for patients, especially the uninsured

Health and Medicine | Press releases | Population health | Public health

June 15, 2021

Researchers have linked drug discounts to higher costs for patients.General Manager of Wellness / Flickr

Federal agencies that regulate drug pricing and health insurance are concerned that an industry practice of using discounts to reduce drug costs for insurers has resulted in increased list prices and out-of-pocket costs for patients.

To determine whether patients with or without insurance were paying more because of discounts given to insurers, researchers led by the University of Washington looked at cost and price data for more than 400 brand-name drugs. the study found that the rebates were associated with increases in out-of-pocket expenses for patients of an average of $ 6 for those with commercial insurance, $ 13 for Medicare patients, and $ 39 for uninsured.

“We know list prices have gone up quite dramatically, as have discounts, but no one has looked at the association between discounts and out-of-pocket expenses,” said the study’s lead author. Kai yeung, assistant professor affiliated to the CHOICE Institute at the UW School of Pharmacy. “Increases in out-of-pocket expenses are associated with discounts, but discounts also help reduce premium costs. “

Therefore, said Yeung, who is also an assistant professor at the Kaiser Permanente Bernard J. Tyson School of Medicine, “The impact of the pricing mechanism on the uninsured, who are most affected, has not been sufficiently focused. “.

For the study published on June 14 in JAMA, the researchers used data on 444 brand name drugs with no generic equivalent from national datasets for healthcare costs and drug prices from 2007 to 2018, including the federal government Panel survey on medical expenditure and RSS Health, a private company that collects and analyzes data on prescription drug prices.

The researchers point out that rising costs may impact patient health, as higher costs may cause patients to take their medications less often. This, in turn, can lead to increased use of emergency rooms and hospitalizations. People in their study who did not have insurance had the worst health and those with low income were less likely to take prescribed medications when costs rose.

“Additionally,” the researchers wrote, “uninsured people were more likely to be part of racial minority groups, amplifying pre-existing disparities in access to health care.”

Accordingly, the authors suggest that future research and policy should focus on decoupling list prices from what patients pay out of pocket, “especially for the uninsured.”

“The most important thing to remember is to understand that rebates help lower the cost of prescription drugs for insurance companies and can lower premiums,” said the co-author. Anirban basu, the Stergachis family, endowed director of the CHOICE Institute and professor of health economics at the UW School of Pharmacy. “And while it’s not clear to what extent discounts reduce premiums, they certainly don’t translate into lower out-of-pocket costs for patients who use the treatment because of this coinsurance and co-payment structure. linked to the list price. “

Stacie Dusetzina, Vanderbilt University School of Medicine, Nashville, Tennessee, is also a co-author. This research was funded in part by grants from the larger portfolio of the Donaghue Foundation.


For more information, contact Yeung at [email protected] and Basu at [email protected]

Label (s): Anirban Basu • CHOICE Institute • Kai Yeung • School of Pharmacy

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