Dr.Jeff Kane: If you already teach quantum theory, test yourself on drug pricing | Lifestyles

“Yes. Your drug insurance still has $400 of deductible left. And there’s a copay of $60 because this is a Tier Four medication.”

I politely turned it down, I was no chump; I’ll shop around, I told myself. I called our local Drugs R Us, crept through its interminable algorithm (needless to say, its “…options have changed”), and finally reached a human.

“It depends on your insurance. If you bring your card in, we can determine your benefits.”

“Well, can you tell me the general range of cost? My local pharmacy asked $210.”

“Ha. You got off easy. I’ve seen it between $4.50 and $371. And you usually do better with a discount coupon, but sometimes that raises the price.”

“I’d heard there’s a law that requires pharmacies to post the prices of its most popular drugs.”

“There was, but it vanished a few years ago.”

It’s easier to understand the brain’s wiring than how drugs are priced. At first I thought that was my own deficiency, but the process is more complex than even medical professionals can grok. I concluded that I’m either ineducable–in which case I’d do well to stop questioning–or drug pricing is an intentional shell game inside a black box.

Drug pricing is devised by middle-people called “pharmacy benefit managers” who employ mesmerizing concepts like “spread pricing,” “preferred formulary products,” “tiered formularies,” and “clawbacks.” In the PBM world, price negotiations are generally considered trade secrets. Pharmacies and insurance companies are often prohibited by PBMs from discussing costs and rebates.

In short, today’s drug economics–surprise!–benefits the people who make the rules. They’re no fools, My inner cynic tells me that new, more equitable rules will only invite them to find lucrative loopholes. But fortunately, there is a solution: end greed. I’ll get a specialist on it tomorrow.