Drug Out of Pocket Costs to Rise
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?The rise in… drug costs will incent consumers to be more demanding? |
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The cost of prescription drugs to consumers is going to rise for most people under Obamacare.? A study by HealthPocket, a company that measures the cost of insurance plans, says consumers will pay about 34% more out of pocket under the bronze and silver plans. Most people are expected to sign up for those categories of plans. The current out of pocket average drug cost per year is $758 and a 34% increase would put that over $1000.
The study says that consumers are going to need to carefully review insurance plans to see which drugs are covered. The gold and platinum plans have higher premiums but less co-pays and out of pocket drug costs. The authors advise those patients on expensive drugs to cost out the differences.
Obamacare may help a lot of people. On the flip side there is no free ride. Americans have seen their premiums go up because someone is going to pay for all those people with pre-existing conditions and all those health subsidies for lower income families. That someone is all of us who currently have insurance. Obamacare, whatever the ethical and moral justification, is not a cost reducer or cost container.
The rise in out of pocket drug costs will incent consumers to be more demanding. That is, they will not just fill whatever the doctor prescribes unless they know the cost and the alternatives. This means more information is going to be needed by both doctor and patient to determine if the drug prescribed is cost effective. This will make it harder to market “me-toos.” Insurance companies, PBM?s, government, employers, and individual patients will be sharpening their pencils and demanding lower prices and more justification for using a branded script.
Drug companies are going to have to be better at showing added value to buying their drug. That could mean easier to use pills or devices, better follow up services, more promotional price support, less side effects, better online information, and of course greater effectiveness. It will mean longer pre-planning periods to scope out a consumer plan that is more than just producing a commercial. The idea of making consumer marketing the last thing in the process will no longer work. Instead, consumer experts need to be part of the R&D process at a fairly early stage where they can have input on product parameters.
Consumers have been asked for years to pay more out of pocket and this trend will worsen. They will be given all kinds of counter detailing stories to push generics, OTC?s, or some lifestyle changes instead of branded drugs. Drug company marketers need to be ready to show why their premium priced drug is a better alternative. That will be harder to do in the next five years. Are they ready for the new environment?
Bob Ehrlich, Chairman
DTC Perspectives, Inc.
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