All residents win when we create an equitable place to live. For some time now, residents face barriers to quality life, such as rising rents, food, gas, and health care. For residents who depend on medication to maintain their health, price matters a great deal.
What most residents don’t know is that the rising cost of health care is caused by the policies of pharmacy benefit managers (PBMs) and health insurers who work in tandem to pocket savings meant for patients.
As the Mayor Pro Tem for the City of Carson, I meet residents everyday who struggle with their prescriptions and the costs associated with them. The burden of extra cost is on citizen’s shoulders. Many residents need to choose either paying for their treatments or paying for necessities for their children. The hardship is daunting, and some put their health last in order to take care of their loved ones first.
A recent study found that Asian, Hispanic, and Black Americans were 20% to 50% more likely to not take their blood pressure medications as prescribed due to cost. In addition, a California Health Benefits Review Program (CHRP) analysis demonstrated that if health plans shared 90% of discounts and rebates, rather than going to big companies, Californians would see $70.8 million in savings at the pharmacy counter.
How do third parties manipulate the cost of medications? Long before treatments are offered to patients, PBMs and insurers negotiate rebates and discounts on the cost of medicines. These entities pocket the cost savings that should go to vulnerable patients sometimes living with debilitating diseases.
For example, a patient walks into a pharmacy to pay for their $100 medication. At the back end, the health insurer or the PBM has already negotiated a discount of $45 for a net cost to them of $55. A patient with a 25% coinsurance pays $25 for a medicine with a $100 list price (.25×100), rather than the $13.75 (.25×55.)
These unscrupulous and unfair business practices have not gone unnoticed. Senator Steven Bradford (D-Gardena) has authored Senate Bill (SB) 873 which would lower out-of-pocket costs and give back some monetary relief to patients.
SB 873 is a solid step forward to mend a broken health care system. It would require health insurers and their PBMs to share rebates directly with patients at the pharmacy counter. The result would be cost savings for patients, medication adherence, and tax savings for the state – all positives in a health care industry that should place patients first.
Jawane Hilton is Mayor Pro Tem for the City of Carson.