No More Middlemen! Reduce Drug costs and stop medication shortages!
By: Holly L. Thacker, MD • Posted on October 17, 2018 • Updated April 29, 2020
Why Is There An Increase in Medication Costs?
I recently read a heart wrenching story about a young man with type 1 diabetes who died from preventable ketoacidosis. Since the cost of life saving insulin has sky rocketed, he was parsing out his insulin until his next paycheck as he couldn’t afford his insulin and died just three days before he was to get his next paycheck.
In my three decade career in the field of medicine, I have seen the emergence of so called ‘middlemen’ who control the market. These Group Purchasing Organizations (GPO) and Pharmacy Benefit Managers (PBM), dubbed as “Programs Bilking Millions” by our Cleveland Clinic Chief Pharmacy Officer Scott Knoer, emerge due to a loop hole in a federal law that allows for legalized kickbacks to these middlemen who control the market. This has led to increased costs of medicines and medical supplies and critical drug shortages.
For years, many of my patients used CanadaDrugs.com to get the same medicine at a fraction of the cost. However, this website was shut down and was illegal to get medications from another country although a recent ruling allows for people to import medicines from Canada and many patients go on www.northdrugstore.com and www.totalcaremart.com to search for the same medication at lesser costs. Daily, my nurses and Specialized Women’s Health fellows give patients information on how to reduce cost of their medications, including looking through coupons and trying to find rebates, ironically funded by some of these middlemen! We have told our patients to ask about the ‘cash price’ for medications as they are sometimes cheaper in cash without insurance as opposed to using medication insurance that is controlled by the PBMs.
I find that many of my patients are NOT aware of these GPO and PBM contracts. These contracts are highly lucrative for the middlemen and are this highly guarded and sadly a well-kept secret.
What Can Be Done About Expensive Medications?
1. We need to REPEAL this safe harbor loophole to reduce medication costs and end deadly drug shortages.
2. You can contact your two U.S. Senators and your U.S. House Representative.
3. Call and email your elected representatives. You can google to find your representative and call or email in just a few minutes.
4. Watch the video. Share this information with your friends and family.
5. I have become involved in the group Physicians Against Drug Shortages (PADS).
This is a bi-partisan issue, one that affects everyone regardless of political stripes. Both sides of the aisle are lobbied regularly to keep these kickbacks and control of the market in place.
Repeal of GPO Kickback Safe Harbor
It is critical that the GPO Kickback Safe Harbor {42 CFR § 1001.952} gets repealed as it:
- Increases health care costs
- Causes the unprecedented drug price spikes
- Causes dangerous, even fatal shortages that began in 2006
It has been estimated that by eliminating these kickbacks in the healthcare supply chain we can save between $30 to $90 BILLION per year based upon published analyses.
If we can restore the drug marketplace so that inexpensive and available generic medications can become available to patients and rejuvenate the generic drug manufacturing industry in the U.S., it would allow for more competition, better prices and more available life-saving medications and supplies. Competition creates low prices and abundant supply. Competition lowers prices and improves quality. However, middlemen cartels inflate prices and can cause scarcity.
Be Strong. Be Healthy. Be in Charge!
-Holly L. Thacker MD
Holly L. Thacker, MD, FACP is nationally known for her leadership in women’s health. She is the founder of the Cleveland Clinic Specialized Women’s Health Fellowship and is currently the Professor and Director of the Center for Specialized Women’s Health at Cleveland Clinic and Lerner College of Medicine at Case Western Reserve University. Dr. Thacker is also the Executive Director of Speaking of Women’s Health and the author of The Cleveland Clinic Guide to Menopause. Her special interests and areas of research including menopause and related medical problems including osteoporosis, hormone therapy, breast cancer risk assessment, menstrual disorders, female sexual dysfunction and interdisciplinary women’s health.
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