Fox Carolina Investigates: Why prescription drugs prices are so high

GREENVILLE, S.C. (FOX Carolina) - Drug prices are not cheap and middlemen could make patients pay more.

“It’s crazy how much extra they charge you for the drugs,” said patient Cole Chapman. “I mean it is just ridiculous”

“We are overpaying, sometimes two, or three times the price, why? Medication should be affordable for all of us,” Ardane Medical Dr. Sandra Rosado said.

“PBMs should get the Nobel prize for greed,” South Carolina Pharmacy Association CEO, Brian Clark said. “PBMs are nothing but pharmacy benefit manipulators.”

Pharmacy benefit managers are the middlemen in the prescription drug market. The Federal Trade Commission reports the revenue of four PBMs exceeds $1 trillion and they control 86% of the market. Meanwhile, the price patients pay for drugs has increased nearly 300% in the last 30 years, according to Peterson-KFF Health System Tracker.

Cole Chapman has been dealing with high drug prices for several years. He has an irregular heartbeat and has to take certain medications.

“I have five medications total,” Chapman said. “I am sure there are people who are out there taking more.”

These medications keep him alive. In the past, he says he was paying about $300 a month out of pocket through his insurance plan. But he was able to cut his payments in half when he started coming to Ardane Medical in Seneca, SC.

“There are no middlemen here, if you need medication I go look for it at the pharmacy,” Dr. Sandra Rosado said.

Dr. Rosado runs a medical practice that doesn’t take insurance. She can often find cheaper medication prices because she gets the generic version. Chapman was surprised it was less.

“When I started here I was paying out of pocket and I couldn’t believe that,” Chapman said. “When they said it, I thought, ain’t no way you can do that.”

April Cope started coming here for the same reason. She has osteoporosis and needs an infusion once a year. Dr. Rosado showed us the generic version costs $120 out of pocket, whereas the brand name costs $1300.

“That is such a huge difference,” April Cope said.

But the less expensive generic isn’t always offered. According to the FTC, middlemen in the system, known as pharmacy benefit managers, are forcing patients to buy the brand name instead of the generic.

Fox Carolina received a document from a pharmacist showing this in action. It says the “generic will not be covered” and generic claims should receive a “reject.”

“They’re not controlling the cost, they’re forcing the patient to pay more when a generic is available,” Brian Clark said.

Clark says rebate incentives are to blame. Let’s say the generic of a drug is $60 and the brand name is $200. Clark says a drug manufacturer may offer an exclusive rebate deal with a pharmacy benefit manager, who helps negotiate prices. This PBM can get $50 off if their insurance company covers this brand-name drug. In turn, they don’t cover the generic and then they tell the pharmacy to only offer the brand-name drug.

“It is not very transparent as to where those dollars go, you would hope those dollars help lower the co-pay for the patient, but is not what happens,” Clark said. “Often times the PBMs keep those dollars.”

These rebates don’t just happen with generic drugs. A report published by the National Institute of Medicine found that as PBMs demand larger rebates or discounts, manufacturers offset these reductions by raising the list price for their drugs.

“When your car breaks you pay to get it fixed, so I don’t have a problem paying for healthcare when you need it,” Cope said. “But when the healthcare costs are skyrocketing, it’s frustrating. Nobody can pay those costs on an ongoing basis.”

PBM’s can also steer patients to their affiliated pharmacies, instead of the pharmacy with the lowest price. In one case the FTC reports it cost a woman $2,000 more for her breast cancer treatment because the pharmacy where it was cheaper was not covered.

“Patients are paying more because of these formulary decisions by the PBMs,” Clark said.

“In other countries in the world, they say our price for medication is so much more and why?” Coleman said. “Because we have to pay more people to do the job?”

Fox Carolina reached out to the four biggest PBMs. Two responded.

Express Scripts:

“Express Scripts believes that independent pharmacies play a vital role in providing essential health care in local communities and are committed to supporting that role. Express Scripts has increased reimbursement to rural pharmacies and has launched several initiatives to deepen our relationships with independent pharmacies that seek to allow pharmacist to practice at the top of their license by expanding access to vaccines, and in states where legally permissible, perform additional clinical services such as providing medication administration services for injectable medications that treat mental health and substance use disorders:

• Between 2019 and June 2024, the number of independent pharmacies in Express Scripts’ commercial network of 64,000 pharmacies increased by 20%, including an increase of 12% in South Carolina - and overall, Express Scripts contracts with thousands of independent pharmacies.
• In the spring of 2023, Express Scripts launched the IndependentRx Initiative, which provides increased reimbursement to more than 700 rural pharmacies in the United States.”

CVS Caremark:

“Drug manufacturers alone set list prices. Employers want us to seek the lowest net cost in our negotiations with manufacturers and pharmacies, and that’s what we do. Multiple current FTC commissioners have labeled the interim report and process as flawed.”