Cost of Medications


I'm wondering if anyone can explain why the cost of dermatologic medications has sky-rocketed? How am I supposed to write for a branded medication when the cost is prohibitive and the coupons are not being honored or accepted by the insurance? I spend too much of my day addressing prior-auths, step edits or simply changing medications. How do I continue to support industry and the investment into R&D if most of what I'm writing is denied or generates too much additional work?

Jeff Johnson
34 months ago

2 answers


COST: prices paid do not match up logically to any in supply chain due to opaque contracts with confidentiality clauses. This middlemen profit taking drives up "pricing" on all drugs. DERM is somewhat unique in that generally most are not covered by insurance unless medically necessary, and patients are willing to pay for any DERM product the PRESCRIBER writes for typically. Lastly, fewere manufacturers in DERM also result in higher prices from the manufacturer, even generics due to less competition.
COUPONS: since most are not accepted by insurers but is a point of sale tactic to overcome what is covered by insurance so this becomes a cost to the manufacturer to offer higher coupon amounts that translate into higher prices into the market from the manufacturer.
Prior Auth: a middleman (insurer/PBM) tactic that mostly inflates their earnings through limiting access then allowing access when rebates or other incentives are provided by the manufacturer.
SUPPORT MANUFACT: due to the convoluted market conditions in the USA and misaligned incentives, it is difficult to really support the manufacturer who is not willing to support rationale change in the marketplace for drugs, devices or diagnostics.

Randy Vogenberg, PhD
34 months ago

Hi Jeff,
I have worked on preauth, non-coupon, sometimes-registry-required C-II and C-IV drugs coming into a satisfied market, often in a market with a gold standard that's gone generic. That is super-tough. In those cases, you need to rely on clinical trial data, and really focus on clinical results that are superior to the existing medication(s). In most cases this is adverse events (ie, your drug is safer, even if ony marginally so, or the gold-standard drug has AEs your drug doesn't have... eg, the gold standard might be a steroid and your drug isn't). For a dermatologic product, it's likely that you also have PROs (patient-reported outcomes), and if yours are better than those of the gold standard, that's another angle. Your pharma client is likely to have a topline clinical trial summary, and they are also likely to have a breakdown of the competitive landscape.
Another challenge is to get your drug on formulary if hospitals already have a gold-standard generic drug on formulary. This almost never works, unless you've come out with a whopping MUCH safer drug. You may also have access to the drug dossier, which can possibly give you a little more ammo, and perhaps the pharma company's payer deck,where they try to convince insurers that your drugs works out to be competitive in price over the long run--maybe fewer dosing intervals, or outpatient vs inpatient dosing or something.
Your pharma client should advise you of their drug benefits. I mean, they'll KNOW what their strengths and weaknesses are... they have SWOTted it to death in ad boards. Get those results. Sometimes their "strengths" are a real stretch, but if that's what you've got, that's what you've got.
It's really tough, I feel your pain. Good luck!

Kelleen Flaherty
34 months ago

Have some input?