Every day at America’s community pharmacies, patients pay a bigger and bigger share of the cost for their prescription medications. But two new studies have revealed one of the puzzling reasons why — and how market-based solutions could help ease the strain on America’s patients.

Stephen Ubl, PhRMA

Like any complex U.S. industry, the biopharmaceutical sector relies on a strong supply chain to bring medicines from the laboratory to America’s patients. And while there are many factors that go into how that medicine is priced, it is widely known that vigorous negotiations between biopharmaceutical companies and health insurance companies often result in big rebates on that list price.

In fact, according to a study from the Berkeley Research Group, more than a third of the list price for brand medicines is rebated back to the government, payers and other stakeholders in the supply chain. Private payers are reportedly getting rebates as high as 55% for medicines to treat diabetes, asthma, high cholesterol, hepatitis C and other conditions.

So where do all the savings go? Unlike care received at an in-network hospital or physician’s office, those negotiated discounts and rebates for medicines aren’t shared with patients with high deductibles or co-insurance.

There’s more. An analysis from Amundsen Consulting found that more than 50% of commercially insured patients’ out-of-pocket spending for brand medicines is based on the full list price — not the lower, discounted price the insurer paid. The research also showed that this kind of cost sharing exists for one in every five brand prescriptions filled ­commercially.

This can’t continue. We need to make sure that when patients step into a community pharmacy they receive more of the benefit from price negotiations between biopharmaceutical companies and payers. When they do get access to those discounted prices at the point of sale, it could dramatically lower their out-of-pocket costs.

You need only look to America’s 29 million diabetes patients to see why this needs to change. If you did, you’d find that a person in a high-deductible plan who pays $350 for his or her son’s monthly insulin — an amount based on the list price of the medicine — may be paying hundreds, or even thousands, of dollars more every year than his or her insurer, who is pocketing the difference.

As community pharmacists know, one of the most important — and confounding — aspects of care is trying to ensure patients take the medicines they are prescribed, as prescribed. That’s what makes our work untangling this supply chain issue more urgent, because we know that patients with high deductibles or co-insurance are less likely to take medicines as prescribed.

In fact, Amundsen Consulting found that brand prescriptions subject to a deductible were more than twice as likely to be abandoned at the pharmacy. As a critical front line in health care retail, you know that this avoidable tendency puts your customers at greater risk for expensive emergency room visits, avoidable hospitalizations and worse health outcomes — including premature death.

We need to do better, and we can start by implementing market-based solutions that better protect American patients’ health — and their pocketbook.

For one, health insurance companies should share more of the discounts they negotiate with patients at the point of sale. And our reimbursement system needs to evolve to better recognize and reward value. Biopharmaceutical companies are partnering with health insurers and pharmacy benefit managers to find new ways to pay for medicines that better reward clinical results and make medicines more affordable for patients.

America’s biopharmaceutical companies are constantly looking for ways to get the right medicines to the right patients at the right time. This new research shows that the savings are there. Now it’s time to share the savings with the patients who need them.

Stephen Ubl is president and chief executive officer of the Pharmaceutical Research and Manufacturers of America (PhRMA).