Reconciling with Reconciliation Over Drug Pricing | Opinion

I am taking a break from writing about the health of our democracy to write about the state of our public health—specifically the issue of the cost of prescription drugs for the elderly. One of the key provisions of the original Biden Build Back Better proposal was that Medicare would finally be authorized to negotiate directly with pharmaceutical companies for the price of prescription drugs. It was knocked out of the Biden compromise framework the president outlined to Congress a couple of weeks ago. It appears now that that provision is back in though based on a further compromise worked out among Democratic factions on Capitol Hill. Yet, what will be in or out of the final bill is still unknown as it sits in the House, where a vote may occur before Thanksgiving with a less certain path in the Senate.

Doing something about the high cost of prescription drug pricing is supported by over 80 percent of Americans. Yet, the entire fate of what is in the reconciliation legislation and how prescription drug pricing may be effected has become somewhat more questionable as a result of how Senators Joe Manchin (D-W.Va.), Kyrsten Sinema (D-Ariz.) and other moderates are reading the results of the Virginia election.

The pharmaceutical industry launched a massive advertising campaign to muster support for dropping the reform to Medicare drug pricing, but it is a top lobbying priority of such organizations as AARP. This is an issue that has garnered support in the past well beyond progressive Democrats, with many Republicans voicing outrage at the high cost of prescription drugs, due to the fact that on average Americans are paying 250 percent more for prescription drugs than consumers do in other developed countries.

We should cheer the fact that the pricing elements of Medicare Part D enacted under former President George W. Bush might finally be addressed via the pending reconciliation package. Yet, even under the announced compromise, senior citizens would have to shoulder $2,000 a year of drug costs. For those many millions of elderly who live solely on fixed Social Security incomes, even this cost of prescription drugs can be a hardship. Moreover, for many millions of lower income and middle class Americans the announced compromise on Medicare pricing for the elderly does not address the current cost of drugs for them. While there is a provision in the compromise as of now that puts an inflation cap on the price of drugs for all Americans, even if this provision survives a ruling by the Senate parliamentarian (which is in doubt), this would not bring down the current price of drugs, but instead would only limit future price increases.

Further complicating this issue, Senator Manchin has consistently raised the issue of how new federal programs will further accelerate inflation which is sure to bring about revisions to the reconciliation bill in order to bring down the extent of government spending on any new initiative. While allowing Medicare to negotiate with pharmaceutical companies will bring down the cost of drugs, subsidizing that cost for seniors above the $2,000 cap will mean vast new government subsidies.

Is there an answer for all those other Americans and even those among the elderly where $2,000 is a hardship that might address this issue, while also providing some solution that can help limit the size of massive new federal outlays to cover the cost of prescription drugs for the elderly? The answer is yes, and I am extremely surprised that this solution has gotten close to no attention in the midst of all the uproar over what to do about the high cost of drugs. There is plenty of debate about what should be in or out of the reconciliation Build Back Better legislation, and what benefits we as a nation can afford, but no recognition that the private marketplace already provides an extremely constructive path on this very issue. Americans are simply not taking advantage of a way the marketplace is already providing access to enormous discounts to most drugs.

The answer here lies with a company called GoodRx and a few smaller companies like it. GoodRx may be the best kept secret in drug pricing despite the fact that it is a company with almost a $20 billion market cap, and went public in the midst of the pandemic. How can a single company be an answer to such a major public health issue as the pricing of prescription drugs for all Americans?

Well, here's how it works. GoodRx provides a way to look up on its app most prescription drugs, and then tells the consumer what the pricing of that prescription drug is at various pharmacy locations within their local area. It provides pricing for thousands of drugs at 70,000 retail pharmacies around the country. It will generally list prices at 10 to 12 pharmacy locations in a given area from CVS and Walgreens to a pharmacy inside a local supermarket. When you look at the pricing differentials that exist from all the locations in a market, you quickly realize that the pharmacy you most regularly use may well not be the least expensive location to fill a prescription. The pricing differentials are striking. For instance, a large pharmacy chain price for a certain prescription drug might be three, five or eight times higher than the cost of going to a local supermarket prescription drug counter and filling it there.

Now, ready for the catch? Well, there is none. This is a free app, and it costs nothing to take advantage of the pricing that GoodRx makes available to any consumer, elderly or not. And the discounted pricing is available simply by presenting to a pharmacist a GoodRx coupon you get on the app right on your phone, which will be honored even if you put the prescription originally through your higher priced drug insurance plan. Having insurance that covers prescription drugs, just like having Medicare, by no means suggests that a consumer is not being greatly overcharged for a prescription drug. What you will most often find is that the best price that GoodRx displays is usually not only cheaper than the Medicare offered price but also cheaper than the price that is available through a private insurance company that already does negotiate with pharmaceutical companies for the price of drugs.

Prescription medication is pictured
Prescription medication is pictured. Phil Walter/Getty Images

A couple of examples: A commonly prescribed drug for elderly patients, Carvedilol, a beta blocker for heart conditions, is available at CVS for $33 for two months of tablets. The exact same drug and number of tablets through GoodRx is available at Walmart pharmacy counters for $4. Amlodipine, prescribed to Medicare patients for high blood pressure, is available at Walgreens for a monthly dose at about $25, and at Stop n' Shop through GoodRx at about $5. On an annual basis, that is a difference for just one medication of $240. The savings relative to what Medicare Advantage insurance plans covering drugs offer could be even more.

My family has been using GoodRx for two years and saving a lot of money. The question I've asked myself is—if the marketplace is making available a free solution for every senior citizen, or any consumer, to substantially lower their prescription drug pricing, why don't most people know about this option? While there are clearly many consumers that have taken advantage of this opportunity to lower their drug cost, having talked to a wide number of Medicare enrollees who have private Medicare Advantage plans covering their prescription drugs, it is generally not known that GoodRx pricing is available to them.

We have had this huge public policy outcry about the high cost of prescription drugs, and I have not heard a peep about how much of this issue simply can be addressed by the GoodRx solution. In the midst of the heated debate and multimillion dollar pharmaceutical ad campaign intended to defeat legislation lowering the price of drugs through Medicare, it is somewhat astounding to me that there is not far broader recognition that the private marketplace has provided a great solution for substantially lowering the cost of most drugs.

To get into the real nitty gritty of how GoodRx makes money, you have to understand how prescription drug pricing is handled for insurance companies by pharmacy benefit managers who pay GoodRx for referrals to pharmacies that they supply. To understand how pricing of prescription drugs ultimately affects your pocketbook, you need to take into account what your deductible on your insurance plan is, what your co-pay is, what reimbursement tier your drug is categorized under and whether your plan establishes a flat fee for your drug payment, or whether you pay a percentage of the retail price of the drug under your insurance plan. Given that a combination of all these factors is putting a lot of upward pressure on the prices that consumers of all ages are paying for their prescription drugs, the opportunity to take advantage of GoodRx to significantly reduce the cost of drugs has never been greater.

There is one major caveat to GoodRx and one hugely important benefit of the reconciliation bill compromise putting a cap on the total cost any Medicare recipient would have to pay for drugs in a given year. GoodRx does not provide a solution to the vexing issue of prescription drug prices, and the exorbitant cost to many consumers of life saving drugs for rare diseases, such as certain cancers and autoimmune diseases. The exorbitant price of some of these prescription drugs, which can cost patients thousands of dollars a month and wreak havoc on their economic livelihood, are not the kind of drugs that GoodRx's discount showcasing covers. Thus, neither GoodRx nor the Medicare fix address the issue of the financial havoc access to these drugs can cause on those who are not of Medicare age—like the young parents with a child whose only hope of survival is a drug regimen they don't have the means to afford. How to balance the incentives for pharmaceutical companies to develop drugs for more rare and complex diseases against the economic turmoil the pricing of those drugs can cost patients is still a public policy issue that the marketplace has not yet solved.

However, for the vast majority of drugs and the vast majority of citizens, elderly or not—and whether the Build Back Better bill ultimately passes or not, with or without prescription drug pricing addressed—we can reconcile with the reconciliation bill not addressing the cost of prescription drugs for most Americans, by creating far greater awareness of a terrific answer for most that requires no legislative answer at all.

Tom Rogers is an editor-at-large for Newsweek, the founder of CNBC and a CNBC contributor. He also established MSNBC, is the former CEO of TiVo, currently executive chair of Engine Media and is former senior counsel to a congressional committee.

The views expressed in this article are the writer's own.