Health care leadership: Three ways we’re lowering prescription drug prices

Published March 3, 2022

Author: Kim Keck

Kim KeckFor over a decade, covering Americans with health insurance has been the priority of many policymakers. Today, more than 91% have some form of health insurance. The challenge now is making that coverage affordable by addressing the underlying costs of health care. Lower health care costs lead to lower health insurance costs.

In the U.S. today, nearly 20% of health insurance premiums are driven by the cost of prescription drugs. For many, however – particularly those with rare conditions and those who are uninsured or underinsured – this annual cost can be much higher. This makes life-saving medication effectively inaccessible for millions of Americans.  

In addition, nearly 60% of adults between the ages of 18 and 64 reported being prescribed at least one medication within the previous year, and 29% of those noted they’re not taking the drugs as prescribed due to cost. Consumers deserve access to the prescription drugs they need at a price they can afford. Generic medications, for example, cost 80-85% less than the brand-name product and are foundational to driving down cost in the system. Together, Blue Cross Blue Shield Association (BCBSA) and Blue Cross Blue Shield (BCBS) companies think we can go further.

Generic Medications

That’s why the Blues launched a partnership with Civica Inc. (Civica) to bring much-needed competition to the prescription marketplace and ultimately make pharmaceuticals more affordable. Established in 2020, CivicaScript will disrupt an industry entrenched with inefficiencies and high, uncompetitive prices by bringing generic drugs directly to consumers at the lowest possible price. By directly handling the manufacturing and distribution, we’re able to eliminate the intermediaries and inflated costs that have plagued the market and forced consumers to pay artificially high prices for generic drugs. The first of these lower-cost generic prescriptions are expected to be available to consumers through retail and home delivery pharmacies later this year, creating $100 million in cost-savings annually for consumers.

Insulin

In addition to this partnership, Civica recently announced it will begin manufacturing and distributing insulin using this same transparent cost model. More than 8 million Americans rely on insulin to live but many can’t afford to take the amount they need because of the historically high and prohibitive cost of the medicine, upwards of $400 per vial. The story of 13-year-old Joshua Davis highlighted during the President’s recent State of the Union address is just one of millions of stories that underscore the need to get this right. Families shouldn’t have to make the choice between their medications and living expenses.

For Joshua and the millions of Americans like him, Civica plans to set a recommended price to the consumer of no more than $30 per vial. For the 1 in 4 diabetics who are currently rationing their insulin over affordability concerns, this amounts to a potentially life-saving change. With 4 in 10 diabetics seeing annual ER costs of over $3,000 and annual inpatient costs exceeding $22,000, per BCBS Health Index data, it’s critical to stop this damaging cycle of insulin rationing to protect patient health and advance care affordability.

Advanced Therapies

Another group of consumers facing extreme prescription costs are those with rare conditions, such as autoimmune disorders. For these patients, gene therapy drugs are often the most promising treatments, but research and development in this burgeoning field is costly. That’s why BCBSA has partnered with the Health, Medicine & Society Program of the Aspen Institute (Aspen Institute) to develop Breakthrough Cures, Blockbuster Costs: Future Directions. This framework, created by a working group of industry stakeholders and co-chaired by former U.S. Food and Drug Administration (FDA) Commissioners Scott Gottlieb and Margaret Hamburg, advocates for the modernization of current policies and payment models. Collectively, we hope to encourage the development and equitable distribution of these costly medications by creating a system that supports medical breakthroughs without breaking the bank.

Now’s the Time for Change

Making health care and prescription drug costs affordable and accessible for all Americans is no small undertaking. In our partnership with Civica, we are working to bring lower cost generics and insulin to patients. However, policymakers can take steps right now to lower drug prices by promoting generic medicines and biosimilars and eliminating manufacturer practices that distort free and fair competition. We believe that this dual approach to change – one that encompasses private and public sectors – is the best and most efficient way to ensure an equitable health care system that puts patients first.

We’re proud of the work that is already underway to lower health care costs but we know the work is far from done. By working together with a shared commitment to do better for the people we serve, we’re optimistic we can make health care more affordable for everyone.


The Blue Cross and Blue Shield Association is an association of independently owned and operated Blue Cross and Blue Shield companies. Read more about how BCBS companies are promoting sustainably affordable health care.