Author: Kim Keck
For 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 United States 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.
While nearly 60% of adults between the ages of 18 and 64 reported being prescribed at least one medication within the previous year, 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.
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 is disrupting 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 generics is abiraterone acetate—a generic medication used to treat prostate cancer. The medicine was chosen as a priority generic medicine based on its high list price from other manufacturers and significant patient need. It is now available to patients at a maximum retail price of $171—about $3,000 less than someone on Medicare Part D would pay for a comparable month’s supply.
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. Families shouldn’t have to make the choice between their medications and living expenses.
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.
Among the highest-cost drugs on the market today are those that treat rare and complex diseases—particularly medical benefit drugs, or those that are injected or infused by a health care professional in a clinical setting. These treatments include multi-million-dollar therapies. To improve access to these critical drugs, a group of BCBS-affiliated companies recently founded Synergie Medication Collective (Synergie). Synergie is a first-of-its-kind approach that prioritizes partnership and transparency to improve affordability, accelerate innovation and increase efficiency in managing the costs of medical benefit drugs. This new, independent organization will drive affordability by establishing a more efficient contracting model with pharmaceutical manufacturers and other industry stakeholders.
Research and Development
Gene therapy drugs are often the most promising treatments for those with rare conditions, 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.
Making health care and prescription drug costs affordable and accessible for all Americans is no small undertaking. We believe coupling good public policy with private-market solutions is the best and most efficient way to ensure an equitable health care system that puts patients first. That’s why BCBS companies are working with local and national partners to tackle the affordability crisis.
BCBSA has put forth a set of comprehensive proposals for how policymakers can reduce health care costs by approximately $767 billion over 10 years: BCBSA's Affordability Solutions for the Health of America. These proposals focus on:
- Improving competition among health care providers
- Enhancing consumer access to lower-cost prescription drugs
- Ensuring patients receive high-quality care at the right place and time
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 and prescription drugs 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.