Generic Drugs Should Be Cheap, but Insurers Are Charging Thousands of Dollars for Them

livemint.com:

The cancer drug Gleevec went generic in 2016 and can be bought today for as little as $55 a month. But many patients’ insurance plans are paying more than 100 times that. CVS Health and Cigna can charge $6,600 a month or more for Gleevec prescriptions, a Wall Street Journal analysis of pricing data found.

They are able to do that because they set the prices with pharmacies, which they sometimes own. Once the patent on an expensive medicine runs out, lower-priced copies go on sale, promising significant savings. But certain generic drugs—for cancer, multiple sclerosis and other complicated diseases—are still costing thousands of dollars monthly.

Across a selection of these so-called specialty generic drugs, Cigna and CVS’s prices were at least 24 times higher on average than roughly what the medicines’ manufacturers charge, the Journal found. The prices at UnitedHealth Group, which also owns a large health insurer, were 3.5 times as much, according to the analysis of data compiled by 46brooklyn Research, a nonprofit drug-pricing analytics group. “Someone in the middle of that transaction is making a lot of money, and they’re doing it at the detriment of the consumers," said Stacie Dusetzina, a health policy professor at Vanderbilt University School of Medicine who studies drug costs.