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The Sketchy Reasons Big Pharma Can Charge Over $500 for Acne Face Cleanser

Because health care is broken.

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My son and I are at the ages where we’re both going through hormonal turmoil — puberty and perimenopause, respectively. It’s showing up on our faces as angry, inflamed pimples that neither one of us can keep under control with over-the-counter medications. I was ordering our must-have CosRX pimple patches 10 packs at a crack at one point. Finally, it was time for both of us to visit the dermatologist.

After my appointment, I went to the pharmacy to pick up my prescriptions, a cleanser and a low-dose version of doxycycline, an antibiotic that acts as an anti-inflammatory at that dose. The pharmacy tech said to me, “Um, are you okay with the price of the Plexion cleanser?” in a tone of voice that made me pretty sure I was not going to be okay with it. And I sure wasn’t: It cost $511.99 and was not covered by my insurance. The antibiotic was $683.09 — for the generic version. A few days later, I found out my son’s Epiduo Forte, a prescription gel containing a retinoid and benzoyl peroxide, had a list price of $479.98.

This is the norm and not the exception for anyone who needs acne prescription medications these days, adding (financial) insult to (our pores’) injury. “Every single patient [in our practice] is prepped to have a battle at the pharmacy, to have a potentially outrageous price charged to them,” says Dr. Rachel Nazarian, the dermatologist who treated my son. She says her practice has “spent tons of money hiring people to deal with the pharmacy and the insurance companies to get our patients their medication.”

My experience with acne treatment provides a small window of insight into how messed up the US health care system truly is. “[Drug] prices have no bearing on the actual cost of goods,” says Doug Hirsch, formerly at Yahoo and Facebook and now the co-founder of GoodRx, an online platform that allows consumers to search local pharmacies for the best prescription drug prices. As Hirsch explained it, a drug may cost $2 to make but drug manufacturers can charge $150, or really, whatever price they want, because there is no transparency and no regulation built into the system.

Here’s how it works if you have commercial insurance: A manufacturer makes a drug and sets a price on it. Your insurance company then works with a pharmacy benefits manager (PBM) like CVS Caremark or Express Scripts to negotiate between your insurance company and the drugmaker on the pricing the insurance company will pay and, ultimately, how much you will pay. PBMs also often get a “rebate” (a polite term for kickback) from the drug company, as Forbes explains. (If you’re interested in more detail about how secretive PBM/insurance company/pharmacy negotiations can be, read this eye-popping Axios article about Express Scripts.)

This results in some creative pricing strategies. So now that $2 drug can go from a retail price of $150 to $300. “[Drug manufacturers] can then say to Express Scripts, ‘Oh, yeah, we’ll give you 80 percent off, no sweat,’ and still be able to make money,” explains Hirsch. If you have a high insurance deductible, you could be paying that arbitrarily elevated list price until your insurance kicks in to cover it. And the price you pay may be completely different from what someone with another type of insurance pays for the same drug. And if someone has Medicaid, no insurance, or really high deductibles? They’re pretty much limited to over-the-counter treatments.

Drug prices, especially in dermatology, have gone up exponentially in the past decade. A 2016 study in JAMA noted that prices on 19 brand-name dermatologic drugs rose an average of 401 percent from 2009 through 2015. “We’ve seen inordinate increases in the cost of acne medications, both oral and topical,” confirms Dr. Bruce Brod, a clinical professor of dermatology at the University of Pennsylvania and a former chair of the American Academy of Dermatology’s drug pricing and transparency task force. “It’s a complicated problem, and there’s a lot of blame to go around.”

Generics, which historically were a much cheaper alternative to name brands, aren’t really a bargain anymore. As companies charge more for name-brand drugs, companies that produce generics then feel emboldened to also raise their prices, Brod explains. And there has been some consolidation of generic drug companies in recent years, further decreasing competitive pricing.

It’s led to some headline-making drug prices. Doxycycline pricing increased 1,854 percent over two years. Aczone, a topical medication once shilled by Kate Bosworth, is about $600 for a tube. The acne treatment world even had its own brief “pharma bro”-esque moment in 2016 when Novum Pharma raised the price on Aloquin, a prescription gel for acne and inflammation, to $9,561 for a 60-gram tube.

Which brings us back to my family’s ridiculously expensive acne medications. Dr. Nazarian referred me to a local non-chain pharmacy her practice uses, to fill my son’s Epiduo Forte. My receipt noted that the price was $479.98 but listed a deduction of $404.98, meaning I only ended up paying $75 out of pocket for it. I called the pharmacy for some clarity on why I was given that seemingly generous and random discount, and was told they applied a “manufacturer’s coupon.”

This is the final type of price manipulation tactic used before a pharmacy hands over a drug to you, and it’s a common one now. “It’s a way for [drug manufacturers] to have a workaround, because their drug may have been put on a higher [payment] tier, so it creates higher out-of-pocket costs for the patient,” says Brod. “That’s because the insurance companies or the pharmacy benefit managers are trying to discourage patients from getting more costly drugs.” So the drug companies cover the cost of the price “disincentive” to make sure you’re still buying their drug — and even with the steep discount, they likely still make a profit.

Nazarian became audibly frustrated while talking about this process. She says that sometimes drug companies will offer coupons until a patient meets their deductible, and then will charge the insurance full freight for the very expensive drug when the patient no longer has to pay out of pocket. It then becomes an issue for the whole health care system. “When insurance companies have to pay a lot for expensive medications, what happens? Everybody’s premium goes up!” she says. But when she prescribes generics that don’t offer coupons, in an attempt to be conscious of systemic abuses, cost often becomes prohibitive for patients.

Brod says that price can change significantly even based on dose, an experience he has a lot when trying to prescribe or change doses of isotretinoin, the generic version of Accutane. He also says PBMs have made it difficult to prescribe from a variety of newer topical retinoids that may be more effective or tolerated better than the original. Insurance companies have “limited it just to a few choices of generic tretinoin. And that’s a shame because if the cost is too much for patients, they’re not going to be able to afford to get it. Then they either end up on oral drugs or they get scarring from their acne, and they have more visits to the office and it ends up costing the system much, much more.”

“Doctors are put in a really bad position because the price of generics has gone up,” Nazarian says. “I’ve literally seen people cursing out their doctor at the pharmacy. So overall, it doesn’t help anybody to use those coupons [long term], but it helps the patient in the moment.”

Brod agrees. “The responsibility is to the patient that’s in front of you. Sometimes it’s the only tool to get access to the medication.”

Access is definitely an issue. A co-worker who was put on Finacea, a topical azelaic acid, says she got one tube for $120 and then declined to refill it because of the price. Another friend has a similar story of being prescribed a cleanser she never filled because of the price.

I ended up opting not to fill the $511.99 cleanser prescription. Of the $683.09 cost of the antibiotic I was prescribed, my insurance covered $171.53 and a coupon saved me another $125.75, even though it was a generic. So I ended up paying $385.81 for a month’s supply. I’ve done it for two months and am really considering whether the results I’ve had are worth putting up that money for a third month. I think I’ll save that money for the next medication my kid needs instead, because who knows how much it will be.

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