fter months of targeting drug makers over their pricing, Senator Chuck Grassley is now probing one of the biggest insurers in the mid-Atlantic region, opening what may become another front in the battle over the cost of prescription medicines.
The lawmaker has asked CareFirst BlueCross BlueShield to explain a complicated policy that he suspects may force patients to overpay for brand-name medications that doctors have specified must be dispensed. Grassley is also concerned that some people may instead feel they have no choice but to opt for lower-cost generic drugs that, in such situations, may not be as effective.
“The issues at stake not only have a financial impact, but a medical impact,” the Iowa Republican wrote in a letter to CareFirst chief executive officer Chet Burrell on Monday. “Many patients have tested generics, but have found that their body simply does not react positively to them and, therefore, require brand name drugs.”
Specifically, Grassley is looking at something called a “brand penalty.”
Here’s the scenario: A CareFirst beneficiary is prescribed a drug by a doctor, who purposely notes that only a brand-name drug should be dispensed. But when the patient pays at the pharmacy, they are charged the difference in cost between a brand-name and corresponding generic, instead of the expected co-pay which, invariably, would be lower.
Considering the higher cost involved, Grassley wonders about the extent to which patients may try to persuade a pharmacist to call the physician to authorize that a generic be dispensed instead. But given that these are believed to be scenarios in which physicians specifically write “dispense as written” on the prescriptions, it is uncertain how often they would comply. Grassley did not cite such data.
Nonetheless, he contended that “the brand penalty can potentially cost patients thousands of dollars per year through no fault of their own,” according to his letter, in which he described brand penalties as a “concerning trend.” He also suggested that these so-called penalties may violate federal law that “appears to place emphasis on a doctor’s decision to make a drug medically necessary.”
A CareFirst spokeswoman declined to comment.
Grassley, by the way, is not confining his interest only to this one insurer, which covers Maryland, Washington, D.C., and northern Virginia. As his letter indicates, he is curious to know whether other insurers similarly impose such penalties and a source familiar with the matter suggested the senator plans to pursue the topic with other health plans as more is learned.
On that note, we asked America’s Health Insurance Plans, the trade group, for comment about branded penalties as well as the probe, and will update you with any reply.
Over the past year, Grassley has also looked into Medicaid rebates for EpiPen, launched an investigation into potential loopholes exploited by drug makers seeking lucrative orphan drug designations from the Food and Drug Administration, and introduced a bill to allow Americans to import medicines from Canada.