OK. One last column on the whole “why is my medicine so expensive” thing, and then I am done. Promise.
It has come to my attention that one of my Healio | OSN pieces was “borrowed” to support a manufacturer’s cash-pay strategy for its dry eye disease (DED) medication. I am flattered, of course, and also grateful for the opportunity this provides to shed some light on the whole “opt out” of insurance thing when it comes to prescription medications.
In a nutshell, a patient who wishes to fill a prescription has the option of opting out of insurance coverage for that treatment and paying cash. My BFF Mark Cuban and his Cost Plus Drugs company is built on this concept. It is the purest version possible: no coupons, no prior authorization (PA), just cash (note: all drugs from this source are generics). This is true for both commercial insurance for people younger than 65 years and for those whose medicines are covered by traditional Medicare (Part D). Note that Medicare Advantage programs (Part C) can do pretty much whatever they want with pretty much everything, so all that follows has a great big caveat: If your patient has Medicare Advantage, they cannot avoid reading the fine print.
Let’s start with Medicare patients. Believe it or not, in this case, Medicare is actually more straightforward. You write a prescription, presumably checking your patient’s insurance to determine coverage and cost. Both you and your patient discover that the cost is high. Perhaps you decide to attempt a PA, perhaps not. It does not matter for Part D. With or without “smoothing,” your patient cannot stomach the cost and opts to forgo insurance coverage and pay cash. You reroute the prescription through a specialty pharmacy, which contacts your patient, accepts the advertised payment and mails the drug to the patient.
Like everything else insurance touches, there are catches. There ain’t no such thing as a free lunch, as Heinlein famously wrote in The Moon is a Harsh Mistress. If a patient opts out in favor of paying cash in traditional Part D, they are doing so for the entire remainder of the coverage year (typically January through December); they cannot opt in and out over the year. Naturally, Medicare Advantage is trickier. Some plans treat the opt-out decision as a forever event; opt out once and you have forever forsworn insurance coverage for that medicine. Again, patients covered by Advantage plans must read the fine print.
A bigger catch applies to all Medicare patients: No payments made under an opt-out decision count toward the annual deductible. I recently shared a bunch of information on the unexpected consequences of the Inflation Reduction Act. Yes, there is a $2,000 “hard cap” on annual medication expenses, but only the expenses actually reimbursed by the insurance company count toward that $2,000. This should be disclosed to the patient in bold print by the manufacturer offering the plan.
If your patient has chosen to use smoothing to spread out their payments for drugs, they cannot add cash-pay drugs to the mix. If you have the misfortune to write a patient’s first prescription of the year, you have my sympathy. As I suggested in my smoothing column, simply make them aware of smoothing and the opt-out option, and let them make the call. No doctor has enough time to go into detail while they have a patient in the chair.
How about commercial plans that cover people younger than 65 years of age? Believe it or not, this is more complex than Medicare. High prices exist because they allow the manufacturer to give the pharmacy benefit manager (PBM) or insurance company larger rebates and to push a higher percentage of the cost to the patient. PBMs and insurance companies are being disingenuous when they blame the manufacturers for these high prices; without the promise of large rebates, manufacturers cannot find a place for their drugs on the covered formularies.
Commercial patients typically prefer to use their insurance to pay for their medications. The cost of their drugs is applied to their deductible, and going through a PA allows them access to coupons and other discounts. Behind the scenes, manufacturers that do manage to get their drugs on an insurance company or PBM’s formulary want every patient to go through a PA. They offer a bigger discount and a more generous coupon program to those patients who have gone through a PA than those who do not. Why? PAs demonstrate demand for a medication and provide leverage for the manufacturer when it comes time to negotiate formulary tier levels and coverage, and consequently revenue.
Let me frame this in a more personal way for all of you DED doctors out there: Manufacturers and insurance/PBMs are both willfully and purposefully forcing you and your staff to endure the misery of the PA process for their benefit. Sadly, all your patient understands is how much the medicine costs. They, too, want you to suffer through the PA when it looks like it will result in a lower cost for them. With full disclosure as noted above, in those few cases in which an opt out is offered, it can make sense.
Only immunomodulators have opt-out options in DED. What follows is SkyVision Centers math, off-label usage and opinions based on my personal experiences in the clinic. The most straightforward way to get your patient on an immunomodulator at a decent price is to prescribe cyclosporine 0.05% to Cost Plus Drugs through your electronic medical record. Sadly, it carries only the “nonauthorized” generic made by Viatris. In the wild, this version is significantly inferior to every other version of cyclosporine. In our very busy DED clinic, patients forced to switch to this are failing nearly 75% of the time. It is all about the vehicle. It is not a viable option. Note to my BFF Mark: Call up AbbVie and make a deal for the authorized generic.
Which leaves Sun (Cequa) and Harrow (Vevye). Cequa cyclosporine 0.09% is delivered in a micelle-encapsulated form, whereas Vevye is cyclosporine 0.1% dissolved in perfluorobutylpentane. Both are highly effective and well tolerated. Since late 2020, Sun has utilized a single specialty pharmacy to offer an opt-out/cash option to Medicare patients and a straight-up cash coupon for commercial coverage for $89 per month. We tell our patients to use each vial for three doses in both eyes over 24 hours for an effective per month cost of approximately $30 (they will still have drops remaining in the vial when they pitch it). Patients, doctors and staff have found the program to be consistently effective.
On the surface, the use of my blog post by Harrow and its executive team to promote its opt-out/cash program seems reasonable enough. However, careful reading of my post and the column linked shows that my concerns are as much about the burden placed on eye doctors and their staff by manufacturers and insurance/PBMs. In 2024, Vevye opt-out/cash-only prescriptions at $79 per month went to thousands of regular pharmacies that routinely rejected the program, generating countless calls from unhappy patients that practices had to manage.
Still, around the country, many practices found the Harrow program effective enough, and the price was certainly great: $79 for 90 drops and potentially 45 days of treatment works out to $53 per month. All was going fine until January when the program was shuttered, at least for Medicare, in favor of standard insurance coverage at $500 per month in my market; 45 days at $500 works out to $334 per month. Ouch. I used this exact example in the blog post that was quoted by Harrow. Every practice with patients on Vevye faced the burden of changing prescriptions to another drug, a clear example of what my blog post and column are trying to help people avoid.
In late March, Harrow rolled out a new opt-out cash-pay program for both Medicare and commercial patients on Vevye, this time through a single specialty pharmacy, for $59 per month. Each bottle of Vevye contains 90 drops, 45 days of twice-daily treatment, which works out to an effective monthly cost of $40 per month, assuming patients never miss or spill a drop. Using a single pharmacy dramatically improved both patient and office satisfaction.
Which leaves us with four effective immunomodulators from which to choose: two that have highly variable traditional insurance coverage that counts toward a deductible, and two that are offered with similar cash-pay options that do not. As an eye doctor, you can stand on your virtue and prescribe only the drug you feel is the most effective option or stand behind your patient and make the most economical choice; it is your call.
My call? With Cequa at $30 (effective) per month and Vevye at $40, it is great that we have two cash-pay options to choose from if there are side effects from one or the other. It was awfully gracious of Harrow to link my blog post on the vicissitudes of government policy and in so doing acknowledging the strategic errors I pointed out with its original $79 opt out and its short-lived flirtation with traditional Medicare coverage. We can hope that this presages a new commitment to relieving patient and prescriber burdens.
It is always nice to hear that people are reading my stuff.
- For more information:
- Darrell E. White, MD, of SkyVision Centers in Westlake, Ohio, can be reached at dwhite@healio.com.
Sources/Disclosures
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Source:
Expert Submission
Disclosures:
White reports speaking and consulting for Allergan, Bausch + Lomb, Sun, Tarsus and Viatris, consulting for Aldeyra, Bruder, Nordic Pharma and Thea, and consulting for and being an investor in Orasis and SpyGlass.
Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.