STEVE INSKEEP, HOST:
Today in Your Health, an approach to childbirth that brings down costs and improves care. First, we report on the cost of prescriptions. Millions of people are getting letters this month from insurance companies. The letters say people have lost coverage for their medicines. People are told they need to switch medications. And for some, that's a major problem. NPR's Alison Kodjak reports.
ALISON KODJAK, BYLINE: Tim Kilroy is a father of five, and he runs a business out of his home in Arlington, Mass. When he was about 30, he was diagnosed with attention deficit hyperactivity disorder.
TIM KILROY: My life was kind of in shambles. I was constantly broke, and it had nothing to do with the amount of money I was making. It's because I couldn't keep track of what I was spending and couldn't remember to make sure that all of the baby stuff was in the baby bag. So we'd be places with kids without coats because I was in charge of getting the coat and couldn't remember to do it.
KODJAK: He spent six years trying medications, adjusting doses, switching and starting over before he and his doctor focused on a long-acting form of Ritalin. He'd finally landed on the drug that worked for him. But about a year ago, he switched insurance and the new company refused to pay.
KILROY: I thought how dare you? How dare this company that I pay money to tell me how to manage my health care?
KODJAK: He paid full price for the Ritalin one time, but it cost more than $120 a month on top of his insurance premiums. So he asked his doctor to move him to another medication that was covered. Kilroy says it does a good job controlling his ADHD, but it has some unpleasant side effects.
KILROY: Apparently in men of a certain age, it makes your prostate swell. So to be indiscreet, it's really hard to pee.
KODJAK: So now he's switching insurance again so he can get back on Ritalin. Kilroy is just one of millions of people affected by a battle between drug companies trying to make as much money as possible and insurers trying to drive down their prices. More and more, insurers are refusing to pay for expensive medications. Ronny Gal is a drug industry analyst at Alliance Bernstein.
RONNY GAL: Drug companies have been pricing their drugs largely along the lines of, you know, whatever you can get away with and still we have the patient get the drug.
KODJAK: He says this year, most insurers will exclude some drugs from coverage.
GAL: So first of all, exclusion becomes standard feature of the industry, which is actually quite - will be quite a shocker for a lot of patients.
KODJAK: This exclusion strategy was pioneered by Express Scripts, a company that manages prescription coverage for more than 80 million people. Two years ago, Express Scripts first experimented with excluding drugs. The company's chief medical officer, Steve Miller, says they essentially offered their customers business to the lowest bidder.
STEVE MILLER: That gives us the opportunity to go the pharmaceutical manufacturers and say who wants my market share? Whoever will give me the best price, I will reward you with an enormous amount of market share.
KODJAK: Right out of the gate, they took on some big-name products, like Advair, the blockbuster asthma drug made by GlaxoSmithKline. Advair's price had risen more than 20 percent the previous year. Then on January 1 of 2014, Express Scripts tossed Advair off its drug list and moved its customers to a cheaper drug. The results were immediate. Sales of Advair dropped $1.8 billion that year, and the prices of both drugs are still falling.
MILLER: When you move that market, the pharmaceutical manufacturer rewards you with better discounts.
KODJAK: Doctors aren't so thrilled about the discounts when the deals get in the way of their patient care. Barbara McAneny is an oncologist in New Mexico. She says very few of the chemotherapy drugs she prescribes are excluded from approved drug lists. But the medications used to help patients get through chemo, like painkillers and hormone treatments, are. This complicates her ability to care for her patients.
BARBARA MCANENY: Some patients will tolerate one pain medicine, for example, but not another. One can cause nausea and the other pain medicine doesn't. If I get a regiment that works for patients and controls their pain, it is entirely inappropriate for some pharmacy benefit manager to rearrange that regimen and cause that patient to have symptoms.
KODJAK: Now most prescription insurers have lists of drugs they don't pay for. They include new expensive medications like the hepatitis C drug Sovaldi, as well as older brand-name drugs like Kilroy's Ritalin. Insurers argue their efforts will help keep premiums low, but it also means many patients and doctors no longer have the last word on the medications they take. Alison, NPR News, Washington.
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