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Health Insurance Guys: What to do about high drug prices?
Health Insurance Guys

Health Insurance Guys: What to do about high drug prices?

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Dear Tom, Alan and Kyle:

I’m thinking of retiring soon. I’m pushing 70 but the work is still OK, so it’s not because I have to.

What’s holding me up is that the company has a really good health plan; in particular, a drug plan that covers my newest one: Humira. It’s for my wife who has bad arthritis and it’s covered very well under my current plan.

The problem is that if I get off the employer’s plan and go on Medicare with a supplement, I’ll need to find a drug plan for my wife that doesn’t cost an arm and a leg for Humira.

Is there a generic for Humira? Should I just stay put and keep the good benefits? Is the cost of Humira as bad as I’m told?

Buzz

Tom: To answer your last question first: yes, the retail cost of Humira is high. We went to the Medicare.gov drug search and put in a total of four injector kits per month, 40 mg, .4 ml pen. (Sorry if this is way off, but there are a lot of options).

Anyway, the monthly retail cost is $11,173.69! So…the first plan that popped up was a company called Elixir Rx Plus, with a monthly premium of $15.10, and an annual deductible of $445. Because we’re at the end of the calendar year, the breakdown goes like this: $2,809.76 for October; $558.68 for November; and, $558.68 for December.

Al: Humira is a Tier 5 Specialty Tier requiring prior authorization and quantity limits. We won’t have the new rates and coverages for 2022 until toward the end of October (remember the Annual Enrollment Period, AEP, goes from October 15 to December 7 and things change every doggone January 1).

The reason Humira is so expensive is its production is through the manipulation of genetic material. As a biologic, it is much more difficult to make than synthetic medications. Yes, I had to look it up.

Kyle: Humira is the brand name for Adalimumab and the patent is owned by a company called AbbVie who took it over from Abbot Labs several years ago. It is possible that a generic will be available after June 2023.

We also found that an Indian company has produced a generic for one-fifth of the cost, but who knows how long, if at all, it would take to get FDA approval. Humira is already approved for treatment of both rheumatoid arthritis and Crohn’s disease.

Tom: So to answer our reader’s question, yes, Buzz, our advice is to stay put with your great employer benefits because the open market does not seem to be at all hospitable.

Since there is a possibility of a generic on the horizon, you also have the option of taking COBRA for at least the next 18 months after you do retire. In fact, June of 2023 is only 21 months from this October (yikes). Should you decide to take this path, there are two specific forms to avoid penalties. Call us.

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