Our prescription for safe, effective, more affordable drugs

The prescription drug market is rife with problems. But many can be overcome with the right public policies in place. Our experience at Kaiser Permanente shows what is possible when evidence, safety, and value are our guides.

Policy changes we support

We support an array of policy positions designed to make prescription drugs more effective, safe, and affordable. We urge lawmakers to take the following actions.

• Take stronger steps to enable evidence-based prescribing. For example, the Federal Trade Commission should crack down on disinformation spread by drug companies about the quality and effectiveness of lower-priced generic drugs and biosimilars.
• Continue efforts to ensure health care organizations pay for prescription drugs based on their value, and not on an arbitrary high price set by the manufacturer. Given our success at Kaiser Permanente negotiating lower drug prices for our members, we support Medicare’s ability to negotiate drug prices, as outlined in the Inflation Reduction Act.
• Ensure the FDA has both the authority and the resources to identify and evaluate post-market efficacy data and safety concerns. For example, policymakers should reinforce the FDA’s authority to ensure manufacturers complete their required postmarket trials — including through more consistent enforcement of civil monetary penalties — when such studies are delayed or not completed.
• Address anticompetitive practices that enable pharmaceutical companies to block competition, maintain monopolies, and set high drug prices. We have proposed ways to reform the U.S. patent system, and we work closely with our colleagues at CSRxP (the Campaign for Sustainable Rx Pricing) and I-MAK (the Initiative for Medicines, Access, & Knowledge) to highlight and address egregious ways some pharmaceutical companies engage in anticompetitive tactics, including product hopping and creating patent thickets.
• Consider solutions to prevent drug shortages and improve the resilience of our nation’s prescription drug supply chain. Policies should focus on meaningful supply chain transparency, domestic manufacturing, manufacturing and supply chain quality and resilience, and enhanced FDA and federal engagement and ability to stockpile critical medications.

The importance of prescribing based on evidence

We take an evidence-based approach to medication selection. Our clinical pharmacists and physicians evaluate each medication’s clinical value and safety. To do this, they review evidence from published clinical trials and from our own electronic health record system. From that review, we develop our prescription drug formulary (our list of drugs we prefer for coverage for and use by our members). This process gives our physicians and other prescribers confidence in our formulary.

We also significantly restrict visits from pharmaceutical sales representatives who market their products directly to clinicians. Instead, our experts provide internal, unbiased information about medications to inform our formulary and prescribing decisions.

The importance of negotiating prices based on drug value

After we’ve set our list of safe, effective drugs, we negotiate prices directly with drug manufacturers. We’re unique among health care organizations because we buy and dispense prescription drugs.

As a health plan, pharmacy, and provider all in one, we’re able to negotiate for the lowest price possible. We also buy drugs from a variety of drug manufacturers. This helps us secure adequate supplies for our members.

Unlike many health plans that rely on pharmacy benefit managers, or PBMs, to fully manage their prescription drug benefits, our integrated model is straightforward and brings simplicity to drug purchasing. By managing these functions directly, we reduce the role of intermediaries, and the complexity and opaqueness often associated with traditional PBM arrangements.

The importance of embracing generics and biosimilars

Because we decide which drugs to cover based on how well they work and how safe they are, we actively encourage the use of generic and biosimilar drugs. We prescribe generic and biosimilar drugs at rates higher than the national average.

Generics are essentially identical versions of brand-name drugs. Biosimilars are very similar alternatives to branded biologic drugs. Both are less expensive and equally effective options. As an added level of safety, Kaiser Permanente also does its own testing of select generic medications to ensure they meet quality and purity standards.

We’ve saved $200 million by switching to biosimilars for some cancer care. We’ve also switched most of our members to a biosimilar alternative to Humira. Humira is a prescription injection used to treat rheumatoid arthritis and other conditions. It has a list price of nearly $7,000 per month. This switch saved Kaiser Permanente close to $300 million in the first year alone. These savings translate to lower costs for our members and employer groups.

The importance of tracking safety and outcomes

Our electronic health record system allows us to monitor the safety and effectiveness of the drugs we prescribe. These data protect not only our members but everyone. For example, our data informed early concerns about the safety of the arthritis drug Vioxx, which was subsequently pulled from the market.

Kaiser Permanente pharmacists have access to the member’s full electronic health record and health care team if questions or concerns arise, improving the safety of our medication use processes. Our pharmacists actively track medication adherence for patients with chronic conditions and regularly communicate with them on how to take their medications most effectively.

At Kaiser Permanente, we provide our members with safe, high-quality medication at the best possible value for their dollar. We do this by prescribing based on evidence, negotiating drug prices, making generics and biosimilars accessible, and tracking safety and outcomes.

Every patient deserves access to high-quality, affordable drugs when they’re needed. Learn more about the prescription drug policies we support.