The Neurologist’s Guide to Drug Pricing in the United States

Abstract

ABSTRACT As newer, innovative neurology drugs enter the US health care system, neurologists should consider the cost of these treatments in addition to their efficacy, safety, and tolerability. To do so thoughtfully requires an understanding of how prescription drugs are priced in the United States. The process of drug pricing is linked to the distribution supply chain and the many stakeholders involved. Stakeholders include pharmaceutical manufacturers; wholesalers; pharmacies; pharmacy benefit managers; payers, including health insurers; hospital systems; neurologists and other clinicians; and patients. Drug pricing has taken center stage as the Inflation Reduction Act of 2022 has set maximum out-of-pocket expenses for Medicare beneficiaries for the first time in the program’s history and limits drug price increases for a select group of Medicare Part D drugs. This article describes the US drug distribution supply chain and its stakeholders and introduces key drug pricing terms; a brief description of how rebates are generally estimated will also be discussed. Finally, as newer neurology outpatient drugs enter the market, the “value” of drugs will be described through cost-effectiveness terminology and their utility for the clinical neurologist.