How Insurance Companies Profit from Antidepressants

     If Americans are being overmedicated, how is it that insurance companies have not tried to reduce the number of prescriptions for antidepressants that 43 million American are now taking? Yes, this for-profit industry can – and do — raise their premiums for mental health coverage, but that’s no guarantee of profit when there are so many people taking antidepressants.

     No actuaries find enough revenue in that.

     Until they factor in Pharmacy Benefit Managers. These PBMs negotiate prices and rebates for antidepressants (and other medications) and so can allow insurers – who own their own PBMs…and that’s the catch — to receive more revenue because of the difference between the price charged to the insurer and the payment received by the pharmacy. 

     As with many of the clever “in-between guys” of any industry which have cleverly inserted themselves into production or distribution chains to earn additional profits from products, PBMs have come about between drug manufacturers and pharmacies to either mitigate a potential loss or, better yet, actually add profit to the insurance industry.

     Actuaries love them.

     Insurance companies do now justify raising their premiums for antidepressant coverage because of the increased costs that Big Pharma now charges. The public won’t therefore object…much. The real difference in the bottom line for insurance companies, however, comes from the negotiated rebates they get through the lower brokered cost that Big Pharma is charging the pharmacies for their antidepressant products.

     Everybody wins…within the insurance/Big Pharma conglomerate, at least.

     Only the consumer loses. Not only do they have to pay far more for their insurance premiums, but it’s also a lot easier for a doctor to prescribe those 43 million Americans antidepressants if insurance is paying for them. But that also subjects those 43 million to the higher suicide risks, horrifying withdrawal ordeals, and generally negative physical side effects of antidepressants.

     Worse, antidepressants don’t actually work particularly well. One study, using FDA-submitted data, found that the difference in effectiveness between antidepressants and placebos was significant only in cases of severe depression. Another 2007 review of antidepressants showed there was no evidence that they had a “clinically significant effect” for those taking them.

     How many of those 43 million Americans are “severely depressed”? Probably not too many. Those other 40 million antidepressant users, however, are doing a mighty good job funding Big Pharma and their complicit co-conspirators, the insurance industry, even if their antidepressants are not doing much of anything for them besides reducing their quality of life.