EYEWITNESS NEWS (WBRE/WYOU) — Many people pay more for, or go without costly prescription medications.
Critics say part of the price problem is companies that are supposed to actually lower the cost.
A troubling trend has developed since 2014 concerning how much you pay for prescription medication.
“Prescription drug prices have increased much faster than the rate of inflation. Drug prices have gone up 35 percent while the cost of all goods and services has jumped just 19 percent,” said Senator Maria Cantwell (d) Washington, Commerce Committee Chair.
According to critics, part of the prescription drug price problems are pharmacy benefit managers or PBMs. They are essentially corporate middlemen who buy drugs from pharmaceutical manufacturers and resell them to health plans and pharmacies.
“The original value proposition was by aggregating demand from lots of smaller demanders they could leverage volume to drive down prices from manufacturers. A really good idea, right,” stated Mark Blum, Executive Director, America’s Agenda.
But something very wrong has happened. According to the National Healthcare Alliance America’s Agenda, PBMs leveraged down prices without passing on the savings.
“And the net result was PBMs play a very significant role in driving up prices for prescription drugs and then extracting savings largely for themselves,” Blum said.
Besides a lack of checks and balances, Mark Blum blames a limited number of PBMs. Just three control nearly 80 percent of the U.S. marketplace and are merged with the biggest three insurance companies.
“You don’t have competitive pricing. The PBM can actually switch profits from insurance company to the PBM to the pharmacy and in fact, that’s exactly what our research shows that PBMs are doing,” said Blum.
It’s why a U.S. Senate Bipartisan Bill called the Pharmacy Benefit Manager Transparency Act of 2022 was introduced last week. It would require greater transparency concerning pharmaceutical rebates, pass along rebates to consumers, and ban what’s called spread pricing to ensure you’re not overpaying PBMs.
“We need to expand that kind of control on PBM behavior,” said Mark Blum, Executive Director, America’s Agenda.
A recent report claims changing the way PBMs reimburse pharmacies would save $18BIL a year nationally. That breaks down to $281 for each senior getting drugs through Medicare part ‘d.’