Unbiased Analysis of Today's Healthcare Issues
A helpful article from Mattingly et al. (2023) describes history, business practices, economics, and policy for pharmacy benefit managers (PBMs). Part of this article explains how PBMs make money. They claim there are three primary avenues. Rebate retention. Plan sponsors pays the list price of the drug net of rebates and discounts received. PBMs are…
A ViewPoint by Richman and Adashi in JAMA this week provides a nice overview of the pharmacy benefit manager (PBM) marketplaces as well as some considerations for the Federal Trade Commission (FTC) to consider. Below I summarize some of the developments in the PBM market in recent decades. Of particular note is that PBMs have…
Perhaps surprisingly, the answer is PBMs, not drug manufacturers. That is one of the conclusions discussed in a recent commentary by Good and Hernandez (2021). They try to get to the bottom of this question, writing: Most explanations for increasing drug costs start with drug companies, and indeed they are an easy target. Manufacturers in…
The list price for pharmaceutical price is not what health insurers have to pay. Sure there are patient copayments and coinsurance, but the main reason why insurers don’t pay full list prices are due to pharmacy benefit managers (PBMs). PBMs contract with payers to negotiate rebates by which pharmaceutical manufacturers discount their prices for specific…