by: JD Heyes
Monday, January 01, 2018
President Donald J. Trump campaigned, in part, on a pledge to pursue policies that would end the nightmare trend of skyrocketing costs for medications across America, and the latest data on Big Pharma’s revenue stream proves once again that this is a promise he really needs to keep.
In October, the president heavily criticized drug prices and Big Pharma in general, while suggesting he was preparing to take policy actions aimed at bringing down drug prices.
“We are going to get prescription drug prices way down because the world is taking advantage of us,” he said during a press conference, noting that often, some of the same drugs sold outside of the U.S. cost a fraction of what Americans have to pay.
“The same exact pill from the same company, same box, same everything, is a tiny fraction of what it costs in the United States,” he said.
Earlier the same day, The Hill reported, Trump told his Cabinet that drug companies were “frankly getting away with murder,” which he used on a campaign trail.
Last summer, administration officials floated the notion that Trump could issue an executive order clearing away regulatory barriers that companies blame for raising drug costs.
But what about the middlemen who are helping to drive up costs? Like most Americans, you didn’t know about them, did you?
As Kaiser Health reported:
The complicated pharmaceutical supply chain in the United States means middlemen — such as pharmacy benefit managers (PBM) and, in some cases, hospitals and doctors’ offices — can gain financially by choosing more expensive drugs. That’s because PBMs usually get a rebate from the drugmakers on top of whatever profit they get from selling or administering the drug.
Those rebates often are based on a percentage of the list, or wholesale, price. So, the middlemen who get the rebates take in more money when drugmakers raise those sticker prices.
So, who pockets the rebates? PBM firms, of course — companies whose job it is to ‘oversee’ drug benefits for millions of Americans. They share all or part of the rebates with insurers or those who hire them. And in some cases, Kaiser Health noted, “the rebates go directly to specialty pharmacies, medical clinics or physicians dispensing the treatments” — some of the very same people and firms who are already benefiting from sky-high drug prices.