Last Friday, The New York Times reporters Rebecca Robbins and Reed Abelson published the first article in a series about “how pharmacy benefit managers prioritize their interests, often at the expense of patients, employers and taxpayers.”
This piece, informed by hundreds of interviews, is a highlight reel for anyone familiar with the ongoing drug pricing debate. It points out several key issues:
💡 Perverse system incentives favor prescription medicines with higher list prices and larger rebates rather than lower-cost options.
💡 Consolidation in the health care system results in patients cycling between different divisions of three vertically-integrated companies for care and reimbursement.
💡 There is a steady increase in discounts, rebates, and fees paid by manufacturers, but there is no way to ensure those increases are used to help patients access and afford the medications they need in the form of lower copays or cost-sharing.
At Sanofi, we see these dynamics first-hand and bring these concerns to light in our annual Pricing Principles report to advocate for a better, patient-focused system.
In 2023, Sanofi had a 15% increase in fees – or service charges – paid on top of negotiated rebates to PBMs and health plans in Managed Care, Medicare Part D, and Managed Medicaid agreements. In total, we paid about $1.4 billion more in negotiated rebates and fees than in 2022 – almost an 18% increase year-over-year. Yet, too many patients still struggle to afford their medicines.
The issues discussed may not surprise those who study the disconnect between the rebates, discounts, and fees the industry pays to PBMs and the price patients pay at the pharmacy counter.
However, there are millions of people who now have a better understanding of what a PBM is—and many of those readers experience firsthand the issues exposed in the article.
Will this be the spark that pushes PBM reform over the finish line? I look forward to seeing what Rebecca and Reed publish next.
https://lnkd.in/gyVs35x5
Pharmacy benefit managers — like CVS Caremark, Optum Rx and Express Scripts — act as middlemen overseeing prescriptions for more than 200 million Americans. They’re meant to reduce drug costs. But instead, they steer patients toward pricier drugs, charge steep markups on otherwise inexpensive medicines and extract billions in hidden fees, a New York Times investigation found.
The Opaque Industry Secretly Inflating Prices for Prescription Drugs
https://www.nytimes.com