Latest news with #pharmacybenefitmanagers
Yahoo
3 days ago
- Business
- Yahoo
How Democrats can pull off a win under a GOP trifecta: Dismantle the "legal" drug cartel
Just before President Trump pushed her out at the behest of his corporate donors, former Federal Trade Commission chairwoman Lina Khan released a damning report about the most rapacious and anti-competitive actors in the entire healthcare system: pharmacy benefit managers. These middlemen in the drug supply chain don't discover new medicines. They don't manufacture them. They don't even physically dispense most prescriptions. Yet they rake in tens of billions of dollars each year by driving up costs for everyone else — especially patients battling cancer, HIV, heart disease, and autoimmune conditions. In their report, FTC investigators documented how the PBM industry — which is dominated by just three firms, CVS Caremark, Express Scripts, and OptumRx, that collectively oversee roughly 80% of all prescriptions dispensed nationwide — imposed eye-popping markups on generic drugs used to treat deadly diseases. The PBMs' affiliated pharmacies charged hundreds — even thousands — of percent more than they paid to acquire drugs like the cancer treatment Gleevec and multiple sclerosis medication Ampyra. This isn't just a case of corporations being greedy. It's the result of a rigged market structure. In theory, pharmacy benefit managers could play a valuable role by negotiating with drug manufacturers for lower prices. Since they haggle on behalf of health plans that collectively enroll hundreds of millions of Americans, these PBMs have considerable leverage, and should theoretically drive a hard bargain and win enormous discounts. And in fact, they do. The problem is that those savings rarely flow to patients at the pharmacy. Instead, PBMs have made the supply chain so convoluted that almost nobody on the outside — whether the patient filling the prescription, the pharmacist dispensing it, the doctor writing it, or even the employer sponsoring the health plan — can easily tell how much a drug will cost after discounts, rebates, and various fees and clawbacks are applied. This opacity isn't an accident. It's by design. The lack of transparency enables PBMs to overcharge patients and health plans. Congressional investigations have revealed numerous instances in which PBMs steered patients towards more expensive drugs — which come with bigger discounts and rebates for the PBM — "even when there are lower-cost and equally safe and effective competing options" available. Some of the largest PBMs have even created offshore shell corporations to help pocket negotiated rebates — instead of passing them off to patients. Patients don't even realize when they're being ripped off. PBMs almost never disclose the total discounts they negotiate on specific drugs. So patients' cost-sharing obligations are calculated based on a drug's unnegotiated, inflated "list price," rather than its true discounted price. As a result, patients spend billions more out-of-pocket than they otherwise would if the discounts were publicized. These inflated costs are a key reason that 21% of American adults have skipped filling a prescription in the past year due to affordability concerns, while 12% have skipped doses or cut pills in half. The FTC also found clear patterns of self-dealing, where PBMs steered the most profitable prescriptions to their own affiliated pharmacies while boxing out independent community pharmacies. Thousands of independent pharmacies have closed in recent years, leaving entire counties without a single brick-and-mortar store where patients can fill a prescription. Finally, PBMs use their consolidated power to keep drugs off of health plan formularies — unless manufacturers pay exorbitant fees. This is a policy failure. But it's also a political opportunity. Congress has previously considered two bipartisan bills that would rein in PBMs' worst abuses. If reintroduced and passed, one bill would eliminate the perverse incentive for PBMs to favor expensive drugs by delinking PBMs' compensation from list prices. Another would require that negotiated discounts be passed directly to patients at the pharmacy. And just last month, FTC Chair Andrew Ferguson reignited an FTC lawsuit against pharmacy benefit managers (PBMs) that accuses them of anticompetitive behavior. Democrats have a chance to lead — and win — on this issue. Taking on PBMs doesn't just lower drug costs. It shows voters that we're willing to fight the entrenched interests hurting their families and their finances. It shows that we're the party that puts patients ahead of profiteers. We don't need to wait for the next election. We just need the political will to act.
Wall Street Journal
18-05-2025
- Health
- Wall Street Journal
How to Reduce Drug Prices Without Ruining Innovation
Regarding Tevi Troy's op-ed 'Price Controls Won't Make America Healthy' (May 13): While lowering drug prices is a worthy goal, advocates should take note of at least two things. First, 90% of drugs Americans consume are generics for which we pay manufacturers substantially less than most other countries. Generic drug margins are already low enough to create a fragile supply chain. Second, there is tremendous cost to consumers and payors created in the middle of the pharmaceutical supply chain—between the manufacturers and the providers—by entities such as pharmacy benefit managers. True reform in that space would be a better place to find savings that wouldn't jeopardize innovation and may even improve manufacturing resilience and the continued availability of providers, such as retail pharmacies.
Bloomberg
12-05-2025
- Business
- Bloomberg
Stock Movers: Carnival, NRG Energy, Cigna
On this episode of Stock Movers: - Carnival Corp. (CCL) shares are up. The company is issuing bonds for the third time this year, as the cruise operator chips away at a debt load that had ballooned during the Covid-19 pandemic. Monday's $1 billion offering of senior unsecured notes will be used to refinance 7.625% notes maturing next year, according to a person familiar with the matter. Pricing for the new notes is being discussed in the 5.875% to 6% range, the person said. - NRG Energy (NRG) shares hit an all time high as the company agreed to acquire a fleet of natural gas-fired power plants from LS Power Equity Advisors LLC for about $12 billion including debt, betting the fuel will be crucial to meet electricity demand from data centers. The cash-and-stock deal calls for NRG to buy 18 gas-fired facilities from LS with a combined capacity of about 13 gigawatts, the companies said Monday in a statement. That's enough to power about 10.4 million homes. - Cigna (CI) and other US health-care companies that own pharmacy-benefit management units are trading lower on Monday after President Donald Trump proposed a plan to 'cut out' the drug-industry middlemen as a way to reduce drug costs. Meantime, House Republicans are reviving measures that would primarily prohibit 'spread pricing' in the Medicaid safety net program -- where pharmacy benefit managers profit by paying pharmacies less than what they charge state Medicaid plans for a medication.
