The Great Northern States Health Care Initiative is a group of people from Minnesota and Wisconsin who have come together for the purpose of advocacy for a better health care system in our respective states and the nation. Our main objective is education of ourselves and others in our communities on the imperatives of a single payer health care system.
641-715-3900, Ext. 25790#
Monday, July 29, 2024
Drug middlemen say Pharma sets prices. Then why do middlemen have hundreds for the same drug?
Drug middlemen say Pharma sets prices. Then why do middlemen have hundreds for the same drug?
BY: MARTY SCHLADEN - JULY 28, 2024 10:00 AM
https://wisconsinexaminer.com/2024/07/28/drug-middlemen-say-pharma-sets-prices-then-why-do-middlemen-have-hundreds-for-the-same-drug/?emci=08e0913c-174d-ef11-86c3-6045bdd9e096&emdi=6bf11f65-a84d-ef11-86c3-6045bdd9e096&ceid=534498
Pharmacy middlemen known as pharmacy benefit managers deny claims that they’re responsible for the inflating cost of medicine. They say that big drugmakers are the sole culprits for the sticker shock you or whomever pays for your insurance experiences at the pharmacy counter.
On the surface, it seems to make sense. If the pills are ridiculously expensive, the first suspects would be the companies that make them. But new evidence has emerged showing that things aren’t so straightforward.
Drug transactions are controlled by middlemen who are owned by huge health conglomerates that also own big insurers. And a new report says that those companies often list hundreds of different prices for the same drug, some that are 51 times as much as others — or even more.
Pharmacy benefit managers, or PBMs have been coming under fire for years. Community pharmacists accuse them of engaging in anticompetitive practices to the advantage of their own affiliated pharmacies while they drive competitors out of business. The result, some analysts have said, is decreasing competition and higher prices.
The Federal Trade Commission earlier this month issued a scathing report saying it uncovered what appeared to be evidence of anticompetitive practices.
It noted that each of the corporations that owns the three biggest PBMs is one of the 15 largest in the United States. Combined, they went from receiving 12% of all U.S. healthcare dollars in 2016 to 20% last year — a 67% increase in their share of a gargantuan healthcare market over eight years.
In addition to being part of huge conglomerates, the big-three PBMs are huge players in their own right. Combined, they control about 80% of the insured drug transactions in the United States. They act on behalf of insurers, which are often part of the same company. And they decide how much to reimburse pharmacies with which they are often in direct competition because they own mail-order pharmacies and one, CVS, is the largest brick-and-mortar retailer.
Since they decide which drugs are covered by insurance, they also have great leverage with the companies that make them. But as prices have shot up, PBMs have blamed drugmakers for the rise.
“Big drug companies alone set and control drug prices and want to restrict pharmacy benefits to prevent pharmacy benefit companies from providing the only real check on their pricing power,” the Pharmaceutical Care Management Association, an industry group, says on its website.
The statement might seem strange since the big PBMs claim they use their size to force drugmakers to lower prices.
And Medicare data regarding generic drugs seems to show that PBMs have considerable agency in price-setting. An analysis showed that Part D plans owned by the same parent companies as the big PBMs reimbursed their affiliated middlemen for the same drugs at hundreds of often wildly different price points.
The analysis, by 46 Brooklyn Research, looked at data for thousands of drugs covered by companies that act as insurers under Medicare Part D. They manage plans that are underwritten by taxpayers, while beneficiaries have to pay premiums and sometimes make copayments.
For some drugs, the disparities between high and low prices aren’t very big. For others, they’re vast.
Take the cancer drug imatinib, for example.
Providers owned by CVS Health, then conglomerate that also owns the biggest PBM, reimbursed PBMs at 501 different rates ranging from $1,794 to $6,826 for a month’s supply. Plans affiliated with Cigna/Express Scripts, the owner of the second-biggest PBM, reimbursed at only 19 different rates ranging from $2,732 to $3,657.
Meanwhile plans affiliated with UnitedHealth, owner of the third-biggest PBM, paid at fewer price points than CVS, 115, but they varied much more wildly — from $79 to $6,826 for a month’s supply.
The data didn’t indicate which PBM handled transactions at the different prices or how much the pharmacies filling the scripts got paid. So the analysis couldn’t evaluate whether the conglomerates were using the variable pricing to the advantage of their affiliated companies.
But if those variations make you suspect there’s an arbitrary element to the prices health conglomerates assign to drugs, you’re not alone. In its conclusion, the FTC report says they have an incentive to use that variability to their own advantage.
“…these healthcare conglomerates operate some of the largest retail, mail order, and specialty pharmacies in the country, which compete with local independent pharmacies,” it says. “Given these relationships, PBMs and their affiliated entities may have the incentive and ability to engage in steering a growing share of prescription revenues to their own pharmacies through specialty drug classification, self-preferential pricing, and pharmacy contracting procedures to target and control the business operations of pharmacies.”
Tuesday, May 21, 2024
Monday, May 13, 2024
Check out the recording of Single Payer 101!
https://pnhp.salsalabs.org/activistconferencecallinvitationmarch272019_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy1_copy2_copy1_copy3_copy1_copy2_copy1_copy1_copy2_copy2_copy2_copy2_copy1_copy3_copy5_copy1_copy1?wvpId=4253130c-768b-4c12-9b29-38df5bc9c2ec
May 12, 2024
Dear health justice advocate,
Did you miss our “Single Payer 101” webinar last week? If you did, not to worry! We have a recording of the session, which was led by PNHP Vice President Dr. Diljeet Singh.
Even if you weren’t able to watch live, this is one webinar you won’t want to skip. Dr. Singh describes the current state of U.S. health care, the urgent need for reform, and what we could have if we embraced a Medicare-for-All program that brought everybody in and left nobody out.
Watch and share our “Single Payer 101” session >>> video HERE
Here are some additional resources from last week’s webinar:
Slideshow used during “Single Payer 101”
Recording of “Single Payer 101”
We also encourage you to register HERE for our next webinar, “Taking Advantage: How Corporate Health Insurers HARM America’s Seniors” on Monday, June 3 at 8:00 p.m. Eastern.
Thank you for continuing to fight the good fight!
In solidarity,
PNHP Organizing Team
Thursday, April 11, 2024
Bloomberg News: Health care is still too costly for Americans
BLOOMBERG NEWS
Apr 10, 2024
America’s approach to health care is an outlier among the world’s rich countries, and not in a good way. Extraordinarily complex and hideously expensive, it still manages to leave some 26 million people without coverage. The Affordable Care Act of 2010 made notable progress, but failed to solve the pressing problems of high costs and less-than-universal access.
The ACA fell short partly because legislators dropped the so-called public option. This idea should be revived. The dysfunction in Washington makes such innovation difficult at the federal level, but states have been trying variants. These experiments are worth watching.
The need for more reform is clear. The U.S. spends about 17% of gross domestic product on health care, half as much again as comparable countries — yet on many metrics, including life expectancy, U.S. outcomes are worse. The system’s enormous cost is partly hidden because most Americans are insured through their employers: The premiums suppress wages, so the true hit to families’ finances is disguised. Even covered employees can be on the hook for additional charges, enough in some cases to pay for a small car.
Workers fear that losing their jobs will mean they lose their insurance. More than half of the 20 million who’ve signed up for Obamacare in 2024 complain of high monthly costs and out-of-pocket spending. And despite the ACA, roughly 10% of Americans still have no coverage at all.
When Obamacare was taking shape, some lawmakers envisioned a public option — a government-run plan that would compete alongside private insurance. Like Medicare, it would save money by negotiating prices and cutting costs. Voters liked the idea, but it met stiff industry opposition and was ultimately scrapped. During his presidential campaign a decade later, Joe Biden supported a public option, but his administration has focused on other ways to make health care more affordable.
Yet the public option wasn’t quite dead: As a result of the ACA, states have been able to try “innovative strategies” to lower costs and broaden coverage. Three have used it to advance programs they’re calling public options, and a handful of others have plans underway.
Colorado’s scheme is especially popular, thanks to generous benefits (including free primary and mental-health care) and lower premiums than many marketplace plans. State law requires insurers to meet annual premium-reduction targets, and the insurers negotiate hard with hospitals to cut costs. If they miss the targets, insurers and providers alike can be summoned to public hearings. ... The state has also introduced a reinsurance program to defray the cost of expensive claims.
Admittedly, schemes like Colorado’s depart from the original public-option idea, which relies on competition from a gradually expanding Medicare, not price controls. The old-school public option still has a lot to recommend it: Use Medicare’s systems and provider network to gradually extend affordable coverage — with premiums set to recover full actuarial costs, offset by ACA subsidies for eligible households. A plan called Medicare-X, championed by Sens. Michael Bennet and Tim Kaine, would work in this way. The aim of such proposals isn’t to replace private insurance, as some “single payer” schemes envisage, or to regulate some private offerings more tightly state by state (as in Colorado’s plan), but to broaden access to affordable choices.
However conceived, public options will face setbacks. Health-care reform is administratively demanding and politically fraught. Absent rules compelling participation, hospitals and providers could refuse to see patients if reimbursement rates fall too low, leaving areas with less coverage and weaker competition. Nobody says this will be easy.
Yet The existing system is undeniably failing. In poll after poll, Americans say rising health-care costs are a top concern. States should keep on trying new approaches to see what works. And Washington should put the Medicare-based public option — perhaps the most promising way to solve the system’s biggest problems — back on the agenda.
Saturday, March 30, 2024
Saturday, March 23, 2024
Monday, February 12, 2024
Sunday, January 21, 2024
Need to change how U.S. handles drug pricing
A complicated system of intermediaries and a lack of legal constraints have contributed to high drug prices in the United States.Credit...Paola Chapdelaine for The New York Times
NYT article
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