Amid continuing political pressure on drug makers, a new analysis finds that brand-name companies increased their wholesale prices by 3.1% in this year’s second quarter, a smaller boost than the 4.6% hike that occurred during the same time a year ago.
Meanwhile, after subtracting certain allowances, net prices fell by 5.8% compared with a 6.1% decline in last year’s second quarter, according to Sector & Sovereign Research, which tracks the pharmaceutical industry. Notably, these allowances include rebates paid to pharmacy benefit managers for favorable placement on formularies, the list of medicines for which insurance coverage is provided.
The findings actually highlight a trend that largely began four years ago, as the pharmaceutical industry and pharmacy benefit managers began undergoing increasing scrutiny for their opaque pricing practices. However, in the current political climate, where drug companies are demonized during Democratic presidential debates, more declines can be expected.
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Hi – what percent of the rebate drug companies give lowers out of pocket cost for patients? How much of the rebate do the PBM’s keep?
Alex, the problem is that there is NO transparency with the PBM’s , they say
oh that information is proprietary ! Which you and I both know is a bunch of crap ! They’re saying that because they don’t want anyone to know how much they’re stealing as extortion money .
You really outlined the whole problem with drug prices Ed. Drug rebates paid to the PBM’s for
preferential placement on formulary. Really? Why don’t they do away with these payoffs to be put on formulary and allow all drugs in these classes of drugs be on formulary? The drugs that show to be most effective move up in preferential placement. GSK started making generic Advair, they also make the brand of this drug. Only the brand is covered on any formulary.Why you might ask, because the PBM gets a kickback as a drug rebate. Yet the generic version is $100’s cheaper, and you can be sure they both are made in the same factory! So you tell me, who is keeping the price of drugs high? The PBM’s negotiate prices? Do PBM’s actually buy any drugs? No, it’s the pharmacies that buys the drugs and expects to get paid at least what it cost them. Yet many times the reimbursement is below cost. Then the PBM claws back 2-6% off of Retail Price from the pharmacy in a DIR fee.
Where is the logic to this whole pricing scheme? It just seems to me that everything is based around lining the
PBM’s pockets.