PBMs told investors i​t would find “an alternate funding /pri​cin​g structure” to offset lost rebate dollars.

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IN SUMMARY: PBMs are keeping a smaller share of rebates and passing more along to their clients. Instead, PBMs are collecting more revenue through various fees — the same shift the Trump administration envisions — and through a practice called “spread pricing,” according to a Pew analysis.

According to Pew “net spending on retail prescription drug coverage increased each year of the study period, growing from $250.7 billion in 2012 to $341.0 billion in 2016. During the same time frame, the share of commercial insurance premiums for retail prescription drug coverage rose from 12.8 percent to 16.5 percent. While the total cost of this coverage has increased, patient out-of-pocket spending has remained stable in recent years, due in part to increased insurance coverage and manufacturer assistance, such as the Part D coverage gap discount and copay coupons. Rebates and other discounts have played an increasingly important role in partially offsetting the continued growth of list prices for brand name drugs. Although PBMs have passed along a growing share of manufacturer rebates to plan sponsors, these entities have slightly increased their share of the total spend through other types of revenue”.

What does all this mean?

Drug prices are going to remain high until the basics of how drugs are priced are changed. Healthcare is too profitable for middlemen to ignore and they want a share of every healthcare dollar that is spent.

The complicated trail of prescription drug revenue

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Politicians & the media who continue to attack pharma are doing the public a great disservice. Our SYSTEM needs to be on trial not jyst drug companies.

Originally published at worldofdtcmarketing.com on March 15, 2019.

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Marketing contrarian with over 15 years of developing leading edge and award winning digital marketing initiatives.

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