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Post by centralcoastinvestor on Jan 30, 2017 15:33:07 GMT -5
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Post by lakon on Jan 31, 2017 12:45:43 GMT -5
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Post by mnholdem on Jan 31, 2017 13:04:31 GMT -5
Excerpt:
The lawsuit filed Monday claimed that the three companies intentionally raised the list prices on their drugs to gain favorable treatment from pharmacy benefit managers, who work with health insurers and drug makers and help decide how a drug will be covered on a list of approved drugs.
Insurers do not pay the list prices that the drug makers set. Instead, the pharmacy benefit managers negotiate a rebate that is returned to them. The benefit managers, in turn, take a slice of that rebate for themselves, although the amount of the rebate, and the amount they keep, is not made public.
As a result, the drug manufacturers end up setting two prices for their drugs — the higher list price and the lower, secret, “real” price that insurers pay. The lawsuit claims that rather than competing with one another to offer a lower, “real” price to the insurers, the drug makers are vying to offer the best payment to the pharmacy benefit manager, which is why they have been raising the list price.
When the list price goes up, many patients see their out-of-pocket costs rise, even if they have health insurance. That’s because plans increasingly carry high deductibles, which require patients to pay for their drug costs themselves until they hit a certain limit, as well as to pay a percentage of the list price even after their deductible is met.
While Mr. Berman accused the benefit managers of being complicit, he said the lawsuit focused on the drug makers because “they are playing the game, and they are the ones who publish the list price.”
Michael Carrier, an antitrust professor at Rutgers Law School, described the filing of the lawsuit as “big news” and said it was interesting because it turned its attention to the inner workings of the pharmacy benefit managers, which until now “have floated under the radar of sustained drug pricing scrutiny.”
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That's where the money goes, apparently...  
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Post by factspls88 on Jan 31, 2017 14:18:16 GMT -5
Outrageous.
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Post by kbrion77 on Jan 31, 2017 14:31:46 GMT -5
It's just hilarious. It's blatant racketeering but another term for that is US Healthcare system.
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Post by dreamboatcruise on Jan 31, 2017 14:37:46 GMT -5
Michael Carrier, an antitrust professor at Rutgers Law School, described the filing of the lawsuit as “big news” and said it was interesting because it turned its attention to the inner workings of the pharmacy benefit managers, which until now “have floated under the radar of sustained drug pricing scrutiny.”
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That's where the money goes, apparently...
The funny (not as in ha ha) thing is that as PBMs grew in importance in our system they were always spun as a way to control drug costs... by pooling the buying power they would allow insurers to get better pricing out of drug makers. Shocking it didn't turn out to work that way  We have an incredibly complicated system, and it really shouldn't be a surprise that all the players are doing what one should expect... gaming the system to make the most money possible. I don't claim to have a solution, but it does sure seem Americans are bearing an unfair share of worldwide healthcare costs. |
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Post by esstan2001 on Jan 31, 2017 15:03:40 GMT -5
Michael Carrier, an antitrust professor at Rutgers Law School, described the filing of the lawsuit as “big news” and said it was interesting because it turned its attention to the inner workings of the pharmacy benefit managers, which until now “have floated under the radar of sustained drug pricing scrutiny.”
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That's where the money goes, apparently...
The funny (not as in ha ha) thing is that as PBMs grew in importance in our system they were always spun as a way to control drug costs... by pooling the buying power they would allow insurers to get better pricing out of drug makers. Shocking it didn't turn out to work that way We have an incredibly complicated system, and it really shouldn't be a surprise that all the players are doing what one should expect... gaming the system to make the most money possible. I don't claim to have a solution, but it does sure seem Americans are bearing an unfair share of worldwide healthcare costs. A good start would e to disintermediate- get rid of the middle man pbm's; then get the payor incented to not let the payee screw them. Simple = works better. |
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Post by dreamboatcruise on Jan 31, 2017 15:40:11 GMT -5
A good start would e to disintermediate- get rid of the middle man pbm's; then get the payor incented to not let the payee screw them. Simple = works better. Though medical care is hardly simple. It's a long way from truly being a free market system, and likely shouldn't be... drugs are regulated, doctors control the supply of new doctors. It's a product (health care) that few consumers really understand. It's a product we often cannot live without. With drugs there often arise true monopolies where there is only one treatment or one that is clearly superior. ---- I'm curious, if getting rid of middle man really resulted in lower cost drugs for the insurance companies, why would the insurance companies not go back to negotiating pricing directly with pharma companies? Who is supposed to be getting rid of the PBMs? |
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Post by esstan2001 on Jan 31, 2017 16:31:32 GMT -5
A good start would e to disintermediate- get rid of the middle man pbm's; then get the payor incented to not let the payee screw them. Simple = works better. Though medical care is hardly simple. It's a long way from truly being a free market system, and likely shouldn't be... drugs are regulated, doctors control the supply of new doctors. It's a product (health care) that few consumers really understand. It's a product we often cannot live without. With drugs there often arise true monopolies where there is only one treatment or one that is clearly superior. ---- I'm curious, if getting rid of middle man really resulted in lower cost drugs for the insurance companies, why would the insurance companies not go back to negotiating pricing directly with pharma companies? Who is supposed to be getting rid of the PBMs? Let me start by saying I am surely no expert .... The pbm's are not just aggregating purchase orders to get better pricing (like the CM's do with purchasing agreements across multiple board customers when buying semi's)- they are negotiating exclusionary agreements which may not be to the benefit of the ultimate consumers (payors) or insurance companies (intermediaries, that the payors contract with). So as I think you said, it gets complex. PBM's provide a service to the insurance industry...and maybe benefits to the drug co's. I think logic dictates that every touch in the path will add cost- along the way they will want something for their services. What is strange to me is since the Ins co's. collect the outcomes data and use it to drive financial / coverage decisions, I do not understand why they would not want to directly negotiate the drug pricing. They are in a better position to understand the value I would think... can the aggregation cut pricing so much so that the pbm's are needed? I have no answers, other than in general I believe simpler is better. If I pay a doc directly for service, I will shop the doc for price and reputation- I want value for my $$ (that means I should have some skin in the game). Now I digress into health policy... |
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