Through spat with PBMs and insurers, pharma deflects drug-price scrutiny

In the drug-price debate, the health insurance industry’s largest trade group has made it clear which side it’s on. (Pixabay)

Under mounting pressure about sky-high drug prices, the pharmaceutical industry has labored over the past year to deflect blame onto pharmacy benefit managers and health insurers. 

The effort has involved national and state advertising campaigns, white papers and cartoon infographics, according to The Washington Post. One radio ad, for example, pointed out that "more than one-third of the list price of a medicine is rebated back to middlemen like insurers and pharmacy benefit managers."

PBMs have hit back by pointing out they pass most of their negotiated savings onto consumers. But the reality is that both drug companies and PBMs play a role in rising prices, Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health, told the publication.


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For the most part, the article added, insurers are on the same side as PBMs. After all, they contract with PBMs to negotiate drug discounts, or in the case of larger insurers like UnitedHealth, run their own in-house PBMs. Then there’s Aetna, which is set to be acquired by a pharmacy giant that owns one of the country’s largest PBMs—CVS Caremark.

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Indeed, the health insurance industry’s largest trade group has made it clear which side it’s on. Take, for example, the words of Matt Eyles—America’s Health Insurance Plans' senior executive vice president and chief operating officer—when he testified about he drug-price issue in December before the U.S. House Energy and Commerce Committee Subcommittee on Health:

“As the committee explores the role of various participants in the supply chain, we urge you to recognize that the entire pricing process is driven entirely by the original list price of a branded drug—which is determined solely by the drug company, not by the market or any other participant in the pharmaceutical supply chain,” he said (PDF).

But even insurers and PBMs haven’t always played nice. Anthem is embroiled in a lawsuit with Express Scripts, which accuses the PBM of failing to pass on millions of dollars worth of prescription drug savings. Rather than renew its contract with Express Scripts or align with another freestanding PBM, Anthem plans to create its own in-house PBM—with the help of CVS—starting in 2020.

Some believe all the finger-pointing that has taken place proves that drug companies' deflection tactics were successful at slowing down the push to make them more accountable for high prices. 

“For the past year, they’ve played fantastic defense,” M. Nielsen Hobbs, executive editor of the Pink Sheet at Informa Pharma Intelligence, told The Washington Post.

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