PhRMA, Express Scripts go head to head on drug pricing
- Industry lobbying group PhRMA continued its debate with the pharmacy benefit management (PBM) sector this week, putting out a report that highlights the complicated cost system and the many parties involved in determining drug prices.
- "After accounting for all discounts, prices for brand medicines have grown at or more slowly than historical rates, yet many patients have experienced rapidly increasing out-of-pocket costs," said the report. "One reason that it seems as if the costs of medicines are going up dramatically is because discounts and rebates provided by brand manufacturers do not flow directly to the patients taking the medicine."
- Steven Ubl, president and CEO of PhRMA, told BioPharma Dive that he sees the industry reputation changing in a positive way. PhRMA started its GoBoldly campaign seven months ago and Ubl noted that it's starting to reinvigorate the employee base, as well as improve the industry's standing in Washington.
The mudslinging between the industry and the payment middlemen continued this week, with PhRMA head Ubl toeing the industry line and putting responsibility for high drug prices onto PBMs, directing it away from the industry. Meanwhile, the leader of one the country’s largest PBMs deflected blame, pointing fingers at the insurance market.
In reality, due to the complex system of rebates and discounts, blame for high drug prices could be spread across all stakeholders.
"Our research shows that you could pass 50% to 80% of rebates to patients and it would only increase premiums by a very modest 1%," said Ubl at the Forbes Healthcare Summit in New York City on Nov. 30, noting many payers say insurance plan premiums would increase if more rebates or discounts were passed to patients.
"Although PBMs say they prefer lower list prices, as this paper shows, in many cases, the system creates incentives for PBMs to prefer medicines with higher list prices and higher rebates," said the PhRMA report published Nov. 29.
On the inverse side of the argument, Tim Wentworth, president and CEO of the PBM Express Scripts argued at the conference that the company's role is to bring down costs across the healthcare system.
"It’s important to understand how rebates flow. We retain 10% of rebates for our services and administrative fees, and 90% flows straight through to the plans," he said, further passing blame on to payers and insurance plans.
Wentworth noted that new innovations like biosimilars are going to help bring down costs — eventually. "It's going to take longer than anyone would like. . .There are meaningfully significant companies already doing this. It's not as if these product don't exist or that there's a big development curve. It's a question of regulatory and court [hurdles]. You've got great companies sitting on the sidelines just waiting to get their products out of the courts into the market," he added.
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