PBM’s - You’re goin' down!

This forum made possible through the generous support of SDN members, donors, and sponsors. Thank you.
Says Trump.

Trump Targets Drug Middlemen With ‘Devastating’ Rebate Plan
Bloomberg Reports

Anyone work at a PBM? Ya'll freaking out? I used to tell my students that this was a sham, and if it's too hard to explain, it's likely not practical.

He's just gonna force them to merge and integrate. The end result will be a bigger monstrosity than the likes of which you have ever seen. Becareful what you wish for.
 
Last edited:
Weather this week + this = even hell is frozen over because I agree with Trump on this. However, the irony of anyone in that administration being anti-kickbacks is rich.
 
instead of passing rebates to pbm, the rebates are passed to consumers. that can only mean one thing. the drug maker continues to push drug price through the roof, but now consumers think they're saving money from rebates. but are they really saving money? Look at epipen for example. a "coupon" for epipen brand brings the price from $600 to $300. the price without coupon for generic? also $300. both generic and brand are made by the same manufacturer! which one would you get? are you really saving money with the coupon? the drug maker determines the $600 price tag, then provided a coupon (rebate). but it's the same exact product as the so-called $300 generic. the generic coming from the same manufacturer?! how is it saving money? it's like changing the volume of water from a fish bowl to a fish tank, it's the same 10 gallon. the drug maker comes out with a $10,000 product. gave a $9,000 rebate to consumers. skip the pbm. is the consumer still saving money?
 
instead of passing rebates to pbm, the rebates are passed to consumers. that can only mean one thing. the drug maker continues to push drug price through the roof, but now consumers think they're saving money from rebates.

I see your point, but won't this at least cut down on nonsense formularies where the brand is the PBM preferred product (and the generic isn't covered at all) due to the rebate to the PBM?

I mean no solution is perfect but don't letter perfect be the enemy of better. Any improvement is better than what we have now.
 
Between this and actually enforcing the 340b price ceilings on manufacturers it looks like Trump is making an actual effort to do something meaningful about drug prices, surprising as that may be.

This would be a fantastic improvement if implemented. The rebate system as it stands is simply a kickback system and worse it gives a fog on the individual parties for their actual pricing details. Secret rebates allow both the drug manufacturers and the PBMs to point fingers at one another when the public wonders why drug prices are so high with very little objective data to analyze who is screwing the consumer (it's almost certainly both). Pulling the pricing system into the light won't fix everything by itself, but it will at least make it more obvious which parties are blatantly gaming the pricing system.
 
This will likely lead to a shortage of drugs, as when their costs go up, they lose money, either subsidization will need to happen, or the firms will shut down or sell patents until no one wants them.

I can fix the ridiculous drug pricing scam that's being run in this country with one law. Just make it illegal to increase the wholesale cost of a generic medication (no loophole rebates or anything allowed, has to be the final price) more than the rate of inflation except for certain predefined exceptions (increase in supply costs, new FDA approved indication, etc.). Drug companies could petition for exceptions with whoever (FDA? FTC?). Honestly, the system would make money as drug companies would inevitably break the law and the government could go in and impose hefty fines. Charge for a petition application so there isn't just a flood of applications for each medication.

No more incentive to price fix and monopolize. It's still a free market as the end price will be the free market price minus artificial increases for detrimental reasons. Rule number 47 of management is focus on outputs, not inputs. Don't outlaw rebates and monopolies, outlaw stupid price increases.
 
Top