At the bottom of this post is a graphic that outlines where the dollars you pay for your medications go. The entities that get the largest chunk of the money, are the ones that have no R&D costs, no inventory costs, and no delivery/distribution costs. They pay the pharmacy $10 for an Rx, then demand a discount/rebate/kickback from the pharma so that their meds are on the PBM’s approved formulary and do not require prior authorization. Then charge the insurance many times what they paid the pharmacy for the medication. If you notice in this article, the PBM industry is not part of the cost-savings. Of course, the 5 major PBM’s are owned by major insurance companies. Back in the day, when there were no PBMs, there were virtually no generics, there was no shortage of medications, there were no prior authorizations, and the average Rx’s price was $4 -$5 each. If nothing had changed, maybe the average Rx price would be $40-$50 each, but with the percentage of generics we now use, maybe the average Rx price would be in the $20-$30 range. If this administration does not see price savings from the PBM industry, collectively we may experience fewer new/improved medications coming to market. No one else does Research and Development (R&D) for new meds, and no one else markets these new meds to doctors. Maybe that is what the Feds want, lowering the life expectancy so that fewer dollars will be paid out by SS and Medicare. When SS was first started > 50% of people did not live to 65 y/o and when Medicare was started in 1965, was just as the Baby Boomers were graduating from high school, and I suspect that the federal bureaucrats looked at the then largest population was going into the workforce and the youngest Baby Boomer was just being born in 1964
When I was born, my life expectancy was 65 y/o, now that I have passed that age, my life expectancy is in the low to mid-80s. How much did the pharma industry contribute to that fact?
All drugmakers send in counteroffers in Medicare price negotiations
All of the manufacturers whose drugs were chosen for the federal government’s Medicare price negotiation program have sent back counteroffers for what they consider to be a maximum fair price, the White House said Monday.
President Biden confirmed in a statement Monday that all companies are continuing to engage in the negotiation process, despite the host of legal battles to block the program.
On Feb. 1, the Centers for Medicare and Medicaid Services (CMS) sent out initial offers of a maximum fair price for the first 10 drugs chosen for Medicare negotiations. These include medications of Eliquis, Jardiance, Xarelto, Januvia and Farxiga. Drugmakers had until March 2 to send back counteroffers.
“Today, my Administration is announcing that manufacturers for all ten selected drugs will continue to participate in drug price negotiations, as all manufacturers have submitted counteroffers,” Biden said Monday. “This is an important milestone in our fight to give seniors the best possible deal on their prescription drugs and in lowering health care costs for all families.”
“And it comes in the face of attacks from Big Pharma in the courts and from Republicans in Congress who continue to try to repeal the Inflation Reduction Act which would keep seniors on Medicare from benefitting from these lower-cost drugs,” he added.
Biden indicated he would have more to say on this issue in his State of the Union address Thursday.
Talks are expected to go through Aug. 1, when negotiations officially end, per CMS guidance. The maximum fair prices are scheduled to be published Sept. 1 and are set to go into effect at the start of 2026.
The pharmaceutical industry is engaged in a legal battle with the federal government to block the Medicare negotiation; drugmakers and trade groups have filed numerous lawsuits alleging the program violates federal law and is unconstitutional.
Since the start of the year, two of those lawsuits have gone in favor of the federal government, with one suit filed by the trade group PhRMA being dismissed last month and a federal judge issuing summary judgment last week in favor of Medicare negotiation in a case brought by AstraZeneca.
Filed under: General Problems
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