Express Scripts CEO addresses drug pricing ‘misinformation’
The nation’s largest pharmacy benefit manager is defending itself against accusations that it’s partly to blame for high drug prices.
Express Scripts Chief Executive Tim Wentworth delivered a strongly worded response to such claims during an earnings call Wednesday.
“Let me first say that in my nearly 20 years in the PBM business, I have never been prouder of the results we create, but I’ve never seen more misinformation and absence of facts in the dialogue about our role.”
Express Scripts negotiates the cost of drugs directly with pharmaceutical companies and provides prescriptions to about 85 million Americans each year through employer-based coverage.
“Let me start with the facts,” Wentworth said during Wednesday’s call. “Drug companies set drug prices, and over the last eight years, those list prices have increased by more than 200 percent. If not for us, our clients and patients would be left to pay those costs. Drugmakers set prices, and we exist to bring those prices down to ensure patients can access the drugs they need and that payers can afford them.”
Rebates are one of the most popular tools used to lower drug prices. Wentworth said Express Scripts’ clients received 89 percent of the rebates the company negotiated with drug manufacturers. Express Scripts had not shared that figure in recent years.
Express Scripts has a national preferred formulary, which is a list of drugs it covers. Because Express Scripts filled 1.4 billion prescriptions last year, manufacturers want to have their drugs on that formulary. To get listed, they agree to rebates.
That timing can expose some patients, especially those with high deductibles, to the full cost of a drug, said Rachel Sachs, an associate professor of law at Washington University. She focuses on health law and food and drug regulation.
PBMs serve a function, Sachs said, but they are partly to blame for high drug costs. Ultimately, she said, there’s not a lot of transparency in how the rebates are passed through to patients.
Express Scripts tried to provide more information on Wednesday’s call.
Wentworth said Express Scripts sometimes passed the entire rebate through to its client, which is an employer or health insurance company, and the client decides what to do with the money.
“One hundred percent of the time, our clients determine how to share rebates,” Wentworth said.
Sometimes clients share the rebate with Express Scripts, and sometimes Express Scripts keeps all of it.
“To suggest that our creating competition and the resulting rebates is why prices go up is uninformed and simply wrong,” Wentworth said.
Filed under: General Problems
There would be no need for intermediaries like Express Scripts if the DHHS Centers for Medicare and Medicaid set a cap on the insurance reimbursement of pharmaceutical company prices, based on cost of development and production plus a moderate (~20%) profit during the patent period. So far, the pharmaceutical companies have succeeded in paying off Congress to deny price competition of this sort. The bribes are called campaign contributions and they mount up into the tens of millions of dollars in every election year. Big Pharma owns most of our Congressmen and Senators, lock stock and barrel. Until we as citizens deny some of these creeps reelection, NOTHING will change.