The Worst Biopharma CEOs of 2016 Are …

https://www.thestreet.com/story/13924750/3/the-worst-biopharma-ceos-of-2016-are.html

Once upon a time, tobacco companies funded a public relations campaign to convince Americans that smoking cigarettes was good for their health. Today, a similar spin job is underway to portray pharmacy benefit managers like Express Scripts (the largest PBM in the country) as the good actors in the fight over drug prices.

Wentworth, the CEO of Express Scripts, and his sidekick, Chief Medical Officer Steve Miller, go to work every day to prevent consumers from being fleeced by evil, price-gouging drug companies.

It’s a compelling story well told. Too bad it’s not true.

In their middleman role representing insurers and employers, PBMs like Express Scripts negotiate lower prices largely by demanding rebates — discounts off the list price of a drug — from manufacturers. If a drug company refuses, Express Scripts removes their products from its formulary. The drug companies comply because they can’t afford to be frozen out from the millions of consumers Express Scripts represents.

What happens to that rebate?

Express Scripts pockets a big chunk of the money as profit. How much? No one really knows, because Express Scripts demands secrecy in its dealings with drugmakers over pricing and rebates. That’s on purpose, of course, lest people discover that higher rebates demanded by PBMs can contribute to higher, not lower, drug prices.

When a mobster demands and receives protection money from a local business owner, it’s extortion. When a PBM demands and receives a rebate from a drug manufacturer, it’s perfectly legal and hailed as a victory against rising drug costs.

Only in America!

Filed under: General Problems