PBM Drug Pricing Distortion Report
11 days ago
- #drug-pricing
- #healthcare-reform
- #PBMs
- The article discusses the persistent issue of drug pricing distortions, particularly focusing on vertically integrated Pharmacy Benefit Managers (PBMs) and drug manufacturers.
- PBMs, originally meant to counteract high drug prices, now sometimes set prices themselves, leading to misaligned incentives and higher costs.
- Recent research highlights concerns about PBM-owned drug companies like Quallent Pharmaceuticals, which set high Average Wholesale Prices (AWPs) despite low Wholesale Acquisition Costs (WACs).
- AWP, an outdated and inflated pricing benchmark, remains dominant in contracts, distorting actual drug costs and benefiting PBMs and pharmacies.
- Quallent's pricing strategy shows high AWPs relative to competitors, leading to higher costs for payers and increased margins for pharmacies.
- The article contrasts Quallent's pricing with cost-plus models like Mark Cuban's Cost Plus Drug Company, which offers significantly lower prices.
- Historical context reveals AWP's flaws, including past lawsuits and settlements, yet it persists due to entrenched contractual practices.
- The piece calls for scrutiny of PBM pricing models and advocates for transparency and reform to align incentives with lower drug prices.