Here's the essence of the PCMA memo:
Dear President Trump and Congress,
We save you money so give us even greater control who gets what drugs and at what price.
We will provide you a cut of whatever we make. Promise.
Peace and love
No one can accuse the PBMs of not being transparent. The memo is classic rent seeking.
It still begs the question of the use of discriminatory benefit designs to extract $60-70 billion in rebates and patient cost sharing from the sickest patients.
Express Scripts says that "the unit cost of specialty drugs, the most expensive category of medicines, rose by 6.2 percent after drugmaker discounts. That's the smallest increase in five years." But list prices increased by about 11 percent from 2015-2016, the same increase in list prices for specialty Rx between 2014-105. So if the 6.2 percent is net of rebates, that means Express Scripts just pocketed more rebate dollars. Meanwhile, cost sharing for most specialty drugs increased.
It still begs the question of why not let price competition flourish under other business models. The fact is, instead of PBMs pocketing rebates and clawing back revenues of retail and specialty pharmacies after the fact, why not let the price competition occur at the point of service with the goal of eliminating cost sharing. Prices throughout the supply chain would still be proprietary but would be transparent and predictable at the consumer level.
Finally, as I noted in my last blog: It's NOT their money. It's ultimately pharma's $. Getting rid of PBMs won't help consumers if pharma doesn't use the rebate money to reduce prices and cost sharing!