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babylonsister

(171,049 posts) Mon Jan 10, 2022, 01:35 PM Jan 2022

Biden Regulators Take Action on Hidden Pharma Monopolies

Biden Regulators Take Action on Hidden Pharma Monopolies
A proposed rule would eliminate the ability of pharmacy benefit managers to extract profits after a prescription drug is sold.
by David Dayen
January 10, 2022

Pharmacy benefit managers such as Express Scripts are middlemen who negotiate prices between health plans and drug companies.

The Centers for Medicare & Medicaid Services (CMS) has proposed a new rule that would attack one of the key tactics enriching the middlemen who keep prescription drug prices high and make it difficult for independent pharmacists to survive.

The rule could dent the profits of pharmacy benefit managers (PBMs), middlemen who negotiate prices between health plans and drug companies, and in the process use their knowledge advantage to skim off the top from virtually everybody.

These companies, three of which control around 80 percent of the market, have come under fire at the state and federal level for betraying their promise of securing lower drug prices. They are part of the tangle of interests in the pharmaceutical supply chain, which has patients paying exorbitant rates for lifesaving medications. Independent pharmacies that are unaffiliated with PBMs have been hit particularly hard, with low reimbursement rates for distributing drugs, high and often random fees, and an inability to earn back above costs. Many such pharmacies have shut their doors, particularly in rural areas where they are a key element of the health system.

The CMS rule isn’t the first effort at tackling PBMs. But it may be one of the most important because of what it’s targeting: a particularly pernicious part of the PBM arsenal known as direct and indirect remuneration (DIR) fees, which these middlemen often pocket.

more...

https://prospect.org/health/biden-regulators-take-action-on-hidden-pharma-monopolies/