From the Brass Knuckles Capitalism Files: US drug prices

A NYT article (not paywalled) discusses how American pharmaceutical drug prices are jacked up by middlemen who operate in secrecy:

The Opaque Industry Secretly Inflating Prices for Prescription Drugs

Americans are paying too much for prescription drugs.

It is a common, longstanding complaint. And the culprits seem obvious: Drug companies. Insurers. A dysfunctional federal government.

But there is another collection of powerful forces that often escape attention, because they operate in the bowels of the health care system and cloak themselves in such opacity and complexity that many people don’t even realize they exist.

They are called pharmacy benefit managers. And they are driving up drug costs for millions of people, employers and the government.

The three largest pharmacy benefit managers, or P.B.M.s, act as middlemen overseeing prescriptions for more than 200 million Americans. They are owned by huge health care conglomerates — CVS Health, Cigna and UnitedHealth Group — and are hired by employers and governments.

The job of the P.B.M.s is to reduce drug costs. Instead, they frequently do the opposite. They steer patients toward pricier drugs, charge steep markups on what would otherwise be inexpensive medicines and extract billions of dollars in hidden fees, a New York Times investigation found.

Most Americans get their health insurance through a government program like Medicare or through an employer, which pay for two different types of insurance for each person. One type covers visits to doctors and hospitals, and it is handled by an insurance company. The other pays for prescriptions. That is overseen by a P.B.M.

“We’re really, really good at what we do,” Jon Mahrt, president of UnitedHealth’s P.B.M., Optum Rx, said in an interview. The main lobbying group for the P.B.M.s says that in 2022 they saved their clients and patients $286 billion.

But those savings appear to be largely a mirage, a product of a system where prices have been artificially inflated so that major P.B.M.s and drug companies can boost their profits while taking credit for reducing prices.

• P.B.M.s sometimes push patients toward drugs with higher out-of-pocket costs, shunning cheaper alternatives.

• They often charge employers and government programs like Medicare multiple times the wholesale price of a drug, keeping most of the difference for themselves. That overcharging goes far beyond the markups that pharmacies, like other retailers, typically tack on when they sell products.

• The largest P.B.M.s recently established subsidiaries that harvest billions of dollars in fees from drug companies, money that flows straight to their bottom line and does nothing to reduce health care costs.

• The P.B.M.s, which are responsible for paying pharmacies on behalf of employers, are driving independent drugstores out of business by not paying them enough to cover their costs. Small pharmacies have little choice but to accept these lowball rates because the largest P.B.M.s control an overwhelming majority of prescriptions. The disappearance of local pharmacies limits health care access for poorer communities but ultimately enriches the P.B.M.s’ parent companies, which own drugstores or mail-order pharmacies.

• P.B.M.s sometimes delay or even prevent patients from getting their prescriptions. In the worst cases, patients suffer serious health consequences.

Many patients learn about the existence of P.B.M.s only when they have a problem getting medications and spend hours navigating a byzantine system of approvals and restrictions.

So when PBM spokesman Jon Mahr says, “We’re really, really good at what we do,” he is spot on correct. That is absolutely true. His job is to help screw the American people out of every last penny to squeeze every last penny of profit out of health care. He is really good at what he does, i.e., he lies to us in pursuit of profit.

The radical, authoritarian Republican Project 2025 wants to reduce regulations on all businesses, including PBMs. Why? Because there is so damn much money to be made for the giant "human" corporations and the Republicans who open the floodgates of profit for those "people." 

It is all about the Benjamins, not human health or the public interest.