Why Are Prescription Drugs So Expensive with Michael Navin & Dr. Randy Vogenberg | Only Healthcare Podcast #19

In this episode of Only Healthcare, hosts Michael Navin and Dr. Randy Vogenberg dive deep into one of America's most pressing healthcare questions: Why are prescription drugs so expensive? 

Michael, a leading expert in biotech market access and commercialization strategies, unpacks the complex web of pricing decisions, negotiations, and middleman systems that drive up drug costs for patients and employers alike.

Key Topics Discussed:

• Drug Pricing Fundamentals - How pharmaceutical companies set initial prices based on market research, differentiation analysis, and anticipated rebate demands from pharmacy benefit managers
• PBM Rebate Evolution - The dramatic shift from 10-25% rebates in the early 2000s to today's 50-80% rebate demands, and how this has fundamentally distorted market pricing
• Patient Cost-Sharing Crisis - Why patients pay full list prices until hitting deductibles while rebates flow to PBMs, leading to $24 billion in pharmaceutical industry copay assistance programs in 2023
• Technology Solutions & Reform - How AI-driven pricing transparency, machine-readable rebate files, and direct-pay programs from companies like Lilly and Novo are beginning to bypass traditional middlemen

The broken pricing system isn't just complex. it's actively preventing market competition and forcing patients to pay inflated prices while PBMs profit more than drug manufacturers themselves.

🎧 Listen now: onlyhealthcarepodcast.com

Chapters:

(00:00) Introduction
(01:00) Drug company pricing strategy fundamentals
(04:00) Evolution of PBM rebates from 10% to 50%+
(07:00) Real-world pricing example: Why $60 drugs can't compete with $700 alternatives
(10:00) How PBMs now make more money than drug companies
(16:00) The $24 billion patient assistance crisis
(20:00) Technology solutions and transparency reform
(22:00) Key takeaways for system change

Michael's LinkedIn

Randy's LinkedIn

Sponsored by:
Peek: A game-changing prescription shopping solution that allows its members to view all their prescription cost options across cash discount programs and their insurance in one easy-to-use platform. Peek is currently being offered to organizations to help both employees and plan sponsors save money on their prescription spend. https://peekmeds.com/.

Institute for Integrated Health (IIH): Health care benefits, insurance coverage regulations, and doing business in the healthcare industry can be complicated. At IIH, Dr. Randy Vogenberg and his team understand these unique challenges and provides strategic guidance customized to every client. To help overcome your unique challenges, IIH delivers education, planning and advisory on market trends, and U.S. health care market intelligence. The firm’s decades of proven success are due to strategic collaboration with associates from the business, clinical, and scientific communities. https://iih-online.com/.