May 14, 2023 • 25 mins
Lowering Drug Costs with Health Insurance Regulations Has Overwhelming Bipartisan Support - Voters Strongly Favor Policies that Hold Pharmacy Benefit Managers Accountable and Provide Value*
A new national poll finds that a majority of likely voters overwhelmingly support policies that regulate health insurance middlemen companies known as Pharmacy Benefit Managers (PBMs), requiring them to provide more value and help lower drug costs. PBMs act as middlemen between drug manufacturers and patients’ health plans who – instead of lowering drug costs as they initially promised – take advantage of the healthcare system to increase their revenues at the expense of local pharmacies, taxpayers and patients. Three PBM companies control 75% of the market. The poll, conducted by the bipartisan polling team of Lake Research Partners and Bellwether Research, found that 84% of likely voters say it’s important or very important to have rules that require PBMs to provide value and lower drug costs for consumers. Respondents said they want elected officials to take on the issue of regulating PBMs, with 73% saying it should be a high or top priority for Congress and their state legislatures. What’s more, 72% say they are more likely to vote for a candidate who supports regulating PBMs.
Mark Blum, Executive Director of America’s Agenda: Health Care for All. joins Mark Alyn for a look at lowering prescription costs.
Become a supporter of this podcast: https://www.spreaker.com/podcast/late-night-health-radio--2804369/support.
A new national poll finds that a majority of likely voters overwhelmingly support policies that regulate health insurance middlemen companies known as Pharmacy Benefit Managers (PBMs), requiring them to provide more value and help lower drug costs. PBMs act as middlemen between drug manufacturers and patients’ health plans who – instead of lowering drug costs as they initially promised – take advantage of the healthcare system to increase their revenues at the expense of local pharmacies, taxpayers and patients. Three PBM companies control 75% of the market. The poll, conducted by the bipartisan polling team of Lake Research Partners and Bellwether Research, found that 84% of likely voters say it’s important or very important to have rules that require PBMs to provide value and lower drug costs for consumers. Respondents said they want elected officials to take on the issue of regulating PBMs, with 73% saying it should be a high or top priority for Congress and their state legislatures. What’s more, 72% say they are more likely to vote for a candidate who supports regulating PBMs.
Mark Blum, Executive Director of America’s Agenda: Health Care for All. joins Mark Alyn for a look at lowering prescription costs.
Become a supporter of this podcast: https://www.spreaker.com/podcast/late-night-health-radio--2804369/support.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:07):
This is Late Night Health. Thisis the radio show that cares about the
most important part of your life,your health. During the next down where
we're going to be talking with someinteresting people, both from the Washington,
DC area. During the second partof our show, we're going to be
talking about an advocate who works withpeople to get through the trials and tribulations
(00:33):
of insurance companies and anything else,but mostly insurance companies when they decline claims.
That'll be happening in the second partof our show. The first part
of our show, we're gonna begoing also to Washington, DC to speak
with Mark Bloom. He's leading healthplessy expert. He's even worked here in
(00:55):
our home state of California. Heis I've got it right here. He
is the executive director of America's AgendaHealthcare for All, and we're gonna be
talking about pharmacy benefit managers and howthey can be regulated to reduce drug costs
for all Americans. Mark, Welcometo Late Night Health. It's a pleasure
(01:18):
to be with you and your listeners. Mark. I'm just gonna talk about
this in general. I think drugcosts in the United States are outrageously expensive.
I understand several things capitalism. Everybodywants to make money. I want
(01:40):
to make money. You want tomake money, but not by breaking the
backs of the American people. I'mgoing to give you an example of something
that I think is just absolutely horrific. I checked out a drug. It's
called Celebrex. Celebrex has been onthe market for about twenty five years.
(02:01):
The generic form of celler breaks.Any idea how much that that costs without
insurance, I'm gonna guess it's afraction of what it costs with a prescription
benefit plan. Yes, right,Well it's the generic is four hundred dollars
(02:23):
a month, and on a prescriptionplan it's like thirty bucks, which I
still think is high because the costof this stuff has got to be about
fifty cents for thirty pills. It'soutrageous. Any thoughts on that before we
(02:44):
talk about about ppms PBMs. Well, it's hard to talk about that without
talking about PBMs, because pricing ofdrugs in America is a really complex conversation
(03:04):
because it isn't a simple marketplace.It's a simple marketplace in which supply and
demand is intermediated by these mega corporatemiddlemen, mega corporations. I'm talking about
multi billion dollar fortune fifty corporations thatin fact buy from manufacturers, negotiate discounts
(03:30):
or manufacturing manufacturers prices, and thenresell the drugs to employer health plans,
to self funded health plans, togovernment health plans, and through them to
individual patients who cost share. Andthey are the fastest growing component of healthcare.
Healthcare grows typically about three times therate of the consumer price index,
(03:52):
and the fastest growing part of healthcareis in fact the prescription drug spend.
Let me just give you an exampleof how large the margins are in New
Jersey. A few years ago,we were recruited by the public sector unions
of New Jersey as well as thelegislative leadership and the Governor of New Jersey
(04:14):
to develop a model to create competitionbetween PBMs in order to drive down prices
by having them compete against each other. The long and the short is we
experimented. We opened the first relativelytransparent marketplace for PBMs in the country,
and we saved the state two pointfive three billion dollars in drugs spend over
(04:39):
five years without any cut and prescriptionmedicines that was all it just fat it
was excess profits. The PBM stillmade profits, but they gave back to
the state two point five three billiondollars in that period. How did it
affect the consumer? I mean,if they were paying four hundred dollars a
(05:03):
month for a prescription, would thathave been lowered? Yes, premiums were
ultimately lowered as well. Let's talkabout the cost share part, which is
what you're talking about right now.What's the consumer paying is cost share at
the pharmacy counter when they pick upa prescription medicine. Typically, and this
(05:24):
is this is part of the gamesthat PBMs play. Remember, you're not
buying your drug from a manufacturer directly. You're buying your drug from a PPM
at a price that's been set bythe PPM. PBMs very typically set the
price, the cost share your consumerpays on the list price of the drug
(05:45):
set by the manufacturer. But nobodypays the list price except you, the
patient at the pharmacy counter. Whyis that? You got to look with
the PBM value proposition? Was thePPM value proposition is manufacturers are effectively monopolies
of the brand drugs that they sell. We have a lot of relatively small
(06:05):
demanders. They may be local governments, they may be private employers. We
will aggregate demand from all of thesesmall health plans, will use that volume
to leverage down the price from manufacturers. Thirty to forty years ago and PBMs
first arrived on the American healthcare scene, That's what they did. They still
do it. They do it verywell. They negotiate step discounts for manufacturers.
(06:30):
But then they have found ways todivert those discounts into their own bank
accounts rather than passing the savings onto patients. Many techniques for doing that,
but one of those is to chargepatients the list price, not the
price, the net price, whichis after the discounts have been deducted.
So you're the person you're talking aboutis actually paying a cost share, a
(06:53):
copay on a list price that thePBM has never paid. In fact,
no one has paid in the marketplaceexcept for your patient. That's absolutely that's
ridiculous. And what about things likegood RX? Amazon, Mark Cuban has
got a new thing, and Ialso want to get into formularies during our
(07:15):
next segment, But sure, whatabout good rx and other programs like that?
Good RX kind of proves the pointwhat good RX does is it tells
you, looking at pharmacies in yourcommunity, what it will cost you to
buy a prescription medicine. Take ageneric medicine, for example, if you
pay the full price buying the drugfrom the pharmacist who, after all,
(07:41):
has bought the drug at wholesale price, and then it's charging a dispensing fee.
Good r X shows you what youcan pay at a pharmacy if you
don't use your insurance at all,versus what you're gonna pay if you pay
co pay in your prescription drug plan. Good X the whole reason for being
is to show you that you canpay full cost out of pocket and it'll
(08:03):
be a fraction of what your costshare will be if you buy it for
your insurance plan. Yeah. I'veseen that several times and it really ticks
me off. And I also wantto know. And I'm going to use
CBS as an example, because theyare either number one or number two drug
store and pharmacy in the United Statesright now. I think Day and Walmart
(08:26):
kind of knows to knows are Walgreens. I'm meant formularies whoever is negotiating those
rates. I mean at four hundreddollars a month. That person should absolutely
be let go. I think atjail time. That's how serious I believe
this is. You know, theFederal Trade Commission may agree with you.
(08:52):
They finally launched, after years ofpostponement, an investigation the PBM industry as
being potentially in violation of American antitrust laws for reason we haven't discussed,
but it's an interesting discussion. Maybemaybe in another segment, we could talk
about the vertical integration of insurance companiesPBMs, retail and specialty pharmacies. And
(09:16):
now PBMs or these vertical conglomerates haveopened GPOs group purchasing organizations turn fact offshore,
even though PBMs have no offshore business. So these vertically integrated multinational corporations
that sit in the middle of ourprescription drug market, and we're gonna,
you know, we're gonna take abreak, Mark, We've got to take
a break for a few moments tosome business. When we come back,
(09:39):
I want to talk about formularies becauseI think those are anti consumer. I
think that insurance companies should be spankssomehow. Jail time would be nice,
and we need to bring the prescriptiondrugs down and We're going to talk about
the FTC and the fact that theygo after dollars. They don't care about
(10:03):
consumers. In my opinion, I'mMark Allen along with the insane Daryl Wayne.
Don't go away. As Late NightHealth continues. Late Night Health is
proud of our partnership with the EBC, the Evolutionary Business Council. Check them
out at eb Council dot com.You're listening to Late Night Health with Mark
(10:26):
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If you're listening to Late Night Healthright now, you're part of the
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Words are a critical aspect of success. How you get your point across as
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That's I ni ci box dot vfairs dot com and join the conversation
to be part of the solution.Late Night Health continues. I'm Mark Allen,
along with the insane Darryl Wayne.Be sure to join us at late
Night Health dot com. Late NightHealth dot com. We'll have a pretty
(14:13):
picture of our guest, Mark Bloomup there in a couple of weeks,
and we'll also have a link tothe show as well, and you'll be
able to find out more about Markand about his organization, America's Agenda Healthcare
for All. I really liked thename of your group, Healthcare for All,
(14:35):
in particular. During our break wewere talking about a couple of things,
and I have said for years nowthat formularies were not in favor of
consumers. Am I correct in thatassumption. Yeah, formularies are in favor
(14:56):
of the PBMs, the pharmacy benefitmanager entities that design them. Listen,
a lot of guys will vilify PBMs. I haven't hearded you do it.
I try not to do it,because you're right. This is capitalism,
and PBMs are responding to perverse incentivesto make a profit. The perverse incentives
(15:22):
are this while their value proposition iswill negotiate discounts and passmond of consumers.
In fact, PBMs have figured outthat more expensive drugs let them get deeper
discounts and therefore have more profits toextract from those discounts to divert into their
(15:43):
own bank accounts. So we seePBMs have a systematic incentive to offer more
expensive drugs on the preferred tiers.So you're paying a copay, we can
actually give you a reduced copay ona much higher drug price that takes more
money out of your pocket and alsoout of your health plans pocket. If
(16:03):
you have an employer sponsored health planor a government health plan, the government
or your employer pay a lot morefor the drugs on the preferred pier than
they would. The US Senate Committeejust so this isn't just me and you
talking. The Finance Committee of theUS Senate did a study on the crisis
of diabetes drugs, some insulins,of which there are a wide number of
(16:26):
kinds of insulin and insulin therapeutic equivalentson the marketplace biosimilars as well, and
found that systematically PBMs are denying placementon preferred tiers and sometimes not letting drugs
insulins come onto their formularies at allthat are the least expensive, the most
(16:48):
affordable for patients. Why because ofthe least profitable for the PBM and so
recently when under the IRA, theInflation Reduction Act that thirty five dollars or
caps who are imposed upon auto pocketpayments for seniors in Medicare for accessing insulin.
Understand still, the most expensive insulindrugs are on the preferred tiers of
(17:12):
those those formularies. Right now,PBMs are starting to readjust and reduce the
costs they're charging for insulin drugs becauseof the IRA, because of Biden's Inflation
Reduction the Well Congress is Inflation ReductionAct that the President Biden signed. But
the fact is that systematic incentives tobring the most expensive drugs unto the preferred
(17:37):
tiers of formularies exist for PBMs becauseit's simply profitable. They're responding to a
perverse incentive. Look in a marketplacewhich was truly competitive and truly transparent,
manufacturers are competing to offer lower drugsto get consumer demand. Right in this
marketplace, PBMs are actually offering thehighest price drugs possible in order to maximize
(17:59):
problems. They're not really competing witheach other with each other. What's happening,
then, Mark, is that CBSand Walgreens, And I'm trying to
think of another rite aid here inCalifornia, they a third party that's actually
(18:21):
running their drug program. Well,you're right, it's a third party if
you're talking about Walgreens. But whenyou're talking about CBS care Mark, CBS
CBS care Marks, the PPM thatowns the CPS retail drugs, it vertically
integrated conglomerate. We did a studya few years ago and we saw that
over three years, under pressure,a lot of criticism about PBMs retaining rebates
(18:45):
that they negotiated from drugs. Thoseare discounts from the manufacturer prices, retaining
them rather than paths gound to consumers. In over three year period, we
found that PBMs passed through they ssixty four percent of the rebates they previously
chained. In other words, retentionof rebates declined by sixty four percent.
Wow, now you're going to seebig discounts on drugs. No. In
(19:07):
fact, drug prices went up overthat. Profitability of ppms went up because
they found other ways to take moneyout of the same transactions from consumers.
We found that when sixty four percentreduction and rebates happened, they increased fees
on manufacturers by fifty one percent andprofits on pharmacis they owned by fourteen percent.
(19:30):
To wait a second, this islike the car industry. You sell
ten Mercedes this month and you geta rebate. You know, and we
all know how when you buy acar, you know you're gonna get I
guess I can say screwed. Soyou know you're gonna get screwed, you
just don't know by how much.So when you buy a drug, you
(19:52):
know you're gonna get screwed, butyou just don't know by how much because
of the ppms. In fact,you won't find out because their pricing is
not transparent. PBMs don't share theirdata. That's one of the problems.
The accounting or the reporting requirements forPBMs are the least in the entire healthcare
industry. It is a shady industryof multiple price manipulation schemes to make profits
(20:18):
for the PBMs and keep price opaqueto consumers. Now, we don't want
to get totally pessimistic with your readers, I hope because there's actually movement in
Congress right now for some reforms thatcould truly be meaningful in this area as
America's agenda healthcare for all? Areyou a lobbyist at all? Do you
(20:41):
know we're not. We're not forprofit think tank on health policy. We're
not lobbyists, got it? Maybeyou need so were Our mission is to
find the common ground between patient advocates, labor unions, employers, and healthcare
(21:03):
providers that share the mission of tryingof wanting healthcare to be as affordable as
possible for American workers. Let's justbriefly talk about the Federal Trade Commission again,
another government agency that oversteps its boundslooking for dollars. I've worked in
(21:25):
the direct response industry and they're theones who enforce FDA rules, but they
stretch them. They they they're notconsistent. If somebody is making a hundred
million or two hundred million dollars ona product, they go after them.
(21:45):
And they shouldn't. They they needto. They need to be regrouped and
organized, just like the FDA andpossibly Congress. I don't know. Maybe
the country we're pulling apart, folksum, but we are still the greatest
country in the world and have alwaysbeen that. And I don't care what
(22:06):
any former president says. I don'tmean to be polited. Oh yeah,
I do in our remaining moments.Mark, First of all, I'd like
to invite you to come back whenthere's legislation or anything. Please come back.
Sam is listening to us right now, and Sam, that's your job.
(22:29):
Get back to me. I justwant to I just want to interrupt
you to accept that offer. I'dbe delighted to come back and talk to
you into your audience again. Thishas been fun. I'm glad. What
can the American people do right now? What should we do? What should
Daryl and I do to come back? Price of drugs? The most important
(22:52):
thing you can do right now isright now, in this Session of Congress
is I was mentioned earlier and we'lltalk about your next show. There is
very serious reform legislation PBM directed reformlegislation being led by by on the Democratic
side by Chairman Widen of the FinanceCommittee, and he's joined in bipartisanship by
(23:15):
the ranking member Craple of Mike Crepleof Idaho. Wow, here, let
me tell you the basic thesis ofthe reform. We only have ten seconds
left and Okay, go ahead.I'm sorry we're out of time, but
we will pick up on this.Our guest has been bloom He is the
(23:37):
executive director of America's Agenda Healthcare forAll. I'm Mark Allen. Coming up
next. We've got Harold Cameron,who will probably be just down the street
from Mark because he's also in DC, and we'll be talking to him about
being an advocate for people on allkinds of issues. Late Night Health continues.
Be sure to visit us at LateNight Health touch on to
This is Late Night Health. Thisis the radio show that cares about the
most important part of your life,your health. During the next down where
we're going to be talking with someinteresting people, both from the Washington,
DC area. During the second partof our show, we're going to be
talking about an advocate who works withpeople to get through the trials and tribulations
(00:33):
of insurance companies and anything else,but mostly insurance companies when they decline claims.
That'll be happening in the second partof our show. The first part
of our show, we're gonna begoing also to Washington, DC to speak
with Mark Bloom. He's leading healthplessy expert. He's even worked here in
(00:55):
our home state of California. Heis I've got it right here. He
is the executive director of America's AgendaHealthcare for All, and we're gonna be
talking about pharmacy benefit managers and howthey can be regulated to reduce drug costs
for all Americans. Mark, Welcometo Late Night Health. It's a pleasure
(01:18):
to be with you and your listeners. Mark. I'm just gonna talk about
this in general. I think drugcosts in the United States are outrageously expensive.
I understand several things capitalism. Everybodywants to make money. I want
(01:40):
to make money. You want tomake money, but not by breaking the
backs of the American people. I'mgoing to give you an example of something
that I think is just absolutely horrific. I checked out a drug. It's
called Celebrex. Celebrex has been onthe market for about twenty five years.
(02:01):
The generic form of celler breaks.Any idea how much that that costs without
insurance, I'm gonna guess it's afraction of what it costs with a prescription
benefit plan. Yes, right,Well it's the generic is four hundred dollars
(02:23):
a month, and on a prescriptionplan it's like thirty bucks, which I
still think is high because the costof this stuff has got to be about
fifty cents for thirty pills. It'soutrageous. Any thoughts on that before we
(02:44):
talk about about ppms PBMs. Well, it's hard to talk about that without
talking about PBMs, because pricing ofdrugs in America is a really complex conversation
(03:04):
because it isn't a simple marketplace.It's a simple marketplace in which supply and
demand is intermediated by these mega corporatemiddlemen, mega corporations. I'm talking about
multi billion dollar fortune fifty corporations thatin fact buy from manufacturers, negotiate discounts
(03:30):
or manufacturing manufacturers prices, and thenresell the drugs to employer health plans,
to self funded health plans, togovernment health plans, and through them to
individual patients who cost share. Andthey are the fastest growing component of healthcare.
Healthcare grows typically about three times therate of the consumer price index,
(03:52):
and the fastest growing part of healthcareis in fact the prescription drug spend.
Let me just give you an exampleof how large the margins are in New
Jersey. A few years ago,we were recruited by the public sector unions
of New Jersey as well as thelegislative leadership and the Governor of New Jersey
(04:14):
to develop a model to create competitionbetween PBMs in order to drive down prices
by having them compete against each other. The long and the short is we
experimented. We opened the first relativelytransparent marketplace for PBMs in the country,
and we saved the state two pointfive three billion dollars in drugs spend over
(04:39):
five years without any cut and prescriptionmedicines that was all it just fat it
was excess profits. The PBM stillmade profits, but they gave back to
the state two point five three billiondollars in that period. How did it
affect the consumer? I mean,if they were paying four hundred dollars a
(05:03):
month for a prescription, would thathave been lowered? Yes, premiums were
ultimately lowered as well. Let's talkabout the cost share part, which is
what you're talking about right now.What's the consumer paying is cost share at
the pharmacy counter when they pick upa prescription medicine. Typically, and this
(05:24):
is this is part of the gamesthat PBMs play. Remember, you're not
buying your drug from a manufacturer directly. You're buying your drug from a PPM
at a price that's been set bythe PPM. PBMs very typically set the
price, the cost share your consumerpays on the list price of the drug
(05:45):
set by the manufacturer. But nobodypays the list price except you, the
patient at the pharmacy counter. Whyis that? You got to look with
the PBM value proposition? Was thePPM value proposition is manufacturers are effectively monopolies
of the brand drugs that they sell. We have a lot of relatively small
(06:05):
demanders. They may be local governments, they may be private employers. We
will aggregate demand from all of thesesmall health plans, will use that volume
to leverage down the price from manufacturers. Thirty to forty years ago and PBMs
first arrived on the American healthcare scene, That's what they did. They still
do it. They do it verywell. They negotiate step discounts for manufacturers.
(06:30):
But then they have found ways todivert those discounts into their own bank
accounts rather than passing the savings onto patients. Many techniques for doing that,
but one of those is to chargepatients the list price, not the
price, the net price, whichis after the discounts have been deducted.
So you're the person you're talking aboutis actually paying a cost share, a
(06:53):
copay on a list price that thePBM has never paid. In fact,
no one has paid in the marketplaceexcept for your patient. That's absolutely that's
ridiculous. And what about things likegood RX? Amazon, Mark Cuban has
got a new thing, and Ialso want to get into formularies during our
(07:15):
next segment, But sure, whatabout good rx and other programs like that?
Good RX kind of proves the pointwhat good RX does is it tells
you, looking at pharmacies in yourcommunity, what it will cost you to
buy a prescription medicine. Take ageneric medicine, for example, if you
pay the full price buying the drugfrom the pharmacist who, after all,
(07:41):
has bought the drug at wholesale price, and then it's charging a dispensing fee.
Good r X shows you what youcan pay at a pharmacy if you
don't use your insurance at all,versus what you're gonna pay if you pay
co pay in your prescription drug plan. Good X the whole reason for being
is to show you that you canpay full cost out of pocket and it'll
(08:03):
be a fraction of what your costshare will be if you buy it for
your insurance plan. Yeah. I'veseen that several times and it really ticks
me off. And I also wantto know. And I'm going to use
CBS as an example, because theyare either number one or number two drug
store and pharmacy in the United Statesright now. I think Day and Walmart
(08:26):
kind of knows to knows are Walgreens. I'm meant formularies whoever is negotiating those
rates. I mean at four hundreddollars a month. That person should absolutely
be let go. I think atjail time. That's how serious I believe
this is. You know, theFederal Trade Commission may agree with you.
(08:52):
They finally launched, after years ofpostponement, an investigation the PBM industry as
being potentially in violation of American antitrust laws for reason we haven't discussed,
but it's an interesting discussion. Maybemaybe in another segment, we could talk
about the vertical integration of insurance companiesPBMs, retail and specialty pharmacies. And
(09:16):
now PBMs or these vertical conglomerates haveopened GPOs group purchasing organizations turn fact offshore,
even though PBMs have no offshore business. So these vertically integrated multinational corporations
that sit in the middle of ourprescription drug market, and we're gonna,
you know, we're gonna take abreak, Mark, We've got to take
a break for a few moments tosome business. When we come back,
(09:39):
I want to talk about formularies becauseI think those are anti consumer. I
think that insurance companies should be spankssomehow. Jail time would be nice,
and we need to bring the prescriptiondrugs down and We're going to talk about
the FTC and the fact that theygo after dollars. They don't care about
(10:03):
consumers. In my opinion, I'mMark Allen along with the insane Daryl Wayne.
Don't go away. As Late NightHealth continues. Late Night Health is
proud of our partnership with the EBC, the Evolutionary Business Council. Check them
out at eb Council dot com.You're listening to Late Night Health with Mark
(10:26):
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That's I ni ci box dot vfairs dot com and join the conversation
to be part of the solution.Late Night Health continues. I'm Mark Allen,
along with the insane Darryl Wayne.Be sure to join us at late
Night Health dot com. Late NightHealth dot com. We'll have a pretty
(14:13):
picture of our guest, Mark Bloomup there in a couple of weeks,
and we'll also have a link tothe show as well, and you'll be
able to find out more about Markand about his organization, America's Agenda Healthcare
for All. I really liked thename of your group, Healthcare for All,
(14:35):
in particular. During our break wewere talking about a couple of things,
and I have said for years nowthat formularies were not in favor of
consumers. Am I correct in thatassumption. Yeah, formularies are in favor
(14:56):
of the PBMs, the pharmacy benefitmanager entities that design them. Listen,
a lot of guys will vilify PBMs. I haven't hearded you do it.
I try not to do it,because you're right. This is capitalism,
and PBMs are responding to perverse incentivesto make a profit. The perverse incentives
(15:22):
are this while their value proposition iswill negotiate discounts and passmond of consumers.
In fact, PBMs have figured outthat more expensive drugs let them get deeper
discounts and therefore have more profits toextract from those discounts to divert into their
(15:43):
own bank accounts. So we seePBMs have a systematic incentive to offer more
expensive drugs on the preferred tiers.So you're paying a copay, we can
actually give you a reduced copay ona much higher drug price that takes more
money out of your pocket and alsoout of your health plans pocket. If
(16:03):
you have an employer sponsored health planor a government health plan, the government
or your employer pay a lot morefor the drugs on the preferred pier than
they would. The US Senate Committeejust so this isn't just me and you
talking. The Finance Committee of theUS Senate did a study on the crisis
of diabetes drugs, some insulins,of which there are a wide number of
(16:26):
kinds of insulin and insulin therapeutic equivalentson the marketplace biosimilars as well, and
found that systematically PBMs are denying placementon preferred tiers and sometimes not letting drugs
insulins come onto their formularies at allthat are the least expensive, the most
(16:48):
affordable for patients. Why because ofthe least profitable for the PBM and so
recently when under the IRA, theInflation Reduction Act that thirty five dollars or
caps who are imposed upon auto pocketpayments for seniors in Medicare for accessing insulin.
Understand still, the most expensive insulindrugs are on the preferred tiers of
(17:12):
those those formularies. Right now,PBMs are starting to readjust and reduce the
costs they're charging for insulin drugs becauseof the IRA, because of Biden's Inflation
Reduction the Well Congress is Inflation ReductionAct that the President Biden signed. But
the fact is that systematic incentives tobring the most expensive drugs unto the preferred
(17:37):
tiers of formularies exist for PBMs becauseit's simply profitable. They're responding to a
perverse incentive. Look in a marketplacewhich was truly competitive and truly transparent,
manufacturers are competing to offer lower drugsto get consumer demand. Right in this
marketplace, PBMs are actually offering thehighest price drugs possible in order to maximize
(17:59):
problems. They're not really competing witheach other with each other. What's happening,
then, Mark, is that CBSand Walgreens, And I'm trying to
think of another rite aid here inCalifornia, they a third party that's actually
(18:21):
running their drug program. Well,you're right, it's a third party if
you're talking about Walgreens. But whenyou're talking about CBS care Mark, CBS
CBS care Marks, the PPM thatowns the CPS retail drugs, it vertically
integrated conglomerate. We did a studya few years ago and we saw that
over three years, under pressure,a lot of criticism about PBMs retaining rebates
(18:45):
that they negotiated from drugs. Thoseare discounts from the manufacturer prices, retaining
them rather than paths gound to consumers. In over three year period, we
found that PBMs passed through they ssixty four percent of the rebates they previously
chained. In other words, retentionof rebates declined by sixty four percent.
Wow, now you're going to seebig discounts on drugs. No. In
(19:07):
fact, drug prices went up overthat. Profitability of ppms went up because
they found other ways to take moneyout of the same transactions from consumers.
We found that when sixty four percentreduction and rebates happened, they increased fees
on manufacturers by fifty one percent andprofits on pharmacis they owned by fourteen percent.
(19:30):
To wait a second, this islike the car industry. You sell
ten Mercedes this month and you geta rebate. You know, and we
all know how when you buy acar, you know you're gonna get I
guess I can say screwed. Soyou know you're gonna get screwed, you
just don't know by how much.So when you buy a drug, you
(19:52):
know you're gonna get screwed, butyou just don't know by how much because
of the ppms. In fact,you won't find out because their pricing is
not transparent. PBMs don't share theirdata. That's one of the problems.
The accounting or the reporting requirements forPBMs are the least in the entire healthcare
industry. It is a shady industryof multiple price manipulation schemes to make profits
(20:18):
for the PBMs and keep price opaqueto consumers. Now, we don't want
to get totally pessimistic with your readers, I hope because there's actually movement in
Congress right now for some reforms thatcould truly be meaningful in this area as
America's agenda healthcare for all? Areyou a lobbyist at all? Do you
(20:41):
know we're not. We're not forprofit think tank on health policy. We're
not lobbyists, got it? Maybeyou need so were Our mission is to
find the common ground between patient advocates, labor unions, employers, and healthcare
(21:03):
providers that share the mission of tryingof wanting healthcare to be as affordable as
possible for American workers. Let's justbriefly talk about the Federal Trade Commission again,
another government agency that oversteps its boundslooking for dollars. I've worked in
(21:25):
the direct response industry and they're theones who enforce FDA rules, but they
stretch them. They they they're notconsistent. If somebody is making a hundred
million or two hundred million dollars ona product, they go after them.
(21:45):
And they shouldn't. They they needto. They need to be regrouped and
organized, just like the FDA andpossibly Congress. I don't know. Maybe
the country we're pulling apart, folksum, but we are still the greatest
country in the world and have alwaysbeen that. And I don't care what
(22:06):
any former president says. I don'tmean to be polited. Oh yeah,
I do in our remaining moments.Mark, First of all, I'd like
to invite you to come back whenthere's legislation or anything. Please come back.
Sam is listening to us right now, and Sam, that's your job.
(22:29):
Get back to me. I justwant to I just want to interrupt
you to accept that offer. I'dbe delighted to come back and talk to
you into your audience again. Thishas been fun. I'm glad. What
can the American people do right now? What should we do? What should
Daryl and I do to come back? Price of drugs? The most important
(22:52):
thing you can do right now isright now, in this Session of Congress
is I was mentioned earlier and we'lltalk about your next show. There is
very serious reform legislation PBM directed reformlegislation being led by by on the Democratic
side by Chairman Widen of the FinanceCommittee, and he's joined in bipartisanship by
(23:15):
the ranking member Craple of Mike Crepleof Idaho. Wow, here, let
me tell you the basic thesis ofthe reform. We only have ten seconds
left and Okay, go ahead.I'm sorry we're out of time, but
we will pick up on this.Our guest has been bloom He is the
(23:37):
executive director of America's Agenda Healthcare forAll. I'm Mark Allen. Coming up
next. We've got Harold Cameron,who will probably be just down the street
from Mark because he's also in DC, and we'll be talking to him about
being an advocate for people on allkinds of issues. Late Night Health continues.
Be sure to visit us at LateNight Health touch on to
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