Are Middlemen to Blame for Rising Drug Prices?

As drug prices continue to rise at alarming rates, major drug makers are beginning to pass the blame to the middlemen. These being wholesalers, pharmacies, and pharmacy benefit managers (PBMs), all play a key role in determining drug prices, and are criticized for taking their own cut out of each prescription. PBMs in particular are under great pressure as their rebate system is based on the percentage of the drug’s list price. This means that as drug prices continue to increase, the rebates increase as well, allowing for PBMs to highly benefit as time goes on.

In the article, “Drugmakers Point Finger at Middlemen for Rising Drug Prices”, Joseph Walker writes:

“Critics say these rebates also can encourage drug companies to increase prices more sharply than they would have done otherwise. For example, if a drugmaker wants to raise the price it gets for a drug by 6% to drive sales growth and offset research costs, it has to raise the sticker price even more than that to offset the percentage it rebates to PBMs, says Ron Cohen, chief executive of drugmaker Acorda Therapeutics Inc.”

This environment creates continuous pressure on both drug makers and middlemen alike, resulting in a broken system and many major companies losing track of everyone’s best interests. However, there are still companies that stand by their values and are willing to fight for what is right, even when nobody is looking.

It is up to company leaders and management to actively seek the best for their employees, especially in this difficult playing field. BCR was developed to help shed light on this rampant waste and abuse. It is our hope to push for a more honest future in the health care system.

Read the full article, Drugmakers Point Finger at Middlemen for Rising Drug Prices, from the Wall Street Journal for more information on this trending topic.