PhRMA take on PBM’s in response to Trump drug price plan

pharmafile | July 19, 2018 | News story | Business Services, Manufacturing and Production, Medical Communications, Research and Development, Sales and Marketing  

In response to Donald Trump’s plan to lower drug prices in the US, the Pharmaceutical Research and Manufacturers of America (PhRMA) have proposed a plan to transform the convoluted system through which payments in the drug supply chain are made.  

The powerful trade lobby released a “bold new policy position” aimed at changing the way in which Pharmacy Benefit Managers (PBM’s) are reimbursed for their services. PhRMA argued that PBMs should no longer be compensated by payments linked to the list price of drugs but should instead be paid a set fee in exchange for the services they provide.

The PBM’s, which act as intermediates between insurers and drug makers, negotiate with pharmaceutical companies to get the best prices on medicines. However consumers often may not see these savings. This has led to the pharmaceutical industry placing blame for rising drug prices on PBMs.

IQVIA last year calculated that on average list prices for drugs protected by patent exclusivity, increased by 6.9%. However these price increases were only 1.9% when rebates and discounts were factored in.

As such PhRMA have proposed that the Trump administration should change the way in which PBM’s are compensated as they believe that the payment system offers no incentive to push drug prices down.

 As explained by Alex Azar, Department of Health and Human Services Secretary: “”Everyone in the system, from drug manufacturers to pharmacy benefit managers and wholesalers, makes their money as a share of list prices, so they have little incentive to force them down.”

Louis Goss

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