ONE NEWS NOW: “One of the real hidden costs that we’ve been seeing [in drug prices] is the role that the pharmacy benefit mangers (PBMs) play,” says Jeff Stier, senior fellow at the Consumer Choice Center. “Those are the middle men who negotiate between the drug companies – the companies that innovate, that make the drugs we so badly need – and our insurance companies.”
Having such “go-betweens” may sound like a great thing to have, but following two recent mergers, Stier says all major PBMs are now part of the health insurance industry.
That causes Stier to question whether PBMs are playing a crucial role in containing medical costs for patients. “Or, are they so conflicted – because they take a share of rebates offered by pharmaceutical companies – that they are incentivized to keep prices high?” he wonders.
But to answer that, Stier says, will require more transparency through the entire supply chain to show whether consumers are, in fact, benefiting from negotiations.
“There are changes we can do to find some common ground,” he shares, “and common ground, I think, would be necessary to actually lower the price of drugs without stifling innovation.”