Rx Middlemen Cost Americans Billions Per Year

Jan 27, 2020

The Hill – It is no secret that the cost of prescription drugs is a major concern for Americans today.

Around 79 percent of the public agree that the price of prescription medication is unreasonable.

But while much attention is focused on the role of drug manufacturers, a new report details how almost half of consumer spending on brand-name drugs goes to providers and Prescription Benefits Managers (PBMs), who act as the middlemen that administer prescription and medical plans.

To lower consumer prescription costs, policymakers need to take a holistic approach and look at entire supply chain.

The recent study by the Berkeley Research Group analyses the cashflow and supply chain of brand-name prescription medications without generic equivalents between 2013 and 2018.

Despite the fact that brand-name prescription spending has increased dramatically in recent years, the study illustrates how PBMs and providers are receiving a larger and larger share of that spending.

Between 2013 and 2018, middlemen increased their share of cashflow from brand-name drug purchases by 12.5 percent. If this trend continues, in a few short years the majority of brand-name sticker prices will be for everything except the actual medicine.

While competition among drug companies helps to drive down costs, an increasing amount of the discount is captured by middlemen and isn’t being passed on to consumers.

As drug prices continue to rise, and PBMs claim more and more revenue, consumers across the nation are struggling to keep up with the costs. Almost 30 percent of Americans who take prescription medication say they have skipped doses or split pills to make ends meet.

And soaring prescription drug prices are just one of the many health care costs that countless American consumers cannot afford.

More than 13 percent of American adults say they know a family member or friend who has died in the past five years because they couldn’t afford their broader health care bills … Read more. 

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