Summary The purpose of paper is to show that the binding arbitration proposal championed by Speaker of the House Nancy Pelosi to lower Medicare Part D drug prices is off-target. We believe that there three broad categories of drugs where binding arbitration based on some neutral party’s estimate of value is more appropriate than mano-e-mano […]
Tag Archives: gross-to-net drug price bubble
Quantifying a Pharmacy Benefit Manager (PBM) Fee-For-Service Business Model
Summary: Using CVS’s 2017 10-K reports to the SEC and its 2017 drug trend report, we convert its PBM segment (a.k.a. Caremark) reseller gross profits business model to a single transparent fee-for-service expressed in terms of dollars per member per year (PMPY). The following table summarized our results: Our estimated FFS equivalent of $64 […]
Insulin Drug Price Inflation: Racketeering or Perverse Competition?
Summary We contend that recent insulin drug price inflation is a case of perverse competition rather than a case of illegal racketeering in violation of the RICO Act. We will present the case that a now consolidated racketeering RICO lawsuit initiated by the law firm Hagens Berman has inverted the hierarchy of […]
Merck Data Discredits PBM-Sponsored Study of Brand Drug Price Inflation
Summary We present data supplied by the drug company Merck that discredits a study sponsored by the pharmacy benefit manager (PBM) trade association showing no correlation between PBM rebate rates and brand drug price inflation. Introduction The management of the prescription (Rx) drug benefit portion of health care plans has become the domain of contracted […]
Blame Pharmacy Benefit Managers (Not Pharma) For Driving Drug Price Inflation
Summary: We start with a review of the history of the opaque pharmacy benefit manager (PBM) reseller business model. We present our prior estimates of the distribution of PBM gross profits over the past decade showing that they have become dependent today on retained rebates from specialty drugs. Next, we present numbers showing how PBMs […]
Three Phases of the Pharmacy Benefit Manager Business Model
We present the case that there has been three distinct phases of the pharmacy benefit manager (PBM) business model over the past 15 years. Each phase has been demarcated by a major shift in the dominant source of gross profits. These radical shifts in the primary source of gross profits in such a short period […]
Pharmacy Benefit Manager Rx Drug Rebates – PBMs
A Position Auction Demonstration Project to Lower Reference + Biosimilar Rx Drug Prices in Medicare Part B (8/19) Pharmacy Benefit Managers as Conflicted Countervailing Powers (01/07) Who is Best at Negotiating Pharmaceutical Rebates? (12/05) The Role of Pharmacy Benefit Managers in Formulary Design: Service Providers or Fiduciaries? Journal of Managed Care Pharmacy Vol. 10 No. […]