The Alliance

The Weekly Dose | 04.12.19

April 15, 2019 3:57 pm

Biopharmaceutical companies have given $166 billion in rebates and discounts to the hospitals, insurers, and pharmacy benefit managers (PBMs). In front of Senate lawmakers this week, unfortunately, PBM execs refused to reveal where this money is going. Tuesday’s PBM Senate Finance hearing lasted roughly three hours, but didn’t receive nearly the same level of attention as a previous hearing with drug manufacturers.


Given PBMs’ outsized role in the pharmaceutical supply chain – and patients’ lives – and the fact that we still don’t know how much PBMs are pocketing from rebates, we hope lawmakers will ask them back.


Also in the Senate this week: a new bill that would change the system for drug patents. We’ve explained in previous blog posts here and here who is behind these proposals, and how these policy changes would hamper innovation.


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Patrick O’Connor – Executive Director

Rosemarie Calabro Tully – Communications Director




According to former @US_FDA @PeterPitts, “If we axed #pricecontrols now, by 2030, we’d see an additional 13 #drugs developed each year.” Click here to RT.

“Thanks to a system in the US that encourages & rewards investment & innovation, we are...on the cusp of delivering breakthrough treatments for [#SickleCell] disease. This evolution did not happen by accident.” - @GBT_news on why #innovation matters. Read: Click here to RT.

#Patients have voiced their very real concerns in the #DrugPricing debate, but @JohnArnoldFndtn-funded groups use hot rhetoric that “feeds a dangerous temptation to adopt policies that would restrict patients’ access to existing medicine.” Learn more: Click here to RT.



What Is A PBM? The U.S. Senate Finance Committee heard this week from five pharmacy benefit managers (PBMs). Since “pharmacy benefit manager” is not yet a household phrase, we thought a short overview of what role these companies play in the pharmaceutical supply chain might be helpful. For starters, “PBMs dictate which drugs consumers can receive from their plan without incurring additional out-of-pocket costs.” Read the full blog post here.

In case you missed them, here are some other recent posts on the APMI blog:

 - NYU Medical Professor: “Sick Patients Deserve The Rebates”

 - The Cost Of Insurer-PBM Consolidation

 - Who Benefitted From Drugmaker Rebates?



Do Drugs Reduce Overall Healthcare Spending? Yes, says PureTech Ventures Senior Director John LaMattina. In Forbes, LaMattina argues, “Based on an analysis from the Pew Charitable Trust, only 14 percent of the U.S. health bill is due to medicines. That’s still about $490 billion - a significant amount of money. However, when one considers that the proper use of drugs can greatly reduce the amount of money spent on downstream costs like medical procedures, hospitalizations, etc., this drug expenditure can be viewed as a major source of cost savings.”

Bipartisan Agreement: Americans Think PBMs Should Have To Pass Drug Rebates On To Consumers. A recent poll taken by Morning Consult found 68 percent of Americans support a proposed Trump administration regulation that would require pharmacy benefit managers (PBMs) and insurers to pass on money saved from drug rebates to consumers. That figure includes 70 percent of Democrats and 71 percent of Republicans who support the policy. Another survey from Consumers for Quality Care came up with similar results. Related: the Community Oncology Association also wants some answers from PBMs, including why they “delay filling” prescriptions “that could extend the life of a stage 4 metastatic breast cancer patient.”

More Bipartisan Agreement: Time To Address PBM Spread Pricing. Bloomberg reports Senate Finance Committee Chair Charles Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Ore.) have asked the Health and Human Services Department inspector general to investigate a practice by pharmacy benefit managers known as spread pricing, under which they “charge one amount to health plans for a drug, then reimburse pharmacies a different, often lower amount -- and capture the spread in between.” More on PBMs from TIME: “PBMs are not incentivized to negotiate for lower list prices as much as they are for higher rebates, since the share of those refunds they keep is a part of how they make their money.”

Innovation Nation: Small Step Toward Cancer Vaccine. Scientists announced this week that they have made a small step toward devising a cancer vaccine that boosts the immune system to attack lymphoma cancer tumors, leading to a period of remission. Axios explains this “matters” because “indolent non-Hodgkin’s lymphomas (iNHLs) tend to be a slow-growing cancer that is incurable with standard therapy and poorly responsive to a newer type of treatment called checkpoint blockade.” CNBC has more.

Trump Administration Proposal Would Restrict Patient Access To Cancer, HIV Drugs. Lung cancer survivor Bonnie Addario explains in the San Jose Mercury News how a Trump administration plan to end guaranteed Medicare coverage for six classes of medications that treat complex illnesses like cancer, epilepsy, mental illness and HIV/AIDS will “restrict coverage, impeding access to innovative, more-effective treatments.”



In the Journal of Oncology Navigation & Survivorship this week, Drug Channels Institute CEO Adam Fein explains why lawmakers should not focus on drug list prices. (Hint: it’s not what Americans actually pay for medications.) Fein says:

“What Americans pay at the pharmacy counter is determined by a complex, opaque third-party payment system for prescriptions. By focusing only on list prices, politicians ignore the huge rebates and discounts drug companies give to multiple parties involved in distributing their products: wholesalers, hospitals, physicians, pharmacies and pharmacy-benefit managers, the third-party companies that purchase drugs and treatments on behalf of employer health plans. These rebates and discounts mean drugs almost always sell far below their list prices.”