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>Basically discounted medicines are medicines being sold at the market price insurance companies pay in practice. But there’s an incentive for insurance compani
by delfinom 3y ago
>Basically discounted medicines are medicines being sold at the market price insurance companies pay in practice. But there’s an incentive for insurance companies for list prices for medicines to be sky high, and given the market power of insurers as buyers, those incentives extend to manufacturers.
This goes way beyond insurance companies. There's an entire class of middlemen known as PBMs (Pharmacy Benefit Managers). They are probably the largest contributor to medication pricing being a complete scam and disaster in the US.
Of course the scam is so profitable that CVS now owns both an insurer (Aetna) and a PBM (Caremark).
PBMs are so bad, that in some circumstances, pharmacies can owe the PBM money after dispensing a drug.
- twoodfin 3y agoPBMs are so bad, that in some circumstances, pharmacies can owe the PBM money after dispensing a drug. Is the theory that PBM’s are foolishly generous and incur undue costs for their clients the insurance companies? Or that they’re foolishly stingy, and force pharmacies to offer unsustainably low prices?
- sct202 3y agoThe PBMs are who contracts with pharmacies over which insurance plans will be accepted. Basically pharmacies have to take the contracts as a whole and do the math over if they'll win or lose across the whole contract. Really only a few companies have the ability and leverage to negotiate somewhat fairly with the PBMs. On top of this, the major PBMs are now all owned by insurance companies so the difference between the PBM and insurance companies are kind of nebulous, and with this consolidation pushes the power more to the insurance company.
- twoodfin 3y agoUnder this logic how are PBM’s driving costs up? Seems like they’re there to reach the scale necessary to maximize downward pressure on costs.
- lotsofpulp 3y ago>The PBMs are who contracts with pharmacies over which insurance plans will be accepted. When the PBM is owned by the insurer in the first place, it is a moot point. The 5 biggest health insurers all have their own PBM.