“This policy would significantly change drug pricing and utilization and shift billions of dollars annually from patients and taxpayers to drug manufacturers and retail pharmacy companies.”
Competitive Enterprise Institute (CEI)
CEI published a new study, A Free Market Solution for Drug Distribution, that describes and explains the role of pharmacy benefit companies in the U.S. healthcare system. Joel Zinberg, MD, senior fellow at CEI and Director of the Public Health and American Well-Being Initiative at Paragon Health Institute, writes:
“PBMs are a free market solution that enhances competition through group purchasing and negotiated discounts… This is particularly important in the world of prescription drugs where manufacturers can be sole source providers of new, patent protected, brand name drugs or sometimes older generic drugs that have only one maker and where the top three wholesalers make up more than 80 percent of the market and the top three pharmacies more than 50 percent.”
Dr. Zinberg goes on to analyze pending legislative proposals that dramatically impact the tools PBMs have available to deliver savings to employers and patients:
“The legislation is likely to be counterproductive, resulting in reduced competition, higher costs, and an end to the natural evolution in the market of terms and arrangements which benefit the actors in the drug distribution system.”
Read the full article on PCMA.