![]() ![]() That in itself is proof positive that a great part of the drug “market” is actually a repressive oligopoly, where the only competition comes from these titanic firms using their economic leverage created by market dominance or vertical integration to force others into doing business with them on their terms. ![]() OptumRx is a division of the huge insurer UnitedHealth Group, while CVS Caremark is owned by the CVS pharmacy chain. It’s not a coincidence that two of the big three are associated with other big players in the health-care market. Few can even understand how the system works - only that they’re paying through the nose - and those who do can’t do anything about it. Market power and kickbacks are used to steer patients to more expensive drugs, a deliberately opaque and Byzantine billing system is used to jack up prices on all parties, especially small pharmacies, and so on. It’s very profitable to abuse your middleman position to extract money from all players - pharmacies, drug companies, insurers, and patients. Dayen reports that ExpressScripts’ adjusted profit per prescription has increased by 500 percent since 2003. On the contrary, spending on prescription drugs exploded by 1,100 percent between 19, and all three companies - which are each among the top 22 of the Fortune 500 - rake in huge profits. As a result, the promised savings have not materialized. But over time, two big things changed: The health-care billing system got more and more hideously complex, and virtually all the PBMs were rolled up into three big companies - ExpressScripts, CVS Caremark, and OptumRx, which now control a combined 75 to 80 percent of the market. As the industry grew, PBMs presented themselves as a way to keep drug prices low because they could “form large patient networks, and negotiate discounts from both drug companies and pharmacies, which would have no choice but to contract with them to access the network.” PBMs date back to the 1960s, when they served as streamlined claims processors to intermediate between pharmacies and drug companies. But the basic idea is reasonably straightforward. The details of the PBM architecture are extraordinarily complicated, as Dayen’s piece explains. These middleman companies are a major part of why American drug prices are so wildly out of line with the rest of the world. It involves something called “pharmacy benefit managers,” or PBMs, as David Dayen explains in a blockbuster article for the American Prospect. Yet there is another side to the story, a quintessentially American part of the pharmaceutical supply system that goes largely unnoticed. military, may be an even more stark example. Martin Shkreli, the hedge fund “pharma bro” who has since been charged with securities fraud, made himself the villainous face of price-gouging doing just that - though Mylan Pharmaceuticals, which pulled the same routine with a device originally developed for the U.S. Every month or so there comes yet another story about some holder of a pharmaceutical patent jacking the price up a zillion percent to make a quick buck at the expense of sick people. Most people agree that American drug prices are too high - and it seems to be getting worse. ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |