Big Pharma’s Latest Ad Binge A Critical Reminder: Policies Targeting PBMs Would Hand Drug Companies A Profit Windfall At The Expense Of Seniors And Taxpayers

Paragon Health Institute: Rebates Reduce Premiums, Warn Against Delinking Policy

This week, Big Pharma launched yet another ad campaign urging Congress to pass proposals undermining pharmacy benefit managers (PBMs).

Big Pharma's latest ad binge should serve as a stark reminder to lawmakers that these proposals only reward drug companies at the expense of heightened costs for American Medicare beneficiaries, and taxpayers.

Policies like "delinking" are big drug companies' top priority to weaken the one real check against their otherwise limitless monopolistic pricing power.

Here's a reminder to lawmakers of what "delinking" would really accomplish:

• Huge money grab from hardworking Americans, including seniors, in the Medicare Part D program including hiking premiums for Medicare Part D beneficiaries $13 billion
• Massive financial windfall for drug companies totaling $10 billion in the Medicare Part D program, and a whopping $32 billion if "delinking" is implemented in the Medicare Part D and commercial health insurance market.
• Weakened negotiating power against drug companies for PBMs to secure greater rebate savings on behalf of health plan sponsors.

THE PARAGON HEALTH INSTITUTE released its policy recommendations for the lame duck, including on so-called "delinking," saying, "Pharmacy benefit managers (PBMs) negotiate rebates on drug…These rebates reduce both total drug spending and premiums."

"We recommend against delinking PBM revenue from rebates, because it is key incentive for PBMs to negotiate the best price on drugs possible."

In fact, according to a recent report from Dennis Carlton, Ph.D., David McDaniel Keller, Professor of Economics Emeritus at the University of Chicago Booth School of Business, one of the leading industrial organization economists in the country, and former chief economist at the U.S. Department of Justice (DOJ) Antitrust Division, PBM-negotiated rebates do not drive higher drug costs.

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PCMA is the national association representing America's pharmacy benefit companies. Pharmacy benefit companies are working every day to secure savings, enable better health outcomes, and support access to quality prescription drug coverage for more than 275 million patients.