Transparency may be a trendy topic in pharma these days. But while drugmakers have been opening their files on financial relationships with doctors--even edging toward sharing trial data--they haven't said much about proprietary pricing info. Discounts and rebates tend to be closely guarded.
Now, state legislators might force some pricing information into the open. As The Wall Street Journal reports, drugstores are lobbying for legislation that would force pharmacy benefits managers to share their reimbursement rates. That way, independent stores would know how much their rivals are getting for each drug--and could help them negotiate better pricing deals.
It's one more consequence of the patent cliff. With big drugs falling off patent, generics are accounting for a growing share of prescription revenue, and drugstores' profit margins on generic drugs are much smaller than those on branded meds. Big pharmacy chains have more power to negotiate favorable prices, but even they are suffering from the margin squeeze. Drugstores argue that PBMs are maintaining their own margins while cutting reimbursements for pharmacies.
As the WSJ notes, PBMs deny that they're keeping a disproportionate share of drug profits. They say the laws would give pharmacies the opportunity to collude on pricing. Not surprisingly, they are fighting the disclosure bills.
This isn't pharma's own pricing data, of course. Drugmakers have to report wholesale pricing information to Medicare and Medicaid, because the government programs' reimbursement rates are based on the averages. But other pricing arrangements--with hospitals, wholesalers, and the like--are proprietary.
The PBMs argue that opening access to pricing data could have unintended consequences. The info could inspire shifts to branded drugs, for instance. And drugstores themselves say they might steer away from money-losing drugs, which could restrict access to cheaper meds.
- read the WSJ piece
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