Unveiling the True Cause of High Drug Costs in America

[Social Media]

 

Earlier this month, President Biden and Senator Bernie Sanders (I-Vt.) published an op-ed highlighting the "outrageous prices that the pharmaceutical industry charges the American people for prescription drugs." This latest move is part of Sanders’s ongoing campaign to address exorbitant drug prices in the U.S. In June, Sanders, who chairs the Senate Committee on Health, Education, Labor, and Pensions, announced that Lars Jorgensen, CEO of Novo Nordisk, would voluntarily testify before Congress.

 

The hearing aims to scrutinize the high prices Americans pay for Novo Nordisk's blockbuster drugs, Ozempic and Wegovy. These drugs, known for their efficacy in controlling diabetes (Ozempic) and aiding weight loss (Wegovy), have gained popularity, especially among celebrities, thus drawing significant public and media attention. Sanders hopes to leverage this notoriety to emphasize his long-standing argument: drug costs in the U.S. are unreasonably high. "The American people are sick and tired of paying, by far, the highest prices in the world for prescription drugs," Sanders said recently.

 

Sanders often uses Ozempic as a prime example. He points out that "Novo Nordisk currently charges Americans with Type 2 diabetes $969 a month for Ozempic, while this same exact drug can be purchased for just $155 in Canada and just $59 in Germany." Sanders anticipates Jorgensen's testimony will shed light on why Americans are paying significantly more for these medications compared to people in other countries.

 

The explanation for the high costs of drugs in America, particularly Ozempic, lies in the role of Pharmacy Benefit Managers (PBMs). The first PBMs emerged in the late 1950s, initially handling simple tasks like processing reimbursements for patients and drug stores. However, the modern PBM, which took shape in 2018, is a direct consequence of the Affordable Care Act (ACA), signed into law by President Barack Obama in 2010.

 

One of the many provisions of Obamacare required insurance companies to spend 85 percent of each dollar on patient care, limiting the remaining 15 percent to overhead and profit. This rule aimed to curb insurance companies' ability to reap massive profits at the expense of patients. In response to this profit cap, the modern PBM emerged to perform similar management roles as insurance companies but without the profit restrictions.

 

A recent exposé by The New York Times detailed how insurance companies have maneuvered around Obamacare's 85 percent rule by creating, acquiring, or merging with PBMs to maintain substantial profits. The Times highlighted that major health insurers like Aetna and Cigna sought mergers with PBMs to achieve the growth demanded by Wall Street. Aetna merged with CVS, while Cigna acquired Express Scripts. UnitedHealth, another giant in the health insurance industry, built its own PBM. This new arrangement allows pharmaceutical companies to sell drugs through pharmacies only by going through PBMs, which demand rebates from the pharmaceutical companies.

 

These rebates, instead of benefiting patients, go to the PBMs. The rebates can be modest but are often substantial, turning PBMs into major profit centers. The exact amount of these rebates remains undisclosed since they are considered trade secrets. These rebates are a significant reason why drug costs in the U.S. are so high. For instance, in 2016, 266 million Americans had their drug purchases managed by a PBM, and manufacturer rebates to PBMs skyrocketed from $39.7 billion in 2012 to $89.5 billion in 2016.

 

The Times reported that "the three biggest PBMs would each rank among the top 40 U.S. companies by revenue. The largest, Caremark, generates more revenue than Ford or Home Depot." Furthermore, some PBMs are now establishing another layer of middle-management called group purchasing organizations (GPOs), which also become profit centers.

 

The question remains: what value do PBMs add to the system? Ohio Attorney General David Yost, a Republican, argues that PBMs are "seeking to extract from the system, without creating any corresponding value for the system. The patients are the ones that are suffering." 

 

When Sanders convenes his committee in early September, a logical starting point for the questioning would be: What percentage of the $969 Novo Nordisk charges for a month's supply of Ozempic in the U.S. constitutes rebates to PBMs? Some estimates suggest it could be around 70 percent, which more than explains why Ozempic is so expensive in the U.S. compared to other countries where PBMs do not operate.

 

Credit: Hill 2024-07-16

 

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[john donson]

USA nr 1, in mass shootings

 

not in education, not in affordable healthcare

[Pouatchee]

hostage taking by big pharma. why this is going on and people dont revolt is beyond me. the whole american healthcare system is a mafia

[impulse]

15 hours ago, Social Media said:

However, the modern PBM, which took shape in 2018, is a direct consequence of the Affordable Care Act (ACA), signed into law by President Barack Obama in 2010. 

 

For instance, in 2016, 266 million Americans had their drug purchases managed by a PBM, and manufacturer rebates to PBMs skyrocketed from $39.7 billion in 2012 to $89.5 billion in 2016.

 

So, Obama,  Obamacare and the Dem donation machine have their fingerprints all over this.

 

[Tug]

8 hours ago, impulse said:

 

So, Obama,  Obamacare and the Dem donation machine have their fingerprints all over this.

 

Yup they are destroying the big pharma rip off so yup their handprints are all over it and thanks for your support on this worthy cause!

[Gweiloman]

14 hours ago, john donson said:

USA nr 1, in mass shootings

 

not in education, not in affordable healthcare

Nr. 1 in many other things too, none of them positive.

[Tug]

21 minutes ago, Gweiloman said:

Nr. 1 in many other things too, none of them positive.

Wrong there are many positive things America contributes just as every country does

[Gweiloman]

24 minutes ago, Tug said:

Wrong there are many positive things America contributes just as every country does

Highest incarceration rate in the world.

The most gun violence in the developed world.

The highest number of registered and unregistered drug addicts in the world.

The lowest life expectancy in the OECD.

Nr. 1 in mass shootings (already mentioned)

On average, 3 persons killed by those sworn to serve and protect them.

 

[impulse]

51 minutes ago, Gweiloman said:

Highest incarceration rate in the world.

The most gun violence in the developed world.

The highest number of registered and unregistered drug addicts in the world.

The lowest life expectancy in the OECD.

Nr. 1 in mass shootings (already mentioned)

On average, 3 persons killed by those sworn to serve and protect them.

 

Go big or go home.

[JonnyF]

Hunter bought them all. 

 

A shortage of supply always leads to higher prices. 

[Paul Henry]

Reduce pricing by reducing Patent protection life allowing generics into the market much earlier .The increase in competion will rapidly bring down the costs of most patented drugs. The arguement about the high cost of development is just another way to say lets increase our profits over a longer time frame.Increase usage will increase revenue some simple examples.Asprin,paracetamol,esameprazole and the list goes on,all of these have been restricted at some stage.Same principle applies to agricultural chemicals (often manufactured by the same drug companies.). Check initial pices for Glyposate,sulphonyl ureas etc prices now down by 90%.

[spidermike007]

The Big Pharma mafia, in cahoots with the CDC, a major lobby, and the FDA. Nothing else needs to be said. 

[Srikcir]

Biden-⁠Harris Administration Takes Major Step Forward in Lowering Health Care Costs; Announces Manufacturers Participating in Drug Price Negotiation Program, Oct. 03, 2023. whitehouse.gov

GOP missing in action.

[Yellowtail]

7 minutes ago, Srikcir said:

Biden-⁠Harris Administration Takes Major Step Forward in Lowering Health Care Costs; Announces Manufacturers Participating in Drug Price Negotiation Program, Oct. 03, 2023. whitehouse.gov

GOP missing in action.

What they mean is redistributing the cost, not lowering it. 

[Tug]

4 hours ago, Srikcir said:

Biden-⁠Harris Administration Takes Major Step Forward in Lowering Health Care Costs; Announces Manufacturers Participating in Drug Price Negotiation Program, Oct. 03, 2023. whitehouse.gov

GOP missing in action.

Good post to bad it’s lost on the resident trolls

[Peterphuket]

On 7/16/2024 at 5:15 PM, Pouatchee said:

hostage taking by big pharma. why this is going on and people dont revolt is beyond me. the whole american healthcare system is a mafia

Believe me, not only in America, in more  Europe countries happens the same, e.g. essential drugs that are no longer available.

[Luuk Chaai]

IDIOTS !

The American people are sick for prescription drugs,"

 Ozempic as a prime example. Americans with Type 2 diabetes $969 a month for Ozempic

Stop eating sugar, processed foods, seed oils and unneccesary carbs

reverse that T2 ang go on with a healthy life,,,,,, ( and save all that wasted $$$$  and your life )

 

[john donson]

22 hours ago, Peterphuket said:

Believe me, not only in America, in more  Europe countries happens the same, e.g. essential drugs that are no longer available.

 

Europe even bans many supplements freely available in usa

 

protecting big pharma profits instead of more natural things

[Yellowtail]

On 7/17/2024 at 7:56 PM, Tug said:

Good post to bad it’s lost on the resident trolls

Make you wonder why big pharma supports Biden. 

[impulse]

On 7/17/2024 at 8:56 PM, Tug said:

On 7/17/2024 at 4:33 PM, Srikcir said:

Biden-⁠Harris Administration Takes Major Step Forward in Lowering Health Care Costs; Announces Manufacturers Participating in Drug Price Negotiation Program, Oct. 03, 2023. whitehouse.gov

GOP missing in action.

Good post to bad it’s lost on the resident trolls

 

Makes a great title, and a catchy talking point, but if you dig down to what they actually have planned, there's very little substance.  Just a few drugs up front, with the rest pushed back for years, so they can find an excuse to renege on them or blame the next administration.  Not to mention, they cancelled some of Trump's programs that reduce the price of insulin to $35 a month.  Then they announced the Biden plan to reduce the price of insulin to...drum roll... $35 a month.

 

Please summarize for us, exactly what did Biden reduce, and how many reductions have kicked in so far?  Without that information, it's just an election year porkie.

 

Edited July 18 by impulse

[radiochaser]

On 7/18/2024 at 9:30 PM, impulse said:

 

Makes a great title, and a catchy talking point, but if you dig down to what they actually have planned, there's very little substance.  Just a few drugs up front, with the rest pushed back for years, so they can find an excuse to renege on them or blame the next administration.  Not to mention, they cancelled some of Trump's programs that reduce the price of insulin to $35 a month.  Then they announced the Biden plan to reduce the price of insulin to...drum roll... $35 a month.

 

Please summarize for us, exactly what did Biden reduce, and how many reductions have kicked in so far?  Without that information, it's just an election year porkie.

 

Some time back, I read that the drug price reduction under biden's plan would not kick in until after he finished his second presidential term!

[Yellowtail]

5 minutes ago, radiochaser said:

Some time back, I read that the drug price reduction under biden's plan would not kick in until after he finished his second presidential term!

Again, it is interesting that Biden goes on about how he's taking the evil big pharma to task and the lefties eat it up, yet big pharma supports Biden. How funny is that? 

[impulse]

47 minutes ago, radiochaser said:

Some time back, I read that the drug price reduction under biden's plan would not kick in until after he finished his second presidential term!

 

From the White House themselves:

 

Medicare drug price negotiation will result in lower out-of-pocket costs for seniors and will save money for American taxpayers. Negotiations for the first group of selected drugs will begin in 2023, with negotiated prices going into effect in 2026.

 

https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/29/fact-sheet-biden-harris-administration-announces-first-ten-drugs-selected-for-medicare-price-negotiation/

 

From CNN:

 

After the initial round, the Health and Human Services secretary can negotiate another 15 drugs for 2027 and again for 2028. The number rises to 20 drugs a year for 2029 and beyond.

 

https://edition.cnn.com/2023/08/29/politics/medicare-drug-price-negotiations/index.html

 

I read the list (of 10) 2026 drugs to see if any will affect me.  Nope.  10 whole drugs listed.  Count 'em.  10.   Big whoop.

 

Edit:  If I were a cynical guy, I'd bet that most of those 10 will be coming off patent soon and the WH and Pharma know the price will drop like a rock anyway, when the generics hit the market.

 

 

Edited July 21 by impulse

[radiochaser]

9 hours ago, impulse said:

 

From the White House themselves:

 

Medicare drug price negotiation will result in lower out-of-pocket costs for seniors and will save money for American taxpayers. Negotiations for the first group of selected drugs will begin in 2023, with negotiated prices going into effect in 2026.

 

https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/29/fact-sheet-biden-harris-administration-announces-first-ten-drugs-selected-for-medicare-price-negotiation/

 

From CNN:

 

After the initial round, the Health and Human Services secretary can negotiate another 15 drugs for 2027 and again for 2028. The number rises to 20 drugs a year for 2029 and beyond.

 

https://edition.cnn.com/2023/08/29/politics/medicare-drug-price-negotiations/index.html

 

I read the list (of 10) 2026 drugs to see if any will affect me.  Nope.  10 whole drugs listed.  Count 'em.  10.   Big whoop.

 

Edit:  If I were a cynical guy, I'd bet that most of those 10 will be coming off patent soon and the WH and Pharma know the price will drop like a rock anyway, when the generics hit the market.

 

 

That would be a more accurate time frame for the drug reduction plan to kick in for most drugs, vs. my memory thinking it would be after his second term in office  (if re-elected).

[impulse]

4 minutes ago, radiochaser said:

That would be a more accurate time frame for the drug reduction plan to kick in for most drugs, vs. my memory thinking it would be after his second term in office  (if re-elected).

 

At the rate of 10-15 drugs a year, most of the drugs will come off patent and be cheaper generics long before they ever get negotiated.  His plan makes for a great soundbite, but not a significant savings, except for a few.  And maybe for the gub'ment.

 

[radiochaser]

10 hours ago, Yellowtail said:

Again, it is interesting that Biden goes on about how he's taking the evil big pharma to task and the lefties eat it up, yet big pharma supports Biden. How funny is that? 

From an article or editorial, that I skimmed through the other day, someone claims that the high cost of drugs is due to a group of business's, now owned by hospitals, drug companies or pharmacies (I might be wrong on the ownerships) that negotiates with drug manufactures for discounted purchases of drugs, then resells the drugs at a high price and keeps the profit rather than passing the discounted price to the customer.  

This may not be an accurate remembrance of what I skimmed through. 

What I do know is, I have a good discounted drug price through my goverment health plan that I kept when I retired.   I forgot to renew a prescription, through the health plan, for a drug that I have to take daily.   They authorized a 14 day supply through the local pharmacy. 

 

For 14 pills I paid a co-pay of $350.00!!   A three month supply, through the health plan mail pharmacy costs me $20.00!!!!