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Supply Chain Complexity and Rx Pricing Games

February 7, 2019 – For any given prescription drug, there are often five companies involved in getting it to the consumer, and that’s the way they like it.

Scripta was founded by doctors, and we’ve spent years studying prescription pricing games. We have hundreds of examples of systemic pricing anomalies that affect healthcare at the most basic level: If patients can’t afford their drugs, they don’t follow doctor’s orders.

While it’s fashionable to blame the drug companies for rising drug prices, they aren’t the only ones with their hand in the cookie jar. For years, drug makers, drug wholesalers, pharmacies, and pharmacy benefit managers (also known as PBMs) have thrived in a complex system that conceals profiteering.

Just have a look at this superb infographic by Skype Gould for Business Insider:

Who pays for your prescription?


The complexity is the point. It gives cover to profit-taking by any number of companies in the supply chain. And, as Justin Leader of Benefit Design Specialists noted in a tweet, it helps to explain why we can’t point to one villain when it comes to prescription drug price increases.

In the same way that “Employees see a $10 or $20 copay and never think about what you are being charged as a self-funded employer on the back end,” as Justin puts it, payers in turn are forced to rely on and trust in the beneficence of their own PBM (as if that PBM were not also answerable to shareholders).

The Business Insider article does a good job of outlining the state of play noting that, “Lately… some people have come to wonder if PBMs serve much of a purpose at all, other than skimming off profits for themselves. That’s because the PBM have an enviable position in the middle of all this…”


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