Dark Secret: PBM Profits

BEFORE Medicare Part D:

• PBM profits came from secretly keeping MOST “pharma rebates”, instead of passing them on to patients and clients
• • In 2003, the largest PBM, Medco (now part of Cigna/Express Scripts) kept more than half of "manufacturer brand drug rebates"
  • For 2003, the brand drug "manufacturer rebates" Medco kept accounted for MORE THAN 100% of the the company's entire corporate profits

AFTER Medicare Part D:

• PBM brand drug profits have secretly come mostly from "pharma fees" tied to "sticker" prices and price increases

• The pharma/health insurer/PBM "partners" secretly switched from "rebates to “pharma fees” because:
  • • PART D required full rebate transparency for the first time
    • Widespread pharma U.S. patent losses led to fewer U.S. brand drugs and less rebate opportunities
    • Limited Part D "pharma fee" (i.e., bonafide service fee (BFSF)) reporting and oversight
      • Enabled unlimited "pharma fee" payment to health insurer/PBMs tied to massive U.S. brand drug prices and price increases

• Link to Whistleblower Complaint discussion of Medco's 2003-2011 SEC financial filings and its secretive profit switch from "manufacturer rebates" to "manufacturer fees" with Medicare Part D

• “PHARMA FEES” NOW SECRETLY ACCOUNT FOR 80-100% OF HEALTH INSURER/PBM PROFITS FROM U.S. BRAND DRUGS AND LIKELY MOST OF PBM OVERALL PROFITS 

• NOW NEARLY 15 YEARS SINCE IT BEGAN, THIS SIMPLE, BUT SECRETIVE, PHARMA/HEALTH INSURER/PBM COLLUSIVE PARTNERSHIP HAS CAUSED UNPRECEDENTED PATIENT AND PUBLIC HARM