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The simple corporate scheme behind massive US Brand Drug Prices

My 7-year whistleblower effort
"People Before Profits"

Definitive Proof of the Pharma/PBM Scheme

Of the Straightforward “Pharma Fee” Price Collusion Scheme

 

October 2013 Industry “Pharma Fee” Conference

  • Definitive one-of-a- kind conference I attended; October 7-8, 2013 in Philadelphia.
  • 45-50 insiders from the pharmaceutical, biotechnology, health insurance and PBM industries.
  • Detailed firsthand insider admissions of the “pharma fee” scheme.
  • Definitive quotes from senior executive industry “insiders” at the conference: 
    • PBM profits from drug manufacturers secretly “shifted from rebates to fees.” 
    • Secret “pharma fees” (tied to “sticker” prices”) were the PBMs’ “main source of income.” 
    • The “Government had little knowledge” about these secret “pharma fees.”
    • CMS (which oversees Medicare Part D) was “getting burned out because it had a lot of stakeholders (i.e. the corporations) in their ear.” 
    • “When will the government be dangerous enough to understand how industry works?” 
    • "I hope this conference is not being recorded” 
  • Link to full Whistleblower case discussion and industry attendees of this definitive conference

Biopharmaceutical CEO Firsthand Admission 

  • Direct CEO quote, in discussing the basis for massively raising the U.S. price of his brand drug despite severe competition: 
    • "Well, PBMs don't make their money off of rebates anymore"…"PBMs make their money off of service fees" (from pharma companies) and you just have to "play ball with them" to get a contract.” (i.e., pay them secret fees tied to the massive price increases) 
  • Link to the Whistleblower case discussion of this Biopharma CEO meeting

THE DEFINITIVE FIRSTHAND INSIDER ADMISSIONS AT THIS ONE-OF-A-KIND CONFERENCE WERE THE MAIN REASON I CONTACTED THE DEPARTMENT OF JUSTICE (DOJ) AND QUICKLY FILED THE WHISTLEBLOWER CASES IN THE PUBLIC INTEREST STARTING IN EARLY 2014. 

SINCE FILING THE CASES, U.S BRAND DRUG PRICES HAVE DOUBLED AGAIN DUE TO THIS STRAIGHTFORWARD PRICE COLLUSION SCHEME. 

TO MY SURPRISE AND DISAPPOINTMENT, THE DEPARTMENT OF JUSTICE (DOJ) ADMITTED NEVER INTERVIEWING AN Y OF THESE FIRST-HAND INSIDER WITNESSES UNDER OATH DURING ITS FOUR-YEAR INVESTIGATION OF THE TWO WHISTLEBLOWER CASES. 

PBM Senior Executive Public Admissions

August 2018:

  • CVS and Express Scripts
  • For the first time, both PBMs publicly admitted that “manufacturer rebates” on U.S. brand drugs now account for LESS THAN 10% OF PROFITS.
  • “Manufacturer rebates” accounted for virtually ALL PBM profits BEFORE Medicare Part D.
  • Secret "pharma fees" directly tied to U.S. "sticker" prices are the ONLY other major source of PBM profits from brand drugs.
  • These secret "pharma fees" tied to massive 'sticker" prices now account for MOST AND IN MANY CASES ALL health insurer/PBM profits from U.S. brand drugs.
  • Link to Express Scripts and CVS August 2018 public admissions of the “pharma fee” scheme in the Whistleblower documents

 

 

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