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The simple corporate scheme behind massive US Brand Drug Prices

My 7-year whistleblower effort
"People Before Profits"

The largest healthcare whistleblower case in history – yet the silence is deafening.

The largest healthcare whistleblower cases in history by a wide margin – yet the silence remains deafening.

$175 Billion and growing every day.

The scale of harm sounds ridiculous, but it is not – it has been driven by massive 5-10-fold U.S. price increases over more than a decade for 22 blockbuster brand drugs.

Just look at the picture links on the website or in the whistleblower complaints. Truly shocking.

The two whistleblower cases target the simple systemic “fee” scheme behind one of the greatest healthcare crises to afflict this nation in the past several decades – the widespread increase in U.S. brand drug prices.

Price increases for “old” blockbuster U.S. drugs that never should have happened for declining brands in crowded, highly competitive markets. Prices for most of them should have been going down, not up 5-10-fold!

The massive price increases on these “old” brand drugs set the stage for even higher U.S. prices on new brand drugs, further accelerating public harm and the crisis across this nation.

My two vast whistleblower cases were filed in two Federal Circuit Courts, including the prestigious Southern District of New York (SDNY). 

My whistleblower cases have now been public for nearly two years, since April 2018, with extensive Court activity/filings since then, including lots more evidence and harm.

The estimated public harm, carefully documented in the Court documents,  has TRIPLED since I filed the initial case in January 2014, as price increases further accelerated.

You can access all the extensive public Court documents on the www.drugpricetruth.org website.

Yet, despite all of this, not a peep in the public domain about the cases from the pharmaceutical or health insurance/PBM industries, or a wide array of healthcare experts that have been aware of them for years.

THE SILENCE IS DEAFENING

How is that possible?

After seven years of pursuing these cases in the public interest, I believe the reason for the deafening silence by the pharma and health insurers/PBMs is clear.

Because the information in the whistleblower cases is all TRUE, fully verified by firsthand insiders (and other extensive evidence)  and not legitimately (i.e., factually) refutable.  

There is no other explanation, but I remain open to anyone who might like to suggest one.

As such, if/when pharma/health insurer/PBM executives were to publicly discuss the cases, it could quickly lead to straightforward questions (that have surprisingly never been asked) that would open “Pandora’s Box” to the simple truth.

To Pharma: How are you paying the dominant health insurer/PBMs with U.S. brand drug price increases?

To the dominant health insurer/PBMs: How are you making virtually all your money on U.S brand drugs these days?

The answer to both questions is the same and quite simple:  SECRET FEES, tied directly to massive U.S. “sticker” prices.  

An American-only scheme that began suddenly with the Medicare Part D program, which the four dominant health insurer/PBMs (United Health, CVS/Aetna, Cigna/Express Scripts, Humana) control thanks to the pharma industry’s support.

The largest PBMs were OWNED by pharmaceutical companies just before Part D was passed into law in 2003 – that about says it all!

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And remember, in Part D, the law and regulations regarding these “fees” are very clear.

Legitimate “fees” (called bona fide service fees in Part D (BFSFs)) are REQUIRED BY LAW to be for supporting patients and to be paid at a legitimate, fair price.

Paying these fees standardly as a “percentage” of massive 5-10-fold “sticker” price increases in secret national contracts for “old” brand drugs, while their use by doctors and patients is plummeting, is preposterous. It is obvious and severe abuse.  The straightforward legal term is “KICKBACK”, which is a central part of the False Claims Act (qui tam, whistleblower law).

Generating massive increases in profits for both pharma (from the massive price increases) and the health insurer/PBMs (from the linked fees) for selling LESS products and doing LESS work.

Really?

And doing all this without taking ANY risk – because all the costs are passed on to patients, families, American businesses and especially taxpayers in Part D.

Really?

And NOT reporting the secret “fee” source of 80-100% of brand drug profits to clients, investors and the SEC in their financial statements? While publicly claiming that patients always come first?

Really?

Wouldn’t we all like to be in businesses like that? Make huge profits just by massively increasing prices, doing less work and having someone else pay for it!

No wonder most the companies in my two whistleblower cases have been among the best performing stocks in the past decade-plus.

No wonder  the senior executives orchestrating this simple scheme have gotten among the biggest pay packages, driven by their skyrocketing stock prices.

So, of course, the silence and closely guarded secrecy of the pharma and health insurer/PBMs regarding these vast whistleblower cases is not a surprise.  They have lots of reasons to worry.

Silence remains their most viable option, in my view.  Just a little public attention and a few straightforward questions could end their shocking and simple game very quickly.

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However, my inability to engage a vast array of major healthcare experts, despite my extensive outreach efforts over many years now,  has been a greater disappointment.

THE EXPERT SILENCE ALSO REMAINS DEAFENING, AS PATIENT/PUBLIC HARM HAS ACCELERATED

How is this possible?  When so many of these healthcare experts are focused on massive U.S. drug prices?

Hard to say. I have contacted many types of healthcare experts.

However, I don’t speak for other people. I can only speak to my motivations, intentions and goals.

As a physician, an ethical investment professional and a good citizen, my motivations and goals have remained the same  since I uncovered and verified this remarkably simple, but secretive, price collusion scheme more than SIX YEARS AGO NOW in mid-late 2013.

Simply put, this preventable and easily fixable scheme is causing unimaginable and escalating harm to all Americans, but especially the most vulnerable people among us with life-threatening illnesses. 

It must be stopped.

Diabetes, multiple sclerosis, cancer, rheumatoid arthritis, and many others.

But all Americans are paying for this in our skyrocketing drug and overall healthcare bills, insurance premiums, co-pays, deductibles, etc. It is endless.

Virtually no one can afford a $100,000 MS drug, a $75-80,000 rheumatoid arthritis drug or a $200-400,000 cancer drug, and many others now at astronomical prices.

Many of these drugs cost a fraction of this (and still do in Europe!) before this secret Part D fee scheme began.

We are all in this together. And even if you are healthy now, we are all just a diagnosis away from massive drug costs and potential financial ruin.

 “PEOPLE OVER PROFITS”

Sadly, both the public harm and the evidence of the scheme has greatly increased since I filed the initial whistleblower case, in the public interest, in January 2014. 

Yet no government action has been taken to protect American citizens. In fact, it has gotten far worse.

Patients are continuing  to lose their lives and to lose access to life-savings drugs.  Patients and families are routinely facing financial ruin.  

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I remain hopeful that other experienced healthcare professionals, public interest groups and/or elected officials, will eventually come forward.

How much longer can you remain silent?

Just look at the whistleblower information/evidence. If you think it is not accurate, I would be glad to hear your thoughts and discuss it with you.  

And most importantly think of your sick family members, friends and colleagues that are dealing with these massive drug prices on a daily basis. Then, like a physician or a nurse must do daily, put yourselves in the shoes of people you don’t know, especially our senior citizens, young adults and children, that may be suffering far more.

We cannot allow this to continue. If people and their lives don’t matter more than corporations and their profits, we don’t have much left. Please join my efforts.

In the meantime, the primary goal of my efforts and this website remains to increase broader public awareness in a professional, responsible, lawful, factual and diligent manner.

Remember, this is all public information available in the whistleblower Court documents.

So please forward this blog post and the website to friends, families, colleagues and anyone you like and please ask them to do the same. We can get there together over time.

The key is this scheme is really simple – not insulting anyone, just the truth.

I welcome the opportunity to speak to any interested parties.

I also welcome any feedback or questions about the information on the website and in the whistleblower documents. I stand by the accuracy of it all.

My policy has always been and remains full transparency.

I can be easily reached via email at info@drugpricetruth.org

Thank you,

John R. Borzilleri, M.D.

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