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The simple corporate scheme behind massive US Brand Drug Prices

My 7-year whistleblower effort
"People Before Profits"

The Obvious Pharma/Health Insurer/PBM “Partnership” in Massively Raising U.S Brand Drug Prices – Six Facts in Plain sight

Six Facts in Plain Sight

  1. Virtually ALL brand drug profits for the four dominant health insurer/PBMs (United Health Care, CVS/Aetna, Humana) have secretly come from the pharmaceutical industry for the past 20+ years. Before Part D, the profits came from secretly keeping most pharma rebates/discounts that should have gone to patients and clients. Now their profits come from keeping virtually all “fees” from secret national contracts as a percentage of massive U.S. brand drug prices and price increases. All the public rebate talk now is just nonsense and a diversion tactic.
  2. The three largest PBMs were OWNED by pharmaceutical companies (Merck, Eli Lilly and Glaxo SmithKline) just before Part D. No surprise that all the massive U.S-only brand price increases (insulins, multiple sclerosis, cancer, rheumatoid arthritis, etc.) began at the same time when Part D began under the PBMs’ control, with pharma’s support. The secret scheme shifting from secret rebates to secret fees began with Part D. Why? Because Part D required transparency for rebates for the first time, but not fees tied to massive price increases!
  3. Despite their public claims of being “enemies”, the pharma industry is a huge financial supporter of the dominant PBMs’ closely controlled lobbying organization, the Pharmaceutical Care Management Association (PCMA). See the link below for the long list of pharma companies sponsoring the upcoming sPCMA business forum in March which is focused on high cost “specialty” drugs, the driver of both the pharma and PBM industries for the past decade. See link. https://www.pcmanet.org/pcma-event/2020-spcma-business-forum/sponsors/
  4. In 2018, the just departed Chief Executive (CEO) of the pharma company Glaxo SmithKline, Andrew Witty, was hired by United HealthCare to run its Optum PBM division. Do you think that industries claiming to be mortal enemies hire each other’s senior executives? I think not. Mr. Witty was recently promoted and is listed as among  UnitedHealth’s highest paid employees. See link: https://www.businesswire.com/news/home/20191111005130/en/Sir-Andrew-Witty-Named-UnitedHealth-Group-President
  5. In 2018, the just departed Chief Financial Officer (CFO) of Eli Lilly, Derica Rice, was hired by CVS Health to run its PBM division.   Do you think that industries claiming to be mortal enemies hire each other’s senior executives? I think not. It was announced today that Mr. Rice is leaving CVS. See link: https://www.fiercepharma.com/pharma/ex-lilly-exec-derica-rice-joins-cvs-as-head-pharmacy-benefit-unit
  6. The recent mergers of Cigna/Express Scripts and CVS/Aetna were approved without a single protest from a pharmaceutical company or its powerful lobbying organizations.  The Justice Department’s public comment section has endless protests from community pharmacists, but not a word from a pharmaceutical company or their powerful lobbying organizations. You will also see that my two whistleblower cases (and a letter I sent requesting to be a witness) were about half of the 1200 pages (see TC-015) of public comments. I requested of the Court to be a witness at the hearings held last summer, but was denied with a single handwritten line from the judge. See link to the Justice Department public comment section regarding the CVS/Aetna merger. https://www.justice.gov/atr/us-v-cvs-health-corp-and-aetna-inc-index-comments

So, pharma is publicly claiming that PBMs are the cause of massive U.S. brand drug prices, but they have no problem with more health insurer/PBM mergers and the industry becoming even more concentrated and secretive? Really?

Wonder why that would be?

Because pharma is the real wizard behind the screen for the health insurer/PBM industry. Pharma gets most of the “partner” profits from the massive brand drug price increases, while giving the health insurer/PBMs a percentage with secret “fees”.

Sadly, many community pharmacists and their organizations think pharma is behind them in their battle against PBMs. A lot of community pharmacy organizations get some funding from pharma.

Unfortunately, community pharmacies are just getting played by pharma as they are being driven out of business across this country. Community pharmacists have been cut out of the big game, high cost “specialty” drugs (with mandatory mail, narrow networks, etc.), left to be decimated by health insurer/PBMs largely in the generic market (spreads, MAC pricing, DIR fees, etc.)

In reality, pharma is the PBM industry’s biggest supporter.

About 40% of the PCMA’s $20+ million in annual funding comes from undisclosed outside sources. Take a look at the form 990 on the PCMA website. Take a guess where most of that outside likely comes from?

Community pharmacists should attend the sPCMA meeting in Orlando on March 15-17, if they want to know what is really going on before it is too late.

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

I would be glad to speak with any interested parties. The abuse of all Americans by this simple pharma/health insurer/PBM “fee” pricing scheme must be stopped. The harm continues to accelerate.

Thank you,

John R. Borzilleri, M.D.

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