MESSAGE
| DATE | 2023-12-06 |
| FROM | Ruben Safir
|
| SUBJECT | Re: [Hangout - NYLXS] the NEW way that CVS/Carmart will steal money
|
Government Shrilling for the PBMs
I can solve the high drug prices problem TOMORROW, with or without
patents...
Everything cash and carry. So who will pay those prices out of pocket.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7311400/
Monopoly
The most important reason for the high cost of prescription drugs is the
existence of monopoly4,5. For many new drugs, there are no other
alternatives. In the case of cancer, even when there are multiple drugs
to treat a specific malignancy, there is still no real competition based
on price because most cancers are incurable, and each drug must be used
in sequence for a given patient. Patients will need each effective drug
at some point during the course of their disease. There is seldom a
question of whether a new drug will be needed, but only when it will be
needed. Even some old drugs can remain as virtual monopolies. For
example, in the United States, three companies, NovoNordisk,
Sanofi-Aventis, and Eli Lilly control most of the market for insulin,
contributing to high prices and lack of competition6.
BOINK - wrong. The high cost of drugs is because PBMs encrourage the
high prices to get a bigger CUT.
On 12/6/23 04:26, Ruben Safir wrote:
> CVS Plans to Overhaul How Much Drugs Cost
> Anna Wilde Mathews
> 6–7 minutes
>
> , the nation’s largest drugstore chain, will move away from the complex
> formulas used to set the prices of the prescription drugs it sells,
> shifting to a simpler model that could upend how American pharmacies are
> paid.
>
> Under the plan, CVS’s roughly 9,500 retail pharmacies will get
> reimbursed by pharmacy-benefit managers and other payers based on the
> amount that CVS paid for the drugs, in addition to a limited markup and
> a flat fee to cover the services involved in handling and dispensing the
> prescriptions. Today, pharmacies are generally paid using complex
> measures that aren’t directly based on what they spent to purchase
> specific drugs.
>
> A similar payment model, sometimes known as “cost plus,” has been
> promoted by entrepreneur Mark Cuban’s eponymous pharmacy company, among
> others, which have said it brings greater clarity and accountability to
> drug pricing.
>
> CVS’s move, earlier reported by The Wall Street Journal, is to be phased
> in starting in the first half of 2024. It will take the approach to a
> far greater scale, embedding it in a company that stands at the core of
> the American drug-supply chain.
>
> “It’s a fundamental change in how pharmacy services are priced,” said
> Adam Fein, chief executive of the Drug Channels Institute, which
> provides research on the drug-supply chain. It is also, he said, “a
> legitimate step toward transparency.”
>
> For consumers, employers and health insurers paying for prescriptions,
> the change will have mixed effects. Some drugs may cost less, while
> others might rise in price, CVS executives said. More should show
> declines than increases, they said.
>
> CVS is making the move as it seeks to stabilize its retail pharmacy
> business, which has long struggled with stagnating margins on its core
> function of dispensing prescriptions.
>
> The company is also responding to criticism from lawmakers, employers
> and patients about the complexity and opacity around how drugs are
> bought and sold. Members of Congress and some employer groups have
> argued that the current setup is flawed and secretive.
>
> “Transparency and clear pass-through pricing based on the actual cost of
> the drugs is exactly what we have been hoping the market will do,” said
> Elizabeth Mitchell, chief executive of the Purchaser Business Group on
> Health.
>
> The company’s move appears to be a step in that direction, Mitchell
> said, though she wants more detail on its plans. “What really matters
> is, will this make drugs more affordable?” she said.
>
> CVS said prices will much more closely reflect what the company’s
> pharmacies pay to acquire the drugs. The shift will likely also
> eliminate many high-profile discrepancies in which patients with
> insurance found they could get medications for less when they paid cash
> with a drug discount card instead of using their employers’ drug-benefit
> coverage.
>
> The pharmacies will be paid in “a much simpler and more transparent
> way,” said CVS Chief Pharmacy Officer Prem Shah. “We want to change the
> market for the future.”
>
> The company will call the payment model CostVantage. When it starts
> rolling out next year, the new prices will first become available to
> consumers paying cash for their prescriptions using an array of drug
> discount cards.
>
> In 2025, the setup will be incorporated into CVS pharmacies’ contracts
> with pharmacy-benefit managers covering drugs paid for under employer plans.
>
> Executives said they plan to implement the new retail pharmacy-payment
> model for government-backed coverage, such as Medicare plans, in the future.
>
> CVS said the change isn’t expected to increase its pharmacies’ profits,
> but would ensure more stable and predictable earnings. The company
> declined to disclose target ranges for its drug markup or the flat fees.
>
> Fein said that, over time, the new model will likely mean that retail
> pharmacies are able to halt the trend toward shrinking profits on
> prescriptions and retain higher margins than they otherwise would have.
>
> He also said that CVS-linked units are sometimes involved in setting the
> price of drugs sold to the company’s own pharmacies, which may muddy the
> picture.
>
> A CVS spokesman said its pharmacies pass the value of all of their drug
> savings on to PBMs and other payers.
>
> Pharmacies are mostly paid by pharmacy-benefit managers—including CVS
> Caremark, a sister company to the retail-pharmacy unit—often using a
> complicated setup in which compensation targets are set across groups of
> drugs, not for particular products.
>
> Under that model, pharmacies may get paid at relatively higher rates for
> certain medications, and use that margin to subsidize losses on other
> prescriptions. Using a “cost-plus” structure, this should no longer be
> typical.
>
> Still, CVS’s pharmacy unit will be using an index to approximate its
> cost for acquiring drugs.
>
> CVS will also introduce a new option for clients of its PBM, CVS
> Caremark, that will work in tandem with the new retail pharmacy-payment
> scheme. The new PBM product, called TrueCost, will be based on the net
> cost of drugs with defined fee structures, the company said. Employers
> and other clients will have the choice to use it or not.
>
> However, employers may be reluctant to take one step that is part of the
> TrueCost setup, which involves applying rebates the PBM receives from
> drugmakers to individual prescriptions for those drugs. Currently,
> patients often pay out of pocket amounts based on the higher, prerebate
> price. Employers and insurers sometimes use those rebates to offset
> other healthcare costs.
>
> Other pharmacy-benefit managers have also been touting efforts to
> increase transparency and clarity. Express Scripts, a unit of , recently
> announced a new model called ClearNetwork.
>
> Joseph Walker contributed to this article.
>
> Write to Anna Wilde Mathews at Anna.Mathews-at-wsj.com
>
>
--
So many immigrant groups have swept through our town
that Brooklyn, like Atlantis, reaches mythological
proportions in the mind of the world - RI Safir 1998
http://www.mrbrklyn.com
DRM is THEFT - We are the STAKEHOLDERS - RI Safir 2002
http://www.nylxs.com - Leadership Development in Free Software
http://www.brooklyn-living.com
Being so tracked is for FARM ANIMALS and extermination camps,
but incompatible with living as a free human being. -RI Safir 2013
_______________________________________________
Hangout mailing list
Hangout-at-nylxs.com
http://lists.mrbrklyn.com/mailman/listinfo/hangout
|
|
